You are on page 1of 33

Content

Notice of the Annual General Meeting


Financial Highlights
Corporate Information
The Chronicle of NGC
Chairman s Statement
Director s Report
Financials
Report of the Auditors
Report of the Audit Committee
New Thinking
Significant Accounting Policies
Profit and Loss Accounts
Balance Sheet
Statement of Cash Flows
Notes to the Accounts
Statement of Value Added
Five Year Financial Summary
Shareholders' Information
Proxy Form

2006 NGC 1 Annual Report


Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the 42" Annua1 NOTES:
Genera1 Meting of the Sharehoclers of N'GLRIAN-
GERMAN CHEMICALS dLC w be he'd at The 1. Proxies
Presidenfia1 Hat, Sl<y Dav ion, Adebola House, 38
Ooeb: Road, Ikeja, Lagos State on Friday, October A member entitled to attend and vote at the
27, 2006 at 11 am for the foltowing purposes: Annua' General Meeting s entitled to appoint a
proxy attend and vote 'n hs/her p'ace.
Ordinary Business
A proxy need not be a member of the
1. Go receive the Annual Report and Company. If foe proxy fornn 's to be va'id, It
Gnancia' Statements for the /ear ended must be DULY STAMPED by foe member
December 31 , 2005 together vvth tine concerned and should be deposited with the
D rectocs , Auditor s and Aud Committee Registrar, Git, Security Limited, Primrose
Reoorts thereon. ÿwer. and 17A, TUubu Street, L agos, or with
Company Secretary, DTT L imbed, 235, 'korodu
2. T o declare a Dividend. Road, t agos not less foan 48 hours before the
Ine of holding the meeting.
3. To e'ecl re -e'ect Directors.
2. Closure of the Register and transfer Books
4. To authorize the Directors to rix Ihe
remuneration ur the Aud tors. Gne Register of Members wi" be closed from
Monday, October 9, 2006 lo I nday October
5. I o e'ect re e ect members of the Audit 20, 2006 (both days inclusive) for the purpose
Committee of payment of dividend,

3. Dividend Warrants
Special Business
h foe payment of foe dividend is approved, the
6. To approve the remuneration ol the Directors. warrants wi" be posted on Monday, November
6, 2006 to shareholders whose names are
BY ORDER OF THE BOARD registered in the Reg'ster of Members at tire
c'ose of business on October 6, 2006.
DTT SERVICES LIMITED
Secretaries 4. Audit Committee

Dated: September 13, 2005 A member may nominate a shareho'der as a


member of the Audit. Committee by giving
notice in writing of such nomination to foe
Company secretary at least 21 days before the
Date of the Annua' General Meeting.
Financial Highlights

2005 2004
N'O00 N'000 %

Turro\.er 2,455,005 2,085,446 19

r-ro*'l be'ce tavato" 209,494 '59,896 31

pron after tax 1258.05 94,936 28

Share capita1 56.893 56,893

Shareholdors' funds 512,5823 5060.283 6

Per N1.00 share data:

Bau .up 538. 586.0' 2 ord u / shares of N1.00 each

[ ÿ' pe' 9' I1'J 62 25

Mel assets ce' sha'a 689 6

Number of employees '50

"Today NGC is renowned


for some of Nigeria's
biggest pharmaceutical
brands, brands that
generations have trusted
and depended on like
Daga, Benylin, Fastaquine p«ji«

and Sloan's Liniment"


Corporate Information

Directors HRH Alhaji Shehu Idris (CF R) Chairman


-

Mr. Adeboye Shonekan Executive Vce Chairman

Executive Directors Mr. Samson Osewa Pharmaceuticals

Non - Executive Directors Mr. [ mmanue1 Nctok/ ere

Mr. Gbade Ba'ogun

Mr. Ton Lindsay

Secretary DM Services Limited


235. 'korodu Road
Lagos

Auditors Akintola Williams De'o'tte


235, Ikxodu Road
Lagos

Registrar City Securities (Registrars) Limited


Registrar department
Pronrose Tower (6th Floor)
17a. Thubu Street
t agos

Company's Registered Office Plot 1 44, Oba Akran Avenue


'ndusfria' Estate, Ikeja, lagos
Tel: J 96 8220 - 8
Email: euciuiiyg nacij'c.coin
Webs'te: / v/.v.nacu'c.com
NGC Story

1963: O December "8, the company //as formed under the nar"e 1991 : On Ju'y 3. the authorized share capita' of the company was increased
"Hoechst Products Niger's Lmited", from fiheen pnllon naira (N1 5.000,000) to twenty five million naira
(N25.000.000i by the creation of an acld'towa' twenty mi"fon (20,000,00)
1963: O January "0. foe Company //as reg'stered as a or ate abi ty ordinary shares of Okobo eacti.
company /."th an authorized share cap'tal o'ten thousand pounds' £10,000) On July 3, trie paid -up capital of the company //as increased from fourteen
d'vded into ten thousand (10,000) ordinaiy shares ot £| each. On ,Ju y 6, the million nana (N '4.000.000) to seventeen miiijon, f'-/e hundred thousand nana
authorised share caota' was increased to f% thousand pounds (£50,000) (N 1 / ,500,000) by a bonus issue of one ordinary share for every four ordinary
by the ceat'on o* ah adcHtra' forty thousand (40,000) ord nary shares o'£* shares a'ready he'd.
each. On August 4, ten thousand f 0.000) ordinar/ shares of /'hcK
Parbwekerlce Hoechst AG he'd 60fo and Major & Company 40V 1992: The company offered for subscription debenture stock of sixty mil"on
na-ra (N60.000.000i which //as fu"y subscribed.
1971: On October 4, the PVA pant at Ikeja was commissioned.
1994: For the second tirme in the company's history , tine Nigerian Stock
1972: On January "0, the authorized share capita' was increased to four Exchange Vent Award was received for the best presentation, oiua"ty and
hundred thousand pounds £400,000) by the oeat'on of an additions three depth of (he annua' report and accounts for the year 1 992.
hundred and fift\ thousand (350,0001 ord'oay scares of £' each.
1995: Hoechst Ag divested ts ho'ding in Nigerian Hoechst PL C and at an
1973: On Aur'1 13, Map & Company so'd the r 40% si one1xi d ug to F.O. extra -ordinary Genera' Meeting he'd on 23 F ebruay 1995. tire shareho'ders
Asha' nu A Sons fl-Wngsi Ltd. On foe same day the name ot f-e company approved of Die change of the company name to " Nigerian German
-

./as phangecf to "Nigerian u'oeuhst Lmited". Chemica's PLC".

1977: On Deeembei 6, !he authorized shoe caoita1 was increased to two 1996: On the 4th o1 March the authorized share capita' o' he company
t'ilknn (N2.000.900j by foe preat'O'n ot an add'tiona1 six hundred thousand increased rrom N25. 000.000 to hh'00, 000.000 and foe pad up capital //as
(600,009) ord'nary slxves of N2 each. increased from N 1 7, 500,000 to N30, 625,000 by a rights issue.

1978: 0" March 16. the authorized share cao'tal //as 'no/eased to three 1997: I he company's turnover crosses the bi"fon naira martc for the first time.
mif'on (N3,000,000) BY HE- CHEA40N OF «N ADD' I 'ONAl HUE
1

NGC entered strategic relationship wfo Parke Da "s (now Pfzsr Consumer
HUNDRED I HOUSAND (500,000:. O'fo'nay shares of N2 each or t1 e same Hea'lhca'e) and introduced Beny'in ranges, Anuso' and Sterns.
da/, shares of N2 was subdvded into four (4) acinar, shares ot 50 kobo
each, 1999: Me a. Shonelxan appointed Chief E recutr /e Officer, The Company
On October 2 A the paid-up cac-ta1 was ;ncreased to three irl'0" commissions' pharmaceutical oral 'iquid 'ine and produces iou'd niedipines
(N3.000.000) by a pub'-c issue of one m''|jon (N* ,000,000). "bis meant that for the first time at (lie Otta p'anL
all of tie company's authorized capita' was issued and fully paid-up.
2000: Our association with Avenfe the successor of Hoechst group final'/
1979: 'n Mugust, Nigerian Roechst shares were ouoted on the Nigerian ended.
Stock E xchange 'or the f,rst t,ni9. The quotation /as 30 kobo oer store of
50 kobo. 2001 : Company's issued slwe capita' increased to N 76, 893,000 foifowng a
bonus 'ssue of 1 new share for every 6 existing shares.
1981: On Ida,; 26. the fouteato" of the otermaceut'ca' Factory at Otta was
'aid by two d'st'ngu'shed oemo'ia'-tos Dr. Koge of pharmaoeuttea's d «scr
-
2002: NGC e/'ts ago vet unprofitable business ate industrial Chemica's.
of Hoechst mG. r rankfurt Ma,n ate the Olo'a o* Otta, Oba T.T. Dada.
2003: Company commissions its m,[j't'-m""on-i\i'ra water p'ant -Sparwasser
1982: On August 26, the authorze shane caiu ta' was increased from three successfu™y introduced into the nxiri<et.
mil'on naira (N3.000.000) to ten m'"ion wiira (N'O.OOO.OOOl by the creator
an add'f'ona1 fourteen mi'ion (14.000.000) o'xj'na'y shares of 50k each. On 2004: NGC celebrates its 40th Am11 /ersary.
September 21. the oad-up capital was "xmased from three rffon nam
(N3.000.000r to se en mifoi naira 0,000,000) by rights dree -V'cr 2006: NGC launches new brands: Arpo (ato1 ma'aria'). Vimri.o (refreshing dr'nk),
(3.000:000) and pub"c f e mi"'on (5,000,000) ssues o' eight ir I o" Liriton Fferk (wire) into the Nigerian market
(8.000.000) oel'nar, slxi'es of 50k eac'x
On No/ember 4, 1'e i/foam laceuTca' 'acto'y and I'e centra1 warehouse al
Otta wee ohioal'y commissioned.

1985: On July 5. the authorzecl sham capta' o' lhe company was ncmased
from len mill'on ng.ra (N10,000.000) to fiheen mlcr wx (N15.000,000). O-
Ju'y 15, I'e paid up capita' cf the co'-pa-y was •••ceased f,om Severn n il o"
(N7.000.000r to ten mtton, toe hunded thousand nam (N10.500.000) by
bonus issue of ce prd'nary share a'ready he'd.

1988: On June 30, bonus shares o* one ord'nary share for e/ery fo-ee
ordinary shares ahead/ he'd "//ere 'ssued to shareho'de(s and paid-up caota
therefore increased from ten m'Ton, e '•unded thousand (N10.500.000} to
fourteen nii"'on nana c' 4,000.000). On December "8, the company
ce'ebrated 'ts 25th ann' /ersary.

2036 ' I >0 5 A' " -I 1 1


Chairman's Statement
Distinguished Shareholders, my colleagues on the Board, Ladies and
Gentlemen,

am p'eased to / e'come you all to the 42nd Annual Genera1 Meeting of our
Company and to present the Annua1 Report and Financia1 Report for the year
ended 31 December, 2005.

The Political and Business Environment

The country continued to enjoy a stable po'dca' d'spersatfon characterised by


greater democratic space, public enterprises restructuring, and wide spread
macro economic reforms. Conseouent'y, the country's image ;s impro/ing,
crystallizing in renewed interest and confiderrce horn both loca' and international
investors.

1he business en /ironment was both dynamo and cha'leng'ng, a feature which
has become consistent with Nigerian economy, the year witnessed banking
sector reforms occasioned by changes ;n recapitalization pole, b, the Central
Bank, slabbsaton or the foreign exchange rate, progress towards cance"at'on
of the country's debl, unprecedented increase in crude o1' prices, and
improvements in the country's foreign reserves. The year a'so saw." great
progress in the administration ol pensions; the Pension Commission was
established a'ong wth the licensing of major Pension I und Administrators.

On the other hand, the inflation rate remained comparatve'y high at 1 7.8%
continuing to push up cost of doeg business and suppressing consumer
purchasing power. In spite of foe improved avai'abi'ity of 'oanab'e funds, cost of
hoto / ing was high, sustaining rates above 20%.

"...in line with the performance for


the year, your Board is pleased to recommend
to members, the declaration of a dividend
of 35 kobo, amounting to N53.8 million, subject to
the deduction of relevant withholding tax".

2006 NGG 6 Annual Report


Chairman's Statement

Overa", the business en/ronnnent mproved during the yea" under compared to N2.085 in the phor yean Famings Attrbutab'e to
revew due to varous reforms berg imo'emented b> the go /or rent Shareho'ders rose by 28% over the same period, to N121 million uo from'
and its institutions, as sgnified by the recorded genera1 economic N94.9 million. This achievement was a culmination of (fie gains made to
growth of 5.6'fe. Our Conuoany we'come these de> 'e ooirents and vi1
reduce interest payable bi" arid a remarkable growth in fee o1' business.
continue to take appropriate strategies designed to position itse'f to
better performance and inwove busress susta nabil ty.
Review of Operations
The Healthcare Sector
NGC PLC
In add'tion to these maco econoro factors, the healthcare sector
was impacted upon by certain rdustry specific 'actors. These The business faced numerous challenges resulting in a limited safes
include the ban of imootation of ceOan pharmaceutical products, gro Mh of 6% fcr the ÿ, ear compared to the previous period, achieving
imposition of multiple taxes In/ each of the three t ers of government, N2 b'"ion comoared to N1 .9 b'"'or. This was due to capacity restrictions
and the continued effectiveness of Natona' rood and Drugs that continued to negative!, impact on product avai'abi'ity and product
Administration and Conbo' (NAFDAC) efforts on ,var against rationalization undertaken b, management to improve margins.
counterfe't products and substandard goods.
h pursuit of this bus'ness objective, fee Company lias undertaken
'hese successes scored by NAFDmC are benefiting the significant investment nto modem plant and equipment for consumer
phanriaceutica1 mdust'y and have helped to restore pub c products. Production and marketing or the new consumer brands has
confidence a the sector. |n response, fee Company s investing r commenced h the cunrent year and fee project ;s expected to mature into
Research and Development (R & D) and pari capacity to expand and afu" f'edged dvsion in the next two years. The deve'opment will al'ow the
enhance its product range, improve product availability and satisfy company to access growth opportunities available in the consumer
market demand. products segment.

2005 Performance

Desp'te the challenges faced by the biasness, the Group ach eved a
Turnover growth of 20"-.: for the year, managing N2.477 b ior

Retained Profit For The Year

'01 '02 '03 '04 '05

67,540

200V NGC 7 X " 'X 1 X. .1 :


Chairman's Statement

NGC Oil Services NGC O1' Services has established itse'f as a recognised player in the
market. Management .vil seek to nde on th s growing goodw'l and
Tiffs entjty has bui'ton fee good pe-frymance of the prevous year and superior brand quality to 'auncfe more products and grow customer
recorded a remarkab'e gro vvfe, ac'ffe /irg a turnover increase o*' 26%, base.
J

contributing 17% to Grouio Derformance, to record sales o" N4V


mi"'on compared to N"85 mil'cn in the prior year. The good It is my belief that, the p'ans assemb'ed by management, ami tine
performance ;n this di /sion was a result ot growing demand for ts caoita1 expenditure investment put into the Grouo, augurs well for
products, buoyed by customer frxsused marketing efforts put n by improved future performance.
management and stab. The Grouo wil' continue to pursue and exoloit
opportunities offered b, ths sectop expanding product range, Board of Directors
impro/ing servce de'very, and close attention and pnanagennent o'
the relat'onsh'D with our prncipa1, Clarefechemca s ir ths bus ress. At fee end of the year, Mr Kayode Popoola, tine Finance Director,
resigned from his employment wh.h the company, to join his family
Information Technology abroad. Further more, subsequent to the year end. tine
Admnistration/L ega1 Director. Ms R.U. E tukudo a'so resigned from the
In the course of the year, the company migrated from ar od IT Cqi nroany. Oi 1 behalf of the board, we would ike to thank them for t1 ieir
applicator system cal'ed "Pegasus" to an MGF DRO, vhcln s FRD inva'uable contributions through out then tenure wife the company; tine
(Fnterprse Resource Planningi sob/ are. A product or O.AD boardand wis( l feem every/ success in then future endeavours.
headoushered at Santa Barbara USA. This FRP helps the company lo
slay fean, agi'e and competitve, thus enab' ng iranageme'h to make Dividends
informed decsiows and ouick'y rcact to changing market demands.
In line w'th the performance fry the yea' , your Board is pleased to
W'th thus new tRP, the management rfrymaton system s perform ng
recommend to members, the dec'aration of a dividend ot 35 kobo,
at nigh degree ot nlegml-on acoss a" deoadr-enls ard tunctons. It
amounting to N53.8 million, subject to the deduction ot relevant
has e'lmhated LHe hazards ol duo'cate data entry and error-prone
witlnho'ding tax.
processing,
F lyfeer more, the ful' integration o' the Company to MF G/DRO proved Management and Staff
to be the key to ba'anchg business processes. The system manages
tiÿe entire business how, starting with receipt of customer Die achievements of the year demonstrate great commitment of tine
specifications, to fee outbound ad /awced shipping notices, to the management team and staff, without which tiffs resu't would not have
customer and supo'ier base. been possible. In return, the Company remains Frm'y in support of its
human caoita1 continuing to improve the working environment, offering
Future Prospects opportunities for oersona1 growth and investing in skiffs development.
Join me 'n extending our deep appreciation of feed efforts, service and
The new consumer products dvsion is expected to provide commitment to the Company.
significant opportunities for growth to fee business and overal Group
performance. Appropriate strategies and shod w be out n to -realise
"
Conclusion
management objectives in tins ine of bus'ness.
In conc'us'on, I woufei like to thank our members for their continued
Pharmaceutics' business continues to be the backbone of the Group understanding and support. Your company remains fundamental/
and p'anned investments in expansen of production capacity and strong wife a firm asset base and sustainab'e feng term prospects. My
product range are expected to un'ock 'urther potehia offered by this appreciation a'so goes to myfel'o .v directors and a'l our stakeho'ders.
growing sector. These efeots are recevng a major boost from tine
go/emment's import substtut'on po'icy, whch s offer ng good I thankyoua" feryour attention.
prospects fer fiie Company to broaden product fees and improve
performance, dh-en by growth ol 'ocal manulaclurng o' products.

Shehu 'dris (CFR) EnffrofZassau


Chairman

17 August 2006

i
1
1: 8 . :;j ' ,"i 1
NGC brands bring
happiness to homes and
offices nationwide. They provide
quality healthcare solutions for all
classes of society, create jobs,
expand opportunities and
contribute to the growth
of a healthier Nigerian
economy.
Director's Report

V e take great pleasure m presenting Ms repot and the audited fnancia' statements hy the year ended December 31, 2005.

HISTORY AND PRINCIPALACTIVITIES


Nigerian-Geriran Chemicas Pc was incorporated as a ur /ate 'imited "ab'ity company on January 10, 1964 and became a pub'c
baited l ab ' ty' company, quoted on Me Nigerian Stock Exchange in August 1979. The Company !s engaged h the manufacture,
irarketng and d str but or of oKarnaceutca healthcare products, household consumer products, as we" as oi1 -fed cherrca's.

YEAR 2005 OPERATING RESULTS


Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

profit be'o'e ta\ 209.494 159.896 159. 748 136.5 75


Taxat'on ',88,129) (64,960) (63,745) (54,242)
D1 /idend (53,825) <46.136) (53.325) (46. 136)
Retaned oro'it transferred
to general reser e 67,540 48,800 37,178 36,197

DIRECTORS

1. The D""ectors who ser/ed during Me year and al Me li,ne or 'his repoh are as fo'bws:

Alhaj' S. ctrs. iCuH) Chairman


Vr, A. Shonei<an Executive Vce Chairman
Vr, S, , Osev/a
ÿ
Executive Director
Vr. C, Balcgun Director
Vr. t . Ndok/vere Director
Vic T. L indsay 'British) Director
Alhai; A.R. MohammerJ Director
Vr. L .'<. Poooo'a (Resigned Dec. 9, 2005) F ve. Director
Vs. R.U. Ftukudo (Resigned Aug. 3", 2006) Fxe. Director
Vr. O. OshincA'o Huocnted Aug. 17. 2006) Director

2. In accordance with Article 96, Mr. G. Balogunand Mr. T. Lindsay will retire by rotation and being eligible, offer themselves
for re- election.

DIRECTORS' INTEREST IN SHARES


The interest of the Directors in the issued share capital of the Company as recorded in the Register of Directors' shareholding

2005 2004
Name Direct Direct
Vr. A. She -A or (E Vc - C
- VI n an)
ÿ
958.958 993.958
Vr. SA . Ose/va 80,896 30.896
Vi. G. Ba'ornj" 28.868 28,868

None of the Directors '-as notified Me Company, in accordance with Secfon 2 77 of the Companies and A»ied Matters Act. CAP
C20 1 FN 2004 or an/ decarube Merest n a") contracts jpvo1 'irlg the Company either as at December 3" . 2005 ex at the dale of
IP'S reDOd.

CORPORATE GOVERNANCE

"ÿ"he Compaq 'eougtves the mpoitanceof high standard of corporate governance. The Board consists of two executes and Kenon
e\ecut'\ e Drectors chared by HPP "he Emir cl Zaumsau. A'haj1 -Shehu dlrs. CPR. The Board met three Tmes in the year under review.
The Board has focus on 4s responsibilities and has perfected 4s operate A strategies to achieve reasonable performance of the
Company.
Director's Report

The non -executive Directors have been ooecat'cg n such a way that them Post Balance Sheet events
independence has not been imDa;red, There is an Execut <e Vice Chairman
v/ho 's a separate indvdua' from the Chairman, "There are no significant post balance sheet events, which cou'cl have had
any material effect on tine state of affairs of the Company as at 31 December.
Audit Committee 2005, which have not been adeouafely provided forand/oi disc'osed.

T
he Audit Committee chaired by A'haj; F . A Vebude s n -ade up o* one Employment and Employees Affairs
non-executive and tv\o executive Directors and three representat ves of the
shareho'ders. The Committee met three t,nms ;n the year. i) Health, Safety and Welfare of Employees
In comp'iance with Laws and safety regulations, the Company provides
Annua1 Genera' l\"eet,ng 1AGV1 prO'Udes umaue opportun'fy to for Safety and hea'th of workers >n the L st. Ccmprehens' /e we'fare
communicate w'th shareho'ders. Shareho'ders rece've the annua1 report packages, which compare with industry standard, are prodded for staff.
and Financia1 Statements as reouired by 'am and free'y ask Questions Use of retained hospitals. c'inics and emergency medical services are
concerning tlÿe Company's operat'ons at the AGIV. provded for state

The Company has como'ed, as 'wjcte as noss'ble with Code of Best ii) Employees Involvement and Development
Practice in Corporate Go 'ernance as oub'shed by the Secunt es & Continued cod'a' 'abour re'atior's existed between management and staff
E xchange Commission in co"abcratio" wth tee Corporate Affairs as a resu't of tl >e Company's open door policy and dia'ogue in reso1 zing
Commission. staff issues. Our m'ssop s to deve'op a we" -trained and motivated work;
force. Conseauent'v, some 'members of staff were sponsored to attend
Analysis of Shareholding as at December 31 , 2005 relevant courses, seminars and conferences. Ihere has been partnership
No. of % of No. of % of
wth academic community through students' Industna1 Work [ xpenence.
Range of holdings holders holders holdings holdings
iii) Employment of Disabled Persons
- ' .Quo 5,2 '3 4i3.85 2.400.324 "
.59 I |ne Company is an eoua1 opportunities ernployer and does not
1 ,00"
5.000 4.405 3923 9,944 484 6.46 discriminate when considering app'icat'ons. A" employees are given eoua1
o.QO'i 10.000 789 7.00 5.528.376 3.59 opportunity for cie /elopment regard'ess o1 any form of disabbty. Howe\ er,
' 0,00 ' 50.000 639 5.67 '3930.799 8.53 there was no disabled person in 11 ie Company's employment as al 31
50.00' ' 00,00'J 82 0. te 5,388,303 3.63
100.00" 500,000 58 0.5 '
<4.186.242 9.22
December, 2005.
500.00' ' 000.000 5 0.04 3,816,477 2.43
1
,000.001 "0.000.000 3 C 02 6.751.571 4 39 Research and Development
10,000.001 - 2,000,000 000 2 0.01 '32.3 79.236 60.06
11,256 100.00 153,786,012 100.00 The Company has a continuing focus 00 research and de 'e'opment mainly
geared towards inipro 'teg operational processes S new product.
deve'opment.
ACQUISITION OF OWN SHARES
Auditors
The Company d'd not purchase any o" Is own shares dunng the year.
I" accordance with Section 357!?) of the Companies and Abed Matters Act
SUBSTANTIAL INTEREST IN SHARES CAP C20 LAN 2004, Messrs Akmtola Whams De'otte have indicated their
v/iiiingness to continue in oft'ce. A resolution wi" therefore be proposed at
The 'ssued and fu"y pad up capita' of tee Comcany s N76, 893.006 ti'e Annual General Meeting to authorize tire Directors to determine their
divded nto 1 53,786.012 ord'naiy shares of 50 kobo each. Of this amount. remuneration.
76.831.048 shares eauivale'te to J9.96'c mas he'd by Voter Securities S
investment Limted while "5.548. 388 shares eqirvatent to 10.11% was held BY ORDER OF THE BOARD
lev the Nvieran Sooal 'nsurance T|"ust c und (NS'TR as at 31 December.
2(305.

FIXED ASSETS

Movement ot 'i/ed assets du'ing the yecr s shown in Note 5 cr page ?? DP Services f miled
23. In tee opinion of the Directors, tee maCel -.a'ues o' lKe Compam s Company Secretaries
property are not 'ess than iib ,a'ues shown ,n tie accounts. I agios. Nigeria.

DONATIONS
17 August, 2006
Donations during U 10 yea' grwMrp to N3 'u 000 wv as 'ot'ov.s:

S/N Name of oenefciaies Amount Amount F«: ITf 5EKVIC£S lfMinD


N
1. Faou'ty of Post Graduate Studies 'ABU) 50 000 COMMIT SKRETillil
2. Our Savours Church Bo Lagos
T
"00, 000
3, hacu'ty of Ved'ome UNN 130.000
4, Hone L ife Project on Ads '20. 000

2006 NGC 11 .Annua Fieport


The Financials

Results taken from


Turnover growth (Company)
2002 to 2005 show
the company has grown 2002

from 1,439,659 to 2,060,023 1.439.659

2003

2005 003,303

3060,023

2.7 .A 395%

2004

1,900,800

2,060,023

1,900,800

1,603,313

1,439,659
Report of the Auditors

Deloitte.
Akintola Williams Deloitte
(West end Central Africa)
Chartered Accountants
23d, Ikorodu Road, Hupeju,
P, O. Box 96b, Marina
Lagos, Nigeria.

Tel: +234-1-2717800
+234-1-4930720-4
Fax: +234-1-4970023
REPORT OF THE AUDITORS TO THE MEMBERS OF info@avvdebitte.com
vvwvv.debitte.com
NIGERIAN-GERMAN CHEMICALS PLC
We have audited the consolidated 'nancia' statements of Nigeria-German Chemicals Pic as at 3'lst December
2005 set out on pages ''7 to 31 Atrch have been prepared on the basis of the accounting po'cies set out on
page " 7

Respective responsibilities of Directors and Auditors

In accordance iith the Companies and Al'ed Matters Act, CAP C20 t FN 2004, the Company's Directors are
resporsib'e ror the preoarat on ur line ' nancia1 statements. It is our responsibility to form an independent opinion
based on our audit or those statements and to report our opinion to you.

Basis of Opinion

We conducted our audi n accordance A'th the intemat'ona1 standards on auditing issued by the Intemafona1
I ederation of Accountants. An audit heudes examination, oi i test basis, of evidence relevant to f te amounts ai id
d'sc'osures h the Iwa-cia statements. It also includes an assessment of the significant estimates and judgements
made by the Directors n the preparation of the financia' statements, and of .vhether the accounting policies are
aoproorate to the Company's and the Group circumstances, consistent'y applied and adeouate'y d'sc'osed.

We oa'-uned and performed our aud t. so as to obtain a'l the information and exp'anations, which we considered
necessary r order to provide us A'th sufficient evidence to give reasonable assurance that the financial
statements are *ree from materia misstatement. In forming our opinion, we also evaluated the overall adeouacy of
the presentation of information in the 'herca' statements and assessed whether the Group and the Company's
books o+ account had been property kept. We inave obtained at the information and exp'anations we required for
t'm purpose of our audit.

Opinion

In our opinion, the Company and the Group have kept proper books of account and the f'nancia1 statements are
in agreement with the books. The 'ha-cia' statements, drawn up in conformity with the general'y accepted
accourtrg standards in Nigeria, gve a true and fair vew of the state of affairs of the Company and the Group as
at 3 1 st December, 2005 and of the profit and cash flows for the year ended on that date and have been property
prepared r accordance wit'- the Companies and A'"ecl Matters Acl, CAP C20 LFN 2004,

Chartered Accountants
Lagos, Nigeria

Audit -Tax- Consuming • Financial Advisory A member firm of


Deloitte Touche Tohmatsu
17 August 2006
Deloitte West and antral Africa
Offices at: Lagos, Ab.tja, & -or HarooiA (Ngaia};
Acca (Ghana); Baric (TIiq Gambia;;
Do.iala (Caneroi.n); Malaoo (Equator at Guinea)

L "id of Fartners' nenes is avaiabte a:


duo. iko'odu Roac. lupcu, _acios.

2006 NGG 13 .Annua Report


Report of the Audit Committee
To the members of Nigerian-German Chemicals Pic

In compliance wtln the provision of sect on 359 (6 ) of the Companies and Alfed Matters Act, Cap C20 LFN
of 2004, we reoort as follows:

(i) We have ascertained and hereby confirm that the accounting and reporting policies of the company
are in accordance with legal requirements and agreed ethical practices.

(li) The scope and planning of audit requirements for the year ended December 31 , 2005 are
Adequate.

(lii) The interna' controls were being constantly and effectively monitored, and

(Iv) We are satisfied with the External Auditors' management report for the year ended December 31 ,
2005 as well as the response of tine management thereto.

Dated: August 17, 2006.

Alhaji F.A. Mebude


Chairman, Audit Commttee

MEMBERS OF THE AUDIT COMMTTEE

Alhaji F.A. Mebude Chairman

Mrs. A.A. Olatokunbo Member

Mr. G. Balogun Member

Mr. Mathew Chadzimura - Member

2006 NUC 14 x " " i:1 I .1. ÿ. 1 1


To create a future weHrelodmng at our past and present,
working hard to:both transform our business and to be
partners in transforming healthcare itself.

It's down to one question how can we help 'For us, innovation is a never-ending
people live better and healthier lives? process1
1
.
Benson Enabuwa
Cr»oh

- Chukwuka Chukwutem

'It's all about delivering customer and


shareholder value'
John Onyeoguzoro
New Thinking

We will invest in New Product The strategic intent is to PHARMA DIVISION


Development to introduce more become the fastest
Our company continues to push the
OTC and prescription medicines growing, fast moving boundaries of performance, with some of
that satisfy our customers consumer goods leading oroducts in the pharmaceutical
needs. business in our industry industry. Strong nationwide sa'es and a
s'ick distribution network for pharma¬
Success >n New Product Development ceutical products show proof of ths. A" of
.vas achieved ;n t'ÿe current year wiC the CONSUMER HEALTHCARE which is anchored by an aggressive and
'aunch of ARCO. A f,rst in the anti-ira'ar'al focused sa'es team, ed by one of the
market; as AF'GO is the only one day. The rapid!-, growing population of young industry's most experienced sales
fixed -dose Ahemr'sin -based Combin¬ people, a better poltcal environment, managers. Thrs 's 'n line with the
ation Therapv (A.C.T) anti-nna'aral in the better disposal income from an expan -dog company's overall growth strategy. We
Nigerian market today. The Federa1 economy hold bright prospects for key intend to deepen our relationships at key
Ministry of Hea'th a'ong v/th the Wor'd players ke NGC Dc. To harness the new purchasing decision points, and
Hea'th Organisation now recommenc! oopohuo I es, our company estab'ished the
ACT tyioe drugs ror ma'aria treatment. Consumer Healthcare Division. This
division v/as estab shed as a business This is in line with the company's
T his 'urxj'at've real A'as acheved lhrough modu'e n 2003 wlh the objecl've ol
grow irg a A'orld cass. 'asl movng
overall growth strategy. We intend
co"aborafon wth Kunming Pharniac
eutica1 Corporation of CNna, a v.or'd consumer goods business. Our current to deepen our relationships at key
'eader in oua'ity oharmaceutcals, We tocus s on drnks and house ho'd purchasing decision points, and
have also /entured oto new theraoeuto products and an organic growth that wit
evoke around ex sling product segments. reinforce our position as " the
segments wth oroducts such as U'ceora1
tab'ets (anti-u'cer), Ante'ndn tablet (ant - home of good health"
helminthic) and Cofeeze (cough and The strategic nteh s to become the
co'd), and Gnseova1 (anf-funga'i, Making fastest growing fast moving consumer
this is one of the most orom'sing oenods goods business r our industry .Tins s reeforce our position as " the home of
of our 42 ÿear h'stog/. evdenced wth the successfu1 'aunch of good hea'th". To achieve this, significant
V mto drink, a refreshing fizzy drnl< into the investment was made in setting up a
STRATEGIC FOCUS Ngerian market. potent and dynamic young marketing
team led by a Genera1 Manager wth vast
Continuous investments m New Product The mission of the Consumer health -care experience spanning 16 years in the
Development w"1 be pursued to introduce Division s to mprove the quality of life of pharmaceutics' indu-sky. The team is
more OTC and prescription medicines consumers around Nigeria and the West responsib'e for brand bui'dng, driving
Fiat saFsfy the needs of our customers. Coast of Africa. This xe are committed to demand and identifying new markets for
Tin's will be backed by marketing by providing products that our eNsting/future brands.
empower people to ['ve better
communications support for our brands,
to sustain our leadership postions and to achieve more. This initiative has bo'stered our current
espeoal'y in the Co'd&Cough, Diabetes operations as seen by growth in the
and Ant1 - gyneco'ogical, anf -malarial and
in+ect've antibiotic market's in 2005 and
markets. also conso'idating on our lead
in tire anti-diabetc market.

ZOOS NOG 16 r " " i:1 I A ÿ_ 1


1
Significant Accounting Policies

a. Basis of Accounting g. Debtors


A'l trade and staff debtors considered doubtful in
The financia statements are prepared uncler fire the 'igirt of nranagenrent experiences and prudent
I • sto1 ica cost convention as modified for the accounting practices wou'd be provisioned in
revaliation of f xed assets. No adjustments have been accordance with the age of tire debts such that
made to reflect the mpact on tire financa1 statements provisions wou'd not be 'ess than 100% of any
ef specific price changes or changes in the genera' balance outstanding for more than 360 days.
leve1 of prices.
Debtors are stated after deduction of specific
b. Basis of consolidation Pro /ision for debts considered doubtful.
of recovery
The company's subs'diag NGC O'l Servces Liniited.
comnienced operat on n Ap>d 2004 aind 'ts resu'ts are h. Deferred taxation
conso'idated n the f ware a statements.
The Directors reso\ed tl'at the accounts of Va'ue Deferred taxation on (lie timing differences between
Pharmaceutica's Limited v/i™ not be consolidated with the treatment of certain items for accounting
that of Nigerian -German Chem'ca's P'c because the purposes and their treatment for taxation is provided
iBsu't of /alue Pharmaceuticals Iimbed ;s insignificant using the 'ability method at tire current rate of
to the- resu'ts of tKe l_o ding company. taxation in accordance wth SAG ' 9.

c. Turnover I. Foreign currencies

turnover represents 'he net 'nvo'ce /o'ue o' goods f pi-Qign currency transactions are recorded m
and sen ces so rt to tb rd parties during the year. Ngena at tine 'ales oF e /change njiing at II >e elate of
each transaction. Assets arid "ab"ilies denominated
d. Fixed Assets in foreign currencies are converted at the rules of
excha' ige preval> ig a fire ba'aiice sheet date.
I ixed assets are stated at cost/ va'uation 'ess
accumu'ated deprec at on. Gam or loss arising therefrom ts dea't wth mi the
profit and 'oss accouiit,
Depreciat on is prov elect on cost or re /a'ued amount in
equa nsta merits ove1' the es'ima'ed usefij1 Pes at
the fo'lo' v no annual ates:
1
j. Leases
Assets under finance 'ease are included m tire
% balance sheet at the fair va'ue of tire assets and tire
L easehold land and bu Id ng 5 present value of tire minimum 'ease payments. Tire
Plant and mach nery 10 depreciation is ca'culated on the same basis as
Fou'pment. Olu'es and fittings 10 other categories of fixed assets.
Motor vehie'es 20
k. Research and development
e. Stocks
Research and de/etopment cos's are amortised
Goods bought try resa e. f Ashed goods, raw materia' o\ era period of
e years.
and work in progress are /a'ued at the lower of cost
and net tealLabe vaue. Costs comprise tire direct I. Employees' benefit
cost of production arid Ce attj 'butab'e poTon of a"
overt leads appropriate to location and cond't'oir. The comoan, operates a contributory stab pension
Goods iri trans t are valued at in /oiee price. scheme 'or 'ts stab. Fmc'oyees contribute f.b% %
their re'e/ant emo'uments, whi'e the conipany
f. Investments contributes A5% or the same toward the scheme.
'he conipany o'so makes provision for staff gratuity
I o«g term investments are slated at cost. Provisions based on the 'ength 0t semce o1 each stafi m
for' 'osses are made where there is a permanent accordance Arith the existing staff conditions of
C|iminut on nthecost of nvestments. service. Benefit under the p'an is genera"/ re'ateri to
an empioyee's length o' ser 'ice and remuneration,

2UOi5 NOG 17 r ÿ'


- i.X ' -.I I
Profit and Loss Account
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
Note N'000 N'000 N'000 N'000

T umover 2 2,4 7 4,005 2,085,446 2,060,023 1 ,900,800

Cost of sales C ,521,416) (1.293,958) (5215,558) (5164,279)

Gross profit 955,589 791,488 844,465 736,521

Distribution expenses i'164,182) (142,325) (164,132) (142,325)


Administrative expenses (534,705) (4f 1,896) (4 73,325) (380,250)
Oliver income 43,819 36.980 43,819 36.980

Operating profit 300,521 274,247 250,777 250,926

'nterest payab'e and s,,TV'ar charges (91.028) (114.355 (91,028l ( 11 4.351)

Prof|l. on ordinag' act" "ties be'ore laxatio" 3 209,494 159,896 159,748 1 36,575

1 ax on prolt on ordinary actvtes 4 (88,129) (64,960) (68,745) (54,242)

Profit on ordinary activities after taxation


transferred to general reserve 121,365 94,936 91,003 82,333

APPROPRIATION

Proposed dvdend (53,825) (46,136) (53,825) (46,136)

Retained profit transferred to general reserve 67,540 48,800 37,178 36,197

Earnings per sKce (kobo) 49 62 59 54


D""clend oer share (kobo) 35 30 35 30

The account'cg po'ees on cage 1 7 and the notes or pages 21 to 29 form pad of these Financial Statements.

2006 NOP 18 A1 " -IJ-' i 1


1
Balance Sheet
at 31st December, 2005

Group Company
2005 2004 2005 2004
Note N'000 N'000 N'000 N'000

Fixed Assets 5 729,7 70 716,312 725,529 714, ,13


Investments 6 140,760 135,817 281,948 23S027
Intangible Assets 7 137,339 134,569 137,339 134,569
Deferred Payments 8 29,643 39,525 - -

1,037,512 1,026,223 1,144,816 1,079,709

Current Assets
Stocks 9 823,273 722,651 640,248 596.952
Debtors 10 4 76,2 ' 1
373,566 436,487 3M,943
Bank and Cash Ba'ances 1
3,637 44,563 8,992 40.492

1,313,121 1,140,780 1,085,727 952,387

Creditors: Amounts falling due within one year


bade creditors (95,094) (170,187) (82,073) (68,633)
Bank ove'chad (266,408) (238,123) (266,408) (238,123)
Commerc'al Papers (90,078) (110.169) (90,078) (110,169)
Taxaticm J 049,503) (89,306) (120,223) (78,927)
Other creditors 11 (436,319) (344,004) (402,317) (333,972)

(1,037,402) (951 ,789) (961 ,099) (829,824)

Net Current Assets 275,719 (188,991) 124,627 122.563

TOTAL ASSETS LESS CURRENT LIABILITIES 1.313,231 1.215.214 1,269,443 1,202,272


Deferred Taxation 12 (169,134) (-141,201) (168,311) (140,862)

Provisions For Liabilities And Charges


Gratu'A 13 (16,274) (13,730) (16.274) (13,730)

1,127,823 1,060,283 1,084,858 1,047,680

Capital And Reserves


Share Gap'tal 14 76,893 76,893 76,893 76,893
Share Prenuur° 15 377,339 377,339 377,339 377,339
Reva'uation Reser/e 15 256,850 256,850 256,850 256,850
General Reserve 15 416,741 349,20 1 373,776 336,598

1,127,823 1,060,283 1,084,858 1,047,680

approved by the Buard o( Dreclcns > Directors


' h's f'nancal statements //ere HRH. A'haji Shehu 'dns (CtR)
o° 1 7 August, 2006 and signed on Is behalf by:

Mr, A, Shonekar

The accounting oo'ees on page 1 7 and the r>otes on pages ?' to 29 form part of these Financia1 Statements.

200(3 NSC 19 x " " IK I ,i I


Statement of Cash Flows
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
Note N'000 N'000 N'000 N'000

Cash Flows from operating activities

Gas1'1 rece;pts from customers 2,417,916 2,059,929 1


,982,034 1,933,902

Payment to suppliers and emp'oyees (2,131,2321 ("' ,644,707) (1 ,652,894) (1,475,019)

'ncome tax pa cl (1 0.000) (10.000)

Net cash provided by operating activities 16 286,684 405,222 329,140 448,883

Cash flows from investing activities

Purchase or G-.ed assets 5 (135,9311 1260.963) (132,985) (258,359)

Proceeds from sa'e of fxed assets 265 314 265 314

Purchase o+ investments (4,943) (7,665) (50,92i) (58,001

Research and Deve'ooment (48,014) (26.524) (48,014) (26,524)

Net cash provided by investing activities (188,623) (294,838) (231,655) (342,570)

Cash flows from financing activities

Di /'deed paid (46,152) (53,405) (46.152) (53,405)

'nterest paid (91,028) (114,351) (91 ,028) (114,351)

Net cash provided by financing activities (137,180) (167,756) (137,180) (167,756)

Net decrease in cash and cash equivalents (39,120) (57.372) (39.695) (61 .443)

Cash and cash equivalents at the 1 January (303,229) 1246.352) (302,800) (246,357)

Cash and cash equivalents at 31 December 17 (342,849) (303,729) (347,495) (307,800)

2006 NGC 20 .Annua Fieport


Notes to the Financial Statements
Year ended 31st December, 2005

1. The Company

The comeary commenced ooerations on '8 December, 1963 as Nigeria Hoechst Ltd and was registered as a private 'imited
lability company on 10 January, 1954, r August 19 89, the company became a pub'ic limited 'iabi'ity company, It changed its
name to Nigerian -German Chemicas P c upon d vestment b\ the principa' foreign shareho'ders,

It manufactures, markets and distrbutes pharmaceutical heathcare products, consumer hea'thcare products, industrial chemicals,
oil fie'd chemica's and agro chemical products.

T he company 's who'h, owned by Ngenans with the ext. of the foreign shareholders.

2. Turnover
Group Company
2005 2004 2005 2004
Turnover Gross Profit Turnover Gross Profit Turnover Gross Profit Turnover Gross Profit
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

Industna' Chen""cal 2,990 7229 15,388 5,963 7,990 1 ,229 75,388 5,963
Fth'cal Pharmaceutcal "
,870,054 764.557 7755,447 680,200 1
,870,054 764,557 7755,447 680,200
Agro-Chemica's - 14,957 5,796 "'4,957 5,796
Consumer healthcare '8(3,979 78,679 '15,008 44,563 186,979 78,679 115,008 4 4,563
Oi fie'd Cherrica's 4' 6,982 111774 184,646 54,966 - -

2,477,005 955,589 2,085,446 791,488 2,060,023 844,465 1,900,800 736,521

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000
Profit on ordinary
activities before taxation

TPs 's stated ahe1'


charging/icredifng):
Directors remunerat'on:
-
Fees 150 toO 750 150
-
Other emo'umerts as executives 1
0.167 10767 10367 10,167
Depreciation
-Owned assets 177,473 1
04,898 1
27569 104,493
Profit on disposal of
fixed assets (265) (341) (265) (341)
f xchange loss 7109
Audilom remuneraton 3,360 2,800 2,400 2,000

20u6 I 21 x " " l.1 ReixU


Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

4. Taxation

Based on Drofit for De year 52,984 33,280 35,308 23,579


Fducation tax 7,213 6,504 5,988 5,826
Deferred tax 27.932 25,176 27,449 24.837

Per profit and loss account 88,129 64,960 68,745 54,242

Balance brought for.vaol 89,306 59,522 78,927 59,522


Tax caid (10,000) (10,000)
Deferred fax ha'cstered (Note '?) (27,932) (25, 1 76) ('2 7,449) (24,837)

Per balance sheet 149,503 89,306 120,223 78,927

5. a) Fixed assets - COMPANY

Leasehold Plant Equipment Leased


land and and fixtures and Motor motor
building Machinery fittings Vehicles vehicles Total
N'000 N'000 N'000 N'000 N'000 N'000

CostA/aluation
At 1 January 2005 245,181 920,229 67,466 19N269 1
5,000 1,439,U5
Add'tions 30,04' 43,205 10,390 49,349 1
32,985
Rec'assbcation (105.472) '05,472 15,000 (15,000)
Disposals (3,414) (3,414)

At 31 December 2005 275,222 857, 962 183,328 252,204 1,568,716

Depreciation
At 1 January 2005 104,462 435,255 41 ,262 129,053 -'5,000 725,032
Charge tor the year '2,519 74.584 12.729 2N737 121,569
Rec'assbcatior (94,440) 94,440 15,000 (15,000)
Disposals (3,414) (3,414)

At 31 December 2005 116,981 415,399 148,431 162,376 . 843,187

Net Book Value


At 31 December 2005 158,241 442,563 34,897 89,828 725,529

At 31 December 2004 140,719 484,974 26,204 62,216 714,113

2006 NGC 22 .Annua Report


Notes to the Financial Statements
Year ended 31st December, 2005

Leasehold Plant Equipment Leased


land and and fixtures and Motor motor
building Machinery fittings Vehicles vehicles Total
N'000 N'000 N'000 N'000 N'000 N'000
. b) Fixed assets -GROUP

Cost/Valuation
At 1 January 2005 2-15, "8" 920,229 67,875 193,464 1
5,000 1,441.749
Additions 30,0-1' 43,205 12,036 50.649 135,931
Reclassification 005,472) 105,472 1 5,000 (1 5,000)
Disoosa's (3.414) (3,414)

At 31 December 2005 275,222 857, 962 185.383 255,699 1,574,266

Depreciation
At 1 January 2005 104,462 435.296 41,262 129,417 55,000 725,437
Charge +or the year '2,5'9 74,584 12,934 22,436 122,473
Reclassification (94,440) 94,440 15,000 (55,000)
Disposa's (3.414) (3.414)

At 31 December 2005 116,981 415,440 148,636 163,439 _ 844,496

Net Book Value


At 31 December 2005 158,241 442,522 36,747 92,260 729,770

At 31 December 2004 140,719 484,933 26,613 64,047 - 716,312

The leasehold 'and and bui'drgs, p'ant and machinery, eauipment and motor vehic'es /.ere orofessiona"y va'ued by
Vessrs. Knight Yank (N'gena), Ghartered sur/eyors, on 31 December, 1993 on Ye basis of the open market valued and
ref'ecfng the exstng use of Ye properties.

The surp'us ansog from the reva'uation has been transferred to revaluation reserve account net of potential
capital gains tax thereon. A" addtors ader this date have been stated at cost.

COO'S NOG 23 r. ÿ,
l:, | ,L , . |
Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

6. Investment

Subsidiary companies
NGG Oil Sen/ces L'ÿ'ted 14 1 , 188 95,210
Value Pharmaceuticals Limited 31 ,949 27,006 31 ,949 27,006

31,949 27,006 173,137 122,216

Others
IJncj insurance p'c "40,000,000 odcay
-

share at cost (Market value (N182,000,000)


-
108,811 108,811 108,811 108,811

140,760 135,817 281,948 231,027

7. Intangible assets

Research ard Development 93,873 64,205 93,873 64,205


Brand Acqu'sifon 88, 7 10 118,281 88,710 1 18,281

ess: Amort'sat'on (45,244) (4 7.91 7) (45,244) (47,917)

137,339 134,569 137,339 134,569

8. a) Research and Development

The company acquired the branclna'ÿe +or "DAGA" n Nigeria and Ghana e year
2003 from Avent's Pharnna Deutch'and Gmbh. "he cost o1 Research and
Development and brand acqu'sit'on are an,o'tsed over Syears.
2005 2004 2005 2004
N'000 N'000 N'000 N'000
8. b) Deferred payments

Pre-operat'onal expenses of NGC Oil Limited 39,525 49,402


Amortsed dumg the ,ear (9,882) (9,882)

Balance 29,643 39,525

the Board deeded to amort'sed the payments over 5 years start ng from 31 December

200'S NOG 24 r, , l:, | _.L , . |


Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

9. Stocks

Raw catena's 197,176 399,900 1973 76 399,900


Work-in-Drogress 51,879 34,859 51,879 34,859
Fnished goods 412,657 190,620 229,633 64,921
Others (Goods bought for resa'ei 1
7,615 20,659 17,615 20,659
Goods in trans't 143,946 76,613 143,946 76,613

823,273 722,651 640,248 596,952

J. Debtors

T
rade Debtors 270,305 200,756 231 ,990 144,986
Other debtous 34,246 34,632 34,246 33,595
Prepayments 17,556 13,590 16348 ii,774
Due from re'ated companies 154,103 124,588 154503 124,588

476,211 373,566 436,487 314,943

1 . Other creditors

Payments received n advance - 542 542


Ob'gation under f,nance 'ease 96,496 172,899 96,496 172,899
Others payable 165,172 30,130 135,091 20,898
Provision 88,07 7 75821 86,936 75821
Accrua's 29,937 21,468 28,977 20,668
Due to re'ated company 1,820
DYdend oayab'e 54,817 4 7,144 54,817 4 7.144

436,319 344,004 402,317 333,972

200(3 NOG 25 x " " IK I _1_ i.1 1


Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

12. Deferred taxation

At 1 January 2005 141,201 I '6.025 140,862 1 16,025

Prov'sfon during foe year 27,933 25376 27,449 24,837

At December 31 , 2005 169,134 141,201 168,311 140,862

13. Provision for gratuity

At 1 January,2005 73.430 1 2,344 13,430 12,344


Provision during foe year 2.983 2,552 2.983 2,552

16,713 14,896 16,713 14,896


Payments during the year (439l (13 66) (439) (7166)

At December 37 2005 16,274 13,730 16,274 13,730

2005 2004
N'000 N'000
14. Share capital

Authorised:
200,000,000 Ooifnao Shares 50k each 100,000 100,000

Issuedand fully paid:


153, 486,01 2 Ordinary shares of 50k each 76,893 76,893

15. Share premium account and reserves


Share Revaluation Group Company
premium reserve General General
At 1 January 2005 account N'000 reserve Reserve
RetaOed profit N'000 N'000 N'000

At 31 December 2005 3 OS 339 256,850 349,201 336,598


67.540 37,178

377,339 256,850 416,741 373,776

Under current regulatons, the assets revauaticr reserve s aol ava ab'e for distribution to shareholders as dividends,

200(3 NSC 26 ('


""c I A I
Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

16. Reconciliation of net profit to net cash Provided by operating activities

Net profit after tax 121,365 94,936 91,003 82,333

Adjustments to reconcile net income to


net cash provided by operating activities

Gain on sa'es of fxecl assets 1 265) (3M) (265) (314)


Interest payable 95028 114,351 91,028 114,351
Deprec'at'on 122,473 1
04,898 121,569 104,493

Amortisation of brand acquiston 557 26 57,799 45,244 47,917

Changes in assets and liabilities

(Increasej/decrease in bade debtors (69,549) 7535/) (87,004) 44,413


Increase 7 stock (100,622) (207,039) (43,296) (85340)
Increase in other debtors and preoaymerts (33,095) 705476) (34,540) 48.287)
lncrease /(decrease) o trade creditors 175,093) 99,520 13,440 (2,034)
Increase 7 other credtors and accued expenses 84,643 1
97,558 60,671 141,723
Increase 7 gratuity 2,544 5386 2,544 1,386
Increase in deferred tax 27,932 25776 27,449 24,837
Increase in tax payable 607 97 29,784 41,296 1
9,405

Net adjustment 165,319 310,286 238,137 366,550

Net cash provided by operating activities 286,684 405,222 329,140 448,883

17. Cash and cash equivalents

Bank and cash balances 13,63 7 44,563 8,992 40,492


Bark overdrafts (266,408) (238,123) (266,408 (2387 23)
Commercial pacers (90,078) ("0,169) (90,078) ( 1 1 0. 1 69)

Cash and cash equivalents at 31 December (342,849) (303,729) (347,495) (307,800)

2006 NSC 27 x " " i:1 I ,i I


Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 N'000 N'000 N'000

18. Information Regarding Directors and Employees

18.1 Directors

Directors' emolument comprise:

Pees:
-
Chairman 45 45 45 45
- Other Directors 105 105 105 105
Other emolument as executves 9,888 9.888 9,888 9,888
Pension Contribution 279 279 279 279

10,317 10,317 10,317 10,317

Chairman 45 45 45 45
highest pad Director 3,200 3,200 3,200 3,200

The table be'ow shows the number of Directors of the company


(exclud'ng the Chairman) .vhose emoluments during the year exc uctng
Denser contr'bufons fe" wiCr the bands shown beloA:.

N Number Number Number Number

0 2,500,000 3 3 3
2,500,001 3,000,000
3,000,001 and above 1 1

UOO'oN'jC 28 x " " i:: I .1. I


Notes to the Financial Statements
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004

18. Information Regarding Directors and Employees (Cont'd) Number Number Number Number

18.2 Employees

Average number of persors emo'oyed during the year

Management 16 15 15 12
Factory 69 62 62 62
Sales and marketing 45 38 38 38
Administration 34 30 25 25

155 150 154 142

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

1 mployees' costs 114,074 85,983 103,983 83,299

I he number o+ employees 'n Nigera with gross


emoluments within the following bands were:

N N Number Number Number Number

1 - 500,000 75 121 66 1
16
500,001 - 1,000,000 26 22 23 20
1,000,001 - 1,500,000 40 3 39 2
1,500,001 - 2,000,000 9 9
2,000,001 - 2,500,000 1 3 1 3
2,500,001 - 3,000,000 4 4
3,000,001 and above 12 1 i2 -1

19. Capital Commitments

There .vere no cao'ta' commitments al 3" December,2005, (2004 - Ni'1

20. Contingent Liabilities

There v/erc no contingent ab ' ties \r respect or egal act ons aga rst the Compan, for year ended 3 1 December, 2005, (2004 - N2,884 ,873)

21. Related Party Transactions

The Company entered rto transactions .vith ts subs d ay companies during the year ended 31 December, 200b. The amount due from the
re'ated comica'd at 31 December, 2005 amounted to 14152,283,000 (2004 N124,588,000) -

UOO'oN'jC 29 r " " i:1 I .1. •_ 1 1


Statement of Value Added
Year ended 31st December, 2005

Group Company
2005 2004 2005 2004
N'000 % N'000 % N'000 % N'000 %

T urnover 2,4 4 7,005 2,085,446 2.060,023 1


,900,800
Other Income 43,8' 9 36,930 43,819 36,980

2,520,824 2,122,426 2,103,842 1,937,780

Bought-in-Vateral and Semces


- L oca' (781,6961 (641,8401 (768430) (594,3691
- Imported (1,202,059) (',015,4581 (859,562) (904,6931

Value Added 537,069 100 465,128 100 476,150 100 438,718 100

Applied as follows

To pay employees:
- Salaries and staff costs '14,074 21 85,983 18 1
03,805 22 83,299 19

To pay Government:
Corporate tax 60,197 '1 39,784 9 41 ,296 9 29.405 7

To pay provider of capital:

-
Interest 9' ,028 14 114.351 25 91,028 19 1
14.351 26

-
Dividend 53,825 10 46,136 10 53,825 11 46,136 11

To provide for replacement


of fixed assets:
-
Depreciation 122,443 23 104,898 23 121,569 25 104,493 23
- Deferred tax 24,932 5 25.146 5 24,449 6 24,834 6
- Profit fer the year 48,800
64,540 13 10 344 48 8 36.194 8

537,069 100 465,128 100 476,150 100 438,718 100

Value Added represents the addtonal wea'th which the company has been able to create b\ ts own and its emp'oyees edorts. Ihe statement
shows t|ne a'locaton o+ that v/ea'th aÿong the emp'oyees. caoita providers. Government and that retained for creator of more wealth.

To pay employees' To provide for


wages, salaries To pay maintenance of Profit for the
and staff costs corporate ta> To pay interest To pay iMdcnd fixed assets Deferred tax period

Group statement of Value Added: 2005 21 % 17% 10% 23% 13%


Company statement of Value Added: 2005 22% 9% 19% 11% 25%

Group statement of Value Added: 2004 18% 9% 25% 23% 10% |


Company statement of Value Added: 2004 19% 26% 11% 23% 6% 8%

2006 NGC 30 Annua Report


Five year Financial Summary
31st December, 2005

Group <- Company -ÿ


2005 2004 2003 2002 2001
N'000 N'000 N'000 N'000 N'000

Employment of Capital

F Ued Assets 729,770 716,312 560.247 571,342 518,092


investments 140,760 1
35,8'' 7 1
73.026 169,293 169,293
'ntang'b'e Assets 137,339 134.569 1
55.962 13,541 1
9,148
Deferred Payment 29,643 39.525
Net Current Assets 235,719 188,99 1 250,617 342,593 339,81 1
Deferred Tax (169234) (141,201) 216.025) 792,021 ) (50,603)

Provision for Liabilities


and Charges
Gratuity 0 6,274) (13,730) 2 2,344) (8,661 ) (7.670)

1,127,823 1,060,283 1,011,483 996,087 988,071

Source of Capital

Share Caiuila1 76,893 76,893 76.893 76,893 76,893


Reserves 1 ,050,930 983,390 934.590 919,194 91M78
1,127,823 1,060,283 1,011,483 996,087 988,071

Turnover, Profit And Loss

T umover 2,477,005 2,085,446 1,603,313 1,439,659 977,168

Prof't Before Taxaton 209,494 159,896 124,751 95,090 39,336


Taxation (88229) (64,960) (63,219) (56,317) (34,872)
Di /idend (53.825) (46,136) (96336) (30,757)

Retained Profit For The Year 67,540 48,800 15,396 8,016 4,464

Earnings Per Share iKobo) 79 62 40 25 3


Di /idend per Share (Kobe) 35 30 30 20
Net Assets Per Share (Koboi 733 689 658 648 642

Fam'ngs and net assets per share are calcu'aled cr 153, ,'86,012 ordinary shares ;n issue as at 31st December. 2005

2Gu6 NGC 31 ' " " l.1 I- 1 '


Shareholders Information
Year ended 31st December, 2005

1. Major Shareholders
Accorcl'ng to the register o* rubers, the 'o'b.vng shareholders heel more tiÿen 5% of the issued share capital of the company on 31st December, 2005

No. of Shares %

(I) olker secirit'es ancf Investment Limited 76,831,048 46.63


(ii| Nigerian Socia' lrsurance Trust Pund (NST,F) 15,548,188 10.11

2. Analysis of Shareholders

Range No. of Holders % Units %

1 - 1
,000 5,243 46.85 2.460,324 1.59
1,001 -
5,000 4,405 39.13 9.944,484 6.46
5,001 - 10,000 789 7.00 5,526.376 3.59
10,001 - 50,000 639 5.67 133' 30.799 8.53
50,001 - 100,000 82 0.73 5,588.503 3.63
100,001 - 500,000 58 0.51 14486.242 9.22
500,001 -
1
,000,000 5 0.04 3.8 1 6.4/4 2.48
1,000001 - 10,000,000 3 0.02 6,451,541 4.39
'0,000001 - 2,000,000,000 2 0.01 92.349,236 60.06

Grand Total 11,256 100.00 153,786,012 100.00

3. Unclaimed Dividends
Details of unclaimed dividends at 31st August, 2006

We hereby notify our numerous shareholders that some d defends have remaned unclaimed. Kindly contact either the Head, HR -Admin
Nigerian German-Chemicals p,c.. p.O. Box 26" , keja , Lagos State., or CSL Registrars, Primrose tower. 1 7A Tinubu street, Lagos,
for pay ments of your cli\ idends as -ndicated beov\ :
Dividend Year 2001
Number Paid (N)

12 1990 12,933.64
13 1991 31,606,96
14 1 992 44,230.81
15 1993 100,468.48
16 1994 157,052.28
17 1 995 40,810.85
18 1996 2,037,680.00
19 1997 2.066,765.98
20 2000 4 49, 46 4.50

Balance in the custody of the Company 5,271,316.83


Balances with Registrars 491,537.53
91 2002 505701.69
22 2003 734,078.37
23 2004
6,998,634.42

Shareholders should contact (Incase of Unclaimed Dividends Nos. 12-20)

Head. HR/Admin
NIGERIAN GERMAN-CHEMICALS PLC., P.O. Box 261, 'keja, Lagos State. P'ot 144, Qba Akran Avenue, Industrial Estate, ikeja.

In case of Unclaimed Dividends 21-23, please contact: CSL, Registrars, Primrose Tower, 17A, Tinubu Street, Lagos

Note: This page does not form part of the statutory financial statements.

2006 NGC 32 Annua Report


Jlirr Priiiiinj Wiilrrÿ

Pcraecwrro R P
Syrup i2!rV,M,
LINIMENT IdMtcwiudk\<Mk!W'gi
HUB

Llaga