NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group as a lessee 2. 12 Intangible assets
Finance leases that transfer substantially
Acquired computer software licenses
all the risks and benefits incidental to
ownership of the leased item to the Group, are capitalized on the basis of the costs
are capitalized at the commencement of incurred to acquire and bring to use the
the lease at the fair value of the leased specific software when their values can
asset or, if lower, at the present value be reasonably determined and economic
of the minimum lease payments. Lease benefits will accrue to the Group.
payments are apportioned between Computer software is stated at cost less
finance charges and reduction of the amortization and impairment losses.
lease liability so as to achieve a constant
rate of interest on the remaining balance Subsequent expenditure
of the liability. Finance charges are Subsequent expenditure is capitalized
recognized in finance costs in the income
statement. only when it increases the future
economic benefits embodied in the
A leased asset is depreciated over the specific asset to which it relates. Costs
useful life of the asset. However, if there associated with maintaining computer
is no reasonable certainty that the Group software programmes are recognized as
will obtain ownership by the end of the expenses when incurred.
lease term, the asset is depreciated over
the shorter of the estimated useful life of Amortisation
the asset and the lease term.
Computer software are amortized over
Operating lease payments are recognized
as an operating expense in the income the useful economic life estimated as the
statement on a straight-line basis over
the lease term. period over which the assets will be used
by the Group. The amortisation period and
Group as a lessor the amortisation method are reviewed at
Leases in which the Group does not
least at the end of each reporting period.
transfer substantially all the risks and
benefits of ownership of an asset are Changes in the expected useful life or
classified as operating leases. Initial direct
costs incurred in negotiating an operating the expected pattern of consumption
lease are added to the carrying amount
of the leased asset and recognized over of future economic benefits embodied
the lease term on the same basis as rental
income. Contingent rents are recognized in the asset are considered to modify
as revenue in the period in which they are
earned. the amortisation period or method, as
appropriate, and are treated as changes
in accounting estimates. Amortisation
rate for intangible asset is as follows:
Computer software 33.33%
Consolidation • Stability • Focus 101
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Derecognition of intangible assets 2.14 Provisions
An intangible asset is derecognized on
Provisions are recognized when the
disposal, or when no future economic Group has a present obligation (legal or
benefits are expected from its use. Gains constructive) as a result of a past event
or losses arising from derecognition of and it is probable that an outflow of
an intangible asset, measured as the resources embodying economic benefits
difference between the net disposal will be required to settle the obligation
proceeds and the carrying amount of the and a reliable estimate can be made of
asset are recognized in profit or loss. the amount of the obligation. Where
there are a number of similar obligations,
2.13 Employee benefits the likelihood that an outflow will be
required in settlement is determined by
Short-term benefits considering the class of obligation as a
Short-term employee benefit obligations whole. A provision is recognized even if
the likelihood of an outflow with respect
are measured on an undiscounted basis to any one item included in the same class
and are expensed as the related service of obligations may be small. If the effect
is provided. of the time value of money is material,
provisions are discounted using a current
A provision is recognized for the amount pre-tax rate that reflects current market
expected to be paid under short-term assessments of the time value of money
cash, bonus or profitsharing plans if the and the risks specific to the liability.
Group has a present legal or constructive When discounting is used, the increase in
obligation to pay this amount as a result the provision due to the passage of time
of past service provided by the employee is recognized as a finance cost.
and the obligation can be estimated
reliably.
Post-employment benefits When the Group expects some or
all of a provision to be reimbursed,
Defined contribution plans the reimbursement is recognized as
The Group operates a defined a separate asset, but only when the
reimbursement is virtually certain.
contribution plan in accordance with the The expense relating to a provision is
provisions of the Pension Reform Act. presented in the statement of profit or
The contribution of the employee and loss net of any reimbursement.
employer is 8% and 10% of the qualifying
monthly emoluments (i.e. basic, housing
and transport) of employees respectively.
The Group’s obligations for contributions 2.15 Cash and cash equivalents
to the plan are recognized as an expense
in profit or loss when they are due. For the purposes of the consolidated
statement of cash flows, Cash and
cash equivalents include cash in hand,
102 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
unrestricted demand, call deposits with Regulatory risk reserve
banks, and short term highly liquid The Nigerian banking regulator requires
financial assets (including money market
funds), with original maturities of three Microfinance Banks to create a reserve
months or less from the acquisition date, for the difference between impairment
which are subject to insignificant risk of charge determined in line with the
changes in their value and used by the principles of IFRS and impairment charge
Group in the management of its short- determined in line with the prudential
term commitments. guidelines issued by the Central Bank
of Nigeria (CBN). This reserve is not
available for distribution to shareholders.
2.16 Share capital and reserves
Fair value reserve
Comprises fair value movements on
Share capital
The issued ordinary shares of the equity instruments
Company are classified as equity
instruments. Incremental costs directly Dividends
attributable to the issue of an equity Dividends on ordinary shares are
instrument are shown in equity as a
deduction, net of tax, from the proceeds. recognized in equity in the period in which
they are approved by the Company’s
Share premium shareholders. Dividends for the period
Premiums from the issue of shares are that are declared after the reporting date
are disclosed in the financial statements
reported in share premium. as a non-adjusting event
2.16 Earnings per share
Statutory reserve
Nigerian banking regulations require The Group presents earnings per share
Microfinance Banks to make an annual (EPS) for its ordinary shares. Basic EPS
appropriation to a statutory reserve. is calculated by dividing profit or loss
Section 8.1.7(a) of the Central Bank attributable to ordinary shareholders of
of Nigeria Revised Regulatory and the Company by the weighted average
Supervisory Guidelines for Microfinance number of ordinary shares outstanding
Banks (MFBs) stipulates that an during the reporting period. Where there
appropriation of 50% of profit after tax are shares that could potentially affect
is made if the statutory reserve is less the number of shares issued, those shares
than 50% of the paid-up share capital, an are considered in calculating the diluted
appropriation of 25% of profit after tax is earnings per share. There are currently
made if the statutory reserve is 50% or no share that could potentially dilute the
more but less than 100% of the paid up total issued shares.
share capital and 12.5% of profit after tax
if the statutory reserve is equal to 100%
or more of the paid-up share capital.
Consolidation • Stability • Focus 103
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
2.17 Fair value measurement fair value of the corresponding asset
held by another market participant at the
Fair value is defined as the price that measurement date. Counterparty credit
risk and own credit risk are taken into
would be received to sell an asset or account in determining the fair value of a
paid to transfer a liability (i.e. the ‘exit liability. In the absence of quoted market
price’) in an orderly transaction that prices, an entity uses valuation techniques
is not a forced sale, liquidation sale appropriate in the circumstances and
or a distressed sale between market for which sufficient data are available
participants at the measurement date. to measure fair value, maximizing the
Fair value is determined based on market use of relevant observable inputs and
conditions at the measurement date and minimizing the use of unobservable
the assumptions that market participants inputs.
would use (i.e. it is a market-based
measurement). Fair value measurement 2.18 Borrowing costs
assumes the transaction to sell the asset
or transfer the liability occurs in a principal Borrowing costs directly attributable
market or, in the absence of a principal
market, in the most advantageous market to the acquisition, construction or
to which the entity has access. It does production of an asset that necessarily
not consider an entity’s intent to sell the takes a substantial period of time to
asset or transfer the liability. Fair value get ready for its intended use or sale
measurements of non-financial assets are capitalized as part of the cost of
take into account a market participant’s the asset. All other borrowing costs are
ability to generate economic benefits by expensed in the period in which they
using the asset in its highest and best occur. Borrowing costs consist of interest
use or by selling it to another market and other costs that an entity incurs in
participant that would use the asset connection with the borrowing of funds.
in its highest and best use. The highest
and best use is determined from the 2.19 Expense recognition
perspective of market participants, even
if the entity intends a different use. Operating expenses
Expenses are decreases in economic
An entity’s current use of a non-financial
asset is presumed to be its highest and benefits during the accounting period
best use unless market or other factors in the form of outflows, depletion of
suggest that a different use by market assets or incurrence of liabilities that
participants would maximize the value result in decrease in equity, other than
of the asset. In the absence of quoted those relating to distributions to equity
market prices, the fair value of a financial participants.
or non-financial liability or an entity’s
own equity instruments is taken as the Expenses are recognized on an accrual
bases regardless of the time of spending
104 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
cash. Expenses are recognized in the appreciation purposes are accounted
income statement when a decrease in for as investment properties and are
future economic benefit related to a measured using the fair value model.
decrease in an assets or an increase of a Gains and losses arising from changes
liability has arisen that can be measured in the fair value of investment properties
reliably. Expenses are measured at are included in profit or loss in the period
historical cost. in which they arise.
Only the portion of cost of a previous An investment property is derecognised
period that is related to the income upon disposal or when the investment
earned during the reporting period is property is permanently withdrawn from
recognized as an expense. Expenses that use and no future economic benefits are
are not related to the income earned expected from the disposal. Any gain
during the reporting period, but expected or loss arising on derecognition of the
to generate future economic benefits, property (calculated as the difference
are recorded in the financial statement between the net disposal proceeds and
as assets. The portion of assets which the carrying amount of the asset) is
is intended for earning income in the included in profit or loss in the period in
future periods shall be recognized as an which the property is derecognised.
expense when the associated income is
earned.
2.21 Related party transactions
Expenses are recognized in the same Transactions with related parties are
reporting period when they are incurred conducted and recorded at arms’ length
in cases when it is not probable to directly and disclosed in accordance with IAS 24
relate them to particular income earned “Related party disclosures”.
during the current reporting period and
when they are not expected to generate 3 FINANCIAL RISK MANAGEMENT
any income during the coming years.
In 2021, the macro pressures from the
covid pandemic in 2020 slowly eased but
2.20 Investment Properties the risks still remain.
Investment properties are properties held The economy benefited from government
to earn rentals and/or capital appreciation policy support, rising oil prices and
(including property under construction international financial assistance. Nigeria
for such purposes). Investment properties exited the recession in 2020 Q4. Headline
are measured initially at cost, including inflation rose sharply during the pandemic
transaction costs. Subsequent to initial reaching 18.2 percent in March 2021 but
recognition, investment properties are declined to 15.6 percent in December
measured at fair value. All of the Group’s 2021.
property interests held under operating
leases to earn rentals or for capital Consolidation • Stability • Focus 105
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Despite the recovery in oil prices, the All of these trends and many others
general government fiscal deficit is will continue to change the industry,
projected to widen in 2022 from fuel eliminating some risks and introducing
subsidies and higher security spending. new ones. It is imperative that we
Government revenue-to-GDP ratio understand the operational cycle and
remains among the lowest in the world. best practices surrounding managing
risks properly as the financial market
The macroeconomic headwinds continues to evolve.
continued to create multiplicity of known For the Group, the outlook was viewed
as an opportunity to optimize our risk
and unknown risks. It is important to and governance processes and position
the Group to benefit from market and
acknowledge at the outset of this section regulatory developments. In summary,
it has been a very engaging year of risk
that Risk management is constantly management. Various risk management
initiatives came to fruition during the
evolving. Regulations are changing, period which deepened the range of
risk management tools/processes that
technology continues to advance and assisted the Group in managing risk over
the period.
new exotic structures will continually be
introduced into the Nigerian financial
Bespoke Enterprise Risk Management
market. Some of the major trends that Helping our stakeholders achieve their
will continue to affect risk management ambitions lies at the heart of our processes
as we apply bespoke risk management
are: framework in identifying, assessing,
monitoring, controlling and reporting the
(a) Global macroeconomic trend inherent and residual risks associated
with the pursuit of these ambitions and
(b) Regulatory and financial reform ensuring they are achieved the right way.
will continue to impact operational
processing and is expected to As we deepen our presence in the
play a key role in future trends for market, proactive Enterprise Risk
providing transparency Management Framework becomes even
more critical.
(c) Technology continues to advance
rapidly, enabling businesses to
execute many more transactions The Group views and treats risks as an
during periods of market volatility.
intrinsic part of business and maintains a
(d) Businesses will continue to disciplined approach to its management
develop new and more exotic of risk. The Risk functions remain
types of transactions especially
in FX derivatives and oil hedging
products.
(e) New and more diverse types of
clients continue to enter the market,
which require development of
new operational procedures and
products.
106 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
dynamic and responsive to the needs of and operational risks as well as for other
stakeholders as it improves its focus on key risks such as liquidity, strategic and
the inter-relationships between risk types. reputational risks.
It uses periodic reviews of risk exposure
limits and risk control to position itself To some institutions, risk is viewed as a
against adverse scenarios. threat or uncertainty, but to us, it goes
beyond that. Risk to us, presents potential
The Group’s risk management opportunities to grow and develop
architecture, as designed, continued to our business within the context of our
balance corporate oversight with well- clearly articulated and Board-driven risk
defined risk management functions which appetite.
fall into one of three categories where
risk must be managed: lines of business,
governance & control, and audit. The Risk Management Framework
Board of Directors and management of All activities and processes of the Group
the Group are committed to constantly
establishing, implementing and sustaining involve the identification, measurement,
tested practices in risk management evaluation, acceptance and management
to match those of leading international of risk or combinations of risks. The
organisations. We are convinced that Board, advised by the various Board and
the long-term sustainability of our Management Risk Committees, requires
Group depends critically on the proper and encourages a strong risk governance
governance and effective management of culture which shapes the Group’s attitude
our business. As such, risk management to risk. We believe that risk management
occupies a significant position of encompasses the insights delivered by
relevance and importance in the Group. information which facilitate appropriate
actions. VFD Group benefits from
Risk strategies and policies are set by the having enhanced its risk management
Board of Directors of the Group. These framework, which gives full coverage of a
policies, which define acceptable levels variety of risks.
of risk for day-to-day operations as well
as the willingness of the Group to assume We have a holistic view of all major risks
risk, weighed against the expected facing the Group. We remain vigilant with
rewards are detailed in the Enterprise regard to both known and emerging risks
Risk Management (ERM) Framework, and ensure that we are strong enough
which is a structured approach to to withstand any exogenous shocks.
identifying opportunities, assessing the Our Board-level risk committees play a
risk inherent in these opportunities and critical role in providing oversight of risk
actively managing these risks in a cost- management and ensuring that our risk
effective manner. Specific policies are appetite and risk profile are consistent
also in place for managing risks in the with and support our strategy to deliver
different core risk areas of credit, market long-term, sustainable success in
achieving our strategic vision.
Consolidation • Stability • Focus 107
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Risk, by definition, is dynamic in nature. The enhancing the quality of strategic, capital
management of risk, consequently, must allocation and day-to-day business
be evolving, necessitating regular review decisions.
of the effectiveness of each enterprise
risk management component. The Group believes that enterprise risk
management provides the superior
We believe that understanding and capabilities to identify and assess the full
managing our risks and continuously spectrum of risks and to enable staff at all
improving our controls are central to the levels to better understand and manage
delivery of our strategic objectives. The risks. This will ensure that:
Board’s risk committees play an active
role in ensuring that we undertake well- • Risk acceptance is done in a
measured, profitable risk-taking activities
that support long-term sustainable responsible manner;
growth. • The executive and the Board of
Risk Management Philosophy, Appetite the Group have adequate risk
and Objectives management support;
VFDGroup’sRiskmanagementphilosophy • Uncertain outcomes are better
and culture remain fundamental to the anticipated;
delivery of our strategic objectives. • Accountability is strengthened; and
Risk management is at the core of the • Stewardship is enhanced.
operating structure of the Group. We seek
to limit adverse variations in earnings Risk Appetite
and capital by managing risk exposures Risk appetite is an articulation and
within our moderate risk appetite. Our
risk management approach includes allocation of the risk capacity or quantum
minimizing undue concentrations of of risk VFD Group is willing to accept
exposure, limiting potential losses in pursuit of its strategy, duly set and
from stress events and the prudent approved by the executive committee
management of liquidity. and the Board, and integrated into our
strategy, business, risk and capital plans.
Risk management is fundamental
to the Group’s decision-making and The risk appetite metrics were tracked
management process. against approved triggers and exceptions
were reported to management for prompt
It is embedded in the role of all employees corrective actions. Key issues were also
via the organizational culture, thus escalated to the Board Risk Management
Committee.
108 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Risk management objectives derive directly from its operations. The
The broad risk management objectives Group also holds FVOCI investment
securities.
of the Group are:
The Board of Directors reviews and
agrees policies for managing each of
• To identify and manage existing the financial risks, which are summarised
and new risks in a planned and below.
coordinated manner with minimum
disruption and cost;
• To protect against unforeseen losses 3.1 Credit risk Management
and ensure stability of earnings;
Credit risk arises from the failure of an
• To maximize earnings potential and obligor of the Group to repay principal or
opportunities; interest at the stipulated time or failure
otherwise to perform as agreed. This risk
• T o maximize share price and is compounded if the assigned collateral
stakeholder protection; only partly covers the claims made to the
borrower, or if its valuation is exposed
• T o develop a risk culture that to frequent changes due to changing
encourages all staff to identify risks market conditions (i.e. market risk).
and associated opportunities and to
respond to them with cost effective
actions. The Group’s Risk Management philosophy
Scope of risks is that moderate and guarded risk
The scope of risks that are directly attitude will ensure sustainable growth
managed by the Group is as follows: in shareholder value and reputation.
Extension of credit in the Group is
• Credit risk guided by its Credit Policy Guide, which
• Operational risk sets out specific rules for risk origination
• Market and liquidity risk and management of the loan portfolio.
• Legal and compliance risk The Policy also sets out the roles and
• Strategic risk responsibilities of different individuals
• Reputational risk and committees involved in the credit
• Capital risk process.
The Group’s principal financial liabilities The goal of the Group is to apply
comprise borrowings and other liabilities. sophisticated but realistic credit models
The main purpose of these financial and systems to monitor and manage
liabilities is to finance the Group’s credit risk. Ultimately these credit models
operations. The Group’s principal financial and systems are the foundation for the
assets include loans and receivables, application of internal rating-based
other assets (excluding prepayments) approach.
and cash and short-term deposits that
Consolidation • Stability • Focus 109
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
The pricing of each credit granted reflects • Reviewing and assessing credit
the level of risks inherent in the credit. risk. Assessing all credit exposures
Subject to competitive forces, The Group in excess of designated limits, prior
implements a consistent pricing model to facilities being committed to
for loans to its different target markets. customers by the business unit
The client’s interest is guarded at all concerned. Renewals and reviews
times, and collateral quality is never the of facilities are subject to the same
sole reason for a positive credit decision. review process.
• Developing and maintaining the
The Group’s credit process requires Group’s risk grading in order to
rigorous proactive and periodic review categorise exposures according to
of the quality of the loan portfolio. This the degree of risk of financial loss
helps us to identify and remediate credit faced and to focus management
issues proactively. on the attendant risks.
The Board credit Committee is • Providing advice, guidance and
responsible for oversight of the Group’s specialist skills to business units to
credit risk, including: promote best practice throughout
the Group in the management of
• Formulating credit policies in credit risk.
consultation with business units,
covering collateral requirements,
credit assessment, risk grading
and reporting, documentary and
legal procedures, and compliance
with the Group credit policies
110 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
An internal credit rating scale is in place to measure the counterparty risk. All customers that
are granted credit are evaluated using the Group’s risk rating model. The risk rating scale
ranges from A to D, where D represents very high risk and A represents low risk. The rating
grid is shown below:
Above 50: Very High Risk (“D” client)
26 – 50: High Risk (“C” client)
15 – 25: Medium Risk (“B” client)
Less than 15: Low Risk (“A” client)
The Group establishes an allowance for impairment that represents its best estimate of
incurred loss in respect of loans and receivables
Group Cash Investment Loans and Held for **Other Total
and cash securities receivables/ trading financial
At 31 December 2021 equivalents placements N’000
Neither past due nor N’000 N’000 assets 68,950,307
impaired N’000 33,732,781 N’000 -
Gross amount N’000
Impairment allowance 3,881,378 31,035,976
Carrying amount 300,172
3,881,378 33,732,781 31,035,976 - 300,172 68,950,307
3,881,378 33,732,781 (1,486,820)
29,549,156 (1,486,820)
- 300,172 67,463,487
At 31 December 2020 N’000 N’000 N’000 N’000 N’000 N’000
Neither past due nor 4,490,804 13,750,345 12,270,561 5,974 852,321 31,370,005
impaired
4,490,804 13,750,345 12,270,561 5,974 852,321 31,370,005
Gross amount 4,490,804 (125,966) (979,446) 5,974 - (1,105,412)
Impairment allowance 11,291,115 30,264,592
Carrying amount 13,624,379 852,321
Consolidation • Stability • Focus 111
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Company Cash Investment Loans and Held for **Other Total
and cash securities receivables/ trading financial
At 31 December 2021 equivalents placements N’000
Neither past due nor N’000 N’000 assets 44,022,258
impaired N’000 26,654,078 N’000 -
N’000
2,306,643 14,761,365
300,172
Gross amount 2,306,643 26,654,078 14,761,365 - 300,172 44,022,258
Impairment allowance 2,306,643 - (256,344) 300,172 (256,344)
Carrying amount 14,505,021 -
26,654,078 43,765,914
At 31 December 2020 N’000
Neither past due nor N’000 N’000 N’000 - N’000 N’000
impaired 4,077,652 12,073,172 5,745,543 288,616 22,184,984
Gross amount 4,077,652 12,073,172 5,745,543 - 288,616 22,184,984
Impairment allowance (109,822)
Carrying amount 5,635,721 (122,038) (231,860)
**includes mutual funds 4,077,652 12,073,172 - 166,578 21,953,124
3.2 Liquidity Risk Management: liquidity risk. Specifically, the Group
adopted the following approaches;
a) Funding and Liquidity plan;
Liquidity risk arises when the Group is b) Gap Analysis; and
unable to meet expected or unexpected c) Ratio Analysis.
current or future cash flows and collateral
needs without affecting its daily The Funding and Liquidity plan defines
operations or its financial condition. The the Group’s sources and channels of
Group is managed to preserve a high utilization of funds. The funding liquidity
degree of liquidity so that it can meet the risk limit is quantified by calculating
requirements of its customers at all times liquidity ratios and measuring/monitoring
including periods of financial stress. the cumulative gap between our assets
and liabilities. The Liquidity Gap Analysis
We analyze and monitor our liquidity quantifies the daily and cumulative gap
risk, maintain excess liquidity and access in a business-as-usual environment. The
diverse funding sources. gap for any given tenor bucket represents
the borrowings from, or placements to,
the market required to replace maturing
Quantifications
VFD Group has adopted both qualitative
and quantitative approaches to measuring
112 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
liabilities or assets. The Group monitors events, economic or market conditions,
the cumulative gap as a + or – 20% of the earnings problems or situations beyond
total risk assets and the gap as a + or – its control could cause either a short or
20% of total deposit liabilities. long-term liquidity crisis. It reviews its
contingency funding plan in the light of
Limit management and monitoring evolving market conditions and stress
Active management of liquidity through test results.
the framework of limits and control To monitor liquidity and funding, the Group
presented above is possible only with Treasury prepares a liquidity worksheet
proper monitoring capabilities. The that project sources and uses of funds.
monitoring process focuses on funding The worksheet incorporates the impact
portfolios, the forward balance sheet of moderate risk and crisis situations. The
and general indicators; where relevant worksheet is an integral component of
information and data are compared the contingency funding plan. Although
against limits that have been established. it is unlikely that a funding crisis of any
The Group’s Treasury is responsible significant degree could materialize, we
for maintaining sufficient liquidity by consider it important to evaluate this risk
maintaining sufficient high ratio of liquid and formulate contingency plans should
assets and available funding for near- one occur.
term liabilities. The secured liquidity
measure is calculated and monitored The contingency funding plan covers: the
by risk management. Liquidity risk is available sources of contingent funding
reported to the Board of Directors on a to supplement cash flow shortages;
quarterly basis. the lead times to obtain such funding;
the roles and responsibilities of those
Liquidity risk is strongly related to other involved in the contingency plans; and
financial risks such as credit risk and the communication and escalation
market risks, such as interest rate risk, requirements when early warning
security price risk, etc. indicators signal deteriorating market
conditions. Both short term and long-
Contingency funding plan term funding crises are addressed in the
The Group has a contingency funding contingency funding plan.
plan which incorporates early warning
indicators to monitor market conditions.
The Group monitors its liquidity position
and funding strategies on an ongoing
basis, but recognizes that unexpected
Consolidation • Stability • Focus 113
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
The tables below represent the maturity profile of the carrying amounts of the non-derivative
financial assets and financial liabilities within the Group.
Group Carrying Contractual 0-90 days 91-180 days 181-365 days Above 365
amount cash flows N’000 days
At 31 December 2021 N’000 N’000
Financial liabilities N’000 N’000 N’000
Borrowings
Funds under management 8,379,397 8,379,397 582,774 2,629,192 5,167,431 -
Other financial liabilities 26,062,482 26,062,482 12,476,110 10,198,249 3,388,123 -
(excluding deposit for 1,632,107 3,122,917
shares) 7,737,687 7,737,687 1,132,156 1,219,191
Financial assets 42,179,566 42,179,566 14,191,040 14,046,632 10,187,661 3,122,917
Cash and cash equivalents
Investment securities 3,881,378 3,881,378 3,880,378 - - -
Loans and receivables 25,492,189 25,492,189 737,672 5,247,044 3,871,618 16,026,233
Fixed debt placement 31,035,976 31,035,976 12,648,158 7,072,200
Other financial assets ** 8,240,592 8,240,592 11,089,596 5,017,337 1,547,599
2,404,421 818,653 -
Net liquidity (surplus)/ 300,172 300,172 - - -
deficit 68,950,307 68,950,307 300,172 15,961,155
(26,770,741) (26,770,741) 18,412,239 18,713,855 (5,773,494) 17,573,832
(4,221,199) (4,667,223) (14,450,915)
Group Carrying Contractual 0-90 days 91-180 days 181-365 days Above 365
amount cash flows N’000 days
At 31 December 2020 N’000 N’000
Financial liabilities N’000 N’000 N’000
Borrowings
Funds under management 7,313,096 7,313,096 525,198 2,986,300 3,801,598 -
25,248,777 25,248,777 17,036,096 3,787,317 2,045,151 2,380,214
Financial assets
Cash and cash equivalents 60,286,829 60,286,829 29,956,459 17,542,807 10,356,861 2,430,704
Fair vale through Profit or
loss 4,490,804 4,490,804 4,490,804 - - -
Investment securities 5,974 5,974 5,974 - - -
Loans and receivables
Fixed debt placement 11,828,127 11,828,127 4,049,475 4,175,673 2,761,005 841,974
Other financial assets ** 13,250,008 13,250,008 1,506,317 7,429,701 3,142,169 1,171,821
307,717 1,415,351
Net liquidity (surplus)/ 2,541,721 2,541,721 818,653 -
deficit 30,258,825 30,258,825 23,754,746 5,571,099 294,218 638,762
62,375,459 62,375,459 34,115,033 17,995,126 7,612,743 2,652,557
(2,088,629) (2,088,629) (4,158,574) (452,319) 2,744,118 (221,853)
114 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Company Carrying Contractual 0-90 days 91-180 days 181-365 days Above 365
amount cash flows N’000 days
At 31 December 2021 N’000 N’000
Financial liabilities N’000 N’000 N’000
Borrowings
Other financial liabilities 33,536,150 33,536,150 9,483,957 2,342,892 6,155,076 15,554,224
(excluding deposit for 8,213,335 8,213,335 608,811 1,840,650 2,691,446 3,072,428
shares)
41,749,485 41,749,485 10,092,768 4,183,542 8,846,522 18,626,652
Financial assets 2,306,643 2,306,643 2,306,643 - - -
Cash and cash equivalents 23,052,092 23,052,092 452,127 4,829,482 3,186,471 -
Investment securities 3,930,031 691,065
Loans and receivables 14,761,365 14,761,365 7,456,043 - 3,601,986 -
Fixed debt placement 3,601,986 3,601,986 - - -
Other financial assets ** - - 691,065
300,172 300,172 300,172 4,829,482 10,718,488 17,935,587
Net liquidity (surplus)/ 44,022,258 44,022,258 10,514,985 (645,940) (1,871,966)
deficit (2,272,773) (2,272,773)
(422,217)
Company
Carrying Contractual 0-90 days 91-180 days 181-365 days Above 365
At 31 December 2020 amount cash flows N’000 days
Financial liabilities N’000 N’000
Borrowings N’000 N’000 N’000
Other financial liabilities
(excluding deposit for 22,161,397 22,161,397 17,432,967 2,986,300 1,742,130 -
shares) 27,106,983 27,106,983 16,297,872 9,550,000 1,232,107 27,004
49,268,380 49,268,380 33,730,839 12,536,300 2,974,237 27,004
Financial assets 4,077,652 4,077,652 4,077,652 - - -
Cash and cash equivalents 11,230,513 11,230,513 5,155,198 3,999,457 2,075,858 -
Investment securities 1,203,873 5,855,366 1,945,843 3,218,458 691,065
Loans and receivables 1,415,351 - -
Fixed debt placement 1,415,351 1,415,351 - - 71,357
Other financial assets ** 28,990,273 28,990,273 23,468,916 5,450,000 - 762,422
46,917,662 51,569,155 36,062,960 12,667,915 2,075,858 (735,418)
Net liquidity (surplus)/ (2,300,775) 898,379
deficit 2,350,718 (2,332,121) (131,615)
Consolidation • Stability • Focus 115
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
3.3 Market Risk Management Depending on the market conditions and
risk outlook, recommendations are made
to the risk management committees in
VFD Group is faced with the risk of respect of the market risk profile, risk
decline in its earnings and capital appetite appraisal, as well as review of
arising from adverse changes in market limits against actual position.
variables, such as interest rate and foreign
exchange rate. Market Risk is the risk The Group regularly conducts stress
that the value positions will be adversely testing to monitor its vulnerability to
affected by movements in equity prices, unfavorable shocks. It monitors and
interest rates, currency exchange rates controls its risk, using various internal
and commodity prices. and regulatory risk limits.
Interest rate risk
Market Risk Management: Policy and Interest rate risk is the exposure of the
control Group’s financial condition to adverse
Over the years, the Nigerian financial movements in interest rates, yield curves
market has witnessed a dramatic and credit spreads.
expansion in the array of financial services
and products. This tremendous growth The Group’s exposure to interest rate
in scale and scope has also generated risk is minimal as it does not invest in
new risks with global consequences, floating rate securities and its fixed rate
especially market risk, necessitating an placements are with banks and other
assessment of exposures to the volatility financial institutions.
of the underlying risk drivers.
Re-pricing and Liquidity Gap Analysis
These developments have prompted The Group’s objective for management
a comprehensive and dynamic Market of interest rate risk to ensure a higher
Risk Policy, to ensure that risks faced degree of interest rate mismatch margin
across business activities and on an stability and lower interest rate risk over
aggregate basis are within the stipulated an interest rate cycle.
risk appetite of the Group. These policies
have been benchmarked with industry The Group’s operations are subject to
and international best practices. the risk of interest rate fluctuations to
the extent that interest-earning assets
The Board approves the risk appetite and interest-bearing liabilities mature or
and risk limits are set within the context re-price at different times or in differing
of the approved market risk appetite. amounts. In the case of floating rated
Limits are set based on the approved risk assets and liabilities..
appetite, underlying liquidity as well as
legal limitations on individual positions
imposed by the regulatory authorities in
Nigeria.
116 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Sensitivity Analysis Dealer Limits: This limit sets a maximum
Interest-rate risk is monitored with a Gap tolerable position exposure for a specific
dealer.
report. A limits framework is in place to
ensure that retained risk remains within Mark-to-Market (MTM)
approved appetite. The marking-to-market technique
establishes historical profit/loss by
revaluing money market exposures to
Sensitivity Analysis and Stress Testing prevailing market prices.
Sensitivity analysis and stress testing
Stress testing
are risk measurement techniques that The stress testing methodology
help us ensure that the risks the Group
takes remain within our risk appetite assumes that scope for management
and that our level of capital remains action would be limited during a
adequate. Sensitivity analysis involves stress event, reflecting the decrease
varying a single factor (e.g. a model in market liquidity that often occurs.
input or specific assumption) to assess
the impact on various risk measures.
Stress testing generally involves Stress testing is an integral part of the
consideration of the simultaneous market risk management framework and
movements in a number of risk factors. It considers both historical market events
is used to measure the level of potential and forward-looking scenarios. Stress
unexpected losses for Credit, Market , testing provides an indication of the
Operational and Liquidity Risks. potential size of losses that could arise
in extreme conditions. It helps to identify
Limits risk concentrations across business
Specific limits and triggers (regulatory lines and assist senior management
in capital planning decisions.
and in-house) have been set across
the various market risk areas to Stress scenarios are regularly updated
prevent undue exposure and the to reflect changes in risk profile and
market risk management exist; economic events. Regular stress test
scenarios are applied to interest rates,
Stop Loss Limit: This limit sets a credit spreads and exchange rates
maximum tolerable unrealized profit/loss Financial instruments affected by market
to date which will trigger the closing of risk include borrowings, deposits and
a position in order to avoid any further FVOCI investments.
loss based on existing exposures.
Positions are liquidated uniformly
when stop loss limits are breached.
Consolidation • Stability • Focus 117
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Currency risk • to provide adequate returns to
The Group’s transactions are denominated shareholders by pricing products and
services commensurately with the
in Naira but it maintains domiciliary level of risk.
accounts in foreign currencies, United
States Dollar and Pound Sterling. However,
the Group’s exposure to currency risk is
negligible because its foreign currency The Group’s sources of capital comprise
balances are insignificant. equity and borrowings (short term fixed
debt takings from customers). The Board
3.4 Capital management of Directors has overall responsibility for
VFD Group Plc is in the business of managing the Group’s capital. The Group
investing in securities either in its name sets the amount of capital in proportion
or the name of any nominee. The Group to risk. In order to manage or maintain
has subsidiaries that provide finance to the capital structure, the Group may
customers. issue new shares, accept more takings
from customers or adjust the amount of
The Group’s objectives in managing dividends paid to shareholders.
capital are:
• to ensure that the Group continues
as a going concern so that it can
continue to provide returns for its
shareholders and benefits for other
stakeholders, and
The Group’s gearing ratio as at the end of the reporting period was as follows:
Group 2020 Company 2020
2021 =N=' 000 2021
=N=' 000 =N=' 000 =N=' 000
Borrowings 8,379,397 15,743,876 33,536,150 12,643,657
Equity 14,642,357 5,982,102 14,131,184 4,804,733
Gearing ratio 237%
57% 263% 263%
118 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
3.5 Operational Risk Management the markets in which we operate, our
capital and liquidity, and the competitive,
Operational risk is the risk of loss economic and regulatory environment.
resulting from inadequate or failed
internal processes, people, or systems, Our operational risk strategy seeks to
or from external events. Our definition of minimise the impact that operational risk
operational risk excludes regulatory risks, can have on shareholders’ value.
strategic risks and potential losses related
solely to judgments with regard to taking In order to create and promote a culture
credit, market, interest rate, liquidity, or that emphasizes effective operational
insurance risks. management and adherence to operating
controls, there are three distinct levels of
It also includes the reputation and operational risk governance structure in
franchise risk associated with business VFD Group
practices or market conduct in which
the Group is involved. Operational risk Level 1 refers to the oversight function
is inherent in the Group’s business carried out by the Board of Directors,
activities and, as with other risk types, is Board risk committee and the executive
managed through an overall framework management. Responsibilities at this level
designed to balance strong corporate include ensuring effective management
oversight with well-defined independent of operational risk and adherence to the
risk management. approved operational risk policies.
This framework includes: Level 2 refers to the management
function carried out by operational risk
• recognized ownership of the risk by management. It has direct responsibility
the businesses. for formulating and implementing the
• oversight by independent risk Group’s operational risk management
management; and framework including methodologies,
• independent review by Audit. policies and procedures approved by the
Board.
We seek to minimise exposure to
operational risk, subject to cost trade-offs. Level 3 refers to the operational function
Operational risk exposures are managed carried out by all business units and
through a consistent set of management support functions in the Group. These
processes that drive risk identification, units/functions are fully responsible and
assessment, control and monitoring. accountable for the management of
operational risk in their units. They work in
The goal is to keep operational risk at liaison with operational risk management
appropriate levels relative to the to define and review controls to mitigate
characteristics of our businesses and identified risks. Internal audit provides
Consolidation • Stability • Focus 119
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
independent assessment and evaluation of While all operational risks cannot be
the Group’s operational risk management eliminated, they can be managed by
framework. This periodic confirmation of instituting strong control framework and
the existence and utilization of controls by monitoring and responding timely
in compliance with approved policies and to potential risks. Such controls include
procedures, provide assurance as to the documentation of processes, controls
effectiveness of the Group’s operational and procedures, segregation of duties,
risk management framework. reconciliation and other management
review procedures.
.
3.6 Classification category of financial assets and financial liabilities
The classification category of financial assets and liabilities, together with the carrying
amounts shown in the statement of financial position, are as stated below:
Group Notes Cost Amortised Fair value Fair value Total carrying
cost through P through OCI amount
At 31 December 2021 13 N’000
Cash and bank balances 16.3 N’000 or L N’000 N’000
Held for trading 16.2 3,881,378 N’000
Fixed placement 16.2 - - - 3,881,378
Mutual funds 16.1 - - - - -
Loans and receivables - - - 8,240,592
16.2 - - - 300,172 8,240,592
Investment securities 21 31,035,976 - - 300,172
Other financial assets - -
7,739,247 1,917 31,035,976
Borrowings 11,620,626 - -
Other financial liabilities - 19,924,739 19,926,656
31,037,894 - - 7,739,247
28,465,503 71,124,022
24 - 8,379,397 - - 8,379,397
- - 7,737,687
25 7,737,687 - - - 16,117,084
7,737,687 8,379,397
120 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Notes Cost Amortised Fair value Fair value Total carrying
cost through P through OCI amount
At 31 December 2020 13 N’000
Cash and bank balances 16.3 1,461,325 N’000 or L N’000 N’000
Held for trading 16.2 - - 1,461,325
Fixed placement 16.2 - - N’000 -
Mutual funds 16.1 - - 2,393
Loans and receivables 16.2 - 61,046 - 61,046
Investment securities 21 - - 2,393 433,053 433,053
Other financial assets - - 4,475,486
24 6,076,555 4,475,486 - 1,333,704
Borrowings 25 7,537,880 - - 1,333,704 6,076,555
Other financial liabilities - - -
Notes - 13,843,562
Company 4,536,532 - 1,766,757
13
At 31 December 2021 16.2 2,393
Cash and bank balances 16.2
Fixed placement 16.1 - 15,743,876 - - 15,743,876
Mutual funds 16.2 2,502,232 - - - 2,502,232
Loans and receivables 21 2,502,232 - - 18,246,108
Investment securities 15,743,876
Other financial assets 24
25 Cost Amortised Fair value Fair value Total carrying
Borrowings cost through P through OCI amount
Other financial liabilities N’000
N’000 or L N’000 N’000
At 31 December 2020 2,306,643
Cash and bank balances - - N’000 - 2,306,643
Fixed placement - - 3,601,986 3,601,986
Mutual funds - - -
Loans and receivables - 14,761,365 - - -
Investment securities 4,831,399 - 18,370,730 14,761,365
Other financial assets 4,981,183 - - 23,202,129
7,287,826 19,592,764 - -
Borrowings - 21,972,717 4,981,183
Other financial liabilities 48,853,307
-
- 33,536,150 - - 33,536,150
8,213,335 33,536,150 8,213,335
8,213,335
- - 41,749,485
N’000 N’000 N’000 N’000 N’000
- - 1,185,918
13 - 1,185,918 - - 1,203,873
16.2 - 1,203,873 - 315,415 315,415
- - 719,902
16.2 - - - 1,089,294
854,268 6,170,722
16.1 - 719,902
16.2 - 235,026
21 6,170,722 -
6,170,722 3,344,719 - 1,169,683 10,685,124
24 - 12,643,657 - - 12,643,657
- - 6,012,631
25 6,012,631 - - - 18,656,288
6,012,631 12,643,657
Consolidation • Stability • Focus 121
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
The fair values of cash and cash equivalents, can also be defined as the risk associated
loans and receivables, other financial assets, with future business plans and strategies,
borrowings and other financial liabilities are including plans for entering new business
not expected to be materially different from lines, expanding existing services through
their carrying amounts due to the short-term mergers and acquisitions, and enhancing
nature of these instruments. infrastructure.
Information Security and Continuity of Strategic risk management involves various
Business organizational functions within the Group.
Information security and the protection of The following principles govern the Group’s
confidential and sensitive customer data strategic risk management:
are a priority of VFD Group. The Group has
developed and implemented an Information The Board and executive management are
Security Risk Management framework that responsible for Strategic risk management
is in line with best practice. The framework is and oversees the effective functioning of the
reviewed and enhanced regularly to address strategic risk management framework; The
emerging threats to customers’ information. functional units (i.e. the units which carry
out business or operational functions) assists
The Group mitigates business continuity the Board and executive management in
risks by reviewing and testing recovery formulating an implementing strategies, and
procedures. in providing input to the strategic planning
and management processes; and as well as
Strategic Risk Management implementing the strategic risk management
We define Strategic Risk as the process for framework.
identifying, assessing and managing risks
and uncertainties, affected by internal and The strategic risk management functions
external events or scenarios that could inhibit support the Board and senior management
the Group’s ability to achieve its strategy and in managing strategic risk and other related
strategic objectives with the ultimate goal processes in the Group.
of creating and protecting shareholder and
stakeholder value. It is a primary component Strategic plans are approved and monitored
and necessary foundation of our Enterprise by the board. Regular environmental scan,
Risk Management. business strategy sessions and workshops
are set up to discuss business decisions,
Strategic risk management, therefore, is close monitoring to ensure that strategic
defined as current or prospective risk to plans are properly aligned with the business
earnings and capital arising from adverse model, regular performance review by EXCO,
business decisions, improper implementation business plans are approved by the board.
of decisions or lack of responsiveness to
changes in the business environment. It
122 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Reputational Risk Management
Reputational risk arises when the Group’s reputation is damaged by one or more reputational
events from negative publicity about the organization’s business practices, conduct or financial
condition. The Group’s Strategic and Reputational Risk Management is mandated to protect the
Group from potential threats to its reputation.
VFD Group takes the management of reputational risks seriously because of their far-reaching
implications.The effects of the occurrence of a reputational risk event include but are not limited
to the following:
• Loss of current or future customers;
• Loss of public confidence;
• Loss of employees leading to an increase in hiring costs, or staff downtime;
• Reduction in current or future business partners;
• Regulatory sanctions;
• Increased costs due to government regulations, fines, or other penalties; and
The desired risk appetite for reputation is low risk. The Group will ensure that highest ethical
standards are followed at all times and the code of conduct policy will be strictly implemented.
Consolidation • Stability • Focus 123
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
4 Interest and Similar Income 2,404,399 2,305,698 2,287,610 1,143,899
Loans and advances 2,460,789 479,926 1,130,051 243,854
Placement 78,273
Treasury bills 48,841 823,510 - 68,077
Interest from investment 2,412,337 379,901 177,610
3,687,407
7,326,366 3,797,562 1,633,440
5 Interest and Similar Expense 4,589,647 641,107 4,020,350 954,421
Fixed debt takings 218,062 - - -
other interest expense 242,864 - - -
Commission expense - -
Loans & overdraft 95,119 39,533 - 28,038
Time deposits - 300,588 - -
Savings accounts - - -
Interest from investment 33,105 -
Other cost of sales 2,489,851 28,700 4,020,350
982,459
7,635,543 1,043,033
6 Net Trading Income 1,857,548 25,357 1,692,285 25,357
Brokerage fee (a) 856,304 965,058 856,304 965,058
Business support 685,365 1,698,809 685,365 1,698,809
Derivative income 186,398 113,200
(Loss)/ gain on disposal of financial assets (8,073) 43,397
Investment income 586,482 57,154 20,528 17,529
Disposal of asset 2,266,917 7,074 138,817 7,074
6,244,544 2,939,850 3,436,696 2,827,027
7 Other income 867,048 345,304 - -
Fees and commission income - 7,324 - -
Gains from disposal of shares 365,503 491,007
Exchange Gain/(Loss) 372,514 503,164 303,465 80,282
Dividend income 90,142 64,504 785,206 137,077
Disposal of investment property 785,206 172,077 - 396,679
Provision no longer required 3,238 562,452 - -
Rental Income 1,228,172 681,228 -
Others 969,580 -
- 2,135,403 1,105,045
4,315,900
1,654,825
124 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
8 Net (loss)/gain from financial assets at fair - 74,531 - 74,531
valued through profit or loss - 74,531 - 74,531
Net (loss) on equity instruments designated 217,769 217,769
as FVTPL - -
9 Share of profit from associate 1,233,603 981,954 279,354 293,729
77,702 51,967 26,095 25,935
10 Personnel expenses 79,500
Staff cost 653,265 1,033,921 335,065
Contributions to defined contribution plans 1,964,570 640,514 399,164
Other staff costs
37,487 16,578 18,624 7,990
11 Other operating expenses 68,517 32,466 24,000 15,000
Repairs & maintenance 433,790 118,021 273,842 95,201
Auditors remuneration 285,140 63,522 238,095 48,773
Professional fees 919,146 25,251
Travel and accommodation 82,354 - 3,651
Business development 363,314 5,119 44,029 144
Insurance 108,338 314,291 229,803
General administrative expenses 92,364 79,487 68,016 219,994
Advertisement and branding 32,061 17,499 32,390
Donations 69,948 12,135
AGM/Dividend processing expenses 107,190 11,668 22,267 17,192
Bad debt written off 44,822 - 8,708
Rent and rates 85,926 -
Directors fees and other allowances 86,049 56,011 -
Subscription - 25,348 8,500 62,596
Printing and stationeries 75,967 50,975 38,894 15,000
Office running expenses 41,534
Utilities 9,017 4,750 -
Fines and penalties 3,811 270,985 102,172 -
IT license and maintenance fee 268,168 236,800
Exchange loss 5,911 3,161 9,984
Bank charges 42,935 41,458 - -
Other Expenses 272,752 38,630 40,828
Provision for other assets 15,329
- 338 15,071
32,924 12,141 -
3,408,958 1,904
7,431 19,652
31,465 - -
1,175,747
1,277,416 5,606
886,130
Consolidation • Stability • Focus 125
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
12 Impairment of financial assets 409,109 515,419 146,522 109,822
Loans and receivables 61,939 140,160 - 135,930
Financial assets and other receivables 44,599 -
Other assets 4,009 245,752
515,646 659,588 146,522
13 Income tax expense
Recognised in the profit or loss 507,017 715,463 34,841 434,253
Income tax - 53,049 8,710 34,632
Education tax - 40,533 29,955
Information technology tax - 34,167 151
Police trust fund - 416 171 -
Capital gains tax - - 197
Prior year under provision 13,882 499,189
507,018 (11,533) -
Deferred tax 430,950 797,929 (111,727)
Prior year overprovision (71,570) 91,770
(1,088) 238,558 387,462
14 Depreciation and amortisation 936,880 726,360
Ofiice equipment 330,328 32,645
Plant and machinery 81,490 38,286
Computer equipment - 41,287 11,523
Furniture and fittings 14,514 15,469
Leasehold asset 32,754 3,020 18,939 72,442
Motor vehicle 13,225 20,323
Right of use asset 503 16,856 98,097 7,292
Operating lease 188,303 102,846 139,371
Amortisation of Software 45,974 8,962
220,527 17,331 187,608 -
15 Investment in Associates 54,677 191,564
At 1 January 638,743 - -
Reclassification from unquoted equity 2,446,535 -
Additions during the year 1,431,616
Share of profit using equiy method 2,664,304 1,431,616 -
217,769
At 31 December 4,095,921
4,095,921
126 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
16 Earnings per share 3,004,240 3,349,293 3,086,360 2,599,705
Basic earnings per share
Basic earnings attributable to shareholders 126,685 119,233 126,685 119,233
(N’000) 2,371 2,809 2,436 2,180
Number of ordinary shares in issue (‘000)
Basic earnings per share (kobo) 257 9,762 - -
3,881,122 4,481,042 2,306,643 4,077,652
17 Cash and cash equivalents
Cash in hand 3,881,378 4,490,804 2,306,643 4,077,652
Balance with banks and other financial
institutions
Cash and cash equivalents comprise balances with less than three months’ maturity from the date of acquisitions, including
cash in hand, deposits held at call with other banks and other short-term highly liquid investments with original maturities
less than three months.
All bank balances and money market placements are assessed to have low credit risk at each reporting date as they are held
with reputable financial institutions.
17a Statutory Deposit
1,780 - --
Statutory deposits represents funds kept with Nigerian Stock Exchange and the Central Securites Clearing System (CSCS)
by Anchoria Investment and Securities Limited in line with regulatory requirements.
18 Special Placement with CBN
- 25,000,000 - 25,000,000
- 25,000,000 - 25,000,000
The special placement with CBN as capital licence for obtaining a banking license was withdrawn by the Company during
the year,
19 Funds Under Management 11,311,525 11,423,348 --
Fixed Debt Placement
Investment Securities 3,859,060 1,369,065 --
Total Balance 15,170,586 12,792,413 --
20 Investment in Financial Assets 35,340,724 16,094,912 19,336,420 9,884,788
28,241,385 9,798,868 22,122,851 8,112,721
Financial assets measured at amortised cost
- (Note 19.1) - 5,974 -
63,582,110 25,899,754 17,997,509
Financial assets measured at Fair value
through other comprehensive income -
(Note 19.2)
Financial assets measure at Fair value
through profit or loss - (Note 19.3)
41,459,270
Consolidation • Stability • Focus 127
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
20.1 Financial assets measured at amortized
cost
Investment in Debt Securities 5,789,650 3,999,457 4,829,482 3,999,457
Loans and receivables 31,035,976 12,270,561 14,761,365 5,745,543
Treasury bills
1,917 804,341 1,917 249,610
Loss allowance on financial assets at 36,827,544 17,074,358 19,592,764 9,994,610
amortized costs (Note 20.1a) (1,486,820) (979,446) (256,344) (109,822)
35,340,724 16,094,912 19,336,420 9,884,788
20.1a Loss allowance on financial assets at
amortized costs
At 1 January 109,822 - 109,822 -
Charge during the period: - 752,711 - -
(Write Back) allowance on loan to customers 1,376,998 226,735 146,522 109,822
Loss allowance on other financial assets 1,486,820 979,446 256,344 109,822
Financial assets measured at amortized cost are assessed to have low credit risk at each reporting date based on their
respective external credit ratings. As such, the Group assumes that the credit risk on these financial instruments have not
increased significantly since initial recognition as permitted by IFRS 9 and recognises 12 month ECL for these assets. There
was additional impairment of N135.8m on financial assets and a writeback of N144.9m on loan to customers during the year
ended 31st December 2021.
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
20.2 Fair Value Through Other Comprehensive
Income (FVTOCI)
Quoted equity instrument 3,720,699 4,232,899 3,186,471 4,232,899
Unquoted equity instrument 16,204,039 2,297,893 15,184,259 2,297,893
Fixed debt placements 2,541,721 3,601,986
Proprietory investment 8,240,592 1,415,351
Mutual funds - 484,750 - -
367,571 300,171.8
Less: Fair value adjustments (20.2a) 300,172 22,272,889 288,616
28,465,503 9,924,834 (150,038) 8,234,759
(125,966) (122,038)
(224,117) 22,122,851
9,798,868 8,112,721
28,241,385
128 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
20.2a Changes in fair value reserve
At 1 January
Arising during the year 125,966 203,755 122,038 -
At 31 December 98,151 (77,789) 28,000 122,038
125,966 150,038 122,038
224,117
20.3 Fair Value Through Profit or Loss (FVTPL)
Investment in mutual funds
-- -
Fair value changes (Note 19.3a) -- --
- 5,974 --
- 5,974 --
21 Investment in subsidiaries
Holding 2021 Value 2020 Value Country
Investment in VFD Group Plc 99% N'000 N'000 Nigeria
VFD Bridge Limited 99% 41,354 19,998 Nigeria
Everdon Bureau De Change Limited 90% 57,236 57,236 Nigeria
VFD Microfinance Bank Limited 84% 954,000 954,000 Nigeria
Anchoria Asset Management Limited 55% 417,500 417,500 Nigeria
Kairos Capital Limited 58% 146,850 146,850 Nigeria
Dynasty Real Estate Limited 79% 818,542 818,541 Nigeria
Anchoria Investment Securities Limited 92% 190,924 Nigeria
Atiat Insurance Brokers Limited 52% 250,000 - Nigeria
Atiat Leasing Limited 100% 55,000 - Nigeria
VFD Tech Limited 1,250,000 -
-
4,181,406 2,414,124
21.1 Significant restrictions
The group does not have significant restrictions on its ability to access or use the assets and settle the liabilities of any
member of the Group other than those resulting from the subsidiaries’ supervisory frameworks. Disclosures on liquidity,
capital adequacy and credit risk were made in the enterprise risk management, (Note 3) of the financial statements.
Consolidation • Stability • Focus 129
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Property, plant and Furniture & Motor Plant & Leasehold Office Computer Right of Land and Total
equipment Fittings vehicles Equipment Building
Machinery Improvement Equipment Used Asset
22 (i) Group
Cost =N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000
At 1 January 2021
Additions 71,544 451,081 137 62,077 158,593 3,497 37,814 1,324,183 2,108,926
Disposals 58,255 302,168 38,616 60,407 826,673
At 31 December (6,245) 205,129 162,097 (1,324,183)
2021 129,799 747,004 42,113 98,221 - (1,330,428)
137 267,206 320,690 1,605,172
Depreciation 30,306 143,245 137 30,512 80,301 1,102 12,723 2,192 300,518
At 1 January 2021 32,754 188,303
(1,952) 503 81,490 14,514 45,974 363,538
Additions 63,060 329,596
(2,192) (4,144)
Disposals
137 31,015 161,791 15,616 58,697 - 659,911
At 31 December
2021
Carrying amounts 66,739 417,408 - 236,191 158,899 26,497 - 945,259
41,238 307,836 1,321,991 1,808,409
At 31 December 0 31,564 78,292 2,395
2021
At 31 December
2020
(ii) Company Furniture & Motor Plant & Leasehold Office Computer Land and Total
Fittings Building
Cost vehicles Machinery Improvement Equipment Equipment
At 1 January 2021
Additions 54,918 325,806 - 57,632 113,016 - 1,061,183 1,612,554
Disposals 31,570 98,501 - - 156,191
At 31 December - - - 26,120
2021 - (1,061,183) (1,061,183)
86,488 424,306 - - - 707,563
- 57,632 139,137
Depreciation
At 1 January 2021 18,044 88,343 - 28,672 53,490 - - 188,549
Additions 18,939 98,097 - 20,323 41,287 - - 178,646
Disposals -- - - --
At 31 December 36,984 186,440 - 48,995 94,776 - - 367,195
2021
Carrying amounts 49,505 237,866 - 8,637 44,359 - - 340,367
36,874 237,462 - 1,061,183 1,424,005
At 31 December - 28,960 59,526
2021
At 31 December
2020
130 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
23 Intangible assets Group Company
Purchased software =N=' 000 =N=' 000
Cost
At 1 January 2021 148,210 111,113
Addition 562,493 -
At 31 December 2021 710,703
111,113
Amortization 35,203
At 1 January 2021 62,679 12,443
Addition 97,882 8,962
At 31 December 2021 21,405
612,822
Carrying amounts 89,708
At 31 December 2021 Group
=N=' 000 Company
Intangible assets =N=' 000
Purchased software 81,724
Cost 66,486 54,968
At 1 January 2020 148,210 56,145
Addition 111,113
At 31 December 2020 17,872
17,331 5,151
Amortization 35,203 7,292
At 1 January 2020 12,443
Addition 113,007
At 31 December 2020 98,670
Group
Carrying amounts =N=' 000 Company
At 31 December 2020 =N=' 000
6,080,258
24 Investment property and development property 4,728,820 3,825,175
4,728,820
Cost 711,358 785,206
At 1 January 2021 (6,950,000) (6,950,000)
Addition 4,570,436 2,389,201
Fair value gain
Reclassification to investment in subsidiary 4,571,669 2,389,201
At 31 December 2021 6,080,258 3,825,175
Carrying amounts
At 31 December 2021
At 31 December 2020
Consolidation • Stability • Focus 131
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
24 Operating lease - - --
At January 1 1,185,168 - --
On consolidation of subsidiary (1,050,531) - --
Accumulated depreciation 134,637 - --
25 Trade receivables & prepayments 1,066,307 3,627,153 1,387,450 3,460,461
Account receivables 221,316 114,738 48,954 69,827
Prepayments - - - -
Accrued income 931,326 -
Due from related entities 895,123 794,920 1,016,617
Derivative assets 430,279 895,123 430,279
WHT receivable 687,580 63,484 -
Restricted Cash - 68,726 -
Receivable from stockbrokers - -
Deposit for shares 1,021,980 71,357
Other receivables 3,601,628 71,357 3,584,970 28,175
1,360,631 293,152 8,763 4,031,924
Loss allowance on trade receivables (note 25.1) 9,785,892 5,400,325
(115,769) (26,762) 7,005,362 -
25.1 Loss allowance on trade receivables 9,670,123 5,373,563 - 4,031,924
At 1 January
26,762 396,284 7,005,362 276,494
-
Arising during the year 89,007 (369,522) - (276,494)
At 31 December 115,769 26,762 --
The Group applies the simplified approach and recognises lifetime ECL for trade receivables using a provision matrix. The provision matrix is
based on the historical observed default rates, adjusted for forward looking estimates. At each reporting date, the historical observed default
rates are updated.
26 Deferred tax 117,076 5,349 95,944 (15,783)
(12,630) - - -
Deferred tax assets: 225,288
– Deferred tax asset to be recovered after
more than 12 months
– Deferred tax liability to be recovered after
more than 12 months
On acquisition of subsidiary
Charge for the year (430,950) 111,727 (238,558) 111,727
101,216 117,076 142,614 95,944
Deferred tax liabilities: 12,630 25,756 - 15,783
– Deferred tax liability to be recovered after
more than 12 months (12,630) (13,126) 477,116 (15,783)
- 12,630 - -
Charge for the year
Total
132 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
27 Funds Under Management 21,299,938 22,604,095 --
Fixed debt placement 4,762,544 2,644,682 --
Investment securities 26,062,482 --
25,248,777
28 Borrowings
Borrowings from related parties 7,040,337 5,271,773 28,238,117 22,097,410
Other borrowed funds 1,172,686 474,805 0 63,986
Other deposits 166,375 1,619,600 -
7,366,178 5,298,033
28.1 Other borrowed funds 8,379,397 33,536,150 22,161,396
At 1 January
Loan from commercial bank 474,805 5,114,623 63,986 6,165,641
Repayment during the year - 1,051,019 - -
Bank Overdraft (6,101,655)
At 31 December (402,119) (63,986) (6,101,655)
1,100,000 410,817
29 Other liabilities - 63,986
Other financial liabilities: 1,172,686 474,805
Due to related entities
Accounts payable 4,452,644 1,174,568 1,233,471 1,341,306
Other financial liabilities (29a) 7,737,687 27,724,955 8,213,335 27,106,982
Accrued expenses 9,591,760 4,119,323
Other payables 893,296 169,274 39,510
2,844,472 52,912
29a Other financial liabilities 29,068,797 28,487,798
Swap liability 25,519,858 13,619,041
Eurobond liability
Debt note 1,114,422 - 1,114,422 -
Commercial paper 3,004,901 - 3,004,901 -
Other financial liabilities 1,502,700 -- -
3,482,378 -- -
30 Deposit liabilities -- -
Current deposits 486,466 - 4,119,323 -
Savings deposits 9,590,867
Term deposits
Unclaimed deposits 3,059,670 1,102,084 --
3,206,551 1,700,802 --
19,549,628 6,481,857 --
--
4,158 1,074
--
25,820,007 9,285,817
Consolidation • Stability • Focus 133
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
31 Current tax liabilities 812,396 258,076 499,038 56,535
Per statement of financial position: 936,880 797,929 91,770 499,189
At 1 January (842,167) (243,639) (56,686)
Charge for the year 907,109 812,396 (151,920) 499,038
Tax paid 438,889
At 31 December
The charge for income tax in these financial statements is based on the provisions of the Companies Income Tax Act 2004
as amended, while Education Tax is based on Tertiary Education Trust Fund (Establishment etc) Act, 2011.
Group Company
32(i) Share capital 31 December 31 December 31 December 31 December
The share capital comprises: 2021 2020 2021 2020
(i) Authorised -
=N=' 000 =N=' 000 =N=' 000 =N=' 000
shares of 50k each
- 150,000 150,000 150,000
(iI) Issued and fully paid -shares of 50k each 59,616 59,616 59,616 59,616
At 1 January 3,726 - 3,726 -
Rights issue 63,342 63,342
59,616 59,616
33 Share Premium 3,822,062 3,822,062 3,822,062 3,822,062
At 1 January 4,090,037 3,822,062 4,090,037 3,822,062
Rights issue 7,912,098 7,912,098
At 31 December
34 Retained earnings 4,199,114 1,406,457 3,197,496 989,987
At 1 January 2,929,488 3,193,930 3,086,360 2,599,705
Transfer from profit or loss account
Transfer to regulatory risk reserve - (7,024) - -
Transfer to fair value reserve 122,038
Dividend paid during the year (1,014,672) (394,249) (1,014,672) (392,196)
6,113,930 4,199,114 3,197,496
At 31 December 5,391,222
134 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
35 Regulatory Risk Reserve 13,486 6,462 --
At 1 January (10,796) 7,024 --
Transfer from reserve 13,486 --
At 31 December 2,690
36 Other Reserves 820,379 (81,389) 765,772 (66,932)
At 1 January - - - -
Writeback of loss allowance - -
Transfer from retained earnings (81,389) (122,038)
Adjusted opening balance 820,379 643,734 (66,932)
Arising during the period: - - - -
Transfer of gain/(loss) from OCI to retained 220,300 901,768 120,788 832,704
earnings on disposal of FVOCI Instruments 1,040,679 820,379 764,522 765,772
(Note 29.1)
Fair valuation on items that will be - - - -
subsequently reclassified to profit or loss - - - -
(Note 29.2) - - - -
At 31 December - - - -
Net fair value gain/(loss) on investments
in quoted equity instruments measured at
FVTOCI
Net fair value gain/(loss) on investments in
unquoted equity instruments measured at
FVTOCI
Transfer of gain/(loss) from OCI to retained
earnings on disposal of FVOCI Instruments
36.1 Fair valuation on items that may be
subsequently reclassified to profit or loss
- - - -
Net fair value gain(loss) on investments in 220,300 901,768 120,788 832,704
debt instruments measured at FVTOCI
220,300 901,768 120,788 832,704
Net fair value gain/(loss) on investments
in other financial instruments measured at
FVTOCI
Consolidation • Stability • Focus 135
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
37 Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise influence over the other
party in making financial and operational decisions, or one other party controls both. The definition includes subsidiaries,
associates, joint ventures as well as key management personnel.
37.1 Identity of related parties Relationship %
VFD Bridge Limited Subsidiary 99
Everdon Bureau De Change Limited Subsidiary 99
VFD Microfinance Bank Limited Subsidiary 90
Anchoria Asset Management Limited Subsidiary 84
Kairos Capital Limited Subsidiary 55
Dynasty Real Estate Limited Subsidiary 58
Anchoria Investment Securities Limited Subsidiary 79
Atiat Insurance Brokers Subsidiary 92
Atiat Leasing Limited Subsidiary 52
VFD Tech Limited Subsidiary 100
37.2 Key management personnel
Key management personnel constitutes those individuals who have the authority and the responsibility for planning,
directing and controlling the activities of VFD Group Plc, directly or indirectly, including any director (whether executive or
non-executive). The individuals who comprise the key management personnel are the Board of Directors as well as certain
key management officers.
Group Company
31 December 31 December 31 December 31 December
2021 2020 2021 2020
=N=' 000 =N=' 000 =N=' 000 =N=' 000
37.3 Other information on key management
personnel
1,500 1,500 1,500 1,500
Emoluments: 171,718 171,718 65,395 65,395
Chairman 173,218 173,218 66,895 66,895
Other Directors 20,850 20,850 8,500 8,500
10,810 10,810 5,040 5,040
Fees 141,558 141,558 58,395 58,395
Sitting allowance 173,218 173,218 71,935 71,935
Other emoluments
38 38 15 13
The total number of Directors were:
136 VFD Group plc 2021 Annual Report & Financials
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
37.4 The number of persons employed 182 139 40 23
(excluding directors)in the company during
the year was as follows:
38 Principal subsidiaries
The financial statements of the Group include the operation of the following subsidiaries:
Company Place of Incorporation Primary Business Operation % Held
VFD Bridge Limited Nigeria Investment and Fund Management 99
Everdon Bureau De Change Nigeria Bureau De Change Business 99
Limited
VFD Microfinance Bank Nigeria Microfinance Banking services 90
Limited
Anchoria Asset Nigeria Investment and Fund Management 84
Management Limited
Kairos Capital Limited Nigeria issuing house and investment adviser 55
Dynasty Real Estate Nigeria Propecting and investing in Real estate 58
Limited
Anchoria Investment Nigeria Stock brokerage Services 79
Securities Limited
Atiat Insurance Brokers Nigeria Insurance Brokerage services 92
Atiat Leasing Limited Nigeria Auto and finance leasing 52
VFD Tech Limited Nigeria IT infrastructure and Development 100
39 Events after reporting period
There are no material issues after the reporting period.
Consolidation • Stability • Focus 137
NSTOATTEESMTEONTTHOEFCVOANLUSOE LAIDADTEEDD AND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
2021 Group % 2021 Company %
=N=' 000 2020 =N=' 000 2020
Gross earnings 9,953,390 5,420,558
Operating expenses - Local % =N=' 000 % =N=' 000
(3,408,958) 6,653,993 (1,175,747) 4,411,832
(1,277,416) (886,130)
VALUE ADDED 6,544,432 100% 5,376,577 100% 4,244,811 100% 3,525,702 100%
Applied as follows: 1,964,570 30% 1,033,921 19% 640,514 15% 399,164 11%
To pay employees:
Salaries and other benefits
To pay Government: 507,018 8% 797,929 15% 91,770 2% 499,189 14%
Taxes 0
Over provision of taxes (1,088) 0% 0 0% 0% 0 0%
Retained for future replacement of assets and expansion of business:
Deferred tax 430,949 7% (71,570) 238,558 6% (111,727)
187,608 4% 139,371
Depreciation 638,743 10% 191,564 4% 0% - 4%
1% - 73% 0%
Impairment loss - 0% 75,439 62% 3,086,360 2,599,706 74%
100% 100% 100%
Profit for the year 3,004,240 46% 3,349,293 4,244,811 3,525,702
6,544,432 100% 5,376,577
Value added represents the additional wealth which the company has been able to create on its own and employees’ efforts. The
statement shows the allocation of that wealth between the employees, government and that retained by the company for the future
creation of more wealth.
138 VFD Group plc 2021 Annual Report & Financials
FNIONTAENSCTIAOLTSHUEMCMOANRSYO-LICDOATMEPDANAYND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
2021 2020 2019 2018 2017
=N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000
ASSETS 2,306,643 4,077,652 1,185,918 37,453 35,386
Cash and cash equivalents 41,459,270 17,997,509 3,328,484 3,843,252 1,096,538
Investment in financial assets
Investment in joint venture - - - - 75,000
Investments in subsidiaries 4,181,406 2,414,124 1,514,125 549,523 131,233
Investment in associates 4,095,921
Property, plant and equipment 340,367 1,424,005 1,248,922 1,028,360 13,550
Intangible assets 98,670 49,817 33,702 633
Investment Property 89,708 - 41,500 -
Trade and other receivables 2,389,201 3,825,175
Special Placement with CBN 7,005,362 4,060,099 6,213,312 2,960,084 617,922
Deferred tax assets 25,000,000 10,000,000 -
TOTAL ASSETS - - 14,141
- 95,944 - 1,984,403
LIABILITIES 58,993,178 23,540,578 8,493,874
Borrowings 61,867,878
Other liabilities
Current tax liabilities 33,536,150 22,161,396 12,643,657 1,997,810 -
Deferred tax liabilities 13,619,041 28,487,798 6,019,867 5,006,917 968,011
56,535
TOTAL LIABILITIES 438,889 499,038 15,786 50,039 5,149
142,614 - 17,762 -
EQUITY 18,735,845
Share capital 47,736,694 51,148,232 7,072,528 973,160
Share premium
Retained earnings 63,342 59,616 59,616 42,368 42,368
Other reserves 7,912,098 3,822,062 3,822,062 984,027 984,027
SHAREHOLDER'S FUND 5,391,222 3,197,496 363,104 (89,328)
989,987
TOTAL LIABILITIES AND EQUITY 764,522 765,772 (66,932) 31,847 74,176
CONTINGENT LIABILITIES 14,131,184 7,844,946 4,804,733 1,421,346 1,011,243
61,867,878 58,993,178 23,540,578 8,493,874 1,984,403
- - - - -
Consolidation • Stability • Focus 139
NFIONTAENSCTIAOLTSHUEMCMOANRSYO-LIGDARTOEUDPAND SEPARATE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2021
2021 2020 2019 2018 2017
=N=' 000 =N=' 000 =N=' 000 =N=' 000 =N=' 000
ASSETS 3,881,378 4,490,804 1,461,325 1,133,251 145,893
Cash and cash equivalents 15,170,586 12,792,413 18,668,089 5,990,507 -
Funds under Management 63,582,110 25,899,754 6,305,682 5,924,201
Investment in financial assets 2,209,119
Investment in Joint Ventures - - - - 65,372
Investment in associates 4,095,921 - - - -
Investment in property 4,571,669 6,080,258 - 1,841,500
Development Property - 137,365 - -
Property and equipment - 1,808,409 1,432,500 1,054,263 1,519
Operating lease 945,259
Intangible assets 134,637 113,007 63,852 46,169 23,536
Special Placement with CBN 612,822 25,000,000 10,000,000 - -
Trade and other receivables
Statutory deposit - 5,373,563 6,131,815 3,058,271 645,891
Deferred tax assets 9,670,123
Goodwill 117,076 36,069 - 26,504
TOTAL ASSETS 1,780
- 81,675,284 44,236,697 19,048,162 3,117,834
LIABILITIES
Managed Funds 157,102
Borrowings
Other liabilities 102,823,387
Deposit liabilities
Current tax liabilities 26,062,482 25,248,777 16,018,428 6,152,919 -
Deferred tax liabilities 8,379,397 7,366,177 15,743,876 4,233,010 990,120
TOTAL LIABILITIES 25,519,858 6,204,954 7,011,895 1,090,776
29,068,808
EQUITY 25,820,007 9,285,817 - - -
Share capital 907,109 812,396 287,337 99,522 10,662
Share premium 101,216 12,630 15,526
Retained earnings 38,254,595 -
Regulatory risk reserve 86,790,069 71,794,605 17,512,872
Other reserves 2,091,558
SHAREHOLDER'S FUND
Non-controlling Interest 63,342 59,616 59,616 42,368 42,368
TOTAL LIABILITIES AND EQUITY 7,912,098 3,822,062 3,822,062 984,027 984,027
CONTINGENT LIABILITIES 5,623,548 1,406,457 471,692 (78,987)
4,199,113
2,690 13,486 6,462 (37,267) 75,784
1,040,679 (81,389) 1,460,820 1,023,192
820,379
14,642,357 5,213,208 74,470 3,084
1,390,961 8,914,656 768,894 19,048,162 3,117,834
966,023
102,823,387 44,236,697 - -
- 81,675,284 -
-
140 VFD Group plc 2021 Annual Report & Financials
05
SHAREHOLDER /
INVESTOR
INFORMATION
• NOTICE OF ANNUAL GENERAL MEETING
• PROFILE OF DIRECTORS FOR RE-ELECTION
• PROXY FORM
• DEMATERIALIZATION FORM FOR MIGRATION
• E-DIVIDEND MANDATE ACTIVATION FORM
• E-SHARE REGISTRATION APPLICATION FORM
• E- SERVICE/DATA UPDATE FORM
NOTICE OF THE 6TH ANNUAL
GENERAL MEETING – VFD GROUP PLC
NOTICE IS HEREBY GIVEN that the 6th Annual General Meeting of VFD Group Plc will be held at
Radisson Blu Anchorage Hotel, 1A Ozumba Mbadiwe Avenue, Victoria Island, Lagos on Tuesday,
May 31, 2022, at 11.00 am to transact the following business:
ORDINARY BUSINESS
1. To lay before the Company the Audited Financial Statements for the year ended December
31, 2021, together with the Reports of the Directors, Auditors and Audit Committee.
2. To declare a dividend.
3. To elect/appoint the following Directors:
• Mr. Kelvin Orogun.
• Mr. Femi Akinware.
• Mr. Folajimi Adeleye.
• Mr. John Okonkwo.
• Mr. Olanipekun Osinowo.
4. To re-elect the following Director[s] retiring by rotation:
• Mr. Nonso Okpala.
• Mr. Adeniyi Adenubi.
• Mr. Gbenga Omolokun.
• Mr. Suleiman Lawal.
• Mr. Olatunde Busari (SAN).
5. To authorize the Directors to fix the remuneration of the Auditors.
6. To elect/ re-elect members of the Audit Committee in accordance with Section 404 (3) of the
Companies and Allied Matters Act, 2020.
7. To disclose the remuneration of Managers of the Company in line with the provisions of
Section 238 of the Companies & Allied Matters Act, 2020.
SPECIAL BUSINESS
8. To consider and, if thought fit, pass the following resolution as ordinary resolution:
a. That the remuneration of the Non-executive Directors be and is hereby fixed at
N53,900,000 (Fifty-Three Million, Nine Hundred Thousand Naira) only for the year
ending December 31, 2022, such payments to be effective from January 1, 2022.
142 VFD Group plc 2021 Annual Report & Financials
9. To consider and if thought fit, pass the following as special resolutions:
a. Issuance of Bonus Shares
That in accordance with Section 430 of the Companies and Allied Matters Act 2020
and all other applicable laws and regulations the Directors are hereby authorized to
capitalize the sum of N31,671,214.00 (Thirty-one Million Six Hundred and Seventy-
one Thousand, Two Hundred and Fourteen Naira), out of the balance standing to the
credit of the share premium of the Company, as at December 31, 2021, and available
for distribution, and to appropriate the said capitalised sum to the members holding
126,684,910 (One Hundred and Twenty-six Million Six Hundred and Eight-four
Thousand Nine Hundred and Ten) ordinary shares of 50 Kobo each in the capital
of the Company and registered as at the close of business on Friday, May 13, 2022,
(Transfer Date), on the condition that the sum appropriated shall not be paid in cash
but applied in paying up, in full, at par, on behalf of such holders, 63,342,428 (Sixty-
three Million Three Hundred and Forty-two Thousand Four Hundred and Twenty-
eight) ordinary shares of 50 Kobo each (Bonus Shares) which Bonus Shares shall be
issued and allotted, credited as fully paid up, in full, at par to those members in the
proportion of 1 (one) ordinary share of 50 Kobo for every 2 (two) ordinary shares of
50 Kobo now held by them, as at the Transfer Date, and which Bonus shares shall
rank parri passu in all respect with the existing ordinary shares of the Company
except that such shares shall not rank for dividend recommended by the Directors
in respect of the year ended December 31, 2021.
b. That the Directors be and are hereby authorized to deal with fractional shares
resulting from the issuance of bonus shares, as they deem fit pursuant to the extant
laws.
c. Cancellation of unissued shares
That the Company be and is hereby authorized to take all steps necessary to
comply with the requirements of Section 124 of the Companies and Allied Matters
Act 2020 and Regulation 13 of the Companies Regulations 2021, as it relates to
unissued shares forming part of the Share Capital of the Company, including the
cancellation of the unissued shares of the Company. The Company’s balance
unissued shares of 109,972,662 (One Hundred and Nine Million, Nine Hundred and
Seventy-two Thousand Six Hundred and Sixty-two) ordinary shares of 50 kobo
each be and is hereby cancelled.
d. That the Company be and is hereby authorized to take all steps necessary to ensure
that the Memorandum and Articles of Association of the Company are altered
to comply with this Resolution 9, including replacing the provision stating the
authorized share capital with the issued share capital.
e. That pursuant to the above resolutions, that Clause 6 of the Memorandum of
Association of the Company be and are hereby amended to read as follows:
Consolidation • Stability • Focus 143
“The Share Capital of the Company is N95,013,669 (Ninety-Five Million, Thirteen
Thousand, Six Hundred and Sixty-nine Naira) divided into 190,027,338 (One
Hundred and Ninety Million, Twenty-Seven Thousand, Three Hundred and Thirty-
eight) ordinary shares of 50 kobo each”
f. That for the purposes of implementing the cancellation of the Company’s unissued
shares, the Board is hereby authorized to execute all relevant documents, take all
such lawful steps as may be required by statute and or regulations and do such other
acts or things as may be necessary, supplementary, consequential, or incidental for
the purpose of giving effect to this resolution including but not limited to engaging
professional advisers and complying with any directive which any regulatory agency
or body may deem fit to impose or approve.
g. That the Board of Directors of the Company be and is hereby authorised to do all
such things and take all such actions as are required to give effect to the above
resolutions in compliance with extant laws and regulations.
Dated May 9, 2022
BY ORDER OF THE BOARD
Gbeminiyi Shoda
Group Company Secretary
FRC/ 2015/NBA/00000011768
VFD Group Plc
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 several guidelines and directives aimed at curbing the spread of COVID-19 in
Nigeria. The convening and conduct of the AGM shall be done in compliance with these directives
and guidelines.
2. PROXY
The Federal Government of Nigeria, State Governments, Health Authorities and Regulatory
Agencies have issued several guidelines and directives aimed at curbing the spread of COVID-19 in
Nigeria. The convening and conduct of the AGM shall be done in compliance with these directives
and guidelines.
144 VFD Group plc 2021 Annual Report & Financials
3. ATTENDANCE BY PROXY 8. NOMINATION TO THE AUDIT
COMMITTEE
In line with CAC Guidelines, attendance of the
AGM shall be by proxy only. Shareholders are In accordance with Section 404 (6) of the
required to appoint a proxy of their choice from Companies and Allied Matters Act 2020, any
the list of nominated proxies below: shareholder may nominate a Shareholder for
appointment to the Audit Committee. Such
a. Mr. Olatunde Busari (SAN). nomination should be in writing and should
b. Mr. Nonso Okpala. reach the Company Secretary at least twenty-
c. Mr. Olayinka Olajuwon. one (21) days before the Annual General
d. Ms. Fehintola Bisola Babawale. Meeting. Such notice of nominations should be
e. Ms. Gbeminiyi Shoda sent via email to gbeminiyi.shoda@vfdgroup.
com for the attention of the Company Secretary.
4. STAMPING OF PROXY The Securities and Exchange Commission’s
Code of Corporate Governance for Public
The Company has made arrangement at its cost, Companies and Financial Reporting Council of
for the stamping of the duly completed and Nigeria, Audit Regulations, 2020 provides that
signed proxy forms submitted to the Company’s members of the Audit Committee should have
Registrars within the stipulated time. basic financial literacy and should be able to
read financial statements.
5. ONLINE STREAMING OF AGM
9. E-DIVIDEND/BONUS
The AGM will be streamed live online. This will
enable shareholders and other stakeholders Pursuant to the directive of the Securities and
who will not be attending physically to follow Exchange Commission, members are hereby
the proceedings. The link for the AGM online advised to open bank accounts, stock broking
live streaming will be made available on the accounts and CSCS accounts for the purpose
Company’s website at www.vfdgroup.com. of the payment of e-dividend/bonus.
6. DIVIDEND 10. PROFILES OF DIRECTORS FOR
ELECTION/RE-ELECTION
The Directors have recommended the
declaration of a dividend of N10.79 per share. Profiles of Directors standing for election or re-
If the dividend recommended by the directors election are provided in the Annual Report.
is approved by the members at the annual
general meeting, the dividend will be paid on 11. RIGHT OF SHAREHOLDERS TO
May 31, 2022, to the shareholders whose names ASK QUESTIONS
appear in the Company’s Register of members
at the close of business on Friday, May 13, 2022 Shareholders have a right to ask questions not
(qualification date). only at Meetings, but also in writing prior to the
Meeting, and such questions must be submitted
7. CLOSURE OF REGISTER OF to the Company Secretary via email to
MEMBERS [email protected] not later than
two (2) weeks before the date of the Meeting.
The Register of members of the Company will
be closed from Monday, May 16, 2022, to Friday,
May 20, 2022 (both days inclusive) for the
purpose of dividend and scrip.
Consolidation • Stability • Focus 145
PROFILE OF DIRECTORS
FOR ELECTION
KELVIN Kelvin is the Managing Director and Chief Executive
OROGUN Officer of Cashpot Limited, a money remittance
company with headquarters in London and offices
Non-Executive in Lagos Nigeria. Prior to starting Cashpot, he was
Director the Managing Director, Africa Market- Small World
Financial Services Group Ltd from October 2006 to
December 2010. He started his career in Universal
Trust Bank. Kelvin is a graduate of University of
Benin where he obtained a bachelor’s degree in
Computer Science. He also obtained an MBA from
Cass Business School- City University London.
FEMI Femi is an experienced telecommunications
AKINWARE executive, an entrepreneur, and a seasoned
engineer with over 24 years of accomplished
Non-Executive leadership spanning nearly every area of telecoms
Director business. Femi spent 15 years working on mergers
and acquisitions, asset building, corporate
FOLAJIMI development, business process re-engineering, IT
ADELEYE consultancy, and business start-ups.
Executive Director, Folajimi is the Executive Director, Finance, and
Finance has experience spanning 12 years in audit and
advisory services, financial reporting, and financial
management including set up of finance function
for start-up companies in the financial services
industry.
146 VFD Group plc 2021 Annual Report & Financials
JOHN OKONKWO John has several years’ experience in Finance,
Audit, Risk Management, Sustainability Services
Executive Director/ and Corporate Governance Services. He was the
Chief Operating Chief Financial Officer at Heirs Holdings Limited.
Officer Prior to joining Heirs Holdings Limited in June
2012, he was a Manager in the Internal Audit, Risk
& Compliance Services division of KPMG. John is a
Fellow of the Institute of Chartered Accountants of
Nigeria (ICAN).
OLANIPEKUN Olanipekun Osinowo is the Managing Director of
OSINOWO Layipo Farms Limited. He is a dedicated finance
and management professional with over 27
Non-Executive years of experience which spans across Financial
Director & Business analysis, Strategy, Performance
management, Administration and Negotiation.
Prior to joining Layipo Farms, he worked in different
capacities at Ecobank Nigeria Ltd, First Bank Plc
and First Immaculate Konsult. Olanipekun has a
B.Sc. in Economics from Ogun State University,
MSC in Economics and MBA in Finance from the
University of Lagos and is a Fellow of the Institute
of Chartered Accountants of Nigeria.
Consolidation • Stability • Focus 147
VFD IN PICTURES
VFD Group Signing Ceremony May 2021 Participants of the 2021 Graduate Trainee Program
Miliki Art Exhibition with Chinyere Akachukwu VFD Group Live at the Premier of AWO The man,
His Jewel And....
Abbey Morgage Bank’s Unveiling ceremony Anchoria Investment Ltd Brand Relaunch
Official Relaunch of the Anchoria Brand GMD speaking at the New Atiat Leasing
Limited Office Launch in Abuja
148 VFD Group plc 2021 Annual Report & Financials
The New Atiat Leasing Limited Office New Directors’ Induction
Launch in Abuja
VBank Women in Tech Makeathon VBank’s representatives at the 2021
Nigeria Fintech Week
VFD Group Live at 2021 IATF in Durban, GMD, Nonso Okpala with Former Nigerian
South Africa President, Olusegun Obasanjo at IATF 2021
Networking at the 2021 IATF in Durban, Networking at the IATF 2021
South Africa Consolidation • Stability • Focus 149
150 VFD Group plc 2021 Annual Report & Financials
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