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CHAMS PLC AND ITS SUBSIDIARY COMPANIES
AUDITED FINANCIAL STATEMENTS
31 DECEMBER 2018
Chams Plc Audited
Financial Statement
31 December 2018
CONTENT
PAGE
Corporate Information i-ii
Directors' Report iii-x
Statement of Directors' Responsibilities xi
Audit Committee's Report xii
Independent Auditor's Report 1-3
Statement of Profit or Loss and Other Comprehensive income 4
Statement of Financial Position 5
Statement of Changes in Equity 6-7
Statement of Cashflows 8
Notes to the Financial Statements 9-51
Value Added Statement 52
Five Year Financial Summary 53
i
CORPORATE INFORMATION
Date of incorporation: 10 September 1985
Registration number: RC 76807
Company's Website: www.chamsplc.com
Registered Office:
8, Louis Solomon Close, off Ahmadu bello Way, Victoria
Island, Lagos
Directors: Dr. (Mrs.) ‘Dere Awosika MFR, mni------------------Chairman
Mr. Olufemi Williams ---------- -----Group Managing Director
Sir Demola Aladekomo --------- ------------------------ Director
Prof. Oyewusi Ibidapo-Obe-----------------------------Director
Alhaji Yusufu Modibbo - --------------------------------Director
Dr. Evans Woherem--------------------------------------Director
Mr. Wim Tappij Gielen ---------- -----------------------Director
Pastor Ituah Ighodalo ------------ -----------------------Director
Mrs. Funke AlomoOluwa --------- -----------------------Director
Mrs. Mayowa Olaniyan ----------- -----------------------Director
Company Secretary: Yetunde Emmanuel
Independent Auditors: BDO Professional Services
ADOL House 15, CIPM Avenue, CBD, Alausa
Registrars: First Registrars Plot 2 Abebe Village Road, Iganmu, Lagos
ii
Bankers: UBA PLC
35 Broad Street Marina Lagos
First Bank of Nigeria Ltd
Adeola Odeku Street Victoria Island lagos
Zenith Bank Plc
Ajose Adeogun Street Victoria Island Lagos
GTBank Plc
Awolowo Road Ikoyi Lagos
FCMB Plc
38 Adeola Hopewell Street Victoria Island Lagos
Polaris Bank Plc
Adeola Hopewell Street Victoria Island Lagos
Access Bank Plc
Awolowo Road Ikoyi Lagos
Wema Bank Plc
WEMA Towers Marina, Lagos
Eco Bank Plc
Akin Adesola Street Victoria Island Lagos Stanbic IBTC Bank Plc Plot 1712 Idejo Street, Off Adeola Odeku Victoria Island Lagos
iii
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2018
The Directors present their annual report on the affairs of Chams Plc (“the Company”), and
subsidiaries (“the Group”), together with the group audited financial statements and the
auditor’s report for the year ended 31 December 2018.
1. PRINCIPAL ACTIVITIES
The principal activities of Chams Plc and its subsidiaries continue to be provision of
technology and business intelligent solutions. This includes the development, deployment,
implementation and maintenance of technology based systems, computing and solutions
platforms, communication infrastructure and other services designed to facilitate the
operations of all forms of electronic business.
2. LEGAL FORM
The company was incorporated as a private limited company on September 10th 1985 and
became a public limited company in 2007. At the 23rd Annual General Meeting of the
Company on 6 June 2008, the shareholders authorized the Directors to change the name
Chams Nigeria PLC to CHAMS PLC. Subsequent to the Placements authorized by the
shareholders, an application was made to the Council of the Nigeria Stock Exchange for
the admission of all the issued and paid up shares of the Company to the Daily Official List
of the Exchange through Listing by Introduction.
3. SUBSIDIARIES
The company has three subsidiaries; CardCentre Nigeria Limited, engaged in the
production and manufacturing of Cards – Identity, payments, Smart cards etal;
ChamsAcccess Limited, licensed consortium for the deployment of ATMs in the country also
involved in the deployment of multi-application terminals; and ChamsSwitch Limited ,
engaged in provision of the e-payment transaction processing platform for the Nigerian
Market.
4. OPERATING RESULTS
The following is a summary of the Company’s operating results:
OPERATING RESULT SUMMARY
GROUP COMPANY
2018 2017 2018 2017
=N='000 =N='000 =N='000 =N='000
Turnover 3, 012, 513 1, 956, 517
584, 392 608, 314
Cost of Sales (2, 226, 979) (1, 213, 524)
(346, 230) (238, 887)
Gross Profit 785, 534 742, 993
238, 162 369,427
Profit After Tax 380, 148 (1, 269, 217)
385, 796 (1, 734, 120)
EPS 7K (27)k
8k (37)k
5. DIVIDENDS
The Board of Directors, pursuant to the powers vested in it by the provisions of section 379 of
the Companies and Allied Matters Act (CAMA) of Nigeria, proposed a final dividend of 3k
per share as at December 31, 2018. This will be presented for ratification by the Shareholders
at the next Annual General Meeting.
Payment of dividends is subject to withholding tax at the rate of 10% in the hand of qualified
recipients.
iv
6. SHARE CAPITAL HISTORY
SHARE CAPITAL HISTORY
Year
Authorized Issued Share Capital Consideration
Increase
Cumulative Increase Cumulative
1985 100,000
100,000 100,000 100,000 Cash
2004 99,900,000
100,000,000 0 100,000 Cash
2005
200,000,000 300,000,000 0 100,000 Cash
2006
0 300,000,000 99,900,000 100,000,000 Cash
2007
2,200,000,000 2,500,000,000 72,060,000 172,060,000 Cash
2007
2,500,000,000 5,000,000,000 172,060,000 344,120,000 Cash
2007
0 5,000,000,000 1,378,480,000 1,720,600,000 4 for 1 Bonus
2008
0 5,000,000,000 2,000,000,000 3,720,600,000 Cash
2008
0 5,000,000,000 975,000,000 4,695,600,000 Cash
2009
0 5,000,000,000 0 4,696,060,000.00 Cash
2010
0 5,000,000,000 0 4,696,060,000 Cash
2011
0 5,000,000,000 0 4,696,060,000 Cash
2012
0 5,000,000,000 0 4,696,060,000 Cash
2013
0 5,000,000,000 0 4,696,060,000 Cash
2014
0 5,000,000,000 0 4,696,060,000 Cash
2015
0 5,000,000,000 0 4,696,060,000 Cash
2016 0 5,000,000,000 0 4,696,060,000 Cash
2017
0 5,000,000,000 0 4,696,060,000 Cash
2018
0 5,000,000,000 0 4,696,060,000 Cash
7. DIRECTORS WHO SERVED DURING THE YEAR
The following Directors served during the year under review:
Name Designation
1. Dr. (Mrs.) ‘Dere Awosika MFR, mni Chairman
2. Sir Demola Aladekomo Non-Executive Director
v
3. Prof. Oyewusi Ibidapo-Obe Non-Executive Director
4. Dr. Evans Woherem Non-Executive Director
5. Pastor Ituah Ighodalo Non-Executive Director
6. Alhaji Yusufu Modibbo Non-Executive Director
7. Mr. Wim Tappij Gielen Non-Executive Director
8. Mr. Femi Williams Group Managing Director
9. Mrs. Mayowa Olaniyan Executive Director
10. Mrs. Funke AlomoOluwa Executive Director
8. DIRECTORS’ INTEREST IN SHARES
The Directors who served during the year and their interests in the shares of the Company are as
follows:
S/N
NAME HOLDINGS
1 Dr. (Mrs.) ‘Dere Awosika MFR, mni
NIL
2 Mr. Demola Aladekomo
69,090,000
3 Dr. Evans Woherem
NIL
4 Prof. Oyewusi Ibidapo-Obe
2,000,000
5 Pastor Ituah Ighodalo
NIL
6 Mr. Wim Tappij Gielen
NIL
7 Alhaji Yusufu Modibbo
NIL
8 Mr. Femi Williams
8, 000, 000
9 Mrs. Mayowa Olaniyan
500, 000
10 Mrs. Funke AlomoOluwa
16,000, 000
DISCLOSURE OF SUBSTANTIAL SHAREHOLDING (ABOVE 5%) AS AT DECEMBER 2018
S/N AC NAME ADDRESS HOLDING HOLDINGS
1 11789 STANBIC NOM./ AMCON /
ACCESS BANK PLC
C/O
STANBIC
NOMINEES
NIG LTD,
PLOT 1712
IDEJO
494,900,229 10.54
2 11715 FC/AMC/SKYESTB/SMARCITY
RESORTS PLC – F
C/O FIRST
PENSIONS
CUSTODIAN
LTD, 124
352,526,737 7.51
TOTAL 847,427,036 18.05%
vi
9. ANALYSIS OF SHAREHOLDING
The analysis of the distribution of the shares of the Company as at 31 December 2018 is as
follows:
ANALYSIS OF SHAREHOLDING
CATERGORY CAT DESCRIPTION NO OF HOLDERS HOLDINGS % HOLDINGS
1
FOREIGN 32 13,975,940 0.30
2
CORPORATE BODY 544 2,593,557,206 55.23
3
INDIVIDUALS 8,034 2,088,526,854 44.47
TOTAL
8,610 4,696,060,000 100.00
10. ELECTION, RETIREMENT AND RE-ELECTION OF DIRECTORS
The following persons are retiring and being eligible their intentions for re-election as
Directors of the Company:
1. Dr. Evans Woherem
2. Sir Demola Aladekomo
The following person was appointed as a Director at the Board of Directors meeting held on
the 16th October, 2018:
Alhaji Yusufu Modibbo (Non-Executive Director)
The following person resigned from the Board as a Non-executive Director of the Company:
Mr. Wim Tappij Gielen (Non-Executive Director)
Subject to ratification at the Annual General meeting in accordance with the provisions of
CAMA.
11. STATEMENT OF DIRECTORS’ RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2018
In accordance with the provisions of the Companies and Allied Matters Act of Nigeria, the
Directors are responsible for the preparation of financial statements, which give a true and
fair view of the state of affairs of the Company and of the profit or loss for that year. In so
doing, the Directors are required to ensure that:
a. Proper accounting records are maintained which disclose with reasonable accuracy the
financial position of the Company and which ensures the financial statements comply
with the requirements of the Companies and Allied Matters Act.
b. Applicable accounting standards are followed.
c. Suitable accounting policies are adopted and consistently applied.
d. Judgments and estimates made are reasonable and prudent.
e. The going concern basis is used, unless it is inappropriate to presume that the Company
will continue in business.
f. Internal control procedures are instituted which, as far as is reasonably possible,
safeguard the assets of the Company and prevent and detect fraud and other
irregularities.
12. DONATIONS AND CHARITABLE GIFTS
The Company identifies with the aspirations of the community as well as the environment
within which it operates and made voluntary donations to various charitable organizations
vii
and other institutions in the country details of which are shown below. No donation was
made to any political organization.
The Company during the year donated a total sum of =N=3, 250, 000 to charitable causes.
The details are as follows;
BENEFICIARIES
Donation to Nigerian Computer Society (NCS) Ogun State
Chapter.
Donation of Apple Computers to HallMark University.
13. EMPLOYMENT AND EMPLOYEES
a. Employment of physically challenged persons
The Company has a non-discriminatory policy on recruitment. Applications would always
be welcomed from suitably qualified disabled persons and are reviewed strictly on
qualification. The Company’s policy is that the highest qualified and most experienced
persons are recruited for appropriate job levels irrespective of an applicant’s state of
origin, ethnicity, religion or physical condition.
b. Health safety and welfare of employees
Health and safety regulations are in force within the Company’s premises and
employees are aware of existing regulations. The Company provides subsidies to all level
of employees for medical expenses, transportation, housing, lunch etc.
c. Employees involvement and training
The Company is committed to keeping employees fully informed as much as possible
regarding the Company’s performance and progress and seeking their opinion where
practicable on matters, which particularly affect them as employees.
Training is carried out at various levels through both in-house and external courses.
Incentive schemes designed to encourage the involvement of employees in the
Company’s performance are implemented whenever appropriate.
14. POST BALANCE SHEET EVENTS
There were no post balance sheet events which could have had a material effect on the
state of affairs of the Company as at 31 December 2018 or the profit for the year ended on
that date, which have not been adequately provided for or disclosed.
15. COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE
Chams Plc continuously strives to comply with global standards of corporate governance.
The Company has separated the posts of Managing Director and Chairman and the
Chairman is not involved in the day-to-day running of the Company. This is geared towards
avoiding the concentration of too much power in a single individual.
The Board as a whole is comprised of a number of sub-Committees which are Audit,
Finance, Appointment, Promotion and Governance, and Innovation, Marketing and
Technology Committees. The Board is also comprised of high profile non-executive
members serving in various capacities at the sub-Committees mentioned above and
involved in setting the emoluments of the Managing Director and other Directors of the
Company. The non-executive directors are appointed for a fixed period and have to be re-
elected by the shareholders at an AGM. The Company is committed to full disclosure and
transparency in providing information to all stakeholders because of its belief that this is the
most important driving force in any good governance process.
16. FINANCE COMMITTEE
viii
The Committee acts on behalf of the Board on matters relating to Financial Management. It
reviews the Budget and Audited Accounts and is responsible for providing useful advice to
the Company’s management team as and when required.
The members are as follows:
S/N
NAME STATUS
1.
Dr. Evans Woherem Chairman
2.
Sir Demola Aladekomo Member
3. Mrs. Mayowa Olaniyan
Member
4.
Mrs. Funke AlomoOluwa Member
5.
Mr. Dumebi Obodo Member
17. AUDIT COMMITTEE
This is established in accordance with part C of the Code of Corporate Governance. It
comprises dedicated individuals with proven integrity that have a thorough understanding
of the Company’s business affairs including the associated risks and controls put in place to
mitigate those risks. The Company Secretary is the secretary of the Committee and they
meet regularly. The members are as follows:
S/N
NAME STATUS
1
Mr. Emmanuel Onochie Chairman
2
Mr. Moses Igbrude Member
3
Mr. Doyin Owolabi Member
4 Dr. Evans Woherem
Member
5 Pastor Ituah Ighodalo Member
6 Mrs. Mayowa Olaniyan Member
18. APPOINTMENT, PROMOTION AND GOVERNANCE COMMITTEE
This Committee is responsible for defining and assessing the qualifications for Board of Director
membership and identifying qualified individuals, responsible for assisting the Board organize
itself in the discharge of its duties and responsibilities properly and effectively, ensuring proper
attention and effective response to shareholders concerns regarding corporate governance,
assisting the Board in the fulfilment of its oversight responsibility for the Group’s broad enterprise
risk management program in connection with the Groups governance structures.
S/N
NAME STATUS
1 Prof. Oyewusi Ibidapo-Obe
Chairman
2
Pastor Ituah Ighodalo Member
ix
3
Mrs. Mayowa Olaniyan Member
4
Mrs. Funke AlomoOluwa Member
19. INNOVATION, MARKETING AND TECHNOLOGY COMMITTEE
The purpose of the Committee is to assist the Board with understanding of Chams Plc innovative
and technological developments and marketing framework for the projects or programs,
priorities and resource allocation, so that the Board can discharge its responsibilities and
oversight functions more effectively.
20. BOARD MEETING
The Board and its Committees met as follows:
Board/ Committee Meetings
No of Meetings
Board of Directors
4
Board Audit Committee
4
Board Appointments, Promotions and Governance Committee
4
Board Finance Committee
4
Innovation, Marketing and Technology Committee
4
ATTENDANCE AT BOARD MEETINGS FOR THE YEAR ENDED 31ST DECEMBER 2018
S/N
Director No of Meetings Attendance
1
Dr. (Mrs.) ‘Dere Awosika MFR, mni
4 4
2
Sir Demola Aladekomo
4 4
3
Dr. Evans Woherem
4 4
4
Prof. Oyewusi Ibadapo-Obe
4 4
5
Pastor Ituah Ighodalo
4 2
6
Alhaji Yusufu Modibbo
4 1 ( He was appointed
on 18th October 2018)
7
Mr. Wim Tappij Gielen
4 1
S/N
NAME STATUS
1
Sir Demola Aladekomo Chairman
2
Prof. Oyewusi Ibidapo-Obe Member
3
Mr. Emmanuel Ojo Member
4
Mr. Tomiwa Aladekomo Member
x
8
Mr. Olufemi Williams
4 4
9
Mrs. Mayowa Olaniyan
4 4
10
Mrs. Funke AlomoOluwa
4 4
21. AUDITORS
BOD Professional Services have indicated their willingness to continue in office. In
accordance with Section 357(2) of the Company and Allied Matters Act of Nigeria, a
resolution will be proposed at the Annual General Meeting to authorize the Directors to fix
their remuneration.
BY ORDER OF THE BOARD
Yetunde Emmanuel
Company Secretary
FRC/2018/NBA/00000018086
xi
xii
INDEPENDENT AUDITORS REPORT
TO THE SHAREHOLDERS OF CHAMS PLC AND ITS SUBSIDIARY COMPANIES
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
Basis for Opinion
Key Audit Matters
Revenue Recognition
Risk
Response
We have audited the accompanying financial statements of Chams Plc and its subsidiary Companies
('together the Group') for the financial year ended 31 December 2018, which comprises the
consolidated and separate statement of financial position, consolidated and separate statement of
profit or loss and other comprehensive income, consolidated and separate statement of changes in
equity, consolidated and separate statement of cash flows for the year then ended, and notes to the
consolidated and separate financial statements which include the significant accounting policies and
other explanatory notes
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Some of the parent and its subsidiaries revenue stream are recognised overtime depending on the
agreed performance obligation. Under ISA 240 (the auditor's responsibilities relating to fraud in an
audit of financial statements) there is a presumed risk that revenue may be misstated due to the
improper recognition.
Revenue is recognised when performance obligation has been satisfied, this is signified by the trasfer
of control, risk and rewards to customers. In addition, existence and completeness of the revenue is
verified by:
In our opinion, the accompanying financial statements give a true and fair view of the Group's and the
Company's financial position as at 31 December 2018 and of its financial performance and cash flows
for the year then ended in accordance with International Financial Reporting Standards issued by the
International Accounting Standards Board, and in compliance with the relevant provisions of the
Financial Reporting Council of Nigeria, Act No 6, 2011 and the Companies and Allied Matters Act, CAP
C20, LFN 2004.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements attached as an appendix to our report. We are independent of the
Company and its subsidiaries in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants together with the ethical requirements that
are relevant to our audit of the financial statements in Nigeria, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the International Ethics Standards Board
Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion
1
2
● Vouching revenue recorded in ledger to sales invoices raised/ certificate of completion
●
● Ascertaining revenue recognition criteria and policy are consistently applied
●
Accounts receivable
Risk
Response
Test the reliability of the ageing analysis by:
●
● In making allowance for doubtful balances, we made reference to the Group's policy and
b) Check whether allowance is required by reference to:
i) payment history
ii) Subsequent to year end receipts
iii) customers correspondences
●
●
●
●
● Requested for customers to confirm direct to BDO:
· The year end balance
· Details of the reconciling items if in disagreement
Other Information
Test completeness of revenue throughout the year by tracing, on sample basis, the delivery notes,
waybills etc to the ledger.
The existence of trade receivables was considered a risk of material misstatement and our response
below was designed to address the risk.
In connection with our audit of the financial statements, our responsibility is to read the other
information and in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this information, we are required to report that fact, we have nothing to report in
this regard.
Reviewed job completed forms and the award letters and considered whether these have been
accounted for in the correct year.
Obtained status report from Project Management Office and ensured receivables are booked in
accordance with the milestones reached
Reviewed material journals throughout the year and all journals raised after the year end.
Selected samples of trade receivables balances on the receivables ledger and traced invoices from
the ledger to supporting documents
Management is responsible for the other information. The other information comprises the information
included in the Chairman's and Directors' statements, but does not include the financial statements
and our auditors report thereon. Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
a) Check if receivables are not past due by ensuring that the credit granted have not exceeded
365 days.
Reviewing ageing of trade receivables and ensure that the trade receivable included therein exist
and recoverable and that they are appropriately included in the schedule of trade receivables
allowances.
Vouching sales invoices to supporting documentation such as contract/award letter, ensuring
contract is duly signed.
Appendix
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, and significant audit findings and any significant deficiencies in internal
control that we identify during our audit.
As part of an audit in accordance with International Standards on Auditing, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
* Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
* Obtain an understanding of internal control relevant to the audit 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 Company's internal control.
* Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
* Conclude on the appropriateness of Management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
* Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 4
CONSOLIDATED AND SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
Notes 2018 2017 2018 2017
N’000 N’000 N’000 N’000
Revenue 9 3,012,513 1,956,517 584,392 608,314
Cost of sales 10 (2,226,979) (1,213,524) (346,230) (238,887)
Gross profit 785,534 742,993 238,162 369,427
Other operating income 11 838,978 129,516 845,018 127,248
Administrative expenses (1,311,429) (2,102,427) (817,142) (2,217,281)
Profit/(loss)from operations 313,083 (1,229,918) 266,038 (1,720,606)
Finance expenses 12 (15,739) (23,815) - (5,327)
Finance income 12 4,270 14,813 3,402 9,284
Net finance (expenses)/income (11,469) (9,002) 3,402 3,957
Profit/(loss) before taxation 301,614 (1,238,920) 269,440 (1,716,649)
Tax expense 24(a) 78,534 (30,297) 116,356 (17,471)
Profit/(loss) after taxation 380,148 (1,269,217) 385,796 (1,734,120)
Other comprehensive income:
Item that will not be reclassified to profit or loss - - - -
Gain on revaluation of intangible assets 16(a) 571,069 - - -
Item that may be reclassified to profit or loss - - - -
Total other comprehensive income net of tax 571,069 - - -
Total comprehensive income/(loss) 951,217 (1,269,217) 385,796 (1,734,120)
Profit/(loss) for the year attributable to:
Owners of the parent 338,799 (1,254,664) 385,796 (1,734,120)
Non-controlling interest 41,349 (14,553) - -
Income/(loss) after taxation 380,148 (1,269,217) 385,796 (1,734,120)
Total comprehensive income/(loss) attributable to:
Owners of the parent 855,349 (1,254,664) 385,796 (1,734,120)
Non-controlling interest 95,868 (14,553) - -
Total comprehensive Income/ (loss) 951,217 (1,269,217) 385,796 (1,734,120)
Basic profit/(loss) per share (Kobo) 13 7K (27)k 8K (37)k
Diluted profit/(loss) per share (Kobo) 13 7K (27)k 8K (37)k
Auditors' report, pages 1 and 2.
Group Company
The accompanying notes to the financial statements on pages 9 to 51 and other national disclosures on pages 52 and
53 form part of these financial statements.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 6
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
Group Share
capit
al
Share
pre
miu
m
Revalu
ati
on
rese
rve
Capit
al
rese
rve
Reta
ined
earn
ings
Tota
l
att
ributa
ble
to
equit
y h
old
ers
of
pare
nt
Non-
contr
ollin
g
inte
rest
Tota
l equit
y
N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000
1 January 2018 2,348,030 5,458,750 959,065 145,522 (7,683,783) 1,227,584 (650,560) 577,024
Profit for the year - - - - 338,799 338,799 41,349 380,148
Other comprehensive Income - - - - - - -
Gain on revaluation of intangible assset - - 523,099 - - 523,099 47,970 571,069
Total comprehensive income - - 523,099 - 338,799 861,898 89,319 951,217
Transaction with owners recorded
directly in equity
Transferred of share premium to retained earning- (5,423,742) - 5,423,742 - - -
Issued share - - - - - - 125,000 125,000
31 December 2018 2,348,030 35,008 1,482,164 145,522 (1,921,242) 2,089,482 (436,241) 1,653,241
Share
capit
al
Share
pre
miu
m
Revalu
ati
on
rese
rve
Capit
al
rese
rve
Reta
ined
earn
ings
Tota
l
att
ributa
ble
to
equit
y h
old
ers
of
pare
nt
Non-
contr
ollin
g
inte
rest
Tota
l equit
y
N’000 N’000 N’000 N’000 N’000 N’000 N’000
1 January 2017 2,348,030 5,458,750 959,065 145,522 (6,429,119) 2,482,248 (646,507) 1,835,741
Loss for the year - - - - (1,254,664) (1,254,664) (14,553) (1,269,217)
Other comprehensive Income - - - - - - - -
Total comprerhensive loss - - - - (1,254,664) (1,254,664) (14,553) (1,269,217)
Transaction with owners recorded
directly in equity - - - - - - 10,500 10,500
Dividend - - - - - - - -
31 December 2017 2,348,030 5,458,750 959,065 145,522 (7,683,783) 1,227,584 (650,560) 577,024
Auditors' report, pages 1 and 2.
The accompanying notes to the financial statements on pages 9 to 51 and other national disclosures on pages 52 and 53 form part of these financial statements.
7
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECENBER 2018
Company
Share
capit
al
Share
pre
miu
m
Revalu
ati
on
rese
rve
Reta
ined
earn
ings
Tota
l equit
y
N’000 N’000 N’000 N’000 N’000
1 January 2018 2,348,030 5,458,750 959,065 (5,423,742) 3,342,103
Profit for the year - - - 385,796 385,796
Other comprehensive income, net of tax - - - -
Total comprehensive income - - - 385,796 385,796
Transaction with owners and recorded directly in equity - - - - -
Transferred of share premium to retained earning - (5,423,742) - 5,423,742 -
31 December 2018 2,348,030 35,008 959,065 385,796 3,727,899
Share
capit
al
Share
pre
miu
m
Revalu
ati
on
rese
rve
Reta
ined
earn
ings
Tota
l equit
y
N’000 N’000 N’000 N’000 N’000
1 January 2017 2,348,030 5,458,750 959,065 (3,689,622) 5,076,223
Loss for the year - - - (1,734,120) (1,734,120)
Other comprehensive income, net of tax - - - - -
Total comprehensive income - - - (1,734,120) (1,734,120)
Transaction with owners and recorded directly in equity - - - - -
Dividend paid - - - - -
31 December 2017 2,348,030 5,458,750 959,065 (5,423,742) 3,342,103
Auditors' report, pages 1 and 2.
The accompanying notes to the financial statements on pages 9 to 51 and other national disclosures on pages 52 and 53 form part of these financial statements.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 8
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
Group
2018 2017 2018 2017
Notes N’000 N’000 N’000 N’000
Profit/(loss) after taxation 380,148 (1,269,217) 385,796 (1,734,120)
Adjustments for:
Finance costs 12 15,739 23,815 - 5,327
Finance income 12 (4,270) (14,813) (3,402) (9,284)
Tax income/ expense 24(a) (78,534) 30,297 (116,356) 17,471
Depreciation of property plant and equipment 14(a)&(b) 212,259 170,165 145,093 146,331
Amortisation of intangible assets 16(a)&(b) - 92,545 - 75,652
Impairment allowance for Investment in subsidiaries 17(e) - - - 599,251
Profit on disposal 11 (36,893) (5,250) (36,743) (5,250)
Changes in assets and liabilities:
Decrease/(Increase) in inventories 221,759 (181,956) 19,344 12,670
(Increase)/decrease in trade and other receivables (322,316) 1,281,417 392,649 1,245,315
(Decrease)/Increase in trade and other payables (481,281) 365,976 (848,564) (18,601)
(93,389) 492,979 (62,183) 334,762
Tax paid 24(d) (70,078) (247,541) (49,939) (243,333)
Net cash generated from operating activities (163,467) 245,438 (112,122) 91,429
Cash flows from investing activities
Purchase of property, plant and equipment 14(a)&(b) (65,468) (47,949) (21,427) (1,640)
Additions to investment projects 15 - (460) - (460)
Sales proceed on disposal of property plant and equipment 36,893 10,148 36,743 5,250
Purchase of intangible assets 16(a)&(b) (30,786) (56,391) - -
Finance income 12 4,270 14,813 3,402 9,284
Net cash used in investing activities (55,091) (79,839) 18,718 12,434
Cash flows from financing activities
Finance expenses 12 (15,739) (23,815) - (5,327)
Contribution from Minority shareholders 125,000 10,500 - -
Net cash outflow from financing activities 109,261 (13,315) - (5,327)
Net (decrease)/ increase in cash and cash equivalents (109,297) 152,284 (93,404) 98,536
Cash and cash equivalents at the beginning
of the year 109,418 (42,866) 123,111 24,575
Cash and cash equivalents at the end of the year 32 121 109,418 29,707 123,111
Auditors' report, pages 1 and 2.
The accompanying notes to the financial statements on pages 9 to 51 and other national disclosures on pages 52 and 53 form
part of these financial statements.
Company
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 9
NOTES TO THE FINANCIAL STATEMENTS
1. History of the Company and nature of operations
2 Basis of preparation
a) Summary of significant accounting policies
b) Statement of compliance
c) Basis of measurement
d) Functional and presentation currency.
e) Use of estimates and judgement
3) Changes in accounting policies
(a) New standards, interpretations and amendments effective from 1 January 2018
• IFRS 9 Financial Instruments ; and
• IFRS 15 Revenue from Contracts with Customers
(b) New standards, interpretations and amendments not yet effective
•
•
•
•
Chams Plc (The Company) was incorporated as a limited liability Company on 10 September 1985 and became a
public Company on 4 September 2008. The Company was listed on the floor of the Nigerian Stock Exchange on 8
September 2008. The principal activities of Chams Plc and its subsidiaries (the Group) include identity
management, payment collections and transactional systems. The Company’s registered office is located at 8,
Louis Solomon Close, Victoria Island, Lagos.
The consolidated and separate financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and
interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC) and the
requirements of the Companies and Allied Matters Act, CAP C20, LFN, 2004.
The consolidated financial statements have been prepared on the historical cost basis except for revalued
property, plant and equipment.
The preparation of financial statements in compliance with IFRS requires management to make certain critical
accounting estimates. It also requires management to exercise judgement in applying the Group's accounting
policies. Areas where assumptions and estimates are significant to the financial statements are disclosed in Note
4.
These financial statements are presented in Naira, which is the Group's functional currency. Amounts are rounded
to the nearest thousand, unless otherwise stated.
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out
in note 5. The policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements were authorised for issue by the Board of Directors on 7 March 2019.
IFRIC 23 Uncertainty over Income Tax Positions (effective 1 January 2019).
Prepayment features with Negative Compensation-Amendments to IFRS
Plan Amendment, Curtailment or Settlement-Amendments to IAS 19
New standards impacting the Company have been adopted in the annual financial statements for the year ended
31 December 2018, and which have given rise to changes in the Company’s accounting policies are:
There are a number of standards, amendments to standards, and interpretations which have been issued by the
IASB that are effective in future accounting periods that the Company has decided not to adopt early. The most
significant of these are:
IFRS 16 Leases (mandatorily effective for periods beginning on or after 1 January 2019).
Details of the impact of these standards are stated in note 7(c) below. Other new and amended standards and
Interpretations issued by the International Accounting Standards Board that will apply for the first time in the
next annual financial statements are not expected to impact the Company as they are either not relevant to the
Company’s activities or require accounting which is consistent with the Company’s current accounting policies.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 10
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Title Key requirements Effective Date
IFRS 16 Leases IFRS 16 will affect primarily the accounting by leases and will result in the
recognition of almost all leases on balance sheet. The standard removes
the current distinction between operating and financing leases and
requires recognition of an asset (the right to use the leased item) and a
financial liability to pay rentals for virtually all lease contracts. An
optional exemption exists for short-term and low-value leases.
The income statement will also be affected because the total expense is
typically higher in the earlier years of a lease and lower in later years.
Additional, operating expense will be replaced with interest and
depreciation, so key metrics like EBITDA will change.
Operating cash flows will be higher as cash payments for the principal
portion of the lease liability are classified within financing activities. Only
the part of the payments that reflects interest can continue to be
presented as operating cash flows.
The accounting by lessors will be not significantly change. Some
differences may arise as a result of the new guidance on the definition of
a lease. Under IFRS 16, a contract is, or contain, a lease if the contract
conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
1 January 2019
Early adoption is
permitted only if
IFRS 15 is adopted
at the same time.
Interpretation 23
Uncertainty over
Income Tax
Treatments
The interpretation explains how to recognize and measure deferred and
current income tax assets and liabilities where there is uncertainty over a
tax treatment. In particular, it discusses:
• how to determine the appropriate unit of account, and that each
uncertain tax treatment should be considered separately or together as a
group, depending on which approach better predicts the resolution of the
uncertainty
• that the entity should assume a tax authority will examine the uncertain
tax treatments and have full knowledge of all related information, ie that
detection risk should be ignored
1 January 2019
• that the entity should reflect the effect of the uncertainty in its income
tax accounting when it is not probable that the tax authorities will accept
the treatment.
• that the impact of the uncertainty should be measured using either the
most likely amount or the expected value method, depending on which
method better predicts the resolution of the uncertainty, and
• that the judgments and estimates made must be reassessed whenever
circumstance have changed or there is new information that affects the
judgements.
While there are no new disclosure requirements, entities are reminded of
the general requirement to provide information about judgments and
estimates made in preparing the financial statements.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 11
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Prepayment
Features with
Negative
Compensation-
Amendments to
IFRS 9
The narrow-scope amendments made to IFRS 9 Financial instruments in
December 2017 enable entities to measure certain prepayable financial
assets with negative compensation at amortised cost. These assets, which
include some loan and debt securities, would otherwise have to be
measured at fair value through profit or loss.
To qualify for amortised cost measurement, the negative compensation
must be reasonable compensation for early termination of the contract’
and the asset must be held within a ‘held to collect’ business model.
1 January 2019
Plan Amendment,
Curtailment or
Settlement –
Amendments to
IAS 19
The amendments to IAS 19 clarify the accounting for defined benefit plan
amendments, curtailments and settlements. They confirm that entities
must:
• calculate the current service cost and net interest for the remainder of
the reporting period after a plan amendment, curtailment or settlement
by using the updated assumptions from the date of the change
• any reduction in a surplus should be recognized immediately in profit or
loss either as part of past service cost, or as a gain or loss on settlement.
In order words, a reduction in a surplus must be recognized in profit or
loss even if that surplus was not previously recognized because of the
impact of the asset ceiling.
• separately recognize any changes in the asset ceiling through other
comprehensive income.
1 January 2019
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 12
NOTES TO THE FINANCIAL STATEMENTS
4 Critical accounting estimates and judgements
a. Power to exercise significant influence
b. Legal proceedings
c. Income and deferred taxation
d. Impairment of property, plant and equipment and intangible assets
The Group makes certain estimates and assumptions regarding the future. Estimates are based on
factors including historical experience and expectations of future events that management believes to
be reasonable. However, given the judgmental nature of such estimates, actual results could be
different from assumptions used. The estimates and assumptions that can have significant risks of
causing material adjustments to the carrying amounts of assets and liabilities are set out below:
In accordance with IFRS, the Group recognizes a provision where there is a present obligation from a
past event, a transfer of economic benefits is probable and the amount of cost of the transfer can be
estimated reliably. In instances where the criteria are not met, a contingent liability may be disclosed in
the notes to the financial statements. Application of these accounting principles to legal cases requires
the Group’s management to make determinations about various factual and legal matters beyond
control. The Group reviews outstanding legal cases following developments in the legal proceedings and
at each reporting date in order to assess the need for provisions and disclosures in its financial
statements. Among the factors considered in making decisions on provisions are the nature of litigation,
claim or assessment, the legal process and potential level of damages in the jurisdiction in which the
litigation, claim or assessment has been brought, the progress of the case( including the progress after
the date of the financial statements but before those statements are issued), the opinion or views of
legal advisers, experience on similar cases and any decision of the Group’s management as to how it will
respond to the litigation, claims or assessment.
When the Group holds less than 20% of voting rights in an investment but the Company has the power to
exercise significant influence, such an investment is treated as an associate. Where the Company holds
over 20% of voting rights (but not over 50%) and the Group does not exercise significant influence, the
investment is treated as an available – for – sale investment.
The Group assesses assets or groups of assets for impairment annually or whenever events or changes in
circumstances indicate that carrying amounts of those assets may not be recoverable. In assessing
whether a write-down of the carrying amount of a potentially impaired asset is required, the asset's
carrying amount is compared to the recoverable amount. Frequently, the recoverable amount of an
asset proves to be the Group's estimated value in use. The estimated future cash flows applied are based
on reasonable and supportable assumptions and present management's best estimates of the range of
economic conditions that will exist over the remaining useful life of the cash flow generating assets.
Chams Plc and its subsidiary Companies annually incure significant amounts of income taxes payable and
also recognises significant changes to deferred tax assets and liabilities, all of which are based on
management's interpretations of applicable laws and regulations. The quality of these estimates is highly
dependent upon management's ability to properly at times apply a complex set of rules, to recognise
changes in applicable rules and in the case of deferred tax assets, management's ability to project future
earnings from activities that may apply loss carry forward positions against future income taxes.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 13
NOTES TO THE FINANCIAL STATEMENTS
5 Significant accounting policies
i) Foreign currency translation
(ii) Revenue recognition
Performance obligation and timing of revenue recognition
There is limited judgement needed in identifying the point control passes:
(a) Once delivery of service to agreed location or client have occurred.
(d) Retains none of the significant risks and rewards of the service or goods in question.
Determining the transaction price
Allocating amounts to performance obligations
Incremental costs of obtaining contracts and costs to fulfilling contracts
(b) The customer has accepted the services being deliver as evidenced with a Job Acceptance /delivery
or Completion Certificate.
(c) The entity has a present right to receive payment from the customer as signed by parties to the
contract in the agreement, memorandum of understanding or invoice.
The Company provides applications developed to fit in to the specific need of client and price are fixed
per client per service rendered , therefore the amount of revenue to be earned from each contract is
determined by reference to those fixed prices. Exceptions are as follows
Where tansaction is done in large volume like in the case of confirmme price can be varied through
discount depending on the volume of transaction. Commission is also earned from continous transaction
by client.
All prices has been allocated to each performance obligation identified in the contract on a relative
stand-alone selling price basis. Chams only provide services, so each service are invoiced in accordance
with agreement signed and the priced agreed with the customer. Therefore, there is no judgement
invloved in allocating contract price to performance obligations(all perfomance obligations are capable
of being, and are, sold separately).
The Company does not incur significant costs in obtaining contracts (e.g. Administration costs related to
the tender process). Also the Company is not expected to recover those costs. The costs to fulfill the
contracts comprises the cost of application developed, hardware and the installation and other
deliverable costs are charged separately to a customer.
In preparing the financial statements of the Group, transactions in currencies other than the entity's
presentation currency (foreign currencies) are recognised at the rates of exchange prevailing at the
dates of the transactions.
At the end of each reporting year, monetary items denominated in foreign currencies are retranslated at
the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
Foreign currency differences on loans and other borrowings are recognised as finance income and
expenses. Other foreign currency differences as a result of transactions are recognised in the related
items within the operating results.
Revenue is derived from the sales of various product lines which span across delivery of business
solutions , biometric data capture, e-voting platform, business process outsourcing, contract and
supplies. Revenue is recognised at a point in time when control of services has transferred to the
customer as evidenced by the Job Completion and Acceptance Certificate.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 14
NOTES TO THE FINANCIAL STATEMENTS
(iii) Finance costs and finance income
(iv) Basis of consolidation
-
-
-
-
a. Associates
Substantive potential voting rights held by the group and by other parties
Other contractual arrangements
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, changes
in the fair value of financial assets at fair value through profit or loss where the Company holds such
financial assets and impairment losses recognised on financial assets (other than trade receivables).
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss.
Finance income comprises interest income on short-term deposits with bank, dividend income, changes
in the fair value of financial assets at fair value through profit or loss and foreign exchange gains.
Historic patterns in voting attendance.
The consolidated financial statements present the results of the company and its subsidiaries ("the
Group") as if they formed a single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the
acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities
and contingent liabilities are initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated and separate statement of profit or loss and
other comprehensive income from the date on which control is obtained. They are deconsolidated from
the date on which control ceases.
When the Group has the power to participate in (but not control) the financial and operating policy
decisions of another entity, it is classified as an associate. Associates are initially recognised in the
consolidated statement of financial position at cost. The Group’s share of post-acquisition profits and
losses is recognised in the consolidated and separate statement of profit or loss and other
comprehensive income except that losses in excess of the Group’s investment in the associate are not
recognised unless there is obligation to make good those losses.
Profit and losses arising on transactions between the Group and its associates are recognised only to the
extent of unrelated investor’s interest in the associate. The investor’s share in the associate’s profits
and losses resulting from these transactions is eliminated against the carrying value of the associates.
Where the company has control over an investee, it is classified as a subsidiary. The company controls
an investee if all three of the following elements are present: power over the investee, exposure to
variable returns from the investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a
change in any of these elements of control.
De-facto control exists in situations where the company has the practical ability to direct the relevant
activities of the investee without holding the majority of the voting rights. In determining whether de-
facto control exists the company considers all relevant facts and circumstances, including:
The size of the company’s voting rights relative to both the size and dispersion of other parties who hold
voting rights
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 15
NOTES TO THE FINANCIAL STATEMENTS
b. Joint venture
v) Segment reporting
An operating segment is a component of an entity:
(a) That engages in business activities from which it may earn revenues and incur expenses
(including inter group transactions).
(b)
(c) For which discrete financial information is available
The Company has three main business segments:
● Identity Management and solutions
● Payments, Collections and Transactional Systems
● ICT Training
All reported revenue and related costs of each segments are reconciled.
a. Identity management
●
Whose operating results are regularly reviewed by the entity’s chief operating decision maker to make
decisions about resources to be allocated to the segments and assess its performance and
Revenue and cost reporting are directly related to the segments. Operating segments are reported in a
manner consistent with the internal reporting provided to the chief operating decision makers. The
chief operating decision makers have been identified as the members of the management team including
the Group Managing Director.
The Group's identity management activities will include prometrics, biometrics identification with
applications in the financial, healthcare, corporate and other public fields.
Chamscity: is the major hub for large and nationwide Biometrics, data management, online real-time
examinations and conferences etc. It offers a unique infrastructural backbone for the realisation of net
national identification schemes and projects.
Chams Plc is a regional resource centre for identification solutions for clients ranging from corporations,
educational bodies to national government.
Any premium paid for an associate above the fair value of the Group’s share of the identifiable assets,
liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the
associate. Where there is objective evidence that the investment in the associate has been impaired,
the carrying amount of the investment is tested for impairment in the same way as other non financial
assets.
A joint venture is a contractual arrangement whereby the Group and other parties undertake an
economic activity that is subject to joint control; that is, when the strategic financial and operating
policy decisions relating to the activities require the unanimous consent of the parties sharing control.
The Group reports its interests in jointly controlled entities using the equity method, which involves
recognition in the consolidated income statement of Chams Plc’s share of the net results of the joint
ventures for the year. Accounting policies of joint ventures have been changed where necessary to
ensure consistency with the policies adopted by the Group. Chams Plc’s interest in a joint venture is
carried in the statement of financial position at its share in the net assets of the joint venture together
with goodwill paid on acquisition, less any impairment loss. When the share in the losses exceeds the
carrying amount of an equity-accounted company (including any other receivables forming part of the
net investment in the company), the carrying amount is written down to nil and recognition of further
losses is discontinued, unless we have incurred legal or constructive obligations relating to the company
in question
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 16
NOTES TO THE FINANCIAL STATEMENTS
Card Centre Limited
b. Payments, collections and transactional systems
ChamsAccess Limited
ChamsSwitch Limited
ChamsMobile Limited/Naira.com
c. All non current assets under each segment are geographically analysed.
d. Others: Terminal and printers and recharge card aspect of Card Center
Geographical location
The Company has presence in both Lagos and Abuja.
vi) Property, plant and equipment
Set up to build an enabling infrastructure to ensure unimpeded expansion of all other E-payment
initiatives of Chams Group.
Setting up mobile payment platforms that will allow users carry out transactions through their mobile
phones. These transactions ranges from funds transfer and airtime top-up to balance equiry etc.
Under the Group Operations it provide identity management through our subsidiary companies such as:
This is an operator of one of the world’s largest card manufacturing and personalising factory. It also
has Smart and Chip Card expertise engaging efficient and effective technologies for card personalisation,
identity card enrolment logistic and access control.
Deploys across the nation the premium automated teller machines and self-service Chams Access Service
Terminals (CAST) and acess control.
Freehold buildings are subsequently carried at fair value, based on year valuations by a professionally
qualified valuer. These revaluations are made with sufficient regularity to ensure that the carrying
amount does not differ materially from that which would be determined using fair value at the end of
the reporting year. Changes in fair value are recognised in other comprehensive income and
accumulated in the revaluation reserve except to the extent that any decrease in value in excess of the
credit balance on the revaluation reserve, or reversal of such a transaction, is recognised in profit or
loss.
Freehold land is not depreciated. Depreciation on assets under construction does not commence until
they are complete and available for use. Depreciation is provided on all other items of property, plant
and equipment so as to write off their carrying value over their expected useful economic lives.
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price,
cost includes directly attributable costs and the estimated present value of any future unavoidable costs
of dismantling and removing items. The corresponding liability is recognised within provisions.
The payment systems involve building, developing and maintenance of ICT infrastructures across the
nation through its companies by helping Nigeria move seamlessly with the world’s trend of cashless
economy. Under the Group Operations, it provide payment platforms through our subsidiary companies
such as:
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 17
NOTES TO THE FINANCIAL STATEMENTS
The expected useful lives of property, plant and equipment are as follows:
Leasehold improvement Over the shorter of the useful life of the item
Building 50 years
Computers and other IT equipment 4 years
Furniture and fittings 4 years
Plant and machineries 7 years
Motor vehicles 4 years
IT Software 5 years
Derecognition
vii) Leases
viii) Intangible assets
At the date of revaluation, the accumulated depreciation on the revalued freehold property is
eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued
amount of the asset. The excess depreciation on revalued freehold buildings, over the amount that
would have been charged on a historical cost basis, is transferred from the revaluation reserve to
retained earnings when freehold buildings are expensed through the consolidated and separate
statement of profit or loss and other comprehensive income (e.g. through depreciation, impairment). On
disposal of the asset the balance of the revaluation reserve is transferred to retained earnings.
If there is an indication that an asset is impaired, the carrying amount of the asset is reduced to its
recoverable amount. Impairment losses are recognised immediately in the income statement.
An item of property, plant and equipment is derecognised on disposal when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in
profit and loss in the year the asset is derecognised.
Internally generated intangible assets primarily comprised internally developed software. Such
software as well as other internally generated assets for internal use are valued at cost and amortised
over their useful lives. Impairments are recorded if the carrying amount of the asset exceeds the
recoverable amount.
At each statement of financial position date, the Group assesses whether there is any indication that an
asset may be impaired. If any such exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss, if any.
When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the smallest generating unit to which the asset belongs.
Leases in which substantially all the risks and rewards incidental to the ownership of the leased asset
have been transferred to the Group (a finance lease), the asset is treated as if it has been purchased
outright. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its
fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the
asset is accounted for in accordance with the accounting policy applicable to that asset. The interest
element of the lease is charged to the consolidated statement of comprehensive income over the year of
the lease. Leases order than finance lease are operating lease and are not recognised as assets in the
books. lease expenses are charged to the statement of profit or loss and other comprehensive income.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 18
NOTES TO THE FINANCIAL STATEMENTS
ix) Inventory
x) Financial Instruments
Financial assets
Amortised cost
a) Trade receivables
b) Other receivables
c) Loan receivable from related company
Development costs include, in addition to those costs attributable to the development of the asset, an
appropriate proportion of overhead costs. Borrowing costs are capitalised to the extent that they are
material and related to the year over which the asset is generated. The estimated useful life of
software is 10 years which is assessed for impairment every year.
Inventories are stated at the lower of cost and net realisable value. Inventories include Scanner and
Computers for biometric data capture and versity books for training and are stated at cost, which is
arrived at using the average cost method. Net realisable value is the estimated selling price in the
ordinary course of business. Cost comprises purchase price and other incidental cost in bringing the
inventory to the warehouse.
Write down on inventories of spare parts and consumables are calculated by comparing book value and
probable net realizable value after a specific analysis of obsolescence of inventory.
Naira.com is a software that was internally developed by the Company. It is an internet based payment
solution platform with an indefinite life. The software will not be subjected to annual amortisation, but
will be review for an impairment on an annual basis. The software which was initially recognised at cost
will be subsequent carried at the revalued amount. The revaluation will be carried out at interval of
every three years.
The Group classifies its financial assets into one of the categories discussed below, depending
on the purpose for which the asset was acquired. The Group's accounting policy for each category is as
follows:
The Group's financial assets measured at amortised cost comprise trade and other receivables, loan
receivables and cash and cash equivalents in the consolidated statement of financial position.
These assets arise principally from the provision of goods and services to customers (e.g trade
receivables), but also incorporate other types of financial assets where the objective is to hold
these assets in order to collect contractual cash flows and the contractual cash flows are solely
payments of principal and interest. They are initially recognised at fair value plus transaction
costs that are directly attributable to their acquisition or issue, and are subsequently carried
at amortised cost using the effective interest rate method, less provision for impairment.
Trade receivables arise principally from the provision of services to customers perfomed in the ordinary
course of business. They are generally due for settlement 30 days after performance obligations have
been fulfilled, while some services are piad immediately per transaction and therefore can be classified
as current.Trade receivables are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
These amounts generally arise from transactions outside the usual operating activities of the Company
and collateral is not normally obtained. The non-current other receivables are due and payment within
three years from the end of the reporting period.
Loan receivable from either subsidiaries or associates due after one year will attract calculation of
interest at ruling rate in order to reflect the effect of time value for money.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 19
NOTES TO THE FINANCIAL STATEMENTS
d) Cash and cash equivalents
xi) Impairment of financial assets
Fair value through other comprehensive income
xii) Prepayments
xiii) Financial liabilities
a) Trade and other payables
The Group classifies its financial liabilities into one of two categories, depending on the purpose
for which the liability was acquired. the Group's accounting policy for each category is as follows:
The Group has an investment in unlisted entities which are not accounted for as subsidiaries, associates
or jointly controlled entities. For this investments,the Group has made an irrevocable election to classify
the investments at fair value through other comprehensive income rather than through profit or loss as
the Group considers this measurement to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value recognised in other comprehensive
income and accumulated in the fair value through other comprehensive income reserve. Upon disposal
any balance within fair value through other comprehensive income reserve is reclassified directly to
retained earnings and is not reclassified to profit or loss.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months or less.
For the purpose of reporting cash flows, cash and cash equivalents include cash on hand and bank
balances held with financial institutions.
Impairment provisions for current and non-current trade receivables are recognised based on the
simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected
credit losses. During this process the probability of the non-payment of the trade receivables is assessed.
This probability is then multiplied by the amount of the expected loss arising from default to determine
the lifetime expected credit loss for the trade receivables. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off against the associated
provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised
based on a forward looking expected credit loss model. The methodology used to determine the amount
of the provision is based on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit losses along with gross interest
income are recognised. For those for which credit risk has increased significantly, lifetime expected
credit losses along with the gross interest income are recognised. For those that are determined to be
credit impaired, lifetime expected credit losses along with interest income on a net basis are
recognised.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of
part of the cost of the investment, in which case the full or partial amount of the dividend is
recorded against the associated investments carrying amount.
Prepayments are payments made in advance relating to the following year and are recognised and
carried at original amount less amounts utilised in the statement of profit or loss and other
comprehensive income.
Trade payables and other short-term monetary liabilities, which are initially recognised at
fair value and subsequently carried at amortised cost using the effective interest method.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 20
NOTES TO THE FINANCIAL STATEMENTS
b) Customer Deposits (Transit Account)
c)Borrowings
De-recognition of financial liabilities
xiv) Borrowings costs
xv) Employee benefits
a) Short - term employee benefits
b) Defined contribution plans
c) Termination benefits
Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable
to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised
cost using the effective interest rate method, which ensures that any interest expense over the period
to repayment is at a constant rate on the balance of the liability carried in the consolidated statement
of financial position. For the purposes of each financial liability, interest expense includes initial
transaction costs and any interest payable while the liability is outstanding.
Advance payment from customer where performance obligation is not yet fulfiled, will be recognised as
loan. Interest will be calculated at the ruling rate where performance obligation will be fulfiled after
12months period.
The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or they expire. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is recognised in income statement.
All short term employee benefits payable within 12 months after service is rendered, the undiscounted
amount of the benefits expected to be paid in respect of service rendered by employees in a year
should be recognized in that year. All benefits that are due or outstanding as at the end of the year are
accrued for.
The Company operates a defined contribution plan as stipulated in the Pension Reform Act, 2004. Under
the defined contributory scheme, the Company contributes 10%, while its employees contribute 8% of
their annual basic, housing and transport allowances to the scheme. Once the contributions have been
paid, the Company retains no legal and constructive obligation to pay further contributions if the fund
does not hold sufficient assets to finance benefits accruing under the retirement benefit plan. The
Company's obligations are recognised in the statements of comprehensive income as administrative
expenses (employee benefits) when they are due. Prepaid contributions are recognised as an asset to
the extent that a cash refund or reduction in the future payments is available.
Termination benefits would be recognized when and only when, the Group is demonstrably committed to
either terminate the employment of an employee or group of employees before the normal retirement
date or provide termination benefits as a result of an offer made in order to encourage voluntary
redundancy. The Group shall recognize termination benefits as an expense when the Group is
demonstrably committed with a detailed formal plan for the termination without realistic possibility of
withdrawal.
Borrowing costs are interest and other costs that the entity incurs in connection with the borrowing of
funds. Borrowing costs on qualifying capital expenditure are capitalized while others are expensed.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 21
NOTES TO THE FINANCIAL STATEMENTS
xvi) Income tax
xvii) Share capital and share premium
The Group's ordinary shares are classified as equity instruments.
xviii) Reserves
Reserves include all current and prior year retained earnings.
xix) Dividends on ordinary shares
xx) Offsetting financial instruments
xxi) Impairment of financial instruments
Additional income taxes that arise from the distribution of dividend by the Group are recognized at the
same time as the liability to pay the related dividend is recognized.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profit will be
available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.
Dividends on ordinary shares are recognised as a liability and deducted from equity when they become
legally payable. Interim dividends are deducted from equity when they are declared and no longer at
the discretion of the shareholders. In the case of final dividends, this is when approved by the
shareholders at the Annual General Meeting.
Shares are classified as equity when there is no obligation to transfer cash or other assets. Any amounts
received over and above the par value of the shares issued are classified as ‘share premium’ in equity.
Incremental costs directly attributable to the issue of equity instruments are shown in equity as a
deduction from the proceeds, net of tax. Financial instruments issued by the Group are classified as
equity only to extent that they do not meet the definition of a financial liability or financial asset.
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis or realise the asset and settle the liability simultaneously.
The Company assesses at the end of each reporting year whether there is objective evidence that a
financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is
impaired and impairment losses are incurred only if there is objective evidence of impairment as a result
of one or more events that occurred after initial recognition of the asset (a 'loss event') and that loss
event (or events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing
significant financial difficulty, default or delinquency in interest or principal payments, the probability
that they will enter bankruptcy or other financial reorganisation, and where observable data indicates
that there is a measurable decrease in the estimated future cash flows such as changes in arrears or
economic conditions that correlate with defaults.
Expenses on income tax comprise current and deferred tax. Current tax is the expected tax payable on
taxable income or loss for the year, using tax rates enacted by the Government. Current tax assets and
liabilities will be offset on the statement of financial position. Deferred tax is provided using the
statement of financial position method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amount used for taxation
purposes.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 22
NOTES TO THE FINANCIAL STATEMENTS
xxii) Provisions, Contingent Assets and Liabilities
Provisions are discounted to their present values when the time value of money is material.
xxiii) Related party transactions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of
past events, and it is probable that an outflow of economic resources will be required from the group
and the amounts can be estimated reliably. Timing or amounts of the outflow may still be uncertain.
The Company considers two parties to be related if, directly or indirectly one party has the ability to
control the other party or exercise significant influence over the other party in making financial or
operating decisions. Where there is a related party transactions with the Company, the transactions are
disclosed separately as to the type of relationship that exists with the Company and the outstanding
balances necessary to understand their effects on the financial position and the mode of settlement
For the loans and receivables category, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows (excluding future
credit losses that have not been incurred) discounted at the financial asset’s original effective interest
rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the income
statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is
the current effective interest rate determined under the contract.
As a practical expedient, the company may measure impairment on the basis of an instrument’s fair
value using an observable market price.
If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the
debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the
income statement.
Related parties include the related Companies, the directors and any employee who is able to exert
significant influence on the operating policies of the Company. Key management personnel are also
considered related parties. Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity.
Provisions are measured at the estimated amounts required to settle the present obligation, based on
the most reliable evidence available at the reporting date, including the risks and uncertainties
associated with the present obligation. Where there are a number of obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class of obligations as a whole.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES
FINANCIAL STATEMENTS, 31 DECEMBER 2018 23
NOTES TO THE FINANCIAL STATEMENTS
Accounting classification and fair value of financial assets and liabilities
31 December 2018
Financial assets N’000 N’000 N’000 N’000
Cash and cash equivalents 111,523 - 111,523 111,523
Investment in Joint Komputer Kompany Plc - 100,000 100,000 100,000
Trade and other receivables 1,396,055 - 1,396,055 1,396,055
1,507,578 100,000 1,607,578 1,607,578
Financial liabilities
Trade and other payables 3,132,934 - 3,132,934 3,132,934
Loans and borrowings 152,974 - 152,974 152,974
3,285,908 - 3,285,908 3,285,908
31 December 2017
Financial assets
Cash and cash equivalents 184,294 - 184,294 184,294
- 100,000 100,000 100,000
Trade and other receivables 1,086,988 - 1,086,988 1,086,988
1,271,282 100,000 1,371,282 1,371,282
Financial liabilities
Trade and other payables 3,593,429 - 3,593,429 3,593,429
Loans and borrowings 137,235 - 137,235 137,235
3,730,664 - 3,730,664 3,730,664
Investment in Joint Komputer
Kompany Plc
Amortised
cost
Investment in
Equity fair
value through
OCI
Total
carrying
amount Fair value
The table below sets out the carrying amounts and fair values of the Group's financial assets and
financial liabilities:
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 24
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
6 Financial Risk Management
- Reputational risk
- Technology risk
- Legal Risk
- Credit risk
- Fair value or cash flow interest rate risk
- Foreign exchange risk
- Other market price risk, and
- Economic government/political risk.
- Trade receivables
- Cash and cash equivalents
- Investments in unquoted equity securities
- Trade and other payables
- Bank overdrafts
- Floating-rate bank loans
- Forward currency contracts
General objectives, policies and processes
Credit risk
The Group is exposed through its operations to the following risks:
In common with all other business, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group's objectives, policies and processes for managing those risks and
the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them from
previous years unless otherwise stated in this note.
The principal financial instruments used by the Group, from which financial instrument risk arises, are as
follows:
The Board has overall responsibility for the determination of the Group's risk management objectives and
policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing
and operating processes that ensure the effective implementation of the objectives and policies to the
Group's finance function. The Board receives quarterly reports from the Financial Controller through which
it reviews and monitors performance. The Group's internal auditors also review the risk management
policies and processes and report their findings to the Audit Committee.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set
out below:
Credit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its
contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy to
assess the credit risk of new customers before siging contracts. Such credit ratings are taken into account
by business practices.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 25
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Cash in bank and short-term deposits
A significant amount of cash is held with the following institutions:
2018 2017
N'000 N'000
Zenith International Bank Plc 4,035 83,807
First Bank of Nigeria Limited 158 149
Access Bank Plc 1,903 -
United Bank for Africa Plc 20,883 9,773
Skye Bank Plc - 12,101
Sterling Bank Plc - 17,281
Stanbic IBTC Bank 867 -
Guarantee Trust Bank 509 -
Others 1,350 -
29,705 123,111
Market risk
Fair value and cash flow interest rate risk
During 2018 and 2017, the Group's borrowings at variable rate were denominated in Naira
The Group analysis the interest rate exposure on a quarterly basis. A sensitivity analysis is performed by
applying a simulation technique to the liabilities that represent major interest bearing positions.
Based on the various scenarios the Group then manages "its cash-flow" interest rate risk by changing from
using floating-to-fixed interest rate.
The Finance Committee monitors the utilisation of the credit limits regularly and at the reporting date
does not expect any losses from non-performance by the counterparties.
Market risk arises from the Group's use of tradable and foreign currency financial instruments. It is the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates (currency risk) or other market factors (other price risk)
The Group is exposed to cash flow interest rate from borrowings at floating rate. It is currently Group
policy that all existing floating rate borrowings are restructured to fixed rates in order to mitigate against
frequent fluctuation in interest rate.This policy is managed across the Group by individual treasury units.
Although the board accepts that this policy neither protects the Group entirely from the risk of paying
rates in excess of current market rates nor eliminates fully cash flow risk associated with variability in
interest payments, it considers that it achieves an apropriate balance of exposure to these risks.
The Finance Committee determines concentrations of credit risk by quarterly monitoring the
creditworthiness rating of existing customers and through a monthly review of the trade receivables' ageing
analysis. In monitoring the customers' credit risk, the Group ensures that substantial amount of the
outstanding balance is paid before future credit sales are made to the customers.
Credit risk also arises from cash and cash equivalents with banks and financial institutions. For banks and
financial institutions, the Group consider banks that have been approved by the Central Bank of Nigeria.
The Finance Committee has established a credit policy under which each new customer is analysed
individually for creditworthiness before the Group's standard payment and delivery terms and conditions
are offered from the Finance Committee.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 26
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Foreign exchange risk
Liquidity risk
Below Between Above
1 year 1 to 2 years 3 years Total
At 31 December 2018 N'000 N'000 N'000 N'000
Trade and other payables 3,132,934 - - 3,132,934
Loans and borrowings 111,402 - - 111,402
Total 3,244,336 - - 3,244,336
Between Between Above
At 31 December 2017 1 year 1 to 2 years 3 years Total
N'000 N'000 N'000 N'000
Trade and other payables 3,593,429 - - 3,593,429
Loans and borrowings 74,876 - - 74,876
Total 3,668,305 - - 3,668,305
Liquidity risk arises from the Group's management of working capital and the finance charges and principal
repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its
financial obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when
they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet
expected requirements for a year of at least 45 days. The Group also seeks to reduce liquidity risk by fixing
interest rates (and hence cash flows) on a portion of its long-term borrowing.
The Board receives rolling 12-month cash flow projections on a monthly basis as well as information
regarding cash balances. At the end of the financial year, these projections indicated that the Group
expected to have sufficient liquid resources to meet its obligations under all reasonably expected
circumstances and will not need to seek for overdraft facilities. The Group currently maintain a "no
borrowing Philosophy".
The liquidity risk of each entity is managed by the treasury function within the entity. To ensure efficiency
in liquidity management, the treasury unit manages the funds for each projects within the Group. Projects
within each entity are seen as being self funding.
The following table sets out the contractual maturities (representing undiscounted contractual cash-flows)
of financial liabilities:
Foreign exchange risk arises when individual Group entities enter into transactions denominated in a
currency other than their functional currency. The Group's policy is, where possible, to allow group entities
to settle liabilities denominated in their functional currency with the cash generated from their own
operations in that currency. Where group entities have liabilities denominated in a currency other than
their functional currency (and have insufficient reserves of that currency to settle them), cash already
denominated in that currency will, where possible, be transferred from elsewhere within the Group.
In order to monitor the continuing effectiveness of this policy, the Board receives a monthly forcast,
analysed by the major currencies held by the Group, of liabilities due for settlement and expected cash
reserves.
The Group is currently not exposed to foreign exchange risk as it does not have any liability to be settled in
foreign currency.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 27
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Capital Disclosures
The Group's objectives when maintaining capital are:
2018 2017 2018 2017
N'000 N'000 N'000 N'000
Loans and borrowings 111,402 74,876 - -
Less: cash and cash equivalents (111,523) (184,294) 29,707 123,111
Net debt (121) (109,418) 29,707 123,111
Total equity 1,653,241 577,024 3,727,899 3,342,103
Total adjusted capital 1,653,241 577,024 3,727,899 3,342,103
Debt to adjusted capital ratio (%) -% (18)% 1% 4%
Consistent with others in the industry, the Group monitors capital on the basis of the debt to adjusted
capital ratio. This ratio is calculated as net debt adjusted capital as defined above. Net debt is calculated
as total debt (as shown in the consoidated statement of financial positon) less cash and cash equivalents.
The objective of this strategy is to secure access to finance at reasonable cost by maintaining a high credit
rating. The debt-to-adjusted-capital ratios at 31 December 2018 and at 31 December 2017 were as
follows:
The decrease in the debt to adjusted capital ratio during 2017 resulted primarily from the decrease in net
debt arising from settlement of outstanding loans and borrowings during the year.
The Group monitors "adjusted capital" which comprises all components of equity (i.e. share capital share
premium, non-controlling interest, retained earnings, and revaluation reserves)
Group Company
- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns
for shareholders and benefits for other stakeholders, and
- to provide an adequate return to shareholders by pricing products and services commensurately with the
level of risk.
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital
structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or
sell assets to reduce debt.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 28
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
7) Effect of changes in accounting policies
a) IFRS 15 - Revenue from contract with customers
b) IFRS 9 - Financial instruments
i) the classification and measurement of financial assets and financial liabilities and
The only significant impact on the Group is in relation to the impairment of trade receivables.
c) Impact on the financial statements
Effect of transition to IFRS 9 and IFRS 15 on the statement of financial position as at 31 December 2017
i.
IFRS 15 IFRS 9
Adjustments N'000 N'000 N'000 N'000 N'000
Revenue 1,956,517 - 1,956,517 - 1,956,517
Cost of sales (1,213,524) - (1,213,524) - (1,213,524)
Gross profit 742,993 - 742,993 - 742,993
Other operating income 129,516 - 129,516 - 129,516
Operating expenses (2,102,427) (2,102,427) - (2,102,427)
Loss from operations (1,229,918) - (1,229,918) - (1,229,918)
Finance income 14,813 - 14,813 - 14,813
Finance expense a (15,327) - (15,327) (8,488) (23,815)
Net finance income (514) - (514) (8,488) (9,002)
Loss before tax (1,230,432) - (1,230,432) (8,488) (1,238,920)
Tax expense (30,297) - (30,297) - (30,297)
Loss after tax (1,260,729) - (1,260,729) (8,488) (1,269,217)
Other comprehensive income - - -
Total comprehensive loss (1,260,729) - (1,260,729) (8,488) (1,269,217)
As at 1 January 2018, the directors of the Group reviewed and assessed the Group’s existing trade receivables for
impairment using reasonable and supportable information that is available without undue cost of effort in
accordance with the requirements of IFRS 9 to determine the credit risk of the respective items at the date they
were initially recognized. No material adjustments were identified.
ii) impairment for financial assets.
In the current financial year the Group has adopted IFRS 15 Revenue from Contracts with Customers. The Group has
elected to restate comparative information from prior periods upon adoption of IFRS 15 and has applied the
practical expedient under which contracts that began and ended in 2017 or that were completed prior to 1 January
2017 are not restated.
The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.
As at 1 January 2018, the directors of the Group reviewed and assessed the Group's revenue for possible impact of
the adoption of IFRS 15 without undue cost of effort in accordance with requirement of IFRS 15. No material
adjustments were identified.
In the current period the Group has applied IFRS 9 Financial Instruments (as revised in July 2014) and the related
consequential amendments to other IFRS 9 introduces new requirements for:
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an
incurred credit loss model under IAS 39. The expected credit loss model required the Group to account for expected
credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk
since initial recognition of the financial assets. In other words, it is no longer necessary for a credit event to have
occurred before credit losses are recognized.
The Group adopted IFRS 9 and IFRS 15 with a transition date of 1 January 2018. The adoption of IFRS 15 has no
material effect on the Group prior year financial statements and therefore were not restated. The Group has
chosen to restate comparatives on adoption of IFRS 9 and, therefore reflected in the restated prior year financial
statements.
31 December
2017 As originally
Presented
31 December
2017 As
restated
31 December
2017 As
restated
Reconciliation of the Group's statement of profit or loss and other comprehensive income for the year ended
31 December 2017.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 29
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Adjustments IFRS 15 IFRS 9
Non current assets N'000 N'000 N'000 N'000 N'000
Property, plant and equipment 2,809,867 - 2,809,867 - 2,809,867
Intangible assets 120,986 - 120,986 - 120,986
Investment projects 460 460 460
100,000 100,000 100,000
3,031,313 - 3,031,313 - 3,031,313
Current assets
Inventory 469,538 469,538 - 469,538
Trade and other receivables 1,086,988 - 1,086,988 - 1,086,988
Cash and cash equivalents 184,294 - 184,294 - 184,294
1,740,820 - 1,740,820 - 1,740,820
Current liabilities
Trade and other payables 3,593,429 3,593,429 3,593,429
Income tax payables 464,445 464,445 464,445
4,057,874 - 4,057,874 - 4,057,874
Non current liabilities
Loans and borrowings b 128,747 - 128,747 8,488 137,235
Net liabilities 585,512 - 585,512 (8,488) 577,024
Equity
Share capital 2,348,030 - 2,348,030 2,348,030
Share premium 5,458,750 5,458,750 5,458,750
Revaluation reserve 959,065 959,065 959,065
Retained earnings (7,676,090) - (7,676,090) (8,488) (7,684,578)
Capital reserve 145,522 145,522 145,522
Non controlling interest (649,765) (649,765) (649,765)
585,512 - 585,512 (8,488) 577,024
a)
Fair value through other
comprehensiveincome( available -for-
sale 2017) investments
In 2017 one of the directors convert its deposit for investment into term loan at interest free rate. The group
accounted for this at cost. In accordance with the requirement of IFRS 9, the financial liability measure at fair
value. The effect of applying IFRS 9 will be to increase the loans and borrowing and hence increase the loss for the
year by N8,488,000.
31 December
2017 As originally
Presented
31 December
2017 As
restated
31 December
2017 As
restated
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 30
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
8 Segment information (Group) 2018
Identity
management &
Solution Others Total
2018 2018 2018
N’000 N’000 N’000
Revenue 3,012,513 - 3,012,513
Cost of sales (2,226,979) - (2,226,979)
Gross profit 785,534 - 785,534
Total gross profit from external customers 785,534 - 785,534
Group gross profit per consolidated
statement of comprehensive income 785,534 - 785,534
Depreciation -
Segment profit 785,534 - 785,534
Other operating income 838,978
Depreciation of head office building
Finance expenses (15,739)
Finance income 4,270
Administrative expenses (1,311,429)
Group loss before tax 301,614
Segment financial position as at 31 December 2018
N’000 N’000 N’000
Property plant and equipment (carrying amount) 2,663,076 - 2,663,076
Investment project 460 - 460
Investment in equities at FVTOCI 100,000 - 100,000
Intangible assets 722,840 - 722,840
Deposit for investments 13,249 - 13,249
Current assets 1,755,358 - 1,755,358
Current liabilities (3,560,169) - (3,560,169)
Non-current liabilities (41,572) - (41,572)
Net liabilities as at 31 December 2018 1,653,241 - 1,653,241
Segment information (Group) 2017 N’000 N’000 N’000
Revenue 1,956,517 - 1,956,517
Cost of sales (1,213,524) - (1,213,524)
Gross profit 742,993 - 742,993
Group gross profit per consolidated
statement of comprehensive income 742,993 - 742,993
Depreciation (130,163) - (130,163)
Segment profit 612,830 - 612,830
Other operating income 129,516
Depreciation of head office building (40,002) Finance expenses (23,815) Finance income 14,813
Administrative expenses (1,932,262)
Group loss before tax (1,238,920)
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 31
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Identity
management &
Solution Others Total
Segment financial position as at 31 December 2017
N’000 N’000 N’000
Property plant and equipment (carrying amount) 2,809,867 - 2,809,867
Long term investments 100,000 - 100,000
Investment projects 460 - 460
Deferred taxation 120,986 - 120,986
Current assets 1,740,820 - 1,740,820
Current liabilities (4,132,750) - (4,132,750)
Non current liabilities (62,359) (62,359)
Net assets as at 31 December 2017 577,024 - 577,024
Segment information (Company) 2018
N’000 N’000 N’000
Revenue 584,392 - 584,392
Cost of sales (346,230) - (346,230)
Gross profit 238,162 - 238,162
Gross profit per statement of
comprehensive income 238,162 - 238,162
Depreciation (99,498) - (99,498)
Segment Profit 138,664 - 138,664
Other operating income 845,018
Depreciation of head office building (45,595)
Finance income 3,402
Administrative expenses (672,049)
Company loss before tax as at 31 December 2018 269,440
Segment financial position as at 31 December 2018
Property plant and equipment (carrying amount) 1,994,062 - 1,994,062
Investment projects 460 - 460
Investment in Subsidiaries 2,453,826 - 2,453,826
Investment in equities at FVTOCI 100,000 - 100,000
Investment in Subsidiaries - - -
Loan receivables 49,810 - 49,810
Current assets 607,801 - 607,801
Current liabilities (1,478,060) - (1,478,060)
Net assets 3,727,899 - 3,727,899
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 32
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Segment information Company 31
December 2017
Identity
management &
Solution Others Total
2017 2017 2017
N’000 N’000 N’000
Revenue 608,314 - 608,314
Cost of sales (238,887) - (238,887)
Gross profit 369,427 - 369,427
Gross profit per statement of
comprehensive income 369,427 - 369,427
Depreciation (106,329) - (106,329) Segment Profit 263,098 - 263,098
Other operating income 127,248 Depreciation of head office building (40,002) Finance expenses (5,327) Finance income 9,284
Administrative expenses (2,070,950)
Company loss before tax as at 31 December 2017 (1,716,649)
Segment financial position as at 31 December 2017
N’000 N’000 N’000
Property plant and equipment (carrying
amount) 2,117,728 - 2,117,728
Investment projects 460 - 460
Intangible assets - - -
Investment in equity at FVTOCI 100,000 - 100,000
Investment in Subsidiaries 2,453,826 - 2,453,826
Loan receivables 192,747 192,747
Current assets 970,261 - 970,261
Current liabilities (2,492,919) - (2,492,919)
Net assets 3,342,103 - 3,342,103
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 33
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
Revenue from contract with customers
The Company has disaggregated revenue into various categories as analysed below:
2018 2017 2018 2017
9(a) Product line Category N'000 N'000 N’000 N’000
Business process outsourcing 22,778 14,399 22,778 14,399
Chams core 527,257 461,471 527,257 461,471
Membership 1,308 2,799 1,308 2,799
E- voting 19,571 9,500 19,571 9,500
Confirm me 1,535 6,514 1,535 6,514
BVN Sales and Maintenance 1,020,528 540,811 11,103 44,413
Sales of computer 840 69,217 840 69,217
Data card products 161,665 111,604 - -
Supply of Cards 862,000 408,096 - -
Identity cards 77,342 105,906 - -
Managed service Evolving 155,660 139,576 -
ATM Transaction fees/charges 9,984 9,923 - -
Switching service income 136,290 75,551 -
Access control 15,550 - - -
Sales of Automated teller Machine 205 1,150 - -
Total 3,012,513 1,956,517 584,392 608,313
(b) Customer category
N'000 N'000 N’000 N’000
Government ministries 627,168 537,022 490,878 461,471
Financial institutions 1,008,479 494,720 -
Private companies 1,376,866 924,775 93,514 146,842
3,012,513 1,956,517 584,392 608,313
(c) Geographical spread N'000 N'000 N’000 N’000
Nigeria 3,012,513 1,956,517 584,392 608,313
Other countries - - - -
3,012,513 1,956,517 584,392 608,313
10 Cost of sales N'000 N'000 N’000 N’000
Analysis by operations
Biometric 305,656 528,029 305,656 209,684
Training 40,574 26,803 40,574 26,803
ATM 5,496 16,898 - -
Switching 13,949 21,736 - -
Scratch Cards and consumables 44,364 402,572 - -
Cost of sales data card and evolving 190,032 183,008 - -
Cost of sales - E value 38,082 - - -
BVN 781,755 - - -
Cost of sales access control 8,696 440 - -
Card supply 731,898 214 - -
Virtual airtime 13,238 31,424 - -
Other direct costs 53,239 2,400 - 2,400
2,226,979 1,213,524 346,230 238,887
Company
Group Company
Group
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 34
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
2018 2017 2018 2017
11 Other operating income N'000 N'000 N’000 N’000
Rental Income 3,725 3,500 28,837 27,612
Miscellaneous income 62,867 25,504 - 11,901
Provision for bad debts no longer
required 23,298 12,777 241,708 -
Profit from disposal of property,
plant and equipment 36,893 5,250 36,743 5,250
Exchange difference - 82,485 - 82,485
Accrued expenses no longer
required 151,297 - 151,297 -
Write back of over provistion for
VAT 560,898 - 386,433 -
Total 838,978 129,516 845,018 127,248
2018 2017 2018 2017
12 Finance income and expense N’000 N’000 N’000 N’000
Finance income 4,270 14,813 3,402 9,284
Finance expenses N’000 N’000 N’000 N’000
Interest expense on loans and
overdraft (15,739) (23,815) - 5,327
Total finance expenses
Net finance expenses/income
recognised in income statement (11,469) (9,002) 3,402 3,957
13 Earnings/(loss) per share
N’000 N’000 N’000 N’000
Profit/(loss) for the year used in
basic EPS 338,799 (1,254,664) 385,796 (1,734,120)
Profit/(loss) used in diluted EPS 338,799 (1,254,664) 385,796 (1,734,120)
Denominator ‘000 ‘000 ‘000 ‘000
Weighted average number of
shares used in basic EPS 4,696,060 4,696,060 4,696,060 4,696,060
Weighted average number of
shares used in diluted EPS 4,696,060 4,696,060 4,696,060 4,696,060
7K (27)k 8K (37)k
Company Group
Group Company
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 35
FINANCIAL STATEMENTS, 31 DECEMBER 2018.
NOTES TO THE FINANCIAL STATEMENTS
14(a) Property, plant and equipment (Group)
Land
Buildin
g
Pla
nt
and
machin
ery
Fix
ture
s
and f
itti
ngs
Com
pute
r
equip
ment
Equip
ment
Moto
r
Vehic
le
Tota
l
Cost/valuation N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000
Balance at 1 January 2017 76,667 2,000,000 902,703 342,751 437,881 1,458,217 171,048 5,389,267
Additions - - 1,260 4,275 3,406 9,228 29,780 47,949
Reclassifications - - - - (20,622) 20,622 - -
Disposals - - - (2,148) - (7,378) (6,500) (16,026)
Balance at 31 December 2017 76,667 2,000,000 903,963 344,878 420,665 1,480,689 194,328 5,421,190
Balance at 1 January 2018 76,667 2,000,000 903,963 344,878 420,665 1,480,689 194,328 5,421,190
Additions - - 23,148 5,799 3,433 7,722 25,366 65,468
Reclassifications - - (850) - 850 - - -
Disposals - - - (46,075) - (94,169) (13,560) (153,804)
Balance at 31 December 2018 76,667 2,000,000 926,261 304,602 424,948 1,394,242 206,134 5,332,854
Accumulated depreciation
Balance at 1 January 2017 - 86,812 322,046 341,751 401,006 1,151,815 149,691 2,453,121
Depreciation charge for the year - 40,002 2,775 2,040 7,998 101,239 16,111 170,165
Accummulated depreciation on assets
transferred - - - - (3,007) 3,007 - -
Write off - - - (2,148) - (7,378) (2,437) (11,963)
Balance at 31 December 2017 - 126,814 324,821 341,643 405,997 1,248,683 163,365 2,611,323
Balance at 1 January 2018 - 126,814 324,821 341,643 405,997 1,248,683 163,365 2,611,323
Depreciation charge for the year - 45,595 44,158 2,533 9,705 94,509 15,759 212,259
On disposal - - - (46,075) - (94,169) (13,560) (153,804)
Balance at 31 December 2018 - 172,409 368,979 298,101 415,702 1,249,023 165,564 2,669,778
Carrying amount as at:
31 December 2018 ₦76,667 ₦1,827,591 ₦557,282 ₦6,501 ₦9,246 ₦145,219 ₦40,570 ₦2,663,076
31 December 2017 ₦76,667 ₦1,873,186 ₦579,142 ₦3,235 ₦14,668 ₦232,006 ₦30,963 ₦2,809,867
The company building was professionally valued by Jide Alabi & Co (Estate Surveyors and Valuers) as at 31 December, 2014 on the basis of their open market values. The
revised value of the properties was N2,000,000,000 resulting in a surplus on revaluation of N959,065,000 which has been credited to the property, plant and equipment
revaluation account. The revaluation report was dated 31 December 2014.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 36
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
14(b) Property, plant and equipment (Company)
Land
Buildin
g
Pla
nt
and
machin
ery
Fix
ture
s
and f
itti
ngs
Com
pute
r
equip
ment
Equip
ment
Moto
r
Vehic
le
Tota
l
Cost/valuation N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000
Balance at 1 January 2017 20,230 2,000,000 78,232 247,283 93,838 1,240,629 116,442 3,796,654
Additions - - - 703 - 937 - 1,640
Reclassification - - - - (20,622) 20,622 - -
Disposals - - - (2,148) - (7,378) - (9,526)
Balance at 31 December 2017 20,230 2,000,000 78,232 245,838 73,216 1,254,810 116,442 3,788,768
Balance at 1 January 2018 20,230 2,000,000 78,232 245,838 73,216 1,254,810 116,442 3,788,768
Additions - - - 458 - 3,031 17,938 21,427
Disposals - - - (46,075) - (94,169) (6,310) (146,554)
Balance at 31 December 2018 20,230 2,000,000 78,232 200,221 73,216 1,163,672 128,070 3,663,641
Accumulated depreciation
Balance at 1 January 2017 - 86,812 76,929 245,393 62,214 956,247 106,640 1,534,235
Depreciation charge for the year - 40,002 32 1,250 6,172 90,079 8,796 146,331
Reclassification - - - - (3,007) 3,007 - -
On disposal - - - (2,148) - (7,378) - (9,526)
Balance at 31 December 2017 - 126,814 76,961 244,495 65,379 1,041,955 115,436 1,671,040
Balance at 1 January 2018 - 126,814 76,961 244,495 65,379 1,041,955 115,436 1,671,040
Depreciation charge for the year - 45,595 1,270 443 6,705 86,542 4,538 145,093
On disposal - - - (46,075) - (94,169) (6,310) (146,554)
Balance at 31 December 2018 - 172,409 78,231 198,863 72,084 1,034,328 113,664 1,669,579
Carrying amount as at:
31 December 2018 ₦20,230 ₦1,827,591 ₦1 ₦1,358 ₦1,132 ₦129,344 ₦14,406 ₦1,994,062
31 December 2017 ₦20,230 ₦1,873,186 ₦1,271 ₦1,343 ₦7,837 ₦212,855 ₦1,006 ₦2,117,728
The company building was professionally valued by Jide Alabi & Co (Estate Surveyors and Valuers) as at 31 December, 2014 on the basis of their open market values.
The revised value of the properties was N2,000,000,000 resulting in a surplus on revaluation of N959,065,000 which has been credited to the property, plant and
equipment revaluation account. The revaluation report was dated 31 December 2014.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 37
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
15 Investment projects:
2018 2017 2018 2017
Investment projects N’000 N’000 N’000 N’000
Chams Varsity 4,083 4,083 4,083 4,083
Chams Consortium 146,589 146,589 146,589 146,589
Chams Mobile Limited 27,620 27,620 27,620 27,620
Allowance for impairment (177,832) (177,832) (177,832) (177,832)
Total 460 460 460 460
ChamsAccess Limited
ChamsSwitch Limited
ChamsMobile Limited
Setting up more mobile payment platforms that will allow users to carry out transactions through their
mobile phones. These transactions range from funds transfer and airtime top-up to balance enquiry etc.
Group Company
Deploys across the nation the premium Automated Teller Machines and self - service Chams Access Service
Terminals (CAST)
Investment projects represent expenses incurred on behalf of Chams Varsity, Chams.Net and Chams Wallet
divisions, and will be converted to shares when these divisions become subsidiaries.
Set up to build an enabling infrastructure to ensure unimpeded expansion of all other E-payment initiatives of
Chams Group
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 38
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
16(a) Intangible assets - Group
Cost Mast
erV
erv
e
Cert
ific
ate
Nair
a .
com
Work
in
pro
gre
ss
NC
C L
icences
Soft
ware
Develo
pm
ent
Konal so
luti
on
Tota
l
N’000 N’000 N’000 N’000 N’000 N’000
Balance at 1 January 2017 48,282 68,645 - 150,000 125,349 - 392,276
Additions - externally acquired - 30,581 5,810 - - 20,000 56,391
Balance at 31 December 2017 48,282 99,226 5,810 150,000 125,349 20,000 448,667
Balance at 1 January 2018 48,282 99,226 5,810 150,000 125,349 20,000 448,667
Additions - externally acquired - 19,019 11,766 - - - 30,785
Revaluation surplus - 571,069 - - - - 571,069
Accummulated amortisation transfer on revaluation- (4,050) - - - - (4,050)
Balance at 31 December 2018 48,282 685,264 17,576 150,000 125,349 20,000 1,046,471
Amortisation
Balance at 1 January 2017 31,390 4,050 - 150,000 49,696 - 235,136
Amortisation charge for the year 16,892 - - - 75,653 - 92,545
Balance at 31 December 2017 48,282 4,050 - 150,000 125,349 - 327,681
Balance at 1 January 2018 48,282 4,050 - 150,000 125,349 - 327,681
Amortisation charge for the year - - - - - - -
Transfer of accummulated amortisation (4,050) (4,050)
Balance at 31 December 2018 48,282 - - 150,000 125,349 - 323,631
Carrying amount as at:
31 December 2017 - 95,176 5,810 - - 20,000 120,986
31 December 2018 - 685,264 17,576 - - 20,000 722,840
The Group's intangible assets were independently valued by WisdomHouse Resources and Services Limited
(FRC/2013/ICAN/00000003808) as at 31 December 2018 to ascertain the open market value of the assets. The Valuer's
opinion of the market value was primarily derived from analysis of recent evidence of market transactions on comparable
assets within the neighbourhood. The valuation resulted in a revaluation surplus of N432,247,000 on Naira.com which has
been credited to revaluation reserve.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 39
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
16(b) Intangible assets - Company
Total
Cost N’000 N’000
Balance at 1 January 2017 125,349 125,349
Additions - -
Balance at 31 December 2017 125,349 125,349
Balance at 1 January 2018 125,349 125,349
Additions - -
Balance at 31 December 2018 125,349 125,349
Amortisation
Balance at 1 January 2017 49,697 49,697
Amortisation charge for the year 75,652 75,652
Balance at 31 December 2017 125,349 125,349
Balance at 1 January 2018 125,349 125,349
Amortisation charge for the year - -
Balance at 31 December 2018 125,349 125,349
Carrying amount as at:
31 December 2017 N- N-
31 December 2018 N- N-
Software Development
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 40
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
17 Investment in subsidiaries
a) Composition of the Group
Country of
incorporation Proportion of ownership
and principal Interests held by the Group
Name of the Subsidiary
place of
business 2018 2017
Card Centre Nigeria Limited Nigeria 90.61% 90.63%90.63%
Chams Access Limited Nigeria 78.02% 97.23%97.23%
Chams Switch Limited Nigeria 91.60% 91.60%
As at 31 December 2018
Card Centre
Nigeria Limited
Chams Access
Limited
ChamsSwitch
Limited
N'000 N'000 N'000
Revenue 939,342 1,352,489 136,290
Cost of sales (829,074) (986,406) (65,269)
Gross profit 110,268 366,083 71,021
Other operating income 184,292 48,006 5,184
Administrative expenses (199,177) (219,060) (98,720)
Profit/(Loss) from operating activities 95,383 195,029 (22,515)
Net finance (expenses)/income (15,172) 301 -
Profit/(loss) before taxation 80,211 195,330 (22,515)
Taxation (6,116) (29,221) (2,485)
Profit/(loss) after tax for the year 74,095 166,109 (25,000)
Profit/(loss) allocated to NCI 6,958 36,212 (2,100)
Other comprehensive income allocated to NCI - - 36,309
Total comprehensive income/(loss) allocated to NCI 6,958 36,212 34,209
Cash generated from operating activities 29,215 37,096 3,342
Cash outflow from investing activities (30,760) (13,774) (30,760)
Cash inflow/(outflow) from financing activities - (17,937) 48,051
Net cash (outflow)/inflow (1,545) 5,385 20,633 -
As at 31 DECEMBER 2018 -
Total assets 1,305,846 507,506 758,947
Total liabilities (2,117,940) (264,293) (647,560)
Equity (812,094) 243,213 111,387
Percentage of holding 90.61% 78.02% 91.60%
Principal Activities
Processing of electronic
payment
Development of ATM, POS,
printers and terminals
Printing of payment/ financial
cards
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 41
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
As at 31 December 2017
Card Centre
Nigeria Limited
Chams Access
Nigeria Limited
ChamsSwitch
Limited
N'000 N'000 N'000
Revenue 514,002 758,650 75,551
Cost of sales (433,997) (518,904) (21,736)
Gross profit 80,005 239,746 53,815
Other operating income 2,582 22,890 908
Administrative expenses (198,022) (216,154) (94,603)
(Loss)/profit from operating activities (115,435) 46,482 (39,880)
Net finance income/(expense) 735 (5,206) -
(Loss)/profit before taxation (114,700) 41,276 (39,880)
Taxation (4,811) - (2,294)
(Loss)/profit after tax for the year (119,511) 41,276 (42,174)
(Loss)/profit allocated to NCI (11,198) 1,143 (3,543)
Other comprehensive income allocated to NCI - - -
Total comprehensive (expense)/income allocated to NCI (11,198) 1,143 (3,543)
Cash generated from operating activities 26,124 42,188 16,209
Cash (outflows)/inflows from investing activities (18,024) (36,501) (39,318)
Cash inflow from financing activities - - 9,000
Net cash inflows/(outflow) 8,100 5,687 (14,109)
As at 31 December 2017 N'000 N'000 N'000
Total assets 1,132,945 304,150 157,805
Total liabilities (2,010,591) (344,212) (592,487)
Equity (877,646) (40,062) (434,682)
Percentage of holding 90.63% 97.23% 91.60%
b) Subsidiary with material non-controlling interests
c) Interest in unconsolidated structured entities
The Group has no interests in unconsolidated structured entities
d) Investment in associate
Name
The Group's only investment in associate is in Paymaster Limited. No dividend were received from Paymaster
Limited during 2018 and 2017. The investment in Paymaster Limited has been fully provided for based on
diminution in value.
The Group includes one subidiary, Chams Access Limited with material non-controlling interests (NCI) as at 31
December 2018. However, as result of additional investment of N1,000,000,0000 by Chams Plc, the non-
controlling interest become insignificant.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 42
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
e) Analysis of investment 2018 2017 2018 2017
in subsidiaries N’000 N’000 N’000 N’000
Card Centre Nigeria Limited - - 1,531,302 1,531,302
Chams Access Limited (e(i)) - - 1,810,600 1,810,600
Chams Switch Limited - - 806,343 806,343
- - 4,148,245 4,148,245
f) Impairment provision for value of subsidiaries
Card centre Limited - - (981,798) (981,798)
Chams Access - - (113,370) (113,370)
Chams Switch - - (599,251) (599,251)
Net investment in subsidiaries - - 2,453,826 2,453,826
18 Investment in equity accounted entities
Paymaster Nigeria Limited 263,471 263,471 263,471 263,471
Impairment allowance for value of
investment (263,471) (263,471) (263,471) (263,471)
Net investment in associate - - - -
19 Investment in equity at FVTOCI
Unitec Nigeria Limited 1,500 1,500 1,500 1,500
100,000 100,000 100,000 100,000
101,500 101,500 101,500 101,500
Impairment provision (1,500) (1,500) (1,500) (1,500)
Net Investemnt in equity
accounted enties 100,000 100,000 100,000 100,000
20 Deposit for investments N’000 N’000 N’000 N’000
Chams Mobile 13,249 - -
Company Group
Joint Komputer Kompany Limited
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 43
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
21 Loan receivables 2018 2017 2018 2017
Loan due from Chams Access N’000 N’000 N’000 N’000
Balance at beginning of the year - - 192,747 -
Reclassifification from current assets( 20(d)) - - - 192,747
Repayments (142,937)
Balance at the end of the year - - 49,810 192,747
22 Inventory N’000 N’000 N’000 N’000
Terminals and consumables 240,115 434,339 59,983 66,109
Work in progress 7,665 35,199 7,665 20,883
247,780 469,538 67,648 86,992
23(a) Trade and other receivables N’000 N’000 N’000 N’000
Trade receivables 3,405,275 3,037,723 2,573,383 2,672,158
(2,342,373) (2,119,840) (2,133,477) (1,940,618) -
Trade receivables - net 1,062,902 917,883 439,906 731,540
Receivables from subsidiary companies (Note
23f(i)) - - 7,799 6,417
Receivables from related parties (Note 23(f(ii)) - 13,249 - -
1,062,902 931,132 447,705 737,957
Prepayments 29,036 20,605 1,479 1,613
Restricted bank balance(Note 23(b) 15,840 15,840 15,840 15,840
Other receivables (Note 23(c) 288,277 119,411 45,422 4,748
Total trade and other receivables 1,396,055 1,086,988 510,446 760,158
(b)
(c) Other receivables N’000 N’000 N’000 N’000
Withholding tax 198,088 65,056 42,533 2,618
Directors current account 67 67 67 67
VAT 27,653 27,709 2,428 1,278
Staff receivables 90,764 94,595 75,384 79,448
Other receivables 46,195 10,147 - -
Call in arrears 500 500 - -
Less impairment allowance on staff loans and -
directors current account (Note 23(e)) (74,990) (78,663) (74,990) (78,663)
Total other receivables 288,277 119,411 45,422 4,748
Group Company
Total financial assets other than cash and cash
equivalents classified as loans and receivables
Less: provision for impairment of trade
receivables (23(d))
Restricted bank balance represents an amount in Zenith Bank Plc placed under lien as a security over
performance guarantee bond to Osun State Bureau of Public Procurement on the Time and Attendant Device
contract.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 44
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
(d) Movement in impairment allowance for trade receivables
2018 2017 2018 2017
N’000 N’000 N’000 N’000
Balance at beginning of the year 2,119,840 1,476,202 1,940,618 1,314,748
Additions during the year 243,156 656,415 213,482 625,870
Write off - - - -
Write back during the year (20,623) (12,777) (20,623) -
Balance at the end of the year 2,342,373 2,119,840 2,133,477 1,940,618
(e) Movement in impairment allowance for staff loans
and other receivables N’000 N’000 N’000 N’000
Balance at beginning of the year 78,663 80,698 78,663 80,698
Write off (3,673) - (3,674) -
74,990 80,698 74,989 80,698
Write back during the year - (2,035) - (2,035)
Balance at the end of the year 74,990 78,663 74,989 78,663
Allowance for doubtful receivables was made on trade and other receivables which have been past due.
Receivables are considered to be past due when they exceed the credit granted or are over 365 days.
(f) Receivables from subsidiaries and other related parties
(i) Receivables from subsidiaries N’000 N’000 N’000 N’000
Card Centre Nigeria Limited - - 844,463 1,055,074
Chams Switch Limited - - - 3,315
Chams Access Limited - - - 3,102
- - (836,664) (1,055,074)
- - 7,799 6,417
(ii) Receivables from related parties
Chams Consortium 41,875 41,875 41,875 41,875
Chams mobile 41,587 41,587 28,338 28,338
Provision for impairment on receivables from
related Company (70,213) (70,213) (70,213) (70,213)
Transfer to deposit for investment (13,249) - - -
- 13,249 - -
(g) The ageing analysis of trade receivables that are past due but not impaired is stated below:
N'000 N'000 N'000 N'000
Up to 3 months 341,818 55,600 78,053 55,600
3 to 6 months 14,280 51,254 19 51,254
6 to 12 months 27,477 744,723 17,760 15,284
Over 12 months 3,010,700 2,186,146 2,477,551 2,550,020
3,394,275 3,037,723 2,573,383 2,672,158
Movement in impairment allowance for trade receivables are disclosed in notes 20(d) and 20(e)
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
Group Company
Allowance for impairment of amount receivable
from subsidiaries
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 45
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
24(a) Income tax
Current tax expense 2018 2017 2018 2017
Current tax on loss for the year: N’000 N’000 N’000 N’000
Income Tax/Minimum Tax 43,681 28,419 19,480 17,471
Education tax 7,645 1,586 - -
Information Technology Tax 4,647 292 2,694 -
Write back of overprovision (144,334) - (148,357) -
Additional education tax 9,827 - 9,827 -
(78,534) 30,297 (116,356) 17,471
Deferred tax expense - - - -
Originating and reversal of temporary
differences - - - -
Total current tax (78,534) 30,297 (116,356) 17,471
(b)
N'000 N'000 N'000 N'000
Profit/(loss) for the year 301,614 (1,238,920) 269,440 (1,716,649)
Corporate tax at the domestic rate of
30% (2017: 30%) 156,740 (758,097) 80,832 (514,995)
Effect of income that is exempt from
taxation (190,341) 1,575 (199,465) 1,575
Effect of expenses that are - -
not deductible in -
determining taxable profit 101,133 658,227 110,711 415,857
Losses relieved (3,101) - (3,101) -
Investment allowance - - - -
Adjusted loss/relieved (18,564) 95,988 - 95,988
Capital allowances absorbed (32,867) - - -
Minimum tax 25,804 28,419 19,480 17,471
Education tax 7,645 1,586 - -
Information Technology Tax 4,647 292 2,695 -
Balancing charge 11,201 2,307 11,023 1,575
Back duty assessment (140,830) (138,530)-
Tax expense (78,533) 30,297 (116,355) 17,471
Effective rate (%) (26) (2) (43) (1)
Group Company
The reasons for the difference between the actual tax charge for the year and the standard rate of
corporate tax in Nigeria applied to profits for the year are as follows:
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 46
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
(c) Group
Closing Balance
at 31
December
2017
Recognize in
net income
Recognize in
OCI
Reclassify
from equity
to net
income
Closing Balance
at 31
December 2018
Deferred tax liabilities N'000 N'000 N'000 N'000 N'000
Excess of NBV over TWDV 259,741 - - - 259,741
Deferred tax liability 259,741 - - - 259,741
Deferred tax assets N'000 N'000 N'000 N'000 N'000
Unutilised capital allowances 544,792 - - - 544,792
Write off (285,051) - - - (285,051)
Deferred tax assets 259,741 - - - 259,741
Net deferred tax liability
movement - - - - -
Company
Opening
Balance at 31
December
2017
Recognize in
net income
Recognize in
OCI
Reclassify
from equity
to net
income
Closing Balance
at 31
December
2018
Deferred tax liabilities N'000 N'000 N'000 N'000 N'000
Excess of NBV over TWDV 259,741 - - - 259,741
Deferred tax liability 259,741 - - - 259,741
Deferred tax assets N'000 N'000 N'000 N'000 N'000
Unutilised capital allowances 544,792 - - - 544,792
Write off (285,051) - - - (285,051)
Deferred tax assets 259,741 - - - 259,741
Net deferred tax liability
movement - - - - -
(d) Corporate tax liability 2018 2017 2018 2017
Per Statement of Financial Position N'000 N'000 N'000 N'000
Balance as at the beginning of the year 464,445 681,689 398,151 624,013 - -
Charge/originating timing
difference for the year55,973 30,297 22,174 17,471
Over provision written back (134,507) - (138,530) -
385,911 711,986 281,795 641,484
Payment during the year (70,078) (247,541) (49,939) (243,333)
Per Statement of Financial Position 315,833 464,445 231,856 398,151
(e)
(f) Education tax for the Group and the Company is computed at 2% of assessable profit in line with Education Tax Act
CAP E4 LFN, 2004 as amended.
Group Company
The amount provided as income tax on the results of the Group and the Company is based on the provisions of
Companies Income Tax Act CAP 21 LFN 2004 (as amended)
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 47
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
2018 2017 2018 2017
25 Trade and other Payables N’000 N’000 N’000 N’000
Trade payables 1,340,299 1,116,895 680,687 788,929
Other payables and accruals (Note 25(a)) 1,792,635 2,476,534 558,675 1,279,453
3,132,934 3,593,429 1,239,362 2,068,382
- - 6,842 26,386 Other payables - tax and social security payments - - -
Total trade and other payables 3,132,934 3,593,429 1,246,204 2,094,768
25(a) Other payables and accruals N’000 N’000 N’000 N’000
Advances from customers 58,512 60,326 33,999 60,325
Staff payable 223,802 257,877 82,298 87,105
Sundry creditors 463,306 637,873 196,155 349,330
ChamsCooperative 15,002 12,785 12,305 11,755
Withholdingtax 13,726 61,907 1,761 59,394
Value Added Tax 271,282 698,408 96,088 457,003
Deposit for shares 265,542 22,492 10,030 10,030
Accrued audit fee 4,200 9,200 - 5,600
Accruals 26,590 154,562 - 122,831
Dividend payable 26,303 21,464 21,464 21,464
Pension payable 108,782 80,210 34,691 12,879
Paye payable 78,450 74,364 36,564 30,551
NHF payable 22,888 21,730 17,867 17,147
Industrial training fund payable 17,812 17,186 15,453 16,589
Accrued tax penalty 2,375 27,839 - -
Provision for finance charges 1,665 1,665 - -
Deferred revenue 120,264 220,562 - -
Accrued directors allowance 72,134 96,084 - 17,450 0
1,792,635 2,476,534 558,675 1,279,453
26 Loans and borrowings N’000 N’000 N’000 N’000
Bank Loan (Note 26(a)) 24,816 24,816 - -
Other unsecured loan (Note 26(b)) 128,158 112,419 - -
Total Loans and borrowings 152,974 137,235 - - 0
26(a) Movement in bank loans N’000 N’000 N’000 N’000
Balance at beginning of the year: 24,816 122,263 - 97,447
Repayments - (97,447) - (97,447)
Balance at the end of the year 24,816 24,816 - -
Security on Facility
1. Admission into mortgage debenture on Head Office property.
2. Domiciliation of contract proceeds upon utilization of CFF
3 Personal Guarantee of Sir Demola Aladekomo, Former Group Managing Director
4 Personal Guarantee of two directors of Chams Plc supported by statements of net worth
5 All Assets Debenture
Total financial liabilities, excluding loans and
borrowings, classified as financial liabilities
measured at amortised cost
Payable to subsidiary companies(Note 27)
Group Company
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 48
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
2018 2017 2018 2017
26(b) Movement in other unsecured loans N’000 N’000 N’000 N’000
Balance at beginning of the year: 112,419 103,931 - -
Accrued interest 15,739 8,488 - -
Balance at the end of the year 128,158 112,419 - -
N’000 N’000 N’000 N’000
Current 111,402 74,876 - -
Non current 41,572 62,359 - -
27 Due to related party N’000 N’000 N’000 N’000
Chams Access - - 2,782 -
Card Centre - - 26,386
Chams Switch - 4,060 -
- - 6,842 26,386
28 Share capital
Value Value Value Value
Authorised: N’000 N’000 N’000 N’000
10 billion ordinary shares of 50 kobo each 5,000,000 5,000,000 5,000,000 5,000,000
Number Number Number Number
’000 ’000 ’000 ’000
10 billion ordinary shares of 50k each 10,000,000 10,000,000 10,000,000 10,000,000
Issued and fully paid: Value Value Value Value
N’000 N’000 N’000 N’000
4,696,060,000 ordinary shares
of 50 kobo each 2,348,030 2,348,030 2,348,030 2,348,030
Number Number Number Number
'000 '000 '000 '000
4,696,060,000 ordinary share of 50k each 4,696,060 4,696,060 4,696,060 4,696,060
29 Reserves
(i) Share premium N’000 N’000 N’000 N’000
Share premium 5,458,750 5,458,750 5,458,750 5,458,750
Transfer to retained earning (Note 29(ii)) (5,423,742) - (5,423,742) -
35,008 5,458,750 35,008 5,458,750
Group Company
Group Company
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 49
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
(ii) Share premium
(iii) Revaluation reserve N’000 N’000 N’000 N’000
Opening balance 959,065 959,065 959,065 959,065
Surplus on revaluation 523,099 - - -
Balance at the end of the year 1,482,164 959,065 959,065 959,065
(a) Revaluation surplus
N’000 N’000 N’000 N’000
Analysis of revaluation surplus
Owners of the parent 523,099 - - -
Non-controlling interest 47,970 - - -
Intangible assets 571,069 - - -
At the meeting of extra ordinary general meeting of the Chams Plc held on 24 April 2018 at Louis Solomon
Close, Victoria Island, Lagos. The following resolutions were proposed and duly passed:
That the directors be and hereby authorised to all such incidental consequential and supplimental actions
and to execute all requisite documents as may be necessary to give effect to the above resolutions.
That the Directors be and hereby authorised to consent to any modification(s) of the Scheme subject to such
conditions as the Federal High Court May think fit to impose.
That all acts carried out by Directors and Management hitherto in connection with the above, be hereby
ratified
The above resolution was approved by Corporate Affairs Commission on 13 July 2018
The board of the directors of Chams Plc was empowered subject to the confirmation of high court to
approved the scheme of the balance sheet restructuring and effect all the necessary accounting entries in
line with the statutory requirements.
That a Balance Sheet Restructuring Account (BSRA) be created for the purpose of effecting all necessary
accounting entries in line with the statutory requirement
That the share premium of N5,423,742,000 to be transferred to Balance Sheet Restructuring Account.
That the Negative balance of N5,423,742,000 as at 31 December 2017 be written off and transferred from
Retained Earnings Account to the Balance Sheet restructuring account.
That the sum of N5,423,742,000 in the Balance Sheet Restructuring Account be written off, by using a
corresponding amount from the "Balance Sheet Restructuring".
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 50
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
(iv) Retained earnings 2018 2017 2018 2017
N'000 N'000 N'000 N'000
Balance at the beginning of the year (7,683,783) (6,429,119) (5,423,742) (3,689,622)
Transfer from share premium 5,423,742 - 5,423,742
Transfer from income statement 338,799 (1,254,664) 385,796 (1,734,120)
Balance at the end of the year (1,921,242) (7,683,783) 385,796 (5,423,742)
30 Capital reserve N'000 N'000 N'000 N'000
Opening balance 145,522 145,522 - -
Capital reserve on consolidation - - - -
Balance at the end of the year 145,522 145,522 - -
31 Non-controlling interests N'000 N'000 N'000 N'000
Share capital 642,246 617,246 - -
Share premium 115,119 15,119 - -
Revenue reserves (1,241,576) (1,282,925) - -
Revaluation reserves 47,970 - - -
(436,241) (650,560) - -
32 Cash and cash equivalents
Comprises: N’000 N’000 N’000 N’000
Bank and cash balances 59,691 91,808 12,508 32,525
Short term deposit 51,832 92,486 17,199 90,586
111,523 184,294 29,707 123,111
Bank overdraft/borrowings (111,402) (74,876) - -
121 109,418 29,707 123,111
33. Guarantees and other financial commitments
Capital commitments
Contingent liabilities
a)
b)
34. Subsequent events review
35. Comparative figures
Company Group
Where necessary comparative figures have been adjusted to conform to changes in presentation in the
current year in accordance with International Accounting Standard (IAS)1
There were no capital commitments authorised by the Directors as at 31 December, 2018 (31 December
2017 - Nil).
In the opinion of the Directors, there were no significant subsequent events that could have material
effect on the state of affairs of the Company and its subsidiaries as at 31 December 2018 and on the loss
for the year ended on that date, which have not been adequately provided for or disclosed in these
consolidated financial statements.
The contingent liability in respect of a pending litigation with a member of the group is three hundred
and fifty million Naira (N350,000,000) with respect to certain contracts executed between the group and
a third party.
In the opinion of the legal counsel, the group has fifty percent chance of winning the suit.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 51
FINANCIAL STATEMENTS, 31 DECEMBER 2018
NOTES TO THE FINANCIAL STATEMENTS
36. Related party transactions
Transactions with Subsidiaries
· Rent and service charges to Chams Access Limited is N5.28million
· Rent and service charges to Card Centre Nigeria Limited is N15.83 million
Rent and service charges to Chams Switch Nigeria Limited is N4.00 million
Other related parties
·
37. Staff Costs
Information regarding Directors and Employees
Staff Costs (including directors) Comprise:
2018 2017 2018 2017
N’000 N’000 N’000 N’000
Wages and salaries 369,796 344,154 166,345 181,245
Pension contribution 15,434 19,591 13,455 16,342
385,230 363,745 179,800 197,587
Emoluments of Directors of the Company were -
Fee: N’000 N’000 N’000 N’000
Chairman 3,130 3,130 2,500 2,500
Other Directors 12,420 12,420 10,000 10,000
15,550 15,550 12,500 12,500
Fees (excluding pensions
contributions) include amounts paid to
N’000 N’000 N’000 N’000
The Chairman 2,500 2,500 2,500 2,500
The highest paid Director 2,500 2,500 2,500 2,500
Group Company
The related party transactions arose among others from rents due and payments to suppliers. As at 31 December
2018 balances due from and to related Companies were as stated in Notes 23 and 27 to the consolidated
financial statements respectively. The significants transactions with the related parties are disclosed below:
Related parties include the Board of Directors, the Group Executive Board, the Group Managing Director, close
family members and companies which are controlled by these individuals.
During the year, the Company transacted business to/from its subsidiaries and associated companies
Working capital loan to Chams Access Limited and Cards Center Nigeria Limited from Chams Plc were
N49.81million and N331million respectively.
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 52
FINANCIAL STATEMENTS, 31 DECEMBER 2018
OTHER NATIONAL DISCLOSURE
CONSOLIDATED AND SEPARATE STATEMENT OF VALUE ADDED
2018 2017 2018 2017
N'000 % N'000 % N'000 % N'000 %
Sales of products and services 3,012,513 1,956,517 584,392 608,314
Other income 838,978 129,516 845,018 127,248
3,851,491 2,086,033 1,429,410 735,562
Bought in materials and services:-
- Imported - - - -
- Local (2,795,015) (2,754,868) (615,820) (2,078,598)
Value eroded 1,056,476 100 (668,835) (100) 813,590 100 (1,343,036) (100)
Applied as follows:
To pay employees:
Employees' wages, salaries and
other benefits 369,796 35 344,154 51 166,345 20 181,245 13
To pay Government:
Income tax 78,534 7 (30,297) (5) 116,356 15 (17,471) (1)
To pay providers of capital:
Finance costs 15,739 2 23,815 5 - - 5,327 0
To provide for replacement of
assets and growth:
- Depreciation of property,
plant and equipment 212,259 20 170,165 25 145,093 18 146,331 11
- Amortisation of intangible assets - - 92,545 14 - - 75,652 6
- Retained earnings/(loss) 380,148 36 (1,269,217) (190) 385,796 47 (1,734,120) (129)
1,056,476 100 (668,835) (100) 813,590 100 (1,343,036) (100)
GROUP COMPANY
CHAMS PLC AND ITS SUBSIDIARY COMPANIES 53
OTHER NATIONAL DISCLOSURE
CONSOLIDATED AND SEPARATE FINANCIAL SUMMARY
31 DECEMBER 2018
2018 2017 2016 2015 2014 2018 2017 2016 2015 2014
ASSETS/(LIABILITIES) N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Property, plant and equipment 2,663,076 2,809,867 2,936,146 3,106,027 3,358,528 1,994,062 2,117,728 2,262,419 2,028,171 2,119,959
Intangible assets 722,840 120,986 157,140 84,641 104,615 - - 75,652 83,303 90,953
Long term investments 100,000 100,000 100,000 100,000 100,000 2,553,826 2,553,826 1,945,985 1,945,985 1,945,985
Investment projects 460 460 - 224,048 151,035 460 460 - 224,048 151,035
Deferred tax asset - - - 285,051 249,495 - - - 285,051 249,495
Loan receivables - - - - - 49,810 192,747 - - -
Deposit for investments 13,249 - - - - - - 1,207,092 - -
Net current (liabilities)/assets (1,846,384) (2,454,289) (1,357,545) (445,415) 2,889,915 (870,259) (1,522,658) (414,925) 2,418,098 5,040,324
1,653,241 577,024 1,835,741 3,354,352 6,853,588 3,727,899 3,342,103 5,076,223 6,984,656 9,597,751
CAPITAL AND RESERVES
Share capital 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030 2,348,030
Share premium 35,008 5,458,750 5,458,750 5,458,750 5,458,750 35,008 5,458,750 5,458,750 5,458,750 5,458,750
Fixed assets revaluation reserve 1,482,164 959,065 959,065 959,065 959,065 959,065 959,065 959,065 959,065 959,065
Revenue reserve (1,921,242) (7,683,783) (6,429,119) (5,000,410) (1,654,792) 385,796 (5,423,742) (3,689,622) (1,781,189) 831,906
Capital reserve 145,522 145,522 145,522 145,522 145,522 - - - - - - - - - - - -
Non-controlling interests (436,241) (650,560) (646,507) (556,605) (402,987) - - - - -
Total equity 1,653,241 577,024 1,835,741 3,354,352 6,853,588 3,727,899 3,342,103 5,076,223 6,984,656 9,597,751
REVENUE AND PROFIT -
Revenue 3,012,513 1,956,517 1,482,037 1,610,478 4,115,835 584,392 608,314 641,435 914,929 3,336,359
Profit/(loss) before taxation 301,614 (1,238,920) (1,471,916) (3,393,020) 261,805 269,440 (1,716,649) (1,873,838) (2,516,775) 415,137
Taxation income/expenses 78,534 (30,297) (46,696) (12,296) 18,622 116,356 (17,471) (34,595) (2,399) 31,201
Profit/(loss) after taxation 380,148 (1,269,217) (1,518,612) (3,405,316) 280,427 385,796 (1,734,120) (1,908,433) (2,519,174) 446,338
Attributable to:
Owners of the Company 338,799 (1,254,664) (1,428,709) (3,251,697) 310,739 - - - - -
Non controlling interest 41,349 (14,553) (89,903) (153,619) (30,312) - - - - -
PER SHARE DATA (Kobo):
Earnings/(loss) per share
Basic(kobo) 7K (27)k(30)k (30)k (69)k 7k 8K (37)k (39)k (54)k 10k
Earnings/(loss) per share
Diluted(kobo) 7K (27)k(30)k (30)k (69)k 7k 8K (37)k (39)k (54)k 10k
Net assets per share (kobo) 35 12 39 71 146 79 71 108 149 204
GROUP COMPANY
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