IKEJA HOTEL : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

IKEJA HOTEL PLC

Contents	Page
Certification	2
Statement of Financial Position	3
Satement of Comprehensive Income	4
Statement of Changes in Equity	5
Statement of Cash Flows	6
Notes to Financial Statement	7-25
Operating Result Summary	26

IKEJA HOTEL PLC

Certification of Financial Statements

In compliance with Section 60(2) of the Investment and Securities Act, 2007, we have reviewed the unaudited interim Financial Statements of the Group for the third quarter ended 30 September 2023.

The Financial Statements, based on our knowledge, does not contain any untrue statement of any material fact or contain any misleading information in any respect.

The Financial Statements, and other financial information included therein, present fairly in all material respects the consolidated statement of financial position, consolidated statement of financial performance and consolidated statement of cash flows of the Group for the third quarter ended 30 September 2023.

We are responsible for designing the internal controls and procedures surrounding the financial reporting process and assessing these controls in accordance with Section 60(2) of the Investment and Securities Act, 2007 and have designed such internal controls and procedures, or caused such internal controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within the entity. The controls, which are properly prepared, have been operating effectively during the year under reference.

Based on the foregoing, we, the undersigned, hereby certify that to the best of our knowledge and belief, the information contained in the unaudited interim Financial Statements of Ikeja Hotel Plc for the third quarter ended 30 September 2023 are complete, accurate and free from any material misstatement.

Theophilus E. Netufo	Zacchaeus O. Adeyemo
Managing Director/CEO	Financial Controller
FRC/2013/ICAN/00000004775	FRC/2018/ICAN/00000017858
24 October 2023	24 October 2023

2

IKEJA HOTEL PLC

Consolidated Statement of Financial Position
As at 30 September 2023
			The Group		The Company
	Notes	30-Sep-23		31-Dec-22	30-Sep-23				31-Dec-22
			N'000		N'000	N'000				N'000
Non-Current Assets
Property, Plant and Equipment	7		7,016,629		6,927,608			7,016,629	6,927,608
Capital Work in Progress	9		144,684		67,842			144,684	67,842
Intangible Asset	10		19,476		18,329			19,476	18,329
Investment in Subsidiaries	35		-		-			4,444,518	4,444,518
Investment Accounted for Using the
Equity Method	36		-		-			798,722	798,722
Total Non-Current Assets			7,180,789		7,013,779			12,424,029	12,257,019
Current Assets
Inventories	20		196,268		223,605			196,268	223,605
Trade Receivables	18		1,190,679		863,604			1,188,644	863,604
Other Receivables and Prepayment	19		855,612		872,080			855,612	869,787
Loan to Related Party	21		9,952,308		9,952,308			9,952,308	9,952,308
Amount Due from Related Parties	22		-		-			268,442	643,739
Financial Investment	37		-		2,332,655			-	-
Cash and Cash Equivalents	23		13,643,494			8,605,724			8,336,737			5,494,754
Total Current Assets			25,838,360		22,849,976			20,798,012		18,047,796
Total Assets			33,019,148		29,863,755			33,222,041	30,304,815
Equity and Liabilities
Share Capital	31.2		1,039,398		1,039,398			1,039,398	1,039,398
Share Premium	32		1,381,072		1,381,072			1,381,072	1,381,072
Retained Earnings	33		5,931,764		5,551,514			5,971,688	5,686,510
Capital reserve			1,832		1,832				-
Equity Attributable to Equity Holders
of Parent			8,354,066		7,973,816			8,392,158	8,106,980
Non-Controlling Interest	34		(139,710)		(190,903)			-			-
			8,214,356		7,782,913			8,392,158	8,106,980
Liabilities
Non-Current Liabilities
Amount Due to Related Parties	27		10,776,380		9,888,824			11,549,486	10,668,541
Retirement Benefits Obligation	30.		728,740		533,726			728,106	533,726
Deferred Tax	29.2		159,133			159,133			159,133			159,133
Non-Total Current Liabilities			11,664,253		10,581,683			12,436,724	11,361,400
Current Liabilities
Trade and Other Payables	25		2,466,263		2,506,564			1,955,597	2,004,704
Deferred Income	24		10,005,854		8,742,793			9,863,599	8,600,538
Deposit for Shares	26		93,600		93,600			93,600	93,600
Dividend Payable	28		16,691		16,691			16,691	16,691
Current Tax Payable	29.1		558,132			139,511			463,672			120,902
Total Current Liabilities			13,140,539			11,499,159			12,393,159			10,836,435
Total Liabilities			24,804,792			22,080,842			24,829,883			22,197,835
Total Equity and Liabilities			33,019,148		29,863,755			33,222,041	30,304,815

These consolidated financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf on 24 October 2023.

Chief Anthony Idigbe, PHD, SAN	Alh Abatcha Bulama	Mr. Theophilus E. Netufo	Mr. Zacchaeus O. Adeyemo
Chairman	Director	Managing Director/CEO	Financial Controller
FRC/2014/NBA/00000010414	FRC/2014/ICAN/000006535	FRC/2013/ICAN/00000004775	FRC/2018/ICAN/00000017858

The accompanying notes form an integral part of these consolidated financial statements.

3

IKEJA HOTEL PLC

Consolidated Statement of Comprehensive Income
For The Third Quarter Ended 30 September 2023
		The Group	The Company
		Year to date	Year to date
	Note	30-Sep-23	30-Sep-22	30-Sep-23	30-Sep-22
		N'000	N'000	N'000	N'000
Revenue	11	7,692,320	6,165,075	7,692,320	6,127,386
Cost of Sales	12	(5,003,536)	(3,971,323)	(5,003,536)	(3,971,323)
Gross Profit		2,688,785	2,193,752	2,688,785	2,156,063
Other Income	13	145,763	33,473	140,953	28,710
Sales and Distribution Expenses	16	(268,989)	(217,240)	(268,989)	(217,240)
Administrative and General Expenses	15	(945,477)	(1,276,404)	(836,174)	(722,357)
Operating Profit/(Loss)		1,620,082	733,581	1,724,575	1,245,176
Finance Income	14	338,870	3,168	12,261	3,168
Finance Costs	17	(888,947)	(808,246)	(888,947)	(808,246)
Share of loss in investment accounted
for using equity		-	-	-	-
Profit/(Loss) Before Taxation		1,070,005	(71,497)	847,888	440,098
Current Tax (Expense)/Income	29.3	(482,652)	(175,043)	(406,801)	(175,043)
Profit for the Period
	587,353	(246,540)	441,088	265,055
Profit/(Loss) Attributable to:
Equity Holders of the Parent		536,160	(246,540)	441,088	265,055
Non-Controlling Interest		51,193	-	-	-
		587,353	(246,540)	441,088	265,055
Other Comprehensive
Income/(Loss) for the Period:
Re-measurement Gain/(Loss of
Defined Benefit Plan)		-	-		-
Other Comprehensive Income for the
Period		-	-	-	-
Total Comprehensive Income for the
Period		587,353	(246,540)	441,088	265,055
Total Comprehensive Income for the
Period Attributable to:
Equity Holders of the Parent		536,160	(246,540)	441,088	265,055
Non-Controlling Interest		51,193	-	-	-
Total Comprehensive Income for the
Period Attributable to:		587,353	(246,540)	441,088	265,055
Basic Earnings Per Share (kobo)		28	(12)	21	13

4

Consolidated Statement of Comprehensive Income
For The Three Months Ended 30 September 2023
	The Group	The Company
	Jul.-Sep 2023	Jul-Sep 2022	Jul.-Sep 2023	Jul-Sep 2022
	N'000	N'000	N'000	N'000
Revenue	3,124,338	2,111,838	3,124,338	2,111,838
Cost of Sales	(1,945,928)	(1,301,875)	(1,945,928)	(1,301,875)
Gross Profit	1,178,410	809,964	1,178,410	809,964
Other Income	18,157	28,828	16,612	24,065
Sales and Distribution Expenses	(102,299)	(68,344)	(102,299)	(68,344)
Administrative and General Expenses	(337,389)	(791,860)	(317,140)	(242,457)
Operating Profit/(Loss)	756,879	(21,412)	775,582	523,228
Finance Income	71,323	1,233	(68,914)	1,233
Finance Costs	(299,103)	(272,109)	(299,103)	(272,109)
Profit/(Loss) Before Taxation	529,098	(292,287)	407,565	252,353
Current Tax Expense	(339,285)	(95,440)	(263,695)	(95,440)
Profit for the Period	189,813	(387,727)	143,869	156,913
Profit Attributable to:
Equity Holders of the Parent	173,733	(246,540)	143,869	156,913
Non-Controlling Interest	16,080	-	-	-
	189,813	(387,727)	143,869	156,913
Other Comprehensive Income for the
Period
Total Comprehensive Income for the
Period	189,813	(387,727)	143,869	156,913
Eanings Per Share (Kobo)	9	(19)	7	8

4b

IKEJA HOTEL PLC

Statement of Changes in Equity as at 30 September 2023

				The Group					The Company
						Non-
	Issued	Share	Retained	Capital	Revaluation	controlling	Total		Issued	Share	Retained
Attributable to the Equity Holders of the Company	Capital	Premium	Earnings	Reserve	Reserve	interest	equity		Capital	Premium	Earnings	Total
	=N='000	=N='000	=N='000	=N='000	=N='000	=N='000	=N='000		=N='000	=N='000	=N='000	=N='000
Balance as at 1 January 2023	1,039,398	1,381,072	5,551,514	1,832	-	(190,903)	7,782,912		1,039,398	1,381,072	5,686,510	8,106,980
Changes in Equity for the Period
Profit for the Period			536,160			51,193	587,353		-	-	441,088	441,088
Dividend Paid			(155,910)				(155,910)				(155,910)	(155,910)
			-				-				-	-
Total Comprehensive Income for the Period			380,251		-	51,193	431,443				285,178	285,178
Reclassifications/derecognition
At 30 September, 2023	1,039,398	1,381,072	5,931,765	1,832	-	(139,710)	8,214,355		1,039,398	1,381,072	5,971,688	8,392,158
Balance as at 1 January 2022	1,039,398	1,381,072	6,413,223		3,121,799	8,806,428	20,761,921		1,039,398	1,381,072	5,448,269	7,868,740
Changes in Equity for the Period
Profit/(Loss) for the Period			(246,540)			-	(246,540)		-	-	265,055	265,055
Adjustment (CHPL Shares disposed)			(2,501,833)		(2,394,303)	(6,775,545)	(11,671,681)
												-
Total Comprehensive Income for the Period			(2,748,373)	-	(2,394,303)	(6,775,545)	(11,918,221)		-	-	265,055	265,055
At 30 September, 2022	1,039,398	1,381,072	3,664,850	-	727,496	2,030,883	8,843,698		1,039,398	1,381,072	5,713,323	8,133,794

5

IKEJA HOTEL PLC

Consolidated Statement of Cash Flows
For The Third Quarter Ended 30 September 2023
		The Group		The Company
	Notes	30-Sep-23	30-Sep-22		30-Sep-2330-Sep-22
		N'000	N'000		N'000	N'000
Profit/(Loss) before tax		1,070,005	(71,497)	847,888	440,098
Adjustment for:
Depreciation of PPE	7	329,648	469,732	329,648	337,680
Amortisation of Intangible Asset	10.1	2,317	1,156	2,316	1,156
Finance Costs	17	888,947	808,246	888,947	808,246
Post Employment Benefit Expense		-	(1,592)	-	(1,592)
Interest on Placement with Banks	14	(338,870)	(10,564)	(12,261)	(3,168)
Adjustment(CHP Shares Disposed)			227,440	-
Profit on Disposal of PPE	7	(650)	(1,594)	(650)	(1,594)
Exchange (Gain)/Loss		-	-	-	(24,012)
						-
		1,951,398	1,421,327	2,055,889	1,556,814
Changes in:
Inventories	20	27,337	58,797	27,337	3,203
Trade and Other Receivables	18	(327,075)	46,558	(325,040)	(406,921)
Other Assets	19	16,468	19,817	14,175	(300,897)
Post Employment Benefits expense		194,380	438,595	194,380	71,495
Due from Related Parties		-	-	375,296	91,518
Trade and Other Payables	25	320,829	(2,115,325)	(49,107)	68,572
Deferred Income	24	1,263,061	(39,773)	1,263,060	(3,076)
Due to Related Parties		887,556	1,180,952		880,945	706,805
Cash Generated from Operating Activities		4,333,955	1,010,947	4,436,935	1,787,514
Income Tax Paid	29.1	(64,031)	(50,222)	(64,031)	(50,222)
Net Cash from Operating Activities		4,269,923	960,725	4,372,903	1,737,292
Cash Flows from Investing Activities
Additions to Property Plant and Equipment	7	(418,670)	(293,047)	(418,669)	(78,993)
Additions to Intangible Assets		(3,464)	-	(3,464)	-
Additions to/Utilization of Capital Work in Progress	9	1,129	(1,542)	(76,842)	(1,542)
Proceed from Sales of Shares(CHPL)		1,894,188	3,014,808	-	-
Interest on Placement with Banks		338,870	3,913	12,261	3,168
Proceed on Disposal of property, Plant and
Equipment		650	7,761		650	1,804
Net Cash Flows used in Investing Activities		1,812,703	2,731,893	(486,064)	(75,564)
Cash Flows from Financing Activities
Finance Costs		(888,947)	(803,202)	(888,947)	(808,246)
Dividend Paid		(155,910)		(155,910)
Payment to Related Party		-	-			(32,500)
Net Cash Flows used in Financing Activities		(1,044,857)	(803,202)	(1,044,857)	(840,746)
Net Increase in Cash and Cash Equivalent		5,037,770	2,889,416	2,841,983	820,982
Cash and Cash Equivalents at the Beginning of the
Year		8,605,724	4,844,019	5,494,754	3,836,334
Effect of Foreign Exchange Rate Changes on the
Balance of Cash Held in Foreign Currencies		-	-	-	24,012
Cash and Cash Equivalent at the End of the
Period		13,643,494	7,733,435		8,336,737	4,681,329

6

IKEJA HOTEL PLC

Notes to the Unaudited Financial Statements

For the Period Ended 30 September 2023

1. The Group

1.1 The reporting entity

1.1.1 The Group

The group comprise Ikeja Hotel Plc. and its subsidiary - Hans Gremlin Limited (75%),Charles Hampton (90%) and IHL Services Limited with 100% shareholdings.

1. The Company
   Ikeja Hotel Plc., formerly Properties Development Limited, was incorporated on 18 November, 1972. It owns the Sheraton Lagos Hotel, and is a core investor in Hans Gremlin Nigeria Limited. It also has significant shareholding in the Tourist Company of Nigeria Plc. (Owners of Federal Palace Hotel & Casino, Lagos).
   The Hotel was managed and operated by Starwood Eame License and Services Company BVBA up to June 2017 under an agreement dated 31 October 1980 and renewed 1 April 2008. Subsequently Marriot International took over the management of the Sheraton brand from June 2017 due to acquisition of Starwood Eame License and Services Company BVBA.
2. Corporate office
   The registered office of the company is 84, Opebi Road, Ikeja, Lagos, Nigeria.
3. Principal activities
   The principal activities of the group are operation of hotels and restaurants, apartment letting, recreational facilities, night

clubs and business centre services, advisory and consultancy services.

2. Basis of preparation

These financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act Cap C.20, Laws of the Federation of Nigeria, 2004, the Financial Reporting Council of Nigeria Act, 2011.

1. Functional and presentation currency
   The consolidated financial statements are presented in naira, which is the group's functional and presentational currency. The consolidated financial statements are presented in the currency of the primary economic environment in which the group operates (its functional currency). For the purpose of the consolidated financial statements, the consolidated results and financial position are expressed in naira, which is the functional currency of the group and the presentational currency for the financial statements.
2. Going concern status
   The consolidated 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 foreseable future. For this reason, the going concern basis has been adopted in preparing the consolidated financial statements.
3. Basis of consolidation
   The interim consolidated financial statements comprise the financial statements of the company and its subsidiaries as at 30 September, 2023. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the group obtains control, and continues to be consolidated until the date when such control ceases. The financial statements of the
   subsidiaries are prepared for the same reporting period as the parent company, using the same accounting policies.
   All inter-group balances, transactions, dividends, unrealised gains on tranasctions within the Group are eliminated on consolidation. Unrealised losses resulting from inter-group transactions are eliminated, but only to the extent that there is no evidence of impairment.
   A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

1. Basis of measurement
   The financial statements have been prepared under the historical cost basis except for the following:
2. • Investment properties measured at fair value.
   • Financial assets classified as amortised cost measured at amortised cost.
     Financial assets designated at fair value through other comprehensive income measured at fair value through other
   • comprehensive income.
   • Financial asets designated at fair value through profit or loss measured at fair value through profit or loss.
   • Financial liablities including borrowings measured at fair value.
   • defined benefit obligations measure at the discounted future value of all expected future obligations plus past service costs and actuarial loss less actuarial gains.
   • Inventory measured at lower of cost and net realisable value.
3. Critical accounting estimates and judgement
   The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial year are as follows:

1. Asset useful lives and residual values:
   Property, plant and equipment are depreciated over their useful lives, taking into account residual values where appropriate. The actual useful lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset useful lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the assets and projected disposal values.
2. Taxes

7

IKEJA HOTEL PLC

Notes to the Unaudited Financial Statements

For the Period Ended 30 September 2023

i Uncertainties exist with respect to the amount and timing of future taxable income. Given the complexities of existing contractual agreement, differences arising between the actual results and the assumptions made could necessitate future adjustment to tax income and expenses already recorded. The Company establishes provisions based on reasonable estimates.

1. 1. Deferred taxes are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
2. Provisions/contingencies
3. 
   Provisions are liabilities of uncertain timing and are recognised when the entity has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and
   the amount that can be reliably estimated. Provisions are not recognised for future operating losses.
   Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
   Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre- tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
4. Impairment of financial assets
5. 
   Impairment of financial assets is based on the application of the expected credit loss model (ECL) in accordance with IFRS 9, Financial Instruments. The measurement of expected credit loss by the Group under IFRS 9 reflects an unbiased and probability-weighted amount that is determined by evaluating the range of possible outcomes as well as incorporating the time value of money. Also, management considers reasonable and supportable information about past events, current conditions and reasonable and supportable forecasts of future economic conditions when measuring expected credit losses. Management considers the risk or probability that a credit loss occurs by considering the possibility that a credit loss occurs and the possibility that no credit loss occurs, even if the probability of a credit loss occurring is low. The application of variables under this model involves estimates which require significant judgemet by management.
6. Retirement benefit obligation
7. 
   The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using various assumptions that may differ from actual developments in future. The assumptions used include the discount rate, future salary increases, mortality rates and future pension increases. Changes in these assumptions will impact the carrying amount of the pension obligation. The Group determines the appropriate discount rate at each reporting date. In determining the appropriate discount rate, management considers the interest rates of corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the expected term of the related pension obligation.
8. Investment property
9. 
   Investment properties are initially recognsed at cost and subsequently carried at fair value, determined annually by independent professional valuers on the highest and best use basis. Changes in fair values are recognised in profit or loss. Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised and the carrying amounts of the replacement components are recognised in profit or loss. The cost of maintenance, repairs and minor improvements is recognised in profit or loss when incurred. On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognised in profit or loss.
10. Impairment of inventory
11. 
    The inventory provision is based on average loss rates of inventory in recent months. The provision makes use of inventory

counts performed which is considered to be representative of all inventory items held.

3. Summary of Standards and Interpretations effective for the first time

1. The following represent amendments and revisions to the International Financial Reporting Standards and interpretations which are effective for annual periods beginning on or after 1 January 2017. These amendments and interpretations have been adopted where applicable in preparing the financial statements. The nature and the impact of each newly effective standard and amendments are described below:

2. Amendments to "IFRS 5 Non-current Assets Held for Sale and Discontinued Operations"
   The amendment clarifies cases in which an entity reclassifies an asset from held for sale to held for distribution or vice versa and cases in which held-for-distribution accounting is discontinued.
3. Amendments to "IFRS 7 Financial Instruments: Disclosures"
   The amendment adds additional guidance to clarify whether a servicing contract is continuing involvement in a transferred asset for the purpose of determining the disclosures required. It also clarifies the applicability of previous amendments to IFRS 7 issued in December 2011 with regards to offsetting financial assets and financial liabilities.
4. Amendments to IFRS 11 "Joint Arrangements" Accounting for Acquisitions of Interests in Joint Operations Amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business which specify the appropriate accounting treatment for such acquisitions.

8