FCMB : QUARTER 5 - FINANCIAL STATEMENT FOR 2022

FCMB Group Plc

Annual Report and Financial Statements Year ended 31 December 2022

FCMB GROUP PLC

AUDITED ANNUAL REPORT AND FINANCIAL STATEMENTS - 31 DECEMBER 2022

Contents	Page
Board evaluation report	1
Corporate governance	2 - 9
Board of Directors, officers and professional advisors	10
Directors' report	11 - 15
Statement of Directors' responsibilities	16
Statutory Audit Committee Report	17
Statement of Corporate Responsibility	18
Independent Auditor's report	19 -25
Financial statements:
Consolidated and separate statements of profit or loss and other comprehensive income	26
Consolidated and separate statements of financial position	27
Consolidated and separate statements of changes in equity	28 - 29
Consolidated and separate statements of cashflows	30
Notes to the consolidated and separate financial statements	31 - 135
Other financial Information:
Value added Statement	137
Five year financial summary	138 - 139

DCSL Corporate Services Limited

235 Ikorodu Road	Abuja Office:
Ilupeju	Suite A05, The Statement Hotel
P. O. Box 6315, Marina	Plot 1002, 1st Avenue
Lagos, Nigeria	Off Shehu Shagari Way Central Business District
	Abuja, Nigeria
Tel: [phone]	Tel: [phone]
info@ dcsl.com.ng
www.dcsl.com.ng
RC NO. 352393

February 2023

REPORT OF THE EXTERNAL CONSULTANTS ON THE PERFORMANCE OF THE BOARD OF DIRECTORS OF FCMB GROUP PLC FOR THE YEAR ENDED 31ST DECEMBER 2022.

The Board of FCMB Group Plc ("FCMB Group" or "the Group") engaged DCSL Corporate Services Limited (DCSL) to carry out a performance evaluation of the Board of Directors for the year ended 31 December 2022 in line with the provisions of the Securities and Exchange Commission (SEC) Corporate Governance

Guidelines for Public Companies ("SCGG") and Principle 14.1 of the Nigerian Code of Corporate Governance, 2018 ("NCCG").

To ascertain the extent of compliance with relevant corporate governance principles, and appraise the performance of the Board, we benchmarked the Company's corporate governance structures, policies, and processes against the above-mentioned Codes as well as global best practices and considered the following seven key corporate governance themes:

1. Board Structure and Composition;
2. Strategy and Planning;
3. Board Operations and Effectiveness;
4. Measuring and Monitoring of Performance;
5. Risk Management and Compliance;
6. Corporate Citizenship; and
7. Transparency and Disclosure.

In conducting the appraisal, we reviewed the Group's corporate and statutory documents, Minutes of Board and Committee meetings, policies, processes, and ancillary documents made available to us. We also administered questionnaires and interacted with some members of the Board. Our review confirms that FCMB Group has substantially complied with the provisions of the SCGG and NCCG and that the activities of the Board and the Group significantly align with corporate governance best practices. The Board has demonstrated commendable oversight of the activities of the Group's Operating Companies and a strong commitment to emplacing a culture of corporate governance.

We have proffered recommendations to address the areas of improvement identified during the appraisal exercise and have assurance that the Board would take appropriate steps to implement these.

We are grateful for the opportunity to be of service and look forward to working with you in the future. Please accept the assurances of our highest regards and esteem.

Yours faithfully,

For: DCSL Corporate Services Limited

Bisi Adeyemi

Managing Director

Directors: ● Abel Ajayi (Chairman) ● Obi Ogbechi ● Adeniyi Obe ● Dr. Anino Emuwa ●Adebisi Adeyemi (Managing Director)

Corporate Governance

Commitment to Corporate Governance

FCMB Group Plc (the Group) remains committed to institutionalising corporate governance principles. It continues to adhere to the implementation of Corporate Governance Rules of the Central Bank of Nigeria, the Nigerian Exchange Group, the Securities and Exchange Commission and the Financial Reporting Council of Nigeria.

The Group's Board (the Board) operates in line with its responsibilitiesas containedinRegulatory Codes of Corporate Governance, the Company's Articles of Association and the Companies and Allied Matters Act. Its oversight of the operations and activities of the Company are carried out transparently without undue influence.

The Group has undertaken to create an institutional framework conducive to defending the integrity of our Directors, and is convinced that on account of this, the Group's Board is functioning in a highly effective manner. It is intended that we continue to challenge ourselves to improve in areas where the need for improvement is identified.

Board Composition and Independence

The Board is composed of ten Directors made up of Seven Non-Executive Directors and three Executive Directors, in line with international best practice which requires the number of Non-Executive Directors to be more than the Executive Directors.

The appointment of Board members is in line with the Companies and Allied Matters Act 2020, CBN Code of Corporate Governance, and the Company's selection criteria for Directors.

The Group's Board, led by a Non-Executive Chairman, is composed of individuals with enviable records of achievement in their respective fields and who bring on board high levels of competencies and experience. The Board meets regularly to set broad policies for the Group's business and operations and ensures that an objective and professional relationship is maintained with the Group's internal and external auditors in order to promote transparency in financial and non-financial reporting.

Directors' emoluments, as well as their shareholding information, are disclosed in the Company's Annual Report and Accounts.

The Directors are guided by the Code of Conduct of the Central Bank of Nigeria for Directors and the Securities and Exchange Commission Code of Corporate Governance for Public Companies in Nigeria as well as the Nigerian Code of Corporate Governance.

Board Selection and Appointment Process

The Board of the Company ensures a formal and transparent process for the selection and appointment of Directors to the Board. The Board Governance and RemunerationCommittee plays a major role in the selection of candidates for appointment to the Board.

Appointed candidates must:

• be analytically strong.
• be financially savvy.
• contribute to a gender-diverse Board.
• be experienced in asset management.
• be suitably educated and professionallyqualified.
• hold extensive relevant experience.
• be able to support business generation.
• have a good relationship with the regulatoryauthority.
• be well respected in society.
• demonstrate very high levels of integrity.
• pass the fit and proper persontest.

The process involves:

• a careful analysis of the existing Board's strengths and weaknesses, its skills, experience gaps and diversity considering the Company's current business priorities and future plans;
• identification, shortlisting and interviewing ofcandidates with the appropriate expertise and experience;
• conducting formal and informal background checks to ensure they are fit and proper persons to sit on the Board of the Company:
• discussing formally with prospective candidates the
  Board's expectations and the nominee's ability to make the necessary commitment;
• the appointment process is communicated to Board members and filed by the Company Secretary;
• external consultants may be engaged as appropriate to obtain an independent view and input into the appointment process;

 once the nomination is approved b y t h e Board, the Company Secretary notifies the CBN in writing, seeking the CBN'sapproval to the appointment;

• upon approval by the CBN, the appointmentand approval is communicated to the new Director in writing; and
• other required regulatory authorities are notified of the appointment in writing.

Existing CBN guidelines on appointment to the Board of Non-Financial Holding Companies in Nigeria shall continue to be applied.

The Guiding Principles of the Group's Code of Corporate Governance are as follows:

• all power belongs to the shareholders;
• delegation of authority by the owners to the Board and subsequently to Board Committees and executives is clearly defined and agreed;
• institutionalised individual accountability andresponsibility through empowerment and relevant authority;

• clear terms of reference and accountability forcommittees at Board and executive levels;
• effective communication and information sharing outside of meetings;
• actions are taken on a fully informed basis, in good faith with due diligence and care and in thebestinterestofthe Groupandshareholders;
• enhancing compliance with applicable laws and regulations and the interest of the stakeholders; where there is any conflict between the Group's rules, the local laws and legislation supersede;
• conformity with overall Group strategy anddirection; and
• transparency and full disclosure of accurate,adequate and timely information regarding the personal interest of Directors in any area of potential conflict regardingGroup business.

Role of the Board

• Investment and capital management, investor relations, Group financial and statutory reporting, articulation and approval of Group policies, setting overall Group strategic direction, monitoring and coordinating Group performance, succession planning for key positions on the Boards of the Group and operating companies.
• Reviewing alignment of goals, major plans ofaction,annual budgets and business plans with overall strategy; setting performanceobjectives; monitoring implementation and corporate performance and overseeing major capital expenditure in line with the approvedbudget.
• Ensuring the integrity of the Group's accounting and financial reporting systems (including the independence of Internal Audit, and that appropriate systems are in place for monitoring risk, financial control and compliance with the law).
• Selecting, compensating, monitoring and when necessary, replacing key executives and overseeing succession planning.
• Interfacing with the management of theGroup to ensure harmony in implementing Group strategy.