7UP annual report 2017

1. Seven‐Up Bottling Company PLC
Annual Report
31 March 2017

2. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Contents
Page
Directors and other corporate information 1
Results at a glance 2
Directors’ report 3
Statement of directors’ responsibilities in relation to the financial statements 12
Report of the Audit committee 13
Independent Auditor's Report 14
Statement of financial position 18
Statement of profit or loss and other comprehensive income 19
Statement of changes in equity 20
Statement of cash flows 21
Notes to the financial statements 22
Other national disclosures 68
Value Added Statement 69
Five Year Financial Summary 70

3. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Directors and other corporate information
Board of Directors: Mr. Faysal El‐Khalil, O.O.N (Lebanese) ‐ Chairman
Mr. Sunil Sawhney (Indian) ‐ Vice Chairman with effect from 1 April 2017
Mr. Ziad Maalouf (Lebanese) ‐ Managing Director/ CEO with effect from 1 April 2017
Chief Farid El‐khalil (Lebanese)
Otunba (Dr) A. Ojora O.F.R., C.O.N.
(Alternate) ‐ Mrs. Oluwatoyin Ojora Saraki
Chief Emmanuel N. Nwokoro
Mallam Mohammed Hayatu‐Deen O.O.N.
Mr. Ziad A. El‐Khalil (Lebanese)
Mr. Femi Mokikan
Mr. Georges Kolakez (Lebanese)
Company Secretaries: Equity Services Limited
162 Ikorodu Road (2nd floor)
Onipanu, Lagos
Registered Office: 247 Moshood Abiola Way
Ijora
Lagos
Registrars: GTL Registrars Limited
2 Burma Road
Apapa, Lagos
KPMG Professional Services
KPMG Tower
Bishop Aboyade Cole Street
Victoria Island, Lagos
Principal Bankers: Access Bank PLC.
Citibank Nigeria Limited
Diamond Bank PLC.
Ecobank Nigeria PLC.
Fidelity Bank PLC.
First Bank of Nigeria Limited
First City Monument Bank Limited
FSDH Merchant Bank Limited
Guaranty Trust Bank PLC.
Heritage Bank Limited
Jaiz Bank PLC.
Rand Merchant Bank Nigeria Limited
Skye Bank PLC.
Sterling Bank PLC.
Stanbic IBTC Bank PLC.
Standard Chartered Bank Nigeria Limited
Union Bank of Nigeria PLC.
United Bank for Africa PLC.
Zenith Bank PLC.
Independent Auditor:
1

4. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Results at a glance
Increase
2017 2016 %
Financial information ‐ (in thousands of naira)
Revenue 108,277,000 85,634,679 26
(Loss)/profit before taxation (11,228,438) 3,757,390 (399)
(Loss)/profit for the year (10,776,712) 3,347,463 (422)
Share capital 320,295 320,295 ‐
Total equity 13,225,471 24,779,594 (47)
Data per 50k share ‐ (in naira )
Basic earnings per share (16.82) 5.23 (422)
Diluted earnings per share (16.82) 5.23 (422)
Declared dividend* 1.60 2.75 (42)
Net assets 20.65 38.68 (47)
Dividend proposed** NIL 1.60 ‐
Stock exchange quotation at 31 March
in Naira per share 109.40 155.00 (29)
Number of shares issued (‘000) 640,590 640,590 ‐
Market capitalization at 31 March (N '000) 70,080,546 99,291,506 (29)
Stock Exchange Information
* Declared dividend represents the final dividend proposed for the preceding year but declared
during the current year.
** In current year, no dividend was proposed by the directors (2016:dividend proposed amounting
to N1,024,944,581 representing N1.60 per share on the issued share capital of 640,590,363
ordinary shares of 50 kobo each).
2

5. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Directors’ Report
For the year ended 31 March 2017
1 Legal Form
2 Principal Activities
3 Operating Results
The highlights of the Company’s operating results are as follows:
2017 2016
In thousands of naira
Revenue 108,277,000 85,634,679
Results from operating activities (7,208,085) 6,961,343
Loss/profit before taxation (11,228,438) 3,757,390
Loss/profit for the year (10,776,712) 3,347,463
Total comprehensive (loss)/ income for the year (10,562,376) 2,598,854
4 Dividend
5 Board of Directors
The Directors have pleasure in presenting their report on the affairs of Seven‐Up Bottling Company PLC
(“the Company”) together with the Company’s audited financial statements for the year ended 31 March
2017.
The Company was incorporated as a private limited liability company on 25th June, 1959 under the
name Seven‐Up Limited. On 16th May, 1960, the name was changed to Seven‐Up Bottling Company
Limited and in 1978 it became a public company. The name “Seven‐Up Bottling Company PLC” was
adopted on 26th November, 1991 in compliance with the provisions of the Companies and Allied
Matters Act 1990. Currently, the Company’s shares are quoted on the floor of the Nigerian Stock
Exchange.
The Company continued to be engaged in the bottling and marketing of a wide range of soft drinks
and Aquafina table water.
In current year, no dividend was proposed by the directors (2016:dividend proposed amounting to
N1,024,944,581 representing N1.60 per share on the issued share capital of 640,590,363 ordinary
shares of 50 kobo each).
The names of the Directors who held office during the year under review are as listed in Note6(a) of
this report.
Mr. Sunil Sawhney joined the company as Chief Operating Officer in 2001 and was appointed
Managing Director/Chief Executive Officer in May 2009. He was subsequently elevated to the
position of Vice Chairman with effect from 1st April 2017.
3

6. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
6 Directors and their Interests
(a)
Name 2017 2016
Otunba (Dr.) A. Ojora O.F.R, C.O.N 2,252,635 2,252,635
Chief Emmanuel N. Nwokoro 600,300 672,643
Mr. Femi Mokikan 33,116 33,116
Mr. Faysal El‐Khalil ** ‐ ‐
Mr. Sunil Sawhney * ‐ ‐
Chief Farid El‐Khalil ** ‐ ‐
Mallam Mohammed Hayatu‐Deen O.O.N ‐ ‐
Mr. Ziad A. El‐Khalil ** ‐ ‐
Mr. Georges Kolakez ** ‐ ‐
* Indian
** Lebanese
(b)
(c)
Mr. Ziad Maalouf was appointed Managing Director/Chief Executive Officer after the last AGM
effective from 1st April 2017. In compliance with the Companies and Allied Matters, Act CAP C20
Laws of the Federation of Nigeria 2004 (hereinafter referred to as “CAMA”), he will retire at the next
following AGM and being eligible, he offers himself for re‐election.
As stipulated in Article 90 of the company’s Articles of Association, Mr. Faysal El‐Khalil and Mr. Ziad
El‐Khalil are the directors who are retiring by rotation. Being eligible, they offer themselves for re‐
election at the forthcoming AGM. With regard to Chief Emmanuel N. Nwokoro, Special Notice has
been received by the company, pursuant to section 256 of CAMA, of the intention to propose the
following resolution as an ordinary resolution:
“That Chief Emmanuel N. Nwokoro who has attained the age of 76 years, be and is hereby re‐elected
a Director of the company.”
The names of the Directors who held office during the year under review are as listed in Note 6(a) of
the Directors' report. Subsequent to the last Annual General Meeting (AGM), Alhaji Ahmadu Yaro
resigned as Director of the Company with effect from 22nd September, 2015.
In accordance with Article 90 of the Company’s Articles of Association, Mr. Georges Kolakez, Otunba
(Dr.) Adekunle Ojora and Mallam Mohammed Hayatu‐deen are the Directors retiring by rotation at
this AGM and being eligible, they offer themselves for re‐election. Pursuant to section 258(2) of the
Companies and Allied Matters Act, CAP C20 LFN 2004, a record of the Directors’ attendances at
board meetings during the year under consideration will be made available for inspection by any
member.
The Directors who served during the year and their interests in the issued and paid up share
capital of the Company as recorded in the Register of Members for the purpose of section 275 of
the Companies and Allied Matters Act, CAP C20 LFN, 2004 were as follows:
Shareholdings as at
None of the Directors has notified the Company of any declarable interest in any contract or
proposed contract to which the Company was a party to during the year ended 31 March 2017
for the purpose of section 277 of the Companies and Allied Matters Act, Cap C20, Laws of the
Federation of Nigeria, 2004.
No share options were granted to the directors by Seven Up Bottling Company PLC.
4

7. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
7 Analysis of Shareholdings
Number of Number of
Shareholding Between shareholders % shares %
1 ‐ 1,000 19,492 60.51 9,208,386 1.44
1,001 ‐ 5,000 10,277 31.90 21,154,189 3.30
5,001 ‐ 10,000 1,380 4.29 9,749,507 1.52
10,001 ‐ 50,000 822 2.55 15,999,515 2.50
50,001 ‐ 100,000 100 0.31 6,920,015 1.08
100,001 ‐ 500,000 106 0.33 22,482,582 3.51
500,001 ‐ 1,000,000 14 0.04 9,923,486 1.55
1,000,001 and above 23 0.07 545,152,683 85.10
32,214 100 640,590,363 100
8 Substantial Shareholders
9 Donations
2017 2016
In thousands of naira
Lagos State Security Trust Fund ‐ 2,000
AFBTE Secretariat ‐ 3,000
Co‐sponsor Financial Reporting Council of Nigeria ‐ 1,000
2016 Nigeria Stock Market (Pearl Awards) ‐ 125
GCE Forms for 20 Abete Community Children 297 297
Nigeria Red Cross Babies Home 20 ‐
Entrepreneurship support for 2016 ‐ Fate Foundation Nigeria 90 ‐
URJA Foundation ‐Support for three kids 400 ‐
Scholarship for 3 Courage Education Foundation Students 610 ‐
Scholarship support to Bethesda Child Support Agency 450 ‐
Scholarship to UmuolaEgbelu Community 600 ‐
Nigeria Army Officers Mess ‐ Ikeja 100 ‐
Computer Centre Project for UmuolaEgbelu Youth 488 ‐
Anthony Akpati Annual Tribute 311 282
Privilege and Orphanage Home 150 ‐
Lady of the Rosary Church ‐ 600
3,516 7,304
In accordance with section 38(2) of the Companies and Allied Matters Act, Cap.20, Laws of the
Federation of Nigeria, 2004, the Company did not make any donation or gift to any political party,
political association or for any political purpose during the year.
As contained in the Register of Members, AFFELKA S.A. held 469,047,789 ordinary shares of 50k each
in the capital of the Company representing 73.22% of the issued capital as at 31st March, 2017. No
other shareholder held 5% or more of the share capital of the Company as at that date.
In the year under review, the Company made donations to charitable institutions, bodies and
individuals amounting to N3,515,500 (2016: N7,304,000). The beneficiaries were as follows:
5

8. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
10 Local Sourcing of Raw Materials
11 Suppliers
12 Product Distribution
13 Acquisition of Own Shares
The Company did not acquire any of its own shares during the year under review.
14 Property, plant and equipment
15 Events after the reporting date
16 Employment and Employees
(a) Employment of physically challenged persons:
(b) Health and Safety at Work and Welfare of Employees:
The Company continues to maintain its policy of non‐discrimination on recruitment and selection
when considering applications for employment, including those received from physically
challenged persons. In the event of any employee becoming disabled in the line of duty through
industrial accident, the Company ensures continuity of employment by arranging suitable
training for such employees who are subsequently redeployed to jobs compatible with their
capability. Presently, the Company has seventeen (2016: seventeen) physically challenged
persons on its payroll.
Information relating to changes in property, plant and equipment is given in Note 11 to the financial
statements.
There were no events after the reporting date which could have had a material effect on the
financial position of the Company as at 31 March 2017 and its operating results for the year ended
which have not been adequately provided for in these financial statements.
The Company gives priority attention to health, safety and welfare of its employees, and ensures
that its Smoke Area Policy is observed in all its facilities. The health and ailment status of its
workforce are regularly monitored.
On a continuing basis, the Company explores the use of local raw materials in its production
processes and has successfully introduced the use of locally produced items such as sugar, crown
corks and chemicals in a number of its products.
The Company procures all of its raw materials on a commercial basis from overseas and local
suppliers including Bua Sugar Refinery, Golden Penny Sugar, Aristocrat, Prima Corporation and
Indorama.
The Company distributes its products directly nationwide. The Company motivates key dealers to
expand the existing distribution network by establishing mini depots.
6

9. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(c) Employee Involvement and Training:
17 Corporate Governance
Name of Directors
No. of
meetings
held
No. of
meetings
attended
Mr. Faysal El‐Khalil, O.O.N 5 5
Mr. Sunil Sawhney 5 4
Otunba (Dr.) A. Ojora, O.F.R, C.O.N 5 5
Chief Farid EL‐Khalil 5 2
Chief Emmanuel N. Nwokoro 5 4
Mallam Mohammed Hayatu‐deen, O.O.N 5 1
Mr. Ziad A. EL‐Khalil 5 4
Mr. Femi Mokikan 5 5
Mr. Georges Kolakez 5 4
The Board of Directors met five (5) times during the financial year ended 31 March 2017 and a
record of their attendance is as shown below:
The meetings were held on 22nd June 2016, 28th September 2016, 1st December 2016 , 8th
February 2017 and 8th March 2017
The Company is committed to providing employees information regarding issues that affect the
Company’s performance and plans as well as seeking their views, where practicable, on matters
that affect their interests. Towards this end, management holds meetings with employees,
through their representatives, at formal and informal sessions while circulars are published
regularly to brief them about significant corporate issues.
To improve the efficiency and productivity level, employees undergo on‐the‐job training in
addition to being reimbursed all expenses incurred in acquiring professional qualifications.
The Board comprises eight Non‐Executive Directors including the chairman and one Executive
Director. In line with global best practice in corporate governance, the positions of the Chairman
and Chief Executive Officer are separate with two Directors acting in both capacities.
The Board has overall responsibility for supervising the Company’s business, maintaining adequate
and effective internal control system, adding value to shareholders and protecting the interests of
other stakeholders.
The Company’s premises are certified by the Fire Service for emergency preparedness with fire
fighting equipment strategically located within the premises. Fire drills are organised occasionally
to sensitize the employees on the dangers of fire accident in order to prepare them against any
eventuality.
The Company subsidizes housing, transportation and meals and provides free health care
services to employees and their nuclear families. Additionally, it operates a contributory Pension
Scheme and provides a comprehensive National Health Insurance Plan for its employees.
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10. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Corporate Governance/Remuneration Committee
Name of Directors
No. of
meetings
held
No. of
meetings
attended
Otunba (Dr.) A. Ojora, O.F.R, C.O.N Chairman 3 3
Chief E.N Nwokoro Member 3 3
Mallam M. Hayatu‐deen Member 3 0
Mr. Femi Mokikan Member 3 3
Risk Management Committee
No. of
meetings
held
No. of
meetings
attended
Mr. Sunil Sawhney Chairman 3 2
Chief Farid EL‐Khalil Member 3 1
Mr. Georges Kolakez Member 3 3
Mr. Ziad El‐Khalil Member 3 3
Management Committee
The Management Committee is made up of two members: Messrs. Sunil Sawhney and Ziad El‐Khalil,
and has responsibility for recommending strategic initiatives to the Board of Directors and
supervising the implementation of board policies.
The committee met 36 times during the year under review and the members' attendance record is
as shown below:
The Risk Management Committee has the objective of advising the board on, among other things,
the company’s appetite for risk and its risk management policy, oversight function regarding
management’s process for the identification of significant risk across the company and the adequacy
of prevention, detection and reporting mechanisms as well as reviewing the adequacy and
effectiveness of risk management and controls.
The committee met on 22nd June 2016, 28th September 2016 and 1st December, 2016 during the
financial year ended 31st March 2017. The record of attendance of members is set out below:
The Committee comprises four Non‐Executive Directors with the responsibility of ensuring the
company’s compliance with good governance practice, nominating for board’s approval candidates
to fill board vacancies, considering and making recommendations on succession planning of the
company for the positions of chairman, managing director, executive director, and other senior
executives. Additionally, it ensures that an appropriate remuneration policy for all directors and
staff is in place and also oversees major changes in employees benefits structure.
The committee meetings were held on 22nd June 2016, 28th September 2016 and 1st December
2016 and the members’ record of attendance is as follows:
8

11. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
No. of
meetings
held
No. of
meetings
attended
Mr. Sunil Sawhney 36 36
Mr. Ziad A.EL‐Khalil 36 36
18 Securities Trading Policy
19 Complaints Management Policy
OR
20 Audit Committee
The Company has securities trading policy applicable and circulated to directors, insiders, external
advisers and all employees that may at any time possess any inside or material information about
our company.
The Company has adopted a code of conduct regarding securities transaction by the directors on
terms no less exacting than the required standard set out in the Listing Rules of the Nigerian Stock
Exchange.
The Company made specific enquiry of all directors whether they have complied with the required
standard set out in the listing rules and the Company’s code of conduct regarding securities
transactions by directors and the company is unaware of any non‐compliance.
Pursuant to section 359(3) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the
Company has an Audit Committee in place whose functions are as stated in section 359(6) of the Act.
The Committee consists of three (3) Directors and three (3) shareholders’ representatives, including
the chairman. The Committee members met four (4) times in the year under review and their
attendance record is as shown below:
All complaints should be directed to:
GTL Registrars Limited
274, Muritala Muhammed Way
Alagomeji, Yaba, Lagos
P.M.B. 12717
Lagos, Nigeria
Telephone: +234 12793161, +234 18131925
E‐mail: info@gtlregistrars.com
Website: www.gtlregistrars.com
Equity Services Limited
162, Ikorodu Road
Onipanu, Lagos
P.O. Box 7625
Lagos, Nigeria
Telephone: 08188811779
E‐mail:
equityservicesltd@ymail.com
In accordance with the Securities and Exchange Commission’s Rule Relating to the Complaints
Management Framework of the Nigerian Capital Market which became effective in February 2015,
Seven‐UP Bottling Company PLC has put in place a Complaints Management Policy for the effective
and efficient handling of shareholders’ complaints arising from issues covered under the Investments
and Securities Act, 2007 in a fair, impartial and timely manner.
The complaints management procedure will be posted on the Company’s website:
www.sevenup.org.
9

12. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
No. of
meetings
held
No. of
meetings
attended
Shareholders’ Representative 4 4
Mr Obarinde I. Obatosho Shareholders’ '' 4 4
Mr Kenneth N. Nwosu Shareholders’ '' 4 4
Mr Femi Mokikan Directors’ '' 4 3
Otunba (Dr.) A. Ojora, C.O.N, O.F.R Directors’ '' 4 4
Mr. Georges Kolakez Directors’ '' 4 4
21 Disclosures
(a) Borrowings and maturity dates
(b) Risk Management and Compliance System
(c) Related Party Transactions
22 Report on Social, Ethical, Safety, Health and Environmental Policies and Practices
Corporate Social Responsibility
Evang. Peter Akinola Soares‐ Chairman
The meetings were held on 20th June 2016, 28th November 2016, 6th February 2017 and 10th
February 2017.
The details of the borrowings and maturity dates are stated in Note 22 to the financial
statements.
The Directors are responsible for the total process of risk management as well as expressing their
opinion on the effectiveness of the process. The risk management framework is integrated into
the day‐to‐day operations of the business and provides guidelines and standards for
administering the acceptance and on‐going management of key risks such as operational,
reputational, financial, market, technology and compliance risk. The directors are of the view that
effective internal audit function exists in the Company.
The Company has contractual relationship with related companies in the ordinary course of
business. The details of the value of the transactions and outstanding balances arising from
related party transactions are stated in Note 29 to these financial statements.
Seven‐Up Bottling Company PLC continued its collaboration with the Lagos State Ministry of Youth
and Social Development on Corporate Apprentice Scheme aimed at equipping the youths with
relevant skills for self‐employment and creation of jobs for other people. The Company continued its
sponsorship of one Nigerian graduate each year to do an MBA programme at the Harvard Business
School with all expenses paid. Additionally, the Company has several local projects by which students
at secondary and tertiary levels are given scholarship.
On sports, the company has established the Pepsi Football Academy to give young and talented
players in Nigeria a platform where they can showcase their skills and actualize their dream of
becoming world’s best footballers, in addition to providing them with qualitative education that will
make them well rounded individuals.
The Company sponsors the Aquafina Elite Model competition which aims at promoting fashion and
lifestyle in addition to co‐sponsoring the annual COPA beach soccer in Lagos.
10

21. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Statement of profit or loss and other comprehensive income
For the year ended 31 March
In thousands of naira
Note 2017 2016
Revenue 4 108,277,000 85,634,679
Cost of sales 5(a) (95,349,880) (60,622,243)
Gross profit 12,927,120 25,012,436
Other income 5(b) 427,036 317,434
Selling and distribution expenses 5(a) (13,910,747) (11,801,831)
Administrative expenses 5(a) (6,651,494) (6,566,696)
Results from operating activities (7,208,085) 6,961,343
Finance income 6(a) 424,008 41,571
Finance costs 6(b) (4,444,361) (3,245,524)
Net finance costs (4,020,353) (3,203,953)
(Loss)/Profit before taxation 7 (11,228,438) 3,757,390
Income tax credit/(expense) 9(a) 451,726 (409,927)
(Loss)/Profit for the year (10,776,712) 3,347,463
Other comprehensive income
Items that will never be reclassified to profit or loss:
Remeasurement of defined benefit asset/(liability) 23(a) 315,200 (1,069,442)
Related tax 15(b) (100,864) 320,833
Other comprehensive income/(loss) for the year, net of tax 214,336 (748,609)
Total comprehensive (loss)/ income for the year (10,562,376) 2,598,854
Equity holders of the Company (10,776,712) 3,347,463
Equity holders of the Company (10,562,376) 2,598,854
Earnings per share
Basic and diluted earnings per share (kobo) 10(a) (1,682) 523
Total comprehensive (loss)/ income for the year is
attributable to:
(Loss)/profit for the year is attributable to:
The accompanying notes and significant accounting policies on pages 22 to 67 form an integral part of
these financial statements.
19

22. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Statement of changes in equity
For the year ended 31 March
In thousands of naira Note Share capital Share premium Retained earnings Total equity
Balance, 1 April 2015 320,295 299,140 23,314,198 23,933,633
Total comprehensive income
Profit for the year ‐ ‐ 3,347,463 3,347,463
Other Comprehensive loss ‐ ‐ (748,609) (748,609)
Total comprehensive income ‐ ‐ 2,598,854 2,598,854
Transactions with owners of the Company
Contribution and distribution
Dividend to equity holders 10(b) ‐ ‐ (1,761,623) (1,761,623)
Unclaimed dividend written back 24(c) ‐ ‐ 8,730 8,730
Total transactions with owners of the Company ‐ ‐ (1,752,893) (1,752,893)
Balance, 31 March 2016 320,295 299,140 24,160,159 24,779,594
Balance, 1 April 2016 320,295 299,140 24,160,159 24,779,594
Total comprehensive income
Loss for the year ‐ ‐ (10,776,712) (10,776,712)
Other comprehensive income ‐ ‐ 214,336 214,336
Total comprehensive income ‐ ‐ (10,562,376) (10,562,376)
Transactions with owners of the Company
Contribution and distribution
Dividend to equity holders 10(b) ‐ ‐ (1,024,943) (1,024,943)
Unclaimed dividend written back 24(c) ‐ ‐ 33,196 33,196
Total transactions with owners of the Company ‐ ‐ (991,747) (991,747)
Balance, 31 March 2017 320,295 299,140 12,606,036 13,225,471
The accompanying notes and significant accounting policies on pages 22 to 67 form an integral part of these financial statements.
20

23. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Statement of cash flows
For the year ended 31 March
In thousands of naira
Note 2017 2016
Cash flows from operating activities
(Loss)/Profit for the year (10,776,712) 3,347,463
Adjustments for:
Depreciation of property plant and equipment 11(a) 9,487,448 9,325,971
Amortization of intangible assets 12 25,219 35,237
Finance income 6(a) (424,008) (41,571)
Finance costs 6(b) 4,444,361 3,245,524
Employee benefit charge 23(c) 752,221 1,142,434
Impairment loss on trade receivables 12,599 63,306
(Gain)/loss on sale of property, plant and equipment (174,973) 4,109
Bad debt written off 145,276 -
Income tax expense 9(a) (451,726) 409,927
3,039,705 17,532,400
Change in inventories (10,950,017) (1,926,393)
Change in trade and other receivables* (11,540,391) (1,222,739)
Change in investment (42,000) -
Change in prepayments 76,820 177,142
Change in deposit for imports 1,005,917 4,957,800
Change in trade and other payables (excluding dividend payable)** 9,811,283 1,577,023
Cash (used in)/generated from operating activities (8,598,683) 21,095,233
Value Added Tax (VAT) paid ** (1,378,957) (1,812,611)
Income tax paid 9(c) (953,617) (974,853)
Employee benefit paid (1,156,731) (1,323,426)
Net cash (used in)/generated from operating activities (12,087,988) 16,984,343
Cash flow from investing activities
Finance income received 6(d) 40,076 31,455
Proceeds from sale of property, plant and equipment 201,341 93,396
Acquisition of property, plant and equipment 11(a) (7,318,097) (7,321,118)
Acquisition of Intangible assets 12 (905) (62,908)
Net cash used in investing activities (7,077,585) (7,259,175)
Cash flow from financing activities
Proceeds from loans and borrowings 22(a)(ii) 153,550,872 70,326,373
Repayment of loans and borrowings 22(a)(ii) (138,938,617) (67,812,771)
Interest paid 6(c) (3,888,396) (3,015,927)
Dividend paid 24(c) (410,980) (1,643,748)
10,312,879 (2,146,073)
Net (decrease)/increase in cash and cash equivalents (8,852,694) 7,579,095
Cash and cash equivalents at the beginning of the year 4,780,270 (2,798,981)
Effect of exchange rate fluctuations on cash held 56,836 156
Cash and cash equivalents at the end of the year 20 (4,015,588) 4,780,270
Net cash generated from /(used in) financing activities
*Change in trade and other receivables has been adjusted for the effect of impairment loss on trade receivables, bad
debt written off and the effect of exchange rate fluctuations on cash held.
**Change in trade and other payables has been adjusted for the effect of Value Added Tax (VAT) paid shown
separately on the statement of cash flows as well as the portion of property plant and equipment unpaid as at year
end and net gain on foreign exchange transactions.
The accompanying notes and significant accounting policies on pages 22 to 67 form an integral part of these financial
statements.
21

24. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Notes to the financial statements
For the year ended 31 March 2017
Page Page
1 Reporting entity 23 16 Inventories 47
2 Basis of preparation 23 17 Investment 47
3 Significant accounting policies 24 18 Derivative 47
4 Revenue 38 19 Trade and other receivables 47
5 Analysis of expenses and other income 38 20 Cash and cash equivalents 48
6 Finance income and finance cost 39 21 Capital and reserves 48
7 Profit before taxation 39 22 Loans and borrowings 49
8 Personnel expenses 40 23 Employee benefits 51
9 Taxation 42
24 Trade and other payables 53
10 Earnings and declared dividend per share 43
25 Financial instruments‐ Fair values
and risk management
54
11 Property, plant and equipment 44 26 Capital management 63
12 Intangible assets 45 27 Operating leases 63
13 Prepayments and other receivables 46 28 Contingencies 64
14 Deposit for import 46 29 Related parties 64
15 Deferred taxation 46 30 Subsequent events 67
22

25. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Notes to the financial statements
For the year ended 31 March 2017
1 Reporting Entity
2 Basis of Preparation
(a) Statement of compliance
(b) Basis of measurement
(c) Functional and presentation currency
(d) Use of judgment and estimates
Judgments
Note 27 Leases: whether an arrangement is an operating or finance lease;
Note 9(d) Split of financial results into Pioneer and Non‐ Pioneer
Derivative financial
instruments
Measurement BasisItem
Fair Value
Defined Benefit Liability
Seven‐Up Bottling Company PLC (“the Company”) is a company domiciled in Nigeria. The Company
was incorporated in Nigeria as a private limited liability Company on 25th June, 1959 under the
name Seven‐Up Limited. On 16th May 1960, the name was changed to Seven‐Up Bottling Company
Limited and thereafter to “Seven‐Up Bottling Company PLC” on 26th November 1991 in compliance
with the provisions of the Companies and Allied matters Act 1990. Currently, the Company’s shares
are quoted on the floor of the Nigerian Stock Exchange. The majority shareholder of the Company is
AFFELKA S.A, having 73.22% interest in the equity of Seven‐Up Bottling Company PLC. The address
of the Company’s registered office is 247, Moshood Abiola Way, Ijora, Lagos.
The Company is primarily involved in the business of bottling and marketing of a wide range of soft
drinks and Aquafina premium table water across Africa.
The financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters
Act, Cap C.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council of
Nigeria Act, 2011. These financial statements were authorized for issue by the Company's Board
of Directors on 28th June 2017.
The financial statements have been prepared on the historical cost basis except for the following
items, which are measured on an alternative basis on each reporting date.
These financial statements are presented in Naira, which is the Company’s functional currency.
All amounts have been rounded to the nearest thousand unless otherwise indicated.
In preparing these financial statements, management has made judgements, estimates and
assumptions that affect the application of the Company's accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
estimates are recognised prospectively.
Information about judgements made in applying accounting policies that have the most
significant effects on the amounts recognised in the consolidated financial statements is
included in the following notes:
Present value of the defined benefit obligation
23

26. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
Assumptions and estimation uncertainties
Note 23 Measurement of defined benefit obligation: key actuarial assumption
Note 28
Note 24 Liability for returnable packaging material
(e) Measurement of fair values
(f)
3 Significant accounting policies
(a) Foreign currency
Foreign currency transactions
The accounting policies set out below have been applied consistently to all years presented in these
financial statements.
Transactions denominated in foreign currencies are translated and recorded in Naira at the
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency at the exchange rate at the
reporting date. Non‐monetary assets and liabilities that are measured at fair value in a foreign
currency are translated into the functional currency at the exchange rate when the fair value
was determined. Non‐monetary items that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction. Foreign currency
differences are generally recognised in profit or loss.
Information about assumptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment in the year ending 31 March 2017 is included in the following
notes:
During the year, the Company reviewed the estimated useful life of its leasehold land as
unlimited on the bias that it is reasonably certain that the Government will usually renew the
leases upon expiration and that the substance of the lease is that the Company has ownership
of the Land, not a right to use the land for a predefined period. This change in accounting
estimate was applied prospectively in accordance with IAS 8 ‐ Accounting Policies, Changes in
Accounting Estimates and Errors.
A number of the Company’s accounting policies and disclosures require the measurement of fair
values, for both financial and non‐financial assets and liabilities.
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same
level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the
following notes:
• Note 25 ‐ Financial instruments‐ Fair values and risk management
Change in accounting estimate
Contingencies: key assumptions about the likelihood and magnitude of
an outflow of resources
24

27. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(b) Financial instruments
I. Non‐derivative financial assets‐recognition and measurement
Loans and receivables
Cash and cash equivalents
II. Non‐derivative financial liabilities‐recognition and measurement
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognized initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, loans and receivables are
measured at amortized cost using the effective interest method, less any impairment losses.
An impairment loss is recognized if the carrying amount exceeds the estimated recoverable
amount. Loans and receivables comprise trade and other receivables.
Cash and cash equivalents comprise cash on hand, cash balances with banks and call
deposits with original maturities of three months or less. Bank overdrafts that are repayable
on demand and form an integral part of the Company’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
The Company’s non‐derivative financial assets are classified as loans and receivables and
cash and cash equivalents.
The Company initially recognizes loans and receivables and deposits on the date that they
are originated. All other financial assets are recognized initially on the trade date at which
the Company becomes a party to the contractual provisions of the instrument.
The Company derecognizes a financial asset when the contractual rights to the cash flows
from the asset expire, or it transfers the rights to receive the contractual cash flows on the
financial asset in a transaction in which substantially all the risks and rewards of ownership
of the financial asset are transferred. Any interest in transferred financial assets that is
created or retained by the Company is recognized as a separate asset or liability.
All financial liabilities are recognized initially on the trade date at which the Company
becomes a party to the contractual provisions of the instrument.
The Company derecognizes a financial liability when its contractual obligations are
discharged or cancelled or expire.
The Company has the following non‐derivative financial liabilities: loans and borrowings,
bank overdrafts, trade and other payables. Such financial liabilities are recognized initially at
fair value less any directly attributable transaction costs. Subsequent to initial recognition
these financial liabilities are measured at amortized cost using the effective interest method.
Financial assets and financial liabilities are offset and the net amount presented in the
statement of financial position when, and only when, the Company has a legally enforceable
right to offset the amounts and intends either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.
25

28. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
III. Derivative financial instruments
IV. Share capital
(c) Property, plant and equipment
I. Recognition and measurement
II . Subsequent costs
The Company holds derivative financial instruments to hedge its foreign currency
exposures. Embedded derivatives are separated from the host contract and accounted for
separately if certain criteria are met.
Derivatives are initially measured at fair value; any directly attributable transaction costs are
recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are
measured at fair value, and changes therein are generally recognised in profit or loss.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of ordinary shares and share options are recognized as a deduction from equity, net of any
tax effects.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Items of
property, plant and equipment under construction are disclosed as capital work‐in‐progress.
The cost of construction recognized includes the cost of materials and direct labour, the
costs of dismantling and removing the items and restoring the site on which they are
located, and borrowing costs on qualifying assets and any other costs directly attributable to
bringing the assets to the location and condition necessary for it to be capable of operating
in the manner intended by management. Engineering spare parts and stand‐by equipment
are capitalised as property, plant and equipment when the Company expects to use them
for more than one year.
The cost of replacing a part of an item of property, plant and equipment is recognized in the
carrying amount of the item if it is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can be measured reliably. The carrying
amount of the replaced part is derecognized. The costs of the day‐to‐day servicing of
property, plant and equipment are recognized in profit or loss as incurred.
Items of property, plant and equipment are measured at cost less accumulated depreciation
and any accumulated impairment losses and residual value.
Purchased software that is integral to the functionality of the related equipment is
capitalized as part of the equipment.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The carrying amount of an item of property, plant and equipment is derecognized on
disposal or when no future economic benefits are expected from its use or disposal. The
gains and losses on disposal of an item of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant and
equipment, and are recognized net within other income in profit or loss.
26

29. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
III. Depreciation
The estimated useful lives for the current and comparative periods are as follows:
• Buildings 20 years
• Plant and machinery
‐ moulds 3 years
‐ Other plant and machinery 7 years
• Motor vehicle 5 years
• Office equipment
‐ Furniture and fittings 10 years
‐ IT equipment 4 years
• Returnable packaging materials
‐ Bottles 5 years
‐ Crates 7 years
(d) Intangible assets
I. Software
II. Subsequent expenditure
Depreciation is calculated to write off the cost of items of property, plant and equipment
less their estimated residual values using a straight‐line basis over their estimated useful
lives. Depreciation is generally recognized in profit or loss, unless the amount is included in
the carrying amount of another asset. Leased assets are depreciated over the shorter of the
lease term and their useful lives unless it is reasonably certain that the Company will obtain
ownership by the end of the lease term in which case the assets are depreciated over the
useful life.
Depreciation methods, useful lives and residual values are reviewed at each financial year
end and adjusted if appropriate. As disclosed in Note (2f), the Company reassessed the
useful life of leasehold land from the lease period (99 years) to unlimited. Consequently, the
Company discontinued the depreciation of leasehold land.
Capital work‐in‐progress is not depreciated. The attributable cost of each asset is transferred
to the relevant asset category immediately the asset is available for use and depreciated
accordingly.
Purchased software with finite useful life is measured at cost less accumulated amortization
and accumulated impairment losses.
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, is recognized in
profit or loss as incurred.
Items of property, plant and equipment are depreciated from the date they are available for
use or, in respect of capital‐work‐in‐progress, from the date that the asset is completed and
ready for use.
27

30. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
III. Derecognition
IV. Amortization
• Computer software 4 years
(e) Leases
I. Determining whether an arrangement contains a lease
● the arrangement contains a right to use the asset(s).
II. Leased assets
At inception of an arrangement, the Company determines whether such an arrangement is
or contains a lease. This will be the case if the following two criteria are met:
At inception or on reassessment of the arrangement, the Company separates payments and
other consideration required by such an arrangement into those for the lease and those for
other elements on the basis of their relative fair values. If the Company concludes for a
finance lease that it is impracticable to separate the payments reliably, then an asset and a
liability are recognised at an amount equal to the fair value of the underlying asset.
Subsequently the liability is reduced as payments are made and an imputed finance cost on
the liability is recognised using the Company’s incremental borrowing rate.
● the fulfillment of the arrangement is dependent on the use of a specific asset or assets;
and
Amortization is calculated over the cost of the asset, or other amount substituted for cost,
less its residual value.
An item of intangible asset is derecognized on disposal or when no future economic benefits
are expected from its use or disposal. The gain or loss arising from the derecognition of an
intangible assets are determined by comparing the net proceeds (if any) from disposal with
the carrying amount of the intangible assets and are recognized net within other income in
profit or loss.
Amortization is recognized in profit or loss on a straight‐line basis over the estimated useful
lives of intangible assets, from the date that they are available for use, since this most closely
reflects the expected pattern of consumption of the future economic benefits embodied in
the asset. The estimated useful life for the current and comparative periods is as follows:
Amortization methods, useful lives and residual values are reviewed at each financial year‐
end and adjusted if appropriate.
Assets held by the Company under leases for which the Company assumes substantially all
the risks and rewards of ownership are classified as finance leases. Upon initial recognition
the leased asset is measured at an amount equal to the lower of its fair value and the
present value of the minimum lease payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases are operating leases and the leased assets are not recognized
in the Company’s statement of financial position.
28

31. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
III. Lease payments
(f) Inventories
Engineering spares:
Goods‐in‐transit: purchase cost incurred to date
Allowance is made for obsolete, slow moving or defective items where appropriate.
Raw and non‐returnable packaging materials
Products‐ in‐ process and manufactured finished
goods
purchase cost on a weighted
average cost basis, including
transportation and clearing costs
purchase cost on a first‐ in, first ‐ out
basis including transportation and
clearing costs
weighted average cost of direct
materials and labour plus a
reasonable proportion of
manufacturing overheads based on
normal levels of activity
Inventories are measured at the lower of cost and net realizable value. The cost of inventories
includes expenditure incurred in acquiring the inventories, production or conversion costs and
other costs incurred in bringing them to their existing location and condition. In the case of
manufactured inventories and work‐in‐progress, cost includes an appropriate share of
production overheads based on normal operating capacity. Cost incurred in bringing each
product to its present location and condition is based on:
Payments made under operating leases are recognized in profit or loss on a straight‐line
basis over the term of the lease. Lease incentives received are recognized as an integral part
of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance
expense and the reduction of the outstanding liability. The finance expense is allocated to
each period during the lease term so as to produce a constant periodic rate of interest on
the remaining balance of the liability.
Weighted average cost is reviewed periodically to ensure it consistently approximates historical
cost.
Net realizable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
29

32. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(g) Impairment
I. Non‐derivative financial assets
II. Non‐financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting
date to determine whether there is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has occurred after the initial
recognition of the asset, and that the loss event had a negative effect on the estimated
future cash flows of that asset that can be reliably estimated.
Objective evidence that financial assets are impaired can include; default or delinquency by
a debtor, restructuring of an amount due to the Company on terms that the Company would
not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the
disappearance of an active market for a security. In addition, for an investment in an equity
security, a significant or prolonged decline in its fair value below its cost is objective evidence
of impairment.
The Company considers evidence of impairment for receivables at both a specific asset and
collective level. All individually significant receivables are assessed for specific impairment.
All individually significant receivables found not to be specifically impaired are then
collectively assessed for any impairment that has been incurred but not yet identified.
Receivables that are not individually significant are collectively assessed for impairment by
grouping together receivables with similar risk characteristics.
In assessing collective impairment, the Company uses historical trends of the probability of
default, timing of recoveries and the amount of loss incurred, adjusted for management’s
judgment as to whether current economic and credit conditions are such that the actual
losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as
the difference between its carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest rate. Losses are recognized in
profit or loss and recognized in an allowance account against receivables. Interest on the
impaired asset continues to be recognized through the unwinding of the discount. When a
subsequent event causes the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through profit or loss. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, if no impairment loss had been recognized.
The carrying amounts of the Company’s non‐financial assets, other than inventories are
reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
For intangible assets that have indefinite useful lives or that are not yet available for use, the
recoverable amount is estimated each year at the same time.
30

33. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(h) Employee benefits
I. Defined contribution plans
The recoverable amount of an asset or cash‐generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre‐tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For the
purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or groups of assets (the
“cash‐generating unit, or CGU”).
The Company’s corporate assets do not generate separate cash inflows. If there is an
indication that a corporate asset may be impaired, then the recoverable amount is
determined for the CGU to which the corporate asset belongs.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment losses are recognized in profit or loss.
Impairment losses recognized in respect of CGUs are allocated to reduce the carrying
amounts of the other assets in the unit (group of units) on a pro rata basis.
In respect of other assets, impairment losses recognized in prior periods are assessed at
each reporting date for any indications that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortization, if no impairment loss had been recognized.
A defined contribution plan is a post‐employment benefit plan under which an entity pays
fixed contributions into a separate entity and has no legal or constructive obligation to pay
further amounts in respect of all employee benefits relating to employee service in current
and prior periods.
In line with the provisions of the Pension Reform Act 2014, the Company has instituted a
defined contribution pension scheme for their permanent staff. Staff contributions to the
scheme are funded through payroll deductions. Obligations for contributions to the defined
contribution plan are recognized as employee benefit expense in profit or loss in the periods
which related services are rendered by employees. The Company and its employees each
contribute 10% and 8% respectively of the employees' basic salaries, transport & housing
allowances to the fund on a monthly basis.
31

34. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
II. Defined benefit plans
III. Other long term employee benefits
IV. Termination benefits
The discount rate is the yield at the reporting date on Federal Government of Nigeria issued
bonds that have maturity dates approximating the term of the Company’s obligation. The
calculation is performed using the Projected Unit Credit method. Any remeasurements are
recognized in the profit or loss.
Termination benefits are recognized as an expense when the Company is committed
demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either
terminate employment before the normal retirement date, or to provide termination
benefits as a result of an offer made to encourage voluntary redundancy. Termination
benefits for voluntary redundancies are recognized as an expense if the Company has made
an offer of voluntary redundancy, it is probable that the offer will be accepted, and the
number of acceptances can be estimated reliably. If benefits are payable more than 12
months after the reporting period, then they are discounted to their present value.
The Company’s other long‐term employee benefits represent Long Service Awards scheme
instituted for all permanent employees. The Company’s obligation in respect of the Long
Service Awards scheme is the amount of future benefits that employees have earned in
return for their service in the current and prior periods. The benefit is discounted to
determine its present value.
A defined benefit plan is a post‐employment benefit plan other than a defined contribution
plan. The Company’s net obligation in respect of defined benefit gratuity scheme is
calculated by estimating the amount of future benefit that employees have earned in return
for their service in the current and prior years and that benefit is discounted to determine its
present value. In determining the liability for employee benefits under the defined benefit
scheme, consideration is given to future increases in salary rates and the Company's
experience with staff turnover.
The Company's liability with respect to this scheme is determined by an independent
actuarial valuation every year using the projected unit credit method. Remeasurements
arising from differences between the actual and expected outcome in the valuation of the
obligation are recognized in other comprehensive income. When the benefits of a plan are
changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognised immediately in profit or loss. The
Company recognises gains and losses on the settlement of a defined benefit plan when the
settlement occurs The discount rate is the yield on Federal Government of Nigeria issued
bonds that have maturity dates approximating the terms of the company’s obligation.
Although the scheme is not funded, the Company ensures that adequate arrangements are
in place to meet its obligations under the scheme
32

35. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
V. Short‐term employee benefits
(i) Provisions
(j) Contingent liabilities
(k) Revenue
Revenue is recognized when persuasive evidence exists that the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable and
there is no continuing management involvement with the goods, and the amount of revenue
can be measured reliably. If it is probable that discount will be granted and the amount can be
measured reliably, then the discount is recognized as a reduction of revenue as the sales are
recognized.
Short‐term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under short‐term cash bonus or
profit sharing plans if the Company has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
A provision is recognized if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre‐tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of
the discount is recognized as finance cost.
A contingent liability is a possible obligation that arises from past events and whose existence
will be confirmed only by the occurrence or non‐occurrence of one or more uncertain future
events not wholly within the control of the Company, or a present obligation that arises from
past events but is not recognized because it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation; or the amount of the
obligation cannot be measured with sufficient reliability.
Contingent liabilities are only disclosed and not recognized as liabilities in the statement of
financial position. If the likelihood of an outflow of resources is remote, the possible obligation is
neither a provision nor a contingent liability and no disclosure is made.
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value
of the consideration received or receivable, net of value added tax, sales returns, trade
discounts and volume rebates.
Transfer of significant risk and rewards of ownership is determined to be transferred to the
buyer at the point of delivery to the buyer.
33

36. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(l) Finance income and finance costs
(m) Income tax
I. Current tax
II. Deferred tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates statutorily enacted at the reporting date, and any adjustment to tax
payable in respect of previous years. The Company is subject to the following types of
current income tax;
• Company Income Tax‐ This relates to tax on revenue and profit generated by the Company
during the year, to be taxed under the Companies Income Tax Act Cap C21, LFN 2004 as
amended to date.
• Tertiary Education Tax‐ This is based on the assessable income of the Company and is
governed by the Tertiary Education Trust Fund (Establishment) Act LFN 2011.
Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognized for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable profit or loss;
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be used. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised. Such reductions are reversed when the probability of future taxable profits
impairs. Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or substantively enacted
at the reporting date.
Finance income comprises gain on derivative financial instruments and interest income on funds
invested. Interest income is recognized as it accrues in profit or loss, using the effective interest
method.
Finance costs comprise interest expense on borrowings, loss on derivative financial instruments
and impairment losses recognized on financial assets (other than trade receivables).
Borrowing cost that are not directly attributable to the acquisition, construction or production
of a qualifying asset are recognized in profit or loss.
Foreign currency gains and losses are recognised in profit or loss and presented on a net basis as
either finance income or finance cost.
In 2013, the Company was granted a 5 year pioneer tax relief (i.e. tax exemption) for Can and
Pet products in 3 of its plant locations. The financial results for the non‐pioneer products and
pioneer products is determined based on the revenue and the expenses from the pioneer and
non‐pioneer products. Income tax expense represents the sum of current tax expense and
deferred tax expense.
34

37. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(n) Deposit for Returnable Packaging Material
(o) Earnings per share
(p) Dividends
Dividends are recognized as a liability in the period they are declared.
(q) Related parties
The Securities and Exchange Commission (SEC) published a circular in 2015 directing Capital
Market Registrars to return all unclaimed dividend which has been in their custody for fifteen
(15) months and above to the paying companies. These unclaimed dividends are included as a
liability to the shareholders until they become statute barred in accordance with the provisions
of Section 385 of CAMA.
Deferred tax are recognized in profit or loss except to the extent that it relates to a business
combination, or items recognized directly in equity or in other comprehensive income.
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the period,
adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary
shares.
Dividends which remained unclaimed for a period exceeding twelve (12) years from the date of
declaration and which are no longer actionable by shareholders in accordance with Section 385
of Companies and Allied Matters Act of Nigeria are written back to retained earnings.
Related parties include the holding company and other group entities. Directors, their close
family members and any employee who is able to exert a significant influence on the operating
policies of the Company are also considered to be related parties. Key management personnel
are also regarded as related parties. Key management personnel are those persons having
authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity.
Deferred tax assets and liabilities are offset only if certain criteria are met.
The Company collects deposits for returnable packaging materials (i.e. bottles and crates) from
customers. A liability is then recognized in the financial statements with respect to these
deposits. The deposit is refunded to the customer when the customer returns the packaging
material.
Each year an amount is written into the Income statement. This amount represents the
breakages in trade of which the customers would not come back to collect deposit made on the
bottles or crates. Factors such as bottle turnover, bottle additions, bottle refill rate, amount of
bottles with distributors, market trend and market loss rates are considered in the
determination of the amount to be written back into the income statement on a yearly basis.
35

38. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(r) Segment reporting
(s) Standards and interpretations not yet adopted
(i)
(ii) IFRS 9 Financial Instruments effective for annual periods beginning 1 January 2018
IFRS 15 Revenue from contracts with customers effective for annual periods beginning 1
January 2018
This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18
Transfer of Assets from Customers and SIC‐31 Revenue – Barter of Transactions Involving
Advertising Services.
On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which
replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39
Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on
the classification and measurement of financial instruments, a new expected credit loss
model for calculating impairment on financial assets, and new general hedge accounting
requirements. It also carries forward the guidance on recognition and derecognition of
financial instruments from IAS 39. The Company is yet to carry‐out an assessment to
determine the impact that the initial application of IFRS 9 could have on its business;
however, the Company will adopt the standard for the year ending 31 March 2019.
All of the Company’s products have similar risks and returns thus management does not use
operating segments’ operating results to make decisions about resources to be allocated to the
segment and assess its performance.
A number of new standards, amendments to standards and interpretations are effective for
annual periods beginning after 1st April 2016, and have not been applied in preparing these
financial statements. Those which may be relevant to the Company are set out below. The
extent of the impact of these standards is yet to be determined. The Company does not plan to
adopt these standards early. These will be adopted in the period that they become mandatory
unless otherwise indicated
An operating segment is a distinguishable component of the Company that earns revenue and
incurs expenditure from providing related products or services (business segment), or providing
products or services within a particular economic environment (geographical segment), and
which is subject to risks and returns that are different from those of other segments.
The standard contains a single model that applies to contracts with customers and two
approaches to recognising revenue: at a point in time or over time. The model features a
contract‐based five‐step analysis of transactions to determine whether, how much and
when revenue is recognised.This new standard will most likely have a significant impact on
the Company, which will include a possible change in the timing of when revenue is
recognised and the amount of revenue recognised. The Company is yet to carry‐out an
assessment to determine the impact that the initial application of IFRS 15 could have on its
business; however, Company will adopt the standard for the year ending 31 March 2019.
36

39. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(iii)
(iv)
Amendments to IAS 7 Disclosure Initiative effective for annual periods beginning 1 January
2017
The amendments provide for disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising
from cash flow and non‐cash changes. This includes providing a reconciliation between the
opening and closing balances arising from financing activities. The Company will adopt the
amendments for the year ending 31 March 2018.
IFRS 16‐ Leases effective for annual periods beginning 1 January 2019
IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a
Lease, SIC‐15 Operating Leases – Incentives and SIC‐27 Evaluating the Substance of
Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the
recognition, measurement, presentation and disclosure of leases for both parties to a
contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’). IFRS 16 eliminates the
classification of leases as operating leases or finance leases as required by IAS 17 and
introduces a single lessee accounting model. Applying that model, a lessee is required to
recognise:
a. assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value; and
b. depreciation of lease assets separately from interest on lease liabilities in the profit or
loss.
For the lessor, IFRS 16 substantially carries forward the lessor accounting requirements in
IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance
leases, and to account for those two types of leases differently.
The Company is yet to carry out an assessment to determine the impact that the initial
application of IFRS 16 could have on its business; however, the Company will adopt the
standard for the year ending 31 March 2020.
37

40. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
4 Revenue
Revenue for the year comprises:
In thousands of naira 2017 2016
Sale of goods:
Local 108,002,978 85,616,691
Export 274,022 17,988
Total Revenue 108,277,000 85,634,679
5 Analysis of expenses and other income
(a) Analysis of expenses by nature
In thousands of naira 2017 2016
Raw materials and consumables 85,626,440 48,058,473
Advertising and sales promotion 2,410,149 3,352,822
Depreciation (Note 11(a)) 9,487,448 9,325,971
Auditors' remuneration 41,000 39,000
Professional fees (i) 83,767 89,924
Amortization (Note 12) 25,219 35,237
Personnel expenses (Note 8(a)) 10,045,983 10,872,213
Transportation 2,126,620 2,360,438
Repairs and maintenance 5,523,144 4,350,490
Management fees (ii) 112,722 ‐
Lease and rentals 429,629 506,202
115,912,121 78,990,770
Total cost of sales, selling & distribution and administrative expenses is made up of:
In thousands of naira 2017 2016
Cost of sales 95,349,880 60,622,243
Selling and distribution expenses 13,910,747 11,801,831
Administrative expenses 6,651,494 6,566,696
115,912,121 78,990,770
(i)
(ii)
(b) Other income represents income from the sale of scrap.
Tax and advisory services amounting to N15 million (2016:N25 million) were provided by
KPMG Professional Services. The balance of professional fees amounting to N68 million
(2016: N64million) represent expenses for professional services provided by companies and
firms other than the external audit firm.
Total cost of sales, selling & distribution and administrative
expenses
This represents 2016 financial year Management fees which is now recognised following the
receipt of NOTAP approval in current year. See details on Note 29(d))vi).
38

41. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
6 Finance income and finance cost
(a) Finance income comprises:
In thousands of naira 2017 2016
Interest income on bank deposit 40,076 31,455
Net gain on foreign exchange transactions 252,084 10,116
Derivative gain 131,848 ‐
424,008 41,571
(b) Finance costs comprises:
In thousands of naira 2017 2016
Interest on overdraft (746,604) (429,096)
(3,390,977) (2,816,428)
Derivative loss (306,780) ‐
(4,444,361) (3,245,524)
Net finance costs recognized in profit or loss (4,020,353) (3,203,953)
(c) Finance costs in the cash flow
In thousands of naira 2017 2016
Finance costs per profit or loss 4,444,361 3,245,524
Interest accrual (249,185) (229,597)
Derivative loss (306,780) ‐
Interest paid per statement of cash flows 3,888,396 3,015,927
(d) Finance income in the cash flow
In thousands of naira 2017 2016
Finance income in the statement of profit or loss / cash flows (424,008) (41,571)
Gain on foreign exchange transactions* 252,084 10,116
Derivative gain 131,848 ‐
Finance income received per statement of cash flows (40,076) (31,455)
7 (Loss)/profit before taxation
(Loss)/profit before taxation is stated after charging/(crediting):
In thousands of naira 2017 2016
Depreciation of property, plant and equipment (Note 11 (a)) 9,487,448 9,325,971
Amortization of intangible assets (Note 12) 25,219 35,237
Auditor’s remuneration 41,000 39,000
Directors’ remuneration (Note 8 (c)) 11,567 18,695
Personnel expenses (Note 8 (a)) 10,045,983 10,872,213
(Gain)/loss on sale of property, plant and equipment (174,973) 4,109
Gain on foreign exchange transactions (Note 6(d)) 252,084 (10,116)
Operating lease cost (Note 27) 429,629 462,253
Management service fee (29(d)(vi)) 112,722 ‐
*The effect of the gain in foreign exchange transactions in the statement of cash flows has been
adjusted for in the change in trade and other payables.
Financial liabilities measured at amortized cost‐
interest expense (Note 22 (a)(ii))
39

42. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
8 Personnel expenses
(a) Personnel expenses for the year comprise the following:
In thousands of naira 2017 2016
Salaries, wages and allowances 7,737,790 7,878,078
Expenses related to other employee benefits (Note 23(c)) 752,221 1,142,434
Expenses related to defined contribution plans (Note 24(b)) 413,258 465,598
Other personnel expenses 1,142,714 1,386,103
10,045,983 10,872,213
(b)
2017 2016
N N Number Number
600,001 ‐ 650,000 ‐ 1
650,001 ‐ 700,000 ‐ 2
700,001 ‐ 800,000 2 18
800,001 ‐ 1,000,000 408 1,144
1,000,001 ‐ 1,200,000 614 393
1,200,001 ‐ 1,400,000 208 153
1,400,001 ‐ 1,600,000 116 159
1,600,001 ‐ 1,800,000 113 177
1,800,001 ‐ 2,000,000 111 150
2,000,001 ‐ 2,500,000 229 208
2,500,001 ‐ 3,000,000 124 102
3,000,001 ‐ 3,500,000 82 77
3,500,001 ‐ 4,000,000 59 54
4,000,001 ‐ 4,500,000 36 32
4,500,001 ‐ 5,000,000 20 16
5,000,001 ‐ 7,000,000 31 36
7,000,001 and above 40 37
2,193 2,759
Employees of the Company, whose duties were wholly or mainly discharged in Nigeria, received
remuneration (excluding pension costs and certain benefits) in the following ranges:
40

43. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
The number of full‐time persons employed per function as at 31 March was as follows:
2017 2016
Number Number
Manufacturing 1,206 1,169
Distribution 633 1,102
Finance 156 163
Human Resources/ Administration 170 297
Information Technology 28 28
2,193 2,759
(c) Directors' remuneration
Remuneration paid to directors of the Company was as follows:
In thousands of naira 2017 2016
Fees paid to non‐executive directors 700 700
Remuneration paid to the chairman 4,809 4,212
Remuneration paid to executive directors 6,058 13,783
11,567 18,695
The executive directors’ remuneration shown above includes:
In thousands of naira 2017 2016
Highest paid director 6,058 5,370
2017 2016
N N Number Number
0 ‐ 3,000,000 7 8
3,000,001 ‐ 4,500,000 ‐ ‐
7 8
The number of other directors (excluding the Chairman and highest paid director) who received
emoluments excluding pension contributions and certain benefits were within the following
41

44. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
9 Taxation
(a) Income tax expense
In thousands of naira 2017 2016
Current tax expense
Current year income tax 1,433,009 871,705
Tertiary education tax 217,901 156,314
Capital gains tax ‐ 5,400
1,650,910 1,033,419
Deferred tax expense
Origination and reversal of temporary differences (2,102,636) (623,492)
Total income tax (credit)/expense (451,726) 409,927
(b) Income tax recognized directly in other comprehensive income
In thousands of naira 2017 2016
Remeasurement of defined benefit asset/ (liability) (Note 23(a)) 315,200 (1,069,442)
Related tax (Note 15(b)) (100,864) 320,833
Defined benefit plan actuarial gain/(loss), net of tax 214,336 (748,609)
(c) Movement in current tax liabilities
Movement in tax payable account during the year was as follows
In thousands of naira 2017 2016
Balance, beginning of the year 1,398,371 1,339,805
Payments in the year (953,617) (974,853)
Charge for the year 1,650,910 1,033,419
Balance, end of the year 2,095,664 1,398,371
The tax charge for the year has been computed after adjusting for certain items of expenditure
and income, which are not deductible or chargeable for tax purposes, and comprises:
42

45. Seven-Up Bottling Company PLC
Annual Report
31 March 2017
(d)
i Can products produced at the Company's Lagos Plant
ii
(e) Reconciliation of effective tax rate
2017 2016
In thousands of naira
(Loss)/profit for the year (10,776,712) 3,347,463
Taxation 451,726 409,927
Profit before tax (11,228,438) 3,757,390
30.0% (3,368,531) 30.0% 1,127,217
Impact of Tertiary education tax 2.0% (224,568.76) 4.2% 156,314
Impact of Capital gains tax 0.0% ‐ 0% 5,400
Non‐deductible expenses ‐1.3% 145,038 2.0% 76,585
Tax exempt income 3.1% (337,204) ‐1.9% (75,044)
Effect of pioneer charges/(gains) ‐10.8% 1,210,034 ‐23.4% (880,545)
‐18.9% 2,123,506 0.0% ‐
Tax expense 4.1% (451,726) 11.0% 409,927
10 Earnings and declared dividend per share
(a)
(b)
Income tax using the Company’s
domestic tax rate
Declared dividend per share of 160 kobo (2016: 275 kobo) is based on the dividend declared
on 28 September 2016 of N1,024,942,585 (2016: N1,761,623,498) on 640,590,363 ordinary
shares of 50 kobo each (2016: 640,590,363 ordinary shares of 50 kobo each), being the
number of ordinary shares in issue during the year.
Basic and diluted earnings per share of (1,682)kobo (2016: 523 kobo) was calculated based on
loss attributable to the owners of the Company for the year of N10,776,712,000 (2016:Profit
of N3,347,463,000) and on 640,590,363 ordinary shares of 50 kobo each (2016: 640,590,363
ordinary shares of 50 kobo each), being the number of ordinary shares in issue during the year
and at the end of the year.
In 2013, the Nigerian Investment Promotion Council (NIPC) granted the Company a pioneer
status for a five year period with respect to the following production activities of the
Company.
PET products produced at the Lagos, Enugu and Abuja plant locations, with a retroactive
commencement production date of 1 September 2011.
The effective commencement production date was certified by the Industrial Inspectorate
Department of the Federal Ministry of Commerce and Industry on 23 November 2013. In
accordance with the provision of the Industrial Development (Income Tax Relief) Act, the
Company's profit attributable to the pioneer line of business is therefore not liable to income
taxes for the duration of the pioneer period. In current year, the Company's pioneer status
expired hence the pioneer period was for only five (5) months.
Tax effect of changes in pioneer status
43