PZ Cussons Nigeria : P Z CUSSONS NIGERIA PLC.- QUARTER 5 - FINANCIAL STATEMENT FOR 2023

PZ CUSSONS NIGERIA PLC

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

31 MAY 2023

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Table of Contents

Corporate Information	i
Financial Highlights	ii
Directors' Report	iii
Statement of Directors Responsibilities	xi
Certification of Financial Statements	xii
Report of the Audit Committee	xiii
Independent Auditors' report	1
Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income	4
Consolidated and Separate Statements of Financial Position	5
Consolidated Statement of Changes in Equity	6
Consolidated Statements of cash flows	8
Notes to the consolidated and separate financial statements	9
Value added statement	73
Five Year Financial Summary	74

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Corporate Information

Board of Directors

Mrs. I.M.O Okauru, MFR - Chairman, Independent Non-Executive Director(Appointed w.e.f 25 January 2023)

Mr. G. Oyebode	-	Chairman, Independent Non-Executive Director(resigned w.e.f 25 January 2023)
Mr. P. Katsis	-	Managing Director / Chief Executive Officer(Retired w.e.f 31 May 2023)
Mr. D. Kostianis	-	Managing Director / Chief Executive Officer(Appointed w.e.f 1 June 2023)
Mr. P. Usoro, SAN	-	Non - Executive Director(Retired w.e.f 25 January 2023)
Ms. J.F Coker	-	Executive Director
Mr. Z. Momoniat	-	Executive Director(Resigned w.e.f 31 December 2022)
Mr D. Anniss	-	Non Executive Director
Mr. K. Massie	-	Non Executive Director
Mallam B. Manu	-	Independent Non-Executive Director (Appointed w.e.f 21 November 2022)
Mrs. O. Odutayo	-	Independent Non-Executive Director (Appointed w.e.f 21 November 2022)

Mr. B. Egan	-	Chief Finance Officer	(Appointed w.e.f 1 Jan 2023)
Company Secretary / Legal Adviser
Mrs O. Olonade-Agaga		-	(Appointed w.e.f 14 Mar 2023)

Registered Office

45/47 Town Planning Way

Ilupeju Industrial Estate

P.M.B. 21132

Ikeja.

Registration Number

RC 693

Registrars

First Registrars and Investors Service Limited

Plot 2, Abebe Village Road

Iganmu Complex

P.M.B. 12692

Lagos.

Independent Auditors

Deloitte & Touche (Chartered Accountants)

Civic Towers,

Plot GA1, Ozumba Mbadiwe Avenue

Victoria Island, Lagos, Nigeria.

i

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Financial Highlights
	The Group
In thousands of naira	2023			2022		% Change
Revenue	113,964,309			99,503,320	15%
Operating profit/(loss)	8,224,028			(231,533)	3652%
Profit before taxation	20,463,740			10,008,025	104%
Taxation	(6,115,395)			(3,308,700)	85%
Profit after tax	14,348,345			6,699,325	114%
Non-controlling interest	1,455,559			729,210	100%
Profit attributable to equity holders of parent company	12,892,786			5,970,115	116%
At year end:
Share capital	1,985,238			1,985,238	0%
Total equity	48,360,058			37,739,831	28%
Data per 50k share
Based on 3,970,477,045 ordinary shares of 50k each:
Basic and diluted earnings per share (Naira)	3.28			1.50	118%
Number of employees	996			1,040	-4%
Stock exchange quotations in Naira (Company):	19.5			11.5	70%

ii

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report

Accounts and Results

The Board of Directors of PZ Cussons Nigeria Plc is pleased to present to members the consolidated and separate statements of financial position as at 31 May 2023 together with the consolidated and separate statements of profit or loss and other comprehensive income, changes in equity, cashflows for the year ended on that date and notes to the financial statements including a summary of significant accounting policies.

Operating Result
The following is the summary of the group's operating result as at 31 May 2023
	2023	2022	Change %
	N'000		N'000
Revenue	113,964,309	99,503,320	15%
Operating profit/(loss)	8,224,028	(231,533)	3652%
Profit before taxation	20,463,740	10,008,025	104%
Taxation	(6,115,395)	(3,308,700)	85%
Profit for the year	14,348,345	6,699,325	114%
Non-controlling interest	1,455,559	729,210	100%
Profit attributable to equity holders of parent company	12,892,786		5,970,115	116%

Principal Activities

The principal activities of the group are the manufacture, distribution and sale of a wide range of consumer products and home appliances through owned depots. These products are leading brand names throughout the country in detergent, soap, cosmetics, refrigerators, freezers and air-conditioners. The Group facilitates the distribution of products of a related entity - Harefield Industrial Nigeria Limited.

Directors and their interest

The directors who served as at 31 May 2023 and their interest in the shares of the Group as recorded in the register of members for the purpose of Section 301 of the Companies and Allied Matters Act 2020 ("CAMA"), and in compliance with the Listing Requirements of the Nigerian Stock Exchange are as follows:

Directors	2023		2022
	Direct	Indirect	Direct	Indirect
Mrs. Ifueko Marina Omoigui Okauru, MFR	59,713	Nil	59,713	Nil
Mr. Gbenga Oyebode (Up to 25 January 2023)	Nil	Nil	Nil	Nil
Mr. Panagiotis Katsis	Nil	Nil	Nil	Nil
Ms. Joyce F Coker	3,889	Nil	3,889	Nil
Mr. Kevin Massie ***	Nil	Nil	Nil	Nil
Mr Duncan Anniss ***	Nil	Nil	Nil	Nil
Mallam Ballama Manu	Nil	Nil	Nil	Nil
Mrs. Oluwatoyin Odutayo	Nil	Nil	Nil	Nil
Mr. Paul Usoro, SAN (Up to 25 January 2023)	1,000,000	Nil	1,000,000	Nil
Mr. Zuber Momoniat	Nil	Nil	Nil	Nil
The above are the directors holdings as at 31 May 2023.

***Mr. Massie and Mr. Anniss represent the interest of the majority shareholder PZ Cussons (Holdings) Limited UK with 2,909,349,788 shares

Interest in contracts

In accordance with Section 303 of the CAMA, Mallam Manu has notified the Company that he is an Independent Director on the Board of Stanbic IBTC Holding PLC, the holding company of one of our bankers. No other Director has notified the Group of any declarable interest in any contract in which he/she was involved with the Group during the year.

iii

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report (cont'd)

Directors for re-election

In accordance with Article 90 of the Group's Articles of Association and Section 285 of the Companies and Allied Matters Act 2020, one-third of the number of Directors, based on the length of stay in office, must retire at the Annual General Meeting and they may offer themselves for re-election. Accordingly, Mr. Kevin Massie and Mr. Duncan Anniss being eligible, have offered themselves for re-election. Mallam Ballama Manu and Mrs. Toyin Odutayo were appointed to the Board after the last Annual General Meeting. Their appointment is now being presented for Shareholders' approval.

Records of Directors Attendance

In compliance with Section 284 (2) of the CAMA, the Record of Directors' Attendance at Board Meetings in the 2022/2023 financial year will be made available at the Annual General Meeting for inspection by members.

Meetings of the Board of Directors

As a rule, the Board of Directors meets at least quarterly, and additional meetings are convened as required. Also, as allowed by the Company's Articles of Association, material decisions are sometimes taken between meetings by way of written resolutions.

At every quarterly meeting, the directors are provided with comprehensive reports of the activities of the various business units as well as important corporate events. They are also briefed on all business developments between meetings. The Board met eight times during the 2023 financial year.

The meetings were presided over by the Chairman. In all cases, written notices of meetings, the meeting agenda as well as the reports for consideration were circulated well ahead of the meetings. The minutes of the meetings were appropriately recorded and circulated.

Attendance at Meetings

The Board has a formal schedule of meetings each year and met eight (8) times in the course of the year under review. The record of attendance of the Directors at the meetings is set below:

Directors	23/6/22	28/9/22	28/10/22	24/1/23	25/1/23	24/3/23	31/3/23	27/4/23
Mr. G. Oyebode	√	√	√	√	√	R	R	R
Mrs. I.M.O Okauru	√	√	√	√	√	√	√	√
Mr. P. Katsis	√	√	√	√	√	√	√	√
Ms. J.F. Coker	√	√	√	√	√	√	√	√
Mr. K. Massie *	√	√	√	√	√	√	√	√
Mr D. Anniss *	√	√	AB	√	√	√	√	√
Mr. Z. Momoniat	√	√	√	R	R	R	R	R
Paul Usoro ,SAN	√	√	√	√	√	R	R	R
Mallam B. Manu	NA	NA	NA	√	√	√	√	√
Mrs. O. Odutayo	NA	NA	NA	√	√	√	√	√

• Present

AB	Absent
R	Retired
NA	Not Appointed

• Mallam B. Manu became a member on 21 November 2022.
• Mrs. O. Oduntayo became a member on 21 November 2022.
• Mr. Z. Momoniat resigned on 31 December 2022.
• Mr. O. Oyebode resigned on 25 January 2023
• Paul Usoro, SAN resigned on 25 January 2023

iv

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report (cont'd)

Major Shareholdings

According to the Register of Members as at 31 May 2023, PZ Cussons (Holdings) Limited held 2,909,349,788 shares. This represents 73.27% of the paid-up capital of the Company.

Analysis of Shareholdings

	No. of
Range	Shareholders	Holders %	Units	% Units
1 - 1000	25,618	33.74%	10,774,408	0.27%
1001 - 5000	23,093	30.41%	57,000,858	1.44%
5001 - 10000	11,386	15.00%	87,382,095	2.20%
10001 - 50000	13,652	17.98%	278,987,313	7.03%
50001 - 100000	1,184	1.56%	83,713,686	2.11%
100001 - 500000	848	1.12%	164,241,878	4.14%
500001 - 1000000	76	0.10%	52,425,655	1.32%
1000001 - 5000000	60	0.08%	124,646,082	3.14%
5000001 - 10000000	3	0.00%	22,836,859	0.58%
10000001- 500000000	5	0.01%	120,201,120	3.03%
500000001- 100000000	2	0.00%	141,360,143	3.56%
100000001- 3970477045	1	0.00%	2,826,906,948	71.20%
	75,928	100%	3,970,477,045	100.00%
List of 5% and Above shareholdings:
PZ Cussons (Holding) Limited	1	0.00%	82,442,840	2.07%
PZ Cussons (Holding) Limited	1	100.00%	2,826,906,948	71.20%
			2,909,349,788	73.27%

Apart from PZ Cussons (Holdings) Limited, UK, no other shareholder held more than 5% of the paid-up capital of the Company as at 31 May 2023.

Shareholding Structure/Free Float Status

	31 May 2023	31 May 2022
Description	Unit	Percentage	Unit	Percentage
Issued Share Capital	3,970,477,000	100%	3,970,477,000	100%
Substantial Shareholdings (5% and above)
PZ Cussons(Holdings) Limited, UK	2,909,349,788	73.27%	2,909,565,546	73.28%
Total Substantial Shareholdings	2,909,349,788	73.27%	2,909,565,546	73.28%
Directors' Shareholdings (direct and indirect),
excluding directors with substantial interests
Ms. Joyce Coker	3,889	0.00%	3,889	0.00%
Mr. P. Usoro, SAN	1,000,000	0.03%	1,000,000	0.03%
Mrs. I.M.O Okauru, MFR	59,713	0.00%	-	0.00%
	--	--	--	--
Total Directors' Shareholdings	1,063,602	0.03%	1,003,889	0.03%
Other Influential Shareholdings
AMCON & PFA	98,793,459	2.49%	-	0.00%
		0.00%		0.00%
Total Other Influential Shareholdings	98,793,459	2.49%	-	0.00%
Free Float in Units and Percentage	961,270,151	24.21%	1,059,907,565	26.69%
Free Float in Value	₦ 16,245,465,551.90	₦ 12,135,941,619.25

v

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report (cont'd)

Declaration:

1. PZ Cussons Nigeria Plc with a free float percentage of 24.21% as at 31 May 2023, is compliant with The Exchange's free float requirements for companies listed on the Main Board.
2. PZ Cussons Nig Plc with a free float value of N12,135,941,619.25 as at 31 May 2022, is compliant with The Exchange's free float requirements for companies listed on the Main Board.

Board Committees

The Board has established Standing Committees whose terms of reference clearly spelt out roles, responsibilities and scope of authorities. To ensure compliance with the Best Practice in Corporate Governance each Committee is chaired by a Non- Executive Director.

Board Audit and Risk Management Committee

The Committee is to assist the Board in its oversight of the risk profile, risk management framework and risk review strategy. The Committee is to carry out periodic review of changes in the economic and business environment, including emerging trends and other factors relevant to the Group's risk profile.

The Committee is made up of three (3) members namely

Mrs. I.M.O. Okauru, MFR**
Mallam Ballama Manu*	Chairman
Mr. Duncan Anniss	Member
Mrs. Oluwatoyin Odutayo*	Member
Mr.P. Usoro, SAN**

The Committee met seven times during the financial year. The table below summarises members' attendance at the meetings:

	No. of meetings	No. of meetings
Name	held	attended
Mrs. I.M.O. Okauru, MFR**	7	5
Mallam Ballama Manu*	7	2
Mr. Duncan Anniss	7	7
Mrs. Oluwatoyin Odutayo*	7	1
Mr.P. Usoro, SAN**	7	5

The meetings were held on 22 June 2022, 27 September 2022, 11 October 2022, 12 October 2022, 23 January 2023, 22 March 2023, and 9 May 2023.

**Mrs. I.M.O. Okauru, MFR** resigned on 25 January 2023

• Mr. P. Usoro, SAN. resigned on 25 January 2023
• Mallam Ballama Manu became a member on 25 January 2023
• Mrs Oluwatoyin Odutayo became a member on 9 May 2023

Governance and People Committee

The committee advises the Board on the appointment of directors, corporate governance matters, staff welfare and remuneration, talent management and other strategic employees' relations matters.

The Committee members are:
Mrs. Oluwatoyin Odutayo*	Chairman
Mrs. I.M.O. Okauru, MFR**	Member
Mr. K. Massie	Member
Mr. P. Usoro, SAN**	Member
	vi

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report (cont'd)

Governance and People Committee (cont'd)

The Committee met seven times during the financial year and the table below shows the attendance at the meetings:

Name	No. of meetings held	No. of meetings attended
Mrs. Oluwatoyin Odutayo*	7	3
Mrs. I.M.O. Okauru, MFR**	7	4
Mr. K. Massie	7	7
Mr. P. Usoro, SAN**	7	4
Mallam B. Manu	7	Nil

The meetings were held on 22 June 2022, 7 July 2022, 27 October 2022, 13 December 2022, 3 March 2023 and 31 March 2023.

**Mrs. I.M.O. Okauru, MFR resigned on 25 January 2023

• Mr. P. Usoro, SAN. resigned on 25 January 2023
• Mrs. Oluwatoyin Odutayo became a member on 13 December 2022 *Mallam Ballama Manu became a member on 21 June 2023 after the year end.

Statutory Audit Committee

The Committee is established to perform the functions listed in Section 404 (7) of the Companies and Allied Matters Act 2020. The Committee consists of five (5) members made of three representatives of the shareholders elected at the previous Annual General Meeting for the tenure of one year and two Non-Executive Directors. The meetings of the Committee were attended by the Head of Internal audit and representatives of Deloitte & Touche, the Group's external auditors.

The following directors served on the Committee during the year:

Mallam B. Manu*

Mrs. I.M.O MFR Okauru**

Mr. P. Usoro, SAN**

The table below summarises the attendance at the Committee meetings during the year: "

Name	No. of meetings held	No. of meetings attended
Mallam B. Manu*	5	1
Mrs. I.M.O MFR Okauru**	5	4
Mr. P. Usoro, SAN**	5	4
Mr. E.A. Akinduro	5	3
Hon. B. Nwabughogu	5	5
Mr. O.I.Obarinde	5	4
Mr. O. Owoeye*	5	1

The meetings were held on 22 June 2022, 30 September 2022, 13 October 2022, 14 December 2022 and 22 March 2023.

**Mrs. I.M.O. Okauru, MFR resigned on 25 January 2023

• Mr. P. Usoro, SAN. resigned on 25 January 2023
• Mallam Ballama Manu became a member on 24 January 2023 *Mr. Owoeye became a member on 24 January 2023.

Board Composition

The Company's Articles of Association provide for a maximum of fifteen directors. At the date of this report, the Board consists of seven directors: Three Independent Non-Executive Directors, two Non-Executive Directors and two Executive Directors. There is an ongoing board recruitment process for the appointment of two additional Independent Non-Executive Directors as at the time of this Report.

vii

PZ CUSSONS NIGERIA PLC Annual report and consolidated financial statements 31 May 2023

Directors' Report (cont'd)

Board Composition (cont'd)

The profile of the Board comprises distinguished individuals with diverse skills and competencies in different areas of the Group's business. This continually ensures the realisation of the set corporate objectives.

In line with best practices, the position of the Chairman is distinct from that of the Group Chief Executive Officer.

The Chairman is Mrs. Ifueko Omoigui Okauru, an Independent Non-Executive Director while the Chief Executive Officer is Mr. Dimitris Kostianis. Furthermore, while the Chairman is responsible for providing overall leadership for the Company and ensuring the effective operation of the Board to achieve the Company's strategic goals, the Chief Executive Officer is responsible for coordinating the running of the business and implementing strategies.

Independent Directors

In compliance with Section 275(1) of the CAMA and the Nigerian Code of Corporate Governance, more than a third, three

1. of the seven Directors, are independent directors having no significant shareholding interest or any special business relationship with the Group.

Board Operations

The Board is the ultimate governing body of the Group and it is responsible for its overall supervision and the protection of the interest of shareholders and other stakeholders. It ensures that the Group is appropriately managed to achieve strategic objectives.

The specific issues reserved for the Board include:

The ultimate direction of the Group particularly the conduct and supervision of the business.

• Determination of the Group's organisation
• Risk Management and internal control
• Supervision with respect to compliance with the law
• Corporate Governance matters
• Communication with shareholders
• Review of business performance

The Board has delegated to Management the day-to-day running of the business and the Chief Executive Officer, who is the head of the Management Team, is answerable to the Board.

Board Appointment and Induction

Directors are appointed to the Board following a declaration of vacancy at a Board meeting. New Directors are selected through carefully articulated selection guideline that place emphasis on integrity, skills and competences relevant to the Group's goals and aspirations. The Policy confers on the Governance and People Committee the responsibility of identifying individuals with a track record of outstanding achievements and potential for value enhancement. The Committee's recommendation is subjected to further scrutiny by the Board before a decision is taken. The appointed director is made to undergo an induction programme to equip and familiarise him/her with the requisite knowledge and information about the Group and its business.

Furthermore, a newly appointed director receives a letter of appointment spelling out in detail the entitlements, terms of reference of the Board and its Committees and the Key Performance Indicators.

The appointment of the director is presented to the subsequent Annual General Meeting for ratification.

Internal Control

The Board maintained a sound system of internal control to safeguard shareholders investments and the Group's assets. The system of internal control provides reasonable assurance against material loss. The responsibilities include oversight functions of internal audit and control, risk assessment and compliance, conformity and contingency planning, and formalisation and improvement of business process.

viii