AFRICA PRUDENTIAL : QUARTER 5 - FINANCIAL STATEMENT FOR 2023

AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

CORPORATE INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2023

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

STATEMENT OF DIRECTORS' RESPONSIBILITIES

In preparing the financial statements, the Directors are responsible for:

• properly selecting and applying accounting policies;
• presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• providing additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance.
• making an assessment of the Company's ability to continue as a going concern.
  The Directors are responsible for:
• • designing, implementing and maintaining an effective and sound system of internal controls throughout the Company;
  • maintaining adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable

accuracy at any time the financial position of the Company, and which enable them to ensure that the financial statements of the Company comply with IFRS;

• maintaining statutory accounting records in compliance with the legislation of Nigeria and IFRS;
• taking such steps as are reasonably available to them to safeguard the assets of the Company; and
• preventing and detecting fraud and other irregularities.

Going concern:

The financial statements have been prepared on a going concern basis, which assumes that the entity will be able to meet its financial obligations as at when they fall due. There are no significant financial obligations that will impact on the entity's resources which will affect the going concern of the entity.

The financial statements of the Company for the period ended 31 December 2023 have been authorised for issue and were approved by the Board of Directors on 20 February 2024.

On behalf of the Directors of the Company

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors are pleased to present their report on the affairs of the Company, together with the Audited Financial Statements and auditor's report for the year ended December 31, 2023.

LEGAL FORM AND PRINCIPAL ACTIVITIES

Africa Prudential Plc was originally incorporated as UBA Registrars Ltd on March 23, 2006. The Company subsequently changed its name to Africa Prudential Registrars Plc on August 10, 2011, and was listed on the Nigerian Exchange (NGX) in January 2013. To expand its business portfolio, the Company acquired UAC Registrars Ltd in June 2013.

To enhance its market competitiveness and diversified business interests, the Company changed its name to Africa Prudential Plc, following a special resolution passed by the Members in General Meeting on March 28, 2017.

Africa Prudential Plc primarily carries on the business of registrar and investor relation service in accordance with its Memorandum and Articles of Association. As part of its business diversification strategy, it has expanded its business activities to the provision of digital solutions for businesses. Its flagship digital solutions product known as EasyCoop is a unique software, which is aimed at aiding the administration of Cooperative Societies in Nigeria and other digital business solutions.

The Company's competency in digital technology covers advanced Agile and other Software Development Life Circle (SDLC) Methodologies, Biometrics management, Cyber Security, Cloud Computing, Design thinking / Product Development Labs, Blockchain technology, among others. The Company deploys Platform as a Service (PaaS) and Software as a Service (SaaS) which are scalable for various sizes of organizations.

RESULTS FOR THE YEAR

The Company's results for the year are set out on pages 33 and 34. The profit after tax for the year ended 31 December 2023 in the sum of ₦0.963 billion (2022: ₦1.49 billion) has been transferred to retained earnings.

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

DIVIDENDS

The Directors have recommended a full year dividend of 45 kobo per share (2022: 50 kobo per share) based on the number of ordinary shares issued and paid as at 31 December 2023.

DIRECTORS

The directors who held office during the year and to the date of this report were:

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023- Continued

Record of Directors' Attendance at Meetings

Pursuant to Section 284(2) of the Companies and Allied Matters Act, 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.

Board Composition

As of 31 December, 2023, the Company had eight (8) Directors all of whom held office in the year under review. Their biographies are contained in the Annual Report and are incorporated into this Report by reference. The appointment, removal or re-appointment of Directors is governed by the Company's Articles of Association, the Companies and Allied Matters Act, 2020 as well as relevant Board and governance policies. Also, these documents set out the rights and obligations of the Directors.

Directors Interests in Contracts

None of the Directors has notified the Company, for the purpose of Section 303 of the Companies and Allied Matters Act, 2020, of any declarable interest in Contracts in which the Company is involved.

Directors and their Interests in the Shares of the Company

Directors' interests in the issued share capital of the Company as recorded in the Register of Members and/or as notified by the Directors in compliance with Sections 301 and 302 of the Companies and Allied Matters Act, 2020 and the Listing Requirements of the Nigerian Exchange were as follows:

The details of indirect shareholding of Directors in the issued share capital of the Company is as below:

Alternate Directorship

There was no alternate directorship during the year under review.

SHAREHOLDING

The issued and fully paid up share capital of the Company is N1,000,000,000 (One Billion Naira) divided into 2,000,000,000 ordinary shares of N0.50k

each.

In terms of significant shareholding (5% and above), the Register shows that International Equity Capital Limited is the largest shareholder with 519,000,000 units of shares. The table below is instructive.

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023- Continued

ANALYSIS OF SHAREHOLDINGS

The details of shareholding of the Company as at 31 December 2023 is as stated below;

SHAREHOLDING RANGE ANALYSIS AS AT December 31, 2023

CORPORATE GOVERNANCE

The Board of Directors of the Company is cognizant of its responsibilities under the Code of Corporate Governance issued by the Securities and Exchange Commission, the Code of Corporate Governance issued by the Financial Reporting Council of Nigeria and the Nigerian Code of Corporate Governance in the administration of the Company and is ensuring that the Company consistently complies with the Codes.

In furtherance of the Board's commitment to strong Corporate Governance, the Company successfully concluded the process and was awarded a corporate governance rating by the Nigerian Exchange (NGX) in January 2018 under the Corporate Governance Rating System (CGRS) in partnership with the Convention on Business Integrity (CBI). Consequently, the Company has satisfied one of the criteria required to be listed on the Premium Board of the NGX.

BOARD EVALUATION

To ensure effectiveness of the Board and the Directors, a Board evaluation was undertaken covering the period of the financial year under review by an independent Corporate Governance consulting firm. The performance of the Board, Board Committees and individual directors were adjudged satisfactory and necessary feedback was communicated to individual directors arising from the exercise.

COMPLAINT MANAGEMENT FRAMEWORK

The Company has a Complaint Management Policy and Framework in place in accordance with the SEC directives on resolution of complaints. This policy has also been uploaded on the Company's website for public access.

INSIDER TRADING AND PRICE SENSITIVE INFORMATION

The Company has in place a Securities Trading Policy which prohibits the directors and employees from trading on the Company's shares during periods they are in possession of price sensitive information. The Company was in compliance with the Securities Trading Policy during the year under review.

WHISTLE BLOWING POLICY

The Company has a Whistle Blowing Policy in place. This was extensively reviewed by the Board and it covers among other things, the procedures for the receipt, retention and treatment of information received from whistle blowers.

The whistle-blowing process involves steps that should be taken by the whistleblower in reporting a reportable misconduct, and steps required for the investigation of the reported misconduct. The Company has a procedure that encourages staff and other relevant stakeholders to report perceived unethical or illegal conduct of employees, management, directors and other stakeholders to appropriate authorities in a confidential manner without any fear of harassment, intimidation, victimization or reprisal of anyone for raising concern(s) under this policy.

The Board of Directors and Management is committed towards promoting a culture of openness, accountability and integrity, and will not tolerate any harassment, victimization or discrimination of the whistle blower provided such disclosure is made in good faith with reasonable belief that what is being reported is fact. The company has dedicated email address and telephone numbers through which staff are encouraged to raise any concern or unethical conduct.

ACQUISITION OF OWN SHARES

The Company did not purchase any of its own shares during the year.

HUMAN RESOURCES

The Company makes it a paramount objective to hire individuals based on standards of merit and competence. Also, the Company upholds a sound culture of providing continued development and training for its Staff to address knowledge gaps and provide new skill sets along the Company's lines of responsibilities. Annually, trainings are identified for staff and followed through in accordance with an approved training plan meant to ensure that this objective is achieved. The Company encourages easy interaction between Management and other staff of the Company so as to foster an atmosphere of warmth at work and also to kindle the necessary synergy required for the Company's success.

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023- Continued

EMPLOYMENT OF DISABLED PERSONS

The Company operates a non-discriminatory policy on recruitment. Applications by disabled persons are always fully considered bearing in mind the respective aptitudes and abilities of the applicants concerned.

During the year under review, there was no disabled person in the Company's employment.

HEALTH, SAFETY AND WELFARE OF EMPLOYEES

The Company approaches Health, Safety and Welfare issues affecting Staff with every sense of seriousness and therefore maintains an insurance health care scheme with Avon, a Health Maintenance Organization (HMO), licensed by the National Health Insurance Scheme (NHIS) to provide health insurance to employees in the private sector. Through this arrangement, each employee, their respective spouses, and dependents below the age of eighteen (18) years are entitled to medical treatments in well-equipped, qualitative network of hospitals under the scheme.

Safety regulations are in place within the Company's premises and employees are regularly informed of the regulations.

There are contributory retirement benefit schemes for both management and employees of the Company in conformity with the Pensions Reform Act 2014.

EMPLOYEES' INVOLVEMENT AND TRAINING

The Company has an effective employer/employee communication system aimed at enhancing industrial harmony. Employees are kept fully informed as much as practicable of the Company's activities which particularly affect them as employees and are also encouraged to communicate any information useful to management through dedicated channels of communication.

Regular training programs are usually arranged for employees locally and where applicable, overseas for the improvement of skills and enhancement of career prospects.

DONATIONS

Africa Prudential Plc has always and continues to support the work and efforts of the Tony Elumelu Foundation. During the year under review, Africa Prudential donated N300,000.00 as part of social responsibility and utilized the funds towards the Lagos State Security Trust Fund (LSSTF) 16th annual town hall meeting held on 24th November,2022 at Civic Centre Ozumba Mabdiwe Avenue, Victoria Island, Lagos.

EVENTS AFTER REPORTING DATE

The Company discontinued the offering of Digital Products solutions to Clients from January 2024. This is to support its new year strategy on focusing on its core mandate of Registrar business and Investors Relations.

Also, on 30 January 2024, the Board of Africa Prudential Plc announced the appointment of Mrs. Catherine Uzoamaka Nwosu as the incoming Managing Director and Chief Executive Officer to replace Mr. Obong Idiong whose resignation is effective from 29 February 2024. Mrs. Catherine Uzoamaka Nwosu apointment will become effective from 1 March 2024.

Aside the above, there were no events subsequent to the financial position date which require adjustment to or disclosures in the financial statements.

PROPERTY, PLANT AND EQUIPMENT

In the opinion of the Directors, the market value of the Company's property, plant and equipment is not less than as shown in the financial statements. Information relating to changes in property, plant & equipment is disclosed in note 19 to the financial statements.

FORMAT

The financial statements of Africa Prudential Plc have been prepared in accordance with the reporting and presentation requirements of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), Financial Reporting Council of Nigeria (Amendment) Act, 2023 and the provisions of the Companies and Allied Matters Act, 2020. The Directors consider that the format adopted is the most suitable for the Company.

AUDITORS

The Auditors, Messrs. Ernst & Young having indicated their willingness, will continue in office as the Company's Auditors in accordance with Section 401 of the Companies and Allied Matters Act, 2020.

By order of the Board

Joseph Jibunoh

FRC/2018/NBA/00000017719

Company Secretary

220B Ikorodu Road, Palmgrove

Lagos

Date: 20 February 2024

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

MANAGEMENT DISCUSSION AND ANALYSIS

This report represents Management Discussion and Analysis in respect of the audited financial statements of Africa Prudential Plc for the year ended 31 December 2023. This should be read in conjunction with the full audited Financial Statements of thhe Company.

Africa Prudential Plc is a foremost Registrar business registered and incorporated in Nigeria. It was originally incorporated as UBA Registrars Ltd on March 23, 2006. The Company subsequently changed its name to Africa Prudential Registrars Plc on August 10, 2011, and was listed on the Nigerian Exchange (NGX) in January 2013. Africa Prudential Plc primarily carries on the business of registrar and investor relation services in accordance with its Memorandum and Articles of Association. As part of its business diversification strategy, it has expanded its business activities to the provision of digital solutions to Clients' businesses. Its flagship digital solutions product known as EasyCoop is a unique software, which is aimed at aiding the administration of Cooperative Societies

Operating Environment

The global economy continued to witness slow growth and weak aggregate output in 2023. International and domestic trades were impacted by the political tension in Russia and Ukarine, and later the Israeli conflict in the middle east. Consequently, while Europe, America, and Asia experienced unstable macro economic environment, Africa was not insulated. The continued imposition of travel restrictions across the globe pushed the trade barriers further to unpleasant level and together with the associated uncertainty weighed on business sentiment. Generally, there were macroeconomic stress and tighter financial conditions, and geopolitical tensions

Nigeria economy is yet to attain full swing of pre-covid era performance. While oil production dropped, the international oil price oscilated. The effort to lower inflation rate to a single digit faced structural and macroeconomic constraints, especially the removal of fuel subsidy which resulted in rising petroleum product prices, food prices, etc. As at the last quarter of 2023, the average inflation rate hovers around 29.8%. Foreign exchange rate spiralled to unimaginable level despite the series of monetary policies intervention and this has continued to affect major industrial production and distributive trade etc. All these impacted individual and local corporate economic activities.

The Registrar business in Nigeria did not experience significant growth in Revenue because of moderate remunerations to Client shareholders arising from their weak corporate business performance. Apart from the fact that the Registrar business sub-sector is coasting at a relatively matured and steady state, the few corporate business actions available in the market witnessed strict price competition and innovative schemes. Our strength and focus is to continue to lead the market and onboard new businesses via innovatiove service solutions driven by technology.

Operating Result

During the 2023 operating period, the Company demostrated strong resilience to macroeconomic uncertainty in the environment. We closed the year ended 31 December 2023 with gross revenue of N3.96 billion compared to N4.13 billion in 2022. Similarly profit before tax achieved was N1.44 billion (2022: N2.17 billion) The operating performance was largely impacted by delay conversion of digital business activities during the year. The Company remains focussed on delivery its core registrar mandates to clients.

The Company recorded significant increase of 39% in investment income and other income from ₦2.2 billion income to ₦3.1 billion in 2023. The increase is largely attributable to interest income on fixed income earning assets as a result of improvement in market yields. The Company remained committed to its strategic policy on safety of Shareholders' funds as well as assets and liabilities

matching for optimal portfolio management.

Total assets of the Company increased by 19% from ₦19.3 billion to close at ₦22.98 billion as at 31 December 2023. This was largely driven by N20 billion (2022: N17bn) in assets under management. The net effect in equity was positive from ₦9.3 billion to ₦9.7 billion in 2023 representing 4% growth in equity after the payment of 2022 full year dividend and provision for taxes.

Outlook

The Board members possess strong knowledge of the Company's business and usually participate actively at Board meetings. In the years ahead, the Company will focus on its strategic and core registrar mandate plan. The plan is to achieve improved market shares and further penetration to onboard new clients as well as improve on service offerings.

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AFRICA PRUDENTIAL PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS

STATEMENT OF CORPORATE RESPONSIBILITY FOR THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

In line with the provision of section 405 of CAMA 2020, we the undersigned hereby certify the following with regards to the audited annual financial statements for the year ended 31 December 2023 that:

1. We have reviewed the audited financial statements and to the best of our knowledge:

i.the audited financial statements do not contain any untrue statement of material facts or omit to state a material fact, which would make the statements misleading, in the light of the circumstances under which such statement was made, and

1. the audited financial statements and all other financial information included in the statements fairly present, in all material respects, the financial condition and results of operation of the Company as of and for, the periods covered by the audited financial statements;

2.We are responsible for establishing and maintaining internal controls and has designed such internal controls to ensure that material information relating to the Company is made known to the officer by other officers of the companies, particularly during the period in which the audited financial statement report is being prepared;

1. We have evaluated the effectiveness of the Company's internal controls within 90 days before the date of audited financial statements, and certify that the Company's internal controls are effective as of that date;
2. We have disclosed to the Company's auditors and audit committee -

i. all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarise and report financial data, and has identified for the Company's auditors any material weaknesses in internal controls, and

1. any fraud whether or not, material that involves management or other employees who have a significant role in the
   Company's internal control.

5.There were no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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