Quarter 3 - financial statement for 2023

B) Ptemiet Paints Plc with a See Saat value of N403.740. S00.00 as at30 Set 2023. is com#iant with be Exchange's See Saat tequitements lot

1. GENERAL INFORMATION
2. Reporting Entity

   Premier Paints Plc is situated at KM 2, Ifo-Ibogun Road, Ifo, Ogun State. The company was incorporated on 24 August 1982 as a private family business. At incorporation, the issued share capital was 100,000 ordinary shares of 50 kobo each. The company was converted to a public quoted company and the shares were listed on the Nigerian Stock Exchange on 7 November 1995.

   Trans Global Holdings Limited (TGHL), a Nigerian holding company, bought 31 percent of the shares of the Company on 12 March 2012 through a special placement by the name "Clover Global Resources Ltd" thereby increasing its shareholding from 20% to 51% thus making TGHL the controlling shareholder of the Company.

3. Principal Activities

1. Summary of 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 periods presented, unless otherwise stated.

2. Basis of preparation

1. New Standards and Amendments adopted by the Company
   1. Standards issued but not yet effective

      Standards issued but not yet effective up to the date of issuance of the Company's financial statements are listed below. This listing of standards and interpretations issued are those that the Company reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date. The company intends to adopt these standards when they become effective.

      A number of standards, interpretations and amendments are effective for annual period beginning after 1 January 2018 and earlier application permitted; however, the company has not early applied the following new or amended standards in preparing these financial statements:

      New or amended standards	Summary of the requirements	Possible impact on financial statements
      Definition of Material (Amendments to IAS 1 and IAS 8	IASB issued Definition of Material (Amendments to IAS1 and IAS 8) on 31st October, 2018. Its aimed at clarifying the definition of material and align the definition used in the conceptual framework and the standards. The amendments are effective on annual reporting beginning on or after 1 January 2020.	Thisisnotexpectedtohaveaneffectonthe Company'sfinancialstatements.
      Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)	On 23 January 2020, IASB issued Classification of Liabilities as Current or Non-Current (Amendments to IAS 1), aimed at providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date, helps to ravel whether some debt and other liabilities with an uncertain payment date should be classified as currentor non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.	This is not expected to have an effect on the company's financial statements.
      Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 32 & IFRS 7)	On 26 September 2019,IASB publish an Amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 32 & IFRS 7) to address the concern about how entities would continue to apply certain hedge accounting requirements assuming that interest rate benchmark in which the hedged cashflows and cashflows from the hedging instruments are based will not altered as a result of interest rate benchmark reform. The amendments are effective on annual reporting periods beginning on or after 1 January 2020.	This is not expected to have effect on the Company's financial statements.
      Definition of a Business (Amendments to IFRS 3)	On 22 October 2018, the IASB issued Definition of a Business (Amendments to IFRS 3) aimed at resolving the difficulties that arise when an entity determines whether it has acquired a	This is not expected to have an effect on the Company's financial statements.

      	business or a group of assets. The amendments are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020.
      IFRS 17 Insurance Contracts	IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity's financial position, financial performance and cash flows.	This is not expected to have an effect on the Company's financial statements.
      	IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2021.

   2. Standardsandinterpretationseffectiveduringthereportingperiod

1. Summary of significant accounting policies

   The following are the significant accounting policies applied by Premier Paints Plc in preparing its financial statements:

   1. Operating segment

      An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of its' other components. It also includes a component of entity for which discrete financial information is available and whose operating results are regularly reviewed by the company's chief operating decision maker .The company is assessed as a single line of business "paint manufacturing" and it operates in one geographical location.

   2. Issued share capital and reserves Share issue costs

      Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of an equity instrument are deducted from the initial measurement of the equity instruments.

      Dividend on the Company's ordinary shares

      Dividends on the Company's ordinary shares are recognised in equity in the period in which they are paid or, if earlier, approved by the Company's shareholders.

   3. Property, Plant and Equipment

      Property, plant and equipment arerecognised at cost except for Land and Building which are subsequently recognized at fair value based on the valuations by the independent valuers less accumulated depreciation and accumulated impairment loss.Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property, plant or equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

      PREMIER PAINTS PLC

      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont'd............

      The cost of replacing part of an item of property, plant or equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the Statement of profit or loss as incurred.

      Depreciation is charged to profit or loss on a straight-line basis to write down the cost of each asset, to their residual values over the estimated useful lives of each part of an item of property, land and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Depreciation begins when an asset is available for use and ceases at the date that the asset is derecognised.

      The estimated useful lives for the current and corresponding periods are as follows: Leasehold land 99 years

      Building 50 years

      Plant and machinery 10 years

      Furniture and equipment 10 years

      Motor vehicles 5 years

      Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted prospectively if appropriate.

      An item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

      On revaluation of property, plant and equipment, a revaluation surplus is recorded in OCI and credited to the asset revaluation reserve in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit or loss. A revaluation deficit is recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation reserve. Upon disposal, any revaluation reserve relating to a particular asset been sold, is transferred to retained earnings.

   4. Earnings per share

      The company presents basic/ diluted earnings/ (loss) per share data for its equity ordinary shares.

      Basic earnings/ (loss)per share is calculated by dividing the profit/ (loss) attributable to ordinary equity holders of the company by the weighted average number of ordinary shares outstanding during the year.

      Diluted earnings/ (loss) per share is calculated by dividing the profit/ (loss) attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary share that would be issued on conversion of all the dilutive potential ordinary share into ordinary shares.

   5. Impairment of non-financial assets

      The carrying amounts of the Company's non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's or cash generating units' (CGUs) recoverable amount is estimated and an impairment loss is recognised if the carrying value of the asset or CGU exceeds its useful life. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash-generating units (CGUs). The recoverable amount is the higher of an asset's fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGUs). An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

      Premier Paints evaluates impairment losses for potential reversals when events or circumstances may indicate such consideration is appropriate. The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.Impairment losses and impairment reversals are recognised in profit or loss.

   6. Inventories

      Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on first-in first-out principle and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

      Finished products and work-in-progress

      Finished products and work-in progress are measured at manufacturing cost and takes into account the production stage reached. Costs include an appropriate share of direct production overheads based on normal operating capacity.

      Raw and packaging material

      Raw and packaging materials are measured at actual cost comprising invoice price, duty, freight, and handling charges.

   7. Financial instruments

      A financial instrument is any contract that gives rise to a financial asset of one party and a financial liability or equity instrument of another party. Financial instruments are initially measured at fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs, that are directly attributable to the acquisition or issue of the financial asset or financial liability.

      1. Financial assets

         For purposes of subsequent measurement, financial assets are classified into four categories: Financial assets as fair value through profit or loss, loans and receivables, held-to-maturity investment and available for sale assets. The company's financial assets include trade and other receivables and cash and bank balances. These financial assets have all been classified as loans and receivables.

         Loans and receivables

         Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are subsequently measured at amortised cost using the effective interest rate method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate method.

         The losses arising from impairment are recognised in profit or loss in finance costs for loans and in administrative expenses for receivables.

         Derecognition of financial assets

         A financial asset (or, when applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

         1. The rights to receive cash flows from the asset have expired or

         2. The Company retains the right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either:

            • The Company has transferred substantially all the risks and rewards of the asset or

            • The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

              When the Company has transferred its right to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company's continuing involvement in the asset.

              Impairment of financial assets

              The Company assesses at each reporting date whether there is any objective evidence that a financial asset or groupof financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred 'loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the groupof financial assets that can be reliably estimated.

              Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Individually significant financial assets are tested for impairment on an individual basis.

              All impairment losses for items measured at amortised cost are recognised in the profit or loss.An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.

              Financial assets carried at amortised cost

              For financial assets carried at amortised cost (such as trade receivables), the Company first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed forimpairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows (excluding future expected credit losses that have not been incurred) discounted at the financial asset's original effective interest rate.

      2. Financial liabilities

         All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.

         Subsequent measurement

         The measurement of financial liabilities depends on their classification as follows:

         Financial liabilities at amortised cost:

         The company's financial liabilities include loans and borrowings and trade and other payables which are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as though the EIR amortisation process.

         Financial liabilities are classified as current liabilities if payment is due within 12 months. Otherwise, they are presented as non-current liabilities.

         Derecognition of financial liabilities

         A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of profit or loss.

      3. Determination of fair value

         Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement is based on thepresumption that the transaction to sell the asset or transfer the liability takes place either:

         
         
         

         •

         •

         liability

         The principal or the most advantageous market must be accessible to by the Company.

         The fair value of an asset or a liability is measured using the assumptions that market participants would usewhen pricing the asset or liability, assuming that market participants act in their economic best interest.

         A fair value measurement of a non-financial asset takes into account a market participant's ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participantthat would use the asset in its highest and best use.

         All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fairvalue measurement as a whole:

         
         
         

         • - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

           
           
           

         • - Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement 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

      4. Offsetting of financial instruments

         Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

   8. Cash and cash equivalents

      Cash and cash equivalents in the Statement of financial position comprise cash at bank and on hand and short-term deposits with original maturity of three months or less.

      For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

   9. Taxes Current income and Education taxes

      Current income and education taxes assets and liabilities for the current year are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date in Nigeria. Where necessary, current income and education taxes assets and liabilities also include adjustments for tax expected to be payable or recoverable in respect of previous periods. The company income tax is charged on the taxable profit at 30% while the education tax is charged on the assessable profits of the company at the rate of 2%.

      Assessable profit is defined as adjusted profit less unrelieved losses carried forward before taking into consideration capital allowances, balancing allowance and or balancing charge.

      Deferred tax

      Deferred tax is provided using the liability method in respect of temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except:

      • When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

      Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

      • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

      • Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

      The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

      Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in profit or loss, other comprehensive income or directly in equity.

      Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

      Value added tax

      Expenses and assets are recognised net of the amount of value added tax, except:

      • when the value added tax incurred on a purchase of assets or goods is not recoverable from the taxation authority, in which case, the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

      • when receivables and payables are stated with the amount of value added tax included.

      The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

   10. Employee benefits Defined contribution plan

       A defined contribution plan is a pension plan under which the Company pays fixed contributions into aseparate entity. The company has no legal or constructive obligations to pay further contributions if the funddoes not hold sufficient assets to pay all employees the benefits relating to employees service in the currentand prior period.

       For defined contribution plans, the Company pays contributions to publicly or privately administered pensionfund administration (PFA) on a mandatory basis in line with Pension Act. The company has no furtherpayment obligations once the contributions have been paid.

       The company operates a defined contribution pension scheme in line with the Pension Reform Act 2016. The employees and the Company contribute 8% and 10% of basic salary, housing and transport allowances respectively. The Company's contributions are accrued and charged to the Statement of profit or loss as and when the relevant service is provided by employees. The company has no further payment obligations once the contributions have been paid.

       Termination benefits

       Termination benefits are recognised as an expense and a liability when the Company is demonstrably committed, withoutrealistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normalretirement date. Termination benefits for voluntary redundancies are recognised if the Company has made anoffer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number ofacceptances can be estimated reliably.

       Short term benefits

       Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the relatedservice is provided.

   11. Revenue recognition

       Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding tax, duties, returns, customer discounts and other customer related discounts. The company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.

       Sale of goods

       Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods, recovery of the consideration is probable, the associated costs and possible return of products can be estimated reliably, and there is no continuing management involvement with the products. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as reduction of revenue as the sales are recognised.

   12. Expenses Interest expense

       Interest expenses are recognised as they accrue in profit or loss, using the effective interest method.

   13. Leases

       The determination of whether an arrangement is, (or contains), a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

       Company as a lessee Operating lease payment

       Operating lease is a lease that does not substantially transfer all risks and rewards incidental to

       ownership to the Company. Payments and lease incentives under operating leases are recognised in profit or loss on a straight-line basis over the term of thelease. Lease incentives received are recognised as an integral part of the total lease expense, overthe term of the lease.

       Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item to the Company, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

       A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.Operating lease payments are recognised as an operating expense in the Statement of profit or loss on a straight-line basis over the lease term.

   14. Financial Instrument's risk management, objectives and policies