annual report
& accounts
ADDRESS: 5 6, Oladipo Bateye Street, Ikeja GRA, Lagos State TELEPHONE: 01-295 5586
FAX: 01-2955014
WEBSITE: www.Interlinkedtechnologies.com
OUR PARTNERS Tyco Electronics
Prysmian Cables & System
Zhuhai Hansen Technology Co., LTD.
2010 ANNUAL REPORT Five Year Financial Summary
Company Information financial Highlights Notice of Meeting Chairman’s Statement Board of Directors Report of the Directors Report of the Auditors Report of the Audit Committee Statement of Accounting Policies Profit and Loss Accounts Balance Sheet
Statement of Cash Flows Notes to the Financials Statements Statement of Value Added
Table of Contents
2 3 4 5 8 9 14 16 17 19 20 21 22 28 29
Notes 30
Managing Director/CEO’s Report 6
BOARD OF DIRECTORS Mr. F. C. Nnadozie Chairman Mr. O. Layode*
Mr. G. N. Abangwu
Mr. U. Abubakar Director Director Director
Mr. K. Awobodu Director Mrs. U. A. Adogu Director
Mrs. M. C. Nnadozie Director Mr. E. Bribena* Director Mr. A. Adedayo* Director
*Representing the interest of Boussole Integrated Limited.
COMPANY SECRETARY: A k i n Olugbenjo
REGISTERED ADDRESS: 5 6, Oladipo Bateye Street, Ikeja GRA, Lagos State WAREHOUSE: T h e D a ily Times Premises, Lateef Jakande Road, Lagos.
BRANCH: Wa r ri TELEPHONE: 0 1 - 2 9 5 5586 FAX: 01-295 5014
WEBSITE: www.interlinkedtechnologies.com EMAIL: [email protected]
Company Information
PROFESSIONAL ADVISERS Auditors:
Nnamdi Oyeka&Co (Chartered Accountants)
34,Bassie Ogamba Street, Off Adeniran Ogunsanya Street.
Surulere, Lagos State.
Registrars:
Corporate Diamonds & Securities & Investments Ltd Waterfront Plaza (Suite A3), 1st Avenue
Opposite Mr. Bigg’s, Festac Town, Lagos.
Mobile: 08033276738; 08035668103 Bankers:
Access Bank Plc Diamond Bank Plc Fidelity Bank Plc Finbank Plc First Bank Plc
Oceanic International Bank Plc Skye Bank Pic
Zenith Bank Plc
Company Solicitors Zik Chuka Obi & Co.
Solicitors
9th Floor, Western House 8-10 Broad Street, Lagos.
2010 ANNUAL REPORT
2
Chief J. Okwuonu
Executive Director
Managing Director/Chief Executive Officer
Barr. Z. C. Obi II
2010 ANNUAL REPORT
Financial Highlights Financial Highlights
2010 2009 % change
-59%
-58%
-63%
-1800%
-346%
-86%
N N
Turnover
Cost of Sales
Gross Margin
Loss/Profit Before Tax
Loss/Profit After Tax
Paid Up Share Capital
Shareholder’s Funds
Earnings Per Share
292,132,943
(219,804,179)
72,328,764
15,597,929
1,124,539
23,600,113
(25,680,689)
2.38k 174,316,054
(127,916,078)
46,399,976
(13,318,748)
(18,833,096)
118,349,761
446,449,545
(7.96k)
2010 ANNUAL REPORT 4
Notice of Meeting
Notice is hereby given that the 29th Annual General Meeting of Interlinked Technologies Plc will be held at the Airport Hotel, Obafemi Awolowo Way Ikeja. Lagos on Thursday 16th December, 2010 at 11:OOa.m for the following purposes:
AGENDA
1. To receive the Profit and Loss Accounts for the year ended June 30, 2010, the Balance Sheet as at that date a nd the reports of the Directors and Auditors thereon.
2. To receive the Report of the Audit Committee 3. To re-elect Directors
4. To approve the remuneration of the Directors
5. To authorize the Directors to fix the remuneration of the Auditors 6. To appoint members of the Audit Committee
NOTES:
I. A member entitled to attend and vote may appoint a proxy in his/her stead using the enclosed form and such proxy need not be a member. To be valid for the purpose of the meeting, the enclosed proxy form must be stamped by the Commissioner of Stamp Duties and deposited at the office of the Registrar Corporate Diamond Securities and Investments Ltd, 5th Floor, 47 Marina, Lagos not less than 48 hours prior to the time of the meeting.
2. The Register of members and the Share Transfer Books of the Company will be closed from 14th to 18th June, 2010, both days inclusive.
3: In accordance with Section 359 (5) of the Companies and Allied Matters Act, (CAP 20 Laws of the Federation of Nigeria, 2004), all nominations in writing of members for appointment to the Audit Committee should reach the Company Secretariat at least 21 days before the date of the Annual General Meeting.
By Order of the Board.
A. Olugbenjo Company Secretary.
September 22, 2010
NOTICE OF MEETING
2010 ANNUAL REPORT
Chairman’s Statement
Distinguished Shareholders,
It is my pleasure to welcome you all to the 29th Annual General meeting of our Company.
The fiscal year that ended on June, 30, 2010, is the first full year of operation since the move to recapitalize and inject more funds into the company.
Turnover reduced from N292million to N174million during the year. The reduction was caused by delay in execution of projects by our major customer. This performance would have been better but for the general Economic situation in the Country and as mentioned earlier
We will continue in our efforts to improve the Business of the Company in the New Year. So far, we have increased our product base by the introduction of new complimentary products in the Electrical, and Oil industries. Our main objective for this year is to strengthen our product portfolio, increase our customer base, develop our existing markets, open new markets and establish new branch offices in Abuja and Port -Harcourt, while further strengthening our presence in Warri. We have developed a distributorship network for many of our products while paying particular attention to Consumer products that will give us continuous cash flow and steady profitability. We have broadened cooperation with Companies around the world in areas that will enhance our new objective and deepen our Business base. We have, in fact,
PROSPECTS FOR 2010 /2011
We will continue our efforts to of the Company in the New Year
improve the Business
established joint venture partnerships with some Companies that will complement our existing businesses and open the door to new ventures.
We call on you, our Shareholders, to partner with us in our effort to uplift the fortunes of our Company. We believe that with your usual support, we will achieve all our objectives for the future.
I would like to use this opportunity to thank the Board, Management and Staff of this Company for their continued service and devotion to duty.
Thank you all and God Bless.
Chairman Fabian .C. Nnadozie
2010 ANNUAL REPORT 6
Managing Director /CEO’s Report INTRODUCTION
2009 /2010 ECONOMIC ENVIRONMENT, MARKET & COMPETITION
This meeting provides the opportunity to give you my fellow shareholders a brief on the performance of our company for the year ended 30 June 2010. The year under review was a period during which the world's economy felt the full impact of the global financial crisis and so also the Nigerian economy because of the fall in the price of crude oil; a key driver of our Gross National Product. Before going into details of our financial and operating performance, I consider it most appropriate to review the challenges we faced, how these challenges were managed to make the company stay afloat and also to share with you the strategic direction of the company. The year 2010 was particularly difficult for many businesses in general especially as the financial sectors suffered heavily. The lack of funding coupled with the poor showing of our Rights issue affected us significantly. In addition, the lack of funds to many businesses stalled significant projects we were awarded as they failed to take off due to lack of funds.
Resistance to price increases in the face of rising cost was also a major contributor to our low turnover.
Consequently, the result being presented to you today is a result of the outcomes of all the issues and factors we faced during the year. We would like to acknowledge the support of the board and our tireless staff for staying resilient in the face of the challenges.
Despite of the unfavourable macroeconomic environment which made 2009/2010 extremely difficult and challenging financial year for the company, the company recorded a lower turnover of
N175m for 2010 compared to N292m in 2009. We could not increase our selling price due to competitive pressures, funding was unavailable due to our low rights issue result which eventually we finished quite later than we had anticipated. Many of our significant customers stepped down on many projects we were awarded due to lack of funds. Our Rights issue was concluded very late due to several factors beyond our control at that time. Consequently we were unable to utilize the funds we raised. We achieved 25% of the funds we set out to raise which is not enough for us to embark on our aggressive growth plans.
We strongly believe that our people are our greatest asset and having excellent people agenda at the heart of our business has a real and tangible effect on our business Performance. We are committed to developing our workforce and retaining our talents as we recognise that this is fundamental to our long term successes and accordingly, we have started investing in this area in order to have the best talented pool in our areas of business in order to have a sustainable value creation for our shareholders. Consequently, we have put in place an effective career development and succession plan in order to have and achieve a sustainable effective workforce for sustainable business performance.
WORKFORCE
2010 ANNUAL REPORT
Managing Director /CEO’s Report
OUTLOOK FOR 2011
. BOARD RESTRUCTURING
The future remains challenging considering the general economic slowdown coupled with the upcoming general elections in the country with its uncertainties, the intense pressure on costs of production inputs, uncertainty over the financial sector, unreliable power supply and competition from substandard products. Also of significant importance is the need to have significant working capital to be able to withstand various financial challenges especially with the current stagnant lending situation in the financial sectors. These notwithstanding, we will continue to work hard and keep pursuing our key cost reduction activities, growing our turnover significantly, expanding our operational base to include Abuja and increasing the capacity of our workforce. We are determined to overcome all the increasing challenges we face and move into higher profitability during the coming financial year.
Consequently, our growth plans have been divided into phases with the first phase being acquisition of more credible technical partners like Hansen technologies, Prysmian cables (Fibre optics ). Expansion into other locations will be given attention, increase in our product portfolio to include Geldesa transformer. Our plan is to have all forms of electrical accessories and fibre optics and its accessories. This would put us in good stead for a good performance in the coming years. The company remains optimistic of the year ahead with significant growth areas in cable and fibre optic sales, project execution, and expanding our customer base. In the pursuit of value creation for all our stake holders, we will work at getting funding for the company and continue to invest in our people, product expansion, customer growth and delivering quality services to our clientele base. We will remain firmly committed to good corporate governance and proactively continue to put safeguards in place to deal with any environmental constraints local or global.
Our customers are considered an indispensable partner in this difficult but interesting journey of success. We shall continue to hold them with our value.
Finally, we have started the process of reducing the number of members on the board to truly reflect the current state of our company. We have started the discussions and I am sure we would have restructured the board before the next AGM. I would like to use this opportunity to thank all our esteemed shareholders for their patience and resilience and for their contribution to the development of our company.
Thank you all.
Olusegun Layode FCA Managing Director/CEO
2010 ANNUAL REPORT 8
BOARD OF DIRECTORS (from left): Mr. K. Awobodu; Barr. Z.C. Obi III; Mr. A. Adedayo; Mr. F.C. Nnadozie; Mr. E. Bribena; Mr. O. Layode;
Mr. G.N. Abangwu; Mr. A. Olugbenjo; Chief J. Okwuonu. Board members not pictured: Mr. U. Abubakar; Mrs. U.A.Adogu; Mrs. M.C. Nnadozie
Board of Directors
AUDITED FINANCIAL STATEMENTS
In accordance with sections 342 of the Companies and Allied Matters Act, CAP 20 Laws of the Federation of Nigeria, 2004, the Directors have the pleasure to submit herewith their Annual Report together with the Balance Sheet as at June 30, 2010, and Profit & Loss Account for the year ended on that date.
1. PRINCIPAL ACTIVITIES
The principal activities of the Company during the year were the development, manufacturing and marketing of a wide range of high performance polymeric, porcelain and metallic products, sales and marketing of High and Low Voltage electrical cable accessories, Umbilicals cables and accessories, all telecommunications cable accessories, fibre optics accessories and all forms of cable closures, sales and Installation of transformers.
The Company also undertakes Turnkey Electrical projects for clients around the country.
2. STATE OF AFFAIRS
In the opinion of the Directors, the state of affairs of the Company is satisfactory and there has been no material change since the date of the Balance Sheet.
3. RESULTS FOR THE YEAR
4. FIXED ASSETS
There were some fixed assets acquisitions during the year. Details are given in Note 5 to the Financial Statements.
5. DIVIDENDS
No dividends was recommended by the Directors because of the state of affairs of the Company.
6. DONATION AND GIFTS
There were no donations to charities during the year.
N
JUNE 30, 2009 JUNE 30, 2010
(18,833,096) 1,124,539
1,124,539 (57,505,520) (56,380,981)
(56,380,981) (75,214,077)
N
- -
(18,833,096) (Loss)/Profit before Tax
Proposed Dividend (Loss)/Profit for the Year (Loss) Brought Forward (Loss) Carried forward
2010 ANNUAL REPORT
Report of the Directors
for the year ended June,30, 20107 BOARD OF DIRECTORS
Appointment:
There were no new appointments during the under review.
Retirement and Re-election:
The directors retiring from he board accordance with the rotation clause the Articles of Association of the compan are Mrs. Nnadozie, Chief Jerry Okwuonu and Mrs Adogu. Mrs. Nnadozie has signified her intention to retire from the board. However, Chief Jerry Okwuonu and Mrs. Adogu being eligible for re-election, offer themselves for re-election.
The names of the Directors the date of this report and those who held office during the year are as follows:
Mr F. C. Nnadozie
Mr O. Layode* Managing Director/Chief Executive Officer Mr G. N. Abangwu Director
Mr. U. Abubakar Director .
t y
. . .
.
(a) Board of Directors:
(b) APPOINTMENT, RETIREMENT AND RE-ELECTION OF DIRECTORS
(c) DIRECTORS
The Board is responsible for setting the company's strategic direction, for leading, controlling and monitoring activities of the management. It meets at least four times a year. The Board presents a balanced and understandable assessment of the company's progress and prospects.
The Board consists of the Chairman and ten Directors all representing shareholders' interest. The Chairman and the office of the Managing Director are held by two different distinct individuals as required by the corporate governance code of ethics. The Non-Executive Directors are independent of management and free from constraints, which could materially interfere with the exercise of their independent judgment. They have varied experiences in business to make valuable contributions to the company's progress.
year
in in
at Chairman Executive Chief Jerry Okwuonu Director Barr. Zik Chuka Obi II Director Mr. K. Awobodu Director Mrs. U A. Adogu Director Mrs M C Nnadozie Director Mr. E. Bribena* Director Mr. A. Adedayo* Director
*Representing the interest of B ussole Integrated L mited .
.
. .
o i
2010 ANNUAL REPORT
10
Report of the Directors
for the year ended June,30, 2010.(d) DIRECTORS' INTEREST
(a) SHAREHOLDING ANALYSIS
Directors interest in the share c pital of the Company was as follows
As at June 30, 2010 As at June 30, 2009 o of Shares (50k Shares No of shares (50k Shares)
Olusegun Layode Mr. F Nnadozie Mrs U. A. Adogu Ch ef Jerry Okwuonu Mr U Abubakar Mr K. Awobodu Mr. Z C Obi II Mrs M C Nnadozie Mr. G N Abangwu
The called up Capital o the Co pan as a June 0 2010 was 236,699,521 Ordinary Shares of 50k each All shares are held by igerian Citizens and Associates.
a :
N )
C.
i . . .
. . . .
. .
f m y t 3 , . N
. .
.
327,260 26,930,060
5,385,000 23,480,000
1,531 ,687 1,248,962 80,950 30,000 25,000
DIRECT DIRECT INDIRECT
150,323,022 7 74 00, 0
37 350,
3 7 602 ,2 6 93 060, 0,
3,480 000, 1 531 687, , 1,248,962 80 950, 30 000, 2 ,5 000
9,32 ,3 022 747 000, 5 385 000, ,
37,350
Number of S areholdersh % Holding
INDIRECT
0.7 1.9 0.7
Holding Between Shares
01 - 1,000 1,001 10 000- , 10 001 20 000, - ,
8841, 2361, 107
1 722,324, 4 494,675, 1 669,439,
20,001- 50,000 76 2,565,158 1.1 50,001 -100,000 21 1,519,181 0.7 100,001-200,000 13 1,684,099 0.7 200,001 - 500,000 8 2,589,165 1.1 500,001 and above 9 220,455,480 93.1
3 , 3 54 236,699,521 100.00 (b) SUBSTANTIVE SHAREHOLDING
According to the register of members, the following shareholders of the Company held more than 5% of the Issued Share Capital as at June 30, 2010:
Boussole Integrated Limited Mr. Fabian C. Nnadozie
Chief Jerry Eze Okwuonu
NO OF SHARES HELD 150,223,022 26,930,000 23,480,000
63.47 11.38 9.92
%
2010 ANNUAL REPORT
Report of the Directors
for the year ended June,30, 20109. RESEARCH AND DEVELOPMENT
These are mainly in the areas of developing local contents in the composition of its insulator business aimed towards satisfying the major voltage requirements of Nigeria's Electrical Industries.
10. MAJOR CUSTOMERS & DISTRIBUTORS
1. Power Holdings Company of Nigeria 2 . She ll Petroleum Development Company of Nigeria 3. Siemens Nig Ltd 4. ABB Nig. Ltd.
5. Stallion Properties Ltd. 6. Chevron Nigeria Ltd.
7. Mobil Nig. Plc 8. West African Portland Cement Plc 9. HFP Engineering Nig. Ltd 1 0. Cakasa Engineering Nig. Ltd.
11. Rockson Engineering Ltd. 12. FAN Milk Nig. Ltd.
13. Solid Homes Ltd. 14. Saipem Contracting 15. NEGRIS 16. Nokia Siemens Nig. Ltd.
17. RCCG 18. Trussnet 11. SUPPLIERS
The Company's major Overseas and Local suppliers are:
1. Prysmian Cables and Systems, Italy 2. Tyco Electronics (Belgium, Germany and UAE) 3. CTL Components Plc, UK 4. Densyl Tapes USA
5. Hansen Technologies Ltd. 6. Tyco Thermal Control
1. ABBNig. Ltd. 2. Adswitch PIc.
3. Cutix Pic. 4. Mane Ltd.
5. Nigerchin Nig. Ltd. 6. Ade Sab Nig. Ltd.
7. Wadoye
12. EMPLOYMENT AND EMPLOYEES
It is the policy of the Company to give all employees, whether or not disabled, equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their careers. As at June 30, 2010, no disabled person was employed by the Company
Protective clothing and fire fighting gadgets are provided in the factory and offices. The Company has relationship with some clinics for employees for the treatment of ailment and accidents on duty. The Company operates a Group Accident, Life and Pension Insurance with a reputable Insurance Company, for the welfare of employees.
The Company as a matter of policy embarks on training of staff through such organizations as the Nigeria Institute of Management (NIM), Manufacturer's Association of Nigeria, GMPlast Denmark, Lagos Business School, Tyco Germany and other reputable organisations.
(a) OVERSEAS
(b) LOCAL
(a) Employment of Disabled persons
(b) Health Safety and Welfare at Work of Employees
(c) Employees Interest and Training
2010 ANNUAL REPORT
12
Report of the Directors
for the year ended June,30, 201013. RECAPITALISATION EXERCISE
We have concluded the capital raising exercise and want to use this opportunity to thank all the shareholders who took up their rights. As already published, we achieved a little over 25% of the rights offered existing shareholders. The funds raised were barely enough to carry out the purposes for which we have earmarked them for. Towards this end, we would be embarking on raising private funds to continue the repositioning of our great company. Funds are required for several key initiatives which we have embarked upon to improve the fortunes of the company and bring us to the desired level of performance.
14. AUDITORS .
Messrs. Nnamdi Oyeka & Co. having expressed their willingness will continue in office as the Company's auditors, in accordance with Section 357 (2) of the Companies and Allied Matters Act, CAP 20 Laws of the Federation of Nigeria, 2004. A resolution will be proposed to authorise the directors to fix their remuneration.
15. QUALITY/ISO CERTIFICATION
We are in the middle of our ISO certification and have instituted world class processes and procedures to ensure that our product quality and processes meet world class standards. A new department is now in place to monitor our systems and procedures to ensure strict compliance. Regular Audit is being performed to ensure compliance and effectiveness.
16. AUDIT COMMITTEE
The committee is made up of four members, two shareholders and two Non-Executive directors. The chairman is a shareholder. The members meet at least twice a year to review the scope of the audit and the findings and also to review the performance of the company. The committee also review the internal controls, compliance with the Laws and regulations and safeguarding of the company's assets. In accordance with the Companies and Allied Matters Act of Nigeria 1990, you will elect, from the nominations received, the members of the Audit Committee of the company for the year 2010/2011. The following were elected members of the Audit Committee at the last Annual General Meeting.
1. Overseer R.O. Oguntoye - Chairman 2. Mr. O. Oduyemi 3. Mr. A. Adedayo - Board Member 4. Mr. G. N. Abangwu - Board Member Their report is attached.
BY ORDER OF THE BOARD
AKIN OLUGBENJO
Secretary 2010 ANNUAL REPORT
Report of the Directors
for the year ended June,30, 2010To the Members of Interlinked Technologies Pic.
Report on the Financial Statements
We have audited the accompanying financial statements of Interlinked Technologies Plc. ('the Company”) which comprise the balance sheet as at June 30, 2010, the profit and loss account, statement of cash flows and value added statement for the year then ended, the statement of accounting policies, notes to the financial statements and the five year financial summary, as set out on pages 17 to 29.
Directors' responsibility for the financial statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with Nigerian Statements of Accounting Standards and with the requirements of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's responsibility
Our responsibility is to express an independent opinion on the financial statements based on our audit. We conducted our audit in accordance with International Statements on Auditing. These standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts 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
2010 ANNUAL REPORT
14
Report of the Auditors
company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, 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 opinion.
Opinion
In our opinion the accompanying financial statements give a true and fair view of the state of the financial affairs of the company at June 30, 2010 and of the loss and cash flows of the Company for the year then ended in accordance with Nigerian Statements of Accounting Standards and the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004.
Report on other legal requirements
The Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004 requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:
I) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
ii) in our opinion proper books of account have been kept by the company, so far as appears from our examination of those books;
iii) the company's balance sheet and profit and loss account are in agreement with the books of account.
2010 ANNUAL REPORT
Report of the Auditors
To the Members of Interlinked Technologies Plc.
In accordance with the provision of section 359 (6) of the Companies And Allied Matters Act, CAP 20 Laws of the Federation of Nigeria, 2004.
We the members of Interlinked Technologies Pic Audit Committee, have examined the Auditors' report for the year ended June 30, 2010 and confirm that the accounting policies agreed with ethical practices.
In our opinion, the scope and planning of the audit for the year ended June 30, 2010, were adequate. We also reviewed the Auditor's findings and were satisfied with management's responses thereon.
OVERSEER R.O OGUNTOYE, Chairman, Audit Committee Lagos, Nigeria
September 20, 2010.
MEMBERS OF THE AUDIT COMMITTEE
• Overseer R.O. Oguntoye
• Mr. O. Oduyemi
• Mr. A. Adedayo
• Mr. G. N. Abangwu
2010 ANNUAL REPORT
16
Report of the audit Committee
for the year ended June 30, 2010A summary of the principal accounting policies are set out below:
The accounts are prepared under the historical cost convention, as modified by the revaluation of the Company's fixed assets.
Turnover represents income from invoiced value of goods and services provided by the Company in the normal course of business, less rebates and discounts.
(I) Fixed Assets are stated at cost less accumulated depreciation. Cost includes expenditure that is directly attributable to the acquisition of the assets.
(II) The costs of the day to day servicing of fixed assets are recognised in the profit and loss account as incurred.
(II) Gains or losses on the disposal of fixed assets are determined by reference to their carrying values and are included in the profit and loss account.
Motor vehicles - 331/3% Per annum Furniture & fittings - 25% " "
Machinery and equipment - 10% " "
Borehole - 10% " "
Computer equipment - 25% " "
Surpluses arising on the revaluation of individual fixed assets are credited to a non-distributable reserve known as the revaluation reserve.
Stocks are valued at the lower of cost and net realisable value. Cost is ascertained on the following basis:- Raw Materials:
Actual cost comprises invoice price, duty, freight and handling charges.
Finished Goods:
Cost comprises direct cost of production together with an appropriate portion of production overhead.
Debtors are stated net of provisions for bad and doubtful debts. Bad debts are written off to the extent that they have been determined to be uncollectible.
(a) Basis of Accounting:
(b) Turnover:
(c) Fixed Assets:
(d) Depreciation of Fixed Assets:
(e) Revaluation Reserve:
(f) Stocks:
(g) Debtors:
2010 ANNUAL REPORT
statement of accounting Policies
for the year ended June 30, 2010(h) Foreign Currency:
(i) Deferred Taxation:
(j) Pension Scheme:
(k) Provisions:
Transactions denominated in foreign currencies are recorded in Naira at actual exchange rates as of the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the profit and loss account.
Deferred taxation is provided by the liability method which represents taxation at current rates of corporate income tax on the differences between the net book values of assets qualifying for capital allowances and their corresponding income tax written down values.
In line with provisions of the Pension Reform Act 2004, the Company instituted a contributory Pension Scheme for all its employees. The Company and its employees respectively contribute 7.5% of employees' annual insurable earnings to the Scheme. Staff contributions to the Scheme are funded through payroll deductions while the Company's contribution is charged to the profit and loss accounts.
Provisions are recognized when the Company has a present obligation, whether legal or constructive, as a result of past event for which it is possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amounts of the obligations.
2010 ANNUAL REPORT
18
statement of accounting Policies
for the year ended June 30, 2010The accounting policies on page 17 & 18 and the notes to the accounts on pages 22 to 27 form an integral part of these accounts.
Turnover Cost of sales
Notes 2010 2009
N N
292,132,943 (219,804,179) 174,316,054
(127,916,078)
Gross profit 46,399,976 72,328,764
Other Income 2 1,670,545 36,083,007
48,070,521 108,411,771
Administrative overheads (61,051,187) (63,287,011)
(Loss)/Profit before interest expense and taxation (12,980,666) 45,124,760
Interest expense 3 (338,082) (29,526,831)
(Loss)/Profit before taxation 4 (13,318,748) 15,597,929
Taxation 11 (5,514,348) (14,473,390)
(Loss)/Profit after taxation 1,124,539
Earnings per share (7.96k) 2.38k
(18,833,096)
2010 ANNUAL REPORT
profit and loss ACCOUNTS
for the year ended June 30, 2010Notes 2010 2009
N N
N FIXED ASSETS
CURRENT ASSETS:
Inventories
Debtors &.Prepayments Cash and bank balances CURRENT LIABILITIES:
Creditors and accruals Sundry Creditors Taxation payable Deposit for shares
NET CURRENT (LIABILITIES):
Provision for Liabilities & Charges:
Deferred charges TOTAL ASSETS
CAPITAL AND RESERVES:
CALLED UP CAPITAL CAPITAL RESERVE GENERAL RESERVE
5
6 7
9 10 11 12
11.2
13 14 15
22,165,736 49,551,564 251,938,084 6,561,861 308,051,509 86,962,927 4,121,187 128,438 262,000,000 353,212,552 (45,161,043) (2,685,382)
23,600,113 7,100,179 (56,380,981) (25,680,689) 84,859,903
- 2,462,719 - 87,322,622 95,354,412 398,461,940 23,359,664 517,176,016
429,853,394 (5,749,841)
118,349,761 403,313,861 (75,214,077) 446,449,545 22,345,992
{Directors
(25,680,689) 446,449,545
2010 ANNUAL REPORT
20
balance Sheet
at June 30, 20108
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash receipts from customers Cash paid to suppliers and employees
Cash generated from operations Taxation paid
Net cashflows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets Proceed from sale of fixed assets Purchase of Investment
Net cash (outflow)from investing activities CASH FLOWS FROM FINANCING ACTIVITIES:
Deposit for shares Interest expense
Proceed from sale of shares
Share increase and public offer expenses written off Net cashflows used in financing activities Net Increase in cash and cash equivalents Opening cash and cash equivalents Closing cash and cash equivalents Represented By:
Bank and cash balances
Notes 2010 2009
N N
197,340,831 (233,162,430) 8,715,803 (10,851,241)
(38,072,645) (3,754,800) - (170,000,000) (173,754,800)
(338,082) 522,347,533 (31,384,203) (262,000,000)
228,625,248 16,797,803 6,561,861 23,359,664
23,359,664 16
283,503,541 (377,732,445)
(122,432,978) (2,291,850) (124,724,828)
(15,501,501) 1,436,653
(14,064,848)
- (29,526,831) - (16,497,931) (46,024,762) (184,814,438) 191,376,299 6,561,861
6,561,861 Input VAT
Output VAT
(37,957,037) (115,608)
14,606,647 (42,810,721)
-
2010 ANNUAL REPORT
statement of cash FLOWS
for the year ended June 30, 20101. THE COMPANY:
2. OTHER INCOME:
Profit on asset disposal After-sales service Interest on fixed deposit Bad debt recovered
Previous years provisions no longer required Sale of scrap
3. INTEREST AND SIMILAR CHARGES:
Interest on bank overdraft and other loans 4. PROFIT BEFORE TAXATION:
This is arrived at:
After charging:
Directors' fees Auditors' remuneration Depreciation
Bank interest and similar charges And after crediting:
Other income
- 10,000 667,315 - 1,670,545 2010
N
338,082
1,000,000 3,574,514 338,082 -
460,000
1,670,545
11,592,211 984,871 1,733,237 4,086,121 17,686,567 - 36,083,007 29,526,831
460,000 1,000,000 2,545,983 29,526,831 36,083,007 2009
N
993,230
The Company was incorporated as Raychem Nigeria Limited in November 1981 to distribute Raychem International Products.
It changed its name to Interlinked Technologies Limited in May 1988 to start local production of electrical porcelain. In November 1991 , the company converted to public company and was subsequently quoted on the Nigerian Stock Exchange.
2010 ANNUAL REPORT
22
notes to the Accounts
for the year ended June 30, 20105 FIXED ASSETS:
Fenced Land
3,250,000
Motor Vehicles
4,722,199
Plant &
Machinery
8,824,027 429,000
Furniture &
Equipment
10,084,142 1,270,000
Computer
Equipment Borehole
5,863,800
705,800 -
Total
33,074,168 3,754,800
N N N N N N N
Cost/Valuation:
At July 1, 2009 Additions At June 30, 2010 Depreciation:
At July 1, 2009 Annual charge At June 30, 2010 Net Book Value:
At June 30, 2010 At June 30, 2009.
The Company's fixed assets were revalued on open market basis on August 30, 1999 by Messrs Charlie Aniagolu & Co., Chartered Surveyors and Valuers. The Board of Directors subsequently resolved to incorporate only the revalued values of the land and plant and equipment.
3,250,000
3,250,000 3,250,000
6,072,199
4,722,159
5,135,689
936,510 70
9,253,027
1,420,448 890,020 2,310,468
6,942,559 7,403,579
11,354,142
3,630,439 761,697 4,392,136
6,962,006 6,453,703
6,569,600
1,110,604 1,476,279 2,586,883
3,982,717 4,753,196
330,000
32,988 57,800
272,200
36,828,968
10,908,462 3,574,514 14,482,976
22,345,992 22,165,736
6. INVENTORIES:
Inventories comprise:
Raw materials Work in progress
7. DEBTORS AND PREPAYMENTS:
Trade Debtors (amount falling due within 1year) Prepaid tax
Other debtors and prepayments
60,331,257 35,023,155 95,354,412
100,221,804 23,446,777 274,793,359 398,461,940
26,990,015 22,561,549 49,551,564
123,246,581 23,295,925 105,395,578 251,938,084 2010
N
2009 N 330,000
- 1,350,000
-
- 413,530
24,812
-
305,188
Included in other debtors is investment of N170m with Radix Capital Partners Limited. The investment which has a tenor of 90 days is at an interest rate of 5%.
2010 ANNUAL REPORT
notes to the Accounts
for the year ended June 30, 20109. CREDITORS AND ACCRUALS:
(Amount falling due within 1 year) Trade creditors
VAT payable
Other Creditors and accruals 10. SUNDRY CREDITORS:
F. C. Nnadozie
These are monies advanced to the Company by the Chairman at bank ruling interest rate.
The advances were repaid during the year.
11. TAXATION:
i) Taxation on profit on ordinary activities Education tax
Deferred tax (Note 11 .2)
Per Balance Sheet
ii) Taxation on profit on ordinary activities Education tax
Balance brought forward Payments during the year - Cash
Payments during the year - withholding tax Per Profit and Loss Account
.
11.2 Deferred Taxation:
At July 1,2009 Charge for the year Per Balance Sheet 12. DEPOSIT FOR SHARES:
Boussole Integrated Limited
The charge for taxation has been computed in accordance with the provisions of the Companies Income Tax Act (LFNCAP 60) as amended to date
16,260,659 2,135,438 66,463,805 84,859,903
2,440,500 28,204,074 56,318,353 86,962,927 4,121,187
2010 N
2009 N 2,449,889
- 3,064,459 5,514,348 2,449,889 - 2,449,889 128,438 (115,608) - 2,462,719
863,745 13,481,207 14,473,390 863,745 992,183 1,428,105 (1,428,105) 128,438
2,685,382 3,064,459 5,749,841
-
(10,795,825) 13,481,207 2,685,382
262,000,000 2010
N
2009 N 128,438
128,438
(863,745) 8. CASH AND BANK:
Included in cash and bank balances during the year is the sum of N4,926,843 which was used as security for Fidelity Bank Plc guarantee. This money is not available to the Company for immediate utilization.
24 These amounts have been capitalized during the year
notes to the Accounts
for the year ended June 30, 20102010 ANNUAL REPORT2010 N
2009 N
-
13. SHARE CAPITAL:
Authorised: 750,000,000 Ordinary shares of 50k each.
Issued & Fully Paid: 236,699,521 (2009 – 47,200,226) Ordinary shares of 50k each
14. CAPITAL RESERVE:
Balance b/f Additions during the year
375,000,000 118,349,761 7,100,179 427,597,885 434,698,064
375,000,000 23,600,113 36,647,337 - 36,647,337 (16,487,931) 2010
N
2009 N
Share increase & capital issue expense written off Revaluation reserve on disposed assets
Share premium Revaluation reserve 15. GENERAL RESERVE:
(Loss) brought forward
Profit/(Loss) for the year after taxation Loss carried forward
16. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES:
Profit before interest and taxation Adjustments:-
Depreciation
Profit on assets disposal
Operating profit before working capital changes (Increase) in stock
(Increase) in Debtors and prepayments
(31,384,203) - 403,313,861 400,225,005 3,088,806 403,313,861 (56,380,981) (18,833,096) (75,214,077)
7,100,179 4,011,373 3,088,806 7,100,179
1,124,539 (57,505,520) (56,380,981)
N N
(12,980,666) 3,574,514 - (9,406,152) (45,802,848)
23,476,144 (112,591,380) 45,124,760 2,545,983 (11,592,211) 36,078,532 (21,304,106) (13,049,227)
2010 ANNUAL REPORT
notes to the Accounts
for the year ended June 30, 2010Increase in Creditors and accruals Net Cash flows from Operating Activities
(6,224,181)
(37,957,037) (122,432,978) (24,616,024)
17. CHAIRMAN AND DIRECTORS' EMOLUMENTS:
(I) Directors' fees Other Emoluments
(ii) The number of directors including the Chairman whose emoluments were within the following ranges were:-
N20,000 - N40,000 N40,001 - N60,000 Above N60,001
Number of directors who had no emoluments Remuneration of the highest paid director MD/Chief Executive Officer:-
Fees
Other emoluments 18. STAFF NUMBERS:
(I) The average number of persons employed by the Company during the year, including Directors, were as follows:-
Managerial staff Intermediate staff Junior staff
460,000 5,156,345 5,616,345 460,000
5,156,345 5,616,345
11 None
100,000 871,625 971,625
11 None
100,000 871,625 971,625
2010 2009
No. No.
6 6 12
6 4 - 10 (ii) The number of employees in receipt of emoluments within the following ranges were:-
Under N200,001 N300,001 N400,001 N500,001 Above
N200,000 N300,000 N400,000 N500,000 N600,000 600,000
2010 2009
Number
12 12
Number
- - - - 10 10 -
-
- -
-
-
- - - - -
2010 ANNUAL REPORT
26
notes to the Accounts
for the year ended June 30, 201019. (a) ANALYSIS OF SHAREHOLDERS 01
1,001 10,001 20,001 50,001 100,001 200,001 500,001
3,354
(b) According to the Register of Members, the following Shareholders of the Company held more than 5% of the shares of the Company at June 30, 2010.
Holding Between Number of Shareholders Shares Number %of Share- Holding
1,000 1,884 1,722,324 0.7
Shares 4,494,675 1.9 1,236
10,000
0.7 1,669,439
107 20,000
2,565,158 1.1 50,000 76
1,519,181 0.7 100,000 21
0.7 1,684,099
200,000 13
2,589,165 1.1 500,000 8
220,455,480 93.1 9
and above
100.00 236,699,521
Boussole Integrated Limited Mr Fabian C. Nnadozie Chief Jerry Okwuonu
63.47 11.38 9.92 Ordinary Shares
Of 50k each 150,223,022 26,930,000 23,480,000
% Holding
20. GUARANTEES AND OTHER FINANCIAL COMMITMENTS:
(a) The Directors in their letter of representation dated August 16, 2010 confirmed that there are no contingent liabilities.
(b) Capital Expenditure:
There was no capital expenditure under commitment as at June 30, 2010.
The directors are of the opinion that all known material liabilities and commitments have been taken into account in the preparation of the accounts under review. The liabilities are relevant in assessing the Company's state of affairs.
21. LOAN AND OTHER TRANSACTIONS FAVOURING DIRECTORS AND OFFICERS:
(a) During the period, the Company did not guarantee loans in favour of directors and officers of the Company.
(b) No loans were made to the directors for the purchase of the Company's shares.
23. COMPARATIVE FINANCIAL STATEMENTS:
Where necessary, certain comparative figures have been adjusted to conform with changes in presentation in the current year. No adjustment made as a result from changes in accounting policy during the year.
( c ) Financial Commitment:
2010 ANNUAL REPORT
- - - - - - -
22. SEGMENT REPORTING:
A segment is a distinguishable component of the Company that is engaged either in providing related products or services (business segment) or in providing products or services within a particular economical environment (geographical segment) which is subject to result and returns that are different from those of other segments. Segment information is required to be presented in respect of the Company’s business and geographical segment, where applicable.
notes to the Accounts
for the year ended June 30, 2010Sales Other income Sales and other income Bought-In-Materials and Services:
VALUE ADDED APPLIED AS FOLLOWS:
To pay employees:
Wages, salaries and terminal benefits To pay providers of capital:
Interest on loans To pay Government tax
To provide for enhancement of assets and expansion:
Depreciation Deferred charges Retained earnings
2010 N
2009 N
% %
Foreign Local
NOTE:
Value added represents the additional wealth which the company has been able to create by its own and employees' efforts.
This statement shows the allocation of that wealth between employees, government, providers of capital and that retained for future creation of more wealth.
292,132,943 36,083,007 328,215,950
(86,592,636)
59,903,071
12,232,328
29,526,831 992,183
2,545,983 13,481,207 1,124,539 59,903,071 174,316,054
1,670,545 175,986,599
(58,127,544)
(710,973)
8,695,179
338,082 2,449,889
3,574,514 3,064,459 (18,833,096) (710,973)
(118,570,028) (181,720,243)
100.00
20.42
49.29 1.66
4.25 22.51 1.87 100.00 100.00
(1223.00)
(47.55) (344.58)
(502.76) (431.02) (2648.91) 100.00
statement of Value Added
for the year ended June 30, 20102010 ANNUAL REPORT28
Turnover
(Loss)/Profit before taxation Taxation
(Loss)/Profit after taxation
Earnings/(Loss) per share (actual Note 1) Earnings/(Loss) per share (adjusted Note 2) ASSETS EMPLOYED:
Fixed assets
Net current (liabilities) Deferred charges Net (Liabilities)/Assets FINANCED BY:
Share capital Capital Reserve General Reserve
2010
N N
2008
N N
NOTE 1
Earnings per share (actual) have been calculated each year on the issued share capital at balance sheet date and it is based on the profit after taxation.
2009 2007
N 2006
NOTE 2
Earnings per share (adjusted) have been calculated each year on the issued share capital at June 30, 2010 and it is based on the profit after taxation.
174,316 (13,319) (5,514) (18,833) (7.96)k (7.96)k 22,346 429,853 (5,749) 446,450
118,350 403,314 (75,214) 446,450
292,133 15,598 (14,473) 1,125 2.38k 0.48k
22,166 (45,161) (2,685) (25,680)
23,600 7,100 (56,380) (25,680)
285,635 (21,700) 8,583 (13,177) (27.79k) (5.57k)
12,104 (20,158) 10,796 2,742
23.600 36,647 (57,505) 2,742
77,087 (8,001) 6,013 (1,988) (5.25k) (0.84k) 9,411 (10,086) 1,617 942
18,939 26,392 (44,389) 942
128,410 9,145 (1,054) 8,091 21.36k 3.42k 9,521 (2,004) (4,587) 2,930
18,939 26,392 (42,401) 2,930
five year financial Summary
for the year ended June 30, 20102010 ANNUAL REPORTNotes
proxy Form
INTERLINKED TECHNOLOGIES PLC ANNUAL GENERAL MEETING to be held at 11 :00 am on Thursday, 16th December ,2010, at the Airport Hotel, Obafemi Awolowo Way, Ikeja, Lagos.
I/We*...hereby appoint**...of...or failing him, the Chairman of the meeting as my/our proxy to act and vote for me/us and on my/our behalf at the Annual General Meeting to be held on December 16th, 2010, and at any adjournment thereof.
+ Shareholder's Signature...Dated this...Day of...2010.Please indicate 'X' in the appropriate space how you wish your votes to be cast on the resolutions set out below. Unless otherwise instructed, the proxy will vote or abstain from voting at his/her discretion.
+ It is a requirement of the law under the Stamp Duties Act Cap. 191 Laws of the Federation of Nigeria and Lagos 1959, that Instrument of Proxy to be used for purposes of voting by any person entitled to vote at the meeting of Shareholders must bear appropriate Stamp Duty, not adhesive postage stamp.
*Shareholders name to be inserted in Block CAPITALS please. In case of joint shareholders any of such may complete this form, but the names of all joints holders must be inserted... .
Please admit the shareholder named on this form or his duly appointed Proxy to the Annual General Meeting to be held at the Airport Hotel, Obafemi Awolowo Way, Ikeja, Lagos, 11 :00 am Thursday, 16th December ,2010.
Name:...
INTERLINKED TECHNOLOGIES PLC ANNUAL GENERAL MEETING
ORDINARY RESOLUTION FOR AGAINST
To receive the Report and Account To re-elect Chief Jerry Okwuonu To approve Directors’ Remuneration
To authorize the Directors to fix the remuneration of the Auditors To appoint members of the Audit committee
Before posting the above form, please tear off this part and retain it for admission to the meeting.
ADMISSION FORM INTERLINKED TECHNOLOGIES PLC
TO BE VALID, THIS FORM MUST BE STAMPED ACCORDINGLYNumber of Shares Held
Number of Shares Held To re-elect Mrs. Adogu
** Provision has been made on the form for the Chairman of the Meeting to act as your Proxy, but if you wish, you may insert in the blank space (marked**) the name of any person, whether a member of the company or not, who will attend the meeting and vote on your behalf instead of the Chairman of the meeting.
NOTE: Please sign this form and deliver or post it to reach the office of the registrar, Corporate Diamond Securities & Investments Ltd, Waterfront Plaza (Suite A3), 1st Avenue, Opposite Mr. Bigg’s, Festac Town, Lagos, not later than 11:00am on November 24, 2010. If executed by a corporation, this form should be sealed with its common seal………...………
