ROYAL EXCHANGE : QUARTER 5 FINANCIAL STATEMENT FOR 2023

Royal Exchange Plc

(RC: 6752)

Consolidated Audited Financial Statements 31 December 2023

ROYAL EXCHANGE PLC RC: 6752
34/36 Oshodi Apapa Expressway	T. [phone]; [phone]
Charity Bus Stop	E. [e-mail]
Oshodi, Lagos	W. www.royalexchangeplc.com

Directors:

Mr. Kenneth Ezenwani Odogwu (Chairman), Chief Anthony Ikemefuna Idigbe (SAN), Alhaji Ahmed Rufa'i Mohammed, Mr. Adeyinka Adekunle Ojora, Mr. Hewett Benson

Royal Exchange Plc

Annual Report and Consolidated Financial Statements

Table of Contents
Corporate information	1
Share Dealing Policy	2-4
Free Float Report	5
Chairman's Statement	6-8
Report of Corporate Governance	9-12
Sustainability Report	13
Management's Report on Internal Control Over Financial Reporting	14
Management's Attestation on Internal Control Over Financial Reporting	15
Risk Management Statement	16-18
Directors' Report	19-22
Statement of Directors' Responsibilities in Relation to the Financial Statements	23
Director's Attestation/Certification of Financial Statements	24
Report of the Audit Committee	25
Independent Auditor's Attestation	26-27
Independent Auditor's report	28-31
Result at a glance	32
Consolidated Statements of Financial Position	33
Consolidated Statement of Profit or Loss and Other Comprehensive Income	34
Statement of Changes in Equity	35
Consolidated Statements of Cashflows	36
Notes to the Consolidated financial statements	38 -99
Other National Disclosures
Value added statement	100
Five Year Financial summary	101-103

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Royal Exchange Plc

Annual Report and Consolidated Financial Statements

CORPORATE INFORMATION
Directors:
Chairman	Kenneth Ezenwani Odogwu	Nigerian
Non-Executive Directors:	Chief Anthony Ikemefuna Idigbe (SAN)	Nigerian
	Alhaji Ahmed Rufai Mohammed	Nigerian
	Mr. Adeyinka Ojora	Nigerian
Chief Executive Officer	Mr. Hewett Benson	Nigerian
Group Company Secretary	Mazars Ojike and Partners
	18 Oba Akran Avenue
	Ikeja, Lagos
Registered Office	31, Marina, Lagos
Independent Auditor	Grant Thornton Nigeria
	3rd & 4th Floor 294 Herbert Macaulay Way
	Sabo, Yaba
	Lagos Nigeria
Bankers:	Ecobank Plc
	FCMB Plc
	Fidelity Bank Plc
	FSDH Merchant Bank Limited
	Heritage Bank Limited
	Keystone Bank Limited
	Royal Exchange Microfinance Bank Limited
	Stanbic IBTC Bank Plc
	United Bank for Africa Plc
	Wema Bank Plc
Registrars	Cardinal Stone Registrars Limited,
	358, Herbert Macauley Street,
	Yaba,
	Lagos.
RC No	6752

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Royal Exchange Plc

Annual Report and Consolidated Financial Statements

SHARE DEALING POLICY

1 PURPOSE

1. To outline RE's share dealing policy which is applicable to all of its employees, directors, officers, contractors, agents, auditors or audit committee members, consultants and shareholders holding 5% or more of any class of RE's securities (together "Applicable Persons").
2. As RE's shares are listed on the Nigerian Stock Exchange, RE is obliged to comply with the rules of the Nigerian Stock Exchange, the Investments and Securities Act as well as Securities and Exchange Commission ("SEC") Rules and Regulations 2013 ("SEC Rules"), SEC Code of Corporate Governance for Public Companies 2013,the Companies and Allied Matters Act 2020 ("CAMA"),The Financial Reporting Council of Nigeria Act ("FRCN") (together the "Relevant Securities Laws").
3. The Relevant Nigerian Securities Laws imposes restrictions on dealings in the securities of a listed company (which would include shares) to ensure that employees and certain other persons do not abuse, and do not place themselves under suspicion of abusing price sensitive information that they may have or be perceived to have.
4. Care must therefore be taken in the timing of any 'Dealing' in RE's shares.

2 THE POLICY

2.1 It is expressly prohibited for any Applicable Person or Connected Person to Deal in RE's shares when:

1. they have Inside Information; or
2. they are notified by RE that trading is prohibited for a fixed period or until further notice.

1. Employee Insiders (as defined below) may not Deal in RE's shares without obtaining clearance to Deal in advance in accordance with paragraph 6 (Clearance to Deal).
2. A breach of this Policy constitutes a serious employee disciplinary offence, which could result in dismissal, and may also expose Applicable Persons or Connected Persons to criminal and/or civil sanctions.
3. For the avoidance of doubt this Policy is a supplement to, and not a substitute for any of the Relevant Securities Law.

3 DEFINITIONS APPLICABLE TO THIS POLICY

1. The following definitions are referred to within this Policy:

   "Connected Persons" include:

2. the spouse or civil partner;
3. any children (including step-children) under 18 years of age;
4. a nominee, including an investment manager managing funds on their behalf;
5. a trust of which they, any member of their family, or any family controlled company, are the trustee or beneficiary;
6. a person in partnership with them or any of their connected persons mentioned in (a) to (c) above (acting in his or her capacity as such); or
7. a company which they or their family control.

'Deal' or 'Dealing' includes:

1. any acquisition or disposal of, or agreement to acquire or dispose of the shares of the company;
2. entering into a contract (including a contract for difference) the purpose of which is to secure a profit or avoid a loss by
3. the grant, acceptance, acquisition, disposal, exercise or discharge of any option to acquire or dispose of any of the
4. entering into, or terminating, assigning or novating any stock lending agreement in respect of the shares of the company;

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Royal Exchange Plc

Annual Report and Consolidated Financial Statements

1. using as security, or otherwise granting a charge, lien or other encumbrance over the shares of the company;
2. any transaction, including a transfer for nil consideration, or the exercise of any power or discretion effecting a change of ownership of a beneficial interest in the shares of the company; or
3. exercising any other right or fulfilling any obligation, present or future, conditional or unconditional, to acquire or dispose of any securities of the company.

"Inside Information" is information of a nature which:

1. is not generally available to the general market; and
2. would, if generally available, be likely to have a significant effect on the price of RE's shares.

"Employee Insiders" are Applicable Persons who are considered to have access to Inside Information on a regular or occasional basis and would automatically include:

1. all directors of RE;
2. all directors and managers of RE subsidiaries
3. all senior executives of RE;
4. all senior executives of all RE subsidiaries;
5. certain members of the finance division;
6. certain members of the corporate affairs division;
7. certain members of the legal department division;
8. certain members of the information technology department;
9. certain personal assistants executive assistants/administrative assistants to the above roles; and
10. any other person designated as an Employee Insider by any director or officer of RE from time to time.
11. Acting as trustee: where a person to whom this policy applies acts as a trustee of a trust this policy may also apply to dealings undertaken by that trust. Persons to whom this is relevant should seek further information from the Group Head of Legal.

If you are in any doubt regarding whether you are classified as an Employee Insider, you must check with the Group Head of Legal. The Legal department maintains a register of all Employee Insiders.

"Prohibited Period" is any Close Period or any period when there exists any matter which constitutes Inside Information in

relation to RE.

4 SHARE DEALING RESTRICTIONS ON ALL APPLICABLE PERSONS

1. As an Applicable Person, you must not Deal in RE shares if you are in possession of Inside Information or if you are notified by RE that trading is prohibited for a fixed period or until further notice. If you are in any doubt as to whether information you possess is Inside Information you should contact the [Head of Legal] before you Deal.
2. Your obligation not to Deal while in possession of Inside Information also applies to Dealing in shares of another company if such Inside Information would possibly have a significant effect on the price of the shares of that other company. For example, if RE was in negotiations to acquire another listed company or be sold to another listed company, share trading in both companies would be prohibited during the period of such negotiations.
3. If you are in possession of Inside Information, the prohibition on Dealing also applies to people connected to your
   'Connected Persons' (see the above definition).
4. This Policy applies to all securities you now own, or may in the future acquire, whether you or any Connected Person hold such securities directly or indirectly.

5 SHARE DEALING RESTRICTIONS ON ALL EMPLOYEE INSIDERS

5.1 All Employee Insiders (or any Connected Persons) must not Deal in any securities of RE without obtaining clearance to Deal in advance in accordance with paragraph 6 (Clearance to Deal).

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Royal Exchange Plc

Annual Report and Consolidated Financial Statements

5 SHARE DEALING RESTRICTIONS ON ALL EMPLOYEE INSIDERS (Cont'd)

5.2 This restriction is designed in particular to protect directors and senior executives who do not have access to Inside Information which may be known to the other members of the Board or who may be unable correctly to assess the significance of the information. The object is to prevent embarrassment to the person concerned, the Board and RE as a whole.

5.2 The [Group Head of Legal] will be able to provide you with a form for you to complete your request for authorisation to Deal.

6 CLEARANCE TO DEAL

6.1 An Employee Insider who wishes to Deal in any securities of RE must first notify the director designated by the Board for

1. A response to a request for clearance to Deal must be given to the relevant Employee Insider within five business days of the request being made.
2. RE will maintain a record of the response to any Dealing request made by a Employee Insider and of any clearance given. A copy of the response and clearance (if any) must be given to the Employee Insider concerned.
3. An Employee Insider who is given clearance to Deal in accordance with this paragraph 6 (Clearance to Deal) must Deal as soon as possible and in any event within two (2) business days of clearance being receivedexcluding the day on which clearance was given. A fresh clearance must be sought if the dealing is not completed within this period. Failure to comply withthis time period is a serious disciplinary matter and may also constitute a criminal offence.
4. An Employee Insider must not be given clearance to Deal in any securities of RE during:
5. 1. a Prohibited Period;
   2. on considerations of a short term nature (an investment with a maturity of one year or less will always be considered
   3. at any time when the person responsible for the clearance otherwise has reason to believe that the proposed Dealing
6. In exceptional circumstances, an Employee Insider who is not in possession of Inside Information in relation to RE may be given clearance to sell, but not to purchase, securities to alleviate severe personal hardship. Examples of the type of circumstance which may be considered exceptional for these purposes would be where severe personal hardship would otherwise result to an Employee Insider or his immediate relatives such as the urgent need for a medical operation or to satisfy a court order where no other funds are reasonably available.

7 CLOSE PERIODS

1. Employee Insiders (and any Connected Persons) are prohibited from Dealing in RE's shares during:
2. 1. the 60 days preceding the announcement of the interim and full year results; or
   2. if shorter, the period between the end of the relevant financial period and the announcement of associated results (a
      "Close Period").
3. Employee Insiders will be given notice by the [Head of Legal] when RE is about to enter a Close Period.

1. CONFIDENTIALITY OBLIGATIONS
   As you know, every Applicable Person is under an obligation to RE to ensure they do not disclose confidential information concerning RE, its business or its clients to anyone except in the necessary course of business. It is therefore important that you do not discuss confidential information in situations where it may be overheard, nor participate in discussions regarding decisions by others about investments in RE.
   Persons to whom this policy applies must keep confidential the fact that they are intending to deal or that they have applied for clearance and if clearance was refused that this was the case.
2. AMENDMENTS TO THIS POLICY
   This Policy may be amended, revised or modified at any time. Any such amendments, revisions or modifications will be disseminated throughout RE.

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					Royal Exchange Plc
			Annual Report and Consolidated Financial Statements
ROYAL EXCHANGE PLC
Board Listed:	Main Board
Year End:	December
Reporting Period:	Period Ended 31 December 2023
Share Price at end of reporting period	N0.63k (2022: N1.06K)
Shareholding Structure/Free Float Status
	31-Dec-23		31-Dec-22
			Percentage (In		Percentage
Description			relation to		(In relation to
			Issued Share		Issued Share
	Units		Capital)	Units	Capital)
Issued Share Capital	5,145,370,074		100%	5,145,370,074	100%
[Name(s) of Shareholders]
Dantata Investment & Securities Co. Ltd	912,536,581		17.74%	912,536,581	17.74%
Chief (Dr) Sunny Dike Odogwu (OFR)	266,870,509		5.19%	266,870,509	5.19%
Helen and Troy Holdings Limited	261,058,784		5.07%	261,058,784	5.07%
DE-CANON INVESTMENT LTD	159,388,632		3.10%	159,388,632	3.10%
ROYAL EXCHANGE ASSURANCE LONDON	3,776		0.00%	3,776	0.00%
Total Substantial Shareholdings	1,599,858,282		31.10%	1,599,858,282	31.10%
Details of Directors Shareholdings (direct and indirect), excluding directors' holding substantial interests
[Name(s) of Directors]
Mr. Kenny Ezenwani Odogwu (Indirect)	2,013,119,834		39.12%	2,013,119,834	39.12%
Chief Anthony Ikemefuna Idigbe (San) (Indirect)	-		0.00%	-	0.00%
Alhaji Ahmed Rufa'i Mohammed (Direct)	-		-	-	-
Mr. Adeyinka Ojora (Direct)	-		0.00%	-	0.00%
Mr. Adeyinka Ojora (Indirect)	183,529,858		3.57%	183,529,858	3.57%
Mr. Hewett Benson (Direct)	-		-	-	-
Mr. Banmore Olawale Omotunde (Direct)	-		0.00%	-	0.00%
Total Directors' Shareholdings	2,196,649,692		42.69%	2,196,649,692	42.69%
Details of Other Influential shareholdings, if any (E.g. Government, Promoters)
[Name(s) of Entities/ Government]
Nigerian Government	15,300,555		0.30%	22,969,505	0.45%
OTHER NIGERIAN CITIZENS & ASSOCIATION	1,333,561,545		25.88%	1,325,892,595	25.74%
Total of Other Influential Shareholdings	1,348,862,100		26.18%	1,348,862,100	26.19%
Free Float in Unit and Percentage	NIL		0.00%	NIL	0.00%
Free Float in Value	NIL			NIL

Declaration:

1. Royal Exchange Plc does not have any free float units of shares as at December 31, 2023, is compliant with The Exchange's free float requirements for companies listed on the Main Board.

1. Royal Exchange Plc does not have any free float units of shares as at December 31, 2022, is compliant with The Exchange's free float requirements for companies listed on the Main Board.

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CHAIRMAN'S STATEMENT

On behalf of the Board of Directors, I am delighted to present the Chairmans statement for the 2023 Annual Report of Royal Exchange Plc. This statement provides an overview of the operating environment for the year ended 31st December 2023, the Company's financial statements, and a synopsis of our expectations for 2024.

Financial Highlights:

The Group delivered positive earnings performance in FY2023 with increased revenue across its investee companies contributing to the Groups overall top line. The Group achieved increased revenue across its investee companies with an increase in net Income of 208% from N249m to N767m for FY 2022 and 2023, respectively. Total expenses reduced by 10% from N397 million to N357 million in FY 2023. The Group recorded a Loss After Tax position of N206m in FY 2023.

Royal Exchange boasts a robust liquidity position and healthy cash flow, providing flexibility for future investment opportunities. The company remains dedicated to capitalizing on market opportunities and ultimately generating value for shareholders. This turn around was achieved despite significant global and local economic headwinds, including macroeconomic turbulence, financial market volatility, and domestic challenges like fuel subsidy removal and foreign exchange fluctuations.

Overall, Royal Exchange Plc'sFY 2023 performance demonstrates a successful turnaround strategy and strong fundamentals that position the company for continued growth.

2023 Macroeconomic Review

2023 was a year of relentless inflation on a global scale, driven by a complex interplay of factors. The recovery from the COVID-19 pandemic spurred demand, outpacing supply and igniting price increases. Supply chain disruptions persisted, impacting the availability of goods. The war in Ukraine sent energy prices soaring, impacting costs worldwide. The July 2023 collapse of the Black Sea Grain Initiative, which had allowed Ukraine to export food and fertilizers, further fueled food price increases in many countries.

These global factors significantly impacted Africa's operating environment. Additionally, expansionary monetary policies introduced during the COVID-19 pandemic contributed to inflationary pressures, while labour market tightness led to wage-driven price hikes. Currency depreciation and rising inflation expectations further fueled the situation, with impacts differing significantly across regions. A growth deceleration in China led to reduced demand for industrial commodities, weighing on international commodity prices, whilst signs of economic slowdown in several key economies, notably in the Euro Area, contributed to a decrease in global freight rates. Africa's operating environment was significantly affected, and further complicated, by these global factors.

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Nigeria was navigating a particularly challenging landscape amid rising inflation largely driven by higher food prices and uncertainty in foreign exchange rates, which has hindered forward planning for imports by companies. Major economic policies, namely the fuel subsidy removal and unification of the exchange rate reform in the second quarter of 2023 contributed adversely to the economic situationInflation peaked at a two-decadehigh of 18.8%, fueled by energy and food price increases and passthrough effects of exchange rate depreciation. The Central Bank of Nigeria (CBN) aggressively raised interest rates to combat inflation, with the policy rate reaching a peak of 28.92% in December 2023.

Economic Expectations For 2024

Nigeria'sambitious revenue targets for 2024 depend heavily on oil prices and reform implementation. Historically, actual revenue realized has averaged less than 70% of the total budget, creating funding gaps for critical government programs. Achieving budgeted oil revenue in 2024 will depend on several factors, including OPEC oil production quota, international oil prices, improved security in the oil-producing regions, and geopolitical factors. The proposed fiscal reforms have the potential to boost non-oil revenue and shape the economy for long-term growth. The success of Nigeria'srevenue collection in 2024 will depend on effectively managing these various factors and implementing the proposed reforms efficiently.

According to the World Bank'sNigeria Development Update (NDU) report series, Nigeria'seconomy is expected to grow by 3.7% in 2024 on the back of sustained policy reforms albeit growth prospects may be limited by elevated economic pressures. Fiscal sustainability concerns may remain slightly elevated given debt servicing costs. Inflation is projected to remain elevated in 2024, fueled mainly by rising food, diesel, and gas prices and persistent supply disruptions amplified by the Russia-Ukraineconflict.

High unemployment will continue to create social tensions, potentially leading to increased poverty, crime rates, and social unrest. The rising public debt and associated funding costs could pose significant fiscal risks. High debt servicing costs could limit government spending on critical areas like infrastructure and social programs, hindering long-term economic growth. Public debt is targeted to reach 40% of GDP by 2024 on fresh borrowing, raising concerns about fiscal sustainabilityNigeria'seconomic growth prospects in 2024 hinge on effectively managing these challenges, such as by creating jobs and implementing sustainable fiscal policies.

Looking Ahead: Building on Transformation and Delivering Value

2023 marked the successful culmination of our three-year transformation journey into a leading asset management company. This strategic shift is reflected in the positive trend of our financial performance.

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As we embark on the next phase of our journey, Royal Exchange remains focused on two key objectives: consolidating our asset management expertise through driving growth and profitability across our investee companies, and leveraging on our diversified portfolio which we have repositioned strategically, ensuring long-term value creation.

A Word of Appreciation:

I extend my sincere gratitude to my fellow Board members and the entire management team for their unwavering cooperation and contributions throughout the past year. Their dedication has been instrumental in achieving our goals.

Finally, to our loyal shareholders, I express my deepest appreciation for your continued faith in Royal Exchange Plc. We are committed to delivering long-term value and exceeding your expectations.

Thank you for your attention.

Kenny Ezeanwani Odogwu

Group Chairman

Royal Exchange Plc.

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