ABC TRANSPORT PLC - Trombino

ABC TRANSPORT PLC

ANNUAL REPORT AND ACCOUNTS31 DECEMBER 2014

ANNUAL REPORT AND ACCOUNTSFOR THE YEAR ENDED 31 DECEMBER 2014

INDEX Page

Corporate information i

Report of the Directors ii - v

Independent Auditors' Report 1

Consolidated and separate statements of profit or loss 2

Consolidated and separate statements of other comprehensive 3

Consolidated and separate statements of financial position 4

Consolidated and separate statements of changes in equity 5

Consolidated and separate statements of cash flows 6

Notes to the Financial Statements 7 - 64

Statement of value added – Group 65

Statement of value added – Company 66

Five year financial summary – Group 67

Five year financial summary – Company 68

ABC TRANSPORT PLC

ABC TRANSPORT PLC

COMPANY REGISTRATION NUMBER 219970

DIRECTORS, OFFICERS AND PROFESSIONAL ADVISERS

DIRECTORS: Mr. Olumide Obayomi - ChairmanMr. Frank Nneji - Managing DirectorMr. Jude Nneji - Deputy Managing DirectorMrs. Uche Ohimai-Ehimiahe - Non-Executive DirectorAlh. Kabiru Yusuf - Non-Executive DirectorMr. John Okoro - Non-Executive Director

SECRETARY/LEGAL:ADVISER Vivian C. Okpe

REGISTERED KM 5, MCC/Uratta Road, Umuoba UrattaOFFICE: P.O. BOX 2575, Owerri Imo State

Tel: 080396600958, 08053002000,Fax: 083-231275E-mail: [email protected]

AUDITORS: PKF Professional ServicesPKF House, 205A ObanikoroIkorodu Road, Lagos. Nigeria

PRINCIPAL Fidelity Bank PlcBANKERS: Zenith Bank Plc

Diamond Bank PlcGuaranty Trust Bank Plc

REGISTRAR First Registrars Nigeria LimitedPlot 2, Abebe Village RoadIganmu, Lagos

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ABC TRANSPORT PLC

REPORT OF THE DIRECTORSFOR THE YEAR ENDED 31 DECEMBER 2014

1 RESULT Group Company N’000 N’000

(Loss)/profit for the year after taxation #REF! #REF!

2 LEGAL FORM

3 PRINCIPAL ACTIVITIES

4 DIRECTORS AND DIRECTORS’ INTERESTS

5 DIRECTORS’ RESPONSIBILITIES

- proper accounting records are maintained;

- applicable accounting standards are followed;- suitable accounting policies are adopted and consistently applied;- judgments and estimates made are reasonable and prudent; and

The Directors submit their report together with the audited financial statements forthe year ended 31 December 2014.

- Internal control procedures are instituted which, as far as is reasonablypossible, safeguard the assets and prevent and detect fraud and other irregularities.

ABC Transport Plc was incorporated as a Private Limited Company on April 5, 1993and was converted to a Public Limited Liability Company on November 21, 2005. Theshares were quoted on the Nigerian Stock Exchange on December 20, 2006. Asapproved by the Shareholders at the Annual General Meeting of August 12th 2011,the Company’s name was changed from Associated Bus Company Plc to ABCTransport Plc in 2011.

No Director has any disclose-able interest in contracts in which the company wasinvolved during the year under review.

The Directors are responsible for the preparation of the financial statements whichgive a true and fair view of the state of affairs of the Company at the end of eachfinancial year and of the profit or loss for that period and which comply with theCompanies and Allied Matters Act CAP C20 LFN 2004. In doing so they ensure that:

- internal control procedures are instituted which as far as is reasonablypossible, safeguard the assets and prevent and detect fraud and other irregularities;

- the going concern basis is used, unless it is inappropriate to presume thatthe Company will continue in business.

Principal activity of the company is road transportation. It provides both long and short haulbus services; consolidated cargo and haulage services within Nigeria and West African sub-region

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ABC TRANSPORT PLC

REPORT OF THE DIRECTORS (continued)

6 DIRECTORS’ SHAREHOLDING AS AT 31 DECEMBER 2014:

Name Direct IndirectMr. Olumide Obayomi - 100,000 - 5,200,000Mr. Frank Nneji - 560,000,000 - -Mr. Jude Nneji - 12,000,000 - -Alhaji Kabiru Yusuf - 1,000,000 - -(Rep: Mrs. Uche Ohimai-Ehimiahe) 15,401,203 - 258,661,359Mr. John Okoro - 765,386 - -

7 PROPERTY, PLANT & EQUIPMENT

8 POST BALANCE SHEET EVENTS

9 MAJOR SUPPLIERS:The Company’s significant local suppliers are:

Conoil Company LimitedEterna Oil Nig. PlcCummins West Africa LtdMcquintus LtsMichelin Tyre Co. LtdPalm Petroleum LtdLeventis Nig. Ltd

10 DONATIONS

NUNAA Owerri Branch Outstanding Donation - 1,000,000Ascend Foundation book Launch - 20,000Corporate Gifts - 961,000Donation to Fadeyi Youths - 284,000Ogunsakin Ben Tosin book Launch - 10,000

2,275,000

Staff Wedding, Gifts & Condolence/Burial Assistance 3,456,274

There are no significant post balance sheet events which have not been provided for in theseaccounts.

The following amounts have been given by way of donations and gifts during the year underreview.

There was no donation or gift made to any political party, political association or for any politicalpurpose in the course of the year under review.

Holdings

Movements in property,plant and equipment during the year are shown in Note 15 to thefinancial statements.

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ABC TRANSPORT PLC


11 EMPLOYMENT AND EMPLOYEES

1. Employment and Employees

2. Employment of Disabled Persons

3. Work Environment

4. Employee Involvement, Development and Training

Employees are adequately rewarded and motivated to achieve results.

5. Health, safety at work and welfare of employees

Career development of each employee and succession planning are major priorities ofthe company. The employees of the company attend short and long term trainingprogrammes which are tailored to meet the needs of both the employee and company.

The company considers the health, safety and welfare of its employees of paramountimportance. In demonstration of this, the company has a group life insurance policy,pension scheme and has retained the services of healthcare providers across variouslocations. Safety standards are adhered to in the workplace. The employees of thecompany are currently enrolled by the company to the National Health InsuranceScheme.

ABC Transport Plc is an equal opportunity employer concerned with the retention of staffand strives to remain the employer of choice within the road transport sector. Thecompany provides a total compensation package that enables it to attract and retainhighly skilled and qualified employees while recognizing the need to mange payrollcosts.

The Company has reviewed its employment policy in line with the needs of the business.A policy of the Company stipulates that there should be no discrimination in consideringapplications for employment including those from disabled persons. All employeeswhether or not disabled are given equal opportunities to develop. As at 31 December2014, ABC Transport Plc had a total of three (3) persons in its employment.

The Company endeavours to ensure a safe working environment for its employees.Health and safety regulations are in force within the Company’s premises andemployees are aware of existing regulations. Subsidies are provided to all levels ofemployees for medical, transportation, housing etc

Training workshops and seminars are organized regularly for employees at all levels.The Company is committed to keeping employees informed regarding its progress andperformance and the views of the employees are sought particularly with respect tomatters which directly affect them.

The company places considerable value in the involvement of its employees in theattainment of its goals and has continued to keep them as fully informed as possibleregarding the company’s performance and progress. Formal meetings are held amongststaff within the operational zones and suggestions and opinions of employees aresought and considered on the general operations of the company as well as mattersaffecting them employees.

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ABC TRANSPORT PLC


6. Safety Policy

11 AUDITORS

BY ORDER OF THE BOARD

Vivian C. OkpeCompany Secretary/Legal Adviser

Imo State, Nigeria.18th March 2015

ABC Transport Plc places a premium on the safety of its passengers and crew whilein transit. To this end, the company organizes quarterly safety re-orientation andtraining programmes for its crew. All the vehicles in our fleet are fitted with trackingdevices which monitor speed as the movement of the vehicles. For the period underreview, the accident rate of the company’s fleet was well within acceptable limits,with a large number of the recorded accidents attributable to the errors andmiscalculations of other road users.

At the Annual General Meeting of 2014, upon the retirement of the then externalauditors (Messer Akintola Williams Deloitte). A resolution to appoint PKFProfessional Services as the company's Auditors was propopsed and duly passed. Aresolution will be proposed authorising the Directors to determine their remuneration.

v

INDEPENDENT AUDITORS' REPORTTO THE MEMBERS OF ABC TRANSPORT PLC

Report on the Consolidated Financial Statements

Directors’ Responsibility for the Financial Statements

Auditors’ Responsibility

Opinion

Olatunji O. Ogundeyin, FRC/2013/ICAN/02224For: PKF Professional ServicesChartered AccountantsLagos, NigeriaDate: 25 March 2015

The company and its subsidiaries have kept proper books of account which are in agreement with theconsolidated financial position and statements of comprehensive income as it appears from ourexamination of their records.

In our opinion, the consolidated financial statements present fairly, in all material respects the consolidatedfinancial position of ABC Transport Plc (“the Company”) and its subsidiaries (together “the Group”)at 31 December 2014, and of their financial performance and cash flows for the year then ended, inaccordance with the Companies and Allied Matters Act, Cap C20, LFN 2004 and in the manner required bythe International Financial Reporting Standards in compliance with the Financial Reporting Council ofNigeria Act, No 6, 2011.

We have audited the accompanying consolidated financial statements of ABC Transport Plc, (theCompany”) and its subsidiaries (together “the Group”) which comprise the consolidated statements offinancial position at 31 December 2014, the consolidated income statements, consolidated statements ofchanges in equity, consolidated statements of cash flows for the year ended, a summary of significantaccounting policies, and other explanatory information.

The Directors are responsible for the preparation and fair presentation of these consolidated financialstatements in accordance with the Companies and Allied Matters Act, Cap C20, LFN 2004 and in themanner required by the International Financial Reporting Standards in compliance with the FinancialReporting Council of Nigeria Act, No 6, 2011, and for such internal control as the Directors determine arenecessary to enable the preparation of consolidated financial statements that are free from materialmisstatement whether due to fraud or error

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.We conducted our audit in accordance with International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in theconsolidated financial statements. The procedures selected depend on the auditors’ judgment, includingthe assessment of the risks of material misstatement of the consolidated financial statements, whether dueto fraud or error. In making those risk assessments, the auditors consider internal control relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by the Directors, as wellas evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.

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ABC TRANSPORT PLC

CONSOLIDATED STATEMENTS OF PROFIT OR LOSSFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013 2014 2013Continuing operations Notes N'000 N'000 N'000 N'000

Revenue 6.1 7,347,873 6,656,947 6,846,024 6,636,859Cost of sales #REF! #REF! #REF! #REF!

Gross profit #REF! #REF! #REF! #REF!

Administrative expenses #REF! #REF! #REF! #REF!Other operating income 6.2.1. 94,887 108,549 85,699 108,549Interest income 6.2.2. 1,973 1,625 1,970 1,621Net fair value gains/(losses) on financial assets atfair value through profit or loss 6.2.2.1 1,634 1,309 1,634 1,309

Income from investments 6.2.4. 741 16,021 741 16,021Impairment losses 9. (9,883) (14,479) (9,883) (14,479)Other gains and losses 6.2.3. 121,697 387,878 121,148 369,320Finance costs 10. (444,442) (243,158) (414,011) (243,158)

(Loss)/profit before tax #REF! #REF! #REF! #REF!

Income tax expenses 11. (113,253) (216,258) (113,264) (213,725)

(Loss)/profit from continuing operations #REF! #REF! #REF! #REF!

Attributable to:Equity shareholders #REF! #REF! #REF! #REF!Non-controlling interests (51,029) (10,977) - -

#REF! #REF! #REF! #REF!

Basic and diluted (loss)/earnings per share(Kobo) 12.1. #REF! #REF! #REF! #REF!

Group Company

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ABC TRANSPORT PLC

CONSOLIDATED AND SEPARATE STATEMENTS OF OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013 2014 2013Notes N'000 N'000 N'000 N'000

(Loss)/profit for the year #REF! #REF! #REF! #REF!

Items that may be reclassified subsequentlyto profit or loss

Foreign exchange translation gains/losses, net of tax 25. 2,055 (2,580) - -

Net actuarial losses on defined benefit plans, net of tax 30. (14,734) (33,920) (14,154) (33,806)

Other comprehensive loss (12,679) (36,500) (14,154) (33,806)

Total comprehensive (loss)/ income for the year #REF! #REF! #REF! #REF!

Attributable to:

Equity shareholders #REF! #REF! #REF! #REF!Non-controlling interests 27. (51,150) (11,016) - -


Group Company

3

ABC TRANSPORT PLCCONSOLIDATED STATEMENTS OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013 2014 2013Non-current assets Note N'000 N'000 N'000 N'000Deferred tax asset 11.3 60,543 59,864 59,864 59,864Intangible assets 14. 21,046 17,308 21,046 17,308Property, plant and equipment 15. 4,403,699 3,733,804 4,407,840 3,737,954Investment in subsidiaries 16. - - 11,520 6,520Other investments 17. 1,845 1,845 1,845 1,845Financial assets - FVTPL 17.2. 18,093 16,459 18,093 16,459Finance lease receivables 18. 16,987 62,263 16,987 62,263

4,522,213 3,891,543 4,537,195 3,902,213Current assetsInventories 19. 995,647 291,693 185,976 208,526Finance lease receivables 18. 13,096 36,415 13,096 36,415Trade and other receivables 20. 491,778 526,944 594,941 438,605Other assets 21 329,051 733,439 300,992 1,021,291Cash and bank balances 23. 84,074 152,234 47,278 107,570

1,913,646 1,740,725 1,142,283 1,812,407

Non- current assets held for sale 22. - - - -

Total assets 6,435,859 5,632,268 5,679,478 5,714,620

Equity and reservesIssued share capital 24.1 753,500 753,500 753,500 753,500Share premium 24.2 582,068 582,068 582,068 582,068Retained earnings 26.1 #REF! #REF! #REF! #REF!Other comprehensive income reserve 25. (67,884) (55,467) (58,284) (44,130)

Shareholder's fund #REF! #REF! #REF! #REF!Non-controlling interests 27. (58,544) (7,394) - -

Total equity and reserves #REF! #REF! #REF! #REF!

Non-current liabilitiesLong-term borrowings 28. 875,754 876,043 875,754 876,043Finance lease obligations 29. 62,075 118,374 62,075 118,374Post employment benefits - defined benefits 30.1. 238,873 211,393 236,876 210,455Provisions 31. 38,035 36,204 38,035 36,204Deferred tax 11.3 - - - -

1,214,737 1,242,014 1,212,740 1,241,076Current liabilitiesShort term borrowings 28. 1,467,903 857,652 804,882 857,652Finance lease obligations 29. 128,520 156,018 128,520 156,018Post employment benefits - defined contribution 30.1. 127,821 63,367 127,821 63,367Current taxation liabilities 11.2 231,947 231,297 231,279 229,861Trade and other payables 32. 1,106,447 664,642 992,076 663,999Deferred income 33. 15,529 29,052 15,529 29,052Bank overdrafts 23.1 339,823 108,912 159,874 108,912

3,417,990 2,110,940 2,459,981 2,108,861

Total liabilities 4,632,727 3,352,954 3,672,721 3,349,937Total equity and liabilities #REF! #REF! #REF! #REF!

………………………………………………………………………………………….} Chairman FRC/2013/………………………………………}

………………………………………………………………………………………….} Managing Director/CEO FRC/2013/…………………….}

………………………………………………………………………………………….} Chief Financial Officer FRC/2013/………………………

The accounting policies and explanatory notes on pages 8 to 64 form part of these financial statements

Group Company

The financial statements on pages 2 to 64 were approved by the Board of Directors on 25 March 2015 and signed on itsbehalf by:

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ABC TRANSPORT PLCCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2014

I. Group Issued Nonshare Share Retained OCI controlling

capital premium earnings reserves interests TotalN'000 N'000 N'000 N'000 N'000 N'000

1 January 2013 753,500 582,068 886,462 (19,006) 3,622 2,206,646

Changes in equity for 2013:(Loss)/loss for the year - - #REF! - (10,977) #REF!Translation loss - - - (2,554) (26) (2,580)Actuarial loss - - - (33,907) (13) (33,920)Dividends relating to 2013 paid during the year - - (195,910) - - (195,910)

31 December 2013 753,500 582,068 #REF! (55,467) (7,394) #REF!

1 January 2014 753,500 582,068 #REF! (55,467) (7,394) #REF!

Changes in equity for 2014:Profit/(loss) for the year - - #REF! - (51,029) #REF!Dividends relating to 2014 paid during the year - - (90,420) - - (90,420)Translation gain/(loss) - - - 2,035 20 2,055Actuarial loss - - - (14,452) (141) (14,593)

31 December 2014 753,500 582,068 #REF! (67,884) (58,544) #REF!

II. Company Issued share Share Retained OCIcapital premium earnings reserves Total

N'000 N'000 N'000 N'000 N'000

1 January 2013 753,500 582,068 914,061 (10,324) 2,239,305

Changes in equity for 2013:Profit/(loss) for the year - - #REF! - #REF!Other comprehensive income - - - (33,806) (33,806)Dividends relating to 2013 paid during the year - - (195,901) (195,901)

31 December 2013 753,500 582,068 #REF! (44,130) #REF!

1 January 2014 753,500 582,068 #REF! (44,130) #REF!

Changes in equity for 2014:(loss)/profit for the year - - #REF! - #REF!Other comprehensive income - - - (14,154) (14,154)Dividends relating to 2014 paid during the year - - (90,420) - (90,420)

31 December 2014 753,500 582,068 #REF! (58,284) #REF!The above consolidated and separate statement of changes in equity should be read in conjunction with the accompanyingnotes.

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ABC TRANSPORT PLC

CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013 2014 2013Note N'000 N'000 N'000 N'000

Cash flows from operating activitiesCash received from customers, staff andrelated parties 7,383,039 6,128,407 6,689,688 6,259,148Cash paid to suppliers and others (5,830,220) (5,233,108) (4,312,681) (5,377,154)

Cash generated from operations 1,552,819 895,299 2,377,007 881,994Income tax paid (79,750) (101,793) (79,478) (97,909)

Net cash from operating activities 34. 1,473,069 793,506 2,297,529 784,085

Cash flows from investing activities:Investments in financial assets 1,634 1,309 1,634 1,309Purchase of property, plant and equipment 15. (1,941,683) (1,172,114) (1,922,029) (1,171,796)Other movement in PPE 61,130 - 64,778 -Purchase of intangible assets (12,854) (14,237) (12,854) (14,237)Additional investment in subsidiaries - - (5,000) -Proceeds from investments 741 16,021 741 16,021Proceeds on sale of property plant and equipment

73,675 145,366 73,486 145,366

Cash received from investment in finance leases 32,230 84,603 32,230 84,603

Net cash used in investing activities (1,785,127) (939,052) (1,767,014) (938,734)

Cash flows from financing activities:Additional borrowings taken 1,631,035 1,232,880 945,821 1,232,880Repayment of borrowings (999,365) (849,242) (999,362) (849,983)Additional finance leases 124,150 147,185 124,150 147,185Repayment of finance lease obligations (207,947) (138,914) (207,947) (139,048)Interest repaid (444,442) (243,158) (414,011) (243,158)Dividends paid to the company's shareholders (90,420) (195,910) (90,420) (195,910)

Net cash from/ (used in) financing activities 13,011 (47,159) (641,769) (48,035)

Net decrease in cash and cash equivalents (299,047) (192,705) (111,254) (202,684)

Cash and cash equivalents at 1 January 43,298 236,003 (1,342) 201,342

Cash and cash equivalents at 31 December 23. (255,749) 43,298 (112,596) (1,342)

Group Company

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ABC TRANSPORT PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014

1. General information1.1. The Group

1.2. Going concern

2.1 Statement regarding status of compliance with IFRSs

2.2 Basis of preparation

3. Statement of significant accounting policiesThe following are the significant accounting policies adopted by the Group:

3.1 Revenue

The consolidated financial statements have been prepared in accordance with International Financial ReportingStandards.

Revenue is measured at the fair value of the consideration received or receivable in respect of passengeroperation, cargo services, haulage, hire services and hospitality business.

Revenue received in advance (advance bookings) is treated as a liability, until the service is rendered. Revenuefor cargo items not yet delivered to destination as at the reporting date is equally treated as a liability while allattributable revenue on delivered loads (haulage and cargo) at the end of the reporting period are included inrevenue irrespective of when they are invoiced to the customer.

ABC Transport Plc was incorporated in Nigeria in April 1993 with registered office at Km 5, MCC/Uratta Road,Umuoba Uratta, P.O. Box 2575, Owerri, Imo State. The company’s primary business is road passengertransportation between major cities in the South, North Central and Abuja.In July 2004, the company commenced road passenger transportation on the West Coast between Lagos, Nigeriaand Accra, Ghana. ABC Transport Ghana in which ABC Transport Plc owns a 99% equity stake wasincorporated in 2007 to provide transport services within Ghana and to offer passenger and cargo handlingservices to ABC Transport Plc. ABC Transport Plc is also involved in cargo business across the road passengernetwork and hospitality business at its City Transit Inn (CTI), Abuja. Haulage activities picked up actively for thecompany in the year 2010.

The company is listed on the Nigerian Stock Exchange (NSE) and is required to prepare its consolidated financialstatements in accordance with the International Financial Reporting standards (IFRS) set by the InternationalAccounting Standards Board (IASB) and adopted by the Federal Republic of Nigeria, under the regulation of theFinancial Reporting Council of Nigeria with effective date of transition to IFRS on 1st January 2011.

The financial statements are prepared on the historical cost basis of accounting other than for certain items ofproperty, plant and equipment that have been stated at deemed cost under the transition rules of IFRS. Certainfinancial instruments are measured at fair value.

The consolidated financial statements are presented in thousands Naira, which is the functional currency of theeconomic environment in which the entity operates.

ABC Transport Plc which became a public liability company in 2005 equally owns 50% equity stake in TransitSupports Services Ltd, a trading company engaged in the importation and sales of vehicle spares and installationof motor vehicle speed governing devices, and a 5% stake in ABC Express Courier (ABEX) Ltd. In October2014,Transit Supports Services Ltd commenced the assembly of heavy duty trucks under the automotive policy ofthe Federal Government of Nigeria. The assembly is carried out in partnership with the Shanxi Group ofChina(owners of the SHACMAN franchise) and the Anambra Motor Manufacturing Company of Nigeria.

The Group's management has made an assessment of the Group's ability to continue as a going concern. Whilethe management is satisfied that ABC Transport Plc, ABC Transport Ghana Ltd and Transit Supports Serviceshave the resources and business prospects to continue in business for the forseeable future, however, thebusiness of a new subsidiary, City Sightseeing Ltd floated within the year was suspended because of lowpatronage due to security challenges in the northern part of Nigeria where it was designed to operate. CitySightseeing Ltd ceased operations in December 2014 having operated for only three months. It was resolved thatthe assets and liabilities of City Sightseeing Ltd be acquired by the parent company with effect from December2014 and the financial statements have been prepared on this basis.

The Company floated a new fully owned subsidiary, City SightSeeing Nig. Ltd within the period. City SightSeeingLtd which commenced operations in August 2014 operates a dedicated tour service that takes tourists throughmajor sites attraction in Abuja using specially designed state-of-the-art tour buses

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3.2. Customer loyalty programme

3.3. Property, plant and equipment

Useful livesLuxury buses and trucks 5 - 7 yearsTrailer beds 7 - 10 yearsShuttle buses 2 - 5 yearsPool buses 4 - 6 yearsComputers 3 - 5 yearsFurniture and equipment 4 - 5 yearsBuildings 15 - 20 years

Depreciation commences when assets are available for use.

Major refurbishments and renovations are capitalized as part of the item of the property, plant andequipment and are depreciated over the remaining useful lives of the assets. Depreciation is provided onthe cost of assets less any residual value over their estimated useful lives, using the straight-line method, asfollows:

Proceeds from the disposal of property, plant and equipment are excluded from revenue, they form part ofother income as gains or losses from disposal of property, plant and equipment. Gains or losses on theremeasurement of non-current assets classified as held for sale that does not meet the definition ofdiscontinued operations are included in profit or loss from continuing operations.

On presentation of 11 manual tickets or 10 e-tickets, a customer is awarded a free ticket for the next travel,hence revenue from passenger operation (coach) is regarded as a multiple-component sales i.e thecomponents being revenue and award credit.

The Group grants award credits for each sale/travel which is accumulated for each passenger up to thenumber required for redemption of the award. The consideration initially received for each travel is allocatedbetween revenue and the award credit. The consideration allocated to award credits represents the amountthat the entity has received for accepting an obligation to supply awards if customers redeem the credits.This amount reflects both the value of the awards and the Group’s expectations regarding the proportion ofcredits that will be redeemed, i.e. the risk of a claim being made. A customer loyalty award obligation isrecognized as a liability until the Group fulfills its obligations to deliver awards to customers or when the riskof a claim has expired. Claims in respect of a particular year expire at the end of February of the succeedingyear. Hence, revenue relating to award credits is recognized as the risk expires, i.e. based on the number ofaward credits that have been redeemed relative to the total number expected to be redeemed. This is inaccordance with International Financial Reporting Interpretation Committee 13 (IFRIC 13).

Property, plant and equipment are stated at cost less accumulated depreciation and any recognizedimpairment loss. Bus terminals and other buildings are carried at their historical cost less accumulateddepreciation and any impairment loss. Durability of such items is considered before capitalisation. Majorspare parts of motor vehicles which include axle, gear box, engine and body are capitalised when they arereplaced and depreciated over the remaining useful lives of the assets. The values of the replaced parts arederecognised on replacement.

Buildings on leasehold lands are depreciated over their estimated useful lives unless there are indicationsthat the lease will not be renewable at the expiration of the extant lease terms, in which case the buildingsare depreciated over the remaining life of the lease. In such a case a decommissioning cost is capitalisedand discounted over the remaining life of the lease in accordance with IAS 37.

The revalued amounts of land and buildings have been adopted as the deemed cost for these assets. Allother assets have been recognized at their historical costs.

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ABC TRANSPORT PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014

3.4. Basis of consolidation

All intra-group transactions, income and expenses are eliminated in full on consolidation.

3.5. InventoriesSpare parts and other stock items are valued at the lower of cost and net realisable value. Cost includespurchase cost and other cost incurred in bringing the stocks to their present location and condition. Theweighted average cost method is used to determine cost.

An executive director in ABC Transport Plc represents the company on the Board of Transit SupportServices Ltd; and ABC Transport Plc is a major customer to Transit Support Services Ltd, which deals onvehicle consumable.

Non-controlling interests represent the portion of profit or loss and net assets of subsidiaries not owned,directly or indirectly by ABC Transport Plc. Non-controlling interests are presented separately in theconsolidated income statement and within equity in the consolidated statement of financial positionseparately from the parent shareholders' equity.

Associates are those entities over which the Group can exercise significant influence, but not control or jointcontrol. Investment in associate is accounted for in the financial statements using the equity method.Investment in the associate is carried in the statement of financial position at cost plus post acquisitionchanges in the Group’s share in the net assets of associate, less any impairment in value. The statement ofprofit or loss reflects the Group’s share of the results of the operations of associate.

The useful lives of the assets are reviewed at least at each financial year end and, if expectation differsfrom previous estimates, the change is accounted for as a change in accounting estimate in accordancewith IAS 8. Asset classified as held for sale are carried at the lower of carrying amount and fair value lesscost to sell in accordance with IFRS 5. Items of PPE classified as held for sale are not depreciated inaccordance with IFRS 5 non-current assets held for sale and discontinued operations.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference betweenthe sales proceeds and the carrying amount of the asset and is recognised in other income.

Borrowing costs relating to self constructed items of property, plant and equipment are capitalised in linewith IAS 23 borrowing costs.

The consolidated financial statements incorporate the financial statement of ABC Transport Plc and itssubsidiaries made up to 31 December each year.

Subsidiaries are entities over which the Group has power to govern the financial and operating policies,generally accompanying a shareholding of more than one half of the voting rights.

Although the equity interest of the Group in Transit Support Service Ltd is 50%, control is predicated on thefact that: The managing director of ABC Transport Plc owns the other 50% equity of the equity shares and isequally the managing director of Transit Support Services Ltd:

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ABC TRANSPORT PLC


3.6. Impairment

Indicators of impairment

3.7. ProvisionsThe Group recognises a provision if, and only if:

i. A present obligation (legal or constructive) has arisen as a result of past event,ii. Payment is probable (more likely than not), andiii. The amount can be reliably estimated.

3.8. Foreign currencies

Provision for settlement of litigation is measured at the most likely amount payable, as advised by theGroup’s solicitors. Provision for warranties is measured at a probability weighted expected value. Bothmeasurements are at discounted present values using a pre- tax discount rate that reflects the currentmarket assessment of the time value of money specific to the liability.

The functional currency of the Group is Naira. Transactions in currencies other than naira are recorded atthe rates of exchange prevailing on the dates of the transactions. Foreign exchange gain and lossesresulting from the settlement of such transactions and from the translation at year end exchange rates ofmonetary assets and liabilities denominated in foreign currency are recognised in the statement of othercomprehensive income.

A possible obligation i.e. a contingent liability is disclosed but not accrued. However, disclosure is notmade if payment is remote.

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there isany indication that those assets have suffered an impairment loss. If any such indication exists, therecoverable amount of the asset is estimated in order to determine the extent of the impairment loss (ifany). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing valuein use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money.

Where the asset does not generate cash flows that are independent from other assets, the Groupestimates the recoverable amount of the cash-generating unit to which the asset belongs. If the asset doesnot belong to a cash generating unit, its fair value is determined and compared to its carrying amount todetermine its recoverable amount. If the recoverable amount of an asset (or cash-generating unit) isestimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) isreduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unlessthe relevant asset is carried at a revalued amount, in which case the impairment loss is treated as arevaluation decrease to the extent of previous revaluation gains, with any residual impairment recognisedas an expense.Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit)is increased to the revised estimate of its recoverable amount, but so that the increased carrying amountdoes not exceed the carrying amount that would have been determined had no impairment loss beenrecognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss isrecognised as income immediately, unless the relevant asset is carried at a revalued amount, in whichcase the reversal of the impairment loss is treated as a revaluation increase.

The Group’s motor vehicle performance report provides the primary reference for motor vehiclesimpairment review. The report has such indicators as number of breakdowns per vehicle, sparesconsumption per vehicle, number of operation run per vehicle, accidented vehicles etc. Secondaryindicators include market prices and the general economic situation in the country.

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ABC TRANSPORT PLC


3.9. Taxation/deferred tax assets

3.10. Financial instruments

Trade and other receivables

Borrowings

Trade and other payables

Effective interest method

Loans and borrowings are initially measured at fair value, net of direct transaction costs. Subsequently, loansand borrowings are measured at amortised cost, which is calculated by taking into account any discount orpremium on settlement.

Trade and other payables are initially measured at fair value, and are subsequently measured at amortisedcost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial asset or liability and ofallocating interest income or expense over the relevant period. The effective interest rate is the rate that exactlydiscounts estimated future cash receipts or payments over the expected life of the financial asset or liability.

Judgment is required to determine the amount of deferred tax assets that can be recognized, based upon thelikely timing and level of future taxable profits, together with future tax planning strategies.

Assets and liabilities of ABC Ghana limited are translated from its functional currency into naira at theexchange rate prevailing at the reporting date. Trading results are translated at the average rate for theperiod. Exchange differences arising on the consolidation of the net assets of ABC Ghana limited are dealt withthrough the foreign currency translation reserve, while those arising from trading transactions are dealt with inthe statement of profit or loss. On disposal of a business, the cumulative exchange differences previouslyrecognised in the foreign currency translation reserve relating to that business are transferred to the statementof profit or loss as part of gain or loss on disposal.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxationauthorities.

Deferred tax is determined using the tax rates that have been enacted or substantially enacted by the reportingdate and which are expected to apply when related deferred tax asset is realised or deferred tax liability issettled. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will beavailable against which the temporary differences can be utilised.

Financial assets and financial liabilities in respect of financial instruments are recognised on the Company’sbalance sheet when the Company becomes a party to the contractual provisions of the instrument. Financialliabilities and equity instruments are classified according to the substance of the contractual arrangementsentered into.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying amounts in the consolidated financial statements.

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriateallowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing ofthe receivable balances and historical experience. Individual trade receivables are written-off whenmanagement deems them not to be collectible.

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ABC TRANSPORT PLC


Held to maturity (HTM) investments

Available-for-sale (AFS) financial assets

Held for trading (HFT) financial assets

Financial instruments at fair value through profit or loss

Impairment of financial assets

Assets carried at amortized cost

The Company first assesses whether objective evidence of impairment exists individually for financialassets that are individually significant, and individually or collectively for financial assets that are not anindividually assessed financial asset, whether significant or not, and the asset is included in a group offinancial assets with similar credit risk characteristics and that group of financial assets is collectivelyassessed for impairment. Assets that are individually assessed for impairment and for which animpairment loss is or continues to be recognized are not included in a collective assessment ofimpairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be relatedobjectively to an event occurring after the impairment was recognized, the previously recognizedimpairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the incomestatement, to the extent that the carrying value of the asset does not exceed its amortized cost at reversaldate.

Financial instruments are classified in this category if these result from trading activities or derivativestransaction that are not accounted for as accounting hedges, or when the Company elects to designate afinancial instrument under this category.

HTM investments are non-derivative financial assets with fixed or determinable payments and fixedmaturities wherein the Company has the positive intention and ability to hold to maturity. HTM investmentsare carried at cost or amortized cost in the balance sheets. Amortization is determined by using theeffective interest rate method.

AFS financial assets are non-derivatives that are either designated in this category or not classified in anyof the other categories. AFS financial assets are carried at fair value in the balance sheets. Changes inthe fair value of such assets are accounted for in equity only when the investment is derecognized orwhen the investment is determined to be impaired at which time the cumulative gain or loss previouslyreported in equity is included in the statements of income.

The fair value of financial instruments that are actively traded in organized financial market is determinedby reference to quoted market bid prices at the close of business on the balance sheet date. For financialinstruments where there is no active market, except for investment in unquoted equity securities, fair valueis determined using valuation techniques. Such techniques include using recent arm’s-length markettransactions; reference to the current market value of another instrument, which is substantially the same;discounted cash flow analysis; and option pricing models. In the absence of a reliable basis fordetermining fair value, investments in unquoted equity securities are carried at cost, net of impairment.

The Company assesses at each balance sheet date whether a financial asset or group of financial assetsis impaired.

If there is objective evidence that an impairment loss on loans and receivables carried at amortized costhas been incurred, the amount of the loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future credit losses that have notbeen incurred) discounted at the financial asset’s original effective interest rate (i.e the effective interestrate computed at initial recognition). The carrying amount of the asset shall be reduced either directly orthrough use of an allowance account. The amount of the loss shall be recognized in profit or loss.

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Assets carried at cost

Available-for-sale financial assets

Derecognition of financial assets and financial liabilities

- the right to receive cash flows from the assets have been expired; or-

3.11. Segmental reporting

The Group is primarily organized on a business basis and it includes the following:Coach operationShuttle operationSprinter operationHaulage service;Cargo service andHospitality services.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled orexpires. Where an existing financial liability is replaced by another from the same lender or substantiallydifference terms, or terms of an existing liability are substantially modified, such an exchange ormodification is treated as a derecognition of the original liability and the recognition of a new liability, andthe difference in the respective carrying amounts is recognized in the income statement.

The management of ABC Transport Plc has determined the operating segments of the Group basedupon the information provided to the Managing Director who is considered to be the chief operatingdecision maker.

This is consistent with the way the group manages itself and the format of the Group’s internal financialreporting. The second analysis is presented according to the geographic markets comprising Nigeria andGhana. The Group’s geographical segments are determined by the location of the Group’s assets andoperations.

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financialassets) is derecognized where:

the Company retains the rights to receive cash flows from the asset, but has assumed anobligation to pay them in full without material delay to a third party under a “pass-through”arrangement; or the Company has transferred its rights to receive cash flows from the asset andeither (a) transferred substantially the risks and rewards of the asset, or (b) has neithertransferred nor retained substantially all the risks and rewards of the asset, but has transferredcontrol of the asset. Where the Company has transferred its right to received cash flows from anasset and has neither transferred not retained substantially all the risks and rewards of the assetnor transferred control of the asset, the asset is recognized to the extent of the Company’scontinuing involvement in the asset.

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carriedat fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked toand must be settled by delivery of such an unquoted equity instrument has been incurred, the amount ofthe loss is measured as the difference between the asset’s carrying amount and the present value ofestimated future cash flows discounted at the current market rate of return for similar financial assets.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost(net of any principal payment and amortization) and its current fair value, less any impairment losspreviously recognized in profit or loss, is transferred from equity to the statement of income. Reversals inrespect of equity instruments classified as available-for-sale are not recognized in statement of income.Reversals of impairment losses on debt instruments are reversed through profit or loss if the increase infair value of the instrument can be objectively related to an event occurring after the impairment loss wasrecognized in income statement.

13

This is consistent with the way the group manages itself and the format of the Group’s internal financialreporting. The second analysis is presented according to the geographic markets comprising Nigeria andGhana. The Group’s geographical segments are determined by the location of the Group’s assets andoperations.

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ABC TRANSPORT PLC


3.12. Trade and other receivables

3.13.

3.14 LeasesLeases are classified as finance leases whenever the terms of the lease transfers substantially all therisks and rewards of ownership to the lessee. All other leases are classified as operating leases. Assetsheld under finance leases are included in the statement of financial position at fair value, or, if lower, atthe present value of the minimum lease payments, each determined at inception of the lease lessdepreciation and impairment losses. These assets are depreciated over the shorter of the asset’s usefullife and the lease term. Where the lease term is shorter than the useful lives of the assets and there is areasonable expectation that ownership will be obtained after the expiration of the lease term, the assetsare depreciated over their useful lives.

The finance charges are allocated over the period of the lease in proportion to the capital amountoutstanding.

Trade and other receivables are recognised and carried at the lower of their original value andrecoverable amount. Allowance is made where there is evidence that the balances will not be recoveredin full.

The Group operates a funded contributory pension scheme in accordance with the Pension Reform Act,2004, where both employer and employee contribute 7.5% each of the sum of the employee’s basicsalary, housing and transport allowances. The Group’s portion is charged to the statement of profit orloss. The Group also operates an unfunded gratuity scheme for the benefit of its employees. Provision forthe scheme is reviewed annually in line with the actuarial gratuity computations at the end of eachfinancial year. IAS 19 paragraph 51 on employee benefits allows the Group to use estimates, averagesand computational short cuts to provide reliable approximations to the liability, in conformity with theprojected unit credit method.

The cost of the defined benefit plan is determined using actuarial valuation method as valued byprofessional actuaries. The actuarial valuation involves making assumptions about discount rates, futuresalary increases, mortality rates and future pension increases. Due to the long term nature of theseplans, such estimates are subject to significant uncertainty.

The undiscounted amount of short-term benefits which include wages and salaries, bonuses and otherallowances attributable to services which have been rendered by employees in the period are recognisedas an expense. Any difference between the amount expensed and cash payments made is treated asliability or prepayment. Provisions are made for un-lapsed compensated leave of absence not yet takenby employees as at the reporting date.

Retirement benefit cost, defined benefit obligation and short term employee benefit

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ABC TRANSPORT PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20143.15 Cash and cash equivalents

3.16. Share premiumThis relates to issue of the shares of ABC Transport Plc.

3.17. ReservesThe translation reserve:

3.18. Government grants

3.19 Share Capital

4. New and revised IFRSs in issue but not yet effective

4.1 IFRS 14 Regulatory Defferal Accounts

a.

b.

c.

Rate regulation: A framework for establishing the prices that can be charged to customers for goods andservices and that framework is subject to oversight and / or approval by a rate - regulator.

Rate regulator: An authorised body that is empowered by statute or regulation to establish the rate orrange of rates that bind an entity. The rate regulator may be a third-party body or a related party of theentity, including the entity's own govening board, if that body is required by statute or regulation to setrates both in the interest of customers and to ensure the overall financial viability of the entity.

Regulatory deferral account balance: The balance of any expense (or income) account would not berecognised as an asset or a liability in accordance with other standards, but that qualifies for deferralbecause it is included, or is expected to be included, by the rate regulator in establishing the rate(s) thatcan be charged to adopter of IFRS.This standard will however not affect the Group's financial statementsas the Company is not a first time customers.

Government grants are recognized where there is reasonable assurance that the group will comply withthe conditions attaching to it, and that the grant will be received. Where government grant is by theextension of interest free loans or below-market rate of interest, the benefit of the interest free/belowmarket interest rate is measured as the difference between the initial carrying value of the loandetermined in accordance with IAS 39 and the proceeds received. Government grants are recognized inthe profit or loss on a systematic basis over the periods in which the group recognizes as expenses therelated costs for which the grants are intended to compensate.

Cash comprises cash in hand and demand deposits. Cash equivalents are short-term highly liquidinvestments with a maturity of less than 90 days that are readily convertible to known amounts of cashand subject to insignificant risk of changes in value.

The translation reserve comprises all foreign currency differences arising from the translation of the netassets of overseas operations.

The company has not applied the following new and revised IFRSs that have been issued but are not yeteffective at the reporting period (Earlier application is permitted in some cases)

IFRS 14 was originally issued in January 2014 and applies to an entity's first annual IFRS financialstatements for a period beginning on or after 1 January 2016.The objective of IFRS 14 is to specify thefinancial reporting requirements for 'regulatory deferral account balances' that arise when an entityprovides goods or services to customers at a price or rate that is subject to rate regulation. IFRS 14 isdesigned as a limited scope Standard to provide an interim short-term solution for rate-regulated entitiesthat have not yet adopted IFRS. Its purpose is to allow rate-regulated entities adopting IFRS for the firsttime to avoid changes in accounting policies in respect of regulatory deferral accounts until such time asthe International Accounting Standards Board (IASB) can complete its comprehensive project on rateregulated activities.

The company has one class of shares, ordinary shares and are classified as equity. Incremental costdirectly attributable to issue of ordinary shares are recognized as a deduction from equity, net of taxeffects.

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ABC TRANSPORT PLC


4.2 IFRS 15 Revenue from contracts with customers

4.3 IFRS 9 Financial Instrument (final version)

The package of improvements introduce by the final version includes:1. A logical model for classification and measurement.2. A single, forward looking ' expected loss' impairment model.

3. A substantially- reformed approach to hedge accountingThis final version supersedes all previous versions ( IFRS 9 (2009) or (2010) or (2013) or IFRS 9 (2014),subject to specific time frame.

It was originally issued in May 2014 and its effective date is reporting period beginning on or after January 1,2017. The objective of IFRS 15 is to establish the principles that an entity shall apply to report usefulinformation to users of financial statement about the nature,amount,timing and uncertainty of revenue andcash flows arising from a contract with a customer. It is a converged standard on the recognition of revenuefrom contracts with customers issued by IASB and FASB. The standard will improve the financial reporting ofrevenue and improve comparability of the top line in financial statements globally. The areas that could havesignificant inpacts / challenges for entities are highlighted below.

Variable consideration: Entities might agree to provide goods or services for consideration that variescertain future events occurring or not occurring.Those amounts are often not recognised as revenue until thecontigency is resolved. Now an estimate of variable consideration is included in the transaction price if it ishighly probable that the amount will not result in a significant revenue reversal if estimates changes. Thisamount is recognised as revenue when goods or services are transferred to the customer.

Allocation of transaction price based on relative stand-alone selling price: Entities that sell multiplegoods or services in a single arrangement must allocate the consideration to each of those goods orservices.This allocation is based on the price an entity would charge a customer on a stand-alone basis foreach good or service.

Time value of money: Some contracts provide the customer or the entity with a significant financing benefit(explicitly or implicitly). This occur when performance and payment occur at significantly different times. Thetransaction price should be adjusted for time value of money , if the contracts includes a significant financingcomponent. Adoption of this standard is not expected to have a material effect on the way the Grouppresently accounts for its contracts with customers.

(Effective for annual periods beginning on or after January 1,2018, with early adoption permitted.)

Transfer of control: Obtaining control of goods and services by cutomer entails recognition of revenue theseller / provider.This control means ability to direct the use of and obtain the benefits from the good orservice. The standard gives guidance and clarification on whether revenue should be recognised over time orat a point in time.

IFRS 9 is a new standard for financial instruments that is ultimately intended to replace IAS 39 in its entirety.

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ABC TRANSPORT PLC


4 Classification and measurement of financial assets and financial liabilities

5

6

7 Expected loss impairment model

8 Hedge Accounting

Although, IFRS 9 treatment of financial assets are still similar to that of IAS 39 Financial Instruments:recognition and measurement, thus: amortized cost, fair value through other comprehensive income(FVTOCI) and fair value through profit or loss (FVTPL). Now, criteria for classification into the appropriatemeasurement category are significantly different. Embedded derivatives are no longer seperated fromfinancial assets hosts. The final version of IFRS 9 introduces a new classification and measurementcategory of FVTOCI for debt instruments that meet the following two conditions:

The financial asset is held within a business model whose objective is achieved by both collectingcontractual cash flows and selling financial assets

The impairment model in IFRS 9 is based on the concept of providing for expected losses at inception of acontract, except in the case of purchased or originaed credit-impaired financial assets, where expectedcredit losses are incorporated into the effective interest rate. Financial assets measured at amortised cost;Financial assets mandatorily measured at FVTOCI; Loan commitments when there is a present obligationto extend credit (except where these are measured at FVTPL); Financial guarantee contracts to which IFRS9 is applied (except those measured at FVTPL); Lease receivables within the scope of IAS 17 Leases; andContract assets within the scope of IFRS 15 Revenue from Contracts with Customers (i.e. rights toconsideration following transfer of goods or services). Expected credit losses are required to be measuredthrough a loss allowance at an amount equal to: The 12-month expected credit losses (expected creditlosses that result from those default events on the financial instrument that are possible within 12 monthsafter the reporting date); or Full lifetime expected credit losses (expected credit losses that result from allpossible default events over the life of the financial instrument).

The significant improvement is majorly to align accounting more closely with risk management.Theobjective is to represent in the financial statements the effect of an entity's risk management activities whenthey use financial instrument to manage exposures arising from particular risks and those risks could affectprofit or loss, or other comprehensive income. The fundamental improvements on IAS 39 were in the areasof: objective, hedge items, hedging instruments, effectiveness assessment,discontinuation andrebalancing,groups and net positions and presentation and disclosure. The group is not commited atadopting the standard earlier and in its eventual adoption will not hesitate to make adequate disclosures.

Business model test

Cash flow characteristics testThe contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding. Unless, on initial recognition, it isdesignated at fair value through profit or loss to address an accounting The final Standard also addsguidance on how to determine whether financial assets are held under a business model that is 'hold tocollect' or 'hold to collect and sell', also under contractual cash flow characteristics test it clarify that inbasic lending arrangements the most significant elements of interest are consideration for the time value ofmoney and credit risk.

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ABC TRANSPORT PLC


4.4 Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)(Effective for annual periods beginning on or after January 1,2016.)

4.5(Effective for annual periods beginning on or after January 1,2016.)

4.6(Effective for annual periods beginning on or after January 1,2016.)Amends IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and JointVentures (2011) to clarify the treatment of the sale or contribution of assets from an investor to itsassociate or joint venture, as follows: Require full recognition in the investor's financial statements ofgains and losses arising on the sale or contribution of assets that constitute a business (as defined inIFRS 3 Business combinations) Require the partial recognition of gains and losses where the assets donot constitute a business, i.e. a gain or loss is recognised only to the extent of the unrelated investors'interests in that associate or joint venture. The amendment will not have impact on the financial staementas there were no transaction of this nature during 2014 financial year.

Amends IFRS 11 Joint Arrangements to require an acquirer of an interest in a joint operation in which theactivity constitutes a business (as defined in IFRS 3 Business combinations) to: Apply all of the businesscombinations accounting principles in IFRS 3 and other IFRSs, except for those principles that conflictwith the guidance in IFRS 11. Disclose the information required by IFRS 3 and other IFRSs for businesscombinations. The amendments apply both to the initial acquisition of an interest in joint operation, andthe acquisition of an additional interest in a joint operation (in the latter case, previously held interests arenot remeasured). The application of the standard will not have effect on the financial statement as thegroup is not involve in any joint operation arrangement presently.

Amends IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets to: Clarify that a depreciationmethod that is based on revenue that is generated by an activity that includes the use of an asset is notappropriate for property, plant and equipment. Introduce a rebuttable presumption that an amortisationmethod that is based on the revenue generated by an activity that includes the use of an intangible assetis in appropriate, which can only be overcome in limited circumstances where the intangible asset isexpressed as a measure of revenue, or when it can be, demonstrated that revenue and the consumptionof the economic benefits of the intangible asset are highly correlated. The company systematicallyallocate depreciable amount of an asset over its useful lives, so the amendement will not have any impacton her financial statement.

Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 andIAS 38)

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendmentsto to IFRS 10 and IAS 28)

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4.7 Amendments in issue applicable for financial year beginning on or after july 1, 2014.i Defined Benefit plans: Employee Contributions (Amendments to IAS 19)

ii Annual improvements to IFRSs 2010-2012 Cycle-various standardsiii Annual improvements to IFRSs 2011-2013 Cycle-various standards

It involves the following standards and the specifics:IFRS 1;IFRS version that a first-time adopter can applyIFRS 2;The meaning of 'Vesting condition'IFRS 3;The classification and measurement of contingent consiseration.IFRS 8; Disclosure on the aggregation of operating segments.IFRS 13;Measurement of short term receivables and payables.IAS 16 & 38; Reinstatement accumulated depreciation (amortization) on revaluation.IAS 24;definition of 'related party'IAS 40; Interrelationship of IFRS 3 and IAS 40

4.7.2 IFRS 10 consolidation financial statements

4.7.3 IFRS 11 joint arrangements

The amendments are relevant only to defined benefit plans that involves contributions from employeesor third parties meeting certain criteria. It further clarify how service linked contributions fromemployees or third parties should be included in determining net current service cost and the definedbenefit obligation. The group defined benefit scheme is funded by the employer only therby making theamendment irrelevant to the group.

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements that deal withconsolidated financial statements. SIC-12 Consolidation – Special Purpose Entities will be withdrawnupon the effective date of IFRS 10. Under IFRS 10, there is only one basis for consolidation, that is,control. In addition, IFRS 10 includes a new definition of control that contains three elements: (a)power over an investee, (b) exposure, or rights, to variable returns from its involvement with theinvestee, and (c) the ability to use its power over the investee to affect the amount of the investor'sreturns. Extensive guidance has been added in IFRS 10 to deal with complex scenarios.

The directors of the Company made an assessment as at the date of initial application of IFRS 10 (i.e.1 January 2013) as to whether or not the Group has control over the subsidiaries in accordance withthe new definition of control and the related guidance set out in IFRS 10. The directors concluded thatit has had control over the subsidiaries since the acquisition on the basis that the Company has themajority share holding in the subsidiaries and there are no hindrances or arrangements that wouldgive control to the non-controlling interest holders. Therefore, in accordance with the requirements ofIFRS 10, the subsidiaries have been subsidiaries of the Company since 2011.

IFRS 11 replaces IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement ofwhich two or more parties have joint control should be classified. SIC-13 Jointly Controlled Entities –Non-monetary Contributions by Ventures will be withdrawn upon the effective date of IFRS 11. IFRS11 is concerned principally with addressing two aspects of IAS 31: first, that the structure of thearrangement was the only determinant of the accounting, and second, that an entity had a choice ofaccounting treatment for interests in jointly controlled entities.The application of this standard had no material impact on the disclosures or on the amountsrecognised in the consolidated financial statements as the Group does not currently hold any JointArrangement contract

The group have not adopted the amendments early but the eventual adoption will not have significantinfluence on the annual report.

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ABC TRANSPORT PLC


4.7.4 IFRS 12 Disclosure of interests in other entities

4.8. New IFRS pronouncements adopted.4.8.1 Amendments to IFRS 10,IFRS 12 and IAS 27

(Effective for annual periods beginning on or after 1 January 2014)

4.8.2 Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities.(Effective for annual periods beginning on or after 1 January 2014)

4.8.3(Effective for annual periods beginning on or after 1 January 2014)

4.8.4 IFRIC 12 Levies(Effective for annual periods beginning on or after 1 January 2014)This provide guidance on when to recognise a liability for a levy imposed by government, both for levies thatare accounted for in accordance with IAS 37 Provisions, Contigent Liabilities, and Contigent Assets and thosewhere the timing and amount of the levy is certain. The application of these standards does not have anysignificant or material effect on the amounts and disclosures in the financial statement.

Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets.

IFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, jointarrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements inIFRS 12 are more extensive than those in the current standards. IFRS 12 replaces the disclosurerequirements in IAS 27, IAS 28 and IAS 31 except for the disclosure requirements that apply only whenpreparing Separate financial statements, which are included in IAS 27 Separate financial statements.

IFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, jointarrangements, associates and/or unconsolidated structured entities. In general, the application of IFRS 12 hasresulted in more extensive disclosures in the consolidated financial statements

The amendments to IFRS 10 introduce an exception from the requirement to consolidate subidiaries for aninvestment entity.In terms of exception, an entity is required to measure its interests in subsidiaries at fairvalue through profit or loss. The exception does not apply to subsidiaries of investment entities that provideservices that relate to the investment entity's investment activities. None of the subsidiaries in the groupqualifies as 'investment entity'.

The amendments to IAS 32 clarify existing application issues relating to the offseting requirements.Specifically,the amendments clarify the meaning of 'currently has a legally enforceable right of set-off,'simultaneous realisation and settlement', 'offsetting of collateral amounts' and 'the unit of account for applyingthe offsetting requirements'. The company is aware of retrospective application of the amendments.There isno offsetting arrangement in the group.

The amendment reduces the circumstances in which the recoverable amount of assets or cash generatingunits is required to be disclosed, clarify the disclosure required and to introduce an explicit requirement todisclose the discount rate used in determining impair ment (or reversals) where recoverable amount (based onfair value less cost of disposal) is determined using a present value technique. Disclosure requirementfollowed in the presentation of the financial statement

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ABC TRANSPORT PLC


5.0 Critical accounting estimates

5.1 Property, plant and equipment

Estimation of useful life

YearsFreehold buildings 20Motor vehicles 5 - 7Furniture and equipment 5Flat beds 7Furniture, fixtures and equipment 5

PPE is stated at fair value less accumulated depreciation and any impairment losses. Depreciation iscalculated to write off the fair value of PPE other than land and work-in-progress on a straight-line basisover the estimated useful life of the respective classes of assets at the following annual rates:

The preparation of financial statements in conformity with IFRS requires management to makejudgments, estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. Keyestimates were made in the area of impairment of assets held for sale, contingent liability, provision fordefined benefit plan and general allowance on trade receivables.

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’sexpected useful life and the expected residual value at the end of its life. Increasing an asset’s expectedlife or it’s residual value would result in the reduced depreciation charge in the consolidated incomestatement.

Property, plant and equipment represent the most significant proportion of the asset base of the group,accounting for about 80% of the Group’s total assets. Therefore the estimates and assumptions made todetermine their carrying value and related depreciation are critical to the Group’s financial position andperformance.

The Group prepares its consolidated financial statements in accordance with IFRS, the application whichoften requires judgments to be made by management when formulating the Group’s financial positionand results. Under IFRS, the directors are required to adopt those accounting policies most appropriateto the Group’s circumstances for the purpose of presenting fairly the Group’s financial position, financialperformance and cash flows.

In determining and applying accounting policies, judgment is often required in respect of items where thechoice of specific policy, accounting estimate or assumption to be followed could materially affect thereported results or net assets position of the Group should it later be determined that a different choicewould be more appropriate.

Management considers the accounting estimates and assumptions discussed below to be its criticalaccounting estimates and accordingly provides an explanation of each below.

The discussions below should also be read in conjunction with the Group’s disclosure of significantaccounting policies.

21

ABC TRANSPORT PLC


5.2 Provisions and contingent liabilities

5.3 Allowances for trade receivables

5.4 Defined benefit obligation

The useful lives and residual values of motor vehicles are determined by management based onhistorical experience as well as anticipation of future events and circumstances which may impact theiruseful lives such as utility, nature of the road infrastructure, and changes in automobile technology.

Buildings on owned land are depreciated over the period management expects to derive benefit from theiruse and this period is reviewed annually for appropriateness. Judgment is however applied on the usefullives of buildings constructed on lands held on short-term leases which are only depreciated over a periodextending beyond the expiry of the lease if there is reasonable expectation that the lease will be renewed.Depreciation charged in the income statement together with the carrying amounts will differ significantlyshould an expected renewal of short-term fail to materialize. This is in view of the under-provisionresulting from the shorter useful lives and the possible impacts of un-capitalized decommissioning costs.

The group exercises judgment in measuring and recognizing allowance for trade receivables

Impairment allowance is made when there is objective evidence that the company/group will not be ableto collect the debts. The allowance raised is the amount needed to reduce the carrying value to thepresent value of expected future cash receipts.

Receivables resulting from barter arrangements are not subject to the aged-analysis above as judgmentis exercised by management in determining the position of such receivables.

The Group operates an unfunded defined benefit scheme which entitles staff who put in a minimumqualifying working period of five years to gratuity upon leaving the employment of the company. IAS 19requires the application of the Projected Unit Credit Method for actuarial valuations. Actuarialmeasurements involve the use of several demographic projections regarding mortality, rates of employeeturnover etc and financial projections in the area of future salaries and benefit levels, discount rate,inflation etc.

Withholding tax credit notes receivable aged 18 months and above are considered doubtful for collectionand are subjected to a 100% provision. No provisioning is made for credit notes aged below 18 months asthey are considered collectible going by the present timeframe between the remittance of deductions andproduction of the credit notes by the Federal Inland Revenue Service.

The uncertainty underlying these assumptions about the future is likely to make actual payments differfrom liabilities carried in the statement of financial position.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that the Group will be required to settle the obligation, and a reliable estimate canbe made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle thepresent obligation at the end of the reporting period, taking into account the risks and uncertaintiessurrounding the obligation. When a provision is measured using the cash flows estimated to settle thepresent obligation, its carrying amount is the present value of those cash flows (when the effect of thetime value of money is material).

Judgment is equally exercised in assessing the likelihood that a pending litigation will succeed, or aliability will arise and to quantify the possible range of the financial settlement. Because of the inherentuncertainty in the foregoing evaluation processes, actual outcomes may be different from the originallyestimated provisions.

22


5.5 Taxation

5.6 Non-current assets held for sale

6.0. Revenue and other income6.1. Revenue

Categories of revenue 2014 2013 2014 2013 N'000 N'000 N'000 N'000

Transport earnings 3,096,857 3,498,133 3,096,242 3,519,087Haulage operations 2,347,029 1,837,073 2,347,029 1,837,073Loads and waybill 1,280,747 1,175,831 1,280,747 1,175,831Hospitality 121,269 103,015 121,269 103,015Sale of vehicle spares and speed governors 500,695 41,042 - -Service charge (cash transfer services) 1,276 1,853 737 1,853

7,347,873 6,656,947 6,846,024 6,636,859

6.1.1

6.1.2 Information about major Customers

Segment:-------- Haulage operationsCustomer:------- United Cement Company of Nigeria LtdRevenue:------- N1,712,350,877.12

United Cements contributes 23% of the total revenue of ABC transport plc during the year, as detailed below:

The company is into a barter arrangement with a government parastatal (Federal Radio Corporation of Nigeria-FRCN) in which it extends coach passenger services in exchange for advert placement on the parastatal'sbroadcast media. Revenue on this arrangement is recognized at the fair value of the services rendered whichis the aggregate value of tickets issued. Included in transport earnings above is the sum of N12.68m (2013:N30.96m) earned from the barter arrangement for the period. Invoices on advert placements are included inadvertisement expenses. All barter income is earned by the parent company.

The Group’s tax charge on ordinary activities is the sum of the total current and deferred tax charges. Thecalculation of the of the group’s total tax charge necessarily involves a degree of estimation and judgment inrespect of certain items whose treatment cannot be finally determined until resolution has been reached withthe relevant tax authority. Under the Nigerian tax system, self-assessment returns are subjected to a deskreview for the determination of tax due for remittance in the relevant year of assessment. This is however notconclusive as field audits are carried out within six years of the end of the relevant year of assessment todetermine the adequacy or otherwise of sums remitted under self-assessment thus making tax positionsuncertain.The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient andsuitable taxable profits will be available in the future against which the reversal of temporary differences can bededucted.

Recognition therefore involves judgment regarding the future financial performance of the particular legal entityin which the deferred tax asset has been recognized which will not crystallize where future performance doesapproximate the projections.

On retirement of items of PPE (usually operational motor vehicles) from operations, they are fair-valued andreclassified to a non-current-assets-held-for-sale account at the lower of their NBVs and fair-value less cost tosell with any differences arising thereon taken to profit or loss. Since there are no active markets dealing insecond-hand vehicles, the Group exercises judgment in placing realistic values to the assets classified as held-for-sale by reference to the circumstances of previous disposals taking cognizance of physical conditions,vehicle brands, age, economic realities etc. These valuations are usually carried out by an assets disposalcommittee comprising the head of materials management, head of administration, head of internal audit, headof finance and the service engineer. The gross value of these assets are usually material and future resultscould be affected where actual proceeds differ materially from the valuations.

The following is an analysis of the Company's and Group's revenue for the year from continuing operations(excluding investment income)

Group Company

23

ABC TRANSPORT PLC


6.2. Other income

6.2.1. Other operating income 2014 2013 2014 2013 N'000 N'000 N'000 N'000

Insurance indemnity 18,724 12,123 18,724 12,123Operating rental income 21,152 20,143 20,650 20,142Finance lease income 33,916 66,058 33,916 66,058Income from adverts 7,896 5,319 7,896 5,319Sale of scrap/other assets 2,346 1,830 2,346 1,830Tour package income - 510 - 510Sale of promotional items 890 533 890 533Forex gains 8,910 716 220 716Demurrage on waybills 1,053 1,318 1,053 1,318

94,887 108,549 85,695 108,549

6.2.2. Interest incomeBank interest 1,973 1,625 1,970 1,621

6.2.2.1 Net fair value gains/(losses) on financialassets at fair value through profit or loss 1,634 1,309 1,634 1,309

6.2.3. Others gains and lossesProfit on disposal of PPE 34,427 28,919 34,238 28,919Others (reversal of provisions/accruals etc) 87,270 358,959 86,910 340,401

121,697 387,878 121,148 369,320

6.2.4. Income from investments:Dividend received from Abex Ltd 741 4,021 741 4,021Part disposal of shares in Abex Ltd - 12,000 - 12,000

741 16,021 741 16,021

7. Segment information

7.1. Description of segments

Coach passenger operations - long distance service using luxury busesSprinter passenger operations - long distance service using midi buses.Shuttle passenger service - relatively shorter distance service using mini busesHaulage servicesCargo services

packages delivery.Hospitality CTI - budget accommodation targeted at sleep-over

passengers.Corporate and others - head office revenue and others

Group Company

Management has determined the operating segments based on the reports reviewed by the Budget Committee(chaired by the Managing Director) that are used to make strategic decisions. The Budget committee currentlyconsists of the managing director, the chief financial officer, the head of planning, the chief internal auditor,head of human resources and the operating divisional heads. The committee considers the business from anoperating basis based on services, subject to differing risks and return patterns and have identified thereportable segments as follows:

- dedicated long distance haulage servicing manufacturers.- consolidated cargo services including mails and light

24

ABC TRANSPORT PLC


7.2 Business segment - 2014

Coach Sprinter Shuttle Cargo Haulage CTI CT Others Total

Income: N'000 N'000 N'000 N'000 N'000 N'000N'00

0 N'000 N'000

Gross segment revenue 2,324,979 269,116 567,502 1,213,830 2,347,029 121,269 737 486,159 7,330,621Intersegment revenue 17,250 - - - - - - - 17,250

Total revenue 2,342,229 269,116 567,502 1,213,830 2,347,029 121,269 737 486,159 7,347,871Other income - - - - - - 220,934 220,934

2,342,229 269,116 567,502 1,213,830 2,347,029 121,269 737 707,093 7,568,805

Less: Direct costs

Material 634,981 94,434 170,061 207,067 701,262 19,875 - 486 1,828,166Salaries and wages 140,500 23,045 69,135 87,807 165,031 14,724 - - 500,242Depreciation - direct 358,550 37,659 95,998 45,717 530,907 1,398 - - 1,070,229Depreciation- apportioned 19,114 3,135 9,405 10,619 22,451 - - 64,724Finance lease charges 43,965 2,803 4,143 2,865 313,956 6,704 - 55,618 430,054Operating lease charges 64,582 - - - 46,500 - - - 111,082Impairment losses - - - - 4,162 - - 5,721 9,883Other direct overheads 630,826 57,767 99,882 216,666 631,222 34,893 - 601,374 2,272,630

1,892,518 218,843 448,624 570,741 2,415,491 77,594 - 663,199 6,287,010

Contribution to profit 449,711 50,273 118,878 643,089 (68,462) 43,675 737 43,894 1,281,795

Less: Apportioned costsWorkshop charge 47,414 4,741 9,483 24,480 87,429 - - - 173,547General administration 507,955 50,796 101,591 221,520 468,357 6,000 - 12,000 1,368,219

555,369 55,537 111,074 246,000 555,786 6,000 - 12,000 1,541,766

(Loss)/profit before taxation (105,658) (5,264) 7,804 397,089 (624,248) 37,675 737 31,894 (259,971)

Quantitative threshold:

Corporate & others

While Spinter and Shuttle segments do not meet the quantitative thresholds of IFRS8, they have beenreported separately as management believes that information about the segment will enable users evaluatethe passengers business.

25

ABC TRANSPORT PLC


7.2 Business segment - 2013

Coach Sprinter Shuttle Cargo Haulage CTI CT Others TotalIncome: N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

Gross segment revenue 2,727,929 260,704 530,684 1,112,123 1,839,499 103,015 1,853 13,531 6,589,338Intersegment revenue 67,609 - - - - - - - 67,609

Total revenue 2,795,538 260,704 530,684 1,112,123 1,839,499 103,015 1,853 13,531 6,656,947Other income - - - - - - 515,382 515,382

2,795,538 260,704 530,684 1,112,123 1,839,499 103,015 1,853 528,913 7,172,329

Less: Direct costsMaterial 703,696 69,593 158,486 208,634 576,661 23,050 - - 1,740,120Salaries and wages 212,643 15,438 44,321 70,715 102,587 12,390 - - 458,094Depreciation - direct 354,051 18,468 84,735 88,468 352,288 1,185 - 26,129 925,324Depreciation- apportioned 32,176 2,336 6,706 10,700 15,523 - - - 67,441Finance lease charges 44,499 1,228 4,715 33,211 135,473 - - 24,032 243,158Operating lease charges 93,021 - - - 48,480 - - - 141,501Impairment losses - - 1,696 - 12,783 - - - 14,479Other direct overheads 659,616 42,189 93,592 185,416 483,362 28,244 - 11,531 1,503,950

2,099,702 149,252 394,251 597,144 1,727,157 64,869 - 61,692 5,094,067

Contribution to profit 695,836 111,452 136,433 514,979 112,342 38,146 1,853 467,221 2,078,262

Less: Apportioned costsWorkshop charge 40,926 3,411 13,642 28,990 80,357 - - - 167,326General administration 596,908 49,742 198,969 219,521 318,460 6,000 - - 1,389,600

637,834 53,153 212,611 248,511 398,817 6,000 - - 1,556,926

Profit/(loss) before taxation 58,002 58,299 (76,178) 266,468 (286,475) 32,146 1,853 467,221 521,336

Corporate & others

26

ABC TRANSPORT PLC


7.3 Geographical segment

Nigeria Ghana Total Nigeria Ghana TotalN'000 N'000 N'000 N'000 N'000 N'000

Revenue and other income 6,740,678 828,129 7,568,807 6,198,364 973,965 7,172,329Earning before depreciation, interestand tax 779,715 138,994 918,709 1,556,150 201,133 1,757,283Interest income 1,973 - 1,973 29,340 - 29,340Finance cost 426,085 18,357 444,442 234,327 8,831 243,158Income tax expense or income (100,862) (27,719) (128,581) (267,017) (8,347) (275,364)Segment assets 6,105,665 330,192 6,435,857 4,994,530 637,739 5,632,269Capital expenditure 2,851,555 - 2,851,555 1,171,787 - 1,171,787

7.4 Segment assets and liabilities CorporateCoach Sprinter Shuttle Cargo Haulage and others Total

Segment assets N'000 N'000 N'000 N'000 N'000 N'000 N'0002014 1,795,128 372,022 765,100 974,340 2,184,199 345,067 6,435,8562013 2,168,027 221,869 504,013 777,650 1,825,333 135,377 5,632,269

Segment liabilities2014 - - - - - - 4,503,6982013 - - - - - - 3,352,955

Capital expenditure2014 219,718 111,416 47,762 445 2,179,595 292,619 2,851,5552013 540,911 92,434 187,213 68,289 49,598 233,352 1,171,797

7.5 Segment reconciliation 2014 2013 N'000 N'000

RevenueTotal revenue from reportable segments 7,347,875 6,656,947Other revenues 220,934 515,382

Group revenue 7,568,809 7,172,329

(Loss)/profitTotal (loss)/profit from reportable segments (253,971) 521,360Income tax expense 163,577 (224,420)

Group profit (90,394) 296,940

AssetsTotal property, plant and equipment 4,403,698 3,733,804Other non-current assets 118,513 157,739Current assets 1,913,648 1,740,728Assets held for sale - -

Group assets 6,435,859 5,632,271

2 0 1 4

Segment asset is made up of items of property, plant and equipment and held for sale assets. Other assets like debtors, prepayment,etc are not reported to the Chief Operating Decision Maker on a segment basis, hence they are not included in this report. Liabilitiesare also not reviewed by the Chief Operating Decision Maker on a segmental basis, hence it has been provided on the Group basis.

2 0 1 3

Group

27


2014 2013 2014 20138. Operating profit N'000 N'000 N'000 N'000

Operating profit has been arrived after charging/(crediting)Depreciation of PPE 1,166,708 992,765 1,165,126 988,231Amortization of intangible assets 4,510 1,607 4,511 1,607Impairment losses 9,883 14,479 9,883 14,479Staff cost 902,510 1,023,678 872,228 820,532Operating lease rentals payable on plant and machinery - 141,501 - 141,501Profit on disposal of PPE 34,427 28,919 34,238 28,919Audit fees #REF! #REF! #REF! #REF!

Expenses by natureMaterials consumed (spares, tyres, oil and lubricant, etc) 3,094,543 2,279,828 2,671,855 2,444,112Employee expenses (Note 38) 902,510 1,023,678 872,228 820,532Depreciation and amortization expenses #REF! #REF! #REF! #REF!Rent expenses 51,089 45,263 50,931 39,207Transport expenses 44,768 43,146 41,465 42,481Others #REF! #REF! #REF! #REF!


9. Impairment losses

2014 2013 2014 2013N'000 N'000 N'000 N'000

Intangible asset (Note 14) 4,606 - 4,606 -Property plant and equipment (Note 15b) 5,277 14,479 5,277 14,479

Total 9,883 14,479 9,883 14,479

10. Finance costsThis represents interest paid by the company in the course of servicing the borrowed funds.

2014 2013 2014 2013N'000 N'000 N'000 N'000

Financial liabilities held at amortized cost:

Interest on borrowings - 230,427 - 230,427Interest on finance lease obligations 444,442 12,731 414,011 12,731

444,442 243,158 414,011 243,158Fair value through the income statement (held for trading): - - - -

Total finance costs 444,442 243,158 414,011 243,158

All finance charges for the group were as a result of borrowings and finance leases taken by the parent company. Noamounts were due to the subsidiaries.

Company

Group Company

CompanyGroup

Group

In addition to the depreciation and amortisation reported above, impairment losses of N5.277m (2013:N14.479m)were recognised in respect of property, plant and equipment.

The net impairment losses were based on fair value less cost to sell for PPE and net recoverable amount forintangible. All impairment for the group belonged to the parent company.

28


2014 2013 2014 201311. Taxation N'000 N'000 N'000 N'00011.a. Income tax expense

Income tax 109,661 182,032 108,993 179,499Education tax 19,599 24,245 19,599 24,245(over)/under provision in previous year (15,328) 7,603 (15,328) 7,603

Total current tax expense 113,932 213,880 113,264 211,347

11.b.Deferred tax on origination and reversal of temporarydifferences:Deferred tax (Note 11.3) (679) 2,378 - 2,378Total deferred tax charge/(income) (679) 2,378 - 2,378

Total income tax expense 113,253 216,258 113,264 213,725

11.1 Factors affecting tax expenses for the year

(Loss)/Profit before tax as shown in the consolidatedincome statement #REF! #REF! #REF! #REF!Expected income tax expense on (loss)/profit at statutory taxrate (30%) #REF! #REF! #REF! #REF!Effect of portion of income taxed on a different basis- education tax 19,599 31,848 19,599 31,848Effect of expenses that are not deductible in determiningtaxable profit 16,514 17,716 16,514 17,716Effect of permanent differences on investment allowance (1,682) (914) (1,682) (914)Effect of income and expenses that are exempt fromtaxation (28,745) (6,377) (28,745) (6,377)Accelerated capital allowance on property, plant andequipment 149,430 (682) 149,430 (682)Effect of tax on disposal of property, plant and equipment 11,231 5,187 11,231 5,187Temporary differences on bad debt provision, retirementbenefit obligation and impairment losses - (11,297) - (11,297)Effect of different statutory tax rates of foreign/overseasjurisdiction - ABC Ghana Ltd 2,265 - -Effect of minimum taxation on loss making subsidiary- Transit Supports Services Ltd 36,633 271 - -Effect of temporary differences on other provisions - - - -Effect of unrealized profit eliminated on consolidation - 14,237 - -Adjustment recognized in current year in relation tocurrent tax of prior years (15,328) 7,603 (15,328) 7,603


Effective tax rate #REF! #REF! #REF! #REF!

No income tax was recognized directly in equityNo income tax was recognized in other comprehensive income

Group Company

29


2014 2013 2014 2013N'000 N'000 N'000 N'000

11.2 Current tax liabilitiesIncome tax payable 231,947 231,297 231,279 229,861

11.3 Deferred tax balances

Deferred tax assets 60,543 59,864 59,864 59,864

Recognised RecognisedOpening in Closing Opening in Closing

11.3a 2014 balance profit or loss balance balance profit or loss balanceN'000 N'000 N'000 N'000 N'000 N'000

Deferred tax assets/liabilities in relation to:Property, plant and equipment 2,142 679 2,821 2,142 - 2,142Retirement benefit obligations 16,101 - 16,101 16,101 - 16,101Provision for doubtful debts 26,832 - 26,832 26,832 - 26,832Impairment 14,789 - 14,789 14,789 - 14,789 - -

59,864 679 60,543 59,864 - 59,864

11.3b 2013

Deferred tax assets/liabilities in relation to:Property, plant and equipment 15,967 (13,825) 2,142 15,967 (13,825) 2,142Retirement benefit obligations 19,747 (3,646) 16,101 19,747 (3,646) 16,101Provision for doubtful debts 11,739 15,093 26,832 11,739 15,093 26,832Impairment 14,789 - 14,789 14,789 - 14,789

62,242 (2,378) 59,864 62,242 (2,378) 59,864

The following is the analysis of the deferred tax assetspresented in the consolidated and separate statements offinancial position:

There are no unrecognised deductible temporary differences, unused tax losses and unused tax credits for which nodeferred tax assets have been recognised.

Group Company

CompanyGroup

Management is optimistic that there would be available profits in the near future to realise the deferred tax assets.

30


2014 2013 2014 201311.4 Income tax N'000 N'000 N'000 N'000

Analysis of movements in the current taxbalance during the year

1 January 231,297 208,153 229,861 205,603

Income tax 109,661 182,032 108,993 179,499Education tax 19,599 24,245 19,599 24,245Back duty charge (15,328) 7,603 (15,328) 7,603Tax paid during the year (79,750) (101,793) (79,478) (97,909)Withholding tax credit notes utilised for tax payments (32,368) (89,180) (32,368) (89,180)Exchange movements (1,164) 237 - -

31 December 231,947 231,297 231,279 229,861

Factors affecting the tax charge in future years

2014 2013 2014 201312. Equity dividends N'000 N'000 N'000 N'000

Declared during the financial year:Final cash dividend for the year ended 31 December 2014(0 kobo per share) (2013 - 0 kobo per share) - - - -Interim dividend for the year ended 31 December 2014(0 kobo per share) (2013 - 0 kobo per share) - - - -

- - - -Proposed after the end of the reporting period and notrecognized as a liability

Script dividend for the year ended 31 December 2014 (1 new share of 50kobo for existing 10 shares (2013-Nil)

- 107,643 - 107,643Dividend for the year ended 31 December 2013 (6 kobo perexisting share) (2013 - 6 kobo per share) 90,420 90,420 90,420 90,420

12.1.Basic (loss)/earnings per share2014 2013 2014 2013

N'000 N'000 N'000 N'000(Loss)/profit after taxation #REF! #REF! #REF! #REF!

Number of sharesWeighted average number of shares for basic earning per share 1,507,000 1,507,000 1,507,000 1,507,000Effect of dilutive potential share: restricted shares and share options - - - -

Weighted average number of shares for diluted earningsper share 1,507,000 1,507,000 1,507,000 1,507,000

(Loss)/earnings per share (kobo)-Basic #REF! #REF! #REF! #REF!

-Diluted #REF! #REF! #REF! #REF!

(Loss)/earnings per shares have been computed on (loss)/profit after taxation attributable to ordinary shareholders and divided bythe number of shares at 50k ordinary shares in issue at year end.

Factors that may affect the Group's future tax charge include the impact of corporate restructurings, the resolution of open issues,future planning opportunities, corporate acquisitions and disposals, the use of brought forward tax losses and changes in taxlegislation and tax rates.

Group Company

Group Company

Group Company

31

ABC TRANSPORT PLC


13 Goodwill

14. Intangible assets Computer Franchisesoftware fee Others Total

Cost: N'000 N'000 N'000 N'0001 January 2013 8,308 - - 8,308Additions 9,212 4,725 300 14,237

31 December 2013 17,520 4,725 300 22,545

1 January 2014 17,520 4,725 300 22,545Additions 12,854 - - 12,854

31 December 2014 30,374 4,725 300 35,399

Accumulated impairment losses andamortization:

1 January 2013 3,630 - - 3,630Amortization charge for the year 1,607 - - 1,607

31 December 2013 5,237 - - 5,237

1 January 2014 5,237 - - 5,237Amortization charge for the year 4,091 394 25 4,510Impairment losses - 4,331 275 4,606

31 December 2014 9,328 4,725 300 14,353

Net book value:31 December 2013 12,283 4,725 300 17,308

31 December 2014 21,046 - - 21,046

All the intangible assets owned by the group comes from the parent company

There was no goodwill arising from business combinations on acquisition of the subsidiaries. This was dueto the fact that the subsidiaries were acquired on start-up i.e there were no retained earnings pre-acquisition. The purchase consideration paid by ABC Plc in ABC Ghana Limited and Transit SupportServices Limited formed the net assets of the subsidiaries therefore they were equal and no goodwillearned.

Group and Company

32

ABC TRANSPORT PLC


Computer software

Impairment of intangibles

Intangible asset Estimated useful life

Franchise 5 - 10 yearsVehicle tracking software 3 - 5 yearsTicketing systems 5 yearsERP software 5 - 7 yearsOn-board montage 5 - 7 yearsWebsite 5 - 7 yearsAnti-virus software 3 - 5 years

The useful life of computer software is determined by management at the time the software is acquired andbrought into use and is regularly reviewed for appropriateness. This usually represents management's view ofexpected period over which the Group will receive benefits from the software but not exceeding the licenceterm. Computer software are amortised on a straight-line basis over a period of 3 - 5 years which usually donot exceed the term of the software licences. This is applicable to both software licences purchased off-the-shelf and software uniquely developed for the Group by software vendors.

Impairment will arise where there are indications that the Group will not obtain future economic benefitscommensurate with the carrying amounts of the software licence. This could occur in instances of softwaresub-optimality or due to technological and business process advancements or outright cut-over to anothersoftware. Significant use of judgment will be required where there are indications of impairment to softwarelicences to either write-down/write off the carrying amounts or/and reduce the useful lives. Impairment in thecurrent year amounts to N4.61m (2013-Nil)

Amortization is charged on intangible assets at cost less residual value over the estimated useful lives usingthe straight line method as follows:

33


15. Property, plant and equipment

15a The group EquipmentMotor furniture Computer Work-in-

Land Buildings vehicle and fittings equipment progress Total

Cost: N'000 N'000 N'000 N'000 N'000 N'000 N'000

1 January 2013 114,028 930,659 6,502,396 182,186 39,649 63,076 7,831,994

Additions 2,400 9,274 1,048,262 25,515 5,285 42,418 1,133,154Borrowing cost capitalized - - 38,960 - - - 38,960Transfers from finance lease receivables - - 94,683 - - - 94,683Disposals - - (706,438) (279) - - (706,717)Transfers from work-in-progress 27,488 37,005 - - - (64,493) -Transfers from NCA held for sale - - 6,849 - - - 6,849Unrealised profit/(cost) - - (12,675) - - - (12,675)

31 December 2013 143,916 976,938 6,972,037 207,422 44,934 41,001 8,386,248

1 January 2014 143,916 976,938 6,972,037 207,422 44,934 41,001 8,386,248

Additions 1,550 1,109 1,668,913 32,379 5,827 159,807 1,869,585Transfers from finance lease receivables - - 69,983 1,813 302 - 72,098Transfers to finance lease receivables - - (47,342) - - - (47,342)Disposals - - (484,099) - - - (484,099)Transfers to subsidiary - - (40,707) (1,546) (172) - (42,425)Transfers from subsidiary - - 28,637 - - - 28,637Transfers from work-in-progress - 165,775 - 18,182 - (183,957) -Unrealized profit(cost) - - (18,063) - - - (18,063)31 December 2014 145,466 1,143,822 8,149,359 258,250 50,891 16,851 9,764,639

Accumulated depreciation and impairment:

1 January 2013 - 441,662 3,658,641 104,617 25,704 - 4,230,624

Charge for the year - 32,488 927,890 26,550 5,837 - 992,765Elimination on disposals - - (589,494) (279) - - (589,773)Transfers from NCA held for sale - - 4,349 - - - 4,349Impairment losses recognised - - 14,479 - - - 14,479

31 December 2013 - 474,150 4,015,865 130,888 31,541 - 4,652,444

1 January 2014 - 474,150 4,015,865 130,888 31,541 - 4,652,444

Charge for the year - 35,306 1,096,623 29,315 5,464 - 1,166,708Elimination on disposals - - (444,851) - - - (444,851)Transfers to subsidiary - - (18,503) - (135) - (18,638)Impairment losses recognised - - 4,162 - 1,115 - 5,27731 December 2014 - 509,456 4,653,296 160,203 37,985 - 5,360,940

Net book value:31 December 2013 143,916 502,788 2,956,172 76,534 13,393 41,001 3,733,804

31 December 2014 145,466 634,366 3,496,063 98,047 12,906 16,851 4,403,699

Cost NBVN'000 N'000

Motor vehicles 5,042,544 2,744,071Buildings 896,201 509,596Land 95,643 95,643

6,034,388 3,349,310

All property, plant and equipment pledged as collateral for borrowings as at 31December 2014 indicated in Note 15 in the previous page allbelonged to the parent company

34

ABC TRANSPORT PLC


15b The companyEquipmen

t

Motor furniture Computer Work-in

land Buildings vehicle andfittings equipment progress Total

Cost: N'000 N'000 N'000 N'000 N'000 N'000 N'000

1 January 2013 114,028 930,659 6,486,349 169,762 39,649 63,076 7,803,523

Additions 2,400 9,274 1,048,262 25,197 5,285 42,418 1,132,836Borrowing costs capitalized - - 38,960 - - - 38,960Transfers from finance lease receivables - - 94,683 - - - 94,683Disposals - - (706,438) (279) - - (706,717)Transfers from work-in-progress 27,488 37,005 - - - (64,493) -Transfers from NCA held for sale - - 6,849 - - - 6,849

31 December 2013 143,916 976,938 6,968,665 194,680 44,934 41,001 8,370,134

1 January 2014 143,916 976,938 6,968,665 194,680 44,934 41,001 8,370,134

Additions 1,550 1,109 1,648,473 33,165 5,827 159,807 1,849,931Transfers from finance lease receivables - - 69,983 1,813 302 - 72,098Transfers to finance lease receivables - - (47,342) - - - (47,342)Disposals - - (483,649) - - - (483,649)Transfers to subsidiary - - (40,707) (1,546) (172) - (42,425)Transfers from subsidiary - - 28,637 - - - 28,637Transfers from work-in-progress - 165,775 - 18,182 - (183,957) -

31 December 2014 145,466 1,143,822 8,144,060 246,294 50,891 16,851 9,747,384

Accumulated depreciation and impairment:

1 January 2013 - 441,662 3,649,793 97,735 25,704 - 4,214,894

Charge for the year - 32,488 924,376 25,530 5,837 - 988,231Elimination on disposals - - (589,494) (279) - - (589,773)Transfers from NCA held for sale - - 4,349 - - - 4,349Impairment losses recognised - - 14,479 - - - 14,479

31 December 2013 - 474,150 4,003,503 122,986 31,541 - 4,632,180

1 January 2014 - 474,150 4,003,503 122,986 31,541 - 4,632,180

Charge for the year - 35,306 1,094,402 29,954 5,464 - 1,165,126Elimination on disposals - - (444,401) - - (444,401)Transfers to subsidiary - - (18,503) - (135) - (18,638)Impairment losses recognised - - 4,162 - 1,115 - 5,277

31 December 2014 - 509,456 4,639,163 152,940 37,985 - 5,339,544

Net book value:31 December 2013 143,916 502,788 2,965,162 71,694 13,393 41,001 3,737,954

31 December 2014 145,466 634,366 3,504,897 93,354 12,906 16,851 4,407,840

Cost NBVN'000 N'000

Motor vehicles 5,042,544 2,744,071Buildings 896,201 509,596Land 95,643 95,643

6,034,388 3,349,310

All property, plant and equipment pledged as collateral for borrowings as at 31 December 2014 indicated in Note 15 in the previous page allbelonged to the parent company

35


SUBSIDIARY INFORMATIONHeld by(Units)

% votingpower 2014 2013 2014 2013

16. Investment in subsidiariesIn

thousand N'000 N'000 N'000 N'000ABC Ghana Limited (Note i) 600,000 99% - - 6,470 6,470Transit Supports Services Limited (Note ii) 100 50% - - 50 50City Sightseeing Limited (Note iii) 5,000 99.99% - - 5,000 -

- - 11,520 6,520Impairment of investment in subsidiaries - - - -

- - 11,520 6,520

i

ii

iii

16.1 Subsidiary with significant non-controlling interests

a. Name of Subsidiary: Transit Supports Services Limited

Summary of results: Group Sub Group Sub2014 2014 2013 2013

N'000 N'000 N'000 N'000Turnover 7,347,872 518,759 6,656,947 209,655(Loss)/profit before tax (259,976) (101,454) 521,336 (21,469)Taxation (128,581) (669) (216,258) (271)Loss from continuing operations (388,557) (102,123) 305,078 (21,740)Total comprehensive (loss)/ income (401,236) - 268,578 (21,824)Capital expenditure (gross) - - 1,172,114 -Depreciation 1,166,708 1,400 992,765 2

Summary of financial position:Property, plant and equipment 4,403,699 12,549 3,733,804 7,070Other non-current assets 118,514 - 157,739 -Current assets 1,913,646 848,517 1,740,725 289,388Current liabilities 3,433,319 975,478 2,475,309 310,874Net current liabilities (1,519,673) (126,961) (734,584) (21,486)Non current liabilities 1,214,737 1,110 1,242,014 -Share capital 753,500 100 753,500 100Retained earnings 578,663 (65,069) 1,006,607 (14,515)Shareholders' funds/(deficit) 1,846,347 (65,248) 2,286,708 (14,515)

Summary of cash flows:Net cash from/(used in) operating activities 1,473,069 (96,729) 793,530 (31,583)Net cash from/(used in) financing activities 13,011 663,021 (47,159) (80,790)Net cash used in investing activities (1,785,127) (740,964) (939,052) -Opening cash and cash equivalents 43,298 2,302 236,003 2,990Closing cash and cash equivalents (255,749) (172,370) 43,322 2,302

b. Non-controlling interests

c. The loss reported by Transit Supports Servicess Ltd is largely due to start up cost of assemly project expensed.

Group Company

Non-controlling interests have a 50% equity stake in Transit Supports Services Ltd. Profit(loss) attributable to non-controllinginterests in the 2014 consolidated profit/(loss) amounts to N51.062m (2013 - N10.98m).

ABC Ghana Ltd: A Company incorporated in Ghana the 3rd May, 2007. It commenced road passenger transportation serviceswithin Ghana and the West Coast between Lagos, Nigeria and Accra Ghana. The company also offer passenger and cargohandling services to ABC Transport Plc

Transit Supports Services Ltd: A Company incorporated in Nigeria in 2007 and engaged in the importation and sales ofmotor vehicles, motor vehicle spares and installation of motor vehicle speed governing devices.

City Sightseeing Ltd: Recently incorporated in Nigerian in August 2014. It operates a dedicated tour service that takes touristthrough major sites attraction in Abuja using specially designed state-of-the-art tour buses . However, the Board has approvedthe suspension of the regular hop on-hop off tours service of of the Company until further notice and all assets and liabilitieshave been transferred to the parent company.

ABC Transport Plc owns a 50% equity stake in Transit Supports Services Ltd a company incorporated in Nigeria in 2007 andengaged in the importation and sales of motor vehicles, motor vehicle spares and installation of motor vehicle speed governingdevices. A summary of the results and financial position of Transit Supports Services Limited together with relevant disclosuresrelating to non-controlling interests is provided below in accordance with the requirements of IFRS 12:

36


ABCTranport

Plc

ABCGhana

Ltd

TransitSupportsServicesLimited

CitySightseeing

Limited Elimination TotalN'000 N'000 N'000 N'000 N'000 N'000

16.2 Condensed result of consolidated entities - 2014

Condensed profit and lossGross profit/(loss) 1,434,834 23,012 67,846 (4,115) (41,157) 1,480,418Other operating income 85,695 502 - - 8,690 94,887Interest income 1,970 - 3 - - 1,973Net fair value gains/(losses) on financial assets at fair valuethrough profit or loss 1,634 - - - - 1,634Income from investments 741 - - - - 741Other gains and losses 121,148 189 360 - - 121,697Total operating income 1,646,022 23,703 68,209 (4,115) (32,467) 1,701,350Administrative expenses #REF! (21,130) (139,234) (9,760) 25,343 #REF!Impairment losses (9,883) - - - - (9,883)Finance costs (414,011) - (30,431) - - (444,442)(Loss)/profit before tax #REF! 2,573 (101,456) (13,875) (7,123) #REF!Taxation (113,264) 679 (668) - - (113,253)(Loss)/profit from continuing operations #REF! 3,252 (102,124) (13,875) (7,123) #REF!

16.2 Condensed result of consolidated entities - 2014

Condensed financial positionNon-current assets:Deferred tax asset 59,864 679 - - - 60,543Intangible assets 21,046 - - - - 21,046Property, plant and equipment 4,407,840 1,373 12,549 - (18,063) 4,403,699Investment in subsidiaries 11,520 - - - (11,520) -Other investments 1,845 - - - - 1,845Financial assets - FVTPL 18,093 - - - - 18,093Finance lease receivables 16,987 - - - - 16,987

4,537,195 2,052 12,549 - (29,583) 4,522,213

Current assetsInventories 185,976 - 80,971 - - 266,947Finance lease receivables 13,096 - - - - 13,096Trade and other receivables 594,941 - 8,475 - (111,638) 491,778Other assets 300,992 5,271 22,788 - - 329,051Cash and bank balances 47,278 26,968 7,578 - 2,250 84,074

1,142,283 26,967 7,579 - 2,250 1,184,946

Non- current assets held for sale - - - - - -

Total assets 5,679,478 29,020 20,128 - (27,333) 5,707,159

Equity and reservesIssued share capital 753,500 6,535 100 5,000 (11,635) 753,500Share premium 582,068 - - - - 582,068Retained earnings 714,145 (30,032) (65,069) (13,875) (26,497) 578,663Other comprehensive income reserve (58,284) (704) (140) - (8,756) (67,884)Shareholder's fund 1,991,429 (24,202) (65,108) (8,875) (46,888) 1,846,347Non-controlling interests - (455) (51,201) (6,889) - (58,544)

Total equity and reserves 1,991,429 (24,656) (116,309) (15,764) (46,888) 1,787,803

Non-current liabilitiesLong-term borrowings 875,754 - - - - 875,754Finance lease obligations 62,075 - - - - 62,075Post employment benefits - defined benefits 236,876 768 1,229 - - 238,873Provisions 38,035 - - - - 38,035Deferred tax - - - - - -

1,212,740 768 1,229 - - 1,214,737Current liabilitiesShort term borrowings 804,882 - 663,021 - - 1,467,903Finance lease obligations 128,520 - - - - 128,520Post employment benefits - defined contribution 127,821 - - - - 127,821Current taxation liabilities 246,607 - 669 - - 247,276Trade and other payables 992,076 58,180 132,508 8,875 (85,195) 1,106,447Deferred income 15,529 - - - - 15,529Bank overdrafts 159,874 - 179,949 - - 339,823

2,475,309 58,180 976,147 8,875 (85,195) 3,433,319

Total equity and liabilities 5,679,478 34,292 861,067 (6,889) (132,083) 6,435,859

This was arrived at after elimination of intra-group transactions and differ from the profit presented in the summarized stand-aloneresults for the subsidiary.

Accumulated non-controlling interests attributable to Transit Supports Services Ltd in the consolidated statement of financial positionamounts to N51.062m (2013 - N 7.25m ).

There were no restrictions on the Company's ability to access or use the Group's assets or settle the group's liabilities as at 31December 2014.

37

ABC TRANSPORT PLC


2014 2013 2014 2013N'000 N'000 N'000 N'000

17. Other InvestmentsInvestment in Abex Ltd accounted for as investment under IAS 39 (Note17.1) 1,845 1,845 1,845 1,845

17.1

17.2. Financial assets designated at fair value through profit or loss

2014 2013Held-for-trading non-derivative assets (Note 17.2a) N'000 N'0001 January 16,459 15,150Fair value gain (Note 6.2.1.1) 1,634 1,30931 December 18,093 16,459

17.2a.

2014 201318. Finance lease receivables N'000 N'000

Current portion 13,096 36,415Non-current portion 16,987 62,263

30,083 98,678

18.1. Leasing arrangementsi.

ii.

iii.

An unclaimed dividend pool of N14,424,653.73 was transferred in August 2012 from the custody of the Company'sregistrars to Stanbic IBTC Assets Management Limited for investment to the benefit of the company in line with theprovisions of the Investment and Securities Act 2007. Profit of N1.63m accruing thereon for the period up to 31 December2014 is included in non-operating income reported for the period. The financial assets created from the above is classifiedas fair-value-through-profit or loss (FVTPL) in accordance with IAS 39 . The unclaimed dividend liability of N14,424,653.73is reported under other payables as at 31 December 2014.

During the year ABC Transport Plc. leased 10 TATA Buses to a new leasee at a value of N69,983,333.33. On 27 August2014,the leasee failed to fufilled its obligations to the Company (leasor) leading to termination of agency lease agreement.The finance lease receivables was derecognized in line with the provisions of IAS 39. The vehicles were reclassified toproperty, plant and equipment at their fair values on the date of termination.

5 TATA Buses were also leased to another new leasee in July 2014 of which N32,933,333.46 was debited to financelease receivables while N14,408.333.33 was also debited to accummulated depreciation leading to a total amount ofN47,341,666.79 transferred.

A total sum of N33,915,523.49 was earned as interest income on the company's investment in finance leases.The interestincome reported under other operating income in profit or loss.

Group Company

This is carried at deemed cost of N1,845,263.35 which was the fair value of the remaining 5% at ( 2013:5%) the time ofdisposal of the 35%. The investment is not impaired as Abex Ltd paid dividend of N741,000 in 2014(2013: N4,021,000).

The entire amount reported for the group was invested by the parent company.Group

Group

38


18.2. Amount receivable under finance lease

2014 2013 2014 2013N'000 N'000 N'000 N'000

Not later than one year 28,800 66,861 13,096 24,747Later than one year and not - - - -later than 5 years 19,200 93,576 16,988 62,263

48,000 160,437 30,084 87,010Less: unearned finance income (17,916) (73,427) - -Present value of minimum leasepayment receivable 30,084 87,010 30,084 87,010Over-due rentals outstanding - 11,668 - 11,668

30,084 98,678 30,084 98,678

19. Inventories 2014 2013 2014 2013N'000 N'000 N'000 N'000

Motor vehicle spares 129,440 159,190 152,162 159,190Fuel/diesel 21,734 33,815 21,319 33,815Stationery 1,848 1,620 1,848 1,620Oil and lubricants 27,876 8,887 3,109 8,887Snacks and fruit drinks 163 41 163 41Uniform and promotional materials 10,800 9,319 10,800 9,319Sanitation materials 218 226 218 226City Transit Inn (CTI) 2,582 1,645 2,583 1,645Transit Support Services (TSS) 807,212 97,235 - -

1,001,873 311,978 192,202 214,743

Impairment charge (Note 19.1) (6,226) (20,285) (6,226) (6,217)

995,647 291,693 185,976 208,526

19.1. Movement in the impairment reserve2014 2013 2014 2013

N'000 N'000 N'000 N'0001 January 20,285 3,079 6,217 3,079Written off in the year (14,068) - - -Impairment losses recognised on inventory 9 17,206 9 3,13831 December 6,226 20,285 6,226 6,217

Group Company

Unguaranteed residual values of the leased assets(5 TATA Buses) are estimated at N2.5 million (N500,000 per bus).The finance lease receivables at the end of the period are not impaired.

Inventory is reported net of obsolescence and impairment losses. CTI inventory include food items, food and beverageconsumables, house-keeping items, etc while TSS inventory are tyres, oil filters, air filters, fuel filters, flat beds andauto control products held for sale. The Group expects to consume all inventory existing at the reporting date withintwelve months from the reporting date.

Inventory consumed within the period included in cost of sales amounted to N2.72b (2013: N2.44b).

The entire amount reported for the group belongs to the parent company

Group Company

The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effectiveinterest rate contracted is approximately 53% per annum.

Group and Company Group and Companylease payments

Present value of minimumMinimumlease payments

39

ABC TRANSPORT PLC


20. Trade and other receivables 2014 2013 2014 2013N'000 N'000 N'000 N'000

Included within current assets:Trade receivables 448,543 431,281 436,605 342,876Allowance for trade receivables (Note 20.2) (129,857) (94,735) (122,719) (94,735)

318,686 336,546 313,886 248,141

Amounts owed by staff (Note 20.3) 47,355 5,846 47,355 5,845Amounts owed by/(owed to) related parties (Note 20.5) 125,737 184,552 233,700 184,619

491,778 526,944 594,941 438,605

20.1 Trade receivablesi.

ii.

iii.

iv. FRCN receivables past due but not impaired:Analysis by maturity

2014 2013 2014 2013N'000 N'000 N'000 N'000

91 - 180 days 2,724 4,710 - 4,710181 - 365 days 12,664 12,182 6,072 12,182Over 365 days 40,534 48,922 40,534 48,922

Total amount 55,922 65,814 46,606 65,814

Average days 341 306 341 306

Group Company

Group Company

The average credit period is 60 days. No allowance is charged on outstanding debts for the first 60 days afterthe date of invoice. The group has recognised 100% allowance for debts over 365 days because historicalexperience has shown that debts in this category are usually irrecoverable. Allowances are also made fordebts between 61 days and 365 days based on percentages that reflect the best estimate of collection withreference to entity's historical experience and an analysis of the debtor's financial position. No specificallowance was made for any debtor as at 31 December 2014 (2013-Nil)

Included in the amount of amounts owed by/(owed to) related parties is an amount of N2.09m (2013- N6.66m)owed by ABEX express parcel service. ABC Transport Plc has a 5% equity stake in Abex Ltd. The amountsowed by Abex Ltd. have not been impaired.

Trade receivables disclosed above also includes amounts that are past due but not considered to be impairedat the end of the reporting period. All receivables in this category are due from the barter arrangement with theFederal Radio Corporation of Nigeria (FRCN), the amounts charged against FRCN are technically notreceivable from the customer but can be used at anytime by the group for advert placements in any of thebroadcast stations under the FRCN. It is based on this premise that the group has decided not to make anyallowances for such debts.

40

ABC TRANSPORT PLC


v.

20.1 Movement in the allowance for doubtful debt (trade receivables)

2014 2013 2014 2013N'000 N'000 N'000 N'000

1 January 94,735 80,372 94,735 80,372Impairment losses recognised on receivable 40,290 14,363 33,152 14,363Amounts written off as bad debt during the year (5,168) - (5,168) -

31 December 129,857 94,735 122,719 94,735

20.3 Staff receivables

2014 2013 2014 2013N'000 N'000 N'000 N'000

Gross amount owed by staff 112,765 79,144 112,765 79,143Allowances for staff debts (Note 20.4) (65,410) (73,298) (65,410) (73,298)

Staff receivables (net) 47,355 5,846 47,355 5,845

20.4 Movement in the allowance for doubtful debt (staff receivables)

2014 2013 2014 2013N'000 N'000 N'000 N'000

1 January 73,298 74,142 73,298 74,142Impairment losses recognised on receivable 2,254 2,528 2,254 2,528Amounts recovered during the year (10,142) (3,372) (10,142) (3,372)

31 December 65,410 73,298 65,410 73,298

Group Company

Interests are not charged on overdue debts that arise as a result of IOUs

All trade are included within current assets and are stated after making allowance for bad and doubtful balances andanalyzed below:

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of thetrade receivable from the date credit was initially granted up to the end of the reporting period.

There were no debts considered as specifically impaired during the year (2013-Nil)

The entity also has receivables from staff who owe the group. Staff debts are either in form of loans or unretiredIOUs charged directly to the staff's account.

The group makes specific allowances for staff receivables based on parameters such as the employment status ofthe staff concerned (whether dormant or disengaged) and/or if the debt is an unretired IOU. 100% allowances aremade for unretired IOUs immediately they become due (usually 7 days)

Allowances are made only for debts belonging to the parent company

The staff debts for the group are 100% attributable to the parent company

Group Company

Group Company

41

ABC TRANSPORT PLC


20.5 Receivables from related parties

2014 2013N'000 N'000

Amounts owed by related parties to the group 84,540 84,540Amounts owed by the group to the related parties - -

Net amounts owed. 84,540 84,540

i.

ii.

iii.

iv.

v. Parent company intra-group receivable as at 2014 2013 2014 201331 December N'000 N'000 N'000 N'000ABC Plc receivables due from Rapido Ventures 121,862 71,317 118,187 71,384ABC Plc receivables due from ABC Ghana - 68,139 46,878 68,139ABC Plc receivables due from Transit Support services 2,013 38,437 57,899 38,437ABC Plc receivables due from Abex Express 1,862 6,659 1,862 6,659ABC Plc receivables due from Citysight Seeing - - 8,875 -

125,737 184,552 233,700 184,619

21. Other assets 2014 2013 2014 2013N'000 N'000 N'000 N'000

Prepaid rent 53,321 61,104 40,400 58,379Prepaid insurance 27,761 27,639 27,627 28,159Deferred expenditure 5,567 25,150 5,567 25,150Withholding taxes recoverable 153,789 78,069 153,789 78,069Deposits for vehicle and spares 86,358 530,404 72,070 816,249Others 47,132 35,632 46,416 39,843

373,928 757,998 345,869 1,045,850Impairment charge (44,877) (24,559) (44,877) (24,559)

329,051 733,439 300,992 1,021,291

22. Assets held for sale 2014 2013N'000 N'000

Motor vehicles held for sale - -

Company

Group Company

Group and Company

Group

Intra-group receivables/payables have been eliminated on consolidation.

The group has receivables/payables from related parties. These related parties are not part of the group but theyare related in one way or the other. The bulk of these amounts do not arise from trade activities but usually fromshared costs and other reimbursable

The amounts outstanding are unsecured and will be settled in cash. The group does not make any allowances forrelated party receivables because all amounts are considered collectible within the shortest period possible.

The related party receivables were due to/due from Rapido Ventures Limited.

The managing director of ABC Transport Plc, Mr Frank Nneji is the largest shareholder in both Rapido VenturesLtd and ABC Transport Plc and is equally the managing director of Rapido Ventures Ltd.

Group

42


23. Cash and cash equivalents

2014 2013 2014 2013N'000 N'000 N'000 N'000

Cash in hand 17,439 16,190 11,813 13,452Cash at bank 80,568 139,448 49,398 97,522Gross cash and bank balances 98,007 155,638 61,211 110,974

Impairment on doubful bank balances (Note 23.2) (13,933) (3,404) (13,933) (3,404) 84,074 152,234 47,278 107,570

23.1 Bank overdrafts (Note 23.1a) (339,823) (108,912) (159,874) (108,912)

Cash and bank balances as presentedin the statement of cash flows (255,749) 43,322 (112,596) (1,342)

23.1a

2014 2013 2014 201323.2 Impairment charge N'000 N'000 N'000 N'000

At 1 January 3,404 - 3,404 -Impairment losses recognised in the year 10,529 3,404 10,529 3,404At 31 December 13,933 3,404 13,933 3,404

2014 2013 2014 201324. Share Capital N'000 N'000 N'000 N'000

Authorised:1,600,000,000 ordinary shares of 50k each 800,000 800,000 800,000 800,000

24.1 Issued and fully paid:1,506,700,000 ordinary shares of 50k eachAt 31 December 753,500 753,500 753,500 753,500

24.1a Issued share capital comprises of :420,000,000 ordinary shares at 50k each (December 2005) 210,000 210,000 210,000 210,000420,000,000 ordinary shares at 50k each (April 2006) 210,000 210,000 210,000 210,000666,700,000 ordinary shares at 50k each (September 2006) 333,500 333,500 333,500 333,500

753,500 753,500 753,500 753,500

24.2 Share premium420,000,000 ordinary share premium at 50k each (December 2005) 210,000 210,000 210,000 210,000420,000,000 ordinary share premium at 50k each (April 2006) 210,000 210,000 210,000 210,000666,700,000 ordinary share premium at 50k each (September 2006) 333,500 333,500 333,500 333,500

753,500 753,500 753,500 753,500Total direct expenses on the issue of shares (171,432) (171,432) (171,432) (171,432)

At 31 December 582,068 582,068 582,068 582,068

Group Company

Group Company

For the purposes of the consolidated and separate statements of cash flows, cash and cash equivalents include cash onhand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period asshown in the consolidated and separate statements of cash flows can be reconciled to the related items in the consolidatedand separate statements of financial position.

Cash and bank balances as presented in the statement of financialposition

Group Company

Included in the amount above was N151,358,794.98 owed to Fidelity Bank Plc to be matured on 20 March 2015 at 20.75%.N1,534,970.29 owed to Gtbank ltd and N284,697.66 also owed to Fidelity bank

43

ABC TRANSPORT PLC


24.2a. All the issued shares were ordinary shares and have been fully paid as at 31 December 2014.

24.2b.

The Group share capital belongs wholly to the parent company

2014 2013 2014 201325. OCI reserves N'000 N'000 N'000 N'000

At 1 January 55,467 19,006 44,130 10,324Actuarial losses/(gains) (Note 30) 14,452 33,907 14,154 33,806Foreign currency translation (gain)/loss (2,035) 2,554 - -

At 31 December 67,884 55,467 58,284 44,130

26. Retained earnings and dividends on 2014 2013 2014 2013equity instruments N'000 N'000 N'000 N'000

26.1 Retained earnings #REF! #REF! #REF! #REF!

1 January #REF! 886,462 #REF! 914,061(Loss)/Profit attributable to the ownersof the company #REF! #REF! #REF! #REF!Payment of dividends (90,420) (195,910) (90,420) (195,901)

At 31 December #REF! #REF! #REF! #REF!

27. Non-controlling interests2014 2013

N'000 N'000

1 January 7,394 (3,622)Share of profit for the year 51,029 10,977OCI ReserveForeign currency translation (gain)/loss (20) 26Actuarial losses 141 13

At 31 December 58,544 7,394

Scrip dividend declared at the 2014 annual general meeting of shareholders at a price of 50k per share (1for 10) totalling 150,700,000 shares at a value of N75,350,000 have not been issued.

These are the net assets of the non-controlling interests in the group.

The exchange differences arose from the translation of the results and net assets of the group's foreignoperations from the functional currency to the group's presentation currency (i.e translating ABC Ghana'sresults from cedis to naira). These are recognised directly in other comprehensive income and accumulatedin the foreign exchange revaluation reserve.

Group

Group Company

Group Company

44

ABC TRANSPORT PLC


Company28. Borrowings 2014 2013 2014 2013

N'000 N'000 N'000 N'000a. Secured amounts:

Bank overdrafts 339,823 108,912 159,874 108,912

Bank loans 2,315,836 1,728,641 1,652,815 1,728,641Others (Notes v and vi) 27,821 5,054 27,821 5,053

Total borrowed fund 2,343,657 1,733,695 1,680,636 1,733,695

b. Analysis by maturity:Current-due within 1 year 1,467,903 857,652 804,882 857,652Non-current-due after 1 year 875,754 876,043 875,754 876,043

2,343,657 1,733,695 1,680,636 1,733,69528.1 Summary of borrowing arrangements

i.

ii.

iii.

iv.

v.

vii.

viii.

vix. Import Finance Facility (USD denomiated) obtained by Transit Supports Services Ltd from Diamond bank Plc in July2014 for the importation of CIMC trailer bodies from China. Total amount offered was USD700,000 with a tenor of 365days. Letter of credit valued at USD 464,400 was opened in July 2014 for the importation of 28 trailer bodies. Thedrawdown of USD 464,000 was converted to Naira at the closing rate for 2014 and is included in the amount reported asborrowings in the financial statements. Securities provided include Third Party Legal Mortgage over ABC TransportTerminal located in PortHarcourt, the corporate guarantee of ABC Transport Plc and the personal guarantee of theManaging Director.

Import Finance Facility (USD denominated) obtained by Transit Supports Services Ltd from Fidelity bank Plc in June2014 for the importation of semi knocked down parts(SKD) for assembly of Shacman brandtrucks under the AutomotivePolicy Initiative of the FGN. Letter of Credit(LC) valued at USD3,169,020 was opened in line with terms of the facility withan interest rate of 4% p.a. This amount was converted to Naira at the closing rate for 2014 and is included in the amountreported as borrowings in the financial statements. Securities provided include the personal guarantee of the MD,Legalmortgage over the propoerty of ABC Transport Plc located at 52,Ikorodu Road,Jibowu Lagos,corporate guarantee ofABC Transport Plc and an all assets debenture on fixed and floating assets of Transit Supports Services Ltd. Interestrate for the facility is at a pre-negotiation rate of 4% and post-negotiation rate of Libor + 5%.

Group

Borrowing from Fidelity Bank Plc to part finance the importation of 10 units of yaxing luxury buses. Total amount offeredwas N312.29 while total amount drawn down as at 31 December 2014 was N92.76m for a tenor of 27 months . Securitiesprovided for the loans are legal mortgage over terminal at plot 7, Cadastral zone 5 Abuja, property at 52 Ikorodu Road,Jibowu Lagos, insurance over properties, joint ownership of vehicles financed and personal guarantee of the ManagingDirector personal guarantee of the MD. Effective interest rate for the loan is 20% p.a.

Borrowing from ABC Transport Plc Staff (Multi-Purpose) Co-opperative Society Limited in August 2014 for the purpose ofshoring up the working capital . Total amount offered and drawn down was N32.94m for a tenor of 24 months. Securitiesprovided include Personal guarantee of the MD. Effective interest rate for the loan is 8% p.a.

Borrowing from Fidelity Bank to part finance of 150 units of trucks/trailers. Total amount offered was N2.498b for a tenorof 48 months. The amount is being drawdown in tranches. As at 31 December 2014, a total of N2.39b had beendrawdown. Securities provided for the loans are legal mortgage over terminal at plot 7, Cadastral zone 5 Abuja, propertyat 52 Ikorodu Road, Jibowu Lagos, insurance over properties, joint ownership of vehicles financed and personalguarantee of the Managing Director. Average effective interest rate for the loan is 18.50% p.a.

Borrowing from Fidelity Bank to finance the expansion of CTI. Amount offered was N150 m for a tenor of 45 months. Theamount is being drawn down in tranches. As at 31 December 2014, the total offered amount(N150M)had been fullydrawn down. Securities provided are legal mortgage over terminal at plot 7, Cadastral zone 5 Abuja, property at 52Ikorodu road Lagos, insurance over properties, joint ownership of vehicles financed and personal guarantee of the MD.Average effective interest rate for the loan is 19.51% p.a.

Borrowing from Diamond Bank in February 2014 to part finance the purchase of 21 trailers/flat beds. Amount offered anddrawn down was N95.256m for a tenor of 30 months. Securities provided include lien on imported truck head, legalownership of assets financed, third party legal mortgage over property situated at plot 44/45 road VGC Lagos. Effectiveinterest rate for the loan is 20.87% p.a.

Borrowing from Main Street Bank in March 2014 to finance the purchase of 13 units of Hyundai vehicle for managementstaff. Total amount offered and drawn down was N40.41m for a tenor of 24 months. Securities provided include ,personal guarantee of the MD. Effective interest rate for the loan is 20.24% p.a.

45

ABC TRANSPORT PLC


29. Obligations under finance lease

Amount payable under finance lease

Present value of minimum

2014 2013 2014 2013N'000 N'000 N'000 N'000

Not later than one year - current 128,520 102,386 128,520 156,018Later than one year and notlater than 5 years - non-current 62,075 120,749 62,075 118,374

190,595 223,135 190,595 274,392Less: Future finance charges - (14,869) - -

Present value of minimum leasepayment receivable 190,595 208,266 190,595 274,392Overdue unpaid amounts - 66,126 - -

190,595 274,392 190,595 274,392

2014 2013N'000 N'000

Motor vehicles 2,744,071 246,386

Total 2,744,071 246,386

The group obtained some of its buses under finance leases from The Infrastructure Bank (formerly UrbanDevelopment Bank of Nigeria). The average lease term for the buses is between 24 - 32 months. The ownership ofthe assets transfer to the group at the expiration of the lease term. The group's obligations to the lessor aresecured by the lessor's title to the leased assets.

The group defaulted in repayments to the lessor towards the end of the 2014 financial year to the tune of N16.79m.The outstanding amounts and the related interests have been paid subsequent to year end. In the statement offinancial position, this has been added to amounts payable within the next one year.

The net book value of finance leased assets as at 31 December 2014 included in property, plant and equipmentreported under Note 15 to this financial statements are as follows:

lease payments

Group and Company

All group finance lease obligations are owed by the parent company.

In 2012, the company obtained an interest free loan under the federal government's mass transit initiative. Thedifference between the nominal value of the loan (N247m) and the cash flows incidental on the loan discounted atmarket rate for similar government loans (N229.86m) was recognized as government grant in line with IAS 20.Interest on the loan is included in finance lease charges in financial statements while the incidental governmentgrant was deferred to be recognized as income over the period the company expects to obtain benefits from theusage of the financed motor vehicles.

The average implicit interest rate on the lease is 5% per annum (2013-5% per annum)

Minimum

N2.61m was recognized in the statement of profit or loss as government grant in 2014 while the balance stood atN8.10m on that date.

lease paymentsGroup and Company Group and Company

46

ABC TRANSPORT PLC


30. Post employment benefits

i.

ii.

iii.

2014 2013 2014 201330.1. Statement of financial position N'000 N'000 N'000 N'000

a. Defined contribution schemes 127,821 63,367 127,821 63,367b. Defined benefit schemes 238,873 211,393 236,876 210,455

Total amount presented in the statement of financial position 366,694 274,760 364,697 273,822

30.2. Income statement expense

a. Defined contribution schemes (Note 38.1) 40,129 31,928 40,129 31,928b. Defined benefit schemes (Note 38.1) 35,707 36,390 34,149 36,199

Total amount charged to the incomestatement 75,836 68,318 74,278 68,127

Defined benefit schemes

2014 2013 2014 201330.3. Weighted average actuarial assumptions % % % %

used at 31 December

Rate of inflation 10 10 10 10Rate of increase in salaries 10 10 10 10Return on investment 12 12 12 12

Defined benefit scheme are based upon independent actuarial valuation performed by Excel Actuaries ltdusing the projected unit credit basis. This valuation was carried out as at 31 December 2014 and 31December 2013.

The Group operates a contributory pension scheme of 15% where both employer and employee contribute7.5% prior to 1 July 2014, after July 18% where both employer 10% and employee contribute 8% each ofthe sum of the employee’s basic salary, housing and transport allowances. Also management put in placegratuity for staff that have been in the employment of the company for a minimum of five (5) years and along service grant of two hundred thousand naira (N200,000) for drivers who have served the company upto ten (10) years.

The defined benefit scheme is unfunded with no assets specifically set aside to meet obligations as at whendue. Funds are retained in the Group's business to meet due obligations.Under the defined benefit's scheme member's past service benefits have been assessed using theProjected Unit Credit Method (PUCM). This method calculates the actuarial liability (staff gratuity benefitsand long service grants) as the discounted value of the benefits that have accrued over the past period ofmembership of the beneficiaries. In determining this value allowance is made for any future expectedinflationary growth of the on-going benefits up to the exit date.

The Projected Unit Credit Method (PUCM) was applied to determine the present value of the Group'sdefined benefit obligations and the related current service cost and where applicable the past service costsin accordance with Guidance Note (GN 9) issued by the Institute and Faculty of Actuaries.

Group Company

Group Company

The principal actuarial assumptions used for estimating the Group's benefit obligations (IAS 19) are set outbelow:

47

ABC TRANSPORT PLC


i. Salary increments

ii. Withdrawal rates

iii.Mortality

iv.The present value of the liabilities of the scheme

2014 2013 2014 2013N'000 N'000 N'000 N'000

Gratuity 216,639 188,934 214,642 187,996Drivers long service grant 22,234 22,459 22,234 22,459

238,873 211,393 236,876 210,455

b. Movement in plan liabilities:1 January 211,393 187,234 210,455 186,408

Current service cost 3,973 10,561 3,973 10,368Interest cost 31,734 25,829 30,176 25,831Actuarial losses/(gains) (Note 25) 14,593 33,907 14,154 33,806Benefits paid (22,820) (46,138) (21,882) (45,958)

31 December 238,873 211,393 236,876 210,455

It was assumed that members' basic salaries would increase in future on account of inflation atan average long term compound rate of 10% p.a.

Withdrawals in excess of those anticipated for members with past service less than 5 yearsand 10 years (for drivers of heavy duty vehicles), would generally result in a reduction of thestaff gratuity benefits. Accordingly, a margin has been maintained in the assumed rates ofwithdrawal to ensure that the expected surplus emerging on withdrawals is not overstated.

Mortality in excess of those anticipated, for members with past service less than 5 years and10 years (for drivers of heavy duty vehicles), would generally result in a reduction of the staffgratuity benefits. Accordingly, a margin has been maintained in the assumed rates of mortalityto ensure that the expected surplus emerging on mortality is not overstated. The A1967/70mortality tables were assumed to apply.

The amount included in the statement of financial position arising from the Group's obligationin respect of its defined benefit scheme is as follows:

Group Company

48

ABC TRANSPORT PLC


31. Provisions 2014 2013 2014 2013N'000 N'000 N'000 N'000

1 January 36,204 55,955 36,204 55,955

Additions for the year (31.1) 1,831 36,204 1,831 36,204Write back during the year - (55,955) - (55,955)

31 December 38,035 36,204 38,035 36,204

Analysis by maturity:

Current liabilities - - - -Non-current liabilities 38,035 36,204 38,035 36,204

38,035 36,204 38,035 36,204

31.1.

i.

ii.

iii.

CompanyGroup

All provisions reported by the group are attributable to the parent company.

The provisions in the financial statements relate to estimated default charges of N27.90m onunremitted statutory deductions and judgment debts of N10.135m group on some cases decidedagainst the Company for which the Group has filed an appeal. The Group is optimistic that theultimate liabilities on these cases will be lesser than the amount provided.

The number of grants expected to crystallize under the customer loyalty programme is immaterialhence no provision has been made in connection thereto.

There are no other constructive or legal obligations for which the entity is expected to make provisionsfor as at 31 December 2014.

49

ABC TRANSPORT PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201432. Trade and other payables

2014 2013 2014 2013N'000 N'000 N'000 N'000

Trade payables ( Note 32.a) 598,672 410,388 534,234 411,728Accruals 130,422 56,276 127,779 54,292Industrial Training Fund Levy (Note 32.b) 9,538 8,577 9,539 8,577Unclaimed dividends (Note 32.c) 14,425 14,425 14,425 14,425Co-operative liabilities 7,643 26,949 7,643 26,949Development levy liabilities 15 - 15 -Value added tax liabilities (Note 32.b) 232,128 114,314 232,128 114,314Withholding tax liabilities ( Note 32.b) 3,375 3,134 3375 3,134Pay-As-You-Earn liabilities (Note 32.b) 10,075 4,568 10,074 4,568Staff welfare liabilities 655 624 655 624Other tax payables (Note 32.d) 1,342 12,077 1,342 12,077Other payable 97,996 13,031 50,706 13,031Customer cash transfer 161 280 161 280

1,106,447 664,642 992,076 663,999

All the liabilities above are classified as current

a.

b.

c.

d.

33. Deferred income2014 2013 2014 2013

N'000 N'000 N'000 N'000Deferred income from cargo operations ( Note 33.i) 6,586 6,102 6,586 6,102Deferred income from leased warehouse ( Note 33.ii) 840 11,700 840 11,700Deferred government grant income ( Note 33.iii) 8,103 11,250 8,103 11,250

15,529 29,052 15,529 29,052

i.

ii.

iii.

Group Company

Group Company

The deferred government grant income arises from the government intervention in obtaining finance leasedassets at 0% where it would have normally been 5% (see Note 29). The revenue is earned on a monthly basisand taken to other revenue to be spread over the useful life of the asset.

All deferred income belong to the parent company.

The average credit period for the purchases of major items is 30 days. However, with certain arrangement withmajor suppliers, payment terms can be renegotiated for longer periods.

Statutory liabilities such as VAT, WHT, PAYE, ITF are expected to be settled in line with the relevantlaws/regulations setting them up. With the exception of ITF which is payable yearly, the rest are payable monthly.The entity has defaulted in remitting VAT on a monthly basis and expects future liabilities arising from penaltiesfrom the tax authorities. Probable amounts of charges arising from unremitted statutory liabilities have beenestimated and provision accordingly made (see Note 31).

These represents the total unclaimed dividend pool to several shareholders as at 31 December 2014. Theamounts have been invested in line with the provisions of the Investment and Securities Act 2007.

Deferred income from leased warehouse is the balance of N3.36m rent received in respect of the Company'swarehouse in Abuja covering 24 months from April 2014 to March 2015. The amortized portion for 2014 hasbeen included in other operating income.

These are in respect of additional tax assessments carried out by the Imo State Board of Internal Revenue forundercharge of state tax liabilities. The group has agreed with the tax body to discharge the liabilities over aperiod of time.

Trade and other payables are non-interest bearing and hence approximate their fair values. The Group does nothave any derivative financial instrument.

The deferred revenue for cargo operations is in respect of undelivered cargo in transit as at 31 December 2014for which cash has been received but the income not yet earned. It takes a period of 3 - 7 days to have the cargodelivered. Therefore, the amount reported has been earned after year end.

50

ABC TRANSPORT PLC


34. 2014 2013 2014 2013N'000 N'000 N'000 N'000

(Loss)/profit for the year #REF! #REF! #REF! #REF!

Add/(less): non-cash movements in incomestatement and PPEDepreciation and amortisation 1,171,218 994,372 1,169,637 989,838Investment income (1,973) (82,079) (1,970) (82,079)Fair value gain (1,634) (1,309) (1,634) (1,309)Interest expense 444,442 243,158 414,011 243,158Income tax provision for the year 129,260 206,277 128,592 203,744Income tax adjustments (15,328) 7,603 (15,328) 7,603Tax paid using withholding tax certificate (32,368) (89,180) (32,368) (89,180)Gain on disposal of property, plant and equipment (34,427) (28,919) (34,238) (28,919)Impairment loss recognised in the year 9,883 14,479 9,883 14,479Capitalised borrowing costs - - - 27,108Exchange differences - 2,612 - -

Operating profit before changes in working capital #REF! #REF! #REF! #REF!

Decrease/(increase) in deferred tax asset (679) 2,378 - 2,378Decrease/(Increase) in trade and other receivables 35,167 (148,414) (156,336) 39,899Decrease/(Increase) in other assets 404,389 (498,279) 720,300 (810,700)(Increase)/decrease in inventory (703,956) (74,604) 22,548 (17,257)Increase in post employment benefits 91,934 56,176 90,875 56,064Increase/(Decrease) in provisions 1,830 (19,751) 1,830 (19,757)Increase/(Decrease) in trade and other payables 441,808 (2,877) 328,080 17,067(Decrease)/Increase in deferred income (13,523) 8,578 (13,523) 8,578

Net cash from operating activities before tax #REF! #REF! #REF! #REF!Tax paid (79,750) (101,793) (79,478) (97,909)

Net cash from operating activities #REF! #REF! #REF! #REF!

i.

ii.

iii. interest payments for the entity represent a financing activity due to the nature.

2014 investment income includes income earned from investment in financial assets and from finance leasereceivables.

2014 interest expense includes non-cash movements in deferred income for government grants on financelease obligations.

Group CompanyReconciliation of net cash from operatingactivities

51

ABC TRANSPORT PLC


35. Commitments

Operating lease commitments

Future minimum lease payments under non-cancellable operating leases comprise:

2014 2013Within one year N'000 N'000

Within one year - 106,551In more than one year but less than two years 3,000 3,000In more than two years but less than three years - -In more than three years but less than four years - -

3,000 109,551

36. Contingent liabilities

37. Related parties2014 2013

37.1 Directors and key management compensation N'000 N'000

Directors

Salaries, fees and sitting allowances 31,138 32,528Incentives (rent of MD's premises) 6,000 6,000

37,138 38,528

Key management compensation

The Group has entered into commercial leases on motor vehicles. These include operating lease withFidelity Bank, Evangeline Benoit and Multitasking Incorporated. The Fidelity lease has a tenor of 24months without a renewal option while others basically cover periods of one-year after which they maybe renewed based on the willingness of the parties. Where any party does not intend to continue withthe arrangement after the expiration of a term, notice has to be given to the other party at least withinthree months to the expiration of the present term.

Legal proceedings - The Group's solicitors reviewed all the outstanding cases at the end of eachfinancial period and advised on the possibility or otherwise of each particular case resulting in a liabilityagainst the group after taking due cognisance of the peculiar circumstances of the case in question, thepossibility of settling out of court on mutually agreed terms or by arbitration. The solicitors equallyadvised on the likely timing for the judgment or settlement and amount of the liability.

Appropriate provision has been made in these financial statements for likely liabilities arising from thesecases.

Aggregate emoluments of the directors of the company were as follows:

Aggregate compensation for key management, being the directors and members of the executivemanagement was as follows:

Group and Company

Group and Company

52


2014 2013N'000 N'000

Short-term employee benefits 60,440 47,731Post employment benefits: 3,783 4,604Defined contribution schemes 1,801 1,981Share based payments - -

66,024 50,520

37.2 Related party transactions

ABC Co-op Abex Rapido Mayfair Total

N'000 N'000 N'000 N'000 N'000

Group to the related parties 7,643 6,386 41,290 7,849 63,168

Related party invoices to the Group 737 - - 17,024 17,761

Abex Express Parcel Services Limited

Rapido Ventures Limited

Mayfair Hotels and Suites

Transactions with directors other than compensation

Group and Company

Executive management refers to the management staff from the level of Assistant General Manager and above.

During the twelve months ended 31 December 2014 neither any director or any other executive officer nor anyassociate of any director or any other executive officer was indebted to the Company.

During the twelve months ended 31 December 2014, the Company has not been a party to any other materialtransaction, or proposed transactions in which any member of the key management personnel (includingdirectors, any other executive officer, senior manager, any spouse or relative of any of the foregoing or anyrelative of such spouse) had or was to have a direct or indirect material interest.

The Group's related party transactions are with ABEX Courier Ltd, Rapido Ventures Ltd and Mayfair Suites andConference Centre. As at December 31 2014, the total invoices to and fro the related parties are analysedbelow:

ABC Transport Plc owns 5% of the share capital of Abex Express Parcel Services ltd. Included in tradereceivables as at 31 December 2014 is the sum of N2,093,700.14 due from Abex to ABC Transport Plc. TheGroup provided cargo services to ABEX Express Parcel Services totaling N6,386,122.37 for the year ended 31December 2014 while Abex Limited provided courier services worth N737,104.85 to the Company for the sameperiod. The services were provided at arm's length.

The managing director of ABC Transport Plc, Mr Frank Nneji is the largest shareholder in both Rapido VenturesLtd and ABC Transport Plc and is equally the managing director of Rapido Ventures Ltd. Rapido Ventures owedABC Transport Plc the sum of N118,182,725.54 as at 31 December 2014 which is reported as part of otherreceivables. The nature of the major transactions between the group and Rapido are the reimbursable costs ofoperation which include the diesel issued to Rapido, shared cost of administrative and building costs since theyshare the same premises. The group sometimes helps with cargo delivery on behalf of Rapido. Rapidoinvoices to the group mainly involves rent of premises to ABC Transport Plc and Transit Support Services Ltd.All transactions are carried out at arm's length.

The wife of ABC Transport's managing director is the managing director of Mayfair Hotels and Suites, whichoffers hospitality services to ABC Transport Plc. Mayfair Hotels owed ABC Transport Plc the sum of Nil as at 31December 2014. Mayfair is the official hotelier for the group as they carter for the group's clients and guests.The standard room rate apply except in cases where, at the discretion of hotel management, discounts aregiven. The group, principally through the parent issues diesel to Mayfair Hotels at standard terms also.

53


38. Employees

2014 2013 2014 2013By Activity:Operations 991 942 978 930Accounts 74 78 74 78Audit 37 37 37 37Customer service and marketing 24 25 24 25Materials management 73 65 73 65Fleet maintenance 309 282 309 282Hospitality 36 30 36 30Legal 4 4 4 4Human resources/administration 55 47 55 47Cost control and planning 5 6 5 6General management 36 21 36 21

1,644 1,537 1,631 1,525

By Segment:(a) Business segment

Coach 616 550 616 550Sprinter 60 51 60 51Shuttle 191 170 191 170Trading-Transit Supports Services Ltd 17 12Cargo 238 165 238 165Haulage 249 239 249 239CTI 36 30 36 30CSS 2 0 2 0Others 235 320 239 320

1,644 1,537 1,631 1,525

(b) Geographical segmentNigeria 1,631 1,525 1,631 1,525Ghana 13 12 - -

1,644 1,537 1,631 1,525

2014 2013 2014 2013Wages and salaries and allowances etc 857,384 992,349 827,296 764,394Health insurance 16,700 - 16,700 24,809Share- based payments - - - -Pension costs 28,426 31,329 28,232 31,329

902,510 1,023,678 872,228 820,532

The average employee headcount as at 31 December 2014 by nature of activity and by segment is shownbelow:

The total cost incurred in respect of these employees (including directors) was:

Company

Group Company

Group

54

ABC TRANSPORT PLC


39. Financial instruments risk management

2014 2013N'000 N'000

Cash at bank and in hand 47,277 43,322Security deposits for lease obligations 2,400 18,630Finance lease receivables 30,083 98,678Trade and other receivables 717,892 533,340

Total 797,652 693,970

Credit risk management

Finance lease receivables arose from the lease of mass transit buses to licensed operators in Nigeria. Thecontractual terms provide for comprehensive insurance of the vehicles and regular inspection by designatedofficers to ensure the vehicles are always in good condition as they serve as part of the collateral on thereceivables in the event of defaults by the lessees. The receivables are further collateralized by bank creditguarantees and cash deposits. Collaterals on finance lease receivables as at 31 December 2014 are asfollows:

The Group's exposure to risks arising from financial instruments as at 31 December 2014 are as presentedbelow:

The Group has a high credit risk exposure on trade receivables. Credit exposures arise from the haulage andconsolidated cargo business as proceeds from passenger business are received in advance. The haulagebusiness services big manufacturing concerns with billings done at intervals (usually a period of one month)and payments after another interval depending on the contractual terms. While a major part of the cargorevenue is received on cash basis, about 5% credit is granted to institutional customers with a credit period ofabout one month. With the haulage business contributing over 40% to the Group's turnover, the implication isthat a significant part of the company's reported revenue will remain uncollected at each reporting date.Though there is a subsidiary that operates in Ghana, the bulk of the credit risk is concentrated in Nigeriawithin the Haulage and cargo business segments as mentioned above.

The board risk management committee provides the strategic direction for the overall risk managementwithin the Group. Risk management policies approved at the board level are thereafter passed down throughthe managing director who oversees the implementation in conjunction with the Group Head of Finance andChief Internal Auditor using various management organs including the budget and finance committees.

Gross allowance on doubtful trade receivables was N122.95m as at 31December 2014.

The company manages the credit risk from trade receivables through adequate profiling of customers,granting credit to only blue-chip companies in the haulage business. Credit limits are equally placed on cargodebtors according to their established credit profiles. The treasury units monitor credit with follow-up forcollection upon maturity.

The exposure on staff loans is equally managed by profiling staff for purposes of granting loans andadvances. Gross allowance on doubtful staff debts was N65.61 m as at 31 December 2014.

Group and Company

55

ABC TRANSPORT PLC


2014 2013 N'000 N'000

Cash deposit 8,500 8,500

Total 8,500 15,000

40. Liquidity risk

Negotiation of credit terms with suppliersNegotiation of installments plan with the tax and other relevant authoritiesFollow-up on matured credits for prompt collectionStocking of only vital inventory items

Maintaining a portfolio of borrowings with a varied maturity profile

41. Maturity of borrowings

Group Other Finance Operating Trade Other

Bank loans loans lease leases payables payables Total N'000 N'000 N'000 N'000 N'000 N'000 N'000

Within 6 months 1,138,052 7,959 79,933 3,000 598,672 507,776 2,335,392In 6 to 12 months 313,599 8,293 48,588 - - - 370,480In 12 to 18 months 315,696 8,619 31,038 - - - 355,353In 18 to 24 months 281,110 2,950 31,038 - - - 315,098In more than 24 months 267,379 - - - - - 267,379

31 December 2014 2,315,836 27,821 190,597 3,000 598,672 507,776 3,643,702

Other Finance Operating Trade OtherBank loans loans lease leases payables payables Total

N'000 N'000 N'000 N'000 N'000 N'000 N'000

Within 6 months 395,368 3,774 77,495 66,974 410,385 254,258 1,208,254In 6 to 12 months 457,243 1,299 78,523 39,577 - - 576,642In 12 to 18 months 327,357 - 79,578 3,000 - - 409,935In 18 to 24 months 176,769 - 38,796 - - - 215,565In more than 24 months 371,885 - - - - - 371,885

31 December 2013 1,728,622 5,073 274,392 109,551 410,385 254,258 2,782,281

The maturity profile of the anticipated future cash flows including interest in relation to the Group's non-derivative financialliabilities on an undiscounted basis which therefore differs from both the carrying value and fair value is as follows:

The Group faces the risk of liquidity as a result of the gap between the payment by trade debtors for services rendered and thepressure of immediate payment for inputs, repayment of borrowings, taxes and other obligations. Liquidity risk is managed asfollows:

Investment in money market securities is managed by a professional investment firm which invests the funds in various risk-freesecurities such as government bonds and securities. Security deposits were cash deposits made as collateral for borrowingswhich are returned after the loans get fully liquidated. The Group has been meeting all obligations due on its borrowings.

Group and Company

Negotiation of overdraft facilities in periods of immense pressure leveraging on the Group's high credit rating.

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42 Interest rate risk

43 Foreign exchange risk

The Group finances the acquisition of vehicles through bank borrowings which are often secured on theassets of the Group, the vehicles acquired and the personal guarantees of the directors. The employment ofthis source of funding is substantial in comparison with the equity holders funds and presents a key source ofuncertainty and risk in view of the impact of interest rate fluctuations on financing costs, the pressure ofrepayments on liquidity and the adverse consequences of repayment defaults. The Group has a track recordof keeping with the terms, conditions and covenants of its borrowings which has accorded it a very high creditrating within the financial community. This, it exploits to negotiate financing at concessionary interest rateswith its financiers with relative ease. In recent times there has been an increasing shift in focus for fundsourcing from the traditional financial institutions whose interest rates are benchmarked in line with theCentral Bank of Nigeria's monetary policy rates (MPR) to industrial banks providing cheaper financingtargeted at the development of critical sectors of the economy in line with the government's fiscal objectives.An analysis of the borrowings at 31 December 2014 with the associated interest rates is provided under note28 to these financial statements. Interest on borrowings is usually benchmarked against the Monetary PolicyRate(MPR) of the Central Bank of Nigeria which represents the rate at which the CBN lends to banks. Frompast experience changes in the rate have always led to an overall increases/decreases in the coupon rates ofborrowings by an average of one to two percent. Had the MPR been altered by 100 or 200 basis point in2014, there would likely have been an increase or decrease of profit by approximately N14.17m and N25.69mrespectively.

The Group is exposed to foreign exchange risk in the repatriation of funds generated in foreign currency onits west coast operations, in the transfer of funds to overseas for vehicle spares, and on balances on itsdomiciliary accounts. Funds generated from foreign operations are usually lodged in interest bearingaccounts with banks of the country where they were generated and transferred to Naira denominatedcorrespondent banks targeting periods of favourable exchange rates between the Naira and the foreigncurrency. Procurements are equally planned to ensure transfers to overseas suppliers are made in periodsof favourable exchange rates.

The Group is exposed to foreign exchange risk arising from fluctuations in exchange rates between the Nairaand the Ghanian Cedi, and the Naira against the USD. The results of the Group's foreign operations inGhana are translated to Naira at the average rates prevailing within the period. The Cedi has strengthenedagainst the Naira from an average exchange rate of GHS1.43/N1 in 2007 to GHS0.75 /N1 in 2013. Theaverage exchange rate was GHS0.557/N1 in 2014 and had the GHS strenghtened by a further GHS0.10 tothe Naira, operating profit reported in 2014 would have reduced by N21.90. Transactions through thedomicilary accounts are converted at the rates ruling on the dates of transaction while balances at the end ofthe reporting period are converted at the rate ruling at the end of the reporting period with differences taken toincome. Naira is usually purchased at the rate prevailing on transactions dates and paid into the USDdenominated domiciliary account for overseas procurement of vehicles spares. Transactions through thedomiciliary accounts amounted to USD 402,026 at an average exchange rate of N156.83 per USD. HadUSD/N exchange rate been at the actual closing rate of N180.98/USD ,profit or loss would have beenadversely affected to the tune of N9.70m.

Transit Supports Services Ltd imported goods for resale at an average exchange rate of N167 per USD.Exchange rate for 2014 closed at N189.98 per USD in 2014. Had the average rate been at the level of theclosing rate, cost of sales would have increased by N108.76m. Transit Supports Service Ltd also hadborrowings denominated in USD at 31 December 2014. The borrowings totalling USD3,633,420 werecontracted within the year when the exchange rate hovered between N160 and N170 per USD. Conversion ofthe USD denominated borrowings at the closing rate of N180.98 per USD resulted in a forex difference ofN44.14m debited to profit or loss.

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44. Capital management

The following table summarizes the capital of the Group and company:

2014 2013 2014 2013 N'000 N'000 N'000 N'000

a. Cash and bank balances (255,749) 43,322 (112,596) (1,342)Borrowings and leases 2,534,252 2,008,087 1,871,231 2,008,087

Net debt 2,278,503 2,051,409 1,758,635 2,006,745

Equity 1,707,245 2,369,382 2,049,712 2,408,813

Capital 3,985,748 4,420,791 3,808,347 4,415,558

b. Gearing ratio

The gearing ratio at the year end is as follows:

2014 2013 2014 2013 N'000 N'000 N'000 N'000

Borrowings 2,343,657 1,733,695 1,680,636 1,733,695Finance lease obligations 190,595 274,392 190,595 274,392

Total debt 2,534,252 2,008,087 1,871,231 2,008,087

Equity 2,220,232 2,206,646 2,305,597 2,239,305

Debt to equity ratio 1.14 0.91 0.81 0.90

i.

ii. Equity includes all capital and reserves of the Company that are managed as capital.

The Company manages its capital to ensure that it will be able to continue as a going concern whilemaximizing the return to stakeholders through the optimization of the debt and equity balance. Thecapital structure of the Company consists of debt (which includes the borrowings and finance leaseobligations) disclosed in Notes 28 and equity attributable to equity holders of the parent, comprisingissued capital, reserves and retained earnings as disclosed in the relevant notes in the financialstatements. The Company is not subject to any externally imposed capital requirements. Themanagement of the Company reviews the capital structure on a frequent basis to ensure that gearing iswithin acceptable limit.

Group Company

The Group's policy is to ensure that some profit is retained to finance further growth which iscomplemented with bank borrowings where funds cannot be fully sourced internally.

Group Company

Debt is defined as current borrowings, non current borrowings and finance lease obligations.

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45 Carrying value and fair value information

Carrying Carrying value value Fair value Fair value

2014 2013 2014 2013Financial liabilities measured at amortized N'000 N'000 N'000 N'000cost:Bank loans 2,315,836 1,728,641 2,315,836 1,728,641Finance leases 190,595 274,392 190,595 274,392Other borrowings 27,821 5,053 27,821 14,650

Total 2,534,252 2,008,086 2,534,252 2,017,683

46 Events after reporting period

47 Other commitments

The fair values are calculated using discounted cash flows with a discount rate based on the coupon interestrates of the individual loans and leases at the reporting date.

The Group had no other commitments as at the date of conclusion of this financial statements apart from theoperating lease commitments presented in Note 35.

There are no significant post balance sheet events up to the time of the conclusion of this financialstatements that have not been taken into consideration in the preparation of these financial statements.

The disclosed fair values above fall within level 2 in the fair value hierarchy of IFRS 13 as the cash flows anddiscount rates used in the measurements are market corroborated.

Group Group

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48 Categories of financial instruments

31 December 2014

Loans and Available Non-Goup receivables for sale financial FVTPL Total

N'000 N'000 N'000 N'000 N'000Assets

Cash and bank balances 84,074 - - - 84,074Trade and other receivables 491,778 - - - 491,778Other assets - - 491,778 - 491,778Inventories - 995,648 - 995,648Held for trading investment - - - 18,092 18,092Other investments - 1,845 - - 1,845Property, plant and equipment - - 4,403,698 4,403,698Intangible assets - - 21,045 - 21,045Deferred tax asset - - 60,543 - 60,543Finance lease receivables 30,083 - - - 30,083Assets classified as held for sale - - - 0 0

Total assets 605,935 1,845 5,972,712 18,092 6,598,584

Amortized Non-Liabilities cost financial FVTPL Total

N'000 N'000 N'000 N'000

Borrowings 2,343,657 - - 2,343,657Trade and other payables 1,106,448 - - 1,106,448Finance lease obligations 190,595 - - 190,595Provisions - 38,035 - 38,035Post employment benefits - 366,694 - 366,694Current taxation liabilities - 231,948 - 231,948Deferred income - 15,529 - 15,529Bank overdrafts 339,823 - - 339,823

Total liabilities 3,980,523 652,206 - 4,632,729

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Categories of financial instruments (continued)

31 December 2013

Loans and Available Non-Goup receivables for sale financial FVTPL Total

N'000 N'000 N'000 N'000 N'000AssetsCash and bank balances 152,234 - - - 152,234Trade and other receivables 526,944 - - - 526,944Other assets - - 733,440 - 733,440Inventories - - 291,693 - 291,693Held for trading investment - - - 16,459 16,459Property, plant and equipment - - 3,733,804 - 3,733,804Intangible assets - - 17,308 - 17,308Deferred tax asset - - 59,864 - 59,864Other investments - 1,845 - - 1,845Finance lease receivables 98,678 - - - 98,678Assets classified as held for sale - - 0 - 0

Total assets 777,856 1,845 4,836,109 16,459 5,632,269

Amortized Non-cost financial FVTPL Total

N'000 N'000 N'000 N'000Liabilities

Borrowings 1,733,695 - - 1,733,695Trade and other payables 664,640 - - 664,640Finance lease obligations 274,392 - - 274,392Provisions - 36,204 - 36,204Post employment benefits - 274,760 - 274,760Current taxation liabilities - 231,297 - 231,297Deferred income - 29,052 - 29,052Bank overdrafts 108,912 - - 108,912


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NOTES TO THE FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014


31 December 2014

CompanyLoans and

receivablesAvailable

for saleNon-

financial FVTPL TotalN'000 N'000 N'000 N'000 N'000

Assets

Cash and bank balances 47,278 - - - 47,278Trade and other receivables 594,941 - - - 594,941Other assets - - 300,990 - 300,990Inventories - - 185,975 - 185,975Held for trading investment - - - 18,092 18,092Property, plant and equipment - - 4,407,839 - 4,407,839Intangible assets - - 21,045 - 21,045Deferred tax asset - - 59,864 - 59,864Investment in subsidiaries - - 11,520 - 11,520Other investments - 1,845 - - 1,845Finance lease receivables 30,083 - - - 30,083Assets classified as held for sale - - 0 - 0

Total assets 672,302 1,845 4,987,233 18,092 5,679,472

Amortizedcost

Non-financial FVTPL Total




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31 December 2013

CompanyLoans and

receivablesAvailable

for saleNon-

financial FVTPL TotalN'000 N'000 N'000 N'000 N'000

Assets

Cash and bank balances 107,570 - - - 107,570Trade and other receivables 438,605 - - - 438,605Other assets - - 1,021,290 - 1,021,290Inventories - - 208,523 - 208,523Held for trading investment - - - 16,459 16,459Property, plant and equipment - - 3,737,954 - 3,737,954Intangible assets - - 17,308 - 17,308Deferred tax asset - - 59,864 - 59,864Investment in subsidiaries - - 6,520 - 6,520Other investments - 1,845 - - 1,845Finance lease receivables 98,678 - - - 98,678Assets classified as held for sale - - - - -

Total assets 644,853 1,845 5,051,459 16,459 5,714,616

Amortizedcost

Non-financial FVTPL Total




63


Fair value information:

NotLevel 1 Level 2 Level 3 applicable Total

Non-current assets N'000 N'000 N'000 N'000 N'000

Deferred tax assets - - - 60,543 60,543Other intangible assets - - - 21,045 21,045Property, plant and equipment - - 4,403,698 4,403,698Investment in subsidiaries - - - - -Other investments (i) - 1,845 - - 1,845Financial assets - FVTPL (ii) 18,092 - - - 18,092Finance lease receivables - - - 16,987 16,987

Current assetsInventories - - - 995,648 995,648Finance lease receivables - - - 13,096 13,096Trade and other receivables - - - 491,778 491,778Other assets - - - 329,051 329,051Cash and bank balances - - - 84,074 84,074Non-current assets held for sale - - - 0 0

Total assets 18,092 1,845 6,415,920 6,435,858

Equity and liabilitiesIssued share capital - - - 753,500 753,500Retained earnings and share premium - - - 1,108,173 1,108,173Non-controlling interests - - - (58,543) (58,543)Borrowings - - - 2,343,657 2,343,657Finance lease obligations - - - 190,595 190,595Provisions - - - 38,035 38,035Post employment benefits - - - 366,694 366,694Taxation - - - 231,948 231,948Trade and other payables - - - 1,106,448 1,106,448Deferred income - - - 15,529 15,529Bank overdrafts - - - 339,823 339,823

Total equity and liabilities - - - 6,435,859 6,435,859

The table below sets out the valuation basis of assets and liabilities held at fair value by the Group at 31/12/2014:

(i) Upon loss of significant influence in Abex Ltd, IFRS required the measurement of the remaining shareholding of5% as an investment at fair value. The fair value was determined by recourse to the disposal in December 2014 of35.2% shareholding at a value determined by a professional valuation of Abex Ltd using the adjusted book valuebasis. This method which the Group considered more representative of fair value than other income basedvaluations, considered the net worth of Abex Ltd plus assets not recognized in the statement of financial positionplus adjustments for goodwill and revaluation of assets. The shares were sold to an existing shareholder that isknowledgeable in the business position and dynamics of Abex Ltd. The fair value of the investment stated in thefinancial statements is not expected to be remeasured in the foreseeable future.(ii) This relates to investment in Stanbic IBTC Assets Management Ltd. The fair value is measured as on arecurring basis as the market value of the securities in which the fund is invested less agreed management feeaccruing to the fund managers at the measurement date. Refer to Note 17 of the financial statements for moredetails.

Some items of property, plant and equipment were remeasured at their fair value less costs to sell. While themeasurements were in line with the provisions of IFRS 13, relevant disclosures have been made on note 9 to thefinancial statements. 64

ABC TRANSPORT PLC

STATEMENT OF VALUE ADDED - GROUPFOR THE YEAR ENDED 31 DECEMBER 2014

N'000 % N'000 %

Sales 7,347,872 6,656,947Other income 220,935 515,382

7,568,807 7,172,329Bought in materials, services and excise duties- imports - (236,432)- local (5,179,083) (3,948,073)

Value added 2,389,724 100 2,987,824 100

Applied as follows

To pay employeesSalaries, wages and other benefits 885,810 37 1,023,678 34

To pay shareholdersDividend 90,420 4 195,910 7

To pay providers of capitalInterest 444,442 19 243,158 8

To pay governmentTaxation 129,260 5 213,880 7

To provide for enhancement of taxation- deferredtaxation (679) - 2,378 -- depreciation of fixed assets 1,177,995 49 992,765 33- retained (loss)/profit for the year (337,524) (14) 316,055 11

2,389,724 100 2,987,824 100

Value added represents the additional wealth which the company has been able to create by its ownand its employees' efforts. This statement shows the allocation of that wealth amongst employees,capital providers, government, and that retained for future creation of wealth.

The value added statements are not required by IFRS. They are required by the Nigerian StockExchange hence their inclusion in these financial statements.

2014 2013

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STATEMENT OF VALUE ADDED - COMPANYFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013 N'000 % N'000 %

Sales 6,846,024 6,636,859Other income 211,189 496,820

7,057,213 7,133,679

Bought in materials, servicesand excise duties- imports - (27,690)- local (4,668,260) (4,287,747)

Value added 2,388,953 100 2,818,242 100

Applied as follows

To pay employeesSalaries, wages and other benefits 855,528 36 820,532 29

To pay shareholdersDividend 90,420.00 4 195,901 7

To pay providers of capitalInterest 414,011 17 243,158 9

To pay governmentTaxation 128,592 5 211,347 7

To provide for enhancement ofassets and expansion:- Deferred taxation - - 2,378 --depreciation of fixed assets 1,169,082 49 989,840 35-retained (loss)/profit for the year (268,680) (11) 355,085 13

2,388,953 100 2,818,242 100

The value added statements are not required by IFRS. They are required by the NigerianStock Exchange hence their inclusion in these financial statements.

Value added represents the additional wealth which the company has been able to create byits own and its employees' efforts. This statement shows the allocation of that wealth amongstemployees, capital providers, government, and that retained for future creation of wealth.

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FINANCIAL SUMMARY - GROUP31 DECEMBER 2014

IFRS Non IFRS2014 2013 2012 2011 2010

Assets employed N'000 N'000 N'000 N'000 N'000Non current assets 4,522,213 3,891,543 3,853,000 4,137,077 3,222,385Current assets 1,913,646 1,740,725 1,141,385 935,932 641,758

Total assets 6,435,859 5,632,268 4,994,385 5,073,009 3,864,143

LiabilitiesCreditors within one year 3,417,990 2,110,940 1,997,599 2,060,950 1,325,375Creditors due after one year 1,214,737 1,242,014 799,675 1,114,821 682,960

Total liabilities 4,632,727 3,352,954 2,797,274 3,175,771 2,008,335

Capital employedShare capital 753,500 753,500 753,500 753,500 753,500Share premium 582,068 582,068 582,068 582,068 582,068Retained earnings #REF! 1,006,607 861,543 561,670 520,240OCI Reserve (67,884) (55,467) - - -Non-controlling interests (58,544) (7,394) - - -

Total equity and liabilities #REF! 5,632,268 4,994,385 5,073,009 3,864,143

Profit and loss accountTurnover 7,347,873 6,656,947 6,528,831 5,878,891 4,612,485Cost of sales #REF! (4,991,659) (4,781,024) (4,528,308) (3,101,862)

Gross profit #REF! 1,665,288 1,747,807 1,350,583 1,510,623Administrative expenses #REF! (1,401,698) (1,096,453) (1,062,366) (1,186,770)Other income 220,932 515,383 178,421 87,801 69,083Impairment losses (9,883) (14,479) (46,220) (3,077) -Finance costs (444,442) (243,158) (251,783) (265,302) (220,680)

(Loss)/profit on ordinary activities before tax #REF! 521,336 531,772 107,639 172,256Taxation (113,253) (216,258) (206,257) (36,616) (114,751)

(Loss)/profit after taxation #REF! 305,078 325,515 71,023 57,505

(Loss)/retained earnings forthe year #REF! 305,078 325,515 71,023 57,505

(Loss)/earnings per share - basic (kobo) #REF! 20 22 5 4

The five-year financial summary is not required by IFRS. It is required by the Nigerian Stock Exchange (3 years) and Companiesand Allied Matters Act (5 years) hence its inclusion in these financial statements.

Also, there were no Group accounts prior to transition to IFRS. Hence, only four-year financial summary was prepared for theGroup (Appendix 10).

(Loss)/earnings per share is based on profit after tax and the 1,507,000,000 ordinary shares of 50 kobo each in issue at the end ofeach financial year.

Net assets per share is based on the 1,507,000,000 ordinary shares of 50 kobo each in issue at the end of each financial year andnet asset at the end of each financial year.

The 2010 profit and loss accounts and financial summaries were prepared under the Nigerian Generally Accepted AccountingPractice (NGAAP) which were the prevailing standards at the time of operation. However, under IFRS, adjustments would have tobe made for depreciation, gratuity, deferred tax among others to be comparable.

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FINANCIAL SUMMARY - COMPANY31 DECEMBER 2014

IFRS Non IFRS

2014 2013 2012 2011 2010Assets employed N'000 N'000 N'000 N'000 N'000Non current assets 4,537,195 3,902,213 3,846,779 4,121,324 3,209,832Current assets 1,142,283 18,112,407 1,156,306 921,661 625,380

Total assets 5,679,478 22,014,620 5,003,085 5,042,985 3,835,212

LiabilitiesCreditors within one year 2,459,981 2,108,861 1,964,931 2,041,803 1,306,355Creditors due after one year 1,212,740 1,241,076 798,849 1,114,443 682,625

Total liabilities 3,672,721 3,349,937 2,763,780 3,156,246 1,988,980

Capital employedShare capital 753,500 753,500 753,500 753,500 753,500Share premium 582,068 582,068 582,068 582,068 582,068Retained earnings #REF! 1,073,245 914,061 551,171 510,664OCI Reserve (58,284) (44,130) (10,324) 0 0

Total equity and liabilities #REF! 5,714,620 5,003,085 5,042,985 3,835,212

Profit and loss accountTurnover 6,846,024 6,636,859 6,505,021 5,851,025 4,606,987Cost of sales #REF! (4,950,595) (4,732,975) (4,501,027) (3,455,714)

Gross profit #REF! 1,686,264 1,772,046 1,349,998 1,151,273Administrative expenses #REF! (1,356,636) (1,085,430) (1,065,005) (863,928)Other income 211,192 496,820 177,387 87,311 226,942Impairment losses (9,883) (14,479) (46,220) (3,077) -Finance costs (414,011) (243,158) (251,783) (265,302) (180,743)

(Loss)/profit on ordinary activitiesbefore taxation #REF! 568,811 566,000 103,925 333,544Taxation (113,264) (213,725) (203,128) (33,278) (181,372)

(Loss)/profit after taxation #REF! 355,085 362,872 70,647 152,172

(Loss)/ earnings for the year #REF! 355,085 362,872 70,647 152,172

(Loss)/earnings per share - basic(kobo) #REF! 24 24 5 4

(Loss)/earnings per share is based on (loss)/profit after tax and the 1,507,000,000 ordinary shares of 50 koboeach in issue at the end of each financial year.

Net assets per share is based on the 1,507,000,000 ordinary shares of 50 kobo each in issue at the end of eachfinancial year and net asset at the end of each financial year.

The 2010 profit and loss accounts and financial summaries were prepared under the Nigerian Generally AcceptedAccounting Practice (NGAAP) which were the prevailing standards at the time of operation. However, under IFRS,adjustments would have to be made for depreciation, gratuity, deferred tax among others to be comparable.

The financial summary is not required by IFRS. It is required by the Nigerian Stock Exchange (3 years) andCompanies and Allied Matters Act (5 years) hence its inclusion in these financial statements.

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