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Financials NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2016 The Group’s and Company’s business is predominantly on a cash basis. Revolving credits granted to major distributors and very large corporate customers approximate about ₦5 billion and these are payable within 30 days. Stringent credit control is exercised over the granting of credit, this is done through the review and approval by executive management based on the recommendation of the independent credit control group. Credit to major distributors are covered by bank guarantee with an average credit period of no more than 30 days. For very large corporate customers, clean credit is granted based on previous business relationships and positive credit worthiness which is performed on an on-going basis. This credit is usually payable at no more than 30 days. The Group and the Company do not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as related entities with similar characteristics. There is no material single obligor exposure to report. Trade receivables consist of a large number of customers, spread across diverse geographical areas. On-going credit evaluation is performed on the financial condition of accounts receivable. The credit risk on liquid funds financial instruments is limited because the counterparties are banks with high credit-ratings assigned by credit-rating agencies. 29.6.1 Maximum Exposure to Credit risk Financial assets- Loans and receivables Cash and bank balances Short term deposits Trade and other receivables Due from related parties Group 31-Dec-16 ₦’million 74,001 41,692 26,279 18,609 160,581 31-Dec-15 ₦’million 24,907 15,885 11,544 8,643 60,979 Company 31-Dec-16 ₦’million 33,173 32,337 11,857 651,860 729,227 31-Dec-15 ₦’million 8,189 9,773 4,252 404,542 426,756 29.7 Liquidity risk management The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures and preference shares. The Group has access to sufficient sources of funds directly from external sources as well as from the Group’s parent. 29.7.1 Liquidity maturity table The following tables detail the Group and Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The tables below include both interest and principal cash flows for the Group. Annual Report 2016 207

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