Statement of Profit or Loss and Other Comprehensive Income
For the Period ended 30 September
3 months to | 9 months to | 3 months to | 9 months to | ||
September | September | September | September | ||
2024 | 2024 | 2023 | 2023 | ||
Notes | N'000 | N'000 | N'000 | N'000 | |
Revenue from contracts with customers | 4 | 13,123,227 | 28,612,267 | 4,595,067 | 14,336,161 |
Cost of sales | 7(i) | (10,896,552) | (23,917,464) | (4,306,607) | (13,366,966) |
Gross profit | 2,226,675 | 4,694,803 | 288,460 | 969,195 | |
Other operating income | 8 | 48,699 | 58,956 | 18,184 | 48,699 |
Selling and Distribution expenses | 7(ii) | (101,152) | (240,006) | (46,308) | (134,139) |
Administrative expenses | 7(iii) | (418,744) | (1,093,914) | (168,010) | (499,147) |
Operating profit | 1,755,479 | 3,419,839 | 92,326 | 384,609 | |
Finance income | 9 | 490 | 1,226 | 234 | 985 |
Finance costs | 10 | (396,668) | (1,308,298) | (89,717) | (326,966) |
Profit before tax | 1,359,301 | 2,112,767 | 2,843 | 58,628 | |
Income tax expense | 12(i) | (441,157) | (697,213) | (938) | (19,347) |
Profit for the year | 918,145 | 1,415,554 | 1,905 | 39,281 |
Other comprehensive income for the year (net of tax)
Total comprehensive income for the year, net of tax
Earnings per share(kobo)
Basic earnings for the year attributable to ordinary equity holders
Diluted earnings for the year attributable to ordinary equity holders
- | - | - | - |
918,145 | 1,415,554 | 1,905 | 39,281 |
13 | 30.60 | 47.19 | 0.06 | 1.31 |
13 | 30.60 | 47.19 | 0.06 | 1.31 |
The accompanying notes form an integral part of these financial statements.
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Statement of Financial Position
As at 30 September
Notes | 2024 | 2023 | ||
Assets | N'000 | N'000 | ||
Non-current assets | ||||
Property, plant and equipment | 14(a) | 1,391,404 | 1,150,910 | |
Intangible assets | 15 | 157,944 | 197,538 | |
Total non-current assets | 1,549,348 | 1,348,448 | ||
Current assets | ||||
Inventories | 16 | 10,164,240 | 9,598,916 | |
Trade and other receivables | 17 | 802,264 | 1,676,581 | |
Refund assets | 17 | 5,616 | 5,616 | |
Prepayments | 18 | 129,897 | 132,365 | |
Other financial assets | 19.2 | 17,283 | 17,283 | |
Cash and cash equivalents | 19.3 | 1,493,654 | 597,257 | |
Total current assets | 12,612,954 | 12,028,018 | ||
Total assets | 14,162,302 | 13,376,466 | ||
Equity | ||||
Issued capital | 20 | 1,500,000 | 1,500,000 | |
Share premium | 20 | 693,344 | 693,344 | |
Accumulated Deficits | 672,449 | (743,105) | ||
Total equity | 2,865,793 | 1,450,239 | ||
Current liabilities | ||||
Trade and other payables | 21 | 6,396,760 | 1,524,655 | |
Refund liabilities | 21.2 | 6,240 | 6,240 | |
Income tax payable | 12(iv) | 710,407 | 116,222 | |
Dividend payable | 22 | 17,384 | 17,384 | |
Interest-bearing loans and borrowings | 23 | 4,165,718 | 10,261,726 | |
Total current liabilities | 11,296,509 | 11,926,227 | ||
Total liabilities | 11,296,509 | 11,926,227 | ||
Total equity and liabilities | 14,162,302 | 13,376,466 | ||
The Financial statements was approved and authorised for issue by the Board of Directors on the 25th October
2024 and was signed on its behalf by:
__________________________ | |||
Chairman | Managing Director | Chief Financial Officer | |
Dr. Joseph Dada | Mr. Adedeji Adegboyega | Mr. Adekunle Adepoju | |
FRC/2016/APCON/00000014735 | FRC/2020/003/00000021439 | FRC/2013/ICAN/00000004478 |
The accompanying notes form an integral part of these financial statements.
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Statement of Changes in Equity
For the Period ended ended 30 September
Share | Accumulated | |||
Issued capital | premium | Deficits | Total equity | |
N'000 | N'000 | N'000 | N'000 | |
At 1 January 2023 | 1,500,000 | 693,344 | (513,087) | 1,680,257 |
Profit for the year | - | - | 39,281 | 39,281 |
Total comprehensive income, net of tax | - | - | 39,281 | 39,281 |
At 30 September 2023 | 1,500,000 | 693,344 | (473,805) | 1,719,539 |
At 1 January 2024 | 1,500,000 | 693,344 | (743,105) | 1,450,239 |
Profit for the year | - | - | 1,415,554 | 1,415,554 |
Total comprehensive income, net of tax | - | - | 1,415,554 | 1,415,554 |
At 30 September 2024 | 1,500,000 | 693,344 | 672,449 | 2,865,793 |
The accompanying notes form an integral part of these financial statements.
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Statement of Cash Flows
For the period ended 30 September
Notes | 2024 | 2023 | ||
N'000 | N'000 | |||
Operating activities | ||||
Profit before tax | 2,112,767 | 58,628 | ||
Depreciation of property, plant and equipment | 14(a) | 151,383 | 121,813 | |
Amortisation of intangible assets | 15 | 39,595 | 38,582 | |
Finance cost | 10 | 1,308,298 | 326,966 | |
Finance income | 9 | (1,226) | (985) | |
Government grant | 8 | - | (4,966) | |
Changes in working capital: | ||||
(Increase)/Decrease in inventories | 16 | (565,325) | 778,587 | |
(Increase)/Decrease in trade and other receivables | 17 | 874,317 | 370,799 | |
(Increase)/Decrease in prepayments | 18 | 2,468 | (28,423) | |
(Decrease)/ Increase in trade and other payables | 21 | 4,483,635 | 990,176 | |
Cash outflow generated (used in)/from operating activities | ||||
8,405,913 | 2,651,177 | |||
Income tax paid | 12(iv) | (103,029) | (82,830) | |
Net cash used in/ generated from operating activities | 8,302,884 | 2,568,347 | ||
Investing activities | ||||
Interest received | 9 | 1,226 | 985 | |
Purchase of property, plant and equipment | 14(a) | (391,877) | (185,265) | |
Net cash flows used in investing activities | (390,651) | (184,280) | ||
Financing activities | ||||
Interest paid | 23 & 10 | (1,097,116) | (272,818) | |
Proceeds from borrowings | 23 | 3,706,452 | - | |
Repayment of borrowings | 23 | (9,625,172) | (2,326,356) | |
Net cash flows generated from/ (used in) financing activities | ||||
(7,015,836) | (2,599,174) | |||
Increase in cash and cash equivalents | 896,397 | (215,106) | ||
Cash and cash equivalents at 1 January | 597,257 | 477,841 | ||
19 | ||||
Cash and cash equivalents at 30 September | 1,493,654 | 262,735 | ||
The accompanying notes form an integral part of these financial statements.
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Notes to the Financial Statements
For the period ended 30 September 2024
1 Corporate information
Livestock Feeds Plc was incorporated on 20th March,1963 and commenced business on 20th May, 1963. The Company was quoted on the Nigerian Stock Exchange in 1978. The Company is engaged principally in the manufacturing and marketing of animal feeds and concentrates. The registered office of the Company is located at 1 Henry Carr Street, Ikeja Lagos. The parent Company is UAC of Nigeria Plc.
Statement of compliance
The Company's financial statements for the period ended 30 September 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting, IFRS Accounting Sandards as issued by the International Accounting Standards Board (IFRS Accounting Standards), and in the manner required by the Companies and Allied Matters Act (CAMA), 2020 and the Financial Reporting Council of Nigeria (Amendment) Act,2023. Details of the Company's material accounting policies are included in Note 2.
-
2 Summary of material accounting policies Basis of preparation
The financial statement were authorized for issue by the Board of Directors on 25th October 2024. The financial statements are presented in Naira which is the Company's functional currency and all values are rounded to the nearest thousand (N'000), except when otherwise indicated.
-
Basis of measurement
The financial statements have been prepared in accordance with the going concern assumption under the historical cost concept except for the following terms.
Inventories-lower of cost and net realisable Value
Provisions-measured at present value of the obligations
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Notes to the Financial Statements - Continued
2.2 Summary of material accounting policies
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Fair value measurement
The Company measures its financial instruments at fair value at each reporting date mainly for disclosure purpose. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
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Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable - Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
-
Revenue from contracts with customers
The Company is into agricultural business for the manufacturing and marketing of animal feeds and concentrates.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.
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Notes to the Financial Statements - Continued
Revenue from contracts with customers - continued
The Company has applied IFRS 15 practical expedient to a portfolio of contracts (or performance obligations) with similar characteristics since the Company reasonably expects that the accounting result will not be materially different from the result of applying the standard to the individual contracts. The Company has been able to take a reasonable approach to determine the portfolios that would be representative of its types of customers and business lines. This has been used to categorise the different revenue stream detailed below.
The disclosures of material accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note 3.
At contract inception, the Company assesses the goods or services promised to a customer and identifies as a performance obligation each promise to transfer to the customer either:
- a good or service (or a bundle of goods or services) that is distinct; or
- a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.
The Company has identified one distinct performance obligations:
Contract for the sale of feeds and concentrates begins when goods have been delivered to the customer and revenue is recognised at the point in time when control of the goods has been transferred to the customer, generally on delivery of the goods. The normal credit term is 90 days upon delivery.
The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (if any). In determining the transaction price for the sale of feeds and concentrates, the Company considers the existence of significant financing components and consideration payable to the customer (if any).
-
Significant financing component
Using the practical expedient in IFRS 15, the Company does not adjust the promised amount of consideration for the effects of a significant financing component since Livestock feeds Plc expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. - Variable consideration
If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
Volume incentives and trade discounts
When customers meet a set target in a particular month the Company gives a volume incentive. Trade discounts that range between 16%-20% are given to customers which is determined at the inception of the contract and are set-off against revenue.
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Notes to the Financial Statements - Continued
Rights of return
Some contracts for the sale of Animal feeds provide customers with a right of return and volume rebates. When a contract provides a customer with a right to return the goods within a specified period, the consideration received from the customer is variable because the contract allows the customer to return the products. The Company used the expected value method to estimate the goods that will not be returned. For goods expected to be returned, the Company presented a refund liability and an asset for the right to recover products from a customer separately in the statement of financial position.
Assets and liabilities arising from rights of return.
Refund assets
Refund assets represent the Company's right to recover the goods expected to be returned by customers. The assets is measured at the former carrying amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the value of the returned goods.
Refund liabilities
A refund liability is the obligation to refund some or all of the consideration received (or receivable) from the customer and is measured at the amount the Company ultimately expects it will have to return to the customer.
The Company updates its estimates of refund (and the corresponding change in the transaction price) at the end of each reporting period
Principal vs Agent consideration
When another party is involved in providing goods or services to its customer, the Company determines whether it is a principal or an agent in these transactions by evaluating the nature of its promise to the customer. The Company is a principal and records revenue on a gross basis if it controls the promised goods or services before transferring them to the customer. However, if the Company's role is only to arrange for another entity to provide the goods or services, then the Company is an agent and will need to record revenue at the net amount that it retains for its agency services.
PRACTICAL EXPEDIENTS
Revenue Recognition
Practical expedients
Livestock Feeds Plc (LSF) has elected to make use of the following practical expedients:
- LSF opted for the use of one year or less practical expedients for significant financing component.
- LSF applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Other income
This comprises majorly profit from sale of plant and equipment,sales of sack, government grant and so on.
Income arising from disposal of items of plant and equipment and scraps is recognised at the time when proceeds from the disposal has been received by the Company.The profit on disposal is calculated as the difference between the net proceeds and the carrying amount of the assets.
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Notes to the Financial Statements - Continued
- Taxes
Current income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity or in other comprehensive income. Current income tax is the estimated income tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous years.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year, and any adjustment to tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date and is assessed as follows:- Company income tax is computed on taxable profits
- Tertiary education tax is computed on assessable profits
- National Information Technology Development Agency levy is computed on profit before tax
- Nigeria Police Trust Fund levy is computed on net profit (i.e. profit after deducting all expenses and taxes from revenue earned by the company during the year).
Tertiary Education Tax
Tertiary Education Tax is charged on the assessable profit of the the Company at the rate of 3%. The assessable profit of the Company is ascertained in the manner specified in the Companies Income Tax Act (CITA). The assessable profit is arrived at by adjusting the profit before tax with non-deductible expenses and non-taxable income based on the Companies Income Tax Act. The Company offsets the tax assets arising from withholding tax credits and current tax liabilities if, and only if, the entity has a legally enforceable right to set off the recognized amounts, and it intends either to settle on a net basis, or to realize the asset and settle the liablity simultaneously.
Minimum tax
Minimum Tax (determined based on 0.5% of qualifying Company's turnover (revenue) less franked investment income). Taxes based on taxable profit for the period are treated as income tax in line with IAS 12; whereas minimum tax which is based on a gross amount is outside the scope of IAS 12 and therefore, are not presented as part of income tax expense in the profit or loss. The liability is recogised under tax payable in the statement of financial position.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability differs from its tax base. Deferred taxes are recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes (tax bases of the assets or liability). The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted by the reporting date.
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