oO OLAYINKA OYEBOLA & Co. So, Chartered AccountantsProducam S.A ‘Annual Reports ond Accounts for the Year Ended 31st December, 2017, Contents Corporate Information Director's Report Statement of Directors’ Responsibilities Report of Auditors Significant Accounting Policies Statement of Financial Position Statement of Profit or Loss Account Statements of Changes in Equities Cash Flow Statements Notes to the Account Page| 1 8-18 19 20 ai 2 23-26Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017, Corporate Information Board of Director Mr. Emmanuel NEOSSL - Managing Director Company's Secretary Enganabissen Celestin BP: 648, Doula Cabinet Maitre Enganabissen. Registered Office Bafang Kekem Town Cameroon, Bankers Bicee-Cameroun Societe Commercial De Banque ( Scb- Cameroun) Aftiland First Bank Banque Atlantique Cameroun Commercial Bank of Cameroun Auditors OlayinkaOyebolag Co. (Chartered Accountants) 2" Floor, Nurses House PC 43, Churchgate Street Victoria Island Lagos,Nigeria Page |2Producam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 Reports of the Directors ‘The Directors present their annual report on the Producam S.A (The Company) together with the Audited Financial Statements and the Auditors’ Report for the year ended 31"December, 2017. 1 The Company 11 Legal Form Producam S.A was incorporated in Cameroon under the Companies and Allied Matters Act 1.2 Principal Activity ‘The Company is licensed to merchandise cocoa and allied products in Cameroon. 1.3 Accounting Period ‘The accounting period of this financial statement is 12 months (1"January,2017 — 31"December, 2017) with comparative figure for the year ended 31"December 2016, 2. Operating Result The following is a summary of the Company's operating results: 2017 2016 € Total Income 108,038,693 Profit / (Loss) before Taxation 10,480,779 10,570,421 Taxation (3,458,657) (3,488,239) 7,082,182 Profit for the year 7,022,122 3. Director's Interest None of the company’s directors has notified the company for the purpose of any declarable interest in contracts in which the company is involved as at 31"December, 2017. Below is the list of the directors with their designations. Name of Director ~ Managing DirectorProducam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 4. Property, Plant and Equipment Investment in property, plant and equipment during the period is limited to the amount shown in the financial statements. In the opinion of the Directors, market value of the firm's properties is not less than the value shown in the financial statements. 3. Acquisition of own share The Company did not purchase any of its own shares during the year under review. 6. Post Balance Sheet Events There have been no material changes in the company’s financial position since 31*December, 2017 that would have affected the true and fair view of the company’s state of affairs as at that date. 7. Employment and Employees Its the policy of the company that there is no discrimination in consi employment including those of disabled persons. ring applications for All employees disabled or not are given equal opportunities to develop their experiencé and knowledge and to qualify for promotions in furtherance of their career. As at December 31, 2017, there was no disabled person in the employment of the company. 8 Employee Involvement and Training ‘The company is committed to keeping employees fully informed as much as possible regarding the company’s performance and progress. Views of employees are sought where practicable on ‘matters that particularly affect them as employees. Incentive schemes designed to meet changing circumstances of employces are implemented whenever appropriate and some of these schemes include bonus, promotion, salary review and training 9. Code of Business Ethics Management has communicated the principles in the company’s code of conduct to its ‘employee in the discharge of their duties. These codes set their professionalism and integrity required for business operations which cover compliance with the law, conflicts of interest, environmental issues, reliability of financial reporting, bribery and strict adherence to the principle so as to eliminate the potential for illegal practices. Page | 4Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 10. Donations and Gifts During the year, the Company did not make any donations or charitable gifts to any political party, Voluntary Organisation, Non-Governmental Organisation and Government Agency. 11. Directors Responsibilities In accordance with the provision of Sections 334 and 335 of the Company and Allied Matter ‘Act, the Company Directors are responsible for the preparation of Financial Statements which give a true and fair view of the affairs of the Company as at the end of the financial period and its results for that period and which comply with the Companies and Allied matters Act, 2004. = Proper accounting books and records are maintained. - Applicable accounting standards are followed. = Suitable accounting policies are adopted and consistently applied. ~The going concer basis is used, unless it is inappropriate to presume that the company will continue in business. - Internal control procedures are instituted which will reasonably safeguard the assets, prevent and detect fraud and other irregularities 12, Auditors ‘The Auditors, Messrs Olayinka Oyebola & Co. was appointed to serve as the company’s auditor in accordance with section 357 of the Companies and Allied Matters Decree 1990. By Order of the Board ‘Company Secretary Page| 5Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 ‘Statement of Directors’ Responsibilities in Relation to the Financial Statements In accordance with the provisions of Sections 334 and 335 of the Companies and Al Matters Act 2004, the Directors are responsible for the preparation of annual financial statements which give a true and fair view of the financial position at the end of the financial year of the Company and of the operating result for the year then ended. The responsibilities include ensuring that: © Appropriate and adequate intemal controls are established to safeguard the assets of the Company and to prevent and detect fraud and other irregularities; © The Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Company and which ensure that the financial statements comply with the requirements of the Companies and Allied Matters Act, 2004 * The Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that all applicable accounting standards have been followed; and * The financial statements are prepared on a going concern basis unless that the Company will not continue in business. is presumed The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the group and of its operating result for the year ended. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of the financial statements, as well as adequate systems of financial control. Nothing has come to the attention of the Directors to indicate that the group will not remain a going concern for at least twelve months'from the date of this statement. Signed on behalf of phe Directorsion by: | The Directors accept responsibility for the year’s financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent concepts Page |62nd loo, Nurses House, PC, Churchgate Street, Utormeri ativan Stet) Vitor and, Lagos. seston cn OO OLAVINKA OYEBOLA & Co. YolaBoloftinclsonioncom Chartered Accountants SS Report of the Independent Auditors To the Members of Producam S.A ‘We have audited the financial statements of Producam S.A for the year ended 31" December,2017. The financial statements have been prepared under the historical cost, convention and in accordance with relevant accounting policies. Respective Responsibilities of Directors ‘As contained in the Companies and Allied Matters Act, CAP C20, LFN 2004, the Financial Reporting Council of Nigeria and our terms of engagement, the Directors are responsible for the preparation of the financial statements. Auditors’ Responsibility It is our responsibility to form an independent opinion based on our audit on these financial statements, we will report our opinion to you. We conducted our audit in accordance with International Standards on Auditing. An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgment made by the directors in the preparation of the financial statement and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed. ‘We planned and performed our audit so as to obtain all the information and explanations which we considered necessary to provide us with sufficient evidence to give a reasonable assurance that the financial statement are free from material misstatement, whether caused by fraud, other imegularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion, the financial statements are in agreement with the books of accounts which have been properly kept in accordance with the Companies and Allied Matters Act, CAP C20, a Olayinka Oyebola FCA Olayinka Oyebola & Co Lagos, Nigeria (Chartered Accountants) July, 2018 FRC/2014/1CAN/00000005764 Page |7 Member Firm Public Company Accounting Oversight Board (PCAOB - USA) TAX AUDIT ADVISORYProducam S.A ‘Annual Reports and Accounts for the Yeor Ended 31st December, 2017 Statements of Significant Accounting Policies 1. General Information PRODUCAM S.A was incorporated in Cameroon on 4" of April 2012. The company primarily located in the town of Kekem with legal representative Mr Emmanuel NEOSS 2. Summary of Significant Accounting Policies ‘The following are the significant accounting policies adopted by the company. These policies have been consistently applied to all the years presented, unless otherwise stated. 2.1 Basis of Accounting The financial statements have been prepared under the historical cost convention. They have been prepared in accordance with International Financial Reporting Standards. 2.2 Funetional and Presentation Currency ‘These financial statements are presented in Euro, while the company’s functional currency is Cameroon XAF. Hence, the financial statements are presented in Euro and all values are rounded to the nearest, except otherwise indicated 2.3. Use of estimates and judgments ‘The preparation of the financial statements in conformity with IFRSs requires management to ‘make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, Therefore, actual results may differ from these estimates. However, the estimates and underlying assumptions are reviewed on an ongoing basis while revisions to accounting estimates are recognized in the period in which the estimates is revised and in any future periods affected, 2.3.0 Financial instruments The Financial instruments of the company consist of financial assets, financial liability and equity instrument. Each component of the financial instrument is classified on initial recognition in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument. Page | 8Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 2.3.1 Classification of Financial Assets ‘The financial assets are classified into the following categories depending on the nature and purpose of each of the financial asset: Cash & cash equivalents; Financial assets at fair value through profit or loss; Loans and other receivables; and, Regular way purchase or sale instruments. Cash and cash equivatents Cash (currency) is a financial asset because it represents a medium of exchange and is therefore the basis on which all transactions are measured and recognized in the financial statements. It consists of cash on hand and demand deposits. Cash equivalents comprise other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, all of which are available for use by the company unless otherwise stated. In the statement of financial position, bank overdrafts are included in other liabili Financial assets at fair value through profit or loss This category has two components: those held for trading, and those designated ‘at fair value through profit or loss’ at ineey A financial asset is classified in this category if acquired principally for the purpose of generating profit from short-term fluctuations ‘in price or dealer’s margin, or a security is included in a portfolio in which a pattern of short-term profit taking exists or if so designated by management at inception as held at fair value through profit or loss. Financial assets designated at fair value through profit or loss at inception, are those that are: © Held to match ies that are linked to changes in fair value of these assets. The designation of these assets at fair value through profit or loss eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as ‘an accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognizing gains and losses on them on different bases; or © Managed and whose performance is evaluated on a fair value basis. Information about these financial assets is provided internally on a fair value basis to the company's key management personnel. ‘The company’s investment strategy is to invest in equity and debt securities, and to evaluate them with reference to their fair values. Assets that are part of these portfolios are designated ‘upon initial recognition at fair value through profit or loss. Page | 9Producam S.A ‘Anauol Reports and Accounts for the Year Ended 31st December, 2017 Loans and receivables Loans and receivables represent a contractual right to receive cash in the future. Hence, they are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. ‘These arise when the company provides money or services directly to a debtor with no tention of trading the receivable. Subsequent initial recognition of loans and receivables are measured at amortized cost using the effective interest method, less impairment losse ‘The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is measured on initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount, minus any reductions for impairment of financial assets The carrying amount represents its fair value. Regular way purchase or sale instrument ‘A regular way purchase or sale instrument is a contract whose termsrequire the delivery of financial assets within the time frame established generally by regulation in the marketplace concerned, 2.3.2 Recognition and measurement of Financial Assets Financial assets are recognized in the statement of financial position when»the company becomes a party to the contractual provisions of the instrument. ‘At initial recognition, the company measured its financial assets at their fair value plus (in the case of all financial assets not carried at fair value through profit or,loss) transaction ccosts that are directly attributable to their acquisition. * After the initial recognition, the company shall in compliance with IFRS 9 measure its financial assets at their fair values. Purchases and sales of financial instruments are measured on a “Trade-date” basis. Investments made by the company witich are classified as ‘Held at fair value through profit or loss’ is measured at subsequent reporting dates at fuir value. 2.3.3, Classificat n of Financial Lial jes and Equity Instruments Financial liabilities and equity instruments, issued by the company, are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. 24 Financial Liability A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to the company’s individual or corporate clients or another company. They are classified based on their purpose and nature into the following categories: © Loans & borrowings; ‘© Financial liabilities at fair value through profit or loss Page | 10Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017, © Clients’ fund accounts 2.4.1 Loans & Borrowings Loans and borrowings represent a contractual right to pay cash in the future. Hence, they are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market, 2.4.2. Clients’ Fund Accounts Clients’ fund accounts represent a financial liability that is used to fund trading activities. 2.4.3. Equity Instrument ‘An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. 2.4.4 Recognition and Measurement of Financial Liabilities At initial recognition, the company measures its financial liabilities at its fair value, minus (in the case of a financial liability not at fair value through profit or loss), transaction costs that are directly attributable to the issue of the financial liability Financial liabilities are subsequently measured at amortized cost and interest is recognized over the period of the borrowing using the effective interest method. The company classifies certain liabilities at fair value through profit the accounting classification of assets with similar risks, Such liabil fair value with changes in fair value recognized in profit or loss. F loss, mainly to match ies are accounted for at 2.4.5. Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Hence, the fair values of quoted investments and unit trusts in active markets are based on current market prices. Since actual market prices are available in determining fair values, no significant estimates or valuation models are applied in determining the fair value of quoted financial 2.4.6 Fai value hierarchy Fair values are determined according to the following hierarchy based on the requirements of IFRS 7 ‘Financial Instruments: Disclosures’: a) Level 1: quoted market pric identical instrument : financial assets and liabilities with quoted prices for active markets. b) Level 2: valuation techniques using observable inputs: quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable. Page | 11Producam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 ©) Level 3: valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable. The best evidence of fair value is a quoted price in an active market.In the event that the market for a financial asset or liability is not active, a valuation technique is used. 2.4.7 De-recognition of financial instruments Financial assets are de-recognized when the contractual right to receive cash flows from the investments have expired or on trade date when they have been transferred and the Company has also transferred substantially all risks and rewards of ownership. Non-cash financial assets pledged, where the counterparty has the right to sell or re-pledge the assets to a third party, are classified as pledged assets. Financial liabilities are de-recognized when they are extinguished (ie. when the obligation is discharged, cancelled or expires), The difference between the carrying amount of a financial liability (or part thereof) extinguished or transferred to another party and consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss. 2.4.8 Gains and losses Gains and losses arising from changes in the fair value of the “financial assets at fair value through profit or loss’ category are included in profit or loss in the period in which they arise. Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized in comprehensive income, until the financial asset is derecognized Or impaired at which time the cumulative gain or loss previously recognized in comprehensive income is recognized in profit or loss. Interest income, calculated using the effective interest method, is recognized in profit or loss except for short term receivables where the recognition of interest ‘would be immaterial. Dividends on available-for-sale equity instruments are recognized in the profit or loss when the company’s right to receive payment is established 2.4.9 Effective interest method ‘The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on 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, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. 2.4.10 Offsetting of financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there isa legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or, realize the asset and settle the liability simultaneously. Page| 12Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 2.5.0 Impairment of financial assets 2.5.1 Assets carried at amortized cost ‘At each reporting date, the company assesses whether there is objective evidence that a financial asset or group of financial assets is impaired, A financial asset or @ group of financial assets is impaired and impairment losses are recognized if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event") and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. ‘The company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it then includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in the collective assessment of impairment. If there is objective evidence that an impairment loss on loans and receivables has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. ‘The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract, When a loan is uncollectible, it is written off against the related provision for loan impairment. Such loans are written off after all the necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off decrease the amount of the provision for loan impairment in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the previously recognized impairment loss is reversed by adjusting the allowance account, The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. The amount of the reversal is recognized in profit or loss. Page | 13Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 2.5.2 Assets carried at fair value At each reporting date, the company assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss ~ measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss — is removed from comprehensive income and recognized in profit or loss. Impairment losses recognized in profit or loss on equity instruments that are classified as available-for-sale are not subsequently reversed through profit or loss, any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. However, if in a subsequent period the fair value of a debt instrument classified as available- for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit, ot loss. 2.7.0 Property, Plant and Equipment All items of Property, Plant and Equipment and other tangible assets were reported at their revalued amount net of accumulated depreciation and / or accumulated impairment losses. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All-other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred. Depreciation on assets is calculated using the straight-line method to allocate their cost to their residual values on a systematic basis over their estimated useful lives. The average useful lives are as follows: Building 20 years Equipment 10 years Transport Equipment 5 years Fixture & Fittings 10 years Each part of an item of Building Equipment, Transport Equipment, Fixture & Fittings and other tangible assets with a cost that is significant in relation to the total cost of the item is depreciated separately. ‘The asset’s residual values, useful lives and depreciation method are reviewed on an annual basis, and are adjusted if appropriate, ‘An asset's carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Page | 14Producam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 Gains and losses on disposals are determined by comparing proceeds with the carrying amount.These are included in the profit or loss under other operating expenses. 2.8.0 Share capital Ordinary shares ‘The share capital of the company consists of Three Hundred Million ordinary shares of € 0.00154 that are classified as equity and are recorded at the proceeds received net of incremental external costs directly attributable to the issue. 2.9.0 Employee benefits 2.9.1 Pension fund obligations ‘The company operates a ‘Defined Contribution Plan’ in compliance with the Law No.92-007 of August 14, 1992 on the labour code, wherein the employees contribute 8% of their basic salary and allowances and the company as an employer also contributes 12% of total salaries to «a designated National Social Insurance Fund (NSIF). ‘The company has no further payment obligations once the contributions have been paid. Furthermore, the company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees, the benefits relating to employee service in the current and prior periods. ‘The contributions are recognized as employee benefit expense when they are due. 2.9.2. Short-term employee benefits ‘The cost of short-term employee benefits (those payable within 12 months after service is rendered) such as paid vacation, leave pay, sick leave and bonuses are recognized in the period in which the service is rendered and is not discounted. The expected cost of short-term accumulating compensated absences is recognized as an expense as the employees render service that increases their entitlement or, in the case of non-accumulating absences, when the absences occur. The expected cost of bonus payments is recognized as an expense when there isa legal or constructive obligation to make such payments as a result of past performance. Provisions for leave pay and bonuses are recognized as a liability in the financial statements. 2.10 Taxation ‘The tax expense represents the sum of the current tax payable and deferred tax. ‘The current tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Page | 15Producam S.A Annual Reports and Accounts forthe Year Ended 31st December, 2017 Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognized for taxable temporary differences arising on investments. in subsidiaries and associates, and interests in joint ventures, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future ‘The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available 10 allow all or part of the asset to be recovered. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The ‘measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is charged or credited to profit or loss for the period, except to the extent that the tax arises from (1) a transaction or event which is recognized, in the same or a different period, outside profit or loss, either in other comprehensive income or directly in equity or (2) a business combination. Deferred tax is charged or credited outside profit or loss if the tax relates to items that are recognized, in the same or a different period, outside profit or loss. 2.11 Provisions Provisions are liabi ing or amount, and are recognized when the company has a present obligation as a result of a past event, and it is probable that the company will be required to settle that obligation. Provisions are measured at the directors’ estimate of the expenditure required to settle that obligation at the end of each reporting period, and are discounted (at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability) to present value where the effect is material. Provisions are not recognized for future operating losses. Page |16Producam S.A Annual Reports and Accounts forthe Year Ended 31st December, 2017 Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. 2.12, Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable from services provided in the normal course of business net of VAT and other related sales taxes. 2.12.2 Investment income Investment income comprises realised and unrealised gains on investments, interest income and dividend income. Interest income is acerued on atime basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount. Dividend income is recognized when the right to receive payment is established. 2.13 Foreign currencies transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. The functional curreney is the currency of the primary economic environment in which the entity operates, which is the Nigerian Naira, Foreign exchange gains and losses resulting from the settlement of such transactions related to the service fee income and from the translation at year-end closing exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Page | 17Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 3 Adoption of new and revised IFRS standards 3.1 Accounting standards and interpretations issued but not yet effective ‘The following revisions to accounting standards and pronouncements that are applicable to the Company were issued but are not yet effective. Where IFRSs and IFRIC Interpretations listed below permits, early adoption is permitted; the Company has elected not to apply them in the preparation of these financial statements. ‘The full impact of these IFRSs and IFRIC Interpretations is currently being assessed by the Company, but none of these pronouncements are expected to result in any material adjustments to the financial statements, IFRS 9 Financial instruments In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. The Company expects no significant impact on its balance sheet and equity. IFRS 15 Revenue from contracts with customers IFRS 15 was issued in May 2014 and establishes @ five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after | January 2018, ‘when the IASB finalizes their amendments to deter the effective date of IFRS 15 by one year. Early adoption is permitted. The Company expects no significant impact on its balance sheet and equity, IFRS 16 Leases ‘The scope of the new standard includes leases of all assets, with certain exceptions. The new standard requires lessees to account for all leases under a single on-balance sheet model (Subject to certain exemptions) in a similar way to finance leases under IAS 17. Lessees recognize a liability to pay rentals with a corresponding asset, and recognize interest expense and depreciation separately. The new standard includes two recognition exemptions for lessees ~ leases of “low-value” assets (e.g., personal computer) and short-term leases (i.e., leases with a lease term of 12 months or less). Reassessment of certain key considerations (e.g., lease term, variable rents based on an index or rate, discount rate) by the lessee is required upon certain events, Lessor accounting is substantially the same as today’s lessor accounting, using IAS 17s dual classification approach. The new standard is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15, The Company except that the new standard will affect the figures reported on the balance sheet. Page| 18Producam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 PRODUCAM S.A s ‘IAL POSITION AS AT 31ST DECEMB! 2017 Bist Dec. 2017 31st Dec. 2016 Non Current Assets € € Property, Plant & Equipment 1 11,752,098 8,783,279. Financial Asset 304,878 304,878 12,056,976 9,088,157 ‘Current Assets Inventories 2 27,156,291 24,596,417 Cash and Bank 3 1,824,813 3,299,808 ‘Trade and other receivables 4 4,618,223 4,346,028 33,599,327 32,242,254 Total Assets 45,656,303 41,330,411 EQUITY & LIABILITIES Equity Share Capital 8 457,317 457,317 Retained Earnings , 26,515,781 19,493,660. 26,973,098 19,950,977 Non Current Liabilities Lease Payable - 89,279 Borrowings 6 954,347, 2,003,023 954,347 092,303 Current Liabilities Trade & other payables 5 8,916,563 9,384,025 Bank Overdraft 7 8,812,294 9,903,106 17,728,857 19,287,131 Total Equity and Liabilities 45,656,303 41,330,411 Bs o Approved by Board of Directors on the ‘Name: Mr. Emmanuel Neossi Managing Directoy ‘The accompanying notes form part of the financial statementsProducam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 PRODUCAM S.A STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER, 2017 Note 31st Dec. 2017 31st Dec. 2016 € € Income 10 97,051,124 108,001,106 Cost of sales 11 __ (79,815,882) (88,349,805) 17,235,242 19,651,301 Other income 37,588 Administrative Expenses 12 (5,128,183) (7,403,014) Finance and other Charges 13 (1,626,281) (1,715,453) Profit/(Loss) before tax 10,480,779 10,570,421 Taxation Provision (3,458,657) (3,488,239) Profit/(Loss) after tax “7,022,122, 7,082,182 Other Comprehensive income Other Comprehensive income a , ‘Total Comprehensive Income 7,022,122 7,082,182 Earnings per share 15.36 15.49 The accompanying notes form part of the financial statements 20Producam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 PRODUCAM S.A STATEMENT FOR THE YEAR ENDED 31; Changes in Equity 31st December 2016 Share Note Capital Earnings Total Balance as at 1/1/16 457,317 12,411,477 12,868,794 Profit for the year 7,082,182 7,082,182 Other Comprehensive Income : - - Balance as at 31/12/16 457317 _19,493,660_ _ 19,950,977 ‘Changes in Equity 31st December 2017 Share Retain Note Capit Earnings Total =N= =N= Balance as at 1/1/17 457,317 19,493,660 19,950,977 Profit for the year i 7,022,122 7,022,122 Revaluation - : Other Comprehensive Income Balance as at 31/12/17 26,515,781 __ 26,973,098 21Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 PRODUCAMS.A STATEMI F CASHFLOW FOR THE YEAR ED 31ST DECEMBER, 2 7 Bist Dec. 2017 31st Dec. 2016 Cash flow from Operating Activities € € Non cash items Profit/(Loss) before Taxation 10,480,779 10,570,421 Depreciation 997,111 1,101,949 11,477,889 11,672,370 Changes in Working Capital (Increase)/Decrease in Receivables (272,194) (85,066) Increase/(Decrease) in Payables (467,462) (9,636,994) Increase/(Decrease) in Inventories (2,559,874) (2,311,635) Tax Paid (3,458,657) ___(3.488,239) Net cash flow from Operating Activities 4,719,702, 6,849,564) Cash flow from Investing Activities Purchases of asset (3,965,930) * Financial Assets = (3,965,930) Cash flow from Financing Activities Share Capital - = Lease Repayments : Increase/(Decrease) in Term Loan (2,228,768) __* 4,043,341 (2,228,768) 4,043,341 Net increase in cash & cash equivalent (1,474,995) 193,778 Cash and cash equivalent at the beginning of the year 3,299,808 3,106,031 Cash and eash equivalent at the end of the year 1.824813 3,299,808 2Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 PRODUCAM S.A NOTES TO THE ACCOUNT FOR THE PERIOD ENDED DECEMBER 31ST 2017 1 The accounting period covered by this audited financial statement is 12 months (January 2017 - December 2017) 2. The Company: The company was incorporated on the 4th of April, 2012. and commence business immediately. Its activities covers merchadising of cocoa and allied products 3. Property, Plant & Equipment ‘Transport Fixtures & Land Building Equipment Equipment Fittings Total cost € € € € € € Balance b/f 775,177 7,954,822 794,425 1,191,593 463,034 11,179,051 Addition during the year - = 3,088,473 853,659 23,798 3,965,930 Disposal Cost as at (31/12/17) T7517] _ 7,954,822 3,882,898 2.045251 486,832 __ 15,144,981 Depreciation Balance b/f - 757,175 395,105 1,068,027 175,466 2,395,772 Charge for the Period - 397,741 438,598 112,683. 48,088 = (997,111 Charge on disposal Depreciation as at @ui27) 154,916 833,703__1,180,710_223,554 392,883 NBV (1/12/17) 775,177 __ 6,799,906 3,049,195 __864,542_263,279_11,752,098 NBY (31/12/16) 775,177_7,197,647_399,320_123,566_287,568_ 8,783,279PRODUCAM S.A NOTES TO THE At 2 Inventory 3 Cash & Cash Equivalents Producam S.A ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 FOR THE YEAR ENDED 3IST DE Bist Dee. 2017 31st Dec. 2016 4 Trade Receivables & Prepayments “Trade Receivables (Other Receivables Prepayments 5 Trade Payables & Accrual Trade Payables (Other Payables Employee Benefits ‘Tax payables 6 Non Current Liabilities Finance Lease Long Term Borrowings 7 Current Liabilities Bank Overdraft Loan 8 Share Capital Authorised: € € 27,156,291 24,596,417, 27,156,291 24,596,417 1,824,813 3,299,808 1,824,813 3,299,808, 2,583,756 2,010,662 744,895 997,074 1,289,572 1,338,292 4,618,223 45346,028, ssn sara abtwoss ses 10283 783 Loweast___1g9136 sss, ans 0209 2,003,023 954.347 2,092,303, 889,018 383,636 300,000,000 300,000,000 Ordinary Share issued & fully paid “457,317.07 __457317.07 9 Retained Earnings Balance b/f Profit(Loss) for the year balance ed 10 Turnover Sales of merchandise 19,493,660 12,401,477 7,022,122 7,082,182, ara 9.093.560, BMst Dec. 2016 3st Dee. 2015 € € 97,051,124 108,001,106 97,051,124 108,001,106 ER, 2017 ‘Turnover represents income generated from merchadising Of cocoa and allied products. 11 Cost of Sales Purchases of Merchandise 79,815,882 88,349,805 4Producam SA ‘Annual Reports and Accounts for the Year Ended 31st December, 2017 12 Administrative Expenses Personel expenses 295,522 281,728 Other purchases 2,185,205 277,027 External services 1,561,859 2,666,993 Transport 02,802 800,527 Taxes & Levies 882,739 7,403,014 13 Finance and Other Charges Depreciation 997,111 1,101,949 Finance Charges 629,170 613,504 1,626,281 1.715.453 Eaming per share (basic) (EPS) have been computed for each period on the profit after taxation attributable to ordinary shareholders and divided by the weighted number of issued 300,000,000 inary shares during the period. While diluted earnings per share is calculated by adjusting the ‘weighted average ordinary shares outstanding to assume conversion of all diluted potential ordinary shares. There were no potential dilutive shares in December 2017 (December 2017: Nil) 15 Finance Instruments Exposure to Credit Risk Credit risk arises from cash and cash equivalents, deposits and receivable from customers. The ‘Company does not have any significant concentrations of credit risk. ‘The credit risk atthe reporting date was as follows: Trade & other receivables 3,328,651, 3,007,736 Cash at bank 1,824,813, 5.153.464 16 Impairment losses [No impairment losses have been recognised on loans and receivables as management is confident of full recovery of the balances. 17 Liquidity Risk ‘The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Less than I year Over I year Bist December 2017 ‘Trade and other payable 7,891,848 : Taxation 1014451 - 8,906,300 = 3st December 2016 ‘Trade and other payable 7,965,136 - Taxation 1391,346 - 9,356,482 - asProducam S.A Annual Reports and Accounts for the Year Ended 31st December, 2017 18 Market Risk Exposure to currency risk ‘The Company's exposure to foreign currency risk based on notional amount was as follows: Bist Dee. 2017 31st Dec. 2016 In EURO € € Cash and cash equivalents 1,824,813 3,209,808 Trade and other payable 7,902,112 7,992,679, 9,726,925 11.292.487 “The following rates were applied during the year: Average rte 000621 0.00132 Reporting date spot rte 0.00897 0.00152 19 Sensitivity analysis A 10 percent strengthening of the Euro against the Cameroon XAF as at 31 December 2017 ‘would increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interes rate remain constant, BAst Dec. 2017 31st Dec. 2016 € € Equity (Euro) 972,693) 1,129,249) Profit or loss (Euro) 972,693 1,129,249, A 10 percent weakening of the Euro against the above Cameroonian XAF as at 31 December 2017 would have had an equal opposit effect on the above currency to the amounts shown above, ‘om the basis that all other variables remain constant. 20 Interest Rate Risk Profile ‘The Company did not have any fixed or variable rate financial instruments as atthe reporting date Variable rate instruments Loan from the Parent Company 7,923.26 9.519.470, ‘Cash flow sensivity analysis for variable rate instruments ‘A change of 100 basis point in interest rate at the reporting date would have increased / (decreased) profit or loss by the amounts shown below. This analysis assumes all other variable remain constant. Variable rate instrument Increase 7,923,276 9,519,470 Decrease 7.923.276) 9,519,470) 21 Fair Value The fair value of the Company's financial assets and liabilities approximates thei carrying values as a the reporting date 22 Capital commitment and contingencies Capital commitments. There were no capital commitments as at 31 December 2017. Contingent assets and liabilities There were no contingent assets and liabilities as at 31 December 2017. 23 Events after the reporting date ‘There were no events after the reporting period that could have had material effects on the financial statements of the Company that have not been adequately provided for or disclosed in these financial statements 26