Distinguished Shareholders, Ladies and Gentlemen,
It gives me pleasure to welcome you to the 33rd Annual General Meeting of our Company, Chams Plc, and present to you the Annual Report of our Company for the financial year ended 31st December 2016.
Before I present the operating performance of the Company for
the year ended 2016, let me take you through the global and macro-economic environment in which we operate and how global events have impacted our results in 2016 and the outlook for 2017. I will also keep you abreast with the strategies we are putting in place to enable us continue to be a dominant player in the identity management space in Nigeria.
The year 2016 started on a slow mode, with global oil prices falling as low as $28 per barrel in February 2016.This was caused by ramp up in crude oil production by member countries of the Organization for Petroleum Exporting Countries (OPEC) as well as Non-OPEC members like the United States of America which has developed new technologies to drill the Shale oil in a cost efficient manner thereby lowering their demand for Crude oil. The slowdown in the economy of China also contributed to the glut in the world oil supply.
The overall impact of the price and output slowdown was a shortfall in the country’s foreign exchange
earnings. In fact, the country’s foreign reserves hovered between $23billion dollars and $27billion dollars for the most part of 2016. This created an exchange rate crisis for the Central Bank of Nigeria with the exchange rate losing close to 50% of its value within the first six (6) months of the year. Inflation rate also moved up significantly from a single digit of 9.6% in December 2015 to a double digit of 18.45% in December 2016.
This was fuelled by increase in food prices, energy costs, liberalization of the oil industry, transportation cost, exchange rate devaluation etc. The removal of oil subsidy for petroleum import marketers was also effected in 2016 which took the pump price per litre of petrol to a new level of N145 per litre. The Nigerian economy closed 2016 with its worst economic performance in over 20 years witnessing four consecutive quarters of negative GDP growth rate.
The general weakness in the economy affected the federal government as well as the state governments
alike in executing major identity management projects as actual revenue receipts were negatively impacted by both external and local shocks in the oil and gas space.
The above factors affected significantly the top and bottom line of our financial performance as major mandates could not be secured from Federal government institutions as well as State government who
represent a sizeable portion of our business.
We recorded a loss after tax of N1.9 billion in 2016. This loss was heavily impacted by the huge impairment charges of N2.0 billion made on some of our investments as dictated by the International Financial Reporting Standard (IFRS) on investment. These were investments made in our subsidiaries to position our group for a seamless execution of the Concession on the National Identity Card project which, regrettably, became subject of Mediation/Arbitration. On the part of Board and Management, the impairment that hit our books was a bold step in cleaning our books of all overhang of the unfortunate developments in the National Identity Card Project on our performance.
Steps have been taken to rationalize staff and streamline operations to make your company more nimble
and responsive to market dynamics. As a technology-based organization, we are concentrating more on
innovative products and services that will surpass the expectations of customers in the private sector. To
this end, we are collaborating with world-class organizations to deliver products that will bring speed,
convenience and security to transactions across a broad spectrum of our national economy. We believe
that we have finally come out of the woods.
We look to the years ahead with great enthusiasm and optimism, with God on our side and given the
caliber of Directors and staff with whom we are blessed.
BOARD OF DIRECTORS
In the course of the year under review, Mr. Ben Akabueze was appointed as Director General of the Budget Office by the Federal Government and had to resign his appointment as a Director of your company to answer the national call to duty. Mr. Kyari Bukar and Prof. Shehu Abdullahi also resigned as Directors due to other pressing commitments. On your behalf, I thank them for their avowed interest in serving on our Board and the invaluable contributions they made. We wish them success in all their endeavours.
To strengthen our market position locally and internationally, the Board approved the appointment of
Pastor Ituah Ighodalo and Mr. Wim Tapij Gielen as Non-Executive Directors; Mrs. Mayowa Olaniyan and Mrs. Funke Alomooluwa as Executive Directors. Their profiles are provided in the Annual Report.
I believe it is pertinent at this juncture to state that members of the Board of Directors of your company
have made immense sacrifice and contributions towards the survival of your company during the very
difficult phase through which it has passed.
Technology has been adjudged to be the new oil or an alternative to crude oil and your company remains
on the cutting edge of developing innovative solutions and technologies aimed at improving the quality of life of the populace.
According to Managing Director and Chief Economist, Global Research Africa, Standard Chartered Bank, Razia Khan, Nigerian economy should grow at 2.8 percent on the average in 2017 while Moody’s Aurelien Mali predicted a 2.5% expansion provided the country can achieve 2.2 million barrels per day of oil production.
We remain confident about 2017with positive expectations that your company will start reaping the full
dividend of diversification of our revenue source. We have over the years since 2014 begun to build our
private sector clientele which has also made us to invest in technologies aimed at meeting and satisfying
In conclusion, On behalf of the Board of Directors, I thank you, our esteemed shareholders for your unflinching support and confidence you have reposed in the Board and management of your company over the years. I also thank my colleagues on the Board for their unalloyed commitment and sacrifice towards the progress of this our Company. I am also grateful to the management and staff who work tirelessly daily to make the vision and goals of your company a reality. I pray the Good Lord will continue to shower his blessings upon us all.
God bless you all.
Very Rev. Ayo Richards