| DIRECTORS REPORT |
The directors have pleasure in submitting to the members the Consolidated Balance Sheet as at 31st December, 2007 together with the
Consolidated Profit and Loss Accounts for the year ended on that date, showing a net consolidated profit of N3058 million after providing for
taxation of N1304 million and the transfer of Minority Interest share of profits amounting to N724million.
The report also covered a review of the business performance in the last financial year as well as a look at future prospects. |
DIVIDEND
The Directors have recommended the payment of N1.20k dividend per 50k share for the year.
|
PROFIT FOR THE YEAR AFTER TAXATION |
2007 |
2006 |
|
N'000
|
N'000
|
Group profit for the year after taxation,minority interest and extraordinary items |
3,058,450 |
3,203,589 |
PRINCIPAL ACTIVITIES
UAC of Nigeria Plc is a diversified business with activities in the following principal sectors: Foods, Manufacturing, Automobile, Logistics and Real Estate.
|
CORPORATE GOVERNANCE
In pursuance of the Code of Best Practices on Corporate Governance in Nigeria, 2003 (“the Code”) we hereby report as follows:
- By the Articles of Association of the Company, the business of the Company shall be controlled and managed by the Directors, who may
exercise all such powers of the Company as are not by statute or the articles to be exercised by the Company in General Meeting.
- The Board of Directors was composed of a non-Executive Chairman, the Group Managing Director/Chief Executive Officer, an Executive
Director and six non-executive directors with an alternate director for two of the non-executive directors during the year. However, a nonexecutive
director resigned after the last Annual General Meeting upon attaining the age of 70.
- The full Board met six (6) times during the year.
- The Board functioned through two standing Committees, to wit, the General Purposes Committee and the Compensation and Remuneration
Committee.
|
|
| 1. |
General Purposes Committee
The General Purposes Committee (GPC) reviewed the monthly operational performance of the Company; approved capital and revenue
expenditure and disposal of fixed assets, sealing of share certificates, share transfers and indemnities, banking transactions, sealing of legal
documents and related matters. |
| |
Lt. Gen M I Wushishi (rtd) |
Chairman |
| |
Mr. Larry. E. Ettah |
Member |
| |
Mr. O A Adetomiwa |
" |
| |
Mr. V G Hammond |
" |
| |
Mr Simon G Harford |
" |
| |
Chief S O Bolarinde |
" |
The Committee met five (5) times during the year. |
| |
| 2. |
Remuneration and Compensation Committees
The Compensation and Remuneration Committee was set up to
deal with and approve the appointment and remuneration package
of senior managers and Executive Directors of the Company. The
Committee meets at such time or times as it deems fit and regulates
its own proceedings as appropriate. |
| |
Lt. Gen M I Wushishi |
Chairman |
| |
Senator U U Udoma |
Member |
| |
Mr. V G Hammond |
" |
| |
Mr Simon G Harford |
" |
| |
Mr. L E Ettah |
'' |
| |
| |
The Committee met five (5) times during the year |
| |
| 3. |
Business Review Committee
At the Management level, a Business Review Committee presided over by the Group Managing Director/CEO and comprising the Executive Director, Divisional Managing Directors of the Divisions of the Company, the managing Directors of the Subsidiaries and Associated Companies and the Heads of Corporate Centre units met once every month to review the performance and operational issues of each of the businesses within the group. |
| |
| 4. |
Audit Committee
During the year, the Audit Committee of the Company composed of
three representatives of the Board of Directors (an executive
director and two non-executive directors) and three representatives shareholders who were duly elected at the last Annual General Meeting. The
Committee performed the statutory functions in section 359(6) of the
Companies and Allied Matters Act Cap C20, Laws of the Federation of Nigeria,
2004. The Committee was chaired by a shareholders' representative, who is a
Chartered Accountant. It met three times since the last Annual General
Meeting. |
| |
|
The Company has complied with the provisions of the Code. Additionally, the
UACN Code of Business Principles and Ethics which came into force in 2004
and is subscribed to annually by all employees forms the foundation for the
conduct expected of every employee of the Company and reflects our core
values and principles. |
DIRECTORS' INTERESTS
In Ordinary Shares |
|
December, 2007 |
December, 2006 |
Directors |
ordinary shares |
ordinary shares |
Lt. - Gen. M.I. Wushishi (rtd), CFR, GCON, FSS, PSC |
464,000 |
464,000 |
Mr. L. E. Ettah |
131,250 |
131,250 |
Mr. O. A. Adetomiwa |
190,770 |
200,770 |
Chief S. O. Bolarinde |
474,090 |
474,090 |
Mr. V. G. Hammond |
2,878 |
2,878 |
Alhaji (Dr.) M H Koguna (retired w.e.f. 23/05/07) |
---- |
377,337 |
Mr. U. U. Udoma} direct |
838,052 |
838,052 |
 }indirect
|
9,325,180 |
9,325,180 |
In Contracts |
|
|
Some of the directors have given notices for the purposes of Section 277 of the
Companies and Allied Matters Act, 1990, to the effect that they are members of
some specified companies which could be regarded as interested in any contracts
with which the group was involved during the year under review.
|
CHARITABLE GIFTS AND OTHER DONATIONS |
N
|
Scholarships (Secondary Schools/Higher Education) |
13,850,000
|
Schools Renovation, Projects, etc |
20,848,696
|
Sponsorships |
5,190,713
|
Other donations (N40,000 & below) |
494,695 |
| |
________
40,384,104 |
| BUSINESS UNIT COMMENTARIES |
uac foods
The business recorded remarkable growth
in volume, turnover and profit in 2007.
Channel development efforts during the
year focused on the out-of-home channels
particularly retail, food service and institutions. The business invested
in new plant and equipment to improve operational efficiencies, and
increase capacity output to satisfy market demand.
uac Foods was awarded the ISO 22000:2005 Food Safety
Management Certification by the Standards Organization of Nigeria
(SON) and became the second Nigerian company to attain this
laudable status.
The Gala brand was registered by the Food & Drugs Board of the
Republic of Ghana in the last quarter of 2007; Gala Sausage Rolls are
now sold in Ghana.
A new product - Funtime-Cake - was introduced into the market in
2007 and it was well accepted by consumers.
The Food Services unit, which used to be part of the former Mr. Bigg's
Division, was successfully integrated into uac Foods, and effectively supplied pastries, sauces, seasoning and confectionary products.
|
| |
uac franchising
uac Franchising became a Division, following the
restructuring of our food business in September, 2006.
The Division is the brand house responsible for the
Quick Service Restaurant [QSR] brands under the uac
stable. These include Mr Bigg's, Village Kitchen,
Nando's and the Innscor brands (Chicken Inn, Pizza Inn, Creamy Inn and
Dial-a-Delivery). uac Franchising is responsible for marketing,
franchising, brand standards and compliance, intellectual development,
menu engineering, development projects and training.
The brands currently operate over 260 counters in 195 restaurant
locations. The biggest of the brands - Mr Bigg's - is the leading QSR
brand in Nigeria and operates 185 restaurants in more than 50 cities in
Nigeria and 4 international restaurants in Ghana. Nando's and the
Innscor brands are two of the most reputable international QSRs.
Village Kitchen is the ethnic meal brand and our fastest growing brand.
Franchise turnover grew from 4.1b in 2006 as a department of Mr Bigg’s
to 7b in 2007 as a division. |
uac dairies
The dairy market experienced challenges
due to scarcity of raw materials leading to
unprecedented hike in prices.
UAC Dairies, in its first full year as a division, experienced
significant growth in turnover and profit. Efforts were made in the
year at improving quality and expanding capacities in anticipation of
future demand.
The business also obtained the SON/NIS certification in the year.
The business will continue to seek growth and operational
efficiencies against the challenging environment and competitive |
uac restaurants
uac Restaurants, which manages all the
company -owned Quick Service
Restaurants (QSR) business, was
established in the last quarter of 2006. It maintained her position as the
largest, fast-growing QSR business in West Africa.
By year end 2007, uac Restaurants had 94 Mr. Bigg's, 13 Chicken Inn, 9
Pizza Inn, 22 Creamy Inn, 6 Nando's and 7 Village Kitchen restaurants
increasing to a total of 155 restaurants in over 120 sites in 32 cities
across Nigeria and Ghana.
Using the “Food Court” concept as it's strategy, uac Restaurants has
expanded its brand portfolio to include additional exciting brands to the
Mr. Bigg's brand - Village Kitchen, offering hygienically-prepared ethnic
meals catering for the diverse cultures in different regions; Chicken Inn,
offering Rotisserie chicken and Battered, Deep-fried chicken; Pizza Inn,
Italian style pizza in any variety of choices; and Creamy Inn, exciting Ice
Cream flavours and toppings.
uac Restaurants also operates the Nando's brand, which brings to the
aspirational customer a healthy, worldwide acknowledged Portuguese
style flame grilled peri-peri chicken in a welcoming and exotic
environment.
|
mds logistics
The business achieved growth in its turnover
and operating profit over the preceding year.
MDS consolidated its leadership position in
telecoms distribution with the signing on of another major
telecommunication service provider.
The business further expanded its warehousing facilities with the
commencement of operations at its Lagos Distribution Centre in
Oregun, acquisition of a metropolitan distribution centre Ogba and a
world class pharmaceutical distribution centre at Isolo.
The Haulage business also experienced significant growth and
capacity expansion during the year. |
SUBSIDIARIES |
| |
GM NIGERIA LIMITED
The Company completed its restructuring exercise
by relocating to an ultra modern facility in Oregun.
This impacted positively on its performance
improved profitability and returns to shareholders.
In order to improve on its performance, the company
has commenced the repositioning of its pick-up brands as utility
vehicles to meet emerging market demand, with upcoming new
products like 4 x 4 patrol pick-ups, armored pick-ups and trucks.
|
CAP PLC
CAP plc remains the leading player in
the Paints sector. It has repositioned
itself to focus on the coatings business
by disposing its personal & household
operations in the year under review. Investors' confidence in the
company continued to grow as a result of its impressive
performance, leading to the remarkable growth in its market
capitalisation. The company again won The Nigerian Stock
Exchange President's and Pearl Awards for Chemical and Paints
sector.
|
SPRING WATERS NIGERIA LIMITED
The impact of the restructured capital base has
started yielding the desired results with
improvement in turnover and operational profit.
The recently completed Plant upgrade will assure the company's
ability to meet its customers’ demand.
The newly introduced SWAN soft drinks variants of Apple,
Pineapple and Orange have enjoyed acceptability from
consumers and customers across the country.
|
GRAND CEREALS & OIL MILLS LIMITED
The company had an impressive year as turnover
and operational profit improved over the previous
year.
The feed category which contributed largely to
the turnover and profit growth due to a renewed confidence in the
poultry industry.
We have established proven market potentials in Fish Feed and
are investing in a new plant to take advantage of the opportunities.
The Cereals segment of the business slowed down due to weak
patronage from major industrial customers of maize grits.
|
WARM SPRING WATERS NIGERIA LIMITED
The business experienced significant growth in turnover during the year in the very competitive bottled water market. It also made profit for the first time due to continuous improvements in the efficiency of our operations.
The Company concluded its restructuring exercise which resulted in substantial reduction of its debt profile and financial charges.
A plan is in place to re-launch Gossy and clearly position it as a premium brand. This would create better awareness for the brand
and boost consumer demand.
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DISTRIBUTORS/CUSTOMERS
Some of our goods and services are handled by distributors. These distributors are appointed solely on the level of business they can make and the degree of support services they can provide to customers. Distributors and clients are spread across the length and breadth of the country.
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