| DIRECTORS REPORT |
The directors have pleasure in submitting to the members the Consolidated Balance Sheet as at 31st December, 2008 together with the
Consolidated Profit and Loss Accounts for the year ended on that date, showing a net consolidated profit of N4,192 million after providing for
taxation of N1,989million and the transfer of Non-controlling Interest share of profits amounting to N2,597million.
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 N2.00k dividend per 50k share for the year.
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PROFIT FOR THE YEAR AFTER TAXATION |
2008 |
2007 |
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N'000
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N'000
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Group profit for the year after taxation and non-controlling interest |
4,192,044 |
3,600,541 |
PRINCIPAL ACTIVITIES
UAC of Nigeria Plc is a diversified business with activities in the following principal sectors: Foods, Manufacturing, Automobile, Logistics and Real Estate.
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CORPORATE GOVERNANCE REPORT
In pursuance of the Code of Best Practices on Corporate Governance in Nigeria, 2003 (“the Code”) we hereby report as follows:
uac of nigeria Plc is a Company of integrity and high ethical standards. Our reputation for honest, open and dependable business conduct, built over the years, is an asset just as our people, brands and factories. Every employee of the Company and its subsidiaries subscribes to comply with the uacn Code of Business Principles & Ethics ("the Code") on an annual basis. The Board of directors is responsible for ensuring that the Code is communicated to, understood and observed by, all employees.
In order to strengthen the corporate governance practices of the Company, the Board engaged KPMG Professional Services Nigeria in 2008 to review the Company's corporate governance policies, practices and processes. In its report KPMG identified some gaps in uacn corporate governance when compared with International best practice and made recommendations which are being implemented by the Board.
THE BOARD OF DIRECTORS
Under 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 Comapany as are not by statute or the Articles to be exercised by the Company in General Meeting.
The Matters Reserved For The Board
The following are matters reserved for the Board of Directors of the Company:
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Strategy and Management
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Selection, performance appraisal and compensation of executive directors
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Succession planning
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Communication with shareholders and management of investor relations
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Integrity of financial controls and reports
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Risk and Internal controls
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Board Appointments
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Corporate Responsibility through the approval of relevant policies
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Approves and reviews the matters reserved for the Board and the terms of reference for Board Committees.
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Determines the scope of delegated authority to Board Committees and management and their accountabilities and responsibilities
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Sets the procedure for determining the renumeration for non-executive directors
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Develops and enforces a code of conduct for non-executive directors
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Ensures compliance with all applicable laws and regulations by the Company and its subsidiaries
COMPOSITION OF THE BOARD OF DIRECTORS
The Board was made up of six non-executive and two executive directors during the 2008 financial year. Mr. V.G. Hammond however resigned from the Board towards the end of the year. Dr. N.D. Moyo and Mr. S.G. Harford represent Actis Fund LLP, a significant minority shareholder with 9.4% holding in the Company on the Board.
All the directors have access to the advice and services of the Company Secretary, and with the approval of the Chairman of the Board to the advice and other professionals in areas where such advice will improve the quality of their contribution to Board decision-making process.
SEPERATION OF THE POSITIONS OF CHAIRMAN AND MANAGING DIRECTOR
The position of the Chairman is held by Lt-Gen Mohammed Inuwa Wushishi (rtd), a non-executive director distinct from the office of the Group Managing Director/CEO, which is occupied by Mr. Larry Ephraim
Ettah.
The Board met seven (7) times during the 2008 financial year. The following is the list of the directors and their attendance at the Board meetings:
Attendance Keys: A = Absent ; P = Present
Committees of the Board
The Board functioned through a General purposes Committtee ( now known as Audit & Risk Committee) and the Renumeration & Compensation Committee (now known as Governance & Renumeration Committee). All Board Committees make recommendations for approval by the full Board.
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General Purposes Committee (now Board Audit and risk Committee)
The committee was chaired by a non-executive director and made up of three other non-executive directors and the two executive directors.
The Terms of reference of the Committee
The following are the terms of reference of the Committee
- To oversee internal audit and internal controls; and to document and review the Charter that states the roles, responsibilities, authority and scope of operations of the internal audit function; approve the annual audit plan; and to periodically carry out a quality assurance review of the internal audit function.
- To oversee risk management within the group and it is responsible for developing and implementing an enterprise risk management framework for indentifying, measuring, mentoring and controlling risks in the Company and group.
- To oversee financial reporting, its policies and processes.
- To review the group operational performance.
- To approve capital expenditures, specific projects and their financing within the overall plan approved by the Board.
- To approve bank borrowings.
- To Monitor compliance with applicable laws and regulations by the Company and its subsidiaries.
- To authorize the sealing of legal documents and instruments.
COMMITEE MEETINGS
The General Purposes Committee met three (3) times during the year. The following shows the meetings and the attendance of the members of the Committee at such meetings:
* Lt-Gen M.I. Wushishi (rtd) relinquished the position of the Chairman of the Committee towards the end of 2008. The Committee is now chaired by Senator Udoma, a non-executive director.
2.) The Renumeration and Compensation Committtee (now Governance and Renumeration Committee)
The Committee was chaired by a non-executive director and made up of three other non-executive directors and the Group managing Director/CEO.
The Terms of Reference of the Committee
- To make recommendations on the composition of the Board
- To define the criteria and the procedure for the appointment of Directors to the Board and its Committees and to nominate new directors for appointment to the Board of the Comapny and its subsidiary and associated Companies.
- To recommend the appointment, renumeration and promotion of Executive directors and Senior Management.
- Annual evaluation of the Board, its Committees and the Boards of subsidiary Companies as appropriate.
- Sets the performance targets/criteria and evaluates the performance of the Group Managing Director/CEO and makes recommendations to the Board on his performance.
- To review from time to time succession planning proposals.
- Responsible for documenting and reviewing the Board Charter and defining the composition, roles, responsibilities, authorities, reporting framework of Board Committees and the Boards of subsidiary Companies.
- To make recommendations to the Board on the adoption of a Code of Conduct (including the policy on trading in Company shares) for Directors and Senior Executives and to review the same from time to time.
- To make recommendations on the whistle blowing process for the Company that encourages stakeholders to report any unethical activity/breach of corporate governance.
- Continuing education of Board members and the induction of new directors.
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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 Subsidiaries and Associated Companies and the Heads of Corporate Centre units met monthly to review and address the performance and operational issues of each of the businesses within the group.
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Audit Committee
The Audit Committee was composed of
six members made up of three representatives of the shareholders elected at the 2008 Annual General Meeting for a tenure of one year till the conclusion of the 2009 Annual General Meeting; and three representatives of the Board of Directors nominated by the Board. The Chairman of the Committee is Mr Olabisi Fayombo, a Chartered accountant and shareholder's representative. The Company Secretary is the Secretary of the Committee. The meetings of the Committee were attended by the Internal auditor and representatives of PricewaterhouseCoopers, our external auditors. The following table shows members' attendance at the meetings of the Committee.
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The Terms of Reference of the Committee
The following are the terms of reference of the Committee as provided in section 359(6) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria, 2004:
- ascertains whether the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices;
- reviews the scope and planning of audit requirements;
- reviews the findings on management matters in conjuction with the external auditor and departmental responses thereon;
- keeps under review the effectiveness of the Company's system of accounting and internal control;
- makes recommendations to the Board in regard to the appointment, removal and remuneration of the external auditors of the Company; and
- authorises the Internal auditor to carry out investigation into any activities of the Company which may be of interest or concern to the Committee.
Compliance with the Code of Corporate Governance
The Company has compiled with the provisions of the Code of Corporate Governance in Nigeria, 2003.
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DIRECTORS' INTEREST in Contracts
Some of the directors have given notices for the purposes of section 277 of the Comapnies and Allied Matters Act, 1990, to effect that they were 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.
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CHARITABLE GIFTS AND OTHER DONATIONS |
N
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Scholarships (Secondary Schools/Higher Education) |
2,000,000
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Schools Renovation, Projects, etc |
4,200,000
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Sponsorships |
11,050,107
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Other donations (N40,000 & below) |
1,320,097 |
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18,570,204 |
| BUSINESS UNIT COMMENTARIES |
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SUBSIDIARIES |
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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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