“We are delighted with our growth over the last 10 years ‘and we believe the Group is well positioned to take advantage of eure ea) sEVOLUTIGN Nand Lael odes omyContents Inthis report Page Overview About The Company 6 Our Vision & Mission 7 Our Core Values 7 Notice of Annual General Meeting 8 Business Review Corporate Profile 11 Chairman's Statement 13 GMD/CEO's Statement 18 1-25 Governance Board of Directors 27 Management Team 33 Sustainability & Corporate Social Responsibility Report 38 Directors’ Report 43 Statement by the External Consultants (on the Board Evaluation $1 Statement of Directors’ Responsibilities SZ Report of Audit Committee $3 Independent Auditors’ Report $4 Report on the Audit of the Financial Statements S6 ar-57 Group Financial Statements Financial Statements: Consolidated and Separate Statement of Financial Position 60 Consolidated and Separate Statement ‘of Comprehensive Income 61 Consolidated and Separate Statement of ‘Changes in Equity 62 Consolidated and Separate Statement of Cash Flows 64 Notes to the Consolidated and Separate Financial Statements 65 60-116 (Other National Disclosure: Consolidated and Separate Statement of Value Added 119 Five Year Financial Summary 120 Articles 125 Proxy Form Dematerialization Form for Migration E-Dividend Mandate Activation Form E-Share Registration Application Form E-Service/Data Update Form 119 - 132Overview In this section ‘About the Company 6 Our Mission 7 ‘Our Core Values 7 Notice of Annual General Meeting 8 6-9 VFDGROUP Anna Rapor counts 2018, 5About The Company 2009 2013 FD Group Is a proprietary investment company that focuses on building positive and socially conscious ‘ecosystems by aggregating potentially viable business with the objective of creating innovative products and solutions ‘that are accessible to the everyday Nigerian ctizen and ‘entrepreneur. ‘FD Group was founded by skilled professionals with diverse experience, qualifications and backgrounds. As a ‘tearn, we identified the gap between bath Individuals and small businesses and ther financial services experiencesand setouttobridgethedivide. ‘We discovered that despite the size of the formal financial sector, the informal sector is larger and that there are immense opportunities for value creation within this Informal sector. Considering that, we developed a business model which allowis us to operate in every area of the financial industry and beyond through our portfolio investment approach, providing Financial Advisory, Asset Management, Currency, Real Estate, Debt Services and Private Funds Management Services, taking deposits and providing loans at very ‘competitiverates, OO-O Inall our endeavors, we are cognizant with the risks that come with pioneering innovation and creating formal structures around traditionally informal businesses, The diverse backgrounds and combined expertise of our Management and Board have enabled us to develop a versatile team of in-house risk managers, thoroughly cenablingus tomitigate these risks. Founded on the values of integrity and good governance, and built on the strength of innovation and network, the ‘goal of VFD Group is to establish a firm foothold in various, ecosystems on the continent through our subsidiary ‘companies, Through these companies, we:alm to creatively and consistently build our capacity to provide financial solutions that cater to every need an individual or small business might have, leading us to becaming the foremast Proprietary investment company in Nigeria and on the ‘continent. VED Group was incorporated with the Corporate Affairs Commission (CAC) on 7th July 2009 and commenced business operationseffectivelyon the istof january 2011.LS) Te Tetl a We are thorough, honest Er reer eats Nid Carers elton) We are continually creating innovative Ree asc even as we remain on top of the foremost financial technologies. uel Perea ee presented and take ownership of a Peet une un Rees eke for all involved. Wrrosrove Empathy 360 ] Meee rae Sete eee cree with priority on the company and its Bee acted Reese ced sas Teamwork Si As ans Coe rena! Remeron esOverview continued Notice Of Annual General Meeting Notice of the 4" Annual General Meeting NOTICE IS HEREBY GIVEN that the 4th Annual General Meeting of VFD GROUP PLC due to the Covid-19 pandemic will be held at Foresight House, 163/ 165 Broad Street, Lagos Island Lagos on Friday, 15 May, 2020 at 11.00 a.m to transact the following business: ‘ORDINARY BUSINESS 1 Tolay before the company in general meeting the Audited Financial Statements for the year ended December 31, 2018, together with the Reports of the Directors, Auditors ‘and Audit Committee thereon; 2. Todeclarea dividend; 3. To approve the appointment of Mr. Chuks C. Origbo asa Director; 4,To re-elect the following Mr. Suleiman Lawal, Mr. Olatunde Busari (SAN), Mr. ‘Azubike Emodi, Dr. Samuel Maduka Onyishi and Ms. Jewel ‘Okwechime; 5. To appoint the firm of Messrs. Deloitte as the Auditor of the Company, in accordance with Section 357 (1) of the ‘Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004 (“the Act"); 6. To authorize the Directors to fix the remuneration of the Auditor; 7. To elect/ re-elect members of the Audit Committee in accordance with section 394 (4) (5) of the Companies and Allied Matters Act, Chapter C20, 2004, Dated 20April,2020. BYORDER OFTHE BOARD ‘Gheminiyi Shod: ‘Group Company Secretary FRC/2015/NBA/00000011768 VED Group Ple 163/165 Broad Street Lagos NOTES: 1. Compliance With Covid-19 Related Directives And Guidelines ‘The Federal Government of Nigeria, State Governments, Health Authorities and Regulatory Agencies have issued a number of guidelines and directives aimed at curbing the spread of COVID-19 in Nigeria Particularly, the Lagos State Government prohibited the gathering of more than 25 people while the Corporate Affairs Commission (CAC) issued Guidelines on Holding AGM of Public Companies by Proxy. The convening and conduct of the AGM shall be done incompliance with these directives and guidelines. 2.Proxy ‘Any member of the Company entitled to attend and vote at this meetingis also entitled to appoint aproxy toattend and vote in his/her stead. A proxy need not be a member of the Company. For the appointment of the proxy to be valid, a proxy form must be completed and deposited either at the office of the Company's Registrar, Africa Prudential Plc, 2208 Ikorodu Road, Palmgrove, Lagos, or via email at cfe@efriceprudential.com not later than 48 hours before the time fixed for the meeting. A blank proxy form is attached to the Annual Report and may also be downloaded from the Company's website at www.vidgroup.com 3.Attendance By Proxy Inline with CAC Guidelines, attendance of the AGM shall be by proxy only. Shareholders are required to appoint a proxy of their choice fromthe list of nominated proxiesbelow: a. Mr. Olatunde Busari (SAN) b.Mr.Nonso Okpala Ms. Gbeminiyi Shoda 4.Stamping Of Proxy ‘The Company has made arrangement at its cost, for the stamping of the duly completed and signed proxy forms submitted to the Company's Registrars within the stipulatedtime. 5. Online Streaming Of Agm ‘The AGM will be streamed live online, This will enable shareholders and other stakeholders who will not be attending physically to follow the proceedings. The link for ‘the AGM online live streaming willbe made availableon the Company's websiteat www.vidgroup.comNotice Of Annual General Meeting 4 Dividend ‘Thadirectorshaverecommended the deckrationofadnidend ‘of N3.30K per share. If the dividend recommended by the rectors ls approved by the members at the annual general meeting, the dividend wil be pald on Friday, 15 May, 2020 to ‘the sharahelders whose nemas uppeer in the company's Ragiatar of rsanibart at te close of busin on Friday, May 1, 2020, 7.Clomreof Ragistar of Members “Tha Registar of mambers of tha Company wall bu dosed from Monday, May 4, 2020 to Fridey, May 8, 2020 (both days inclusive forthe purpose of updating the Register of Members. 3, Nomination To The Audit Committee Inaccordance with Section 359(5) of the Compantes and Aled Matters Act 1990, any shareholder may nominate a ‘Shareholder for appointment to the Audit Committee, Such nomination should be In writing and should reach the ‘Company Secretary at least twenty-one (21) days before the ‘Annual General Meeting. Such notice of nominations should be sant via emall to kwestor-retatorsgyidgroup.com for the attention of tha Company Secretary, The Securities and Exchange Commission's Coda of Corparate Gavarnancs for Public Companies provides that mambars of tha Audit ‘tammnitize should hava basic financial literacy and should be ‘ablato read financial statarnants ‘9. Approval OF Naw Director Pursuant to Section 249 of the Act, the Board of Directors appointed Mr. Chuks C. Qzigbo on June 3, 2019 as n Non- ‘executive Director, His appointment Is presented for ‘Shareholders approvalatthe Arnal General Meeting and his biographical detalls are providedin the Annual Report or 2019 anden the Company's website at wane vfd group.com ‘WO. Right OF shareivoldars Te-Ask Questions ‘Shareholders have a right to ask questions not only at Misiings, but also i woiting prior bo the Mating, did Such ‘questions must ba submitted to the Company Secretary via ‘email tm rvestor-retrtionsgeflgroup.com nat later than twa {2} wneks before tha data ofthe Menting. VEDGROUP Aer iagert Rewes 2219 8Business Review In this section Corporate Profile 11 Chairman's Statement 13 GMD/CEO's Statement 18 11-25Corporate Profile REGISTERED OFFICE FRCNNUMBER: Foresight House, FRc/2017/00000008863 163/165 Broad Street, Marina, REGISTRATION NUMBE} Lagos, Nigeria 829196 DIRECTORS, Mr Olatunde usar (SAN) Mr Nonso Okpala Dr. Samuet Onyishi es, Ngox ghana Me. Vitor Fagbamila Mr. Suleiman Laval Ms jewel Okwechime CORPORATE HEAD OFFICE Foresight House, 1 163/165 Broad Street, Marina, Re Lagos, Nigeria ‘Mr. Ayodele Onawunmi Mr. Chuks C. Oxigbo ‘Mr. Mobolaji Adewuri Mr. Adeniyi Adenubi Mr. Gbenga Omalokun Mr, Azubike Emodi EXECUTIVE MANAGEMENT Mr. Nonso Okpala Group Managing Director/ CEO Mr, MobolajiAdewumi Executive Director, Finance Mr. Adeniyi Adenubi Executive Director, institutional ‘Business and Investor Relations Mr. Gbenga Omolakun Executive Director, Gavemance, Risk and Compliance Mr. Azubike Emodi Group Commercial Director Mr. Dipo Adeoye Chief Operating Offcer (COO) )VFDGROUP ‘Aarual Rept + Accounts 2018 ‘OUR SUBSIDIARIES/ AFFIUATES Mr. Azubike Emodi Managing Director, VED Microfinance Bank Ms. Ete Ogun ‘Managing Director, Anchoria Asset ‘Management Mr. Kanayo Eni-keh Managing Director, Atiat Leasing Mr. Obinna Okeke General Manager, Dynasty Real Estate Mr. Sam Chidoka Managing Director, Kairos Capital Mrs. Theresa Ezeh Managing Director, Everdon Bureau De Change usiness Review 11Corporate Profile 2 (OFFICERS & PROFESSIONAL ADVISERS. Company Secretary Ms. Gheminiyi Shoda ‘VED Group Ple Foresight House, 163/165 Broad Street, Marina, Lagos, Nigeria United Bank fr Africa PLC ‘Atacoft Services LLP (Corer accourarts) ‘SUBSIDIARIES AND AFFILIATES ‘Anchoria Asset Management Limited Elephant House, 214 Broad Street, Marina, Lagos, Nigeria Dynasty Real Estate Limited Foresight House, 163/165 Broad Street, Marina, Lagos, Nigeria MANAGEMENT TEAM. Mr. Nonso Okpala Mr. Mobolaji Adewuri Mr. Adeniyl Adenubi Mr. Gbenga Omotokun Mr. Azubike Emodi Mr. Dipo Adeoye Mr. Folajimi Adeleye Everdon Bureau De Change Limited Foresight House, 163/165 Broad Street, Marina, Lagos, Nigsrie Kairos Capital Limited Elephant House, 214 Broad Street, Marina, Lagos, Nigeria [AS AT DECEMBER 31, 2079, Ms. Gbeminiyi Shoda Mrs. Damilola Makinde Ms. Toyin Abet Ms. Tosin Dabiri Mr, Adekunle Adelaja Mrs. Oluwatosin Adebukunola Mr. Olufemi Oke VED Bridge Limited Foresight House, 163/165 Broad Stret, Marina, Lagos, Nigra VED Microfinance Limited Elephant House, 214 Broad Street, Marina, Lagos, Nigeria- 4 Se eee ey ee rd eee ees eed Pee es Annual General Meeting of our Cu AC hc acok le eee ear] eel Baa e leaChairman's Statement Distinguished Shareholders, Members of the Board of Directors, Ladies and Gentlemen, | am pleased to ‘welcome you to the 4th Annual General Meeting of ourcompany. In line with the dictates of my office, | will give an overview of the macroeconomic environment, outline our performance for the past year and conclude with our outlook for 2020. In the history of our company, 2019 represents a significant period which highlights how far we have come; 10 years of building a resilient brand amidst challenging economic and operational environment. Macroeconomic Outlook & Operating Environment Compared to 2018, the world economy witnessed a slowdown in 2079 growing by an average of 3.3% duringthe year, down from’3.7%6in 2018. Uncertainties lingered amongst leading economies; Britain struggled with political upheaval and commercial incertitude as BREXIT inched closer. The United States’ protectionist foreign policy and indifference towards multilateralism threatened several trade agreements and led to a short-lived trade war with China. The saber-rattling from the US in the Persian Gulf slightly steadied crude oil prices, however prices still fell below 2018 average. On the domestic front, Nigerian economy grew by 2.28% as at 3rd quarter of 2019. While this marked an improvernent compared to same prior year (1.81%), 4 this result remains significantly below widespread expectation. Geopolitical uncertainty accompanying. the 2019 general elections led to some capital flight Which resulted in a downward spiral on the stock ‘exchange. However, CBN's decision to drive down the markets’ benchmark pricing instrument, the treasury bills, has driven investors to the equity market with signs of recovery towards the end of the year. CBN also introduced a Loan to Deposit ratio (LDR) for commercial banks primarily to improve real sector and SME lending. Consistent with the mixed outcomes on several indices, inflation rate which had been on the decline for 8 consecutive months (from 11.44% in Dec 2018 to 11.02% in Aug 2019) began to rise in the last 5 months (to 11.98% in Dec 2019) spurred by FGs decision to close our borders. Financial Performance Distinguished Shareholders, for the second consecutive year, we have delivered strong operating. results. Crossing the billion mark, the Group's PBT grew year on year by 115% to close at N1.48bn (N0.69bn2078). On the backdrop of our diversified investment Portfolio and growth of several operating entities, topline revenue closed at N5.11bn (N2.16bn 2018), a year on year growth of 136%. Inline with our earnings trend, total asset grew year on year by 143% to close atN44.24bnChairman's Statetement continued ‘The growth witnessed in operating expenses speaks to our continued expansion, headlined by investment. in technology and strategic addition to our workforce. BoardDevelopment We have a supportive shareholder base and, in my view, an exceptional management team. As we continue to strengthen leadership competencies, there will be additions to the Board. In May we welcomed Chuks C. Ozigbo as a Non-Executive Director. Chuks brings on board a rich footprint that span actoss several years in the Nigerian financial industry. Other Key Highlights In the year under review, the Group embarked on several activities that are important to the journey ahead. ‘We raised circa N27.47bn towards obtaining a regional bankinglicense. ‘Also, we expanded our business trail with significant, investment in ATIAT Leasing Limited and Abbey Mortgage Bank Plc, the later which has just been approved by the regulatory authorities. Through these investments, we have enhanced our value chain Corporate Social Responsibility ‘We are committed to good corporate governanceand ethical business practices, promoting the long-term ‘interests of shareholders. As part of our commitment to oursociety, the following activities took place: © Donation of a first-class comprehensive data monitoring machine to the Lagos Island General Hospital, Lagos State ® Donation of Nim to Almighty God Compassion Care Home in Lagos. The Home takes care of less privileged children on the street, providing them with shelter, food, education and skills acquisition )VFDGROUP Arvual Repor + Aces 2018 We have a supportive shareholder base and, in my view, an exceptional management team. As we continue to strengthen leadership competencies, there will be additions to the board. Business Review 15,Chairman's Statetement continued Chairman's Statement © Provision of academic, musical and sport material, electronic equipment's and infrastructure for several schools © Training, capacity development and funding of entrepreneurs through the Entrepreneurship Bootcamp Acomprehensive view of these activities is contained in, ‘our ESGreport. Lookingintothe future The 2020 financial year has started with much lower interest rates than expected and regulatory headwinds with potential for significant impact particularly in the bankingsector. However, the roadmap remains clear. Three things stood out during the last Board strategy session and these will guide our path to the future: Profitable Investment, Industry-Agnostic Investment andinnovation. ‘As we consolidate our position within financial services, ‘we will seek investment opportunities in varying industries that delivers optimal returns to our shareholders.For innovation, we will focus on creating systems, solutions and processes that allows us to scale exponentially while retaining a lean and efficient operating structure. Indeed, we have already began this with our newly developed virtual banking application. Distinguished shareholders, we are not complacent about the task ahead but are confident that we can deliveranother impressive performancein FY2020 ‘Appreciation We are delighted with our growth over the last 10 years, and we believe the Group is well positioned to take advantage of opportunities in 2020 and beyond. We 16 realize that our achievements over the years is directly attributable to our shareholders, employees and business partners, and on behalf of The Board of Directors, we are grateful foryour support. Thankyou. Olatunde Busari (SAN) Chairman oryOre olg WELCOME TO A WORLD OF [ides POSSIBILITIES CC ear uc We are guiced by a system of rules and principles that ensure we constantly ‘create value, innovative products and solutions that are accessible to the everyday citizen and entrepreneur. on Oe | ceo a Rae A eo a el Phone: O8189989808 rail Infoovidercuncom TERI] vrncreue @ ver.crumNae) Pec ti) ‘our esteemed company. | am Peet yet Ser a financial performance as well Pets operations of VFD Group Ple for the year ended December 31,2019.GMD/CEO's Report DearEsteemed Shareholders, ‘A. Ten£ventfuland Remarkable Years -Opening Address Welcome to the 4th Annual General Meeting of our esteemed company. | am delighted to present to you the financial performance as well as a report of the business operations of VFO Group Plc for the year ended December 31,2079. 2019 was the first year in the current 5-year strategic plan whichis expected torun from 2019 to 2023. This 5-year plan is the second phase of our "13-year 3-phased Strategic Plan" which was sectioned into 3, 5 and 5 years respectively. Consolidating on the achievements from the first 3-year phase (2016 to 2018) of the strategic plan, 2019 emerged a successful financial year on all fronts. review of the Group's financial performance and operational activities wil provide the necessary details to further elucidete this success. In a symbolic way, 2019 was special toall of us because it marked ‘our 10th year anniversary. Ten eventful but remarkable years of providing innovative financial solutions to all our clients, home znd abroad. B. Our2019 Financial Scorecard In the year under review, we experienced monumental growth across all key financial indicators. This is demonstrative of the successful implementation of our strategicplanduringtheyear. ‘The Group delivered the following key financial metrics: 11. Gross earnings of N5.1%billion in 2018, a 137% increase from 2018's N2.19billion which is largely attributed to ‘the significant increase of other income by 134% from ‘N1.O7billion in2018 toN2.5obillionin2019. 2. Profit before Tax (PBT) of N1.4Bbillion being a 114% boost from the previous year's figure of NO.63bilion. 3, Total assets of N44.23billion in 2019 a 143% increase fromN19.05billion in2018 4. Shareholders’ funds of N5.98bilion in 2019 2 288% increase from N1.54billionin 2018. Contributorstothe Group'seamings are largely from: 1. Interest income earned from placements and treasury bills - We earned approximately N7.04billion from placements madeby the Group in treasury illsand other Investments. 2. Gain on disposal of shares of NEM Insurance Plc - We ‘eamed N7.09bilion from the disposal of NEM Insurance Pleshares )VFDGROUP ‘Aarual Repo Accounts 2018 3 ‘Our real estate subsidiary earned N132million from tthe disposal of 8 60,000sqm land that was held for development purposes. We eared N1.40bilion from our treasury trading activities. Earnings from other subsidiaries - Below is a breakdown of earnings contributed by each of our subsidiaries: ‘VD Bridge - N904million ‘VED Microfinance Bank - N427million Everdon Bureau de Change - NB2million ‘Anchoria Asset Management - N506million Dynasty RealEstate - N165million Kairos CapitalLtd - N10%million pane Business Review 19)GMD/CEO's Report continued C._AnAssessment of our Objectives 2019 wasa year of many notable achievernents for the Group. Before we go into details of the most significant achievements of ‘the year, I willreview our performance vis-a-vis the objectives that were set for 2019. Our self-assessment isillustrated below: a a WHATHASBEENDONE [STATUS REMARKS | Acquire a strategic stake in a a. An application has been sent to. Workin Progress. We expect that all regional commercial bank viaanyof the CBN and the mandatory Additional the applications the following options: deposit of N25 billion has also information tobe and required 2 Greenfield approach which __beenmadetotheapexbank —providedbythe approvals will be requires a fresh license b. A significant investment has GMD/CEO obtained in 2020. application to the Central Bank been made in Abbey Mortgage ‘of Nigeria (CBN) Bank. b. Brownfield approach which c. The Microfinance Banking requires the acquisition of a subsidiary hasbeen recapitalized mortgage bank and applying to. to N1 billion as an initial step CBN for conversion into a _towardsits upgrade toanational, Regional Commercial Bank microfinance bank ¢. Brownfield approach which requires an application to CBN to upgrade VFD Microfinance Bank to a Regional Commercial bank 2 Acquisition of a significant stake in We have identified a suitable Workinprogress The acquisition ‘an insurance Company. company with adequate due processis due to be diligence conducted on the firm. concludedin2020 3 Commencement of the This was deferred for the following Deferred reconstruction and renovation of reasons: the proposed headquarters a. Thedelay inthe Lagos State Light (commonly known as AP House) _RailProject withthe objective of completingthe _b. The proposed use of Abbey Project in first or second quarter of Mortgage Bank headquarters as 2021 the commercial bank's headquarters. The increased capital requirement for the commercial bank 4 — Restructuring and recapitalization The real estate subsidiary was Achieved ‘of Dynasty Real Estate (DRE), and successfully recapitalized to N1 the development of the Dynasty billion and the Dynasty Real Estate Estate project which involves the sale was successfully executed. The sale of70 plotsof fully servicedland land for the proposed construction sitting on a sixty thousand square was sold as it offered a higher risk meter (60,000sqm) land. adjusted return. See 83 on page 19 fordetails ofthereturn, 20GMD/CEO's Report continued Further enhancement of our The Group hasbeen restructured to Achieved Thisisa continuous efficiency and operating allow for independence of process as we are effectiveness through the subsidiaries with the elimination of still deploying deployment of well-designed shared services as much as possible. technological processes, procedures and requisite Migration to the new digital bank solutions to some ‘enablingtechnologies. core infrastructure has also been of the subsidiaries completed. Processes have also toensure adequate bem reviewed and reengineered for disaster recovery improved productivity levels, plansarein lace. 6 We successfully migrated to the Achieved The virtual bank strategy and the deployment of new digital bank core infrastructure has been deployed apps that will be supported by the which allows us the flexibility of ‘and we are really bank, one of whichis www.saving- deploying multiple innovative excited about the a savings app that seeks to assist applications for use by our successes thus far. ividualsin achieving theirsavings customers. The digital mobile We are optimistic goals whilst enjoying compelling banking application, V by VFD, our that our interestrates. pioneer product, was deployed subsequent report during the year and will serve as the will detail foundation upon which the digital remarkable banking ecosystem will bbuit. successes for the year 2020 7 Proactively identify acquisition and We were able to successfully Achieved More acquisitions merger opportunities with aview to identify various opportunities such and investments leverage our track record and as: to be done in the ‘emergingindustry reputation a. Abbey Mortgage Bank ~ a next financial year. mortgagebank These acquisitions b. Atiat Leasing Ltd —a vehicle and align with our plan equipmentleasingcompany of controlling . 360 Creative hub — a co-creative ‘complimentary workspace and business businesses to incubator for fashion advance our entrepreneurs ecosystem strategy. 8 Issuance of a S-year tenured NS Thistaskwasdeferredasthecostof _Deffered tll 2020 billion bond long-term bond was high and Group Treasury had predicted a crashinratessubsequentto2019. 9 Launch of 3 SEC registered mutual We successfully launched our Achieved funds via our asset management money market, fixed income and subsidiary equities funds with a combined subscription of 105% through our asset management subsidiary. Based on an assessment of our achievements as detailed in the table above, we were able to achieve 5 out of our 9 set objectives whilst 2 are stil works in progress and the last 2 had to be deferred due to the realities of the macro-economic and business operating environment. IYFDGROUP Anal Report + Accounts 2019 Business Review 21GMD/CEO's Report continued 22 Significant Achievements in2019 Our most significant achievements are highlighted below for further information: Conversion to a Public Company: On the 13th of February 2079, we were granted approval by the Corporate Affairs Commission to convert the erstwhile ‘VED Group Limited to VFD Group Pl. This aligns with ‘our strategic plan of broadening our shareholder base and further enhancing our ability to raise required ‘capital for growth and expansion. Commercial Banking License Application: in line with ‘our strategic plans of acquiring a commercial banking license, the Group invested the sum of Nobillion and raised additional N18.47billion from co-investors for investment in the license acquisition project. The application has been submitted to CBN and the mandatory N25 billion deposit required by apex bank has been made whilst the balance was invested in ‘otherfinancial assets. We are positive that an approval- in-principle will be obtained from CBN in 2020. Note: Thisisasubsequent event update. Successful Deployment of our Mobile Banking Application: In line with our virtual banking and ecosystem plan, we launched the first version of the virtual bank, leveraging our microfinance banking license. The application, which was developed by the bank's internal technology team with support from external consultants, is user-friendly and offers unique and innovative features. A soft launch of the application was done in October 2019 and by December 31, 2019 we had acquired 10,093 downloads, translating to an equal number of newly ‘opened accounts. We plan to hold an official launch of the application in 2020. This mobile application is the first in a series of digital financial products to be released by the bank thus spurring us on our quest to disrupt thenorm andlead the banking revolution. Successful Liquidation of our Debt Notes: Recall that in February 2018 we issued T-year tenured debt notes valued at a total of N428 milion with an interest of 19% pa. | am pleased to inform you that we were able to successfully liquidate these notes on the 15th of February 2019 with receipt of positive reviews from ‘customers and the investing community. >. Successful Ext from Germaine Auto Centre: In2016, we identified the opportunity to invest in an auto sales and servicing company, Germaine Auto Centre, At the time of the investment, the company was experiencing financial issues due to poor management and a high gearing ratio. We made a total investment of N467 rmllion (equity and debt) in the company and seconded one of the Group's Executive Directors, Gbenga ‘Omotokun, to oversee and improve its management and performance. Following the successful restructuring of the company, we made a profitable exit, Investment in Abbey Mortgage Bank Plc: Pursuant to the various approaches we outlined towards the acquisition of our commercial banking license, we have commenced the execution of the second approach (acquisition of a mortgage bank), by making an equity investment of N2.37billion in Abbey Mortgage Bankin exchange for 35% shareholding in the company. Subsequent to December 31, 2019, we obtained the requisite approval forthe transaction from the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC). Investment in Atiat Leasing Limited: In alignment with our objective of establishing a foothold inal sectors of the financial services industry and our overall ecosystem strategy, we made an equity investment of ‘8250 million in Atiat Leasing Limited. Atiat Leasing Limited specializes in various forms of vehicle and equipment leasing. As part of our management restructuring processes, we appointed one of our management staff, Kanayo Eni-Ikeh, as the Managing Director. We intend to expand the company's business to include vehicle sales and servicing. This will complement our existing auto lending business in addition to the proposed car sales and repair arm of Atiat. Establishment of our Technology Subsidiary: As part of our strategy to become a key player in the financial technology space, we have invested in the establishment of a technology-focused subsidiary, VED Tech. VED Tech will be responsible for developing innovative technology solutions for businesses and individual consumers. The subsidiary will also fully support the deploymentof our virtual bank.GMD/CEO's Report continued 9. Recapitalization of the Microfinance Banking Subsidiary: In line with our virtual bank deployment plan, we increased the capital of VFD Microfinance Bank from NSOmillion to Nibillion. We currently have plans to further increase the capital to NSbillion. Thisis necessary to enhance the brand and perceived stability ofthe bankas required fora virtual bank. 10. Successful Launch of AAM's Mutual Funds: In a bid to establish its presence and authenticity in the asset management space, the Group's asset management subsidiary, Anchoria Asset Management Limited launched its mutual funds on May 27, 2019. The funds ‘are approved by SEC and have been categorized into Money market, Equities and Fixed Income Funds amounting to a total of N2 billion. Following their launch, the funds have performed relatively well against industry benchmarks and management's expectations. 111. Receipt of Approval for the IMTO License: To further ‘optimize our existing remittance businessin the United Kingdom and expand our footprints in the foreign ‘currency market, we made an application to CBN for an International Money Transfer Operator (IMTO) License. We received an approval-in-principle from CBN after which a final approval will be given to proceed with business operations following the fulfilment of specified criteria, This license will allow us toconductinand outbound forex transfers, toand from Nigeria, Our intention is to pair this license with our existing remittance license in the UK (operat ‘Transfercorp Limited) to ensure we facilitate efficient forex transfers between Nigeria and Europe. 12, Recapitalization of the Real Estate Subsidiary: We were able to successfully ramp up the shareholders’ capital of ourreal estate subsidiary, Dynasty Real Estate, from ‘N10 million to billion in alignment with our plans to further expand its services to the Real Estate sector and diversify into the Hospitality sector. 13, Launch of our Inaugural Hospitality Project: In a bid to extend our footprints into hospitality, we invested in Boardroom Apartments and dented a potential investee, E Bar Plaza. Boardroom Apartment: lunar boutique guesthouse located in Lei, designed to host corporate and individual guests who wish to hold private and exclusive meetings and events. E-Bar Plaza isa typical bar and popular hang-out spot in the Lekki axis. The bar offers features such as snooker and Foosball games, Karaoke facilities, Shisha, drinks and YFDGROUP ‘Amal Report + Accounts 2013 E _great accompanying dishes both local and continental. We encourage all our shareholders and other stakeholders to patronize both facilities and recommend same to family and friends. These achievements and many more contributed to a successful year for us at VFO Group. We intend to leverage these successes and achieve even greater ones inthe coming years. (Our New Corporate Philosophy In the last quarter of 2019, the Management and Board, of VFD Group Plc held various strategy sessions to develop ideas for our future brand identity and business model. These sessions were informed by the need to expand our horizon beyond the fina services sector and proactively evolve the Group's businesses to continuously ensure value preservation and growth of our shareholders’ wealth. The fallout of ‘those sessions wasa revision of our Vision, Mission, and Core Values, hence the new and approved corporate philosophy for the Group stated below: Vision - To be a commercially viable proprietary invest ment company with global influence focused on building positive and socially consciousecosystems. Mission - To build sustainable ecosystems by aggregating potentially viable businesses through investments and collaborations. Core Values - Integrity, Innovation, Entrepreneurship, Teamworkand Empathy 360. Going forward, VFD Group will no longer have its investment focus in the financial services sector but will now be sector agnostic to ensure all viable opportunities are adequately covered. In alignment with this, the Group will now focus solely on the following business activities: © Investments and Bespoke Structured Deals: to ensure we yield the desired returns or outcomes in tine with our vision © Establishment of Partnerships and Collaborations: to facilitate the development of our ecosystem and ensure there are platforms that enrich our value offering and expose us to market growth ‘opportunities usnessReview 23GMD/CEO's Report continued F 24 © Explorati of Arbitrage Opportunities: to ensure ‘we enjoy significant yields in comparison to the market to generate the required liability and ‘that will facilitate the investment activities of ‘the group. \VFDat10 VED Group was offically registered at the Corporate Affairs Commission on July 7, 2009 and immediately commenced business operations with its lending subsidiary, hence we celebrated our first decade of existence in 2019. As a way of celebrating this milestone and our remarkable achievements during the period, we embarked on several activities during the ‘year, some of whichinclude: © Courtesy charity visit to the Lagos Island General Hospital and donation of a complete patient monitor to enable the Hospital adequately monitor ‘the vital signs of patients under their care. © Community service outreach to some primary schools in our immediate environment in order to impact the children in our community. As part of the activities of the outreach, we provided back-to- ‘school packs and fed and entertained 500 children. We also donated items that were specifically requested by the school administration, some of which include Nursery Furniture, Toys, First Aid Box, fing Fans, DVD Players, Flat Screen TVs, and Booksfor the Library. ‘© Social activities organized for the members of staff to celebrate diversity and inclusion: Movie night, Sports/games and Fitness day, Weekly social media challenges and Outfit specific days ~ VED Colors, Old School, Culturaland]ersey. © Courtesy visit to the alma maters of our Executive Directors — specifically we visited the International School Ibadan (i), Nigerian Military School (NMS) Zatia, Uga Boys High School, and Dennis Memorial Grammar School. In addition to donating some items to the school, we spent some time engaging thestudents on career advice as wel as encouraging. them to putthe bestin their education. ‘© Renovation of the administrative hall as well as the construction of a water reservoir in Uga Boys High School as a way of giving back to the Uga community. © Execution of the maiden edition of our Entrepreneurship Bootcamp designed to train selected growth stage entrepreneurs on how best to scale their business and position themselves for success. © Allthe activities ofthe year wereroundedoffwitha ‘grand year-end party themed "The Great Gatsby’. It ‘was acolorful event that facilitated the acquisition ofnew top-tier clients as wellas the closure of significant transactions and deals for the group and some ofits subsidiaries. ‘Whilst the past 10 years have been rife with monumental. achievements, in our usual ambitious manner, we look forward to exceeding them in the next 10 years with your guidance. G. OurFocusfor2020 Piggybacking on the achievements already recorded in 2078, the first year in our current 5-year strategic plan, we intend to focus on the following pillars which will bring us closer towards achieving the strategicobjectives set for this current phase (2019-2023): Driving Adoption of the Digital Bank: Our objective Is toensure we acquire 2 million new customers with a collective average sitting balance of N12 billion within 18 months. ‘© Building a Financial Ecosystem: Our objective is to create a platform that fintech solution providers can plug into which will ensure easier access and availability of their products and services to a wide rangeof customers * Concluding our Commercial Banking License ‘Acquisition: Our objective is to ensure that we receive the full approval to commence operations from CBN before the end of 2020. © Establishing an Insurance Fund: Our objective is to raise funds from interested investors which will be channeled towards significant investments in identified insurance companiesin Nigeria,GMD/CEO's Report continued ‘© Making Strategic Sector-Agnostic Investments: Our objective is to invest in businesses that will contribute to the ecosystem we intend to build which will ultimately grow the group'sbalance sheet significantly. H. Closing Address Guided by our new corporate philosophy and business model, | am confident in our ability to continue our remarkable growth trend, whilst our focus remains on the delivery of value to our esteemed shareholders and customers We appreciate your unflinching support throughout 2019 and look forward tothe same in 2020. ‘Thank you. Alle NonsoOkpala Group Managing Director/CEO, VFD Group YFDGROUP ‘Anal Report + Accounts 2013 Business Review 25Governance 26 In this section Board of Directors 27 Management Team 33 Directors’ Report 43 Statement by the External Consultants on the Board Evaluation 51 Statement of Directors’ Responsibilities 52 Report of Audit Committee 53 Independent Auditors’ Report 54 Report on the Audit of the Financial Statements 56 27-57Board of Directors )VFDGROUP ‘esa Repo + Accounts 2018 ‘Olatunde Busari (SAN) Chairman (Olatunde Busari (SAN) is the Chairman of VED Group Plc. He holds a B.Sc degree in Political Science from the University of Ife, Nigeria, He also obtained the Bachelor's Degree (LL.B) in Law from the University of Ibadan, ‘Nigeria, and Master's Degree (LL.M) in Law from the University of Lagos, Nigeria Mr. Busari is a highly resourceful legal specialist and well-versed in company ‘management and was called to the Nigerian Bar in 1989. He was called to Bar in 1989 andisa Senior Advocateof Nigeria. Nonso Okpala Group Managing Director/CEO Nonso Okpala is the Group Managing Director/CEO of VFD Group Plc. He was previously the Chief Financial Officer (CFO) of Heirs Holding, an Aftican proprietary invest rent company. Charged with the design and implementation of the company's financial strategy, he was also pivotal in executing tumaround and establishment strategies foritsinvestee companies. Replete with vast experiencein the Nigerian financial services industry garnered while working with reputable firms like KPMG, BGL and United Bank for Africa Plc (UBA), Nonsois adeptin key financial competences from Audit, Finance and Administration, tolnvestment Banking and Management. Nonso is a member of the Institute of Chartered Accountants of Nigeria (ICAN). He holdsaB.Sc. in Marketing from the prestigious University of Nigeria, Nsukka Dr Samual Maduka Onyisht Independent Non-Executive Director Dr Samuel Onyishiisa Non-Executive Director at VED Group Plc. Ahighly resourceful entrepreneur, he chairs a number of corporate boards with diverse experience in petroleum, capital market, banking, transportation and logistics. He holds B.Sc. in Social Work from the University of Nigeria, Nsukka. He also has 2 Mastersin Business Administration.Corporate Govemance continued Board of Directors Ngort Aghanya Non-Executive Director ‘ Neoa! is a Non-Executive Director at VED Group Plc. She Is a lawyer with over a decade of lagal experience and comes with a wealth of experiance in commercial legal transactions, particularly within the finance industry, notably with Greenwich TrustGroup Ltd. {A graduate of law from Nnamdi Azikiwe University, Awka, she holds.apost-graduate diploma In Strategic Management from the Institute of Strategic Management, Strategic Business School and an Intemational Advanced Certificate fram Manchester Business School, Ngozi comes with 2 wealth of experience in commercial legal transactions, partloularty within the finance Industry, notably with Greenwich Trust Group Ltd, a boutique investment bank and more recently, corporate advisory experience from ‘Templars Law Firm, advising in both international and domestic transactions. She is ‘member of the Nigerian Ber Association (NBA) and institute cf Chartered Secretaries and Administrators (\CSA). [Ngoztassists withlegal aéviceonthe board, Victor Fagbamila (Non-Executive Director Victor Fagbamila ls a Non-Executive Director at VFD Group Plc. He has over25 years ‘of work experiance in Professional Practice, Business and Financial Analysis, Project Management, Management Consulting, Commerceand Industry, His work experience spans across Attice and European countries and he's certified Public Accountant (CPA) in New York, USA. Victor Is a fellow member of the Institute of Chartered Accountants of Nigeria (CAN) anda member of the Chartered institute of Taxation of Nigeria (CITN} Suleiman Lawal Non-Executive Director —— a, ‘Suleman Lawal is business strategist with vast experience n project manggement ‘and proven leadership & management skills in challenging, mutticultural, & fast- pacedenvironments, He holds a B.Sc, in Information Systems, Strayer University, Washington, DC, USA, Heworked in SAGEM for many years where he gathered relevant management, Sales ‘and operations experience,Board of Directors Jwerel Okwechime: Non-Executive Director TTT Jewelisa Non-Executive Director at VED Group Plc. She has over 15 years' experiencein| Chemical and Enviroranertal Engineering, developing and leading long-tenn atrategic objectives that resultedn positive growth and Innovation, She holds « Masters of Engineering in Chemical and Bio-Process Engineering degree| fromthe University ofSurrey, UK. Jewel is recognized for excellence, serving ln demanding leadership rales, maintaining] fledbility through change and creativity to solve problems, with a record of achievements that surpasses expectations. Ayodele Onawunmi Non-Executive Director ‘Ayodele isa Non-Executive Director at WFD Group Plc. He holds a B.Sc in Basic Medi Sclences from the Unhersity of lbaden, Nigeria, aPCD n Business Administration the Herlot-Wett University, UK and a Masters In Finance from the London Busi School, He has over 20 years of experience in Investment and Risk Management, Public “ngagement, consulting, business development and strategy and has served invari ‘capacttes at Access Bank, Pensure PFA, Chapel-Hill Denham Group, Leachway Assuran Company, Acord Petrola.an Picand FDHLGroup, t He fs a member of the Private Equity Club and Investment Management Club of the Loriden Business Sehol and ie curently Managing Partner of213 Capital ‘Chuks C. Ozigbo Non-Executive Director ‘Celestine ia Non-Executive Director at VFD Group Plc. He has Extensive experterce in banking and Business Development. Prior to joining Lyca Digitals, he worked at United Bank or AfricaPlcfor three years where he raseto the position of Group Hezd, Corporate Banking, He was responsible for heading and rmanagingthe bank’sbusiness relationships with many major rmiltinationsls ard large corporate arganisations. He was previously Branch Manager, ASPMDA, BBA and Onipanu Branches, First Inland Bank Plc. He joined First inland Bankafter spending four years in First Atlantic Bank Ple Chuks started his career in Fidelity Bank ple. Chuks agraduate of Bankin and Finance from the University of Nigeria, He has an MBA from the University of Lagos. }VFPGROUP ‘Arran pet emus 2018Board of Directors Mobolaji Adewnnmmi Group Executive Director, Finance Mobolaji is an Executive Director, Finance for VFD Group Ple. Prior to joining VED Group Plc, he worked with the Managing Director of First Bank of Nigeria Limited. Prior to that, hewas the Special Adviser to the Managing Director of ASO Savings and Loans Plc while doubling as Head of Strategy. Bolaji has deep financial services ‘experience and expertise, having worked with regional and global leaders in the ‘nancial services sector, suchas the United Bank for Africa and KPMG Nigeria, He holds a BSc. in Management and Accounting from the Obafemi Awolowo University Ile Ife and an MBA specializingin Finance from the Judge Business School, University of Cambridge. He is a member of the Association of Chartered Certified ‘Accountants (ACCA) with overten years post-qualification experience. Group Executive Director, institutional Business investor Relations iyi is the Executive Director of Institutional Business & Investor Relations, VFO Group Pic and he oversees the institutional. businesses within the Group. He holds a degree in Sociology from the University of ibadan. Niyi has vast experience in the financial sector workingin Private Equity, Venture Capital, and Financial Advisory. He has also played Financial Advisory roles to numerous firms in Nigeria and in the United Kingdom, most notably with the Royal Bank of Scotland and ATOS Consulting Niyiisamember ofthe institute of Directors. ‘Niyiis the Chaitman of Anchoria Asset Management and serves on the board of many other companies. He is passionate about Corporate Govemance and brings this to bear onall the Boards that he serves on. He has certifications in Finance and Business ‘Management from the Tanaka Business School. Gbenga Omolokun Group Executive Director, Governance, Risk & Compliance ‘Ghenga isan Executive Director, Risk Compliance and Technology at VED Group Plc. He has over twelve years of business process, technology and strategy experience ‘across various industries including Manufacturing, Financial Services, Public Sector and Pharmaceuticals. Gbenga currently oversees the strategy, technology and ‘operations division ofthe groupand its subsidiaries. Notably, ‘Gbenga acted as the program manager on a systems implementation project for a large manufacturing company across 8 countries inAftica and 10 project locations. ‘Ghenga holds adegree in Mathematics from Obafemni Awolowo University (OAU) Ife and has developed pecificskillsin business processand technology management on various client projects. across severalindustries.Board of Directors ‘Azubike Emodi Group Executive Director/Commercial Director ‘Azubike Is a resourceful financial service specialist with experience in retail and ‘commercial banking. He worked with Zenith Bank before joining Maxxon Pro Service Inc. in Canada where he worked asan Investment Advisor/Financial Planner. Until his appointment at VED Microfinance Bank, he was a Client Advisor (Personal and Commercial Banking) with the Royal Bank OF Canada. He is a member of IFIC (lnvestment Fund in Canada) and an Associate Member ofthe Chartered Institute of Bankers of Nigeria, He holds a B.Sc. in Banking and Finance, an MBA in Management and an M.Sc. Banking and Finance all from the University of Nigeria, Nsukka. Azubike is also an Executive Director of VFO Group Plcand oversees the Commercial Directorate, VFDGROUP ‘enn Rape + Aecouns 2018 31CT gral [Ulo loa ® %) Eda isles Less Nas AUIDGFTING TARGFTFD savingsManagement Team ——— Nonso Okpala ‘Group Managing Director/CEO \ Nonso Okpela is the Group Managing Director/CEO of VFD Group Plc. He was previously the Chief Financial Officer (CFO) of Heirs Holding, an African proprietary investment company. Charged with the design and implementation of the company's financial strategy, he was also pivotal in executing tumaround and establishment strategies foritsinvestee companies. Replete with vast experience in the Nigerian financial services industry gamered while working with reputable firms like KPMG, BGL and United Bank for Africa Plc (UBA), Nonso is adept in key financial competences from Audit, Finance and ‘Administration, to investment Bankingand Management. Nonsois amember of the Institute of Chartered Accountants of Nigeria (ICAN). He holds aB Sc. in Marketing from the prestigious University of Nigeria, Nsukka, Group Executive Director, Finance Mobolaji is an Executive Director, Finance for VFD Group Plc. Prior to joining VFD Group Plc, he worked with the Managing Director of First Bank of Nigeria Limited. Prior to that, he was the Special Adviser to the Managing Director of ASO Savings and Loans Plc while doubling as Head of Strategy. Bolaji has deep financial services ‘experience and expertise, having worked with regional and global leaders in the financial services sector, suchas the United Bank or Africa and KPMG Nigeria. He holds a B.Sc. in Management and Accounting from the Obafemi Awolowo University Ile Ife and an MBA specializing in Finance from the Judge Business School, University of Cambridge. He is a member of the Association of Chartered Certified Accountants (ACCA) with over ten years post-qualification experience. Adeniyi Adenubi Group Executive Director a Nii is the Executive Director of Institutional Business & Investor Relations, VFO| Group Plc and he oversees the institutional businesses within the Group. He holds a ‘degree in Sociology from the University of Ibadan. Niyi has vast experience in the| financial sector workingin Private Equity, Venture Capital, and Financial Advisory. He has also played Financial Advisory roles to numerous firms in Nigeria and in the United Kingdom, mostnotably with the Royal Bank of Scotiand and ATOS Consuiting, Niyiisamember ofthe Institute of Directors. Niyiis the Chairman of Anchoria Asset Management and serves on the board of many’ ‘other companies. He is passionate about Corporate Govemance and brings this to| bear onall the Boards that he serves on, He has certifications in Financeand Business Management from the Tanaka Business School. VFDGROUP ‘Aonual ep + Acounts 2019 CCorperets Governance 33Corporate Governance continued Management Team 34 Cbenga Omotokun Group Executive Director, Governance, i Risk & Compliance Gbenga is an Executive Director, Risk Compliance and Technology at VFD Group Plc. He has over twelve years of business process, technology and strategy experience ‘across various industries including Manufacturing, Financial Services, Public Sector ‘and Pharmaceuticals. Gbenga currently oversees the strategy, technology and ‘operations divisionof the groupanditssubsidiaries, Notably, Ghenga acted as the program manager on a systems implementation project for a large manufacturingcompany across 8 countries in Africaand 10 project locations. {Ghenga holds degree in Mathematics from Obafemi Awolowo University (OAU) ife and has developed specificskllsin business process and technology management on various client projectsacross severalindustries. Azubike Emodi Group Executive Director/Commercial oY Director ‘Auubike is 2 resourceful financial service specialist with experience in retail and ‘commercial banking. He worked with Zenith Bank before joining Maxocon Pro Service Inc. in Canada wherehe workedas an Investment Advisor/Financial Planner. LUntithis appointment at VFD Microfinance Bank, he was a Client. Advisor (Personal and Commercial Banking) with the Royal Bank OF Canada. He is a member of IFIC (investment Fundin Canada) and an Associate Member of the Chartered Institute of Bankersof Nigeria, He holds a B.Sc. in Banking and Finance, an MBA in Management and an M.Sc. ‘Banking and Finance all from the University of Nigeria, Nsukka. Azubike is also an Executive Director of VFD Group Plc and oversees the Commercial Directorate. Adeoye Group Chief Operating Officer ny Dipo is the Chief Operating Officer, VFD Group Plc. He is an astute, well-rounded finance professional, with over a decade experience in financial services sector which span across fixed income trading, treasury management, investment banking and private equity investing. Dipo has been involved in a broad spectrum of investment and banking responsibilities, including mergers and acquisitions, securities trading, treasury management, project management, business turnaround and strategic planning. He holds a Bachelors degree in Engineering from the Federal University of “Technology, Akure, practiced engineering fora year before delving into banking. He's a charter holder ofthe Chartered Global Investment Analyst (CGIA)..Management Team Sbeminiyi Shoda Group Company Secretary/ Legel Adviser SSS ‘Gheminiyi is Group Company Secretary/ Legal Adviser at VED Group Plc. She is a seasoned Legal Practitioner with solid experience in all facets of Corporate and ‘Commercial Law Practice. She is skilled with high capacity for smart work with excellent planning, integrity, commitment, communication and leadership skills.she ‘was an associate in McPherson Barristers & Solicitors before joining VFD Group. She isa member of the Nigeria Bar Association (NBA), Financial Reporting Council of Nigeria FRCN) and the Institute of Directors (IO). She holds Bachelor of Law from the Lagos State University and has been called tothe Nigerian Bar. Folajimi Adeleye Group Financial Controlier >) Heis the Group Financial Controller for VFD Group Plc. Folajim has deep experience in Financial management and reporting, Six years "Big 4" Audit experience in the financial services industry, IFRS compliance, IFRS conversion projects and audits, Internal controls/compliance, control designs and risk-based auditing, Leadership, coaching and mentoring skills, Finance team and function set up for startup ‘companies, Credit management, loan review, credit analysis and budgetary analysis and Taxmanagemeent and regulatory compliance reporting, He is a graduate of Ahmadu Bello University Zaria, Kaduna State Nigeria - BSc. Economics Damilola Makinde ‘Group Head Human Resources ‘ Damilola is the Group Head Human Resources for the Group. She is a Human Resources generalist with a solid record of initiating and implementing hurman resource strategies to achieve business results with a proven track record of successfully delivering on Performance management, compensation & benefits, recruitment & staffing, leaning & development and employee relations. A Strategic {and innovative HR Executive who translates business vision into HR initiatives to improve performance, profitability, growth, and employee engagement. She is a graduate of Babcock University, llishan Remo Ogun State, Nigeria - B.Sc. (Hons) Business Administration. VFDGROUP ‘Aerual Report + Acroures 2019 vee 35Management Team —— Toyin Abel Group Head of Sales ‘ : ‘Oluwatoyin Damilola Abel is the Head of Sales, VFO Group Plc. She has proven relationship management skills, market intelligence gathering prowess, strong negotiation ability and excellent leadership qualities. Oluwatoyin has several years ‘of experience from working with major players inthe financial services industry. She was @ Relationship Manager in United Bank for Africa Plc for several years before she progressed to the Electronic Banking Sales Manager of the same bank in 2014, she ‘was also a former Regional Retail Sales Coordinator of Fidelity Bank Nigeria Plc. Before joining the company, shewas the Sales Team Leadof VED Group Plc. ‘Sheholds a B.Sc. in Economics from Babcock University, llishan, Ogun State. ——<———————————— —$________+ Tosin Dabiri Group Head, Institutional Funding & Investors Relations TTosin is Head, Institutional Funding and Investors Relations for the Group. Tosin has key experience in Corporate Banking, Product Development, Fund Raising (Debt and Equity), having worked as Head, Alternative Funding Desk and Investor Relations for Purple Capital Partners as well as Accounts Manager in Corporate Banking Group, Institutional Banking Division of Guaranty Trust Bank. She is 2 graduate of Old Dominion University, Norfolk, Virginia- Bachelor of Arts in Business Administration- Major: Economics Minor: Finance. She alsohhas a Master of ‘Arts in Economics from same university and is currently an MBA student at the University of Chicago, Booth School of Business. ‘Adekunle Adelaja Group Head, Risk Management and Compliance ‘Adekunle is the Head, Risk Management and Compliance for the Group. He has deep experience in Securities and Exchange Commission (SEC) Sponsored Individual {Capital Market), Compliance and Regulatory Management, Enterprise Risk Management, Remedial Management and Business Recovery, Financial Reporting, Fund Operationsand Accountingand Internal Control and Business Audit He is a graduate of Olabisi Onabanjo University, B.Sc. Accounting and also holds an MBA-Finance from the University of Ibadan. 36Management Team /VEDGROUP ‘anual Report +Aeesnts 2018 Oluwatosin Adebukunola Group Head, Strategy ‘Oluwatosin isthe head of strategy for the Group and is well vast in Business Process Review and Re-engineering, Financial Analysis and Modelling, Budgeting, Policy and Procedure Documentation, Business Plan Documentation and Due Diligence. Tosin isa graduate of Covenant University, Ogun State Nigeria 8. Eng. Information and Communication Technology. Shealso has an Msc- Finance from the University of Stirling, Stirling, Scotland, Oluferni Oke Group Head, Corporate Communications ‘& Customer Experience Femi is the Group Head, Corporate Communications and Customer Experience for the Group. He has cumulative 16+ years' experience in inter/intra-firm ‘communication, proposal development, event management, customer experience ‘management, digital, social and traditional communication, business development strategy, corporate social investment, B2B Channel Marketing, sales & marketing assignments, strategic communication, brand management and ethics compliance, editorial and journalism. Femi holds a Masters Degree in Global Marketing from the University of Liverpool in the UK; 2 first degree in Mass Communication from the Lagos State University, Nigeria and a Social Media Strategy certificate from the University of Cape Town, South Africa, Corporate Govemance 37Sustainability And Corporate Social Responsibility Report ‘\VFD Group is a proprietary investment company that focuses on building positive and socially conscious ecosystems by 2exregning potentially vale business wth he bjectv of creating nova products and soon hat oe cress the everyday Nigerian citizen and entrepreneur. We are taking a more serious look atthe impacts and risks potentially ass retain our standards while deliveringon our corporate social responsibilities. iated with our business operations as we strive to ‘At VFD Group Plc, we understand our responsibility in ensuring our business activities have lasting positive impact in our ‘community andon the environment. Employmentand Labor Relations The heart of every organization is its people, and this is no different at VFD Group Plc. The importance of people in an organizational structure cannot be overemphasized and that is why we focus on the recruitment and retention of the best brains. Toretain ouremployees, we develop and reward talented individuals. We maintain a robust orientation programme for new employees. The orientation programme provides asmooth and seamless transition for new employees. All aspects of our business operations, procedures, processes and policies are taught to new employees. The orientation programme also places special emphasis on the ethics, rules and regulations governing VFD Group anditssubsidiaries. For existing employees, we maintain a reward system by giving out long service awards to employees who have remained and are committed to the organization for aminimum of 5 years.During the last capital rise exercise, we floated an Employee share ‘scheme for interested staff of VFD Groupandits subsidiaries as approved by shareholdersin General Meeting. We have an almost equal distribution across genders in the organisation . The Company offers equal remuneration regardless of gender for everyone who are at the same level and for work of equal value as all staff in the organization receives the same remuneration across the same level respective of gender. Recruitment s carried out without prejudice and with respect for the human rights fll partiesinvolved. Employees have equal access to training and career advancement without any form of discrimination. Social andEnvironmental impact, We continuously work towards improving energy efficiency, reduction of pollution, optimization of resource utilization and improvementin the quality of life for our stakeholders. ‘We have continued in our efforts by adhering strictly to electronic workflows and filings which help to minimize printing and paper works. The use of emails, tele-conferencing, portals, shared folders and other channels is encouraged as work tools for ‘members of staff. Information to shareholders are usually sent electronically viaernails, text messages and phone calls. We also ‘make use of alternative power supply like Inverter to power our office. We derived value from the use of Microsoft Teams. This was used to collaborate in a couple of our meetings. This greatly reduced the need for travel by staff and vendors. Also, annual reports are distributed electronically to shareholders which greatly reduces the cost of printing hard copy annual reportsand enhance faster communication. We understand that a sustainable business is one that continues to manage its direct and indirect operational impact on its stakeholders in order to achieve responsible growth and in our bid to improve customer engagement and service experience, we enhanced our traditional and operating channels to enrich our customer engagement. We are strengthening our social media footprints by being active on all our social media platforms- Instagram, Facebook, Twitter and Linkedin to boost customer engagement and access. 38Sustainability And Corporate Social Responsibility Report HEALTHCARE Lagosisland General Hospital EDUCATION In2019, we donated a patient Monitor to the Lagos Island General Hospital, Lagos State, The machine isa first-class comprehensive data monitoring machine that ‘we hope will bring succor to the already over-burdened medical infrastructure in thestate, Olowogbowo Nursery and Primary School, Lagos Island, Lagos ‘Zumratulslamiyyah School ‘The schools one of the public school the community where we operate; having supported the school in previous years, we took our goodwill a top- higher by ing: 2ssetsof DVD Player and Flat Screen TV for the Nursery Nursery Furniture Toysforthe Nursery First Aid Box 2Standing Fans or the Sick Bay and Library Set of Furniture (Tableand Chair) forthe teachers Backtoschoolitems (Pencils, erasers, crayons, colour booksetc.) ‘Another public school in the community, struggling with clean drinking water amidst otherneeds; we supported with the following: © Awatercloset andpipe. © TVsetand DVD player for Nursery classes © Generator © Rubbertiles © Schoolbandset Uga Boys High School Realizing the importance and relevance of education, VFD renovated an ‘administrative block with tables, chairs and donated other educational materials, ‘to Uga Boys to benefit the community by boosting literacy level in the state. Dennis Memorial Grammar School (DMGS)-Onitsha, ‘Anambra State Established in 1925, the DMGS Onitsha was established to take care of the Interest of students from all parts of the world, Producingnotable Nigerians, one of them being Azubike Emodi, MD VED Microfinance Bank, the school was one of the ones visited during the 10th year anniversary. Donations made included educational materials, electronic white boards etc. Nigerian Military School, Zaria, Kaduna State YFDGROUP ‘Aral Report Accounts 2013 ‘The school is notable for producing many notable past and present leaders in Nigeria; from its establishment to date, it has also produced numerous senior military officers and senior staffin both government and private sectors, amongst which is Bolaji Adewumi, the Executive Director of Finance. Its contributions to ‘economic and socio-political development in Nigeria are in no way measurable. VED Group Plc made a courtesy visit and a donation of 2 Interactive white electronic boards, 2 projectors, 2 HP laptopsand2 UPS. Corporate Governance 39)Ge Corporate Governance Sustainability And Corporate Social Responsibility Report International School Ibadan, The ISI was established by the University of Ibadan on October‘14, 1963 and has Oyo State((st) produced distinguished and notable men and wornen, one of such being Niyi ‘Adenubi, and Executive Director of VFD Group. In marking the 10th year anniversary of the Group, a teaching engegement was organized so members of the executive can give backtotheir Almamaters, During the event, the school was presented with 10 leampad tablets complete with annual subscription. The leampads are designed specifically to provide teachers with the control theyneed to successfully defiverdigital earning, ‘OTHERS: Entrepreneurship Bootcamp ‘We organized an entrepreneurship bootcamp where we tralned entrepreneurs from various business sectors and share ideas for growing and sustaining their businesses in Nigeria. The participants, housed in the Beardroom Apartments, Lekki were trained by the best resources in account and finance, legal, business registrationand opportunity maximization, The program had eight participants with interest in bakery, education, leather works, agriculture and fashion, Seed funds of 47,000,000, N750,000, 450,000 and N250,000 was distributed to the ‘st, 2nd, 3rd and other participants, respectively. We look forward to doing a lat more towards these and other sectors In 2020. 40Atiat WY fey a=W what you pay, value is what you get. area ees) Operating Lease Rec Mangere Insurance Brokerage eee eur uta Pee Easy Driver Outsourcing Car Rental Services. +234 14539086 www.atiatitd.com info@atiatltd.comReport of Directors The Directors are pleased to present their report on the afalrs of the Company, together with the Audited Financial Statements and independent Auditor's Report for the year ended December 31,2019. Legal form and principal activities VED Group Plc was originally incorporated as Viadaz FD Limited in July 2009, The Company subsequently changed its name to FD Group Limitedin February 2016. VED Group Limited was converted to a Public Company and the name was changed to VED Group Plc following a special resolution passed by the Members in a General Meeting on 28 January 2079 in order to broaden our shareholder base and further enhance our ability to raise required capital for growth and expansion. VED Group Pic carries on the business of a proprietary investment Company either in its name or the name of any nominee in accordance withits Memorandum and Articles of Association. Results forthe year The followingis the summary ofthe performance of the Company during the year under review as compared with the previous vyear: (allman thesand Nigerian Naa les cherie sated) Group Company eae Ex 2019 2018 Profit Before Taxation 1,478,144 687,397 930,399 534,374 Taxation (237,589) (140,020) (52,027) (81,942) Profit After Taxation 1,240,555 547,377 878,372 452,432 Dividend The Directors recommend to the Shareholders, the payment ofa dividend of N3.30K per share (31 December 2078: N2.20) payable to Shareholders on the Company's Register of Members as at Friday, May 1, 2020. The dividend is subject to the deduction of appropriate withholding tax Itisbeing paid from the profit realized fromits business activities inthe course ofthe financial year. Directors Recordof Directors’ Attendanceat Meetings Pursuant to Section 258(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004, the records of Director's attendance at Board meetings during the year under review will be available for inspection at the Annual General Meeting. Provided below are the details of the Board meetings held in 2019 showing frequency of the meetings and Key: P= Present AWA= Absent with Apology NYA= Not yet Appointed SR esc) ea) Ea EAE) 1 Mr. Olatunde Busari(SAN) P P P P 2 Mr, Nonso Okpala P P P P 3 Dr. Samuel Onyishi P P P P 'VFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 43,Corporate Governance continued Report of Directors Pe Pe er ee ge grrr) 4 Mrs. Ngozi Aghanya P P P P 5 Mr. Victor Fagbamila P AWA P P 6 Mr. Suleiman Lawal P P P P 7 Ms.Jewel Okwechime AWA P P P 8 Mr. Ayodele Onawunmi NYA P P P 9 Mr.Chuks C, Ozigbo NYA NYA P P 10 Mr, Mobolaji Adewumi NYA P P P 11 Mr.Adeniyi Adenubi P P P P 12 Mr.Gbenga Omolokun AWA P P P 13 Mr. Azubike Emodi P P P P Resignation Mrs. Omobola Fowler and Mrs. Mary Ozigbo resigned from the Board duringthe year underreview. Board Changes Mr. Ayodele Onawunmiwasintll appointed asan Independent non-executive Director on january29, 2019 butiscuretly ‘a non-executive Director effective October 28, 2079; Mr. Mobolaji Adewumi was appointed on April 5, 2019 as the Executive Director, Finance, while Mr. Chuks Celestine Ozigbo was appointed tothe Board as Non-executive Director on june 3, 2019. The appointments of Mr. Ayodele Onawunmi and Mr. Mobolaji Adewumi were approved by the shareholders at the last Annual General Meeting held on May 31, 2019. The appointment of Mr. Chuks Celestine Ozigbo as a Non-executive Director was approved by the Corporate Affairs Commission and shall be presented to the Members for ratification at the Annual General Meeting, Directors interestsin Contracts None of the Directors has notified the Company for the purpose of Section 277 of the Companies and Allied Matters Act of any declarable interest in Contractsin which the Company/sinvolved. Directors and theirinterestsin the shares of the Company. Directors’ interests inthe issued share capital of the Company as recorded in the Register of Members and/or as notified by the Directors in compliance with Sections 275 and 276 of the Companies and Allied Matters Act, CAP C20, LFN 2004 were as follows: Number of Ordinary Shares of SOk each held as at 31 December 2019 Er) boas Indirect Direct Indirect Mr. Olatunde Busari 100,000 - - : Mr. Nonso Okpala - 25,299,094 Nil 18,799,976 Dr. Samuel Onyishi Nil Nil Nil Nil Mrs. Ngozi Aghanya 100,000 8,715,924 100,000 8,715,924Report of Directors Mr. Victor Fagbamila Nil 927e,485 Nil 8,629,628 Mr. Suleiman Lawal 4,552,820 Nil 4,552,820 Nit Ms. Jewel Okwechime 50,000 Nil Nil Nit Mr. Ayodele Onawunmi Nil 4,878,048 Nil Nit Mr. Chuks C. Ozigbo Nil 11,454,451 Nil Nil 1781787 7,390,243 : : Mr. Adeniyi Adenubi 179,339 8,208,256 1,505,054 5,944,569 Mr. Gbenga Omotokun 200,000 2714789 Nil 227,133 Mr. Azubike Emodi Nil 1,531,945 Nil 704,395 Alternate Directorship ‘There was noalternate directorship during the year under review. Shareholding and Substantial Shareholders ‘The current Authorized capital of the Company is N150,000,000 (One Hundred and Fifty Million Naira) divided into 300,000,000 (Three Hundred Million) ordinary shares of NO.SOk each out of which 119,232, 856 (One Hundred and Nineteen Million Two Hundredand Thirty-two Thousand, Eight Hundred and Fifty six) ordinary shares have been issued and fully paid up. Interms of significant shareholding (5% nd above), the table below is instructive, Pr Number of Percentage (%) SE 1 Premium Green Limited 48,920,478 41.03 2 Expoze International 11,454,451 961 3 McGreen Settlement Limited 9,272,485 778 4 Three Seas Investment Limited 8,715,924 731 Shareholding Analysis ca Beene i Corporate 22 95,157,442 2 Individual Bo 22,549,144 3 Joint 3 26,270 Total 105 119,232,856 YFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 45,Corporate Governance continued Report of Directors Analysis of Shareholdings The details of shareholding of the Company as at December 31, 2019 is as stated below; a Woot Units Units 1 - 1000 3 (286 3 6 0.00 6 1,001 - 5,000 13 12.38 16 45,007 0.04 45,013 5001 - —_ 10,000 10 952 26 100,000 008 145013 10,001 - 50,000 23 21.90 49 891,842 O75 1,036,855 50,001 - 100,000 16 (1524 65 1,390,980 aa7 2,427,835 100,001 = 500,000 19 18.10 84 4,828,520 4.05 7,256,355 500,001 ~ 1,000,000 7 6.67 a 5,723,200 48 12,979,555 1,000,001 - ABOVE 4 13.33 105 = 106,253,301 89.11 119,232,856 (GRAND TOTAL 105 100 119,232,856 100 Corporate Governance VED Group Plc holds good governance as one ofits fundamental pillars and confirms its commitment to the implementation of effective corporate governance principlesinits business operations. ‘The Board of Directors of the Company is cognizant of its responsibilities under the Code of Corporate Governance issued by tthe Securities and Exchange Commission and the Nigerian Code of Corporate Govemance in the administration of the Company andis ensuring that the Company consistently complies with the Codes. Inorder to promote effective governance of VFD Group, the following structures have been put in place for the execution of VED Group's corporate governance strategy: © Boardof Directors © BoardCommittees © Executive Management Committees ‘The Board As at 31 December 2019, the Board comprised a Chairman, six (6) Non-Executive Directors, one (1) Independent Non- executive Director and five (5) Executive Directors (which include the Group Managing Director/CEO), all of whom bring a ‘wide range of skillsand experience to the Board. The Non-Executive Directors have the requisite integrity, skillsand experience to bring independent judgment to bear on Board deliberations and discussions. The members of the Board have competence and experience in Accounting, Risk Management, Legal, Planning and Strategy, Corporate Finance, Compliance, Logistics, Information Technology and Administration. ‘The Board of Directors carries out its responsibility through its standing Committees. These are the Board Corporate Governance Committee, Board Finance & General-Purpose Committee, Board Risk Management Committee and the Board Remuneration Committee. Through the workings of these committees, the Board sets broad policy guidelines and ensures the proper management and direction ofthe group. In addition to the Board Committees, there are a number of Management Committees which ensure effective and good corporate governance at the manageriallevel..Report of Directors Responsibility The roles ofthe Chairman and Chief Executive Officer are separated and clearly defined. The Chairman is primarily responsible for the working of the Board whilst the Group Managing Director/ Chief Executive Officer is responsible for the running of the business and implementation of Board strategy and policy. The Chief Executive Officer is assisted in managing the business of the Group on a day-to-day basis by the Executive Management Committee, which he chairs and comprises all Executive Directors. The Board's primary responsibility is toincrease shareholder wealth. The Board is accountable to shareholders andis responsible for the management of the relationships with ts ariousstakeholders. ‘The Board regularly reviews group performance, matters of strategicconcern and any other mattersit regards as material. The Board is also responsible for the group's structure and areas of operation, financial reporting, ensuring there is an effective system of internal control and risk management and appointments to the Board. The Board has the authority to delegate ‘mattersto Directors, Board Committees and the Executive Management Committee. ‘The Board of Directors of the company as at December 31,2019 comprises of the under listed individuals: Mr.OlatundeBusari(SAN) Chairman Mr.Nonso Okpala Group Managing Director Dr. Samuel Onyishi Independent Non- Executive Director Mrs. Ngozi Aghanya Non-Executive Director Mr. Victor Fagbamila Non-Executive Director Mr.SuleimanLawal Non-Executive Director Ms. JewelOkwechime Non-Executive Director Mr. Ayodele Onawunmi Non-Executive Director Mr.Chuks C. Ozigbo Non-Executive Director Mr. Mobolaji Adewumi Executive Director Mr. Adeniyi Adenubi Executive Director Mr. Gbenga Omolokun Executive Director Mr. Azubike Emodi Executive Director Appointments The constitution of the Board changed in the course of this Financial Year with the aim of enhancing the Group's Corporate Governance, Accountability and Transparency. Retirements Inaccordance with the provision of Section 258 of the Companies and Allied Matters Act, CAP C20 LFN 2004, one third of the directors of the Company shall retire from office. The directors to retire every year shall be those who have been longest in office since their last election. in accordance with this provision Messrs Suleiman Lawal, Olatunde Busari (SAN), Azubike , Dr Samuel Maduka Onyishi and Ms. jewel Okwechime retire by rotation and being eligible offer themselves for re- Professional independent Advice All Directors are aware that they may take independent professional advice at the expense ofthe group, in the furtherance of their duties. They all have access to the advice and services of the group Secretary, who is responsible to the Board for ensuring that al governance matters are complied with and assists wth professional developments required. Training and Induction ‘The Board ensures the regular training and education of Board members to improve their decision-making capacity, thereby contributing to the overall effectiveness of the Board. New directors ae given a personalized induction program which includes ‘one-on-one meetings with Executive Directors and Senior Executives. Such sessions focus on the challenges, opportunities and risks facing the business areas. The induction program covers an overview of al the units as well as Board processes and policies Duringthe period under review, the Director's attended various training programs. YFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 47Corporate Governance continued Report of Directors Board Evaluation To ensure effectiveness of the Board and the Directors, a Board evaluation was undertaken covering 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 directors arising from the exercise. Accountability and Audit, Financial Reporting ‘The Board has presented abalanced assessment of the group's position and prospects. ‘The Board is mindful ofits responsibilities ands satisfied that inthe preparation of ts Financial Report, ithas met ts obligation under the Group's Code of Corporate Governance. ‘The Directors make themselves accountable to the shareholders through regular publication of the Group's financial performance and annual reports, The Board has ensured that the Group's reporting procedure is conveyed on the most recent infrastructure to ensure accuracy. This procedure involves the monitoring of performance throughout the financial year, in addition tomonthly reporting of key performance indicators. Messrs. ATACOFF Services LLP acted as external auditors to the Group during the 2019 financial year. Internal Controls ‘The Group has consistently improved its internal control system to ensure effective management of risks. The Directors review the effectiveness of the system of internal control through regular reports and reviews at the Board Risk & Compliance ‘Committee. The Group is currently in the process of hiring skilled professionals tobuild arobust internal control team. Control environment ‘The Board has continued to place emphasis on risk management as an essential tool for achieving the Group's objectives. ‘Towards this end, it has ensured that the Group has in place robust risk management policies and mechanisms to ensure identification of risk and effective control ‘The Board approves the annual budget for the Group and ensures that a robust budgetary process is operated with adequate authorization levels put in place to regulate capital expenditure. Shareholder rights ‘The Board has always placed considerable importance on effective communication with its shareholders, it recognizes the importance of ensuring the flow of complete, adequate and timely information to existing and potential shareholders and regulators to enable them make informed decisions about the Group. The Board is committed to maintaining high standards of corporate disclosure. it ensures that the rights of shareholders are always protected, Notice of meetingsandall otherstatutory Notices and information are communicated to the shareholders regularly. The Group always ensures the protection of statutory and general rights of shareholders, particularly their right to vote at general meetings. Al shareholders are treated equally regardlessof their equity interest or social status. ‘The General Meeting of Shareholdersis he highest decision-making body of the Group and meetings are conducted ina fair and transparent manner that gives shareholders the opportunity to express their opinion. Going forward, the Group will maintain an investor relations unit which would routinely attend to shareholders’ enquires and ensures that shareholders’ views are appropriately escalated to the Management and Board on a continuous basis. n addition, shareholders are encouraged to continuously communicate their opinions and recommendations whenever they see the need todoso, tothe Group Secretary.Report of Directors ‘AccesstoInformationand Resources Management ensures the free fiow of complete, adequate and timely information to the Director's to enable them to make informed decisions in the discharge of their responsibilities. Directors have unrestricted access to Management and company information in addition to the necessary resourcesto carry out their responsibilities. 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 blowersand the custodian ofthe dedicated|ine ‘Acquisition of Own Shares ‘The Company did not purchase any of ts 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 upholdsa sound culture of providing continued development and training frits Staff to addressknowledge gapsand provide new skil 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. alsotokindlethenecessary synergy required for the Company'ssuccess. Employment of Disabled Person: The Company operates a non-discriminatory policy on recruitment. Applications by disabled persons are always fully considered bearingin mind the respective aptitudes and abilities ofthe appicantsconcemed. 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 treat mentsin well-equipped, qualitative network of hospitalsunder thescheme. ‘Safety regulationsare in place within the Company's premises and employeesare regularly informed of theregulations. ‘There are contributory retirement benefit schemes for both management and employees of the Company in conformity with the Pensions Reform Act 2004. 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 use of suggestion boxes andother channels. Regular training programmes are usually arranged for employees locally and where applicable, overseas for the improvement of skillsand enhancement of career prospects. Post Balance Sheet Events There were no post balance sheet events which could have a material effect on the financial position of the Company as at 31 December2019 and resultsattributable to equity holders. YFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 49.Corporate Governance continued Report of Directors Fixed Assets. Inthe opinion ofthe Directors, the market value of the Company's fixed assets is not ess than as shown inthe Balance Sheet. ‘Auditors ‘The Auditors, Messrs. Atacoff Services LLP has indicated their willingness, to continue in office as the Company's Auditors in accordance with Section 357 (2) of the Companies and Allied Matters Act, CAPCZ0, LFN 2004. BYORDEROFTHEBOARD. Gbeminiyishoda FRC/2015/NBA/0000011768 ‘CompanySecretary 163/165 Broad Street, Lagosisland Lagos. Dated: 23 March,2020 50AAGCo Angela Aneke & Co, Suite 81 Dolp! Plaza, Corporation Drive, Dolphin Estate, Lagos, Nigeria +234 708 403 3833, ‘March 27, 2020 ‘Statement by the Extemal Consultants on the Board Evaluation of VED Group Plc for the year ended December 31, 2019 Further to our engagement, we have performed an evaluation of the Board of Directors of VFD Group Pic {the Company) for the year ended December 31, 2019, based on the scope of services agreed with the Company as specified in our letter of engagement. The evaluation exercise benchmarked the requirements of the amended SEC Code of Corporate Governance, the Company's corporate govemance framework and global best practice. Our work and approach included a review of documents provided by the Company, research on global best practice, interviews and questionnaires, including an online self and peer assessment by members of the Board. (ur findings and recommendations have been submitted to the Board of VFD Group Pic in a detailed report. The Chairman of the Board effectively leads the operations of the Board to ensure the company’s strategic objectives are met and acts as the main link between the Board and the CEO as well as advising the CEO in the effective discharge of his duties. The Board of VFD Group Pic has a system of corporate governance that is developing, underpinned by a Board Governance Charter with terms of reference that guide the conduct of the Board and its Board Committees. The Board operates effectively, fully carrying out its functions of Strategic Direction, Policy Formulation, Decision Making and Oversight.The Boards diverse in experience, skill and gender and Directors are rated highly by their peers. The Company also acted as a responsible citizen by embarking on several corporate social responsibilty activities in 2019, Based on our work, we conclude that the Board of directors of VFD Group Pic. largely complied with the amended SEC Code of Corporate Governance and is also taking steps to ensure the Company's compliance with the requirements of the National Code of Corporate Governance issued by the Financial Reporting Council which is to take effect in 2020. Yours faithfully, FOR: Angela YFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 51Statement of Directors' Responsibilities in Relation to Preparation of the Consolidated and Separate Financial Statements The Directors accept responsibilty for the preparation of the annual consolidated and separate financial statements, which give a true and fair view of the state of affairs of the Company and its subsidiaries and of their financial performance. The Directors affirm that the consolidated and separate financial statements have been prepared using appropriate accounting policies supported by reasonable judgments and estimates, inconformity with International Financial Reporting Standards, the requirements ofthe Companies and Allied Matters Act, CAP C20 LFN 2004, the Financial Reporting Council of Nigeria Act No, 2011, the Banks and Other Financial Institutions Act of Nigeriaand relevant Central Bankof Nigeria circulars. The Directors further accept responsibility for maintaining adequate accounting records as required by the Companies and Allied Matters Act, CAP C20 LEN 2004, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. The Directors have assessed the Group's ability to continue as a going concern and have no basis to believe that it will not remaina goingconcern for at east twelve months from the date of approval ofthe financial statements. ‘SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY: ae. tf ath Mr. OlatundeBusari (SAN) Mr. Nonso Okpala FRC/2019/NBA/00000019449 FRC/2013/ICAN/00000004697 23March2020 23 March2020 52Corporate Governance continued Report Of The Audit Committee To The Members Of VFD Group Plc Inaccordance with the provision of Section 359(6) of the Companies and Allied Matters Act CAP C20 LFN 2004, the members ‘of the Audit Committee of VFD Group Plc hereby report on the financial statements for the year ended 31 December 2019 as follows: ‘We have exercised our statutory functions under Section 359(6) ‘of the Companies and Allied Matters Act, CAP C20 LFN 2004 We are of the opinion that the ‘accounting and reporting policies of the Company are in accordance with legal ‘We have deliberated with the external auditors, who have confirmed that necessary co- operation“~was received from and acknowledge the co- requirements andl agreed ethical ‘management in the course of operation of management staff practices and that the scope and their statutory audit and we are in the conduct of these planning of both the external and satisfied with management's responsibilities. internal audits for the year ended responses thereon and with the 31 December 2019 were satisfactory and reinforce the Group'sinternal control systems. effectiveness of the Group's system of accounting and internal control, ‘Themembersof the Audit Committee are: 1. MrJohn Okonkwo Chairman 2. Mr.VictorFagbamila Member 3. Mr.Adeyeri Lawal. Member ‘The Company Secretary servesas the Secretary to the Committee err Mr. John Okonkwo. Chairman, Audit Committee FRC/2013/ICAN/00000004692 2020 )VFDGROUP ‘ena Repre Aerante 2979 53Independent Auditor's Report ‘Tothe Members of VED Group Plc Reporton the Audit ofthe Financial Statements Opinion We have audited the consolidated and separate financial statements of VFD Group Plc ("The Company") and its subsidiaries {"The Group"). These consolidated and separate financial statements comprise the consolidated and separate statement of financial position as at 31 December 2019, the consolidated and separate statement of profit or loss and other comprehensive income, consolidated and separate statement of changes in equity, consolidated and separate statement of cash flows for the year then ended and notes to the consolidated and separate financial statements, including a summary of significant accounting policies. Inour opinion, the accompanying consolidated and separate financial statements give.a true and fair view of the consolidated and separate financial position of VED Group Plc as at 31 December 2019, and of its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with Internationa Financial Reporting Standards (\FRSs), the requirements of the Companies and Allied Matters Act CAP C20 LFN 2004, the Financial Reporting Council of Nigeria Act No 6, 2011, the Banks and other Financial Institutions Act of Nigeria and relevant Central Bank cof Nigeria (CBN) guidelinesand circulars Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standardsare further described in the Auditor's responsibilities for the audit ofthe financial statements ection of our report. We are independent of the Group in accordance with the Intemational Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), together with the ethical requirements that are relevant to the audit of financial statements in Nigeria and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtainedissufficient and appropriate to form an opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, andin forming our opinion thereon, and we do not providea separate opinion on these matters. Key audit matter How the matter wasaddressed ee eed © We considered completeness and valuation | © ularising all the company's stock brokers of investment securities a key audit matter Comparing ownership of investments to due to the subjective method of valuing independently obtained custodial records. dollar denominatedinvestments. ‘Comparing the valuation of dollar denominated investment to confirmation received from the stock broker. our utmost attention during the audit ofthe asset management subsidiary. 54Corporate Governance continued Independent Auditor's Report During the year, the Group adopted IFRS 9 Financial Instruments which became effective on 1 January 2018. With the adoption of this Standard, the Company's impairment losses on financial instruments are now based on the expected loss (ECL) model rather than the incurred loss model; with the significantimpact on oansand advances. ‘The impairment of loans and advances to customers is highly subjective and involves the exercise of significant judgements and the use of complex models and assumptions based on historical financial data obtained from within and outside the Company. The significant judgementsinclude: © determining the Group's definition of default; ‘© determining the criteria for assessing significant increase increditrisk; © methodology used in determining the 12 month and lifetime probability of default (PD) sed in the expected loss model; © estimation of Loss Given Default (LGD) by considering collateral values and the haircut, adjust mentas well asestimation of unsecured LGD; © methodology for incorporating forward looking macroeconomic information into impairment parameters as well as determination of multiple economicscenarios usedin the ECL model The level of subjectivity involved in determining these parameters, make the impairment of loans and advances a matter of significanceto the audit. ‘Our procedures included the following: © we evaluated the design and implementation of key controls over impairment determination process, such as credit committee review of loans and advances and management review and monitoring of the performance of loans andadvances; © examined the appropriateness of the probability of default (PD) by checking that PDs were correctly assigned to each customer based on the customer'srating; © checked that individual maturities of selected loan ‘was considered in the determination of the PD term structure used inthe ECL computation © evaluated the reasonableness of LGD assumptions and checked the calculation of LGD used in the ECL calculations ‘© we recomputed the impairment allowance for loans, and advances using the Group's impairment model and validated key inputs; @ reviewed the IFRS disclosures for reasonableness. Information Other than the Financial Statements and Auditor'sReport thereon ‘The Directors are responsible forthe other information. The other information comprises the Directors Report, Statement of Directors’ Responsibilities and Statement of Value Added (but does not include the consolidated and separate financial statements and our auditor'sreport thereon), which we obtained prior to the date ofthis auditor's report. ur opinion on the consolidated and separate financial statements does not cover the other information and we donot and will not express any form of assurance conclusion thereon. In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained inthe aut, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there sa material misstatement ofthis other information, we are required to report that fact. We have nothing toreportinthisregard. YFDGROUP ‘Annual Report + Accounts 2019 Corporate Governance 55