May & Baker Nigeria PlcNSENG: MAYBAKER

And baker quarter 3 financial statement for 2024

Oct 30, 2024 at 9:14 AM UTC · Issued by May & Baker Nigeria Plc

May & Baker Nig Plc RC. 558

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

FOR NINE MONTHS ENDED '30th SEPTEMBER 2024

UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

			The Group				The Company
		3 Months to	9 Months	3 Months to	9 Months		3 Months to	9 Months	3 Months to	9 Months
		September, 2024	September, 2024	September, 2023	September, 2023		September, 2024	September, 2024	September, 2023 September, 2023
	Note	N'000	N'000	N'000	N'000		N'000	N'000	N'000	N'000
Continuing operations
Revenue	5	7,851,044	21,821,614	5,518,068	14,301,720	7,121,881	19,876,592	5,236,003	13,500,991
Cost of sales		(5,440,804)	(15,062,034)	(3,549,000)	(9,581,280)		(4,929,724)	(13,864,295)	(3,497,797)	(9,286,503)
Gross profit		2,410,240	6,759,580	1,969,068	4,720,440	2,192,157	6,012,297	1,738,206	4,214,488
Other operating income/(Loss)	7	(232,222)	(106,191)	(792,178)	(842,140)	(192,455)	(127,080)	(778,344)	(755,709)
Distribution, sales and marketing expense		(844,118)	(2,213,725)	(700,090)	(1,702,053)	(740,165)	(1,965,508)	(638,224)	(1,556,126)
Administrative expenses		(644,504)	(1,549,893)	(382,911)	(1,100,598)	(626,384)	(1,501,179)	(362,200)	(1,039,053)

Operating profit/(loss)
	689,396	2,889,771	93,888	1,075,649	633,153	2,418,530	(40,563)	863,600
Interest income	8	103,250	255,790	32,586	222,106	91,783	227,354	32,576	222,084
Finance costs	10	(157,987)	(360,702)	(88,531)	(245,769)	(143,288)	(296,724)	(71,375)	(219,626)
Share of proft/( Loss) of Joint Venture	17	(8,168)	(8,578)	2,889	(5,180)		-	-	-	-
Profit/(Loss) before tax		626,492	2,776,280	40,832	1,046,807	581,649	2,349,159	(79,362)	866,059
Current tax expense	13.1	(200,477)	(888,410)	(13,066)	(334,978)	(186,128)	(751,731)	25,396	(277,139)
Profit for the year

11	426,015	1,887,871	27,766	711,828	395,521	1,597,428	(53,966)	588,920
Other comprehensive income:
Items that will not be reclassified
Asset revaluation gain net of tax		-	-	-	-		-		-
Total comprehensive income		426,015	1,887,871	27,766	711,828	395,521	1,597,428	(53,966)	588,920
Earnings per share	14.

Basic (kobo per share) from continuing operation	24.69	109.43	1.61	41.26	22.93	92.59	(3.13)	34.14

Diluted (kobo per share) from continuing operation	24.69	109.43	1.61	41.26		22.93	92.59	(3.13)	34.14

All the profit of the Group is attributable to Owners of the company as there are no non-controlling interests.
The accompanying notes form an integral part of these consolidated financial statements.

MAY & BAKER NIGERIA PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30TH SEPTEMBER, 2024

		The Group			The Company
	September	December	September	September	December	September
	2024	2023	2023	2024	2023	2023
Note	N'000	N'000	N'000	N'000	N'000	N'000

ASSETS
Non-current assets
Property, plant and equipment	16
Intangible assets	15
Right of use assets
Investment in Joint Venture	17
Investment in subsidiaries	18
Asset held for sale	19
Total non-current assets
Current assets
Inventories	20
Trade and other receivables	21
Other assets	23
Cash and cash equivalents	22

5,969,098	5,421,064	5,302,790
14,142	7,288	5,913
	-
1,189,977	1,198,555	1,136,379
-	-	-
-	-	-

7,173,217	6,626,907	6,445,082

8,236,640	6,508,090	4,655,903
1,505,325	1,092,911	1,340,805
1,555,647	2,771,064	1,806,316
2,750,484	3,383,363	3,453,281

5,898,098	5,321,048	5,191,516
14,042	7,143	5,753
	-
1,326,886	1,326,886	1,326,886
3,000	3,000	3,000
-	-	-

7,242,026	6,658,077	6,527,154

7,806,054	6,430,497	4,451,287
1,274,800	1,016,734	1,149,893
1,195,474	2,625,601	1,796,719
2,431,519	2,997,678	3,289,139

Total current assets

Total assets

Equity and Liabilities

14,048,096	13,755,428	11,256,305	12,707,847	13,070,510	10,687,038

21,221,313	20,382,335	17,701,387		19,949,873	19,728,587	17,214,192

Share capital	24
Share premium account	25
Retained earnings	26
Asset revaluation reserve	26.1
Total equity
Non-current liabilities
Borrowings	27
Employee benefits	29
Deferred Income	30
Deferred tax liabilities	13
Total non-current liabilities
Current liabilities
Trade and other payables	28
Current tax liabilities	13
Borrowings	27
Deferred Income	30

862,617	862,617	862,617
3,012,065	3,012,065	3,012,065
5,877,216	4,506,915	4,156,088
408,144	408,144	408,144
10,160,042	8,789,741	8,438,915
1,271,533	1,519,334	1,724,743
31,492	32,587	31,542
204,879	257,110	305,555
986,486	986,482	840,324

2,494,390	2,795,513	2,902,164

3,772,925	3,200,657	2,233,396
905,311	299,042	331,953
3,787,970	5,139,783	3,648,346
100,675	157,600	146,612

862,617	862,617	862,617
3,012,065	3,012,065	3,012,065
5,272,051	4,192,193	3,912,240
408,144	408,144	408,144
9,554,878	8,475,019	8,195,066
1,271,533	1,519,334	1,724,743
31,492	32,587	31,542
204,879	257,110	305,555
971,688	971,688	833,721

2,479,592	2,780,719	2,895,561

3,597,215	3,023,118	2,055,817
767,913	225,769	292,158
3,449,600	5,066,362	3,628,977
100,675	157,600	146,612

Total current liabilities Total liabilities

Total equity and liabilities

8,566,881	8,797,082	6,360,307	7,915,403	8,472,849	6,123,564

11,061,271	11,592,595	9,262,472	10,394,995	11,253,568	9,019,125

21,221,313	20,382,336	17,701,386		19,949,873	19,728,587	17,214,192

Mr. Ayodeji S. Aboderin	Mr. Patrick Ajah
Finance Director/CFO	Managing Director/CEO
FRC/2014/ICAN/00000008270	FRC/2021/003/00000023215

These Financial Statements were approved by the Board on 28 October 2024 (Lagos)

MAY & BAKER NIGERIA PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

			Share
	Share		premium		Retained		Revaluation
	capital		account		earnings		Surplus	Total
	N'000		N'000		N'000		N'000	N'000
Equity attributable to equity
holders of the Group
At 1 January 2023	862,617	3,012,065	3,961,830	408,144	7,271,616
Right issue		-			-	-
Profit for the period		-	711,828	-	711,828
Dividends paid	-	-	(517,570)	-	(517,570)

	-	-	-	-	-
At 30TH SEPTEMBER, 2023	862,617	3,012,065	4,156,088	408,144	7,465,875


At 1 January 2024	862,617	3,012,065	4,506,915	408,144	8,789,741
Right Issue		-			-	-
Adjustment		-			-	-
Profit for the period	-	-	1,887,871	-	1,887,871
Dividends paid	-	-	(517,570)	-	(517,570)
At 30TH SEPTEMBER, 2024
862,617		3,012,065		5,877,216		408,144	10,160,042

				-
Equity attributable to equity
holders of the Company
At 1 January 2023	862,617	3,012,065	3,840,900	408,144	7,159,340
Right issue	-	-	-	-	-
Profit for the Period	-	-	588,920	-	588,920
Dividends paid	-	-	(517,580)	-	(517,580)

						-
At 30TH SEPTEMBER, 2023	862,617	3,012,065	3,912,240	408,144	7,230,680
At 1 January 2024
862,617	3,012,065	4,192,193	408,144	8,475,019
Adjustment

-	-			-	-
Profit for the Period	-	-	1,597,428	-	1,597,428
Dividends paid	-	-	(517,570)	-	(517,570)

At 30TH SEPTEMBER, 2024	862,617	3,012,065	5,272,051	408,144	9,554,878

MAY & BAKER NIGERIA PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

	The Group			The Company
	September	December	September		September	December	September
	2024	2023	2023		2024	2023	2023
	N'000	N'000	N'000		N'000	N'000	N'000
Cash flows from operating activities
Cash received from customers	21,472,775	19,807,717	14,092,362	19,750,931	18,547,355	13,443,474
Cash paid to suppliers and employees	(18,289,373)	(18,549,339)	(11,202,649)	-16,611,092	(17,698,630)	(10,843,787)
Taxes paid	(282,141)	(534,308)	(525,649)	(209,587)	(511,119)	(504,270)
Net cash from operating activities	2,901,261	724,070	2,364,065	2,930,252	337,606	2,095,417
Cash flows from Investing activities
Proceed from contract manufacturing	38,982	-	71,516	38,982	-	71,516
Rent received	-	30,000	3,000	-	30,000	3,000
Other sundry income	66,641	-	30,051	66,605	-	30,051
Proceeds from sale of fixed assets	12,474	56,847	25,158	11,488	56,847	25,158
Interest received	255,790	383,552	222,106	227,354	375,834	222,084
Purchases of Intangible assets	(9,433)	-	(2,561)	(9,433)	-	(2,561)
Purchases of property, plant and equipment	(1,085,405)	(1,042,261)	(1,068,767)	(1,082,738)	(954,530)	(981,138)
Net cash used in investing activities
(720,951)	(571,862)	(719,497)	(747,742)	(491,849)	(631,890)
Cash flows from financing activities

Dividends paid

Additions to/(Repayment of) import facility Loan received

Loans repaid

Pay down on overdraft Unclaimed dividend returned Net proceeds from right issue Finance cost

Net cash used in financing activities

(517,570)	(517,570)	(517,570)
(1,487,598)	1,689,506	223,311
-	-	-
(669,167)	(767,593)	(669,167)
-	-	-
-	31,634	-
-	-	-
(360,702)	(290,374)	(245,769)
(3,035,037)	145,603	(1,209,195)

(517,570)	(517,570)	(517,570)
(1,487,056)	1,616,086	256,180
-	-	-
(669,167)	(767,593)	(669,167)
-		-
-	31,634	-
-	-	-
(296,724)	(254,074)	(219,626)
(2,970,517)	108,483	(1,150,183)

Net increase/(decrease) in cash and cash	(854,728)	297,811	435,373	(788,008)	(45,760)	313,345
Cash and cash equivalents at 1 January	3,176,612	2,878,801	2,878,801	2,790,927	2,836,687	2,836,687
Cash and cash equivalents at 30TH SEPT

2,321,884	3,176,612	3,314,174	2,002,919	2,790,927	3,150,032
Reconciliation of cash and bank balances to
cash and cash equivalents
Cash and bank balance	2,750,484	3,383,363	3,453,281	2,431,519	2,997,678	3,289,139
Bank overdrafts and commercial papers	(428,600)	(206,751)	(139,107)	(428,600)	(206,751)	(139,107)

	2,321,884	3,176,612	3,314,174		2,002,919	2,790,927	3,150,032

Free Float Computation

		Company Name:	May & Baker Nigeria Plc
		Board Listed :	Main Board
		Year End:	December
		Reporting Period:	Quarter 3 Ended 30 September 2024
		Share Price at end of reporting perio N7.25k (2023: N5.15K)
			.
Shareholding Structure /Free Float Status
Description		30-Sep-24			30-Sep-23
	Unit	Percentage		Unit		Percentage

Issued Share Capital		1,725,234,886	100.00%		1,725,234,886		100%
Substantial Shareholdings (5% and above)
T.Y.Holdings Limited		720,878,543	41.78%		720,878,543		41.78%
Onyishi Maduka samuel		266,564,690	15.45%		266,564,690		15.45%
Total Substantial Shareholdings		987,443,233	57.24%		987,443,233		57.24%
Directors' Shareholdings (direct and indirect), excluding directors with substantial interest
Senator Daisy Danjuma (Indirect)	Representing Oil Tech Nigeria Ltd	14,874,759	0.86%		14,874,759		0.86%
Representing Osis Yuvic LtdOil Tech Nigeria Ltd)	11,088,000	0.64%		11,088,000		0.64%

Mr. Patrick Ajah		2,000	0.00%		-		-
Dr. E. Abebe (Direct)		2,012,551	0.12%		2,012,551		0.12%
Mr. Michael C. Odumodu (Indirect) Representing J.I. Odumodu	3,617,198	0.21%		3,617,198		0.21%
Dr. (Mrs.) Rahila Ilegbodu			868,237	0.05%		-		0.00%
Aboderin A.S		93,500	0.01%		93,500		0.01%
Durojaiye Kolawole Olalekan		390,485	0.02%		370,480		0.01%
Other Directors' Shareholdings		32,946,730	1.91%		32,056,488		1.85%

Total Directors' Shareholdings		1,020,389,963	59.14%		1,019,499,721		59.08%

Other Influential Shareholdings
Seravac Nigeria Limited		54,134,958		3.14%	54,134,958	3.14%
Maydav Multi Resources Limited		45,073,864		2.61%	45,073,864	2.61%
Total Other Influential Shareholdings	99,208,822		5.75%	99,208,822	5.75%

Free Float in Units and Percentage	605,636,101		35.10%	606,526,343	35.16%

Free Float in Value (N)	4,390,861,732.25		3,123,610,666.45

Declaration:

May & Baker Nigeria Plc with a free float percentage of 35.10% as at 30th September, 2024, is compliant with The Exchnage's free float requirements for companies listed on the Main Board.

May & Baker Nigeria Plc with a free float value of N4,390,861,732.25kobo as at 30th September, 2024, is compliant with The Exchange's free float requirements for companies listed on the Main Board.

MAY & BAKER NIGERIA PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

1 Description of business

May & Baker Nigeria Plc. was incorporated as a private limited liability company in Nigeria on September 4, 1944 and commenced business on the same date. It was listed on the Nigerian stock exchange in 1994. The company is involved in the manufacture, sale and distribution of human pharmaceuticals, human vaccines and consumer products. Registered business address is 3/5 Sapara street, Industrial Estate, Ikeja, Lagos, Nigeria

2. Basis of preparation

2.1 Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB), and in compliance with Financial Reporting Council of Nigeria Act No 6 2011. Additional information required by national regulations has been included where appropriate.

These consolidated financial statements comprise of the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of financial position, the consolidated and separate statement of changes in equity, the consolidated and separate statement of cashflows and notes to the consolidated financial statements.

2.2 Going concern status

These 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 foreseeable future. For this reason, the going concern basis has been adopted in preparing these consolidated financial statements.

2.3 Basis of measurement

These consolidated financial statements have been prepared in accordance with the going concern principle under the historical cost convention, except for financial assets (liabilities) which were measured at fair value. The liability for defined benefit obligations is recognized as the present value of the defined benefit obligation less the total of the plan assets, plus unrecognized actuarial gains, less unrecognized past service cost and unrecognized actuarial losses while the plan assets for defined benefit obligations are measured at fair value.

These consolidated financial statements are presented in the Nigerian Naira (NGN), which is the Company's functional currency for presentation.

2.3.1 Functional and presentation currency

Items included in these consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The consolidated financial statements are presented in Nigerian Naira (N) which is the Group's functional currency and presentation currency.

2.4 Use of estimates and judgements

The preparation of these consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates, it also requires management to exercise its judgment in the process of applying the company's accounting policies. Changes in assumptions may have a significant impact on these consolidated financial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate and therefore the Group's financial statements present the financial position and results fairly.

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

MAY & BAKER NIGERIA PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

IFRIC 23 Uncertainty over Income Tax Treatments

The interpretation specifies how an entity should reflect the effects of uncertainties in accounting for income taxes.

2.5.1 Standards Issued and Effective on or after 1 January 2022 a) IFRS 17 Insurance Contracts

IFRS 17 creates one accounting model for all insurance contracts in all jurisdictions that apply IFRS.

This standard replaces IFRS 4 - Insurance contracts.

The key principles in IFRS 17 are that an entity:

identifies as insurance contracts those contracts under which the entity accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain, future event (the insured event) adversely affects the policyholder;
separates specified embedded derivatives, distinct investment components and distinct performance obligations from the insurance contracts;
divides the contracts into groups it will recognise and measure;
recognises and measures groups of insurance contracts at a risk-adjusted present value of the future cash flows (the fulfilment cash flows) that incorporates all the available information about the fulfilment cash flows in a way that is consistent with observable market information plus (if this value is a liability) or minus (if this value is an asset) an amount representing the unearned profit in the group of contracts (the contractual service margin);
recognises the profit from a group of insurance contracts over the period the entity provides insurance coverage, and as the entity is released from risk, if a group of contracts is or becomes loss-making, an entity recognises the loss immediately;
presents separately insurance revenue, insurance service expenses and insurance finance income or expenses;
discloses information to enable users of financial statements to assess the effect that contracts within the scope of IFRS 17 have on the financial position, financial performance and cash flows of the entity. To do this, an entity discloses qualitative and quantitative information about:
- the amounts recognised in its financial statements from insurance contracts;
- the significant judgements, and changes in those judgements, made when applying the Standard; and
- the nature and extent of the risks from contracts within the scope of this Standard.

2.5.2 Narrow Scope Amendments deferred until further notice a) IFRS 10 consolidated financial statements

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28): Narrow scope amendment address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

MAY & BAKER NIGERIA PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

b) IAS 28 Investments in Associates and Joint Ventures

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28): Narrow scope amendment to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

2.5.3 New standards, amendments and interpretations issued but without an effective date At the date of authorisation of these financial statements the following standards, amendments to

Amendments to IFRS 10 and IAS 28 consolidated financial statements and Investments in Amends IFRS 10 consolidated financial statements and IAS 28 Investments in Associates and Joint

Require full recognition in the investor's financial statements of gains and losses arising on the
Require the partial recognition of gains and losses where the assets do not constitute a

These requirements apply regardless of the legal form of the transaction, e.g. whether the sale or

3 Significant accounting policies

The principal accounting policies adopted are set out below.

3.1 Foreign currency translation

Foreign currency transactions are booked in the functional currency of the Group (naira) at the exchange rate ruling on the date of transaction. Foreign currency monetary assets and liabilities are retranslated into the functional currency at rates of exchange ruling at the reporting period. Exchange differences are included in the Statement of profit or loss and other comprehensive income. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

3.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of subsidiary acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

3.3 Business combinations

Acquisitions of subsidiaries are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquire. Acquisition-related costs are recognised in profit or loss as incurred.

Where a business combination is achieved in stages, the Group's previously-held interests in the acquired entity are re-measured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from

MAY & BAKER NIGERIA PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR NINE MONTHS ENDED 30TH SEPTEMBER, 2024.

interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for

recognition under IFRS 3(2008) are recognised at their fair value at the acquisition date, except that:

Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non- current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year.

3.4 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

a) Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:

the Group has transferred to the buyer the significant risks and rewards of ownership of the
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group;
the costs incurred or to be incurred in respect of the transaction can be measured reliably;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

b) Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

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