NPF MICROFINANCE BANK : AUDITED FINANCIAL STATEMENT FOR 2022

NPF MICROFINANCE BANK PLC

RC. 220824

ANNUAL ACCOUNTS 31 DECEMBER 2022

NPF Microfinance Bank PLC

Annual Report - 31 December 2022

Contents	Page
Corporate information	1
Directors' report	2
Corporate governance report	8
Statement of directors' responsibilities	15
Statement of corporate responsibility	16
Report of the audit committee	17
Independent auditor's report	18
Statement of financial position	23
Statement of profit or loss and other comprehensive income	24
Statement of changes in equity	25
Statement of cash flows	26
Notes to the financial statements	27
Other national disclosures:
Value added statement	85
Financial summary	86

NPF Microfinance Bank PLC

Annual Report - 31 December 2022

Corporate Information

Directors:	Mr. Azubuko Joel Udah (Esq.)	Chairman
	Mr. Akinwunmi M. Lawal	Managing Director
	Mr. John Kwabe Tizhe	Executive Director
	Mr. Francis C. Nelson	Executive Director
	Mr. Usman Isa Baba	Non-Executive Director
	Mr. Bello Makwashi	Non-Executive Director
	Mr. Uzairu Abdullahi	Non-Executive Director
	Mr. Abdulrahman Satumari	Non-Executive (Independent) Director
	Mr. Salihu Argungu Hashimu	Non-Executive Director
	Mrs. Rakiya Edota Shehu	Non-Executive (Independent) Director
	Mr. Said Umar Fagge *	Non-Executive Director
	*Appointed on 26 January 2023
Company Secretary:	Mrs. Osaro J. Idemudia
	Aliyu Atta House
	1, Ikoyi Road, Obalende
	Lagos
Registered Office:	Aliyu Atta House
	1, Ikoyi Road, Obalende
	Lagos
Independent Auditor:	KPMG Professional Services
	KPMG Tower,
	Bishop Aboyade Cole Street,
	Victoria Island,
	Lagos
Major Bankers:	United Bank for Africa Plc
	57 Marina, Lagos Island,
	Lagos, Nigeria.
	Zenith Bank Plc
	Plot 84, Ajose Adeogun Street,
	Victoria Island,
	Lagos, Nigeria.
	Sterling Bank Plc
	20 Marina Road,
	Lagos Island,
	Lagos.
	First Bank of Nigeria Plc
	Samuel Asabia House
	35 Marina
	Lagos, Nigeria.
Registrars:	CardinalStone Registrars Limited
	335/337, Herbert Macaulay Way
	Yaba, Lagos
Tax Identification Number:	00122558-0001

1

NPF Microfinance Bank PLC

Annual Report - 31 December 2022

DIRECTORS' REPORT

The Directors are pleased to present to members their report on the affairs of NPF Microfinance Bank Plc, together with the Bank's audited financial statements and the Auditor's report for the financial year ended 31 December 2022.

1. LEGAL FORM AND PRINCIPAL ACTIVITIES

The Bank was incorporated in Nigeria as a Private Limited Liability Company on 19 May 1993 under the provisions of the Companies and Allied Matters Act (CAMA) with RC No. 220824. It obtained a provisional license as a Community Bank from the Central Bank of Nigeria on 12 July 1993 with License No. FC 00200 and commenced operations on 20 August 1993. It obtained a final license from the Central Bank of Nigeria on 24 January 2002. It was registered as a Public Limited Company on 13 July 2006. The Bank was given an approval-in-principle to operate as a Microfinance Bank on 10 May 2007 and obtained the final license on 4 December 2007. The shares of the Bank were listed on the Nigerian Stock Exchange on 1 December 2010.

The principal activity of the Bank is the provision of banking and other permissible financial services to poor and low income households and micro enterprises with emphasis on members of the Nigerian Police Community. Such services include retail banking, loans and advances and other allied services.

The Bank currently has 49 branches nationwide from which it operates.

1. OPERATING RESULTS

Highlights of the Bank's operating results for the year ended 31 December 2022 are as follows:

In thousands of naira	31-Dec-2022	31-Dec-2021
Profit before tax	1,324,166	1,030,575
Income tax expense	(441,998)	(323,082)
Profit after tax	882,168	707,493
Total comprehensive income
883,816	704,235
Basic and diluted earnings per share (kobo)	15	31

1. DIVIDENDS

In accordance to S.426 of the Companies and Allied Matters Act (2020), the Board of Directors, subsequent to the reporting date, recommended the payment of a dividend of 10 kobo (31 December 2021: 10 kobo) per share on the issued shares of 5,992,954,557 (31 December 2021: 5,393,659,101) ordinary shares, amounting to ₦599million (31 December 2021: ₦539million). The dividend proposed is subject to the approval of shareholders at the next Annual General Meeting (AGM). Withholding tax will be deducted at the point of payment.

1. DIRECTORS

The Directors who served during the year under review are listed below:-

NAME	DESIGNATION	DATE OF APPOINTMENT
Mr. Azubuko Joel Udah (Esq.)	Chairman	23	July 2015
Mr. Adamu Usman*	Non-Executive Director	25	August 2021
Mr. Bello Makwashi**	Non-Executive Director	28	April 2022
Mr. Jibrin G. Gane	Non-Executive Director	26	October 2017
Mr. Usman Isa Baba	Non-Executive Director	28	May 2019
Mr. Abdulrahman Satumari	Non-Executive (Independent) Director	28	June 2018
Mr. Salihu Argungu Hashimu	Non-Executive Director	28	June 2018
Mrs. Rakiya Edota Shehu	Non-Executive (Independent) Director	28	June 2018
Mr. Uzairu Abdullahi	Non-Executive Director	01	December 2021
Mr. Akinwunmi M. Lawal	Managing Director	26	June 2014
Mr. John K. Tizhe	Executive Director, Operations	02	January 2020
Mr. Francis C. Nelson	Executive Director, Finance & Administration	01	August 2017

*Exited the Board on 17 March 2022

**Appointed to replace Mr. Adamu Usman following his retirement from the Nigeria Police Force

Subsequent to the year end, on 26 January 2023, Mr Said Umar Fagge was appointed as a Director in the Bank.

2

NPF Microfinance Bank PLC

Annual Report - 31 December 2022

DIRECTOR'S REPORT

1. DIRECTORS' INTEREST IN SHARES

The interest of Directors who served on the Board in the issued share capital of the Bank as recorded in the Register of members during the financial year under review and/or as notified by the Directors for the purposes of Sections 301 of the Companies and Allied Matters Act (CAMA), 2020 and the listing requirements of the Nigerian Exchange Limited are as follows:

	31 December 2022	31 December 2021
NAME OF DIRECTOR	DIRECT	INDIRECT	DIRECT	INDIRECT
(units)	(units)	(units)	(units)
Mr. Azubuko Joel Udah (Esq.)	4,444,444	-	4,000,000	-
Mr. Abdulrahman Satumari	-	-	-	-
Mr. Usman Isa Baba	5,096,178	-	2,162,000	-
Mr. Salihu Argungu Hashimu	528,004	-	-	-
Mrs. Rakiya Edota Shehu	-	-	-	-
Mr. Bello Makwashi *	-	4,035,879,917	-	-
Mr. Jibrin. G. Gane *	2,352,000	"	108,000	1,480,718,606
Mr. Uzairu Abdullahi**	-	936,149,939	-	-
Mr. Akinwunmi M. Lawal	5,637,250	-	5,025,861	-
Mr. John K. Tizhe	1,917,487	-	707,749	-
Mr. Francis C. Nelson	2,663,268	-	1,310,796	-

*Mr. Bello Makwashi and Mr. Jibrin G. Gane represent the interest of the Nigerian Police Cooperative Society Limited, which owns 4,035,879,917 (31 December 2021: 1,480,718,606) ordinary shares of 50k each in the issued share capital of the Bank for the year under review.

**Mr. Uzairu Abdullahi represent the interest of the Ngeria Police Welfare Insurance Cooperative Society Limited which owns 936,149,939 (31 December 2021: 234,305,460 ordinary shares of 50k each in the issued share capital of the Bank for the year under review.

Save as disclosed above, none of the directors notified the Bank of any disclosable interest in the Bank's share capital as at 31 December 2022. The Directors' interest in shares remained the same as at the date the 2022 audited financial statements was approved by the Board of Directors.

1. DIRECTORS' INTEREST IN CONTRACTS

None of the Directors notified the Bank for the purpose of Section 303 of the Companies and Allied Matters Act (CAMA), 2020 of any direct or indirect interest in any contract or proposed contract with the Bank in the year 2022.

1. RETIREMENT OF DIRECTORS

In accordance with S.285 (1) & (2) of the Companies and Allied Matters Act (CAMA), 2020 that one third of Directors shall retire from office at the Annual General Meeting, Mr. Abdulrahman Satumari, Mrs. Rakiya Edota Shehu and Mr. Argungu S. Hashimu retire by rotation and being eligible submit themselves for re-election. The profiles of all Directors, including the Directors to be presented for election/re-election are contained in the Annual Report.

1. CHANGES TO THE BOARD

The Board remains adequately resourced and well structured to provide the requisite direction for management and general oversight for the Bank.

The Board of Directors at its meeting held on 26 January 2023 appointed Mr. Said Umar G. Fagge as a Non-Executive Director to fill the vacany created by the redeployment of Mr. Jibrin Garba Gane from the Police Cooperative Multipurpose Society Ltd.

The appointment of Mr. Fagge will be presented for members' approval at the annual general meeting pursuant to Section 274 (2) of the Companies and Allied Matters Act (CAMA) 2020.

1. SUBSTANTIAL INTEREST IN SHARES

According to the Register of Members as at 31 December 2022, the following shareholders of the Bank held more than 5% of the issued ordinary share capital of the Company:

	31 December 2022	31 December 2021
Shareholder	No. of Shares	Shareholding	No. of Shares	Shareholding
(%)	(%)
Nigeria Police Co-operative Society	4,035,879,917	67.34	1,480,718,606	64.75
Limited
NPF Welfare Insurance Scheme	936,149,939	15.62	234,305,460	10.25

In line with the Nigeria Exchange Limited (NGX) rules on the requirement for all listed companies to maintain a minimum free float of 20%, the issued Share capital of the Bank in free float is 16.66% as at 31 December 2022 (31 December 2021: 25%) . The NGX has granted the Bank a one (1) year extension to ensure certain units of its shares are released to the public in order to bring the free float to 20%. The Bank is working closely with her major shareholders to ensure compliance before expiration of the extension on 1 December 2023.

3