NEIMETH INTERNATIONAL PHARMACEUTICALS : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

FINANCIAL STATEMENTS 30 SEPTEMBER, 2023

1

Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

Contents	Page
Statement of Directors' responsibilities in relation to the financial statements
Statement of Compliance
Independent Auditor's Report
Statement of profit or loss and other comprehensive income	3
Statement of financial position	4
Statement of changes in equity	5
Statement of cash flows	6
Notes to the financial statements	7
Other national disclosures:
Statement of value added	46
Financial summary	47

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2023

		Quarter 3		9 Months
		Ended		Ended
		30-Sep-23		30-Sep-23
	Note	N'000		N'000
Turnover	8	553,223	1,510,627
Cost of sales	9	(270,520)		(927,368)
Gross profit / (Loss)		282,703	583,259
Other income	10	113	89,798
Marketing and distribution expenses	11	(123,211)	(576,826)
Administrative expenses	12	(158,275)	(447,054)
Exchange Gain / (Loss)	13	(19,712)		3,112
Operating (Loss) / Profit		(18,382)	(347,711)
Finance costs	14	(101,218)		(224,447)
(Loss) / Profit before taxation		(119,600)	(572,158)
Income tax expense	28			-
(Loss)/Profit for the year from continued operation		(119,600)	(572,158)
Other comprehensive income
Gain on available for sale assets		-		-
Total other comprehensive income		-		-
Total comprehensive (Loss)/Profit		(119,600)		(572,158)
Basic (loss)/earnings per share - Kobo	32	(3)	(13)

Quarter 3 Ended

30-Sep-22N'000

875,988

(498,976)

377,012

7,237

(142,056)

(159,640)

2,194

84,747

(60,758)

23,989

-

23,989

-

-

23,989

1

9 Months	YOY
Ended	Change

30-Sep-22N'000

2,510,739	-40%
(1,424,034)	35%
1,086,705	-46%
20,182	345%
(429,034)	-34%
(415,252)	-8%
105,342	-97%
367,944	-195%
(168,493)	-33%
199,451	387%
-
199,451	-387%
-
	-387%
199,451
11	-227%

The explanatory notes and statement of significant accounting policies form an integral part of these financial statements.

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

STATEMENT OF FINANCIAL POSITION		9 Months		15 Months
AT 30 SEPTEMBER 2023		Ended		Ended
		30-Sep-23		31-Dec-22
	Notes	N'000		N'000
Assets
Non-current assets
Property, plant and equipment	16.	3,202,078	2,855,148
Investment properties	17	33,359		34,010
		3,235,436	2,889,158
Current assets
Inventories	18.	2,223,311	1,719,150
Trade and other receivables	19.	1,314,446	1,391,841
Other current assets	20.	71,539	62,984
Cash and cash equivalents	21.1	2,354,463		448,370
		5,963,759		3,622,345
Total assets		9,199,196	6,511,503
Liabilities
Current liabilities
Trade and other payables	24	1,427,637	1,266,150
Current borrowing	22.4	-	-
Current portion of long term borrowings	22.1	1,841,101	2,157,910
Finance lease liabilities	29.	-	-
Current tax payable	26.	56,929	86,769
Deferred fair value gain on loan	23	112,453		119,041
		3,438,120	3,629,870
Non-current liabilities
Non-current portion of long term borrowings	22.1	1,487,426	1,487,426
Deferred fair value gain on loan	23	434,261	509,213
Deferred tax liability	27.	106,226		106,226
		2,027,913		2,102,865
Total liabilities		5,466,033		5,732,735
Net assets		3,733,162	778,768
Equity
Ordinary shares	30.2	2,136,552	949,579
Share premium	30.3	2,420,572	8,821
Retained earnings	31.	(823,962)		(179,632)
Total equity		3,733,162	778,768

These financial statements were approved by the Board of Directors on October 26, 2023 and signed on its behalf by:

Pharm. J. Valentine Okelu		Mrs. Florence Onyenekwe
Managing Director / CEO		Ag. Executive Director - Finance
FRC/2023/PRO/DIR/003/655491		FRC/2014/ICAN/00000010082

The explanatory notes and statement of significant accounting policies form an integral part of these financial statements.

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

	Ordinary		Share		Retained
	shares		premium		earnings		Total equity
	N'000		N'000		N'000		N'000
At 1 October 2020	949,579	104,880	359,608	1,414,067
Changes in equity for the quarter
Loss for the year	-	-	(441,081)	(441,081)
Other comprehensive income	-		-		-		-
Total comprehensive Loss for the quarte	-		-		(441,081)		(441,081)
Transaction costs for equity issue	-	(59,492)	-	(59,492)
At 30 JUNE 2022	949,579		45,388		(214,414)		780,553
At 1 January 2023
949,579	8,821	(179,632)	778,768
Changes in equity for the Period
Loss for the period	-	-	(572,158)	(572,158)
Other comprehensive income	-		(1,000)		(72,173)		(73,173)
Total comprehensive Loss for the quarte	-		(1,000)		(644,331)		(645,331)
Right Issues Raised	1,186,973					1,186,973
Share premium on Right Issue	-	2,492,644	-	2,492,644
Transaction costs for equity issue	-		(79,893)		-		(79,893)
At 30 September 2023	2,136,552	2,420,572	(823,963)	3,733,162

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023		9 Months to		15 Months to
		30-Sep-23		31-Dec-22
	Notes	N'000		N'000
Profit for the year		(572,158)	(406,299)
Adjustment for:
Depreciation of property, plant and equipment	16	78,041	143,867
Adjustment on PPE	16	-
Depreciation of investment properties	17	651	1,086
Gain or loss on disposal	10	-
Impairment loss on trade receivables	19.2	23,498	56,499
Provision no longer required	10	-
Impairment write back	19.2	-
Finance cost	14	224,447	375,002
Exchange loss	13	(3,112)
Income tax expenses	28	-		18,245
		(248,632)	188,400
Changes in:
Increase in inventories		(504,161)	(254,729)
(Increase)/decrease in trade receivables		53,896	(172,132)
Decrease/(increase) in other asset		(8,555)	(1,276)
Increase in trade and other payables		161,487	472,625
Decrease in finance lease liability		-
Decrease in deferred tax liability		-
Cash generated from operating activities		(545,965)	232,888
Income tax paid	26.	(69,040)		(67,202)
Net cash from operating activities		(615,005)	165,686
Cash flows from investing activities
Purchase of property plant and equipment	16	(438,897)	(1,587,017)
Proceed from disposal of property, plant and equipment	10.1	13,926
Net cash used in investing activities		(424,971)	(1,587,017)
Cash flows from financing activities
Proceed from import finance facility	22.4.2	-	2,803,833
Repayment of loans		(225,000)	(2,360,607)
Reclassification of Loan	22.4	(209,106)
Finance cost paid	14	(220,135)	(351,909)
Proceed on Right issues	22	3,679,617	-
Dividend paid	31	-	(132,941)
Capital restructuring cost	30.3	(79,893)		(96,059)
Net cash (used in)/from financing activities		2,945,483	(137,683)
Effect of exchange rate changes on cash and cash
equivalents		586	(4,290)
Net (decrease)/increase in cash and cash equivalents		1,905,507	(1,559,014)
Cash and cash equivalents at 1 January		448,370		2,011,674
Cash and cash equivalents at 30 September	21.2	2,354,463	448,370

The accompanying notes and statement of significant accounting policies form an integral part of these financial statements.

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

1. The Company 1.1 Legal form

Neimeth International Pharmaceuticals Plc, a Company quoted on the Nigerian Stock Exchange was incorporated on 30 August 1957 as a limited liability company and commenced operation in January 1958. On 14 May 1997, Pfizer Inc. NY divested from the Company through a management buyout.

1.2 Principal activities

The principal activities of the Company are manufacturing and marketing of pharmaceuticals and animal health products.

2. Basis of preparation

2.1 Statement of compliance

These financial statements have been prepared for the year ended 31 December 2022 in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB) and in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011. Additional information required by local regulators has been included where appropriate.

2.2 Basis of measurement

The financial statements have been prepared in accordance with the going concern principle under the historical cost convention, except for financial instruments and land and buildings measured at fair value.

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

2.3 Going concern assessment

The financial statements have been prepared on a going concern basis, which assumes that the entity will be able to meet its financial obligations as at when they fall due. There are no significant financial obligations that will impact on the entity's resources which will affect the going concern of the entity. Management is satisfied that the entity has adequate resources to continue in operational existence for the foreseeable future. For this reason, the going concern basis has been adopted in preparing the financial statements.

2.4 Functional and presentation currency

These financial statements are presented in Naira, which is the Company's presentational currency. The financial statements are presented in the currency of the primary economic environment in which the Company operates (its functional currency).

2.5. Summary of Standards and Interpretations effective for the first time IFRIC 23 Uncertainty over Income Tax Treatments

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

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

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

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

This standard replaces IFRS 4 - Insurance contracts.

The key principles in IFRS 17 are that an entity:

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

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

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

b) IAS 28 Investments in Associates and Joint Ventures

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

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

2.5.3 New standards, amendments and interpretations issued but without an effective date

At the date of authorisation of these financial statements the following standards, amendments to existing standards and interpretations were in issue, but without an effective: This includes:

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

Amends IFRS 10 consolidated financial statements and IAS 28 Investments in Associates and Joint Ventures (2011) to clarify the treatment of the sale or contribution of assets from an investor to its associate or joint venture, as follows:

• Require full recognition in the investor's financial statements of gains and losses arising on the sale or contribution of assets that constitute a business (as defined in IFRS 3 Business Combinations);
• Require the partial recognition of gains and losses where the assets do not constitute a business, i.e. a gain or loss is recognized only to the extent of the unrelated investors' interests in that associate or joint venture.

These requirements apply regardless of the legal form of the transaction, e.g. whether the sale or contribution of assets occurs by an investor transferring shares in a subsidiary that holds the assets (resulting in loss of control of the subsidiary), or by the direct sale of the assets themselves.

3. Summary of significant accounting policies

The significant accounting policies set out below have been applied consistently to all periods presented in the financial statements unless otherwise indicated.

3.1 Intangible assets

3.1.1 Intangible assets acquired separately

Intangible assets acquired separately are shown at historical cost less accumulated amortization and impairment losses.

Amortization is charged to profit or loss on a straight-line basis over the estimated useful lives of the intangible asset unless such lives are indefinite. These charges are included in other expenses in profit or loss. Intangible assets with an indefinite useful life are tested for impairment annually.

Amortisation periods and methods are reviewed annually and adjusted if appropriate.

3.1.2 Intangible assets generated internally

Expenditures on research or on the research phase of an internal project are recognized as an expense when incurred. The intangible assets arising from the development phase of an internal project are recognized if, and only if, the following conditions apply:

• The Company has the intention of completing the asset for either use or resale.
• The Company has the ability to either use or sell the asset.
• It is possible to estimate how the asset will generate income.
• The Company has adequate financial, technical and other resources to develop and use the asset.
• The expenditure incurred to develop the asset is measurable.
• It is technically feasible to complete the asset for use by the Company.

If no intangible asset can be recognised based on the above, then development costs are recognised in income statement in the period in which they are incurred.

3.2 Property, plant and equipment 3.2.1 Initial recognition

All property, plant and equipment assets are stated at cost less accumulated depreciation less accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

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Neimeth Int'l Pharm. Plc

September, 2023 - Financials

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

3.2.2 Subsequent costs

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

3.2.3 Depreciation of property, plant and equipment

Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

	%
Land	Nil
Buildings	3
Office equipment and furniture	10
Machinery and equipment	10
Motor vehicles	20
Computer equipment	331/3

The assets' residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable value.

The Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting year.

3.2.4 Derecognition

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount, these are included in the income statement under operating income. When revalued assets are sold, the amounts included in the revaluation surplus are transferred to retained earnings.

3.2.5 Reclassification

When the use of a property changes from owner-occupier to investment property, the property is remeasured to fair value and reclassified as investment property. Any gain arising on re-measurement is recognized in the income statement to the extent that it reverses a previous impairment loss on the specific property, with any remaining recognized in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognized immediately in the income statement.

3.3 Investment properties

Investment Properties are Properties that are held for long-term rental yields or for capital appreciation or both, that are not occupied by any of the department within the Company. Investment properties are measured at cost less accumulated depreciation and accumulated impairment losses, if any. If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment. It's carrying value at the date of reclassification becomes its cost for subsequent accounting purposes.

Where an investment property undergoes a change in use, evidenced by commencement of development with a view to sale, the property is transferred to inventories. A property's deemed cost for subsequent accounting as inventories is it's carrying amount at the date of change in use.

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