DANGOTE SUGAR REFINERY : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements

for the period ended September 30, 2023

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Index

The reports and statements set out below comprise the consolidated and separate financial statements presented to the shareholders:

Contents	Page
General Information	1
Consolidated and separate statements of profit or loss and other comprehensive income	2
Consolidated and separate statements of financial position	3
Consolidated and separate statements of changes in equity	4
Consolidated and separate statements of cash flows	5
Notes to the Financial Statements	6 - 39

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

General Information

Country of incorporation and domicile	Nigeria
Nature of business and principal activities	Refining of raw sugar into edible sugar and selling of refined sugar
Chairman	Alh. Aliko Dangote (GCON)
Executive Director	Hajiya Mariya Dangote
Group Managing Director/CEO	Mr. Ravindra Singhvi
Director	Mr. Olakunle Alake
Director	Mr. Uzoma Nwankwo
Director	Ms. Bennedikter Molokwu
Director	Dr. Konyinsola Ajayi
Director	Alh. Abdu Dantata
Director	Ms. Maryam Bashir
Director	Mrs. Yabawa Lawan Wabi
Registered office	GDNL Administrative Building
	Terminal E, Shed 20
	NPA Apapa Wharf Complex
	Apapa
	Lagos
Holding company	Dangote Industries Limited, incorporated in Nigeria
Ultimate holding company	Greenview International Corp. Cayman Island
Auditors	PricewaterhouseCoopers
	(Chartered Accountants)
	Landmark Towers
	Plot 5B, Water Corporation Road
	Victoria Island
	Lagos
Bankers	Access Bank Plc
	Coronation Merchant Bank
	Ecobank Plc
	Fidelity Bank Plc
	First Bank of Nigeria Limited
	First City Monument Bank Plc
	FSDH Merchant Bank
	Globus Bank Ltd
	Guaranty Trust Bank Plc
	Greenwich Merchant Bank
	Jaiz Bank Plc
	Providus bank Plc
	Keystone bank Limited
	Rand Merchant Bank
	Sterling Bank Plc
	Stanbic IBTC Bank Plc
	Standard Chartered Bank Nigeria Limited
	United Bank for Africa Plc
	Union Bank of Nigeria Plc
	Unity Bank Plc
	Wema Bank Plc
	Zenith Bank Plc
Company Secretary/Legal Adviser	Mrs. Temitope Hassan
	3rd Floor, GDNL Administrative Building
	Terminal E, Shed 20
	NPA Apapa Wharf Complex
	Apapa
	Lagos
Registrars	Veritas Registrars Limited
	Plot 89A Ajose Adeogun Street
	Victoria Island
	Lagos

1

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Consolidated and separate statement of profit or loss and other comprehensive income

				GROUP						COMPANY
	Note(s)	Qtr3, 2023	30/9/2023	Qtr3, 2022	30/9/2022	F/Yr, 2022		Qtr3, 2023	30/9/2023	Qtr3, 2022	30/9/2022	F/Yr, 2022
	N'000	N'000	N'000	N'000	N'000		N'000	N'000	N'000	N'000	N'000
Continuing operations
Revenue	5	106,929,583	309,713,262	102,863,296	288,320,722	403,245,988	106,929,583	309,713,262	102,863,296	288,320,722	403,245,988
Cost of sales	6	(100,461,533)	(245,056,582)	(84,245,812)	(230,884,913)	(311,282,950)	(100,461,533)	(245,056,582)	(84,245,812)	(230,884,913)	(311,282,950)
Gross profit		6,468,050	64,656,680	18,617,484	57,435,809	91,963,038	6,468,050	64,656,680	18,617,484	57,435,809	91,963,038
Other income	11	866,648	1,011,536	61,632	363,047	1,435,482	866,648	1,011,536	61,632	363,047	533,276
Selling and distribution expenses	7	(156,051)	(459,605)	(188,991)	(557,800)	(741,408)	(156,051)	(459,605)	(188,991)	(557,800)	(741,408)
Administrative expenses	7	(3,293,486)	(9,125,109)	(2,734,696)	(7,369,535)	(10,310,342)	(3,036,829)	(8,359,138)	(2,477,602)	(6,707,152)	(9,357,639)
Impairment gains/(losses)	23.3	58,712	58,712	-	-	63,537	58,712	58,712	-	-	63,537
Operating profit	14	3,943,873	56,142,214	15,755,429	49,871,521	82,410,307	4,200,530	56,908,185	16,012,523	50,533,904	82,460,804
Finance income	8	2,396,580	7,244,843	1,736,512	3,684,116	6,379,475	2,396,579	7,244,842	1,736,512	3,684,116	6,379,475
Finance cost	10	(18,063,182)	(108,721,501)	(11,667,789)	(18,974,011)	(9,802,295)	(17,870,207)	(108,147,213)	(11,759,884)	(19,019,869)	(10,248,536)
Finance costs - net		(15,666,602)	(101,476,658)	(9,931,277)	(15,289,895)	(3,422,820)	(15,473,628)	(100,902,371)	(10,023,372)	(15,335,753)	(3,869,061)
Change in fair value adjustment	9	1,762,375	4,009,039	712,708	1,690,081	3,315,333	1,762,375	4,009,039	712,708	1,690,081	3,315,333
(Loss)/Profit before tax		(9,960,354)	(41,325,405)	6,536,860	36,271,707	82,302,820	(9,510,723)	(39,985,147)	6,701,859	36,888,232	81,907,076
Taxation	12.1	10,920,543	14,298,111	(1,946,496)	(11,439,422)	(27,560,686)		10,920,543	14,298,111	(1,946,496)	(11,439,422)	(27,560,686)
(Loss)/Profit for the period		960,189	(27,027,294)	4,590,364	24,832,285	54,742,134	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
(Loss)/Profit attributable to:
Owners of the parent		964,686	(27,013,891)	4,592,014	24,838,450	54,738,177	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
Non-controlling interest		(4,497)	(13,403)	(1,650)	(6,165)	3,957		-	-	-	-	-
		960,189	(27,027,294)	4,590,364	24,832,285	54,742,134	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
Total comprehensive (loss)/income
for the period		960,189	(27,027,294)	4,590,364	24,832,285	54,742,134	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
Total comprehensive (loss)/income
attributable to:
Owners of the parent		964,686	(27,013,891)	4,592,014	24,838,450	54,738,177	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
Non-controlling interest		(4,497)	(13,403)	(1,650)	(6,165)	3,957		-	-	-	-	-
		960,189	(27,027,294)	4,590,364	24,832,285	54,742,134	1,409,820	(25,687,036)	4,755,363	25,448,810	54,346,390
Earnings per share
Per share information
Basic earnings per share (Naira)	15	0.08	-2.22	0.37	2.04	4.51	0.12	(2.11)	0.40	2.10	4.47
Diluted earnings per share (Naira)	15
0.08	-2.22	0.37	2.04	4.51	0.12	-2.11	0.40	2.10	4.47

2

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Consolidated and separate statements of financial position as at September 30, 2023

Assets
Non-current assets
Property, plant and equipment	16
Investment in subsidiaries	20
Deposit for shares	21
Total non-current assets
Current assets
Inventories	22
Biological assets	17
Trade and other receivables	23
Other assets	18
Asset held for sale	19
Cash and cash equivalents	24

Total current assets

Total assets

Equity

Attributable to owners of Parent company

Share capital	25
Share premium	25
Retained earnings	26
Non-controlling interest	27
Liabilities
Non-Current Liabilities
Deferred tax liabilities	13
Lease liability	31.1
Borrowings	28
Current Liabilities
Current tax liabilities	12.3
Lease liability	31.1
Borrowings	28
Trade and other payables	30
Employee benefits	29
Other liabilities	31

Total current liabilities

Total liabilities

Total equity and liabilities

GROUP	GROUP		GROUP		COMPANY		COMPANY	COMPANY
30/9/2023	31/12/2022	30/9/2022	30/9/2023	31/12/2022	30/9/2022
N'000	N'000		N'000		N'000		N'000	N'000
163,172,403	157,761,632	151,019,061	97,987,162	93,696,015	88,529,830
-	-			297,000	297,000	297,000
-	-				66,508,475	64,025,068	62,696,387
163,172,403	157,761,632		151,019,061		164,792,637	158,018,083	151,523,217
107,443,206	44,264,068	61,125,545	106,144,670	43,387,050	59,707,122
10,567,075	6,942,660	6,248,347	10,567,075	6,942,660	6,248,347
173,566,981	107,434,891	82,175,171	173,023,126	106,797,356	81,818,500
1,714,571	304,179	2,855,705	1,709,084	297,929	2,847,037
868,642	868,642	868,642	868,642	868,642	868,642
159,214,886	174,858,294	169,752,763	159,096,736	174,658,116	169,410,032
453,375,361	334,672,734	323,026,173		451,409,333	332,951,753	320,899,680
616,547,764	492,434,366	474,045,234	616,201,970	490,969,836	472,422,897
6,073,439	6,073,439	6,073,439	6,073,439	6,073,439	6,073,439
6,320,524	6,320,524	6,320,524	6,320,524	6,320,524	6,320,524
113,606,100	158,845,237	128,945,510	115,728,368		159,635,722	130,738,142
126,000,063	171,239,200	141,339,473	128,122,331	172,029,685	143,132,105
(26,192)	(12,790)	(22,912)	-		-	-
125,973,871	171,226,410	141,316,561	128,122,331	172,029,685	143,132,105
841,449	13,238,074	10,431,964	841,449	13,238,074	10,431,964
112,823	-	1,375,276	-	-	1,333,830
321,702	531,563	657,781	321,702	531,563	657,781
1,275,974	13,769,637	12,465,021	1,163,151	13,769,637	12,423,575
7,356,419	25,542,640	15,494,006	7,356,420	25,542,640	15,494,005
974,041	981,142	1,103,799	966,012	933,022	1,024,170
274,242	243,719	172,315	274,242	243,719	172,315
470,428,393	273,746,758	293,195,116	468,054,991	271,527,073	289,878,311
751,304	762,567	762,568	751,303	762,567	762,568
9,513,520	6,161,493	9,535,848	9,513,520	6,161,493	9,535,848
489,297,919	307,438,319	320,263,652	486,916,488	305,170,514	316,867,217
490,573,893	321,207,956	332,728,673	488,079,639	318,940,151	329,290,792
616,547,764	492,434,366	474,045,234	616,201,970	490,969,836	472,422,897

The consolidated and separate financial statements on pages 2 to 39, were approved by the board on October 27, 2023 and were signed on its behalf by:

Alh. Aliko Dangote, GCON	Mr. Ravindra Singh Singhvi	Mr. Oscar Mbeche
Chairman	Group Managing Director/CEO	Group Chief Finance Officer
FRC/2013/IODN/00000001766	FRC/2021/003/000000/22565	FRC*
`		* "Waiver granted by FRCN"

The accompanying notes on pages 6 to 39 form an integral part of the consolidated and separate financial statements.

3

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Consolidated and separate statements of changes in equity

Company	Note
Balance as at 1 January 2022
Profit for the period
Total comprehensive income for the period
Transaction with owners:
Surplus on revaluation of Numan land
Dividend paid
Balance as at 30 September 2022
Balance as at 1 October 2022
Profit for the period
Total comprehensive income for the period
Transaction with owners:
Dividend paid
Balance as at 31 December 2022
Profit for the period
Total comprehensive income for the period
Transaction with owners:

Share Capital		Share		Retained			Total
	Premium		Earnings
N'000		N'000		N'000			N'000
6,073,439	6,320,524	117,436,204	129,830,167
-		-		25,448,810		25,448,810
-	-	25,448,810	25,448,810
					-
-	-	(12,146,874)	(12,146,874)
6,073,439	6,320,524	130,738,140	143,132,105
6,073,439	6,320,524	130,738,140	143,132,105
-	-	-	-
-	-	28,897,580			28,897,580
6,073,439	6,320,524	159,635,720	172,029,685
-	-	-	-
6,073,439	6,320,524	159,635,720	172,029,685
-		-		(25,687,036)		(25,687,036)
-	-	(25,687,036)	(25,687,036)

Dividend paid					-		-		(18,220,314)		(18,220,314)
Balance as at 30 September 2023					6,073,439	6,320,524	115,728,370	128,122,331
Group							Attributable to		Non-
	Share		Share	Retained		owners of
				controlling		Total
	Capital		Premium	Earnings		parent
				interest
							company
	N'000		N'000		N'000		N'000		N'000		N'000
Balance as at 1 January 2022	6,073,439	6,320,524		116,253,934	128,647,897	(16,747)	128,631,150
Profit for the period	-		-		24,838,450		24,838,450		(6,165)		24,832,285
Total comprehensive income for the period	-	-		24,838,450	24,838,450	(6,165)	24,832,285
Transaction with owners:
Dividend paid	-	-		(12,146,874)		(12,146,874)	-	(12,146,874)
Balance as at 30 September 2022	6,073,439	6,320,524		128,945,510	141,339,473	(22,912)	141,316,561
Balance as at 1 October 2022	6,073,439	6,320,524		128,945,510	141,339,473	(22,912)	141,316,561
Profit for the period	-	-		29,899,726	29,899,726	10,122	29,909,850
Total comprehensive income for the period	6,073,439	6,320,524		158,845,237	171,239,200	(12,790)	171,226,411
Transaction with owners:
Dividend paid	-	-		-	-	-	-
Balance as at 31 December 2022	6,073,439	6,320,524		158,845,237	171,239,200	-12,790	171,226,410
Profit for the period	-		-		(27,018,820)		(27,018,820)		(13,403)		(27,032,223)
Total comprehensive income for the period	-	-		(27,018,820)	(27,018,820)	(13,403)	(27,032,223)
Transaction with owners:
Dividend paid	-		-		(18,220,314)		(18,220,314)		-		(18,220,314)
Balance as at 30 September 2023	6,073,439		6,320,524		113,606,103		126,000,066		(26,192)		125,973,871

The accompanying notes on pages 6 to 39 form an integral part of the consolidated and separate financial statements.

4

Dangote Sugar Refinery Plc.

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Consolidated and separate statements of cash flows

		GROUP	GROUP	GROUP	COMPANY	COMPANY	COMPANY
	Note(s)	30/9/2023	31/12/2022	30/9/2022	30/9/2023	31/12/2022	30/9/2022
	N'000	N'000	N'000	N'000	N'000	N'000
Cash flows for operating activities
Profit before taxation		(41,325,405)	82,302,820	36,271,707	(39,985,147)	81,907,076	36,888,232
Adjustments for non-cash income and expenses:
Depreciation of property, plant and equipment	16	7,565,910	9,731,508	7,633,992	6,805,937	8,814,028	6,979,637
Impairment of financial assets	23.3	(58,712)	(63,537)	-	(58,712)	(63,537)	-
Government grant	21b	-	(65,109)	-	-	(65,109)	-
(Profit)/loss on sale of assets	11	-	(174,602)	(174,602)	-	(174,602)	(174,602)
Property, plant and equipment impaired and written off	16	43,220	-	4,695,443	43,220	-	(9,473)
Prior year tax adjustment		(4,929)	-	-	-	-	-
Interest income	8	(7,244,843)	(6,379,475)	(3,684,116)	(7,244,842)	(6,379,475)	(3,684,116)
Interest expense	10	105,722	242,444	124,195	130,510	241,700	146,536
Fair value loss/(gain) on biological assets	9	(4,009,039)	(3,315,333)	(1,690,081)	(4,009,039)	(3,315,333)	(1,690,081)
Changes in working capital
(Increase)/decrease in Inventory		(63,179,138)	11,735,475	(5,126,002)	(62,757,620)	10,766,083	(5,553,989)
Net (additon)/usage of biological assets		384,625	1,028,227	97,288	384,625	1,028,227	97,288
(Increase)/decrease in trade and other receivables		(66,073,378)	(57,215,821)	(32,019,638)	(66,167,058)	(60,431,549)	(35,516,230)
(Increase)/decrease in other assets		(1,410,392)	(165,546)	(2,717,072)	(1,411,155)	(160,778)	(2,709,886)
Increase/(decrease) in other liabilities		3,352,027	1,655,678	5,030,033	3,352,027	1,655,687	5,030,042
Increase/(decrease) in trade payables		196,681,635	75,734,978	91,812,983	196,527,918	84,788,758	99,769,643
Cash generated from operations		24,827,303	115,051,707	100,254,129	25,610,665	118,611,176	99,572,999
Finance cost paid		-	-	-	-	-	-
Tax paid	12.3	(16,284,735)	(9,661,007)	(6,394,487)	(16,284,735)	(9,661,007)	(6,394,487)
Gratuity paid	29	(11,264)	(3,698)	(3,698)	(11,264)	(3,698)	(3,698)
		8,531,304	105,387,002	93,855,944	9,314,663	108,946,471	93,174,814
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment	16	(13,019,900)	(26,151,896)	(18,698,998)	(11,140,303)	(22,037,671)	(11,699,369)
Proceeds on disposal of property,plant and equipment		-	203,162	203,163	-	203,162	203,163
Interest received	8	7,244,843	6,379,475	3,684,116	7,244,842	6,379,475	3,684,116
Net cash used in investing activities		(5,775,057)	(19,569,259)	(14,811,720)	(3,895,461)	(15,455,034)	(7,812,091)
Cash flows from financing activities
Dividends paid	26	(18,220,317)	(12,146,874)	(12,146,874)	(18,220,317)	(12,146,874)	(12,146,874)
Unclaimed dividend received		-	39,269	-	-	39,269	-
Deposit for shares		-	-	-	(2,483,407)	(6,940,916)	(5,612,235)
Interest paid	28	(179,338)	(63,783)	(154,391)	(52,886)	(63,783)	(42,819)
Lease Liabilities paid - Interest	31.1	-	(113,552)	-	(10,678)	(112,808)	-
Lease Liabilities paid - Principal		-	(1,409,999)	-	-	(1,389,678)	-
Repayment of borrowings	28	-	(274,314)	-	(213,294)	(274,314)	(206,547)
Net cash used in financing activities		(18,399,655)	(13,969,253)	(12,301,265)	(20,980,582)	(20,889,104)	(18,008,475)
Net increase in cash and cash equivalents		(15,643,408)	71,848,490	66,742,959	(15,561,380)	72,602,333	67,354,249
Cash and cash equivalents at beginning of period		174,858,294	103,009,804	103,009,804	174,658,116	102,055,783	102,055,783
Cash and cash equivalents at end of the period	24	159,214,886	174,858,294	169,752,763	159,096,736	174,658,116	169,410,032

The accompanying notes on pages 6 to 39 form an integral part of the consolidated and separate financial statements.

5

Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Notes to the Consolidated and Separate Financial Statements 1 General information

Dangote Sugar Refinery Plc (the Company) was incorporated as a Public Limited Liability company on 4 January 2005, commenced operation on 1 January 2006 and became quoted on the Nigerian Stock Exchange in March 2007. Its current shareholding is 68% by Dangote Industries Limited and 32% by the Nigerian public.

The ultimate controlling party is Greenview International Corporation, Cayman Island

The registered address of the Company is located at GDNL Administrative Building, Terminal E, Shed 20 NPA Apapa Wharf Complex, Apapa, Lagos

The consolidated financial statements of the Group for the Period ended 30 September comprise the Company and its subsidiaries - Taraba Sugar Company Limited, Adamawa Sugar Company Limited and Nasarawa Sugar Company Limited.

1.1 The principal activity

The principal activity of the Group is the refining of raw sugar into edible sugar and the selling of refined sugar. The Group's products are sold through distributors across the country.

Going Concern status

The Group has consistently been making profits. The Directors believe that there is no intention or threat from any party to curtail significantly its line of business in the foreseeable future. Thus, these financial statements are prepared on a going concern basis.

1. Operating environment
   Emerging markets such as Nigeria are subject to different risks than more developed markets, including economic, political and social, and legal legislative risks. As has happened in the past, actual or perceived financial problems or an increase in the perceived risks associated with investing in emerging economies could adversely affect the investment climate in Nigeria and the country's economy in general. The global financial system continues to exhibit signs of deep stress and many economies around the world are experiencing lesser or no growth than in prior years. These conditions could slow or disrupt Nigeria's economy, adversely affecting the Group's access to capital and cost of capital for the Group and more generally, its business, result of operation, financial condition and prospects.
2. Financial period

These financial statements cover the financial period from 1 January 2023 to 30 September 2023 with comparatives for the year ended 31 December 2022 and period ended 30 September 2022.

2 Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

In addition, the CBN on 14 June 2023 issued a circular titled Operational Changes to the Foreign Exchange markets abolishing segmentation and introducing willing buyer willing seller on the Investors and Exporters (I & E) Window. Based on the prevailing market rates, the Group changed its USD/Naira closing rate of 461 as at 31 December 2022 to 756 as at 30 June 2023 and now to 776.79 as at 30 September 2023. Monetary Assets and liabilities for the Nigeria operations were revalued at this rate resulting in a revaluation loss of N72.88billion for the Company mainly driven by Letters of Credit and foreign vendor balances. This loss has been taken in the month of September. None of the new or revised standards effective 1 January 2023 had a material effect on the Financial statements.

2.1 Statement of compliance

These consolidated and separate financial statements have been prepared in accordance with International Financial Reporting standards (IFRS) as issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) of IASB (together "IFRS") that are effective at 31 March 2022 and requirements of the Companies and Allied Matters Act of Nigeria and the Financial Reporting Council (FRC) Act 2011 of Nigeria.

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Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Notes to the Consolidated and Separate Financial Statements

1. Basis of preparation
   The consolidated and separate financial statements have been prepared on the historical cost basis except for biological assets which is measured at fair value less cost to sell. Historical cost is generally based on the fair value of the consideration given in exchange for assets. All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand Naira unless otherwise stated.The principal accounting policies are set out below:
2. Consolidation of subsidiaries
   Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non- controlling interests even if this results in the non-controlling interests having a deficit balance.
   When necessary adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. The results of subsidiaries acquired or disposed of during the year are included in the Group statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal as appropriate.
   In the Company's separate financial statements, investments in subsidiaries are carried at cost less any impairment that has been recognised in profit or loss.

2.4 Revenue recognition

1. Accounting policy
   Revenue is measured at the fair value of the consideration received or receivable for goods or services, in the ordinary course of the Group's activities and it is stated net of value added tax (VAT), rebates and returns. A valid contract is recognised as revenue after;
2. • The contract is approved by the parties.
   • Rights and obligations are recognised.
   • Collectability is probable.
   • The contract has commercial substance.
   • The payment terms and consideration are identifiable.

The probability that a customer would make payment is ascertained based on the evaluation done on the customer as stated in the credit management policy at the inception of the contract. The Group is the principal in all of its revenue arrangement since it is the primary obligor in all of the revenue arrangements, has inventory risk and determines the pricing for the goods and services.

Sale of goods

Revenue is recognised when the control of the goods and service are transferred to the customer. This occurs when the goods are delivered to the customer and customer's acceptance is received or when goods are picked up by the customers.

Revenue from sale of sugar and molasses is recognised based on the price specified in the contract, net of the estimated rebates and returns. Rebates are estimated at the inception of the contract except where the time lag between the recognition of revenue and granting rebates is within one month. Returns on goods are estimated at the inception of the contract except where the timing between when the revenue is recognised and when the returns occur is considered immaterial. In these instances, the returns are accounted for when they occur.

The delivery service provided by the Group is a sales fulfilment activity and the income earned is recognised at the point in time when the goods are delivered to the customer.

Delivery occurs when the goods have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and when the customer has accepted the products in accordance with the sales contract, or the acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have been satisfied.

Contract liability is recognised for consideration received for which the performance obligation has not been met.

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Dangote Sugar Refinery Plc

Consolidated and Separate Financial Statements for the Period Ended September 30, 2023

Notes to the Consolidated and Separate Financial Statements

Revenue recognition (continued)

Disaggregation of revenue from contract with customers

The Group recognises revenue from the transfer of goods at a point in time in the following product lines. The Group derives revenue from the sale of sugar, molasses and freight services.

	Freight	Sale of sugar	Sale of	Total
	services	molasses
	N'000	N'000	N'000	N'000
Revenue from contract with customers	1,243,714	306,505,644	1,963,904	309,713,262

2.5 Interest income Recognition

1. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, 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's to that assets's net carrying amount on initial recognition.

2. Pensions and Other post-employment benefits
   The Group operates a defined contribution based retirement benefit scheme for its staff, in accordance with the amended Pension Reform Act of 2014 with employee contributing 8% and the employer contributing 10% each of the employee's relevant emoluments. Payments to defined contribution retirement benefit plans are recognised as an expense in statement of profit or loss when employees have rendered the service entitling them to the contributions.
3. Taxation
   Income tax expense represents the sum of the tax currently payable and deferred tax.
   Current tax
   The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statements of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted.
   Current income tax is the expected amount of income tax payable on the taxable profit for the year determined in accordance with the Companies Income Tax Act (CITA) using statutory tax rates of 30% at the reporting sheet date. Education tax is calculated at 2.5% of the assessable profits in accordance with the Tertiary Education Tax Act.

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