Nigerian Exchange Group Plc
Consolidated and Separate Financial Statements
For the year ended 31 December 2023
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The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Table of Contents
For the year ended 31 December 2023
Reports | |
Corporate Information | 3 |
Directors' Report | 4 |
Corporate Governance Report | 11 |
Statement of Compliance with Nigerian Exchange Limited Listing Rules | 21 |
Statement of Directors' Responsibilities in relation to the Preparation of the Consolidated and Separate | |
Financial Statements | 22 |
Statement of Corporate Responsibility for the Consolidated and Separate Financial Statements | 23 |
Statutory Audit Committee Report | 24 |
Certification of Management's Assessment on Internal Control over Financial Reporting | 25 |
Management's Report on the Assessment of Internal Control Over Financial Reporting | 26 |
Independent Auditor's Attestation Report on Management's Assessment of Internal Control over Financial | |
Reporting | 27 |
Independent Auditor's Report | 30 |
Financial Statements | |
Consolidated and Separate Statements of Comprehensive Income | 36 |
Consolidated and Separate Statements of Financial Position | 37 |
Consolidated and Separate Statements of Changes in Equity | 38 |
Consolidated and Separate Statements of Cash Flows | 40 |
Notes to the Consolidated and Separate Financial Statements | 41 |
Other National Disclosures | |
Value Added Statement | 114 |
Five-year Financial Summary | 115 |
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Corporate information
Directors
Dr. Umaru Kwairanga | Group Chairman (Non-Executive Director) | |
Mr. Oscar Nduka Onyema, OON | Group Managing Director/ GCEO | |
Dr. Okechukwu Itanyi | Independent Non-Executive Director | |
Mrs. Ojinika Olaghere | Independent Non-Executive Director | |
Mr. Sehinde Adenagbe* | Non-Executive Director | |
Mr. Ademola Babarinde* | Non-Executive Director | |
Mr. Mohammed Garuba | Non-Executive Director | |
Mr. Oluwole Adeosun** | Non-Executive Director | |
Mr. Nonso Okpala* | Non-Executive Director | |
Mr. Chidi Agbapu** | Non-Executive Director | |
Mr. Patrick Ajayi** | Non-Executive Director | |
Mrs. Fatimah Bello - Ismai* | Non-Executive Director | |
Mrs. Mosun Belo-Olusoga | Independent Non-Executive Director | |
Mrs. Fatima Wali-Abdurrahman | Independent Non-Executive Director | |
* - appointed 14 July 2023 | ||
** - Resigned 14 July 2023 | ||
Acting Company Secretary: | Mr. Izuchukwu Emmanuel Akpa | |
FRC/2020/002/00000021979 | ||
Registered Office: | Nigerian Exchange House | |
2/4, Customs Street | ||
Marina | ||
Lagos | ||
FRC/2013/0000000000621 | ||
Independent Auditor: | Ernst & Young | |
10th & 13th Floors, UBA House | ||
57 Marina | ||
Lagos | ||
Nigeria | ||
www.ey.com | ||
RC Number | RC 2321 | |
Tax Identification Number (TIN) | 00884470-0001 |
3
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
The Board of Directors presents their report on the affairs of Nigerian Exchange Group Plc ("NGX Group Plc" or "the Company") and its subsidiaries (together "the Group" or "NGX Group"), together with the consolidated and separate financial statements and independent auditor's report for the year ended 31 December 2023.
-
Legal form
NGX Group Plc was incorporated in Nigeria as a private company limited by shares on 15 September 1960 as Lagos Stock Exchange and its name changed to the Nigerian Stock Exchange on 15 December 1977. The Nigerian Stock Exchange was re-registered as a Company Limited by Guarantee on 18 December 1990. On 11 January 2021, it was converted and re- registered as a Public Company Limited by shares, pursuant to the Demutualisation Act, 2018. On 10 March 2021, NGX Group obtained approval from the Securities and Exchange Commission to operate as a demutualized entity. Accordingly, it was converted and re-registered as a Public Limited Company by shares, pursuant to the Demutualization Act, 2018.
NGX Group Plc, however, retained the incorporation date of 15 September 1960 and registration certificate number RC 2321 of The Nigerian Stock Exchange (NSE) which is registered under the laws of the Federal Republic of Nigeria. The demutualization of the NSE resulted in the change of its operational structure from a mutual Company limited by guarantee to a Company limited by shares, and the breakup of the business activities of the mutualized NSE into various separate entities post demutualization. NGX Group being listed by introduction on 15 October 2021 now operates as a SEC registered Capital Market Holding Company (CMHC); with interests in Nigerian Exchange Limited, NGX Regulation Limited and NGX Real Estate. - Principal activities and business review
As a key player in the continent's financial markets, NGX Group Plc is focused on taking an active role in shaping the future of the markets through its investment in business innovation and technology.
NGX Group Plc has six (6) subsidiary companies namely; Nigerian Exchange Limited, NGX Regulation Limited, NGX Real Estate Limited (formerly Naira Properties Limited), Coral Properties Limited, NSE Consult Limited and NSE Nominees Limited. Some of them are in the process of being wound up being pre-demutualisation subsidiaries. NGX Group also has significant interests in Central Securities Clearing System Plc (CSCS) and NG Clearing Limited.
- Operating results
Gross earnings of the Group recorded an increase of 65% (2022: increase of 11%) and profit before tax recorded an increase
of 621% (2022: increase of 26%). Gross earnings for the Group comprises revenue, other income and share of profit of
equity accounted investees. For the Company, gross earnings increased by 90% (2022: decreased by 42%) and the profit
before tax increased by 656% (2022: increased by 76%). Highlights of the Group and the Company's operating results for
Group | Group | Company | Company | |
In thousands of naira | 2023 | 2022 | 2023 | 2022 |
Revenue and other income | 11,803,903 | 7,499,603 | 6,425,296 | 3,568,089 |
Share of profit of equity accounted investee | 4,855,936 | 2,150,844 | - | - |
Income tax expense | (20,710) | (124,607) | - | (10,484) |
Profit / (loss) after income tax | 5,349,009 | 698,482 | 725,760 | (259,737) |
Appropriations: | ||||
Other comprehensive (loss)/ income | (2,043,603) | 1,994,493 | 11,515 | (13,217) |
Transfer to/(from) retained earnings | 3,305,406 | 2,692,975 | 737,275 | (272,954) |
4
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
- The Board members' interests in contracts
No Board member has notified NGX Group Plc, for the purpose of Section 303 of the Companies and Allied Matters Act (CAMA) 2020, of any interest in contracts with the NGX Group Plc during the year.
-
Property and Equipment
Information relating to changes in property and equipment is given in Note 22 to the consolidated and separate financial statements. In the Directors' opinion, the market value of the Group's property and equipment is not significantly different from the value shown in the financial statements. - Directors' interest as at 31 December 2023
S/N | Director's Name | Dec-23 | Dec-22 | ||
Direct | indirect | Direct | Indirect | ||
1 | Dr. Umaru Kwairanga (Finmal Finance | 3,053,924 | 1,420,640 | 3,053,924 | 1,420,640 |
Company Limited) | |||||
2 | Mr. Oscar Nduka Onyema, OON | NIL | NIL | NIL | NIL |
3 | Dr.Okechukwu Itanyi | NIL | NIL | NIL | NIL |
4 | Mrs. Ojinika Olaghere | NIL | NIL | NIL | NIL |
5 | Mr. Sehinde Adenagbe (Standard Union | 2,000 | 1,000,000 | N/A | N/A |
Securities Limited) | |||||
6 | Mr. Ademola Babarinde (Reward | NIL | 869,881 | N/A | N/A |
Investment & Securities Limited) | |||||
Mr. Mohammed Garuba (CardinalStone | |||||
Partners and CardinalStone Securities | 10,000,000 | 103,755,866 | N/A | N/A |
- Limited)
Mr. Nonso Okpala (VFD Group) | NIL | 106,832,501 | N/A | N/A | |
8 | |||||
Mrs. Mosun Belo-Olusoga | NIL | NIL | N/A | N/A | |
9 | |||||
Mrs. Fatima Wali-Abdurrahman | NIL | NIL | N/A | N/A | |
10 | |||||
Mr. Oluwole Adeosun (Chartwell | NIL | NIL | |||
11 | Securities Limited) - as at 14 July 2023 | 5,632,830 | 5,632,830 | ||
Mr. Chidi Agbapu (Planet Capital | NIL | NIL | |||
12 | Limited) - as at 14 July 2023 | 1,000,000 | 1,000,000 | ||
Mr. Patrick Ajayi (WCM Capital Limited) | NIL | NIL | |||
13 | - as at 14 July 2023 | 2,000,000 | 3,000,000 | ||
Mrs. Fatimah Bintah Bello - Ismail as at | NIL | NIL | NIL | NIL | |
14 | 14 July 2023 | ||||
g. Substantial Interest in Shareholding
As at 31 December 2023, the Company had 2,595 shareholders. In compliance with the Securities and Exchange Commission's Demutualisation Rules, none of the shareholders currently hold up to 5% of the shareholding of the
Company.
A total of 222,480,337 shares are being warehoused by Stanbic IBTC Trustees Limited for the Long Term Incentive Plan ("LTIP'') (200,419,990) for employees and as balance Claims Review Shares (22,060,347). The process of operationalising the LTIP and receiving the requisite regulatory approvals is still ongoing.
5
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
h. Shareholding Analysis
Shareholding Analysis as at 31 December 2023
Number Of | % of | Number Of | % of | |||
Share Range | Shareholders | Shareholder | Holdings | Shareholding | ||
1 | - | 10,000 | 1,538 | 59.27 | 3,538,256 | 0.16 |
10001 | - | 50,000 | 398 | 15.34 | 10,451,972 | 0.47 |
50001 | - | 100,000 | 150 | 5.78 | 12,106,593 | 0.55 |
100001- | 500,000 | 158 | 6.09 | 39,944,857 | 1.81 | |
500001- | 1,000,000 | 53 | 2.04 | 42,375,241 | 1.92 | |
1000001 | - | 5,000,000 | 201 | 7.75 | 498,462,152 | 22.61 |
5000001 | - | 10,000,000 | 76 | 2.93 | 470,336,974 | 21.33 |
10000001 | - | 50,000,000 | 12 | 0.46 | 280,368,975 | 12.72 |
50000001 | - | 100,000,000 | 8 | 0.31 | 624,554,550 | 28.33 |
100000001- | 500,000,000 | 1 | 0.04 | 222,480,337 | 10.09 | |
TOTAL | 2,595 | 100.00 | 2,204,619,907 | 100 | ||
Shareholding Analysis as at 31 December 2022 | ||||||
Number Of | % of | Number Of | % of | |||
Share Range | Shareholders | Shareholder | Holdings | Shareholding | ||
1- | 10,000 | 1,176 | 56.3488 | 2,845,708 | 0.1291 | |
10001- | 50,000 | 314 | 15.0455 | 7,942,157 | 0.3603 | |
50001- | 100,000 | 110 | 5.2707 | 8,747,906 | 0.3968 | |
100001- | 500,000 | 113 | 5.4145 | 28,655,760 | 1.2998 | |
500001- | 1,000,000 | 44 | 2.1083 | 34,845,139 | 1.5806 | |
1000001- | 5,000,000 | 222 | 10.6373 | 555,364,334 | 25.1909 | |
5000001- | 10,000,000 | 89 | 4.2645 | 542,179,090 | 24.5929 | |
10000001- | 50,000,000 | 12 | 0.5750 | 264,764,323 | 12.0095 | |
50000001- | 100,000,000 | 5 | 0.2396 | 396,137,789 | 17.9685 | |
100000001- | 500,000,000 | 2 | 0.0958 | 363,137,701 | 16.4717 | |
Total | 2,087 | 100.0000 | 2,204,619,907 | 100.0000 |
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The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
-
Board members responsibilities
The Board members are responsible for the preparation of financial statements which give a true and fair view of the state of affairs and comply with Companies and Allied Matters Act (CAMA) 2020. They are obliged to ensure that: - Proper accounting records are maintained;
- Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other irregularities;
- Applicable accounting standards are followed;
- Judgments and estimates made are reasonable and prudent;
- Suitable accounting policies are adopted and consistently applied; and
- The going concern basis is used, unless it is inappropriate to presume that the NGX Group Plc will continue in business.
- Human Resources
i. Report on Diversity in Employment
The Company operates a non-discriminatory policy (Work Force Diversity and Equal Opportunities Policy) in consideration of applications for employment. The Company's policy is that most qualified and experienced persons are recruited for appropriate job levels, irrespective of an applicant's state of origin, ethnicity, religion, gender or physical
condition.
We believe diversity and inclusiveness are powerful drivers of competitive advantage in developing and understanding our customers' needs and creatively addressing them.
Gender Diversity Breakdown
Male | Female | |
Executive Management (CEOs-ED) | 3 | 1 |
Management Team (PM-ED) | 14 | 3 |
All other staff members (SM and below) | 61 | 50 |
NGX Group board members | 9 | 4 |
Executive Management
(CEO-ED)
Female
25%
Male 75%
Management Team
(PM-GM)
Female
18%
Male
82%
7
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
All other staff members (SM and
below)
Female
45%Male
55%
ii. Employment of Disabled Persons
NGX Group PLC board
members
Female
31%
Male
69%
The Company maintains a policy of giving full consideration to applications for employment from persons with a disability with due regard to their abilities and aptitude vis a vis equirements of the role . In event of a staff member becoming disabled, our policy is to provide continuing employment and training wherever possible.
iii. Health, Safety and Welfare at Work
The Company enforces strict health and safety rules and practices in the work environment, that are reviewed and tested regularly. in addition, the Company provides a top-class health insurance via Health Maintainance Organisations (HMOs) to employees.
Fire prevention and fire-fighting equipments are installed in strategic locations within the Company's premises. In line with its family-friendly focus and fitness, the Company also operates a crèche facility and Gym at its Head Office.
The Company operates both a Group Personal Accident Insurance and the Employees' Compensation Scheme for the benefit of its employees. We also comply with the extant Pension Reform Act.
iv. Employee Training and Development
In line with the Company's policy of continous development, the NGX Group Plc. continues to invest in a range of initiatives to enable staff members develop required competencies, perform in their current roles and prepare them for future roles.
8
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
-
Operational Risk
Operational risk is the risk that the Group would suffer a loss as a result of inadequate or failed processes, people and systems (including information technology and infrastructure) or from external events. By definition, operational risk excludes business risks (strategic and management) and financial risks (market, credit, and liquidity) but include all potential events that may impact one or more operational objectives of the Group.
Operational risk can arise due to human oversight, fraudulent acts, and inappropriate behaviour of employees or system failure. These events could result in financial losses, including litigations and regulatory fines, as well as reputational damage to the Group and can manifest in any of the following forms: business process execution failures, damage to tangible and intangible assets, threat to workplace health and safety, fraud and theft, compliance failures, technology failures and damages.
The Group recognizes that operational risks are inherent within its current operations, and may emerge from implementing new business decisions or from other internal and external changes. Our approach to managing operational risk is through a comprehensive, systematic, disciplined and proactive process implemented to identify, assess, mitigate, monitor and report operational risk related to the achievement of our strategic objectives and is embodied within the Board approved Enterprise Risk Management Framework.
The Group has conducted an enterprise-wide assessment on all its activities, processes, its procedures and implemented global standard operational risk management methodologies intended to enhance our risk mitigating controls and proactive Several programmes targeted at staff development have been developed/deployed such as: The Leadership Enhancement And Development (LEAD) Programme, designed to groom and expand the capacity of staff to take on higher responsibilities. Bespoke courses organised for employees based on job requirement. Local and international courses available to staff within the training budget. All these are complemented by continuous on-the-job training, through mentorship and coaching.
- Director's Remuneration
The Company ensures that remuneration paid to its Directors complies with the provisions of the Codes of Corporate Governance issued by its regulators.
In compliance with Section 34(5) of the Code of Corporate Governance for Public Companies as issued by Securities and Exchange Commission, the Company makes disclosure of the remuneration paid to its directors as follows:
Type of package fixed | Description | Timing |
Basic Salary | Part of gross salary package for Executive | Paid monthly during the |
Directors only. Reflects a competitive salary | financial period | |
package and the extent to which the | ||
Company's objectives have been met for the | ||
financial year. | ||
Other allowances | Part of gross salary package for Executive | Paid monthly during the |
Directors only. Reflects a competitive salary | financial period | |
package and the extent to which the | ||
Company's objectives have been met for the | ||
financial year. | ||
Performance Incentive | Paid to Executive Directors only and tied to | Paid annually in arrears |
performance of the line report. It is also a | ||
function of the extent to which the | ||
Company's objectives have been met for the | ||
financial year. | ||
Director fees | Paid quarterly at the beginning of a new | Paid quarterly in arrears |
quarter to Non-Executive Directors only. | ||
Siting allowances | Allowances paid to Non-Executive Directors | Paid after each meeting |
only, for attending Board and Board | ||
Committee Meetings. |
9
The Nigerian Exchange Group Plc
Annual Report
31 December 2023
Directors' Report
For the year ended 31 December 2023
-
Share based payment scheme
Further to Members' approval at the Extra-Ordinary General Meeting of 3 March 2020 for the establishment of an Employee Share Ownership Plan for the benefit of qualifying employees of Nigerian Exchange Group Plc and its Subsidiaries and the approval at the Annual General Meeting held on 9 September 2021 that the Company be and is hereby authorised to issue and allot 200,419,990 ordinary shares of 50 kobo each out of the share capital of Nigerian Exchange Group Plc for the operation of a Long Term Incentive Plan consisting of a Deferred Bonus Plan (DBP) and an Employee Share Purchase Plan (ESPP), with effect from 1 January 2021, subject to obtaining requisite regulatory approvals, the quantum of shares has been warehoused with Stanbic Trustees, who will serve as the Trustee for the LTIP. The LTIP is however yet to be effective
as at reporting date.
-
Dividend
The Directors at its meeting held on 25 July 2023 recommended an interim dividend of 25k per ordinary share of 50k per share. - Donation
Being a good corporate citizen, the Group made a total donation of N79.5 million in 2023 geared towards the growth of the capital market. The list of the beneficiaries and the sums donated are listed below:
Beneficiary | Amount (N) |
Chartered Institute of Stockbrokers (CIS) | 21,000,000 |
Association of Securities Dealing Houses of Nigeria (ASHON | 20,000,000 |
6th African International Conference on Islamic Finance | 10,000,000 |
West African Capital Market Conference (WACMAC) | 10,000,000 |
Burial of late Chris Ogunbanjo | 7,498,599 |
Burial of late Akintola Williams | 5,000,000 |
Rotary foundation | 2,000,000 |
Nigeria Higher Education Foundation | 2,000,000 |
Lagos Motor Boat Club | 2,000,000 |
79,498,599 |
- Auditor
Messrs. Ernst & Young. having satisfied the relevant corporate governance rules on their tenure in office, have indicated their willingness to continue in office as auditors to the Company in accordance with Section 401(2) of the Companies and Allied Matters Act (CAMA) 2020. Therefore, the auditor will be re-appointed at the next Annual General Meeting of the Company without any resolution being passed.
By Order of the Board
Mr. Izuchukwu Emmanuel Akpa
Acting Company Secretary
FRC/2020/002/00000021979
1 March 2024
10
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NGX - Nigerian Exchange Group plc published this content on 01 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2024 21:57:38 UTC.