NASCON ALLIED INDUSTRIES : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

Nascon Allied Industries Plc (Registration number 11364)

Unaudited Financial Statements

for the period ended 30 September 2023

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Contents

	Page
Statement of Profit or Loss and Other Comprehensive Income	2
Statement of Financial Position	3
Statement of Changes in Equity	4
Statement of Cash Flows	5
Notes to the Unaudited Financial Statements	6 - 38

1

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Statement of Profit or Loss and Other Comprehensive Income

		Reviewed	Reviewed	Reviewed	Reviewed	Audited
		3 Months	3 Months	9 Months	9 Months	12 Months
		ended	ended	ended	ended	ended
		30 September 30 September 30 September 30 September	31 December
		2023	2022	2023	2022	2022
	Notes	N '000	N '000	N '000	N '000	N '000
Revenue	4	20,944,639	15,477,696	59,110,087	40,605,550	58,786,251
Cost of sales	6	(7,586,483)	(8,384,313)	(26,790,428)	(25,142,431)	(34,243,932)
Gross profit (loss)
	13,358,156	7,093,383	32,319,659	15,463,119	24,542,319
Other income	7	24,982	22,415	128,530	47,250	124,293
Other operating (loss)/gains	8	(7,413)	(856,123)	(7,482)	(444,770)	(794,555)
Movement in credit loss allowances	9	-	-	-	-	(16,147)
Distribution costs	10.1	(4,778,151)	(3,422,590)	(12,647,842)	(8,420,176)	(12,038,516)
Administrative expenses	10.2	(1,070,420)	(711,089)	(3,085,112)	(2,158,295)	(3,142,912)

Operating profit (loss)
Investment income	11
Finance costs	12

7,527,154	2,125,996	16,707,753	4,487,128	8,674,482
167,066	118,209	476,332	253,766	394,538
(389,153)	(248,986)	(875,661)	(471,124)	(694,829)

Profit (loss) before taxation		7,305,067	1,995,219	16,308,424	4,269,770	8,374,191
Taxation	13	(2,496,781)	(648,445)	(5,300,013)	(1,387,675)	(2,904,943)
Profit (loss) from continuing operations
	4,808,286	1,346,774	11,008,411	2,882,095	5,469,248
Profit (loss) for the period
	4,808,286	1,346,774	11,008,411	2,882,095	5,469,248
Total comprehensive income for the period
	4,808,286	1,346,774	11,008,411	2,882,095	5,469,248
Earnings per share
Per share information
Basic and diluted earnings per share (Kobo)	15	726	203	554	145	206

The accounting policies on pages 6 to 18 and the notes on pages 19 to 38 form an integral part of the Unaudited Financial Statements.

2

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Statement of Financial Position

				Reviewed	Reviewed	Audited
				9 Months	9 Months	12 Months
				ended	ended	ended
				30 September 30 September	31 December
				2023	2022	2022
			Notes	N '000	N '000	N '000
Assets
Non-Current Assets
Property, plant and equipment	16	12,465,604	13,410,011	12,468,851
Right-of-use assets	17	3,785,819	3,721,083	3,894,704
				16,251,423	17,131,094	16,363,555
Current Assets
Inventories	18	8,709,346	7,004,209	8,266,480
Trade and other receivables	19	27,616,342	13,973,449	11,639,953
Other financial assets	20	695,826	695,826	695,826
Other assets	21	2,205,996	4,903,099	5,558,747
Cash and cash equivalents	22	22,794,135	11,436,094	13,006,210
				62,021,645	38,012,677	39,167,216
Total Assets
		78,273,068	55,143,771	55,530,771
Equity and Liabilities
Equity
Share capital	23	1,324,719	1,324,719	1,324,719
Share premium	24	434,037	434,037	434,037
Retained earnings	25	25,642,583	14,696,457	17,283,610
				27,401,339	16,455,213	19,042,366
Liabilities
Non-Current Liabilities
Borrowings	27	38,570	38,570	38,570
Lease liabilities	28	3,384,470	3,158,537	3,701,309
Retirement benefit obligation	29	124,488	133,171	133,171
Deferred tax	14	2,125,796	2,356,442	2,125,796
				5,673,324	5,686,720	5,998,846
Current Liabilities
Trade and other payables	30	30,501,704	28,494,537	20,177,590
Borrowings	27	6,545,613	2,056,500	4,792,881
Lease liabilities	28	248,022	215,332	301,028
Contract liabilities	31	2,549,241	725,651	2,099,314
Current tax payable	13	5,353,825	1,509,818	3,118,746
				45,198,405	33,001,838	30,489,559
Total Liabilities
		50,871,729	38,688,558	36,488,405
Total Equity and Liabilities
		78,273,068	55,143,771	55,530,771
The Unaudited Financial Statements and the notes on pages 19 to 38, were approved by the Board on the 27 October, 2023 and were
signed on its behalf by:
	Thabo Mabe		Aderemi Saka
	Managing Director		Chief Financial Officer
	FRC/2013/IODN/00000001741		FRC* "Waiver granted by FRCN"

The accounting policies on pages 6 to 18 and the notes on pages 19 to 38 form an integral part of the Unaudited Financial Statements.

3

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Statement of Changes in Equity

	Share capital	Share premium	Retained	Total equity
			income
	N '000	N '000	N '000	N '000
Balance at 1 January 2022	1,324,719	434,037	12,871,924	14,630,680
Profit for the period	-	-	2,882,095	2,882,095
Other comprehensive income	-	-	-	-
Total comprehensive income for the period	-	-	2,882,095	2,882,095
Dividends	-	-	(1,057,562)	(1,057,562)
Total contributions by and distributions to owners of company
-	-	(1,057,562)	(1,057,562)
recognised directly in equity
Balance at 30 September 2022
1,324,719	434,037	14,696,457	16,455,213
Balance at 1 January 2023	1,324,719	434,037	17,283,610	19,042,366
Profit for the period	-	-	11,008,411	11,008,411
Other comprehensive income	-	-	-	-
Total comprehensive income for the period	-	-	11,008,411	11,008,411
Dividends	-	-	(2,649,438)	(2,649,438)
Total contributions by and distributions to owners of company
-	-	(2,649,438)	(2,649,438)
recognised directly in equity
Balance at 30 September 2023
1,324,719	434,037	25,642,583	27,401,339

The accounting policies on pages 6 to 18 and the notes on pages 19 to 38 form an integral part of the Unaudited Financial Statements.

4

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Statement of Cash Flows

	Reviewed	Reviewed	Audited
	9 Months	9 Months	12 Months
	ended	ended	ended
	30 September 30 September	31 December
	2023	2022	2022
Notes	N '000	N '000	N '000

Cash flows from operating activities Cash generated from operations Tax paid

Retirement benefit paid

Net cash from operating activities

32	16,294,698	6,209,225	4,874,504
13	(3,064,934)	(1,230,888)	(1,369,873)
29	(8,683)	(5,043)	(5,043)
	13,221,081	4,973,294	3,499,588

Cash flows from investing activities	16
Purchase of property, plant and equipment	(1,639,500)	(1,234,963)	(1,290,512)
Proceed from sale of property, plant and equipment	16	-	(1)	-
Investment income	11	476,332	253,766	394,538
Net cash from investing activities		(1,163,168)	(981,198)	(895,974)
Cash flows from financing activities	27
Borrowings	1,752,732	2,056,500	4,792,881
Dividends paid	26	(2,649,438)	(1,057,562)	(1,057,562)
Finance costs	12	(634,791)	(105,775)	-
Payment on lease liabilities	28	(738,492)	(493,181)	(375,199)
Net cash used in financing activities		(2,269,989)	399,982	3,360,120
Total cash and cash equivalents movement for the period		9,787,924	4,392,078	5,963,734
Cash and cash equivalents at the beginning of the period		13,006,210	7,044,016	7,044,016
Effect of exchange rate movement on cash balances		-	-	(1,540)
	22
Total cash and cash equivalents at end of the period	22,794,134	11,436,094	13,006,210

The accounting policies on pages 6 to 18 and the notes on pages 19 to 38 form an integral part of the Unaudited Financial Statements.

5

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Accounting Policies

1 Corporate information

Nascon Allied Industries Plc (Formerly known as National Salt Company of Nigeria) was incorporated in Nigeria as a limited liability Company on 30 April 1973. It was fully privatised in April, 1992 and became listed on the Nigerian Stock Exchange on 20 October, 1992. At a general meeting held on 29 September 2006, the shareholders approved the acquisition of the assets, liabilities and business undertakings of Dangote Salt Limited and the issue and allotment of additional NASCON PLC shares as the purchase consideration. The major shareholder of the Company is Dangote Industries Limited that owns 62.19% of the issued share capital, while the remaining 37.81% is held by the Nigerian public.

The ultimate controlling party is Dangote Industries Limited, a Company incorporated in Nigeria.

The registered address of the Company is located at Salt City, Ijoko Ota, Ogun State.

1.1 The principal activity

The principal activities of the Company include, the processing of raw salt into refined, edible and grade salt. The Company also produces seasoning cubes. The Company's products are sold through distributors across the country.

1.2 Financial period

The financial statements cover the financial year from January 1, 2023 to September 30, 2023 with comparatives for the period ended September 30, 2022.

1.3 Going concern status

The Company has consistently turned in Profits since 2007. The Directors believe that there is no intention or threat from any party to curtail significantly its line of business in the foreseeable future. Thus, these Unaudited Financial Statements are prepared on a going concern basis.

2. Significant accounting policies

The significant accounting policies applied in the preparation of these Unaudited Financial Statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Statement of Compliance

The Unaudited Financial Statements have been prepared in accordance with, and comply with, International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee (IFRIC), interpretations issued by the International Accounting Standards Board (IASB), Companies and Allied Matters Act (CAMA) and Financial Reporting Council of Nigeria (FRCN) and effective at the time of preparing these financial statements.

2.2. Basis of measurement

The Unaudited Financial Statements have been prepared on the historical cost basis except for the revaluation of certain financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of IFRS 16, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

6

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Accounting Policies

2.2 Basis of measurement (continued)

Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

2.3 Functional and presentation currency

These Unaudited Financial Statements are presented in Naira, which is the Company's functional currency. All financial information presented in Naira has been rounded to the nearest thousand ('000), unless otherwise stated.

2.3.1 Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Naira, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

At the end of the reporting period:

• foreign currency monetary items are translated using the closing rate;
• non-monetaryitems that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and
• non-monetaryitems that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous unaudited financial statements are recognised in profit or loss as other operating gains/(losses) in the period in which they arise.

When a gain or loss on a non-monetary item is recognised in other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised in other comprehensive income and accumulated in equity. When a gain or loss on a non- monetary item is recognised in profit or loss, any foreign exchange component of that gain or loss is recognised in profit or loss as other operating gains/(losses).

Cash flows arising from transactions in a foreign currency are recorded in Naira by applying to the foreign currency amount the exchange rate between the Naira and the foreign currency at the date of the cash flow.

2.4 Revenue from contracts with customers

Revenue is measured at the fair value of the consideration received or receivable for goods or services, in the ordinary course of the Company's activities and it is stated net of value added tax (VAT), rebates and returns. A valid contract is recognised as revenue after;

• The contract is approved by the parties.
• Rights and obligations are recognised.
• Collectability is probable.
• The contract has commercial substance.
• The payment terms and considerations are identifiable.

The probability that a customer would make payment is ascertained based on the evaluation done on the customer as stated in the credit management policy at the inception of the contract. The Company is the principal in all of its revenue arrangement since it is the primary obligor in most of the revenue arrangements, has inventory risk and determines the pricing for the goods and services.

Revenue is recognised when the control of the goods and service are transferred to the customer. This occurs when the goods are delivered to the customer and customer's acceptance is received or when goods are picked up by the customers. Revenue is driven by the regional spread of the Company's customer network.

Nascon Allied Industries Plc transfers control to the customers after the goods have been delivered to the customer, however, the customer obtains the right to return goods that are bad or damaged after they have been delivered.

7

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Accounting Policies

2.4 Revenue from contracts with customers (continued)

Sales occur when the goods have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and when the customer has accepted the products in accordance with the sales contract, or the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

Revenue from sale of goods is recognised based on the price specified in the contract, net of the estimated rebates and returns. Rebates are estimated at the inception of the contract except where the time lag between the recognition of revenue and granting rebates is within one month.

Returns on goods are estimated at the inception of the contract except where the timing between when the revenue is recognised and when the returns occur is considered immaterial. In these instances, the returns are accounted for when they occur. Contract liability is recognised for consideration received for which performance obligation has not been met.

Specifically, revenue from the sale of goods is recognised when goods are delivered (or collected, if sold under self collection terms) and legal title is passed.

2.5 Investment income

This represents interest income earned on short term placements with banks and other financial assets at amortised cost - treasury bills. Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to its gross carrying amount.

2.6 Employee benefits

Short-term employee benefits

Short term employee benefits: any wages, salaries, incentives, other contributions and paid annual leave are accrued in the period in which the associated services are rendered by employees of the Company.

Termination benefits.

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or as a result of an offer made to encourage voluntary redundancy. The expected cost of compensation is recognized as an expense in the profit or loss account when it occurs.

Retirement benefit obligations

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of defined benefit gratuity scheme is calculated by estimating the amount of future benefits that employees have earned in return for their service in the current and prior years and that benefit is discounted to determine the present value.

Defined contribution plan

The employees of the Company are members of a Defined Contribution Pension plan administered by third-party Pension Fund Administrators under the Pension Reform Act of 2014. The assets of the plan are held separately from those of the Company. The scheme is funded in accordance with the Pension Reform Act of 2014 with the employee and employer contributions representing 8% and 10% respectively of the employee's relevant emoluments.

8

Nascon Allied Industries Plc

(Registration number 11364)

Unaudited Financial Statements for the interim period ended 30 September 2023

Accounting Policies

2.7 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statements of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Current income tax is the expected amount of income tax payable on the taxable profit for the year determined in accordance with the Companies Income Tax Act (CITA) using statutory tax rates at the reporting date. Tertiary Education tax is assessed at 2.5% of the assessable profits as defined by the Tertiary Education Tax Act.

Deferred tax

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Current and deferred tax are recognised in the Statement of Profit or Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are recognised in other comprehensive income or directly in equity respectively.

2.8 Property, plant and equipment 2.8.1 Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Assets under construction are disclosed as capital work- in-progress. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets.

Purchased software that is integral to the functionality of the related equipment is capitalized as part of the equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit or loss and other comprehensive income.

2.8.2 Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

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