Quarter 5 - financial statement for 2023

PREMIER PAINT PLC

AUDITED FINANCIAL STATEMENT AS AT 31STDECEMBER, 2023

PREMIER PAINTS PLC

AUDITED REPORT AND FINANCIAL STATEMENTS - 2023

TABLE OF CONTENTS PAGE

CORPORATE INFORMATION 1

REPORT OF THE DIRECTOR 2

STATEMENT OF CORPORATE RESPONSIBILITIES 6

CORPORATE GOVERNANCE REPORT 7

STATEMENT OF DIRECTORS' RESPONSIBILITIES 13

AUDIT COMMITTEE'S REPORT 14

INDEPENDENT AUDITORS' REPORT 15

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES 19

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 37

STATEMENT OF FINANCIAL POSITION 38

STATEMENT OF CHANGES IN EQUITY 39

STATEMENT OF CASH FLOWS 40

NOTES TO THE FINANCIAL STATEMENTS 41

FIVE-YEAR FINANCIAL SUMMARY 54

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PREMIER PAINTS PLC

AUDITED REPORT AND FINANCIAL STATEMENTS-2023 CORPORATE INFORMATION

BOARD OF DIRECTORS

Chief Ogooluwa Bankole Chairman

Mr.Adedoyin Adeyinka Non-Executive

Mr. Olaleye Adeyinka Non-Executive

Engineer M.K.O. Balogun Non -Executive

Dr.Banji Oyegbami Non-Executive

Alhaji Rasheed.O.Yussuff Non-Executive

SECRETARY

Mrs. Fatima Lawal

REGISTERED OFFICE

KM 2, Ifo Ibogun Road, Ifo, Ogun State REGISTERED NUMBER

RC49197 REGISTRAR

Cardinal Stone (Registrars) Limited 355/337, Herbert Macaulay Way, Sabo Bus Stop,

Yaba, Lagos

BANKERS

Access Bank Plc AUDITOR

Ayinde Saheed & Co,

23, Independent Street, Anifowoshe, Ikeja, Lagos.

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PREMIER PAINTS PLC

REPORT OF THE DIRECTORSFOR THE YEAR ENDED 31 DECEMBER 2023

The directors have pleasure in submitting to the members of the Company their report together with the audited financial statements for the year ended 31 December 2023.

Principal activity

The principal activity of the Company is the production and marketing of different grades of paints such as wood finishes for the furniture industry, decorative, industrial coatings and auto refinishes.

There was no change in the principal activities of the Company during the year.

Dividend

The directors in submitting to the shareholders the financial statements for the year ended 31 December 2023 do not recommend the payment of dividend (2022: Nil).

Property, plant and equipment (PPE)

Information relating to changes in PPE is shown in Note 7 to the financial statements. In the opinion of the Directors, the market value of the Company's PPE is not less than the carrying value shown in the financial statements.

Acquisition of own shares

The company has not purchased any of its own shares during the year (2022: Nil).

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PREMIER PAINTS PLC

REPORT OF THE DIRECTORS Cont'd...

Directors' interest in shares

Pursuant to Sections 275 and 276 of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2020, the direct and indirect interest of the Directors in the shares of the Company as notified by them and recorded in the Register is as follows:

PREMIER PAINTS PLC DIRECTORS' HOLDING AS AT 31 DECEMBER 2021 AND 31 DECEMBER 2022

Directors' interest in contracts

None of the Directors has notified the Company for the purpose of Section 277 of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2020 of any direct or indirect interest in contracts with which the Company is involved as at 31 December 2022 (2021: Nil).

Analysis of shareholding

According to the Register of Members, the following shareholders held more than 5% of the Issued Share Capital of the Company as at reporting date.

It is the policy of the Company that there will be no discrimination in considering applications for employment including those from disabled persons. All employees whether disabled or not are given equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their career. As at 31 December 2023, no disabled person was employed by the Company.

Employees' involvement and training

The company is committed to keeping employees fully informed as much as possible regarding the Company's

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PREMIER PAINTS PLC

REPORT OF THE DIRECTORS Cont'd...

Performance and progress and in seeking their views whenever practicable on matters which particularly affect them as employees.

Management, professional and technical expertise are the Company's major assets and investments in developing such skills continue. The company's expanding skill base has extended the range of trainings provided and has broadened opportunities for career development within the Company. Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include bonus.

Health, safety and welfare of employees

Health and safety regulations are in force within the Company's premises and employees are aware of existing regulations. The company provides subsidy to all employees for medical, transportation and housing.

Events after the reporting date

There were no post balance sheet events that could have had a material effect on the financial statement of the Company that had not been adequately provided for or disclosed in the financial statement

Format of financial statements

The financial statements of Premier Paints Plc have been prepared in accordance with the reporting and presentation requirement of International Financial Reporting Standards (IFRS) issued by the International

Accounting Standards Board (IASB).

Auditors

TAC Professional Services (Chartered Accountants) were appointed as the Company's External Auditors on June 1, 2017 and have expressed their willingness to continue in office as the Company's Auditors in accordance with Section 357(2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2020.

FRC/2013/NBA/00000003039 COMPANY SECRETARY.

January 30, 2024

PREMIER PAINTS PLC

STATEMENT OF CORPORATE RESPONSIBILITIES FOR THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023

In line with the provision of S. 405 of CAMA 2020, we have reviewed the audited financial statement of the company for the year ended 31stDecember, 2023 and based on our knowledge confirm as follows:

1. The audited financial statement do not contain any untrue statement of material fact or omit to state a Material fact which would make the statement misleading.

2. The audited financial statements and all other financial information included in the statements fairly

   present, in all material respects, the financial condition and results of operation of the company as of and for the period ended December 31, 2023.

3. The company's internal controls has been designed to ensure that all material information relating to the company is received and provided to the auditors in the course of the audit.

4. The company's internal controls were evaluated within 90 days of the financial reporting date and are effective as of 31 December, 2023.

5. That we have disclosed to the company's Auditors and Audit Committee the following information:

   1. There are no significant deficiencies in the design or operation of the company's internal controls which could adversely affect the company's ability to record, process, summarize and report financial data, and have discussed with the auditors any weakness in internal controls observed in the cause of the Audit.

   2. There is no fraud involving management or other employees which could have any significant role in the company's internal control.

6. There are no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of this audit, including any corrective actions with regards to any observed deficiencies and material weaknesses.

30 January 2024

Adedoyin Adeyinka (Director) Mathew Eledan (Head of Finance)

FRC/2013/IODN/00000004265 FRC/2013/ICAN/00000002332

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PREMIER PAINTS PLC

CORPORATE REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Premier Paints Plc is committed to the principle of Corporate Governance and Code of Best Practices. We are committed to ensuring integrity, transparency, credibility, full disclosure and accountability in all aspects of its business and providing information to all stakeholders.

As a Company quoted on the Nigerian Stock Exchange, we remain focused on our obligations to safe guarding and improving shareholders value. We remain committed to maintaining transparent and best practices in line with the Securities & Exchange Commission (SEC)'s Code of Corporate Governance for

Nigeria's International Best Practices on Corporate Governance and Premier Paints Plc's Principles of Ethics and Compliance.

The corporate governance practices of the Company are designed to ensure accountability of the Board and management to all stakeholders.

The Board is responsible for controlling and managing the strategic business of the Company and constantly reviews and presents a balanced and comprehensive assessment of the Company's performance and future prospects. The Board exercises all such powers of the Company as are by law and Articles of Association of the Company required to be exercised in General Meeting.

As part of its goal, the Company has maintained different and separate roles for the Chairman and the

Managing Director/Chief Executive Officer. Presently the Board of Directors has an Eight (8) member Board led by the Chairman who is a Non-Executive Director. There are Six (6) Non- Executive Directors and two (2) Executive Directors of the Board.

All the Directors bring various and varied competence to bear on all board deliberations. The Board meets regularly and is responsible for effective control and monitoring of the Company's strategy. The Chairman directs the Board ensuring that it operates effectively, while fully discharging its legal and regulatory obligations.

The Board delegates the responsibility for the day to day management of the Company's affairs to the

Managing Director/CEO who is supported by the Executive Director. Various management Committees also meets regularly.

Appointment to the Board

The appointment of new directors to the Board is done by the Nominations & Governance Committee of the Board setting the criteria for the desired experience and competence of a new director and recommending suitable candidates to the Board for approval. The following core values are considered in nominating a new director to the Board: - (i) integrity, (ii) professionalism, (iii) career success and (iv) availability to add value to the Company.

Shareholding in the Company is not considered a criterion for nomination and appointment.

It is the responsibility of the Board of Directors to ensure that all records are accurate and correctly reflect the financial position of the Company.

The Directors have formalized a Charter and a Code of Business Ethics for the Board. The Charter provides the following for the roles and responsibility of the Board of Directors: -

• Strategy and Planning

• Staffing at Board and Senior Management Levels

• Executive Remuneration

• Performance Monitoring

  PREMIER PAINTS PLC

  CORPORATE REPORT Cont'd...

• Risk Management & Internal Control

• Audit and Compliance

• Capital Management and Financial Reporting

• Communication with the Shareholders and management of investor relations

• Board and its Committees accountabilities and responsibilities

The Board is alive to its responsibilities which basically is the creation of stakeholder value and ensuring the success of the Company. Members of the Board are required at all times to act in the best interest of the Company in the articulation and formulation of its strategic policies; and ensuring that the Company achieves its objectives.

The Directors' direct and indirect shareholdings in the Company, where it exists, are disclosed elsewhere in this report as required by law.

The Board met four (4) times during the year and functions either as a full Board or through any of the under listed three

(3) Committees which are constituted as follows: -

S/N

1 Finance & Strategy committee

1. Audit & Risk Committee

2. Nominations & Governance Committee

MEMBERSHIP STATUS

Dr. M.K.O Balogun Chairman

Alhaji Rasheed O. Yussuff Member

Mr. Adedoyin Adeyinka Member

Alhaji Rasheed O. Yussuff Chairman

Dr Banji Oyegbami Member

Mr. Olaleye Adeyinka Member

Mr. Adedoyin Adeyinka Chairman

Dr. M.K.O. Balogun Member

Alhaji Rasheed O. Yussuff Member

In addition, a Management Executive Committee Meeting headed by the Managing Director meets weekly to address policy implementation and other operational issue.

COMMUNICATION POLICY

The Company is committed to managing an open and consistent communication policy with shareholders, potential investors and other interested parties. The objective is to ensure an appropriate balance in meeting the many needs of its shareholders and at the same time building a relationship with them.

COMPLAINTS MANAGEMENT POLICY

The Company confirms that there is in place a Complaints Management Policy Framework in compliance with the Securities & Exchange Commission Rule effective 2015. The guideline provides that all Capital Market Operators should develop a Complaints Policy Framework on how to resolve complaints arising from issues covered under the Investment and Securities Act, 2007 (ISA).

PREMIER PAINTS PLC

CORPORATE REPORT Cont'd... CODE OF CONDUCT

The Company has put in place a Code of Business Conduct in line with internationally recognized best practices. Employee

compliance with the Company's Code of Conduct training and certification is closely monitored. ATTENDANCE AT BOARD MEETINGS

S/N NAMES DESIGNATION MEETING DATE

JAN.30, 2023

1. Chief A.G.O Bankole Chairman Present

   2. Mr. Adedoyin Adeyinka	Non- Executive Director	Present
   3. Mr. Olaleye Adeyinka	Non- Executive Director	Absent with Apology
   4. Alhaji Rasheed O. Yussuff	Non- Executive Director	Present
   5. Dr M.K.O. Balogun	Non- Executive Director	Present
   6. Dr Banji Oyegbami	Non- Executive	Present

   FINANCE & STATEGY COMMITTEE

   This Committee met twice (2) times. The Committee meets as the need arises to review and make recommendations to the Board of Directors with respect to the Company's Financial and Investment strategies and objectives

   The Committee assists the Board in fulfilling its oversight responsibilities with regards to audit and control as well as ensures that an effective financial and internal control is in place.

   The Committee also ensures that all financial statement and disclosures are accurate and evaluates the performance of both the External and Internal Auditors of the Company.

   ATTENDANCE AT FINANCE & STRATEGY COMMITTEE MEETING

   S/N	NAMES	DESIGNATION	MEETING DATE	MEETING DATE
   			30-01-2023	09-11-2023
   1.	Dr. M.K.O. Balogun	Chairman	Present	Present
   2.	Mr. Adedoyin Adeyinka	Member	Present	Absent with Apology
   3.	Alhaji Rasheed O. Yussuff	Member	Present	Present

   AUDIT & RISK COMMITTEE OF THE BOARD

   The Committee held two (2) meetings during the year. Section 359 (6) of the Companies and Allied Matters Act CAP 20 Laws of the Federation of Nigeria 2020 provides for the functions.

   PREMIER PAINTS PLC

   CORPORATE REPORT Cont'd...

   ATTENDANCE AT THE AUDIT & RISK COMMITTEE MEETING OF THE BOARD

   S/N	NAMES	MEETING DATE: 24-01-2023	MEETING DATE: 28 -05- 2023
   1.	Alhaji Rasheed O. Yussuff	Present	Present
   2.	Dr BanjiOyegbami	Present	Present
   3.	Mr. Olaleye Adeyinka	Absent with Apology	Absent with Apology

   AUDIT COMMITTEE OF THE COMPANY

   The Audit Committee is statutorily empowered to review the financial process of the Company, its audit system, internal control and management of financial risk and ensuring strict compliance with statutory regulatory and professional replacements. The Committee reviews the performance of the External Auditors to the Company. The Committee is chaired by a shareholder and has two other shareholders and three directors as members.

   ATTENDANCE AT AUDIT COMMITTEE MEETING

   S/N	NAMES	MEETING DATE: 24-01-2023	MEETING DATE: 28 -05- 2023
   1.	Mr Alex Ojei	Present	Present
   2	Mr. Samson Olagoke	Present	Present
   3	Ms Efunremi Shopeju	(Late)	(Late)
   4	Alhaji Rasheed O. Yussuff	Present	Present
   5	Dr BanjiOyegbami	Present	Present
   6	Mr Olaleye Adeyinka	Absent with Apology	Absent with Apology

   NOMINATIONS & GOVERNANCE COMMITTEE

   This Committee met twice (2) times. The Committee meets as the need arises to review the composition of the Board and senior management staff. It also makes recommendations relating to Corporate Governance.

   ATTENDANCE AT NOMINATIONS & GOVERNANCE COMMITTEE MEETING

   S/N	NAMES	DESIGNATION	MEETING DATE	MEETING DATE 09-
   			30-01-2023	11-2023
   1.	Mr. Adedoyin Adeyinka	Chairman	Present	Absent with Apology
   2.	Dr. M.K.O. Balogun	Member	Present	Present
   3.	Alhaji Rasheed O. Yussuff	Member	Present	Present

   COMMUNICATION POLICY

   The Company is committed to managing an open and consistent communication policy with shareholders, potential investors and other interested parties. The objective is to ensure an appropriate balance in meeting the many needs of its shareholders and at the same time building a relationship with them.

   COMPLAINTS MANAGEMENT POLICY

   The Company confirms that there is in place a Complaints Management Policy Framework in compliance with the Securities & Exchange Commission Rule effective 2015. The guideline provides that all Capital Market Operators should develop a Complaints Policy Framework on how to resolve complaints arising from issues covered under the Investment and Securities Act, 2007 (ISA).

   CODE OF CONDUCT

   The Company has put in place a Code of Business Conduct in line with internationally recognized best practices. Employee compliance with the Company's Code of Conduct training and certification is closely monitored.

   Management

   The daily running of the business is vested in the Executive Management Committee led by the Managing

   Director/CEO, supported by other Management Staff. The Executive Committee which also is responsible for Internal Control effectiveness holds a weekly meeting to evaluate performance of the various aspects of the Company's operations and make policy decisions in line with Board directives. The Committee sets targets for execution of tasks and reviews minutes at subsequent meeting to monitor compliance with such targets.

   PREMIER PAINTS PLC

   CORPORATE REPORT Cont'd... SHAREHOLDING STRUCTURE/FREE FLOAT STATUS

   COMPANY NAME: Premier Paints Plc

   BOAD LISTED: Main Board

   YEAR END: December

   REPORTING PERIOD: YEAR Ended 31 DECEMBER, 2023

   SHARE PRICE AT END OF REPORTING PERIUOD: N9.40 (2021): N9.40

   Shareholding Structure/Free Float Status 31-Dec-23 31-Dec-22

   Shareholders Units of Holdings		% of Holdings	Units of Holdings	% of Holdings
   Issued Share Capital	123,000,000	100%	123,000,000	100%
   Details of Substantial Shareholdings (5% and above)
   CLOVER GLOBAL RESOURCES LIMITED	48,000,000	39%	48,000,000	39%
   TGHL-Capital Limited	15,000,000	12%	15,000,000	12%
   Chief A.G.O. Bankole	15,548,850	13%	15,548,850	13%
   Total Substantial Shareholdings (5% and above)	78,548,850	64%	78,548,850	64%
   Details of Directors Shareholdings (direct and indirect),
   Excluding directors' holding substantial interest
   Engr. Olawale Bankole	1,500,000	1%	1,500,000	1%
   Total Directors' Shareholdings	1,500,000	1%	1,500,000	1%
   Other influential Shareholdings
   		0%		0%
   				0%
   Total Other influential Shareholdings	-	0%	-	0%
   Free float in Units and Percentages	42,951,150	35%	42,951,150	35%
   Free float in Value	=N=403,740,810.00		=N=403,740,810.00
   Declaration:

   1. Premier Paints Plc with a free float of 35% as at 31 December 2023, is compliiant with The Exchange's free float requirements for Companies listed on the Main Board.

   2. Premier Paints Plc with a free float value of N403, 740, 810.00 as at 31 December 2022, is compliiant with The Exchange's free float requirements for Companies listed on the Main Board.

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PREMIER PAINTS PLC

CORPORATE REPORT Cont'd... SECURITIES TRADING POLICY

The Company confirms that there is in place a Securities Trading Policy which applies to all employees and Directors of the Company in compliance with Rule 17.15 of The Disclosure of Dealings in Issuers' Shares, Rules of the Exchange, 2015 (Issuers' Rules) which states that: "Every Issuer shall establish a Securities Trading Policy which apply to all employees and Directors and shall be circulated to all employees that March at times possess any insider or material information about the Issuer. The Trading Policy shall include the need to embrace confidentiality against external advisers'

The Company has complied with the provisions of Section 14 of the Amended Listing Rules of the Nigerian Stock Exchange by adopting a Code of Conduct regarding securities transactions by its Directors and Staff. All Directors and all Staff have complied with the Listing Rules and the Issuer's Code of Conduct regarding securities transactions.

DIRECTORS INTEREST AS AT DECEMBER 31ST, 2023

PREMIER PAINTS PLC DIRECTORS' HOLDING AS AT 31 DECEMBER 2023 AND 31 DECEMBER 2022

AUDITORS

TAC Professional Services (Chartered Accountants) were appointed as the Company's External Auditors on June 1, 2017 and have expressed their willingness to continue in office as the Company's Auditors in accordance with Section 357(2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2020.

BY ORDER OF THE BOARD

LAWAL FATIMA A. (MRS) LLM, BL FRC/2013/NBA/00000003039 COMPANY SECRETARY.

January 29, 2024

PREMIER PAINTS PLC

AUDITED REPORT AND FINANCIAL STATEMENTS - 2023 STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors accept responsibility for the preparation of the full year financial statements set out on pages 30-48 that gives a true and fair view in accordance with International Financial Reporting Standards and in the manner required by the Companies and Allied matters Act 2020 as amended.

The responsibilities include ensuring that:

• Appropriate and adequate internal controls are established to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

• The Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Company and which ensure the financial statements comply with the requirements of the Companies and Allied Matters Act, 2020, and relevant provisions International Financial Reporting Standards;

• The Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that all applicable accounting standards have been followed; and

• The financial statements are prepared on a going concern basis unless it is presumed that the Company will not continue in business.

The directors accept responsibility for the financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act as amended.

The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its profit or loss. The directors further accept responsibility for the maintenance of accounting records that March be relied upon in the preparation of financial statements as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least twelve months from the date of this statement.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Signature Adedoyin Adeyinka (Director)

FRC/2013/IODN/00000004265

Date: March 29, 2024

Signature

Mr. Olaleye Adeyinka (Director) FRC/2015/ICAN/00000011240

Date: March 29, 2024

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PREMIER PAINTS PLC

AUDIT COMMITTEE'S REPORTFOR THE YEAR ENDED 31 DECEMBER 2023

In compliance with the provisions of Section 359 (4) to (5) of the Companies and Allied Matters Act CAP C20, Laws of the Federation of Nigeria 2020, the committee considered the Audited Financial statements for the year ended 31 December 2023 together with the Manangement Letter from the Auditors and the Management's response thereto as at Meeting held on January 29, 2024.

In our Opinion, the scope and planning of the audit were adequate. After due consideration, the Committee accepted the Report of the Auditors that the Financial Statements were in accordance with ethical practice and generally accepted accounting principles and gives a true and fair view of the state of the Company's financial affairs.

The Committtee reviewed the Management Comment Letter and in response to the Auditors' findings in respect of the management matters we and the Auditors are satisfied with the management's response thereto.

The Committee therefore recommended that the Annual Financial Statement for the year ended 31 December 2023 and Auditors Report thereon be presented for adoption at the Annual General Meeting.

Mr. Alex Ojei

Chairman of Audit Committee FRC/2014/CIIN/00000007170

Dated this March 29, 2024

OTHER MEMBERS OF THE COMMITTEE

Mr. Samson Olagoke Member

Alhaji Rasheed O.Yussuff Member

Mr. Olaleye Adeyinka Member

Dr. Banji Oyegbami Member

INDEPENDENT AUDITORS REPORT TO MEMBERS OF PREMIER PAINTS PLC

Report on the Audited Financial Statements Opinion

We have audited the financial statements of Premier Paints Plc, which comprise the statement of financial position as at 31 December 2023, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes .

In our opinion, the financial statements present fairly, in all material respects, the financial position of Premier Paints Plc as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), and the requirements of the Companies and Allied Matters Act of Nigeria, Cap C20 LFN 2020, the Financial Reporting Council of Nigeria Act, 2011 and relevant Securities and Exchange Commission circulars and guidelines.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code)together with the ethical requirements that are relevant to our audit of the financial statements in Nigeria, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code, and in accordance with other ethical requirements applicable to performing the audit of Premier Paints Plc.. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter

Risk of fraud in revenue recognition

We focused on recognition of revenue because there can be a significant difference between the timing of receipt of cash from customers and the subsequent recognition of revenue on the invoice date. Due to manual intervention and the high volume of transactions, the high number of sales orders and the interfaces of these with the accounting records there is the potential for deliberate manipulation or error.

How the matter was addressed in the audit

We assessed the consistency of the application of the revenue recognition policy by reconsidering the accounting policy for the source of the company's revenue. We tested the design and operating effectiveness of the controls (including IT controls) over the revenue system to determine the extent of additional substantive testing required and also tested sales system reconciliations at 30 December 2022. We found no material misstatements from our testing.

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We checked that revenue had been recognized at the correct time by testing a sample of transactions and comparing the invoice dates against which the revenue had been recognized. No exceptions were noted from our testing.

Impairment assessment of trade and other receivables

We have identified the impairment on trade and other receivables as a key audit matter because of its significance to the financial statements and the policy and assessment for making such impairment involves significant degree of management's judgement.

Valuation of inventories

We identified the valuation of inventories as a key audit matter due to the significance of the balance to the financial statements as a whole, combined with the significant degree of judgement by the management associated with determining the net realizable value ("NRV").

NRV represents the latest selling prices for inventories less all estimated costs of completion and costs necessary to make the sale. The management's estimation of the NRV was primarily based on the latest selling prices and current market conditions. The management carried out the inventory review at the end of the reporting period and concluded that there was no impairment allowance required for inventories at 31 December 2023 and the carrying amount of inventories was approximately N4,345,491 as at 31 December 2023.

Our work also included testing a sample of manual journals which did not identify any items that could not be substantiated.

Our audit procedures in relation to management's impairment assessment of trade and other receivables included:

• Testing the company's credit control procedures, in particular credit assessment in the controls around credit terms.

• Challenging reasonableness of the method and assumptions and critical judgement used by the management by assessing the reliability of the management's past estimates of bad debt provisions and taking into account of receivables at the year end and cash received after year end, as well as the creditworthiness of each debtor.

  We found that the estimation and judgement made by management in respect of the recoverability of trade and other receivables were supportable by the credible evidence.

  Our audit procedures in relation to assessing the appropriateness of the carrying value of the inventories included:

• Testing the operating effectiveness of controls associated with the existence and condition of inventories.

• Obtaining an understanding of how the management estimated the NRVs of inventories and evaluating the historical accuracy of the management's estimations.

• Discussing with management and assessing the basis of the management's estimations of subsequent selling price, costs to completion and costs necessary to make the sale.

• Assessing management's process for researching the current market conditions in paint industries to identify any potential adverse impact on the selling price and the carrying value of the company's inventories.

  • Vertifying the value of a sample of inventories to confirm that the inventories were held at the lower of cost and NRV.

    Based on our procedures described, we found the estimations of management in relation to impairment assessment of inventories were supportable by available evidence.

    Going Concern

    The financial statements have been prepared using the going concern basis of accounting. The use of this basis of accounting is appropriate unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. As part of our audit of the financial statements, we have concluded that management's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

    There is a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern, and accordingly is disclosed in the audited financial statements. Based on our audit of the company's financial statements, we also have identified a material uncertainty.

    Information Other than the Financial Statements and Audit Report thereon

    The Directors are responsible for the other information. The other information comprises the information included in [the directors' report as required by the Companies and Allied Matters Act 2004 as amended, Value added statement and financial summary but does not include the financial statements and our audit report thereon.

    Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

    In connection with our audit of the financial statements, our responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

    Responsibilities of the Directors and Those Charged with Governance for the Financial Statements

    The company's directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and requirements of the Companies and Allied Matters Act of Nigeria, Cap C20 LFN 2004, the Financial Reporting Council of Nigeria Act, 2011 and relevant Securities and Exchange Commission Circulars and guidelines and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

    In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process.

    Auditor's Responsibilities for the Audit of the Financial Statements

    Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

    As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

  Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

As required by the Companies and Allied Matters Act of Nigeria, Cap C20 LFN 2004 we report to you, based on our audit, that:

1. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. in our opinion proper books of account have been kept by the company, so far as appears from our examination of those books; and

3. The company's statement of financial position and profit and loss account are in agreement with the books of account.

4. Related party transactions and balances are disclosed in Note 28 to the financial statements

5. The company complied with the requirements of the relevant circulars of Securities & Exchange Commission and the Nigerian Stock Exchange.

For: Ayinde Saheed & Co. (Chartered Accountants)

SAHEED AYINDE (FRC/2023/PRO/ICAN/004/190358)

Managing Partner

LAGOS, NIGERIA 30 APRIL, 2024

19

PREMIER PAINTS PLC

AUDITED REPORT AND FINANCIAL STATEMENTS - 2023 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The principal activity of the Company is the production and marketing of different grades of paints such as wood finishes for the furniture industry, decorative, industrial coatings and auto refinishes.

The financial statements of Premier Paints Plc have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), Financial Reporting Council of Nigeria Act No 6, 2011 and the provisions of Companies and Allied Matters act, CAP C20 Laws of the Federation of Nigeria 2020.

Additional information required by national regulations is included where appropriate. The financial statements have been prepared on the historical cost basis, except for revalued property, plant and equipment.

Functional and presentation currency

These financial statements are presented in Nigerian Naira, which is the Company's functional currency. All financial information presented in Naira has been rounded to the nearest thousand unless stated otherwise.

Significant accounting estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses and the accompanying disclosures of the contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

PREMIER PAINTS PLC

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont'd...

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared.

Existing circumstances and assumptions about future developments, however, March change due to market changes or circumstances arising beyond the control of the company. Such changes are reflected in the assumptions when they occur.

These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of assumption, estimation, uncertainties and critical judgements in applying the accounting policies that have the most significant effect on the amount recognised in the financial statements include the following:

Taxes

Uncertainties exist with respect to the amount and timing of future taxable income. Given the differences in the interpretation of the underlying principles of taxable income, differences arising between the actual results and the assumptions made could necessitate future adjustment to tax income and expenses alreadyrecorded. The company establishesprovisions basedon reasonable estimates.

Deferred taxes are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgements is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future tax able profits together with future tax planning strategies.

Further details of taxes are disclosed in Note 5 and Note 16. Allowance for doubtful accounts

The allowance for doubtful accounts involves management judgement and review of individual receivable balances based on an individual customer's prior payment record, current economic trends and analysis of historical bad debts of a similar type. Further details of the allowance are disclosed in Note 9.

Property, plant and equipment

Judgments are utilised in determining the depreciation rates, revaluation assumptions and useful lives of these assets at the end of the period.

Land and Building is stated based on the revaluation carried out as at 31 December 2016. Further details of property, plant and equipment are disclosed in Note 7.

Its important to note that no standard or amendment to existing standard during the reporting period, have any material impact on the accounting policies, financial position or performance of the Company.

1. DEFINITION OF A BUSINESS-AMENDMENTS TO IFRS 3: BUSINESS COMBINATION

   The IASB issued amendments to the definition of a business in IFRS 3 Business Combinations to help entities determine whether an acquired set of activities and assets is a business or not. They clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. New illustrative examples were provided along with the amendments

   Minimum Requirements to be a Business

   The amendments clarify that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. They also clarify that a business can exist without including all of the inputs and processes needed to create outputs. That is, the inputs and processes applied to those inputs must have 'the ability to contribute to the creation of outputs' rather than 'the ability to create outputs.

   Market participants' ability to replace missing elements: Prior to the amendments, IFRS 3 stated that a business need not include all of the inputs or processes that the seller used in operating that business, 'if market participants are capable of acquiring the business and continuing to produce outputs, for example, by integrating the business with their own inputs and processes'. The reference to such integration is now deleted from IFRS 3 and the assessment must be based on what has been acquired in its current state and condition.

   Assessing whether an acquired process is substantive

   The amendments specify that if a set of activities and assets does not have outputs at the acquisition date, an acquired process may be considered substantive only if:

   1. it is critical to the ability to develop or convert acquired inputs into outputs; and

   2. the inputs acquired include both an organized workforce with the necessary skills, knowledge, or experience to perform that process, and other inputs that the organized workforce could develop or convert into outputs. In contrast, if a set of activities and assets has outputs at that date, an acquired process may be considered substantive if:

      it is critical to the ability to continue producing outputs and the acquired inputs include an organized workforce with the necessary skills, knowledge, or experience to perform that process; or it significantly

      PREMIER PAINTS PLC

      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont'd...

      contributes to the ability to continue producing outputs and either is considered unique or scarce, or cannot be replaced without significant cost, effort or delay in the ability to continue producing outputs.

      The amendments narrowed the definition of outputs to focus on goods or services provided to customers, investment income (such as dividends or interest) or other income from ordinary activities. The definition of a business in Appendix A of IFRS was amended accordingly.

      Optional concentration test: The amendments introduced an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. Entities may elect to apply the concentration test on a transaction-by-transaction basis. The test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the test is met, the set of activities and assets is determined not to be a business and no further assessment is needed. If the test is not met, or if an entity elects not to apply the test, a detailed assessment must be performed applying the normal requirements in IFRS 3-Buiness Combination.

      The amendments must be applied to transactions that are either business combinations or asset acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020. Consequently, entities do not have to revisit such transactions that occurred in prior periods.

2. Definition of Material - Amendments to IAS 1 and IAS 8

   In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 to align the definition of 'material' across the standards and to clarify certain aspects of the definition. The new definition states that, 'Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.'

   The amendments clarify that materiality will depend on the nature or magnitude of information, or both. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements.

   Obscuring information

   The amendments explain that information is obscured if it is communicated in a way that would have a similar effect as omitting or misstating the information. Material information may, for instance, be obscured if information regarding a material item, transaction or other event is scattered throughout the financial statements or disclosed using a language that is vague or unclear. Material information can also be obscured if dissimilar items, transactions or other events are inappropriately aggregated, or conversely, if similar items are inappropriately disaggregated.

   New threshold: The amendments replaced the threshold 'could influence', which suggests that any potential influence of users must be considered, with 'could reasonably be expected to influence' in the definition of 'material'. In the amended definition, therefore, it is clarified that the materiality assessment will need to take into account only reasonably expected influence on economic decisions of primary users.

   Primary users of the financial statements

   The current definition refers to 'users' but does not specify their characteristics, which can be interpreted to imply that an entity is required to consider all possible users of the financial statements when deciding what information to disclose. Consequently, the IASB decided to refer to primary users in the new definition to help respond to concerns that the term 'users' may be interpreted too widely.

   Other amendments: The definition of material in the Conceptual Framework and IFRS Practice Statement 2: Making Materiality Judgements were amended to align with the revised definition of material in IAS 1 and IAS 8.

   PREMIER PAINTS PLC

   STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Cont'd...

   The amendments must be applied prospectively. Effective for annual periods beginning on or after 1 January 2020.

3. Covid-19-Related Rent Concessions - Amendment to IFRS 16: LEASES

In May 2020, the IASB amended IFRS 16 to provide relief to lessees from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. The amendment does not apply to lessors. As a practical expedient, a lessee may elect not to assess whether a covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of the covid-19 pandemic and only if all of the following conditions are met:

• The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change.

• Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (for example, a rent concession would meet this condition if it results in reduced lease payments before 30 June 2021 and increased lease payments that extend beyond 30 June 2021)

  • There is no substantive change to other terms and conditions of the lease.

Lessees will apply the practical expedient retrospectively, recognising the cumulative effect of initially applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the amendment is first applied.

A lessee will apply the amendment for annual reporting periods beginning on or after 1 June 2020. Earlier application is permitted, including in financial statements not yet authorized for issue at 28 May 2020. Effective for annual periods beginning on or after 1 June 2020.

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 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 use when 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 generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that 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 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:

• 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