Ikeja Hotel PlcNSENG: IKEJAHOTEL

Quarter 3 financial statement for 2024

Oct 24, 2024 at 4:17 PM UTC · MarketScreener

IKEJA HOTEL PLC (RC 10845)

Unaudited Group Financial Statements

For The Third Quarter Ended 30 September, 2024

IKEJA HOTEL PLC

Contents	Page
Certification	2
Statement of Financial Position	3
Satement of Comprehensive Income	4
Statement of Changes in Equity	5
Statement of Cash Flows	6
Notes to Financial Statement	7-25
Operating Summary	26

IKEJA HOTEL PLC

Certification of Financial Statements

In compliance with Section 60(2) of the Investment and Securities Act, 2007, we have reviewed the unaudited Interim Financial Statements of the Group for the third quarter ended 30 September 2024.

The Financial Statements, based on our knowledge, does not contain any untrue statement of any material fact or contain any misleading information in any respect.

The Financial Statements, and other financial information included therein, present fairly in all material respects the consolidated statement of financial position, consolidated statement of financial performance and consolidated statement of cash flows of the Group for the third quarter ended 30 September 2024.

We are responsible for designing the internal controls and procedures surrounding the financial reporting process and assessing these controls in accordance with Section 60(2) of the Investment and Securities Act, 2007 and have designed such internal controls and procedures, or caused such internal controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within the entity. The controls, which are properly prepared, have been operating effectively during the year under reference.

Based on the foregoing, we, the undersigned, hereby certify that to the best of our knowledge and belief, the information contained in the unaudited interim Financial Statements of Ikeja Hotel Plc for the third quarter ended 30 September 2024 are complete, accurate and free from any material misstatement.

Theophilus E. Netufo	Zacchaeus O. Adeyemo
Managing Director/CEO	Financial Controller
FRC/2013/ICAN/00000004775	FRC/2018/ICAN/00000017858
23 October 2024	23 October 2024

IKEJA HOTEL PLC

Consolidated Statement of Financial Position
As at 30 September 2024			The Group	The Company

	Notes	30-Sep-24	31-Dec-23	30-Sep-24				31-Dec-23
Non-Current Assets			N'000	N'000	N'000				N'000
7		22,458,361								22,458,361
Property, Plant and Equipment					22,370,571				22,370,571
Capital Work in Progress	9		472,496				291,521				472,496	291,521
Intangible Asset	10		15,415				17,458				15,415	17,458
Investment in Subsidiaries	33		-				-				4,444,518	4,444,518
Investment Accounted for Using the
Equity Method	34		-				-				798,722	798,722
			22,946,272				22,679,550				28,189,512			27,922,790
Current Assets	20		307,238								307,238
Inventories					251,446				251,446
Trade Receivables	18		1,291,612				1,026,781				1,289,573	1,024,602
Other Receivables and Prepayment	19		1,059,928				1,033,211				1,059,928	1,033,211
Loan to Related Party	21		20,126,475				20,126,474				20,126,475	20,126,474
Amount Due from Related Parties	22		-				-				278,766	269,832
Cash and Cash Equivalents	23		21,250,760				14,642,893				15,785,462	9,239,774
Total Current Assets			44,036,013				37,080,805				38,847,441				31,945,339
Total Assets

		66,982,285				59,760,355				67,036,954			59,868,129
Equity and Liabilities	29.2		1,081,184								1,081,184
Share Capital					1,081,184				1,081,184
Share Premium	30		1,432,886				1,432,886				1,432,886	1,432,886
Retained Earnings	31		8,976,514				7,366,734				9,040,884	7,306,070
Capital reserve	35		1,832				1,832				-	-
Revaluation Reserve	36		13,823,793				13,823,793				13,823,793	13,823,793
Equity Attributable to Equity Holders
of Parent			25,316,209				23,706,429				25,378,748	23,643,933
Non-Controlling Interest	32		(82,050)			(119,709)			-	-
			25,234,159				23,586,720				25,378,748			23,643,933
Liabilities
Non-Current Liabilities	26		12,070,461								12,842,744
Amount Due to Related Parties					11,075,483				11,848,051
Retirement Benefits Obligation	28		475,436				472,407				474,801	472,407
Deferred Tax	27.2		2,734,904				2,734,904				2,725,388	2,725,388
Total Non- Current Liabilities			15,280,802				14,282,794				16,042,933			15,045,846
Current Liabilities
Trade and Other Payables	25		2,817,146				2,440,554				2,295,968	1,917,970
Deferred Income	24		22,365,345				18,912,449				22,223,090	18,770,194
Current Tax Payable	27.1		1,284,832				537,838				1,096,211	490,186
Total Current Liabilities			26,467,324				21,890,841				25,615,269			21,178,350
Total Liabilities
		41,748,126				36,173,635				41,658,202			36,224,196
Total Equity and Liabilities
		66,982,285				59,760,355				67,036,954			59,868,129

These consolidated financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 23 October, 2024.

Chief Anthony Idigbe, PHD, SAN	Alh Abatcha Bulama	Mr. Theophilus E. Netufo	Mr. Zacchaeus O. Adeyemo
Chairman	Director	Managing Director/CEO	Financial Controller
FRC/2014/NBA/00000010414	FRC/2014/ICAN/000006535	FRC/2013/ICAN/00000004775	FRC/2018/ICAN/00000017858

The accompanying notes form an integral part of these consolidated financial statements.

IKEJA HOTEL PLC

Consolidated Statement of Comprehensive Income
For The Nine Months Ended 30 September 2024		The Group		The Company

		Year to date		Year to date
	Note	30-Sep-24	30-Sep-23		30-Sep-24	30-Sep-23
		N'000	N'000		N'000	N'000
Revenue	11	12,598,705	7,692,320	12,598,705	7,692,320
Cost of Sales	12	(7,830,835)	(5,003,536)	(7,830,835)	(5,003,536)
Gross Profit		4,767,870	2,688,785	4,767,870	2,688,785
Other Income	13	187,812	145,763	242,268	140,953
Sales and Distribution Expenses	16	(483,531)	(268,989)	(483,531)	(268,989)
Administrative and General Expenses	15	(1,266,672)	(945,477)	(1,200,959)	(836,174)
Operating Profit/(Loss)		3,205,479	1,620,082	3,325,647	1,724,575
Finance Income	14	878,831	338,870	500,662	12,261
Finance Costs	17	(994,978)	(888,947)	(994,978)	(888,947)
Profit/(Loss) Before Taxation		3,089,332	1,070,005	2,831,331	847,888
Current Tax (Expense)/Income	27.3	(1,084,744)	(482,652)	(934,339)	(406,801)
Profit/(Loss) for the Period from continuing operations
	2,004,589	587,353	1,896,992	441,088
Profit/(Loss) Attributable to:
Equity Holders of the Parent		1,966,930	536,160	1,896,992	441,088
Non-Controlling Interest		37,659	51,193	-	-
Profit/(Loss) for the Period		2,004,589	587,353	1,896,992	441,088
Other Comprehensive Income for the Period		-	-	-	-
Total Comprehensive Income for the Period
	2,004,589	587,353	1,896,992	441,088
Total Comprehensive Income for the Period Attributable to:
Equity Holders of the Parent		1,966,930	536,160	1,896,992	441,088
Non-Controlling Interest		37,659	51,193	-	-
Total Comprehensive Income for the Year Attributable to:		2,004,589	587,353	1,896,992	441,088
Basic Earnings Per Share (kobo)		93	28	88	21

IKEJA HOTEL PLC

Consolidated Statement of Comprehensive Income
For The Three Months (Third Quarter) Ended 30 September 2024	The Group		The Company

		Jul.-Sep 2024	Jul.-Sep 2023		Jul.-Sep 2024	Jul.-Sep 2023
		N'000	N'000		N'000	N'000
Revenue	4,391,628	3,124,338	4,391,628	3,124,338
Cost of Sales	(2,856,285)	(1,945,928)	(2,856,285)	(1,945,928)
Gross Profit		1,535,342	1,178,410	1,535,342	1,178,410
Other Income	130,798	18,157	188,194	16,612
Sales and Distribution Expenses	(166,501)	(102,299)	(166,501)	(102,299)
Administrative and General Expenses		(503,119)	(337,389)	(478,612)	(317,140)
Operating Profit/(Loss)	996,521	756,879	1,078,423	775,582
Finance Income	367,972	71,323	180,165	(68,914)
Finance Costs		(334,080)	(299,103)		(334,080)	(299,103)

Profit/(Loss) Before Taxation	1,030,413	529,098	924,508	407,565
Current Tax (Expense)/Income	(368,117)	(339,285)	(305,088)	(263,695)
Profit/(Loss) for the Period from continuing operations
	662,296	189,813	619,420	143,869
Profit/(Loss) Attributable to:
Equity Holders of the Parent	647,289	173,733	619,420	143,869
Non-Controlling Interest	15,006	16,080	-	-
Profit/(Loss) for the Period		662,296	189,813	619,420	143,869
Total Comprehensive Income for the Period
	662,296	189,813	619,420	143,869

Total Comprehensive Income for the Period Attributable to:
Equity Holders of the Parent	647,289	173,733	619,420	143,869
Non-Controlling Interest	15,006	16,080	-	-
Total Comprehensive Income for the Year Attributable to:		662,296	189,813	619,420	143,869
Basic Earnings Per Share (kobo)	31	9	29	7

IKEJA HOTEL PLC

Statement of Changes in Equity as at 30 September 2024

				The Group							The Company
	Ordinary									Ordinary
	share	Share	Retained	Capital	Revaluation	Non-controlling	Total		share	Share	Retained	Revaluation	Total
Attributable to the Equity Holders of the Company	Capital	Premium	Earnings	Reserve	Reserve	interest	Equity		Capital	Premium	Earnings	Reserve	Equity
	=N='000	=N='000	=N='000	=N='000	=N='000	=N='000	=N='000		=N='000	=N='000	=N='000	=N='000	=N='000
Balance as at 1 January 2024	1,081,184	1,432,886	7,366,734	1,832	13,823,793	(119,708)		23,586,720		1,081,184	1,432,886	7,306,070	13,823,793		23,643,933

Changes in Equity for the Year
Profit for the Year			1,966,930			37,659		2,004,589		-	-	1,896,992			1,896,992
Interim Dividend			(116,983)					(116,983)				-			-
Final Dividend			(240,167)					(240,167)				(162,178)			(162,178)

Total Comprehensive Income for the Year	-	-	1,609,780		-	37,659		1,647,439	-	-	1,734,814			1,734,814

Reclassifications/derecognition

At 30 September, 2024	1,081,184	1,432,886	8,976,514	1,832	13,823,793	(82,049)		25,234,160	1,081,184	1,432,886	9,040,884	13,823,793		25,378,748

Balance as at 1 January 2023	1,039,398	1,381,072	5,551,514	1,832	-	(190,903)		7,782,912	1,039,398	1,381,072	5,686,510	-		8,106,980

Changes in Equity for the Year
Profit for the period			536,160			51,193		587,353				441,088			441,088
Dividend paid			(155,910)					(155,910)				(155,910)			(155,910)

Total comprehensive income	-	-	5,949,566	-	-	51,193		431,443	-	-	285,178	-		285,178

At 30 September, 2023

1,039,398 1,381,072 5,931,765

1,832

(139,710)

8,214,355

1,039,398 1,381,072 5,971,688

8,392,158

IKEJA HOTEL PLC

Consolidated Statement of Cash Flows
For The Nine Months Ended 30 September 2024		The Group		The Company

	Notes	30-Sep-24	30-Sep-23		30-Sep-24	30-Sep-23
		N'000	N'000		N'000	N'000
Profit/(Loss) before tax		3,089,332	1,070,005	2,831,331	847,888
Adjustment for:
Depreciation of PPE	7	401,888	329,648	401,888	329,648
Amortisation of Intangible Asset	9	2,345	2,317	2,345	2,316
Finance Costs	17	994,978	888,947	994,978	888,947
Dividend Received		-	-	(131,157)	-
Interest on Placement with Banks	14	(878,831)	(338,870)	(369,505)	(12,261)
Profit on disposal of PPE		(1,235)	(650)	(1,235)	(650)

Changes in:		3,608,477	1,951,398	3,728,645	2,055,889

Inventories	20	(55,792)	27,337	(55,792)	27,337
Trade and Other Receivables	18	(224,009)	(327,075)	(224,149)	(325,040)
Other Assets	19	(26,717)	16,468	(26,717)	14,175
Post Employment Benefits expense		3,029	194,380	2,394	194,380
Due from Related Parties		-	-	(8,933)	375,296
Trade and Other Payables	25	376,592	320,829	377,998	(49,107)
Deferred Income	24	3,452,896	1,263,061	3,452,896	1,263,060
Due to Related Parties		994,978	887,556		994,693	880,945
Cash Generated from Operating Activities		8,129,453	4,333,954	8,241,034	4,436,935
Income Tax Paid	29.1	(337,750)	(64,031)	(328,314)	(64,031)
Net Cash from Operating Activities
	7,791,703	4,269,923	7,912,721	4,372,903
Cash Flows from Investing Activities
Additions to Property Plant and Equipment	7	(530,500)	(418,670)	(530,499)	(418,669)
Additions to Intangible Assets		(301)	(3,464)	(301)	(3,464)
Additions to/Utilization of Capital Work in Progress	9	(180,975)	1,129	(180,975)	(76,842)
Proceed on disposal of property, Plant and equipment	1,235	650	1,235	650
Interest on Placement with Banks		878,831	338,870	369,505	12,261
Dividend Received		-	-	131,157	-
Management fee received		-	-			-
Net Cash Flows used in Investing Activities		168,291	(81,484)	(209,878)	(486,064)
Cash Flows from Financing Activities
Finance Costs		(994,978)	(888,947)	(994,978)	(888,947)
Dividend Paid		(357,150)	(155,910)	(162,178)	(155,910)
Proceed from sales of shares(CHPL)		-	1,894,188	-	-
Interest Paid		-	-	-	-
Net Cash Flows used in Financing Activities		(1,352,127)	849,331		(1,157,155)	(1,044,857)
Net Increase in Cash and Cash Equivalent		6,607,867	5,037,770	6,545,688	2,841,983
Cash and Cash Equivalents at the Beginning of the
Year		14,642,893	8,605,724	9,239,774	5,494,754
Cash and Cash Equivalent at the End of the
Period		21,250,760	13,643,493		15,785,462	8,336,737

IKEJA HOTEL PLC

Notes to the Unaudited Financial Statements

For the Period Ended 30 September 2024

1. The Group

1.1 The reporting entity

1.1.1 The Group

The group comprise Ikeja Hotel Plc. and its subsidiary - Hans Gremlin Limited (75%),Charles Hampton (90%) and IHL Services Limited with 100% shareholdings.

The Company
Ikeja Hotel Plc., formerly Properties Development Limited, was incorporated on 18 November, 1972. It owns the Sheraton Lagos Hotel, and is a core investor in Hans Gremlin Nigeria Limited. It also has significant shareholding in the Tourist Company of Nigeria Plc. (Owners of Federal Palace Hotel & Casino, Lagos).
The Hotel was managed and operated by Starwood Eame License and Services Company BVBA up to June 2017 under an agreement dated 31 October 1980 and renewed 1 April 2008. Subsequently Marriot International took over the management of the Sheraton brand from June 2017 due to acquisition of Starwood Eame License and Services Company BVBA.
Corporate office
The registered office of the company is 84, Opebi Road, Ikeja, Lagos, Nigeria.
Principal activities

The principal activities of the group are operation of hotels and restaurants, apartment letting, recreational facilities, night clubs and business centre services, advisory and consultancy services.

2. Basis of preparation

These financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act Cap C.20, Laws of the Federation of Nigeria, 2004, the Financial Reporting Council of Nigeria Act, 2011.

Functional and presentation currency
The consolidated financial statements are presented in naira, which is the group's functional and presentational currency. The consolidated financial statements are presented in the currency of the primary economic environment in which the group operates (its functional currency). For the purpose of the consolidated financial statements, the consolidated results and financial position are expressed in naira, which is the functional currency of the group and the presentational currency for the financial statements.
Going concern status
The consolidated financial statements have been prepared on a going concern basis, which assumes that the entity will be able to meet its financial obligations as at when they fall due. There are no significant financial obligations that will impact on the entity's resources which will affect the going concern of the entity. Management is satisfied that the entity has adequate resources to continue in operational existence for the foreseable future. For this reason, the going concern basis has been adopted in preparing the consolidated financial statements.
Basis of consolidation
The interim consolidated financial statements comprise the financial statements of the company and its subsidiaries as at 30 September, 2024. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the group obtains control, and continues to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared
for the same reporting period as the parent company, using the same accounting policies.
All inter-group balances, transactions, dividends, unrealised gains on tranasctions within the Group are eliminated on consolidation. Unrealised losses resulting from inter-group transactions are eliminated, but only to the extent that there is no evidence of impairment.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

Basis of measurement
The financial statements have been prepared under the historical cost basis except for the following:
- Investment properties measured at fair value.
- Financial assets classified as amortised cost measured at amortised cost.
  Financial assets designated at fair value through other comprehensive income measured at fair value through other comprehensive
- income.
- Financial asets designated at fair value through profit or loss measured at fair value through profit or loss.
- Financial liablities including borrowings measured at fair value.
- defined benefit obligations measure at the discounted future value of all expected future obligations plus past service costs and actuarial loss less actuarial gains.
- Inventory measured at lower of cost and net realisable value.
Critical accounting estimates and judgement
The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

4.1 Asset useful lives and residual values:

Property, plant and equipment are depreciated over their useful lives, taking into account residual values where appropriate. The actual useful lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re- assessing asset useful lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into

IKEJA HOTEL PLC

Notes to the Unaudited Financial Statements

For the Period Ended 30 September 2024

account. Residual value assessments consider issues such as future market conditions, the remaining life of the assets and projected disposal values.

Taxes
1. Uncertainties exist with respect to the amount and timing of future taxable income. Given the complexities of existing contractual agreement, differences arising between the actual results and the assumptions made could necessitate future adjustment to tax income and expenses already recorded. The Company establishes provisions based on reasonable estimates.
2. Deferred taxes are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Provisions/contingencies
Provisions are liabilities of uncertain timing and are recognised when the entity has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount that can be
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
Impairment of financial assets
Impairment of financial assets is based on the application of the expected credit loss model (ECL) in accordance with IFRS 9, Financial Instruments. The measurement of expected credit loss by the Group under IFRS 9 reflects an unbiased and probability- weighted amount that is determined by evaluating the range of possible outcomes as well as incorporating the time value of money. Also, management considers reasonable and supportable information about past events, current conditions and reasonable and supportable forecasts of future economic conditions when measuring expected credit losses. Management considers the risk or probability that a credit loss occurs by considering the possibility that a credit loss occurs and the possibility that no credit loss occurs, even if the probability of a credit loss occurring is low. The application of variables under this model involves estimates which require significant judgemet by management.
Retirement benefit obligation
The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using various assumptions that may differ from actual developments in future. The assumptions used include the discount rate, future salary increases, mortality rates and future pension increases. Changes in these assumptions will impact the carrying amount of the pension obligation. The Group determines the appropriate discount rate at each reporting date. In determining the appropriate discount rate, management considers the interest rates of corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the expected term of the related pension obligation.
Investment property
Investment properties are initially recognsed at cost and subsequently carried at fair value, determined annually by independent professional valuers on the highest and best use basis. Changes in fair values are recognised in profit or loss. Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised and the carrying amounts of the replacement components are recognised in profit or loss. The cost of maintenance, repairs and minor improvements is recognised in profit or loss when incurred. On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognised in profit or loss.
Impairment of inventory
The inventory provision is based on average loss rates of inventory in recent months. The provision makes use of inventory counts performed which is considered to be representative of all inventory items held.

3. Summary of Standards and Interpretations effective for the first time

The following represent amendments and revisions to the International Financial Reporting Standards and interpretations which are effective for annual periods beginning on or after 1 January 2017. These amendments and interpretations have been adopted where applicable in preparing the financial statements. The nature and the impact of each newly effective standard and amendments are described below:
Amendments to "IFRS 5 Non-current Assets Held for Sale and Discontinued Operations"
The amendment clarifies cases in which an entity reclassifies an asset from held for sale to held for distribution or vice versa and cases in which held-for-distribution accounting is discontinued.
Amendments to "IFRS 7 Financial Instruments: Disclosures"
The amendment adds additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for

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