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Oao - Oando Plc - Audited Results For The Full Year Ended 31 December 2010

Release Date: 15/06/2011 10:00:03      Code(s): OAO
OAO - Oando Plc - Audited results for the full year ended 31 December 2010      
Oando Plc                                                                       
(Incorporated in Nigeria and registered as an external company in South Africa) 
Registration number: RC 6474                                                    
(External company registration number: 2005/038824/10)                          
Share Code on the JSE Limited: OAO                                              
Share Code on the Nigerian Stock Exchange: UNTP                                 
ISIN: NGOANDO00002                                                              
("Oando" or "the Company" or "the Group")                                       
Audited results for the full year ended 31 December 2010                        
Highlights                                                                      
-   Turnover of US$2.5 billion                                                  
-   Gross profit of US$364.6 million                                            
-   Operating profit of US$186.8 million                                        
-   Profit after tax of US$77.9 million                                         
-   Attributable profit after tax of US$77.9 million                            
-   Earnings per share of 4.49 cents                                            
-   Increased contribution from upstream and gas distribution operations        
-   A second rig (Teamwork) was contracted out during the year                  
-   12.15MW Independent Power Plant ("IPP") was commissioned during the         
   year.                                                                        
Review of results                                                               
Oando, which has a primary listing on the Nigerian Stock Exchange ("NSE") and a 
secondary listing on the JSE Limited ("JSE"), reports profit after tax ("PAT")  
for the full year ended 31 December 2010 of US$77.9 million.                    
Statement of comprehensive income analysis                                      
The Group`s revenue and PAT increased by 12% and 5% respectively when compared  
to the 2009 period. In addition, profit before tax rose by 56% compared to the  
figures for the 2009 period. The improved performance over 2010 is attributable 
to the following:                                                               
Turnover (12% increase)                                                         
Turnover increased due to the following:                                        
- The commissioning of the 12.15MW Akute Power Plant in March 2010. The plant   
was under construction in 2009.                                                 
- Additional customers connected to the gas distribution network.               
- The first rig was operational for the full year compared to five months of    
operations during the 2009 period.                                              
- The Second rig (Teamwork) became operational during April 2010 compared to one
operational rig during the 2009 period.                                         
- Full year production from Oil Mining License ("OML") 56 compared to seven     
months of production during 2009 and crude oil price increases.                 
- Increased level of gross production from OML 125 by 8.4% compared to 2009.    
Other operating income (66% decrease)                                           
Other operating income decreased due to the acquisition and receivables         
factoring that occurred during 2009, which did not re-occur during 2010.        
Administrative expenses (28% increase)                                          
Administrative expenses increased due to the following:                         
- Additional operating expenses incurred by the Akute Power Plant that was      
operational for nine months of the period under review.                         
- Additional operational expenses arising from two operational rigs during the  
full period under review compared to one operational rig during five months of  
the 2009 period.                                                                
Selling and marketing expenses (4% decrease)                                    
Selling and marketing expenses decreased due to lower volumes of petroleum      
products transported and sold at the upcountry locations during 2010, compared  
to the 2009 period.                                                             
Finance cost (27% decrease)                                                     
Finance costs decreased due to the relatively lower interest rates during 2010  
and the restructuring of current borrowings to non-current borrowings during    
2010. In addition, the successful completion of the rights issue during 2010    
assisted the Company to improve its liquidity and to reduce further borrowings. 
Income tax expenses (250% increase)                                             
Income tax expenses increased during the period under review as a result of a   
company income tax rate of 30% and an education tax rate of 2% on additional    
revenue from non-upstream businesses as well as a relative 17% increase in      
petroleum profits tax rate for marginal fields resulting from the increased     
production during 2010.                                                         
Statement of financial position analysis                                        
Property, plant and equipment (16% increase)                                    
Property, plant and equipment increased due to capital expenditure incurred on  
the power plants, rigs refurbishment and upstream assets development.           
Non-current receivables(23% increase)                                           
Non-current receivables (cost of gas distribution pipeline assets) increased due
to additional capital expenditure on the ongoing East Horizon`s Gas pipeline    
project and new customers being connected to the Greater Lagos distribution     
network.                                                                        
Inventory(129% increase)                                                        
Inventory for the period increased when compared to 2009 and is attributable to 
the receipt of inventory of petroleum products by the supply and trading        
subsidiary towards the end of the current period under review. The 2009 period  
witnessed suspension of imports due to accumulated Petroleum Support Fund       
("PSF") debt and uncertainties about deregulation of the downstream sector.     
Trade and other receivables (21% decrease)                                      
The 21% decrease in trade and other receivables is attributable to the improved 
credit management and collections including receipt of outstanding PSF          
receivables from the Federal Government.                                        
Borrowings                                                                      
During the 2010 period, US$405 million of current borrowings was restructured to
a five-year medium term note facility. In addition, some current borrowings were
liquidated with proceeds of the rights issue.                                   
Prospects                                                                       
The Group will continue to leverage the synergy provided by the diversified     
portfolio to deliver superior value to stakeholders.                            
The Group intends to continue the investment in OML 90. It will collaborate with
relevant partners to develop upstream assets owned by Equator Exploration       
Limited, a subsidiary acquired during 2009. Further growth in upstream portfolio
is envisaged through the strategic acquisition of producing or near term assets,
on an ongoing basis. These efforts are intended to improve contribution by the  
upstream business to the Group`s revenue and profitability in the future.       
More customers are being connected to the Greater Lagos distribution network in 
order to utilise the additional capacity provided by the completed Greater Lagos
Phase 3 pipeline network. Construction work at the Eastern Horizon Gas Company`s
128 kilometre pipeline project is at an advanced stage and is expected to be    
commissioned during 2011.                                                       
The Supply & trading business will continue to take advantage of this window and
consolidate its foray into the West African markets. In addition, the Marketing 
business has positioned itself to take full advantage of the inherent gains from
the deregulation of the downstream sector immediately after commencement of this
policy.                                                                         
The Energy services business commenced refurbishment of the third rig. The third
rig is expected to become operational during 2011.                              
The Group is confident that the diversified asset portfolio will continue to    
deliver continuous improved revenue and profitability.                          
AUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31        
DECEMBER 2010                                                                   
31 December     31 December 2009        
                                        2010                                    
ASSETS                                   US$`million     US$`million            
Non-current assets                                                              
Property Plant & Equipment               1,043.92        900.13                 
Intangible Assets                        164.22          166.49                 
Deferred income tax assets               21.52           62.23                  
Long Term Receivables                    160.44          130.20                 
1,390.10        1,128.85                
Current assets                                                                  
Inventories                              150.54          65.64                  
Trade & Other Receivables                523.63          665.11                 
Cash & Cash Equivalents                  81.91           174.49                 
                                        756.08          905.24                  
Total assets                             2,146.18        2,164.29               
Equity                                                                          
Capital & Reserves attributable to                                              
equity holders                                                                  
Share Capital                            6.59            3.53                   
Share Premium                            361.52          231.66                 
Other Reserves                           76.67           0.73                   
Retained Earnings                        179.93          119.52                 
                                        624.71          355.44                  
Minority Interest                        6.81            6.22                   
Total equity                             631.52          361.66                 
                                                                                
Liabilities                                                                     
Non-Current Liabilities                                                         
Borrowing                                503.11          141.74                 
Deferred income tax liabilities          51.21           97.10                  
Retired benefit obligation               9.47            7.21                   
Provisions for other liabilities and     12.38           10.79                  
charges                                                                         
                                        576.17          256.84                  
Current Liabilities                                                             
Trade & Other Payables                   423.73          572.56                 
Current Income Tax Liabilities           37.16           22.55                  
Borrowings                               477.60          950.68                 
Total Liabilities                        938.49          1,545.79               
                                                                                
Total Equity & Liabilities               2,146.18        2,164.29               
AUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31   
DECEMBER 2010                                                                   
                                        31 December 2010  31 December           
2009                  
                                        US$`million       US$`million           
Sales                                    2,547.97          2,283.56             
Cost of Sales                            (2,183.41)        (2,041.94)           
Gross Profit                             364.56            241.62               
Selling & Marketing Costs                (48.68)           (50.65)              
Administrative Expenses                  (157.24)          (122.47)             
Other Operating Income                   28.13             82.28                
Operating Profit                         186.77            150.78               
Net Finance Costs                        (42.15)           (57.78)              
Profit Before Taxation                   144.62            93.00                
Income Tax Expense                       (66.75)           (19.05)              
Profit After Expense                     77.87             73.95                
Attributable to:                                                                
Non-Controlling Shareholders             (0.03)            (0.99)               
Equity Holders of the Company            77.90             74.94                
77.87             73.95                 
The Group is divided into six main business divisions:                          
-   The Exploration and production of oil and gas business ("E&P") is           
   involved in the exploration for and production of oil and gas through        
the acquisition of rights in oil blocks on the Nigerian continental          
   shelf and deep offshore. The E&P segment of the business owns interests      
   in OML 56, OML 90, OML 123 and OML 134 and Oil Prospecting License           
   ("OPL") 236 and OPL 278, amongst others.                                     
-   The Refining and Terminals business is involved in the refinement of        
   crude and storage and logistics for distribution of petroleum products.      
   This division was recently carved out of the downstream marketing            
   business. It has initiated steps towards establishing a refinery at the      
Lekki Free Trade Zone in Lagos.                                              
-   The Gas and power business is involved in the distribution of natural       
   gas through its subsidiaries, Gaslink Nigeria Limited ("GNL") and East       
   Horizon Gas Company Limited ("EHGC"). GNL operates approximately 100         
kilometres of the Greater Lagos natural gas distribution franchise and       
   has connected over one hundred industrial customers. EHGC is                 
   constructing a 128 kilometre natural gas pipeline network to supply          
   natural gas to the United Cement Company ("UNICEM") and other customers      
in Calabar, Eastern Nigeria. The Gas and power business also                 
   incorporates Akute Power Limited that has built and commissioned an          
   Independent Power Plant to supply electricity to Lagos State Water           
   Corporation ("LSWC").                                                        
-   The Energy services business is involved in the provision of services       
   such as drilling and completion fluids and solid control waste               
   management, oil-well cementing and other services to upstream                
   companies. The Energy services business presently has five swamp rigs.       
-   The Marketing business is involved in retail and commercial sales of        
   refined petroleum products with over 600 retail outlets in Nigeria and       
   West African countries.                                                      
-   The Supply and trading business imports cargoes of petroleum products       
for sale to marketing companies and other corporate bodies within and        
   outside Nigeria.                                                             
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE  
TO EQUITY HOLDERS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2009 (RESTATED) 
Share Capital   Other reserves Retained             
                            and share                      earnings             
                            premium                                             
                            US$`million     US$`million    US$`million          
235.07          39.84          62.56                
Balance as at 1 January 2008                                                    
Profit for the year          -               -              74.94               
Other comprehensive income   -               (39.11)        0.11                
for the year                                                                    
Transaction with owners                                                         
Value of employee services-  -               -              0.31                
share option scheme and                                                         
award                                                                           
Tax credit relating to share -               -              0.09                
option and award                                                                
Minority interest on         -               -              -                   
business combination                                                            
Issue of Shares              0.13            -              -                   
Dividend - Final for 2008    -               -              (18.49)             
Balance as at 31 December    235.20          0.73           119.52              
2009(Restated)                                                                  
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE  
TO EQUITY HOLDERS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2009 (RESTATED) 
(CONTINUED)                                                                     
Non-           Total equity         
                                            controlling                         
                                            interest                            
                                            US$`million    US$`million          
1.65           339.12               
Balance as at 1 January 2008                                                    
Profit for the year                          (0.99)         73.95               
Other comprehensive income for the year      -              (39.00)             
Transaction with owners                      -              -                   
Value of employee services- share option     -              0.31                
scheme and award                                                                
Tax credit relating to share option and      -              0.09                
award                                                                           
Minority interest on business combination    5.56           5.56                
Issue of Shares                              -              0.13                
Dividend - Final for 2008                    -              (18.49)             
Balance as at 31 December 2009(Restated)     6.22           361.67              
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE  
TO EQUITY HOLDERS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2010.           
                            Share Capital   Other reserves Retained             
and share                      earnings             
                            premium                                             
                            US$`million     US$`million    US$`million          
Balance as at 1 January 2010 235.20          0.73           119.52              
Profit for the year          -               -              77.91               
Other comprehensive income   -               75.94          0.07                
for the year                                                                    
Transaction with owners                                                         
Value of employee services-  -               -              2.09                
share option scheme and                                                         
award                                                                           
Tax credit relating to share -               -              0.63                
option and award                                                                
Issue of Shares              142.05          -              -                   
Share issue cost             (11.17)         -              -                   
Bonus issue                  2.03            -              (2.03)              
Dividend - Final for 2009    -               -              (18.26)             
Balance as at 31 December    368.11          76.67          179.93              
2010                                                                            
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER`S EQUITY ATTRIBUTABLE  
TO EQUITY HOLDERS OF THE COMPANY FOR THE YEAR ENDED 31 DECEMBER 2010.           
(CONTINUED)                                                                     
                                           Non-           Total equity          
                                           controlling                          
interest                             
                                           US$`million    US$`million           
Balance as at 1 January 2010                6.22           361.67               
Profit for the year                         (0.03)         77.88                
Other comprehensive income for the year     0.62           76.63                
Transaction with owners                     -              -                    
Value of employee services- share option    -              2.09                 
scheme and award                                                                
Tax credit relating to share option and     -              0.63                 
award                                                                           
Issue of Shares                             -              142.05               
Share issue cost                            -              (11.17)              
Bonus issue                                 -              -                    
Dividend - Final for 2009                   -              (18.26)              
Balance as at 31 December 2010              6.81           631.52               
NOTES TO AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010                    
1. General information                                                          
Oando was registered by a special resolution as a result of the acquisition of  
the shareholding of Esso Africa Incorporated (principal shareholder of Esso     
Standard Nigeria Limited) by the Federal Government of Nigeria. The Company was 
partially privatised in 1991. It was however fully privatised during 2000       
consequent upon the sale of Federal Government`s 40% shareholding in the        
Company. 30% was sold to core investor, Ocean and Oil Investments Limited, and  
the remaining 10% to the Nigerian public. In December 2002, the Company merged  
with Agip Nigeria Plc following the acquisition of 60% Agip Petroli`s stake of  
Agip Nigeria Plc in August of the same year. The Company formally changed its   
name from Unipetrol Nigeria Plc to Oando Plc during December 2003.              
The principal activity of the Company locally and internationally is strategic  
investments in energy companies across West Africa. The Group is involved in the
following business activities via its subsidiary companies:                     
-   Marketing of petroleum products and manufacturing and blending of           
   lubricants via Oando Marketing PLC.                                          
-   Distribution of natural gas for industrial customers via Gaslink            
   Nigeria Limited and East Horizon Gas Company Limited.                        
-   Supply and distribution of petroleum products via Oando Supply and          
   Trading, Nigeria and Oando Trading, Bermuda.                                 
-   Energy services to upstream companies via Oando Energy Services Limited     
   and OES Integrity Limited.                                                   
-   Exploration and Production via Oando Exploration and Production             
   Limited, Oando OML 125 & 134 Limited, Oando Production and Development       
Company Limited.                                                             
2. Summary of significant accounting policies                                   
The principal accounting policies applied in the preparation of these           
consolidated financial statements are set out below. These policies have been   
consistently applied to all the years presented, unless otherwise stated.       
2.1 Basis of preparation                                                        
The consolidated financial statements of Oando have been prepared in accordance 
with International Financial Reporting Standards ("IFRS"). The consolidated     
financial statements have been prepared under the historical cost convention, as
modified by the revaluation of land and buildings, and financial assets and     
financial liabilities at fair value through profit or loss.                     
The preparation of financial statements in accordance with IFRS requires the use
of certain critical accounting estimates. It also requires management to        
exercise judgement in the process of applying the Group`s accounting policies.  
Early adoption of standards                                                     
During 2004, the Group early adopted the IFRS below, which are relevant to its  
operations. These and changes to IFRS 2, IFRS 1, IFRS 8, IAS 1, IAS 7, IAS 18,  
IAS 36, IAS 32, IAS 19 have been considered  in the preparation of the audited  
financial report for the year ended 31 December 2010.                           
IAS 2 (revised 2003) Inventories                                                
IAS 8 (revised 2003) Accounting Policies, Changes in Accounting Estimates and   
Errors                                                                          
IAS 10 (revised 2003) Events after the Balance Sheet Date                       
IAS 16 (revised 2003) Property, Plant and Equipment                             
IAS 17 (revised 2003) Leases                                                    
IAS 21 (revised 2003) The Effects of Changes in Foreign Exchange Rates          
IAS 24 (revised 2003) Related Party Disclosures                                 
IAS 27 (revised 2003) Consolidated and Separate Financial Statements            
IAS 28 (revised 2003) Investments in Associates                                 
IAS 32 (revised 2003) Financial Instruments: Disclosure and Presentation        
IAS 33 (revised 2003) Earnings per share                                        
IAS 36 (revised 2004) Impairment of Assets                                      
IAS 38 (revised 2004) Intangible Assets                                         
IAS 39 (revised 2003) financial instruments: Recognition and measurement        
IFRS 2 (issued 2004) Share-based payments                                       
IFRS 3 (issued 2004) Business Combinations                                      
IFRS 5 (issued 2004) Non-current Assets Held for Sale and Discontinued IFRIC 10 
(Issued 2006) Interim Financial Reporting and Impairment.                       
IAS 1                                                                           
-   The early adoption of IAS 10 has resulted in a change in the accounting     
policy for dividends. Proposed dividends, which were previously              
   recognised during the year prior to the declaration, have been adjusted      
   in accordance with IAS 10 and 37 respectively.                               
-   The application IAS 16 has affected the accounting for fair value           
reserve relating to revalued land and buildings upon disposal.               
-   Under the Generally Accepted Accounting Principles ("GAAP"), the            
   revaluation surplus included in equity in respect of an item of              
   property, plant and equipment were transferred to the income, when the       
asset is disposed of, to determine profit on disposal. Adjustments have      
   been passed to transfer the related amounts directly to retained             
   earnings in accordance with IAS 16. Also, early adoption of IAS 16           
   (revised 2004) has necessitated the disclosure of prior year                 
comparatives for all movements in property plant and equipment.              
-   IAS 21 (revised 2003) has affected the translation of foreign entities`     
   income statements, on which closing rates were previously applied but        
   now amended and translated at average rates. The functional currency of      
each of the consolidated entities has also been re-evaluated based on        
   the guidance to the revised standard. All the Group entities have the        
   same functional currency as their presentation currency..                    
-   IAS 24 (revised 2003) has affected the identification of related            
parties and some other related-party disclosures.                            
-   IAS 27 (revised 2004) has affected the consolidation of subsidiaries.       
   Certain subsidiaries, which were not included in the consolidation           
   under previous GAAP have now been consolidated.                              
-   The early adoption of IAS 33 has resulted in a change in the                
   computation of earnings per share. Earnings per share, which were            
   previously computed on the basis of the number of shares in issue at         
   the end of the reporting period, have been adjusted on the basis of the      
weighted average number of shares in accordance with IAS 33.                 
-   The early adoption of IAS 39 has resulted in a change in accounting for     
   financial assets and liabilities.                                            
-   The Group obtained approval for its share option scheme from the            
regulatory authority in February 2009. Accordingly all shared-based          
   payment in operation has been subjected to and accounted for under IFRS      
   2 for the first time in 2008.                                                
-   The early adoption of IFRS 5 has resulted in a change in the accounting     
for non-current assets held for sale and discontinued operations as          
   qualifying assets have been reclassified accordingly.                        
-   The early adoption of IFRS 3, IAS 36 (revised 2004) and IAS 38 (revised     
   2004) resulted in a change in the accounting -policy for goodwill.           
Until 31 December 2002, goodwill was:                                        
   -   amortised on a straight line basis over a period ranging from 5 to       
       20 years; and                                                            
   -   assessed for an indication of impairment at each balance sheet           
date.                                                                    
-   In accordance with the provisions of IFRS 3:                                
   -   the Group ceased amortisation of goodwill from 1 January 2003; and       
   -   accumulated amortisation as at 31 December 2002 has been eliminated      
with a corresponding decrease in the cost of goodwill.                   
-   Goodwill was tested for impairment at 1 January 2003, the transition        
   date. Also, from the year ended 31 December 2003 onwards, goodwill is        
   tested annually for impairment, as well as when there are indications        
of impairment. The Group has also reassessed the useful lives of its         
   intangible assets in accordance with the provisions of IAS 38. No            
   adjustment resulted from this reassessment.                                  
All changes in the accounting policies have been made in accordance with the    
transition provisions in the respective standards.                              
The early adoption of IAS 1, 2, 8, 17 28, and 32 (all revised 2003) did not     
result in substantial changes to the Group`s accounting policies.               
In summary:                                                                     
- IAS 1, 2, 28 and 32 had no material effect on the Group`s policies.           
- IAS 8 (revised 2004) has resulted in the disclosure of the impact of new      
standards                                                                       
2.2 Consolidation                                                               
(a) Subsidiaries                                                                
Subsidiaries include all entities, including special purpose entities, over     
which the Group has the power to govern the financial and operating policies    
generally accompanying a shareholding of more than one half of the voting       
rights. The existence and effect of potential voting rights that are currently  
exercisable or convertible are considered when assessing whether the Group      
controls another entity. Subsidiaries are fully consolidated from the date on   
which control is transferred to the Group. They are deconsolidated from the date
that control ceases.                                                            
The purchase method of accounting is used to account for the acquisition of     
subsidiaries by the Group. The cost of the acquisition is measured as the fair  
value of the assets given, equity instruments issued and liabilities incurred or
assumed and the date of plus costs directly attributable to the acquisition.    
Identifiable assets acquired and liabilities and contingent liabilities assumed 
in a business combination are measured initially at their fair values at the    
acquisition date irrespective of the extent of any minority interest. The excess
of the cost of acquisition over the fair value of the Group`s share of the      
identifiable net assets acquired is recorded as goodwill. If the cost of        
acquisition is less than the fair value of the net assets of the subsidiary     
acquired, the difference is recognised directly in the income statement. All    
balances and unrealised surpluses and deficits on transactions between Group    
companies have been eliminated. Where necessary, accounting policies for        
subsidiaries have been changed to be consistent with the policies adopted by the
Company, Separate disclosure (in equity) is made of minority interests.         
(b) Associates                                                                  
Associates are all entities over which the Group has significant influence but  
not control, generally accompanying a shareholding of between 20% and 50% of the
voting rights. Investments in associates are accounted for by the equity method 
of accounting and are initially recognised at cost. The Group`s investment in   
associates includes goodwill (net of any accumulated impairment loss) identified
on acquisition. The Group`s share of its associates` post-acquisition profits or
losses is recognised in the income statement, and its share of post acquisition 
movements in reserves is recognised in reserves. The cumulative post-acquisition
movements are adjusted against the carrying amount of the investment.           
When the Group`s share of losses in an associate equals or exceeds its interest 
in the associate, including any other unsecured receivables, the Group does not 
recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate. Unrealised gains on transactions between the Group and 
its associates are eliminated to the extent of the Group`s interest in the      
associates. Unrealised losses are also eliminated unless the transaction        
provides evidence of an impairment of the asset transferred. The accounting     
policies of the associates are consistent with the policies adopted by the      
Group.                                                                          
Goodwill included in the carrying amount of an investment is neither amortised  
nor tested for impairment separately by applying the requirements for impairment
testing goodwill in IAS 36, Impairment of Assets. Instead, the entire carrying  
amount of the investment is tested under IAS 36 for impairment.                 
All subsidiaries and associates have uniform calendar year ends.                
2.3 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 return that are different from those of segments operating 
in other economic environments.                                                 
2.4 Foreign currency translation                                                
(a) Functional and presentation currency                                        
Items included in the financial statements of each of the Group`s entities are  
measured using the currency of the primary economic environment in which the    
entity operates (`the functional currency`). The functional currency of the     
Group is the Naira. The consolidated financial statements are presented in US   
dollars, which is the Company`s presentation currency for the purpose of filing 
outside Nigeria.                                                                
(b) Transactions and balances                                                   
Foreign currency transactions are translated into the functional currency using 
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities       
denominated in foreign currencies are recognised in the income statement, except
when deferred in equity as qualifying cash flow hedges and qualifying net       
investment hedges.                                                              
c) Group companies                                                              
The results and financial position of all the Group entities (none of which has 
the currency of a hyperinflationary economy) that have a functional currency    
different from the presentation currency are translated into the presentation   
currency as follows:                                                            
1  Assets and liabilities for each balance sheet presented are translated       
  at the closing rate at the date of that balance sheet.                        
2  Income and expenses for each income statement are translated at average      
  exchange rates and all resulting exchange differences are recognised as       
a separate component of equity.                                               
3  On consolidation, exchange differences arising from the translation of       
  the net investment in foreign entities are taken to shareholders`             
  equity. Upon disposal of part or all of the investment, such exchange         
differences are recognised in the income statement as part of the gain        
  or loss on sale.                                                              
3. Earnings Per Share                                                           
Basic Earnings Per Share ("EPS") is calculated by dividing the profit           
attributable to the equity holders of the Company by the weighted average number
of shares in issue during the period.                                           
                                      31 December 2010  31 December 2009        
Profit attributable to equity holders  77.90             74.94                  
of the Company (US$`million)                                                    
Average number of shares in issue      1,734.75          904.88                 
(millions)                                                                      
Basic EPS (cents)                      4.49              8.28                   
Headline Earnings Per Share ("HEPS")                                            
Profit attributable to equity holders  77.90             74.94                  
of the Company                                                                  
Adjusted for:                                                                   
Profit on sale of buildings associated 0                 0                      
with discontinued operations                                                    
Profit/(Loss) on sale of other assets  0                 0                      
Loss on sales of investment in         0                 0                      
affiliate companies                                                             
Tax thereon                            0                 0                      
HEPS attributable to earnings basis    4.49              8.28                   
(cents)                                                                         

Net assets per share (cents)           35                40                     
Tangible assets per share (cents)      77                139                    
4. Independent audit by the auditors                                            
The condensed consolidated results have been audited by PricewaterhouseCoopers  
who perform their audit in accordance with the International Standards on       
Auditing.                                                                       
5. Post balance sheet events                                                    
There are no significant post balance sheet events that in the opinion of the   
directors will have a material impact on the accounts herein presented.         
For and on behalf of the Board                                                  
Mr. J Adewale Tinubu                                                            
Group Chief Executive                                                           
June 7, 2011                                                                    
Directorate:                                                                    
1  Maj. Gen. M. Magoro (Rtd), OFR  Chairman                                     
2  Mr. J.A.Tinubu                  Group CE                                     
3  Mr. O. Boyo                     Deputy Group CE                              
4  Mr. B. Osunsanya                Group Executive Director                     
5  Mr. Olufemi Adeyemo             Group Executive Director-Finance             
6  Mr. A. Akinrele, SAN            Director (Retired May 7, 2010)               
7  Mr. Oghogho Akpata              Director (Appointed November 11, 2010)       
8  Chief Sena Anthony              Director (Appointed January 31, 2010)        
9  Ms. Nana Afoah Appiah-Korang    Director (Appointed November 11, 2010)       
10 Mr. Navaid Burney               Director (Resigned September 17, 2010)       
11 HRM. Oba A. Gbadebo, CFR        Director                                     
12 Mr. O. Ibru                     Director (Resigned April 30, 2010)           
13 Alhaji H. Mahmud                Director (Retired May 7, 2010)               
14 Mr. O.P. Okoloko                Director (Resigned November 11, 2010)        
15 Ms Amal Pepple, CFR             Director (Appointed January 31, 2010)        
16 Ms Genevieve Sangudi            Director (Resigned November 11, 2010)        
Chief Compliance Officer & Company Secretary: Mrs. Oredeji Delano               
Registered office: 2, Ajose Adeogun Street, Victoria Island, Lagos, Nigeria     
Auditors: PriceWaterhouseCoopers, Plot 252E Muri Okunola Street, Victoria       
Island, Lagos                                                                   
E-mail: info@oandoplc.com                                                       
Registered office in South Africa: 1st Floor, 32 Fricker Road, Illovo Boulevard,
Sandton, 2196, South Africa                                                     
Office of the South African transfer secretaries: Computershare Investor        
Services (Proprietary) Limited (Registration number: 2004/003647/07)            
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)       
Sandton                                                                         
15 June 2011                                                                    
Sponsor: Macquarie First South Advisers (Pty) Limited, The Place, 1 Sandton     
Drive, South Wing, Sandton, Johannesburg, 2196, South Africa.                   
Date: 15/06/2011 10:00:01 Supplied by www.sharenet.co.za                     
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