Nestlé Nigeria Plc
Unaudited Interim Financial Statements
For the Nine Months ended 30 September 2023
1
Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Contents | Page |
Directors' and Other Corporate Information | 3 |
Financial Highlights | 4 |
Directors' Report | 5-11 |
Statement of Directors' Responsibilities | 12 |
Statement of Profit or Loss and Other Comprehensive Income | 13-14 |
Statement of Financial Position | 15 |
Statement of Changes in Equity | 16 |
Statement of Cash Flows | 17 |
Notes to the Financial Statements | 18-27 |
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' and other Corporate Information
Board of Directors: | Mr. Gbenga Oyebode | From 18/05/2023 | Chairman |
Mr. David Ifezulike | Up to 17/05/2023 | Chairman | |
Mr.Wassim Elhusseini (Lebanese) | Managing Director/Chief Executive Officer | ||
Mr. Namit Mishra (Indian) | From 1/08/2023 | Finance & Control Director | |
Mr. Sarmad Saleem (Pakistani) | Up to 31/07/2023 | Finance & Control Director | |
Mr. Ibukun-olu Ipinmoye | Executive Director | ||
Mr. Mauricio Alarcon (Mexican) | Non-Executive Director | ||
Mr. Martin Kruegel (German) | From 01/02/2023 | Non-Executive Director | |
Mr. Ricardo Chavez (Mexican) | Up to 31/01/2023 | Non-Executive Director | |
Dr. Juliet Ehimuan | Independent Non-Executive Director | ||
Mrs Adebisi Lamikanra | Independent Non-Executive Director | ||
Mrs. Maryam Aliko Mohammed | From 1/08/2023 | Independent Non-Executive Director | |
Company Secretary/ | |||
Legal Adviser | Mr. Bode Ayeku | ||
Registered Office: | 22-24 Industrial Avenue | ||
Ilupeju, Lagos | |||
Tel: 01 - 2798184, 2798188, 2790707 | |||
Registrar: | Greenwich Registrars & Data Solutions Limited | ||
274 Murtala Muhammed Way | |||
Alagomeji, Yaba, Lagos | |||
Tel: 01- 5803369, 5451399, 5803367 | |||
Independent Auditor: | Ernst & Young | ||
10th & 13th floors, UBA House | |||
57 Marina | |||
Lagos, Nigeria | |||
Tel: +234(1)6314500 | |||
Members of the | Mr. Matthew Akinlade | Chairman | |
Audit Committee | Alhaji Kazeem Owonikoko Bello | Shareholders' Representative | |
Mr. Christopher Nwaguru | Shareholders' Representative | ||
Dr. Juliet Ehimuan - From 18/05/2023 to 31/07/2023 | Directors' Representative | ||
Mr. Gbenga Oyebode | Up to 17/05/2023 | Directors' Representative | |
Mrs. Adebisi Lamikanra | Directors' Representative | ||
Mrs. Maryam Aliko Mohammed | - From 01/08/2023 | Directors' Representative |
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Financial Highlights
Jan -Sep 2023 | Jan- Sep 2022 | Increase/ | |
In thousands of naira | (decrease) % | ||
Revenue | 396,591,620 | 333,472,223 | 19% |
Results from operating activities | 91,586,139 | 64,877,062 | 41% |
(Loss)/ Profit before income tax | (56,657,399) | 58,385,532 | -197% |
(Loss)/Profit for the period | (43,068,030) | 40,152,150 | -207% |
Jul -Sep 2023 | Jul- Sep 2022 | Increase/ | |
In thousands of naira | (decrease) % | ||
Revenue | 134,822,111 | 111,021,443 | 21% |
Results from operating activities | 30,793,481 | 18,695,564 | 65% |
Profit before income tax | 12,460,197 | 14,645,623 | -15% |
Profit for the period | 6,913,315 | 12,401,113 | -44% |
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report
1 Financial Statements
The directors present their unaudited financial statements on the affairs of Nestlé Nigeria Plc ("the Company") for the period ended 30 September 2023.
2 Principal Activities
The principal activities of the Company continue to be the manufacturing, marketing and distribution of food products including purified water throughout the country. The Company also exports some of its products to other countries within and outside Africa.
3 Operating Results
The following is a summary of the Company's operating results:
In thousands of naira | Jan -Sep 2023 | Jan- Sep 2022 | |
Revenue | 396,591,620 | 333,472,223 | |
Results from operating activities | 91,586,139 | 64,877,062 | |
(Loss)/Profit before income tax | (56,657,399) | 58,385,532 | |
(Loss)/Profit for the period | (43,068,030) | 40,152,150 | |
Total comprehensive (loss)/income for the period | (43,068,030) | 40,152,150 |
4 Directors and Their Interests
- The directors who served during the period and their interests in the shares of the Company at the period ended 30 September 2023 were as follows:
Interest in the Ordinary Shares of the | ||||||
Company | ||||||
2023 | 2022 | |||||
Mr. Gbenga Oyebode From-18/05/2023 | - Chairman | Nil | Nil | |||
Mr. David Ifezulike | Up to 17/05/2023 | - Chairman | 56,255 | 56,255 | ||
Mr. Wassim Elhusseini (Lebanese) | - MD/CEO | Nil | Nil | |||
Mr. Sarmad Saleem (Pakistani) | Up to 31/07/2023 | Nil | Nil | |||
Mr. Namit Mishra (Indian) | From 1/08/2023 | Nil | Nil | |||
Mr. Ibukun-olu Ipinmoye | 2,328* | 2,328* | ||||
Mr. Mauricio Alarcon (Mexican) | Nil | Nil | ||||
Mr. Ricardo Chavez (Mexican) | Up to 31/01/2023 | Nil | Nil | |||
Mr. Martin Kruegel | (German) | From 01/02/2023 | Nil | Nil | ||
Dr. Juliet Ehimuan | 2,146 | 2,146 | ||||
Mrs. Adebisi Lamikanra | Nil | Nil | ||||
Mrs. Maryam Aliko Mohammed | Nil | Nil |
*Out of the 2,328 shares of Nestlé Nigeria Plc held by Mr. Ibukun-olu Ipinmoye, 2,250 shares are managed on his behalf by FBN Quest Trustees Limited,while the remaining 78 shares are registered in his name.
- Mr. Gbenga Oyebode is the Chairman of CFAO Nigeria Plc, one of our vehicle suppliers. Mrs. Adebisi Lamikanra is a director of Standard Chartered Bank,one of our bankers. In accordance with Section 303 of the Companies and Allied Matters Act of Nigeria, they have notified the Company of their position with CFAO Nigeria Plc and Standard Chartered Bank respectively.
- No share options were granted to the directors by Nestlé Nigeria Plc. However, Nestlé S. A., the ultimate parent company has a share based payment scheme offered to certain key management personnel including certain directors of the Company.
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report-Continued
5 Analysis of Shareholdings
Number of | Number of | |||||
shareholders | % | shares | % | |||
1 | - | 5000 | 27,995 | 90.23 | 21,114,834 | 2.66 |
5001 | - | 10000 | 1,531 | 4.93 | 10,463,023 | 1.32 |
10001 | - | 50000 | 1,201 | 3.87 | 23,847,408 | 3.01 |
50001 | - | 100000 | 117 | 0.38 | 8,194,257 | 1.03 |
100001 | - | 500000 | 117 | 0.38 | 24,223,258 | 3.06 |
500001 | - | 1000000 | 29 | 0.09 | 20,274,191 | 2.56 |
1000001 | - | 5000000 | 27 | 0.09 | 54,993,131 | 6.94 |
5000001 | - | 10000000 | 5 | 0.02 | 33,913,611 | 4.28 |
10000001 | - | 50000000 | 1 | 0.01 | 34,352,233 | 4.34 |
31,023 | 100.00 | 231,375,946 | 29.20 | |||
Nestlé S.A, Switzerland | 1 | 0.00 | 36,720,849 | 4.63 | ||
Societe Des Produits | Nestlé S.A | 1 | 0.00 | 524,559,457 | 66.18 | |
31,025 | 100.00 | 792,656,252 | 100.00 |
- Apart from Societe Des Produits Nestlé S.A, Switzerland with 524,559,457 ordinary shares (representing 66.18%), no other shareholder held 5% or more of the paid-up capital of the Company as at 30 September 2023.
- We hereby confirm that the free float of the Company is in compliance with The Nigerian Exchange Group's free float requirements of the Main Board on which Nestlé Nigeria Plc is listed.
6 Property, plant and equipment
Information relating to changes in property, plant and equipment is disclosed in Note 9 to the financial statements. In the opinion of the Directors, the market value of the Company's property, plant and equipment is not less than the carrying value shown in the financial statements.
7 Donations
In compliance with Section 43(2) of the Companies and Allied Matters Act of Nigeria, the Company did not make any donation or gift to any political party, political association or for any political purpose during the period.
In addition to the above mentioned donations, the Company continued with its strong focus on creating shared values initiatives. Nestlé Nigeria invested in technical and employability skills building for youth and in building the capacity of farmers to increase their productivity and income. The Company also worked alongside partners to improve the household nutrition of local farmers through trainings in grain quality improvement and food transformation/preservation techniques.
8 Nestlé Nigeria Trust (CPFA) Limited ("NNTL")
Nestlé Nigeria Trust (CPFA) Limited ('NNTL') previously called Nestlé Nigeria Provident Fund Limited, was incorporated by the Company and is a duly registered Closed Pension Fund Administrator whose sole activity is the administration of the pension and defined contribution gratuity scheme for employees of Nestlé Nigeria Plc.
9 Local Sourcing of Raw Materials
On a continuing basis, the Company explores the use of local raw materials such as soya bean, maize, cocoa, palm olein and sorghum,cassava and corn starch in its production processes in a number of its products.
10 Major Distributors
The Company's products are distributed through various distributors that are spread across the whole country.
11 Suppliers
The Company procures all of its raw materials on a commercial basis from overseas and local suppliers. Amongst the overseas suppliers are companies in the Nestlé Group.
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report-Continued
12 General Licence Agreement
The Company has a general licence agreement with Societe des Produits Nestlé S.A., Switzerland. Under the agreement, technological, scientific and professional assistance are provided for the manufacture, marketing, quality control and packaging of the Company's products, development of new products and training of personnel abroad. Access is also provided to the use of patents, brands, inventions and know-how.
The Company obtained the approval of the National Office for Technology Acquisition and Promotion (NOTAP) with certificate No. CR 007459 for the remittance of General Licence Fees to Societe des Produits Nestlé S.A., Switzerland. The approval is for a period of three (3) years with effect from 1st January 2021 to 31st December 2023.
13 Acquisition of Own Shares
The Company did not purchase any of its own shares during the period.
14 Employment and Employees
-
Employment of physically challenged persons:
It is the policy of the Company that there is no discrimination in considering applications for employment including those of physically challenged persons. The Company had 13 (Dec. 2022: 12) physically challenged persons in its employment as at 30 September 2023.
All employees whether physically challenged or not are given equal opportunities to develop their expertise and knowledge and qualify for promotion in furtherance of their careers. In the event of members of staff becoming physically challenged, every effort is made to ensure that their employment with the Company continues and that appropriate training is arranged. It is the policy of the Company that training, career development and promotion of physically challenged persons should, as far as possible, be identical with that of other employees. - Health and safety at work and welfare of employees:
The Company invests its resources to ensure that hygiene on its premises is of the highest standard. In this regard, the Company has, on three occasions, won the Manufacturers' Association of Nigeria's award for the best kept factory and on three occasions won the Federal Environmental Protection Agency's environmental performance award as the most environment-friendly company in Nigeria.
The Company operates its own clinics which provide quick health care to its employees. In pursuit of efforts to improve health infrastructure and enhance the quality of care for the employees, the company has built an ultra modern clinic at Agbara factory. The clinic which is fully equipped with state-of-the-art medical facilities consists of three consulting rooms, one pharmacy, one laboratory and two observation rooms, amongst others.
The modernization of the medical facilities by the Company is in line with Nestlé Corporate Business principles of promoting safe and healthy work environment for the employee.
The Company caters for the recreational needs of its employees by providing them with a wellness center and other games facilities such as Table Tennis, Draughts, etc. Lunch is provided free to staff in the Company's canteen. - Employees involvement and training:
The Company places considerable value on the involvement of its employees and has continued the practice of keeping them informed on matters affecting them as employees and on various factors affecting the performance of the Company. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.
Circulars and newsletters on significant corporate issues are published. Regular briefing sessions are also held at corporate and operational levels to enhance exchange of information.
Management, professional and technical expertise are the Company's major assets. The Company continues to invest in developing such skills. The Company has in-house training facilities, complemented, when and where necessary, with external and overseas training for its employees. This has broadened opportunities for career development within the organisation.
The Nestlé Technical Training Center (TTC) is a multi-skill engineering training program which runs for a period of 18 months. The content of the course is based on the syllabus of City and Guilds of London Technicians
Examinations Certificates in Engineering, one of the world's leading vocational education organizations.
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report-Continued
The total number of those who have so far completed the programme in our Technical Trainee Centers in Agbara and Abaji factories from 2013 to 30th September 2023 is one hundred and thirty-nine (139). The cost of the training for the eight (8) sets of graduates was fully paid by our Company.
To empower the trainees with relevant skills, the top five (5) students in the scheme were taken to Switzerland for further training within the Group's factories. We are pleased to inform you that the sets of TTC graduates that completed their 18 months program in 2021 recorded outstanding results despite the impact of COVID-19.
The best graduating trainee had 33 distinctions from City and Guilds examinations from levels 3 to 5. The latest batch of graduates of the scheme in Agbara factory (20 Trainees) completed their 18 months program in August 2022 and recorded outstanding result. The best graduating trainee had 29 distinctions from City and Guild examinations from levels 3 to 5.
To reduce unemployment, a total of one hundred and thirty-one (131) graduates were given employment by our Company. The other eight (8) graduates are in full time employment with other organizations. The breakdown of the beneficiaries of the TTC is as follows:
YEAR | NO. | NO. EMPLOYED | |||||
BATCH | OF | NO. OF | |||||
SITE | NO. ADMITTED | EMPLOYED | BY EXTERNAL | ||||
NO. | GRADU | GRADUATES | |||||
ATION | BY Nestlé | PARTY | |||||
1 | 2013 | 16 | 13 | 9 | 4 | ||
2 | 2015 | 16 | 14 | 12 | 2 | ||
3 | 2017 | 20 | 20 | 20 | 0 | ||
4 | 2019 | AGBARA | 20 | 20 | 20 | 0 | |
5 | 2021 | 20 | 20 | 20 | 0 | ||
6 | 2022 | 20 | 20 | 19 | 1 | ||
7 | 2023 | 20 | Still in session | N/A | N/A | ||
Total | 132 | 107 | 100 | 7 | |||
1 | 2023 | FLOWERGATE | 20 | Still in session | N/A | N/A | |
Total | 20 | 0 | 0 | 0 | |||
1 | 2019 | 12 | 12 | 11 | 1 | ||
2 | 2021 | ABAJI | 20 | 20 | 20 | 0 | |
3 | 2023 | 20 | Still in session | N/A | N/A | ||
Total | 52 | 32 | 31 | 1 | |||
GRAND TOTAL | 204 | 139 | 131 | 8 |
The success of the TTC in our Agbara and Abaji factories has encouraged us to establish the TTC model in our Flowergate factory in Sagamu which was commissioned on 10 February, 2023 with twenty (20) pioneer students.
15 Nomination, Governance and Remuneration Committee
Composition of Board Committees
The Nomination, Governance and Remuneration Committee is made up of three (3) directors appointed to make recommendations on the structure and composition of the Board and its Committees; governance issues and to submit proposals on the salaries of executive directors to the Board for approval. The members of the Committee are Mr.Mauricio Alarcon, Mr. Ricardo Chavez (up to 31 January 2023), Mr. Martin Kruegel (from 1 February 2023), Mr. Gbenga Oyebode(up to 17 May 2023) and Dr. Juliet Ehimuan (from 18 May 2023).
16 Audit Committee
In accordance with section 404 of the Companies and Allied Matters Act of Nigeria 2020, members of the audit committee of the Company were elected at the Annual General Meeting held on 17 May 2023. Members that served on the audit committee during the period comprise:
Mr. Matthew Akinlade (Chairman) | Shareholders' Representative | |
Alhaji Kazeem Owonikoko Bello | Shareholders' Representative | |
Mr. Christopher Nwaguru | Shareholders' Representative | |
Dr. Juliet Ehimuan | - From 18/05/2023 to 31/07/2023 | Directors' Representative |
Mr. Gbenga Oyebode | - Up to 17/05/2023 | Directors' Representative |
Mrs. Adebisi Lamikanra | Directors' Representative | |
Mrs. Maryam Aliko Mohammed - From 01/08/2023 | Directors' Representative |
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report-Continued
17 Board Audit and Risk Management Committee
The Committee is to assist the Board in its oversight of audit, risk profile, risk management framework and the risk reward strategy. The Committee is to carry out periodic review of changes in the economic and business environment, including emerging trends and other factors relevant to the Company's risk profile. The members of the Committee are Mr. Oyebode (up to 17 May 2023), Dr. Juliet Ehimuan, Mrs. Adebisi Lamikanra and Mrs. Maryam Aliko Mohammed from 1 August 2023.
18 Effectiveness of Internal Control System
The Board is responsible for maintaining a sound system of internal control to safeguard shareholders' investment and the assets of the Company. The system of internal control is to provide reasonable assurance against material misstatement, prevent and detect fraud and other irregularities.
There is an effective internal control and audit function within the Company which gives reasonable assurance against any material misstatement or loss. The responsibilities include oversight functions of internal audit and control risk assessment and compliance, continuity and contingency planning, and formalisation and improvement of the Company's business processes.
- Disclosures
- Risk Management and Compliance System
The directors are responsible for the total process of risk management as well as expressing their opinion on the effectiveness of the process. The risk management framework is integrated into the day-to-day operations of the business and provides guidelines and standards for administering the acceptance and on-going management of key risks such as operational, reputational, financial, market, technology and compliance risk. The directors are of the view that effective internal audit function exists in the Company and that risk management control and compliance systems are operating efficiently and effectively in all respects.
The Company has a structured Risk Management process in place and undertakes at least annually a thorough Risk Assessment covering all aspects of the business. The Risk Assessment is based on the two criteria "Business Impact" and "Likelihood of Occurrence". For every identified Business risk, mitigating measures are implemented by the Company.
- Sustainability Initiatives
The Company pays adequate attention to the interest of its stakeholders such as its employees, host community, the consumers and the general public. Also, the Company is sensitive to Nigerian's social and cultural diversity and promotes as much as possible national interests as well as national ethos and values without compromising global aspirations where applicable. The Company has a culture of integrity and zero tolerance to corruption and corrupt practices.
- Related Party Transactions
The Company has contractual relationship with related companies in the ordinary course of business. In addition, the Company (and other operating companies of Nestlé in Central and West Africa) executed a Shared Services Agreement with Nestlé Central and West Africa Limited. The purpose of the agreement is to ensure the provision of common operational shared services to all members of the Nestlé Group of companies operating within the Central and West Africa Region, which each member company had previously provided to itself on standalone basis with the attendant duplication of functions, resources and costs. The allocation of the costs to each company is based on Activity Based Costing.
- Report on Social, Ethical, Safety, Health and Environmental Policies and Practices
Corporate Business Principles
Nestlé is a principle-based company, the Nestlé Corporate Business Principles (NCBP) form the foundation of all we do. NCBP consists of ten principles these are:
-
Nutrition, Health and Wellness
We encourage Health and Wellness of our employees via Work-Life Balance, provision of gym and other recreational facilities on our premises, provision of baby room, extended maternity leave that is not annual leave consuming and paternity leave. - Quality Assurance and Product Safety
Everywhere in the world, the Nestlé name guarantees to the consumer that the product is safe and of high standard. - Consumer Communication
We are committed to responsible, reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. We respect consumer privacy.
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Nestle Nigeria Plc
Unaudited Interim Financial Statements for the Nine Months ended 30 September 2023
Directors' Report-Continued
-
Human Rights in Our Business Activities
We fully support the United Nations Global Compact's (UNGC) guiding principles on human rights and labour and aim to provide an example of good human rights and labour practices throughout our business activities. - Leadership and Personal Responsibility
Our success is based on our people. We treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. We recruit competent and motivated people who respect our values. We provide equal opportunities for our employees' development and advancement. We protect our employees' privacy and do not tolerate any form of harassment or discrimination.
The long-term success of the Company depends on its capacity to attract, retain and develop employees able to ensure its growth on a continuing basis. We provide equal opportunity in our resourcing drive. The Nestlé policy is to hire staff with personal attitudes and professional skills enabling them to develop a long-term relationship with the Company. - Safety and Health at Work
We are committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain. We recognise and require that everyone plays an active role in providing a safe and healthy environment, and promote awareness and knowledge of safety and health to employees, contractors and other people related to or impacted by our business activities by setting high standards.
We have Clinics in our Factories, Distribution Centre and Head Office. The Clinics at the factories operate 24 hours service. Also we have Hospitals listed on retainer basis with the company for our employees and their family use. Efforts are being made by the Management and the Safety, Health and Environment Officers at the various sites to avoid industrial accidents through increased training on safety to both staff and contractors. The target of the Company is to ensure that there is no major accident.
We provide basic HIV/AIDS training to our employees. Also, we provide training and basic information to staff on prevention and treatment of serious diseases. On periodic basis, we invite medical experts and health institutions to make available free screening exercise to enable employees know their status in respect of serious diseases and provide the treatment required. We do not discriminate against or disengage any employee on the basis of his or her HIV/AIDS status. The Company makes the above facilities available to staff through the retained clinics. - Supplier and Customer Relations
We require our suppliers, agents, subcontractors and their employees to demonstrate honesty, integrity and fairness, and to adhere to our non-negotiable standards. In the same way, we are committed to our own customers. - Agriculture and rural development
We contribute to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable. - Environmental sustainability
We commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle, we strive to use natural resources efficiently, favour the use of sustainably-managed renewable resources and target zero waste.
We invest continuously to improve our environmental performance. The Nestlé Policy on Environmental Sustainability incorporates the United Nations Global Compact's three guiding principles on environment (Principle 7 on support for precautionary approach to environmental challenges; Principle 8 on the need to undertake initiatives to promote environmental responsibility and Principle 9 on the need to encourage the development and diffusion of environmentally friendly technologies). Our four priority areas are: water, agricultural raw materials, manufacturing and distribution of our products and packaging. We implement our policy through the Nestlé Environmental Management System. We believe that environmental performance is a shared responsibility and requires the cooperation of all parts of society. We are determined to always provide leadership within our sphere of influence. - Water
We are committed to the sustainable use of water and continuous improvement in water management. We recognise that the world faces a growing water challenge and that responsible management of the world's resources by all water users is an absolute necessity.
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Nestlé Nigeria plc published this content on 27 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2023 16:58:24 UTC.