JULIUS BERGER FINANCIAL STATEMENTS: FOR THE YEAR ENDED 31 DECEMBER 2017 @ Nexia Agbo Abel & CoJULIUS BERGER Contents Corporate information, Results at a glance Report of the directors Statement of directors! cesponsibilities Report ofthe statutory audit committee Reportof the aucitors Statement of profit or loss and other comprehorsive income Statement of financial position ‘Statement of changes in equity Statement of cashflows Notes to the financial sta Statement of value added Five year financial summary Additional information JULIUS BERGER NIGERIA PLC FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 Page 3 u 6 1° 20 2 70 2017 FINANCIAL STATEMENTSJULIUS BERGER CORPORATE INFORMATION Directors: Mr, Mutiu Sunmonu, CON ~ Chairman Engr. Heinz Stockhausen (German) ~ Vice Chairman HRH Igwe Peter Nwokike AnugwuJP,OFK —- Independent Director Engr. Jafar Damulak Mr. George Marks (German) Dr. Ernest Nnaemeka Azudial - Obiejest Mis Belinda Ajoke Disu (Appointed wef 20 June 2017) Mrs Gladys Olubusola Talabi (Appointed wef 30 June 2017) Engr. Woligang Goetsch (Austrian) ~ Managing Director ‘Wolfgang Kollermana (German) + Tinancial Director (Resigned wef 15 December 2017) Martin Brack (German) + Financial Director (Appointed wef 16 December 2017) Alhaji Zubair Ibrahim Bayi + Director Administration Company secretary: Mrs. Cecilia Fkanem Madueke RC Number: 6352 Registered office: 1), Shettima A. Mungune Crescent Litako 900 108 PCT Abuja Auditots: Nexia Agbo Abel & Co. 43, Anthony Enahoro Street Utako FCT Abuja. Registrars: GTL Registrars Ltd (Formerly, Union Registrars L.td) 274 Muritala Muhammad Way Fbute Metta Lagos Bankers: Access Bank Ple Diamond Bank Ple Ecobank Nigeria Ple Guaranty Trust Bank Pl Union Bank of Nigeria Ple United Bank for Africa Ple Zenith Bank Plc JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS RC 6852 2RESULTS AT AGLANCE, JULIUS BERGER Group Company py 1ysij6 % RABY -RBY I % ‘000 N00 Change N-000 Now Change Revenue 141 860.498 138.995,752 208 12577 848 119,813,392 4.8 Profit (oss) before taxation 3,739,149 (1.498070) 34960 15821 (4239251) 193.46 Profit/(loss) for the year 257204 (2388.937) 2072266303 G.658210) 117.40 Other comprehensive income 2207875 68221526784) (181,700) 122481547. 98) Total comprehensive income 477,617 4.423.205 S06 454593 (3.533.365) 12.87 ‘Non -contolling interest 8.553 65s) 18859 7 “ 2 Profit/less) attributable to equity holders of the parent 4771068 __4432,850 763 454563 (3533365) 11287 Retained earnings 19447014 17:005,287 1396 1251428 1209.47 Share capital 660,000 60,000 - 660.000 650.000 = Shareholders funds 20005031 25316315_——18.88__13,599680 __13,145087 3.46 Per sare data Eamings per share Basic 361 3.36 768 om 68) 11287 Diluted 30 326 763 om @08) 11287 Net asots per share Basic 280 1688 188 1020 9.06 ads Diluted 2.80 19.18 1888 10.0 9.96 246 ‘Stork Exchange quotation at 31 December (Naito) 2300 3898 ray 23.0 3858749 Numberof omployoe 8,625, page 6.56) 7.599 7.888 240) JULIUS BERGER NIGERIA PLC Re 682 2017 FINANCIAL STATEMENTSBOARD OF DIRECTORS’ REPORT (Bh) smussercen soR THE WEAK ENDED orc The Directors are pleased to present to the members of julius Berger Nigeria Ple at the 48th AGM their report om the business of the Group for the year ended December 31, 2017, Legal form The Company was incorporated in Nigeria under the Companies Act 1968, new CAMA, asa private limited liability company on February 18, 1970. The Company subsequently converted to a public limited liability company and its shares became listed on the Nigerian Stock Exchange (NSE) on September 20, 1991 2. Principal activities TThe principal ectivites of the Company are the business of planning, and construction of all kinds of civil engineering works, ‘The Company has seven subsidiaries, with their principal activities stated as follows: oN Bbs [Principal acivities and bases Datcot Holding incorporation T] Rbamet Nigeia Tinted” | Manutactrers and desler Ta aluminium, Steel] 15 Fane TOD we tron or other structural products of such nature T [fas Borger Sewwies —fProvigers af_ports services, sevedores, cargo) 3) August 2006 100% Nigeria Limited! superintendents, port management, Jwarehousermen, agents and proprietors of} lwarchouses 3 [fas Berger Meza |Health cave provider Tor the operation of weal] 37 August 27 10 services Linited ervice intttions and al fom ef medical and heath cave seven 7 [PrimeToch Desgnand engineers, — planing design, —developrent] 2 August 201 10% Engineering Nigeria construction and. muintonance’ of engineering Limited orks al products of al description. 5 [Julius Berger Iavestments [Investment company and managers, | tiene 208 10% Limited 9, |fulius Berger International [Providers of logistical and technical Support on an] 24 June 2008 TH05| Gmbh intomational level 7 |fulius Berger Pree Zone [Planning and construction oF all Minds and sepects] 21 March 2015 100%] Enterprises Calabar lof civil engineering works and related activities as jwoll as maintenance of buildings and facilities in| lEree Trade Zones, ‘The financial results of all the subsidiaries have bocn consolidated in these financial statements, 3. Results forthe year ‘Comparative highlights of the operational results of the Group for the years ended 31 December 2017 and 2016 are as slated in the ble balow Group 2017 2016 ‘000 N'000 Rovenue 141,890,498 198,993,752 Profitattributable to Group activities 477617 4473,205 Retained earnings 19aa7o14 17,069,287 4. Review of business development In the yar performed satisfactonly and in accordance with planning, Save as heroin disclosed, no other events have occurred sinee the year ended 31 December 2017, which would affect the financial statements, vlor raviow, inspite of the challenging economic environment, the Group, in the opinion of the directors, i ing P, Pi JULIUS BERGER NIGERIA PLC 2007 FINANCIAL STATEMENTS RC: 6852G JULIUS BERGER BOARD OF DIRECTORS’ REPORT JULIUS BERGER NIGERIA PLC RC FOR THE YEAR ENDED 31 DECEMBER 2017 Dividends 5A Dividende The directors are pleased to recommend to the members at the 48th Annual General Meeting, a final dividend for the year ended 31 December 2017. in the stim of N1,320,900,000,00 (Ore Billion, Three Hundred ‘and Twenty Million Naira) representing N1.O0K (One Naira) per 50 Kebo share, held in the equity of the ‘Company which dividend shall be subject to withholding tax at the appropriate rate atthe time of payment. 52. Unclaimed dividends and share certificates “The lists of sharcholders who have unclaimed dividends have been compiled and can be accessed from the Investors’ Relations page of the Company's website, www julius-berger.com, Shareholders who find their names on the lists and have claimed their dividend(s) since December 31, 2017, should kindly ignore the said lists, However, shareholders who are yet to claim their unclaimed dividends) should contact the ‘Company Secretary or the Registrars, CTL Registrars Led Directors and directors’ interests and shazeholding 64 Board of Directors in 2017 The dinectors who served on the Board of the Company for the year ended 31 December 2017 were as follows 1 Mr Mutiu Sunmonu, CON 2 Engr. Heinz Stockhausen (German) 3. HRH Igwe Peter Nwokike Anugwu JP, OFR 4 Engr. jafaru Damulak 9 Dr Emest Nnaemeke Aaudialu - Obiejsi 6 Mr. Gacrge Marks (German) 7 Mrs. Belinda Ajoke Disu 8 Mrs Gladys Olubusola Talabi 9 Engr. Wolfgang Goetsch (Austrian) 0. Mr, Wolfgang Kollermann (German) 1 Alhaji Zuhairw Ibrabioy Bayi 2 Mr. Martin Brack (German) 6.2. Changes to the Board During the period under review. the following changes occurred on the Board of Directors: 62.1 Director for approval Mr, Wolfgang Kollermann :esigned his appointment as a Director and retired as Financial Director ‘with effect irom December 15, 2017. Mr, Martin Brack was appointed Financial Director with effect from December 16, 2017. In accordance with S249 of the CAMA members would be requested to approve the appointment of Mr, Martin Brack. 62.2 Directors for election ‘Mrs Belinda Ajoke Disu and Mrs Glady Olubusola Talabi were appointed Non- Executive Directors of the Company with effect from June 30, 2017. In accordance with $249 of the CAMA members would, be requested to approve the appointments of Mrs Belinda Ajoke Disu and Mrs Glady Olubusola Taleb 62.3 Directors for re-election Engr. Jafar Damulak and HRH Igwe Peter Nwokike Anugiva, JP, OFR are the Directors retiring by rotation, in accordance with the provisions of S259 of CAMA and the Articles of Association, Enge: Jaiaru Damulak and HRH Igwe Poter Nwokike Anugivu, JP, OFR all being eligible, offer themselves for re-election 2017 FINANCIAL STATEMENTS. 5Ey) suwuseercer 6. Directors and directors’ interests 63 Director's interest BOARD OF DIRECTORS’ REPORT FOR THE YRAR ENDED 31 DECEMBER 2017 Por the purposes of $ 275, 276 and 277 of CAMA and in compliance with the listing requirement of the NSE 631 some Directors gove notices of disclesable direct and/or indirect interests in some contracts end assets of the Company; and 632. the Directors’ interest in the issued share capital of the Company as recorded in the Register of Members and in the Register of Directors’ holdings and contracts as notified by them are as stated in the table below Mr. Mutu Sunmonu, CON Engr. Heinz Stockhausen HH Igwe Peter Nwokike Anugwa [P, OFR Engr. Jafara Damulak Dr. Fenest Nnaemeka Azutialu - Obiejesi- Indirect * Mr. George Marks (Mrs Belinda Ajoke Disu Mrs Gladys Olubuscla Talabi Engr. Wolfgang Gooisch Mr. Wolfgang Kollermann Alhaji Zubaiva Ibrahiry Bay Number of Directors’ Direct and Indirect Holdings as at 15March 31 December 31 December 2018 2017 2016 Number Number Number 1000060 190000 1,000,000, 88000 88,000 88,000 1.980849 1.980840 1,980,849, 165127397 16527587 163,127,507 288,662,079 288,662,079 288,662,079 403019 465019 aunts + Watertown Energy Lte,, BOJ-ESL NOMINEE (Continental Acquisitions Ltd.) and AAD ESL Nominee * Goldstone Estates Lid, and Bilton Securities Ltd JULIUS BERGER NIGERIA PLC RC: 6852 2017 FINANCIAL STATEMENTS‘JULIUSBERGER BOARD OF DIRECTORS’ REPORT (CONT'D) 7. Share capital and shareholding ‘The Company did not purchase its own shares during the year. AA. Authorised share capital The authorised share capital of the Company is N80 million made up of 1.8 billion ordinary shares of 50 Kobo cock, 2 Issued and fully paid share capital The issued andl paid-up share capital of the Company currently is N660 million made up of 1.32 billion ordinary shares of 50 Kobo each, 3 Beneficial ownership: The issues and paid-up share capital of the Company, as ai 31 December 2017 and 15 March 2018 when the ‘nancial Statements were approved, were beneficially held as stated in the table below. Beneficial Noof Ordinary Yoholdings as No of Ordinary Yo holdings asat 31 ownership Shares held as at 15 March Shares held as at December at 15 March 31 December 2013 2o1s 270172016 Bilfinger SE 217,800,000 165 217,800,000 185185 Watertown Energy Limited 132.009000 109) 132,000,000 «100100 Goldstone states Limited 262,262,079 99 262262079 199 19.9 Ibife Holdings Limited 72,600,000 55 72,600,000 55 Benue Investment and Property Company Limited 50 56,788,864 43 34 Other Nigerian Citizens, Associations and Governments 1546 720000 000 A Free float The free float analysis of the issued and paid-up share capital of the Company, as at December 31,2017, and March 15, 2018, when the Financial Statements were approved, is as stated below: No of Ordinary No of Ordinary Shares held as holdings as Shares held as at % holdings as.at 31 aliSMarch at15March «31 December December 2018 201s. 2017 aT 2G Strategie shareholding 856522451 4 85101881 LS BLS Directors’ direct shareholding 3554408 03 4.473,655 0303 Staff schemes 2 = = Free float 459913,081 ua 352 35.2 73320,000,000 To00 100 1000 JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS. RC: 6852, 7JULIUS BERGER BOARD OF DIRECTORS’ REPORT (CONT'D) 7. Share capital and shareholding 5 Share range analysis as at 31 December 2017 No of % Share Ranj Shareholders Shareholders No of units held %Sharcholding a) 2.284 2165 448951 03 501 = 1,00 16 10.13 823851 0.05 1.001 - 5,000 3510 31.85 8.987.005 068 S001 10,000 708 15.45 12,198,278 092 10.001 - 25,000 1,203 10.91 18,773,014 142 25.001 - 100,000 81 754 38515223 202 100,001 - 500,000 210 191 452 3.28 800001 - 1,003,000 20 0.18 143850 108 1,000,001 and above 2 039 1182572654 $959 11022 t00.00 4320000000 ——=—=—=—0000 8. Property, plant and equipment (PPE) Significant movements in properties and equipment constituting the PPE of the Group during the year are indicated in Note 14 on page 49, In the opinion of the directors, the market value of the properties and ‘equipment is not less than the value shows in the accounts. 9 Donations and CSR initiatives Daring the year 2017, the Group undertook Corporate Social Responsibility (CSR) initiatives shown in the table on the next page valued at NS4.1 million (2016 - N503 million) and made donations valued at N86 million (2016: NS million) JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS RO 6 8JULIUS BERGER 9, Donations and CSR Initiatives (Continued) BOARD OF DIRECTORS’ REPORT (CONTD) Corporate Social Responsibi Amount (N) Education 2,500,000, Health 16,374,808 Community Development Emergeney Response Donations “Amount [N) Nigerian Institute of Quantity Surveyors 2,000,000 Christopher Kolade Foundation 2,000,000 Mobile Cancer Centers 1,000,009 Lagos Chamber of Commerce and Industry 300,000 Lagos Grassroots Soccer 500,000 Fashion Designers Association of Nigeria 500,000 Lagos State Terns Tournament 300,000 National Woman's Conference 500,000 The Council fr the Regulation of Engineering in Nigeria (COREN) 350,000 IOBGolf end Country Club 200,000 Nigerian Society of Engineers 25.000 FCT Youth Week Programme 150,000 Federal Rood Safety Commission 59,000 ——sA00:000- In compliance with S for any political purpose. 40. Research and development 38(2) of CAMA no donation was made to any political party, political association or Rosoarch, development and deployment of leading edge construction and engineering technologies, design and methodologies are key to Julius Berger Nigerla Plc and its subsidianes. The Group would continue to invest in research and development in order ts enhance its design, planning, execution, construction and local engineering cepabilites to deliver on client requirements innovatively 1. ‘Technical service and know - how agreement A technical services agreoment executed between the Company and Julius Berger Intemational GmbH, i registered with the National Oiice for Technology / Acquisition and Promotion. JULIUS BERGER NIGERIA PLC RO: 68 2017 FINANCIAL STATEMENTS. 9JULIUS BERGER BOARD OF DIRECTORS’ REPORT (CONT'D) 12. Suppliers The significant suppliers to the Company orally and intemationally are: Julius Berger International GinbH Lalange Africa Pl Mantrac Nigeria Limited Abumet Nigeria Limited 5. Dangote Cement Industries Limited 6. Samofar: Nigeria Limited 7. Tabson Nigeria Limited 8, Federated Stee! Mills Limited 9. Apex Paint Limited, 10, Ringardas Nigeria Limited 11, Peri Formwork ~ Scaffolding Nig. Limited 12, Forte Oil Ple 13, Post year end events Save as disclosed, there were no significant post yeas end events, that could have had a material effect on the financial statements for the year ended 31 Decomber 2017, which has not been adequately proviced for 14, Human capital management Employee relations were stable ancl cordial in the year under review 1 Employment of physically challenged persons Its the policy of the Group that there should be no unfair discrimination in considering applications for employment inckiding those from physically challenged persons, All employees whether or not physically challenged are given equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their carcors. As at December 41, 2017, there were 29 physically challenged persons employed by the Group. Health and safety at work and welfare of employees The nature of Group activities demand that a high priority is placed on the health, safety and welfare of employees as well as all visitors in all aspects of Group eperations. To this end, there is @ strict observance ‘of health and safety policies, regulations and structures, Further, medical coverage is provided for all staff and their immediate families, comprising @ spouse and four chikiren, in accordance with the welfare schedule agreed with the operating domestic workers unions as well as the provisions of the National Health Insurance Scheme Act CAP N82, Laws of the Federation of Nigeria 2004, 3 Involvement and training The consultative media for the dissemination of information, and involvement in matters concerning the staf ancl Group affairs, were functional in the period uncer review 15, Audit committee ‘The members of the Statutory Audit Committee, appointed at the AGM held on June 15, 2017, in accordance with $ 350 G) of CAMA were: 1. Brig. Gen, Emmanuel Ebije Ikwue, GCON : Chairman 2. HRI Igwe Peter Nwokike Anugws, JP, OFR = Member 3. Chief Timothy Avobami Adesivan - Member 4. Engr, Jafaru Damulak : Member 5, SieSunday Nnamei Nwosw, KSS Member 6. Dr. Ernest Nnacmeka Azudialu-Obiejosi Member Phe Committee met in accordance with the provisions of S359 of CAMA and will present its report JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS Res 682 w‘JULIUSBERGER BOARD OF DIRECTORS’ REPORT (CONT'D) 16, Auditors The auditors, Messrs Nexia Agbo Abel & Co. have indicated their willingness to continue in office. resolution will be proposed authorising the directors to determine their remuneration 17. Compliance with regulatory requirements, The Directors contirm that they have reviewed the structures and activities of the Company in view of the code of Corporate Governance of the Securities and Exchange Commission and the National Code of Corporate Governance 2016 (the Codes) as weil as the regulations of the NSF and the Securities and Exchange Commission (SEC), the Regulators, The Ditestors conficm that, to the best of thelr knowledge and as atthe date of this report, the Company has been and is in substantial compliance with the provisions of the Codes and the regulatory requirements of the Repulators, By order ofthe Board Li WAc cui“ fe Cala kann Maducks FRC/2017/NBA/00000017540 ‘Company Secretary 10 Shettima A. Munguno Crescent Utako 900 108/FCT Abuja March 15,2018 JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS RC 6852 wh[B] JULIUS BERGER Statement of Directors’ Responsibilities By the acvisions of § 334 and § 335 of CAMA, the Directors are responsble forthe preparation of Financial Stalements which give 4 tue and tar vew of he state of afar ofthe Group, and of the profi or 1s atthe ene f each financial year. The Directors are ‘oqutod by the previslens of the Code to issue this etatementin cenasetion with the preparation ofthe Financial Siatarnents fo the year anded December 31,207 In compliance wth the provisions of GANA, the Olrectors must ensure tat 1. Proper secounting records are mairtained 2 Applicable accounting standards ae flawed 3. Sulable accounting policies are adcpted and consistently applied 4. duagemert and estmates made are reasonable anu prudent, 5. The going cencom basis is used, unless is inapprepsiate to presume that tho Group wil continue in business 5. Infernal contol procedures are insured, which as far as is reasonably possible, are adequate, safeguard the assets and prevent ard detect aus and omer rreguleites, he Directors accept responsibilty er the reparation of these Financial Stetomenie, which have beon prepared in comtiance with 1, The provisonsof CaN: ‘The provisions ofthe Financial Reportng Cour of Ngeria (FRCN), Act No. 6 of 201% “The pubisned accounting and nancial porting sna Issued by the FRCN, ‘The regulations ofthe SEC: and ‘The regulations and listing requirements ofthe NSE. ‘The Drectrs nave mage an assessmentot the Group's billy to cantirue as a going concen besed on the supporting aesumations tate in tha Financia! Statements anc have avery rasscn to els that the Gioup wll remain a going concain in he financial year ahead ‘signed i behallof the Board of Orectors by, Mr Mutt Sutmoru, CON harman FRGI2014/ [09 (00000006187 Engr. Watfeana Gitsch Managing Direcor RCs 2014, NSE / pOv0D006484 March 18, 20:8 apse Or 19 Seta A Mane Coed Ore Src O08, eran EN Ase bee nH. Slohnan Yo Charan Geran Er Coa, rag ce (ar Sere A? | Sih Det iron “ARS ye? Ang POF Exp! Dome Mp8 ADK © Mate Gere 9 Tah[Eq] suuiussBercer Certification of Financial Statements Pursuant to Section 7 (2) of the FRON Act, 2011, we have reviewed the Annual Reports and Consolidated Group Financial Statements of Julius Berger Nigeria Plc and its subsidiaries for the year ended December 34, 2017, Based on our knowledge, cur Consolidated Group Financial Statements do not contain any untrue statement of a material fact or omit to state a material fact necessary and are not misleading with respect to the period covered by the report ‘The Code of Ethics and Statement of Business Practices formulated by the Board has been implemented as part of the corporate governance practices of the Group throughout the period of intended reliance, and the Directors and Key Executives of the Group had acted honestly, in good faith and in the best interests of the whole Group. Our Consolidated Group Financial Statements, and other financial information included therein, fairly present in all material respects the financial condition, results of operatons and cash flows of the Group as of, and for, the period presented in the Consolidated Group Financial Statements We are responsible for designing the intemal controls and procedures surrounding the financial reporting process and assessing these controls (as required by Section 7 (2) (f) of the FRCN Act. 2011) and have designed such internal controls end procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the Group is made known to us by others within those entties, particularly curing the period in whch this report is being prepared. The controls, which ere properly designed, have been operating effectively in the period of intended reliance. Based on the foregoing, we, the undersigned, hereby certify that to the best of cur knowledge and belie the information contained in the Consolidated Group Financial Statements for the year ended December 2077. appar to be true. correct and up to date Managing Director ile 2014! ier ‘Mr. Martin Brack Financial Director FRG/2014/ ANAN 009C0006481 March 15, 2018 a 0 08 Fogleed ce) Sakina Minn Cm a oe tat wen ah err con Era ins arcon “Pho EM 8 8700 Discos W Sunron. CON, Chaar EH Soxthaise, ves Oran (ern Ege Coesch Mana ce Pin) WM Sore Fries ie aren sb 21 a tot meinen oa sou POF (FEW hud Og srr Carn ten 8 & Ce Wate Gara, TlJULIUS BERGER Report of the Audit Committee In cearpiance with $360 (6) of CAMA, wo, the mombers ofthe Slatuloy Audlt Commitioe whose names are stated horoundar, have ‘viewed and considered the Audta'a Repo required to be mada hy scoordsnos with $360 (3) of CAMA, tho consoled ausditad Financial Statemonts ef tre Graup forthe yaar endad Dacernber 21,2017, and the rapore thereon, sant a flows: 4. The accountng and reporing policies of the Group are in secerdance with legal requirements and agreed ethical practices 2. The snepe and planning of cust requirement were in our opinion adequate, 3. We have reviewed the friings on Management matters. a conunction wth the 4, Extemal Auditors, and are satisfied wth the response of Management thereon. ‘The systems of accounting and internal ceno forthe Group are adequal. \We have mede the recommendations required to bo mace in respect ofthe Extemal Autos, Members of the Auct Commites Brig. Gan, Emmanuel Ete tvua, GCON Sir Sunday Nnamdi Nworu, KSS CChiet Timothy Ayebamy Adesiven HH Igwe Pato: Nwoldke Anugw, JP, OFR Engr, lafans Darn Dr Emest Nnaemeka Azudiais Obieiesi sionden “ae connie by, J Yr tw Brg. Gon. Emnrdntel bie tanve, GCON ‘Chatman ofthe Stanutory Audit Committoe FRC/201ODNICOGON 1209 March 14, 2010 Nle: The Chaiman ofthe Statuary Aud Comat, net being professor member ofan socounthg bedy asleished by the Act othe National Asctlyin Nigeria was guid a waive by the Fearcal Repo Coun 0 Nigra sign the repot af the Saltry Ait Commitoe sper yor eo 882TH jlo i Satin Ngo Cra ake 60 08 FT Aba] Ngo tnt wena eercon Ena Hohn brgecn- Pree 24403005 700 Deo: Stem CON. Cin Eng Seen ee Chman (Garay Eng 1 Goss, MantingDredor tsi eM Benoni Oost Ceri] 2h 2 fy Dae Rete RH gus PN up J OF TEM Aca sgt Dark Pr OD C. Mako (Gxman = rs Tatg Nexia Agbo Abel & Co anu INDEPENDENT AUDITOR'S REPORT w ‘TO THE SHAREHOLDERS OF JULIUS BERGER NIGERIA PLC ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Opinion We have audited the accompanying consolidated financial statements of Julius Berger Nigeria Plc and ils subsidiaries which comprise the consolidated statement of finarcial position as at 31 December 2017, the consolidated statement of profit or lose and other comprehensive income, corsolidated statement of changes in equity, consolidated statement of cash flows for the year then ended, a summary of significant accounting policies and other explanatory information set outon pages 28 to 66. Jn our opinion, the consolidated financial satements present fairly, in all material respects, the financial position of Julius Berger Nigeria Ple and its subsidiaries as at 31 December 2017 and the financial performance and cash flows for the year then ended in accordance with the Intemational Financial Reporting Standards, Companies, and Alied Matters Act CAP C20 LEN 2008 and the Financial Reporting Council of Nigeria Act No 6 2011 Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated ‘Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the requirements of the Institute of Chartered Accountants of Nigeria Professional Code of Conduct and Guide for Accountants (ICAN Code) aril other independence requirements applicable to performing, audits of financial statements in Nigeria. We have fulfilled our other ethical responsibilities in accordance with the ICAN. Code and in accordance with other ethical requirements applicable to performing, audits In Nigeria. The ICAN ‘Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professionel Accountants (Parts A and B). Wo believe that the audit evidence we have obtained is sulficient and appropriate to provide a basis for our opinion, Key audit matters Key audit matters are those maiters that, in our professional judgement, wore ot most signiticance in our atudit ot the consolidated financial statements of Ute current period, These matters were acidressect in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a soparate opinion on those matters, [Revenue recognition [Soe note 3.6 and now 6 to the consolidated Tinanctal salements. Key audit matter [How our audit addressed the matter Revenue isa significant measure of the | - Our auclit procedures include testing of the design, existence and| performance of the group. operating effectivenoss of internal control procedures implemented [There isa risk of misstatement of a well as lst of details to ensure accurate processing, of reverie revenue due to inadequate cut-off tuansactions [procedures or wrongapplication of | - We oblained and reviewed contract documents to ensure revenue TAS 11 (TERS 15), were recognised in line with IAS 11 (IERS 15). ~ We performed substantive analytical procedures and investigated] differences in excess of the threshold. ~ We reviewed basis of valuation of foreign denominated contracts, = We performed cut-off tests to ensue that reverme were nat uncler/over stated, Other information the directors are responsible for the otter information. The other information comprises the Directors’ Report Which we obtained prior to the date ofthis auditor's report. The other information doce not include the financial statements and our auditor's report thereon, ‘Our opinion on the consolidated financial statements does net cover the other information and we do not express any form of assurance thereon. In connection with our audit of the consolidated financial statements, our responsibly is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowleege obtained in the audit, or otherwise appears to be materially Based on the work we have performed on the other information that we obtained prior to the date of this auditors report. if we conclude that there is a material misstatement of this other information, we are required to report that fact, We have nothing to report i this regards.ee A (ES ‘Responsibilities of managementand those charge with govemance forthe consolidated financial statements Management is responsible for the preparation and ine presentation of the consolidated! financial iatements in accordance with the Companies and Albed Matto Act CAP C20 LEN 20, the Financial Reporting Coane of Nigeria Ad No6,2011, the Interatioral Finaneiel Reporting Stancards and for such icemnal control as the diecters determine is necessary to enable the preparation of ‘consolidated financial statements that are fee from material misstatement, whether due to faud or error {a preparing the consolitated firarcial statemens, the dvectors are mxponsile for assessing the Company and its subsidiaries’ billy © continue asa going concem, disclosing as applicable, mates related to going concern aad using dhe going concern basis of sequnting unless tie directors etter intend to hguiate the Compacy and its sabmidiaries or to cease operations, or have no. relstcalterative bus to do so Auditors responsibilities for the audit ofthe consolidated financial statements ur objectives are to obtain rexsomable assurance about whetier the conslidated financial statements a5 a whole are ee fron ‘matenal misstatement, whether due to fraud or error, ard to issue an auditors report shat inclles our opinion. Rensorable ‘surance i a high level of assurance, but i ao! a guarantce that an audit conducted in accordance with [SAs will always detect a ‘material misstatement when it exis. Misstatemertscan arse from fraud or error and ate considered material if, individualy ot the aggresat, they could reasonably be expected tn influence the economic decisions of mers taken on the bass of those consolidated statement ‘As part of an auc n accordance with ISAs, we exerese protesscnal judgement and maintain professional scepticism throughout theaudi We se: entfy and assens the risks of material misstatement of the conselidaied financial statements, whether due to fav or errr, ‘sign and perform audit procedures responsive to thse nish, and obtain audit evidence tha is suficent and appropriate 0 provide a busis for opinion. The risk of not detecting 2 material misstatement resulting feoen fraud is higher than for one ‘siting from err, as fraud may involve colusion, forgery, intentional omissions, marepresentation, othe ovettie of internal conto. = Obrain an understanding of intemal control relevant to the austin order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an epinion onthe eflactivencas ofthe Company and ite subsidiaries! internal conta [Evaluate the appropriateness of accounting, polices used and the reasonableness of accounting estimates and related disclesures made by thedirectors, = Conclude on the appropristenes of th diracio ase ofthe going cancers hase of aecoursing and Based on the audit ovidenco bined, whether a material uncertainty exists relating to events or conditorns that may cast signieane doute on the Company and its subsidiaries’ ability ro continue asa going concern If we conclude that a material uncertainty exsts, we are ‘required to draw attention in our avelto's report tothe related disclosures in the consolidated financial satementsor, # sich cisclosures are inacecuste, to modify our epinion. Our cnelusions srw based on tho audit evidence cbtaized up tothe date of ‘war auditer's report However, future evens orconditions may cause the Compatty or is subsidiaries te cease (ocontinue asa goingconeem, = Evaluate the overall presentation structure and content ofthe consolidated financial statements inching the disclosures and whether th contolidatd financial satomentsreproser the underIying transactions end events in manner Wat achieves fair presertauion We communicate with the board of directors reganding. among other matters, the planned scope and tinting of the audit ant Significant audit findings including any sgniican dsfcicncis in intemal conte! that we wlentfy ducing cur aut. We abso provice those charged widk governance with 4 stemnt that we have complied With relevant ethical requirements agarcing mncepercience an to communicate with them allreatonships and other mater that may reasonably be thought to bear on cur independeace, and where applicable elated sfegaards ‘Report on other legal and regulatory requirements {mn compliance with the requirements of the Sixth Schecule of the Companies and Allied Mations Act CAP C20 LEN 2004, we cenirs thet: i) we have obtained all the information and explanations which othe best of oar krowledge att Delef were necessary for the purposes ef our aud i) theCompany and its subsidiaries have kept proper hooks of account sa far at appears foe our examination of those hooks: fly the consoidsted statements of lnanclal postion and comprehensive income ar i agreement with the books of acccunt and returns Toulope Fasanya F8C;/2012/ICAN/coco0000109 for Nexia Agbo Abel & Co Chartered Acsountants ‘Abuja, Nigeria 15" March 2018 Nexia Agbo Abel & Co.a a JULIUS BERGER STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME . FOR THE YEAR ENDED 31 DECEMBER 2017 2 Group Company Note 11/17 Rpiie 1B Lpyi6 e ‘000 N‘000 ‘000 000 my Revenue é 141,890,498 138,993,752 «125,77848 119,813,392 Cost of sales (97,591,978) __(84.767.291)__(95,762.A76)__(81.127.668) Gross profit 44298520 54,226,401 30015372 38,685,724 a Marketing expenses (47.851) 63327) (45,386) (45,408) Administrative expenses: 5,564,107) G7,380,880) (21,042,794) (19,549,439) WW operating prot ‘at6se2 16792258 ~~ @g27a92 ~~ 19,090,877 BB Investment income 7 126,498 284,661 1361430 86,502 Other gains and losses 8 4,076,096 1,448,523 1,949,557 (998,193) Finance cost 9 (0,900,051) (5,784,246) (7,830,008) (5,784,246) W foreign exchange acquisition loss 249,960) __(19.234,241) __ 6,249,960) (14234241) Ig Frofit(1oss) before tax 10 3739140 ~ (1,498,029) 1158214 (1,239,251) | HB Income tax expense 121 (1,167,100) (900,918) (521,861) (2,416,959) By PoFii(toss) forthe year 257200 (2,398,947) 636,353 (3,656,210) Wh Onna weanprencistveinceme tar the yearniet ties gy {uasial(losse)/ gains on retirement bens (181,760) (181,760) 122,845 Irreversible to income statement Differences on translating foreign operations 2,380,336 6,699,307 BB oral comprehensive income A779)617 (3,533,365) a Attributable to: Owners of the company 4771054 4,492,850 454598 (3,539,265) Wi Non-controtting interests 8553 (9,654) : 3 T01al comprehensive income 4779617 4,423,205 454593 (9,535,365) WE Corningy/(osses) per share Basic earnings/ (losses) per share (N) 18 261 336 034 (268) Diluted earnings (losses) per share (§) B a a a a pp /ULUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS RCL6852 v7 aSTATEMENT OF FINANCIAL POSTTION JULIUS BERGER AS AT 31 DECEMBER 2017 Group Company UpYI7 zy BIT. ZAIN Assets Note N00 'N‘000 N00) 'N'000 Non-current asses Property, plant and oguipment 1 agen1az so7iggat —caaese a7 pon.z18 Goodwi Int 97BL9SR Basra 2 Dither intanggibie asso 138 2768 4 Lawestment property QDs —-2ALLAGD —-22ABE AH AOD Lnvestment in subsidiaries 181 16916771 15,193,398 Trade and other rceivables D1 708K7SI7 1.228446 70,589,708 61.2074 Tax receivable 22 132143 -27AK3877 NAIA? 20977973 Dalcerod tax astots 123 __2816807 2505664 5.375.286 Total noa-current assets Tiiaea7 aa7 1549635,109 — 197922,555 157,995,680 Current assets Inwentories 19619880 1,600,526 9,208,985 Amount due trom customers under corstructionconuracts 20 S1S81219 53082493 BO,DA8,382 Trade and other nocsivables 2 (9K 76D _49,0,49 Tax receivable 2 e (Cash an! eas equivalents 37580125 10584522 __19388,619 729,688,848 102,908,522 108 09,318 02,880,908 Asst clawsifiod a hold forsale 5 1os7 Aes __1545.121 1.061.501 1.523.825, Total currentassets 130,746,340 104,383,783 108,985,907 S4408,729 Total assets 279393793 259,178,932 297014402 _252,395409 Equity and liabilities Touity Share capital B 6eop0 660,000 560,000 Share preenium 2 42544025440 425,440 Foreign currency translation reserve 91508,358——7118,062 : Retained earnings 19ai7ond 17065987 __19514,240 guity altributabie to owners of the Company BOIMOSSZ — 25.260,789 13,599,880 Non.controlling interasts a 55070 46,525 Total equity BOOs5.951_BaSIEAs ISSA __aAe0eT Non-Curtent abilities Borrowings 3 B 2 Retizement benefit labiliies 262 «2587S RACAL. «138.209 131,608, Defer a abilities WA —7214AM)—«9RRSR_—HABKIBY. «© 9}00.218 Amount duetocustomersunderconstructioncontracts 20.1 228S1A72 11909589 | IMRBELATZ 119,096,895, ‘Trade and other payables z 4284314 8284314 11,519,264 Provisions 2 474,206 300,900 300,00 Total non-curtent liabilities Taian —sm,A78 Taran (Current abilities Amount duc to customers under constraction contracts 2687977 21009265 ABPIRAET 23,665,512 Traceang other payables 42914438 32895154 $9,572,130 Borrowings | BAS7MG—MAITZTAR—RADLTS6—YAITZTOR (Curreat tax payable 18S 1423923 MaT.299 1.395.600 Retirement benefit Kabilties 112993 3918 2d Total current liabilities TORS 0M 91 AA 173 10 R68.608 97 933,282 ‘Total liabilities MS2I7 8 _DRAAIS _243418,7E2 —_239283,322 Total equity and liabilities 275393793 25978953 _2570IBAG2 252,398,109 These fnanag sta Engg. Wolfgang Gostsch PRC / 2014 NSE /ONDDOOOAEE Managing Director The accounting policies on pages 28 to 40 and notes on pay JULIUS BERGER NIGERIA PLC 8 actin track FRC/2014/ ANAN/COCOUSI8T Financial Director 121 1066 form part o these financial statements 2017 FINANCIAL STATEMENTS.ot SINUINALVLS ‘TVIDNWNIA £10 Md VREDIN WII osveeser = 096'6sc'er. = one'ect 0007099) ‘LiOz s9quiavaq Te We aueTeS ees'rsp : 6st - (ovis) 181) eceoro cso'srret = “aOSTTEL aves ovr'ser 00°09 00. 000, 000. 000.N 000. 00, Gunba je10, Auedwo> sfumues ——aatesaa wunnuard (ede a1eys, aysjestoume —pauyey —wonejsue, —areys ovatqeinquay — oiaiqemquny sousnina utero, Suediuoy Te6'son0e —6L0'S ‘zee op0'‘oe PIOLIP6L —B6E's0S6 Onset 000099 1g Bqwereq LE 1 DUELS 196i ses 00 La't AUST ORE ORT Ki re gesizore gee eset orowsz ess esvesst geoest oTsor GSL697 OFF ECF Zide Sreney ae aoue peg 100.N 000. 000.N 000. be el Kuedwe, aarosaa sunguuard juo> -toLL ayy Jo StoUMO uopeisuen — azeyg ooqeinquny or azgeinquny & ufrai0g L107 WAAWAIIM 1 LV SV SUD VP se BARRE R ERR REPRE 2S OS Eeeua(E}) swuseercer Note Cashflows from operating activities Cash receipts from customers Cash poid to supplicts and empl Cash provided by operating activities Cash paid for taxes Foreign exchange acquisition loss Net cash generated by/tused in) operating activities 2 ‘Cashflows from investing activities Purchase of properly, plant and equipment 4 Deposit for shares Investment property Interest received ? Dividend received Proceeds from equipment lispesal of property, plant and Net cash generated by investing activities Cashflows from financing activities Repayment of loans Interest paid 9 Dividends paid Net casi used im financing activities Net sease/|decrease) in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December 291 Cash and cash equivalents consist of Cash and bank balances Borrowings 291 JULIUS BERGER NIGERIA PLC RCs 6852 37,590,125 10534522 19,384,619 3,172,798) __ (98,421,756) (22,585,276) __ (19,038,137) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017 Group Company pyr pris aysyi7 npyis N00 Nc00 N 000 N 000 222626776 196614019 191,984,709 128512,794 (187,864,263) (73487210) (120994324) ETE CEILS 16537499 7.548.470 (866,749) (716%) (534,522) (3,249,960) (3,249,960) (14,234,241) 50,545 808 12360376 (7.220.293) 680,197) (217284) (684798) (.7a37) (72337) 97.992 234.681 war 86,502 1028 561 127se1 1242 6eousto 3.984002 6,580,455 2350S 6AR9S 374,778 5,982,159 : (9.281 560) (3281590) (6900051) (5784246) (890,008) (5.784.246) (1,980,000) (4.980.000) (6900051) __(11.045,836) (7.830.008) (1.045.836) 26,581,098 (11,140,378) 7,905,146 (12,283,970) @2sse276) (1447898) (14659313) 3.992822 (22,588,276) (19086137) (26943283)JULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 Julius Berger Nigeria Plc was incorporated as a private limited liability Company on 18 February 1970. The Company subsequently converted to 4 public Hiaility company in 1979 with its shares quoted on the Nigerian Stock Exchange. It is sepjstered in Nigeria with registration number, RC 6852. The address ofits registered ollie and principal place of business are disclosed in the introduction to the anual report The principal activities of the Company ard its subsidiaries (the Group) are described in notes 18 and 3 to the financial statements, Application of new and revised International Financial Reporting Standards (IFRS) 2.4 Amendments to IFRSs and the new interpretation that are mandatorilyeflective For the year ended 31 December 2017, The following revisions to accounting stendarcls and pronourcements were issued and effective atthe reporting period. Proneuncement Disclosure Initative (Amendanents to 185 7) Nature of change This amends Statement of Cash flow (IAS 7) to clarify that tnties shall provide disclosures that enable users of the financial statements to evalvate changes in liabilities arising From financing activities, Required tobe implemented for periods beginning on or after T January 2017 Recognition of Defored Tax Assets for Unrealsed Losses (Amenciwentsto IAS 13) The amendment to TAS 12 on Income Taves clanlics the folowing aspects: Unrealised losses on debt instruments measured at fair value aad messsned at cost for tax purposes give rise fo a deductible temporary difference regardless ot whether the debt instruments holder expects to recover the arrying amount ofthe debt instrament by sale o1 by use. The carrying, amount of an asset dacs not limit the estimation of probable future taxable profits Estimates for future table profits exciude tax deductions resulting from the rovorsal of deductible temporary differences. An entity assesses a deferred tax asset in combination with other deferied tax assets, Where tax law rostrcts the wllisation of tax losses, an entity woukl assess a deferred! tax asset it combination with other deterred tax ascots f the same type T January 2017 Annual inprovencts SHE 2010 eye (Amendments to TRS?) The amendments clarify thar the disclosure requirements of IFRS 12 appl to interests in entitios that are classified as hold forsale, except for the summarise financial information. These is immaterial impact of this amendment to the Group. Financial Statements JULIUS BERGER NIGERIA PLC RCL 2017 FINANCIAL STATEMENTS a[E}) zuuussercer 2. Application of new and revised Internat NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 ynal Financial Reporting Standards (IFRS) (Continued) 22. ‘The following revisions to accounting standards and pronouncements were issued but noteffective at the reporting period (Earlier application is permitted in some cases), Pronouncement Nature of change Required to be implemented for periods beginning, on or after TFRS9 Financial Inste and associated amendments to various other standards IFRS 9 replaces the multiple classification and measurement models in IAS 39 Financial instruments Recognition and measurement with a single model that has initially only two classification categories: amortised cost and fair value, Classification of debt assets will be driven by the enlity’s business model for managing the financial asseis and the contractual cash flow characteristics of the financial assets, debt instrument is measured et amortised cost if @) the objective of the business madel is to hold the financial asset for the collection of the contiactual cash flows, and b) the contractual cash flows under the instrament solely represent payments of principal and interest 1 January 2018, JULIUS BERGER NIGERIA PLC RO 52 All other debt and equity instraments, including investments in complex debt instruments and equity investments, must bo recognised at fair value. All fair value movements on financial assets are taken through the statement of profit or loss, oxcopt for equity investments that are not held for trading, which may be recorded in the statement of profit or loss or in reserves (without subsequent recycling to profit oF loss). For financial liabilities that are measured under the fair value option entities will need to recognise the part of the fair value change that is due to changes in the their own credit risk in other comprehensive income rather than profitor loss The now hedge accounting rules (released in December 2013) align hedge accounting more closely with common risk management practices. ‘As a goneral rule, it will be easier to apply hedge accounting going forward, The new standard also introduces expanded disclosure requirements and changes in presentation, 2017 FINANCIAL STATEMENTSJULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 2. Application of new and revised International Financial Reporting Standards (IFRS) (Continued) 22 The following revisions to accounting standards and pronouncements were issued but not effective at the reporting period (Karlier application is permitted in some cases), Pronouncement Nature of change Required to be plemented for periads beginning _ on or after LeRS @ Financial Inetraments andl associated amendments to various other standards JULIUS BERGER NIGERIA PLC Re 6852 In July 2014, the IASB made further changes to the classification and measurement rules and also introduced anew impairment model, With these amendments, IFRS 9 is now complete. ‘The changes introduce: +A third measurement category (FVOC) for certain financial essets that are debt instraments +A new expected credit loss (BCL) model which involves o thece-stage approach wherey financial assets move through the three stages as their credit quality changes. The stage dictates how an entity measures impairment losses and applies the effective interest rate mathod, simplified approach is permitted for financial assets that do not have a significant financing component trade receivables). On initial recognition, entities will record a day-1 loss equal to the 2 month ECL. (or lifetime ECL for trade receivables), unless the assets are considered credit impaired, For financial years commencing before 1 February 2015, entities could elect to apply IERS 8 early for any of the following: * the ovin credit risk requirements for financial Habiities * classification and measurement (C&M) requirements for financial assets * C&M requirements for financial sssets and financial liabilities, oF * CAM requirements for financial assole and liabilities and hedge accounting, After I February 2015, the new rules must be adoptest in thet entirety 1 January 2018 2017 FINANCIAL STATEMENTS 22. Application of new and revised International Financial Reporting Standards (IFRS) (Continued) reporting period (Farlier application is permitted in some cases) NOTES TO THE FINANCIAL STATEMENTS JULIUS BERGER TOR THE YEAR ENDED 31 DECEMBER 2017 22. The following revisions to accounting standards and pronouncements were issued but noteffective at tho entities to use in accounting for revenue arising from contracts with customers. It is untended to supersede the following standard; + IAS 18 revenue IAS II construction contracts + TFRIC 13 customer loyalty programs + IFRIC 15 agreements for the construction of real estate + TFRIC 18 transfer of assets from customers; ane + SIC 31 revenue bartor transactions involving advertising services. ‘The new standard is based on the principle that revenue is recognised when contiol of a good or service transters to a customer ~ so the rotion of control replaces the existing notion of risks and rewards, “These accounting changes may have flow-on effects on the entity's business practices regarding systems, processes and contzols, compensation and bonus plans, contracts, fax planning and investor communications. The new standaid introduces a S-step approach to mvenue recognition and measurement with more prescriptive guidance ond requirements for extensive Pronouncement Nature of change Required to be implemented for periods beginning on or after TERSTS Revenue from Contract 1 January 2018 with Customers This IFRS establishes a single comprehensive model tor TFRS To: Leases This IFRS specifies how a reporter will recognise, measure, present and disclose leases. The Standard provides @ single lessee accounting model, requiring lessees to recognise assets and liabiliies for all tease unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating and finance, with IFRS 16s approach to lessor accounting substantially unchanged from its predecessor. Early application of IFRS 16 Leases is permittee! only for companies that also apply IFRS 15 Revenue from Contracts with Customers, Re 6852 TJanuary 2018 JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS 2(Bh)-wussercer 2. Application of new and revised International Financial Reporting Standards (IFRS) (Continued) NOTES TO THE HNANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 22 The following revisions to accounting standards and pronouncements were issued but not effectiveat the reporting period (Earlior application is permitted in some cases) Pronouncement Amendaents to IPRS 2 Classitication ant Measurement of Share: based Payment Transactions Nature of change This cavities the standard in relation to the accounting for ccash-sellled share-based payment transactions that include a perlormance condition, the classification of share-hased. payment transactions with net settlement features, and the counting for moilifications of sharebased payment tyansections fiom cashrsettled to equity-settled Requited to be implemented for periods beginning onorafter 1 Jaruary 2018 Apphing IRS nancial Instruments with IFRS 4 Insurance Comtraces (Amendments to FRSA) Tnmual Improvements (2014-2016 eyete) Th September 2016, the TASH published an amendment to TERS 4 which addresses the concerns of insurance companies about the different affective datos of IFRS 9 F and the forthcoming new insusance contracts standard. The amendment provides two different solutions for insurance ancial instruments ‘Companies: « temporary exemption from IFRS 9 for entities that meet specific requicemenis (applied at the reporting centty lovol}, and tho ‘overlay approach’. Roth approaches ara optonal IFRS 4 (inclading the amendments) will be superseded by the forthcoming new insurance contracts stanlard. Accordingly, both the temporary exemption and the ‘overlay approach’ are expected to cemse to be applicable when the new insurance standards becomes etfective, The follow ing improvements were finalised in Deceniber 2016 + [ERS 1 - deleted short-term exemptions covering transition provisions of IFRS 7, LAS 19 and IFI relevant, + AS 28 - clatifies thot the election by venture capital organisations, mutual funds, unit trusts and similar entives £9 measure investments in associates or joint ventures at air value though profit or loss should be made separately fo each associate or joint venture at initial recognition 10 whieh age ne longer January 2018 T January 2018 “Transtos of Investment Property (Amendments to TAS 40), “The amendments aA at afer wo Tava property can only be made if there has been a cage i use that's supported by evidence. A change in se occurs when the propeity mee, or ceases to meet the definition of investment propery. A change in itention alone is not The ist of evidence fora cunge of use i he standand was e- choracleiced se a. ronexhaustive lst of examplos to help Ilurat the principe ‘The Roar provided tw option for transition: s Progpectvely, with any Impact from the recasifcalion recognted as adustment t opening retained eamings as at the date of ila revogasion or * Retiospecively - en permited without the use of Wiedigh Adkltioal cisclosues are required if an entity adopts the eis is peer Tianuary 2018 juuus RO 6a BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS JULIUSBERGER FOR THE YEAR ENDED 51 DECEMBER 2017 2. Application of new and revised International Financial Reporting Standards (IFRS) (Continued) 22. The following revisions fo accounting standards and pronouncements were issued but not effective atthe reporting, period (Farlir application ie permitted in some cases) Pronouncement Nature of change Required to be implemented for periods beginning, onor after Trterpretation Ti The heipreation chilies how te determine the date of I January 2018) Foreign Curreney transaction for the exchange rate to be used on initia Transactions ‘and recognition of a related asset, expense or income where an Advance Consideration entity pays or receives consideration in advance for foreign ncy-denominated contracts For a single payment or receipt, the date of the transaction should be the date on which the eatity initially recognises the non-monetary asset or lability arising from the advance consideration (the prepayment 0: deferred income/ contract liability 1 there are multiple payments or receipts for one item, a date cf transaction should be determined as above tor each payment or receipt Enuties can choose to apply the tation rospectivaly for wach period presented + Prospectively to kems in scope that aze intially recognised ‘on or alter the beginning of the reporting period in which the interpretation is first applicd, or + Prospectvely from the beginning of a prior reporting period presented as comparative information, TRS 17 Insurance IFRS 17 wes issued In May 2017 as replacement for IFRS #1 January 2018) Contracts Insurance Contracts It requires a current measurement model where estimates are remeasured each reporting period. Contracts are messured using the building blocks of + Discounted probability-weighiod cash flows + Anexplict risk adjustment, and +A contractual service margin (CSM) representing, the lunneartiod profit ofthe contract which recognised as revenue ‘ver the coverage period The standard allows a choive between recognising changes ia discount rates either in the income statement or directly in ther comprehensive income. The choice is likely to reflect hhow insurers account for tetr financial assets under [FS 9 An optional, simpliisd premium allocation approach is permitted for the lability for the rervaining, coverage for short duration 60 tracts, which are often written by nondlile There is a moditication of the general measurement model called the ‘variable foe appaoacl tor certain contracts written by lite insurers where policyhoklers share in the returns from underlying items. When applying the variable fee approach the enity’s share of the faie value changes of the underlying, items is included in the contractual service macgin. The results of insurers using this model are therefore likely to by lese volatile than under the general model The new rules will affoct the financial statements and key pertormance indicators of all entities that issue insurance contracts or wwostmont contracts with discretionary participation features JULIUS BERGER NIGERIA PLC 2017 HINANCIAL STATEMENTS RC aD esNOTES TO THE FINANCIAL STATEMENTS JULIUS BERGER FOR THE YEAR ENDED 31 DECEMBER 2017 2. Application of new and revised International Financial Reporting Standards (IFRS) (Cont 2.2. The following revisions to accounting. standards ancl pronouncements were issued but not effective atthe reporting period (Eaeto Pronouncement Nature of change Required to be implemented for periods beginning on or after ued) pplication is permitted in some ease Zils ov contbation of The TASH fae made Timitad scope amendments to TFRS 10 ——TTanvany 2018 assets between an Consolidate financial statements aed TAS 28 tnvestments in investor and is associat _assocats aa joint vontures Gr oint venture = The amendments larity the accounting Weatment for sales ox {Amendment t IFRS 10 contribution af assets behveen an investor and its associates or and 1528) Joint ventures. They confirm that the accounting Kealment non-monetary assets sold or contributed to an associate or pint yenture constitute a business’ (as defined in IFRS 3 Business Combinations) Where the non-monetary assets constitute @ business, the investor will recognise the full gain or loss on the sale or contribution of assets. I the assets do not moot the definition of a business, the gain of loss is recognised ty the investor only to the extent of the other investors investors in the associate or joint venture. The amendments apply prospectively depends on whether th JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS ZJULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS (CONTD) ignificant accounting policies, 34 Statement of compliance The consolidated and separate financial statemen International Financial Reporting Standands. of the Group have been prepared in accordance with 32 Basis of preparation The consoliiated and separate financial statements are propared on @ historical cost. The following are the significant accounting policies adopted by the Group in the preparation of these financial statements, The accompanying consolidated and separate financial statements in Nigerian Naira (the functional currency of the Group) have been prepared in accordance with IFRS as issued by the Intemational Accounting, Standards Board (IASB) and adopted by the Financial Reporting Council of Nigeria (FRCN) and as applicable, the Companies anc Allied Matters Act (CAMA), Cap C20, LEN 2004, The preperation of financial statements in conformity with [FRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements aul the reported amounts of revenue and expenses during the reporting period. The estimates and assumptions are reviewed on an ongoing basis, Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods ifthe revision affects both current and future period, 33. Basis of consolidation you RCs The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company: hus power over the investee; + isecposed, or has right to variable returns from its involvement with the investee; and = has the ability to use its power to affect its retums ‘The Company reassesses whether of not it controls an investee if the facts and circumstances indicate that thore are changes toone or more of the three clements of control listed above. When the Company has less than the majority of the voting rights of an investee, it has power over the investee when the voling rights are sulficient to give it the practical ability to direct the relevant ectivities of the investee unilaterally, The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in the investee are sufficient to give power, including: the size of the Company's holding of the voting rights relative to the size and dispersion of the holding of other vote holders ~ potential vating rights held by the Company, othor holders or other parties, + rights arising from other contractual arrangements; and ~ any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting ppatlems at provious shareholders’ meoting, Consolidation of a subsidiary begins when the Company obtains contrel over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, imcome and expenses of a subsidiary acquired or disposed off during the year are included in the concolidated financial statements of profit or loss and other comprehensive income from the date the Company gains control until the date the Company ceases to control the subsidiary. Profit or loss and each component of the other comprehensive income attributed to the owners of the Company and to the non-controlling interests, Total comprehensive income of subsidiaries is attributed to the ‘owners of the Company and fo the non-controlling interest even if this results in the non-controlling interest having a deficit balance. When necessary, adjustments are made to the financial statements of the subsidiaries to. bring their accounting policics ia line with the Group's accounting polices, All intragroup assets anal liabilities, equity, income, expenses and cash{lows relating, to transactions between members of the Group are eliminated in full on consolidation, [US BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS 23. Signi 3a JULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS (CONT'D) int accounting policies {Continued} 1 Changes in the Group's ownership interests in existing subsidiaries ‘Charges in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions, The earrying amounts of the Group's interesis and the nore controlling interesis are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which tho nen-controlling interests ere ecliusted and the fair value of the vonsideretion paid or received is recognised directly in equity and attributed to owners of the Company. When the Group loses control of a subsidiary, « gain or loss i recognised in profit or loss and is calculated as the difference between: ~ the aggregate of the fair value af the consideration received and the fair value of any retained interestand the previous carrying amount of the assets (inclucling goodwill), and liabilities of tho subsidiary rnon-contrelling interests ind any Whon assets of the subsidiary are carried at revelucd amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity are accounted for as il the Group had directly disposed of the relevant assets (ie. reclassified to profit or lass or transferred directly to retained carnings as specified by applicable IFR5s), The feir value of any investment retained in the former subsidiary at the date when contro is lost is regarded as the fair value on initial recognition for subsequent accounting under las3a Business combinations Acquisitions of businesses are accounted for using the acquisition method, The consideration transferred in a business combination is measured at fair velue, which is calculated as the sum of the acquisition-date fair values Df the assets transferred by the Group, labilites incurred by the Group to the former owners of the acquiree and. the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-telated costs are generally recognised in profit or loss as incurred. AF the acquisition date, the identifiable assets acquired and the Habilitics assumed are recognised ai their fair value, except that ~ deferred tax assets of liabilities, ane! assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 and IAS 19 respectively; ~ liabilities or equity instruments related to share-based payment arrangements of the acquitee or share-besed payment arrangements of the Group entered into to replace share-based payment arrangements of the acquires are measured in accordance with IFRS 2 Share-based Fayment at the acquisition date: and ~ assets (or disposal groups) that are classified as held for sale in accordance with IFR55 Non-cusrent Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non interests in the acquiree, and the feir value of the acquirer's previously held cquity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquireel and the liabilities assumod If, after reassessment, the net of the aequisition-late amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiwe and the fair value of the acquircr's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measurod either at fair value oF at the ron. controlling interests’ proportionate share of the recognised amounts of the acquiree's identifiable net assets, The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-contrlling interests are moasured at fair value or, when applicable, on the basis spectfied in another IFRS. JULIUS BERGER NIGERLA PLC 2017 FINANCIAL STATEMENTS C6852 2i) wussercer NOTES TO THE FINANCIAL STATEMENTS (CONTD) 3. Significant accounting policies (Continued) 34 35, 36 JULIUS BERGER NIGERIA PI RCS Business combinations (Continued) When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a. contingent consideration arrangement, the contingent consideration is moasured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments thatarise from additional information obtained during the ‘measurement period’ (Which cannot ‘exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date, The sulbsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent satilement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with LAS 38, or LAS 3 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corrospanding, gain or loss being recognised in profit oF lose, When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured t0 fair value at the acquisition date (ie. the date when the Group obtains control) and the resulting ain or loss, if any, is recognised in profit or less. Amounts arising from interests in the acquiree prior to the acquisition date that have proviously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed ot. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete, Those provisional amoun's are adjusted during the measurement period (see above), or additional assets or Ihabilitiss are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that. if known, would have affected the amounts recognised at that date. Acquisition of interests from non-conteolling sharcholders Acquisitions of non-controlling interests a1e accounted for as transactions within equity. There is no measurement to fair value of net assets acquired that were previously attributable to. non-controlling shareholders. Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to cach of the Group's cash-generating units (or Groups of cash-generating units) that is expectod to benefit from the synergies of the combination. -\ cash-generating unit to which goodwill has been allocated §s tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cesh-generating unit is less than its carrying amount. the impairment loss i allocated first to reduce the carrying amount of any goodwill allocated to the unitand then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit Any impairment foss for goodwill is rocognised directly in profit or loss, An impairment loss recognised for goodwill is not reversed in subsequent periods. On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss an disposal Revenue recognition Revenue is measured! at the fair value of the consideration received or receivable, Revenue is reduced with cotimated customer returns, rebates ond other similar allowances. Revenus is recognised when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity. However, when an uncertainty arises about the colleciability of an amount already included in revenue, the uncollectible amount, of the amount in cespect of which recovery has ceased to be probable, is recognised as an expense. 2017 FINANCIAL STATEMENTS 20fe] JULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS (CONTD) 3. Significant accounting policies (Continued) 36 aot a7 a8 39 JULIUS BERGER NIGERIA PLC Revenue recognition (Continued) Goods and services Sale of goods: Revenue from the sale of goods is recognised when the goods are delivered and tiles have passe and the Group retains neither continuing managerial involvement to the degree usually associated. with ownership nor effectve contrel over the goods sold, Revenue represents de net invoice value of sales to third partios and itis mcagnised when significant risks and rewards of awnership of the pods have heen transferred to the buyer. Rendering of sorviees: Revenue from rendering of services is recognised in the period the services are rendered, Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity Revenues from other income generated from refunds and recoveries by insurance companies ond other regulatory bodies are recognized when net cash is received. onstruction contracts When the outcome of a construction contract can be estimated! reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting date, measured based on the proportion of work completed to date relative to the estimated total contract amount. Variations in contract work, claims and incentive payments are included to the extent that thoy can be reliably measured! and its receiptis considered probable. Where the outcome of a construction contiact cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that itis probable will be recoverable. Contract costs are recognisedt as expenses jn the period in which they are incurred. WVhen itis probable that total contract costs will excoed total contract revenue, the expected loss is recognised as an expense immediately Gross amount due from customers ‘This represents work-in-progross (valued on the basis of enginoars’ estimate of the quantum of work done bat not yet certified) plus recognised profits less recognised losses. Claims receivable arising on contracts are normally taken to income when agreed, In the case of unprofitable contracts, full provision is made for anticipated future losses after iaking, into account a prudent estimate of claims arising in respect of such contracts Advance payments received Advanced payments received ate amounts received before the related work is performed and are assessed on. initial cognition to dotermine whether it is probable that it will be repaid in cash or another financial asset. [n this instence, the advance payment is classified as @ nor-teasting financial liability that is carried at amertised cost. If itis probable that the advance payment will be repaid with goods or services, the lability is cartied at historic cost Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the costof those assets, until such time as the assets are substantially ready for their intended use or sale, Investment income eamed on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2017 FINANCIAL STATEMENTS 13. Significant 30 aan JULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS (CONT'D) recounting policies (Continued) Property, plant and equipment Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, ita Self-produced assets in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes direct costs, appropriate allocations of materials and other overheads associated with the production of the assets, professional fees and, for qualifying, assets, borrowing costs capitalised in accordance with the Group's accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed end ready for interwled use. Depreciation of these assets, om the same basis as other property assets, commences when the assets are ready for their intended use. Maintenance, repairs, and renewals are generally charged to expense ducing the financial period in which they ate incurred, However, majer renovations ere capitalised and included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. No depreciation to lane! and capital work in progress applies, Losses or gains on disposals of assets aze recognised in the Profitor Loss under‘other gains and losses! Depreciation is recognised so as to write-oit the cost or valuation of assets (other than freehold land and properties uncler construction) less their residual values over their useful lives, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis, Residual values Useful lives (6) on cost (years) Building, to 23 Plant and machinery 3 10 Other fixed assets 3 8 An item of property, plant and equipment is derecagnised upon disposal or when no future economic benefits are expected to arise from the continued use of the atset, Any gain o* loss arising on the disposal or reticemant of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profito* lose, Expenditure telated to an acquisition or cepair is capitalized only if it extends the useful lives or increases the production capacity of the assets in question. The identification of such expenses is based on a certain criteria identified by management and/r threshold reviewed from time to time. The criteria as set in the preparation of these financial statements are as follows; 310.11 Items to capitalise + Any purchase of a piece of equipment (i.e. office furniture, machinery, equipment, ee.) of not less than N1500.000. + Expenditures ia the nature of repairs of not less than'1,502,000. + Computer and related equipment of not less than N1,S00,000, + Expenditure on building of not less than NI 300,200, 3012 [toms to be expensed Any item that will not last mors than 12 months should be currently expensed when weed, Any purchase of e piece of equipment (Le. office furniture, machinery, equipment, etc.) that is less than N1,500,000, + Expenditures in the nature of repairs can be expensed if les than N 1,500,000, + Computersand related equipment that is less than N1.500,000. JULIUS BERGER NIGERIA PLC 2017 FINANCIAL STATEMENTS‘JULIUSBERGER NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 3. Significant accounting policies (Con 3.11 Investment propery. All property classified as investment property are measured at cost, Investment property is recogaized when it is probable that the company will enjoy the future economic benefits which are attributable to t, and when the ‘ost or fair value can be reliably measured, Costs include directly attributable expenditore sich as legal foes and property taster taxes ‘Transfers to or from investment property is made only when there is a demonstrated “change in use” as a resull of a transtor: From investment property to owner-occupied property, when owner-occupation commences: = From investment property to inventories, on commencement of development with a view to sale = From an owner-occupied property 1 investment property, when owner-occupation ends Of inventories to investment property, when an operating lease toa third pasty commences; or OF property in the courte of development or construction 16) investment! property, at end of the construction or development, An investment property is derecogaized on disposal or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. Any gains or lasses arising, on the disposal o: rotrement of an investment property is determined! as the difference between the net disposal proceeds and the carrying amount ofthe asset and is recognized in proiit or loss for the period Depreciation is recognised 60 as t0 write-off the cost of investment properties less their residual values over their useful lives, using the straight line method, Where such investment propertes ate revalued,clepreciation is recognized over the useful life of tho asset in a pattern which best reflects the consumption pattern over the cotimated useful life of such assets 312 Non current assets held forsale Now-current assets and disposal Groups are classified as held for sale if thelr carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the salo is highly probable and the non-current asset (or dispesel Group) & available for ‘mmectiate sale in its present conclition. Management must be committed to the sale. which shoutd he expectod {to quality for recognition 26 a completed sale within one year froin the date of classification, Non-current assets (and disposal Groups) classified as held for sale are measured at the lower oftheir previous carrying amount and fair value less costs to ll 33 Leasing Leases are classified as finance leases whenever the terms of the [nase transler substantially all the risks and rewards of ownership to the lesee, All other leases are classifies as operating leases, 311 The Group as lessor Amounts due from lessees unier finance leases are recognined as receivables at the amtouat of the Group's net nvesiment in the leases. Finance lease income is allocated to accounting periods 60 as to reflect a constant periodic rato of ceturn on the Group's net investment outstanding in respect the leases Rental income from operating, leases is recognised on a stiaight-line basts over the term of the relevant lease. Initia! direct costs incurted in negotiating and arranging an operating base are added to the carrying amount ‘0 the leased asset and recognised oa straight-line busis over the fewse term, 3122 The Group as loesoe Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments The corresponding liability to the lessor is included in the consolidated aad separate statement of financial position as a finance lease obligation, Lease payments are apportioned betweon finance expences and reduction of the lease obligation s0 as to achieve a constent sats of interest on the remaining balance of the Labilty, Finartce expenses are recognised ‘immediately in profit o loss, unless they are divectly atributable to qualifying assate, in which case they are capitalised in accordance with the Gioups general policy on borrowing costs, Contingent rentals are recognised as expenses inthe perieds in which they are incurred Operating lease payments are recognised as an expense on a straight-line basis over the lease tezm, except where another systematic basis is more representative of the time patter in Which economic benetts Irom the leased asset are consumed, Contingent mntals arising under operating leases ato recognised as an expense in the period in whieh they are incursed. 1 the event that lease incentives are received to enter into operating leases, such incentives are recognised asa liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line besis, except where another systematse basis ‘§ more representative of the time pattern in which economic benefits from the leased asse! are consumed IUHTUS BERGER NIGERIA PLE 2017 FINANCIAL STATEMENTS RO 6852 iJULIUS BERGER NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 3. Significant accounting policies (Continued) 3a al 31s, JULIUS BERGER NIGERIA PLC RO Intangible assets An intangible asset is an identifiable, non-monetary asset that has no physical substance. An intangible asset is recognised when it is identifiable; the Group has control over the asset itis probable that economic benefits will flow to the Group; and the cost of the asset can be measured reliably. Intangible assets acquired separate Intangible asseis with finite useful lives thet are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, Amortisation is recognises on a straight-line hasis aver their estimated useful Lives. The estimated useful life and amortisation method are reviewed at the end of each, reporting peried, with the effect of any: changes in estimate heing accounted for on a prospective basis, Intangible essets with indefinite useful lives that are acquired separately are cared at cost less accumulated impairment losses, nternally-penorated intangible assets - Research and development expenditure Expenditure on research activities Is recognised as an expense in the period in which it is incurred, An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised when all ofthe following have been demonstrated the technical feasibility of completing the intangible assot co that twill he available for use or sale; = the intention to complete the intangible asset and use or sell it =the ability to use or sll the intangible ascot: + how the intangible asset will generate probable future economic bereits; + the availability of adequate technica, financial and ather resources to complete the development and to use oF sell the intangible asset; andl = the ability to measure reliably the expenditure attributable to the intangible asset during ite development The amount initially recognised for intemally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above, Where no internally-genezated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred, Subsequent to initial recognition, internally-genorated intangible assets are reported al cost less accumulate! amortisation anel accumulated impairment losses, on the same basis as intangible assots that are acquired separately Intangible assols acquired in a business combination Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their feir value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in « business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Derocognition of intangibic assets ‘An intangible asset is cerscognised on disposal, or when no future economic beneftis are expected from use oF disposal. Cains or losses aricing from derscagnition of an intangible aesot, measured a the difference between the net disposal proceeds and the carrying amount of the asset, ere recognised in profit or joss winen the asset is dorecognised, Inventories Inventories are stated at the lower of cost or net realisable value, Net realisable value 1s the amount that can be realised from the sale of the inventory in the normal course of business after allowing for the costs of In adltion to the cost of materials and direct labor, an appropriate proportion of production averkead that have been incurred in bringing the inventories to their present location and condition is included in the inventory values. An allowance is recorded for excess inventory and obsolescence is based on the lower of cost ‘or net realisable value. Cost is determined using standard cost, which approximates actual cost, on & Firstn- Fst Out (FIFO) basis, 2017 FINANCIAL STATEMENTS aNOTHS TO THE FINANCIAL STATEMENTS (CONTD JULIUS BERGER poner 3. Significant accounting policies (Continued) 316 Taxation “Taxation represents the sum of income tax payable and deferred tax 3.16.) Income ancl deferted tax forth Income andl deterred tax are recognised in profit or loss, except when they telete to items that are recognised in other comprehensive income or clrectly in equity, in which case, the income and deferred lax are also recognised in other comprehensive income or divectly in equity respectively. Where income tax or deferred tax arises from the mitial accounting fora business combination, the tax effect is inluded in the accounting for the business combination lncome tax ‘Taxable profit dtfes from profit as reported in the income statement because some items of income or expense are taxable oF de current taxis calcitated based! on Companies Income Tax Act (CAPC24 LFN 2004) as amended to date and tax rates that have eon enacted or substantively enacted by the end of the reporting date vctible in difforont years or may never be taxable or deductible. Tho Group's lability for Deferred taxation [Deferred tax is recognised on temporary differences between the carrying amounts ef assets and liabilities in the consolidated and separate financial statements andl the corresponding tex bases used in the computation of tuxable proiit, Det tax assets ate generally recognised for all deductible temporary dillererces to the extent that itis probable that tunable profits will be available ageinst which those deductible temporary differences can be utilised. Such elorred tax assets and liabilities are not recognised sf the temporary difference arises from goodwill or from the intial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting, protit rel tax liabilities are generally recognised for all taxable temporary differences. Deferred Provision for doforred taxation is made by the liability method and calculated at the tax sale that applies during, the period of reversal an the dlferences between the net book value of qualifying property, plant and ‘oquipmont and their corresponding fax written down values. Also consideration is given for provision for retirement benefit which haveriot been paid in the year Doterred tae is calculated atthe tax rates that are expected to apply in the period when the Fability is settled or the asset realised based on the tax rates enacted by the ena of the ceperting,peciod S47 Foreign currencies All transactions in foreign currencies are recorded in Naita at the rate of exchange ruling at the dates of the transactions, Monetary items are converted to Naira at the ates of exchange ruling at the reporting date. All differences arising there from are taken to the profit oF loss. Non-monetary items carried rates prevailing at the date when the fair value was deteemined, Non-monetary items that are measured in terme of historical eas in a foroign currency are nol translated For the purposes of presenting consolidated and separate financial statements, the assets an! lability of the Group's foreign operations are translated into Currency Units using exchange rates prevailing at the end of eat reporting, period, Income and expense items are translated at the average exchenge rates for the period, unless exchange rates flactuate significantly during that period, in which case the exchange rates atthe dates of the transactions are used. Exchange differences arising, if any, are recogaised in other comprehensive income and accumulated in equity {attributed to nos-controling interests as appropriate). Goodwill and faie value adjustments on idenbfiable ascots and Kabilities acquited arising on the acquisition of 1a foreign operation are teated as assets and liabilities of the foreign operation ancl tansiated at the rate of ‘exchange prevailing at tho end of each reporting, period, Exchange differences arising are recognised in other fair value that are denominated in foreign currencies are retranclated at the comprchensive income andl accumulated in equity 348 Dividends Dividends on ordinary shares to shareholders are recognised in eq if eadtcr, approved by the shareholders atthe Ann ity inthe period in which they are paid or, Genoral Mooting, 3181 Unclaimed dividend Segregated accounts are maintained for unclaimed dividends and are recoverable by shareholders within bvelve years and actionable only when declared, Any amounts standing to the credit of unclaimed dlvidend are invested separately while amounts unclaimed atter twelve years ae taken to retained earnings in tine with JULIUS BERGER NI 12017 FINANCIAL STATEMENTS,Significant account 29 1 3.20 3.201 JULIUS BERGER NIGERIA PIC RC. 6852 JULIUS BERGER: NOTES TO THE FINANCIAL STATEMENTS (CONT'D) og policies (Continued) Retirement benefits Defines contribution plan Payments to defined contribution retirement benefit plans are recognised as an expense when empleyees have rendered! service entitling them to the contributions. Retirement bent plans for members of saff are structured through a defined contributory pension scheme, which is independent of the Group's finances and is managed by Pension Fund Administrators. The scheme, which is funded by contributions from both employoes ancl employer at 8% and 10%: respectively, is consistent with the Pension Reform Act 2014 Defined benefit plan For defined retirement benoft plans, the cost of providing benefits is determined using the Projected Unit Credit, Method, with actuarial valuations being carried out periodically so that a provision for the present value of the cesiimatet cost for liabilities duo at the reporting date in respect of employees’ terminal gratuities based on {qualifying years of service and applicable emoluments as per operating collective agreement is being, made in the satomont of Financial postion, Financial instruments Financial assets and financial labilities are recognised when @ Group entity becomes a party to the contractual provisions of the instrumont, Financial assets and financial Rabilitios are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilitios (other than financial assets and financial liabilities at fair value theough profit or loss) are added to or deducted ftom the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Trinsaction costs dicectly attributable to the acquisition of financial assets or financial liabilities at fair value through profit loss are recognised immediately in profit or los, Financial assets All regular way purchases or sales of financial assets are recognised ancl recognised on a trade date basis, Regular way purchases or sales are purchases or Sales of financial assets that require delivery of assets within, the time frame established by regulation or convention in the m rhotplace Amortiznd cost and affective interest method The effective interest method Is a method of calculating, the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effoctive interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, oF, where appropriate, a shorter pesied, to the net carrying amount on initial recognition, Income is recognised on an effective interest basis for debt instruments measured subsequently at amortsed cost. Interest income is recognised in profitor lose and is included in tho “investment income” line itom, sification of Financial assots Tho Group's financial assets are classified i 0 the following specified categories: financial asses ‘at fair value through profit oF kos’, ‘held-to-maturity’ investments, ‘available-forsale’ financial assets and ‘loans and receivables’, All recognised financial assets are subsequently measured in their entirety at either amortised cost tr fai value, depending on the classification ofthe firancial assets Held-to-maturity Hold-to-maturity investments are noa-derivative financial aces with fived or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold w maturity. Subsequent to initial recognition, held-io- maturity investments are measured at amortised cost using the effective interest method. less any impairment. Loans and receivables [Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not {quoted in an active market. Loans and receivables are measured at amortised cost using the eifective interest imethod, less any impairmont. terest incame is recagnised by applying the effective interest rate, except for short-term receivables when the effec of discounting is immaterial, The assets in this category include trade and other receivables, contract receivables and retentions, cash and cash equivalents, 2017 FINANCIAL STATEMENTS, %6JULIUS BERGER NOTES TO THE FINANCTAL STATEMENTS (CONT'D) 3, Significant accounting policies (Continued) 320.13 TULIUS BERGER NIGERIA PLC RC: 6852 Trade and otter receivables Trade and other receivables are initially socagnised at fxir vale, and are subsequently classified as loans ancl receivables and measured at amortised cost using, the effective imerest rate method. The provision tor impairment of trade and other receivables isestablished when there is objactive evidence that the Group will not be uble to collect all amounts due in accontance with the original (erms of the credit given and includes an assessment of recoverability bused on historical trend analyses and vents that exist at reporting date, The amount of the provision is the «cash flows, discounted at the effective interest rate computed at initial recognition, iference between the carrying value and the present valte of estimated future Contract receivables and retentions Contract receivables and retentions are initially eecognised at fair value, and are subsequently classified as loans and receivables and measured al amortsed cost using the effective interest rate method, Contract receivables and retentions comprise amounts due in respect of certified of approved certificates by the client or consultant at tho reporting date for which payment has not boon received, and amounts held as setentions on cestified certificates at the reporting, date. Contract receivables are slated alter deduction of spocitic allowance for any debt considered doubtiul af collection, The allowance for bad and doubiful debts is based on the estimated Inrecoverable which is determined basee on the ageing of the receivable balance aad historical experience Cash and cash equivalents Cash and cash equivalents comprise cash on haskl, demand deposits ond other short term highly: liquid investments that are readily convertible t» a known amount of cash and ate subject to an insignificant risk of ‘changes in value, Bank overdraits are not offset against positive bank balances unless a legally enforceable right of offset exsis, anc there is an intention to seltle the overdraft and realise the net cash simultaneously, of to settle om a net hasis. All short torm cash investments are invested with major financial institutions in order to naniage crest sh, Foreign exchange gains and losses The fair value of financial assets denominated in 2 foreign currency is determined in that foreign currency and translated at the epot rateat the ond of each reporting, pecied. The foreign exchange component forms port ofits fair value gain or loss. Therefore, for financial assets that are classified as at FVIPL, the foreign exchange component is recognised in profitor loss, For foreign currency denominated debt instruments measured at amortised cost at the snd of each reporting, peried, the foreign exchange gains and losses are determined based on the amortised cost of the financial assets {and are recognised in the other gains and losses’ line item in the Profit or loss. Inapeirment of financial assets Financial assets that are measured at amortised cost are assessed for impairment at the end af each reporting, Peried. Financial assets are considered to be impaiced when there is objective evidence that, as a result of one or more events that occurred after the initial recogaition of the Financial assets, the estimated Future cash flows of the asset howe heen attested. Objective evidence of impairment coud include: significant financial difiiclty of the issuer or counterparty or breach of contract, such asa default or delinguency in interest or principal payments or st becoming probable that the borrower will enter bankrupicy er financial reorganisation or =the disappearance of an active market for that financial assot becatieo of financial difficulties For cortain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired incividually ae, in addition, assessed for impairment ona collective basis, Objective evidence of impairment for 4 portfolio of receivables could include the Group's past experience of collecting payments, an increase in tho number of delayed payments in the portiolo past the average credit period of 60 days, as well as observable changes in national or acal economic conditions that correlate with default on receivables. ‘The amount of the impairmeat less recognises is the difference bevween the assets carrying amount and the: present value of estimated future cash flows reflecting the amount of collateral and guarantee, discounted at the Financial asset's original effective interes! rate 2017 FINANCIAL STATEMENTS o|} suns sercer NOTES TO THE FINANCIAL STATEMENTS (CONT'D) 3. Significant accounting policies (Continued) JULIUS BERGER NIGERIA PLC RC: 6852 Ihe carrying, amount of the financial asset is recluced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account When a trade receivable is considered uncollectible, itis written-off against the allowance account Subsequent recoveries of amounts previously written-off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss 11, im_a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to on event occurring after the impairment was recognised, the previously recognised impairment loss 18 reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed docs not exceed what the mortises cost would have been had the impairment not been recognised Derecognition of financial assets The Group derecognises a finaneial asset only when the contractual rights Jo the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substentially all the risks and rewards of ‘ownership and continues to conttol the transferred asset, the Group recognises its retained interest in the asset and an asvociated liability for amounts it may have t0 pay. If the C and rewards of ownership of a transferred financial asset, the Group continues lo recognise the financial asset and also recognises a collateralised borrowing for the proceeds received, (On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying, amount end the sum of the consideration received anc! receivable is recognised in profit or loss. Sroup retains substantially all the risks On derecognition of a financial ascot that is classified ae fair-valuo-through othe comprehensiveincome (FVLOCD, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is reclassified to retained eamings. Financial liabilities and equity instruments Classification a5 debt or equity Debtand equity instruments issued by a Group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the dofinitions of a financial liability and an equity instrument Equity instr An equity instrument is any contract that evidences a residual interest in the assets of an entity alter declucting all fis liabilities, Equity instruments issued by the Group are recognised atte proceeds received netot direct iste costs, Financial Habiities Financial fiabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial llabilities’. The Group does not have financial liabilities classified as financial liabilities ‘at FVTPL (Other financial liabilities Other financial liabilities (including borrowings and trade and ether payables) are subsequently measured at amortised cost using the effective interest method The effective interest method is a method of calculating the emortised cost of a financial liability and of allocating interest exponso over the relevant period, The effective interest rate is the rate that exectly discounts estimated future cash payments (Including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums of discounts) through the expected life of the financial liability or (where appropriate) a shorter period, to the net carrying amount on inital recognition. 2017 FINANCIAL STATEMENTS 3JULIUS BERGER 1O THE FINANCIAL STATEMENTS (CONT'D) 3. Significant accounting policies (Continued) 3.20.24 Foreign exchange gains and losses For financial liabilities that are clenominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains ancl losses ore determined based on the amortised cost ofthe instruments and are recognised in the ‘other gains and lasses’ line iter note 8) in the profit or loss The fair value of financial liabilities Genominated in a foreign currency is determined in that foreign currency and transiaied at tho spot rate at the end of the rporting peried, For financial liabilities that are measured as at FVIPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profitor loss 4202.5 Do-recognition of financial labiities The Group derceagnises financial Liabilities when, and only when, the Group's obligations are discharged cancelled or they expire. ‘The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 3.21 Provisions Provisions are recognised when the Group has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required (o settle the obligation and ¢ reliable cstimate can be made of the amountof the obligation. Tho amount recognised 26 a provision is the best ostimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation, When a provision i measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material), When some or al of the economic benefits required to settle @ provision are expected to be recovered from thind party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably 322 Related parties Parties ate considered tu be related sf one party has the ability to control or jointly control the other party or exercise significant influoncs over the other party in making financial and operating, decisions. Key management personnel are also regarded as related partles. Key management personnel are those persons having authority and responcibility for planning, directing and controlling, the activities of the Group, directly fo inditeetly, including all executive ancl non-executive duectors, Related party transactions are those where & transler of resources or obligations botwaen related parties occur, regardless of whether or not a price is charged 3.23. Eamings per share The Group presents basic earnings per share (I:°S) for its ordinary shares. Basic earnings per share (EF5) is calculated by dividing the Total comprehensive income attributable to ordinary shareholders of the Group by the weighted average nuniber o! ordinary shares in issue during, the year. Diluted earings per share (DFS) are calculated using fully diluted shores outstanding (ce. including the impact of stock option grants and 324 Segment reporting ‘Sepment information i presented in cespect of the Groups business segments. The business segments are determined by management based on the Group's intemal reporting structure. The determination of the Group’s operating, segments 1s based on the organisation units for which information ig reported (© the Group's management. The Group has three divisions, Building, civil and Services, The three divisions have sepatate management and reporting structures and are considered separately reportable operating segments, Certain headquarter activities are toported as “Cozporate.” These consist of corporate headquarters, including, the Corporate Executive Committee, corporate communications, corporate human resources, corporate finance, including treaeury, taxes and pension fund management. corporate legal and corporate safety and environmental services. IULIUS BERGER NIGERIA PLC 20.7 FINANCIAL STATEMEN R¢ ES 1s Po