Marketing and communication company, WPP-Scangroup on Tuesday released its financial results for the financial year ended 31st December 2020 after delaying the publication for the third consecutive time due to ongoing investigations against its former Chief Executive Officer, Mr Bharat Thakrar and the former Chief Finance Officer, Mr Satyabrata Das. These results were due on 3Oth April 2021.
Group revenue for the year 2020 from continuing operations declined by 22% to Ksh 2.239 Billion from Ksh 2.872 Billion reported in the same period in 2019.
The company said that it made a net gain of Ksh 2.242 Billion from the sale of its interest in Millward Brown East Africa Ltd, Millward Brown Nigeria Ltd, Millward Brown West Africa Ltd and Research & Marketing Group Investment in June 2020.
“These companies represented a significant part of the Group and this disposal therefore materially affects the results of the Group.” the company said in a statement after markets closed on Tuesday 31st August 2021.
Total billings for the full year 2020 declined to Ksh 6.34 Billion from Ksh 9.28 Billion reported in 2019 while operating and administrative expenses increased by Ksh 720m (26%) to Ksh 3.46 Billion.
Its total loss for the year came in at Ksh 1.732 Billion compared to a profit of Ksh 158.792 Million reported in the same period in 2019.
The total comprehensive income for the year amounted to Ksh 357m, a decrease of Ksh 105m compared to the prior year.
Probe on WPP-Scangroup CEO and former CFO
WPP Scangroup Board on 18th February 2021 February 2021 suspended CEO Bharat Thakrar and the Chief Finance Officer, Satyabrata Das, after allegations of gross misconduct in their capacity as senior executives.
The company did not say how it reached its conclusions and did not release a full report of its investigation on the alleged misconduct of its Founder CEO Mr Bharat Thakrar and the former Chief Finance Officer, Mr Satyabrata Das.
WPP Scan Group, considered the largest marketing and communication group in Sub-Saharan Africa, said that the “investigation did not identify items of a material nature that required adjustment to the results of the Company or the Group for the year ended 31 December 2020 or to the balance sheets at that date.”
The board said that interrogations had taken longer than expected as a result of the extended scope of the audit by external auditors.
“During the course of the investigation into the allegations, Mr Thakrar and Mr Das tendered their resignations as Directors and as senior executives of the Company. Following the completion of this investigation, the auditors of the Company extended the scope of their audit work. This extended audit process led to the delay in the Company being able to publish its 2020 results. Both shareholders and the Capital Markets Authority (CMA) have been kept informed regarding the delays and the expected date of publication of the results.” Read the statement from the company.
Deloitte’s Qualified Opinion on WPP-Scangroup
Meanwhile, Deloitte & Touche expressed a qualified audit opinion on the company’s audited consolidated financial statements in their report dated 31 August 2021 which reflects the independent auditor’s inability to give a clean report.
“The basis for our qualified audit opinion was that The Group has five foreign investments; Ocean Ogilvy Gabon, Ocean Central Africa, Ocean Burkina Faso, Ocean Afrique Occidentale and Ocean Conseil and has disclosed these as equity investments. The company has not accounted for these associates using the equity method which is in non-compliance with IFRS.” Deloitte noted in the audited financial report through the engagement partner CPA David Waweru who was responsible for the audit.
“The company considers them as immaterial as disclosed in the consolidated financial statements of WPP Scangroup Plc. We were not provided with sufficient and appropriate audit evidence to determine the appropriateness of the accounting treatment adopted and could therefore not determine if there were any adjustments required to the consolidated financial statements.” continued the satement.