NPF MICROFINANCE BANK : AUDITED FINANCIAL STATEMENT FOR 2021

NPF MICROFINANCE BANK PLC

RC. 220824

ANNUAL ACCOUNTS

31 DECEMBER 2021

NPF Microfinance Bank PLC
Annual Report - 31 December 2021
Contents	Page
Corporate information	1
Directors' report	2
Corporate governance report	8
Statement of directors' responsibilities	15
Statement of corporate responsibility	16
Report of the audit committee	17
Independent auditor's report	18
Statement of financial position	23
Statement of profit or loss and other comprehensive income	24
Statement of changes in equity	25
Statement of cash flows	26
Notes to the financial statements	27
Other national disclosures:
Value added statement	83
Financial summary	84

Corporate Information

Directors:

Mr. Azubuko Joel Udah (Esq.) Mr. Akinwunmi M. Lawal Mr. John Kwabe Tizhe Mr. Francis C. Nelson Mr. Usman Isa Baba Mr. Jibrin G. Gane

Mr. Abdulrahman Satumari Mr. Salihu Argungu Hashimu Mrs. Rakiya Edota ShehuChairman Managing Director Executive Director Executive Director Non-Executive Director Non-Executive Director Non-Executive (Independent) Director Non-Executive Director Non-Executive (Independent) Director

Company Secretary:Registered Office:Independent Auditor:Major Bankers:

Mrs. Osaro J. Idemudia Aliyu Atta House

1, Ikoyi Road, Obalende Lagos

Aliyu Atta House

1, Ikoyi Road, Obalende Lagos

KPMG Professional Services KPMG Tower,

Bishop Aboyade Cole Street, Victoria Island,

Lagos

Sterling Bank Plc 20 Marina Road, Lagos Island, Lagos.

First Bank of Nigeria Plc Samuel Asabia House 35 Marina

Lagos, Nigeria.

United Bank for Africa Plc 57 Marina, Lagos Island, Lagos, Nigeria.

Registrars:

CardinalStone Registrars Limited 335/337, Herbert Macaulay Way Yaba, Lagos

Tax Identification Number:

00122558-0001

1

DIRECTORS' REPORT

The Directors of NPF Microfinance Bank Plc are pleased to present their Annual Report on the state of affairs of the Bank, together with the audited financial statements for the year ended 31 December 2021.

1) LEGAL FORM AND PRINCIPAL ACTIVITIES

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

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

The Bank currently has 37 branches nationwide from which it operates.

2) OPERATING RESULTS

In thousands of naira	31-Dec-2021	31-Dec-2020
Profit before tax	1,030,575	867,012
Income tax expense	(323,082)	(252,595)
Profit after tax	707,493	614,417
Total comprehensive income	704,235	610,977
Basic and diluted earnings per share (kobo)	31	27
3) DIVIDENDS

The Board of Directors, subsequent to the reporting date, recommended the payment of a dividend of 10 kobo (31 December 2020: 20 kobo) per share on the issued share capital of 5,393,659,101 (31 December 2020: 2,286,657,766) ordinary shares, amounting to(31 December 2020:The dividend proposed is subject to the approval of shareholders at the next Annual General Meeting (AGM). Withholding tax will be deducted at the point of payment.

4) DIRECTORS

The following Directors served during the year under review:-

NAME	DESIGNATION	DATE OF APPOINTMENT
Mr. Azubuko Joel Udah (Esq.)	Chairman	23 July 2015
Mr. Mohammed D. Saeed*	Non-Executive (Independent) Director	15 November 2012
Mr. Aminu Saleh Pai**	Non-Executive Director	29 January 2020
Mr. Jibrin G. Gane	Non-Executive Director	26 October 2017
Mr. Usman Isa Baba	Non-Executive Director	28 May 2019
Mr. Abdulrahman Satumari	Non-Executive (Independent) Director	28 June 2018
Mr. Salihu Argungu Hashimu	Non-Executive Director	28 June 2018
Mrs. Rakiya Edota Shehu	Non-Executive (Independent) Director	28 June 2018
Mr. Akinwunmi M. Lawal	Managing Director	26 June 2014
Mr. John K. Tizhe	Executive Director, Operations	02 January 2020
Mr. Francis C. Nelson	Executive Director, Finance & Administration	1 August 2017

*Exited the Board on 18 November 2021 **Exited the Board on 2 August 2021

DIRECTOR'S REPORT

5) DIRECTORS' INTEREST IN SHARES

The direct and indirect interests of Directors in the issued share capital of the Bank as recorded in the Register of members as at 31 December 2021 and/or as notified by the Directors for the purposes of Sections 301 of the Companies and Allied Matters Act (CAMA), 2020 and the listing requirements of the Nigerian Stock Exchange are as follows:

31 December 2021	31 December 2020
NAME OF DIRECTOR	DIRECT (units)	INDIRECT (units)	DIRECT (units)	INDIRECT (units)
Mr. Azubuko Joel Udah (Esq.)	4,000,000	-	4,000,000	-
Mr. Jibrin. G. Gane *	108,000	1,480,718,606	108,000	1,480,718,606
Mr. Abdulrahman Satumari	-	-	-	-
Mr. Usman Isa Baba	2,162,000	-	2,155,000	-
Mr. Salihu Argungu Hashimu	-	-	-	-
Mrs. Rakiya Edota Shehu	-	-	-	-
Mr. Akinwunmi M. Lawal	5,025,861	-	5,025,861	-
Mr. John K. Tizhe	707,749	-	707,749	-
Mr. Francis C. Nelson	1,310,796	-	310,796	-

*Mr. Jibrin G. Gane represent the interest of the Nigerian Police Cooperative Society Limited, which owns 1,480,718,606 (31 December 2020: 1,480,718,606) ordinary shares of 50k each in the issued share capital of the Bank for the year under review.

Directors' interest in shares remained the same as at the date the 2021 audited financial statements was approved by the Board of Directors.

6) DIRECTORS' INTEREST IN CONTRACTS

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

7) RETIREMENT OF DIRECTORS

In accordance with S.285 (1) & (2) of the Companies and Allied Matters Act (CAMA), 2020, Mr. Azubuko Udah, Mr. Jibrin Gane and Mr. Usman Isa Baba retire by rotation and being eligible offer themselves for re-election. The profiles of all Directors, including the Directors to be presented for election/re-election are contained in the Annual Report.

8) CHANGES TO THE BOARD

Mr. Aminu Saleh Pai resigned from the Board on 5 August 2021 following his retirement from the Nigeria Police Force. In accordance with Section 274 (1) of the Companies and Allied Matters Act, Cap C.20 Laws of the Federation of Nigeria 2020, the Board at its meeting held on 25 August 2021 appointed Mr. Adamu Usman to fill the vacancy created by the exit of Mr. Aminu Saleh Pai.

The Board also appointed Mr. Uzairu Abdullahi in the year under review to replace Mr. Mohammed Saeed who retired from the Board following the completion of his tenure on the Board. Mr. Uzairu is to represent the interest of the Nigeria Police Welfare Insurance Cooperative Society on the Board.

The Bank is awaiting CBN approval of both appointments.

9) SUBSTANTIAL INTEREST IN SHARES

According to the Register of Members as at 31 December 2021, the following shareholders of the Company hold more than 5% of the issued ordinary share capital of the Company:

31 December 2021	31 December 2020
Shareholder	No. of Shares	Shareholding (%)	No. of Shares	Shareholding (%)
Nigeria Police Co-operative Society Limited	1,480,718,606	64.75	1,480,718,606	64.75
NPF Welfare Insurance Scheme	234,305,460	10.25	234,305,460	10.25

In line with the Nigeria Stock Exchange rules on the requirement for all listed companies to maintain a free float of 20% and above, the issued Share capital of the Bank in free float is 25% as at 31 December 2021 (31 December 2020: 25%) .