CZAR FARMS IAM Enhancement

Jaiz Bank Plc RC 476637
INVESTMENT APPRAISAL MEMO

AAPP
Date: 24th November, 2023

Branch / Unit: Ilorin Team’s MIS Code 0023
Review Type Enhancement Prepared by ABDULSALAM ZAINAB
CUSTOMER’S INFORMATION:
Account Name : CZAR FARMS LIMITED
RC NO : 1838907
Legal Status : Limited Liability Company
Date of Incorporation : 9th September 2021.
Authorized share capital : N10,000,000.00
Paid Up Capital : N10,000,000.00
Shareholder’s Fund : N282,219,268
Ownership : 100% Expatriate
Nature of Business : Agriculture
Contacts Phone No : 08026452470
ACCOUNT DETAILS
Account Number : 0010327021
CIF : 3018944
Date of Account Opening : 24th January, 2022
BVN : 22468235602, 22473705758
TIN : 24014099-0001
Available Balance : N 12,811,292.00 as at 21st November, 2023
REQUEST DETAILS
Total Facility Amount : N100, 000,000
Request status : Facility Enhancement and renewal
Down Payment : NIL
Equity Contribution : NA
Amount Recommended : N100, 000,000
Investment Type : Murabaha Working Capital Line
Purpose : To finance the purchase and breeding of 60,000 Broilers from Day Old
to maturity.
Tenor : 12 months
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Draw Dawn Cycle : 60 days
Mark up : 24%
Payment : Once every 60 days.
Payment Source : Proceeds from the sales of harvested broilers.
Asset to be financed : Purchase of Day-old chicks and feeds from AMO BYNG LIMITED.
Security/Support : (i) Tripartite legal mortgage on Third party landed property belonging to
Kahm integrated farms ltd situated at Km 22 Old Jebba Road, Oke Oyi,
Kwara State with N287, 600,000 OMV and 192,700,000 FSV
respectively, Plant and Machinery OMV N25, 081,000 and FSV N17,
557,000 by Jide Taiwo & Co. & Company via collateral sharing
agreement supported with Corporate Guarantee from Kham integrated
farms(already in place).
(ii) All asset debenture of Czar farms floating assets with OMV 96M and
FSV 76.8M located in Km 22, Old Jebba Road, Oke-Oyi, Ilorin East
Local Government, Ilorin, Kwara State and Oil plaza Ita-alamu opposite
conoil filling station, Valuation done by Garba kibiya & Company on
22/05/2022 (already in place)
(ii) Personal Guarantee & Notarized Statement of Net worth of the
MD/CEO.
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EXPOSURE SUMMARY:
CUSTOMER/ FACILITY APPROVE CURRENT NEW/ MATURITY
RELATED TYPE D LIMIT EXPOSURE PROPOSED DATE
OBLIGOR N(‘000) N(‘000) LINE
N(‘000)
Direct Facilities
CZAR FARMS Murabaha 50,000 100,000 12 Months
LIMITED Working Capital
Line
Total Direct Nil 50,000 100,000 12 Months

Contingent
Total Contingent
Total Facilities Nil 50,000 100,000 12 Months
COMPANY PROFILE / MANAGEMENT ASSESSMENT

Czar Farms Limited is a Private Company incorporated with Registration number 1838907 in
September, 2021 as a limited liability company, it has an authorised share capital of 10,000,000 at
N1.00 each, fully subscribed. The MD/ CEO of Czars farm Mr. Mohamad Alkhadr Ali originally into
the exportation of Charcoal and wood to South Africa and other African countries, ventured into the
poultry farming business due to the untamed spread of insecurity in the country, which affected his
charcoal business. Since the inception of the farm in September 2021, it has done more than 20 circles
with the turnover amounting to over N4Bn. The farms total turnover is expected to be N6BN in 2024.
Although currently on a lease of Five years with Kahm integrated farms limited located at Km 22, Old
Jebba Road, Oke-Oyi, Ilorin East Local Government, Ilorin, Kwara State, it has two newly refurbished
abattoir situated in Offa garage, Ilorin and Lagos with the capacity to process 10,000 birds daily each
and efforts are ongoing to build a farm of its own. The Kahm integrated farm originally has 8 pen
houses with an addition 6 built in recent times by Czar Farms leading to a total 11 pen houses. The farm
has grown from 76000 broilers in September, 2021 to over 300,000 broilers in October, 2023.
OPERATIONAL ACTIVITIES
Czar Farms Limited operations focuses majorly on the brooding of the day-old chicks to the point at
which they are matured enough and cold room storage for sale. The unit operations are set out from
brooding which comprises of three stages (The starter, grower and finisher) to processing or outright
sales to off-takers. These stages are explained below:
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1. Brooding: This is the first stage in the process. It’s the maximum attention given chicks from a
day old to maturity/sales period. The objective of the brooding phase is to establish good appet-
ite and achieve maximum early growth. Starter, grower, finisher feeds and fresh clean water are
supplied during this period. Upon the arrival of the Day-old chicks, they are dislodged from their
packs and put in the brooding pen. They are immediately served with water and glucose which is
known to increase their strength and agility. A brooder is put in place as well as an electric bulb
to serve as a source of heat for the chicks. Wood shavings are spread on the floor of the brooder
house to absorb fluids coming from the droppings of the chicks.
The young chick needs to be kept warm (brooded) as there is normally no mother hen to brood
them. Standby Generator for constant power supply is made available and some 100-watt bulbs
are suspended above the chicks or placed in a can on the floor. The chicks are confined in the
brooder by placing a chick guard around the chicks with a diameter of about 90 cm and 40-48
cm high.
a. Starter: During the first 10 days of the operation, the temperature of the pen is kept to
about 35oC (reduced as the chicks grow). They are fed with a starter diet which is a
relatively small particle with a large surface area; these aids optimum digestion and
proper utilization of feeds. This starter contains nutrient required for ideal growth. The
chicks are given their second dose of vaccination at this stage (The first dose was given
during the hatchery process).
b. Grower: As the chicks grow reach 3 weeks their diet plan is replaced with a grower
which although contains less nutrient has a higher energy percentage (the nutrient has
been reduced to what is required by the bird).
c. Finisher: This is the last feed given to the broilers from age 5 weeks to sale or processing
period. This finisher sums up the basic requirements of the chicks. It contains lesser
nutrient (protein) but higher energy because as the chicks grow their protein needs
decreases and energy increases.
2. Sales or processing plant: This stage follows immediately after the brooding phase and it’s al-
ways determined by the success of brooding. The farm as an off-taking agreement with numer-
ous ventures. The farm also has a slaughterhouse with the capacity of processing 10,000 birds
per birds which has commenced operations after receiving its NAFDAC approval March, 2022.
BOARD OF DIRECTORS’ & OWNERSHIP STRUCTURE
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YRS OF EXPE- EQUITY
NAME AGE ADDRESS QUALIFICATION RIENCE POSITION %
NO. 9 FATE
ALKHADR ALI MO- ROAD, SHARE-
HAMAD ADULT ILORIN B.SC 7 YEARS HOLDER 51
ADULT NO. 4 LA- 6 YEARS SHAREHOLDE
ABED ELALL HASSAN GOS ROAD, R
ALI ILORIN B.SC 49
TOTAL 100
Captioned below are their brief history and their experiences:
1. ALKHADR ALI MOHAMAD is an accomplished Accountant by profession with Lebanese

origin. He came to Nigeria in 2016, settled down and got married here. He has passion for the
Agro-allied Sector with his interest and experience particularly in poultry farming, cattle rearing
and fish farming.
2. ABED ELALL HASSAN ALI is an accomplished businessman with experience in all sector of
the Nigerian Business Sphere with particular emphasis in Charcoal processing, Rice production,
Cocoa and Soya bean production.
MANAGEMENT
1. ALKHADR ALI MOHAMAD is the managing Director of Czar Farms a graduate of Lebanese
international University (LIU) with an MBA in Accounting. He has over 10 years’ experience in
financial management, business valuation, due diligence and compliance, software
implementations, executive management, enterprise risk services, application of sound project
management techniques to complex projects. He has verse experience in policies and strategy
administrations, supply chain management, tax management, SOX 404, enterprise valuation, due
diligence among others. He has variety of transaction and business advisory engagements for
companies in Nigeria. He has also attended numerous management courses in Nigeria and
abroad, among which are: Euro-Money Training at Integrated Financial Management Farm,
Johannesburg, South Africa; Total Quality Management at J. Crown Associates, Lagos, Nigeria;
and Office Etiquette Training at A2Z Systems Integrated, Lagos, Nigeria.
2. MAHMOON ELAGROUDI GAMAAN is the farm manager. He is a Veterinary Doctor who

has a broad spectrum of experiences with different farms. Before his appointment at Czar farms,
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he worked with Yinbudot Farm Limited, Ayegun Village, Old Ilesha Road, Oyo State as
Supervisor of Poultry arm of the organization.
THE REQUEST
Czar Farms Limited is requesting for an enhancement to the approved Murabaha working capital line of
N50,000,000 to N100,000,000 Murabaha working capital line for a tenor of 12 months with Bi-monthly
drawdown cycle (i.e. 60 days) at a mark- of 24% per annum, this is to finance the purchase of 60,000-
day old chick and feed needed to brood to maturity.
BACKGROUND TO THE REQUEST

Czar Farms Limited, a prominent wholesaler for NAFDAC regulated chicken, has demonstrated
commendable performance with the Murabaha Working Capital finance provided by Jaiz Bank
Plc. The initial facility of N50,000,000.00 (Fifty Million Naira) was approved on June 14 th,
2022, and despite a delayed utilization until November 24 th, 2022, due to collateral challenges,
the customer has been utilizing it efficiently. Notably, all disbursements have been repaid
promptly within the stipulated periods, highlighting the customer's financial discipline and
capacity.
The recent expansion of the farm's supply chain, marked by the establishment of two abattoirs
and cold room storage units in Kwara and Lagos States, has significantly streamlined their
operations. This vertical integration has diminished their reliance on live chicken off-takers.
With an objective to bolster the farm's output and meet the incessant market demands, this
facility extension holds paramount importance. Czar Farms Limited serves various major off-
takers, such as A & B Frozen and Aroma palace in Abuja, Chicken and Co in Osun State, Kebab
house, maleek agro ventures in Ilorin, Brixton superstores in ijebu ode, gracious in Kaduna
State, Murizard Ventures in Ilorin, and Item 7 chain restaurants across Kwara State. The
burgeoning demand for their products indicates an untapped market potential that a renewed
facility could capitalize on, further amplifying the customer's business prospects.
This request for facility renewal is substantiated by robust security measures, including a
tripartite legal mortgage on Third party landed property supported by collateral sharing
agreements and corporate guarantees from Kham Integrated Farms limited. Additionally, an all-
asset debenture, stock hypothecations, and personal guarantees from the company's directors
reinforce the security coverage, ensuring a stable and secure financial arrangement.
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Given Czar Farms Limited's exemplary track record and promising market position, a renewed
facility is poised to not only fortify their operations but also contribute significantly to their
continued success in meeting market demands and expanding their business ventures. Czar farms
limited is one of the major wholesaler for NAFDAC regulated Chicken in Ilorin. The customer is
currently enjoying a Murabaha Working Capital finance of N50,000,000.00 (Fifty Million naira
only) with Jaiz bank plc. This facility was approved on the 14 th of June 2022 but was not utilized
until 24th of November 2022 due to the customer’s inability to meet up with the Collateral
adequacy. The customer is fully Utilizing the Facility with repayments made as at when due.
Below is some of customers utilization history of the approved facility, to show a trend of how
the facility is drawn and utilized:
S/No Date of Disbursement Amount Tenor Remarks
Disbursed (N)
1 24th November,2022 6,600,000 60 days Fully Repaid
4 2nd December,2022 5,887,500 60 days Fully Repaid
5 8th December, 2022 5,967,500 60 days Fully Repaid
8 23rd December, 2022 5,997,500 60 days Fully Repaid
10 25TH January, 2023 6,000,000 60 days Fully Repaid
13 31st January, 2023 5,511,250 60 days Fully Repaid
Due to the recent expansion of the Farms, supply chain, which now includes two abattoir and cold room
storage in Kwara and Lagos State. Their business has become more vertically integrated with less need
for live chicken off takers.
This facility is aimed at increasing the farms output the meet the demands of the market which can
never be satiated. Below are the customers major off takers
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1. A & B Frozen Abuja - They offtake as much as the customer has.
2. Chicken and Co Osun State- 10 tons of chicken Bi-weekly.
3. Aroma palace - 5 tons of chicken monthly.
4. Brixton Superstores - They offtake as much as the customer has.
5. Kebab house– 3 tons per week
6. Item 7 chain restaurant who currently has eight (12) outlets in Ilorin, Kwara State – 73 tons per
month.
The farm has two slaughterhouse, cold room and sales outlet to process birds to wholesalers and
retailers alike. The customer has huge demand for this product, which is not fully tapped, and approving
this facility will further boost the customer’s business opportunities.
The facility is fully secured with:
1. Tripartite legal mortgage on Third party landed property belonging to Kahm integrated farms
ltd situated at Km 22 Old Jebba Road, Oke Oyi, Kwara State with N287, 600,000 OMV and
192,700,000 FSV respectively (already in place). Plant and Machinery OMV N25, 081,000 and
FSV N17, 557,000 by Jide Taiwo & Co. & Company via collateral sharing agreement supported
with Corporate Guarantee from Kham integrated farms
2. All Asset debenture of floating assets of the Company with 163.6% coverage, supported with
stock hypothecations and PG of the two directors.
ASSET CONVERSION CYCLE:
The asset conversion cycle is between 30 to 45 days. The payment for feeds supplied to customer is
usually between 5 to 7 days of supply.
Analysis of stock to be purchased:

S/N Item Quantity Amount per unit Total
1 Day old chick 60,000 300 18,000,000
2 Feed 60,000 1260 75,600,000
3 Vaccine & Medicine 60,000 105 6,300,000
4 Miscellaneous 100,000
Total Cost 100,000,000
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Each bird will weigh between 1.3kg to 3.5Kg at the end of the breeding cycle, which means they would
be fed with at most 3.5kg of feed. Each feed costs 360 naira per Kg amounting to 1260 naira per bird.
1. Total Cost of Stock Purchased:

 Day old chicks: 60,000 * 300 = 18,000,000 NGN
 Feed: 60,000 * 1260 = 75,600,000 NGN
 Vaccine & Medicine: 60,000 * 105 = 6,300,000 NGN
 Miscellaneous: 100,000 NGN
 Total Cost = 18,000,000 + 75,600,000 + 6,300,000 + 100,000 = 100,000,000 NGN
2. Revenue from Sales:
 Each bird will be sold at a weight between 1.3 kg and 3.5 kg.
 Selling price per kg = 2,300 NGN
3. Revenue Generated:
 The revenue generated will depend on the weight of the bird at the time of sale.
Now, let's calculate the yield for Czar Farms and the Bank based on the sales and cost information
(minus overhead costs like insurance per cycle, Tax, administrative expenses):
Czar Farms Yield Analysis:
Revenue Generation:
 The birds' weight ranges from 1.3 kg to 3.5 kg.
 They are sold at 2,300 NGN per kg.
 The average weight of the birds will be assumed to be 2.4 kg.
Average Selling Price per Bird:
 2.4 kg * 2,300 NGN/kg = 5,520 NGN per bird
Revenue Generated:
 Total revenue from sales = Number of birds * Average selling price per bird
 Total birds = 60,000 (assuming all survive)
 Total revenue = 60,000 * 5,520 = 331,200,000 NGN
Profit for Czar Farms:
 Profit = Total Revenue - Total Cost
 Profit = 331,200,000 - 100,000,000 = 231,200,000 NGN
Jaiz Bank PLC Yield Analysis:
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Facility Amount at a 24% Mark-up:
 Facility Amount = 100,000,000 NGN
 Markup (per cycle) = 3,945,205 NGN
Cycle Repayment by Czar Farms to Jaiz Bank:
 Facility + Markup = 100,000,000 + 3,945,205= 103,945,205 NGN
Total Revenue (for 6 cycles) for Jaiz Bank:
 3,945,205 * 6 cycles = N23,671,232
INVESTMENT RATIONALE
Liquidity Management: This facility is liquid to the tune of N100, 000,000 maximum limit facility of
Murabaha Working Capital Line, which will be paid through the bank with strong chance of cross
selling to vendors/suppliers and yet keep fund in vendors account with the bank.
Relationship: The transaction will further cement our relationship with the customer by way of winning
more share of the business and open way for bigger relationships and greater opportunities from all his
suppliers and buyers.
Profitability: The transaction is profitable facility of Murabaha Working Capital is at 24% p.a. tenor 12
months, which is renewable annually.
INDUSTRY REVIEW
Agriculture is the largest sector of the Nigerian economy with GDP contribution of about 40%.
Research shows that Nigeria has over 80 million hectares of arable land. This accounts for about 23% of
arable land across all of West Africa. The necessary key for successful reform is to turn agriculture into
a business that makes money, with a focus on investments as opposed to aid and development. Prospects
for the agricultural sector is very bright, owning to the growing demand for food driven by a large
population and growing incomes as well as higher prices due to demand in the international market.
The Federal Government, through the Ministry of Agriculture announced a supportive program towards
creating a Nigerian agricultural sector worth $256 billion by 2030. By this gesture, government intends
to stop food importation valued at over ₦1 trillion annually and ensure a massive growth in the sector,
in partnership with the private sector. As against the annual loss of funds to importation, ₦350 billion
would accrue to the nation’s economy by the end of 2015 following the import substitution policy for
rice, while the substitution of wheat flour content in bread with cassava flour is estimated to generate
over ₦60 billion.
Currently, Nigeria is rolling out an ambitious reform programme across its agricultural sector aimed at
cutting the country’s dependency on food imports, creating jobs and generating growth. The reforms
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such as the move to privatize the procurement and distribution of fertilizer and seed have resulted in
more private sector participation as well as increasing in foreign direct investments.
The key to unlocking the growth potential of agriculture in Nigeria is to improve the lot of small-scale
farmers. Empowering the millions of smallholder farmers who have access to millions of hectares will
ensure they have access to appropriate inputs, sufficient financing that will significantly boost
productivity. The key model developed to this effect is the Agricultural Franchise Model. This makes
the smallholder farmer a franchisee of a larger farm, with access to all the necessary inputs. This model
stands to minimize the risks associated with investing in the sector and thereby stimulates the financial
sector to invest in the Nigerian Agricultural Sector.
Currently Czar Farms Ltd boasts of over 96,000 broiler birds, the company intends to step up its
business by setting up its own slaughterhouse in an effective and modernized manner to enhance her
position in the market.
TRANSACTION DYNAMICS FOR MURABAHA LINE FACILITY

 Customer submit request letter.
 Relationship team process for approval.
 Upon approval, offer letter is given or issued to the customer.
 Customer accept offer and meet all conditions precedent to drawdown.
 The bank appoint customer as agent by executing agency agreement.
 The customer submit invoice.
 Relationship team confirms the invoice and the availability of the product.
 The bank draw from the approved murabaha line and pays the vendor.
 The customer takes delivery.
 The relationship team execute the Murabaha post disbursement documents with the customer
evidencing the delivery of goods.
 The customer continues to pay at the end of agreed 60 days cycle.
CONDITIONS PRECEDENT TO DRAW DOWN

The facility will become available for utilization upon receipt of the following documents From Czar
Farms Ltd:
1. Facility request letter.
2. Pro-forma Invoice.
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3. Duly Accepted Offer Letter signed by appointed and authorized signatories of Czar Farms Ltd.
4. Duly executed collateral sharing agreement between Czar Farms Ltd and Kahm Integrated
Farms Ltd.
5. Duly Executed Murabaha Agreement.
6. Duly Executed Murabaha Promissory Note.
7. Duly executed Agency Agreement.
8. Legal documents required under Tripartite Legal Mortgage and Asset debenture security
arrangement.
9. All other necessary documentations required to avail disbursement of the facility.
POST DISBURSEMENT DOCUMENTATION – MURABAH LINE

 Acknowledgement of Asset.
CREDIT INFORMATION
 CRC Report: CLEAN Report Date: 28/02/2022
Credit Bureau Coy Bank Facility Type Limit Outstanding Performance
N(‘000) N(‘000) Status
JAIZ Murabaha 50,000 50,000 PERFORMIN
BANK G
Sub Total
Total JAIZ Murabaha 50,000 50,000 PERFORMIN
BANK G
CBN CRMS
Bank Facility Type Limit N(‘000) Outstanding N(‘000) Performance Status
JAIZ BANK Murabaha 50,000 50,000 PERFORMING
Total NIL NIL NIL
BANKING RELATIONSHIP - JAIZ BANK

CZAR farms limited account was opened on 24th January 2022, below is the transactions on the account
for the last Six months
Analysis of statements – Jaiz Bank Plc.
Months Debit N Credit N

129,607,566.73 130,894,011.50
May 23
134,979,389.24 146,185,858.52
Jun 23
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59,471,656.13 154,427,176.16
July-23
155,053,314.76 157,539,930.03
Aug-23
61,604,994.25 62,425,406.52
Sep-23
159,687,332.83 162,097,777.02
Oct-23
700,404,253.94 813,570,159.75
Total
116,734,042.32 135,595,026.63
Average
STATEMENT OF ACCOUNT ANALYSIS; -

Facility Relationship with other banks:
Bank Facility type Approved Limit Utilization Collateral pledged
NIL NIL NIL NIL NIL
INDUSTRY/BUSINESS ANALYSIS
i. Stock/Inventory position: NA (Supported by Stock Report)
ii. Market Situation (tick):  Highly Saturated  Saturated  Low Demand Gap 
High Demand Gap
iii. Customer’s position in the industry (tick): Market Leader  Medium  Weak 
Deteriorating
iv. Name of 3 main competitors:
Name Address Market Share
Amo byng Ltd Lagos 40%
Dayntee farms Kwara 15%
Shabram Poultry Kwara 15%
Asaiwu Agbeke Farms Kwara 8%
Omoniyi salau Farms Kwara 8%
v. Customer’s strengths & weaknesses relative to competitors:
a. Strengths: Highly experienced management team.
b. Weakness: Inadequate working capital.
c. Customer’s rating in the industry: Medium Player.
vi. Business reputation:  Very Good  Good  Average  Bad.
vii. Observation on profitability/marketability of the goods: Transaction is profitable to
the bank and the Customer.
viii. Size of the labour force:
Male Female Skilled Unskilled
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Officer/professional staff 6 12 18 0
Labourers/casual workers 26 4 30 2
Supplier/Buyer Analysis
a. Supplier:
Availability of the items/raw material (tick):  Very Good  Good  Average  Poor
Market Location (tick):  Local Market  Outstation  Overseas  Poor
Number of Supplier (tick):  Very Good  Good  Few  Very few
Time (tick):  Always  Seasonal  Intermittent
Supplier Concentration possibility (tick) :  Nil  Low  High
*Comments on risk magnitude associated with supplier side:  Risk free  Acceptable risk  High risk.
b. Buyer:
Marketability of the goods/Products (tick):  Very Good  Good  Average  Poor
Market Location (tick) :  Local Market  Outstation  Overseas
Number of Buyer (tick) :  Very Good  Good  Few  Very few
Time (tick)  Always  Seasonal Intermittent
Buyer Concentration possibility (tick) :  Nil  Low  High
*Comments on risk magnitude associated with supplier side:  Risk Free  Acceptable risk  High risk.
Observation on profitability/marketability of the goods: The business is profitable with an
income of about.
HISTORICAL FINANCIAL ANALYSIS

AUDITORS: John Makay & Co.
FINANCIAL YEAR END: 31ST December, 2022.
AUDITORS: John Makay & Co.
STATUS: Unqualified.
Sales and Profitability

2021 2022
Sales (N’) 103,093,387 1,049,935,804
Change in Sales (%) - 918.43
SGA /Sales (%) 12.28 2.78
NPAT (N’000) 2,335,826 89,343,949
The farms directors have been in the business since late 2016 but it was until recently (9 th September
2021) they were able to register their company. The above data only captures the company’s record
since registration.
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Sales has been on an increasing pattern from Oct 2021 through Dec 2022 due to high patronage of the
company’s products. This is a good indication that the company has robust profit to cater for much of its
expenses and expansions.
Asset Management
2021 2022
WI (N’) 47,600,000 155,064,171
WI/Sales (%) 46.17 14.77
INVDOH (days) 198 35
APDOH (days) 45 32
ARDOH (days) - 14
The W.I is a significant indicator showing that the company has robust assets to run the business suc-
cessfully. The INVDOH shows an average of 35 days (8 days per quarter), this implies that the com-
pany’s inventory does not stay too long before been sold while all are within the industry average days.
The APDOH averages 32 days for a year (8 days per quarter), this implies the company pays its suppli -
ers/creditors within a maximum of 2 weeks, hence enjoys such spontaneous for the utilization of funds,
this is a good indication that the company pays all its obligations as at when due. The ARDOH averages
14 implying that the company sales on credit to its customers while they pay within quoted period,
which is within industry average days for receivables, and the company acceptable credit period.
Liquidity & Leverage

2021 2022
Working Capital (N’000) 58,952,493 143,321,761
Current Ratio (%) 8.07 3.64
Quick Ratio (%) 2.44 0.78
Leverage Ratio (%) 0.0 0.19
Current and Quick Ratios are well within the industry average. It is a good indication that the company
is liquid to meet all its short-term obligation instantaneously. The increase in working capital through
the reviewed breeding cycle is a sign of financial prudency of injecting and ploughing back its profit
funds. It also tells that the company can take care of the day-to-day running expenses and repurchase of
stocks. However, this are inventory based but still would not meet up the demand push, hence, the aug-
mentation request. The Leverage ratio is an indicative that the company has all its business financed by
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its equity with less than 7% as debt obligations. The company is much geared by its equity to the tune of
93%.
CZAR FARMS
CASH FLOW FORECAST FOR ONE YEAR (BI-MONTHLY - 60 DAYS CYCLE)
CASH INFLOWS 1st Cycle 2nd Cycle 3rd Cycle 4th Cycle 5th Cycle 6th Cycle TOTAL
=N= =N= =N= =N= =N= =N= =N=
SALES PROCEEDS 255,000,000 255,000,000 255,000,000 255,000,000 255,000,000 255,000,000 1,530,000,000
JAIZ BANK'S FACILITY INJECTION 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 600,000,000
TOTAL INFLOWS 355,000,000 355,000,000 355,000,000 355,000,000 355,000,000 355,000,000 2,130,000,000
CASH OUTFLOWS - OPERATIONS
INPUT & RAW-MATERIALS PURCHASES 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 1,200,000,000
ALL RISK INSURANCE 250,000 250,000 250,000 250,000 250,000 250,000 1,500,000
TRANSPORT EXPENSES 300,000 300,000 300,000 300,000 300,000 300,000 1,800,000
OTHER MISCELLANEOUS 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 6,000,000
SALARIES & WAGES 9,200,000 9,200,000 9,200,000 9,200,000 9,200,000 9,200,000 55,200,000
PARTNERS' REMUNERATION 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 12,000,000
BANK CHARGES 10,000 10,000 10,000 10,000 10,000 10,000 60,000
PROFESSIONAL FEES 75,000 75,000 75,000 75,000 75,000 75,000 450,000
BUSINESS TRAVELLINGS - LOCAL 800,000 800,000 800,000 800,000 800,000 800,000 4,800,000
GOVERNMENT FEES & LEVIES 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 9,000,000
JAIZ BANK FACILITY REPAYMENT (BI-MONTHLY) 105,500,000 105,500,000 105,500,000 105,500,000 105,500,000 105,500,000 633,000,000
TOTAL OVERHEAD AND ADMIN EXPENSES 320,635,000 320,635,000 320,635,000 320,635,000 320,635,000 320,635,000 1,923,810,000
NET INCREASE/DECREASE IN CASH FLOW 34,365,000 34,365,000 34,365,000 34,365,000 34,365,000 34,365,000 206,190,000
The Cash Flow is adequately financed by the company’s revenue and has a robust income to cater for its
obligations.
ASSUMPTIONS ON CASH FLOW;

1. The Cash flow is adequately financed by the company’s revenue and has a robust income to
cater for its obligations.
2. The cash flow projection is prepared in respect of N100,000,000 (One Hundred Million Naira
Only) facility accessible from Jaiz Bank Plc.
3. The facility proceeds are meant to augment the working capital of the company which is projec-
ted over a period of 12 months with 6-cycles, it will be financed at 24% mark-up rate per annum
with a cycle of 60-Days, revolving and renewable.
4. Expenses are reported at an inflated pricing, while revenues are sensitized at 20% to adequately
pay the facility.
5. Both investment amount and the profit element are payable and reported on the cycle of 60-
Days.
6. Because of ready market potentials, business will be able to sell its products at any point without
having to keep inventory for more than 30-Days.
CZAR FARMS LIMITED

Financial position of the company ended December 31st 2022.
Property & Assets Liabilities and Owner’s Equity
Page | 16
AAPP
a. Current Assets N ‘000 a. Current Liabilities N’000
1. Cash & Bank 2,751 1. Bank Borrowing
Balances a) Jaiz Bank 50,000
b) Others -
2. Inventory (finished 155,064 2. Directors loan -
goods and WIP)
3. Receivables & 39,757 3. Accounts & 576
Sundry Debtors Payable (Sundry
Creditors)
4. Advance Deposit 3,500 4. Others (Provision for 3,674
& Pre-payment Taxation)
5. Other Current - Sub Total (a) 54,251
Assets
Sub Total (a) 201,073 b. Long Term Liability -
b. Fixed Asset c. Other non-current liabilities -
:
6. Land, Building & other - B. Total Liabilities (a+b+c) 54,251
immovable assets
7. Plant & Machinery 135,397 d. Paid up capital 10,000
Owner’s Capital- Balance as per 180,539
last account
8. Motor Vehicles, - e. Reserves -
Furniture & fittings
9. Other Assets: f. Retained Earnings/Net profit 91,679
for the year transferred to
Balance Sheet
Sub Total (b) 135,397 C. Total Equity (d+e+f) 282,219
A. Grand Total (a+b) 336,470 Grand Total (a+b+c+d+e+f) 336,470
NET WORTH : A-B 282,219
(total assets – total
liabilities)
RISK ANALYSIS:
Continuity Risk
This is the risk that the company will cease to exist due to the lack of competent hands to continue to
manage it effectively.
Page | 17
AAPP
Mitigate: - Although the company’s directors are expatriate, there have been numerous long-term
investments made by the farm that makes it highly improbable for them to just pack up and leave i.e. the
farm on the 1st of January 2022 signed a 5 years lease on a plaza, this plaza is currently used as a
slaughter house and cold room. The current farm they use was leased for 5 years also, they also have a
farm land recently acquired and undergoing construction. All these amounting to more than a hundred
million investments not mentioning their business operations in Lagos. The Company has been in
existence for over 4 years and the management is in the hands of capable people. The company main
promoter Mr. Ali Mohamad Alkhadr, got married here in Nigeria and has two kids while his right-hand
man and veterinary doctor also an expatriate married a Nigerian woman (Yoruba to be precise). Also,
they have a team of well qualified, experienced and knowledgeable staff at the helm of affairs, and they
also have a solid succession plan in place to ensure the going concern of the company.
Management Risk
This is the risk associated with ineffective, destructive or underperforming management.
Mitigation – This is mitigated by the fact that although the directors of the farms are foreigners they are
well versed in agricultural business, the sole promoter is an accountant and very well present in the
business. The farm has employed knowledgeable staff, having two farm veterinary doctors, a farm
manager whose area of specialisation is animal husbandry an accountant who monitors the books and
finances.
Payment Risk
This is the risk that the company may not generate enough cash flow to cater for the payment.
Mitigation - This is mitigated by the fact that the company experiences high patronage from its custom-
ers as not only do they supply frozen chicken for consumers in Ilorin, they also have a slaughter house
in Lagos, where the company has off taker agreement with major supermarkets and restaurants like Ace
supermarket Lagos, The-place restaurant, thus it has huge transaction volumes. Customer breeds most of
the birds used in the slaughter house while in some cases where demand is higher than what’s available,
they buy the birds from other poultry farmers. Some payment by the buyers are made in advance, others
are upon pickup and supplies, the customer will execute irrevocable domiciliation of proceed with the
bank.
Counter-party Risk
This is the risk that the supplier will not be able to supply the goods as expected.
Page | 18
AAPP
Mitigation - This is mitigated by the fact that the bank on behalf of its customer issues a Bank Guaran-
tee IFO supplier to the release of goods to be stated on the Pro-forma Invoice, while payment guarantee
takes effect from the day consignment arrives at company’s office/store.
Demand Risk
This is the risk that the demand for the customer’s product will be low and as such the company may not
have enough sales to meet their repayment.
Mitigate: - This is mitigated by the fact that customer in most cases enjoys high patronage and hence
demand outweighs its supply.
Shariah Non-Compliance Risk

This is the risk that the transaction is not in conformity with Shariah due to its nature of two contracts.
Mitigation - The transaction is a Supplier Credit Based transaction in which the bank and its customer
are both trading a permissible good which is in conformity with Shariah under two different transactions
of Kafala for the Bank Guarantee and Murabaha for trade/sales finance, this are both model of
investment in Islamic Finance.
Environmental & Social risk
This risk is associated contamination and odour pollution of the poultry production
Mitigation –
The farm has two cleaning services responsible for the purification of the farm area and disposal of
waste product. This risk has been adequately mitigated which is how the farms slaughterhouse got the
NAFDAC number and approval (CZAR yummy chicken Reg No: A8-9346L).
Risk Grading (IRG)

Risk Category Weight Score Score Obtained Risk Grade
Financial Risk 50% 31
i. Leverage % 10 7 Good
ii. Liquidity % 10 8 Good
iii. Profitability % 10 8 Good
iv. Coverage % 10 8 Good
Business/Industry Risk 18% 18 15 Excellent
Management Risk 12% 12 10 Excellent
Security Risk 10% 10 8 Excellent
Relationship Risk 10% 10 6 Good
TOTAL 100% 100 70 Good
Page | 19
AAPP
ANY WRITE-OFFS, RESCHEDULING/ RESTRUCTURING AVAILED DURING THE LAST 3

YEARS:
BANK YEAR 1 YEAR 2 YEAR 3
WRITE- RESTRUCTUR WRITE- RESTRUCTUR WRITE- RESTRUCTUR
OFF E OFF E OFF E
NIL NIL NIL NIL NIL NIL
TOTAL NIL NIL NIL NIL NIL NIL
WAYS-OUT ANALYSIS
Primary Source: Proceed from the sales of life birds and frozen chicken.
Secondary source:
 Personal Guarantee and Notarised Statement of Net worth of the MD/CEO.
 All assets debenture of Czar farms floating assets situated at Km 22, Old Jebba Road, Oke-Oyi,
Ilorin East Local Government, Ilorin, Kwara State and Oil plaza Ita-alamu opposite conoil filling
statation, belonging to Czar farms ltd, valued at OMV of N96M and FSV of N78M by Gibiya &
Co.
 Tripartite legal mortgage on Third party landed property belonging to Kahm integrated farms ltd
situated at Km 22 Old Jebba Road, Oke Oyi, Kwara State with N287, 600,000 OMV and
192,700,000 FSV respectively via collateral sharing agreement supported with Corporate
Guarantee from Kham integrated farms (already in place).
ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT SCREENING FORM

Name of Client CZAR FARMS LIMITED
Client Status (New, Existing) EXISTING
Investment Sector AGRICULTURE
Relationship Officer ABDULSALAM ZAINAB
Transaction Description A Murabaha Working Capital finance
SECTION ONE
Does the transaction involve any of the activities featured in the Yes NO NOT
exclusion list (If yes to any of the criteria below, transaction shall not SURE
be treated).
1 Production or activities involving harmful or exploitative forms of 
forced labour or harmful child labour, or practices that are
discriminatory or prevents employees from freely exercising their right
to association and collective bargaining.
2 Production or activities involving harmful or exploitative forms of 
Page | 20
AAPP
forced labour, Production or trade in any product or activity deemed
illegal under Nigerian laws or regulations or ratified international
conventions and agreements.
3 Production or trade in weapons and munitions. 
4 Production or trade in tobacco, cannabis and other intoxicants 
5 Gambling, casinos, brothel and other similar activities or products 

derived thereof
6 Production or trade in radioactive materials 
7 Trade in endangered species of wildlife or wildlife products regulated 

under CITES
8 Production or trade in or use of unbounded asbestos fibers 
9 Production or trade in wood or other forestry products from forests that 

lack sustainable management.
10 Plantation projects that would require the removal of existing non- 
degraded natural forest
11 Production or trade in alcohol and related products 
12 Production, trade, storage, or transport of significant volumes of 

hazardous chemicals, or commercial scale usage of hazardous
chemicals, except for non-hazardous waste destined for recycling.
13 Production or trade in pharmaceuticals subject to international phase- 
out or bans
14 Trans boundary trade in waste or waste products, and persistent 
organic pollutants (POPs).
15 Production or trade in pesticides/herbicides subject to international 
phase-out or bans
16 Production or trade in ozone depleting substances subject to 
international phase-out
17 Drift net fishing in the marine environment using nets in excess of 2.5 
km in length
18 Production or trade in swine and such other products that are 
inconsistent with our banking model.
19 Production or activities that impinge on the lands owned, or claimed 
under adjudication, by indigenous peoples, without full documented
consent of such peoples
SECTION TWO
(If yes to all, no further E&S screening required Proceed to signature block. If no to any at any of
questions below proceed to SECTION THREE)
1 Financing involves activities with minimal or no environmental or 
social impacts e.g. Education or health projects that does not involve
construction, technical assistance, institutional development, human
resource projects
2 Requesting firm is involved in activities with minimal or no 
environmental or social risk
SECTION THREE
Page | 21
AAPP
1 Location : Is the business activity conducted in sensitive country (see
sensitive country list)
2 Labour and working conditions : Is there any evidence (in last 2 years) 
of employee or labour violations e.g child labour, forced labour,
retrenchment of significant number of employees
3 Pollution Prevention and Abatement: Financing activity result to 
increased risk of pollution without mitigation e.g significant emissions
affecting ambient conditions, use of hazardous materials , significant
waste generation, use of pesticides without management plans
4 Community health , safety and security: Financing activity results to 
Increased risk to local communities e.g exposure to communicable
diseases, use or transport of hazardous materials , use of security
personnel without adhering to human rights standards
5 Land Acquisitions and involuntary resettlement: Large scale physical 
resettlement of people or economic displacement caused by loss of
assets or access to livelihood
6 Biodiversity and natural resources: significant disruption to the 
biodiversity of the environment, adverse effect on cultural heritage
sites
TRANSACTION CATEGORIZATION
CATEGORY A/B (If yes or not sure to any item in Nil
section 3) Further E&S Due Diligence required
CATEGORY C (If yes to all items in section 2 & No to Nil
all items Section 3) No E&S DD Required.
Comments The transaction is profitable to the bank.
Completed By Abdulsalam Zainab
Appraised By Fatai Bello Abiodun
INVESTMENT CONSIDERATIONS
 The promoter of the company, Mr. Ali Mohamad Alkhadr is highly experienced in various
field of businesses but he majors specifically in breeding broilers. with over 4 years’
experience in this line of business.
 There is high chance of winning over vendors and other expatriate-peer business partners to
Jaiz Bank.
 The facility is profitable to the bank as facility’s mark-up is at 24% p.a. amounting to
N3,273,972.6 per cycle and 23,671,232 income to the bank for the year, if amount is fully
drawn in every of the 6 cycles.
 It stimulates winning over of other Multi-Million Naira Companies trading within same
environ, while cementing the banking-customer relationship.
RECOMMENDATION
Page | 22
AAPP
Based on the above, we recommend Managements approval for Enhancement of Murabaha working
capital line of N50,000,000 to N100,000,000 IFO Czar farms limited for a tenor of 12 months to finance
the purchase of Day old chicken and feed as a way of augmenting the company’s working capital, at a
mark-up rate of 24% p.a. Which is renewable annually.
APPROVALS
COMMENTS/RECOMENDATION SIGNATURE/DATE
Relationship Officer Kindly approve as requested
Abdulsalam Zainab
Ag.Relationship Manager Recommended for Approval
Fatai bello Abiodun
Credit Admin officer
Mubarak Danraka
Head,Credit Admin
Abdulrasheed basheer
Regional Manager
Taofeeq Kayode Mustapha
ED. South
Abdulfattah Amoo
Page | 23

CZAR FARMS IAM Enhancement

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CZAR FARMS IAM Enhancement

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Jaiz Bank Plc RC 476637

INVESTMENT APPRAISAL MEMO

Date: 24th November, 2023

Total Direct Nil 50,000 100,000 12 Months

COMPANY PROFILE / MANAGEMENT ASSESSMENT

Captioned below are their brief history and their experiences:

1. ALKHADR ALI MOHAMAD is an accomplished Accountant by profession with Lebanese

2. MAHMOON ELAGROUDI GAMAAN is the farm manager. He is a Veterinary Doctor who

BACKGROUND TO THE REQUEST

2. Chicken and Co Osun State- 10 tons of chicken Bi-weekly.

3. Aroma palace - 5 tons of chicken monthly.

4. Brixton Superstores - They offtake as much as the customer has.

5. Kebab house– 3 tons per week

The facility is fully secured with:

ASSET CONVERSION CYCLE:

Analysis of stock to be purchased:

1. Total Cost of Stock Purchased:

TRANSACTION DYNAMICS FOR MURABAHA LINE FACILITY

CONDITIONS PRECEDENT TO DRAW DOWN

1. Facility request letter.

5. Duly Executed Murabaha Agreement.

6. Duly Executed Murabaha Promissory Note.

7. Duly executed Agency Agreement.

POST DISBURSEMENT DOCUMENTATION – MURABAH LINE

BANKING RELATIONSHIP - JAIZ BANK

Months Debit N Credit N

STATEMENT OF ACCOUNT ANALYSIS; -

Male Female Skilled Unskilled

HISTORICAL FINANCIAL ANALYSIS

Sales and Profitability

Change in Sales (%) - 918.43

SGA /Sales (%) 12.28 2.78

NPAT (N’000) 2,335,826 89,343,949

WI/Sales (%) 46.17 14.77

INVDOH (days) 198 35

Liquidity & Leverage

Current Ratio (%) 8.07 3.64

Quick Ratio (%) 2.44 0.78

Leverage Ratio (%) 0.0 0.19

ASSUMPTIONS ON CASH FLOW;

CZAR FARMS LIMITED

This is the risk associated with ineffective, destructive or underperforming management.

Shariah Non-Compliance Risk

Environmental & Social risk

Risk Grading (IRG)

ANY WRITE-OFFS, RESCHEDULING/ RESTRUCTURING AVAILED DURING THE LAST 3

ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT SCREENING FORM

4 Production or trade in tobacco, cannabis and other intoxicants 

5 Gambling, casinos, brothel and other similar activities or products 

7 Trade in endangered species of wildlife or wildlife products regulated 

9 Production or trade in wood or other forestry products from forests that 

12 Production, trade, storage, or transport of significant volumes of 

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