CHELLARAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS 31 MARCH 2023
i
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 Esq. |
Plot 110/114 Oshodi - Apapa Expressway, | |
Isolo, Lagos. | |
Company Registrar | Greenwich Registrars & Data Solutions Limited |
274, Murtala Muhammed Way | |
Alagomeji, | |
Yaba,Lagos | |
Auditors | BDO Professional Services |
ADOL House | |
15, CIPM Avenue | |
Cental Business District | |
Alausa, Ikeja | |
Lagos. | |
Bankers | Standard Chartered Bank Nigeria Limited |
First City Monument Bank Limited | |
First Bank of Nigeria Limited | |
United Bank of Africa Plc | |
Eco Bank Plc | |
Access Bank Plc | |
Union Bank Plc |
CHELLARAMS PLC AND ITS SUBSIDIARY COMPANIES | ii |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
CHAIRMAN'S STATEMENT
Members of the Regulatory Agencies,
Distinguished Shareholders,
Gentlemen of the Press,
Ladies and Gentlemen,
It affords me great pleasure to welcome you all to the 74th Annual General Meeting of Our Group and to present to you the Annual Report and Financial Statements for the year ended 31 March 2023.
THE ECONOMIC OPERATING ENVIRONMENT IN YEAR 2022
It is gratifying that Covid-19 Pandemic challenges which lasted till end of December 2021, was relaxed in first quarter of year 2022 with global growth slowed down to 3.2% which was 1% percent weaker than the achievement of 2021. Equally affected is the negative impact on supply chain, high inflation and climate change.
Nigeria achieved a GDP growth rate of 3.1% in 2022 from 3.4% reported in year 2021 while performance in Agriculture, Manufacturing and the Oil Sectors declined. However, Services sector, especially tele-communications and financial sector, witnessed a boost in performance. Overall, the operating environment in 2022 for Manufacturing Companies in Nigeria was extremely challenging as businesses had to face various headwinds and uncertainties with negative impacts caused by Russia-Ukraine war with its serious disruptions on Raw Materials supply globally.
In 2022, the average spot price of Nigeria's crude oil, the Bonny Light, was higher than its average price in the previous year, unfortunately, due to relatively low volume production, Nigeria could not take advantage of reaping higher earnings. Foreign Exchange (Forex) rates went up in 2022 from N418/$1 to N461 /$1 at year end due to scarcity of forex which led to increased pressure on the sourcing of the forex from I & E window thus driving up input costs for Manufacturing and Trading Sectors of the economy. The Country's foreign Exchange Reserve declined to USD 37.1 Billion by December 2022 as against $40.5 Billion achieved in December 2021.
Nigeria's Annual inflation rate rose to 21.3% in December 2022 compared with 15.6% as at December 2021. This high inflationary rate impacted on consumers' purchasing power with its attendant snow-ball effect on volume of sales.
OPERATING RESULTS AND PERFORMANCE
Our Group's Turnover for the Financial Year ended 31 March, 2023 increased to N10.6 Billion from N9.7 Billion at 31 March, 2022 while Profit Before Tax amounted to N5.07 Billion as against N1.16 Billion of 31 March, 2022. The increase in Profit Before Tax was as a result of waivers of interest as well as reversal of impairment earlier applied by our External Auditors on some of our associated concerns Financials' treatment.
DIVIDEND
Due to accumulated losses as well as the need to utilize improved written back funds to enhance revenue, your Board of Directors could not recommend a Dividend pay out but be assured that the status should change by the end of the current financial Year ending 31 March, 2024.
CORPORATE SOCIAL RESPONSIBILITIES (CSR)
As your Organization remain committed to extending CSR within our operating environment, we incurred the following outlay on CSR during the reporting year:-
N | |
(a) Scholarship to various Nigerian Students | 3,214,556 |
(b) Bursaries to Sons/ Daughters of our employees | 456,326 |
(c) Financial Assistance to Employees' Parents | 241,750 |
(d) Medical Assistance to Nigerian patients | 1,208,753 |
Grand Total | 5,121,385 |
CHELLARAMS PLC AND ITS SUBSIDIARY COMPANIES | iii |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
CHAIRMAN'S STATEMENT (Cont'd)
OUTLOOK
As the International Monetary Fund (IMF) projected a decline in growth in the global economy from 3.4% in 2022 to 2.9% in 2023 in addition to galloping inflation within Nigeria's Domestic Economy, the business outlook for year 2023 is expected to remain volatile. However, with the positive outcome of General Election held in Nigeria in February/ March 2023 and indeed the inauguration of new President in Nigeria on 29 May, 2023, the Businesses environment should slowly rejuvenate irrespective of the inevitable cut back on spending which the Fuel Subsidies and ongoing reforms of Monetary and fiscal policies by new Government would impact on Businesses generally.
Despite these challenges, Your Board of Directors will continue to take measures that should sustain the average annual growth embarked upon from the Reporting Financial Year and indeed on that of current Financial Year.
BOARD, MANAGEMENT AND STAFF
Please allow me to express my profound gratitude to my colleagues on the Board of our Group for their sacrifices by providing pro bono services for the last Three years and indeed to the Managing Director and His top management team for resolving the banking issues amicably with our Financial Institutions which should tremendously aid our continued recovery efforts. I must also pay tribute to our Staff for their understanding during the difficult period of re-organization embarked upon to stimulate revival of our Group.
God bless you all.
ASIWAJU DR SOLOMON K. ONAFOWOKAN, OON
Chairman
FRC /2013/IODN/00000005337
CHELLARAMS PLC AND ITS SUBSIDIARY COMPANIES | iv |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023
CHIEF EXECUTIVE OFFICER'S REPORT
Dear Shareholders and members of the Chellarams Plc family,
This past year has been very challenging for Nigeria as the shortage of foreign exchange and corresponding inflation have affected our business. This is visible in our results as even though our team has worked well to increase sales volumes, margins are adversely affected. To shore up our income we have taken steps to increase the rental revenues at our Isolo property. Investments will be made this year to improve the remaining useable space for new tenants to maximise our income in this area.
The new government has made significant policy decisions to improve the Nigerian economy, and we remain optimistic about the potential benefits. Even still, since our company is emerging from a difficult period of financial strain, we remain conservative whilst we assess the impact these may have on our business.
I said last year that "the company is moving in a forward trajectory", and I stand by that. We ask that you bear with us while we chart out a future course of action.
Our subsidiary Dynamic Industries Ltd has expanded its capacity and is actively improving its operations for better quality and operational efficiency. Sales of United Technical Services Ltd have improved in the past year as well and we expect that their business will benefit from investor confidence in Nigeria leading to new industrial projects.
Finally, we hope that you will join us to celebrate our company as we complete 100 years of business in this country. We would not remain so firmly footed if not for your support and prayers.
Sincerely,
Aditya Chellaram
Chief Executive Officer
FRC/2013/IODN/00000005335
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Chellarams plc published this content on 15 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 July 2023 02:43:02 UTC.