UNION DICON SALT : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

UNION DICON SALT PLC

UNAUDITED FINANCIAL STATEMENTS 3OTH SEPTEMBER 2023

UNION DICON SALT PLC						4
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30TH SEPTEMBER, 2023
			3RD QTR		YEAR TO DATE
	NOTES	2023	2022	2023	2022
		N'000	N'000	N'000	N'000
Revenue	7		-	-	-	-
Cost of sales	8		-	-	-	-
Gross profit			-	-	-	-
Other operating income	9		98,253	15,050	285,553	52,605
Administrative expenses	10		(34,821)	(61,904)	(141,213)	(187,564)
Profit before tax			63,432	(46,854)	144,340	(134,959)
Current tax expense	13(i)	-	-	-	-
Profit for the year			63,432	(46,854)	144,340	(134,959)
Other comprehensive income			-	-	-	-
Total comprehensive Profit/(Loss)			63,432	(46,854)	144,340	(134,959)

The accompanying notes on pages 6 to 24 and other national dislocures on pages 25 and 26 form an integral part of these financial statements.

UNION DICON SALT PLC														5
STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER, 2023
		2023		2022			DECEMBER 2022
Assets	Notes	N'000	N'000		N'000	N'000		N'000	N'000
Non-current
Property, plant and equipment	14	47,022				44,548				43,900
Investment in subsidiary	15	57,682			104,704	56,481			101,029	57,682		101,582
Current Assets
Trade and other receivables	16	9,375				920				1,191
Cash and cash equivalents	21	58,359				6,626					94,553
		67,734				7,546				95,744
Current liabilities
Trade and other payables	17	(1,251,484)				(1,458,303)				(1,542,916)
Current tax liabilities	13(iii)	(59,379)				(58,307)					(53,593)
		(1,310,863)				(1,516,610)				(1,596,509)
Net current liabilities					(1,243,129)					(1,509,064)				(1,500,765)
Total assets less current liabilities					(1,138,425)					(1,408,035)				(1,399,183)
Non-current liabilities
Employee benefit liabilities	18	(60,252)				(61,552)				(61,552)
Deferred tax liabilities	13(v)	(5,384)				(39,591)				(39,591)
					(65,636)					(101,143)				(101,143)
Net liabilities					(1,204,061)					(1,509,179)				(1,500,326)
Equity
Share capital	19(a)				136,673					136,673				136,673
Share premium	19(b)				250,638					250,638				250,638
Actuarial Valuation Reserve					65,692					65,692				65,692
Revenue reserve	20				(1,657,064)					(1,962,182)				(1,953,330)
Total equity					(1,204,061)					(1,509,179)				(1,500,326)

The financial statements were approved by the Board of Directors on, 13th July 2023 and signed on its behalf by:

(i) LT. General T.Y Danjuma (RTD), GCON	Chairman	FRC/2013/IODN/00000003130
(ii) Florence S. Iroye	Ag. Managing Director	FRC/2021/002/00000023527
(iii) Adebunmi Amos	Financial Controller	FRC/2014/ICAN/00000006105

The accompanying notes on pages 6 to 24 and other national dislocures on pages 25 and 26 form an integral part of these financial statements.

UNION DICON SALT PLC				6
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 SEPTEMBER, 2023
		Reserve for
Share	Share	Actuarial	Restated	Total
Capital	Premium	Valuation	Earnings	Equity
N'000	N'000	N'000	N'000	N'000

Balance at 1 January 2023		136,673	250,638	65,692	(1,838,659)	(1,385,656)
Comprehensive income for the year:
Profit for the year		-	-	-	144,340	144,340
Other comprehensive income		-	-	-	-	-
Total comprehensive Profit /(Loss) for the year		-	-	-	144,340	144,340
Transactions with owners recorded directly in equity		-	-		-	-
Balance at 30 SEPTEMBER 2023		136,673	250,638	65,692	(1,694,319)	(1,241,316)
Balance at 1 January 2022		136,673	250,638	65,692	(1,827,223)	(1,374,220)
Comprehensive income for the year	-		-		-	-
Profit/(Loss) for the year		-	-	-	(11,436)	(11,436)
Other comprehensive income		-	-	-	-	-
Total comprehensive Loss for the year		-	-	-	(11,436)	(11,436)
Transactions with owners, recorded directly in equity:		-	-	-	-	-
Balance at 31 December 2022		136,673	250,638	65,692	(1,838,659)	(1,385,656)

The accompanying notes on pages 8 to 23 and other National disclosures on pages 24 and 25 form an integral part of these finacial statements.

UNION DICON SALT PLC			7
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
		2023	2022
	Notes	N'000		N'000
Cash flows from operating activities
Profit YTD		144,340	(134,959)
Adjustments for non cash items:
Depreciation of property, plant and equipment	14	-	-
Accruals	18(e)	62,292	-
Income tax expense	13(i)	-		-
		206,632	(134,959)
Changes in working capital
(Increase)/decrease in other receivables	16	(10,566)	(410)
(Decrease)/increase in employee benefit liabilities	18(d)	(1,300)	(804)
Decrease in trade and other payables	17	(223,400)	136,183
Tax paid	13	-		(4,080)
Cash generated from operations		(28,634)	(4,069)
Cash flows from investing activities
Purchase of property, plant and equipment	14	(3,476)	(1,160)
Purchase of Shares		-		(2,500)
Net cash outflow from investing activities		(3,476)		(3,660)
Net increase in cash and cash equivalents		(32,110)	(7,729)
Cash and cash equivalents at the beginning of the year		90,470		14,355
Cash and cash equivalents at the end of the quarter	22	58,360	6,626

UNION DICON SALT PLC

8

FINANCIAL STATEMENTS, 30 SEPTEMBER 2023

NOTES TO THE FINANCIAL STATEMENTS

1. Corporate information and principal activities
   Dicon Salt Limited and Union Salt Limited were incorporated as private limited liability companies on 11 October 1984 and 30 May 1991 respectively. The Companies merged and simultaneously converted into a public limited liability company on 7 May 1993 to become Union Dicon Salt Plc. The Company became listed on the official listing of the Nigerian Stock Exchange on 23 September, 1993.
   The principal activity of the Company is the processing of crude salt. The issued share capital of the Company is held thus: 28% by Aims Limited, 19% by Defence Industries Corporation, 14% by Danjuma T.Y, 8% by Taraba Fisheries Ltd, 8% by T.Y. Holdings Ltd, 1% by Danjuma Grace Elizabeth, 4% by UDS Plc (Staff Trust Fund) and 18% by others.
   Its registered office is at Phase 2, NPA Kirikiri Lighter Terminal Apapa Lagos.
2. Basis of preparation

1. Statement of compliance
   The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and in compliance with the requirements of the Companies and Allied Matters Act, 2020 and Financial Reporting Council of Nigeria Act No 6, 2011.
2. Basis of measurement
   The financial statements have been prepared under the historical cost concept except for certain financial instruments which were measured at fair value as mentioned in the accounting policies below.
3. Functional and presentation currency
   The Company's functional and presentation currency is the Nigerian Naira. The financial statements are presented in Nigerian Naira and have been rounded up to the nearest thousand except where otherwise stated.
4. Use of estimates and judgement
   The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and judgments. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

3 New standards, interpretations and amendments

1. New standards, interpretations and amendments adopted from 1 January 2022
   New standards effective for adoption in the annual financial statements for the year ended 31 December 2022 but had no significant effect or impact on the Company are:

		Standard/Interpretation	Date Issued by IASB	Effective date periods beginning on or
					after
	IAS 37		Onerous Contracts - Cost of	14 May 2022	1 January 2022
			Fulfilling a Contract
	Amendments to IFRS 1, IFRS 9, IFRS 16	Annual Improvements to IFRS Standards 2018-2020	14 May 2020	1 January 2022
	and IAS
	41
	IAS 16		Property, Plant and Equipment -	14 May 2020	1 January 2022
			Proceeds before Intended Use (Amendments to IAS 16)
(b)	IFRS 3		Reference to the Conceptual Framework	14 May 2020	1 January 2022

The following are the new standards and interpretations that have been issued, but are not mandatory for the financial year ended 31 December 2022. They have not been adopted in preparing the financial statements for the year ended 31 December 2022.

In terms of International Financial Reporting Standards, the company is required to include in its financial statements disclosure about the future impact of standards and interpretations issued but not yet effective at reporting date.

At the date of authorisation of the financial statements of the Company for the year ended 31 December 2022, the following standards and interpretations were in issue but not yet effective:

UNION DICON SALT PLC				9
FINANCIAL STATEMENTS, 30 SEPTEMBER 2023
NOTES TO THE FINANCIAL STATEMENTS
		Standard/Interpretation	Date issued by IASB	Effective date periods beginning on or
		after
	IAS 1		Disclosure of Accounting Policies	12 February 2021	1 January 2023
			(Amendments to IAS 1 and IFRS Practice Statement 2)
	IAS 8		Definition of Accounting	12 February 2021	1 January 2023
			Estimates (Amendments to IAS 8)
	IAS 12		Deferred Tax related to Assets and Liabilities arising from	7 May 2021	1 January 2023
			a single Transaction (Amendments to IAS
			12)
	IFRS 16		Lease liability in a Sale and Leaseback (Amendments to	22 September 2022	1 January 2024
			IFRS
			16)
	IAS 1		Non-current liabilities with	31 October 2022	1 January 2024
			covenants
	IAS 1		Classification of liabilities as	31 October 2022	1 January 2024
			current or non-current

*All standards and interpretations will be adopted at their effective date (except for those standards and interpretations that are not applicable to the Entity).

1. Critical accounting estimates and judgements
   The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience as well as other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assupmtions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

1. Legal proceedings
   The Company reviews outstanding legal cases following developments in the legal proceedings and at each reporting date, in order to assess the need for provisions and disclosures in its financial statements. Among the factors considered in making decisions on provisions are the nature of litigation, claim or assessment, the legal process and potential level of damages in the jurisdiction in which the litigation, claim or assessment has been brought, the progress of the case (including the progress after the date of the financial statements but before those statements are issued), the opinions or views of legal advisers, experience on similar cases and any decision of the Company's management as to how it will respond to the litigation, claim or assessment.

1. Income and deferred taxation
   The Company incurs corporate tax liability and recognises changes to deferred tax assets and deferred tax liabilities, all of which are based on management's interpretations of applicable laws and regulations. The quality of these estimates is highly dependent upon management's ability to properly apply at times a very complex sets of rules to recognise changes in applicable rules and in the case of deferred tax assets, management's ability to project future earnings from activities that may apply loss carry forward positions against future income taxes.

UNION DICON SALT PLC

10

FINANCIAL STATEMENTS, 30 SEPTEMBER 2023

NOTES TO THE FINANCIAL STATEMENTS

1. Impairment of property, plant and equipment and intangible assets
   The Company assesses assets or groups of assets for impairment annually or whenever events or changes in circumstances indicate that carrying amounts of those assets may not be recoverable. In assessing whether a write-down of the carrying amount of a potentially impaired asset is required, the asset's carrying amount is compared to the recoverable amount. Frequently, the recoverable amount of an asset proves to be the
   Company's estimated value in use.
   The estimated future cash flows applied are based on reasonable and supportable assumptions and represent management's best estimates of the range of economic conditions that will exist over the remaining useful life of the cash flow generating assets.
2. Estimates of useful lives and residual value
   The estimates of useful lives and residual values of property, plant and equipment impact the annual depreciation charge. The useful lives and residual values are based on management experience and the condition of the assets. Consideration is given to management's intended usage policy for the assets in the future and potential market prices of similar assets.

1. Summary of significant accounting policies
   The Company's accounting policies set out below have been applied consistently to all years presented in these financial statements.

1. Foreign currency transactions
   In preparing the financial statements of the Company, transactions in currencies other than the entity's presentation currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions and any exchange differences arising are included in the income statement of the reporting period.
   Monetary items denominated in foreign currency are translated using the closing rate as at the reporting date. Non-monetary items measured at historical cost denominated in a foreign currency are translated with the exchange rate as at the date of initial recognition; non monetary items in a foreign currency that are measured at fair value are translated using the exchange rates at the date when the fair value was determined.
   Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the reporting date exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income statement.
   All foreign exchange gains and losses recognised in the income statement are presented net in the Income statement within other operating income and operating expenses respectively. Foreign exchange gains and losses on other comprehensive income items are presented in other comprehensive income within the corresponding item.
2. Revenue
   The Company supplies salt in the wholesale market. Sales are recognized when control of the goods has transferred, being when the goods are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell the goods, and there is no unfulfilled obligation that could affect the wholesale's acceptance of the goods. Delivery occurs when the goods have been transported to the specific location of the wholesaler and either the wholesaler has accepted the goods in accordance with the sales contract, the acceptance provisions have lapsed, or the company has objective evidence that all criteria for acceptance have been satisfied.
   The goods is often sold with volume discounts based on aggregate sales value over a 12 months period. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the most likely value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A refund liability (included in trade and other receivables) is recognized for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made with a credit term of 30 days, which is consistent with market practice. The Company's obligation to replace expired goods under the standard warranty terms is recognized as a provision.

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

UNION DICON SALT PLC

11

FINANCIAL STATEMENTS, 30 SEPTEMBER 2023

NOTES TO THE FINANCIAL STATEMENTS

1. Finance income and finance expense
   Interest income on short-term deposits is recognised 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 the asset's net carrying amount in the income statement.
   Dividend income from investments is recognised in the income statement when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company) and the amount of income can be measured reliably.
   Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss where the Company holds such financial assets and impairment losses recognised on financial assets ( other than trade receivables). Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in the income statement.
2. Property, plant and equipment

i) Recognition and measurement

Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the assets. Items of property, plant and equipment under construction are disclosed as capital work in progress. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets.

ii) Subsequent costs

The cost of replacing a part of an item of property, plant and 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 carrying amount of the replaced part is then derecognised. The costs of the day-to-day servicing and maintenance of an item of property, plant and equipment are recognised in the income statement during the period in which they are incurred.

1. Depreciation

Depreciation is calculated on items of property, plant and equipment to write down the cost of each asset to its residual value over its estimated useful life. No depreciation is charged on items of property, plant and equipment until they are brought into use.

The principal annual rates used for this purpose, which are consistent with those for the previous years, are as follows:

Type of asset	%
Building	2
Plant and machinery	10
Computer equipment	25
Furniture and fittings	20

The assets depreciable methods, useful lives and residual values are reviewed annually and adjusted if necessary. The asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

iv) Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gains 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 the income statement within 'Other income or operating expenses' in the year that the asset is derecognised.

1. Impairment of non-financial assets
   Non-financial assets other than inventories are reviewed at each reporting date for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which they have separately identifiable cash flows (cash-generating units).

UNION DICON SALT PLC

12

FINANCIAL STATEMENTS, 30 SEPTEMBER, 2023

NOTES TO THE FINANCIAL STATEMENTS

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment is treated as a revaluation increase.

1. Inventory
   Inventory include salt, engineering items, bags and other consumables. Inventories are valued at the lower of cost and net realizable value. Cost includes the cost of the products, the landing cost and the expenses/charges associated with the conveyance of the inventory to the warehouse. Costs of the products are determined using the average cost methods. Net realizable value is the estimated selling price in the ordinary course of business less estimated cost necessary to make the sale. Adequate provision is made for slow moving, obsolete and defective inventories to ensure that the value at which inventories is held at the reporting date is reflective of anticipated future sales patterns.

1. Financial instruments a) Financial assets

Financial assets are initially recognised at fair value plus directly attributable transaction costs. Subsequent remeasurement of financial assets is determined by their designation that is revisited at each reporting date.

i) Classification as trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognized initially at the amount of consideration that is uncondition unless they contain significant financing components, when they are recognized at fair value. The Company holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. Details about the Company's impairment policies and the calculation of the loss allowance are provided in the subsequent paragraph.

ii) Classification of financial assets at amortised cost

The Company classified its financial assets as at amortised cost only if both of the following criteria are met:

• the asset is held within a business model whose objective is to collect the contractual cash flows, and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.

iii) Other receivables

These amounts generally arise from transactions outside the usual operating activities of the Company. Interest may be charge at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained. The non-current other receivables are due and payment within three years from the end of the reporting period.

iv) Prepayments

Prepayments are payments made in advance relating to the following year and are recognised and carried at original amount less amounts utilised in the statement of profit and loss and other comprehensive income.

v) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purpose of reporting cash flows, cash and cash equivalents include cash on hand, bank balances, investments in money market instruments with maturity dates of less than three months and are risk free net of bank overdraft.