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FIDSON HEALTHCARE PLC. Lagos, Nigeria REPORT OF THE DIRECTORS AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION

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FIDSON HEALTHCA RE PLC Lagos, Nigeria

REPORT OF THE DIRECTORS AUDITED FINANCIAL STATEMENTS

AND

SUPPLEMENTARY FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30, 2008

(2)

FIDSON HEALTHCA RE PLC REPORT OF THE DIRECTORS,

AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION

FOR THE YEAR ENDED JUNE 30, 2008

CONTENT PAGE

Directors, professional advisers, etc 3

Results at a glance 4

Notice of Annual General Meeting 5

Chairman’s Statement 7

Report of the Directors 9

Audited Financial Statements

Report of the Auditors 15

Statement of Significant Accounting Policies 16

Balance Sheet 18

Profit and Loss Account 19

Statement of Cash Flows 20

Notes to the Financial Statements 21

Statement of Value Added 35

Five-Year Financial Summary 36

Supplementary Information

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3 FIDSON HEALTHCA RE PLC

DIRECTORS, PROFESSIONAL ADVISERS, ETC

DIRECTORS: Mr. Felix O.A. Ohiwerei Chairman(Appointed 8th November, 2007) Mr. Fidelis A. Ayebae (Managing Director/Chief Executive Officer) Emeritus Prof. Oladipo O. Akinkugbe (Appointed 8th November, 2007) Mrs. Olufunmilola O. Ayebae

Mr. Olugbenga O. Olayeye Executive Mr. Abiola A. Adebayo Executive Mr. Olatunde B. Olanipekun Executive Mr. Olutoyin B. Ehinlaiye

COMPANY

SECRETARY: Olatunde B. Olanipekun REGISTERED 6, Ilupeju by-pass

OFFICE: Ilupeju

Lagos.

AUDITORS: Ernst & Young

(Chartered Accountants) 2A, Bayo Kuku Road Off Alfred Rewane Road Ikoyi, Lagos.

SOLICITORS: Oval Law Firm

110, Obafemi Awolowo Way Ikeja

Lagos. PRINCIPAL

BANKERS: Guaranty Trust Bank Plc

Intercontinental Bank Plc Access Bank Plc Diamond Bank Plc Wema Bank Plc Skye Bank Plc First Bank Plc Sterling Bank Plc

(4)

4 FIDSON HEALTHCA RE PLC RESULTS AT A GLANCE 2008 2007 N=’000 N=’000 Turnover 4,503,645 3,307,421

Profit before taxation 526,379 505,304

Profit after taxation 189,300 505,304

Dividend (Declared) 300,000 202,122

At Year End

Paid-up share capital 750,000 89,181

Shareholders’ funds 4,965,948 1,426,726

Per –Share data

Earnings per share 13k 402k

Dividend per share (Proposed) 20k 227k

Net assets per share 331k 1,600k

Number of shareholders

Number of employees 294 255

(5)

5

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of Fidson Healthcare Plc will be held at the Sheraton Hotels & Towers, Mobolaji Bank Anthony Way, Ikeja, Lagos State, Nigeria on Friday, the 23rd of January, 2009 at 10:00am for the purpose of transacting the following business:

Ordinary Business

1. To present the annual financial statements of the Company for the year ended 30th June, 2008 and Reports of Directors and Auditors thereon;

2. To declare the dividend recommended by the directors of the Company;

3. To elect members of the Audit Committee;

4. To authorize the directors of the Company to fix the remuneration of the Auditors;

5. To re-elect the following directors who in accordance with section 259 of Companies and Allied Matters Act, retire by rotation, but are eligible and offer themselves for re-election: Mr. Fidelis A. Ayebae, Mrs. O. O. Ayebae and Mr. Olugbenga O. Olayeye

6. To approve the appointments of Chief Felix O.A. Ohiwerei and Professor Oladipo O. Akinkugbe as directors of the company in accordance with Article 24 of the company’s Articles of Association.

Voting and Proxies

On a show of hands, every member present in person or by proxy shall have one vote, and on a poll, every member shall have one vote for each share of which he is the holder.

A member of the Company entitled to attend and vote at the annual general meeting (the “Meeting”) is entitled to appoint a proxy to attend, speak and vote instead of that member. A proxy need not be a member of the Company.

Registered holders of certificated Fidson Healthcare Plc shares and holders of dematerialised Fidson Healthcare Plc shares in their own name who are unable to attend the Meeting and who wish to be represented at the Meeting, must complete and return the attached form of proxy in accordance with the instructions contained in the form of proxy so as to be received by the share registrars, Meristem Registrars, 305, Herbert Macaulay Way, Sabo, Yaba, Lagos not less than 48 hours before the date of the Meeting.

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6 Dividend Payment

If the dividend of 20k per 50k share recommended is approved and declared, the dividend warrants will be posted or shareholders accounts credited directly on the 27th day of January, 2009 to those shareholders, whose names appear in the Company’s Register of Members at the close of business on 17th of December, 2008

Closure of Register of Members

The Register of members and Transfer Books of the Company will be closed between the 17th to 20th of December, 2008 in terms of the provisions of Section 89 of the companies and Allied matters Act, 1990.

Nomination for the Audit Committee

In accordance with Section 259 of the companies Act, any member may nominate a shareholder as a member of the Audit Committee, by giving notice in writing of such nomination to the Company Secretary at least 21 days before the Meeting.

By the Order of the Board

Olatunde B. Olanipekun Company Secretary

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7 CHAIRMAN’S STATEMENT

INTRODUCTION

It is my pleasure to welcome you to the inaugural Annual General meeting of our company as a public liability company. It is also my first outing as the chairman of our great company and the same goes for majority of members here present as stakeholders. I look forward to our working together to make Fidson Healthcare Plc the leader in it’s sector of our economy.

OPERATING ENVIRONMENT

The year started on a cautious note for the real sector with the uncertainties that followed the general elections. It took considerable time for the new governments to settle down and outline their programmes for the country. Delays in announcing the National Budget did not augur well for the economy. Inflation continued its upward journey, rising from 4.8% at the beginning of our financial year to 12% at the end. The state of the infrastructure impacted negatively on the cost of doing business. Fuel and electricity supplies were costly and epileptic. Confusion at our ports made the cost of clearing goods unpredictable and this resulted to production stoppages.

On the brighter side, activities of regulatory agencies, particularly NAFDAC and Standards Organization of Nigeria positively impacted on our sector as fakers had tough times staying in business. Bank consolidation exercise has made loanable funds available to organizations on longer term basis than hitherto. In addition exchange rate of the naira against other major currencies has become relatively stable, making planning a lot easier. Improved crude oil prices also made available the required foreign exchange for the Nation’s imports.

OUR COMPANY

The company underwent many transformations during the year starting with a very successful private placement exercise done for the following purposes:

· Establishment of a Biotech plant.

· Upgrade of existing plant to WHO/GMP standards.

· Establishment of a hygiene/paper products plant.

· Establishment of a Food & Beverages plant and,

· Completion of our head office complex.

While some of these projects are nearing completion, others have advanced considerably. The benefits are to be seen in the very near future in terms of superior performance and returns.

As a follow – up to the private placement and as promised in the Placement Memorandum, your company successfully went through the rigorous process of listing at the Nigerian Stock Exchange. We got listed on June 04, 2008 and our stock has been doing relatively well in the market, trading decently above the Private Placement price.

Earlier in the year, the company obtained the ISO 9001:2000 certification after a painstaking and meticulous audit of our processes by the Nigerian Standards Organization.

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8

We are determined to uphold and to continuously improve on our systems with the ultimate aim of achieving the next level of certification.

Your company recently unveiled its new logo that is more aesthetically appealing. The new logo aims at giving us a distinct identity fit for the leadership position which we now occupy in the industry.

OUR PERFORMANCE

The company recorded a turnover of N4.52b for the year which represents a growth of 37% over that of the previous year. The growth is almost double the industry average of 17%. Profit before tax of N526m was 4% higher than that of 2006/2007. The year’s result took account of necessary provision for staff pension/ gratuity. We have come to the end of a tax holiday granted by government for our pioneering efforts in local manufacture. A Company Income tax provision of N188.7m has therefore been made in the accounts.

DIVIDENDS

In line with our policy of rewarding our investors, the board has recommended the approval at this meeting a dividend of 20k per 50k share. This figure represents an increase of 54% over the 13k per share (adjusted) paid last year.

FUTURE OUTLOOK

The Board looks to the future with optimism borne out of the confidence that the various projects embarked upon will soon start to yield good results.

Production activities have commenced in our new Hygiene products plant (diapers and paper products.) We have also started the test marketing of these products. The Biotech plant hopefully will

be completed by the 3rd quarter of the company’s financial year. All these are expected to

significantly increase our turnover and consequently profit after tax.

Our vision to position the company as a multi-faceted conglomerate remains on track. We shall also endeavour to bring to bear continuous improvement on our current operations.

CONCLUSION

Distinguished shareholders, I will like to express our appreciation on your behalf, to the management & staff of the company for the impressive results recorded. The expertise of our technical partners remains our source of strength for which we are equally grateful.

To you our stakeholders, your confidence in the company is profoundly appreciated. It is our prayer that the returns on your investment will continue to be excellent.

I thank you for your attention.

MR. F.O.A OHIWEREI Chairman

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9 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED JUNE 30, 2008

1. The Directors have pleasure in submitting to the members of the Company their report together with the audited financial statements for the year ended June 30, 2008.

2. PRINCIPAL ACTIVITIES

The principal activities of the company are the manufacture and distribution of pharmaceutical products. The company commenced manufacturing of pharmaceutical products in July 2002.

3. LEGAL FORM

The Company operated as a private limited liability company until June 5, 2008 when it was incorporated as a Public Limited Liability Company. The shares are currently quoted on the Stock Exchange.

4. STATE OF AFFAIRS

In the opinion of the Directors, the state of the Company’s affairs is satisfactory and there has been no material change since the balance sheet date, which would affect the financial statements as presented.

5. RESULT FOR THE YEAR

N=’000

Turnover 4,503,645

=======

Profit before taxation 526,379

Taxation (337,079)

---

Profit after taxation 189,300

======

6. DIVIDEND

The Directors recommended that a dividend of 20k per share (2007: N2.27k) which translates to N=300,000,000 (2007: N202,121,595) be paid out of the profit for the 2008 financial year.

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10 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS – (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

7. FIXED ASSETS

Information relating to movement in fixed assets is shown in notes 2 and 3 to the financial statements.

8. MAJOR CUSTOMERS

Moddy Drugs Company Limited Adol Pharmacy & Industry Ardmonds Nigeria Limited Zest Pharmacy

Canez HealthCare Limited Ogbuagu Pharmacy JBO Pharmacy Kunbi Pharmacy

Oskajay Chemists Limited Bicon Pharmacy Chemist Sweetflower Pharmacy Danax Pharmacy Bez Pharmacy Matador Pharmacy Tanimola Pharmacy Fiolu Pharmacy MassEldo Pharmacy 9. MAJOR SUPPLIERS

Overseas Suppliers Local Suppliers

V.S. International India NCI Pharmaceuticals Chemists

TIL Exports Pvt Limited India Khushbu Sciences Limited

Gland Pharma Ltd. India Benchmark Sciences Limited

Capsugel (Belgium) Knightsbridge Limited

Hindustan National Glass Fiyique Venture

Industries Ltd,India Incapint Limited

Oriental Containers Ltd., India Glorious Haven Limited

Industries Ltd, India Nuechem (F & P) Limited

MJ Biopharm Pvt. Ltd SAB Nigeria Limited

IFIA Nigeria Limited Hetos Limited

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11 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS – (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

10. DIRECTORS

The names of the Directors at the date of this report and of those who held office during the financial year are as follows:

Mr. Felix A. O. Ohiwerei Chairman (Appointed 8th November, 2007) Mr. Fidelis A. Ayebae Managing Director/Chief Executive Officer Emeritus Prof. Oladipo O.Akinkugbe Director (Appointed 8th November, 2007) Mrs. Olufunmilola O. Ayebae Director

Mr. Olugbenga O. Olayeye Executive Mr. Abiola A. Adebayo Executive Mr. Olatunde B. Olanipekun Executive Mr. Olutoyin B. Ehinlaiye Director

11. DIRECTORS’ INTERESTS

Directors’ interests in the issued share capital of the company are as follows: Numbers of

Shares % Mr. Felix A.O.Ohiwerei (Indirect) 30,000,000 2.00 Mr. Fidelis A. Ayebae 554,095,543 36.94 Prof. Oladipo O. Akinkugbe 6,253,165 0.42 Mrs. Olufunmilola O. Ayebae 54,220,000 3.61 Mr. Olugbenga O. Olayeye 30,302,856 2.02 Mr. Abiola A. Adebayo 30,054,288 2.00 Mr. Olatunde B. Olanipekun 12,000,000 0.80

12. BOARD OF DIRECTORS

In accordance with the provisions of section 259 of the companies & Allied matters Act of Nigeria, one third of the directors of the company shall retire from office.The directors to retire every year shall be those who have been longest in office since their last election.Accordingly, Messrs F.A. Ayebae,O.O. Ayebae and O.O.Olayeye retire by rotation and being eligible,offer themselves for reelection.

13. DIRECTORS INTEREST IN CONTRACTS

None of the Directors has notified the company for the purpose of Section 277 of the Companies and Allied Matters Act, CAP C20 LFN 2004 of any disclosable interest in contracts with which the company is involved as at June 30, 2008.

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12 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS – (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

14. RESPONSIBILITIES OF DIRECTORS

In accordance with the provisions of sections 334 and 335 of the Companies and Allied Matters Act, CAP C20 Law of Federation of Nigeria (LFN) 2004, the Company's Directors are responsible for the preparation of financial statements which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of its profit and cash flows for the year and comply with the provisions of the Act. These responsibilities include:

i) maintenance of proper accounting records;

ii) internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other irregularities;

iii) applicable accounting standards are followed;

iv) suitable accounting policies are used and consistently applied; v) judgment and estimates made are reasonable and prudent; and

v) the going concern basis is used, unless it is inappropriate to presume that the Company will continue in business.

15. SUBSTANTIAL INTEREST IN SHARES

The Registrar has advised that according to the Register of members as at June 30, 2008, only Mr. Fidelis Ayebae with 554,095,543 ordinary shares of 50k each, held more than 5% of the issued share capital of the Company.

16. DONATIONS

The Company made donations amounting to N 66,362,854 (2007: N60,434,355) to charitable organizations and societies during the year as follows:-

N Religious Organizations 27,099,500 Hospitals/Health Institutions 39,263,354 --- 66,362,854 ========

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13 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS – (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

17. POST BALANCE SHEET EVENTS

There are no material post balance sheet events which could have had a material effect on the state of affairs of the Company as at June 30, 2008.

18. ANALYSIS OF SHAREHOLDERS

Analysis of shareholdings as at June 30, 2008.

Range No. of Holders % Units %

1 - 50,000 2,900 81 46,765,632 3 50,001 - 100,000 270 8 21,684,048 1 100,001 - 1,000,000 336 9 97,453,724 7 1,000,001 and above 83 2 1,334,096,596 89

19. EMPLOYMENT AND EMPLOYEES

1. Employment of disabled Persons

It is the Company’s policy that there is no discrimination in considering applications for employment including those from disabled persons. All employees whether or not disabled are given equal opportunities to develop their expertise and knowledge and to qualify for promotion in furtherance of their careers. No disabled person was in the employment of the Company as at June 30, 2008.

2. Welfare

The Company has retainership agreement with a number of private hospitals to whom cases of illness are referred for treatment and/or admission.

The Company provides subsidy to employees in respect of transportation, lunch, housing and healthcare.

3. Training

The Company attaches great importance to training and all categories of staff attend courses or seminars as considered necessary by the Company’s management.

Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include, bonus promotions and wages review.

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14 FIDSON HEALTHCA RE PLC

REPORT OF THE DIRECTORS – (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

20. AUDITORS

Messrs Ernst & Young having indicated their willingness will continue in office as the company’s auditor in accordance with section 357(2) of the Companies and Allied Matters Act, CAP C20 LFN 2004. A resolution will be proposed authorizing the Directors to fix their remuneration.

BY ORDER OF THE BOARD

OLATUNDE OLANIPEKUN COMPANY SECRETARY

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15 REPORT OF THE AUDITORS TO THE MEMBERS OF FIDSON HEALTHCARE PLC

We have audited the accompanying financial statements of Fidson Healthcare Plc which comprise the balance sheet as at June 30, 2008, the profit and loss account, and Statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

As stated on page 8, the Directors are responsible for the preparation and fair presentation of these financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing which require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of Fidson HealthCare Plc as at June 30, 2008 and of its financial performance and its cash flows for the year then ended in accordance with Companies and Allied Matters Act, CAP C20 LFN 2004 and relevant accounting standards issued by the Nigerian Accounting Standards Board.

Lagos, Nigeria October ---, 2008

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16 FIDSON HEALTHCA RE PLC

STATEMENT OF SIGNIFICANT ACCOUNT ING POLICIES FOR THE YEAR ENDED JUNE 30, 2008

The significant accounting policies adopted by the Company in the preparation of its financial statements are as follows:

a. Basis of accounting

The financial statements are prepared under the historical cost convention as modified by the inclusion of certain fixed assets at professional valuation.

b. Turnover

Turnover represents the net invoice value of goods sold to third parties during the year.

c. Fixed assets

Fixed assets are stated at cost or valuation less accumulated depreciation.

Depreciation of fixed assets is calculated on straight line basis at the following annual rates which are expected to write off their cost or valuation over their estimated useful lives:

%

Building 2

Plant and Machinery- Head Office 25

Plant and Machinery- Factory 10

Office equipments 25

Furniture & Fixtures 121/2

Motor vehicles 25

d. Fixed assets revaluation

Surplus/(deficits) arising on the revaluation of individual fixed assets are credited/(debited) to a non-distributable reserve known as the fixed assets revaluation reserve. Revaluation deficit in excess of the amount of prior revaluation surpluses on the same assets are charged to the profit and loss account. On disposal of previously revalued fixed assets, an amount equal to the revaluation surplus attributable to that asset is transferred from the fixed assets revaluation reserve to general reserve.

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17 FIDSON HEALTHCA RE PLC

STATEMENT OF SIGNIFICANT ACCOUNT ING POLICIES - (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2008

e. Leased assets

The capital element of assets under finance lease is capitalized along with the Company’s fixed assets and depreciated at the same rates for assets of that category. The obligation to leassor is shown as part of borrowings appropriately classified as to maturity.

f. Investments

Long term investments in subsidiaries and other investments are stated at cost. Investments in quoted companies are stated at the lower of cost and market value.

g. Stocks and work-in-progress

Stocks are stated at the lower of cost and net realizable value after making adequate provision for obsolescence and damaged items. In the case of goods manufactured by the Company, cost includes production overheads. Goods in transit are valued at the invoice price.

Finished goods and work-in-progress are stated at the lower of cost and net realizable value. Cost in this case consists of direct purchase cost, conversion cost (materials, labour and overhead) and other costs incurred to bring inventory to its present condition and location.

h. Debtors

Debtors are stated after deduction of specific provision for any debt considered to be doubtful of collection.

i. Foreign Currencies

Transactions in foreign currencies are recorded in Naira at the rates of exchange ruling on the date they arise. Assets and liabilities denominated in foreign currencies are converted to Naira at the applicable rates at the balance sheet date. Gains or losses arising therefrom are treated in the profit and loss account.

j. Deferred taxation

Deferred taxation is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred taxation.

k. Retirement Benefit Scheme

The Company operates a pension scheme in line with the Pension Reform Act 2004. The employee and Company each contribute 7.5%. The benefits under the scheme are generally related to employees’ length of service and remuneration. The Company’s contributions are accrued and charged to the profit and loss account while the fund is being managed by IBTC Pension Manager, Pension Alliance Ltd and First Guarantee Ltd.The Company also operates non- contributory gratuity scheme. The costs associated wih the scheme are charged to the Profit and Loss account for the year.

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18 FIDSON HEALTHCA RE PLC BALANCE SHEET AS AT JUNE 30, 2008 Notes 2008 2007 N=’000 N=’000 FIXED ASSETS 2 870,478 586,483

FINANCE LEASE ASSETS 3 140,465 77,418

INVESTMENTS 4 1,606,063 283,824 --- --- 2,617,006 947,725 --- --- CURRENT ASSETS Stocks 5 777,567 504,270

Debtors and Prepayments 6 2,737,290 1,184,894

Due from related Companies 7 541,681 43,105

Cash at bank and in hand 289,771 43,754

--- ---

4,346,309 1,776,023

CREDITORS – DUE WITHIN

ONE YEAR 8 (1,532,330) (1,017,173)

Taxation 9i (188,697) -

Dividend 11 (28,521) (152,147)

--- ---

NET CURRENT ASSETS 2,596,761 606,703

--- --- TOTAL ASSETS LESS CURRENT

LIABILITIES 5,213,767 1,554,428

Obligation under finance lease 12 (46,245) (51,681)

Deferred taxation 10 (198,356) (49,974)

Staff retirement benefits 13 (3,218) (26,047)

--- ---

4,965,948 1,426,726

======= =======

CAPITAL AND RESERVES

Share capital 14 750,000 89,181

Share premium 15 2,973,043 81,818

Fixed assets revaluation reserve 16 26,279 26,279

General Reserve 17 1,216,626 1,229,448 --- --- 4,965,948 1,426,726 ======= ======= ---) ) Directors ---)

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19 FIDSON HEALTHCA RE PLC

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED JUNE 30, 2008

Notes 2008 2007 N=’000 N=’000 Turnover 18 4,503,645 3,307,421 Cost of sales 19 (2,018,552) (1,665,851) --- --- Gross profit 2,485,093 1,641,570 Administrative Expenses (1,811,717) (1,024,410) Financial charges (170,375) (117,628)

Other operating income 20 23,378 5,772

--- ---

Profit before taxation 21 526,379 505,304

Taxation 9.1 (337,079) -

--- ---

Profit after taxation 189,300 505,304

--- ---

Profit for the year 189,300 505,304

====== ======

Earnings per share (kobo) 22 13k 566k

===== =====

*Dividend per share (kobo) (proposed) 20k 227k ===== =====

See notes to the financial statements.

*20k dividend per share amounting to N300m (Three hundred million naira) has been declared for the year.

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20 FIDSON HEALTHCA RE PLC

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2008

2008 2007 Notes N=’000 N=’000 CASHFLOWS FROM OPERATING

ACTIVITIES

Cash received from customers 2,476,051 2,616,174

Cash paid to suppliers and employees (3,355,270) (2,349,105) --- --- Net cash (utilized)/ provided by

operating activities 23 (879,219) 267,069

--- --- Cash flows from Investing Activities

Purchase of fixed assets 2 (372,958) (160,714)

Additions to finance lease assets 3 (107,235) (22,440)

Investment in related companies (14,189) (102,064)

Investment in other companies (1,308,050) (10,000)

Proceeds from sale of fixed assets 17,789 2,215

--- --- Net cash provided by investing activities (1,784,643) (293,003) --- --- Cash flows from financing activities

(Repayment)/ Additional lease obtained (5,436) 27,381 Interest paid on loans and overdraft (170,375) (117,628) Dividend paid 11 (325,748) (19,557) Additions to Share Capital 14 660,819 - Additions to Share Premium 15 2,891,225 -

--- --- Net cash provided/(utilized) by

financing activities 3,050,485 (109,804)

--- --- Net increase (decrease) in cash

and cash equivalents 386,623 (135,738)

Cash and cash equivalents at July 1 (265,803) (130,065)

--- --- Cash and cash equivalents at June 30 24 120,820 (265,803)

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21 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS

1. THE COMPANY

The Company was incorporated as a private limited liability company on 13 March 1995 and commenced business activities on 15 March 1995. The principal activities of the company include manufacturing and distribution of pharmaceutical products. The Company became quoted on the Nigerian Stock Exchange in 5 June, 2008. The issued share capital is held as to 47.79% by the Directors and 52.21% by the Nigerian Public.

2. FIXED ASSETS

Plant Furniture

Land and machinery & & Motor Construction

buildings equipment fittings vehicles in progress Total N N N N N N COST At July 1, 2007 88,766 299,886 14,832 144,009 259,271 806,764 Additions 21,240 70,348 627 55,971 224,772 372,958 Disposals - (196) - (16,157) - (16,353) Reclassification 127,975 - - - (127,975) - --- --- --- --- --- --- At June 30, 2008 237,981 370,038 15,459 183,823 356,068 1,163,369 --- --- --- --- --- --- DEPRECIATION At July 1, 2007 3,732 113,692 5,770 97,087 - 220,281 Charge for the year 1,169 35,887 1,908 46,220 - 85,184 Disposals - (196) - (12,378) - (12,574)

--- --- --- --- --- --- At June 30, 2008 4,901 149,383 7,678 130,929 - 292,891 --- --- --- --- --- --- NET BOOK VALUE

At June 30, 2008 233,080 220,655 7,781 52,894 356,068 870,478 ====== ====== ==== ===== ====== ====== At June 30, 2007 85,034 186,194 9,062 46,922 259,271 586,483 ====== ====== ==== ===== ====== ======

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22 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2.1 Included in construction in progress is a landed property valued at a cost of N88.1million with the title documents in the name of the Managing Director. Arrangement is being made by the Managing Director to obtain a mortgage loan to pay the Company back for the cost of the property.

3. FINANCE LEASE ASSETS

Motor Office

Vehicles Equipment Total N=’000 N=’000 N=’000 Cost

At July 1, 2007 106,059 15,623 121,682

Additions during the year 107,235 - 107,235

Disposal (22,418) - (22,418) --- --- --- At June 30, 2008 190,876 15,623 206,499 --- --- --- Depreciation At July 1, 2007 38,080 6,184 44,264

Charged during the year 26,805 3,906 30,711

Disposal (8,941) - (8,941)

--- --- ---

At June 30, 2008 55,944 10,090 66,034

--- --- --- Net Book Value

At June 30, 2008 134,932 5,533 140,465

====== ==== ======

At June 30, 2007 67,979 9,439 77,418

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23 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

4. INVESTMENTS

Long-term investments (Note 4.2)

FIL Pharmaceuticals Limited 149,286 149,286

Widenet Impex Limited 30,000 30,000

Ecomed Pharma 95,262 73,990 Farm Account - 7,083 --- --- 274,548 260,359 --- --- INVESTMENTS IN SHARES

Spring Bank Plc (Market value N18,006,245) 10,085 10,085 Zenith Bank Plc (Market Value N8,690,000) 3,380 3,380 Friendship Height Nigeria Ltd (Unquoted) 17,430 10,000

Meristem Securities Nigeria Limited 921,600 -

--- ---

952,495 23,465

--- ---

OTHER INVESTMENTS

Investment in IBTC 10,000 -

Investment in Jubilee Life 250,000 -

Investment in Sprukfield (SAPL) UK 119,020 -

--- --- 379,020 - --- ---

1,606,063 283,824

======= ======

4.1 The Directors are of the opinion that the market values of unquoted investments are not below the cost

(24)

24 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

4.2 The subsidiary companies which are wholly owned are not consolidated. The Directors are of the opinion that the amounts involved are insignificant due to the relatively low level of operations. The highlights of the subsidiaries financial statements are as follows:

2008 2007 N=’000 N=’000 FIL Pharmaceuticals Limited

Turnover 204,080 154,337

Profit/ (Loss) before tax 6,073 (20,420)

Profit/ (Loss) after tax 4,175 (23,019)

Net assets 90,950 85,030

====== ======

Widenet impex Limited

Turnover 123,607 123,607

(Loss)/Profit before tax (5,861) 1,457

Profit after tax (6,092) 1,457

Net assets 52,648 58,777

====== ======

5. STOCKS

Finished goods 279,799 114,194

Raw and packaging materials 233,224 127,084

Work-in-progress 10,630 18,526

Goods-in-transit 253,914 244,466

--- --- 777,567 504,270

====== ======

6. DEBTORS AND PREPAYMENTS

Trade debtors 1,262,465 903,034

Sundry debtors 480,469 130,760

Prepayments - 4,997

Directors current account 167,091 126,673

Advance for machineries & spare parts 827,265 19,430 --- --- 2,737,290 1,184,894 ======= =======

(25)

25 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007

N=’000 N=’000

7. DUE FROM RELATED COMPANIES

FIL Pharmaceuticals Limited 18,270 16,669 Widenet Impex Limited 15,793 - Portlab Nigeria Limited 10,900 - Fidson Product (Diaper Project) 486,931 - Ayebae Holdings Limited 9,787 9,723 Ecomed Pharma Ltd - 16,713 --- --- 541,681 43,105 ====== =====

8. CREDITORS DUE WITHIN ONE YEAR

Trade creditors 315,644 391,057

Bank loans (Note 26c) 536,330 56,973

Bank Overdraft (Note 26c) 168,951 309,557

Other creditor and accruals 460,582 213,297

Obligation under finance lease due

within 1 year (Note 12) 50,823 46,289

--- --- 1,532,330 1,017,173 ======= =======

9. TAXATION

i. Balance Sheet:

Provision for the period 188,697 -

--- ---

Balance carried forward 188,697 -

====== ===== ii. Profit and Loss account:

Company Income Tax 167,964 -

Education Tax 20,733 -

Deferred Tax 148,382 -

--- ---

337,079 - ====== =====

(26)

26 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

10. DEFERRED TAXATION

At July 1 49,974 49,974

Charge for the period 148,382 -

--- ---

198,356 49,974 ====== =====

i. The Company enjoyed Pioneer Status in accordance with Section 6 of the Industrial Development (Income Tax Relief) Act No. 22 of 1971 with Production day being 1 November 2002. The pioneer status was for a period of 5 years commencing from the production day. However, the pioneer status lapsed on October 30, 2007.

ii. The charge for taxation in these financial statements is based on the provisions of the Companies Income Tax Act, CAP C21 LFN 2004 and Education Tax Act, CAP E4, LFN 2004.

2008 2007 N=’000 N=’000

11. DIVIDEND

Per Balance Sheet

Balance at July 1, 152,147 24,555

Dividend 202,122 147,149

Payment (325,748) (19,557)

--- ---

Balance carried forward 28,521 152,147

====== ======

11.1 The Directors recommended that a dividend of 20k per share (2007: N2.27k) amounting to N300,000,000 (2007: N202,121,595) be paid out of the profit for the 2008 financial year. No provision has been made in these financial statements in accordance with the Statement of Accounting Standards 23 (SAS) issued by the Nigerian Accounting Standards Board.

(27)

27 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

12. OBLIGATION UNDER FINANCE LEASE

2008 2007 N=’000 N=’000 The maturity of these amounts is as follows:

Amounts payable within one year 50,823 46,289

Amount payable within two to five years 72,405 68,876 Less: Finance charges allocated to future periods (26,160) (17,195)

--- --- 97,068 97,970 ===== ===== Finance leases are analyzed as follows:

Current Obligations (Note 8) 50,823 46,289 Non Current Obligations 46,245 51,681 --- --- 97,068 97,970 ===== =====

Lease obligations are secured on the value of the assets under lease.

2008 2007 N=’000 N=’000

13. STAFF RETIREMENT BENEFITS

At July 1, 26,047 15,530

Provision for the year 20,662 14,340

Amount invested with an insurance company (45,629) (3,925)

Interest on Fund Invested 4,463 989

Payments during the year (2,325) (887) --- ---

At June 30, 3,218 26,047

(28)

28 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

14. SHARE CAPITAL

Authorized: Share capital

1, 500,000,000 ordinary shares of 50k each 750,000 100,000 (2007:100,000,000 ordinary shares of N1 each) ====== ======

On November 8, 2007 the Board of Directors approved that the nominal value of the share be split from N1 per share to 50k per share, and increase the authorized share capital to 1,500,000,000 by the creation of 1,300,000,000 ordinary shares of 50k each.

2008 2007 N=’000 N=’000 Issued and fully paid:

1,500,000,000 ordinary shares of 50k each

(2007: 100,000,000 ordinary shares of N1) 750,000 89,181 ====== =====

15. SHARE PREMIUM

As at July 1 81,818 81,818

Additions during the year 2,891,225 - --- ---

2,973,043 81,818 ======= =====

16. FIXED ASSETS REVALUATION RESERVE

Land, Buildings, Plant, Machinery, Furniture, Fittings and Equipment situated at the Ota Factory were professionally valued by Messrs Diya Fatimilehin & Co., Estate Surveyors & Valuers on April 24, 2002. The valuation was carried out on an open market basis between a willing buyer and willing seller. The net surplus arising on the revaluation amounting to N26.279m has been credited to fixed assets revaluation reserve. Revaluation is carried out as the need arises.

(29)

29 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

17. GENERAL RESERVE

Balance at July 1, 1,229,448 871,293

Dividend paid during the year (202,122) (147,149)

Profit for the year 189,300 505,304

--- ---

Balance at June 30, 1,216,626 1,229,448

======= =======

Analysed as followed:

Reserve for proposed dividend 300,000 202,122

Retained in General Reserve 916,626 1,027,326

--- ---

1,216,626 1,229,448

======= =======

18. TURNOVER

Turnover represents the total value of goods invoiced to third parties locally and is categorized into the following groups:

2008 2007 N=’000 N=’000 Specialties 2,015,532 668,076 Bio Sciences 1,332,177 659,212 Generics 811,648 367,307 Bio-Tech 217,546 - General Goods 126,742 1,612,826 --- --- 4,503,645 3,307,421 ======= ======= 19. COST OF SALES Specialties 1,037,443 302,940 Bio Sciences 384,124 286,413 Generics 425,133 233,840 Bio Tech 94,382 - General Goods 77,470 842,658 --- --- 2,018,552 1,665,851 ======= =======

(30)

30 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

20. OTHER OPERATING INCOME

Interest earned 22,845 5,722

Others 533 50

--- --- 23,378 5,772

===== =====

21. PROFIT ON ORDINARY ACTIVITIES

BEFORE TAXATION This is stated after charging:

Auditors’ remuneration 4,250 3,000

Bank interest 153,142 107,144

Depreciation - Finance lease assets 30,711 27,615

Depreciation - Fixed assets 85,184 66,561

Directors’ emoluments 58,042 34,135

Lease interest 17,233 10,484

(Profit)/Loss on disposal of fixed assets (533) 8,842

Staff cost 437,670 219,694

====== ======

22. Earnings per share is based on profit after tax and on issued & fully paid capital as at June 30th of each year.

(31)

31 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

23. RECONCILIATION OF NET INCOME

TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Net income after taxation 189,300 505,304

Adjustment to reconcile income to net cash provided:

Depreciation 115,895 94,176

(Profit)/Loss on disposal of fixed assets (533) 8,840

Net interest payable 170,375 117,628

Changes in assets and liabilities:

Increase in inventory (273,297) (136,888)

Increase in trade debtors (359,431) (518,355)

(Increase)/decrease in due from related companies (498,576) 9,735 Increase in other debtors (1,192,965) (188,398)

Increase in creditors 655,763 374,193

(Increase)/ (decrease) in due to related companies - (9,683)

Increase in Tax Payable 188,697 -

Increase in Deferred Tax Payable 148,382 - (Decrease)/Increase in retirement benefits (22,829) 10,517

--- --- Net cash (utilized)/ provided by operating activities (879,219) 267,069 ====== ======

24. RECONCILIATION OF CASH AND

CASH EQUIVALENT

Cash and bank 289,771 43,754

Bank overdrafts (168,951) (309,557)

--- ---

Cash and cash equivalents 120,820 (265,803)

(32)

32 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

2008 2007 N=’000 N=’000

25. DIRECTORS AND STAFF REMUNERATION

Chairman and Directors’ emoluments:-

a) Chairman ( Non-Executive) 450 -

b) Others (Non- Executive) 6,115 1,100

c) Executive Directors 51,477 33,035 --- --- 58,042 34,135 ===== ===== HIGHEST PAID DIRECTOR 8,000 6,500

c) The number of directors excluding the Chairman whose emoluments fell within the following ranges were:-

N= N= Numbers Numbers

1,500,000 – 3,000,000 - 2

3,000,001 – 5,000,000 3 -

5,000,001 – 7,000,000 4 3

== ==

d) The average number of persons employed in the financial year and the staff cost were as follows:

Numbers Numbers Managerial and senior staff 148 153

Junior staff 146 102 --- --- 294 255 === === 2008 2007 N=’000 N=’000

Salaries and wages 417,037 212,524

Pension cost 20,633 7,170

--- --- 437,670 219,694

(33)

33 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

e) The number of employees in receipt of emoluments excluding allowances within the following ranges were:

2008 2007 N N Numbers Numbers 70,001 – 80,000 - 3 80,001 – 90,000 - 31 90,001 – 100,000 48 30 110,001 – 120,000 41 24 140,001 – 150,000 43 18 150,001 – 200,000 26 17 200,001 – 500,000 97 134 500,001 – 800,000 30 - 800,000 – 1000,000 4 - 1000,001 – and above 5 - === ===

26. GUARANTEES AND OTHER FINANCIAL COMMITMENTS

a. Capital expenditure

The company proposed N547 million for capital expenditure for 2008 financial year as follows:

Contracted out: N427m

Not Contracted out: N120m

b) Financial commitments

The Directors are of the opinion that all known liabilities and commitments have been taken into account in the preparation of the accounts under review. These liabilities are relevant in assessing the Company’s state of affairs.

c) Security of facilities

The bank loans and overdrafts are secured principally by a legal mortgage over some of the Company’s land and buildings, debenture on the company’s assets, lien on shipping documents of goods imported, personal guarantee of Mr. Fidelis A. Ayebae and joint and several guarantees of the Directors of Fidson Healthcare Plc.

(34)

34 FIDSON HEALTHCA RE PLC

NOTES TO THE FINANCIAL STATEMENTS – (Continued)

27. CONTINGEN T LIABILITIES

The company had no contingent liabilities as at 30 June 2008 (2007 – Nil).

28. RELATED PARTY TRANSACTIONS

2008 2007 N=’000 N=’000 Purchase of raw materials

Widenet Impex 15,793 -

===== ===== Settlement of bills

Ayebae Holdings Limited 9,781 9,723

Ecomed Pharma Limited - 16,713

FIL Pharmaceuticals Limited 18,270 16,669 Fidson Products Limited 486,931 - Portlab Nigeria Limited 10,900 - --- --- 541,675 43,105 ====== =====

29. RECLASSIFICATION

Certain reclassifications were made to the reported figures in the prior year in order to conform to this year’s presentation.

(35)

35 FIDSON HEALTHCA RE PLC

STATEMENT OF VALUE ADDED FOR THE YEAR ENDED JUNE 30, 2008

2008 2007 N=’000 N=’000

Turnover 4,503,645 3,307,421

Other operating income 23,378 5,772

Bought in materials and services

- Imported (1,829,593) (1,473,361) - Local (1,121,363) (903,029) --- --- Value added 1,576,067 100 936,803 100 ======= === ====== === Applied as follows: % % To pay employees:

Salaries and other benefits 437,670 28 219,694 24

To pay government:

Income tax 188,697 12 - -

To pay providers of capital:

Dividend 325,748 21 147,149 16

Bank interest 170,375 11 117,628 12

To provide for replacement of assets and expansion of business:

- Depreciation – finance lease 30,711 2 27,616 3 - Depreciation – fixed assets 85,184 5 66,561 7 - Deferred Taxation 148,382 9 - -

- Retained profit 189,300 12 358,155 38

--- --- --- --- 1,576,067 100 936,803 100 ======= === ====== ===

The value added represents the additional wealth which the Company has been able to create by its own and its employees’ efforts. This statement shows the allocation of that wealth to employees, providers of finance, shareholders, government and that retained for the future creation of more wealth.

(36)

36 FIDSON HEALTHCA RE PLC

FIVE-YEAR FINANCIAL SUMMARY YEARS ENDED JUNE 30,

2008 2007 2006 2005 2004 N='000 N='000 N='000 N='000 N='000 ASSETS Fixed assets 870,478 586,483 501,154 441,992 362,934 Leased assets 140,465 77,418 84,825 18,883 9,500 Investments 1,606,063 283,824 171,760 57,416 50,000 Net current assets 2,596,761 606,703 400,636 234,666 156,746 --- --- --- --- --- 5,213,767 1,554,428 1,158,375 752,957 579,180

Creditors – due after

one year (46,245) (51,681) (24,300) (1,086) (848) Deferred taxation (198,356) (49,974) (49,974) (49,974) (47,054) Staff retirement benefits (3,218) (26,047) (15,530) (3,756) (2,436) --- --- --- --- --- 4,965,948 1,426,726 1,068,571 698,141 528,842 ======= ======= ======= ====== ====== Financed by: Share capital 750,000 89,181 89,181 89,181 84,636 Share Premium 2,973,043 81,818 81,818 81,818 61,363 Revaluation reserve 26,279 26,279 26,279 26,279 29,199 Revenue reserve 1,216,626 1,229,448 871,293 500,863 353,644 --- --- --- --- --- 4,965,948 1,426,726 1,068,571 698,141 528,842 ======= ======= ======= ====== ====== Turnover 4,503,645 3,307,421 2,200,167 1,624,471 1,080,231 ======= ======= ======= ======= =======

Profit before taxation 526,379 505,304 370,430 246,268 182,984 Profit after taxation 189,300 505,304 370,430 245,318 219,058 Dividend - 147,149 98,099 73,634 38,197 ====== ====== ====== ====== ====== Per Share Data

Earnings per share (kobo) 13 402 305 275 25 Dividend per share (kobo) - * 227 110 110 87 Net assets per share (kobo) 331 1,600 1,198 783 625 === ==== ==== ==== ===== Notes:

- Earnings, dividend and net assets per share are based on the number of shares issued and fully paid at the end of each year.

- Earnings and dividend per share are based on profit after taxation.

(37)

FIDSON HEALTHCA RE PLC

SUPPLEMENTARY FINANCIAL INFORMATION JUNE 30, 2008

(38)

38 FIDSON HEALTHCA RE PLC

SUPPLEMENTARY FINANCIAL SUMMARY JUNE 30, 2008 ADMINISTRATIVE EXPENSES 2008 2007 N=’000 N=’000 Advertisement 661,298 247,797 Audit fees 4,250 3,000

Depreciation- Fixed Assets 85,184 66,561

Depreciation-Finance lease assets 30,711 27,615

Donation 66,363 60,434

Fuel and Motor running expenses 76,709 67,597

Insurance 19,658 6,794

Inventory write off 4,448 10,623

Legal & Professional expenses 20,450 26,305

Newspaper & periodicals 541 777

Office supplies 10,450 10,047

Other expenses 11,738 20,867

Printing & stationery 10,181 7,553

Provision for bad debts 84,685 66,228

Rent 11,237 11,628

Recruitment 23 158

Repairs & maintenance 59,429 48,127

Salaries & related cost 437,670 219,694

Security 3,530 3,708

Subscription 10,247 7,505

Telephone & Postage 16,468 15,256

Training & Development 8,921 3,535

Traveling & entertainment 177,525 92,601

--- ---

1,811,717 1,024,410

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