Distinguished shareholders, ladies and gentlemen.
It is my pleasure to welcome you to the 32nd Annual General Meeting of our company, Chams Plc and present to you the Annual Report of the Company for the financial year ended 31st December 2015.
Before proceeding on details of our financial performance, I would like to acquaint you with the key issues in our operating environment that impacted our business during the year.
2015 ECONOMIC AND OPERATING ENVIRONMENT
The year 2015 was a trying period for our company due to the challenging economic and political environment of our country. The delayed elections and the subsequent delays in the appointment of key government officials to man different ministries greatly affected our company’s opportunities to make inroads that would have secured for our company a good year end in 2015 and good return on investment to our stakeholders.
Political and economic developments offered mix of notable events which shaped business and economic environment in 2015. According to National Bureau of Statistics (NBS), Nigeria’s real Gross Domestic Product (GDP) fell to 2.84% in the third quarter of 2015 compared to 6.23% in the same period in 2014. In fact, sectors such as manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015. The successful democratic transition ushered in a new political administration at the federal level. However, business activities were largely slow for a better part of the year due to uncertainties around the general economic policy direction of the new administration.
On the global scene, the price of crude oil continued to experience downward trend. The drastic decline consequently led to various fiscal and economic challenges such as the drop in foreign earnings, strained fiscal budget and huge bailout for some state governments, general cash flow issues in the economy and unstable business environment.
General economic conditions as stated above led to the decline in government revenue and had significant impact on our business as we still depend largely on transactions from Nigerian Government, Ministries and Parastatals while trying to grow our private sector related products.
The consequence of this is the significant impairment of our receivables, which led to an exceptional charge to the income statement. The latter is in line with the provisions of the International Financial Reporting Standard (IFRS) and reflects the overall prudent posture of the Company.
Furthermore, the closure of ChamsCity offices, which was a direct fallout of the cancellation of the National Identity Management Project Concession, constrained us to write off the outstanding balance on Investments made on the Project.
This led to our poor performance as stated below:
|Cost of Sales||(1,221,521)||(2,565,474)||(757,571)||(2,174,798)|
|Profit After Tax||(3,405,316)||280,427||(2,519,174)||446,338|
We would like to assure our esteemed shareholders and the larger investing community that concerted efforts are being made by Board and Management to restore value and drive the company to its full potentials in the shortest possible time.
BOARD OF DIRECTORS
In the course of the Year ended December 31st 2015, two of your long-serving Directors, Alhaji Idi Farouk and Engineer Akinola Sawyerr, retired from the Board after meritoriously serving the Company in different capacities,. Ladies and Gentlemen, on your behalf, I thank them for the 21 years of invaluable contributions and sacrifices made toward the growth of your Company and wish them success in all their endeavors.
To strengthen our market position, the Board approved the appointment of Mr. Bukar Kyari, Prof. Oye Ibidapo Obe and Mr. Ben Akabueze to the Board. We are very delighted to have them join us and we believe they would contribute in an immeasurable position to the development of our company.
Mr. Kyari Bukar holds a B.Sc. degree in Physics from Ahmadu Bello University, Zaria, Nigeria and M.Sc. degree in Nuclear Engineering from Oregon State University, USA. He is an alumnus of Lagos Business School (LBS), Wharton Business School and Harvard Business School, USA.
He is the current Managing Director and Chief Executive Officer of the Central Securities Clearing System (CSCS) Plc, a role he assumed on September, 2011. Prior to joining CSCS, Mr. Bukar was the CEO of ValuCard Nigeria Plc (now Unified Payments Plc). He holds requisite board, management and industry experience and expertise.
Prof. Oye Ibidapo-Obe, attended Ilesa Grammar School and Igbobi College 1962-1968 and the University of Lagos from 1968-1971 where he obtained a B.Sc. Hons in Mathematics (First Class) in 1971. He also obtained M.Sc. in Applied Mathematics with a minor in Computer Science in 1973 and a Doctor of Philosophy (PhD) in Civil Engineering with specialization in Applied Mechanics/Systems in 1976 from the University of Waterloo, Ontario, Canada.
In April 2000, Prof. Oye Ibidapo-Obe was appointed deputy vice-chancellor of the University of Lagos and later became the vice-chancellor by May 1, 2002. He was the chairman of the Committee of Vice Chancellors of Nigerian Universities and was awarded the Best Vice Chancellor’s Prize (2004 and 2005) for the Nigerian University System (NUS). Prof. Ibidapo-Obe is the President of the Nigerian Academy of Science and also a former Vice-chancellor of the Federal University Ndufu-Alike, Ikwo (FUNAI), Ebonyi State. He has published extensively in reputable international journals and has written and delivered numerous academic, social and advocacy papers since his appointment as Professor.
Mr. Ben Ifeanyi Akabueze is a distinguished banker, accountant, economist and administrator, he holds a first class B.Sc degree in Accounting from the University of Lagos and is an Alumnus of the prestigious Lagos Business School.
Mr. Akabueze who is currently the Special Adviser to the President on National Planning has worked with a number of organizations among which are the Nigerian Television Authority, (NTA), Maiduguri, Pricewaterhouse (Chartered Accountants), Nigerian International Bank Limited (Citibank Nigeria), Fidelity Bank Plc and United Bank for Africa Plc. He rose to the apex position of Managing Director/CEO of NAL Bank PLC in 2000 and later as executive Director at Sterling Bank Plc in 2006 before he was appointed Honorable Commissioner for Economic Planning & Budget, Lagos State from 2007 to 2015. He is also a Pastor with the Redeemed Christian Church of God.
The outlook for 2016 may seem tough given the current economic climate and security challenges. However, the Government is taking necessary steps to rebuild the economy by ensuring we have a National budget which would boost growth and tackle the country’s challenges.
In terms of economic growth, real GDP projections for 2016 as specified in the 2016 budget proposal is put at 4.37% – this is predicated on the federal government fiscal objective to boost domestic growth through the diversification of the economy with considerable investment in agriculture and other productive sector of the economy.
In terms of currency value, the resolve of the Central Bank of Nigeria to continue to hold the Naira at the current level in the face of growing FX demand and dwindling external reserves while oil prices remain depressed, may be significantly tested.
To improve public finances, the Federal and State Governments would ensure significant improvement in the collection and remittance of public revenues to plug revenue leakages. In the same vein, the year will witness more efficient tax collection system and a broadening tax bas
While it remains unclear as to what 2016 will bring for Nigeria, we look ahead to opportunities knowing we have the products that would grow the economy.
Finally, on behalf of the Board of Directors, I thank you, our distinguished shareholders, for the support you have given to the Board and management of the company over the years. I thank my colleagues on the Board for the commitment and invaluable contributions which you continue to make toward the growth of the company. I salute the dedication and efforts of management and staff, headed by Mr. Femi Williams, in the repositioning drive of the company. I pray that God will crown all our efforts with success. The past year had its challenges but we are determined to sail to greater and better heights this year.
God bless you all.
Very Rev. Ayo Richards