the infrastructure bank plc and subsidiary companies · 2017-08-15 · the infrastructure bank plc...

THE INFRASTRUCTURE BANK PLC AND SUBSIDIARY COMPANIES

Consolidated and Separate Financial Statements for the year ended 31 December 2014

Together with Directors' and Auditor's Reports

CONTENTS

ReportsCorporate information……………………………………………………………………………………Chairman's statement……………………………………………………………………………………Chief Executive's statement………………………………………………………………………………Directors' report…………………………………………………………………………………………Corporate governance report……………………………………………………………………………Statement of directors' responsibilities……………………………………………………………………Report of the audit committee……………………………………………………………………………Independent auditor's report………………………………………………………………………………

Consolidated and separate financial statementsConsolidated and separate statement of profit or loss and comprehensive income………………………Consolidated and separate statement of financial position………………………………………………Consolidated and separate statement of changes in equity………………………………………………Consolidated statement of cash flows……………………………………………………………………Notes to the consolidated and separate financial statements……………………………………………

1 Reporting entity……………………………………………………………………………………2 Basis of preparation………………………………………………………………………………3 Changes in accounting policies……………………………………………………………………4 Significant accounting policies……………………………………………………………………5 Use of judgments and estimates……………………………………………………………………6 Financial risk management………………………………………………………………………7 Capital management………………………………………………………………………………8 Operating segment…………………………………………………………………………………9 Clasification of financial assets and liabilities……………………………………………………

10 Net interest income………………………………………………………………………………11 Net fees and commission income…………………………………………………………………12 Other income………………………………………………………………………………………13 Expenses…………………………………………………………………………………………14 Taxation……………………………………………………………………………………………15 Basic & diluted earnings per share………………………………………………………………16 Cash and cash equivalents…………………………………………………………………………17 Loans and advances to customers…………………………………………………………………18 Fee income receivables……………………………………………………………………………19 Other assets………………………………………………………………………………………20 Pledged assets……………………………………………………………………………………21 Investment in subsidiaries…………………………………………………………………………22 Property and equipment……………………………………………………………………………23 Intangible assets……………………………………………………………………………………24 Borrowings…………………………………………………………………………………………25 Accruals……………………………………………………………………………………………26 Employee benefit obligations……………………………………………………………………27 Other liabilities……………………………………………………………………………………28 Fiduciary assets……………………………………………………………………………………29 Related parties……………………………………………………………………………………30 Capital and reserves………………………………………………………………………………31 Contravention of laws and regulations……………………………………………………………32 Contingent liabilities and commitment……………………………………………………………33 Events after the reporting date……………………………………………………………………

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Other financial informationValue added statement-----------------------------------------------------------------------------------------Financial summary-------------------------------------------------------------------------------------------------- 75

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The Infrastructure Bank Plc and its subsidiary companiesConsolidated and Separate Financial Statements - 31 December 2014

Together with Directors' and Auditor's reports

Corporate information

Board of Directors: Lamis Dikko - ChairmanJohan Kruger - Vice ChairmanAdekunle AbdulRazaq Oyinloye - Managing DirectorHakeem Olopade - Executive DirectorTaiwo Dauda - Executive DirectorOye Hassan-Odukale - Non-executive DirectorAkinade Akanmu Ogunbiyi - Non-executive DirectorAbdullahi Musa Bello - Non-executive DirectorTanimu Yakubu Muhammad-Ja - Non-executive DirectorUmar Saleh - Non-executive DirectorL. O. T. Shittu - Non-executive DirectorNwabueze Okafor - Non-executive DirectorPromise Adewusi - Non-executive DirectorAnne Sanusi - Non-executive Director

Ag. Secretary and Abiodun Dariaregistered office: Plot 977 Central Business District

(Adjacent National Mosque)P.M.B 272, Garki Abuja F.C.TNigeria

Lagos office: 52 Ahmadu Bello WayVictoria Island, LagosNigeria

Independent auditors: KPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria Island,PMB 40014, FalomoLagos.

Bankers: Access Bank PlcCitibank Nigeria LimitedGuaranty Trust Bank PlcStandard Chartered Bank LimitedUnited Bank for Africa PlcUnity Bank PlcEcobank Nigeria Limited

RC No.: 196688

1



Chairman's statement

Financial Performance

Board of Directors

Outlook

Going for Growth

Conclusion

LAMIS DIKKOFRC/2013/IODN/00000004932Chairman, Board of Directors

I am pleased to report a strong set of results for the financial year to 31 December, 2014, which continues a trend of positive performance by the Bank.In July 2014, a review of the rolling 5-year Strategic Plan revalidated the core business strategy and confirmed steady progress in the accomplishmentof strategic objectives aimed at propelling the Bank towards its Vision of being the premier focal point for infrastructure development in Nigeria.

Profit before tax of N669 million (2013: N867 million) for the Group and N973 million (2013: N875 million) for the Bank contributed to earnings pershare of 11 kobo (2013: 53 kobo) and earnings per share of 21 kobo (2013: 54 kobo) for the Group and Bank respectively. Operational costs remaintightly controlled and well matched with income generation. In addition to the N700 million (2013: N 851 million) of fresh equity raised from a privateplacement exercise, which was concluded in March 2014, total comprehensive income of N611 million (2013: N 1.285 billion) at Group level andN916 million (2013: N1.293 billion) at the Bank level contributed to closing shareholders’ funds of N 2.754 billion (2013: N 1.442 billion) and totalassets of N15.615 billion (2013: N 4.585 billion) for the Group and shareholders’ funds of N 3.338 billion (2013: N 1.721 billion) and total assets ofN7.344 billion (2013: N 4.639 billion) for the Bank.

In the course of the year, Rabiu Suleiman Bichi and Kasimu Garba Kurfi both resigned from the Board. Alhaji Bichi and Mallam Kurfi madeimmeasurable contributions in a critical phase in the life of the Bank and I would like to take this opportunity to thank them both for their commitmentand unstinting support over that period. Umar Saleh replaced Adanu Timta, who resigned his appointment with the Bank effective 19 August, 2014;whilst Akin Ogunbiyi, Abdullahi Musa Bello, Oye Hassan-Odukale and Tanimu Yakubu Muhammad-Ja all joined our Board as non-executivedirectors with effect from 6 November, 2014.

In 2014, the Nigerian economy faced several challenges, some of which were heightened by the fall in oil prices. Conversely, our pipeline ofopportunities increased, a function of the Bank’s increasing stature in the market and the significant latent demand for infrastructure assetsdevelopment nationwide.The 2015 global macro-economic outlook is mixed, whilst the local environment will be shaped by a number of issues including the fallout from therecent general elections, oil prices and fluctuations in the value of the Naira. Indications abound, anecdotally and in real terms, are that Nigeria’soutlook remains positive on the back of ongoing initiatives and structural reforms across the core sectors of the economy. Increased investment incritical infrastructure is at the heart of this activity, which bodes well for the Bank.

The successful recapitalization program has further strengthened the Bank. However, in line with our strategic objectives, the Bank will continue aprogram of raising additional capital to fund the growth plan targets, with the specific aim of complying with the minimum capital requirement of N10billion as prescribed by the Central Bank of Nigeria Regulatory and Supervisory Guidelines for Development Finance Institutions dated 15 February2015.

The Infrastructure Bank has once again demonstrated the strength of its core competencies and continues to forge ahead in pursuit of a Mission thatwill transform the infrastructure landscape in Nigeria, whilst generating further value to shareholders in years to come.I would like to extend my sincere gratitude to all our stakeholders, partners and clients for their trust in us and in our services; our board, management,and staff for their dedication and hard work; and our regulators and government for their continued and unwavering support.

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Chief Executive's statement

Financial Performance

Business Model

Market Environment

Looking forward

ADEKUNLE A. OYINLOYEFRC/2013/CIBN/00000002382Managing Director / Chief Executive Officer

2014 represented a year of consolidation, in which The Infrastructure Bank was able to exhibit sustained improvements in its operational and

financial performance. This year’s results have undoubtedly benefited from the considerable progress made in the preceding three years. As we

refocus our efforts to achieving the strategic objectives of the Bank, we do so in the knowledge that our project pipeline is more robust than ever,

whilst we have strengthened our human capital base to ensure we continue to deliver market leading services.

The recorded profit before tax of N669 million (2013: N 867 million) for the Group and N973 million (2013: N875 million) for the Bankcontributed to earnings per share of 11 kobo (2013: 53 kobo) and 21 kobo (2013: 54 kobo) for the Group and Bank respectively. The transactionadvisory and finance arranging business remains the bedrock of the Bank’s business, allowing us to fully leverage on the strategic alliances we havepainstakingly established over the years with partners in the local and international infrastructure space.

In the face of increasing competition, the Bank’s established niche position in the market as a provider of innovative solutions to takinginfrastructure project ideas from concept to bankability must be carefully nurtured. Our local presence and expertise sets us apart and we shall aimto build on that by bolstering our human capital base through strategic hires and a focus on training and development.In line with our stated objective to attract co-investors and third-party fund investors, we recently announced the establishment of a US$ 500millionNigeria-focused Infrastructure Fund in collaboration with the United Kingdom-based Fund Manager, Gemfonds Plc, and a Madrid-basedInvestment Banking firm, Sigrun Partners, S.L. The Fund provides a unique opportunity for local and international investors with an appetite for theinfrastructure asset class in a Frontier Market setting by creating exposure to our pipeline of commercially attractive and value-adding infrastructureprojects. From a TIB perspective, growing our asset management business is key to risk diversification, generating income and ultimately creatingvalue for our shareholders.

In the year under review, the country battled with the challenges of currency instability, insecurity, and as the year drew to an end, politics took

center stage. The macro-economic environment is raising concerns, affecting the real sector and the economy as a whole. Inflation is trending

upwards, whilst national GDP is projected to fall below 5.0%, albeit this compares favorably to a global rate of c. 3.5%. It is imperative that the

incoming government “walk the talk” and give focus on fiscal and monetary policies that will continue to support the non-oil sectors of the economy

in order that strong growth is sustained in the medium term. International interest in the economy appears intact and will likely grow due to

Nigeria’s fundamental characteristics.

In 2015, our focus will be on growth. The balance sheet will be further strengthened with fresh capital to meet strategic objectives and regulatoryrequirements, whilst we will leverage on existing relationships to complement our current offerings and open up new business opportunities. TheInfrastructure Bank brand continues to grow in stature by dint of the commitment and hard work of everyone involved with the Bank. I would liketo thank the entire team for their efforts this year. We look forward with excitement to making further headway in achieving our strategic goals in2015.

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Directors' reportfor the year ended 31 December 2014

Legal form

Principal activity and business review

Operating results

In thousands of NairaGroup Group Bank BankDec-14 Dec-13 Dec-14 Dec-13

Gross earnings 2,164,490 2,282,658 2,467,571 2,282,658

Profit before minimum tax and income tax 668,739 867,383 973,246 875,441 Minimum tax (19,776) (12,702) (19,776) (12,702) Income tax (339,618) 429,972 (339,618) 429,972

Profit for the year 309,345 1,284,653 613,852 1,292,711

Basic and diluted earnings per share (kobo) 11k 53k 21k 54k

The directors present their report on the affairs of The Infrastructure Bank Plc (“the Bank”) and its subsidiaries ("the Group"), together with thefinancial statements and auditor’s report for the year ended 31 December, 2014.

The Infrastructure Bank Plc is a public limited company incorporated in Nigeria. It was established by Act No. 51 of 1992. The Bank's name was changed from Urban Development Bank of Nigeria Plc to The Infrastructure Bank Plc by a special resolution effective 27 June 2011.

The Bank was established to foster the rapid development of infrastructure across the Federation through the provision of finance and bankingservices.

Highlights of the Group's and Bank’s operating results for the year are as follows:

The Bank incorporated a subsidiary named TIB Asset Management Limited in May 2013 to act as fund manager to the Bank's third party funds.As at the reporting date, the Bank did not have interest in this entity and the entity is yet to obtain operating licence from the Securities andExchange Commission. The entity had also not commenced operation and therefore was not consolidated in the Bank's financial statements.

The Bank's consolidated financial statements include the results of Marina Express Train Services Limited, Motorways Asset Limited and Infrastructure Heights Limited, all three being Special Purpose Vehicles (SPV) registered to execute infrastructure projects on which the Bank is acting in an advisory and/or finance arranging capacity. The Bank typically holds SPV shares in trust pending the admittance of substantive investors, which will result in reducing the Bank's interest to a minority position. Hence, the project SPV subsidiaries created in normal course of business are transitory in nature.

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Ownership structure

Shareholders Number of Shares Shareholding Percentage

Number of Shares Shareholding Percentage

2,063,000,000 66.5% 1,522,540,330 63.3%320,000,000 10.3% 160,000,000 6.7%

160,000,000 5.2% 160,000,000 6.7%

320,000,000 10.3% 320,000,000 13.3%

160,000,000 5.2% 160,000,000 6.7%80,000,000 2.5% 80,000,000 3.3%

Total 3,103,000,000 100% 2,402,540,330 100%

Directors and their interests

Director Direct Indirect Direct Indirect

Lamis Dikko ‐ 58,848,763 - 63,298,043 Johan Kruger ‐ 29,218,320 - 29,218,320 Adekunle AbdulRazaq Oyinloye ‐ 58,848,763 - 63,298,043 Hakeem Olopade ‐ 25,734,912 - 27,275,822 Taiwo Dauda ‐ 25,734,912 - 27,275,822 Sulaiman Tahir* ‐ - - ‐

Nwabueze Okafor ** ‐ - - ‐

Rabiu Suleiman Bichi*** ‐ 28,065,369 - 28,065,369 Kasimu Garba Kurfi*** ‐ - - ‐

L.O.T. Shittu ‐ - - ‐

Promise Adewusi ‐ - - ‐

Anne Sanusi 80,000,000 63,306,360 80,000,000 63,306,360 Umar Saleh**** ‐ - - - Akinade Akanmu Ogunbiyi***** ‐ - - - Taminu Yakubu Muhammad-Ja***** ‐ 174,623,951 - - Oye Hassan-Odukale***** ‐ 310,919,301 - - Abdullahi Musa Bello ***** ‐ 243,648,744 - -

* Sulaiman Tahir resigned from the Board with effect from January 2014

*** Rabiu Suleiman Bichi and Kasimu Garba Kurfi resigned from the Board with effect from 15 August, 2014

State Governments and Federal Capital Territory of Nigeria (represented by the Nigeria Governors' Forum)

Local Governments of Nigeria (represented by the Association of Local Governments of Nigeria)

** Nwabueze Okafor was appointed on the Board as representative of the ALGON on the 16th of April 2014

31 December 201331 December 2014

**** Umar Saleh replaced Adamu Timta who resigned his appointment with the Bank effective 15 August, 2014***** Akinade Akanmu Ogunbiyi, Tanimu Yakubu Muhammad-Ja, Oye Hassan-Odukale and Abdullahi Musa Bello were appointed to the

Board with effect from 6 November, 2014.

Nigeria Labour Congress

The following directors of the Bank held office during the year and represented the Bank's shareholders. The directors have direct and indirect interests in the issued share capital of the Bank as recorded in the register of directors’ shareholding as noted below:

The issued and fully paid-up share capital of the Bank was 3,103,000,000 ordinary shares of N1 each as at 31 December 2014. The shareholdingstructure as at the balance sheet date are as shown below:

31 December 2013

Estate of Hakeem Olamide Sanusi

ICHL Nigeria Limited

31 December 2014

Federal Government of Nigeria (represented by Ministry of Finance Incorporated)

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Directors’ interests in contracts

Property and equipment

Analysis of shareholding

Share rangeNo of

shareholdersPercentage of shareholders No of holdings

Percentage holdings

1 - 1,000,000 - 0.0% - 0.0%1,000,001 – 5,000,000 - 0.0% - 0.0%5,000,001 – 10,000,000 - 0.0% - 0.0%10,000,001 – 50,000,000 - 0.0% - 0.0%50,000,001 – 100,000,000 1 16.7% 80,000,000 2.6%100,000,001 – 500,000,000 4 66.7% 960,000,000 30.9%500,000,001– 1,000,000,000 - 0.0% 0.0%1,000,000,001– 1,500,000,000 - 0.0% - 0.0%1,500,000,001– 2,000,000,000 - 0.0% - 0.0%2,000,000,001– 3,000,000,000 1 16.7% 2,063,000,000 66.5%

6 100% 3,103,000,000 100%

Share range

No of shareholders

Percentage of shareholders No of holdings

Percentage holdings

1 - 1,000,000 - 0.0% - 0.0%1,000,001 – 5,000,000 - 0.0% - 0.0%5,000,001 – 10,000,000 - 0.0% - 0.0%10,000,001 – 50,000,000 - 0.0% - 0.0%50,000,001 – 100,000,000 1 16.7% 80,000,000 3.3%100,000,001 – 500,000,000 4 66.7% 800,000,000 33.3%500,000,001– 1,000,000,000 - 0.0% 0.0%1,000,000,001– 1,500,000,000 - 0.0% - 0.0%1,500,000,001– 2,000,000,000 1 16.7% 1,522,540,330 63.4%

6 100% 2,402,540,330 100%

None of the directors has notified the Bank, for the purposes of Section 277 of the Companies and Allied Matters Act of Nigeria, of any interestin contracts during the year.

The shareholding pattern of the Bank as at 31 December 2014 was as stated below:

The shareholding pattern of the Bank as at 31 December 2013 was as stated below:

Information relating to property and equipment is given in Note 22 to the financial statements. In the opinion of the directors, the net realisablevalue of the property and equipment is not less than the value shown in the financial statements.

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Substantial interest in shares

Number of sharesheld % of shareholding Number of shares held

% ofshareholding

ICHL Nigeria Limited 2,063,000,000 66.5% 1,522,540,330 65.6%Federal Government of Nigeria 320,000,000 10.3% 160,000,000 6.9%

160,000,000 5.2% 160,000,000 6.9%

Local Governments of Nigeria 320,000,000 10.3% 320,000,000 13.8%Nigeria Labour Congress 160,000,000 5.2% 160,000,000 6.9%

3,023,000,000 2,322,540,330

Donations and charitable gifts

Beneficiary Purpose AmountIn thousands of NairaNigerian Society of Engineers Donation towards the world engineerin conference on sustainable infrastructure 1,000Chartered Institute of Bankers Donation towards annual bankers dinner 200Professor Kunle Ade Wahab Donation towards book launch 300Special Person Association Donation towards annual national handicapped seminar and exhibition 100

1,600Human resources

(i) Employment of disabled persons

(ii) Health, safety and welfare at work

Employee involvement and training

Auditors

BY ORDER OF THE BOARD

Abiodun DariaAg. Company SecretaryPlot 977 Central Business District(Adjacent National Mosque)Abuja F.C.T.Nigeria16 April 2015

The Bank continues to maintain a policy of giving fair consideration to applications for employment made by disabled persons with due regard totheir abilities and aptitudes. The Bank’s policies prohibit discrimination against disabled persons in the recruitment, training and careerdevelopment of employees. In the event of members of staff becoming disabled, efforts will be made to ensure that their employment with theBank continues and appropriate training is arranged to ensure that they fit into the Bank’s working environment.

The Bank maintains business premises designed with a view to guaranteeing the safety and healthy living conditions of its employees andcustomers alike. Employees are adequately insured against occupational and other hazards.

The Bank ensures that employees are informed on matters concerning them. Formal and informal channels are also employed in communicationwith employees with an appropriate two-way feedback mechanism. In accordance with the Bank’s policy of continuous development, the Bankdraws up annual training programmes. The programmes include on the job training, classroom sessions and web-based training programmeswhich are available to all staff.

The auditors, KPMG Professional Services, have indicated their willingness to continue in office as auditors. In accordance with section 357(2)of the Companies and Allied Matter Act, 1990, a resolution will be proposed at the Annual General Meeting to authorise the directors to determinetheir remuneration.

According to the register of members at 31 December 2014, no shareholder held more than 5% of the issued share capital of the Bank except thefollowing:

31 December 2014 31 December 2013

State Governments and Federal Capital Territory ofNigeria

The Bank identifies with the aspirations of the community and the environment in which it operates. The Bank made contributions to charitableand non-charitable organisations amounting to N1,600,000 (December 2013: N1,850,000) during the year, as listed below:

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Corporate governancefor the year ended 31 December 2014

Shareholders’ meetings

Ownership Structure

Shareholder Number of Shares

Shareholding Percentage

ICHL Nigeria Limited 2,063,000,000 66.5%Federal Government of Nigeria 320,000,000 10.3%

160,000,000 5.2%Local Governments of Nigeria 320,000,000 10.3%

Nigeria Labour Congress 160,000,000 5.2%Estate of Hakeem Olamide Sanusi 80,000,000 2.5%Total 3,103,000,000 100%

Board of Directors

The Central Bank of Nigeria in May 2013, released a new Code of Corporate Governance, which requires Banks to include in their annual report andaccounts, compliance report to the Code of Corporate Governance. The new CBN Code became effective on the 1st of October 2013 and in compliancewith the Code therefore, we state below our compliance report.

The Infrastructure Bank Plc’s ambition to become the premier focal point for infrastructure development in Nigeria carries with it a responsibility tomaintain the highest standards of corporate governance and to promote a culture of continuous improvement, where there is a code of adopting and beingguided by best practice processes and procedures.

The Bank functions under a governance framework that enables the Board to discharge its role of providing oversight and strategic counsel alongside itsresponsibility to ensure the Bank’s compliance with regulatory requirements and acceptable risk. The Bank is mindful of its obligations under the relevantcodes of corporate governance, such as: the Companies and Allied Matters Act; the Central Bank of Nigeria’s (CBN) Code of Corporate Governance forBanks in Nigeria Post Consolidation (the CBN Code); and the Securities and Exchange Commission’s Code of Corporate Governance (the SEC Code).

These codes, in addition to the Bank’s Memorandum and Articles of Association, collectively provide the basis for promoting sound corporate governancein the Bank. Our core values of teamwork, integrity, innovativeness, tenacity, result oriented, and intellectualism are the bedrock upon which we continue tobuild our corporate behaviour.

The shareholders remain the highest decision making body of the Bank, subject to the Memorandum and Articles of Association of the Bank, and otherapplicable legislation. At the Annual General Meeting (AGM), decisions affecting the Management and strategic objectives of the Bank are taken through afair and transparent process. Such AGMs are attended by the shareholders or their proxies and proceedings at such meetings are monitored by the Bank’sstatutory auditors. Shareholders’ meetings are duly convened and held in line with the Bank’s Articles of Association and existing statutory and regulatory regimes in an openmanner, for the purpose of deliberating on issues affecting the Bank’s strategic direction.This occurs through a fair and transparent process and also serves as a medium for promoting interaction between the Board, Management andShareholders. The Board ensures that Shareholders are provided with adequate notice of meetings. Directors may also, whenever they think fit, convene anExtra-ordinary General Meeting (EGM).

Alhaji Dikko attended College of Advanced Studies, Zaria from 1976 to 1978; he attained his first degree in Economics from Ahmadu Bello University(1981); and was at the Queen Mary College, University of London between 1981 to 1984, where he obtained a Bachelor of Science degree in Economics.He is also an alumnus of the Harvard Business School Leadership Program.

The shareholding structure is shown below:

State Governments and Federal Capital Territory of Nigeria

The authorised share capital of the Bank is made up of 3,103,000,000 ordinary shares of N1 each. As at 31 December 2014, the Bank's share capital wasfully issued and paid-up with 3,103,000,000 ordinary shares of N1 each.

The Board is the Bank’s highest decision making body responsible for governance. It operates on the understanding that sound governance practices arefundamental to earning the trust of stakeholders, which in turn is critical to sustainable growth. The Board of Directors has the responsibility of advancingthe performance of the Bank by collectively directing the Bank’s affairs, while meeting the appropriate interests of shareholders and stakeholders.

The members of the Board of Directors have diversified backgrounds cutting across various professions, with exceptional banking, financial and broaderentrepreneurial experience. These competencies have impacted on the smooth operations and steady growth of the Bank. The office of the Chairman of the Board is distinct and separate from that of the Managing Director/ CEO and the Chairman does not participate in running

the daily activities of the Bank.The Chairman of the Board is Alhaji Lamis Dikko. Alhaji Dikko joined Habib Bank Nigeria Limited in 1986, where he served for twelve years and left as

an Assistant General Manager. He moved to Intercity Bank Plc in 1998 as a General Manager and was appointed the Bank's Managing Director/CEO in

2001, a position he held until Intercity Bank Plc merged with eight other banks to form Unity Bank Plc in 2005. He was initially Executive Director, Credit

Risk Management of Unity Bank prior to being made the Group Executive Director, Central Region.

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Name DesignationLamis Dikko ChairmanJohan Kruger Vice ChairmanAdekunle AbdulRazaq Oyinloye Managing DirectorHakeem Olopade Executive DirectorTaiwo Dauda Executive DirectorRabiu Suleiman Bichi* Non-executive DirectorKasimu Garba Kurfi* Non-executive DirectorNwabueze Okafor** Non-executive DirectorL.O.T Shittu Non-executive DirectorPromise Adewusi Non-executive DirectorAnne Sanusi Non-executive DirectorUmar Saleh*** Non-executive DirectorAkinade Akanmu Ogunbiyi**** Non-executive DirectorTanimu Yakubu Muhammad-Ja**** Non-executive DirectorOye Hassan-Odukale**** Non-executive DirectorAbdullahi Musa Bello **** Non-executive Director

*Rabiu Suleiman Bichi and Kasimu Garba Kurfi resigned from the Board with effect from 15 August, 2014

Delegation of authority

Access to information and resources

***Umar Saleh was appointed with effect from 15 August, 2014. The appointment was approved by the Central Bank of Nigeria via a letter dated 3

February, 2015.****Tanimu Yakubu Muhammad-Ja, Abdullahi Musa Bello, Akinade Ogunbiyi and Oye Hassan-Odukale were appointed with effect from 6 November,2014. Their appointments were approved by the Central Bank of Nigeria via a letter dated 1 April, 2015.

The ultimate responsibility for the Bank’s operations rests with the Board. The Board retains effective control through a well-developed Committeegovernance structure that provides in-depth focus on Board responsibilities. The Board delegates authority to the Managing Director / CEO to manage theaffairs of the Bank within the parameters established by the Board from time to time.

The Directors have unrestricted access to Management and Bank’s information in addition to other resources to carry out their roles and responsibilities,

including access to external professional advice at the Bank’s expense.

There is a continuous engagement between the Executive Management and the Board. The Bank’s external auditors attend meetings convened by theBoard, the Board Audit Committee and the Shareholders, when there is need.

Any such Director also reserves the right to discuss with the Chairman any matter he/she may wish to raise at the meeting. The Directors are also provided

with regular updates on developments in the regulatory and business environment.

All directors are provided with notices, an agenda and meeting papers in advance of each meeting and, where a Director is unable to attend a meeting,he/she is still provided with the relevant papers for the meeting.

The Board meets quarterly and emergency meetings are convened as may be required. Material decisions may be taken between meetings through writtenresolutions as provided for by the Bank’s Memorandum and Articles of Association.

**Nwabueze Okafor was appointed on the Board as representative of the ALGON on the 16th of April 2014

Memberships of the Board of Directors during the year ended 31 December 2014 were as follows:

We confirm that in line with best practice, the Chairman of the Board is not a member of any Board Committee and appointment to the Board is made bythe shareholders at the Annual General Meeting upon recommendation by the Board of Directors.

9



Board committees

BA&RMC BGRNC BCIC BFGPC

M MM

MM MC MM C

C MM CM M

M MM M

M MM M

Board Audit and Risk Management Committee

The Committee evaluates the Bank’s risk policies on a periodic basis to accommodate major changes in the internal or external environment.

The Committee is chaired by Alhaji L.O.T. Shittu. Alhaji Shittu is the Executive Director, Strategy & Research, at the Nigeria Governors' Forum. He is theBoard representative of the Nigeria Governors' Forum.

He has over 25 years of experience in both public and private sectors in Nigeria including holding directorships at Ocean Atlantic Dredging Company andNigerian Communications Commission. He holds a Master of Development Banking and Finance from Giordano Del Amore Institute of Banking &Finance, Italy, as well as a bachelor’s degree in Economics from Wittenberg University, USA. Other members of the Committee have relevant backgrounds in financial management and accounting as required by the CBN Code.

Board Audit and Risk Management Committee (BA&RMC)Board Governance Remuneration and Nomination Committee (BGRNC), Board Credit and Investment Committee (BCIC)Board Finance and General Purpose Committee (BFGPC)

The Board carries out its oversight function through its standing committees, each of which has a charter that clearly defines its purpose, composition, andstructure, frequency of meetings, duties, tenure and reporting lines to the Board. In line with best practice, the Chairman of the Board does not sit on any ofthe committees. In accordance with the new CBN Code of Corporate Governance, the Board merged the Board Audit and Risk Management Committeeand created a Board Governance, Remuneration and Nominations Committee in the course of the year. Hence, the four standing committees of the Boardare:

IndexC = ChairmanM = Member ED = Executive DirectorNED = Non-Executive Director

The Committee assists the Board in achieving its oversight responsibility relating to the integrity of the Bank’s financial statements and the financialreporting process; the independence and performance of the Bank’s internal and external auditors; the Bank’s system of internal control and mechanism forreceiving complaints regarding the Bank’s accounting and operating procedures; establishment of policies, standards and guidelines for risk managementand compliance with legal and regulatory requirements. In addition, it ensures that the risk management framework is integrated into the day to dayoperations of the business and provides guidelines and standards for administering the acceptance and on-going management of key risks such asoperational, reputational, financial, market, technology and compliance, through periodic review of reports provided by Management. The Bank’s InternalAuditor has access to the Committee and submits quarterly reports to the Committee, while the Risk Manager also presents quarterly Risk Reports to theCommittee. The Internal Auditor, Risk Manager, and Executive Directors have a standing invitation to attend the meetings of the Committee.

The membership of the various Board Committees at the end of the year 2014 is set out below:

NAMEAdekunle Oyinloye (MD /CEO)Hakeem Olopade (ED)Taiwo Dauda (ED)Nwabueze Okafor (NED)

Akin Ogunbiyi (NED)Tanimu Yakubu Muhammad-Ja (NED)Oye Hassan-Odukale (NED)

Abdullahi Musa Bello (NED)

L.O.T Shittu (NED)Johan Kruger (NED)Anne Sanusi (NED)Promise Adewusi (NED)Umar Saleh

10



Board Credit & Investment Committee

Attendance at Board Committee Meetings

BCIC BF&GPC BAC* BGRNC** BRMC* BA&RMC BoD Number of meetings held: 4

Number of meetings held: 4






Lamis Dikko (NED) N/A N/A N/A N/A N/A N/A 3Johan Kruger (NED) 3 N/A N/A N/A 2 1 3Sulaiman Tahir 1 1 N/A N/A N/A N/A 1Adamu Timta (NED) 1 0 N/A 0 N/A N/A 1L.O.T Shittu (NED) N/A 3 3 1 N/A 1 4Nwabueze Okafor (NED) N/A N/A 2 0 2 1 2Promise Adewusi (NED) N/A 4 N/A 1 3 N/A 3Anne Sanusi (Represented by her alternate Kazeem Sanusi) (NED)

3 4 N/A1 N/A N/A

4

Kasimu Garba Kurfi (NED) 3 N/A N/A N/A 3 N/A 3Rabiu Suleiman Bichi (NED) N/A N/A 2 1 N/A N/A 2Umar Saleh N/A 1 N/A N/A N/A N/A N/AAkin Ogunbiyi N/A N/A N/A N/A N/A N/A N/ATanimu Yakubu Muhammad-Ja N/A N/A N/A N/A N/A N/A N/AAbdullahi Musa Bello N/A N/A N/A N/A N/A N/A N/AOye Hassan-Odukale N/A N/A N/A N/A N/A N/A N/AAdekunle Oyinloye (MD/CEO) 4 4 N/A N/A 3 N/A 3Hakeem Olopade (ED) 4 N/A N/A N/A N/A 1 4Taiwo Dauda (ED) 4 4 3 N/A 3 1 4

The Committee is chaired by Comrade Promise Adewusi. Comrade Adewusi is the Deputy President of the Nigeria Labour Congress and also NationalPresident of the Senior Staff Association of Nigerian Universities having retired from the University of Lagos after 35 years of meritorious service.Comrade Adewusi is also a lawyer having obtained his Bachelors and Masters of Law from the Lagos State University in 2002 and 2007 respectively. Hewas called to the Nigerian Bar in 2004. He is a seasoned member of the Nigerian Labour movement and author of several books on Labour Law and TradeUnionism in Nigeria. He represents the Nigeria Labour Congress on the Board of the Bank.

During the financial year ended 31 December 2014, directors' attendance at the Board and Board Committee meetings are shown below:

NAME OF DIRECTORS

Mrs. Anne Sanusi is the Acting Chairman of the Committee. She obtained a Bachelor's degree in Zoology from the Rivers State University of Science andTechnology, Port Harcourt, Rivers State in 1994 and in 2011 completed another degree in Accountancy at the George Washington School of Business inWashington DC, USA. She is presently pursuing a Master of Business Administration at Strayer University School of Business, Arlington, Virginia in theUSA. Mrs. Sanusi represents the Estate of Hakeem Olamide Sanusi on the Board of the Bank and she duly appointed Mr. Kazeem Sanusi her alternate onthe Board in accordance with the Bank's Memorandum and Articles of Association.

The Committee considers and approves loan applications within certain limits (as defined by the Board from time to time). The Committee endorses theapproval of credit policies, proposals and changes to credit policies, standards, new products, processes and approving authorities subject to ratification ofthe full Board.

The Committee oversees the administration and effectiveness of, and compliance with, the Bank’s credit policies. It does this by reviewing relevantprocesses, reporting on the recommendation of the Management and by any other means as it deems appropriate.

The Committee is chaired by Mr. Johan Kruger, a Board representative of ICHL Nigeria Limited. Mr. Kruger has more than 35 years experience in the

provision and funding of public infrastructure in South Africa. He graduated from the Stellenbosch University in South Africa in 1975 where he obtained a

Bachelor's degree in Civil Engineering. He also studied business Commerce for non-degree purposes and attended the Advanced Executive Management

Course at the International Institute for Management Development (IMD), Lausanne, Switzerland. He has held a wide range of positions including being the

General Manager of the Development Bank of South Africa and founding the Infrastructure Finance Corporation (INCA), a private sector company

specialising in infrastructure funding. Mr. Kruger is an international consultant on infrastructure financing and development and his clients include the

World Bank, United States Agency for International Development, Standard Bank of South Africa and the Government of Ukraine.

The Committee is responsible for reviewing and recommending to the Board on issues relating to the Bank’s organisational structure, human resourcesstrategy and policies relating to recruitment, and disengagement of staff at all levels, compensation benefits, and related issues of strategic importance thatdirectly affect the Bank’s ability to recruit, develop and retain the highly qualified staff needed for it to achieve its mandate.

Board Finance and General Purpose Committee

The Committee has responsibility for ensuring the implementation of sound governance practices by the Board; the review and recommendation ofexecutive and non-executive directors' remuneration and compensation for approval by the Board; overseeing the annual performance managementevaluation of the Board; and considering and making recommendation to the Board on nominations to the Board in line with the Bank's corporategovernance documents and policies. The Committee is comprised of only non-executive directors.

Board Governance Remuneration and Nominations Committee

11



*BAC and BRMC were merged into BA&RMC by the Board in July 2014**BGRNC was created by the Board in July 2014

Key:NED - Non-Executive Director

ED - Executive Director

MD/CEO- Managing Director/Chief Executive Officer

BCIC- Board Credit and Investment Committee Meeting

BF&GPC - Board Finance and General Purpose Committee Meeting

BAC - Board Audit Committee Meeting

BRMC- Board Risk Management Committee Meeting

BoD - Board of Directors Meeting.

BA&RMC- Board Audit and Risk Management Committee

BGRNC - Board Governance, Remuneration and Nominations Committee

Code of ethics

The Infrastructure Bank Plc has a Code of Conduct, which specifies expected behaviour of its employees and Directors. The Code is designed to empower

employees and Directors and enable effective decision making at all levels of the business, according to defined ethical principles. The Code requires that

each Bank employee shall read the Code and sign a confirmation that he or she has understood the content. The Bank also has a Human Resources Policy Manual, which provides guidelines for addressing violations or breaches and for ensuring enforcement ofdiscipline with respect to staff conduct. The Manual also has a Disciplinary Guide, which sets out examples of possible offences and violations andprescribes appropriate disciplinary measures. The Head, Corporate Services is responsible for the design and implementation of the Code of Conduct, whilethe Head, Internal Audit is responsible for monitoring compliance. In meeting its mandate to provide sound governance structure for the Bank, the Boardalso approved a Directors Disclosure Policy, Succession Planning Policy, Corporate Governance Policy and Compliance Manual for the Bank in the courseof the year 2014.

The Company Secretary has the primary duty of assisting the Board and Management in developing and implementing good corporate governancestandards. The Company Secretary ensures that there is timely and appropriate information dissemination within and to the Board of Directors.

The Company Secretary

12



Adekunle AbdulRazaq OyinloyeFRC/2013/CIBN/00000002382 FRC/2013/IODN/00000002360

Taiwo Dauda

Statement of directors’ responsibilities in relation to the financial statements for the year ended 31 December 2014

The directors accept responsibility for the preparation of the annual financial statements and other financial information as set out onpages 17 to 76 that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) and in the mannerrequired by the Companies and Allied Matters Act of Nigeria, the Financial Reporting Council of Nigeria Act, 2011, the Banks andOther Financial Institutions Act of Nigeria and relevant Central Bank of Nigeria circulars.

The directors further accept responsibility for maintaining adequate accounting records as required by the Companies and AlliedMatters Act of Nigeria and for such internal control as the directors determine is necessary to enable the preparation of financialstatements that are free from material misstatement whether due to fraud or error.

The directors have made assessment of the Bank's ability to continue as a going concern and have no reason to believe that the Bankwill not remain a going concern in the year ahead.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Managing Director/CEO Executive Director

16 April 2015 16 April 2015

13



To the members of The Infrastructure Bank Plc:

•

•

•

L. O. T. ShittuChairman, Audit CommitteeFRC/2013/IODN/00000004953

Members of the Statutory Audit Committee are:1 L.O.T Shittu Chairman2 Johan Kruger Member3 Akin Ogunbiyi Member

In attendance:Jumoke Delano - Ag. Company Secretary

We are of the opinion that the accounting and reporting policies of the Group and Bank are in agreement with legalrequirements and agreed ethical practices and that the scope and planning of both the external and internal audits for the yearended 31 December 2014 were satisfactory and reinforce the Group’s internal control systems.

We have deliberated on the findings of the external auditors who have confirmed that necessary cooperation was receivedfrom management in the course of their final audit and we are satisfied with management’s responses thereon and with theeffectiveness of the Bank’s system of accounting and internal control.

16 April 2015

Report of the Audit Committee

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act of Nigeria, the members of the AuditCommittee of The Infrastructure Bank Plc hereby report on the financial statements for the year ended 31 December 2014 as follows:

We have exercised our statutory functions under section 359(6) of the Companies and Allied Matters Act of Nigeria andacknowledge the co-operation of management and staff in the conduct of these responsibilities.

14



Consolidated and separate statement of profit or loss and comprehensive incomefor the year ended 31 December

Group Group Bank BankIn thousands of Naira Notes 2014 2013 2014 2013

Interest income 10 276,934 138,346 306,109 138,346

Interest expense 10 (408,511) (255,671) (408,511) (255,671)

Net interest expense (131,577) (117,325) (102,402) (117,325)

Fees and commission income 11(a) 1,870,251 2,119,117 2,144,157 2,119,117

Fees and commission expense 11(b) (39,170) (61,217) (39,170) (61,217)

Net fee and commission income 1,831,081 2,057,900 2,104,987 2,057,900

Other income 12 17,305 25,195 17,305 25,195

Operating income 1,716,809 1,965,770 2,019,890 1,965,770

Impairment on financial assets 19(d) (188,200) (333,242) (188,200) (333,242)

Net operating income after net of impairment loss 1,528,609 1,632,528 1,831,690 1,632,528

Personnel expenses 13(a) (413,859) (356,141) (413,859) (356,141)

Depreciation and amortisation 22 & 23 (61,399) (37,424) (61,344) (37,387)

Other operating expenses 13(b) (384,612) (371,580) (383,241) (363,559)

Total expenses (859,870) (765,145) (858,444) (757,087)

Profit before minimum tax and income tax 668,739 867,383 973,246 875,441

Minimum tax 14(a) (19,776) (12,702) (19,776) (12,702) Income tax 14(a) (339,618) 429,972 (339,618) 429,972

Profit for the year 309,345 1,284,653 613,852 1,292,711

Other comprehensive income, net of income taxItems that will never be classified in profit or loss:Fair value gain on property and equipment 22 431,584 - 431,584 - Tax on other comprehensive income 14(b) (129,475) - (129,475) -

30(c) 302,109 - 302,109 -

Total comprehensive income for the year 611,454 1,284,653 915,961 1,292,711

Profit attributable to:Equity holders of the Bank 309,345 1,284,653 613,852 1,292,711 Profit for the year 309,345 1,284,653 613,852 1,292,711

Total comprehensive income attributable to:Equity holders of the Bank 611,454 1,284,653 915,961 1,292,711 Total comprehensive income for the year 611,454 1,284,653 915,961 1,292,711

Earnings per shareBasic earnings per share (kobo) 15 11k 53k 21k 54kDiluted earnings per share (kobo) 15 11k 53k 21k 54k

The statement of accounting policies and accompanying notes form an integral part of these consolidated and separate financial statements.

17



Consolidated and separate statement of financial positionAs at 31 December 2014


AssetsCash and cash equivalents 16 8,913,471 381,162 63,181 366,972Loans and advances to customers 17 460,767 377,359 626,930 501,706Fee income receivables 18(a) 3,331,844 1,753,453 3,664,344 1,753,453Other assets 19(a) 498,340 388,486 498,340 253,098Pledged assests 20 253,000 - 253,000 -Investment in subsidiaries 21 - - 80,748 79,239Property and equipment 22 2,011,080 1,229,280 2,011,007 1,229,152Intangible assets 23 782 1,113 782 1,113Deferred tax asset 14(b) 146,041 454,519 146,041 454,519

Total assets 15,615,325 4,585,372 7,344,373 4,639,252

Liabilities

Borrowings 24 10,296,602 1,397,980 1,996,602 1,397,980Accruals 25 57,964 42,464 56,864 40,964Employee benefits obligations 26(b) 28,132 22,743 28,132 22,743Current tax liabilities 14(c) 42,400 61,905 42,400 61,905Other liabilities 27 2,027,079 1,338,521 1,473,963 1,115,144Deferred tax liabilities 14(b) 408,870 279,395 408,870 279,395

Total liabilities 12,861,047 3,143,008 4,006,831 2,918,131

EquityShare capital 30(a) 3,103,000 2,402,540 3,103,000 2,402,540Capital contribution 30(b) 1,391,230 1,391,230 1,391,230 1,391,230Revaluation reserves 30(c) 941,181 648,116 941,181 648,116Regulatory risk reserve 30(d) - 36,077 - 36,077Accumulated losses 30(e) (2,681,133) (3,035,599) (2,097,869) (2,756,842)Total equity attributable to owners of the Bank 2,754,278 1,442,364 3,337,542 1,721,121Non controlling interest - - - -Total equity 2,754,278 1,442,364 3,337,542 1,721,121

Total liabilities and equity 15,615,325 4,585,372 7,344,373 4,639,252

___________________________ ________________________Adekunle AbdulRazaq Oyinloye Lamis DikkoFRC/2013/CIBN/00000002382 FRC/2013/IODN/00000004932Managing Director/CEO Chairman, Board of Directors

_________________________Taiwo DaudaFRC/2013/IODN/00000002360Executive Director, Finance and Admin.

The audited financial statements was approved by the Board of Directors on 16 April 2015 and signed on its behalf by:

The statement of accounting policies and accompanying notes on pages form an integral part of these consolidated and separate financialstatements.

18



Consolidated and separate statements of changes in equityfor the year ended 31 December

Group

Notes Share CapitalCapital

contributionRegulatory risk

reservesRevaluation

reservesRetained

profit/(loss) Total

Non-controlling

interest Total equity In thousands of Naira

Balance at 1 January 2014 2,402,540 1,391,230 36,077 648,116 (3,035,599) 1,442,364 - 1,442,364

Profit for the year - - - - 309,345 309,345 - 309,345 Other comprehensive income 30(c) - - - 302,109 - 302,109 - 302,109

Total comprehensive income - - - 302,109 309,345 611,454 - 611,454

Transfer between reserves:Reclassification - Excess depreciation transfer 30(c) & (e) - - (9,044) 9,044 - - - Transfer from regulatory risk reserve (36,077) 36,077 - - -

Transactions with equity holders:Allotment of shares from private placement 30(a) 700,460 - - - - 700,460 - 700,460

Balance at 31 December 2014 3,103,000 1,391,230 - 941,181 (2,681,133) 2,754,278 - 2,754,278

Balance at 1 January 2013 1,551,500 1,391,230 - 660,802 (4,296,861) (693,329) - (693,329)

Profit for the year - - - - 1,284,653 1,284,653 - 1,284,653

Total comprehensive income - - - - 1,284,653 1,284,653 - 1,284,653

Transfer between reserves 30(c) & (e) - - 36,077 (12,686) (23,391) - - -

Transactions with equity holders:Allotment of shares from rights issue 30(a) 851,040 - - - - 851,040 - 851,040

Balance at 31 December 2013 2,402,540 1,391,230 36,077 648,116 (3,035,599) 1,442,364 - 1,442,364

Attributable to equity holders of the Bank

19



Consolidated and separate statements of changes in equityfor the year ended 31 December

Bank

Notes Share CapitalCapital

contributionRegulatory

risk reservesRevaluation

reservesRetained

profit/(loss) Total

In thousands of Naira

Balance at 1 January 2014 2,402,540 1,391,230 36,077 648,116 (2,756,842) 1,721,121

Profit for the year - - - 613,852 613,852 Other comprehensive income 30(c) - - 302,109 - 302,109

Total comprehensive income - - 302,109 613,852 915,961

Transfer between reserves:Reclassification - Excess depreciation transfer 30(c) & (e) (9,044) 9,044 - Transfer from regulatory risk reserve (36,077) 36,077 -

Transactions with equity holders:Shares issued during the year 30(a) 700,460 - - - 700,460

Balance at 31 December 2014 3,103,000 1,391,230 - 941,181 (2,097,869) 3,337,542

Balance at 1 January 2013 1,551,500 1,391,230 - 660,802 (4,026,162) (422,630)

Profit for the year - - - 1,292,711 1,292,711 Other comprehensive income 30(c) - - - - -

Total comprehensive income - - - 1,292,711 1,292,711

Transfer between reserves 30(c) & (e) - 36,077 (12,686) (23,391) -

Transactions with equity holders:Allotment of shares from rights issue 30(a) 851,040 - - - 851,040 Balance at 31 December 2013 2,402,540 1,391,230 36,077 648,116 (2,756,842) 1,721,121

20



Consolidated and separate statements of cash flowsfor the year ended 31 December


Cash flows from operating activitiesProfit for the year 309,345 1,284,653 613,852 1,292,711

Adjustments for:Depreciation of property and equipment 22 61,068 37,093 61,013 37,056 Amortisation of intangible assets 23 331 331 331 331 Net impairment loss on financial assets 19(d) 188,200 333,242 188,200 333,242 Net interest expense 10 131,577 117,325 102,402 117,325 Income tax expense/(credit) 14(a) 359,394 (417,270) 359,394 (417,270)

1,049,915 1,355,374 1,325,192 1,363,395 Changes in operating assets and liabilitiesLoans and receivables, (271,189) (17,005) (313,005) (141,352) Fee income receivable (1,578,391) (1,808,453) (1,910,891) (1,808,453) Pledged assets (253,000) - (253,000) - Other assets (109,853) (294,129) (245,241) (163,429) Provision and accruals 15,500 (29,422) 15,900 (29,922) Other liabilities 667,706 454,571 336,458 427,934 Employee benefit obligations 5,389 (15,525) 5,389 (15,525) Tax paid 14(c) (49,571) (8,260) (49,571) (8,260)

Net cash flows from/(used in) operating activities (523,494) (362,849) (1,088,770) (375,612)

CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of property and equipment 22 (411,283) (119,827) (411,283) (119,662) Interest received 10 276,934 138,346 306,109 138,346

Net cash flows from/(used in) investing activities (134,349) 18,519 (105,174) 18,684

CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from borrowings 8,975,700 127,050 675,701 127,050 Repayment of borrowings (174,676) - (174,676) - Proceeds from issue of shares 30(a) 700,460 851,040 700,460 851,040 Interest paid on borrowings 10 (311,332) (255,671) (311,332) (255,671)

Net cash flows from/(used in) financing activities 9,190,152 722,419 890,153 722,419

Net increase in cash and cash equivalents 8,532,309 378,089 (303,791) 365,491

Cash and cash equivalents, beginning of the year 381,162 3,073 366,972 1,481

Cash and cash equivalents, end of year 16 8,913,471 381,162 63,181 366,972

21



Notes to the consolidated and separate financial statementsFor the year ended 31 December 2014

1. Reporting entity

2. Basis of preparation

(a) Statement of compliance

- lands are measured at fair value (using revaluation model)

(c) Functional and presentation currency

(d) Use of estimates and judgements

3. Changes in accounting policies

The Infrastructure Bank Plc is a bank domiciled in Nigeria. It was formerly called the Urban Development Bank of Nigeria Plc and establishedby Act No. 51 of 1992. The Bank's name was changed from Urban Development Bank of Nigeria Plc to The Infrastructure Bank Plc by a specialresolution effective 27 June 2011. The address of the Bank’s registered office is Plot 977, Central Business District, Abuja F.C.T. Nigeria.

These consolidated financial statements comprise the Bank and its subsidiary (together referred to as the "Group"). The Bank was established tofoster the rapid development of infrastructure across the Federation through the provision of finance and banking services.

The Bank assumes a niche position in the Nigerian financial services landscape, interfacing between the market for public sector lending andprivate sector infrastructure project financing, and the market for long term financial instruments and securities.The Bank is a development finance partner and financial facilitator; structurally and functionally complimentary to the commercial bankingsector and the needs of public and private sector infrastructure development promoters.

The consolidated and separate financial statements are prepared in accordance with International Financial Reporting Standards (IFRSs) asissued by the International Accounting Standard Board (IASB) and in the manner required by the Companies and Allied Matters Act of Nigeria,the Financial Reporting Council of Nigeria Act, 2011, the Banks and Other Financial Institutions Act of Nigeria and relevant Central Bank ofNigeria circulars. The consolidated and separate financial statements were authorised for issue by the Bank's Board of Directors on 15 April2015. Except for the changes explained in Note 3, the Group has consistently applied the following accounting policies to all periods presentedin these consolidated and separate financial statements.

(b) Basis of measurement

The consolidated and separate financial statements have been prepared on the historical cost basis except for the following material items, whichare measured on an alternative basis on each reporting date:

The consolidated and separate financial statements are presented in Naira, which is the functional currency of the Group. Except as indicated,

financial information presented in Naira has been rounded to the nearest thousand.

The preparation of consolidated and separate financial statements in conformity with IFRS requires management to make judgements, estimatesand assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses.Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period inwhich the estimate is revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the mostsignificant effect on the amounts recognised in the financial statements are described in Note 5.

Except for the changes below, the Group has consistently applied the accounting policies as set out in Note 4 to all periods presented in theseconsolidated and separate financial statements.

The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards,with a date of initial application of 1 January 2013.

- Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)The amendments to IAS 32 clarify the offsetting criteria in IAS 32 by explaining when an entity currently has a legally enforceable right to set-off and when gross settlement is equivalent to net settlement. The amendments are effective for annual periods beginning on or after 1 January 2014 and interim periods within those annual periods.The change did not have a material impact on the Group's financial statements.

22




4. Significant accounting policies

a. Basis of consolidationi) Non-controlling interests (NCI)

ii) Subsidiaries

iii) Special Purpose Entities

iv) Loss of control

v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. inpreparing the consolidated financial statement. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent thatthere is no evidence of impairment.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated and separate financialstatements.

NCI are measured at their proportionate share of the acquiree's identifiable net assets at the acquisition date.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from itsinvolvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiariesare included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary , and any related NCI and othercomponents of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fairvalue when control is lost.

Special purpose entities (SPEs) are entities that are created to accomplish a narrow and well-defined objective. An SPE is consolidated if, based

on an evaluation of the substance of its relationship with the Group and the SPE’s risks and rewards, the Group concludes that it controls the

SPE.

The following circumstances may indicate a relationship in which, in substance, the Group controls and consequently

consolidates an SPE:

- Entities are controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the

investee and has the ability to affect those returns through its power over the investee. The financial statements of SPEs are included in the

consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to non-controlling

interests are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

- The activities of the SPEs are being conducted on behalf of the Group according to its specific business needs so that the Group obtains

benefits from the SPE’s operation.

- The Group has the decision-making powers to obtain the majority of the benefits of the activities of the SPE or, by setting up an ‘autopilot’

mechanism; the Group has delegated these decision-making powers.

- The Group has the rights to obtain the majority of the benefits of the SPE and therefore may be exposed to risks incident to the activities of the

SPE.

- The Group retains the majority of the residual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities.- The assessment of whether the Group has control over an SPE is carried out at inception and normally no further reassessment of control iscarried out in the absence of changes in the structure or terms of the SPE, or additional transactions between the Group and the SPE. Day-to-daychanges in market conditions normally do not lead to a reassessment of control. However, sometimes changes in market conditions may alter thesubstance of the relationship between the Group and the SPE and in such instances the Group determines whether the change warrants areassessment of control based on the specific facts and circumstances. Where the Group’s voluntary actions, such as lending amounts in excessof existing liquidity facilities or extending terms beyond those established originally, change the relationship between the Group and an SPE, theGroup performs a reassessment of control over the SPE.

23




b. Foreign currencyi) Foreign currency transactions

ii) Non-derivative financial liabilities

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in theprevious category. The Group's investments in unquoted equities are classified as available-for-sale financial assets. Subsequent to initialrecognition, they are measured at fair value and changes therein, other than impairment losses are recognised in other comprehensive incomeand presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss in other comprehensiveincome is transfered to profit or loss.

The Group recognizes borrowings on the date that they are originated. All other financial liabilities are recognised initially on the trade date atwhich the Group become a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

The Group derecognises a financial asset when the contractual rights to the cash flows from the assets expire, or it transfers the right to receivethe contractual cash flows on the financial asset in a transaction in which substantially all risks and rewards of ownership of the financial assetare transferred. Any interest in transfered financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when and only when the group has alegal right to offset the amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: loans and receivables and available-for-sale financial assets.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Suchassets are recognised initailly at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivablesare measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise of loans and advances to customers, staff loans and advances (see Note 17).

Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. Bank overdrafts that arerepayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents forthe purpose of the statement of cash flows.

Transactions in foreign currencies are translated into the respective functional currency of the operation at the spot exchange rate at the date ofthe transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currencyat the spot exchange rate at that date. The foreign currency gain or loss on monetary item is the difference between amortised cost in thefunctional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost inforeign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currenciesthat are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value wasdetermined.

c. Financial instruments

i) Non-derivative financial instrumentsThe Group recognizes loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially onthe trade date at which the Group becomes a party to the contractual provisions of the instrument.

Fee income receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Theseassets are initially recognised at their original invoice value, as the interest that would be recognised from discounting future cash receipts overthe short credit period is not considered to be material. Subsequent to initial recognition, fee income receivables are recognised less anyimpairment allowances for estimated irrecoverable amounts.

24




iii) Share capitalOrdinary shares

d. Property and equipment

i) Recognition and measurement

ii) Subsequent costs

iii) Depreciation

Leasehold land Over the shorter of useful life or lease periodBuilding 50 yearsComputer hardware and equipment 3 yearsFurniture and fittings 5 yearsMotor vehicles 4 yearsOffice equipment 3 years

The cost of replacing a part of an item of property and equipment is recognised in the carrying amount of the item if it is probable that the futureeconomic benefits embodied within the part will flow to the group, and its cost can be measured reliably. The carrying amount of the replacedpart is derecognised. The costs of the day-to-day servicing of property and equipment are recognised in the statement of comprehensive incomeas incurred.

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is recognised in the statement of profit or loss and other comprehensive income on a straight-line basis over the estimated usefullives of each part of an item of property and equipment, since this most closely reflects the expected pattern of consumption of the futureeconomic benefits embodied in the asset.

The estimated useful lives for the current and comparative periods are as follows:

Capital work in progress is not depreciated. Upon completion it is transferred to the relevant asset categoryDepreciation methods, useful livesand residual values are reviewed at each financial year-end and adjusted if appropriate.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised asa deduction from equity, net of any tax effects.

All items of property and equipment except leasehold land, are measured at cost less accumulated depreciation and accumulated impairmentlosses. Cost includes expenditures that are directly attributable to the acquisition of the asset.

Leasehold land is initially measured at cost and subsequently at fair value less any subsequent accumulated amortisation and subsequentaccumulated impairment losses. Fair value changes are recognised in other comprehensive income.

When parts of an item of property or equipment have different useful lives, they are accounted for as separate items (major components) ofproperty and equipment.

Gains and losses on disposal of items of property and equipment are determined by comparing the proceeds from disposal with the carryingamount of property and equipment and are recognised within other income in profit or loss.

When leasehold land is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of theland and the net amount restated to the revalued amount. If an asset’s carrying amount is increased as a result of a revaluation, the increase shallbe recognised in other comprehensive income. The revaluation surplus on the leasehold land is transferred to retained earnings on a systematicbasis over its useful life.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when and only when the Group has alegal right to offset the amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial liabilities: borrowings and other liabilities.

Such liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition thesefinancial liabilities are measured at amortised cost using effective interest method.

25




iv) De-recognition

e) Intangible assets (i) Initial recognition and measurement

iii) Amortisation

Software: 5 years

iv) De-recognition

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidencethat it is impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognitionof the asset, and that the loss event has an impact on the future cash flows of the asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include: default or delinquency by a borrower;restructuring of a loan or advance by the group on terms that the group would not otherwise consider; indications that a borrower or issuer willenter bankruptcy; the disappearance of an active market for a security; other observable data relating to a group of assets such as adverse changesin the payment status of borrowers or issuers in the group; or economic conditions that correlate with defaults in the group. In addition, for aninvestment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for loans and advances and available-for-sale investment securities at both a specific asset andcollective level. All individually significant loans and advances and available-for-sale investment securities are assessed for specific impairment.All individually significant loans and advances and available-for-sale investment securities found not to be specifically impaired are thencollectively assessed for any impairment that has been incurred but not yet identified. Loans and advances and available-for-sale investmentsecurities that are not individually significant are collectively assessed for impairment by grouping together loans and advances and held-to-maturity investment securities with similar risk characteristics.

In assessing collective impairment the group uses statistical modelling of historical trends of the probability of default, timing of recoveries andthe amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actuallosses are likely to be greater or less than suggested by historical modelling. Default rates, loss rates and the expected timing of future recoveriesare regularly benchmarked against actual outcomes to ensure that they remain appropriate.

Impairment losses on assets carried at amortised cost are measured as the difference between the carrying amount of the financial asset and thepresent value of estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss andreflected in an allowance account against loans and advances. Interest on the impaired asset continues to be recognised through the unwinding ofthe discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed throughprofit or loss.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Allother expenditure, including expenditure on internally generated goodwill and brands, is recognised in the statement of comprehensive incomeas incurred.

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.Amortisation is recognised in the statement of comprehensive income on a straight-line basis over the estimated useful lives of intangible assets,other than goodwill, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of thefuture economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows:

f) Impairmenti) Financial assets

Software that is acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulatedimpairment losses.

ii) Subsequent Expenditure

An item of property and equipment is derecognised on disposal or when no future economic benefits are expected from itsuse or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the netdisposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Intangible asset is derecognised on disposal or when no future economic benefits are expected from itsuse or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the netdisposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

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ii) Non-financial assets

h) Provisions

i) Employee benefits

i) Defined contribution plans

g) Pledged assets

Financial assets transferred to external parties that do not qualify for de‐recognition are presented in the statement of financial position fromfinancial assets assets pledged as collateral, if the transferee has received the right to sell or re‐pledge them in the event of default from agreedterms. Initial and subsequent measurement of assets pledged as collateral is at fair value.

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably,and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting theexpected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risksspecific to the liability. The unwinding of the discount is recognized as finance cost.

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has nolegal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employeebenefit expense in the statement of profit or loss and other comprehensivie income in the periods during which related services are rendered byemployees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payment is available.Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render theservices are discounted to their present value.

The Bank operates a defined contribution pension scheme as stipulated in the Pension Reform Act 2014. Employees are entitled to join thescheme on commencement of employment. Employees contribute 8% each while the Bank contributes 10% of the employee's annual basicsalary, housing and transport allowance respectively.

Employee contributions are funded through payroll deductions while the Bank's contribution is expensed in profit or loss. Contributions underthis scheme are remitted to the individul employee's fund administrator.

Impairment losses on available-for-sale investment securities are recognised by transferring the cumulative loss that has been recognised directlyin equity to profit or loss. The cumulative loss that is removed from equity and recognised in profit or loss is the difference between theacquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss previously recognised inprofit or loss. Changes in impairment provisions attributable to time value are reflected as a component of interest income.

If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be objectively related to anevent occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, with the amount of the reversalrecognised in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recogniseddirectly in equity.

The carrying amounts of the group’s non-financial assets, are reviewed at each reporting date to determine whether there is any indication ofimpairment. If any such indication exists then the asset’s recoverable amount is estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups.Impairment losses are recognised in profit or loss

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing valuein use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessmentsof the time value of money and the risks specific to the asset.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longerexists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment lossis reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net ofdepreciation or amortisation, if no impairment loss had been recognised

27




ii) Temination benefits

iii) Short-term benefits

k) Revenue

ii) Commissions

l) Finance income and finance cost

i) ServicesRevenue from services rendered is recognised in profit and loss in proportion to the stage of completion of the transaction at the reporting date.The stage of completion is assessed by reference to work performed.

When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount ofcommission made by the Group. Fee and commission revenue, including administrative fees, processing fees, legal fees, monitoring fees and advisory fees are recognised as therelated services are performed. Fees and commission expenses included in net fee and commission revenue are mainly transaction and service fees relating to financialinstruments, which are expensed as the services are received.

Finance income comprises interest income on funds invested (including available for sale financial assets), dividend income, gains on thedisposal of available for sale financial assets, changes in the fair value of financial assets at fair value through profit or loss that are recognised inprofit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings, unwinding of discount on provisions and impairment losses recognised on financialassets that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production ofqualifying assets are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis.

m) Government grants

Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and thegroup will comply with the conditions associated with the grants. Grants that compensates the group for expenses incurred are recognised inprofit and loss as other income on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate theGroup for the cost of an asset are recognised in the profit and loss on a systematic basis over the useful life of the asset.

Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to aformal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offermade to encourage voluntary redundancy. The Group settles termination benefits within twelve months and are accounted for as short-termbenefits.

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability isrecognised for the amount expected to be paid under short term bonus or profit sharing plans if the Group has a present legal or constructiveobligation to pay the amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

j) Financial guarantee contracts

Financial guarantee contracts are contracts that require the Group (issuer) to make specified payments to reimburse the holder for a loss it incursbecause a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee liabilities are initially recognised at their fair value, which is the premium received, and then amortised over the life of thefinancial guarantee. Subsequent to initial recognition, the financial guarantee liability is measured at the higher of the present value of anyexpected payment, when a payment under the guarantee has become probable, and the unamortised premium. Financial guarantees are includedwithin other liabilities.

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q) New standards and interpretations not yet adopted

o) Earnings per shareThe Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or lossattributable to ordinary shareholders of the group by the weighted average number of ordinary shares outstanding during the period. Diluted EPSis determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary sharesoutstanding for the effects of all dilutive potential ordinary shares.

p) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,including revenues and expenses that relate to transactions with any of the Group's other components. All operating segments' operating resultsare reviewed regularly by the Group's directors to make decisions about resources to be allocated to the segment and assess its performance, andfor which discrete financial information is available.

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, andhave not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. TheGroup does not plan to adopt these standards early.

n) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that itrelates to items recognised directly in equity or comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheetdate, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill,the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxableprofit or loss, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws thathave been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can beutilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxbenefit will be realised.

- IFRS 9 Financial instruments IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and measurement. IFRS 9 includesrevised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculatingimpairment on financial assets, and the new general hedge accounting requirments. It also carries forward the guidance on recognition andderecognition of financial instruments from IAS 39.

IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early adoption permitted.

The group has started the process of evaluation of the potential effect of this standard but is awaiting finalization of the limited amendmentsbefore the evaluation can br completed. Given the nature of the group's operations, this standard is expected to have a pervasive impact on thegroup's financial statement.IFRS 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015 with early adoption permitted. The adoption ofIFRS 9 (2010) is expected to have significant impact on the group's financial assets and financial liabilities.

IFRS 9 (2013) introduces new requirements for hedge accounting that alight hedge accounting more closely with risk management. Therequirements also establish a more principles-based approach to hedge accounting and address inconsistencies and weaknesses in the hedgeaccounting model in IAS 39.

29




The following new or amended standards are not expected to have a significant impact of the Group’s consolidated financial statements.

i). IFRS 14 Regulatory Deferral Accounts

The mandatory effective date of IFRS 9 is not specified but will be determined when the outstanding phases are finalised. However, applicationof IFRS 9 is permitted.

The group has started the process of evaluating the potential effect of this standard but is awaiting finalisation of the limited amendments beforethe evaluation can be completed. Given the nature of the group's operations, IFRS 9 could affect the classification and measurement of group'sfinancial assets.

- IFRS 15 - Revenue from contracts with customersIFRS 15 establishes a comprehensive framework for determining whether, and how much and when revenue is recognised. It replaces theexisting revenue recognistion guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer LoyaltyProgrammes. IFRS 15 is effective for annual reporting periods beginning on or after 1 Janauary 2017, with early adoption permitted.

The Group is assessing the potential impact on its consolidated financial statements resulting from the application of IFRS 15

ii). Accounting for acquisitions of interests in Joint Operations (Amendments to IFRS 11)iii). Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38).iv). Defined Benefits Plans:Employee Contributions (Amendments to IAS 19).v). Equity Method in Separate Financial Statements (Amendments to IAS 27).

30




5 Use of judgements and estimates

(i) Key sources of estimation uncertaintyImpairment losses on loans and advances

(ii) Determining fair values

Critical accounting judgements in applying the Group’s accounting policiesCritical accounting judgements made in applying the Group’s accounting policies include:

Financial asset and liability classification

-

Depreciation and carrying value of property and equipment

In designating financial assets as available for sale, the Group has determined that the asset meet the criteria for this classification.

The estimation of the useful lives of assets is based on management’s judgement. Any material adjustment to the estimated useful lives ofitems of property and equipment will have an impact on the carrying value of these items.

Determination of impairment of property and equipment, and intangible assetsManagement is required to make judgements concerning the cause, timing and amount of impairment. In the identification of impairmentindicators, management considers the impact of changes in current competitive conditions, cost of capital, availability of funding,technological obsolescence, discontinuance of services and other circumstances that could indicate that impairment exists. The Groupapplies the impairment assessment to its separate cash generating units. This requires management to make significant judgements andestimates concerning the existence of impairment indicators, separate cash generating units, remaining useful lives of assets, projected cashflows and net realisable values. Management’s judgement is also required when assessing whether a previously recognised impairment lossshould be reversed.

The Group’s accounting policies provide scope for assets and liabilities to be designated at inception into different accounting categories incertain circumstances:

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions thataffect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differfrom these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period inwhich the estimates are reviewed and in any future period affected.Management discusses with the Board of Directors the development, selection and disclosure of the Group's critical accounting policiesand their application, as well as assumptions made relating to estimation uncertainties. Information about assumptions, estimation andestimation uncertainities that have a significant risk of resulting in a material adjustment within the next financial year and about criticaljudgment in applying accounting policies that have the most significant effect on the amounts recognised in the financial statement isdisclosed below.

Assets accounted for at amortised cost are evaluated for impairment on a basis described in accounting policy 4(f)(i).

At each financial statements reporting date, the Group reviews its loan portfolios for impairment. The Group first assesses whetherobjective evidence of impairment exists for individual loans. If such objective evidence exists, impairment is determined by discountingexpected future cash flows using the loan’s original effective interest rate and comparing this amount to the loan’s net carrying amount.Determining the amount and timing of future cash flows on impaired loans requires significant judgment. If the Group determines that noobjective evidence of impairment exists for an individually assessed loan, that loan is included in a group of loans with similar creditcharacteristics and collectively assessed for impairment. Objective evidence of impairment for a group of loans may include observabledata indicating that there has been an adverse change in the payment status of borrowers in a group, or national or local economicconditions that correlate with defaults on assets in the group. Management uses estimates based on historical loss experience for assetswith credit risk characteristics and objective evidence of impairment similar to those in the portfolio when scheduling its future cash flows.The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduceany differences between loss estimates and actual loss experience.

The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuationtechniques. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requiresvarying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risksaffecting the specific instrument.

31



Valuation of financial instruments

• Level 1: Inputs that are quoted market prices (unadjusted) in an active market for an identical instrument.

•

•

Level 2: Valuation techniques based on observable inputs either directly- i.e. as prices or indirectly- i.e. derived from prices. Thiscategory includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similarinstruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly orindirectly observable from market data.

Level 3: This includes financial instruments, the valuation of which incorporate significant inputs for the asset or liability that is notbased on observable market data (unobservable inputs). Unobservable inputs are those not readily available in an active market due tomarket illiquidity or complexity of the product. These inputs are generally determined based on inputs of a similar nature, historicobservations on the level of the input or analytical techniques.

The Group measures fair values using the following fair value hierarchy which reflects the the significance of the inputs used in making the measurements.

The objective of valuation technique is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likelytiming and the level of future taxable profits together with future tax planning strategies.

Recognition of deferred tax assets and liabilitiesDeferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Bank''s financialstatements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits willbe available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are notrecognized if the temporary difference arises from goodwill (arising in a business combination) or from the initial recognition(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accountingprofit.

Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to theextent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences andthey are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longerprobable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or theasset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Themeasurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Companyexpects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

32



Group31 December 2014

In thousands of Naira Note Level 1 Level 2 Level 3 Total fair valuesTotal carrying

amountAssetsCash and cash equivalents 16 - 8,913,471 - 8,913,471 8,913,471 Loans and advances 17 - - 460,767 460,767 460,767 Fee income receivables 18(a) 3,331,844 3,331,844 3,331,844 Other assets 19(a) - - 489,430 489,430 489,430 LiabilitiesBorrowings 24 - 10,296,602 - 10,296,602 10,296,602 Other liabilities 27 - - 1,960,775 1,960,775 1,960,775

31 December 2013AssetsCash and cash equivalents 16 - 381,162 - 381,162 381,162 Loans and advances 17 - - 379,960 379,960 377,359 Fee income receivables 18(a) 1,753,453 1,753,453 1,753,453 Other assets 19(a) - - 388,486 388,486 388,486 LiabilitiesBorrowings 24 - 1,397,980 - 1,397,980 1,397,980 Other liabilities 27 - - 1,338,521 1,338,521 1,338,521

Bank

31 December 2014

In thousands of Naira Note Level 1 Level 2 Level 3 Total fair valuesTotal carrying

amountAssets

16 63,181 - 63,181 63,181 Loans and advances 17 - - 626,930 626,930 626,930 Fee income receivables 18(a) 3,664,344 3,664,344 3,664,344 Other assets 19(a) - - 489,430 489,430 489,430 LiabilitiesBorrowings 24 - 2,098,320 - 1,996,602 1,996,602 Other liabilities 27 - - 1,407,659 1,407,659 1,407,659

31 December 2013Assets

16 - 366,972 - 366,972 366,972 Loans and advances 17 - - 504,307 504,307 501,706 Fee income receivables 18(a) 1,753,453 1,753,453 1,753,453 Other assets 19(a) - - 253,098 253,098 253,098 LiabilitiesBorrowings 24 - 1,397,980 - 1,397,980 1,397,980 Other liabilities 27 - - 1,115,144 1,115,144 1,115,144

The following table sets out the fair values of financial instruments not measured at fair value and analysed them by the level in the fairvalue hierarchy into which the fair value measurement is categorised:

Cash and cash equivalents

Cash and cash equivalents

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer pricequotations. For all other financial instruments the Group determines fair values using valuation techniques. Valuation techniques includenet present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist and othervaluation models. Assumptions and inputs used in valuation techniques include risk-free interest rates, credit spreads and other premiaused in estimating discount rates, bonds and equity prices. The objective of valuation techniques is to arrive at a fair value determinationthat reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting atarm’s length.

The Group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments, likeinterest rate and currency swaps that use only observable market data and require little management judgement and estimation. Observableprices and model inputs are usually available in the market for listed debt and equity securities. Availability of observable market pricesand model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with thedetermination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is proneto changes based on specific events and general conditions in the financial markets.

Financial instruments not measured at fair value

33




6 Financial risk management

OverviewThe Bank has exposure to the following risks arising from financial instruments:- Credit risk- Liquidity risk- Operational risk- Market risk

Risk management frameworkThe Board of Directors has overall responsibility for the establishment and oversight of the Bank’s risk managementframework.

The Infrastructure Bank (TIB) Plc Board is responsible for managing all risks associated with the operations of theBank, whilst management has responsibility for implementing and managing all policies and procedures approved bythe Board to act as mitigants against specific risks.

The Bank’s risk management policies are established to ensure that risks arising from the Bank's business areproperly identified, evaluated, managed and monitored in line with the Bank's risk appetite and also in order to assistthe achievement of the Bank's strategic goals and protect its franchise, brand and assets. Risk management policiesand systems are reviewed regularly to recognise both new and emerging risks in the Bank’s activities.

The main objective of Enterprise risk management in TIB is to minimise loses, maximise efficiency and reduceearnings volatility. The risk framework runs on a platform of policies and processes that can proactively identify,measure, manage, control, monitor and report on enterprise risk exposures in the Bank on an integrated basis.

(d) Ensuring compliance with applicable laws, conventions, guidelines and regulations.

TIB also has in place a framework of core values, standards and controls, a code of conduct and delegated authoritiesby which all staff are bound. The Board regularly addresses risks attached to business activities and there exists afeedback loop through the management team.

The Risk management policies and procedures are based on the premise that the Bank can perform its trade andeconomic developmental roles using commercial approaches while operating within its chosen risk tolerance levels.

The Bank's risk management framework is aimed at four key objectives:

(a) Achieving the strategic goals derived from the Bank's strategic plans;(b) Operational efficiency in the form of effective and efficient use of the Bank's resources;(c) Ensuring reliability and timeliness of reporting relevant financial and non-financial information; and

34



The Infrastructure Bank Plc's risk management framework has the following components:

* Information and communication - This covers the arrangement for the capture and timely dissemination ofrelevant internal and external information to enable staff and the board carry out their responsibilities;

* Control activities - This covers the plans, policies, procedures and reporting requirements, which are the maininstruments of control under the risk management framework; and

* Monitoring - This covers the regular monitoring and reporting of risk management deficiencies to appropriateauthorities so that the Bank can react swiftly as circumstances warrant.

* The Internal environment - This covers the way risk is viewed by the Board, Management and Staff derived fromits operation in a difficult environment, the ethical standards, values and commitment to excellence that have beenestablished over the years;

* Setting objectives- This covers the Bank's strategic plan, which shapes the strategic goals and objectives of theBank;

* Event Identification - This is the identification of potential internal and external factors and/or events likely toaffect the attainment of the Bank's objectives;

* Risk assessment - This covers the assessment of the risks (inherent and residual) to the attainment of the Bank'sobjective arising from a mix of potential future events;

* Risk response -This covers the various responses that may be triggered by an unexpected occurrence of a materialrisk event based on the Bank's risk appetite. The responses may take the form of avoidance, acceptance, reducing orsharing risks;

35




RISK GOVERNANCE STRUCTURE

BOARD OF DIRECTORS

Board Audit and Risk Management Committee

1 Alhaji LOT Shittu - Chairman2 Mr. Johan Kruger - Member3 Hon. Nwabueze Okafor - Member4 Mr. Akinade Ogunbiyi - Member

5 Mr. Oye Hassan-Odukale - Member

a.

b.c.

d.

e.

f.

g.h.

i.

j.

k.

To review and approve the Bank’s risk management policy including risk appetite and risk strategy;

The Board of Directors is the apex governing body of the Bank and is responsible for credit policy formulation in the Bank.

The Board Audit and Risk Management Committee has the oversight function of insulating the Bank from operational and lending risks.

The Committee has the following membership:

The Risk Management roles and responsibilities of the Committee includes the following:

To conduct at least annually, a thorough risk assessment covering all aspects of the Bank’s business. The results of the riskassessment are used to update the risk management framework of the Bank;

To review the adequacy and effectiveness of risk management and controls; To oversee management’s process for the identification of significant risks across the Bank and the adequacy of prevention,detection and reporting mechanisms; To periodically review changes in the economic and business environment, including emerging trends and other factors relevant tothe Bank’s risk profile; To review and recommend for approval of the Board, risk management procedures and controls for new products and services;

To obtain and review periodically relevant reports to ensure the ongoing effectiveness of the Bank’s risk management framework;

To establish a management framework that defines the Bank’s risk policy, risk appetite and risk limits - (the framework is formallyapproved by the Board);To ensure that the risk management framework is integrated into the day-to-day operations of the business and provide guidelinesand standards for administering the acceptance and on-going management of key risks such as operational, reputational, financial,market, technology and compliance risk;

To review the Bank’s compliance level with applicable laws and regulatory requirements, which may impact the company’s riskprofile;

To ensure that the Bank’s risk management policies and practices are disclosed in the annual report;

36



l.

m.

The Audit Roles and responsibilities of the Committee includes the following:a.

b.

c.

d.

e.

f.

g.

h.

i.

j.

k.

l.

m.

n.

o.

p.

To render periodic reports to the Board on the Banks’ risk management practices, internal controls and level of compliance withregulatory directives; andTo ensure that the internal control system of the Bank is documented and designed to achieve efficiency, effectiveness ofoperations and reliability of financial reporting.

To assist in the oversight of the integrity of the Bank’s financial statements, compliance with legal and other regulatoryrequirements, assessment of qualifications and independence of external auditor, and performance of the Bank’s internal auditfunction as well as that of external auditors;

To discuss the annual audited financial statements and half yearly unaudited statements with management and external auditors;

To review the integrity of the Bank’s financial reporting and oversee the independence and objectivity of the external auditors;

To have access to external auditors to seek explanations and additional information without management presence;

To ensure the development of a comprehensive internal control framework for the Bank, obtain assurance and report annually inthe financial report, on the operating effectiveness of the Bank’s internal control framework;

To oversee management’s process for the identification of significant fraud risks across the Bank and ensure that adequateprevention, detection and reporting mechanisms are in place;

To at least on an annual basis, obtain and review a report by the internal auditor describing the strength and quality of internalcontrols including any issues or recommendations for improvement, raised by the most recent internal control review of the Bank;

To discuss policies and strategies with respect to risk assessment and management;

To meet separately and periodically with management, internal auditors and external auditors;

To review and ensure that adequate whistle-blowing procedures are in place and that a summary of issues reported are highlightedto the Chairman;

To review, with the external auditor, any audit scope limitations or problems encountered and management’s responses to same;

To review the independence of the external auditors and ensure that where non-audit services are provided by the external auditors,there is no conflict of interest;The Committee Chairman shall review a summary of reported cases, cases investigated, the process of investigation and the resultof the investigation;To establish an internal audit function and ensure there are other means of obtaining sufficient assurance of regular review orappraisal of the system of internal controls in the Bank;

To approve the purpose, authority and responsibility of the internal auditing activity, which should be clearly and formally definedin an audit charter. This charter should be consistent with the definition of internal auditing by the Institute of Internal Auditors(IIA); and

To review at audit committee meetings, the quarterly internal audit reports on the adequacy and effectiveness of management,governance, risk and control environment, deficiencies observed and management’s mitigation plans.

37



Board Credit & Investment Committee

The committee has the following members:1 Mr. Johan Kruger - Chairman2 Mr. Umar Saleh - Member3 Mr. Tanimu Muhammad-Ja - Member4 Mr. Oye Hassan-Odukale - Member5 Mr. Adekunle Oyinloye (MD/CEO) - Member6 Hakeem Olopade (ED, Projects) - Member

a.b.

c.

d.

e.f.g.

h.

i.

j.

k.

l.

m.

n.

o.

p.

q.

r.

s.

i. Maximum exposure limits for: Single obligors names based on the rating; Geographic areas; Sectors and Excess

conditionalities.

To review and set credit strategy and policy;To review and approve credit policy and risk management manual. This includes providing clear guidelines on:

To review and recommend to the Board facilities and Investments that are beyond management (Management and Peer ReviewMeetings -MPRM & Management and Investment Decision Meetings -MIDM) approval limits;

ii. Capital requirements and minimum spread per type of exposure; iii. Analytical process to be followed; iv. Contingent liabilities relating to guarantees available to third parties in respect of projects; v. Monitoring systems; vi. Default procedures; andvii. Recovery process. To recommend a financial delegation level for the Credit and Investment Committee to the Board;

To ensure that the Management as well as individuals responsible for credit risk management, possess the requisite expertise andknowledge to accomplish the risk management function;

To approve all material aspects of rating and estimation processes;To be involved in capital planning and establish a strong internal credit culture; To review and approve approval authorities to individuals and committees;

To approve exceptions/write-offs, waivers and discounts on non-performing credit facilities within specified limits;

To ensure that all credits and investments are as per delegated amount from time to time or all credits and investments must bepresented to the Board Credit Investment Committee (it is important that this occurs prior to substantial commitments of resourcesand in principle commitment on non-standard types of project);

To define expenses approval limits for business development and special projects (this does not involve operational/day to dayexpenses);

To approve the banks and institutions and the limits per institution and the ratings and other conditions where excess capital maybe invested;

To ensure that the approved and appropriate credit and risk management policies, processes and methodologies, disbursements,recoveries & remedial actions etc. are applied to manage the various risks and credits to which the Bank may be exposed;

To endorse the approval of credit policies, proposals and changes to credit policies, standards, new products, processes andapproving authorities subject to the ratification of the full Board;

To ensure compliance with the Bank’s credit policies and statutory requirements prescribed by the regulatory/supervisoryauthorities;To ensure that the Bank’s overall credit risk exposure is maintained at prudent levels and consistent with the available capitalthrough quarterly review of various types of credit exposure;

To review the Bank’s investment policies, approving the appropriate investment portfolio mix and approving equity investmentproposals as well as debt financing;

To monitor on an on-going basis the Bank’s risk quality and performance, review periodic credit portfolio reports and assessportfolio performance; and

To periodically review investment portfolios and risk returns parameters, and define new investments returns per latest analyticalreview.

The Board Credit and Investment Committee is charged with the responsibility of evaluating and approving all credits beyond thepowers of the Management and below the powers of the Board.

The roles and responsibilities of the Board Credit and Investment Committee include the following:

38



Board Finance and General Purpose CommitteeThe committee has the following members:1 Promise Adewusi - Chairman2 Anne Sanusi - Member3 Tanimu Yakubu Muhammad-Ja - Member4 Abdullahi Musa Bello - Member5 Adekunle Oyinloye (MD/CEO) - Member6 Taiwo Dauda (ED, Finance & Admin) - Member

Roles and responsibilities of the committee includes:a.

b.

c.

d.

e.

f

g

To, on an annual basis, set, review and approve corporate goals and objectives relevant to the compensation of the Chief ExecutiveOfficer whilst continuously evaluating the performance of the CEO in light of these goals and objectives;

To advise the Board on any factors internal or external to the Bank, which might have a significant effect on the Bank’s plan orbudget during the year and report to the Board as appropriate; and

To ensure that clear policies are in place on treasury management, investment management, risk management and insurance, debtcollection, the claiming of grants and other financial processes and that these policies are periodically reviewed.

To oversee the Bank’s financial affairs on behalf of the Bank and advise the Board on the proper control and management of theBank’s resources;

To review and make recommendations to the Board for approval of the Bank’s organizational structure and any proposedamendments;

To review, monitor and make recommendations to the Board on the Bank's human resources strategy and policies that pertain torecruitment and disengagement of staff at all levels, compensation benefits, and related issues of strategic importance that directlyaffect the Bank’s ability to recruit, develop and retain the highly-qualified staff needed for it to achieve its mandate;

To review any external evaluations of the Bank's human resources strategy and policies and report to the Board its findings andrecommendations on such issues.

39



Board Governance, Remuneration and Nominations CommitteeThe committee has the following members:1 Anne Sanusi - Chairman2 Alhaji LOT Shittu - Member3 Promise Adewusi - Member4 Akinade Ogunbiyi - Member5 Abdullahi Musa Bello - Member6 Hon. Nwabueze Okafor - Member7 Mr. Umar Saleh - Member

The purpose of the Committee is to:a.

b.

Other major roles and resposnibilities of the committee inlclude the following:c.

d.

e.

f.

g.

h.

i.

j.

k.l

m

Establish and maintain appropriate remuneration and incentive policies and practices for the recruitment, retention and terminationfor Senior Management staff; remuneration of directors; and their pension arrangements.

Make recommendations to the Board on all matters of governance, remuneration and nomination of directors in order to achievethe optimal composition of the Board and Board Committees having regard to:

i. size and composition;

iii. the extent to which required skills, experience, expertise, diversity or other attributes are represented; andiv. the need to comply with the law and maintain the best practices in corporate governance.

ii. ensuring that they consist of individuals who are best able to discharge the responsibilities required for the offices;

The Bank's exposure to the risks are explained in more detail below:

The Bank, through its training and management standards and procedures, aims to develop a disciplined and constructive controlenvironment in which all employees understand their roles and obligations.

The Bank’s Board Committees oversee how management monitors compliance with the Bank’s risk management policies andprocedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Bank.

Develop and review as may be necessary the strategy for disclosure of information between the Bank, the Board and shareholders;

Perform other duties and responsibilities as requested by the Board or expressly delegated to the Committee from time to time;

Periodically notify Directors and Shareholders of the skillsets required on the Board so that this can be taken into considerationwhen shareholders are effecting changes in their director representatives;

Conduct a “needs analysis” to identify succession planning/recruitment needs for Board and senior management positions;

Develop and implement succession plans to enable an appropriate mix of skills, experience, expertise and diversity on theBoard/Management and make recommendations to the Board on the orderly succession of Board membership;

Adjudicate in all dispute matters between Management (collectively or individually) and the Board (collectively orindividually) and in all matters of conflict of interest by Board Members and Senior Management Staff and make recommendationsthereon to the Board;

Facilitate an independent review of the performance of the Board, Board Committees and Directors annually;

Review and recommend to the Board the terms and conditions of incentive plans applicable to Senior Management staff (i.e. longterm and short term incentive plans or share options and other benefit plans) and any amendments thereto;

Review and recommend to the Board, the remuneration of the Managing Director, Executive Directors and SeniorManagement Staff;Review and recommend to the Board, the remuneration of the Chairman and non-executive Directors;Ensure that the Bank maintains remuneration and incentive policies and practices that are competitive, equitable and will attractand retain competent executives;

40




(i) Credit risk

Exposure to credit risk

Group

31-Dec 31-Dec 31-Dec 31-DecIn thousands of Naira Note 2014 2013 2014 2013

Carrying amount 17, 18, 19 460,767 377,359 3,331,844 1,753,622

Individually impaired:Specifically impaired loans 353,197 64,056 458,632 60,793

Gross amount 353,197 64,056 458,632 60,793 Allowance for impairment (187,617) (64,056) (458,632) (60,793)Carrying amount 165,580 - - -

Collectively impaired:Performing loans 292,645 374,652 - - Staff loans 4,333 3,914 3,331,844 1,753,622 Gross amount 296,978 378,566 3,331,844 1,753,622 Allowance for impairment (1,790) (1,207) - - Carrying amount 295,188 377,359 3,331,844 1,753,622

Total carrying amount - amortised cost 460,768 377,359 3,331,844 1,753,622

Bank

31-Dec 31-Dec 31-Dec 31-Dec

In thousands of Naira Note 2014 2013 2014 2013

Carrying amount 17, 18, 19 626,930 501,706 3,664,344 1,753,622

Individually impaired:

Specifically impaired loans 353,197 64,056 519,424 519,424

Gross amount 353,197 64,056 519,424 519,424

Allowance for impairment (187,617) (64,056) (519,424) (519,424)

Carrying amount 165,580 - - -

Collectively impaired:

Performing loans 458,808 498,999 - -

Staff loans 4,333 3,914 3,664,344 1,753,622

Gross amount 463,141 502,913 3,664,344 1,753,622

Allowance for impairment (1,790) (1,207) - -

Carrying amount 461,351 501,706 3,664,344 1,753,622

Total carrying amount - amortised cost 626,930 501,706 3,664,344 1,753,622

For this purpose the Management through its Management Investment Decision Meetings (MIDM), Board Credit and Investment Committee (BCIC)and the Board of Directors are mandated to assess the creditworthiness of potential borrowers, and no disbursements are made without approvals atthe appropriate level based on the delegated authority established by the Board of Directors.

Credit policy in this regard is therefore aimed at minimizing the risk of lending to borrowers that is more likely to default, or whose credit quality issubject to probable deterioration.

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. It is thepotential financial loss due to default of one or more debtors/obligors. Credit risk is the largest source of risk for the Bank arising essentially from itslending and treasury operations.

The CEO directs the development of credit assessment procedures, models and application templates suitable for the proper assessment of creditworthiness.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the end of the reportingperiod was as follows:

ReceivablesLoan and advances

ReceivablesLoan and advances

41



Collaterals held and other credit enhancements

Type of credit exposure Group Group Bank Bank

In thousands of Naira 31-Dec 31-Dec 31-Dec 31-Dec2014 2013 2014 2013

Against individually impaired:

Others 165,580 9,491 165,580 9,491

Against collectively impaired:

Property - 226,000 - 226,000

Cash 21,000 14,000 21,000 14,000

Pledged goods/receivables - 186,321 - 186,321

Others - 41,458 - 41,458

Total 186,580 477,270 186,580 477,270

Credit concentration

Group

31-Dec 31-Dec 31-Dec 31-DecIn thousands of Naira Note 2014 2013 2014 2013

Carrying amount 17, 18, 19 460,767 377,359 3,332,014 1,753,622

Concentration by sector:Government 13,751 53,634 3,332,014 1,753,622 Private sector 447,016 319,812 - - Others 3,914 - -

17, 18, 19 460,767 377,359 3,332,014 1,753,622

Concentration by location: 31-Dec 31-Dec 31-Dec 31-DecIn thousands of Naira Note 2014 2013 2014 2013

North Central 269,615 3,914 3,332,014 1,753,622 North East 13,724 53,634 - - North West - - - - South West 177,429 319,812 - -

17, 18, 19 460,768 377,359 3,332,014 1,753,622

Bank

31-Dec 31-Dec 31-Dec 31-DecIn thousands of Naira Note 2014 2013 2014 2013Carrying amount 17, 18, 19 626,930 501,706 3,664,514 1,753,622

Concentration by sector:Government 13,751 53,634 3,664,514 1,753,622 Private sector 613,179 444,159 - - Others - 3,914 - -

17, 18, 19 626,930 501,706 3,664,514 1,753,622

Concentration by location: 31-Dec 31-Dec 31-Dec 31-DecIn thousands of Naira Note 2014 2013 2014 2013

North Central 435,778 3,914 3,664,514 1,753,622 North East 13,724 53,634 - - North West - - - - South West 177,429 444,159 - -

17, 18, 19 626,931 501,706 3,664,514 1,753,622

Concentration by location for loans and receivables are measured based on the location of the borrower. Concentration by location for investmentsecurities is measured based on the location of the issuer of the security.

The Group monitors concentrations of credit risk by sector and by geographic location. An analysis of concentrations of credit risk at the reportingdate is shown below:

The Bank holds collateral and other credit enhancements against certain of its credit exposures. The table below sets out the principal types of collateral held against loans and advances

The general credit worthiness of a customer tends to be the most relevant indicator of credit quality of a loan extended to it. However, collateralprovides additional security and the Bank generally requests that borrowers provide it. The Bank may take collateral in the form of a first charge overfixed assets, cash contribution to a debt service reserve account, domiciliation of incomes and receivables, corporate and personal guarantees,irrevocable standing payment order, amongst others.

ReceivablesLoans and advances

ReceivablesLoans and advances

42



(ii) Liquidity risk

Group

In thousands of Naira NoteCarrying

amountContractual

cash flowLess than 3

months 6 months 12 months 5 yearsMore than 5

years31-Dec-14Non-derivative assetsCash and cash equivalents 16 8,913,471 8,913,471 8,913,471 - - - - Loans and advances 17 460,767 460,767 452,018 8,749 - - - Fee income receivables 18 3,331,844 3,331,844 3,331,844 - Other assets 19 489,430 489,430 489,260 - - - 170

13,195,512 13,195,512 13,186,593 8,749 - - 170 Non-derivative liabilitiesBorrowings 24 10,296,602 10,296,602 230,000 8,568,493 1,498,109 - - Other liabilities 27 1,960,775 1,960,775 1,112,605 848,170 - - -

12,257,377 12,257,377 1,342,605 9,416,663 1,498,109 - - Gap (asset - liabilities) 938,135 938,135 11,843,988 (9,407,914) (1,498,109) - 170 Cumulative liquidity gap 11,843,988 2,436,074 937,965 937,965 938,135

In thousands of NairaCarrying

amountContractual

cash flowLess than 3


years31-Dec-13Non-derivative assetsCash and cash equivalents 16 381,162 381,162 381,162 - - - - Loans and advances 17 377,359 553,589 362,370 8,680 17,360 8,680 156,498 Fee income receivables 18 1,753,453 1,753,453 - - 1,753,453 - - Other receivables 19 170 170 170

2,512,144 2,688,374 743,532 8,680 1,770,813 8,680 156,668 Non-derivative liabilitiesBorrowings 24 1,397,980 1,571,109 117,301 888,798 234,602 321,732 8,677 Other liabilities 27 1,338,521 1,048,495 342,652 44,543 48,815 589,521 22,964

2,736,501 2,619,604 459,953 933,340 283,418 911,253 31,641 Gap (asset - liabilities) (224,357) 68,770 283,579 (924,660) 1,487,396 (902,573) 125,028 Cumulative liquidity gap 283,579 (641,081) 846,315 (56,258) 68,770

The Bank’s achievement of these objectives is predicated on the ability to access funds of the right temperament (tenor, interest rate, size). Failure totap funds appropriately both on- and off-shore would be a business constraint.

The maturity profiles of the contractual cash flows of financial instruments at 31 December were as follows:

Management of liquidity risk involves keeping sufficient liquid reserves and keeping committed credit lines available. The Bank’s approach tomanaging liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal andstressed conditions, without incurring unacceptable losses or risking damage to the Bank’s reputation.

43



Bank

In thousands of Naira NoteCarrying

amountContractual

cashflowLess than 3


years31-Dec-14Non-derivative assetsCash and cash equivalents 16 63,181 63,181 63,181 - - - - Loans and advances 17 626,930 626,930 452,018 174,912 - - - Fee income receivables 18 3,664,344 3,664,344 3,664,344 - - - - Other assets 19 489,430 489,430 489,260 - - - 170

4,843,885 4,843,885 4,668,803 174,912 - - 170 Non-derivative liabilitiesBorrowings 24 1,996,602 1,996,602 230,000 268,493 1,498,109 - - Other liabilities 27 1,407,659 1,407,659 559,489 848,170 - - -

3,404,261 3,404,261 789,489 1,116,663 1,498,109 - - Gap (asset - liabilities) 1,439,624 1,439,624 3,879,314 (941,751) (1,498,109) - 170 Cumulative liquidity gap 3,879,314 2,937,563 1,439,454 1,439,454 1,439,624

In thousands of NairaCarrying

amountContractual

cashflowLess than 3


years31-Dec-13Non-derivative assetsCash and cash equivalents 16 366,972 366,972 366,972 - - - - Loans and advances 17 501,706 553,589 362,370 8,680 17,360 8,680 156,498 Fee income receivables 18 1,753,453 1,753,453 1,753,453 Other receivables 19 170 1,753,622 - - - 170

2,622,301 4,427,636 729,342 8,680 1,770,813 8,680 156,668

Non-derivative liabilitiesBorrowings 24 1,397,980 1,562,433 117,301 888,798 234,602 321,732 - Other liabilities 27 1,115,144 855,145 156,151 44,543 48,815 589,521 16,115

2,513,124 2,417,578 273,452 933,340 283,418 911,253 16,115 Gap (asset - liabilities) 109,177 2,010,058 455,890 (924,660) 1,487,396 (902,573) 140,553 Cumulative liquidity gap 455,890 (468,770) 1,018,625 116,052 256,606

(iii) Market risk

(iv) Currency risk

The table below summaries the Bank’s financial instruments at carrying amount, categorised by currency:

The Bank is minimally exposed to the financial risk related to the fluctuation of foreign exchange rates. This is so because its revenues, capitalexpenditures are principally based in Naira. A significant change in the exchange rates between the Naira(N) (functional and presentation currency)relative to the US dollar would have an insignificant effect on the Bank’s results of operations, financial position and cash flows. The Bank does notenter into any forward exchange contracts to manage the currency risk fluctuations.

The potential borrowers are not homogenous, and range from large States, to small Local Governments. The level of price sensitivity among thevarious borrowers is still uncertain and pricing model is used to deal with pricing and the management of margins for various classes of borrowers.In all cases market orientated risk reward principles are applied.

The Bank has not entered into any derivative or other financial instruments to mitigate the market risk.

On a macro-economic level there is no doubt that a huge demand for investment in infrastructure exists in the country. The demand ranges fromsocial to economic infrastructure, and the Bank may find itself in a position that it will be able to choose between investment alternatives. Demanddriven portfolio growth could result in unwanted results such as concentration and over exposure to certain borrowers (or states / regions), and this isguarded against when designing the portfolio parameters. Caps are placed on single borrower exposure, maximum state exposure, as well as sectorexposure. A further measure that is adopted is to limit the amount expended on loan servicing, in relation to the fiscal allocation of candidate Stateand Local Government borrowers.

Market risk is the risk that changes in market prices, will affect the Bank’s income. The objective of market risk management is to manage andcontrol market risk exposures within acceptable parameter, while optimising the return.

44



Financial instruments by currencyGroup

Total Naira US $ GBP OthersIn thousands of Naira Note31-Dec-14Cash and cash equivalents 16 8,913,471 8,912,368 960 135 8 Loans and advances 17 460,767 460,767 - - - Fee income receivables 18 3,331,844 3,331,844 Other receivables 19 170 170 - - -

12,706,252 12,705,149 960 135 8

Borrowings 24 10,296,602 10,296,602 - - - Accruals 25 56,864 56,864 Other liabilities 27 2,027,079 2,027,079 - - -

12,380,545 12,380,545 - - -

31-Dec-13Cash and cash equivalents 16 381,162 366,288 14,631 233 9 Loans and advances 17 377,359 377,359 - - - Fee income receivables 18 1,753,453 1,753,453 Other receivables 19 170 170 - - -

2,512,144 2,497,270 14,631 233 9


2,777,465 2,777,465 - - -

BankTotal Naira US $ GBP Others

In thousands of Naira Note31-Dec-14Cash and cash equivalents 16 63,181 62,078 960 135 8 Loans and advances 17 626,930 513,052 166,163 - - Fee income receivables 18 3,664,344 3,664,344 Other receivables 19 170 170

4,354,455 4,239,474 167,123 135 8


3,527,429 3,527,429 - - -

31-Dec-13Cash and cash equivalents 16 366,972 363,632 3,276 55 9 Loans and advances 17 501,706 387,828 113,878 - - Fee income receivables 18 1,753,453 1,753,453 Other receivables 19 170 170

2,622,301 2,505,083 117,154 55 9


2,554,088 2,554,088 - - -

(v) Interest Rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Bank has no financial instruments linked to variable interests. The risk that the Bank will realise a loss as a result of any change in the fair valueof financial assets or liabilities is thus immaterial. The Bank has not entered into any derivative financial instrument to manage this risk.

The Bank's policy is that all loans to borrowers must be structured according to the interest rate structure and maturity profile of the funding used.Therefore, in cases where funding is raised at variable rates and loans are offered at fixed rates, and vice versa, the Bank must avail of interest ratesswap or other hedging instruments with commercial banks, and the cost thereof is calculated into the cost of funding. The Bank’s policy is thereforeone of zero appetite for interest rate risk and the Managing Director/CEO ensures that all funding and loan transactions adhere to this policy.

45



Interest rate profile

In thousands of Naira Group Group Bank BankFinancial instruments Note 31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13

Cash and cash equivalents 16 8,913,471 381,162 63,181 366,972 17 460,767 377,359 626,930 491,193

Borrowings 24 (10,296,602) (1,397,980) (1,996,602) (1,397,980)

(922,364) (639,459) (1,306,491) (539,815)

Fair value sensitivity analysis for fixed rate instruments

Group Group Bank Bank

In thousands of Naira 31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13

Increase in interest rate by 100 basis points (+1%) 9,224 6,475 13,065 5,398 Decrease in interest rate by 100 basis point (-1%) (9,224) (6,475) (13,065) (5,398)

Interest rate movements affect reported equity through retained earnings arising from increase or decrease in net interest income.

(vi) Operational risk

(vii) Strategic risk

(viii) Reputational risk

At the end of the reporting period the interest rate profile of the Bank's interest bearing financial instruments as reported to the Management of theBank are as follows:

Loans and advances to customers

The table below shows the impact on the Group’s profit before tax if interest rates on financial instruments had increased or decreased by 100 basispoints, with all other variables held constant.

Reputational risk could result directly or indirectly from actions by the Bank or clients respectively. The Bank endeavours to manage issues that maycause damage to reputation by maintaining a regular reporting framework, which is subject to periodic review by the Board.

The Bank’s reputation as a stable and responsible organisation able to maintain liquidity and a fair return on assets is the foundation of the Bank.Many reputational risks may be avoided through proper systems eliminatingrogue trading; mitigated or reduced through avoidance of undue exposureto certain products or markets; and by diversifying its exposure. Reputational risk is further mitigated by benchmarking to international codes of bestpractice in banking and corporate governance such as Code of Corporate Governance issued by the Central Bank of Nigeria, Securities and ExchangeCommission, Basel 2 and the King 2 codes.

The Bank during the year had a retreat to review and revalidate its strategy during the year. The Bank carried out a robust and thorough self-review ofits future goals, vis-à-vis its current position, with a view to achieving its ambitious corporate strategy. The outcome of this exercise was arevalidation of the corporate strategy and recognition of the significant progress made in the previous 12 months.

Strategic risk is the risk that results from adverse business decisions, ineffective or inappropriate business plans, or failure to respond to changes inthe competitive environment. This risk is being managed by ensuring that the Bank's strategic goals and objectives are set in line with its corporatemission and values, culture, business direction and risk tolerance; active engagement with all stakeholders - customers, investors, regulators, staff, etc;and board approval of significant strategic actions, such as material acquisitions or capital actions.

Operational risks arise from inadequate or failed processes, people and systems or from external factors affecting these. Management at all levelshave responsibility for identifying, assessing, controlling and reporting operational risks. Management is guided by a framework of core values,group policies, a code of business conduct and delegated authorities in place. Internal audit department carries out periodic reviews to ensureadequate management of operational risks.

46



(ix) Concentration risk

(x) Legal / Compliance risk

A factor that will substantially influence the rating and creditworthiness of the Bank is concentration risk, which is the exposure to a single project,client, sector, credit category or geographic area. The Bank applies matrices stipulating maximum exposure expressed as either a percentage ofequity or portfolio size, which are monitored and reviewed from time to time by the Board Credit and Investment Committee and the Board AuditRisk Management Committee

TIB has a zero tolerance for non-compliance with Know-Your-Customer and know your customers business. Staff are exposed to regular training andawareness on anti-money laundering practices.

The Internal Audit / Compliance functions ensure the smooth functioning of the compliance process. He is also charged with the task of ensuring thatthe Bank complies with all statutory and regulatory requirements.

Being in a highly regulated industry, The Infrastructure Bank Plc is required to fully comply with the spirit and letter of governing laws andregulations. To ensure compliance with applicable laws and regulations, the Bank has put in place a comprehensive compliance policy that details theroles and responsibilities of all employees.

Compliance risk is the current and prospective risk to earnings or capital arising from violations of, or non-conformity with laws, rules, regulations,prescribed practices, internal policies, and procedures, or ethical standards. This risk may expose the Bank to fines, penalties, damages, and thevoiding of contracts.

Nigeria is a sovereign state in which the rule of law applies. The judicial system is functional and legitimate business contracts are valid. The legalenvironment itself is supportive of normal business operations. A number of risks in the legal environment are always put into consideration in takingbusiness decisions.

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7. Capital management

• Meet the regulatory capital adequacy requirement and maintain a prudent buffer;• Generate sufficient capital to support overall business strategy;• Integrate capital allocation decisions with the strategic and financial planning process;• Enhance Board and senior management’s ability to understand how much capital flexibility exists to support theoverall business strategy;• Enhance the Bank’s understanding on capital requirements under different economic and stress scenarios; and• Build and support the link between risks and capital and align performance to these.

The Bank’s policy is to maintain a strong capital base and also the minimum capital requirements imposed by theCentral Bank of Nigeria, so as to maintain investor, creditor and market confidence and to sustain future developmentof the business. The impact of the level of capital on shareholders’ return is also recognised and the Bank recognisesthe need to maintain a balance between the higher returns that might be possible with greater gearing and theadvantages and security afforded by a sound capital position.

The allocation of capital between specific operations and activities is primarily driven by regulatory requirements. TheBank’s capital management policy seeks to maximise return on risk while satisfying all the regulatory requirements.The Bank’s policy on capital allocation is subject to regular review by the Board.

The objective of the Bank’s capital management is to ensure that adequate capital is retained at all times to supportthe risks the Bank undertakes in the course of its business. The Bank identifies risks that are material to the Bank’sbusiness and the regulatory capital that is required to be set aside for such risks. However, the Bank intends tocontinue to be conservative and would aim to maintain a reasonable buffer over 10% regulatory capital requirementset by Central Bank of Nigeria.

The Bank recognizes that earnings are the first line of defence against losses arising from business risks and thatcapital is one of the tools to address such risks; also important are establishing and implementing documentedprocedures, defining and monitoring internal limits of the Bank’s activities/exposures, strong risk management,compliance and internal control processes as well as adequate provisions for credit, market and operational losses.However, since capital is vital to ensure continued solvency, the Bank’s objective is to maintain sufficient capital suchthat a buffer above regulatory capital adequacy requirements is available to meet risks arising from fluctuations inasset values, business cycles, expansion and future requirements.

The Bank seeks to achieve the following goals through the implementation of its capital management framework:

Capital Base

The Banks capital base consists of regulatory capital; which is made up of Tier 1 capital (core capital) and Tier 2capital (supplementary capital). Tier 1 comprises share capital, share premium and retained earnings, while Tier 2capital includes assets revaluation reserves.

Capital Adequacy ComputationsThe prime objective of the Bank’s capital management is to ensure compliance with all the prudential requirementsand to maintain healthy capital ratios in order to effectively support its business and to maximize shareholders’ value.The capital adequacy ratio is the quotient of the capital base of the Bank and the Bank's risk weighted asset base. Inaccordance with Central Bank of Nigeria regulations, a minimum ratio of 10% is to be maintained. The followingtable provides an overview of the development of the capital ratios and risk-weighted assets (RWA):

48



Capital Adequacy Computations (contd.)

In thousands of Naira Note Group Group Bank Bank2014 2013 2014 2013

Tier 1 capitalOrdinary share capital 30(a) 3,103,000 2,402,540 3,103,000 2,402,540 Capital contribution 30(b) 1,391,230 1,391,230 1,391,230 1,391,230 Regulatory risk reserves 30(d) - 36,077 - 36,077 Accumulated losses 30(e) (2,681,133) (3,035,599) (2,097,869) (2,756,842)

1,813,097 794,248 2,396,361 1,073,005

Add/(Less):Deferred tax assets 14(b) (146,041) (454,519) (146,041) (454,519) Intangible assets 23 (782) (1,113) (782) (1,113) Total Tier 1 capital 1,666,274 338,616 2,249,538 617,373

Tier 2 capitalRevaluation reserve 30(c) 941,181 648,116 941,181 648,116 Collective impairment 17(b) 1,790 1,207 1,790 1,207

942,971 649,323 942,971 649,323

555,425 649,323 749,846 649,323

Total regulatory capital 2,221,699 987,939 2,999,384 1,266,696

Risk-weighted assets 6,301,861 3,748,578 6,881,200 3,737,409

Capital ratios

35% 26% 44% 34%

26% 9% 33% 17%

Total regulatory capital expressed as a percentage of total risk-weighted assets

Total tier 1 capital expressed as a percentage of risk-weighted assets

As shown above, the Bank currently has a capital adequacy ratio of 44% (31 December 2013: 34%), indicatingan improvement of the Bank's performance over the prior year.

Total Tier 2 capital limited to 33 1/3 of Tier 1 capital

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8 Operating segment

(a) External revenue for the years ended 31 December 2014 and 31 December 2013 is detailed as follows:

Group GroupIn thousands of Naira 2014 2013

Finance advisory and finance arranging fee 1,655,792 1,980,623 Fund management 214,459 138,494 Treasury management 161,842 46,410 Development loans 115,092 91,936 Other income 17,305 25,195

Total external revenue 2,164,490 2,282,658

(b) Geographical information

(i) All the Bank's business transactions and assets during the reporting periods were solely in Nigeria.

(ii) Non-current assets comprise: Group GroupIn thousands of Naira 2014 2013

Property and equipment 2,011,080 1,229,280 Intangible assets 782 1,113

2,011,862 1,230,393

(c) Major customer

In presenting information on the basis of geography, revenue is based on the geographical location of customers and assets are based on the geographicallocation of the assets.

The Ministry of Works of the Federal Government of Nigeria was the major customer of the Bank in respect of project financing and advisory services. Projectfinancing and advisory income earned during the year from this customer was N1.25 billion (December 2013: N1. 753 billion).Other income recognised during the year was earned from the Public Mass Transit Revolving Fund (PMTF) beneficiaries amounting to N214.5 million(December 2013: N138.5 million).

The Bank is a development finance institution dedicated to providing finance and banking services to foster the rapid development of urban infrastructurethroughout Nigeria.

The Bank’s products and services are similar and are structured and distributed in a fairly uniform manner across borrowers. Based on the evaluation of theBank’s operations, management has determined that The Infrastructure Bank Plc has only one reportable segment since the Bank does not manage its operations by allocating resources based on a determination of the contribution to net income from product, service or operation.

The Bank derives its revenue mainly from project finance advisory and arranging; fund management, treasury management, lending and provision of technicalassistance.

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9 Classification of financial assets and liabilitiesAccounting classification, measurement basis and fair values

Group

In thousands of Naira Available for sale Loans and receivables Total carrying amount Fair value

31 December 2014Cash and cash equivalents 16 - 8,913,471 8,913,471 8,913,471 Loans and advances 17 - 460,767 460,767 460,767 Fee income receivables 18(a) - 3,331,844 3,331,844 3,331,844 Other assets 19(a) - 489,430 489,430 489,430

- 13,195,512 13,195,512 13,195,512

Other financial liabilities Total carrying amount Fair value Borrowings 24 - 10,296,602 10,296,602 10,296,602 Other liabilities 27 - 1,960,775 1,960,775 1,960,775

- 12,257,377 12,257,377 12,257,377

31 December 2013 Available for sale Loans and receivables Total carrying amount Fair value Cash and cash equivalents 16 - 381,162 381,162 381,162 Loans and advances 17 - 377,359 377,359 379,960 Fee income receivables 18(a) - 1,753,453 1,753,453 1,753,453 Other assets 19(a) - 388,486 388,486 388,486

- 2,900,460 2,900,460 2,903,061

- Other financial liabilities Total carrying amount Fair value Borrowings 24 1,397,980 1,397,980 1,397,980 Other liabilities 27 1,338,521 1,338,521 1,338,521

- 2,736,501 2,736,501 2,736,501

Bank

In thousands of Naira Available for sale Loans and receivables Total carrying amount Fair value

31 December 2014Cash and cash equivalents 16 - 63,181 63,181 63,181 Loans and advances 17 - 626,930 626,930 626,930 Fee income receivables 18(a) - 3,664,344 3,664,344 3,664,344 Other assets 19(a) - 489,430 489,430 489,430

- 4,843,885 4,843,885 4,843,885


- 3,404,261 3,404,261 3,404,261

31 December 2013 Available for sale Loans and receivables Total carrying amount Fair value Cash and cash equivalents 16 - 366,972 366,972 366,972 Loans and advances 17 - 501,706 501,706 501,706 Fee income receivables 18(a) - 1,753,453 1,753,453 1,753,453 Other assets 19(a) - 253,098 253,098 253,098

- 2,875,229 2,875,229 2,875,229


- 2,513,124 2,513,124 2,513,124

The table below sets out the Group’s classification of each class of its financial assets and liabilities, and their fair values (including accrued interest):

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10 Net interest income Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

10(a) Interest incomeCash and cash equivalents 161,842 46,410 161,842 46,410 Loan and advances to customers 115,092 91,936 144,267 91,936

Total interest income 276,934 138,346 306,109 138,346

10(a) Interest expenseBorrowings (408,511) (255,671) (408,511) (255,671)

Total interest expense (408,511) (255,671) (408,511) (255,671)

Net interest expense (131,577) (117,325) (102,402) (117,325)

10(c)

10(d)

11 Net fees and commission income Group Group Bank BankIn thousands of Naira Note 2014 2013 2014 2013

11(a) Fees and commission incomeProject advisory fees (See note (i) below) 1,655,792 1,980,623 1,929,698 1,980,623 Processing fees 152,775 61,382 152,775 61,382 Legal fees - 7,108 - 7,108 Monitoring fee 15,089 21,320 15,089 21,320 Commission on letters of credit 16,595 4,114 16,595 4,114 Other income from PMTF 30,000 44,570 30,000 44,570

1,870,251 2,119,117 2,144,157 2,119,117

11(b) Fees and commission expenses

Project advisory expenses (39,170) (61,217) (39,170) (61,217)

(39,170) (61,217) (39,170) (61,217)

Net fees and commission income 1,831,081 2,057,900 2,104,987 2,057,900

(ii) The net fee and commission income above excludes amounts included in determining the effective interest rate on financial assets andfinancial liabilities that are not at fair value through profit or loss.

(i) Included in the project advisory fees is N1.46 billion (2013: N1.753 billion) earned by the Bank on the mandate to act as advisor and fundarranger to the Federal Government of Nigeria for the N167 billion Public Private Partnership Rehabilitation, Reconstruction and Expansion ofthe Lagos - Ibadan Dual Carriageway.

Included in interest income for the year ended 31 December, 2014 is a total of N72.1 million (2013: Nil) relating to impaired loans and advances

to customers.

Total interest income and expenses calculated using the effective interest rate method that relates to financial assets and financial liabilities notcarried at fair value through profit or loss are N276.9 million (2013: N138.3 million) for the group and N306.1 million (2013: N138.3 million) inrespect of the Bank.

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12 Other income Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Rental income 10,701 - 10,701 - Sundry income - 23,605 - 23,605 Other income 6,604 1,590 6,604 1,590

17,305 25,195 17,305 25,195

13 ExpensesIn thousands of Naira Group Group Bank Bank

2014 2013 2014 201313(a) (i) Personnel expenses

Salaries and allowances 398,943 345,174 398,943 345,174 Pension contributions 14,916 10,967 14,916 10,967

413,859 356,141 413,859 356,141

(ii) Employee information:

2014 2013

Number Number

500,001 - 800,000 1 1

800,001 - 1,000,000 2 2

1,000,001 - 2,000,000 8 6

2,000,001 - 3,000,000 4 3

3,000,001 - 4,000,000 2 4

4,000,001 - 5,000,000 0 1

5,000,001 - 6,000,000 3 3

6,000,001 - 7,000,000 1 4

7,000,001 - 8,000,000 3 2

8,000,001 - 9,000,000 3 1

9,000,001 - 10,000,000 0 1

10,000,001 - 12,000,000 1 1

12,000,001 - 18,000,000 8 6

Above 18,000,000 4 3

40 38

The average number of persons in employment at the Group and Bank level during the year comprise:Bank Bank2014 2013

Number NumberManagement staff 7 6 Senior staff 25 16 Other staff (Junior staff) 8 16

40 38

The number of employees of the Group, other than directors in receipt of emoluments including allowances within the following ranges were:

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13(b) Other operating expenses Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Maintenance expenses 18,885 17,111 18,828 16,568 Training and recruitment 12,325 6,273 12,325 6,273 Other miscellaneous expenses 79,204 77,556 79,204 77,556 Travel and accommodation 55,623 21,206 55,623 19,614 Marketing expenses 16,804 53,491 16,804 49,608 Motor vehicle running cost 6,479 1,968 6,479 1,968 Welfare and hospitality 2,342 12,743 2,342 12,743 Board expenses 64,599 64,452 64,599 64,452 Professional fees 46,454 73,509 46,454 73,509 Audit fees 14,580 13,000 13,280 12,500 Insurance premium 14,521 12,452 14,521 12,452 Donations 1,600 1,850 1,600 1,850 Bank charges 2,641 9,130 2,627 7,627 Statutory charges and penalty 48,555 6,839 48,555 6,839

384,612 371,580 383,241 363,559

14 Taxation Group Group Bank Bank2014 2013 2014 2013

In thousands of Naira14(a) Current tax expenses

Corporate income tax charge - - - - Education tax 21,503 19,685 21,503 19,685 NITDA Levy 9,637 8,668 9,637 8,668 Income tax 31,140 28,353 31,140 28,353 Reversal/(origination) of temporary differences 308,478 (458,325) 308,478 (458,325)

Income tax expenses/(credit) 339,618 (429,972) 339,618 (429,972)

Minimum tax 19,776 12,702 19,776 12,702

Total tax expenses/(credit) 359,394 (417,270) 359,394 (417,270)

Reconciliation of effective tax rate Groupin thousands of Naira

Tax rate Amount Tax rate AmountProfit before tax 668,739 867,383 Adjustment for NITDA levy (9,637) (8,668) Profit after adjustment for NITDA levy 659,102 858,715

30% 197,731 30% 257,615 Non-deductible expenses 17% 110,747 3% 28,277 Tax exempt income 0% - 0% - Recognition of previously unutilised tax losses 0% - -87% (744,216) Minimum tax 3% 19,776 1% 12,702 NITDA levy 1% 9,637 1% 8,668 Education tax 3% 21,503 2% 19,685

55% 359,394 -49% (417,270)

The Bank was assessed based on the minimum tax legislation for the year ended 31 December 2014 because it had no taxable profit. Hence, the Bank consequently applied the provisions of the Companies Income Tax Act that mandated a minimum tax assessment, where a tax payer does not have any tax liability arising from its tax assessment.

20132014

Income tax using the domestic corporation tax rate

54




Reconciliation of effective tax rate Bank in thousands of Naira

Tax rate Amount Tax rate AmountProfit before tax 973,246 875,441 Adjustment for NITDA levy (9,637) (8,668)Profit after adjustment for NITDA levy 963,609 866,773

Income tax using the domestic corporation tax rate 30% 289,083 30% 260,032 Non-deductible expenses 2% 19,395 3% 28,277 Recognition of previously unutilised tax losses 0% - -86% (746,633)Minimum tax 2% 19,776 1% 12,702 NITDA levy 1% 9,637 1% 8,668 Education tax 2% 21,503 2% 19,685

37% 359,394 -48% (417,270)

14(b) Deferred tax assets and liabilities

(i) GroupThe net deferred tax assets/(liabilities) are attributable to the following:


Assets Liabilities Net Assets Liabilities NetRevaluation of land - (408,870) (408,870) - (279,395) (279,395) Property and equipment 99,110 - 99,110 85,212 - 85,212 Allowances for loan losses 537 - 537 362 - 362 Unrelieved losses 46,394 - 46,394 368,945 - 368,945

146,041 (408,870) (262,829) 454,519 (279,395) 175,124

(ii) BankThe net deferred tax assets/(liabilities) are attributable to the following:

In thousands of Naira 2014Assets Liabilities Net Assets Liabilities Net

Revaluation of land - (408,870) (408,870) - (279,395) (279,395) Property and equipment, and software 99,110 - 99,110 85,212 - 85,212 Allowances for loan losses 537 - 537 362 - 362 Unrelieved losses 46,394 - 46,394 368,945 - 368,945

146,041 (408,870) (262,829) 454,519 (279,395) 175,124

The Bank has unrecognised deferred tax assets of N240.68 million as at 31 December 2014 (31 December 2013: Nil). This was due to non filling of prior year tax losses of N802 million with the relevant tax authority.

2014 2013

2013

2014 2013

55




Movement on the net deferred tax assets/(liabilities) during the year:

In thousands of Naira Group Group Bank Bank(a) Amount recognised in profit/loss 2014 2013 2014 2013

Deferred tax assetBalance, beginning of year 454,519 - 454,519 - Origination/(reversal) of temporary difference (308,478) 454,519 (308,478) 454,519

Balance, end of year 146,041 454,519 146,041 454,519

(b) Amount recognised in other comprehensive incomeDeferred tax liabilitiesBalance, beginning of year (279,395) (283,201) (279,395) (283,201)

(129,475) - (129,475) - Reversal of temporary differences during the year - 3,806 - 3,806

Balance, end of year (408,870) (279,395) (408,870) (279,395)

Net deferred tax assets/(liabilities) as at 31 December (262,829) 175,124 (262,829) 175,124

14(c) Taxation payable Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Balance, beginning of year 61,905 29,110 61,905 29,110 Charge for the year (see note 14(a) above) 50,916 41,055 50,916 41,055 Pre-2008 tax transferred to other liabiity (see note 14(c )(i) below) (20,850) - (20,850) - Payments during the year (49,571) (8,260) (49,571) (8,260)


15 Basic and diluted earnings per share

Group Group Bank Bank

2014 2013 2014 2013In thousands of NairaProfit attributable to ordinary shareholders 309,345 1,284,653 613,852 1,292,711

In thousands of unitWeighted average number of ordinary shares (basic and diluted) 2,918,769 2,402,540 2,918,769 2,402,540

11k 53k 21k 54kEarnings per share (basic and diluted)- Kobo

Origination of temporary differences recognised in other comprehensive income during the year

The calculation of basic earnings per share at 31 December 2014 was based on the profit attributable to ordinary shareholders of N309 million(2013: N1.284 billion) for the group and profit attributable to ordinary shareholders of N614million (2013: N1.293 billion) for the Bank and anaverage number of ordinary shares outstanding of 2,918,769,000 (2013: 2,402,540,330).

Amount relates to pre-2008 company income tax per the back duty tax assessment conducted by FIRS. This was transferred to other liabilitesbased on the loan novation agreement made between the Federal Government represented by the Ministry of Finance Incorporated (MoFI), theInfrastructure Bank and ICHL. Based on the said agreement, the Federal Government agreed and covenanted to exempt and fully indemnifyICHL, the parent of the Bank, for all losses as a result of failure of the Bank on or prior to May 2007, to pay and or remit any and all taxesaccrued and payable to the Nigerian Tax Authority.

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16 Cash and cash equivalents Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Cash balances excluding overdraftBalances with banks 8,864,059 381,162 13,769 366,972

8,864,059 381,162 13,769 366,972 Money market placementsFixed deposits 49,412 - 49,412 -

49,412 - 49,412 -

Cash and cash equivalents in the statement of cash flows

8,913,471 381,162 63,181 366,972

17 Loan and advances to customers Group Group Bank Bank2014 2013 2014 2013

In thousands of NairaLoan and advances 645,841 438,708 812,004 563,055 Staff loan and advances 4,333 3,914 4,333 3,914 Specific allowances for impairment (187,617) (64,056) (187,617) (64,056)Collective allowances for impairment (1,790) (1,207) (1,790) (1,207)

460,767 377,359 626,930 501,706

Current 460,767 377,359 626,930 501,706 Non current - - - -

Carrying amount 460,767 377,359 626,930 501,706

(a) Specific allowances for impairment In thousands of NairaBalance, beginning of year 64,056 64,056 64,056 64,056 Charge during the year 19(d) 187,617 - 187,617 - Written-off during the year - - (64,056) -


(b) Collective allowances for impairment In thousands of Naira

Balance, beginning of year 1,207 1,175 1,207 1,175

Charge during the year 19(d) 583 32 583 32


18(a) Fee income receivables Note Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Account receivables (See note (i) below) 3,386,844 1,808,453 3,719,344 1,808,453 3,386,844 1,808,453 3,719,344 1,808,453

Allowance for doubtful income receivables 18(b) (55,000) (55,000) (55,000) (55,000)

Net carrying amount 3,331,844 1,753,453 3,664,344 1,753,453

Current 3,331,844 1,753,453 3,664,344 1,753,453 Non current - - - - Carrying amount 3,331,844 1,753,453 3,664,344 1,753,453

18(b) Allowances for doubtful fee income receivables Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Balance, beginning of year 55,000 55,000 55,000 55,000 Charge during the year - - - -


(i) Included in account receivables is N3 billion (2013: N1.753 billion) due from the Federal Government of Nigeria through the Federal Ministry ofWorks in respect of the Bank's mandate to act as advisor and fund arranger to the Federal Government of Nigeria for the N167 billion Public PrivatePartnership Rehabilitation, Reconstruction and Expansion of the Lagos-Ibadan Dual Carriageway. The Bank received the amount due from the FederalGovernment of Nigeria through the Federal Ministry of Works subsequent to year end. Subsequent to year end, the Bank's role in respect of theRehabilitation, Reconstruction and Expansion of the Lagos-Ibadan Dual Carriageway was streamlined to the Finance Arranger role only.

57



19(a) Other assets Note Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Mandatory deposit with CBN (See note (i) below) 170 170 170 170 Prepayment 8,910 6,429 8,910 6,429 Withholding tax recoverable - 26,598 - 26,598 Fixed assets reclassified to other assets - 64,068 - 64,068 Due from Marina Express Consortium 458,632 458,631 458,632 458,631 Infrastructure tower project (See note (ii) below) 479,193 186,500 479,193 186,500 Other receivables 10,067 208,459 10,067 73,071

956,972 950,855 956,972 815,467 Allowance for doubtful other receivables 19(b) (458,632) (562,369) (458,632) (562,369)

Net carrying amount 498,340 388,486 498,340 253,098

Current 18,977 6,430 18,977 6,430 Non current 479,363 382,056 479,363 246,668 Carrying amount 498,340 388,486 498,340 253,098

19(b) Allowances for doubtful other receivables Note Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Balance, beginning of year 562,369 284,159 562,369 284,159 Charge during the year 19(d) - 278,210 - 278,210 Written-off during the year (103,737) - (103,737) -


19(c) Analysis of the carrying amount of other assets (net of impairment allowance) based on their nature is shown below:

In thousands of Naira Note Group Group Bank Bank2014 2013 2014 2013

Financial assets:- Mandatory deposit with CBN 170 170 170 170 Non financial assets:- Prepayment and other asset balances 498,170 252,928 498,170 252,928

Net carrying amount 498,340 253,098 498,340 253,098

(i) Mandatory deposit with Central Bank of Nigeria relates to restricted deposit with the Bank's regulator, which is not available for use in the Group's

day to day operations.(ii) Infrastructure Tower Project of N479 million(2013: 186.5 million) represents amount incurred in the implementation of detailed engineeringdesigns and construction plans for the proposed development of the Infrastructure Tower Project as at 31 December 2014.On 22 November, 2013, the Bank signed a design and construction agreement with China Railway No3 Engineering Nigeria Limited to develop a twenty-seven storey state-of-the-art multi-purpose head office tower on the Bank's site located at Plot 977, Central Business District, Adjacent NationalMosque, Abuja. The cost of the project is estimated at US $300 million only and the Bank is committed to make equity down payment which shall beequivalent to 15% of the construction costs or up to US $45million (approximately N6.99 billion) into the Special Purpose Vehicle (SPV).

The special purpose vehicle (SPV) was incorporated on 17 September, 2014 with an authorised share capital of N1 million ordinary shares at N1.00naira each of which 999,001 have been allotted to the Infrastructure Bank Plc. The SPV would drive the project to financial close and appoint aprofessional team of consultants to oversee the design and construction phases of the project.

(iii) Included in the Group's other receivables is N151.40 million (31 December 2013: N135.38 million) which represents the recoverable cost incurredby the Bank on behalf of Marina Express Train Service Limited towards the acquisition of concession rights for the Red Line Light Rail Project of theLagos Metropolitan Area Transport Authority. The amount is to be capitalised into the concession assets to be recognised in Marina Express TrainServices Limited.

58



19(d) Impairment loss on financial assets Note Group Group Bank Bank2014 2013 2014 2013

In thousands of NairaSpecific impairment charge on loans and advances 17(b) 187,617 - 187,617 -

Collective impairment charge on loans and advances 17(b) 583 32 583 32 Impairment charge on doubtful income receivables 18(a) - 55,000 - 55,000

Impairment charge on doubtful other receivables 19(a) - 278,210 - 278,210 Write back of impairment allowance on doubtful receivable - - -

188,200 333,242 188,200 333,242

20 Pledged assets

The nature and carrying amounts of the non tradable financial assets pledged as collaterals are as follows:Group Group Bank Bank

2014 2013 2014 2013In thousands of NairaFixed deposit 253,000 - 253,000 -

253,000 - 253,000 -

21 Investment in subsidiaries Group Group Bank Bank2014 2013 2014 2013

In thousands of NairaInvestment in Marina Express Train Services Limited (See note (a)(i) below) - - 79,239 79,239 Investment in Infrastructure Heights Limited (See note (a)(ii) below) - - 999 - Investment in Motorways Asset Limited (See note (a)(iii) below) - - 510 -

- - 80,748 79,239

(a)(i) Investment in Marina Express Train Services Limited

(ii) Investment in Infrastructure Heights Limited

Marina Express Train Services Limited was incorporated in Nigeria as a private limited liability company on 26 January 2011. The Company emergedfrom a consortium agreement formed in 2009 by the Bank in conjuction with Mainstreet Bank, Unity Bank Plc and a construction company to bid for theLight Metro Rail Transit (LMRT) Red Line Concession in Lagos State. The preferred bidder status was conferred on the consortium in November 2011and Marina Express Train Services Limited was incorporated to carry out the project.

The authorised share capital of the company is 8,000,000 ordinary shares of N1.00 each out of which 3,000,000 ordinary shares of N1.00 each had beenissued and fully paid up by the Bank.The Bank's investment of N79.2 million (December 2013: N79.2 million) in Marina Express Consortium, therefore, represents the cost of investment inthe ordinary shares of the company. As at 31 December 2014, ordinary shares are yet to be alloted to other members of the consortium, thus MarinaExpress Train Service Limited presently remains a wholly owned subsidiary of The Infrastructure Bank Plc.

The pledged assets represents financial assets that were pledged by the Bank. See note 24 (a)(ii)

Infrastructure Heights Limited is a Special Purpose Vehicle incorporated by the Bank on 12 November, 2014 to develop a twenty-seven storey state-of-the-art multi-purpose head office tower on the Bank's site located at Plot 977, Central Business District, Adjacent National Mosque, Abuja. Theauthorised share capital of the company is 1,000,000 ordinary shares of N1.00 each of which 999,001 have been allotted to The Infrastructure Bank Plc.

The Bank's direct financial commitment in the SPV as at year end is N479 million. The Bank also provided transaction advisory and finance arrangerservices to the SPV during the year and earned N120 million. The Bank has committed to make equity down payment which shall be equivalent to 15% of the cost of the project which is about USD 45 million.Also, the Bank intends to limit its exposure to USD 10million and intends to invite other investors to contribute the balance USD 35 million. However,as at 31 Decemer, 2014, Infrastructure Heights Limited remains a wholly owned subsidiary of The Infrastructure Bank Plc.

59



(iii) Investment in Motorways Asset Limited

(b)

Condensed statement of comprehensive income for the year ended 31 December 2014In thousands of Naira Group

balancesElimination

entriesThe

Infrastructure Bank Plc

Marina Express Train

Service

Infrastructure Heights Limited

Motorways Asset Limited

Operating income 1,716,809 (303,081) 2,019,890 - - - Operating expenses (859,870) - (858,444) (926) (250) (250) Net impairment on financial assets (188,200) - (188,200) - - - Profit before tax 668,739 (303,081) 973,246 (926) (250) (250) Taxation (359,394) - (359,394) - - - Profit for the year 309,345 (303,081) 613,852 (926) (250) (250)

Condensed Statement of financial position as at 31 December 2014In thousands of Naira Group

balancesElimination

entriesThe



Service



Cash and cash equivalents 8,913,471 - 63,181 10,233 - 8,840,057 Loans and receivables 460,767 (166,163) 626,930 - - - Fee income receivables 3,331,844 (332,500) 3,664,344 - - - Other assets 498,340 (933,343) 498,340 151,396 619,167 162,780 Pledged assets 253,000 253,000 - - - Investment in subsidiary - (80,748) 80,748 - - - Property and equipment 2,011,081 - 2,011,007 74 - - Intangible assets 782 (1,803,208) 782 1,803,208 - - Deferred tax asset 146,041 - 146,041 - - -

Total assets 15,615,326 (3,315,962) 7,344,373 1,964,911 619,167 9,002,837

Financed by:Borrowings (10,296,602) 166,163 (1,996,602) (166,163) - (8,300,000) Accruals (57,964) - (56,864) (600) (250) (250) Employee benefits obligations (28,132) - (28,132) - - - Current tax liabilities (42,400) - (42,400) - - - Other liabilities (2,027,079) 2,765,970 (1,473,963) (1,998,591) (618,168) (702,327) Deferred tax liabilities (408,870) (408,870) - - -

Total liabilities (12,861,047) 2,932,133 (4,006,831) (2,165,354) (618,418) (9,002,577)

(i) The condensed financial data of the consolidated entities as at 31 December 2014, are as follows:

Condensed results of consolidated entities

Motorways Asset Limited is a Special Purpose Vehicle incorporated by the Bank on 10 September, 2013 to carry on the Rehabilitation, Reconstructionand Expansion of the Lagos-Ibadan Dual Carriageway ("the Project"). The authorised share capital of the Company as at 31 December 2014 was1,000,000 ordinary shares of N1.00 each of which 510,000 shares have been allotted to the Bank.

The Bank 's involvement with the SPV was to act as advisor and fund arranger to the Federal Government of Nigeria for the N167 billion Public PrivatePartnership. Subsequent to year end, the Bank's role was streamlined to the Finance Arranger role only.During 2014, The Bank had successfully arranged N25 billion from the Federal Government of Nigeria and N25 billion from private investors (AccessBank Plc, Ecobank Plc and Diamond Bank Plc) of which N8.3billion was received during the year and the balance received subsequent to year end. TheBank also rendered equity capital raising services to the entity during the year and a total of 1,000,000,000 ordinary shares were offered to investors. Atotal of N540 million was received from investors as at 31 December 2014 as subscription for the company's shares. However, the subscribed sharesremain unallotted as at year end. Thus, Motorways Asset Limited presently remains a wholly owned subsidiary of The Infrastructure Bank Plc. TheBank earned a total of N153.906 million in respect of the services rendered to Motorways Asset Limited during the year under review.

During the year, Motorways Asset Limited, executed a Finance, Operate and Maintain Agreement relating to the Lagos-Ibadan Expressway, with theFederal Government of Nigeria through the Federal Ministry of Works. By executing this agreement, the Federal Government of Nigeria, represented bythe Federal Ministry of Works, grants the project rights to Motorways Asset Limited and obligates Motorways Asset Limited to secure financing for theconstruction works. Subsequent to year end, Motorways Asset Limited also executed Interface Agreements with the Federal Government of Nigeria,represented by the Federal Ministry of Works, and the project construction contractors for the Rehabilitation, Reconstruction and Expansion Works ofthe Lagos Ibadan Expressway. By the execution of the Interface Agreements, Motorways Asset Limited assumes the rights (including all accruedrights), powers and privileges and undertakes to perform and discharge all the obligations, liabilities and duties of the Federal Government of Nigeriaunder the construction contracts.

60



Condensed Statement of Comprehensive income for the year ended 31 December 2013In thousands of Naira Group

balancesElimination

entriesThe



Service Limited



Operating income 1,965,770 - 1,965,770 - - - Operating expenses (765,145) - (757,087) (8,058) - - Net impairment on financial assets (333,242) - (333,242) - - - Profit before tax 867,383 - 875,441 (8,058) - - Taxation 417,270 - 417,270 - - - Profit for the year 1,284,653 - 1,292,711 (8,058) - -

Condensed Statement of financial position as at 31 December 2013

In thousands of Naira Group balances

Elimination entries

The Infrastructure

Bank Plc


Service



Cash and cash equivalents 381,162 - 366,972 14,190 - - Loans and receivables 377,359 (124,347) 501,706 - - - Income receivables 1,753,453 1,753,453 - - - Other assets 388,486 - 253,098 135,388 - - Investment in subsidiary - (79,239) 79,239 - - - Property and equipment 1,229,280 - 1,229,152 128 - - Intangible assets 1,113 (1,446,646) 1,113 1,446,646 - - Deferred tax asset 454,519 - 454,519 - - -

Total assets 4,585,372 (1,650,232) 4,639,252 1,596,352 - -

Financed by:Borrowings 1,397,980 (124,347) 1,397,980 124,347 - - Accruals 42,464 - 40,964 1,500 - - Employee benefits obligations 22,743 - 22,743 - - - Current tax liabilities 61,905 - 61,905 - - - Other liabilities 1,338,522 (1,446,646) 1,115,145 1,670,023 - - Deferred tax liabilities 279,395 - 279,395 - -

Total liabilities 3,143,009 (1,570,993) 2,918,132 1,795,870 - -

(ii) The condensed financial data of the consolidated entities as at 31 December 2013, are as follows:

61




22 (a) Property and equipmentGroup Cost:In thousands of Naira Leasehold land Building Office equipment &

PlantsComputer hardware &

equipmentFurniture &

fittingsMotor vehicles Total

Balance at 1 January 2013 1,050,709 105,787 16,300 24,046 11,080 21,534 1,229,456 Additions - 5,755 12,920 14,041 18,885 68,226 119,827 Balance as at 31 December 2013 1,050,709 111,542 29,220 38,087 29,965 89,760 1,349,283

Balance at 1 January 2014 1,050,709 111,542 29,220 38,087 29,965 89,760 1,349,283 Additions (See (a)(ii) below) 276,049 4,709 9,627 19,517 2,780 38,600 351,283 Revaluation gain (See (a)(i) below) 431,585 - - - - - 431,585 Reclassification to other assets 60,000 - - - - - 60,000 Balance as at 31 December 2014 1,818,343 116,251 38,847 57,604 32,745 128,360 2,192,151

Accumulated Depreciation:

Balance at 1 January 2013 (17,639) (8,136) (13,410) (15,576) (6,735) (21,414) (82,910) Depreciation for the year (13,817) (1,528) (3,291) (6,305) (4,558) (7,594) (37,093) Balance as at 31 December 2013 (31,456) (9,664) (16,701) (21,881) (11,293) (29,008) (120,003)


Carrying amounts

At 31 December 2013 1,019,253 101,878 12,519 16,206 18,672 60,752 1,229,280

At 31 December 2014 1,769,289 104,332 15,582 26,317 15,940 79,620 2,011,080

Current - Non-current 2,011,080 Carrying amount 2,011,080

(c) There were no capitalised borrowing costs related to the acquisition of property and equipments during the year (2013: Nil)

(a)(i) The Head office leasehold land was revalued on the basis of open market value subject to existing use, on 7th December 2012 by Knight Frank & Co., Estate Surveyor and Valuers(FRC/2013/000000000584). The professional valuer is of the opinion that the current market valuation of the leasehold land is as stated. The carrying amount that would have been recognised had the assets beencarried under the cost model as at 31 December 2014 is N71 million (2013: N72 million ).

(b) The Bank's leasehold land and building located at Plot 977, Central Business District, Abuja, FCT are pledged to Unity Bank Plc as collateral for securing borrowings.

(ii) The Lagos land which was acquired during the year was revalued and a revaluation gain of N432 million was recognised in other comprehensive income. The valuation was done by independent professionalEstate Surveyors and Valuers as at 31 December 2014. The determination of fair value of the property wes supported by market evidence. The modalities and process of valuation utilised extensive analysis ofmarket data and other sector specific perculiarities corroborated with available database derived from previous experiences. The Bank valuation was carried out by Jide Taiwo & Co. Estate Surveyors & Valuerswith FRC number FRC/2012/0000000000254. They have requisite experience in the location and category of the properties being valued.

62




(b) Property and equipmentBankCost:In thousands of Naira Leasehold land Building Office equipment &

PlantsComputer hardware

& equipmentFurniture & fittings Motor vehicles Total

Cost

Balance at 1 January 2013 1,050,709 105,787 16,300 24,046 11,080 21,534 1,229,456 Additions - 5,755 12,920 13,876 18,885 68,226 119,661 Revaluation gain - - - - - - - Reclassification to other assets - - - - - - - Balance as at 31 December 2013 1,050,709 111,542 29,220 37,922 29,965 89,760 1,349,117

Balance at 1 January 2014 1,050,709 111,542 29,220 37,922 29,965 89,760 1,349,117 Additions (See (a)(ii) below) 276,049 4,709 9,627 19,517 2,780 38,600 351,283 Revaluation gain (See (a)(i) below) 431,585 - - - - - 431,585 Reclassification from other assets 60,000 - - - - - 60,000 Balance as at 31 December 2014 1,818,343 116,251 38,847 57,439 32,745 128,360 2,191,985

Accumulated depreciation:



Carrying amounts

At 31 December 2013 1,019,253 101,878 12,519 16,078 18,672 60,751 1,229,151

At 31 December 2014 1,769,289 104,332 15,582 26,244 15,940 79,619 2,011,007

Current - Non-current 2,011,007 Carrying amount 2,011,007

(c) There were no capitalised borrowing costs related to the acquisition of property and equipments during the year (2013: Nil)

(b) The Bank's leasehold land and building located at Plot 977, Central Business District, Abuja, FCT are pledged to Unity Bank Plc as collateral for securing borrowings.

(a)(i) The Head office leasehold land was revalued on the basis of open market value subject to existing use, on 7th December 2012 by Knight Frank & Co., Estate Surveyor and Valuers (FRC/2013/000000000584). Theprofessional valuer is of the opinion that the current market valuation of the leasehold land is as stated. The carrying amount that would have been recognised had the assets been carried under the cost model as at 31December 2014 is N71 million (2013: N72 million ).

(ii) The Lagos land which was acquired during the year was remeasured to fair value and a revaluation gain of N432 million was recognised in other comprehensive income. The valuation was done by independentprofessional Estate Surveyors and Valuers as at 31 December 2014. The determination of fair value of the property wes supported by market evidence. The modalities and process of valuation utilised extensive analysis ofmarket data and other sector specific perculiarities corroborated with available database derived from previous experiences. The valuation was carried out by Jide Taiwo & Co. Estate Surveyors & Valuers with FRCnumber FRC/2012/0000000000254. They have requisite experience in the location and category of the properties being valued.

63




23 (a) Intangible assets - Group

In thousands of NairaComputer

SoftwareTotal

Cost:Balance at 1 January 2013 4,935 4,935 Additions - - Balance as at 31 December 2013 4,935 4,935

Balance at 1 January 2014 4,935 4,935 Additions - - Balance as at 31 December 2014 4,935 4,935

Accumulated Amortisation:Balance as at 1 January 2013 (3,491) (3,491) Amortisation charge for the year (331) (331) Balance as at 31 December 2013 (3,822) (3,822)

Balance as at 1 January 2014 (3,822) (3,822) Amortisation charge for the year (331) (331) Balance as at 31 December 2014 (4,153) (4,153)

Carrying amounts:

At 31 December 2013 1,113 1,113

At 31 December 2014 782 782

Current - Non-current 782 Carrying amount 782

(a) There were no capitalised borrowing costs related to the acquisition of the intangible assets during the year (2013: Nil)

64




(b) Intangible assets Bank

Cost:In thousands of Naira Computer software

Balance at 1 January 2013 4,935 Additions - Balance as at 31 December 2013 4,935

Balance at 1 January 2014 4,935 Additions - Balance as at 31 December 2014 4,935

Accumulated Amortisation:Balance as at 1 January 2013 (3,491) Amortisation charge for the year (331) Balance as at 31 December 2013 (3,822)

Balance as at 1 January 2014 (3,822) Amortisation charge for the year (331) Balance as at 31 December 2014 (4,153)

Carrying amount:

At 31 December 2013 1,113

At 31 December 2014 782

Current - Non-current 782 Carrying amount 782

(a) There were no capitalised borrowing costs related to the acquisition of the intangible assets during the year(2013: Nil)

65



Notes to the consolidated and separate financial statementsFor the year ended 31 December

24 Borrowings Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Bank overdraft (See note (b) below) 1,498,109 771,496 1,498,109 771,496 Term loan (See note (a) below) 8,798,493 626,484 498,493 626,484

10,296,602 1,397,980 1,996,602 1,397,980

Current 10,296,602 771,496 1,996,602 771,496 Non-current - 626,484 - 626,484 Carrying amount 10,296,602 1,397,980 1,996,602 1,397,980

(a)

(b)

25 Accruals Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Accrued audit fees 14,380 14,000 13,280 12,500 Other accrued expenses 43,584 28,464 43,584 28,464

Total 57,964 42,464 56,864 40,964

b

26 Employee benefit obligationsGroup Group Bank Bank

In thousands of Naira 2014 2013 2014 201326(a) Defined contribution plan:

Contributory Pension Scheme (See note 26(a)(i) below) 1,580 8,466 1,580 8,466

1,580 8,466 1,580 8,466

Included in overdraft of N1.498 billion is N1.076 billion overdraft facility from Unity Bank to enable the Bank access standby fund tofinance capital projects. The interest rate on the overdraft facility is 15%. The Bank's leasehold land and building are pledged toUnity Bank Plc as collateral for securing borrowings.

(ii) Term loan of N268 million represents amount outstanding on borrowing facilities obtained from Unity Bank Plc to financeoperational costs and development costs associated with infrastructure projects. The term loan is a 42 month facility maturing inSeptember 2015. The interest rate is 15% per annum and it is secured by the domiciliation of all receivables from project mandatesfinanced with the proceeds of the facility and the leasehold land and head office building complex located at Plot 977 CentralBusiness District, Abuja.

(iii) Time loan of N230 million representing facility obtained from Access Bank Plc to finance the purchase of property located at No52, Ahmadu Bello Way, Victoria Island, Lagos. The time loan is a 12 month facility repayable by February 2015. The interest rate is amargin of +5% per annum on the approved deposit rate of 10% and it is secured with a lien on a fixed deposit investment ofN253,000,000 which is 110% of the facility amount. See Note 20.

Term loan comprises:(i) Term loan of N8.3 billion represents facility obtained by Motorways Asset Limited from Access Bank Plc for constructionfinancing for the Lagos - Ibadan Expressway concession. The term loan is a 12 month facility maturing in December 2015. Theinterest rate is 17% per annum and it is secured by an Irrevocable Payment Undertaking supported by a letter of no-objection to issuethe irrevocable standing payment undertaking from the Federal Government of Nigeria. It is also secured with an IrrevocableStanding Payment Order from the Ministry of Works to the office of the Accountant General of the Federation (OAGF) copying DebtManagement (DMO), the Federal Ministry of Finance and the lenders.

66




26(b) Short term employee benefit obligations

Salaries & Wages Control 26,552 14,277 26,552 14,277

26,552 14,277 26,552 14,277

Total 28,132 22,743 28,132 22,743

27 Other liabilitiesGroup Group Bank Bank

2014 2013 2014 2013In thousands of NairaN. H. F. contribution payable 3,631 3,470 3,631 3,470 ITF contribution payable 408 287 408 287 P. A. Y. E. payable 41,708 44,551 41,708 44,551 Withholding tax payable 9,374 8,085 9,374 8,085 VAT payable 9,181 3,121 9,181 3,121 Back duty tax payable 2,002 10,783 2,002 10,783 Trade payable 23,188 33,260 23,188 33,260 Deposit for shares 606,803 326,803 - 260,000 Sundry liabilities 96,944 230,839 92,037 74,265 Deferred income 44,881 - 44,881 - Project deposits by counterparties (see note (a) below) 9,491 9,491 9,491 9,491 PMTF debt service reserve fund (see note (b) below) 879,468 667,832 879,468 667,832 Other liabilities - Escrow agency 300,000 - 300,000 - Financial guarantee - - 58,594 -

2,027,079 1,338,522 1,473,963 1,115,144

Current 2,027,079 57,150 1,473,963 249,508

Non-current - 1,281,372 - 865,636

Carrying amount 2,027,079 1,338,522 1,473,963 1,115,144

(a)

(b)

Project deposit by counterparties represents deposits contributed by private developers, various states and local government towardsmeeting up with the conditions for infrastructure loan.

Public Mass Transit Revolving Fund (PMTF) debt service contribution represents the deposits and advance repayments received fromthe beneficiaries of the Public Mass Transit Revolving Fund Scheme being managed on behalf of the Federal Government of Nigeria.The deposit is held to mitigate against the risk of liquidity constraints, which may be experienced from time to time by the beneficiariesin repayment of their loan obligations to the fund. The deposit is non-interest bearing and will be repayable when the beneficiariescomplete their loan repayment obligations.

(i) The Bank offers its employee benefits under defined contribution plans in line with the Pension Reform Act of 2014, where theemployees contribute 8% and the Bank contributes 10% each of the total annual basic, housing and transport allowances to PensionFund Administrators (PFAs). The Bank does not have any additional legal or constructive obligation to pay further contributions if thePFAs do not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plan are recognised (when an employee has rendered service in exchange for those contributions)as a liability, after deducting any contribution already paid and as an expense. A sum of N14.9 million (Dec. 2013: N10.9 million ) hasbeen charged to the Statement of Comprehensive income in this respect.

67




28 Fiduciary assetsFund under management

In thousands of Naira 2014 2013

PMTF fund under management (26,041,782) 25,772,475

Analysis of fund assets under management:

PMTF Phase 1 2014 2013In thousands of NairaBank and other asset balances 3,311,788 3,920,481 Loan and advances 7,717,258 6,925,133

11,029,046 10,845,614

PMTF Phase 2 2014 2013In thousands of NairaBank and other asset balances 7,897,696 8,586,176 Loan and advances 7,115,039 6,340,685

15,012,735 14,926,861

Total fund assets under management 26,041,782 25,772,475

The Bank provides fund management services to the Federal Government of Nigeria in the administration of the N10 billion PublicMass Transit Revolving Fund (PMTF) Phase I established by the Federal Government of Nigeria from the 2009 Supplementary Actwith the intention to provide affordable road transportation on a large scale to identified target group across the country and N15billionPhase II of the PMTF Scheme created from the Subsidy Reinvestment and Empowerment Program (SUREP) to provide buses for theScheme as a palliative to the increase in the general transportation costs for the citizenry, following the partial removal of petroleumsubsidies in January 2012.

The Bank administers the Fund in accordance with the Fund Management Agreements and the Public Mass Transit Fund (PMTF)lending policy guidelines of the Federal Government of Nigeria dated 23 February 2010 and 23 January 2012 for the Phase 1 andPhase 2 PMTF funds respectively.

The Bank shall indemnify and keep the FGN indemnified up to the full value of the Fund as may be affected or impaired by any factoreither directly or indirectly attributable to failure on the Bank’s part to perform its roles and obligation except if the failure is arisingdirectly from the failure of the FGN to perform its own obligation. The Bank cannot assign or in any way transfer any of its rights orobligations in respect of the fund to any third party without the written consent of the Federal Government.

Funds under management are not assets of the Bank and are not recognised in the statement of financial position.

As at year end, the aggregate amount of funds under management by the Bank which are not included in the balance sheet is shownbelow:

68




29 Related Parties

Parent

Subsidiary

Transactions with key management personnel

Loans to key management

Key management personnel compensation

Key management personnel compensation comprise:2014 2013

Executive compensation 127,500 127,500 Post-employment benefits 5,158 4,454 Directors fees 24,894 24,894 Directors allowances 39,705 39,558

197,257 196,406

Directors' remunerationThe directors' remuneration shown above (excluding pension contributions and other allowances) includes:

Group Group Bank BankIn thousands of Naira 2014 2013 2014 2013

Chairman 2,250 2,250 2,250 2,250

Highest paid director 77,500 77,500 77,500 77,500

Key management personnel and director transactions

Key management personnel and director transactions comprise: 2014 2013Multilateral Investment Guarantee Agency (MIGA) facility fee charge 1,234 -

1,234 -

There are no loans to key management personnel during the period ended 31 December 2014. (December 2013: Nil)

Compensation to the Bank's key management personnel include salaries, non-cash benefits and contributions to the post-employmentdefined contribution plans.

The Group used the financial advisory and consulting service of Afcap Consulting to facilitate the issuance of a Multilateral

Investment Guarantee Agency (MIGA) facility in respect of the Lagos Ibadan rehabilitation, reconstruction and expansion project.

Johan Kruger sits on the Board of Afcap Consulting as the chairman and he is also a non executive director of the Bank. The service

was billed based on normal market rates for such service and were due and payable under normal payment terms.

The value of transactions related to key management personnel and entities over which they have control or significant influence were as follows.

Parties are considered to be related if one party has the ability to control the other party or exercise influence over the other party inmaking financial and operational decisions, or one other party controls both. The definition includes subsidiaries, associates, jointventures, as well as key management personnel.

The Bank’s key management personnel, and persons connected with them, are also considered to be related parties. The definition ofkey management includes the close members of family of key personnel and any entity over which key management exercise control.The key management personnel have been identified as the executive and non-executive directors of the Bank. Close members offamily are those family members who may be expected to influence, or be influenced by those individuals in their dealings with theBank.

Transactions between The Infrastructure Bank Plc and its subsidiaries; Marina Express Train Services Limited, Motorways AssetLimited and Infrastructure Heights Limited also meet the definition of related party transactions. Where these are eliminated onconsolidation, they are not disclosed in the consolidated financial statements.

The parent company of the Group is ICHL Nigeria Limited which has 66.5% interest in The Infrastructure Bank Plc.

The ultimate parent company of the Group is Armdof Asset Limited by virtue of its majority shares in ICHL Nigeria Limited.

69




30 Capital and reserves

30(a) Share CapitalShare capital - Authorised Group Group Bank Bank

2014 2013 2014 2013In thousands of unit

3,103,000,000 ordinary shares of N1 each 3,103,000 3,103,000 3,103,000 3,103,000

Share capital - in issue at 31 December - fully paid2014 2013 2014 2013


Ordinary share in issue and fully paid at 1 January 2,402,540 1,551,500 2,402,540 1,551,500

Additions to share capital from right issues (see (i) below) 700,460 851,040 700,460 851,040

Ordinary share in issue and fully paid as at 31 December 3,103,000 2,402,540 3,103,000 2,402,540

(i)

30(b) Capital contribution reserveGroup Group Bank Bank

2014 2013 2014 2013In thousands of Naira

Budgetary receipt from FGN 1,391,230 1,391,230 1,391,230 1,391,230

Balance, end of year 1,391,230 1,391,230 1,391,230 1,391,230

30(c) Revaluation reservesGroup Group Bank Bank

2014 2013 2014 2013In thousands of NairaBalance, beginning of year 648,116 660,802 648,116 660,802

Transfer from statement of comprehensive income 302,109 - 302,109 - Transferred to retained earnings (9,044) (12,686) (9,044) (12,686)

Revaluation reserve at year end 941,181 648,116 941,181 648,116

During the year, the Bank issued 700,459,670 ordinary shares of N1 each at N1 per share through private placement.

This represents contribution by the Federal Government of Nigeria in form of budgetary allocations in its capacity as a shareholder prior to 2007,when the private investors acquired a controlling interest in the Bank. No equity shares were issued in respect of the contribution.

Revaluation reserves represents surplus arising from the revaluation of the Bank's interest in its Head office leasehold land as well as its land inLagos and Kano. The Head office leasehold land and the Kano land were valued on the basis of open market value subject to existing use as at 31December, 2011 for Kano land and 31 December 2012 for the Head office land. Same values were validated as at 31 December 2014. Thevaluation of the Head office leasehold land was carried out by Knight Frank & Co., Estate Surveyors and Valuers and that of Kano land by E-Philips & Co., Estate Surveyors and Valuers.

The Lagos office leasehold land was acquired during the year and was valued on the basis of open market value subject to existing use as at 31

December, 2014. The valuation was carried out by Jide Taiwo & Co Estate Surveyors and Valuers.

70




30(d) Regulatory risk reserveGroup Group Bank Bank

2014 2013 2014 2013In thousands of NairaBalance, beginning of year 36,077 - 36,077 - Transfer (to)/from retained earnings (36,077) 36,077 (36,077) 36,077

Balance, end of year - 36,077 - 36,077

30(e) Retained earning/(accumulated losses)Group Group Bank Bank

2014 2013 2014 2013In thousands of NairaBalance, beginning of year (3,035,599) (4,296,861) (2,756,842) (4,026,162) Transfer from statement of comprehensive income 309,345 1,284,653 613,852 1,292,711 Transfer (to)/from regulatory risk reserve 36,077 (36,077) 36,077 (36,077) Transfer from revaluation reserve 9,044 12,686 9,044 12,686

Accumulated losses at year end (2,681,133) (3,035,599) (2,097,869) (2,756,842)

Retained earnings are the carried forward recognised income net of expenses plus current period profit attributable to shareholders.

Regulatory risk reserve represents the difference between the allowance for impairment losses on balances on loans and advances based on

Central Bank of Nigeria (CBN) prudential guidelines compared with the incurred loss model used in calculating the impairment under IFRSs. In

2013, the impairment allowance for loan losses per CBN prudential guideline was higher than the impairment allowance per IFRS hence the

need for the reserve. However, per the results of the impairment testing during the year, the impairment allowance per IFRS was higher than the

impairment allowance per CBN prudential guideline, thus, the reserve is no longer required.

71




31 Contravention of laws and regulations

32 Contingent liabilities and commitment

33 Events after the reporting date

There are contingent liabilities in respect of legal actions against the Bank for amounts totaling N616 million(December 2013: Nil) for which provisions amounting to N10.8 million (December 2013: N2.5 million) havebeen made. The actions are being vigorously contested and the Directors are of the opinion that no significantliability will arise therefrom in excess of the provision made in the financial statements.

During the year, the Bank did not pay any penalties in respect of contravention of BOFIA or CBN circularsduring the year (2013: Nil).

The Group in the ordinary course of business is currently involved in 4 litigation cases (December 2013: Nilcases). The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverseeffect on the Bank and are not aware of any other pending or threatened claims and litigations besides thoseincluded in the above number.

During the year, the Bank indemnified the Federal Government of Nigeria on the Lagos-Ibadan ExpresswayProject. The indemnity was to secure the payment by FGN of its N25 billion equity investment in the SpecialPurpose Vehicle (Motorways Asset Limited) which was established to implement the Lagos-Ibadan Expresswayproject. The indemnity was a precondition for the Honorable Minister of Finance/Coordinating Minister for theEconomy (HMF/CME) issuing the IPU that the Bank indemnifies FMF against all and any losses, costs, claims,liabilities, demand and expenses suffered or incurred by the FMF as a result of the failure of the Borrower(Motorways Asset Limited) to perform or discharge its obligations in respect of ensuring that the N25 billioncontribution made via the IPU is properly utilised. The indemnity is expected to run for a period of 48months.

There were no events after the reporting date that could have material effect on the financial statement that havenot been disclosed or adjusted.

72



Other financial information

The Infrastructure Bank Plc and its subsidiary companies

Consolidated and Separate Financial Statements ‐ 31 December 2014


Value added statementFor the year ended 31 December 2014In thousands of Naira

Group Group Bank Bank2014 % 2013 % 2014 % 2013 %

Gross earnings 2,164,490 2,282,658 2,467,571 2,282,658

Interest expense (408,511) (255,671) (408,511) (255,671) 1,755,979 2,026,987 2,059,060 2,026,987

-

Net impairment loss on assets (188,200) (333,242) (188,200) (333,242)

Bought-in-materials and services (15,271) (177,126) (13,900) (169,105)

Value added 1,552,508 100 1,516,619 100 1,856,960 100 1,524,640 100

Distribution of Value Added % % % %To Employees:Employess costs 413,859 27 356,141 23 413,859 22 356,141 23

To governmentGovernment as taxes 359,394 23 (417,270) (27) 359,394 19 (417,270) (27)

To providers of financeInterest on borrowings 408,511 26 255,671 17 408,511 22 255,671 17

Retained in business: - For replacement of property and equipment

61,399 4 37,424 2 61,344 3 37,387 2

- To augment reserve 309,345 20 1,284,653 85 613,852 34 1,292,711 85

1,552,508 100 1,516,619 100 1,856,960 100 1,524,640 100

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Financial summary- Group

December December December December2014 2013 2012 2011

12 months 12 months 12 months 12 monthsIn thousands of NairaAssetsCash and cash equivalents 8,913,471 381,162 3,073 106,454 Loans and receivables 460,767 377,359 360,386 74,329 Fee income receivables 3,331,844 1,753,453 Other assets 498,340 388,486 372,567 6,577 Pledged assests 253,000 - Property and equipment 2,011,080 1,229,280 1,146,546 773,991 Intangible assets 782 1,113 1,444 661 Deferred tax assets 146,041 454,519 - - Total assets 15,615,325 4,585,372 1,884,016 962,012

LiabilitiesBorrowings 10,296,602 1,397,980 1,270,930 988,260 Provision and accruals 57,964 42,464 71,886 25,452 Employee benefits obligations 28,132 22,743 38,268 80,717 Current tax liabilities 42,400 61,905 29,110 25,000 Other liabilities 2,027,079 1,338,521 883,950 660,685 Deferred tax liabilities 408,870 279,395 283,201 178,476

Total liabilities 12,861,047 3,143,008 2,577,345 1,958,590

Net asset 2,754,278 1,442,364 (693,329) (996,578)

EquityShare capital 3,103,000 2,402,540 1,551,500 1,551,500 Capital contribution 1,391,230 1,391,230 1,391,230 1,391,230 Revaluation reserves 941,181 648,116 660,802 416,444 Regulatory risk reserve - 36,077 - - Accumulated losses (2,681,133) (3,035,599) (4,296,861) (4,355,752) Total equity 2,754,278 1,442,364 (693,329) (996,578)

Gross earnings 2,164,490 2,282,658 697,279 234,749

Profit/(loss) before taxation 668,739 867,383 58,868 (584,575)

Profit/(loss) after taxation 309,345 1,284,653 50,608 (588,725)

Profit/(loss) attributable to equity holders 309,345 1,284,653 50,608 (588,725)

Earnings per share - Basic 11k 53k 2k -38k - Diluted 11k 53k 2k -38kNumber of ordinary shares of N1 each 2,918,769,000 2,402,540,330 1,551,500,000 1,551,500,000

75



Financial Summary- Bank

December December December December December2014 2013 2012 2011 2010

12 months 12 months 12 months 12 months 12 monthsIn thousands of NairaAssetsCash and cash equivalents 63,181 366,972 1,481 106,454 41,948 Loans and receivables 626,930 501,706 360,386 74,329 96,840 Fee income receivables 3,664,344 1,753,453 - - - Other assets 498,340 253,098 367,879 6,577 9,593 Pledged assests 253,000 - - - - Investment securities 80,748 79,239 79,239 79,239 79,239 Property and equipment 2,011,007 1,229,152 1,146,546 773,991 761,771 Intangible assets 782 1,113 1,444 661 1,281 Deferred tax assets 146,041 454,519 - - - Investment property - - - - - Total assets 7,344,373 4,639,252 1,956,975 1,041,251 990,672

LiabilitiesBorrowings 1,996,602 1,397,980 1,270,930 988,260 803,403 Provision and accruals 56,864 40,964 70,886 24,952 16,886 Employee benefits obligations 28,132 22,743 28,673 31,433 18,876 Current tax liabilities 42,400 61,905 29,110 25,000 33,225 Other liabilities 1,473,963 1,115,144 696,805 541,768 373,849 Deferred tax liabilities 408,870 279,395 283,201 178,476 172,747

Total liabilities 4,006,831 2,918,131 2,379,605 1,789,889 1,418,986

Net asset 3,337,542 1,721,121 (422,630) (748,638) (428,314)

EquityShare capital 3,103,000 2,402,540 1,551,500 1,551,500 1,551,500 Capital contribution 1,391,230 1,391,230 1,391,230 1,391,230 1,391,230 Revaluation reserves 941,181 648,116 660,802 416,444 403,076 Regulatory risk reserve - 36,077 - - 604 Accumulated losses (2,097,869) (2,756,842) (4,026,162) (4,107,812) (3,774,724) Total equity 3,337,542 1,721,121 (422,630) (748,638) (428,314)

Fund under management 26,041,782 25,772,475 19,346,059 10,076,646 10,000,000

Gross earnings 2,467,571 2,282,658 697,279 234,749 179,666

Profit/(loss) before taxation 973,246 875,441 81,627 (336,635) (347,181)

Profit/(loss) after taxation 613,852 1,292,711 73,367 (340,785) (351,348)

Profit/(loss) attributable to equity holders 613,852 1,292,711 73,367 (340,785) (351,348)

Earnings per share - Basic 21k 54k 5k -22k -28k - Diluted 21k 54k 5k -22k -28kNumber of ordinary shares of N1 each 2,918,769,000 2,402,540,330 1,551,500,000 1,551,500,000 1,551,500,000

The statement of financial position information for 2014, 2013, 2012, 2011 and 2010 and the comprehensive income information presented for 2014, 2013, 2012 and 2011 reporting

periods reflects historical summaries based on International Financial Reporting Standards. Balance sheet information and Profit or Loss account information relating to 2010

reporting periods were based on a different financial reporting framework (Nigerian GAAP) and are therefore not directly comparable.

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the infrastructure bank plc and subsidiary companies · 2017-08-15 · the infrastructure bank plc...

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