Quarter 5 - financial statement for 2025

TIP FINANCE DEPARTMENT

12/31/2025

THE INITIATES PLC

FINANCIAL STATEMENTS 31 DECEMBER 2025

THE INtTIATES PLC

FINANCIAL STATEMENTS

FOR TRR ¥’EAR fiNDED 31 DECEMBER 2025

THE INITIATES 1 LC

POR THE YEAR E.WED 31 DECEMBER 2025

PRELIMINARY REPORT OF THE COMPANY STATEMfiNT OF DIRLCTORS’ ltgSPONSIDILITIES

COkPORATE lNFORhtATtON 2

MSURANCE RAPORT OF TNE tNOEPENDENT AUDITORS 3 - 5

REPORT OF INDEPENDENT AUDITORS

STA7EMEhT OF PROFIT OR LOSS AND OTIMR COMPRE£IENSIYE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUiTY

STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

OTFifiR NAMOiNAL DISCLOSURES

6 - 8

10

II

THE INITIATES PLC

RCZ8G7g5

T 0F THE DIRECTORS

• The Diractârs haye the pleasure of svbmllting IN the members their report as well ae ihe Audited Financial Sta!amant for tha perlod ended 31'° Dacembbr, 2025.

  1. 1agal Fpfwt' the Company was incorporated as a Pr vale. Limited I.ability Company under the Lawe of the Fedemten of 9^‹• on the 3° day of MerCh,196S with RC 2e6755.ft became -a Pub1ic limb Company on the 24* day ot June.2015, and was Listed on the floor of the Nigerian

     Stoch Exchange(NSE) on the 25" day ci October, 2016,

     3. Px/naipa/ Jcf/xJtas: be Gompany is engaged In Waste management, and tndualrial Cleaning Servicee to bob pnvate ard public seqbrs including ihe Oil and Gas industry.

     REVENUE	1.1 89B BE		150.8I2
     DIRECT COST		2,1W.8a	157.07
     GRESSPROFIT	6.›s2.2s		1 t5.65
     a'’ERiucoue	73 @		SBI. j2
     ’TO1AL INDIRECT DDST	I.470:8^	6d7.3	111 7¥
     SPARE OF PROFIT OP aSSoCiATE	206 0u		100JXI
     I”ROFIT BEFORE TAX	5,071.SP	2.05z.g4	1A7.10
     'PRDVIBIDN FOR TAk	1,683.4	672. IE	150.23
     ’PROFtY AFr R TAX	3,368.0ti	1.379.66	1@.W
     'NON4URRENT ASSET		1.930 27	?9.80
     . ASSET - I l• -rRAIIS IT		150.OE	593:Z7
     OTHER NON — CURRENT ASSET		4.b	(100.00
     ’.INTANGBLE ASSET	10.9		‹oo.oo
     TNVESTUENT	239.4'	1QS.82	126.73
     *CURRENT ASSET		2.9Z8.73	1b4 1Z
     OTAL ASSEt	11.727.34	5.120 g6	1Z4.0d
     'NON- CuRRENT LIABLITIES	S77 2d	6a T.D4	f8.S5
     |CJRRENT L/ABILITIES	b,3g6W	2,020W	165.94
     |WORI ING CAPITAL	Z.II.8^		160 0X
     NET SEI			1 32.56

     1. wesu/t of'.Operaffaris ibr lite yeer:

        ”

        ,

        ”

     2. Property, Plant g Equipment: Movements In plant, progeny and equipment dunng tne yoar are as reflected In notes .15 ot the notas to the financial statement

     3. 0/zacfors - Tha namas of Dlractors who hald ofFice during tha period and at 0e date of this report ara : Mr.Joe Ogbonna Anoaikah (Chairman), Mr.Reuben Muatepha assay (Managing DlrectoIYC,E.0) Prof.Edward Alikar (Non-ExeMiye Director), Chief Oboh-Ozohereba .G. (Non-Executive Dtrector Mr,Joeaph Ebinum (Non-Executive Direcor) and Dr. Dorothy Bassey (Independent Non-Executive Director)

        Dlrectqre Remuneration;

        “ Non-Executive Directors ramunerat1on amlprtses Directors fees, Sittlng allowances and travel albwances; whlle Executive Director remuneration comprise salaries and other allowancaa payable durina the year.

     4. Diracfo/s' /n/er«st in aharea: ln accordance with section 301 of the Compares and Allled

     " Uatters Ad,(CAMA) 2020 and the Mating requirer«at of the NSE, ihe direct and Indirect

     Interest of he Dimcturs' shareholding aa adviead oy the qegisoars of be Company are;

     ’

     ’’

     ' ’’

     BharehoIding

     TBE$HTl&T¥sPkC

     9herehoIang

     Nr-Reuben Mustapha Ocsal

     Prof,Egy/er# Ar«or

     150,695,237

     I

     163,ua6,434

     1,126,76T

     31^ Oec 2025

     1.120,761

     Agra dorig Altos Mr.Reuben Muatagfja Ocsai Prof.Edwerd Alikor

     1,t , 1

     Nsta 7he Co rpeny mpresanfed by Dtreotoz w'ifi indfieat share/to/di’ng is. 8GLL /YKEU¥fJTED

     /. gig dfi4r8’/nferes In Confrsces› in One wih ihe provision of aecilon 303 of CALA 2020, no Director has try lnlerast (dlrecty/lndrac8y) in any contraat or propased contr8at wit tha Company 48 St 31st Decamber,2O25 or the data of this return.

     1. Analysis ot Shareholding, The sheras oftha Gampany wera fully awned by Nqerian ci5zans and lnal‹tut‹ons. The following sharehoktecs held mora man 5'h of the eharas of the Company as at 31“

        — Decembar, 2025.

        LJ8Y Ofi SnAREHOLOER9 WITN 6% AND AB0vE

        REUBEN M

        2 ’ AFOLAYAN SAMUEL OLAJIDE 417,727.358 I 13.23

        RICH TE IN STMEKT 6ECUR/TIES LIMITED 50,750,000 S.TO

        T€fE INITIATED PLC

        IP I cz«uvsas RCz10YB6

     2. FraudWorgar'y-There was to forgery recorded during the year under ieview.

     3. Fwmet of Ffnanolaf Sfstemazzt: The financial statement of Tea InlSetes Plc have been prepared in accordance with the Financial reporting council of NigWa as well as the lnternaconat normal R« rtl Standards.

     4. EmpJoymeof eng Employee:

        Gmp/byes waffére: The Company placas high premlum on the haalth, safely and wefaia of its

        employees in their places of work. To this end, the Company has var ous forms of insurance policies

        — Including group life insurance to adequately sacure and profesi its empk yees. The Company also provldea allowances to its employees at all IevaJs for fead›ng, transport and housing. Equal opportunities are also glven during a fright' compe5tlve recruitment process and therea no discnmination an gendar, raca or tribe.

     5. Free Float: The Free boat of a company is the proportion of its sharee that are heB by investors who are likely to be wlling lo tfade the shares on the Secudtles Exchanges. Ir line with the Nigerian Stock Exchange's rules, ihe Company's free float as at 31st December 2025 is above Z0% as shown below:

        -THE ftJlYATE9 PLC

        .8IJARENOLDtNG sTfiUCTURE AND FREE FLOAT 9TATU8 A9 AT TUE PERfOO ENDED 3’f8T DECEMBER 292S

        REPQf41 nG WRe4D

        . L .

     6. Auditors' The Auditors, Messer's Madu, Onyehwena A co, indicated their wi|Iimgnesâ to continue in office in accordance w fh section 401[J) & (2)’of lhe 0ompan%e and Ai!‹ad Maters Aot, Gap C20, Laws of the Federation of I'd@@a 2004.

     Datad this 28• Oay of January, 2026

     , By Older of the Boaid

     OLAIDE ObEJOBf

     Gcmpary Oec&t8fy

     FRC/¥0t7/PRO/NBA/002/00000018739

     oe0CovKWUâo&{mGo

     0C*m*;FnCiw*miAd&

     f.9.8sA71€

     the ‹nitiatea Plc re gniza• Carpora aBI7dfi ac Its bed ck in jha atldNnant of tha

     acoeptable coqwata soelal rasponsibiltty and •or«p mo• wN› ateN‹o‹y ragutetion. The Oompatty anuoudy thnvae In achiavlng beet practjcaa4 ao‹x›rdattoa with tha Bv•s and mgujdlona 0f NlBarla sush aa lhe Boda of Cmrata Govamanca for Public Compenies201 I, tha Conjpaniae end

     Flhanola4 Rapattlng btandald ate.

     In a‹›hWno th»se, the Board of Dlrado›a b cspondblsfoitheJo z•‹ing:

     1, oavabpa at‹atagy aaf›nlng #›a rola oftha Di‹e«lo‹s in the eardl atia ‹ri•riI end a&ieva/ •ot of

     the Company's goala in lina with TIP's vision andBusiness vale

  2. Heintdn proper fixral valu«s by encuñng the Tnt•riiy offinandal xtahrri‹rris, monia›r«peudira

S. Select, Manng^ end support tha Tal E¥eautiva Officer in tha formulation ef policies and the conduct of Buctness

” 4. Oversee the e4écttwnaas end adequacy of)ntornalConIrot 9yetem

6. Ensurecamp6anoeMnLaws and regulatbns

6. En8tJfo el'fs0gVa uc¥Tjmuni0aMon Mtft B|1orehdk}ars

9. Fannufata eta Managament of Fri manageuwntfmt›ewot

The Baard exercisaa M avarsght funwlona thraugh Board Meattngs and Xc CommMtees. Aa at the date ofk›« art. the Co‹hmtttees of the Board are

S VAeMa

THE lNfYfATEB PLC

CommitieetCoroorata Govarnanca/Compenaatlon) Nembershlp Btetu¥

0boh-Ocoherebe .G. Chalrman/ N.E.D

Mr.Joe Ebinum N.1DJMerpber

Prof.Edward Allkor N.E.D/ Mamber

CommIttse(Riehand H8El

Prof.Edward Allkor

Ossal, Reuban Mustapha

Memberchfp 8tstus

Chalrman/N, E,D Member

Statutory AuMit Committee: The CommT\aa held five maafings duñng tha period undar review (28/1/25. 16/3AS, 23/4A5, 2U7/25 end/25/10/29M;) to perform its rates and responslbilkias as sieted !n eection 404(7) of CAMA2020 and the SEC Code oF Corporate Governance(2011)

THE BOARD OF DiRECTORB

During the year under revs, the Board of Directors was made up of e directors comprising a Chairman, a Chlef Executive O9icer, (3) Non-executive Director, ard an lndepahdent Director, The position of thB ChalrmBFl is distinct fr0m that of lhe Chief Execucve officer io ensure transparency

— and separatloo ot power as provided in tke Code oF Cradle Gowmance for Public Compaftiee,

Z0}1. The Board held five meatihgs during tha peflod undar raview (2S" Jan 2025, 10” March

2025,23a April z025; 23“ July 2025 and 24” Agrli 2025)

ATTENDANCE AT BOARD AND AUDIT COMMITTEE MEETINGS:

Names Board Bftongs (5 sttttngs) Audit Committee smlng t5 Glttingst

_ Reuben MustaphaOseal 5 Not applicable(N/A) Joe Dgbonna AnoeiXeh

Chief Oboh-Ovlemuno G. N/A

5

*,*

@HUM,¥. {N.t.D]

THE INITIATES PLC

++r S a i RCZ66755

Mr.Joe Edinum 5 S

Dr.Dorothy Bassey

Christian Ugochukwu Nwanma

Olushoia Adegbite

Dated this 28' Day of January, 2026

By Order of the Board

OLAIDE ODEJOBI

Company Secretary

ARC/2017/PRO/NBA/002/00000016739

4

NfA

M/A

N/A

5

ISWA

ANOSJK EU, J. g. {CUA iR MAN), OSSAJ, #.M (C € 0/ MD]

Q§Q -N OVJE MUNO G. tN.KD

DR 8A$S Es, MORON I•IY {I .N F D)

SOMPLAINTB MANAGEMENT POLICY RAtgEWORK

CXC C0ft9lalnts kfanagBrI1BntWo)f Of be fnig8teG Pkt ftse bnDFl gfBgdtad pUrauazd Hz tha reqU|ramocK8

the Vgertan CcpXal ktert‹et.

The Policy has beenprepatad jn recognlkon aha (mportanoe of oPezzive engagement ir ptazosng

Company and ltc raglstrar pWide asaistanca ragardlng «kaahalder tasuas end ‹x›mams. II sI•o

This Pol cy falat0s one td ShgtahaldafS of Tha GB Pj0 and i6 des4lned Is en6urB that

0om0laints arid enquiries ara w«snaged tna tfnely, eflec5va and efba‹emnanr›er.

GUIDING PRINCIPLES POR PIAN&GINO COMPLAINTS:

. n ii wi c•n@ t••xeii w »••ai•» •Nct o rde›c• and «z r•‹>•r‹sl reas•n

of Comptatnants woukl be adequately protected.

z.Mode at ma¥tae Comnl»l•cc/e•euids A Qorn9teints b‹gw»ant arm e›uId be meda

all Narman 'fiIIIams crastent, Eoutn west, ways, Lagas. Tha Registrar ma0oges all ftse wBi¥ersd inf‹xmakon relating o alt Shareho1dinga, Bhamhokters na‹na•, addra•ssa and z{iutdeñd Paym9ht lhs$ LntlonG am0ng6t oth8f& Up¥n faof a C'•amplalnt/ehqMPy, ThB Innetes Rb would bBuotited of suchmor oring. ‹scald leeqtng.

mo»uc r• ca«/•»y s•o•‹so- F fhe Raglst›ar is i n•s te sessfaaorly »dd‹ec• tte

afflcaaf the cwpany 8acretary

9. Beef B flw p|K|fft/aflquity )C gent dbe4T@ ii tha CIYIpan#. ThM ThittateB {DC &4tl

uponnr›dptoftt›e CompaInPenquiry use Its best endaavouf•. In ensuring t»at:

a. Tfie Complaints/enquiries are recorded

c. The Mgerian SIocg Ezohanqe ie promptly no0flad ojbia Complainie/enqulriee

d. Notify the SharehoDar promptly f complaints/enqulrlas cannet be treated ¥nmedlately

4,Form at CemplalnUEnqulrlea ragletar: The Compldnts regtdar shall be In an 4ect‹onic form

a. The dete ofthe Complaint

b,Tt›e delude/tnfor‹ria kr› aftha Complainant

0, The natura/dascrlptbri oftha Gomplajnt

d. The stepa/autlan Gaian to resolve Ihe Gamplafnt

S,This Policy shall be r›ade avallabk on tha Company‘s wabsite twww.bflat mcp mm) tha

RegtatrBrs and by conteding theogic• oftheCor«pa»y Seoetary of The Initiates Plc

6. The Qom}flalnfa Management Pallcy b sub1wd to la¥lew horn we la tlma by the C0frlpdny

BECURlTiES TRADING POLICY: in line with rula t7:16 of tha Dfadanura of Dae}lnge

In taeuer's ahares, gulabook of Iha Erchenge, The Initfstaa Pte has a tradlr›g policy which

ages to all the employees and Dfreolors who may eat flea possess any Mdar or material

n aeon about rna company.

dealing or assisted any mamber or any pereon to partiâpale in atati tnstder deakng in complbnce with the trading policy.

Olaida dejobi

Company Secretary

FRc/2o1r/PRO/NBA/002/00000018739

THE INITIATES PLC

WASTE MANAGERS & INDUSTRIAL CLEANERS RC266755

CERTIFICATE OF COMPLIANCE OF THE INITIATES PLC PURSUANT TO SECTION 60(2) OF THE INVESTMENT AND SECURITIES ACT,

We the undersigned hereby certify the following with regards to our audited financial statement for the year ended 31ST December, 2025:

that;

1. We have reviewed the report and to the best of our knowledge, the report does not contain;

   (I) Any untrue statement of a material fact, or

   (ii) Omit to state a material fact which would make the statements misleading in the light of the circumstances under which such statements were made;

2. To the best of our knowledge, the financial statements and other financial information included in the report fairly present in all material respects the financial condition and results of operations of the Company as of, and the periods presented in the report.

3. We:

   1. Are responsible for establishing and maintaining internal control.

   2. Have designed such internal control to ensure that material information relating to the Company is made known to such officers within the entity particularly during the period in which this financial statement was prepared.

   3. Have evaluated the effectiveness of the Company’s internal control as of date

      within 30 days prior to the time of this account.

4. (i) We have disclosed to the audit committee;

1. All significant deficiencies in the design or operations of the internal controls which would adversely affect the Company’s ability to record, process, summarize and report financial data and was identified for any material weakness in internal controls;

2. Any fraud whether or not material, that involve management or other employees who have significant role in the company's internal controls;

3. We have identified in the report whether or not there was significant changes in the internal controls or other factors that could significantly affect internal controls subsequent to the date of our evaluation, including any corrective actions with regards to significant deficiencies and material weakness.

Ossai, Reuben Mustapha Taneh Rosemary

Chief Executive Officer Chief Financial Officer FRC/2014/PRO/DIR//003/00000009687 FRC/2017/PRO/ICAN/001/00000016060

THE INITIATES PLC

WASTE MANAGERS & INDUSTRIAL CLEANERS RC266755

STATEMENT OF DIRECTOR’S RESPONSIBILITY FOR THE YEAR ENDED 31ST DECEMBER, 2025

In accordance with the provisions of the Companies and Allied Matters Act, the Directors are required to prepare Financial statements for the year which gives a true and fair view of the state of financial affairs of the Company.The Directors’ responsibility includes ensuring that the Company:

1. Keeps proper accounting records which discloses with reasonable accuracy, at any time, the financial position of the Company;

2. Preparation of the Financial statements in compliance with the provisions of the Companies and Allied Matters Act as well as the International Financial Reporting Standards;

3. Establishes adequate internal control to safeguard its assets and to prevent and detect fraud and other irregularities.

   The Directors accept responsibility for the annual Financial Statements which have been prepared using appropriate accounting policies supported by reasonable and prudent judgment in conformity with the International Financial Reporting Standards issued by the International Accounting Standards Board and the Companies and Allied Matters Act, 2020.

   The Directors are of the opinion that the Financial statement give a true and fair view of the state of the Financial affairs of the Company ended 31stDecember, 2025. The Directors further accept responsibility of the maintenance of the Accounting records that may be relied upon in the preparation of the Financial Statement.

   Nothing has come to the attention of the Directors indicating that the Company will not remain a going concern in the coming year ahead.

   Signed on behalf of the Board of Directors by:

   Reuben Mustapha Ossai Joe Ogbonna Anosikeh

   Managing Director Chairman

   FRC/2014/PRO/DIR/003/00000009687 FRC/2014/PRO/DIR/003/00000008836

   	ANOSIKEH, J. O. (CHAIRMAN), OSSAI, R.M (CEO/ MD)		Plot 400, Location (New) Road
   	OBOH- OVIEMUNO G. (N.E.D)		Off Aba/PH Express Rd, By Oyigbo Junction Umuebule 5
   	PROF. ALIKOR, E.A.D (N.E.D)		(502103)
   	EBINUM, J. (N.E.D)		P.O. Box 7242
   	DR. BASSEY, DOROTHY (I.N.E.D)		Port Harcourt
   	Phone +234 20 84 669510	https://www.initiatesgroup.com	EMAIL:wms@initiatesgroup.com

   AUDIT COMMFFYEE REPORT OF THE INITIATES PLC

   n ptiance wyh Se‹xan 404{7} of the Companies and Allied Mature 2020, and Sedlon 80{3) af the Inveetment and Sacurlttes Act ZDD7, we have revx¥M°d tha Audit rer•rt ter la year anded 31st December 2b25 end hareby stata as folk›ws:

   1. exar nad he ecope planning of the audit for tha year ended 21st December 2025. Ih6

      n

   2. Wa also teviawed tha Ertema Audit‹xa' Nanegament lettar for the yaer aa

well ae Ifio Menagement'e raapon¥a therao

3, We aecartainad lhat the accounting and reporting po¿lofes of the Gompahy for the year endad 11s[ Dacefrlber 2025 are in accordance wlth lagal

requlfemenls and agreed with ethical practices.

— |p our opinion, the asqpa and p|arjning of the audit for the year ended 31st Deoembe 2025 was adeqvata and Managamenfs response to Auditors'findings thereon ware satlcfaotory.

Datad 2W March, 2028

FR‹ /2017/PRO/ ICAN/002/00000018424

I smbero of th• Commtttea;

Mr. cheslan Ugochukwu Nwan‹r›e - Chairman/Shamholder Rapreeentative

Mr. OTuahola Adagblte — Shorehober Representative

Prof. Edwa«i Altkor - Non•Executtve Director

Mr. Jasapfi Sum - Non•Executlve Dlrector

CERTlFiCATl€ i OF MANAGEMENT’S AS9E89UENT D6 INTERNAJ.,

'•ONTROL OVfiR FINANCIAL REP@STING

In c‹•«pIIanosctth the pro›rnIot›sofsesto 4t5 oflhe Company endAMed Meaars Ant, 2020an‹t

Investment ard 8aourdas Ao(ISA) 2007 on InIamal.con0otovo•ffnancal nqxrtfng, ma alraetors, aa

• ). We have revv•dth•se Audk•d hnan•/el aieternents ofTha lni0ase Plc Ibr the yeer erida4 s1^

by. Besed ari our Xnodadg9, Ihia iapott desxfi0t ber‹t6ic any ribue dat•«›ent ofa /naz•rtaI fact cr omit t•

aush st WeYa madn, not mfs&adirIg Pdf raapect fa tha pafM o>aarad by thio repqrt,

»l. Basad on »vr koowled0a. the financlal atetementq wd other fitiwjdal(nformalbnmcIuded Inths’ g›at, f¥irty pra6ent h T# fflAhfll8l feapecls1he fñtandal aitdNDrl, f¥Sult¥ Of opelddons afid’0e6h IU of the Company aa of and lbr, tea pañoos piazeotad n tks repat:

d). y¥e also oeñlfy that w9.

If). hava aaa@ed 4W internal comrob and ldufes, or cauBed Such interaaf zX ltros afid

qfosadufe o be 0esgned und0r of sup0rrdion, tg añ¥uf8 that jtialari4l!nXrme0anrea9n§ s ¥ta

" M). hava d0clgned Mch internal uontfo KyBfBm. of ctBu¥e I su0h lnteffla Nnlrol s§'Btart1 la be da¥igned

ivJ.Owe axaiuateé Ihaaltadivenaas of he Oespany internet ‹font ale and pro•«du‹e» c«»fa date

1. We hava dtscloea4 batad on our most recent eva4Jatlon ofInternal control system, to tha

   oompen/¥zuditonsandWeawdi1‹ mm|tb%becompempabnsn0oAagc ›m(or *oz:r

   1. /II sig/rdcent daltdendes and tha the‹a are no wjatetia(waaItnesseaU tha dasQo or

THE INfTlaTEs PLc

operation of the internal control system which are reasonably llkely to adversely affect the

Company abillty to record, process, summarize and fepert financial informat1on; and

li). There was no fraud, whether or not material, that Involves management or other employees

who have a significant role in the Company's Internal control system.

fj. We Identified, in the report whether or no[ there were significant chenges in internal controls or other facts that could significanJy affact internal controls sub9equent to the data of them evaluation including any corrective actions with regard to significant deficiencies and material weaknesse6.

Ossai, Reuben Mustapha Chief Executive Officer

FRC/2014/PRO/DlR//003/00000009687

Taneh Rosemary

Chlef Flnancial Officer

FRC/2017/PROflCAN/001/00000016080

MANACCMENT'S REPORT ON THE EFFECTIVENESS OF INTERNAL

CONTROL OVER FiNANCIAL REPORTlf4G

To comply Mth the p‹ovle me af.3ec6on1.3 of Sec Ouldance on ImplementsMon of se‹4ions 00-03 of

InvesbfienM and Se0urltids Aat 10D7, wa here0y mako the foIIowk'tg stntem0nts rag0rdfrlg tha Internal

nkols of The InNatea Plc for tka year anded 91* Desarnbar

I}. The lnbstss Pcs ‹nanegementis respo‹albIa far catablbhlng ardmak›talnlrg a syslsn of Insmac eonbol. over ffnendal Importing and the preparacon of tnanefal statements for external purposes In accordance Mth IFR9 hinting Standards and in the manne•requl/ed by the C mpanks ard AU

_ heifers Act (CA¥tA). 2020 8nd Fbaftclel Repa/ttng Co00r4I of Nt0o/te (AMe nt) Act, 2024.

Ilj. The lxBslaa Pte‘s msnagamattt has aasacsed thBt b1e Companys ICFR as of tka and. of 314 Oecembar

2025 is IYB.

5i). Tt›e Inlbtas Pk/c extem«lsudItor Mesata Nadu, Onyatwens a co thet a«dzed la flnan‹›IaI

atatamama, hac had an atteata0on report on management's aseeesmant of me entttyc iotamal

Thare were no changes In our nlamat contrd over toanclal eportlng hat ‹›ocurred x«bsequant to Iha date

if 9UF eyB|U6ti0rt ef th6 afl60tlvan9gs Of intamJ+I 00nb0I 9var fin8n0ief thet BlgnI1198nt|y ¥flactad, 4r

are raaaonably likdy la aqnifloan0y BFect, Iha Company's Internal oonbol over financial reposing.

Oasdi, Raub0rt Mustapha Taneh Rosemary

Chlaf Pinanoal Oliver

FR0/ze17/PRO/t0AN/091/00o00‹i180a0

THE INITIATES PLC

STATEMENT OP D1REC’rOR8’ RE8rfiN8IBILIT1EG

The Direciors ‹if The initiates Plc are responilble fur the preperetion. ml’ the financial siaiomanis thai give a true and fair view oi'lhe financial position uf the Company us at 31 December 20*5, and the results oil its operations, cashflows and changes in equity for the yeat ended, in compliance with Intcftiational Financial Reporting iiteitdetds (’1FRS"'1 md in tlte stutter ignited by the fimpanies and Allied Matters Act 20?0, and the Financial Repeating Council ‹if Nigetia (AmeodmtotJ Act, 2023.

Inpreparing ihe tinancial statements, the Dtwclors are responsible for:

• properly selecting aod applying accounting policies;.

• presenting informalion, including.accounling policies, in amannrz that provides relevanl, ulisble,

  comparable md umicrslandeblc intormatlon;

• pravidiny additional di•cusurcs when t0mylianco with the specific requirements in International I'inaociaI Reporting Standards (lFftSs) err insufficient la enable users to ui demand rhe impact at” treoaacdoas. other events and conditions on rhe Company's finaacial posiflon an+I fiauncisl

  34u Ihmctors arr responsible ior:

• designing, implementing and maintaining.in effective and sound system ofinternal cnntrnls

  thmughmil the Company;

• mniniaining adequate accounting records ihei ord sufficient to shuw and explain the Company's actions and dimlosc wlth ruanonable accuracy ei any rims th linaaci«l p•iviIon of the Cumpant, aad which euabJe totem to rrtsure that to finnrtcieT slatcmenta of6ie Com{m/ly cc›mpTy wiih )FRfii

• maintaining siaiviorY accounting records iti compliance with the lsgislztiun of Nigeria and IFRS;

• taking each steps as are tcasutiabty available to them to mfeguañ the Jesus of tho Company; cxl ” - pteveatiiig and detecting filed and o0iet irteguiarities.

Gqiag Ctizsei•ro

The Directors hevc magle w a¥scssmsnt of the Cautpany's ability to conbnue as a gomg cnncen and

have no onto believe ihet iA Compaq will at›i romsin a goinp cnacern the year ahhh.

The finamial statements o1 thu Compaar, for the year ended 31 December 20*5 were apptnved by the ‘ Directors on 30 Mamh. ?026.

Mr. Joe Oghrinna AnosiLeh

FRC/20 T4/'RO/DIR/003/00000006836

Mr. Reuben Mastuphn Ossoi

O HRHALPO¥THRBOARDOPDWBCTORBY:

FRC/20 l4/PkOOIR/6o3/00000009687

ii r h ITI ATES PLC

ron TUE YEAR ENDED 31 DECKt@kER 202fi

itCCTOttS AND OTHER CORPORATE INFon<ATION

Mr JoScph Ebinum Dr. Dorothy Bassey

Mr Reubon Mustapha Ossui Mr Emska Charles Ufiafor Dr. R.oscma Taneh

Mr Sunduy OyeniraJj Mrs Unirle Odejobi

Chains

Managing Direcur

hon-Executive Diroclor hon-Executive Dircciot Non-Executive Director

Independent hon-Executive Dimtil0t

Managing Director

E xlernal Auditors

Priocipul gsnkers

Madu, Onyokwena A Cn

(Chanered Accountants)

Suite A2, 2nd Floor, Lemu Shopping Plaza,

(Next Time Supemiarkei Duildinp), Abacha Road.

port Narcourt, Risks State.

Apcl Capital Registers Limited g Alhaji Bashortin Slreel, OffNonnan Williams Crescent,

L•8OS.

Gun fly Trust Bank plc f rovidus Bank Plc

FSDH M rchsn‹ Bank Limited

Stanbic I@TC BBLS P!C

Vems Bank Plc

Audit Committee

Mr Christian tJgo«hukwu N vanr»a Prof. Edouard ATikor

Mr Joseph Ebinum

Mr Adegbil6 OlUSg0)8

ylot 400, Shell Location Road.

NOT Ab‹›/PH Expr«sw'a,

By Oyigbo JunCtiOTl. Limucbulc 5.

Rivers Suttc.

Diwctor

Shareholders' Reprcwnl D>c

Mtdu, Onyehwena 6 Co.

To the 8hxrébot‹ter4efYbeZnittattsPtr

Aes‹usacea ‹›a›aaasgea›c»r» •••e•»•at ‹›f‹›s In›•o‹ r 6a•«ctsl

L P n d« n›asan bk csuaaa•s iintamssaJonarerssot‹b4ucsmscuyepem›iz9•«ymg‹xisf-fIMaoleI s¥teiaaazsltt aea•4Isnos ggeesllFaecaPtad aosaoitittBpdntij4es.sndtfat sroeipbaoa e«peaéf¥aesafAsca‹apsazzzcb iagwa:heotyinaceaé¥era aatlarbaéoos ermaea •• atMd

Ill.Pidiiat tcxsanabln u moe. inttp ›vc ion ot tin›ciy d ion of in gq ion, , or dispocifion ofihe comganyi asse8 W mold have amaterial effect or ttio hanmtat›natcmcnri.

ofip i‹d›mni Ii•i‹s›ioa, i‹›anut a›esotovarfi›nacIat«porti«gosynotp›xsas• da«cratt

be fnve coos›tied vñ6t0n i «Iqxadaaeandatbarebioztrejuuoaeus Codaofgz ios Fer P›oA›‹slW As•auaeaa ‹•eud¥yJñaB›am«#assfB ice 5‹anaadsBoed A›rAt«o‹a‹u«i•,‹¥Iâd› s 6aveded on âa das›aastpriag›les bFiatcgitx, o${4cdvity.pafeseom au‹tdeeazc

Whet Guidance requires that we plsn and perform llie Assurance engagement and provide a limitcd assurance report on Ltte entity's internal conyoi over financial reporting hased on our assurance engagement.

The procedures performed in a limitmJ assurance engagement vary in nature and timing from, and are tess in extent than Weir, a rcsscnablc assurance engAgemetit. As a resull, the level of assurance obtained in a I mited assurance cngagcment is substantially lower fhan tIe assurance thst would lisvc boen obtained had we performed a reasonable assurance engagement. Accordingly. we dc nut express a reasonable assurance cipinion on whether Gc Company cs ifilished and mgintainod an effective system of‘tnlemal control over tinanci8l myorting.

As prescribed in the Guidance, the procedures we perti›rmed included obtaining an understanding of internal coattol over financial reporting, assessing the risk thai a material weakness exists, and testing

— and evaluating the design and operating effgctivgness of inlrmal control based on the assessed risk. Our

engagement also included performing such other procedures as we considered necessary in the

We belleve the procedures performed provide s hasis for our repoft on the internal control put in place

Chinedu N. Onyekwens, FCA

FRC/20l3/UAN/011000004886

Vor: Medu, Onyekwena & Co. Chartered Accountant

Port Harcourt, Nigeria

30 March, 2026

5

Madu, Onyekwena & Co.

{Chattorad’Accountnnte)

lNDEPfiNDfiN.T.AUDlTOR'SREPORT

To the Shsrehoidtri ct lh» fnitlsi»i Pte

Repozt on tkc Audit of'tbe 'inAncial Statements

In or opinion, lbc ft at itanments give-a o• W hit view of IN financial paitim of1’be laitinies

Rune for Opinie«

Y/a. kejic.vo lfat tljo sMit avideacc Arc kavd obtitincd sttfficienj xM ayproprieI< to pfuvide a bssis & c^ur

1, Obuiined an undwitandinb of the Company's urndit cnnifol process, ind u«n the dnsi@ at›d

”7-• y/c t' viewed thc aging drioty4is cd'roccivshfw

:“

- â. E*a1tiated menajp ncnt's.amuinptions.mgarditig doiAtlid &bta:

A xt I L’‹•mmiticc‘+ Itopr•rt, Ccrtiljcui‹in of f•tuaa$ctocnf¥ Asso+small of Ijocrrztl L’nnItOl Uv•r Ftnanctai Rag‹1ttirp kfnrmycirianl's Bcpurt ‹ n tks Aw‹cxUticnT u” (nscmnT Cnn1n1) f7var Tinnrlsial gcpu*ting wkicb we

!n cu/uwith uur uudil uf'tht liuanciuI statements, uus rcslxmxibilig’ ts t+ mzJ Ihc 0d cz inf tmezion A‹id. n

ltzsod n0 the s*ort ne lulve performed wn ilvr odicr ioñamuion tksl wz pbrai0cd priur to the date of ibi» Outfits

- rap›rI. ifwe crmclñdc Ifct1 there is.a material utieslatemenl ofthir nil+ar inFcrmatioe, s'e ace zo}uimd. In enpnrl tlud

-. RccpuneibtfiLizs rrf Diractora Ger tlia:fhIaocisl ataGmMLs

Tho Dlttclota are WPoIt blc 'rt the $fs}¥uefloTt slid tttlt 9e0tXIt•zI ofheW III rIx•tu) sUseneti5 th aoc0fddfAe with tntcrnct‹ona Pinaricicl Raporuog 5tandcrJ6 tic fcqulntrteals nd+he Cootpaela /teJ ñ Ifi¥d Ma›f«e sc z‹›*u. xnd the Pmaucial kc{ortirtg Ct›uuci( uf Nigai Is (AmenJc mt) Jul 2+J?,3, uud Liu ai«h.Mammal ci›nkuI u £hn

- lci pwpnri g Its financial s1olenscnts, the Directors arc mspnnsi6tc for aessaeing hc Company‘s ability Sri e›ntinue u a golng cooccm. disclosing os sppllcahA memUL foJ o got a«c•r« a•‹t usiog IT e gciny concern buds of account ny unfct‹s Jo Ditcclots either intcnd ro Jiqldata w Compknd at«J/or co cecse nyotation* 4r love n‹i tualisiic sllemative bid to do so.

Durobj v s xre tn obteio reasnna6te aBsurueu< abnut whntfar tbc briansial iaetoncnts us c wbolc ate time fnnti ntiY mutmissoaemmr, hrtLer Juc â feud as crmr. aod m.keye ap guditot*s zspm fbxt! 1adcs our upIriTo«. itvasena la assuraiics i ivigh revel mans.but ienor a guamnioe th as audit coitdmtcd in eccodocc with

a')

by

iJctiti£y 4jtd ac«cxx lx' ris|x ofn nierixl miyxlxtamenl of the financial «la‹emaos, y'Iicther due la fmuda crmr,

apmoproo x ptovlJr a basis t’or.uur optoi‹ n. ncnsL sf dctcci›tg x maial misslxtootcni rcsultiag mom fr*uri i* hignci than for ono xs»ltinp torn ertot, as feud asy im'olvc oollusinn, fnrgcw, inicntion»1 urnisaiotix, miem{ocsottutIonn, ‹It fho ‹override tab ie1cma Lrstrrols,

Labmin @¥ rtndctstattdlttg at klWl4J c«NTc) pick (o thc audJj in otdct lo design aidol ftt; jkai etg

nyproprtarc in tlte cimu+ns*arc;m but.n i for the yurpnce nf cxj+reeling en qdrior ftt he elTectiychess nf rhx.

’ i“opipany's internal control. '

F.voTuaIc tbf apyropruilcwesnf be acvvatog pdioios used sit the rcasonab1cacss•3facf'uunLinjz.rstimgtcs

ajxi let.a*cd Ji¥clusuws made by tft< F›ifcrjor .

r•aIaatc fhc civelxll prcscctatioo, uwct• c a0 cost of fhe finantiuI stittt«crk ipcludiny th< disclosures,

obtain sufficient nppn›priw audi! evidence n•$ardlrtg ldc financial iniomiation of Ek< untiN or business acttviticz wid›in the 6.nmpnny In express w opiuien on Lhe fiizaasiat statements. 9/c are mspon ible Our the diircñox, ssanJ pcffurmnbct of he xvdit..9» mucin solely n i6tv for our «4ñ •p«ion.

bi ycctmlaucc with the fi0li schnlulc of)hc Ct»npsr'ies a•d Allied Matlcn Acl *fCl0, we ezpves.sly vtafe thai

i) we bzvé rtitaiocd nil One iafermatJon God ‹xplenatlos which to be fast of t›ui inoe'l;dgc and t›c1ief wtrc

_ .tii) The €.runpgz2's fiiancial p•»ition and its cement of prrifit or loss nod other compruhnnsixv income arc in

agic‹mcat with the lx›oks of ino«ati.

Chcrtrw4 Arceueta»ts

THE INITIATES PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025

The notes on pages 14 to 60 form part of these financial statements.

9

19

3S.346d b

9l

.] v#gkJ37

11

12

13

THE INITIATES PLC

NOTES TO THE FINANCIAL STATEMENTS

1. General Information

   1. Reporting entity

      The company was incorporated under the Companies and Allied Matters Act 1990 as a Limited Liability Company on 3 March 1995 and commenced business in February 1997. On 23 March 2015, the company was re-registered and converted to public limited company and accordingly changed its name from The Initiates Limited to The Initiates Plc.

      The registered address of the Company is located at Plot 400, Shell Location Road, Off Aba/PH Expressway, By Oyigbo Junction, Umuebule 5, Rivers State.

   2. Principal activities

      The company's principal activities include waste management services, E-waste management services and industrial cleaning and decontamination services.

   3. Financial period

      These financial statements cover the financial period from 1 January 2025 to 31 December 2025, with comparative for year ended 31 December 2024.

2. Significant Accounting Policies

   The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

   1. Statement of compliance

      The financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC) and the requirements of the Companies and Allied Matters Act 2020 and the Financial Reporting Council (FRC) of Nigeria (Amendment) Act, 2023.

      The components of the financial statements are:

      • Statement of profit or loss and other comprehensive income

      • Statement of financial position

      • Statement of changes in equity

      • Statement of cash flows

      • Notes to the financial statements

        The financial statements are authorised for issue by the Company's Board of Directors on 30 March, 2026.

        14

        THE INITIATES PLC

        NOTES TO THE FINANCIAL STATEMENTS

   2. Basis of measurement

      The financial statements have been prepared on the historical cost basis except for the following:

      • Inventories at the lower of cost and net realisable value

      • The financial instruments (borrowings) measured at amortized cost

   3. Functional and presentation currency

      These financial statements are presented in Naira, which is the Company’s functional currency.

3. Application of new and revised International Financial Reporting Standards (IFRSs)

   1. New and amended standards and interpretations that are effective for the current year.

      In the current year, the Company has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2024. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

      Amendments to IAS 1 Non-current Liabilities with Covenants

      The amendments specify that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity’s right to defer settlement of a liability for at least twelve months after the reporting date (and therefore must be considered in assessing the classification of the liability as current or noncurrent). Such covenants affect whether the right exists at the end of the reporting period, even if

      compliance with the covenant is assessed only after the reporting date (e.g. a covenant based on the entity’s

      financial position at the reporting date that is assessed for compliance only after the reporting date).

      The IASB also specifies that the right to defer settlement of a liability for at least twelve months after the reporting date is not affected if an entity only has to comply with a covenant after the reporting period.

      However, if the entity’s right to defer settlement of a liability is subject to the entity complying with covenants within twelve months after the reporting period, an entity discloses information that enables users of financial statements to understand the risk of the liabilities becoming repayable within twelve months after the reporting period. This would include information about the covenants (including the nature of the covenants and when the entity is required to comply with them), the carrying amount of related liabilities and facts and circumstances, if any, that indicate that the entity may have difficulties complying with the covenants.

      15

      THE INITIATES PLC

      NOTES TO THE FINANCIAL STATEMENTS

      Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements

      The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows. In addition, IFRS 7 was amended to add supplier finance arrangements as an example within the requirements to disclose information about an entity’s exposure to concentration of liquidity risk.

      The term ‘supplier finance arrangements’ is not defined. Instead, the amendments describe the characteristics of an arrangement for which an entity would be required to provide the information. To meet the disclosure objective, an entity will be required to disclose in aggregate for its supplier finance arrangements:

      • The terms and conditions of the arrangements

      • The carrying amount, and associated line items presented in the entity’s statement of financial position, of the

        liabilities that are part of the arrangements.

      • The carrying amount, and associated line items for which the suppliers have already received payment from the

        finance providers.

      • Ranges of payment due dates for both those financial liabilities that are part of a supplier finance arrangement

        and comparable trade payables that are not part of a supplier finance arrangement.

      • Liquidity risk information

      Amendment to IFRS 16 Leases—Lease Liability in a Sale and Leaseback

      The amendments to IFRS 16 add subsequent measurement requirements for sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale. The amendments require the seller-lessee to determine ‘lease payments’ or ‘revised lease payments’ such that the seller-lessee does not recognise a gain or loss that relates to the right of use retained by the seller-lessee, after the commencement date.

      The amendments do not affect the gain or loss recognised by the seller-lessee relating to the partial or full termination of a lease. Without these new requirements, a seller-lessee may have recognised a gain on the right of use it retains solely because of a re-measurement of the lease liability (for example, following a lease modification or change in the lease term) applying the general requirements in IFRS 16. This could have been particularly the case in a leaseback that includes variable lease payments that donot depend on an index or rate.

      As part of the amendments, the IASB amended an Illustrative Example in IFRS 16 and added a new example to illustrate the subsequent measurement of a right-of-use asset and lease liability in a sale and leaseback transaction with variable lease payments that do not depend on an index or rate. The illustrative examples also clarify that the liability that arises from a sale and leaseback transaction that qualifies as a sale applying IFRS 15, is a lease liability.

   2. New and revised International Financial Reporting Standards (IFRSs) in issue but not yet effective.

      At the date of authorisation of these financial statements, the company has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective. They are listed below:

      16

      THE INITIATES PLC

      NOTES TO THE FINANCIAL STATEMENTS

      Lack of Exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates

      1. effective January 1, 2025.

         Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9

      2. Financial Instruments and IFRS 7 Financial Instruments: Disclosures effective January 1, 2026.

      3. Annual Improvements to IFRS Accounting Standards – Amendments to:

         • IFRS 7 Financial Instruments: Disclosures and it’s accompanying Guidance on implementing IFRS7;

         • IFRS 10 Consolidated Financial Statements; and

         • IAS 7 Statement of Cash flows. effective January 1, 2026.

      4. IFRS 18 Presentation and Disclosure in Financial Statements. effective January 1, 2027.

      5. IFRS 19 Subsidiaries without Public Accountability: Disclosures. effective January 1, 2027.

         Lack of Exchangeability - Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates effective January 1, 2025

         Under IAS 21 The Effects of Changes in Foreign Exchange Rates, a company uses a spot exchange rate when translating a foreign currency transaction. However, in rare cases, it is possible that one currency cannot be exchanged into another. This lack of exchangeability might arise when a government imposes controls on capital imports and exports, for example, or when it provides an official exchange rate but limits the volume of foreign currency transactions that can be undertaken at that rate. Consequently, market participants are unable to buy and sell currency to meet their needs at the official exchange rate and turn instead to unofficial, parallel markets.

         Under the amendments, companies will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements. These disclosures might include:

         • The nature and financial impacts of the currency not being exchangeable.

         • The spot exchange rate used;

         • The estimation process; and

         • Risks to the company because the currency is not exchangeable.

      Amendments to the Classification and Measurement of Financial Instruments -Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures effective January 1, 2026

      The amendments introduce an additional SPPI test for financial assets with contingent features that are not related directly to a change in basic lending risks or costs – e.g. where the cash flows change depending on whether the borrower meets an ESG target specified in the loan contract.

      17

      THE INITIATES PLC

      NOTES TO THE FINANCIAL STATEMENTS

      Other annual Improvements to IFRS Accounting Standards – Amendments to IFRS 1, IFRS 7, IFRS

      9,IFRS 10 and IAS 7

      The IASB’s amendments remove the conflict between IFRS 9 and IFRS 15 over the amount at which a trade receivable is initially measured. Under IFRS 15, a trade receivable may be recognised at an amount that differs from the transaction price – e.g. when the transaction price is variable. Conversely, IFRS 9 requires that companies initially measure trade receivables without a significant financing component at the transaction price. The IASB has amended IFRS 9 to require companies to initially measure a trade receivable without a significant financing component at the amount determined by applying IFRS 15.

      Other amendments include derecognising lease liabilities.

      If a lease liability is derecognised, then the derecognition is accounted for under IFRS 9. However, when a lease liability is modified, the modification is accounted for under IFRS 16 Leases.

      The IASB’s amendment states that when lease liabilities are derecognised under IFRS 9, the difference between the carrying amount and the consideration paid is recognised in profit or loss. However, the amendment does not address how to distinguish between derecognition and modification of a lease liability. The IASB has indicated that it may consider this issue as part of a future project.

      IFRS 18 Presentation and Disclosure in Financial Statements effective January 1, 2027

      IFRS 18 replaces ‘IAS 1’ Presentation of Financial Statements. and IFRS 18 defines management performance measures (MPMs); these measures are currently commonly known as non-GAAP measures, alternative performance measures (APMs) or key performance indicators (KPIs).

      IFRS 18 affects all companies, bringing significant changes to how you present your income statement and what information you need to disclose, and making certain ‘non-GAAP’ measures part of your audited financial statements for the first time. You’ll see three new categories of income and expenses, two defined income statement subtotals and one single note on management-defined performance measures.

      To provide investors with better insight into financial performance, the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether material information is included in the primary financial statements or is further disaggregated in the notes.

      Companies are discouraged from labelling items as ‘other’ and will now be required to disclose more

      information if they continue to do so.

      IFRS 19 Subsidiaries without Public Accountability: Disclosures effective January 1, 2027

      The IASB intends to update IFRS 19 on an ongoing basis as new or amended disclosure requirements in IFRS Accounting Standards are issued.

      Because of the timing of IFRS 19’s publication, disclosure requirements in new or amended IFRS Accounting Standards issued between 28 February 2021 and May 2024 were included in IFRS 19 without reductions. The IASB issued a ‘catch-up’ exposure draft in July 2024 to consult on reducing the disclosure requirements for the relevant standards issued in this period, most notably IFRS 18 Presentation and Disclosure in Financial Statements.

      18

      THE INITIATES PLC

      NOTES TO THE FINANCIAL STATEMENTS

4. Summary of significant accounting policies

   The Company has consistently applied the following accounting policies to all periods presented in these financial statements. Set out below is an index of the significant accounting policies, the details of which are available on the pages that follow.

   Page number

   1. Foreign currency 19

   2. Financial instruments 19

   3. Property, plant and equipment 25

   4. Intangible aasets 27

   5. Inventories 27

   6. Impairment of non-financial assets 27

   7. Employee benefits 28

   8. Provisions 29

   9. Contingent liabilities 29

   10. Statement of Cash flows 29

   11. Revenue 30

   12. Income taxes 31

   13. Dividends 32

   14. Earnings per share 32

   15. Segment reporting 32

   16. Related parties 32

1. Foreign currency translation

   Transactions denominated in foreign currencies are translated and recorded in Naira at the actual exchange rates at the dates of the transactions.

   Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rates at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the exchange rate when the fair value was measured. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences arising from translation are recognized in profit or loss.

2. Financial instruments

Financial assets and financial liabilities are recognised in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, financial instruments are initially measured at their fair value, except in the case of financial assets and financial liabilities recorded at Fair Value Through Profit or Loss (FVPL). Transaction costs are added to, or subtracted from this amount.

Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under IFRS15. Refer to the accounting policies on Revenue from contracts with customers.

19

THE INITIATES PLC

NOTES TO THE FINANCIAL STATEMENTS

I Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulations or convention in the marketplace.

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.

Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or originated credit impaired financial assets (i.e.assets that are credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.

For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cashflows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For financial assets other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset. Interest income is recognised in profit or loss and is included in the "finance income – interest.

20