CHELLARAMS PLC
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 31 MARCH 2024
CHELLARAMS PLC
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Contents | Page |
Corporate information | i |
Chairman's statement | ii |
Chief executive officer's report | iv |
Report of the audit committee | v |
Report of Corporate Governance | vi |
Statement of directors' responsibilities in relation to the preparation of the | |
financial statements | 1 |
Certification pursuant to section 60 (2) of the Investment and Securities Act No. | |
29 of Laws of the Federal Republic of Nigeria 2007 | 2 |
Statement of corporate responsibility | 3 |
Certification of management's assessment of internal control over financial reporting | 4 |
Independent Auditor's Attestation Report on Management's Assessment of | |
Internal Controls over Financial Reporting | 5 |
Independent Auditor's report | 7 |
Consolidated statement of profit or loss and other comprehensive income | 12 |
Consolidated statement of financial position | 13 |
Consolidated statement of changes in equity | 14 |
Separate statement of changes in equity | 15 |
Consolidated statement of cash flows | 16 |
Notes to the consolidated financial statements | 17 |
Other national disclosures: | |
Consolidated statement of value added | 60 |
Financial summary - Group | 61 |
Financial summary - Company | 62 |
CHELLARAMS PLC
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
CORPORATE INFORMATION
DIRECTORS, ADVISORS AND REGISTERED OFFICE
Chairman of the Board | Asiwaju Solomon Kayode Onafowokan, OON |
Directors | |
Managing Director | Chief Suresh M. Chellaram |
Director | Alhaji Ahmed Adamu Abdulkadir |
Director | Mrs. Angela Morenike Agbe-Davies |
Chief Executive Officer | Mr. Aditya Suresh Chellaram |
Registered office | Plot 110/114 Oshodi-Apapa Expressway, |
Isolo, Lagos. | |
Company Secretary | Ehimare Isiramen |
Plot 110/114 Oshodi - Apapa Expressway, | |
Isolo, Lagos. | |
Company Registrar | Greenwich Registrars & Data Solutions Limited |
274, Murtala Muhammed Way | |
Alagomeji | |
Yaba, Lagos. | |
Auditors | PKF Professional Services |
PKF House | |
205A Ikorodu Road | |
Obanikoro | |
Lagos. | |
Bankers | Standard Chartered Bank Nigeria Limited |
Zenith Bank Plc | |
First City Monument Bank Limited | |
First Bank of Nigeria Limited | |
United Bank of Africa Plc | |
Eco Bank Plc | |
Access Bank Plc | |
Union Bank Plc |
i
CHELLARAMS PLC
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CHAIRMAN'S STATEMENT
Members of the Regulatory Agencies,
Distinguished Shareholders,
Gentlemen of the Press,
Ladies and Gentlemen,
It is my honor to warmly welcome you all to the 75th Annual General Meeting (''AGM'') of our Group and to present to you, my address and the Annual Report and Financial Statements for the Year ended 31st March 2024.
THE ECONOMIC OPERATING ENVIROMENT FOR YEAR 2023
The gradual recovery from cumulative effects of the Covid-19 Pandemic, the 2022 Russian Invasion of Ukraine as well as global cost-of-living crisis leading to world-wide inflationary trends that impacted on economic growth, without exception. In Nigeria, it was a year of unprecedented challenges and uncertainties which culminated into disruptions of economic activities and widespread hardship created by the Naira re-design policy of Central Bank of Nigeria (CBN). The currency crisis that emanated therefore led to contraction of critical sectors of the economy and indeed affected both formal and informal trading activities. The preparation for General Elections scheduled for FEBUARY/MARCH 2023, was not spared.
On assumption of Office by the new Administration of President Bola Ahmed Tinubu -GCFR on 29th May 2023, the removal of subsidy on Premium Motor Spirit (PMS) and the floating of Naira so as to allow market forces to determine Foreign Exchange (Forex) rates created massive devaluation with enormous impact on cost of transportation, energy and other utilities that obviously led to drastic reduction in purchasing power of Consumers.
The difficulty experienced by Manufacturing and Retailers in accessing Forex from Official sources remained volatile with its negative attendant effect on cost of procurement of manufacturing in-puts.
However, the headline inflation rate rose 21.82% in January, 2023 to 28.92% at the end of year 2023 with food inflation equally rising from 24.32% to 33.93% in the same period while cases of Banditry, Kidnapping, Farmer-Herder clashes remain unabated across most parts of Nigeria till date.
OPERATING RESULTS AND PERFORMANCE
Our Group's Turnover for the Financial Year ended 31st March, 2024 improved to N13.8 Billion as against N 10.56 Billion at 31st March, 2023 while loss of N3.3 Billion was recorded as against Profit of N5.07 Billion as at 31st March, 2023. The loss incurred due to impairment applied by our External Auditors on the treatment of Financials of Subsidiary Companies as well as sharp increase in allowing market forces to determine Forex rates as well as escalated cost of Utilities/Admin Expenses.
DIVIDEND
Unfortunately, despite the determination of your Board of Directors, as reported in my statement last AGM, your Board could not recommend payment of Dividend at today's AGM. Let's keep our figures crossed for a positive position come next AGM.
ii
CHELLARAMS PLC
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CHAIRMAN'S STATEMENT
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
As we remain resolute to extend CSR to our immediate environment that depends on our Organization year in-year-out, we expended the following on CSR during the Reporting financial year:-
N | ||
(a) Scholarship to on-going Nigerian Students | 200,000 | |
(b) Bursaries to Sons/Daughters of our employees | 5,474,698 | |
(c) | Financial Assistance | 680,000 |
(d) | Medical Bills Assistance | 761,425 |
Grand Total | 7,116,123 |
OUTLOOK
As the President of Federal Republic of Nigeria has signed into law the 2024 Appropriation Act to the value of N 28. 7 Trillion early in the year 2024, it is anticipated that various conscious efforts would be made to streamline fiscal and monetary policies of the Government that should positively moderate contraction in the Export of (Crude Oil/Oil Refining Sector) so as to achieve envisaged Forex Savings which will release funds for other uses with ultimate reduction in forex rates. Equally gratifying is the resumption of allocation of forex to Bureau-De-Change Operators.
Notwithstanding, the challenges faced by our Organization in the last six (6) Years, we salute our Shareholders for their immense understanding, resilience and encouragement in the face of obvious adversity while your Board of Directors remain committed to sustaining strong cost Management Culture with a view to achieving our targeted goal sooner than later. Your abiding faith and confidence at this trying time is not taken for granted.
BOARD, MANAGEMENT AND STAFF
Let me extend, on your behalf, my sincere appreciation to my colleagues on the Board of our Group, for their unflinching support and for agreeing to a 50% reduction in Directors Annual fee from this AGM, after several years of pro-bone services. Let me also express my gratitude to our Staffers for their solid support and understanding in the on-goingre-organization embarked upon Three (3) years ago.
Thank you all and God bless you.
ASIWAJU DR. SOLOMON K. ONAFOWOKAN, OON
Chairman
FRC/2015/PRO/ICAN/004/00000010981
Dated: 24 July 2024
iii
2024 Annual Report and Accounts
Chief Executive Officer's Report
Dear Shareholders and our extended Chellarams Plc family,
The economy continues to challenge Nigerian business as inflation has affected consumer spending power. As most of our customer base is consumer-facing this has had a knock-on effect on our business. Our team has worked well to maintain sales volumes and we see margins increasing in the first quarter of FY 24/25. We expect this trend to continue and will go a long way in providing profits to the company.
We continue to increase the rental revenues at our Isolo property to support our expenses. Likewise, Dynamic Industries Ltd has further expanded its capacity this past year and is actively improving its operations for better quality and operational efficiency. Margins for FY 24/25 have increased in Dynamic's segment of Industrial Packaging and will help reverse the exchange losses incurred in this past year.
Sales of United Technical and Allied Services Ltd (UTAS) have improved in the past year and we expect that their business will benefit from investments in industrial projects and the nation's infrastructure. There is significant improvement in UTAS's after-market maintenance business.
The management has shown tremendous resilience in an extraordinary year by insulating the company as much as possible to devaluation of the currency. In a year where a number of MNC's have announced plans to exit their operations in Nigeria, our management is committed to the success of the Company and Group. We are very optimistic of the results for next year.
We thank you for your continued support and prayers.
Sincerely,
Aditya Chellaram
iv
CHELLARAMS PLC
REPORT OF THE AUDIT COMMITTEE
FOR THE YEAR ENDED 31 MARCH 2024
In compliance with Section 404(7) of the Companies and Allied Matters Act, 2020 ('The Act'), we, the members of the Audit Committee have reviewed and considered the consolidated and separate financial statements of the Company for the year ended 31 March, 2024 and the reports thereon and confirm as follows:
- The accounting and reporting policies of the Company are in accordance with legal requirements and ethical practices.
- The scope and planning of the audit requirements were in our opinion adequate,
- We have reviewed the findings on management matters, in conjunction with the External Auditors and are satisfied with the responses of management thereon.
- The Company's system of accounting and internal controls were adequate.
- We have made the recommendations required to be made in respect of the Auditors.
Chairman, Audit Committee
Mr. Ezekiel M. Faniyi - FCA
FRC/2015/ICAN/00000010981
Dated: 24 July 2024
Other Members:
Alhaji Ahmed A. Abdulkadir
Mrs. Morenike Agbe-Davies
Prince Yomi Ogunsowo
Mr. Peter Eyanuku
v
vi
The Board appoints committees to help carry out its duties. Given the separation of roles of the Chairman and the CEO, the Board appoints Non-Executive Directors as chairmen of Board committees. Board committees work on key issues in greater details than would be possible at full Board meetings, which helps to ensure more effective full Board meetings. Each Board committee reviews the results of its meeting with the full Board.
The Board of Directors met Four (4) times during the financial year ended 31 March 2024 and a record of their attendance is as shown below:
Name of Directors | No. of meetings held | No. of meetings attended |
Asiwaju S. K. Onafowokan, OON | 4 | 4 |
Chief S. M. Chellaram | 4 | 4 |
Mr. A. S. Chellaram | 4 | 4 |
Alhaji A. A. Abdulkadir | 4 | 4 |
Mrs. Morenike Agbe Davies | 4 | 4 |
The meetings were held on 6th July 2023, 14th September, 2023, 7th December 2023 and 21st February 2024 respectively.
Board Code of Ethics
To avoid unethical and unwholesome practice and conflict of interest in any business relationship with the company, the Board has put in place Code of Business Ethics to provide guidance for the board and staff to maintain strong ethical standards.
Board Committees
In order to increase the efficiency of its work and enable a more detailed analysis of certain issues, the Board appointed committees for specific areas from among its members and established terms of reference and rules with respect to delegated authority and reporting to the Board. The primary objective of the Committees is to provide preparatory and administrative support to the Board. The issues considered at Committee meetings are recorded in minutes and reported at the subsequent Board meetings.
The Board has the following standing committees which regularly report to the Board as well as submit proposals for discussions and decision making.
Audit committee
The Committee initially comprised of Five (5) members made up of two Non-Executive Directors and three shareholder representatives. The committee serves as a focal point for communication and oversight regarding Financial Accounting Reporting, Internal Control and Compliances.
The committee met thrice during the financial year ended 31st March 2024 and a record of their attendance is shown below:
Members | No. of meetings held | No. of meetings attended |
Mr. Ezekiel Faniyi | 3 | 3 |
Alhaji Ahmed A. Abdulkadir | 3 | 3 |
vii
Mr. Peter Eyanuku | 3 | 3 |
Mrs Angela Morenike Agbe - Davies | 3 | 3 |
Prince Yomi Ogunsowo | 3 | 3 |
The meetings were held on 5th July, 2022, 29th November, 2023 and 21st March 2023.
Risk Management Committee
The committee oversees the Group wide risk governance framework, including risk management and control, risk policies and their implementation as well as the risk strategy and monitoring of operational risks. It reviews the business management and Group risk management function, the Group general policies and procedures and satisfies itself that the effective systems of risk management are established and maintained. It oversees the Group risk appetite statements to ensure alignments with the group's strategic objectives.
The committee met twice during the financial year ended 31st March 2023 and a record of their attendance is shown below:
Directors | No. of meetings held | No. of meetings attended |
Alhaji A. A. Abdulkadir | 2 | 2 |
Mr. A. S. Chellaram | 2 | 2 |
Mrs. Angela M. Agbe-Davies | 2 | 2 |
Mr. Rajesh Mishra | 2 | 2 |
Mr. Samuel B. Akinrin | 2 | 2 |
The meetings were held on 29th November, 2023 and 21st March 2024 respectively.
Finance and General Purpose Committee
The committee assists the board in fulfilling its financial oversight responsibilities with specific reference to corporate finance, resources and assets utilization, capital structure, cash management, equity and debt financing, financial planning and reporting as well as the overall financial performance of the group.
The committee met twice during the financial year ended 31st March 2022 and a record of their attendance is shown below:
Directors | No. of meetings held | No. of meetings attended |
Alhaji Ahmed A. Abdulkadir | 2 | 2 |
Mr. Aditya S. Chellaram | 2 | 2 |
Mrs Angela Morenike Agbe - Davies | 2 | 2 |
The meetings were held on 29th November, 2023 and 21st March 2024.
viii
| Attention: This is an excerpt of the original content. To continue reading it, access the original document here. |