Quarter 5 financial statement for 2024

Audited Financial Statements

for the year ended

31 December 2024

Directors' Report

The Directors have the pleasure of submitting their annual report, together with the audited financial Statements for the year ended 31st December 2024.

Principal Activities

UPDC Plc (UPDC or the Company) is a seasoned development company in Nigeria with an established record in developing, selling, and managing real estate assets across Nigeria. UPDC is the first real estate listed company and offers the most diversified portfolio of residential, commercial, retail, and hospitality assets.

Our Vision

To become the leading lifestyle real estate company of choice in Nigeria by delivering world-class properties and services tailored to the needs of the Nigerian market.

Our Mission

To build and manage:

• Distinctive lifestyle developments
• To time, cost and quality
• Customers for life: from development stage to sales to asset and facility management
• Shareholder value

2

Dividend

The Board of Directors has approved a dividend of ₦0.01 (1 kobo) per ordinary share for the financial year ended 31 December 2024 (2023: Nil). This amounts to a total dividend payout of ₦185,599,699.36, based on the total outstanding ordinary shares of 18,559,969,936.

Directors' Interests in Shares

Directors' interests in the issued share capital of the Company as recorded in the Register of Members and/or as notified by the Directors in compliance with Sections 301 and 302 of the Companies and Allied Matters Act 2020 and the Listing Requirements of the Nigerian Exchange Limited were as follows:

Directors' Interests in Contracts

In line with Section 303 of the Companies & Allied Matters Act 2020, no Director had interest in any contract with the Company during the year.

Shareholders with Substantial Interest of 5 % and Above

The issued and fully paid-up share capital of the Company is N9,279,984,968 divided into 18,559,969,936 ordinary shares of 50 kobo each. The following table shows the shareholders with substantial interest above 5%:

3

Share Capital History

Analysis of Shareholding

Our People

At UPDC we are committed to ensuring that our employees reflect our core values of integrity, responsibility, service, excellence, customer focus and shareholder value creation. Our corporate culture fosters open communication, collaboration, diversity, and forward thinking among all employees to encourage the exchange of views, ideas and knowledge which leads to innovation.

Diversity and Inclusion Strategies

At UPDC, there is no form of discrimination and as such, recruitment, training, and career development are strictly based on character, competence, and merit. To achieve hiring the best individuals, our recruitment processes are tailored to harness fair competition, while identifying the most suitable candidates in each required field, who will contribute immensely to the growth of the Company.

Health, Safety and Employee Welfare

Health and safety is highly fundamental and to this end, The Company is also very conscious of the safety requirements both of its guests and employees, and stringent precautions are taken to ensure this are provided conducive and safe working environment at locations where the employees are located, including; the corporate head office, estates, and project sites. There is

4

access to first aid amenities at these locations to be used in line with safety regulations. Employees are duly covered under Health Insurance schemes.

Employee Recognition and Incentive Scheme

Management openly acknowledges and recognizes employees who have performed exceptionally well in the course of each year. Gift vouchers are also often awarded for individual performances. There are also incentive initiatives that are tailored to foster engagement and encourage team performance. All these are aimed at boosting employee morale which in turn impacts productivity and sales for the company.

Employee Engagement and Team Communication

UPDC recognizes that the employees are an integral part of the business and to this end, certain events are organized to boost staff morale. Employees are fully involved in strategy formulations and executions for their respective business units. This aims at encouraging business plan ownership and commitment at all levels. Team Retreats, Business Review Meetings, Strategy Review Sessions, Project Integration Meetings and Town Hall Meetings are held for cross- exchange of ideas and crucial business information dissemination. In recent times, we have embraced the use of technology to have more hybrid forms of meeting.

Learning and Development

Employees are encouraged in their quest for personal and professional development. We adopt a training methodology that fosters free exchange of knowledge internally. Self-development is also encouraged and monitored, while the company organises training programs in conjunction with external facilitators for career advancement. The trainings involved technical and people development training objectives which aligns with employee needs. The post training feedback indicated a positive Return on Investment (ROI).

Performance Management

Performance Management strategies are structured to achieve the maximum productivity levels from all employees while maintaining a healthy and motivated workforce. UPDC's business objectives are set, cascaded, and monitored periodically to ensure alignment with overall business goals. Trainings on performance management standards are held periodically and compliance is also monitored.

Employee Wellness and Wellbeing

The Company prioritizes employee wellbeing and mental health. The focus on nurturing employee's well-being is critical to the development of workplace resilience. The Company also strives to provide a work environment that is free from health hazards and the continuous provision of resources that create a conducive and ergonomic workplace. Periodically, the Company organizes initiatives and interventions for the improvement of health and the wellbeing of its employees to boost productivity and overall output. Furthermore, employees are encouraged to engage in programs focused on improvement of a healthy lifestyle, with positive impact on the mental, emotional, physical and social well-being. Some of the wellness initiatives implemented during the year include:

• Compulsory Annual Health Checks
• Health Insurance cover for employees through the
• Health Maintenance Organizations (HMOs).
• Regular advisory and health talks during health awareness sessions, work life balance initiatives.

Information Technology Upgrades

Information Technology is embedded into the Company operations. The Company seeks to provide a stable, up to date information technology infrastructure for the improvement of the

5

working environment, increased productivity and cyber security. The technological advancements include:

1. Software use for smarter work and improved productivity. This encompasses various applications with social distancing techniques to reduce physical interactions at the workplace.
2. A centralized office 365 SharePoint Library, set up for ease of document sharing among employees and the backup of official documents, to create a reduction in data loss, accidents or theft.
3. The implementation of a centralized Storage Area Network (SAN) for safe storage and backup for all employee files through integration in the system network.

4. Antivirus Upgrade to maintain a safe cyber environment which matches advancements in emerging threats.

Internship Management

The internship programme is an initiative, designed to develop and create a talent pool. It seeks to provide learning opportunities and practical work experience for career development in young undergraduates (SIWES/ Industrial Attachment). The interns acquire technical and soft skills, based on exposure to the business practices through various learnings modules.

Employee Recruitment

Our internal recruiting team endeavours to not only fill open positions, but to partner with hiring managers to continuously improve our efforts with respect to marketing, screening, interviewing, onboarding and employee retention. In addition to recruiting locally in the communities we serve, we use job fairs, open house events, employee referral programs and social media channels, Our job opportunities are hosted on https:/updcplc.com/careers/jobs/ and posted on www.linkedin.com.

Corporate Social Responsibility

The Company pursues its corporate social responsibility by providing support for people living in villages, communities and the less-developed city outskirts - areas where we may not necessarily get business patronage. We carry out these initiatives to improve the standard of living for beneficiaries and as our corporate contribution to the global drive to eradicate extreme poverty.

BY ORDER O F THE BOARD

Folake Kalaro (Mrs.)

Company Secretary

FRC/2018/NBA/00000017754

6

CORPORATE GOVERNANCE REPORT

Introduction

The Board of UPDC Plc (UPDC or the Company) is committed to high standards of corporate governance, which it considers critical to business integrity and to maintaining investors' trust in the Company. The Company expects all its Directors and employees to act with honesty, integrity, and fairness. The Company strives to act in accordance with the laws and regulations in Nigeria, adopt proper standards of business practice and procedure and operate with integrity.

The Board

Under the Articles of Association of the Company (the Articles), the Board is responsible for controlling and managing the business of the Company. It may exercise such powers of the Company as are not by statute or the Articles to be exercised by the Company in General Meeting.

The primary objective of the Board of Directors (Board) is to build long-term shareholder value with due regard to other stakeholder interests. It does this by setting strategic direction and context, such as the Company's mission, vision and core values, policies and objectives and focusing on issues critical for its successful execution such as staffing, executive training, succession planning, performance, and risk management.

During the period under review, the Board of the Company was made up of four (4) Non- Executive Directors and two (2) Executive Directors. Ms. Bidemi Fadayomi, the Development Director resigned her appointment during the period and was appointed a Non-Executive Director with effect from 2nd January 2025. The Board is headed by a Non-Executive Chairman who is separate from the Chief Executive Officer who heads the management team of the Company. The current Directors of the Company and their classifications are as follows:

All the Directors had access to the advice and services of the Company Secretary. With the approval of the Chairman of the Board, they may take advice from external professionals in areas where such advice will improve the quality of their contributions to Board deliberation and decision-making process.

The following are the matters reserved for the Board of Directors of the Company:

1. Formulation of policies, strategy and overseeing the management and conduct of the business.
2. Formulation and management of risk management framework.
3. Succession planning and the appointment, training, remuneration and replacement of Board members and senior management.

7

1. Overseeing the effectiveness and adequacy of internal control systems.
2. Overseeing the maintenance of the Company's communication and information dissemination policy.
3. Performance appraisal and compensation of board members and senior executives.
4. Ensuring effective communication with shareholders, stakeholders, the investing public.
5. Ensuring the integrity of financial controls and reports.
6. Ensuring that ethical standards are maintained.
7. Ensuring compliance with the Company's Memorandum and Articles of Association, applicable laws, regulations, standards and Code of Corporate Governance by the Company and its Business Units.
8. Definition of the scope of delegated authority to Board Committees and management and their accountabilities.
9. Definition of the scope of corporate social responsibility through the approval of relevant policies; and
10. Approval and enforcement of a Code of Ethics and Business Practices for the Company and Code of Conduct for Directors.

Board Appointment Process, Induction and Training of Members

The Board Remuneration & Governance Committee serves as the nomination committee for recommending candidates to fill vacant positions on the Board. The process of appointing Directors includes declaration of a vacancy at a Board meeting, assessment of the relevant requirements (such as gender, age, technical and soft skills, geographical spread, experience and international exposure), sourcing of the curriculum vitae for suitable candidates, carrying out necessary background checks, informal interviews & interactions, and recommendation of suitable candidate(s) by the Board Remuneration & Governance Committee to the Board for approval. A Director appointed by the Board is presented to the next Annual General Meeting for election in line with statutory requirements. A third of members of the Board retire by rotation at the Annual General Meetings.

Every newly appointed Director receives a comprehensive letter of appointment detailing the terms of reference of the Board and its Committees, the Board structure, schedule of Board meetings, his/her entitlements and demand on his/her time because of the appointment. Significant Company documents such as the Memorandum and Articles of Association of the Company, the previous Annual Report & Accounts, the National Code of Corporate Governance, Code of Business Conduct etc are also sent to the Director to enable him/her understand the Company, its history, culture, core values, governance framework, business principles, people, operations, brands, projects, processes, and plans. A new Director undergoes an induction/orientation process whereby he/she is introduced to the leadership team and get acquainted with business operations. Periodic trainings are organised for Board members from time to time.

Board Evaluation

The Board has established a system of independent annual evaluation of its performance, that of its Committees and individual Directors. In this regard, the Society for Corporate Governance Nigeria was engaged to conduct the Board performance evaluation for the Financial Year Ended December 31, 2024. The Board believes that the use of an independent consultant promotes the objectivity and the transparency of the evaluation process.

8

The annual appraisal covered all aspects of the Board's composition, structure, responsibilities, relationships, processes, individual members competencies and respective roles in the overall performance of the Board, as well as the Company's compliance status with the provisions of the Code of Corporate Governance. The result also confirmed that the individual Directors and the Board continue to operate at a high level of effectiveness and efficiency.

Board Compensation

Consistent with the Company's policy, remuneration of Executive Directors is fixed by the Board Remuneration and Governance Committee, which also has the responsibility of making recommendations to the Board on all payments made to Executive Directors.

Non-Executive Directors are renumerated in line with the Company's policy of providing them with fixed annual fees and sitting allowances for their services on the Board and Committees.

Board Meetings

The Board met three (3) times during the 2024 financial year. The following table shows the attendance of Directors at the Board meetings:

Board Committees

The Board exercises oversight responsibility through its standing Committees, each of which has a Charter that clearly defines its purpose, composition, structure, frequency of meetings, duties, tenure, and reporting line to the Board. In line with best practice, the Chairman of the Board is not a member of any Committee. The Board has three (3) Committees namely: the Board Finance, Investment and Operations Committee, the Board Risk, Audit and Compliance Committee, the Board Renumeration and Governance Committee. The Company also has a Statutory Audit Committee.

While the various Board Committees have the authority to examine issues within the terms of reference and report back to the Board with their decisions and/or recommendations, the ultimate responsibility for all matters lies with the Board.

Finance, Investment and Operations Committee

The Committee supports the Board's responsibilities relating to the financial affairs of the Company and to make recommendations to the Board in connection with the Company's investment, financing and operational activities.

9