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UPDC 2010 Annual report #Nigeria

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UPDC 2010 Annual report #Nigeria UPDC 2010 Annual report #Nigeria Presentation Transcript

  • 2010 Annual Report & Accounts ...building for sustainable value RC: 321582 w w w. u p d c p l c . c o m RC: 321582
  • OUR VISION “To be the No. 1 premium property development and management company in our chosen markets, offering exceptional products and services to our customers.” “To experience the thrill of creating comfortable living and work environment for our customers.” OUR MISSION Annual Report & Accounts 2010 1 If undelivered Please Return To THE REGISTRAR UAC REGISTRARS LIMITED UAC HOUSE 2nd Floor 1 - 5 Odunlami Street P O Box 2183 Lagos THE REGISTRAR UAC REGISTRARS LIMITED UAC HOUSE 2nd Floor 1 - 5 Odunlami Street P O Box 2183 Lagos Tel: 8730080-3 8730085-6 PLEASE AFFIX STAMP Annual Report & Accounts 201052 --------------------------------------------------------------------------------------------
  • Proxy Form UACN PROPERTY DEVELOPMENT COMPANY PLC 13th Annual General Meeting to be held at 10.00 a.m. on Tuesday 7th June, 2011 at the Arthur Mbanefo Hall, Golden Tulip Festac (former Dubar Hotel), Amuwo-Odofin, Lagos State being a member/members of UACN PROPERTY DEVELOPMENT COMPANY PLC do hereby appoint ------------------------------------------------------------------------------------------------ or failing him the Chairman of the Meeting as my/our proxy to vote for me/us on our behalf at the General Meeting of the Company to be held on Tuesday 7th June, 2011 and at every adjournment thereof Dated this ………… day of ……………………… 2011. Shareholder's signature…………………………………. NOTES 1. A member (shareholder) who is unable to attend an Annual General Meeting is allowed by law to attend by proxy. The above form has been prepared to enable you to exercise your vote if you cannot personally attend. 2. Provision has been made on this form for the Chairman of the Meeting to act as your proxy, but if you wish you may insert in the blank space on the form (marked*) the name of any person, whether a member of the Company or not, who will attend the Meeting and vote on your behalf instead of the Chairman of the Meeting. 3. Please sign the above proxy form and post it so as to reach the address shown over leaf not later than 10.00 a.m. on Friday 3th June, 2011. If executed by a corporation, the proxy form should be sealed with the Common Seal or signed. 4. The proxy must produce the Admission form sent with the Report and Accounts to obtain entrance to the Meeting. 5. The proxy form should not be completed and sent to the address if the member will be attending the meeting in person. IF YOU ARE UNABLE TO ATTEND, PLEASE (a) Write the name of your proxy (if any) where marked.* (b) Ensure that the form is signed by you and stamped with COMMISSIONER OF STAMP DUTIES. (c) Tear the proxy form along the perforated lines and post so as to reach the address shown overleaf not later than 48 hours before the time of holding the meeting. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ADMISSION FORM UACN PROPERTY DEVELOPMENT COMPANY PLC Annual General Meeting Admission Card Please admit to the 13th Annual General Meeting of UACN PROPERTY DEVELOPMENT COMPANY PLC which will be held at Arthur Mbanefo Hall, Golden Tulip Festac (Former Durbar Hotel), Amuwo-Odofin, Lagos State on Tuesday, 7th June, 2011 at 10.00 a.m. IMPORTANT NOTICE: 1.This admission card must be produced by the Shareholder or his proxy in order to obtain entrance to the Annual General Meeting. 2.Shareholders or their proxies are requested to sign the admission card in the appropriate place before attending the Meeting GODWIN A SAMUEL, ESQ COMPANY SECRETARY ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- UACN PROPERTY DEVELOPMENT COMPANY PLC 13th Annual General Meeting Admission Card Name and Address of Shareholder Signature of person attending SHAREHOLDER……………………………….......................................................... PROXY…………………………………………….......................................................... RESOLUTIONS ORDINARY BUSINESS To declare Dividend To re-elect Mr. O A Oduntan To re-elect Mr. B O Kasali To authorize the directors to fix Auditor's remunerations To elect members of the Audit Committee SPECIAL BUSINESS To fix the remuneration of Directors FOR AGAINST -------------------------------------------------------------------------------------------- Annual Report & Accounts 2010 51 Contents Notice of Annual General Meeting Directors & Professional Advisers Financial Highlights Chairman’s Statement Corporate Governance Report Report of the Directors Salient Performance Graphs Statement of Directors’ Responsibilities Report of the Independent Auditor Report of the Audit Committee Statement of Principal Accounting Policies Profit & Loss Account Balance Sheet Statement of Cash Flows Notes to the Financial Statements Value Added Statement Five-Year Financial Summary Projects Update Shareholders’ Information CSCS Account Notification Mandate Form Proxy Form 3 5 8 9 12 17 22 23 24 25 26 28 29 30 31 42 43 46 48 49 50 51 Annual Report & Accounts 20102
  • Notice of Annual General Meeting Registered Office UAC House 1-5 Odunlami Street Lagos th NOTICE IS HEREBY GIVEN THAT the 13 Annual General Meeting of the Members of UACN Property Development Company Plc will be held at the Arthur Mbanefo Hall, Golden Tulip th Festac (formerly Dubar Hotel), Amuwo-Odofin, Lagos State on Tuesday 7 June, 2011 at 10.00 o'clock in the forenoon in order to transact the following businesses: Ordinary Business 1. Lay before the Members the Report of the Directors, the Consolidated Balance Sheet of the st Group as at 31 December 2010, together with the Consolidated Profit & Loss Account for the year ended on that date and the Reports of the Independent Auditor and the Audit Committee thereon. 2. Declare a Dividend 3. Re-elect/elect Directors 4. Authorise the Directors to fix the remuneration of the Auditors 5. Elect Members of the Audit Committee Special Business 6. Fix the remuneration of the Directors Proxy A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and vote instead of him and such a proxy need not be a member of the Company. A proxy form is enclosed and if it is to be valid for the purposes of the meeting, it must be completed and deposited at the Registered Office of the Company not less than 48 hours before the time for holding the meeting. th Dated this 16 day of March, 2011 By Order of the Board Godwin A Samuel, Esq., Annual Report & Accounts 2010 3 Shareholder’s Information I/WE hereby request that from now, all dividend warrant(s) due to me/us from my/our holding(s) in the Company ticked a Bank name above. It is our pleasure to inform you that you can henceforth, collect your dividend through DIRECT CREDIT into your Bank Account. We hereby request you to provide the following information to enable us process direct payment of your dividend (when declared) registrars limited a subsidiary of nigeriauac 1-5 Odunlami Street, P.O. Box 2183, Lagos MANDATE FOR e-DIVIDEND PAYMENT Date (DD/MM/YYYY) Surname/Company’s Name Other Names (for individual Shareholder) Present Poster Address City State Email Address Mobile (GSM) Phone Number Bank Name Branch Address Bank Account Number Bank Sort Code REGISTRAR’S USE Name:.......................................... SIGNATURE:............................. DATE:......................................... Name of Company uacn property development company plc Shareholder’s Signature or Thumbprint Shareholder’s Signature or Thumbprint Company Seal/Incorporation Number (Corporate Shareholder) Authorised Signatuire & Stamp of Bankers PLEASE COMPLETE AND RETURN TO US Please be informed that by filling and sending this form to us for processing, you have applied for the e-Dividend thereby, authorizing us to credit your account (in respect of dividends ) electronically. Annual Report & Accounts 201050 MANDATE FORM
  • Name of Company Account Number CSCS ACCOUNT NOTIFICATION To: The Registrar. UAC Registrars Limited, 1-5 Odunlami Street, Marina, Lagos. Please credit my account at Central Securities Clearing Systems Limited (CSCS) with all subsequent allotments and bonuses to me from share holding in the companies as indicated in the right-hand column. Personal Data Surname................................................................................................................ Other Names............................................................................................................................................. Address..................................................................................................................................................... .................................................................................................................................................................. Mobile Phone................................................................................................... Email................................................................................................................ Shareholder’s Signature (1)......................................................................................................... (2)......................................................................................................... Corporate Seal/Stamp (for Corporate Shareholders)....................................... CSCS Details Stockbroker...................................................................................................... Clearing House number.................................................................................... ......................................................................................................................... registrars limited Authorised Signature & Stamp of Stockbroker Please attach a copy of your CSCS statement to this form as evidence that a CSCS account has been opened for you. 47Annual Report & Accounts 2010 49 Notes Notes: Dividend In view of the results, the Directors have recommended to Members the payment of a dividend of 55 kobo per share. A resolution to this effect will be put to the meeting for theapprovaloftheMembers. DividendWarrants th If payment of the dividend is approved, the warrants will be posted on 7 June, 2011 to th shareholderswhosenamesareontheRegisterofMembersby13 May,2011. ClosureofRegisterandTransferBooks TheRegisterofMembersandTransferBookswillbeclosedfromMonday16thtoFriday th 20 May,2010forthepaymentofthedividend. AuditCommittee The Audit Committee consists of two (2) shareholders and two (2) Directors. Any member may nominate a shareholder as a member of the Committee by giving notice in writing of such nomination to the Company Secretary at least twenty-one days before the Annual General Meeting. Nominators should note that by the Code of Corporate Governance in Nigeria and Code of Conduct for Shareholders' Associations in Nigeria, members of the Audit Committee should be able to read and understand basic financial statements, have knowledge of accounting and internal control processesandshouldbecapableofmakingvaluablecontributionstotheCommittee. UnclaimedShareCertificatesandDividendWarrants Shareholders are hereby informed that a sizeable quantity of share certificates and dividend warrants have been returned to the Registrars as unclaimed. Some dividend warrants have neither been presented to the Bank for payment nor to the Registrar for revalidation. A list of unclaimed dividends has been posted on the Company's website http:www.updcplc.com. Affected members are by this advised to please contact the Company Secretary or the Registrars (UAC Registrars Limited) or call at the Registered OfficeoftheCompanyduringnormalbusinesshours. E-Dividend/Bonus Pursuant of the directive of the Securities and Exchange Commission, notice is hereby given to all shareholders to open bank accounts, stock-broking accounts and CSCS accounts for the purpose of e-dividend/bonus. Forms are attached to the Annual reportforcompletionbyallshareholderstofurnishtheparticularsoftheseaccountsto theRegistrar(UACRegistrarsLimited)assoonaspossible. Annual Report & Accounts 20104
  • Directors & Professional Advisers In accordance with section 357(2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria, 2004, PricewaterhouseCoopers will continue in office as Independent Auditor without a resolution being passed. A resolution will however be proposed at this meeting authorizing the directors to fix their remuneration. Directors Mr.LarryE.Ettah Non-ExecutiveChairman Mr.HakeemO.Ogunniran ManagingDirector Mrs.FolasadeO.Ogunde FinanceDirector Mr.AbdulA.Bello Non-Executive Director Hon.(Dr.)IbrahimA.Mohammed Non-Executive Director Mr.OlumideA.Oduntan Non-Executive Director Mr.BabatundeO.Kasali Non-Executive Director Mrs.HalimaT.Alao Non-Executive Director RetirementbyRotation In accordance with the Articles of Association of the company and provisions of the Companies and Allied Matters Act, Cap C20 LFN 2004, Mr. Olumide A Oduntan and Mr. Babatunde O Kasali are the directors retiring by rotation and being eligible offer themselves for re-election. The profiles and biographical information of the Directorsretiringbyrotationareonpage7. RecordofDirectors'attendanceatBoardMeetings In accordance with section 258 (2) of the Companies and Allied Matters Act, Cap C20 LFN 2004, the record of Directors' attendance at Board Meetings during the year is available for inspection at this Annual General Meeting. CompanySecretary GodwinAbimbolaSamuel Registrars UACRegistrarsLimited RegisteredandTransferOffice UACHouse 1-5OdunlamiStreet, Lagos. Auditors PricewaterhouseCoopers CharteredAccountants 252EMuriOkunolaStreet, VictoriaIsland,Lagos. 47Annual Report & Accounts 2010 5 Shareholder’s Information Shareholders' Information ANALYSIS OF SHAREHOLDING According to the register of members, two shareholders (UAC of Nigeria Plc and First Trustees Nig. Limited) st held more than 5% of the issued capital of the company as at 31 December, 2010 of the company Shareholders Shareholding By size of holdings Number % Number % 1 - 5,000 22,113 79.98% 35,948,303 2.6% 5,001 - 10,000 2,410 8.72% 16,793,466 1.2% 10,001 - 50,000 2,426 8.77% 49,284,120 3.6% 50,001 - 100,000 346 1.25% 23,892,249 1.7% 100,001 - 500,000 257 0.93% 50,636,975 3.7% 500,001 - 1,000,000 37 0.13% 24,460,474 1.8% 1,000,001 - 5,000,000 39 0.14% 87,763,884 6.4% 5,000,001 - 10,000,000 10 0.04% 71,730,283 5.2% 1,000,001 - 100,000,000 9 0.03% 220,214,925 16.0% 1,000,000,001 - 10,000,000,000 2 0.01% 794,275,317 57.8% 27,649 100% 1,374,999,996 100% SHARE CAPITAL HISTORY YEAR BONUS ISSUE UNITS VALUE ('000) N'000 1999 Starting Capital 1,000,000 500,000 2004 1 for 10 bonus issue 1,100,000 550,000 2005 - 2009 - 1,100,000 550,000 2010 1 for 4 bonus issue 1,375,000 687,500 INC/(DEC) OVER PRECEEDING YEAR LAST TRADING DAY CLOSING SHARE PRICE At the moment, the unclaimed dividend accounts show that some dividend warrants have not been presented to the Banks for payment. This notice, therefore, serves to remind shareholders, to check out the outstanding dividend list on our website (www.updcplc.com) or contact UAC Registrars Limited at the address and telephone number stated below Address: uac House (2nd floor), 1-5 Odunlami Street, Lagos. Telephone Numbers: 01-2663241, 01-2666229 E-mail: uacreg@uacnplc.com Dividends Amount Unclaimed Year Number N'000 1999 2 52,593 2000 3 4,656 2001 4 2,611 2002 5 30,813 2003 6 13 2004 7 3,459 2005 8 13,817 2006 9 83,948 2007 10 15,110 2008 11 48,413 2009 12 20,544 UNCLAIMED DIVIDENDS LIST AS AT ST 31 DECEMBER, 2010 5 - YEAR SHARE PRICE HISTORY YEAR Last Trading Day Closing Share price 2006 DECEMBER 29 2006 13.80 58% 2007 DECEMBER 31 2007 23.27 69% 2008 DECEMBER 31 2008 26.84 15% 2009 DECEMBER 31 2009 19.86 -26% 2010 DECEMBER 31 2010 16.51 -17% 8 5TH MAY 2006 25K 275,000,000 9 7TH MAY 2007 35k 385,000,000 10 21ST APRIL 2008 49k 535,912,000 11 21ST APRIL 2009 75k 835,000,000 12 21ST MAY 2010 50k 550,000,000 DIVIDEND TOTAL DIVIDEND NUMBER CLOSURE DATED 5 - YEAR DIVIDEND HISTORY DIVIDEND PER SHARE Inc/(Dec) over preceeding year Annual Report & Accounts 201048
  • Directors & Professional Advisers 2211 Mr. Bello is a Chartered Accountant and a fellow of the Institute of Chartered Accountants of Nigeria (ICAN). He holds a Higher National Diploma in Accountancy from Yaba College of Technology, Lagos. After a stint as Chief Accountant of Inlaks Plc, he worked as Financial Controller of Grand Cereals and Oil Mills Limited, Senior Accountant at UACN Corporate Office, Finance Director/Company Secretary and later became the Managing Director of Chemical & Allied Products Plc. He is the immediate past Managing Director of UACN Property Development Company Plc. He joined the Board in December, 2007. He is currently a non-Executive Director of the Board. Mrs. Alao graduated with B.Sc (Hons) and M.Sc (Architecture) from the Ahmadu Bello University, Zaria. She also holds a Masters Degree in Public Administration from the University of Ilorin. She is an alumnus of the Advanced Management and LeadershipProgrammeofUniversityof Oxford Business School. She is a member of the Nigeria Institute of Architects. She has served the Nation invariouscapacitieswhichincludeSole Administrator/Chairman, Ilorin South Local Government, Permanent Secretary, Ministry of Land & Housing, Kwara State, Honourable Minister of State for Education, Minister of State for Health, and Honourable Minister of Environment, Housing and Urban Development. She is the director, Tham Girl-Child Foundation. She joinedtheBoardinJanuary2009. Mr. Abdul Akhor Bello Mrs. Halima Tayo Alao Mr. Ogunniran, Lawyer, Chartered Secretary and Arbitrator holds LL.B, LL.M and MBA degrees of the University of Lagos. He was called to the Nigerian Bar in 1985. He was formerly a Law Lecturer at the University of Lagos. He joined UAC of Nigeria Plc as Manager, Legal Services in 1995 and was later appointed as Western Area Manager and Marketing Manager respectively of GBO/MDS Division of UACN. He is the immediate past Divisional Managing Director of MDS Logistics Division of UACN and the immediate Past President and Chairman of Council of the Institute of Chartered Secretaries and Administrators of Nigeria. He was appointed the ManagingDirectoroftheCompanyin January,2010. Mr. Hakeem Oladele Ogunniran Board of Directors Annual Report & Accounts 20106 Mr. Ettah holds a Bachelors Degree in Industrial Chemistry and an MBA from the University of Benin. He has worked variously among others as the Divisional Managing Director of Mr Bigg's Division of UAC of Nigeria Plc (Now UAC Restaurants), Acting Divisional Managing DirectorofUACFoodsDivision,Executive Director/Head of Human Resources of UAC of Nigeria Plc before his appointment as the Group Managing Director/Chief Executive Officer of UAC of Nigeria Plc in 2007. He is a member of Council of Manufacturers Association of Nigeria (MAN), Nigeria Employers Consultative Association (NECA) and Lagos Chamber of Commerce & Industry (LCCI). HejoinedtheBoardin2007. He is currently the Chairman of the Board. Mr. Larry Ephraim Ettah 2211 Final product Work-in-progress 47Annual Report & Accounts 2010 47 Emerald Court, Gudu, Abuja.
  • 2211 Mr. Kasali graduated with B.Sc (Hons) Economics degree from Manchester Metropolitan University, UK. He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN). His work experience include Audit Senior, Ernst & Young (Chartered Accountants) United Kingdom, Assistant Internal Auditor, Amex Bank Plc, United Kingdom, Principal Manager, Ernst & Young (Chartered Accountants) Nigeria, Financial Consultant, Peugeot Automobile Nigeria Limited, Chief Inspector, Regional Director, Divisional Director and Regional Bank Head, Lagos, Consumer and Commercial Banking Group, United Bank For Africa Plc respectively. He is currently the Managing Partner, Babs Kasali & Co. (Chartered Accountants). He joined theBoardinJanuary2010. Mrs. Ogunde graduated with a B.Sc (Hons) degree in Economics from the University of Ife (now Obafemi Awolowo University) Ile-Ife. She is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN). She started her career with the firm of DeloitteHaskins&Sells(Chartered Accountants), where she gained accountingandauditexperience before joining UAC of Nigeria Plc in 1997. She held such positions as Management Accountant, UAC Foods, Divisional Commercial Director, Mr. Bigg’s, (now UAC Restaurants) and Group Treasurer, UACN before her appointment as Finance Director of UACN Property Development Companyin2005. Mr. Oduntan, a Chartered Accountant and Chartered Stock broker, graduated with B.Sc (Hons) Degree from the Obafemi Awolowo University, Ile-Ife. He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and Chartered Institute of Taxation of Nigeria (CITN) . He worked as an Audit Senior with KPMG Audit before joining First Trustees Limited where he has held such positions as Senior Manager, Operations, Senior Manager, Investment and Assistant General Manager, Investment before his recent appointment as the Acting Managing Director of the Company. Hejoined theBoardinOctober2009. Mrs. Folasade Oluwatoyin Ogunde Mr. Olumide Abayomi Oduntan Mr. Babatunde Oladele Kasali Hon (Dr.) Mohammed is the Makama of Lokoja and the Chairman of Lokoja Traditional Council. He holds a Ph.d in Business Management from Irish University, London Campus. He is a fellow of Chartered Management Institute of Great Britain and the former Chairman, Manufacturers Association of Nigeria, Kaduna North- West Branch. He was an honourable member of the Kwara State House of Assembly 1979-1983. He is the Chairman of Comrade Cycle Company Nigeria Limited, Zaria. He is an alumnus of Ashridge Management College, UK and several other management institutions in the UK. He held several Senior Management positions within the UACN group beforehisretirementin1977. Hon (Dr.) Ibrahim Alawo Mohammed Board of Directors 47Annual Report & Accounts 2010 7 2211 Projects Update UPDC senior management & guests at the handover ceremony of VMP 1 UPDC senior management & guests at the Ground Breaking ceremony of VMP 3 UPDC senior management & guests at the Ground Breaking ceremony of Cameron Green Annual Report & Accounts 201046 UPDC board Visitation to VMP 2
  • Financial Highlights Turnover 8,194,305 13,331,497 (39%) Profit before taxation 2,538,771 2,828,321 (10%) Taxation (260,745) (441,982) (41%) Profit after taxation before non-controlling interest 2,278,026 2,386,339 (5%) Non-controlling interest 45,054 49,063 (8%) Shareholders' funds 29,821,367 29,779,677 0% Proposed dividend 756,250 550,000 38% Net assets per share - Basic (Naira) 21.74 28.19 (23%) Net assets per share - Adjusted (Naira) 27.17 27.13 0% Earnings per share - Basic (Naira) 1.69 2.21 (24%) Earnings per share - Adjusted (Naira) 2.11 2.21 (5%) Share Price as at 31st December (Naira) 16.51 19.86 (17%) 2010 N'000 2009 N’000 % Change Inc/(Dec) Annual Report & Accounts 20108 The way we work, same way we play UPDC joins NCF in Walk for Nature UPDC and Romay Gardens residents donate to Motherless Babies Home UPDC and Romay Gardens residents celebrate International Family Day Annual Report & Accounts 2010 45
  • Chairman’s Statement I am pleased to welcome you all to the 13th Annual General Meeting of our Company, UACN Property Development Company (UPDC) Plc being held today, Tuesday 7th June 2011 at the Arthur Mbanefo Hall, Golden Tulip Festac(formerlyDurbarHotel), AmuwoOdofin, Lagos. The performance of the Nigerian economy in 2010 was impacted by the global economic recession and the after effectsofthebankingsectorreforms. RealGDPgrowthrateintheyearwasat7.86%,higherthan7.30%recorded in the preceding year. The growth in the economy was driven largely by increased oil production following the temporary peace pact formed between the FGN and the Niger Delta militants. Non-oil GDP recorded a growth rate of 8.38% against 8.32% in 2009, while oil GDP recorded a growth rate of 5.08 % against 0.45% in the previous year. Average inflation rate for 2010 was 13.8% as against 12% for the preceding year. Inflationary threats however remained real and pronounced, with increase in minimum wage to N18,000, tighter fiscal policy and imminent saleofrescuedbanks. The country's external debt stock stood at US$4.58 billion in 2010 (Q3), representing an increase of 16% over US$3.95 billion in December 2009. The external reserve position as at December 31, 2010 was US$ 32.35 billion, representingadropof23.72%,comparedwithUS$42.41billionasatDecember31,2009. TheMonetaryPolicyRate(MPR)rosefrom6.0%in2009to6.25%whilePrimeLending Ratedroppedfrom18.67%in2009to16.98%. The average exchange rate of the Naira to the US Dollar was N148.81 compared withN147.04in2009,showingadepreciationof0.45%. The Banking and Finance sector witnessed the trade-off of bonds worth N1.03trn for toxic assets of banks, fund injection into the identifiedailingbanksbyAMCON;SECreformsandPenCom'snew investmentguideline,allaimedatensuringstabilityandgrowth. Infrastructural deficiencies plaguing the economy (in transport, aviation and other sectors) remained unsolved and in particular, electric power supply declined to a sorry state during the year and continuestobeamajorsocio-economicmalady. ReviewofOperatingEnvironment Distinguished Shareholders, Colleagues, Ladies and Gentlemen, 47Annual Report & Accounts 2010 9 THE GOOD EXPERIENCE OF GOLDEN TULIP STARTS FROM THE ENVIRONMENT The GoldenTulipFestac,Lagos is theright placefor guests seekinga luxury hotel experience. We successfully blend consistent international standards with the distinctivecultureofourlocation,with471rooms,weofferguestsvariousroom types according to their requirements. Our spacious standard rooms are well equipped with modern facilities and have a lovely decor. All standard rooms havekeycardsandwirelessconnectivity. Amuwo Odofin, Mile 2, P.M.B 031,Lagos, Nigeria TEL:234 01 1279 2980, MOB +234 803 303 5783 www.goldentulipfestaclagos.com 471 Rooms And Suites State-of-the-art Conference and Meeting Rooms Restaurants and Bars Swimming Pool and Leisure Facilities
  • Five - Year Financial Summary - Group 2010 2009 2008 2007 2006 N'000 N'000 N'000 N'000 N'000 Balance sheets as at 31st December Share capital 687,500 550,000 550,000 550,000 550,000 Share premium 4,115,148 4,252,648 4,252,648 4,252,648 4,252,648 Capital reserve 15,896,527 18,503,352 21,234,275 13,945,795 14,320,833 Revenue reserve 9,122,192 6,473,677 4,863,276 1,800,735 1,857,773 Shareholders' funds 29,821,367 29,779,677 30,900,199 20,549,178 20,981,254 Non-controlling interest 68,344 64,334 113,496 127,237 22,188 Total equity 29,889,711 29,844,011 31,013,695 20,676,415 21,003,442 Fixed assets and investment properties 37,968,735 40,468,614 41,680,926 43,036,643 28,099,025 Long term investments 2,165,440 2,140,114 1,960,974 1,840,735 3,879,789 Current assets 29,397,136 19,675,071 20,369,470 5,630,084 8,018,071 Total liabilities (39,641,600) (32,439,780) (32,997,671) (29,831,046) (18,993,443) Net assets 29,889,711 29,844,011 31,013,695 20,676,415 21,003,442 Profit and loss accounts for the years ended 31st December Turnover 8,194,305 13,331,497 13,328,454 5,676,180 5,484,782 Profit before taxation 2,538,771 2,828,321 3,716,592 773,616 1,368,898 Taxation (260,745) (441,982) (33,725) (348,332) (406,503) Profit after taxation 2,278,026 2,386,339 3,682,867 425,284 962,395 Non-controlling Interest 45,054 49,063 6,350 533 3,712 Profit after tax and non- controlling interest 2,323,080 2,435,402 3,689,217 425,817 966,107 Proposed dividend ( 756,250) (550,000) (825,000) (535,912) (385,000) 1, 566,830 1,885,402 2,864,217 (110,095) 581,107 Basic Earnings per share (kobo) 169 221 335 39 88 Dividend per share (kobo) 55 50 75 49 35 Net assets per share (Naira) 21.7 27.1 28.2 18.8 19.1 Note : Earnings and net assets per share are computed on the profit after taxation and the shareholders funds respectively on the basis of the number of shares in issue as at 31st December. Both basic and diluted Earnings Per Share (EPS) are the same. 47Annual Report & Accounts 2010 43 Chairman’s Statement ReviewofOperations TheCompany UPDCHotelsLimited The real estate industry suffered temporary setbacks in 2008 and 2009 resulting from the global economic crises &realestatemarketmeltdown,theNigerianbankingsectorcrisesandtheattendantliquidityandcreditsqueeze. This downturn in business activities continued in the first half of 2010, with major players generally adopting a ''wait & see'' attitude. There was significant price adjustment in the premium market segment and credit availabilityforretailfinancingwasnon-existent. These developments led to decline in effective demand for property and high default rates in meeting payment termsbybuyersandtenants. Thefactorscombined,impactedmarginsnegativelyduringtheyear. Thesecondhalfoftheyearwitnessedanimprovedlevelofactivityinthesector,withimprovedcreditavailability. Despite the setback, the growth potential of the real estate sector remains higher than average GDP growth. Government policy on the sector however is unclear across all levels as major process & cost hurdles to land acquisitionandownershiptitlesremain. IwishtofurthercommentontheCompanyanditssubsidiary/majorinvestmentsasfollows: Operationally, the Company maintained her leadership position in the premium market segment of the Nigerian real estate market. We achieved full completion of the prestigious Victoria Mall & Plaza (VMP) Residential Apartments at Aboyade Cole Street, Victoria Island, the 8-storey Abuja Phase 3 Office Complex and the Pinnock BeachSite&ServiceScheme. Workcommencedonthe15-storeyVMPOfficeBlockandhasreachedanadvancedstage. The issue of N15billion Corporate Bond at 10% per annum was oversubscribed and at a price un-precedented in thehistoryofcorporatebondissuesinNigeria. The bond issue proceeds were utilized to partly re-finance the Company's short-term borrowings and also fund newlandacquisitionsfornewprojects. Some of the new projects include the on-going Emerald Court, Gudu Abuja; Metro Gardens, Lekki Lagos; Grand Ville,IkejaGRA,Lagos;UPDCMetroCity,ApoAbujaandNAFFEstate,RumuomasiPortHarcourt. Business activity was typically very slow in the first half of 2010 for the hotel operation. The second half witnessed improved rooms occupancy and revenues from use of the hotel’s ample conferencing facilities by corporateclients. Thistrendisimprovingbytheday. Annual Report & Accounts 201010
  • Annual Report & Accounts 2010 11 Chairman’s Statement 1004Estates FinancialPerformance Outlookfor2011 Appreciation The development was completed during the year and over 400 buyers have taken up residency in the estate. Full- fledgedfacilitymanagementbythree(3)reputablefirmsalsocommencedduringtheyear. Inspiteofthechallengingoperatingenvironment,yourCompanypostedamodestturnoverperformanceofN8.19 billion for 2010 compared with N13.33 billion recorded in 2009. Profit before Tax (PBT) was N2.5 billion against N2.8billionintheprecedingyear. In the light of these results, the Board of Directors has recommended for your approval a dividend of 55 kobo per sharefortheyear. Domestic outcomes in 2011 will be largely influenced by electoral developments; the first half of the year will be dominated by preparations towards the general elections while adjustments to electoral outcomes will dominate thesecondhalf. New legislators and political office holders may actually boost demand for houses in the second half if the electionsaresuccessfullyconcluded. For the real estate sector, a cautious optimism exists as major international housing markets continue to show strongsignsofrebound. Significant gaps exist in housing volumes and types in Nigeria and your Management and Board are poised to take advantageoftheemergingopportunitiestocreatesustainablevalueforyou,ouresteemedshareholders. Ladies and Gentlemen, I wish to express my appreciation to the management and staff of our Company for their effortsinworkingforthesustainedprofitabilityofthecompany. Ithankyou,ouresteemedShareholdersforyourunwaveringinterestinourCompany. Finally, I thank my colleagues on the Board for providing the required support, leadership and direction for the Company. Ithankyouallforyourattention. LARRYEPHRAIMETTAH CHAIRMAN st for the year ended 31 December, 2010 Group Company 2010 2009 2010 2009 N'Million % N'Million % N'Million % N'Million % Sale of properties, rents and services 8,194.3 13,331.5 7,637.1 13,331.5 Bought in materials and services (All local) (2,512.8) (8,977.1) (2,652.9) (9,004.3) Value Added 5,681.5 100.0 4,354.4 100.0 4,984.2 100.0 4,327.2 100.0 Distribution: Employees 96.0 7.0 303.0 7.0 254.6 5.1 303.0 7.0 Taxes 260.7 4.6 442.0 10.2 260.7 5.2 442.0 10.2 Interest charges 1,253.5 22.0 745.1 17.1 1,210.2 24.3 745.1 17.2 Dividend 756.3 13.3 550.0 12.6 756.3 15.2 550.0 12.7 Depreciation 688.2 12.1 186.6 4.3 130.5 2.6 159.4 3.7 Transfer to non-controlling interests (45.1) (0.8) (49.1) (1.1) - - (49.1) (1.1) Retained Profit 2,371.9 41.7 2,176.8 50.0 2,371.9 47.6 2,176.8 50.3 5,681.5 100.0 4,354.4 100.0 4,984.2 100.0 4,327.2 100.0 Group Value Added Statement Employees 7.0% Depreciation 12.1% Dividend 13.3% Non-controlling interests (0.8%) Taxes 4.6% Retained Profit 41.7 % Interest charges 22.0% Annual Report & Accounts 201042 Value Added Statement
  • Corporate Governance Report WeherebyreportasfollowspursuanttotheprovisionsoftheCodeofCorporateGovernanceinNigeria(“theCode”). By the Articles of Association of the Company (“the Articles”), the Board is responsible for controlling and managing the business of the Company. It may exercise such powers of the Company as are not by statute or the Articles to be exercisedbytheCompanyinGeneralMeeting. Under the UPDC Board Charter “the primary objective of the Board of Directors ('Board') of UACN Property Development Company (UPDC) Plc is to build long-term shareholder value with due regard to other stakeholder interests. It does this by setting strategic direction and context, such as UPDC's mission, vision and core values, policies and objectives and focusing on issues critical for its successful execution such as staffing, executive training, succession planning,performanceandriskmanagement”. CompositionoftheBoardofDirectors The Board of UACN Property Development Company Plc is made up of Six Non-Executive Directors and two Executive Directors. SeparationinChairmanandCEO'sPositions The positions of the Chairman of the Board of Directors and that of the Managing Director/CEO are separate and occupiedbydifferentpersons. MrLarryEphraimEttah,theChairmanoftheBoardisaNon-ExecutiveDirector. Mr.HakeemDeleOgunniranistheManagingDirector/CEOoftheCompany. TheRolesoftheBoardofDirectors TheCharterprovidesforthefollowingastherolesandresponsibilitiesoftheBoardofDirectors: i) Strategyandplanning ii) StaffingatBoardandseniormanagementlevels&successionplanning iii) ExecutiveRemuneration iv) Capitalmanagement&financialreporting v) Performancemonitoring vi) Riskmanagementandinternalcontrol vii) Audit&compliance viii)Communicationwiththeshareholdersandmanagementofinvestorrelations ix) BoardanditsCommittees’accountabilitiesandresponsibilities BoardAppointment,InductionandTrainingProcesses The process of appointing Directors involves a declaration of a vacancy at a Board Meeting; the sourcing of the curriculum vitae of suitable candidates depending on the required skills, competence and experience at any particular time; and the reference of the curriculum vitae to the Risk and Governance Committee for necessary background checks, informal interviews/interaction and a recommendation for the approval of the Board of Directors. Where it is a Director slot to be filled by an institutional investor who by extant Board policy is entitled to a Board seat based on a shareholding of minimum of 10% of the issued share capital of the Company, the investor will forward the profile/curriculumvitaeofitsnomineetotheChairmanoftheBoardwhowillreferthesametotheRiskandGovernance Committee to undergo a similar process as earlier stated. A Director appointed by the Board is presented to the next AnnualGeneralMeetingofthemembersoftheCompanyforelection. Every newly appointed Director of the Company undergoes a comprehensive induction process. This entails his introduction to the members of the Management Leadership team, the Board of Directors and the operations of the Company. The Managing Director assisted by the Leadership team also makes an induction presentation to the new Director to help him to understand the Company, its history, culture, values, business principles, people, projects, processes and plans. Operational visits are also arranged for the new Director to the regional offices and projects of the CompanyinLagos,AbujaandPortHarcourt. Allrelevantmajordocuments,policies,processesandproceduresthathelp theDirectortogainaninsightintotheCompanyarealsomadeavailabletohim. Annual Report & Accounts 201012 Notes to the Financial Statements st for the year ended 31 December, 2010 25Managementservicesagreement The company has a Management Services Agreement with UAC of Nigeria Plc. This agreement provides that the company pays an annual fee of 1% of its turnover to UACN for services received under the agreement. The services provided include Business Strategy and Financial Advisory, Treasury, Secretarial & Legal, Human Resource Management, Insurance, Pensions & Gratuity Administration, Medical, etc. The amount charged in these financial statementsisN76.37million(2009-N133.3million). 26Contingentliability Therewerelitigationsasatthebalancesheetdateintheordinarycourseofbusinesswhichinvolvedlandacquisition, contractualclaimsandrecoveryofoverduerentsandservicecharges. IntheopinionoftheDirectors,nomaterialloss isexpectedtoarisefromthese. Meanwhile,thoseevaluatedtolikelyresultinlosswereprovidedfor. 27Relatedpartytransactions i) Thecompanyhasadefinedbenefitplanforitsemployees. Itcomprisesofbothfundedandunfunded. Thefunded retirement benefit is managed by UNICO CPFA Limited, while the unfunded retirement benefit is managed by UACN Plc. The latter is however non-contributory (funded solely by the Company) . Contributions to the UNICO Pension schemeisinlinewiththePensionsReformAct(2004). a)Thecontributionsandpaymentsmadeintheyearweretowardstheunfundedretirementschemethus: 2010 2009 N'000 N'000 ContributionsmadetotheUn-fundedRetirementBenefit 26,270 25,050 PaymentsmadetoEx-employees 30,361 24,737 b)Thecompany'scontributorypensionschemeismaintainedwithUNICOCPFALimited. Thecontributionsandpaymentsmadetothefundduringtheyearwerethus: Openingbalance 102,488 96,577 Contributionsintheyear 25,072 16,061 Paymentsmadeintheyear (39,436) (10,150) 88,124 102,488 ii) Thefollowingtransactionswerecarriedoutwithrelatedparties: 2010 2009 a) Salesofservices UACofNigeriaPlc 61,422 94,158 GMNigeriaLtd 3,324 1,168 UACRestaurants 9,114 7,982 ChemicalandAlliedProductsPlc 818 100 MDSLogistics 28,462 26,321 103,140 129,729 b)Purchaseofgoodsandservices UACofNigeriaPlc 72,450 8,198 UACRegistrars 11,615 9,666 GMNigeriaLtd 1,004 1,278 ChemicalandAlliedProductsPlc 30,711 33,110 UACRestaurants 1,572 253 WarmSpringWatersNigLtd 620 1,444 GrandCerealsandOilMillsLimited 374 4,094 UHL 8,101 - 126,447 58,043 Annual Report & Accounts 2010 41 28Financialstatementspresentation Some corresponding period balances have been reclassified to conform with the current year's presentation. 29 Approval of the financial statements th The financial statements were approved by the Directors on 16 March, 2011.
  • Corporate Governance Report The Directors of the Company participated at the UACN Group Board Retreat which was held at Golden Tulip Festac Lagos on November 9. 2011. The training dwelt among others on UACN In Perspective, UACN Today, Directors' Roles and Responsibilities, Governance, Entrepreneuralism and management, appraising the Business Score Card, the State of the Business and New Challenges and Opportunities. All the participants found the training to be very insightful, useful and beneficial. AttendanceofBoardMeetings The Board met eight (8) times during the year. The following is the list of the directors and their attendance at Board meetingsduringthe2010financialyear: 13/1/10 23/2/10 27/4/10 8/6/10 27/7/10 17/8/10 26/10/10 7/12/10Directors Mr. Larry E Ettah Mr. Olumide A Oduntan Mr. Hakeem D Ogunniran Dr. Ibrahim A Mohammed P P P P P P P P P P P P P P P P - P P P P P P P P P P P P P P P Mr. Abdul A Bello Mrs. Folasade O Ogunde Mrs. Halima Tayo Alao P P - - P P P P P P P P P P P P P P P P A A A P P P P P P P P P A = Absent P = Present AWA = AbsentWithApology - = NotyetamemberoftheBoard/resigned The Directors standing for re-election are Mr. Olumide Abayomi Oduntan and Mr. Babatunde Oladele Kasali. Their biographicaldetailsarecontainedonpage7. BOARDCOMMITTEES The Board functions through two Board Committees, namely (i) the Finance & Projects Committee, and (ii) the Risk & Governance Committee. The two Committees are presided over by Non-Executive Directors of the Company. While the ChairmanoftheFinanceandProjectsCommitteeisMrAbdulAkhorBello,Honourable(Dr)IbrahimAlawoMohammedis theChairmanoftheRiskandGovernancecommittee. 1) Finance&ProjectsCommittee: The Finance and Projects Committee is chaired by a non-executive director and made up of two other non-executive directors, the Managing Director and the Finance Director. The Committee meets a fortnight before every Board meeting. ThefollowingarethetermsofreferenceoftheCommittee: TheTermsofReferenceoftheCommittee I) To assist the Board in making investment and capital expenditure decisions in pursuance of strategic objectives. This entailsthefollowingsub-responsibilities: a) Review and evaluate management requests for financial approval for the purchase, development and construction of projectinitiativesandmakeappropriaterecommendationstotheBoard. b) Review,evaluateandmakerecommendationstotheBoardfordebtandotherfinancingalternativesforprojects. c) Monitorandreviewjustificationforprojectcost overrunsandrequestsforsupplementarybudgets. d) ReporttotheBoardonitsactivities,recommendationsanddecisions. Mr. Babatunde O Kasali Annual Report & Accounts 2010 13 Notes to the Financial Statements st for the year ended 31 December, 2010 Annual Report & Accounts 201040 Group Company 2010 2009 2010 2009 20 Share premium N'000 N'000 N'000 N'000 Balance 1 January 4,252,648 4,252,648 4,252,648 4,252,648 Applied for bonus issue (137,500) - (137,500) - Balance at 31 December 4,115,148 4,252,648 4,115,148 4,252,648 A bonus issue of one (1) share for every four (4) shares held was declared for 2009 financial year and effected in May 2010. The resultant financial effect has been adjusted for in the share premium account. 21 Revaluation reserve N'000 N'000 N'000 N'000 Balance 1 January 18,503,352 21,234,275 18,503,352 21,234,275 Loss on investment properties revalued during the year (90,341) - (90,341) - Surplus on disposed investment properties (2,743,288) (3,296,511) (2,743,288) (3,296,511) Deferred tax provision 226,804 565,588 226,804 565,588 Balance at 31 December 15,896,527 18,503,352 15,896,527 18,503,352 Revaluation reserve is the surplus arising from revaluation of investment properties as explained in Note 10. 22 Revenue reserve Balance 1 January 6,473,677 4,863,276 7,411,421 5,509,668 Dividend paid (550,000) (825,000) (550,000) (825,000) Adjustments from prior periods (UHL) 875,435 - - - As restated 6,799,112 4,038,276 6,861,421 4,684,668 Retained profit for the year 2,323,080 2,435,402 3,128,100 2,726,752 Balance at 31 December 9,122,192 6,473,677 9,989,525 7,411,421 Prior year adjustment relates to entry passed to capitalise incidental cost relating to the construction of UPDC hotels which started operations during the year. 23 Non-controlling interest This comprises of amounts due to/(from) holders of minority shares in Manor Gardens Pty Dev. Co Ltd and UPDC Hotels Limited and is made up as follows: 2010 2009 Manor Gardens Property Development Company Ltd. N'000 N'000 Share capital 25,900 25,900 Retained loss (30,002) (30,002) Balance at 31 December (4,102) (4,102) UPDC Hotels Limited N'000 N'000 Share capital 117,500 117,500 Retained loss (45,054) (49,063) Balance at 31 December 72,446 68,437 Total non-controlling interest 68,344 64,334 24 Capital commitments Asat31December2010,theamountofcapitalexpenditureauthorisedandstillunspentamountedtoN9.05billion (2009-N11.8billion). Theyaremainlyinrespectofvariousdevelopmentprojectsatdifferentstagesofcompletion.
  • 2010 2009 Notes to the Financial Statements st for the year ended 31 December, 2010 Group Company 2010 2009 2010 2009 16 Trade & other creditors N'000 N'000 N'000 N'000 Trade creditors 5,429,412 5,809,020 5,385,836 5,809,020 Other credit balances 5,769,257 5,648,673 5,739,901 5,616,817 Staff creditors 426 711 426 711 Acruals 1,407,157 1,126,253 1,407,157 1,126,253 Amounts owed to related companies 29,590 374,940 29,590 374,940 12,635,842 12,959,598 12,562,910 12,927,742 Analysis of other credit balances Advance payment received for properties 2,945,950 2,961,934 2,945,950 2,961,934 Provision for Interest receivable 1,231,438 1,874,395 1,231,438 1,874,395 Provision for expiring leases 74,294 79,104 74,294 79,104 Others 1,517,575 733,241 1,488,219 701,385 5,769,257 5,648,674 5,739,901 5,616,818 17 Deferred income Deferred income within 12 months 460,053 599,725 460,053 599,725 Deferred income longer than 12 months 323,614 101,902 297,334 77,340 783,666 701,627 757,386 677,065 Deferred income are future rental income which are recognised in the profit and loss account when earned. 18 Provisions for liabilities and charges Deferred Taxation Balance at 1 January 2,348,643 2,908,491 2,345,985 2,905,833 Provision for the year (profit & loss) (234,919) 5,740 (234,919) 5,740 Provision for the year (revaluation reserve) (226,804) (565,588) (226,804) (565,588) Balance at 31 December 1,886,920 2,348,643 1,884,263 2,345,985 19 Share capital Number Value Number Value (Units '000) N'000 (Units '000) N'000 Ordinary shares of 50k each Authorised: Balance 1 January 2,000,000 1,000,000 2,000,000 1,000,000 Balance at 31 December 2,000,000 1,000,000 2,000,000 1,000,000 Issued and fully paid: Balance 1 January 1,100,000 550,000 1,100,000 550,000 Bonus shares issued during the year (1 for 4 shares) (note 20) 275,000 137,500 - - Balance at 31 December 1,375,000 687,500 1,100,000 550,000 Annual Report & Accounts 2010 39 Corporate Governance Report ii) To assist the Board satisfy itself about the validity of technical and market prospects for projects and investment initiatives. Thisentailsthefollowingsub-responsibilities: a) Challenge and obtain necessary assurances from management and contractors in respect of project viability, technical quality and completeness of plans, project cost structures, monitoring and reporting arrangements, projectmanagement,contingencyplanningandprovisions,riskassessmentandriskmanagementprocesses. b) Advise Board on above matters prior to the submission of the project (s) to the Board for final approval and make recommendationsasappropriate. c) Following approval of project (s), continue to assist the Board in its oversight of the projects by reviewing project statusandprovidingregularupdatesandreportstotheBoardandadvisingtheBoardaccordingly. The Finance & Projects Committee met five (5) times during the year and the following chart shows the attendance of Committeemembersatthemeetings: Directors Mr. Olumide A Oduntan Mr. Hakeem D Ogunniran P P P P P P P Mr. Abdul A Bello Mrs. Folasade O Ogunde Mrs. Halima Tayo Alao P P 13/4/2010 2/6/10 13/7/10 12/10/10 23/11/10 P P P P P P P P P P P P P P P P 2) Risk&GovernanceCommittee: The Risk & Governance Committee is chaired by a non-executive director and composed of two other non-executive directors,theManagingDirectorandtheFinanceDirector. The Risk and Governance Committee met four (4) times during the year. The following chart shows the attendance of Committeemembersatthemeetings: Mr. Olumide A Oduntan Mr. Hakeem D Ogunniran Dr. Ibrahim A Mohammed Mrs. Folasade O Ogunde Mr. Babatunde O Kasali Directors P P P P P P P AWA 6/4/2010 26/7/10 21/10/10 30/11/10 P P P P P P P P P P AWA AWA TheTermsofReferenceoftheCommittee I) Oversees risk management within the group and it is responsible for developing and monitoring an enterprise risk managementframeworkforidentifying,measuring,monitoringandcontrollingrisksintheCompanyandgroup. ii) Monitors and reviews the effectiveness of the Company's review and audit in the context of the Company's overall risk managementsystem; iii)Reviewsandassessestheannualinternalandexternalauditplans iv)Reviews the recommendations of the InternalAuditor and the ExternalAuditor and Management's responses thereto andmonitorstheimplementationofauditcommentsbymanagementandmakesrecommendationstotheBoard; Annual Report & Accounts 201014
  • Corporate Governance Report v) In line with the UACN group policy, gives consideration to succession planning for directors in the course of its work taking into account the challenges and opportunities facing the Company and what skills and expertise are neededontheBoardinthefuture. vi) In line with the UACN group policy, determines and agrees with the Board the framework or broad policy for the remuneration of the Company's Chief Executive, Chairman, the Executive Directors, members of the executive management team as it is designated to consider. The remuneration of the non-executive directors is a matter for the Chairman and the Executive members of the Board. No director or manager is involved in any decision as tohisorherownremuneration. vii) Annually evaluates and reports to the Board on the performance and effectiveness of the Board and Board Committees to facilitate the directors fulfilling their responsibilities in a manner that serves the best interests of theCompany'sshareholders. viii) AssiststheChairmanoftheBoardinleadingtheBoard'sannualreviewoftheperformanceofallDirectors. ix) Annually reviews the composition of Board committees and presents recommendations for committee membershipstotheBoardChairmanasneeded. x) Develops, periodically reviews and recommends to the Board appropriate revisions to the Company's corporate governance framework, including its Memorandum and Articles of Association, Bye-laws and Corporate GovernanceGuidelines. xi) Monitors compliance by the Company with the Laws and regulations in force and the Corporate Governance Code(s). xii) RegularlyreviewsandmakerecommendationsaboutchangestoBoardandBoardCommitteecharters. xiii) Annually reviews the Company's policies and programs that relate to Corporate Governance, corporate citizenship, including environmental sustainability, corporate social responsibility, etc and make recommendationstotheBoard. xiv) InlinewiththeUACNgrouppolicy,itisresponsibleforthecontinuingeducationofboardmembers. Training TheDirectorsoftheCompanyparticipatedinaUACNGroup Boardretreat,whilethemembersoftheAuditCommittee were sponsored by the Company to attend seminars on financial literacy organised by the Audit Committee Institute duringtheyear. MajorPolicies ThefollowingmajorCompanypolicieshavebeenapprovedbytheBoardandarebeingimplementedbytheCompany: I) Directors' CompensationCriteria ii) RiskPolicy iii) CorporateProcurementPolicy iv) Directors'PerformanceEvaluationProcesses v) IncomeRecognitionPolicy vi) ConflictofInterestPolicy vii) FraudPolicy viii) WhistleBlowingpolicy ix) PolicyonTransferofTitletoSubsequentPurchasers Annual Report & Accounts 2010 15 15 Total finance charge for the year amounted to N2.68billion (2009: N2.17b) and in line with the Company's accounting policy on borrowing cost, N1.43billion (2009: N1.42b) has been capitalised into various projects. The increase in finance charges for the year was due to the rise in the level of borrowing from N15.65b in December 2009 to N23.5b in December 2010. The increased borrowing level is attributable to the expenditure on on-going projects such as VMP 2 and Cameron Green as well as new land acquisitions for future projects. Annual Report & Accounts 2010 Notes to the Financial Statements st for the year ended 31 December, 2010 Cash and bank balances 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Cash in hand and at banks 1,792,715 516,348 1,767,649 500,832 Bank overdrafts (270,629) (3,330,577) (257,139) (3,330,577) Cash and cash equivalents 1,522,086 (2,814,229) 1,510,511 (2,829,745) Bank commercial papers (3,300,000) (5,950,000) (3,300,000) (5,950,000) Bank overdrafts & commercial papers (3,570,629) (9,280,577) (3,557,139) (9,280,577) Term loans (19,934,800) (6,373,254) (19,422,800) (5,571,368) ` (23,505,429) (15,653,831) (22,979,939) (14,851,945) Net cash and bank balances (21,712,714) (15,137,483) (21,212,290) (14,351,113) Group Company 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Term loans Amount due within one year (2,464,910) (2,012,010) (2,208,910) (1,840,037) Amount due after one year (17,469,890) (4,361,244) (17,213,890) (3,731,331) (19,934,800) (6,373,254) (19,422,800) (5,571,368) Schedule of long term loans (UPDC Plc) Amount Tenor Repayment Security Terms First Bank of Nigeria Plc 500,000 12 months Quarterly Equitable mortgage FBN Plc (Balance of project facility for VMP 1) 200,000 18 months Quarterly ’’ FBN Plc (Refinanced IFC Loan ) 2,300,000 48 months Half yearly ’’ Union Bank of Nigeria Plc 164,474 15 months Quarterly ’’ First Securities Discount House Limited 250,000 12 months Quarterly ’’ Access Bank Plc 451,000 36 months Quarterly ’’ International Finance Corporation ($3.75m) 557,326 12 months Half yearly Bank guarantee Corporate Bond (Series 1) 15,000,000 60 months Half yearly Guarantee/Equitable Mortgage & Sinking fund COMPANY TOTAL 19,422,800 Schedule of long term loans (UHL limited) FBN Plc (Refinanced IFC Loan ) 512,000 36 months Half yearly Legal mortgage GROUP TOTAL 19,934,800 The average interest rate for facilities from local banks during the period was 13.26%; IFC loans attract interest rate of LIBOR + 3.75% spread while the bond coupon rate is 10% with a 24 months moratorium (commencement August 2010). Annual Report & Accounts 201038
  • Corporate Governance Report GovernanceatManagementLevel The Managing Director participates in the monthly UACN Group Business Review Meeting. Within the Company, accountability meetings and reviews are held on a weekly, monthly and quarterly basis. These include the weekly meetings of the Leadership Team; monthly Business Review and Project Review meetings and quarterly Village Meetings. Employees of the Company also join their peers within the UACN Group for monthly Finance & IT; Human ResourcesManagersreviewmeetingsandQuarterlyMarketing&Salesconference. THEAUDITCOMMITTEE The Audit Committee is composed of four members made up of two representatives of the shareholders elected at the2009AnnualGeneralMeetingfortenureofoneyearandtworepresentativesoftheBoardofDirectorsnominated by the Board. The Chairman of the Committee is Alhaji Gbadebo Olatokunbo, a shareholders' representative. The Company Secretary provides secretarial services to the Committee. The Committee met three times and the followingtableshowstheattendanceofthemembersatthemeetings: CompliancewiththeCodeofCorporateGovernance TheCompanyhascompliedwiththeprovisionsoftheCodeofCorporateGovernanceinNigeria2003. As a member of the UACN group, the employees of the Company also subscribe to the UACN Code of Business Principles and Ethics which came into force in 2004. It forms the foundation for the conduct expected of every employeeoftheCompanyandreflectsourcorevaluesandprinciples. Mr. Abdul A Bello Alhaji Gbadebo Olatokunbo Mrs. Folasade O Ogunde Mr. Joe O Anosikeh Directors P P P P P P P P P P P P 25/2/10 8/4/10 10/12/10 Annual Report & Accounts 201016 Annual Report & Accounts 2010 Notes to the Financial Statements st for the year ended 31 December, 2010 Group Company 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Operating profit before taxation 2,538,771 2,828,321 3,388,845 3,168,734 Adjustments for non-cash items: Depreciation of fixed assets 688,216 186,586 130,479 159,448 Profit on disposal of investment properties (2,603,160) (1,935,105) (2,603,160) (1,935,105) Net movement in other property stock (705,550) 8,239,680 (705,550) 8,239,680 Reclassification from Investment properties (46,649) 771,493 (46,649) (93,258) Profit on disposal of fixed assets (624) (3,723) (624) (3,723) Adjustments/write off of fixed assets - (281,004) - (281,004) Net prior year adjustments 924,491 - - - Interest charges 1,253,490 745,145 1,212,818 745,145 Cash flow from operating activities 2,048,986 10,551,394 1,376,160 9,999,917 Changes in working capital Decrease/(Increase) in stocks 2,773,703 (980,967) 2,824,547 (800,630) (Increase)/decrease in debtors (2,673,822) 1,166,912 (3,513,890) (2,661,567) Decrease in creditors and other provisions (241,717) (2,413,569) (284,511) (2,366,353) Cash flow after changes in working capital 1,907,150 8,323,770 402,305 4,171,367 Income tax paid (442,002) (349,552) (442,002) (349,552) Net Cash flow from operating activities 1,465,149 7,974,215 (39,696) 3,821,814 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Building Stock work-in-progress 131,112 2,952,429 - 2,821,317 Trade/Technical stocks and spares 235,112 187,498 3,653 6,883 366,224 3,139,927 3,653 2,828,200 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Trade debtors 2,914,371 1,094,857 2,844,362 1,085,641 Amount owed by associated companies 189,684 176,665 15,418,421 14,467,812 Staff debtors 4,910 3,765 2,722 3,765 Sundry debtors 932,906 130,500 932,906 130,501 Prepayments and accrued income 139,971 102,233 105,431 102,233 4,181,842 1,508,020 19,303,842 15,789,952 Group Company Group Company Annual Report & Accounts 2010 37 12 Cash flow from operating activities 13 Stocks and work-in-progress 14 Debtors and other debit balances
  • Annual Report & Accounts 2010 Notes to the Financial Statements st for the year ended 31 December, 2010 i) UPDC Hotels Limited is the company incorporated to hold and manage the assets of Festac '77 Hotel bought from the Federal Government of Nigeria in 2002. The share capital of the company is N2.2 billion. The accounts of UPDC Hotels Limited have been consolidated with UPDC in these financial statements ii) Manor Gardens Property Development Company Limited was incorporated in 2002 and is jointly owned by UPDC and Top Services Limited, a firm of architects and building engineers. UPDC currently holds 67.5% of the subsidiary's equity. iii) 1004 Estates Limited is a Special Purpose Vehicle (SPV) formed by the consortium of companies that bought the 1004 Estate flats from the Federal Government. UPDC currently holds 50.5% stake in the business. The main object of the company is to acquire land, buildings and real estate of any description for holding, improvement, refurbishment and renovation for sale. The accounts of 1004 Estates Limited was not consolidated in the accounts because UPDC's investment in the company is regarded as a project with a terminal date. iv) UNICO CPFA Limited, a Closed Pension Fund Administrator, was incorporated to take over the functions of former UNICO pension Fund. The pension administrator is the fund manager for the employees of UACN PLC , UPDC PLC, Vitafoam and other companies in accordance with the Pension Reforms Act (2004). UPDC's investment in the equity shareholding of the company is 6.7%. v) First Universal Real Estate Investment Trust Plc: This was incorporated to serve as a vehicle to harness the investment opportunities in real estate and maximize wealth for the target investors. It was formed by ten (10) core investors in compliance with Rule 251 (vi) of the Securities & Exchange Commission. The investors were to contribute N100 million each as seed capital, with UPDC as the property manager. Compressed Financial Statements for Subsidiaries UPDC HOTELS LIMITED MANOR GARDENS PTY DEV CO. LTD 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Balance sheets as at 31st December Share capital 2,200,000 2,200,000 79,710 79,710 Revenue reserve (850,074) - (92,264) (92,264) Shareholders' funds 1,349,926 2,200,000 (12,554) (12,554) Fixed assets and investment properties 16,699,069 17,003,070 421 421 Current assets 353,649 257,407 229,364 229,364 Current liabilities (15,449,400) (14,499,788) (242,339) (242,339) Net assets 1,603,318 2,760,689 (12,554) (12,554) Long term loans (253,392) (560,689) - - Total assets less liabilities 1,349,926 2,200,000 (12,554) (12,554) Profit and loss accounts Turnover 557,165 - - - Loss before taxation (850,074) - - (304) Taxation - - - - Loss after taxation (850,074) - - (304) Cash flow Net cash generated from operations 570,579 3,339,854 - - Net cash used in investing activities (253,732) (2,930,909) - - Net cash used in financing activities (307,297) (578,520) - - Movement in cash and cash equivalents 9,550 (169,575) - - Annual Report & Accounts 201036 The Directors have pleasure in submitting to the Members their report together with the audited financial st statements for the year ended 31 December, 2010. PRINCIPAL ACTIVITIES The principal activities of the company are to acquire, develop and provide high quality, serviced commercial and residential accommodation for its customers. TRADING RESULTS 2010 2009 N'000 N'000 Turnover 8,194,305 13,331,497 Profit before taxation 2,538,771 2,828,321 Taxation (260,745) (441,982) Profit after taxation before non-controlling interest 2,278,026 2,386,339 Non-controlling interest 45,054 49,063 Dividend proposed 756,250 550,000 DIVIDEND The directors recommend to the shareholders, the declaration of a dividend of N756.25million representing 55 kobo per share. DIRECTORS' INTERESTS IN SHARES Shareholding as at Shareholding as at 31 Dec.2010 31 Dec.2009 Mr. Larry Ephraim Ettah 2,178,415 1,742,732 Mr. Hakeem Oladele Ogunniran 625 0 Mrs. Folasade Oluwatoyin Ogunde 43,750 35,000 Mr. Abdul Akhor Bello 125,000 100,000 Hon. (Dr) Ibrahim Alawo Mohammed 199,375 159,500 Mr. Olumide Abayomi Oduntan 0 0 Mrs. Halima Tayo Alao 0 0 Mr. Babatunde Oladele Kasali 0 0 Report of the Directors Annual Report & Accounts 2010Annual Report & Accounts 2010 17
  • DIRECTORS' INTERESTS IN CONTRACTS None of the Directors gave notice for the purpose of Section 277 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria, 2004, to the effect that he / she had interest in any contract in which the Company was involved during the year under review. ANALYSIS OF SHAREHOLDING Shareholders Shareholding Shareholding Shareholders categorisation Number Number Percentage Directors and connected persons 5 2,547,165 0.% Individuals and trustees 26,480 335,207,219 24% UAC of Nigeria Plc. 1 632,500,000 46% First Trustees Nigeria Ltd. 1 161,775,317 12% Other Corporate Bodies 1,117 242,970,295 18% 27,606 1,374,999,996 100% CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORT UPDC celebrated the International Family Day with residents of Romay Gardens, lekki and contributed gifts and cash to Lekki Children's Home in a joint donation with the estate residents. DONATIONS & SPONSORSHIP N Nigerian Conservation Foundation (Walk for Nature) 375,000 Nigerian Society of Engineers 250,000 Nigerian Institute of Architects 500,000 Nigerian Institute of Estate Surveyors & Valuers 500,000 Kuramo Conference 2010 (Segment on Housing & Habitat – Sustainable Energy and Environment) 1,000,000 2, 625,000 Report of the Directors ---------------- -------------------------------- --------- ------ ---------- ------------------------------------ ----------------- ---------- -------------- Annual Report & Accounts 201018 10 Investment properties Group / Company N'000 N'000 N'000 N'000 N'000 Cost/Valuation Balance 1 January 2010 2,622,257 21,584,229 24,206,486 14,510,775 38,717,261 Additions during the year 19,155 42,504 61,659 8,010,100 8,071,759 Reallocation within properties 99,374 172,400 271,774 (271,774) - Transferred from Site & service stock - - - - 2,888,771 2,888,771 Disposals - (535,450) (535,450) (2,183,221) (2,718,671) Reclassification - (85,817) (85,817) 132,466 46,649 Revaluation (Note 21) 520,413 (610,754) (90,341) - (90,341) Revaluation on Assets disposed - (2,712,527) (2,712,527) (30,761) (2,743,288) Balance 31 December 2010 3,261,199 17,854,585 21,115,785 23,056,355 44,172,140 Balance 31 December 2009 2,622,257 21,584,229 24,206,486 14,510,775 38,717,261 The revaluation of investment properties is done every two years. The last revaluation was as at December 31, 2010 and was carried out by the following independent surveyors and valuers: Messrs J.A. Oluwatundimu & Co., Adegbemile Aganga, Akinlosotu & Co. and Jide Taiwo & Co. - Lagos area Jide Taiwo & Co - Eastern Region Messrs Garba Kibiya & Co. - Northern Region The valuations were prepared on an existing use basis. The deficit arising from the revaluations exercise was debited to the revaluation reserve account. FREEHOLD LEASEHOLD TOTAL PROPERTIES TOTAL INVESTMENT INVESTMENT INVESTMENT UNDER PROPERTIES PROPERTIES PROPERTIES CONSTRUCTION Notes to the Financial Statements st for the year ended 31 December, 2010 Subsidiaries 11 Long term investments Group Company 2010 2009 2010 2009 N'000 N'000 N'000 N'000 UPDC Hotels Limited (2,082,500,000 Shares of N1.00 each) - - 2,082,500 2,082,500 Manor Gardens Property Development Company Ltd. - - 53,810 53,810 1004 Estates Limited 2,073,067 2,130,114 2,073,067 2,130,114 UNICO CPFA Limited 10,000 10,000 10,000 10,000 Transit Village Development 82,373 - 82,373 - First Universal Real Estate Investment Trust Plc 100,000 100,000 100,000 100,000 Provision for impairment (100,000) (100,000) (100,000) (100,000) Total long term investments 2,165,440 2,140,114 4,301,750 4,276,424 Other relevant details are as follows: Percentage of shareholding UPDC Hotels Limited 1,845,852,273 - Ordinary Shares 236,647,227 - Convertible Preference Shares of N1.00 each 94.7% Hotel & accommodations management Manor Gardens Property Dev. 53,810,000 - Ordinary Shares of Company limited N1.00 each 67.5% Architects & Building Engineers Others 1004 Estates Limited 505,000 - Ordinary Shares of Property acquisition, N1.00 each development & sale UNICO CPFA Limited 10,000,000 - Ordinary Shares of 6.7% Closed Pension Fund N1.00 each Administrator Annual Report & Accounts 2010Annual Report & Accounts 2010 35 Major activities Number of shares held
  • EMPLOYMENTPOLICY,EMPLOYEEWELFARE,SAFETY,HEALTH&ENVIRONMENTISSUES Itisthepolicyofthecompanythatthereisnodiscriminationintheemployment,trainingandcareerdevelopment ofallcategoriesofpeopleincludingphysically-challengedpersons. Thecompanywillcontinuetopursuethis policyinrecognitionoftheplightofthedisabledpeopleinoursociety. Ouremployeesenjoyfreemedical servicesatUACNClinicsandotherretainedclinicsacrossthecountryatthecompany'sexpense. Itisalsoourpolicytoensurethatourworkenvironmentissafe andclean. TheCompany,therefore,enforces strictadherencetosafetyrulesandpracticesbyperiodicallytrainingitsworkforceonsafety,environmental,social andhealthissues. Contractors,suppliersandotherserviceprovidersengagedbytheCompanyarealsorequired tomaintaincertainminimumstandardsofsafety,healthandenvironmentintheirdealingswiththeCompany. TheCompanyprovidesfreelunchforitsemployeesandstrivestobringfuntotheworkplace. TheCompanyoperatesacrechetoassistournursingmothers;fathersalsoareentitledtoaweek'spaternity leavewhentheirwivesgivebirth. TheCompanyalsoencourageswork-lifebalanceforouremployees. EMPLOYEEINVOLVEMENTANDTRAINING Regularmeetingsareputinplacetoensureexchangeofideasbetweenstaffandmanagementthrough consultativecommitteesandsessions. Ourpolicyrecogniseshumanresourceasthemostimportantassetof theorganisation. Itisthereforeourpolicytodevelopourworkforcethroughregulartrainingprogrammestowards achievingexcellenceintheperformanceoftheirday-to-dayactivities. Weencourageselfdevelopmentschemes whichenableemployeestoimprovethemselvesacademicallyandprofessionallyintheirchosencareers. CAPITALEXPENDITURE AnannualestimateofN16.03billion (2009-N11.62billion)wasapprovedbytheBoardofDirectorsforcapital st expenditureintheyear. ActualcapitalexpenditurewashoweverN9.3billionasat31 December,2010,which includespartoftheun-spentpreviousapprovalsbroughtforward. ByOrderoftheBoard GodwinAbimbolaSamuel, Esq. CompanySecretary 16thMarch,2011. Report of the Directors Annual Report & Accounts 2010 19 Cost/Valuation Balance 1 January 2010 698,221 241,580 1,566,394 32,951 146,936 23,627 14,232,567 16,942,276 Additions during the period 101,660 15,315 54,753 13,348 66,511 1,495 1,026,811 1,279,894 Disposals/write-offs (198) (22,105) (3,366) (1,151) - (200) - (27,020) Balance 31 December 2010 799,683 234,790 1,617,781 45,148 213,447 24,922 15,259,378 18,195,150 Depreciation Balance 1 January 2010 219,264 207,461 66,966 22,504 144,151 19,803 - 680,149 Charged for the year 152,253 33,054 321,325 9,767 14,134 5,319 152,363 688,216 On disposals/write-offs (198) (21,605) (3,086) (1,074) - (200) - (26,165) Balance 31 December 2010 371,319 218,910 385,205 31,197 158,285 24,922 152,363 1,342,200 Net book amounts at: 31 December 2010 428,364 15,880 1,232,576 13,951 55,162 - 15,107,015 16,852,950 31 December 2009 478,957 34,119 1,499,428 10,447 2,785 3,824 14,232,567 16,262,127 PLANT & MACHINERY N'000 N'000 N'000 N'000 N’000 N'000 N'000 N'000 MOTOR VEHICLES FURNITURE & FITTINGS COMPUTER HARDWARE COMPUTER SOFTWARE LOW VALUE ASSETS & WIP LAND & BUILDING TOTAL9 Fixed assets (i) Group Cost/Valuation Balance 1 January 2010 294,091 187,430 107,732 32,503 146,937 23,628 - 792,321 Additions during the period 2,428 15,315 2,570 13,348 66,511 1,496 - 101,668 Disposals/write-offs (198) (22,105) (3,366) (1,151) - (200) - (27,020) Balance 31 December 2010 296,321 180,640 106,936 44,700 213,448 24,924 - 866,969 Depreciation Balance 1 January 2010 204,736 156,042 62,549 22,009 144,151 19,654 - 609,141 Charge to Profit & Loss 51,527 30,323 19,211 9,814 14,135 5,470 - 130,479 Disposals/write-offs (198) (21,605) (3,086) (1,074) - (200) - (26,163) Balance 31 December 2010 256,065 164,760 78,674 30,749 158,286 24,924 - 713,457 Net book amounts 31 December 2010 40,256 15,880 28,262 13,951 55,162 - - 153,512 31 December 2009 89,355 31,388 45,183 10,494 2,786 3,974 - 183,179 PLANT & MACHINERY MOTOR VEHICLES FURNITURE & FITTINGS COMPUTER HARDWARE COMPUTER SOFTWARE LOW VALUE ASSETS & WIP LAND & BUILDING TOTAL N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 (ii) Company Notes to the Financial Statements st for the year ended 31 December, 2010 Annual Report & Accounts 201034 7 Dividend A dividend of N550,000,000 representing 50kobo per share and a bonus issue of one (1) share for every four (4) shares held was declared for 2009 financial year and paid in May, 2010. The withholding tax thereon was remitted to the tax authorities both at the Federal and various State levels. 8 Earnings per share Earnings per ordinary share of 169k was calculated on the profit after taxation and non-controlling interest on the basis st of ordinary shares in issue as at 31 2010. Group Company 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Profit attributable to ordinary shareholders 2,323,080 2,435,402 3,128,100 2,726,752 Weighted average number of shares 1,375,000 1,100,000 1,375,000 1,100,000 Basic/diluted earnings per share (kobo) 169 221 227 248 There are no potential dilutive shares as at year end December
  • 2211Cameron Green is a residential development located on the high-brow Cameron Road in Ikoyi with picturesque landscape filled with ample trees and lush vegetation in line with updc's goal of environmental sustainability. The estate will comprise of the following housing units: 4 Nos 5-bedroom Detached houses with BQ and private swimming pool (approx.1,000 sq.m of land) 2 block of flats comprising of: 10 units of 4 bedroom flats 10 units of 3 bedroom flats 8 units of 1 bedroom flats All the housing units will have a luxury finish and come equipped with fitted kitchens and air conditioners. Cameron Green, Ikoyi Metro Gardens, Lekki Residential Housing Estate by Lagoon School (through the new 2nd roundabout) with 55 housing units consisting of the following: 5 Bedroom Detached Houses 4 Bedroom Detached Houses 4 Bedroom Terraces 3 Bedroom Terraces 4 Bedroom Penthouses The estate will be managed by updc. Target Commencement date: June 2011 Located on Ladipo Omotosho Street, in Lekki Phase 1, Investing for the Future Annual Report & Accounts 201020 b) The number of employees (excluding directors) who earned over N90,000 in the year and fell within the bands were as follows: Notes to the Financial Statements st for the year ended 31 December, 2010 6 Taxation Group Company (i) Per profit & loss account 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Charges for the year: Income tax 470,738 405,298 470,738 405,298 Education tax 24,926 30,944 24,926 30,944 Deferred tax (234,919) 5,740 (234,919) 5,740 Total 260,745 441,982 260,745 441,982 (ii) Per balance sheet Opening balance: Income tax 748,248 666,304 747,854 665,910 Education tax 27,832 23,086 27,832 23,086 Charges for the year : Income tax 470,738 405,298 470,738 405,298 Education tax 24,926 30,944 24,926 30,944 Payments during the year: Income tax (410,698) (323,354) (410,698) (323,354) Education tax (31,304) (26,198) (31,304) (26,198) Closing balance: Income tax 808,288 748,248 807,894 747,854 Education tax 21,454 27,832 21,454 27,832 829,742 776,080 829,348 775,686 Annual Report & Accounts 2010 33 Group Company 2010 2009 2010 2009 N Number Number Number Number 300,001 - 400,000 62 12 0 12 400,001 - 500,000 67 24 6 24 500,001 - 600,000 55 13 26 13 600,001 - 700,000 18 14 18 14 700,001 - 800,000 23 13 14 13 800,001 - 900,000 7 8 6 8 900,001 - 1,000,000 9 7 7 7 1,000,001 - 2,000,000 43 25 32 25 2,000,001 - 3,000,000 20 11 12 11 3,000,001 - 4,000,000 4 3 3 3 4,000,001 - 5,000,000 3 3 3 3 5,000,001 - 6,000,000 1 0 1 0 6,000,001 - 7,000,000 2 3 1 3 7,000,001 - above 3 0 1 0 317 136 130 136
  • Notes to the Financial Statements st for the year ended 31 December, 2010 Group Company 2010 2009 2010 2009 N'000 N'000 N'000 N'000 4 Interest received 79,491 93,541 79,491 93,541 Investment Income 2,250 2,250 2,250 2,250 Other sundry Income 56,817 16,175 56,817 16,175 138,558 111,966 138,558 111,966 Other income GROUP 20092010ii) Emoluments of directors a) The aggregate emoluments of the directors were: Fees 1,425 1,200 Other emoluments, including contribution for retirement gratuities 55,034 44,858 56,459 46,058 b) The Chairman's emoluments (excluding contribution for retirement gratuities) 300 300 c) The emoluments (excluding contributions for retirement gratuities) of the highest paid director amounted to: 14,399 13,654 d) The table below shows the number of directors of the company, excluding the Chairman, whose remuneration, excluding pension contribution) fell within the bands shown: N N 2010 2009 100,001 - 400,000 6 3 5,000,001 - 12,000,000 2 2 8 5 iii) Staff number and costs The average number of persons employed (including Directors) and the associated payroll costs during the period were: 2010 2009 Number Cost Number Cost N'000 N'000 Management 75 239,532 48 194,201 Staff 242 156,451 88 108,808 Total 317 395,983 136 303,009 COMPANY Management 57 183,012 48 194,201 Staff 73 71,610 88 108,808 Total 130 254,622 136 303,009 N'000 N'000 5 Profit before taxation 2010 2009 2010 2009 N '000 N'000 N'000 N'000 I) The group profit before taxation is arrived at after charging: Depreciation of fixed assets 688,216 186,586 130,479 186,586 Directors' emoluments 64,633 46,058 64,633 46,058 Auditors' fees 15,500 13,500 12,000 10,000 Interest charges 1,250,916 745,145 1,210,244 745,145 Exchange loss 2,575 9,603 2,575 9,603 Annual Report & Accounts 201032 Grand Ville, Ikeja GRA Mixed residential development (Near Yayale Estate), with 230 housing units comprising the following: 5 Bedroom Detached Houses 4 Bedroom Semi-Detached Houses 4 Bedroom Terraces 2 & 3 Bedroom Flats The estate will be managed by updc. Target Commencement date: July 2011 situated at Apo, Abuja Metro City, Apo, Abuja Residential Housing Estate located on Ladoke Akintola Street, GRA, Ikeja, Lagos and comprising of 20 terrace houses. Facilities on the estate will include: Swimming Pool Children's Playground Sewage treatment plant Borehole & water treatment plant Fire alarm & burglar alarm systems PHCN and Standby generator Ample parking space for residents and visitors The estate will be managed by updc Target Commencement date: July 2011 Annual Report & Accounts 2010 21 Investing for the Future
  • Notes to the Financial Statements st for the year ended 31 December, 2010 Development & Sales of Properties Annual Report & Accounts 2010 31 Consolidation Adjustments 2010 2009 2010 2009 2010 2009 2010 2009 N'000 N'000 N'000 N'000 N’000 N'000 N'000 N'000 Hospitality Services Total 1. The Company th The Company was incorporated as a public limited liability company on 6 October 1997, commenced operations st th effectively on 1 April 1998 and was listed on the Nigerian Stock Exchange on the 19 November 1999. The company is owned 46% by UAC of Nigeria Plc and 54% by other Nigerian shareholders 2a Segment information Nigeria is the Company's primary geographical segment as the Company's operations are entirely carried out in Nigeria. st As at 31 December 2010, UPDC plc operations comprised two business segments namely; Property Development, Sales & maintenance and Hospitality Services. b. Segment Profit and Loss Accounts Turnover 7,637,140 13,331,497 557,165 - - - 8,194,305 13,331,497 Depreciation 130,479 186,586 557,737 - 688,216 186,586 Profit before tax 3,388,845 3,168,734 (850,074) (340,413) - - 2,538,771 2,828,321 Segment Balance Sheet Non Current Assets 25,571,047 28,666,089 16,645,628 16,025,138 (2,082,500) (2,082,500) 40,134,175 42,608,727 Net Assets 30,688,700 30,717,421 1,349,926 1,859,587 (2,148,915) (2,732,997) 29,889,711 29,844,011 2010 2009 N '000 N'000 Sale of investment properties 3,138,610 2,340,524 Sale of property stock 3,488,533 9,995,420 Rental income 920,173 701,861 Rest house revenue 13,415 13,132 Project management fees 76,409 280,560 UACN Property Dev. Company Plc. 7,637,140 13,331,497 UPDC Hotels Limited 557,165 - Group turnover 8,194,305 13,331,497 Sale of investment properties 2,603,160 1,935,105 Sale of property stock 1,973,677 2,002,477 Rental income 493,238 502,853 Rest house 12,130 10,472 Project management fees 76,408 280,560 UACN Property Dev. Company Plc. 5,158,613 4,731,467 UPDC Hotels Limited 425,440 - Group gross margin 5,584,053 4,731,467 3. Gross margin by business category c. Turnover by business category YEAR N N Salient Performance Graphs N m N m PROFIT BEFORE TAX N m 3,000 1,000 Annual Report & Accounts 2010 Annual Report & Accounts 201022
  • Group Company Statement of Cash Flows st for the year ended 31 December, 2010 2010 2009 2010 2009 N'000 N'000 N'000 N'000 Net Cash in/(out) flow from operating activities (Note 12) 1,465,149 7,974,215 (39,696) 3,821,815 Cash flow from investing activities Proceeds from sale of properties 3,138,610 2,340,524 3,138,610 2,340,524 Proceeds from sale of fixed assets 1,481 6,730 1,481 6,730 Purchase of properties (8,071,759) (7,148,403) (8,071,759) (7,148,403) Purchase of fixed assets (1,279,894) (3,497,057) (101,668) (41,503) Purchase of investments (25,326) (179,140) (25,326) (179,140) Net cash flow from investing activities (6,236,888) (8,477,346) (5,058,662) (5,021,792) Cash flow from financing activities Dividend paid (550,000) (825,000) (550,000) (825,000) Bank loans and commercial papers 10,911,546 (258,292) 11,201,432 608,131 Interest paid (1,253,490) (745,145) (1,212,818) (745,145) Net Cash from financing activities 9,108,056 (1,828,437) 9,438,614 (962,014) Net increase in cash and cash equivalents 4,336,315 (2,331,567) 4,340,256 (2,161,990) Cash and cash equivalents at beginning of the period (2,814,229) (482,662) (2,829,745) (667,755) Cash and Cash equivalents at the end of the period 1,522,086 (2,814,229) 1,510,511 (2,829,745) The statement of accounting policies on pages 26 and 27 and the notes on pages 31 to 41 form an integral part of these financialstatements. Annual Report & Accounts 201030 Thefollowingstatements,whichshouldbereadinconjunctionwiththestatementofIndependent Auditors'responsibilitiessetoutintheAuditors'Reportonpage24,aremadeforthepurposeof clarifyingforshareholderstherespectiveresponsibilitiesoftheDirectorsandtheAuditorsinthe preparationoftheaccounts. ANNUAL ACCOUNTS TheDirectorsarerequiredbytheprovisionsofSections334and335oftheCompaniesandAllied MattersAct,1990,topreparefinancialstatementsforeachyearwhichgiveatrueandfairviewof thestateofaffairsoftheCompanyattheendofthefinancialyearandoftheresultsforthatyear. ACCOUNTINGSTANDARDSANDPOLICIES TheDirectorsconsiderthatinpreparingthefinancialstatementsofthecompany,appropriate accountingpolicieswereconsistentlyappliedthroughouttheyearandsupportedbyreasonable andprudentjudgementsandestimates. TheDirectorshaveresponsibilityinensuringthatthe Companykeepsappropriateaccountingrecords,whichdisclosewithreasonableaccuracythe financialpositionoftheCompany,soastoenabletheDirectorsensurethattheCompanycomplies withrelevantlegislation. Allaccountingstandards,whichtheyconsidertobeapplicable,havebeen followed. GOING CONCERN TheDirectorshaveareasonableexpectationthatthecompanyhasadequateresourcesto continuein operationalexistencefortheforeseeablefuture. Forthisreason,theyadopteda goingconcernbasisinpreparingthefinancialstatements. RECORD-KEEPINGANDINTERNALCONTROLS TheDirectorsalsohavegeneralresponsibilityfortakingstepstoensurethatassetsofthe Companyaresafeguardedandtopreventanddetectfraudandotherirregularities. Tothisextent well-establishedinternalcontrolprocedures,whichincorporateinternalfinancialcontrolprocedures, maintenanceofproperaccountingrecordsandprovisionofreliablefinancialinformation,arewell documentedandregularlyreviewed. Thefollowingarethemainfeaturesoftheinternalcontrol:- a) Controlenvironment- Thecultureandvaluesofthecompanyarecommunicatedthrough specificpoliciescoveringthequality,integrityandethicsofpersonnel. Thereareclear responsibilitieswithinadefinedorganisationalstructure; b) Investmentandexpenditureappraisal- Thereareclearpoliciesandproceduresfor capitalexpenditure,othercostcommitments andassetdisposals,withdetailed appraisalandreviewproceduresanddefinedlevelsofauthority; c) Controlprocedures- Therearecomprehensivepoliciesandprocedureswhichcover authorisation,segregationofduties,recordingofdata,physicalsecurityoftheCompany's assetsandcontrolsoverthecompany'sinformationsystem; d) Monitoringsystems- Thereareestablishedproceduresfortheexecutivemanagement tomonitorcompliancewiththecompany'srequiredstandardsofinternalfinancialcontrol. InadditiontoourInternalCheckDepartment,theUACNAuditDepartmentreviewsmatters relatingtointernalcontrolandreportsonitonregularbasis. Statement of Directors' Responsibilities Annual Report & Accounts 2010 23
  • Group Company LarryE.Ettah HakeemD.Ogunniran Directors Balance Sheet as at 31st December, 2010 The financial statements on pages 26 to 41 were approved by the Board of Directors on 16th March, 2011 and signed on its behalf by: The statement of accounting policies on pages 26 and 27 and the notes on pages 31 to 41 form an integral part of these financial statements. 2010 2009 2010 2009 Notes N'000 N'000 N'000 N'000 Non-current assets Fixed assets 9 16,852,950 16,262,127 153,512 183,179 Investment properties 10 21,115,785 24,206,486 21,115,785 24,206,486 Long term investments 11 2,165,440 2,140,114 4,301,750 4,276,424 40,134,175 42,608,727 25,571,047 28,666,089 Current assets Properties under construction 10 23,056,355 14,510,775 23,056,355 14,510,775 Stock and work-in-progress 13 366,224 3,139,927 3,653 2,828,200 Debtors & debit balances 14 4,181,842 1,508,020 19,303,842 15,789,952 Cash and bank balances 15 1,792,715 516,348 1,767,649 500,832 29,397,136 19,675,071 44,131,499 33,629,759 Current liabilities: due within one year Bank overdrafts & commercial papers 15 (3,570,629) (9,280,577) (3,557,139) (9,280,577) Term Loans (Amount falling due within one year) 15 (2,464,910) (2,012,010) (2,208,910) (1,840,037) Trade and other creditors 16 (12,635,842) (12,959,598) (12,562,910) (12,927,742) Deferred Income 17 (460,053) (599,725) (460,053) (599,725) Taxation 6 (829,742) (776,080) (829,348) (775,686) (19,961,176) (25,627,991) (19,618,360) (25,423,768) Net current assets/(liabilities) 9,435,960 (5,952,920) 24,513,139 8,205,991 Total Assets less current liabilities 49,570,135 36,655,807 50,084,186 36,872,080 Deferred income 17 (323,614) (101,902) (297,334) (77,340) Term Loans (Amount falling due after one year) 15 (17,469,890) (4,361,244) (17,213,890) (3,731,331) Provision for liabilities and charges 18 (1,886,920) (2,348,643) (1,884,263) (2,345,985) Net assets 29,889,711 29,844,011 30,688,700 30,717,421 Share capital 19 687,500 550,000 687,500 550,000 Share premium 20 4,115,148 4,252,648 4,115,148 4,252,648 Revaluation reserve 21 15,896,527 18,503,352 15,896,527 18,503,352 Revenue reserve 22 9,122,192 6,473,677 9,989,525 7,411,421 Shareholders' funds 29,821,367 29,779,677 30,688,700 30,717,421 Non-controlling interest 23 68,344 64,334 - - Total equity 29,889,711 29,844,011 30,688,700 30,717,421 Annual Report & Accounts 2010 29 Chartered Accountants Lagos, Nigeria 31 March 2011 REPORTOFTHEINDEPENDENTAUDITOR TOTHEMEMBERSOFUACNPROPERTYDEVELOPMENTCOMPANYPLC Reportonthefinancialstatements We have audited the accompanying separate and consolidated financial statements of UACN Property Development Company Plc (the company) and its subsidiaries (together “the group”) which comprise the balance sheets as of 31 December 2010 and the profit and loss accounts and statements of cashflowsfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatorynotes. Directors'responsibilityforthefinancialstatements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with Nigerian Statements of Accounting Standards and with the requirements of the Companies and Allied Matters Act and for such internal control, as the directors determine necessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatements,whetherduetofraudorerror. Auditor'sresponsibility Our responsibility is to express an independent opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selecteddependontheauditor'sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherdueto fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financialstatementsin ordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionon the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion. Opinion In our opinion the accompanying financial statements give a true and fair view of the state of the financial affairs of the company and the group at 31 December 2010 and of their profits and cash flows for the year then ended in accordance with Nigerian Statements of Accounting Standards and the CompaniesandAlliedMattersAct. Reportonotherlegalrequirements TheCompaniesandAlliedMattersActrequiresthatincarryingoutourauditweconsiderandreporttoyouonthefollowingmatters. Weconfirmthat: I) wehaveobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthe purposesofouraudit; ii) inouropinionproperbooksofaccounthavebeenkeptbythegroup,sofarasappearsfromourexaminationofthosebooks; iii) thegroup’sbalancesheetandprofitandlossaccountareinagreementwiththebooksofaccount. PricewaterhouseCoopers Chartered Accountants, 252E Muri Okunola Street, Victoria Island, Lagos Nigeria. Report of the Independent Auditor Annual Report & Accounts 201024
  • REPORT OF THE AUDIT COMMITTEE TO THE MEMBERS OF UACN PROPERTY DEVELOPMENT COMPANY PLC In compliance with Section 359(6) of the Companies and Allied Matters Act CAP C20, Laws of the Federation of st Nigeria, 2004, we have reviewed the audited Financial Statements of the Company for the year ended 31 December, 2010 and report as follows: (a) The accounting and reporting policies of the Group and Company are consistent with legal requirements and agreed ethical practices. st (b) The scope and planning of the external audit for the year ended 31 December, 2010 were, in our opinion, adequate. (c) We reviewed the findings and recommendations in the Internal Auditor's Report and the External Auditor's Management Controls Report and we were satisfied with the management responses thereto. (d) The Company maintained effective accounting and internal control system. th Dated 15 day of March, 2011 Alhaji Gbadebo Olatokunbo CHAIRMAN-AUDIT COMMITTEE MEMBERS OF THE COMMITTEE Alhaji Gbadebo Olatokunbo - Chairman Mr. Abdul Bello - Member Mr. Joe Anosikeh - Member Mrs. Folasade Ogunde - Member Secretary Godwin A. Samuel, Esq. Report of the Audit Committee Mr. Joe Anosikeh Member Mrs. Folasade Ogunde Member Mr. Abdul Bello Member Alhaji Gbadebo Olatokunbo Chairman Annual Report & Accounts 2010 25 The statement of accounting policies on pages 26 and 27 and the notes on pages 31 to 41 form an integral part of these financialstatements. Group Company Profit and Loss Account for the year ended 31st December, 2010 2010 2009 2010 2009 Notes N'000 N'000 N'000 N'000 Turnover 2 8,194,305 13,331,497 7,637,140 13,331,497 Cost of sales (2,610,252) (8,600,030) (2,478,527) (8,600,030) Gross profit 3 5,584,053 4,731,467 5,158,613 4,731,467 Other income 4 138,558 111,966 138,558 111,966 Administration expenses (1,930,973) (1,273,690) (696,131) (933,277) 3,791,637 3,569,743 4,601,039 3,910,156 Finance charges (note 15) (1,253,490) (745,145) (1,212,818) (745,145) Net operating profit 2,538,147 2,824,598 3,388,221 3,165,011 Profit from disposal of fixed assets 624 3,723 624 3,723 Profit before taxation & non-controlling interest 5 2,538,771 2,828,321 3,388,845 3,168,734 Taxation 6 (260,745) (441,982) (260,745) (441,982) Profit after taxation but before non-controlling interest 2,278,026 2,386,339 3,128,100 2,726,752 Non-controlling interest (note 23) 45,054 49,063 - - Profit after taxation and non-controlling interest 2,323,080 2,435,402 3,128,100 2,726,752 Retained by the company 3,128,100 2,726,752 3,128,100 2,726,752 Retained by subsidiaries (805,020) (291,350) - - Profit retained for the year 22 2,323,080 2,435,402 3,128,100 2,726,752 Basic/diluted earnings per share (Naira) 8 1.69 2.21 2.27 2.48 Annual Report & Accounts 201028
  • Statement of Principal Accounting Policies a) Basis of preparation The financial statements are prepared under the historical cost convention as modified by the revaluation of investment properties. b) Fixed assets and depreciation of fixed assets Fixed assets are stated at cost or valuation less accumulated depreciation provided thereon to date. Assets which are not yet in use by the company are held in work in progress account. All such assets once in use are capitalised to the fixed assets accounts and subjected to the applicable depreciation rate in the year they are used. Depreciation is calculated to write off the cost or revalued amounts of fixed assets over their expected useful lives on a straight-line basis at the following annual rates : - Heavy Industrial Plant ) Office Furniture ) 20% - Light Industrial Plant ) Heavy Vehicles ) 20% - Light Vehicles ) Computer Equipment ) 33 1/3% For leasehold properties of 10 years and below, provisions are made for the book values of the properties over the remaining lease periods. c) Turnover Turnover comprises proceeds from sale of properties, rental income from investment properties, property management fees, project consultancy fees and Rest House revenue. d)Property Stock/Property Stock-in-Progress These are properties bought or developed solely for trading purpose, that is, properties developed for outright sale. They are stated at the lower of cost and net realiseable value. e)Debtors Debtors are stated after deduction of adequate provisions for any debts considered bad or doubtful of recovery. f) Foreign Currencies Transactions in foreign currencies are translated into Naira at the rates ruling on the dates of the transaction. Assets and liabilities in foreign currencies are converted into Naira at the rates of exchange ruling on the balance sheet date. All exchange gains and losses are included in the operating results. g) Retirement Benefits Retirement Benefits for the company's employees are provided for under a funded defined contribution plan and an unfunded defined benefits plan. Provisions in respect of the funded defined contribution plan are charged to operating results and paid over to the Fund Manager, UNICO CPFA. The company makes deductions for the unfunded defined benefits and remits the contribution to UACN Plc., who manages the fund. Annual Report & Accounts 201026 h) Investment Properties Investment Properties are properties held by the company for rentals and capital appreciation other than for production, supply of goods and services or for administrative purposes. Investment properties are carried at market value determined every two (2) years by external independent valuers. Increases in their carrying amounts are credited to the revaluation reserve in shareholders' equity. Decreases that offset previous increases of the same assets are charged against the revaluation reserve, while all other decreases are charged to the income statement. Revaluation surplus on disposed assets are transferred to income in line with the provisions of SAS 13. I) Borrowing Costs Borrowing costs associated with loans utilised in execution/acquisition of qualifying capital work in progress are capitalised in accordance with the provisions of International Accounting Standard (IAS) No. 23. They include interest charges, establishment fees and other incidental fees directly related to the creation and arrangement of the facilities. j) Taxation Income tax is computed on the basis of the Companies Income Tax Act. Education tax represents 2% of assessable profit. Capital gains tax is usually provided at the rate of 10% in accordance with the Finance (Miscellaneous Taxation Provisions) Act. However, whenever proceeds will be reinvested in similar assets, no provision is made for Capital Gains Tax in line with Section 32 of Capital Gains Tax Act. Deferred Taxation - The Company, using liability methods, has made sufficient provision for all temporary differences arising from the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Deferred income tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted rates are used to determine deferred income tax. k) Consolidation I. The Group balance sheet and profit and loss accounts of the holding company and of its subsidiary are made up to the balance sheet date. ii. A subsidiary is a company in which the Group owns more than half of its equity share capital. l) Dividend Dividend on ordinary shares are recognised as liability in the period in which they are declared. m) Segment Reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. n) Basis for Consolidation Subsidiaries are those companies in which the group, directly or indirectly, has an interest of more than one half of the voting rights or otherwise has control over the operations. Subsidiaries are consolidated from the date on which effective control is transferred to the group. Inter company transactions, balances and unrealised profit or loss on transactions between group companies have been eliminated. o) Long term investments Long term investments are stated at cost and provision is made for permanent dimunition in value. Annual Report & Accounts 2010 27 Statement of Principal Accounting Policies