CHEMICAL AND ALLIED PRODUCTS : QUARTER 5 - FINANCIAL STATEMENT FOR 2022

ANNUAL REPORT

FOR THE YEAR

-

0

ENDED

31 DECEMBER 2022

The notes on pages 8 to 50 are an integral part of these financial statements.

Chemical and Allied Products Plc

Annual Report

For the year ended 31 December, 2022

Contents

Corporate Information 3

Financial Highlights 4

Report of the Directors

5 - 10

Corporate Governance Report 11-21

Report of the Statutory Audit Committee 22

Statement of Directors Responsibilities in Relation to the Financial Statements 23

Statement of Corporate Responsibility for the Financial Statements 24

Independent Auditors' Report 25-28

Statement of profit or loss and other comprehensive income 29

Statement of financial position 30

Statement of cash flows 31

Statement of change in Equity 32

Notes to the Financial Statements 33-70

Other National Disclosures

- Value Added Statement 73

- Five Year Financial Summary 73

Corporate Information

BOARD OF DIRECTORS:

Mrs. Awuneba Ajumogobia

Mrs Bolarin Okunowo Mrs. Udo Okonjo

Mrs. Muhibat Abbas Dr Vitus Ezinwa

Mr Folasope Aiyesimoju Mrs Ifeoma Chuks- Adizue

Mr Yomi Adenson

Mr Babs OmotowaChairperson (Independent Non-Executive Director)

Managing Director

Independent Non-Executive Director

Non-Executive Director Non-Executive Director Non-Executive Director

Executive Director - Commercial

Executive Director - Finance & Risk

Independent Non-Executive Director

COMPANY SECRETARY:

Ayomipo Wey

REGISTERED OFFICE:REGISTRATION NUMBER:

2, Adeniyi Jones Avenue P.M.B. 21072, Ikeja - Lagos Tel: [phone]

E-mail:[e-mail]

RC 4551

WEBSITE:

www.capplc.com

AUDITOR:

REGISTRAR:

KPMG Professional Services

KPMG Tower, Bishop Aboyade Cole Street Victoria Island

Lagos

Africa Prudential Plc 220B, Ikorodu Road Palmgrove

Lagos.

TIN:

01331249-0001

BANKERS:

Zenith Bank Plc

First Bank of Nigeria Plc

First City Monument Bank Plc Guaranty Trust Bank Plc Union Bank of Nigeria Plc Stanbic IBTC

Coronation Merchants Bank

Financial highlights	2022	2021
₦'000	₦'000	change
Revenue	19,208,470	14,207,818	35
Operating profit	3,096,001	1,478,524	109
Finance income	381,765	256,588	49
Profit before taxation	3,444,212	1,727,498	99
Taxation	(1,068,004)	(604,915)	77
Profit for the year	2,376,208	1,122,583	112
Total equity and liabilities	13,406,204	12,115,919	11
Additions to property, plant & equipment (PPE)	704,409	614,717	15
Depreciation on PPE	353,875	225,100	57
Cash and cash equivalents	3,761,078	2,571,991	46
Earnings per share (kobo) - Basic	292	151	93
Earnings per share (kobo) - Diluted	292	151	93
Net asset per share (kobo) - Basic	837	559	50

Chemical and Allied Products Plc

Annual Report

For the year ended 31 December, 2022

Reports of Directors

The Directors have the pleasure in presenting their report to members on the affairs of Chemical and Allied Products PLC (the

"Company" or "CAP PLC" or "CAP"), together with the Audited Financial Statements and independent Auditor's Report for the year ended December 31, 2022.

• 1 LEGAL FORM AND PRINCIPAL ACTIVITIES

  Chemical and Allied Products PLC is a technological licensee of AkzoNobel Coatings International B.V. ("AkzoNobel"). CAP Plc evolved from the world-renowned British multinational, Imperial Chemical Industries PLC (ICI), which formalized its Nigerian operations in 1957 under ICI Exports Limited. In 1965, ICI Exports Limited changed its name to ICI Nigeria Limited and in 1968, it was subsumed by ICI Paints Limited. ICI was acquired in 2008 by AkzoNobel, changed its name to Chemical and Allied Products Limited (CAPL) in the spirit of indigenization and in 1991, CAP became a public company. In 1992, ICI Nigeria Limited disposed-off its 40% shareholding in CAP when it sold 35.7% of its equity to UAC of Nigeria PLC ("UAC") and the rest to the Nigerian public. Currently, UAC holds 57.85% of CAP's shares.

  CAP operates within the premium and standard segments of the Paints and Coatings market with flagship brands such as Dulux positioned in the premium segment, and Caplux and Sandtex in the standard segment. CAP also operates in the marine and protective coatings segment through distribution of the Hempel brand. The Company has the ISO 9001:2015 Quality Management System certification and the ISO 14001:2015 Environmental Management system certification. CAP is a signatory to the UN Global Compact (UNGC) initiative, raising the bar in human rights, labour standards, environment, and anti-corruption.

  The Company pioneered the colour centre concept in Nigeria in 2005, which began a revolution in the Nigerian paint industry. Currently, the Company has One hundred and Four (104) outlets across major cities in the country following the strategic merger with Portland Paints and Products Nigeria Plc ("Portland Paints") which became effective on July 1, 2021.

• 2 OPERATING RESULTS

  The following is the summary of the performance of the Company for the year under review as compared with the previous year:

3

2022	2021
N'000	N'000
Revenue	19,208,470	14,207,818
Operating Expenses	(4,800,166)	(3,342,428)
Profit before taxation	3,444,212	1,727,498
Taxation	(1,068,004)	(604,915)
Profit after taxation	2,376,208	1,122,583
Retained earnings	4,700,110	3,028,137
DIVIDEND

The Directors are pleased to recommend to shareholders a full year ordinary dividend of N1.55k per 50 kobo share, representing N1.26billion cash distribution. Dividend will be paid net of withholding tax. (2021:N985million)

Cash dividend will be paid to shareholders whose names appear in the Company's Register of Members as at the close of business on June 1, 2023.

4 RECORD OF DIRECTORS' ATTENDANCE AT MEETINGS

Pursuant to Section 284(2) of the Companies and Allied Matters Act, No. 3 of 2020, the records of Director's attendance at Board meetings during the year under review will be available for inspection at the Annual General Meeting.

5 BOARD CHANGES

RETIREMENT

Amb. Kayode Garrick, having spent 9 years on the Board since his first election, retired from the Board as an independent non-executive director on March 21, 2022.

The Board was deeply appreciative of Amb. Garrick for his hard work and valuable contributions to the growth of the Company. The NGX Regulation Limited, the Securities and Exchange Commission and the Corporate Affairs were duly notified of these retirements.

BOARD APPOINTMENT

During the period under review, the following appointments were made to the Board of the Company:

• - Mrs. Ifeoma Chuks-Adizue as executive director with effect from April 1, 2022

• - Mr. Yomi Adenson as executive director with effect from April 1, 2022, and

• - Dr. Babs Omotowa as an Independent non-executive director with effect from June 16, 2022

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