THIS DOCUMENT IS IMPORTANT AND SHOULD BE CAREFULLY READ AND UNDERSTOOD BY PROSPECTIVE INVESTORS. IF YOU ARE IN ANY DOUBT AS TO THE CONTENTS OF THE PROSPECTUS OR THE ACTION TO TAKE, PLEASE, CONSULT YOUR FINANCIAL ADVISER, SOLICITOR, ACCOUNTANT, TAX CONSULTANT, BANK MANAGER OR ANY OTHER PROFESSIONAL ADVISER FOR GUIDANCE IMMEDIATELY. THIS PROSPECTUS HAS BEEN SEEN AND APPROVED BY THE DIRECTORS OF FIRST ALLY ASSET MANAGEMENT LIMITED AND THEY JOINTLY AND INDIVIDUALLY ACCEPT FULL RESPONSIBILITY FOR THE ACCURACY OF ALL INFORMATION GIVEN AND CONFIRM THAT, AFTER HAVING MADE ALL ENQUIRIES WHICH ARE REASONABLE IN THE CIRCUMSTANCES, AND TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT MISLEADING.
The rental yield on real estate portfolio held by the REIT is not equivalent to the yield of the units and the value of real estate may fluctuate.
“FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, PLEASE REFER TO “RISK FACTORS” ON PAGES 19 - 21
(Authorised and Registered in Nigeria as a Real Estate Investment Trust Scheme)
Offer for Subscription Of 20,000,000 Units
of N1,000 each at par Payable in full on Application
Fund Manager
RC: 1204564
Fund Sponsor Trustee Custodian
RC: 268444 RC: 322271 RC:125097
Lead Issuing House and Financial Adviser
RC: 1191465
Joint Issuing Houses
RC: 617327 RC: 217005 RC: 189502 Futureview Financial Services Limited Cowry Asset Management Limited Greenwich Trust Limited
Application List Opens: Wednesday, February 1, 2017 Application List Closes: Friday, March 10, 2017
THIS PROSPECTUS AND THE UNITS WHICH IT OFFERS HAVE BEEN REGISTERED BY THE SECURITIES & EXCHANGE COMMISSION. THE INVESTMENTS AND SECURITIES ACT NO 29, 2007 (“THE ACT”), PROVIDES FOR CIVIL AND CRIMINAL LIABILITIES FOR THE ISSUE OF A PROSPECTUS WHICH CONTAINS FALSE OR MISLEADING INFORMATION. THE REGISTRATION OF THIS PROSPECTUS AND THE UNITS WHICH IT OFFERS DO NOT RELIEVE THE PARTIES FROM ANY LIABILITY ARISING UNDER THE ACT FOR FALSE OR MISLEADING STATEMENTS CONTAINED OR FOR ANY OMISSION OF A MATERIAL FACT IN THE PROSPECTUS.
This Prospectus is dated January 19, 2017
Table of Contents
1. DEFINITION OF TERMS ------3
2. ABRIDGED TIMETABLE ------5
3. SUMMARY OF THE OFFER ------6
4. CORPORATE DIRECTORY OF THE FUND MANAGER ------9
5. PROFESSIONAL PARTIES TO THE OFFER ------10
6. THE TSL REIT ------12 6.1 Introduction to the REIT ------14 6.2 Investment Objectives ------14 6.3 Investment Policy ------14 6.4 Investment Outlet ------15 6.5 Investment Incentives ------15 6.6 Investment Strategy ------15 6.7 Investment Decisions ------16 6.8 Exit Strategy ------16 6.9 Investment Approach ------16 6.10 Investment Restriction ------17 6.11 Financing Policies ------17 6.12 Borrowing Policies ------17 6.13 Disposal Policies ------17 6.14 Valuation of Real Estate Assets ------18 6.15 Fee Structure ------18 6.16 Risks & Mitigants ------19
7. The Investment Committee ------22 7.1 Member Profiles ------23 7.2 Investment Committee Responsibilities ------24 7.3 Investment Management ------24 7.4 Membership ------24 7.5 Quorum ------24 7.5.1 Notice of Meeting ------24 7.5.2 Minutes of Meeting ------24 7.5.3 Reporting Procedures ------24 7.5.4 Meeting of Unit Holders ------25
8. Overview of the Properties 8.1 Asset Portfolio Holders ------26 8.2 Adeniran Ogunsanya Mall ------27 8.3 Apapa Mall ------29 8.4 Cocoa Mall ------31 8.5 Akure Mall ------33 8.6 Valuation of Properties ------35 8.7 Statement of Position of the Sub-lessors ------35
9. TSL REIT Structure ------36 9.1 Structure Diagram ------36 9.2 Property Transfer Structure ------37 9.3 REIT Parties ------38 9.4 TSL REIT Fund Manager Rating ------39 9.5 Deed of Declaration of Trust ------41
10. Financial Forecast ------42 10.1 Statement from Reporting Accountants ------42 10.2 Bases and Assumptions ------43 10.3 Forecast Statement of Financial Position ------45 10.4 Forecast Statement of Comprehensive Income ------46 10.5 Forecast Statement of Changes Attributable to Unitholders ------47 10.6 Forecast Statement of Cashflow ------48 10.7 Notes to the Profit Forecast ------49 10.8 Statement of Significant Accounting Policies ------51 10.9 Letter from the Issuing House ------55
10. The Fund Manager ------56 10.1 Profile ------56 10.2 Board of Directors ------56 10.3 Management Team ------58 10.4 Role as Fund Manager of the TSL REIT ------58 10.5 Financial Summary ------60
TSL REIT 1
Table of Contents
11. The Sponsor ------61 11.1 Profile ------61 11.2 Client Real Estate Development ------61 11.3 Top Services Real Estate Development ------62 11.4 Board and Management Team ------63
12. The Trustees ------65 12.1 Profile ------65 12.2 Scope of Trustee Business ------65 12.3 Track Record ------65 12.4 Board and Management of the Trustees ------66
13. The Custodian ------69 13.1 Company Profile ------69 13.2 Profile of Board of Directors ------69 13.3 Management Team ------72
14. The Facility Manager ------74
15. Market and Industry Information ------76 15.1 The Economy ------76 15.2 Economic Outlook ------81 15.3 The Real Estate Market ------82 15.4 The Retail Real Estate Market ------82 15.5 The Opportunity ------84
16. Statutory and General Information ------85 16.1 Extract from the Trust Deed ------85 16.2 Extract from Deed of Declaration of Trust ------101 16.3 Extract from Deed of Assignment of Receivables ------108 16.4 Extract opinion on Due Diligence Report ------111 16.5 Corporate Governance & Operating Structure------112 16.6 Indebtedness ------113 16.7 Estimated Costs and Expenses ------113 16.8 Foreign Currency Investors ------114 16.9 Unit Statements ------114 16.10 Relationship Between Fund Manager and Sponsor ------114 16.11 Relationship between Fund Manager and Its Advisers ------114 16.11 Relationship between Sponsor and Its Advisers ------114 14.6 Material Contracts ------114 14.7 Consents ------114 14.8 Documents available for Inspection ------115
17. PROCEDURE FOR APPLICATION AND ALLOTMENT ------117
18. RECEIVING AGENTS ------118
19. APPLICATION FORM ------119
20. INSTRUCTION FOR COMPLETING THE APPLICATION FORM ------121
TSL REIT 2
Definition of Terms and Abbreviations
The following definitions shall apply throughout this Prospectus
“Business Day” Any working day in Nigeria on which The Nigerian Stock Exchange is open for clearing business
“CSCS” Central Securities and Clearing System
“ISA” Investment and Securities Act No. 29 2007
“Initial Assets” Adeniran Ogunsanya Mall, Akure Mall, Apapa Mall and Cocoa Mall
“NAV” Net Asset Value
“NEFT” National Electronic Funds Transfer
“Offer Price” The price an investor will pay for units in the REIT being N1,000.00 per unit. US Dollar subscriptions will be converted to Naira at the prevailing foreign exchange market rate, prior to utilization
“Parties” Professional Advisers engaged to ensure the success of the Offer
“Payment Date” The date on which distribution income from the Fund shall be paid into the accounts of Unitholders
“Receiving Agents” Financial institutions authorized to receive Application Forms/monies from the general public
“RTGS” Real Time Gross Settlement
“SEC” or “The Commission” Securities & Exchange Commission
“Solicitor to the Transaction” Udo Udoma & Belo-Osagie (“UUBO”).
“The Constitution” Constitution of the Federal Republic of Nigeria 1999 as amended
“The Custodian” Stanbic IBTC Bank Plc (Custodial Services – Stanbic Nominees Limited)
“The Fund/ The REIT” The Top Services Limited Real Estate Investment Trust (“TSL REIT”)
“The Fund Sponsor” Top Services Limited (“TSL”)
“The Fund’s Financial Year End” December 31
“The Fund’s Financial Quarter” March 31, June 30, September 30 and December 31
“The Fund Manager” First Ally Asset Management Limited (“FAAM”)
“The Lead Issuing House” First Ally Capital Limited (“FACL”)
“The Joint Issuing Houses” Cowry Asset Management Limited Futureview Financial Services Limited Greenwich Trust Limited
TSL REIT 3
Certain Defined Terms and Conventions
“The Offer” The offer of 20,000,000 units of TSL REIT at N1,000.00 each
“The Stockbroker & Market Maker” FSDH Securities Limited
“The Trustee” ARM Trustees Limited
“The Rating Agent” Agusto & Co
“The Receiving Bank” Access Bank Plc
“The Registrars” United Securities Limited
“The Reporting Accountants” Pedabo Audit Services
“Unit(s)” Unit(s) of participation in the Fund, created and issued, representing one undivided share in the asset of TSL REIT
“Unit Holder” Any person or body corporate registered as a holder of units of the Fund including persons registered as joint holders
“Value Date” Any date on which the Net Asset Value of the Fund is determined.
TSL REIT 4
Abridged Timetable
Date Activity Responsibility
01/02/17 Application List Opens Issuing Houses
10/03/17 Application List Closes Issuing Houses
24/03/17 Receiving Agents make Return Issuing Houses / Registrars
29/03/17 Forward allotment proposal and draft Issuing Houses newspaper advertisement to SEC
03/04/17 Receive SEC clearance of Allotment Proposal Issuing Houses
04/04/17 Payment of Net proceeds of the Offer to the Issuing Houses / Receiving Custodian Banks
05/04/17 Custodian transfers payments due to the Custodian Sponsor and other stakeholders
05/04/17 Allotment Announcement Issuing Houses
05/04/17 Return Rejected/excess application monies Issuing Houses/ Registrars
14/04/17 Crediting of Investors CSCS Accounts Registrars
17/04/17 Forward Report on Completion of Offer to SEC Issuing Houses
17/04/17 Listing of TSL REIT on the Stock Exchange Stockbrokers/Issuing Houses *All dates provided are subject to change by the Issuing Houses in consultation with the Fund Manager and subject to obtaining the relevant regulatory approvals
TSL REIT 5
Summary of the Offer
The following information should be read in conjunction with the full text of this prospectus from which it is derived. Investors are advised to seek information on the fees and charges before investing in the REIT.
Fund Manager: First Ally Asset Management Limited
Financial Adviser/Lead Issuing House: First Ally Capital Limited
Joint Issuing Houses: Cowry Asset Management Limited Futureview Financial Services Limited Greenwich Trust Limited
Trustee: ARM Trustees Limited
Custodian: Stanbic IBTC Bank Plc (Custodial Services - Stanbic Nominees Limited)
Solicitors to the Transaction: Udo Udoma & Belo-Osagie
Reporting Accountants: Pedabo Audit Services
Registrars: United Securities Limited
Stockbrokers to the Issue & Market Makers: FSDH Securities Limited
The Offer: 20,000,000 Units of N1,000.00 each at par in the TSL REIT
Method of Offer: Offer for Subscription
Nature and Objectives of the Fund: Constituted under a Trust Deed, the Top Services Limited Real Estate Investment Trust (TSL REIT) is a close ended Real Estate Investment Fund that aims to provide Investors:
with regular and stable income and, sustainable long-term growth in dividend payment and Net Asset Value (“NAV”) per unit.
The REIT will invest in a portfolio of high-quality retail malls that are already generating income and money market instruments
Minimum Subscription: 1,000 units and multiples of 500 units thereafter
Offer Price: N1,000.00 per Unit
Offer Size: N20,000,000,000.00 (Twenty Billion Naira Only)
Payment Terms: In full on Application
Mandatory Subscription: The Sponsor shall hold up to 30% of the REIT while the balance will be held by the investing public. The Sponsor shall receive equivalent Units of the REIT in part consideration for their interest in the Malls.
This is in compliance with current regulation issued by the Commission that the Promoters of unit trust schemes in Nigeria must subscribe to a minimum of 5% of the initial issue of such Scheme
TSL REIT 6
Summary of the Offer
Oversubscription: In the event of oversubscription, the REIT will take up additional 15% of the excess monies as provided in the SEC Rules, subject to prior registration with SEC of the additional units to which the excess subscription will be applied.
Undersubscription: In the event of undersubscription (above 50% but below 100%), the REIT will purchase the Adeniran Ogunsanya Mall and the Cocoa Mall, followed by the Akure Mall, and the Apapa Mall, subject to availability.
Underwriting: At the instance of the Sponsor, this offer will not be underwritten
Opening Date: February 1, 2017
Closing Date: March 10, 2017
Quotation: An application will be made to the Council of the Nigerian Stock Exchange (NSE) for the admission of the 20,000,000 Units being offered for subscription to its Daily Official List. Units of the REIT will be tradable on the floor of the NSE upon conclusion of the Offer.
Status: The units qualify as securities in which Pension Fund Assets can be invested under the Pension Reform Act, 2014 and securities in which Trustees may invest under the Trustees Investments Act, Cap T22, Laws of the Federation of Nigeria 2004.
Distributions: A minimum of 97.5% of the net income earned in any financial year will be distributed to Unit holders at the end of every financial year
Rating: The TSL REIT has been assigned a “Bbb” rating by Agusto and Co Limited
Forecast Offer Statistics: (Extracted from the Reporting Year Ending 31st 2017 2018 2019 2020 2021 Accountants Report) December N’m N’m N’m N’m N’m
Open Net Asset 19,588 19,137 18,685 18,234 17,783 Value Total Income 2,187 2,507 2,793 3,118 3,487 Total Expenses 732 725 732 725 732
Net Asset Value at year end 19,173 18,766 18,367 17,975 17,593
Earnings Yield 9.55 11.44 13.17 15.27 17.65 (%)
TSL REIT 7
Summary of the Offer
A copy of this prospectus together with the documents specified herein, having been approved by the Trustees, has been delivered to the Securities & Exchange Commission (“SEC” or “the Commission”) for registration.
This prospectus is issued in compliance with Section 160 of the Investments and Securities Act No. 29 2007, the amended Rules and Regulations of the Securities & Exchange Commission for the purpose of giving information to the public with regard to the Offer for Subscription of 20,000,000 units (“the Units”) at N1,000.00 per Unit in the Top Services Limited Real Estate Investment Trust. The Fund has been authorised and registered by SEC as a Real Estate Investment Trust Scheme.
The Directors of First Ally Asset Management Limited collectively and individually, accept full responsibility for the accuracy of the information contained in this Prospectus. The Directors have taken reasonable care to ensure that the facts contained herein are true and accurate in all respects and confirm, having made reasonable enquiries that, to the best of their knowledge and belief, there are no material facts, the omission of which would make any statement contained herein misleading or untrue.
The Securities and Exchange Commission has approved the issue, offer or invitation in respect of the public offering and the approval shall not be taken to indicate that the Commission recommends the public offering. The Commission shall not be liable for any non-disclosure on the part of the manager and takes no responsibility for the content of this document, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever arising from reliance upon the whole or any part of the contents of the prospectus.
The valuation approved or accepted by the Commission shall only be utilized for the purpose of the proposal submitted to and approved by it and shall not be construed as an endorsement by the Commission on the value of the subject assets for any other purpose.
First Ally Capital Limited RC 1191465
And
Cowry Asset Management Ltd Futureview Financial Services Ltd Greenwich Trust Ltd RC 617327 RC 217005 RC: 189502
On Behalf of
First Ally Asset Management Limited RC 1204564 Offer for Subscription and are authorized to receive applications for
20,000,000 units of N1,000.00k each
at par in the
TOP SERVICES LIMITED REAL ESTATE INVESTMENT TRUST
Payable in full on Application
The Application list for the units now being offered will open on Wednesday, February 1, 2017 and close on Friday, March 10, 2017
TSL REIT 8
Corporate Directory of the Fund Manager
Fund Manager First Ally Asset Management Limited 7th Floor, Architects’ Place 2, Idowu Taylor Street Victoria Island Lagos Tel: [email protected] Website: www.first-allyasset.com
Principal Officers Mr. Winston Osuchukwu Mr. Ayodeji Ogunleye Ms Janet Agun Mrs Efe Ogunnaiya
Company Secretary Titi Savage 7th Floor, Architects’ Place 2, Idowu Taylor Street Victoria Island Lagos
Directors
Mr Abiodun Arokodare (Chairman) Mr. Ebenezer Olufowose 7th Floor, Architects’ Place 7th Floor, Architects’ Place 2, Idowu Taylor Street 2, Idowu Taylor Street Victoria Island Victoria Island Lagos Lagos
Mr. Obeahon Ohiwerei Mr. Ken Aghoghovbia 7th Floor, Architects’ Place 7th Floor, Architects’ Place 2, Idowu Taylor Street 2, Idowu Taylor Street Victoria Island Victoria Island Lagos Lagos
Mr Kyari Bukar Mr Winston Osuchukwu 7th Floor, Architects’ Place 7th Floor, Architects’ Place 2, Idowu Taylor Street 2, Idowu Taylor Street Victoria Island Victoria Island Lagos Lagos
Investment Committee Members Mr Winston Osuchukwu Chief Tokunbo Omisore Mrs Folashade Adeloye Ms Melissa Cook (Independent)
Financial Summary See Page 59.
TSL REIT 9
Professional Parties to the Offer
Sponsor Top Services Limited 63b, Marine Road Apapa Lagos
Directors of Sponsor Chief Tokunbo Omisore Ms Oyinkan Kokoricha
Company Secretary of the Sponsor Babatunde Osikoya & Co. 1st Floor, Lambe House 20, Igbasan Street Opebi, Lagos
Financial Adviser & Lead Issuing House First Ally Capital Limited 7th Floor, Architects’ Place 2, Idowu Taylor Street Victoria Island Lagos
Joint Issuing Houses Cowry Asset Management Limited Plot 1319, Karimu Kotun Street Victoria Island Lagos
Futureview Financial Services Limited Futureview Plaza Plot 22, Oju-Ologbon Close Off Idejo Street Victoria Island Lagos
Greenwich Trust Limited 1698a, Oyin Jolayemi Street Victoria Island Lagos
Trustee ARM Trustees Limited 1, Mekuwen Road Off Oyinkan Abayomi Drive Ikoyi Lagos
Solicitors to the Transaction Udo Udoma & Belo-Osagie St Nicholas House (10th and 13th Floors) Catholic Mission Street Lagos Island Lagos
Custodian Stanbic IBTC Bank Plc (Stanbic Nominees Limited) I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos
TSL REIT 10
Professional Parties to the Offer
Reporting Accountant Pedabo Audit Services 67, Norman Williams Street Off Keffi Street Ikoyi Lagos
Rating Agency Agusto & Co 5th Floor UBA House 57, Marina Lagos
Stockbrokers to the Issue & Market Maker FSDH Securities Limited UAC House (8th Floor) 1/5, Odunlami Street Marina Lagos
Receiving Bankers Access Bank Plc 999c, Danmole Street Victoria Island Lagos
Estate Valuer Jide Taiwo & Co Sinari Daranijo Street Victoria Island Lagos
Property Manager Tunji Ologbon Partnership 11, Atinuke Olobanji Street Off John Olugbo Street Ikeja Lagos
Registrar United Securities Limited 9, Amodu Ojikutu Street Off Bishop Oluwole Street Victoria Island Lagos
TSL REIT 11
The TSL REIT
1. Introduction
The TSL REIT is registered in Nigeria as a Collective Investment Scheme under Section 160 of the ISA. The REIT is constituted under a Trust Deed with ARM Trustees Limited as Trustee. The TSL REIT is a close-ended scheme that aims to achieve long term capital appreciation of assets by investing in a portfolio of high-quality retail commercial real estate assets that produce above market yields. The units of the REIT will be quoted on the main board of the Nigerian Stock Exchange (NSE).
The REIT will focus investment activities on, and use the proceeds of this offering principally, for the acquisition of a diverse portfolio of existing retail-focused commercial properties, located in the South West of Nigeria. The operations and performance of the Fund would be duly monitored by the Investment Committee.
The portfolio of assets of the TSL REIT consists of retail-focused malls in various locations within the South West of Nigeria. The properties currently identified have a net lettable area of over 36,000 square meters and average occupancy rates of over 80%.
The tenant profile of the properties consists of international and local retailers. The diversity in client base and the long term rental/lease agreements mitigate against high vacancy rate and assures of consistent income for the REIT and distribution to investors.
The TSL REIT presents an opportunity for discerning investors to balance their investment portfolio by investing in a counter cyclical cashflow that is hedged against inflation, and to partake in stable and consistent stream of Real Estate income which a REIT provides, as over 90% of income is distributed annually. The REIT also allows for capital appreciation.
The following sets out the summary of the key features of the Offer:
The Offer: The Offer which is the subject of this Prospectus, is an Offer of 20,000,000 units in the TSL REIT, at an issue Price of N1,000.00 per unit
Type of Offer: Equity REIT
Insurance: In compliance with the SEC rules and regulations no 524, the assets of the REIT highlighted in the Prospectus shall be insured against losses. The insurance classes with regard to the assets include fire policy, public liability insurance and Business Interruption risk due to damage by flood, fire and windstorm which would lead to loss of income for the period during which the property is undergoing repairs.
Forecast Statement of Distribution: Forecast cash on cash distributions after fees are paid to all professional parties are 9.55% in the FY 2017, 11.44% in FY 2018, 13.17% in FY 2019, 15.27% in FY 2020, 17.65% in FY 2021 for investors under this Prospectus.
Mandatory Investment by TSL: The Sponsor shall hold up to 30% of the REIT, while the balance will be held by the investing public.
Ownership Structure: Title for the Adeniran Ogunsanya Mall, Surulere, Apapa Mall Cocoa Mall Ibadan and Akure Mall is held 100% by the Fund Sponsor.
As consideration for the Lease/concession agreements, granted the Sponsor, an annual payment of 30% of the gross annual rental income is paid to the sub-leasors/concessionaires (Wemabod and
TSL REIT 12
The TSL REIT
Odu’a Group) for the Apapa and Cocoa Malls respectively, while 25% is paid to Ondo State Government in the first 25 years and 30% over the last 5 years of the Lease.
Use of Proceeds: The proceeds of the REIT will be applied as consideration for the purchase of the Initial Assets of the REIT from the Sponsor.
The Sponsor will receive a combination of Units equivalent to 30% on allotment and cash payment for the balance. A portion of the proceeds will be paid to the banks in settlement of the Sponsor’s outstanding obligations to them, as shown below;
N’M N’M Offer Size Value of REIT 20,000 16,200 Property Offer Cost Other Investible 412 3,388 Funds Net Proceeds 19,588 19,588
N’M Consideration: N’M Purchase of Cash to Banks* 16,200 3,177 Malls Other Investible Cash to Property 3,388 7,023 Funds Owner Maximum Value of 6,000 Units to TSL Other Investible 3,388 Fund Total 19,588 19,588
*The Sponsor is indebted to First Bank and Wema Bank and a part of the receipt from the sale of the properties would be used to liquidate the indebtedness. The balance stated above was as at July 31, 2016. A portion of the loans obtained by the Sponsor was denominated in dollars (used for the importation of some mall fittings), of which the outstanding balance as at July 31,2016 was $8.97million, converted @ N321.16/$1. Actual conversion rate to be determined on repayment date and payable from proceeds due to TSL.
The Sub-leasors (Wemabod Estates Limited, Odu’a Investment Limited, Ondo State Government) have the option of selling all or a portion of their beneficial interest in the real estate properties to the REIT. Consideration for this sale may be granted either in cash or units in the investment Trust.
Capital Growth: The properties were selected with the aim to achieve capital growth over the longer term from the underlying rental growth and active management of the assets.
Fees and Other Costs: The Fund Manager and other professional parties are entitled to be paid certain fees and to be reimbursed for expenses incurred in connection with the REIT. For information on all fees and expenses please refer to page 18 of this Prospectus.
Risks: The risks of investing in the REIT have been outlined on pages 19 to 21 of this Prospectus. The key risks which are specific to an investment in this REIT are summarized as follows:
Performance of the Fund Manager Risk related to the assets
TSL REIT 13
The TSL REIT
Taxation: REITs are considered to be pass-through vehicles, once it distributes at least 90% of the income.
The TSL REIT proposes to distribute 97.5% of its income and It is expected that income of this REIT may not be subject to taxation. However, REIT Income to investors may be subject to withholding tax but as franked investments, it is not subject to further tax once it is in the hands of investors.
2. Investment Objectives
The investment objective of the REIT is to provide investors with regular and stable income with sustainable growth, liquidity and capital growth per unit in a Real Estate investment. It aims to achieve long-term appreciation of its assets and maximize returns on capital employed.
The Fund Manager shall seek to maintain a balance between realized income and capital growth to ensure regular income and continuous appreciation in asset values while ensuring optimal safety of assets and adequate liquidity to meet the REIT‘s obligation as they fall due.
The Fund seeks to maximize returns to investors from Real Estate income sources and limit the risks of volatility through investment in various real estate classes. Investment in the REIT portfolio is expected to result in higher yields to investors at minimum risks and affords investors opportunity to enjoy returns from multiple retail focused commercial properties. The proactive management of the REIT portfolio by the Fund Manager and active trading of the stock on the floor of the Nigerian Stock Exchange (NSE) will ensure a sustained growth of the unit value of the Stock and returns to unit holders.
3. Investment Policy
To achieve the objectives of the REIT, the Fund Manager shall adopt and maintain an investment policy that is designed to ensure a steady return on capital and capital gains. Subject to the terms and conditions hereinafter contained and in accordance with the regulatory framework of SEC, the REIT‘s investment policy shall be to build up a balanced portfolio of authorized investments consistent with the objectives of the REIT.
Target investments for the TSL REIT shall be retail focused commercial property. The Fund Manager is not limited to specific geographic locations in Nigeria where it may purchase compliant assets.
i. No Off-Plan Property Investment: The REIT will only be used to invest in identified retail properties that are fully built, operational and have signed long term rental/lease agreements with appropriate tenants.
ii. Joint Venture/Co-Ownership: The REIT will invest in property through a Joint Venture or with Co- Owners for various assets where appropriate.
iii. Buying and selling Properties: The REIT will buy, hold and sell core assets with each investment action subject to the REIT‘s stringent standards and Investment Guidelines as well as provisions of the SEC rules.
When making an acquisition, the Fund Manager will emphasize the performance and risk characteristics of that individual investment and how that investment will fit into the REIT’s portfolio-level performance objectives and the return and risks of available investment alternatives.
The Fund Manager generally intends to hold the core properties throughout the life of the Fund, which is anticipated as the optimal period to enable the REIT capitalize on the potential for increased income and capital appreciation of properties. There may be new investments made on other developed, occupied retail malls during the life of the Fund.
TSL REIT 14
The TSL REIT
iv. Other Investments: The Fund Manager will bring its professional expertise to bear in the investment of earmarked REIT funds for other real estate assets, real estate related assets and money market instruments for greater yield to investors.
4. Investment Strategy
The Strategy for the REIT is to invest in a portfolio of Real Estate assets that have attractive investment fundamentals in terms of prime location, architectural designs, diversified tenant base, stable tenant profiles and long (and properly structured) leases.
The Fund Manager has identified 4 suitable retail malls in South Western Nigeria. The properties identified will meet strict criteria of delivering regular returns as well as offering the opportunity for moderate to high capital growth.
5. Investment Outlet - The investment outlets through which the investment policy will be achieved shall be structured as follows:
Asset Classes % Allocated Real Estate Assets Minimum of 75% Real Estate Related Assets Maximum of 25% Liquid Assets Maximum of 10%
The Fund Manager will diversify the REIT portfolio by property location, investment size and risk with the goal of attaining a portfolio of income-producing properties that provide attractive and stable returns to investors. The Fund Manager in the course of managing the REIT has the liberty to invest in liquid real estate related assets as it deems fit with the consent of the Trustee and the approval of the Investment Committee. The Fund Manager also has the liberty to invest in other retail real estate assets, subject to the approval of the Trustee and the Securities and Exchange Commission.
Property Type: The sole property types in which the REIT intends to invest in are already built commercial retail focused properties, which have occupancy rates above 80% (in terms of lettable area). This offer would invest primarily in 4 (four) neighborhood malls.
6. Investment Incentives
Unique investment incentive and benefit to investors in the TSL REIT are highlighted below:
Stable and regular income distribution from diversified portfolio of Real Estate and Real Estate related assets; Existing long term leases with tenants; Diverse corporate tenant profile with staggered rental renewal periods which prevents mass vacancy at any one period and provides stable and resilient portfolio performance; Attractive valuation metrics with a portfolio that delivers stable and consistent returns to investors; Deposit of pre- executed agreements (Deed of Assignments, Deed of declaration of Trust - DOT) with the Custodian by the Sponsor, prior to the offer; Reduced transfer costs of the assets due to the DOT structure being adopted for the transfer of the assets being acquired; Diversification of investment portfolios thereby reducing risks; The REIT will be managed by professionals with great care, top skill, prudence and diligence; Access to the experience of professionals of diverse skills and in-depth knowledge in Real Estate investment and operations that make up the Investment Committee; The REIT is transparently structured and backed by reputable organizations including First Ally Asset Management Limited, ARM Trustees Limited, Stanbic IBTC Bank Plc and FSDH Securities Limited.
TSL REIT 15
The TSL REIT
7. Investment Decisions
The Fund Manager will have substantial discretion with respect to the selection of specific investments and the purchase and sale of liquid assets, subject to the approval of the Investment Committee. The Investment Committee will review the investment policies at least quarterly to determine whether the investment policies continue to be in the best interests of Unitholders.
8. Exit Strategy
Successful real estate investment requires the implementation of strategies that permit favorable purchases, effective asset and property management and timely disposal of those assets. As such a disciplined investment approach that combines the experiences of Real Estate professionals with a structure that emphasizes thorough market research, and an extensive down-side analysis of the risks of each investment has been put in place. Active management is critical to creating value in the REIT. Thus a well-defined exit strategy for each liquid investment made by the REIT will be developed by the Fund Manager, in response to the performance of the individual asset, market conditions and overall portfolio objectives to determine the optimal time to sell the asset.
In view of the nature of this investment, the Investment Committee will ensure that the properties are adequately maintained/upgraded in order to obtain maximum value at the end of the life of the Fund.
9. Investment Approach
The Fund Manager will implement the following practices when considering an investment:
i. Proactive asset management and asset enhancement strategy: The Manager will take an active role in managing and enhancing TSL REIT’s properties. The Manager’s strategy for organic growth will be to actively optimise the tenant mix of TSL REIT’s properties and to provide proactive property management services to tenants while also undertaking periodic refurbishment of TSL REIT’s properties, as appropriate.
Through active asset management, the Manager seeks to ensure that the interests of all stakeholders, including tenants, shoppers and Unitholders, are protected while keeping TSL REIT’s properties at the forefront of evolving retail mall trends and relevant to the changing demands of consumers.
ii. Risk Management: Risk management is a fundamental principle in the construction of portfolios and in the management of each investment. Diversification of portfolios by property type and geographic location is critical to controlling risk. Operating performance risks arise at the investment level and often require Real Estate operating experience to cure. The Fund Manager will continuously review the operating performance of investments against projections and provide the oversight necessary to detect and resolve issues as they arise. Also the vast experience of members of the Investment Committee in Real estate will help to combat envisaged risks.
The Fund Manager working alongside the Property Manager will ensure that the mall is not untenanted at any point in time and ensure consistent distribution of income to unit holders. The Property Manager will be expected to establish a good human relationship management with tenants in order to forestall unexpected vacancies and to facilitate prompt renewal of tenancy agreements by tenants for longer tenors.
iii. Asset Management: TSL REIT Investment Committee will review the assets’ business strategies quarterly to anticipate changes or opportunities in the market during a given phase of the market cycle. TSL REIT designed this process to allow for realistic yet aggressive enhancement of value throughout the investment period.
TSL REIT 16
The TSL REIT
The composition of the Investment Committee with members aggregating over 100 years professional experiences in the financial and Real Estate sector is an added advantage to the TSL REIT in the assessment of viable liquid assets or other Real Estate related investments for the REIT.
10. Investment Restrictions
The Fund shall invest in such instruments as are authorised by the SEC Rules and allowed under the Trust Deed of the REIT. The Fund Manager shall not:
Carry out transactions that expose any part of the held assets to unlimited liabilities or results in the said assets being unnecessarily encumbered. Invest in any assets or securities that are not freely transferable. Engage in any transaction that is against the interests of the Unitholders.
11. Financing Policies
Equity, debt capital or a combination of both could be adopted by the REIT for the financing of REIT operations (working capital) and investment strategies (upgrades, renovation, repairs etc), however the consent of the Trustee would be obtained and the financing strategy must strictly abide with SEC approved guidelines for borrowing at all times during the life of the REIT.
12. Borrowing Policies
SEC guidelines stipulate that borrowing shall not exceed 15% of the net asset value of the REIT. The Fund manager therefore with the consent of the Trustee can borrow on behalf the Unitholders to facilitate the attainment of REIT objectives where required.
13. Termination
The Fund Manager intends to hold the REIT‘s properties and other investments throughout the life of the Fund which the Fund Manager believes will enable the REIT capitalize on the potential for increased income and capital appreciation.
Economic and market conditions may influence the Fund Manager to hold the REIT investments for different periods of time. The Fund Manager may sell an asset before the end of the expected holding period if the Fund Manager believes that market conditions and property positioning have maximized the asset‘s value or the sale of the asset would be in the best interests of the REIT‘s Unitholders.
The REIT‘s Trust Deed requires that the Fund Manager seek Unitholders approval and the approval of the Commission, for the liquidation of the Trust. Liquidation would only be permitted if a majority of the Unitholders determine that liquidation would be in their best interest, or if the SEC initiates the wind up of the Trust, in line with the provisions of the ISA.
Where the Fund Manager seeks and fails to obtain Unitholders approval of the REIT‘s liquidation the Fund Manager would continue to operate as before except the SEC gives a directive for the REIT to be liquidated. Where the Fund Manager seeks and obtains Unitholders and the Commission’s approval of the REIT‘s liquidation, the Fund Manager would begin an orderly sale of the REIT‘s properties and other assets. The precise timing of such sales would take account of the prevailing conditions in the Real Estate and financial markets.
14. Valuation of the Real Estate Assets
A valuation report of the REIT‘s Real Estate assets shall be conducted by a Real Estate Valuer registered with SEC and appointed by the Fund Manager and filed with SEC every two years, or such period as the Commission may from time to time prescribe.
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The TSL REIT
15. Valuation of the Securities of the REIT
Application has been made to the NSE to list the REIT on the Main Board, prices of the units will thus be subsequently determined by the forces of demand and supply. The Fund Manager will conduct a valuation of the REIT’s assets based on SEC‘s approved period and will subsequently inform the market (Exchange, Unitholders and the Investing public) of the Net Asset Value of the REIT after the valuation.
16. Fee Structure
The REIT is obliged to retain a number of Professional Parties who will play various roles in ensuring the profitable operation of the REIT and also enable compliance with specified regulatory requirements. The expenses due to the Professional Parties will be borne by the REIT and charged to its operating account.
Fees for the life parties and initial offer costs are as contained in the table below:
Type of Fee Amount
The Fund Manager Quarterly Management fee of 0.25% of the Net Asset Value of the REIT payable in arrears.
An incentive fee which shall not exceed 10% of the total returns in excess of 10% of the REIT‘s Net Asset Value (“NAV”) per annum.
The Trustee An annual fee of 0.050% of the NAV The Custodian An annual fee of 0.075% of the NAV of the REIT The Registrar An annual fee of N500,000 Property Manager An annual fee of N1,000,000 will be paid to the Property Manager
Rating Agency A fee of N3,000,000 every two years Insurer An annual fee of 0.10% of the value of properties Estate Valuer Estate Valuer fee of N4million, payable upon valuation every two years.
Offer Cost The initial offer costs including all regulatory fees to the
Securities & Exchange Commission Nigerian Stock Exchange Central Securities Clearing Systems Professional Parties Placement Fee Advertising and printing costs
Estimated at NGN411,534,375.00 (2.05%) of the offer will be borne by the REIT and will be deducted from the offer proceeds upon conclusion of the Offer Total Annual Expenses Shall not exceed 5% of the NAV of the REIT
TSL REIT 18
Risks and Mitigants
The potential risks associated with the REIT have been segmented into two broad classes. The first category, Transaction Structure Risks, summarizes the risks inherent in the specific transaction structure. The second class of risks, Generic Risks, has to do with the risks that are in a Real Estate Investment Trust.
A. Transaction Structure Risks
i. Concentration Risk: The risk that rents falling due on the same dates could lead to the mass vacancy if all or the anchor tenants vacated the property at the same time.
Mitigants: The Property Manager has staggered the rents so that rents do not fall due on the same date to forestall vacancies occurring at the same time.
The Property manager would be abreast of lease terms and be proactive such that new tenants are secured preferably for longer lease periods before existing tenants leave or vacate a property. Lease exit notification period of about six months would be considered for insertion in the lease agreements where applicable. The Property Manager would maintain good relationships with tenants.
ii. Holding Beneficial Title Risk: These are the risks associated with the DOT Structure where the legal title to the REIT properties remains with the Sponsor and not the Trustee.
Mitigants: The DOT structure strips the Sponsor of all rights to deal with the properties of the Trust except as directed by the Trustee. In addition, all title documents to the properties will be deposited with the Custodian to the REIT and all monies held by the Trustee is held on behalf of the beneficiaries, who have a right to trace such monies to the recipient.
iii. Performance Risk: The performance of the Fund is directly dependent on the decision making abilities of the Fund Manager regarding assets selection and pricing.
Mitigants: The tested and proven knowledge of the Fund Manager in the management of Real Estate investment will help enhance the performance of the Fund. The Investment Committee which oversees the activities of the Fund Manager is made up of seasoned professionals with in-depth knowledge and experience in the business of Real Estate in Nigeria and globally.
iv. Taxation Risk: Double incidence taxation: - first to the REIT and subsequently in the hands of the investors in the REIT.
Mitigants: REITs are considered to be pass-through vehicles and it is expected that income of REITs may not be subject to taxation. Effort is being made by the Commission and capital market trade groups to liaise with the relevant government body on the need to formally exempt REITs from taxation.
v. Structural Risk: From time to time the buildings that the REIT would invest in may be in need of significant structural repairs. Whilst it is anticipated that the costs of such structural repairs should not be significant, there is the potential reduction in income from high levels of structural repairs costs.
Mitigants: The Project Manager will conduct an initial evaluation of the assets for any structural defects and make repairs as necessary. Also, from time to time an evaluation of the assets would be carried out and repairs made as necessary to forestall significant damage to the properties.
vi. Property Vacancy Risk: Whilst the Property Manager will employ strategies aimed at ensuring the mall retains the stated minimum 80% occupancy, there exists the risk that the tenancy rate may fall short of this threshold.
TSL REIT 19
Risks and Mitigants
Mitigants: The Project Manager will stay up to date on tenancy expiry periods and take proactive steps towards securing new tenants in the event existing tenants decide to vacate their shops.
vii. Regulatory Risk: There is the risk that though the Fund is fully compliant with regulatory matters on commencement, changes in legislation regarding property and tax matters can result in reduced returns to investors
Mitigants: The Fund manager will be encouraged to relate actively with relevant decision making bodies in the country so as to contribute positively for the origination of policies that will benefit the growth of the market and Nigerian economy.
They will also pay attention to ensure that the Fund remains fully compliant with the relevant rules as may be set by the regulatory authorities.
viii. Transfer of Property Risk: This is the risk that the properties will not be transferred to the REIT after the disbursement of funds.
Mitigants: The Sponsor has deposited unsigned Deed of release with the Custodian prior to the Offer. These would be executed the day after SEC approval of Allotment before disbursement of funds to the Banks and minority shareholders. Also, the Banks would execute undertakings to release the encumbered properties as well as execute deeds of release upon receipt of funds.
The Sponsor has also pre-signed and deposited the deed of declaration of trust, and other relevant agreements with respect to the properties to be acquired from it.
ix. Risk that subsisting or future obligations of the Sponsor under the title documents and the lease/concession agreements will be transferred to the TSL REIT.
Mitigants: The Sponsor has covenanted under the Deed of Assignment of Receivables and the Declaration of Trust that it will continue to retain the liabilities and perform any present and future obligations which may arise in relation to any of the malls pursuant to the underlying title documents and any other contract which affects the ownership, management and operation of the malls.
B. Generic Risks
i. Market Risk: There may be a loss of capital as a result of adverse changes in either domestic or international economic conditions. This could be caused by factors that include inflation, interest rate and other fiscal policies.
Mitigants: The inflationary effects on the REIT are muted due to the fact that Incomes from the properties are linked to the dollar.
Other adverse effect of changes in market conditions on the REIT will be well managed with expertise and track record of the Fund Manager, Property Manager and members of the Investment Committee.
ii. Demand/ Supply Risk: The forces of demand and supply may not be easily determined in the Real Estate industry. There is a risk of the units of the REITs not being liquid and tradable.
Mitigants: The Fund is investing in retail commercial real estate. The properties to be purchased are neighbourhood malls within the South-Western Parts of the Country, with current collective occupancy rates of over 80%. The rentals in these malls are lower than some comparable malls, which increases the likelihood of it being fully occupied.
TSL REIT 20
Risks and Mitigants
The REIT will be listed on the floor of the NSE to facilitate liquidity of the units.
iii. Property Risk: Properties could be affected by hazardous occurrences such as fire, flood, windstorm etc
Mitigants: The properties are insured against the identified risks.
iv. Political Risk: Political risk refers to the impact political occurrences or changes in Government policies could have on Real Estate and Real Estate investments.
Mitigants: The efforts of the Federal government to make Nigeria an attractive investment destination has engendered various investment mechanisms which has opened up opportunities for foreign investment and has led to prediction of Nigeria being the next investment hub.
Various strategies to curtail the unrest and insurgencies in the North that could discourage foreign investment in Nigeria or create an unstable economy is also being put in place by the Federal Government.
The Fund Manager will maintain a balanced Real Estate portfolio diversification with regards to asset type, location and tenant base so as to curtail policy shocks.
TSL REIT 21
The Investment Committee
The Investment Committee is formally constituted as the oversight / highest investment decision making body of the REIT. The terms of reference and Investment Guidelines are approved by the Trustee. The investment Committee shall be constituted by the Fund Manager and shall consist of a maximum of nine (9) members:
Two (2) members shall represent the Fund Manager; One (1) member shall represent the Fund Sponsor; and One (1) member shall represent the Trustee; Other individuals acting as independent members will be appointed.
The Investment Committee is made up of a team of professionals with vast experience in Portfolio management, real estate consulting and finance in Nigeria and abroad. The Investment Committee members aggregate over 100 years professional experience in Investments and Real estate. The profile of the investment committee members are as follows:
A. Member profiles i. Winston Osuchukwu
Mr Osuchukwu is the pioneer Managing Director/CEO of First Ally Asset Management Limited. He joined First Ally from Legacy Investment and Management Company (“Legacy”), where he was Director of Investments. Prior to joining Legacy, Winston was a Group Head at Ecobank Transnational Incorporated, a PanAfrican enterprise with US$200 Million Assets Under Management as of 2011.
In addition to his group responsibilities, Winston spearheaded Ecobank’s acquisition of Oceanic Bank Plc in 2011. Winston was also the Managing Director at Access Investments & Securities Limited and Head of Wealth Management with Afrinvest (West Africa) in Nigeria. Prior to returning to Africa, He held positions with Lehman Brothers, JP Morgan Chase and Morgan Stanley in the United States.
He holds an MBA from Southern Methodist University in Dallas, Texas (2002) and BBA in Finance from the University of Houston (1998). ii. Chief Tokunbo Omisore
Chief Omisore has been a practicing architect in the U.K and Nigeria for over 35 years. He began his career in Nigeria in 1978 with Aderele Omisore Adebanjo & Associates, Nigeria before joining Eric Askew & Partners in the United Kingdom in 1979.
Upon his return to Nigeria in 1981, Chief Omisore worked with International Consulting Architects, Nigeria, who amongst others over saw the construction of Ashakun House in Broad Street Marina as well as other private luxury flats, commercial properties, warehouses and government developments.
In 1984, he founded Tokunbo Omisore & Associates, the company that was instrumental in the design and rollout of Mr. Biggs restaurants nationwide. TOP Services Limited was founded in 1996 to develop projects in the hospitality and retail space.
Chief Omisore is a Fellow at the Nigerian Institute of Architects and a chartered member of the Royal Institute of Architects. He was the Assistant Secretary to the Nigerian Institute of Architects between 1987 and 1991, as well as Secretary to the NIA Education Board in 1991. He served as the Secretary General of the African Union of Architects (a Union of forty member countries) between 2005 till 2011, subsequent to which he became the President of the African Union of Architects (AUA), until 2015. Chief Omisore remains in council of the AUA until 2018.
On January 11, 2016, he became an honorary member of the American Institute of Architects.
TSL REIT 22
The Investment Committee iii. Folashade Adeloye
Folashade is the Managing Director of ARM Trustees Limited, a wholly owned subsidiary of Asset & Resource Management Company Limited responsible for the Company’s Compliance, Legal and Trust functions. She also serves as the Company Secretary of Asset & Resource Management Company Limited. She has a wealth of experience in legal structuring, capital markets and financing transactions. Her expertise also spans commercial trust, private trust and other estate planning alternatives.
Prior to working in ARM, Folashade worked with Aina Blankson LP between 2002 to 2008, where she rose to the ranks of Partner and Head of Chambers. Her responsibilities included structuring and advising several companies during international capital market transactions ranging from corporate structuring, debt and equity hybrids, Initial Public Offerings and various private placements. She also worked briefly at Odua Investment Management Co. and Emmanuel Chambers (Afe Babalola & Co).
Folashade holds an LL.B from Obafemi Awolowo University (2000), Bachelor of Laws from the Nigerian Law School (2002) and is a qualified Barrister & Solicitor of the Supreme Court of Nigeria. She also holds an LLM from the University of Lagos, Nigeria (2012), Folashade is an associate member, Chartered Institute of Secretaries & Administrators (ICSA) UK and is a member of the Negotiation & Conflict Management Group (NCMG). iv. Melissa Cook – Independent Member
Melissa T. Cook, CFA, is an independent member of the Investment Committee. She is currently the Founder & Managing Director of African Sunrise Partners LLC, a company that provides information and Advisory services to companies in Africa aimed at improving their clients’ strategy and decision making capacity.
Ms. Cook has over 25 years of global research experience—including monitoring the emergence of new economies in Eastern Europe and China. Throughout her career, she has covered sectors such as entertainment, broadcasting, housing and building materials, capital goods, and consumer companies as an analyst at Drexel Burnham, Prudential Securities, and CLSA/Crédit Agricole. At CLSA, Ms. Cook was the Head of Asia USA Strategy, where she analyzed the impact of China’s rise on multinational companies and global markets, as well as China’s strategy for developing new markets. She was a Managing Director and Head of Global Research at Lazard Asset Management, New York, USA.
In November 2014, she was one of the fifteen senior executives, investors, and experts from a broad spectrum of American business, appointed to the United States of America’s President’s Advisory Council on Doing Business in Africa (PAC-DBIA). The PAC-DBIA through the Secretary of Commerce, advises President Obama on how to expand US corporate and institutional investment activity on the continent.
Ms. Cook has an A.B. degree in History from Dartmouth College and an M.B.A. in Finance from the Stern School of Business at New York University. She is a CFA charterholder and holds FINRA Series 7, 16, 24, 63, 86, and 87 licenses.
B. Investment Committee Responsibilities
The Investment Committee’s responsibilities include; Setting appropriate policies, reviewing and assessing processes and controls, which would guide investment proposals by the Fund Manager. Overseeing the performance of the Fund Manager and reviewing the investment options of the REIT Reviewing the investment management / performance report of the Fund Manager, objectively assessing significant changes and /or deviation from reasonable investment return levels of the REIT portfolio and if deemed necessary, take action to sell any of the REIT‘s properties or acquire new ones that will accelerate the achievement of the REIT objectives; Analysing the impact of external, economic, political and global factors on the REIT portfolio and taking steps beneficial to the REIT
TSL REIT 23
The TSL REIT
Continuously re-evaluating the investment strategy with particular focus on inherent risk in order to protect the Fund against losses Considering and making recommendations on matters pertinent to the investment of funds, the receipt of income, incurring of expenses and the management of the REIT. Receiving during the course of the quarter, reports on matters that may impact on the Fund and the assets contained within the investment portfolio.
C. Investment Management
The Investment Committee will review the strategic medium to long-term approach as it relates to the projected return on investment of the funds and assets of the REIT, with particular reference to its projected performance, level of investment risk and scope of investment portfolio. In accordance with the Trust Deed, the Investment Committee shall annually review the Investment Guidelines in order to align the Trust‘s investment strategy with prevailing economic, social, political and global environment. This is also necessary to continuously ensure that the REIT remains a vibrant and relevant investment asset to Unit Holders and prospective Investors. The Committee will also discuss any problems or reservation arising from the Fund Manager‘s work and any other matters that the Fund Managers may wish to bring to the attention of the Committee.
D. Memberships
The Committee will be constituted by the Fund Manager. Two members of the Committee aside from the Fund Manager shall have asset management and Real Estate background. Also, an independent member must be knowledgeable in investment and financial management. The period for which members of the Investment Committee shall serve on the Committee shall be determined by the Fund Manager.
E. Frequency of Meetings
Meetings will hold at least four times a year. An Investment Committee meeting must take place in each quarter of the year.
F. Quorum
The quorum necessary for the transaction of business shall be three (3) members, one representative of the Trustees, the Fund Manager and an Independent Committee member. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
G. Notice of Meetings
Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any member thereof. Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend, no fewer than three working days prior to the date of the meeting.
H. Minutes of Meetings
The Secretary shall minute the proceedings and resolutions of all Committee meetings including the names of those present and in attendance. Minutes of Committee meetings shall be circulated promptly to all members of the Committee. Minutes shall be approved at the subsequent meeting whenever practicable.
I. Reporting Procedures
The Committee will make a brief statement in the annual report about its activities, the performance of the malls and on the process used to evaluate potential acquisitions or sale of liquid assets or other real estate related assets.
TSL REIT 24
The Investment Committee
Specifically, the Investment Committee is required to ensure that the minutes of the Investment Committee meetings are formally recorded and submitted to the Trustees.
J. Meeting of Unitholders
The Chairman of the Committee or a Deputy will attend the Meeting of Unitholders, prepared to respond to any questions on the Committee‘s activities.
TSL REIT 25
Overview of the Properties
Asset Portfolio
The following properties are all commercial retail malls and will form the initial underlying assets that will be acquired by the TSL REIT. The information provided is as at December 31, 2015.
S/N Property Unexpired Lease Occupancy Rate
1 Adeniran Ogunsanya Mall, Surulere, Lagos 45 years 97% State 2 Apapa Mall, Apapa Lagos State 30 years 82%
3 Cocoa Mall, Dugbe, Ibadan, Oyo State 30 years 98%
4 Akure Mall 28 years 84%
The properties to be acquired will be upgraded as may be required and as opportunities present themselves.
TSL REIT 26
Overview of the Properties
A. Adeniran Ogunsanya Mall (“The AOS Mall”), Surulere, Lagos
Surulere is a residential and commercial Local Government Area located on the mainland of Lagos State, Nigeria, with an area of 23 km². At the last census in the year 2006, there were 503,975 inhabitants, with a population density of 21,864 inhabitants per square kilometre. Surulere is famous for its streets: Adeniran Ogunsanya, Adelabu, Ogunlana Drive, Bode-Thomas and Eric Moore amongst others.
Adeniran Ogunsanya Street is one of the most popular streets in the heart of Surulere. It is known as the most visited shopping streets of Surulere, as it houses a number of shopping malls. The most popular one is the AOS Mall, where Shoprite store is located.
The AOS Mall located at No 84, Adeniran Ogunsanya, Surulere, sits on 15,000 sqm of land with over 154 shops ranging from 20sqm to 2,500sqm. lt was completed and Shoprite commenced business therein on 3rd June 2010. The Mall became fully operational on 1st September 2010 and was officially commissioned by the then Lagos State Executive Governor, Mr. Babatunde Raji Fashola (SAN) on February 18, 2011.
The AOS Mall, is a huge focal point displaying a wide variety of merchandise, from groceries to high Fashion Boutiques, as well as its Food Court. Its trading hours are Mondays to Sundays 9am to 9pm.
The Mall has amenities such as: – 200 car multi-storey car park – Multiple (3) synchronized backup generators – 24 hour armed police security – Modern firefighting and suppression systems – CCTV surveillance system.
By virtue of a Deed of Sublease the Lagos State Development and Property Company (“LSDPC”) granted TSL a leasehold interest in relation to the AOS mall for a period of 52 (fifty-two) years commencing from 30th March, 2009. The title to this mall is held 100% by Top Services Limited. The Mall’s occupancy rate was 97% as at December 31, 2015.
TSL REIT 27
Overview of the Properties
Top Five Tenants of the Adeniran Ogunsanya Mall
The top 5 tenants of the mall (by square metre) are listed below;
S/N Tenants Sector % of Total Space
1 Tenant A Departmental Store and 42% supermarket
2 Tenant B Media 15%
3 Tenant C Food and Beverages 6.7%
4 Tenant D Fashion, shoes and 2.8% accessories
5 Tenant E Consumer durables 2.7%
Trade Sector Analysis
The following charts provides a breakdown by Gross Rental Income (GRI) and Net Lettable Area (NLA) of the different trade sub-sectors represented in the property as at December 2015.
TSL REIT 28
Overview of the Properties
B. Apapa Mall, Apapa Lagos
The region of Apapa lies near the gateway of Lagos lagoon, and contains ports and terminals for various commodities such as containers and bulk cargo, houses, offices and a small old disused railway Station. It is the site of a major container terminal which was owned by the Federal Government of Nigeria and operated by the Danish firm A. P. Moller-Maersk Group. Apapa is home to an estimated 522,384 people according to the Lagos State Government’s website.
The Apapa Mall is located at 13 Park Lane, Apapa Lagos and was opened to the public in August 2014. The Mall occupies a Gross Built-Out Area (GBA) of approximately 13,700sqm with a Net Lettable Area (NLA) of approximately 10,000sqm.
This shopping mall is host to over 40 retail sales outlets, with top brands from both within and outside the shores of the country.
The vision for bringing the Mall to Apapa was to provide a one-stop shopping centre where residents within Apapa and its environs could carry out all their shopping activities. With the exception of Filmhouse and Beerhugz, its trading hours are Monday to Sunday 9am to 9pm. The mall has the following amenities: – 200 car park – Multiple (3) synchronized back-up generators – CCTV surveillance system – 24 hour armed Police security.
TSL obtained the legal title to this mall from Wemabod Estates Limited (“Wemabod”) by virtue of a Deed of Sublease. TSL’s leasehold interest in the mall is for 35 years, with an unexpired period of 30 years. In consideration for the lease granted, Wemabod is entitled to 30% of gross rental income received from the mall. The title to the property is held 100% by Top Services Limited.
The property enjoyed an occupancy rate of 82% as at December 31, 2015.
TSL REIT 29
Overview of the Properties
Top Five Tenants of the Apapa Mall
The top 5 tenants in this mall (by square metre) are listed below;
S/N Tenants Sector % of Total Space
1 Tenant A Departmental Store and 35% supermarket
2 Tenant B Media & Entertainment 12%
3 Tenant C Electronics 7.4%
4 Tenant D Fashion, shoes and 3.6% accessories
5 Tenant E Technology 1.8%
Trade Sector Analysis
The following charts provides a breakdown by Gross Rental Income (GRI) and Net Lettable Area (NLA) of the different trade sub-sectors represented in the property as at December 2015.
TSL REIT 30
Overview of the Properties
C. Cocoa Mall, Dugbe, Ibadan, Oyo State
Ibadan is the capital city of Oyo State and the third largest metropolitan city, by population, in Nigeria, after Lagos and Kano, with a population of over 3 million, and the largest metropolitan geographical area. Ibadan is located in south-western Nigeria, 128 km inland northeast of Lagos.
Ibadan is a busy city but with an abundance of entertainment and relaxation centres. The city boasts two malls, one of which is the Cocoa mall.
The Cocoa Mall houses several local and international retail stores located in the same compound as Cocoa House at Dugbe, Ibadan. In addition to other local and international retailers, the Mall houses the largest Shoprite store in Nigeria.
The Cocoa Mall opened to the public in June of 2013. The Cocoa Mall has an NLA of approximately 8,500sqm.
The mall is equipped with the following amenities:
– A 200 car park – Multiple (2) back-up generators – Modern fire suppression equipment – 24 Hour armed police for security – CCTV surveillance system.
TSL obtained the 100% legal title to this mall pursuant to a Deed of Sublease from Odu’a Investment Company who granted a leasehold interest to TSL for a 35 (thirty-five) year period as consideration for receiving 30% of the gross annual rental income on the mall.
The mall had an occupancy rate of approximately 98% as at December 31, 2015.
TSL REIT 31
Overview of the Properties
Top Five Tenants of the Cocoa Mall
The top 5 tenants in this mall (by square metre) are listed below;
S/N Tenants Sector % of Total Space
1 Tenant A Departmental Store and 52% supermarket
2 Tenant B Fashion, shoes and 6.5% accessories
3 Tenant C Food & Beverages 4.6%
4 Tenant D Consumer durables 2.03%
5 Tenant E Fashion, shoes and 1.45% accessories
Trade Sector Analysis
The following charts provide a breakdown by Gross Rental Income (GRI) and Net Lettable Area (NLA) of the different trade sub-sectors represented in the property as at December 2015.
TSL REIT 32
Overview of the Properties
D. Akure Mall, Ondo State
Ondo State was created on 3 February 1976 from the former Western State with Akure as its State capital. Akure is the largest city within the State, with a population size of about 588,000 people, based on the 2006 population census.
The Akure Mall opened to the public in October 2015 and is located within the premises of the State owned Owena Motels on Igbatoro Road, Akure.
The Akure Mall occupies a GBA of approximately 11,500sqm with an NLA of approximately 10,000sqm. Shoprite and the Film House (with a state of the art 5 screen cinemas) are the anchor tenants and occupy approximately 42.37% of the GLA.
The Mall includes the following facilities: 200 car park Multiple (3) back-up generators Modern fire-fighting and suppression systems 24 hour armed police security CCTV surveillance system.
The Ondo State Government pursuant to a Deed of Sub-lease, granted a 30-year lease to TSL to develop, own and operate the Akure mall under the terms that they would receive an annual payment of 25% in the first 25years and 30% in the last 5 years of the gross annual rental income from the property as consideration for granting the sublease.
The mall had an occupancy rate of approximately 84% as at December 31, 2015.
TSL REIT 33
Overview of the Properties
Top Five Tenants of the Akure Mall
The top 5 tenants in this mall (by square metre) are listed below;
S/N Tenants Sector % of Total Space
1 Tenant A Departmental Store and 37.6% supermarket
2 Tenant B Entertainment 13.59%
3 Tenant C Fashion, shoes and 3.7% accessories
4 Tenant D Food & Beverage 3.07%
5 Tenant E Entertainment 1.9%
Trade Sector Analysis
The following charts provide a breakdown by Gross Rental Income (GRI) and Net Lettable Area (NLA) of the different trade sub-sectors represented in the property as at December 2015.
TSL REIT 34
Overview of the Properties
Valuation of Properties
The properties highlighted in the prospectus for transfer to the TSL REIT have been valued by Jide Taiwo & Co.
The valuation report of Jide Taiwo & Co, dated April 15, 2016, expressed their opinion about the properties, the assumptions in arriving at the values of the properties and the valuation methods adopted. Some of the assumptions made by the valuers include:
a. Information supplied is correct b. Title to property is good and marketable c. Property is not adversely affected by, or subject to compulsory acquisition, road widening, new road proposals or planning regulations and environmental laws.
Further details of the properties for transfer to the REIT and the transfer values are captured below;
Property Unexpired Net Lettable Open Transfer Current Year of Period Area (sq.m) Market Value to the Occupancy Valuation Value REIT N Rate (as at N(million) (million) December 31, 2015)
Surulere Mall 45 15,000 4,364 4,364 97% 2016
Apapa Mall 30 10,000 6,815 6,815 82% 2016 Cocoa Mall, 2016 Ibdan 30 8,500 2,744 2,744 98%
Akure Mall 28 10,000 2,269 2,269 90% 2016
Statement of Position of Sub-Lessors
The proceeds from the REIT is expected to transfer beneficial interests in the Malls to the Unit Holders. The Sub-Lessors (Wemabod, Odu’a and ODGS) would either; Receive units in the REIT as full consideration for their interest in the Malls; Receive units in the REIT as part consideration for a portion of their interest in the Malls; or Maintain status quo.
TSL REIT 35
TSL REIT Structure
Structure Diagram
Unit Holders
ARM Trustees (Trustee
Management Services Services)
First Ally Asset Trustee Fees Management TSL
REIT
Net Property Income
Ownership of Assets
Custodian
Cash
Property Management Services
Property Management
Fees
TSL REIT 36
TSL REIT Structure
Property Transfer Structure
The Sponsor has pre-identified 4 (four) properties which are to make up the initial underlying asset pool of the TSL REIT. Legal title in the 4 (four) properties is vested 100% in the Sponsor.
The rental incomes from the 4 (four) properties within the underlying asset pool have been identified as being assigned in favour of Wema Bank Plc and First Bank of Nigeria Limited (jointly known as “the Banks”), while Wema Bank has equitable interest in the Apapa Mall.
Despite the encumbered rental incomes, these assets have been selected because of the discounted acquisition price (the valuation report was based on rental incomes pegged at a dollar rate of N200/$1) at which they are being offered and the use of an acquisition structure (described above) that ensures that the properties can be acquired by the REIT without jeopardizing the interest of investors.
The proposed acquisition structure and safeguard mechanisms have been detailed below.
The acquisition structure proposed for the encumbered rental incomes in favor of the Banks is a “transfer in lieu of redemption”.
The REIT will deal jointly with the Banks, the Owner and the Sub-Lessors (dependent on their desire to participate) in the REIT creation/acquisition process.
The REIT will offset any outstanding indebtedness owed to the Banks on behalf of the Owner and pay the balance purchase price (less outstanding indebtedness and any prepaid rental fees and other income from the properties to be calculated from the effective date of transfer of the REIT) to the Owner.
In return, the interest in the Properties will be assigned to the REIT without further action. Upon financial close (after SEC approval of the allotment) the deed of assignment will be executed by the Banks and released to the REIT custodian.
At the same time, subsequent to the settlement of the Banks, the Fund Manager will instruct payment of the proportionate purchase price for the property to all stakeholders in the retail properties who choose to participate in the REIT.
TSL REIT 37
TSL REIT Structure
REIT Parties
Following the completion of the public offering of units in the TSL REIT, the following Parties shall make up the structure of the REIT;
A. The Originating Parties
The Sponsor
The Fund Manager
B. The Statutory Parties
The Trustee
The Custodian
The Auditors to the REIT
The Property Manager
The Rating Agency
The Registrars
The Estate Valuer
The Market Maker.
C. REIT Features
The Insurance Company(ies).
D. The Public
The Investors.
TSL REIT 38
TSL REIT Rating
TSL REIT 39
TSL REIT Rating
TSL REIT 40
Deed of Declaration of Trust
A declaration of trust “DOT” is a legal structure made by deed which allows the Sponsor (as title holder) to declare itself as holding the pre-identified properties to be acquired by the REIT in Trust irrevocably for the REIT (as beneficiaries).
Under the structure, the legal title (Deed of Sub-lease) to the properties remains with the Sponsor who shall act as a bare trustee whose only right to deal with the properties is upon the instructions of the REIT, while only the beneficial ownership in the pre-identified properties is vested in the REIT.
The structure minimizes the huge transfer costs which will ordinarily be incurred for the transfer of the properties to be vested in the REIT upon completion of the Offer if the conventional Deed of Assignment was utilized.
Key characteristics of the DOT structure include:
All of the Sponsor‘s entitlement to receivables in the properties, including right to rental incomes and capital appreciation will be legally assigned to the REIT Trustee (via a deed of assignment of receivables). All obligors are thereafter notified of the assignment in order to vest legal title to the receivables in the Trustee;
The Sponsor shall have absolutely no right/powers to independently sell, mortgage, transfer title of properties without express authorization from the REIT Trustee;
The DOT is bankruptcy remote, thus the properties transferred to the REIT will be segregated from the general assets of the Sponsor and cannot be used to offset debts owed by Sponsor in the unlikely event that the Sponsor becomes bankrupt;
The DOT is irrevocable. Consideration would have been offered and accepted for the Trust and the REIT will have clear legal rights to claim title to the properties as beneficiaries;
The physical legal title documents of the real estate portfolio (subject matter of the DOT) shall be deposited with the Custodian on behalf of the Trustee.
In addition, a notice stating the interest of the REIT shall be affixed on all the properties and the evidence of the REIT's interest in the properties will be lodged at the relevant lands' registry by way of a caution.
Benefits of the Structure
Minimizes transaction costs that will be borne by the REIT for property transfer taxes. This significantly reduces the REIT’s transaction costs and increases the REITS Net Asset Value;
Protects investors’ interests by vesting beneficial ownership of the property and the rights to the receivables, in the REIT Trustee;
Creates a platform for increased income distribution to unit holders, as the transaction cost arising from the property transfer is avoided.
TSL REIT 41
Financial Forecast
Statement from the Reporting Accountant
15 July 2016
The Directors First Ally Asset Management Limited 7th Floor, Architects’ place No 2, Idowu Taylor Street Victoria Island Lagos
Gentlemen,
PROFIT FORECAST
We have reviewed the accounting policies and calculations made in preparation of the Profit Forecasts of the Top Services Limited Real Estate Investment Trust (the TSL REIT) for the years ending 31 December 2017, 2018, 2019, 2020 and 2021. The Fund Manager, First Ally Asset Management Limited, is solely responsible for the profit forecast including the assumptions on which the forecasts are based.
In our opinion, the Profit Forecast so far as the accounting policies and calculations are concerned, have been properly compiled based on the assumptions made by the Fund Manager, and are presented on a basis consistent with the accounting policies of the Fund Manager and with generally accepted accounting principles in Nigeria.
However, there will usually be differences between forecasts and actual results for the reason that circumstances do not occur as expected, and these differences may be material.
We have no responsibility to update this report for events and circumstances occurring after the date of this report.
Yours faithfully,
Reporting Accountants Ajibade Taofeek Fashina For: Pedabo Audit Services FRC/2013/ICAN/00000000904 Lagos Nigeria
TSL REIT 42
Financial Forecast
Bases and Assumptions
1. Introduction
This memorandum has been prepared to summarize the information available to the Fund Manager and their basic assumptions at the time of preparing the forecast of the profits for the years ending 31 December 2017, 2018, 2019, 2020 and 2021.
2. Forecast
The Fund Manager is of the opinion that subject to unforeseen circumstances, and based on the assumptions stated below, the net income before distribution for the years ending 31 December 2017, 2018, 2019, 2020 and 2021 respectively will be in order of N1.46billion, N1.78billion, N2.06billion, N2.39billion and N2.75billion respectively.
3. Basis of Assumptions
Basis
The prospective financial information for the years ending 31 December 2017, 2018, 2019, 2020 and 2021 have been prepared in compliance with the requirements of International Financial Reporting Standards and in accordance with the Companies and Allied Matters Act, CAP C20 LFN 2004 and Investment and Securities Act, 2007.
Assumptions
i. The fund size for the REIT is N20 billion.
ii. The N1,000 per unit of 20 million units of the Fund will be fully subscribed, within the initial subscription period under the terms and conditions of the Offer.
iii. It is expected that the Assets being the investment property would depreciate over 35 years.
iv. Rental income will be indexed to the dollar and the exchange rate used in the initial year is N305/$1 which is expected to grow by 10% at the end of each year.
v. The maximum occupancy to the REIT is 95% which would be achieved within the first 2 years.
vi. The quality of the Fund Manager, Trustee, and Custodians will be sustained during the forecast period.
vii. The investment of the excess cash flows will be subject to the asset allocation.
viii. The rental income growth for each tenant without a fixed maximum percentage increase shall be 5% annually.
ix. Distributions shall be made at the end of each year which would be 97.5% of the net income of the Fund.
x. Section 17 of the Companies Income Tax Act Cap C21 LFN subjects the income of authorised unit trusts under the Investment and Securities Act to taxation. However, the subsequent enacted Investment and Securities Act 2007 replaced the term authorised unit trust with collective investment scheme. The tax implication and legal interpretation of this change is not certain and entities undertaking scheme of this nature has continuously omitted to make provisions for taxes as a result of this uncertain tax law.
TSL REIT 43
Financial Forecast
Bases and Assumptions
As a result, we have not provided for tax in the profit forecast resulting in a distributable profit of N1.46billion, N1.78billion, N2.06billion, N2.39billion and N2.75billion for the years ended 31 December 2017, 2018, 2019, 2020 and 2021 respectively. If the incomes of REITs are adjudged to be subject to tax subsequently, the impact of the decision on this Prospective Financial Information is a charge of tax at 30% on the incomes arising from this Prospective Financial Information and the scheme's distributable profit would have reduced to N1.02billion, N1.25billion, N1.44billion, N1.68billion and N1.93 billion for the years ending 31 December 2017, 2018, 2019, 2020 and 2021 respectively.
xi. The REIT would commence on January 1, 2017
xii. The issue cost for the Fund is estimated to be N411.53 million.
xiii. The Fund Manager will be responsible for the cost of valuing of investment assets as well as all administrative, custodial and other related expenses to be incurred in the day-to-day operations of the Fund. The following shall be estimated annual expenses for the Fund throughout the 5 year projected period.
- Fund Management fees at 1% of the opening annual Net Asset Value - Trustee fees at 0.05% of the annual opening Net Asset Value - Custodian fees at 0.075% of the opening Net Asset Value - Registrar fees are fixed at N500,000.00 throughout the rest of the forecast period - Auditors fees are fixed at N5,000,000.00 throughout the rest of the forecast period - Estate Valuer fees are fixed at N4,000,000 every two years throughout the forecast period upon valuation - Property Manager’s fees are fixed at N1,000,000 throughout the rest of the forecast period - Rating Agency fees are fixed at N3,000,000 every two years.
xiv. The valuation of the four shopping malls structured into the REIT have been conducted and the report generated showed the properties were valued as follows:
Apapa Shopping Mall N6.8 Billion Adeniran Ogunsanya Mall N4.4 Billion Akure Shopping Mall N2.3 Billion Cocoa Shopping Mall N2.7 Billion Total N16.2 Billion.
xv. GDP growth rate is estimated at range of between 2% to 3% during the forecast period.
xvi. Inflation is not expected to exceed 20% during the forecast period.
xvii. There will be relative stability in the political, economic and regulatory environment in Nigeria during the forecast period.
xviii. There will be no significant changes in the Federal Government's Monetary and Fiscal Operations that will adversely affect the operations of the REIT.
xix. The REIT will remain a going concern throughout the forecast period
xx. There will be no material changes in the accounting policies currently adopted by the REIT
xxi. There will be no litigation that will have adverse material effect on the REIT
TSL REIT 44
Financial Forecast
Forecast Statement of Financial Position
NGN Million Notes 2017 2018 2019 2020 2021 Assets Cash/Cash Equivalents 221 340 444 556 679 Investments 2 3,388 3,388 3,388 3,388 3,388 Investment Property 3 15,737 15,274 14,811 14,349 13,886 Total Assets 19,346 19,002 18,643 18,293 17,953
Liablities Deferred revenue 173 236 276 318 360 173 236 276 318 360
Net Assets 19,173 18,766 18,367 17,975 17,593
Equity attributable to unit holders 4 19,588 19,137 18,685 18,234 17,783 Capital Repayments (451) (451) (451) (451) (451) Retained earnings 8 36 81 132 192 261 Unit holder's fund 19,173 18,766 18,367 17,975 17,593
Efficiency Ratios 2017 2018 2019 2020 2021
Fixed Asset Turnover 0.10 0.12 0.15 0.17 0.20 Asset Turnover 0.16 0.10 0.11 0.13 0.15 Return on Turnover 91.66% 94.62% 95.75% 97.34% 98.20% Return on Equity 7.43% 9.31% 11.03% 13.13% 15.50%
Cash on Cash Yield 9.55% 11.44% 13.17% 15.27% 17.65%
TSL REIT 45
Financial Forecast
Forecast Statement of Comprehensive Income
NGN Million Notes 2017 2018 2019 2020 2021 Rental Income 5 1,588 1,884 2,153 2,459 2,807 Interest Income 599 623 640 659 681 Total Income 2,187 2,507 2,793 3,118 3,487
Other operating expenses 6 (269) (262) (269) (262) (268) Deprecation (463) (463) (463) (463) (463) Profit before tax 1,455 1,782 2,061 2,394 2,756
Tax Expense 7 - - - - - Net Profit/(Loss) 1,455 1,782 2,061 2,394 2,756
Dividend 1,419 1,738 2,010 2,334 2,687 Capital payments 451 451 451 451 451 Total cash distributed to unit holders 1,870 2,189 2,461 2,785 3,138
Profitability Ratios 2017 2018 2019 2020 2021 Net Profit Margin 0.67 0.71 0.74 0.77 0.79 Return on Capital Employed 7.52% 9.38% 11.06% 13.08% 15.35% Return on Equity 7.61% 9.54% 11.31% 13.46% 15.90%
Yield 7.24% 9.08% 10.76% 12.80% 15.11%
TSL REIT 46
Financial Forecast
Forecast Statement of Changes Attributable to Unit Holders
NGN Million 2017 2018 2019 2020 2021 Opening Balance 19,588 19,173 18,766 18,367 17,975 Increase in Net Asset 1,455 1,782 2,061 2,394 2,756 21,043 20,956 20,828 20,760 20,731
Dividend and Capital repayment (1,870) (2,189) (2,461) (2,785) (3,138) Closing Balance 19,173 18,766 18,367 17,975 17,593
NGN Million 2017 2018 2019 2020 2021
Net profit after tax to be distributed 1,455 1,782 2,061 2,394 2,756 Capital payments available to unit holders 463 463 463 463 463
Total cash Available 1,918 2,245 2,524 2,856 3,219 Total payment to unit holders (97.5%) 1,870 2,189 2,461 2,785 3,138
*The dividend to be distributed is 97.5% of the Net profit after tax while the Capital payments is 97.5% of the non-cash item (depreciation) which is to repaid out of capital.
TSL REIT 47
Financial Forecast
Forecast Statement of Cashflow
NGN Million 2017 2018 2019 2020 2021 Net Profit/(Loss) 1,455 1,782 2,061 2,394 2,756 Add Back Depreciation 463 463 463 463 463 Cash From Operations 1,918 2,245 2,524 2,856 3,219
Increase in deferred revenue 173 63 40 41 43 Net cash from operating activities 2,091 2,308 2,565 2,898 3,262
Owner's Contribution 20,000 - - - - Dividend (1,419) (1,738) (2,010) (2,334) (2,687) Capital Payments (451) (451) (451) (451) (451)
Net Cash From Financing Activities 18,130 (2,189) (2,461) (2,785) (3,138)
Purchase of Investment Property (16,200) - - - - Other Investments (3,388) - - - - Listing Costs (412) - - - - Net Cash Used In Investments Activities (20,000) - - - -
Cash Opening Balance - 221 340 444 556 Net Increase in Cash Position 221 119 104 113 123 Cash Closing Balance 221 340 444 556 679
TSL REIT 48
Financial Forecast
Notes to The Profit Forecasts
1. Reporting Entity
First Ally Asset Management Limited (“The Company”) was incorporated on 16 July, 2014 and is licensed by the Securities & Exchange Commission (“SEC”) as a Fund / Portfolio Manager. The Company seeks to launch a Real Estate Investment Trust (REIT) and list the securities on the floor of the Nigerian Stock Exchange (NSE), subject to the approval of the Securities and Exchange Commission.
First Ally Asset Management Limited is the full service Asset Management subsidiary of First Ally Capital Limited. The Firm employs an innovative, proactive and client-centered approach in delivering its services and solutions. It offers products and services to its clients in the area of Privately Managed Accounts, Private Investment Opportunities, Pooled Investment Products (Mutual Funds, Unit Trusts, Exchange Traded Funds etc) as well as Portfolio Advisory.
2. Held to Maturity Assets
This relates to investment in Government treasury bills which are intended to be held till maturity. A maximum of 10% of the excess cash will be invested in government treasury bills, while the balance would be invested in real estate related assets, subject to the asset allocation.
3. Investment Property
NGN Million 2017 2018 2019 2020 2021 Opening Balance - 15,737 15,274 14,811 14,349 Additions during the year 16,200 - - - - Depreciation (463) (463) (463) (463) (463) Closing Balance 15,737 15,274 14,811 14,349 13,886
4. Equity Attributable to UnitHolders
This represents the amount to be subscribed to by unit holders. This is to be fully taken/paid before the period end 31 December 2017. Please see breakdown in Statement of changes in net assets attributable to unit holders.
5. Rental Income
This represents revenue received from tenants from lease of shop space on an annual basis. Revenue is recognised on a straight line basis over the duration of the lease term.
TSL REIT 49
Financial Forecast
Notes to The Profit Forecasts
6. Other Operating Expenses
Professional fees included in the operating expenses include the following:
NGN Million 2017 2018 2019 2020 2021
Custodian Fees 15 15 15 15 15 Management Fees 200 200 200 200 200 Trustee Fees 10 10 10 10 10 Audit Fees 5 5 5 5 5 Board Expenses 5 5 5 5 5 CSCS 2 2 2 2 2 NSE 3 3 3 3 3 Registrars Fee 1 1 1 1 1 Valuation Fees 4 - 4 - 4 Rating Fees 3 - 3 - 3 Insurance 20 20 20 20 20 Facility Management Fee 1 1 1 1 1
Total Other Operating Expenses 269 262 269 262 268
7. Current Tax Liability
No provision has been made for tax in the forecast based on the assumption in note 3B(x)
8. Retained Earnings
NGN Million 2017 2018 2019 2020 2021 Opening Balance - 36 81 132 192 Profit for the year 1,455 1,782 2,061 2,394 2,756 Dividend Payments (1,419) (1,738) (2,010) (2,334) (2,687) Closing Balance 36 81 132 192 261
TSL REIT 50
Financial Forecast
Statement of Significant Accounting Policies
The following is a summary of the significant accounting policies adopted in the preparation of the prospective financial information of the Fund and have been consistently applied throughout the forecast period:
1. Basis of preparation
a. Statement of compliance The prospective financial information of the Fund for the five years ending 31 December 2021 has been prepared in accordance with International Financial Reporting Standards (IFRSs).
b. Basis of measurement The prospective financial information has been prepared on the historical cost basis.
c. Functional and presentation currency This prospective financial information is presented in Naira, which is the Fund’s functional currency. All financial information presented in Naira has been rounded to the nearest thousand.
d. Use of estimates and judgments The preparation of the prospective financial information in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, 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 in which the estimates are revised and in any future periods affected.
2. Revenue Recognition
Rental Income Rental income arising from investment properties is accounted for on a straight-line basis over the lease term.
3. Dividend expense
Distributions to unit holders are estimated at 97.5% of the Net Income of the Fund in any year and Interest income distributable to unit holders will be on quarterly basis.
4. Cash and cash equivalents
These include fund’s deposits with banks in Nigeria and cash in hand at the end of each reporting date.
5. Taxation
Income from discounted money market instruments are tax free and such incomes are not subjected to any form of tax.
6. Financial Assets and Liabilities
Investment in government securities are designated as financial instrument and are accounted for in line with the provision of IAS 39 as financial assets available for sale (AFS).
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Financial Forecast
Recognition All financial assets and liabilities are initially recognized when and only when the Fund becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place are recognized on the settlement date, i.e. the date that the assets are delivered to the Fund.
Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
the rights to receive cash flows from the asset have expired; or the Fund has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a `pass-through' arrangement; and either
- the Fund has transferred substantially all the risks and rewards of the asset, or - the Fund has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Fund has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Fund's continuing involvement in the asset. In that case, the Fund also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects rights and obligations that the Fund has retained.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired.
Impairment of financial assets The Fund assesses at each reporting date whether a financial asset or a group of financial assets classified as loans and receivables is impaired. A financial asset or group of financial assets is deemed to be impaired, if and only if there is objective evidence of impairment as a result of one or more events that have occurred after initial recognition of the asset (an incurred "loss event") and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably measured.
Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, the probability that they will enter bankruptcy or other financial reorganization, default or delinquency in interest or principal payments and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
If, there is objective evidence that an impairment loss has been incurred, the amount of loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred) discounted using the assets original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in profit or loss as a "Credit loss expense".
Impaired debts, together with the associated allowance, are written off when there is no realistic prospect of future recovery and all collateral has been realized or has been transferred to the Fund. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized
TSL REIT 52
Financial Forecast
impairment loss is increased or reduced by adjusting the allowance account. If a previous write-off is later recovered, the recovery is credited to the "Credit loss expense".
Interest revenue on impaired financial assets is recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.
Offsetting financial instruments Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.
7. Standards issued but not yet effective
Standards issued but not yet effective up to the date of issuance of the Fund's financial statements are listed below. The Fund intends to adopt applicable standards when they become effective.
IFRS 7 Disclosures — Offsetting Financial Assets and Financial Liabilities — Amendments to IFRS 7 These amendments require an entity to disclose information about rights to set-off and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity's financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32.
IFRS 9 Financial Instruments: Classification and Measurement IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. IFRS 9 (2010) introduces additions relating to financial liabilities. The IASB currently has an active project to make limited amendments to the classification and measurement requirements of IFRS 9 and add new requirements to address the impairment of financial assets and hedge accounting. The IFRS 9 (2009) requirement represents a significant change from the existing requirements in IAS 39 in respect of financial assets. The standard contains two primary measurement categories of financial assets: amortised cost and fair value. A financial asset would be measured at amortized cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset’s contractual terms give rise on specific dates to cash flows that are solely payment of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of held to maturity, available –for-sale and loans and receivables. For an investment in equity instrument which is not held for trading, the standard permits an irrevocable election, on initial recognition, on an individual share-by-share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognised in other comprehensive income would ever be reclassified to profit or loss at a later date. However, dividends on such investments are recognised in profit or loss, rather than other comprehensive income unless they clearly represent a partial recovery of the cost of the investments.
IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early adoption permitted. The Company has commenced the process of evaluating the potential effect of this standard but is awaiting finalization of the limited amendments before the evaluation can be completed. Given the nature of the Company's operations, this standard is expected to have a pervasive impact on the Company's financial statements.
IFRS 15 - Revenue from contracts with customers IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces the existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.
TSL REIT 53
Financial Forecast
IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2017, with early adoption permitted.
8. Improvements to IFRSs
The following new or amended standards are not expected to have a significant impact on the Company's financial statements.
IFRS 13 Fair Value Measurement This amendment clarifies the IASB’s rationale for removing paragraph B5.4.12 of IFRS 9 Financial Instruments and paragraph AG79 of IAS 39 Financial Instruments: Recognition and Measurement as consequential amendments from IFRS 13 Fair Value Measurement. The Fund would assess the impact that this standard will have on the financial position and performance.
IAS 16 Property, Plant and Equipment and IAS Intangible Assets This amendment clarifies the requirements for the revaluation method in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets to address concerns about the calculation of the accumulated depreciation or amortisation at the date of the revaluation.
IAS 24: Related Party Disclosures The amendment makes an entity providing key management personnel services to the reporting entity a related party of the reporting entity.
IAS 38: Intangible Assets The amendment removes the requirement to proportionately restate accumulated depreciation and amortisation on revaluation.
TSL REIT 54
Financial Forecast
Letter from Issuing Houses
Cowry Asset Management Greenwich Trust Limited Limited
November 7, 2016
The Directors First Ally Asset Management Limited 7th Floor, Architects Place 2 Idowu Taylor Street Victoria Island Lagos
Dear Sirs,
OFFER FOR SUBSCRIPTION OF 20,000,000 UNITS IN THE TOP SERVICES LIMITED REAL ESTATE INVESTMENT TRUST
We write further to the Prospectus issued in respect of the Offer for Subscription of 20,000,000 Units of N1,000 each in the Top Services Limited Real Estate Investment Trust (“The TSL REIT‘‘), the draft of which we have had the privilege of reviewing.
The Prospectus contains financial forecasts of the Fund for the years ended December 31 2017, 2018, 2019, 2020 and 2021.
We have discussed the bases and assumptions upon which the forecasts were made with you and with Pedabo Audit Services, the Reporting Accountants. We have also considered the letter dated July 16, 2016 from the Reporting Accountants regarding the accounting bases and calculations upon which the forecasts were compiled.
Having considered the assumptions as well as the accounting bases and calculations reviewed by Pedabo Audit Services, we consider that the forecasts (for which you, as Fund Managers, are solely responsible) have been made by you after due and careful enquiry.
Yours faithfully, FOR ISSUING HOUSES
Ebenezer Olufowose Johnson Chukwu Managing Director Managing Director First Ally Capital Limited Cowry Asset Management Limited
Elizabeth Ebi Kayode Falowo Managing Director Managing Director Futureview Financial Services Limited Greenwich Trust Limited
TSL REIT 55
The Fund Manager A. Profile
First Ally Asset Management Limited (“FAAM” or “the Firm”) is the Asset Management subsidiary of First Ally Capital Limited, an innovative, proactive and client-centred Investment Banking and Financial services company. The firm is duly registered with the Securities & Exchange Commission (SEC) as Fund and Portfolio Managers.
The Firm leverages its solid capital base, the strong financial services background of its promoters and the excellent track-record and credentials of its directors and shareholders, to provide customized financial solutions using all the various asset classes. The Company’s focus is the broad spectrum of Asset Management.
FAAM clients have access to professionally managed portfolios with investment strategies that are specifically designed to meet each client’s investment objectives. Its core business areas licensed by the SEC to provide, cover the following services and products:
Privately Managed Accounts (“PMA”) Pooled Investment Products such as mutual funds as approved by the SEC Structured Products Private Investment Opportunities (Opportunistic Investments).
FAAM has a credit rating of BBB+ by Agusto & Co.
B. Board of Directors of the Fund Manager
Abiodun Arokodare – Chairman
Mr Arokodare started his career with NEM Insurance Company Plc in 1983. Between 1984 and 2005, he served in various capacities in the banking industry and rose to the position of Deputy General Manager and Acting MD/CEO of an investment bank. He later joined the oil industry in February 2007 with his appointment as the Group General Manager (Accounts) of The Nigeria National Petroleum Corporation (NNPC), a position he held until April 2009 when he was appointed the Group Executive Director (Finance & Accounts) of the Corporation.
He was responsible for coordinating, controlling and directing the finance, treasury and accounting functions and overseeing assets and human capabilities thereon. He possesses significant record of achievements in banking, accounting and financial management spanning several years in the financial services sector and the oil & gas industry.
He holds a first degree in Accountancy from the University of Nigeria, Nsukka where he graduated in 1982 as the best student both in the Department of Accountancy and in the Faculty of Business Administration, winning several prices. He also holds an MBA degree in Management & Finance (1990) from the University of Lagos. He is also a 1991 fellow of The Association of Chartered Certified Accountants (FCCA) of the United Kingdom and a 1996 Fellow of The Institute of Chartered Accountants of Nigeria (FCA). He is a product of many management development courses in Harvard Business School, Wharton Business School and INSEAD.
Ken Aghoghovbia – Director
Mr. Ken Aghoghovbia currently serves as Chief Operating officer and Deputy Managing Director at African Reinsurance Corporation. He had previously served as Regional Director of West Africa at African Reinsurance Corporation. He has over 30 years (1985 till date) cognate experience in the Re-Insurance Industry.
Mr Aghoghovia at various times had served as Chairman of Technical Committee of Professional Re- Insurance Association and Member of a Ministerial Committee on Aviation Insurance, and Member, Executive Committee of West African Insurance Companies. He has presented Papers at Conferences across 4 continents, which were also published in Newspapers, Magazines and International Journals.
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The Fund Manager
Mr Aghoghovia holds a Bachelor’s degree in Insurance from the University of Lagos (1984), and an MBA degree in 1997 from ESUT Business School, Lagos. In 1997 also, he became a Fellow of the Chartered Insurance Institute of London, and a Fellow of the Chartered Insurance Institute of Nigeria (CIIN) in 2008.
Ebenezer Olufowose – Director
Ebenezer Olufowose is the founding Managing Director/CEO of First Ally Capital Limited, the parent company of FAAM. He was previously Executive Director of Access Bank Plc from 2007 to November of 2013 where he held overall responsibility for the Financial Markets Division comprising Group Treasury, Corporate Finance, Structured Finance and Financial Institutions. Prior to this, Mr. Olufowose was Director and Head of Corporate Finance at Citigroup. He was also an Executive Director at Citibank Nigeria where he led the origination, structuring and execution of corporate finance deals. From 1996 to 2002, Mr. Olufowose was Head of Investment Banking at Guaranty Trust Bank Plc and was responsible for the setting up of GTBank’s first subsidiary outside of Nigeria.
He led (or played key roles) in the structuring and execution of several landmark capital market transactions, including the Listing by Introduction of Guaranty Trust Bank Plc on the Nigerian Stock Exchange, the Access Bank IPO with global depository receipt (GDR) component, Access Bank’s USD500million Eurobond listed on the London Stock Exchange, and the acquisition of Intercontinental Bank Limited, which transformed Access Bank from a tier 2 bank to a tier 1 bank. He also played a key role in the first rollout financing of MTN in Nigeria and the OML 42 Reserve Based Lending facility for Neconde Limited, amongst others.
He holds a first class honours Economics degree from the University of Lagos (1982) where he emerged the best overall graduating student in the Department of Economics and the Faculty of Social Sciences winning several prizes including the University Prize and the Vice Chancellor’s Prize in that year. He also holds an MA Degree in International Economics from the University of Sussex, Brighton, England (1984) where he studied as a Sir Adam Thomson Scholar. He is an alumnus of the Lagos Business School and the Harvard Business School.
Obeahon Ohiwerei – Director
Mr Ohiwerei is the Deputy Managing Director of FACL. He began his professional banking career with Guaranty Trust Bank plc (“GTBank”) in 1991. His exceptional performance saw him rise to the position of Manager within six years. After a successful career with GTBank, he worked with Standard Trust Bank (now UBA Plc) where he was appointed the Pioneer Group Head, Consumer Banking in 1998 and resigned in 2002 as General Manager in charge of Lagos and West.
In August 2002, he was appointed Managing Director of Pacific Bank Limited (then on Central Bank of Nigeria’s holding action), where he repositioned the bank with his new team within 15 months and resigned to take up a new appointment as the pioneer Managing Director of Standard Trust Bank Ghana, between 2004 – 2006 (now UBA Ghana). He was a Group Executive Director with Access Bank Plc for 7 years (2006 to 2013), and a Director in 3 of Access Bank’s offshore subsidiaries as well as FITC, Lagos.
He holds a first degree in Mathematics from Bendel State University, Ekpoma, Edo State (1989) and a Masters Degree in Business Administration from Ambrose Alli University, Ekpoma, Edo State (2001). He is an Alumnus of the Harvard Business School, Boston USA, IMD Switzerland and the Manchester Business School, UK.
Kyari Bukar – Director
Mr. Kyari Abba Bukar is the Managing Director and Chief Executive Officer of the Central Securities Clearing System (CSCS) Plc. Prior to joining CSCS in September 2011, Kyari was the MD/CEO of ValuCard Nigeria Plc between 2004 to 2011 (now Unified Payments Plc), where he achieved phenomenal successes by transforming the business from a loss making, low morale and close looped local e-payment player into a highly profitable, world - class, global payment processor in partnership with Visa International Company.
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The Fund Manager
Kyari worked for FSB International Bank Plc (now Fidelity Bank) between 2001 to 2004, where he rose to the position of Executive Director, E-Banking and Information Technology and Operations. Prior to that, he worked at Hewlett - Packard USA in Silicon Valley, California (2000-2001). He held several positions amongst which are Process and R&D Engineer, Performance Programme and Benchmarking Manager, Marketing Programme Manager and Senior IT Consultant, World Wide Technical Marketing Manager until his return to Nigeria in 2002.
Presently, Kyari is the Chairman of the Nigerian Economic Summit (NESG). He sits on the Board of Credit Registry Services Plc and is a Member of the Board of Trustees of the Investment Protection Fund of the NSE. He was one of the members of the Nigerian National Conference representing the organized Private Sector Group (NESG).
He holds a B.Sc. degree in Physics from Ahmadu Bello University, Nigeria (1980), M.Sc. in Nuclear Engineering from Oregon State University, USA (1992) and an MBA from the Portland State University (1996). He is an alumnus of Lagos Business School (LBS), Wharton Business School and the Harvard Business School.
Winston Osuchukwu – Managing Director/CEO
Mr Osuchukwu is the pioneer Managing Director/CEO of First Ally Asset Management Limited. He joined First Ally Asset Management Limited from Legacy Investment and Management Company where he was Director of Investments. Prior to joining Legacy, Winston was a Group Head at Ecobank Transnational Incorporated, a Pan-African enterprise with US$200 Million Assets Under Management as of 2011. In addition to his group responsibilities, Winston spearheaded Ecobank’s acquisition of Oceanic Bank, Plc in 2011. Winston has also held positions with Access Investments and Afrinvest W.A. in Nigeria, Lehman Brothers and JP Morgan in the United States.
He holds an MBA from Southern Methodist University in Dallas, Texas and BBA in Finance from the University of Houston.
C. Management of the Fund Manager
The management of FAAM is led by Winston Osuchukwu. Other key management staff include;
Ayodeji Ogunleye – Client Coverage
Ayodeji joined FAAM in 2015 from Dunn Loren Merrifield Asset Management & Research Co. Limited. He started his Asset Management career as an Investment Adviser with Cashcraft Asset Management Limited in 2007; thereafter as a pioneer member of the Offshore Business Team (Investment Management Division) where he was responsible for offshore client relationships (non-resident Nigerians) and other domestic accounts. He later joined FCSL Asset Management Company Ltd. In 2011-2013 as a Senior Associate/ Relationship Manager responsible for the High Net- worth Individuals/Investors portfolios within the Investment and Capital Market Division.
Ayodeji holds a B.Sc (Hons.) in Accounting from the University of Ado-Ekiti (2005). He is also an Associate of the Chartered Portfolio Management Institute. He is currently pursuing an MBA (Finance) at the University of Leicester School of Management, U.K. and is a final level candidate of the Chartered Institute of Stockbrokers.
Role as the Fund Manager to the TSL REIT
Responsible for implementing the Fund‘s investment strategy Managing the REIT portfolio as outlined in the REIT Trust Deed and Investment Guidelines Works closely with other parties in the REIT to identify potential liquid investments as per REIT investment policy. Reinvests income arising from investments in the Fund
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The Fund Manager
Enhancing existing REIT properties‘ values by pursuing proper maintenance and renovation as the need arises. Taking proactive and prudent stance in maintaining a fundamentally sound and effective capital structure.
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The Fund Manager
Financial Summary
31 Dec 2015 N=
Net Earnings 15,258,425
Incorporation expenses (3,240,600) Administrative expenses (31,553,012) Impairment from Property and Equipment (1,430,653) ------Loss before taxation (20,965,840)
Taxation ------Loss after taxation (20,965,840) ======
Assets
Cash & Short Term Investments 235,558,301 Other assets 8,284,404 Property and equipment 21,336,957 ------Total Assets 265,179,662 ======
Liabilities Other liabilities 36,145,502 ------Total Liabilities 36,145,502 ------Equity Share capital 250,000,000 Accumulated loss (20,965,840) ------Total Equity 229,034,160 ------
Total Equity and Liabilities 265,179,662 ======
TSL REIT 60
The Sponsor
1. Profile
Top Services Limited (TSL) commenced business operations as an affiliate of Tokunbo Omisore & Associates - a firm of Chartered Architects, Project Management/Development Consultants established in 1984. It was thereafter formally registered in 1995 with an existing authorized share capital of N20,000,000 (Twenty Million Naira) to handle designs and construction on a contract management basis. This role of contract management has since become a turnkey one with the financing of projects in certain sectors as stated below:
Filling Stations Hospitality outfits Fast Food Outlets Residential Estates Retail Commercial Real Estate.
2. Client Real Estate Developments
When the Company commenced business, it executed contracts for several companies. TSL has executed works for:
i. UAC Foods - Mr. Bigg’s: The Company has successfully constructed and completed 113 outlets, all over the country within the last five years. The outlets were all developed and executed within agreed costs and time.
ii. Chevron Texaco Nig. Plc. TSL was one of the Contractors that handled the construction and rehabilitation of fuel stations for the Company.
New Construction Works - Filling Station along Lagos Expressway. - Filling Station along Airport Road, Abuja
Rehabilitated Works - Filling Station at Aba Road, Port-Harcourt.
iii. Mobil Oil Nigeria The contract with the Company commenced in 2001. TSL was one of the two Main Contractors that handled the construction and rehabilitation of several Filling Stations and some food courts.
Fuel Stations Rehabilitations: - Along Obafemi Awolowo Rd, Ikeja – Obanikoro along Ikorodu Rd, Lagos – Warehouse Rd, Apapa – Abule Egba, Agege, Lagos – Mile 3 Aba Road Port Harcourt – Old Aba Road, Port Harcourt – Mandela Junction, Suleja – Challenge Road, Palm Avenue, Lagos – Ibadan Express Way, Gbagada Lagos.
New Constructions - Agidingbi, Lagos – Lekki, Lagos – Festac, Lagos – Ijaiye Ogba, Lagos – Aguda, Lagos – Utako, Abuja.
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The Sponsor Food Courts: – On the Run Food Court at Lekki Phase ll, Lagos – On the Run Food Court and Filling Station at Magodo, Lagos – On the Run Food Court and Filling Station at Moloney, Lagos – On the Run Food Court at Mobil Filling Station Maryland, Lagos – On the Run Food Court and Filling Station at 23 Road, Festac, Lagos.
3. Top Services Real Estate Developments
As the Company built competence in real estate development for clients over the years, it began developing its own real estate properties, ranging from hotels to commercial real estate (malls). Some of the Company’s real estate developments are highlighted hereunder:
a) La Cour Boutique Hotels b) Cocoa Mall, Dugbe, Ibadan c) Apapa Mall, Parklane, Apapa, Lagos d) Adeniran Ogunsanya Shopping Mall, Lagos e) Akure shopping mall, Ondo State.
a. La Cour Limited This is a hospitality Company in Ikoyi within Lagos with two Boutique Hotels. There are currently two locations, Glover and Femi Okunu Road, Ikoyi. Amenities include:
Gyms Swimming pools Meeting room Landscaped areas with adequate car parks 49 one-bed suites with kitchenettes 11 two-bed suites with kitchenettes Restaurants and bars with kitchen and storage areas Mini Conference room for 40 and 80 people respectively External services include 300 KVA transformers at each location with generators, borehole systems, water treatment and overhead water storage tank.
b. Adeniran Ogunsanya Shopping Mall: Top Services Ltd., designed and built this shopping mall with a multi–storey car park as the developer/concessionaire. The Mall commenced operations on 3rd September 2010. The Shopping mall has a 21,600sqm built-up area. The shopping malls’ anchor tenant is Shoprite.
c. Apapa Mall, Parklane, Apapa, Lagos: The mall was developed as a Joint Venture partnership in conjunction with Wemabod Estates Limited, with Net Lettable Area of 10,000sqm and Gross Built-up Area of 16,764sqm which includes a car park area on the first floor and 1 level car park building.
The anchor tenant for this property are Shoprite and Film House.
d. Cocoa Mall, Dugbe, Ibadan: The mall was developed as a Joint Venture partnership in conjunction with Odu’a Investment Limited, with a Net Lettable Area of approximately 8,500sqm and a Gross Built-up Area of 14,785sqm, which includes a car park area within the building. The anchor tenant for this property is Shoprite.
e. Akure Mall, Akure Ondo State: The mall was developed as a Joint Venture Partnership in conjunction with the Ondo State Government. The Mall commenced operations and opened to the public on 21st October 2015, with a Net Lettable Area of approximately 10,000sqm and a Gross Built-up Area of approximately 11,500sqm.
The anchor tenants are Shoprite and Film house.
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The Sponsor
4. Board & Management Team
4.1 The Board
Chief Tokunbo Omisore Chief Omisore has been a practicing architect in the U.K and Nigeria for over 35 years. He began his career in Nigeria in 1978 with Aderele Omisore Adebanjo & Associates, Nigeria before joining Eric Askew & Partners in the United Kingdom in 1979.
Upon his return to Nigeria in 1981, Chief Omisore worked with International Consulting Architects, Nigeria, who amongst others over saw the construction of Ashakun House in Broad Street Marina as well as other private luxury flats, commercial properties, warehouses and government developments.
In 1984, he founded Tokunbo Omisore & Associates, the company that was instrumental in the design and rollout of Mr. Biggs restaurants nationwide. TOP Services Limited was founded in 1996 to develop projects in the hospitality and retail space.
Chief Omisore is a Fellow at the Nigerian Institute of Architects and a chartered member of the Royal Institute of Architects. He was the Assistant Secretary to the Nigerian Institute of Architects between 1987 and 1991, as well as Secretary to the NIA Education Board in 1991. He served as the Secretary General of the African Union of Architects (a Union of forty member countries) between 2005 till 2011, subsequent to which he became the President of the African Union of Architects (AUA), until 2015. Chief Omisore remains in council of the AUA until 2018.
On January 11, 2016, he became an honorary member of the American Institute of Architects.
Mrs. Oyin Kokoricha Mrs. Kokoricha is an estate surveyor with over 10 years’ experience in the United Kingdom. She commenced her career in 1997 with Black House Surveying Services London and has worked with the Halifax Bank London, LaSalle Investment Management London, to mention a few. She is currently working with Oak Medical Practice, Clovis NM.
She graduated with First Class honors from the University of Wales in Estate Management in 1999 and has an MSc in property investment from the University of London in 2000.
4.2 The Management Team
Ilori Olumuyiwa Ayo – Quantity Surveyor Mr Ayo commenced his career in 2001 as the Resident Quantity Surveyor during the development of the Jos University Teaching Hospital, from where he moved on to Woodlands Resources Limited in 2008 as a Developer where he was involved in the construction of the Ultra-Modern market at Ikeja Cantonment, Oshodi, Lagos.
He is currently a Quantity Surveyor at Top Services Limited and has been involved in several projects some of which include; construction of Mr Biggs, construction of some filling stations and the construction of the ultra-modern shopping mall at its car park at the Adeniran Ogunsanya Mall, Surulere Lagos.
Mr. Ayo obtained a Higher National Diploma (HND) in quantity Surveying in 1999 from Federal Polytechnic Zaria and a Post Graduate degree in Construction, from the Abubakar Tafawa Balewa University (Formerly Federal University of Technology) Bauchi in 2002.
Alika Thomas Ikechukwu – Project Manager Mr. Ikechukwu has over 15 years work experience in project management. He commenced his career in 1995, where he worked with Akinpelu Ogunmakin & Co, Lagos. By 2000, he commenced working with the Management Science Centre in Lagos, where one of the projects he handled was the renovation and
TSL REIT 63
The Sponsor redevelopment of Wellspring University, Benin, Edo State. In 2007, he commenced work with Top Services Limited and was involved in the redevelopment of the Adeniran Ogunsanya Mall, Lagos.
Mr Ikechukwu obtained a Higher National Diploma in Civil Engineering from the Yaba College of Technology in 1999, a B.SC in Building from the University of Lagos in 2005 and a Masters in Business Administration from the Ambrose Alli University in 2007.
Taiwo Adebukunola (Mrs) – Architect Mrs Adebukunola has over 20 years working experience. She began her career with the Archi-Hives Architects in 1995, before joining Top Services Limited in 1999.
She obtained a Bachelor of Science Degree in Architecture and an MSc also in architecture in 1989 and 1992 respectively, from the Obafemi Awolowo University. In 2004, she obtained an Advance Certificate in Project Management from the University of Lagos (Unilag Consult) Akoka, Lagos State. She is a member of the Architects Registration Council of Nigeria (ARCON) and the Nigeria Institute of Architects (NIA).
Mr. Celestine Jeremiah – Assistant General Manager Finance and Business Development Mr. Jeremiah has over 10 years work experience. He commenced work with Top Services Limited in 2005 and oversees all activities relating to accounts and finances as well as business development activities for the Company.
He obtained a BSc in Accounting from the University of Lagos in 2003. He is a member of the Institute of Chartered Accountants of Nigeria and is currently pursuing his Masters in Business Administration from the University of Lagos.
Olowu Blessing Titilayo – Human Resources Manager Prior to joining Top Services as the Human Resources Manager in 2014, Titilayo worked with Cityplanners Property and Investment Limited also as a Human Resources Manager.
In 2009, she obtained a BSc in Business Administration from the University of Ilorin. She is a member of the Nigerian Institute of Management, and an Associate of the Chartered Institute of Personnel Management.
TSL REIT 64
The Trustee
A. Profile
ARM Trustees Limited (“ARMT”) is a wholly-owned subsidiary of Asset & Resource Management Traditional Asset Management Limited (ARMTAM), which is the privately owned investment management subsidiary of the reputable asset management company, Asset & Resource Management Company Limited (“ARM”).
ARM, was incorporated in May, 1994 to provide professional investment management and financial advisory services to private and institutional investors. It is the largest non-bank financial services Firm in Nigeria with circa N630Billion (Six Hundred and Thirty Billion Naira) under management invested in both the domestic and international capital markets and shareholders’ funds of N12Billion (Twelve Billion, Four Hundred Million Naira). In line with ARM’s objective of providing comprehensive asset management services to its Clients, ARMT was incorporated in October 1997, to offer Commercial and Private Trust services to institutional and private clients respectively.
ARM Trustees presently has assets under management worth over N13Billion (Thirteen Billion Naira). A combination of ARM’s financial expertise in capital market transactions and ARM Trustees experience in Trust matters, places the Firm in a good position to effectively offer fiduciary services required for capital and debt issues. The Company is duly licensed by the Securities & Exchange Commission (SEC) to carry out Trusteeship services.
B. Scope of the Trustees Business
ARM Trustees is made up of a dedicated team of experienced professionals, whose primary focus is to deliver qualitative service in an efficient and professional manner.
The trusteeship services principally cover the following: i. Commercial Trust Services
Sub-National Bond Issues Debenture/Corporate Bond Issues Mutual Funds/Unit Trusts Schemes Pension Funds Loan Syndication & Consortium Lending Transactions.
Ii. Estate Planning Services
Private Trust constitution and management/administration of variety trust structures; and Advisory on other estate planning structures including Wills, Holding Companies, Foundations and offshore Trusts.
C. Track Record
Highlighted below are some of the Company’s recent Commercial Trust transactions:
Trusteeship service in the restructuring exercise of a major public oil company Acted as Trustee to a Trust Fund Pension Trusteeship service to an international, non-profit organization Trustees to a gated-estate property transaction Trustee and Secretariat to a subsisting State Bond Co-Trustee to a subsisting Bond and another proposed State Bond.
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The Trustee
D, Board and Management of the Trustees i. Members of the Board of Directors Include;
Ms. Jumoke Ogundare - Director
Jumoke Ogundare is currently the Chief Executive Officer of ARM. Prior to becoming the CEO of the ARM Group, she was responsible for ARM’s non-pension asset management business, ARM Trustees, and ARM Securities and the Group’s Marketing and Communications department.
Jumoke has several years of credit and marketing experience spanning International Merchant Bank (IMB), Prime Merchant Bank Limited, and Citadel Savings and Loans. She currently serves on the boards of ARM, ARM Pensions, ARM Life, ARM Securities and Mixta Africa.
Jumoke holds a B Sc. in Economics from the University of Jos (1988), and a Masters in Business Administration degree from Cardiff Business School in Wales (1992), Jumoke is also an alumnus of the Program for Management Development (PMD) and Advanced Management Programme (AMP) of the Harvard Business School.
Sadiq Mohammed – Director
Sadiq Mohammed is currently the Deputy Group CEO of ARM. Prior to that, he was the Managing Director of ARM Pension Managers (PFA) Limited between 2011 and 2014. Previously, at different points he served as the Chief Operating Officer (COO) of ARM Group and the Managing Director in charge of ARM’s Proprietary business, overseeing the development of notable projects such as the Lekki Road Project (LCC). He was at Arthur Andersen Nigeria (now KPMG Professional Services) before joining ARM in (1996).
Sadiq is an Industrial Chemistry graduate of Abubakar Tafawa-Balewa University (1986 – 1991) and a Financial Risk Manager (FRM) (2003) Charterholder; a Fellow of the Global Association of Risk Professionals (GARP) and earned a dual Executive MBA from Carnegie-Mellon University; the University of Geneva (2006). He is an alumnus of Harvard Business School’s Advanced Management Program (AMP) (2014).
Sadiq serves on the boards of ARM Group of companies, FMDQ Plc., Four Points Hotel Lagos and the Moorhouse Hotel. Over the last few years, Sadiq had served as Chairman of the Pension Operators (PenOp) Technical Committee for 2 terms and had previously served on different occasions as the Chairman of the Investment Management Subcommittee of the Capital Markets Committee and as a member of the FGN Committee on Infrastructure as well as the FGN Committee on drafting a Code of Conduct for Capital Market Regulators.
Mrs. Folashade Adeloye - Managing Director
Folashade is the Managing Director of ARM Trustees Limited, a wholly owned subsidiary of Asset & Resource Management Company Limited responsible for the Company’s Compliance, Legal and Trust functions. She also serves as the Company Secretary of Asset & Resource Management Company Limited. She has a wealth of experience in legal structuring, capital markets and financing transactions. Her expertise also spans commercial trust, private trust and other estate planning alternatives.
Prior to working in ARM, between 2002 and 2008, Folashade worked with Aina Blankson LP where she rose to the ranks of Partner and Head of Chambers. Her responsibilities included structuring and advising several companies during international capital market transactions ranging from corporate structuring, debt and equity hybrids, Initial Public Offerings and various private placements. She also worked briefly at Odua Investment Management Co. (2001) and Emmanuel Chambers (Afe Babalola & Co)(2001).
She holds an LL.B from Obafemi Awolowo University (2000), Bachelor of Laws from the Nigerian Law School (2002) and is a qualified Barrister & Solicitor of the Supreme Court of Nigeria. She also holds an LLM from the University of Lagos, Nigeria (2012), Folashade is an associate member, Chartered Institute of Secretaries &
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The Trustee
Administrators (ICSA)(2004) UK, she is a member of the Negotiation & Conflict Management Group (NCMG), and an Alumni of INSEAD (2004). ii. Other key management staff include;
Michael Abiodun Thomas – Head, Commercial Trust
Michael currently oversees the Commercial Trust unit of ARMT which comprises Public and Corporate sectors. Prior to joining ARM Trustees, Michael started his career as a Legal counsel in the commercial law department of Messrs Rickey Tarfa & Co in 2009 -2010. Whilst in the Commercial Law department, he was responsible for provision of legal advisory service to multi-national oil and gas companies, commercial banks, pharmaceutical firms, FMCGs and public agencies.
He joined Skye Trustees Limited in 2010 and was specifically involved in over 15 State Government Bonds, an FG debt-structured Bond and the first Sukuk Bond in Nigeria. His experience in corporate Trusteeship spans through numerous Loan Syndication, Debenture Trust, Real Estate Investment Trust, Hybrid debt instruments in major sector like Telecommunication, Oil and gas, FMCG, Power Distribution Companies amongst others.
Prior to joining ARM Trustees, he worked briefly as the Acting Managing Director of Radix Trustees Limited in 2014. There, he reported to the Board and was directly responsible for strategizing business plans and policy as well as building an executive team.
He holds a Bachelor of Law degree (LL.B) from the Faculty of Law, Lagos State University (2007), a Barrister and Solicitor of the Supreme Court of Nigeria (B.L) (2008). He is currently pursuing a Masters of Law (LL.M) degree in Commercial Trust at the Queen Mary, University of London.
He is an associate student of the Chartered Institute of Taxation (CITN), a certified professional Negotiator and Mediator (pnm), a member of Nigerian Bar Association (NBA), Lagos Island Chapter, immediate past Assistant General Secretary of the Association of Corporate Trustees (ACT).
Ugochukwu Ndubuisi- Trust Counsel
He is responsible for overseeing all private equity, legal structuring and asset management activities including constant regulatory interface with the Securities & Exchange Commission, FIRS, and the Nigerian Stock Exchange amongst others. He is also responsible for legal insights on ARM Trustees commercial trust mandates involving syndicated loans/consortium transactions, debenture and bond issues. Prior to joining ARM, Ugochukwu worked at Detail Solicitors (2008) – a corporate and commercial law firm.
Ugochukwu has a First Class Honours Degree from the University of Ibadan, Nigeria (2006). He also has a B.L. Degree from the Nigerian Law School (2007) and an LLM (Distinction) from University College London (2011).
Fatah Kadiri – Senior Trust Adviser
Fatah joined ARM Trustees Limited in 2016. In his role at ARM Trustees, Fatah provides oversight on the operation and administration of Private Trusts, Corporate and State Bonds as well as Collective Investment Schemes.
Prior to joining ARM Trustees Limited, Fatah had worked at FBN Trustees Limited (formerly First Trustees Nigeria Limited) and STL Trustees Limited from 2011 to 2015, and between 2015 and 2016 respectively. Fatah has led teams responsible for the trust oversight of more than twenty (20) collective investment schemes (including a Real Estate Investment Scheme), more than thirty (30) sub-sovereign, corporate and supranational bonds as well as dozens of loan syndications, a few sub-national reserve funds, several estates and private trust arrangements all of whom have aggregate values in excess of $4 Billion.
Fatah Oluwaseun Kadiri holds a Master of Science Degree (with Distinction) in Investment Management from Coventry University in the United Kingdom (2010). He is also a Law (LLB) graduate of Obafemi Awolowo
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The Trustee
University (2007) and obtained a Barrister at Law (BL) degree from the Nigerian Law School (2008). He has been the Assistant General Secretary of the Association of Corporate Trustees, which is the umbrella body for all SEC-licensed Trust Companies in Nigeria, since October 2014. Fatah is a Level III Candidate in the Chartered Financial Analyst (CFA) Program.
TSL REIT 68
The Custodian
A. Profile of Stanbic IBTC Nominees Limited
Stanbic IBTC Nominees Limited is a leading custody and investor services company in Nigeria. It was incorporated on 06 March 2000 as Stanbic Nominees Nigeria Limited and subsequently changed to Stanbic IBTC Nominees Limited on 22 February 2013.
Stanbic IBTC Nominees Limited is a wholly-owned subsidiary of Stanbic IBTC Bank PLC. The Company maintains an authorized and paid-up share capital of N100,000 divided into 100,000 ordinary shares of N1.00 each. Stanbic IBTC Bank PLC is the major shareholder in the company, holding 99.99% of the shares. The Company’s registered office is; I.B.T.C. Place Walter Carrington Crescent, Victoria Island, Lagos
Stanbic IBTC Nominees Limited carries on business pursuant to the Custody License granted to Stanbic IBTC Bank PLC by the Securities and Exchange Commission. The Company was set up to not only focus its principal objects but also to enable Stanbic IBTC Bank PLC segregate its proprietary assets from those of its other clients in furtherance of the custody business. Notwithstanding the foregoing, the Company has subsequently been licensed to keep custody of specific securities such as Bonds.
The principal businesses of the company are:
1. Safekeeping and settlement services for equities, bonds, treasury bills and money market Instruments 2. Corporate action, income collection and proxy services 3. Global Custody services 4. American Depository Receipts 5. Trustee Services.
Stanbic IBTC Nominees Limited has Assets Under Custody of over N1.4trillion encompassing capital and various of forms of traded securities on behalf of clients. The Company’s clientele is comprised of high net- worth local and international organizations. With a highly professional and innovative team, the company has consistently delivered cutting edge customer service and global best practice in safe keeping of assets. In this regard, they have been honored with the following accolades and awards:
Global Investors’ Best Sub-Custodian in Nigeria (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007) Global Custodian’s Commended Rating in Domestic, Cross-Border & Leading Clients Survey rating in Nigeria (2013, 2012, 2011, 2010, 2009, 2008, 2007) Global Finance’s Best Sub-Custodian Bank in Nigeria Award (2015, 2014, 2013, 2012, 2011 & 2010).
Stanbic IBTC Nominees Limited is a member of the Association of Asset Custodians of Nigeria. The Company was also recently licensed to offer various securities lending products and services pursuant to the implementation of Market Making on the floor of the Nigerian Stock Exchange.
B. Profile of the Board of Directors of Stanbic IBTC Nominees Limited
Mrs. Sola David-Borha - Chairman
Mrs. David-Borha is the Chairman of the Board of Directors of Stanbic IBTC Nominees Limited. She is the Chief Executive Officer of Stanbic IBTC Holdings PLC having previously served as Chief Executive of Stanbic IBTC Bank PLC. Mrs. David-Borha also previously served in Stanbic IBTC Bank as Executive Director, Corporate and Investment Banking (2006 –April 2010) and Executive Director, Corporate Banking (1994 - 2005).
Mrs. David-Borha holds an MBA degree from Manchester Business School, United Kingdom. Her executive educational experience includes the Advanced Management Programme of the Harvard Business School.
TSL REIT 69
The Custodian
Mr Yinka Sanni – Non-Executive Director
Mr. Sanni is currently Chief Executive, Stanbic IBTC Bank PLC. He was the pioneer CEO of Stanbic IBTC Pension Managers, Nigeria’s largest Pension Fund Administrator both in terms of number of persons registered and total assets under management.
He was also the pioneer CEO of Stanbic IBTC Asset Management Limited, which manages Nigeria’s largest mutual fund, The Stanbic IBTC Nigerian Equity Fund. He grew the Company from a start up to Nigeria’s leading independent asset management and stockbroking firm with assets under management in excess of N50billion as at 2005.
Yinka has extensive financing, capital raising, M&A and privatization advisory experience, and served as Deputy Head of Stanbic IBTC’s Corporate Finance team in the past, where he advised clients on landmark, complex and innovative transactions.
Yinka joined Stanbic IBTC Bank in 1990 and is currently a Director in two of the Bank’s subsidiaries. He has a Bachelors degree in Agricultural Economics and an MBA. He is also an Associate of the Chartered Institute of Stockbrokers of Nigeria.
Mr. Wole Adeniyi - Non-Executive Director
Mr. Adeniyi has over 20 years experience in banking operations, process management and business support within the financial services industry. His expertise in these areas span across routine business operations, IT processes, property and premises management, payment strategies and business integration to IT systems, commercial banking, credit, export finance, risk management, asset management, transactional banking and custody.
Mr. Adeniyi currently serves as Executive Director, Business Support, Stanbic IBTC Bank PLC. Mr. Adeniyi previously served as Head, Country Operations for the then Stanbic Bank Nigeria Limited in 2003 providing the Bank a consistently high network support. Upon joining Stanbic IBTC Bank PLC in 2007 he was appointed Head, Business Operations, Corporate and He also currently serves as Head, Investor Services, Stanbic IBTC Bank PLC.
He also previously served in the then Stanbic Bank Nigeria Limited at various times as Head, Investment Management Services; Head, Custodial Services; Head, Business and product Development and Custody; Head, Global Transactional Banking. He also served in Oceanic Bank International PLC as Assistant General Manager, Custodial Banking and Trusteeship.
Mr. Adeniyi holds a Bachelor Degree in Economics, Masters Degree in Economics and a Master of Banking and Finance. He has also attended several leadership and development trainings in commercial banking operations, credit, asset management, transactional banking, custody and securities lending.
Mr. Babatunde Macaulay - Non-Executive Director
Mr. Macaulay is currently Head, Transactional Products and Services –West Africa for Stanbic IBTC Bank PLC.
Prior to joining Stanbic IBTC Bank PLC in April 2012, Mr. Macaulay served as Head, Transaction Banking, Standard Chartered Bank Nigeria; Group Head, Transaction Banking, First City Monument Bank PLC (FCMB) and subsequently, Divisional Head, Human Resources and Change Management for FCMB. Mr. Macaulay has over 15years experience in transaction banking, cash management, human resources, change management and other financial services responsibilities.
Mr. Macaulay holds a Bachelor’s degree in Industrial Chemistry and currently doing an executive Masters Degree in International Human Resources Management at the Cranfield University, United Kingdom.
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The Custodian
Mr Akeem Oyewale – Managing Director
Mr. Oyewale is the Chief Executive of Stanbic IBTC Nominees Limited. He is also a Non-Executive Director on the Boards of Stanbic IBTC Stockbrokers Limited and Stanbic IBTC Capital Limited. Until his appointment as a Non-Executive Director of Stanbic IBTC Stockbrokers Limited in January 2012, Mr Oyewale served as the Chief Executive Officer of the Company from July 2009 to January 2012.
Prior to joining Stanbic IBTC Stockbrokers Limited, Mr Oyewale served as Head, Trade Marketing, Corporate Banking in the then Investment Banking and Trust Company (IBTC) (now Stanbic IBTC Bank Plc) from December 1998 to May 2004. In May 2004, Mr Oyewale was appointed Head, Mutual Funds, IBTC Asset Management Limited (now Stanbic IBTC Asset Management Limited), and subsequently, Managing Director of the Company in 2006.
Mr Oyewale holds a B.Sc (Hons.) from the University of Lagos as well as an MBA from Manchester University, United Kingdom. He is a member of the Institute of Chartered Accountants of Nigeria, Chartered institute of Stockbrokers. He is also an Associate Member, Chartered institute of Bankers of Nigeria, as well as the Chartered Institute of Taxation of Nigeria.
Mr Oyewale is an accomplished accountant, stockbroker, banker and capital market operator with invaluable expertise in equities and corporate finance.
Mr. Victor Williams - Non-Executive Director
Mr. Williams serves as Executive Director, Corporate and Investment Banking for Stanbic IBTC Bank PLC. Prior to his reassignment from Standard Bank South Africa, he was Head Corporate and Investment banking for Standard Bank in Kenya and East Africa.
He also possess over 20 years’ experience in Banking/Finance from the various positions he has held and has worked in a number of organization including Cornerstone Research, Goldman Sachs and Wells Fargo in the United States of America.
Victor holds a Bachelor of Science in Mathematics, Bachelor of Arts in Economics from the Brown University in the United States of America as well as a Master of Business Administration and General Management from the prestigious Harvard Business School Boston.
Mr. Rajesh Ramsundhar - Non-Executive Director
Rajesh is the Head of Standard Bank’s Investor Services business in African markets outside of South Africa and the Head of Standard Bank’s Custody product in South Africa. Standard Bank’s Investor Services business is a leading provider of custody and related products and services to domestic and foreign institutional investors across fourteen sub-Saharan Africa markets.
Rajesh is a seasoned Investor Services professional in Sub Saharan Africa with over 16 years of experience across various functions and markets. During his tenor at Standard Bank Rajesh has held senior leadership positions across multiple disciplines of the Investor Services business including Sales, Global Strategy and Product Management. He has also held a regional leadership position in Global Markets, at an international bank, heading up Transactional Foreign Exchange and Money Market Sales in Sub Saharan Africa.
Rajesh is a bachelor of Commerce graduate from the University of Witwatersrand, an MBA graduate from the Gordon Institute of Business Science, and has a passion for Finance and Economics in developing and frontier markets.
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The Custodian
C. Profile of the Management Team of Stanbic IBTC Nominees Limited
Mr. Akeem Oyewale heads the management team of the Company. Other members include;
Mr. Segun Sanni
Mr. Sanni currently serves as Head, Investor Services, Stanbic IBTC Nominees Limited.
Mr. Sanni has over 20 years’ experience in commercial banking, credit, export finance, risk management, asset management, transactional banking and custody. He previously served in the then Stanbic Bank Nigeria Limited at various times as Head, Investment Management Services; Head, Custodial Services; Head, Business and product Development and Custody; Head, Global Transactional Banking. He also served in Oceanic Bank International PLC as Assistant General Manager, Custodial Banking and Trusteeship.
Mr. Sanni holds a Bachelor Degree in Economics, Master’s Degree in Economics and a Master of Banking and Finance. He has also attended several leadership and development trainings in commercial banking operations, credit, asset management, transactional banking, custody and securities lending.
Mrs. Toyin Ogunbamowo
Mrs. Toyin Ogunbamowo is a Relationship Manager in Investor Services. She has over 9 years banking experience spanning across International trade, Client Services and Client Relationship Management. Mrs. Ogunbamowo started her banking career in Standard Chartered Bank as a trade expert.
She holds a Bachelor’s Degree in Geography from University of Ilorin. A member of Institute of Chartered Accountant of Nigeria and also holds a master degree in Business Administration from Lagos State University.
Mr. Yemi Odubiyi
Mr. Yemi Odubiyi is Head, Investor Services Operations. He has over 9 years of experience in Investor services.
Mr. Odubiyi holds a Bachelor’s degree in Accounting from Olabisi Onabanjo University, Ago-Iwoye, Nigeria. He has a certification in UK Securities Market structure and regulations Covering London Stock Exchange (LSE), CREST settlements and Eurobond market and Euro clear.
He also has a certification in Securities Lending, Processing and Settlement and various other certificates in the Custodial industry.
Mr. Adebayo Bank-Lawani
Mr. Adebayo Bank-Lawani is the Head of Corporate Actions in Investor Services. He started his banking career with the Zenith Bank Group and has over 8 years banking experience spanning custody and share registration in the capital market.
Mr. Bank-Lawani holds a Bachelor’s Degree in History and International Studies from the Lagos State University, Ojo and currently running his master’s degree in business administration with the Business School Netherlands. He is also a student member of the Nigeria Institute of Public Relation (NIPR).
Mrs. Seun Adebanjo
Mrs. Seun Adebanjo is the Head of Settlements in the Investor Services Operations Department. She has over 10 years banking experience spanning across Relationship Management, domestic settlements and trade settlements.
She holds an MSc in Finance, Investment and Risk from University of Kent, Canterbury and a BSc in Banking and Finance from Ogun State University. She is also an Associate of the Chartered Institute Bankers of Nigeria.
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The Custodian
Mrs. Temitayo Olusanya
Mrs. Temitayo Olusanya is the Head of FX processing in Investor Services Operations. She has over 7 years banking experience spanning across FX processing, Reinvestment, Reconciliation and General Banking.
Mrs. Olusanya is a seasoned Investor Services professional with various Certifications in the Custodial Industry. She holds a Bachelor’s Degree in Botany from the University of Lagos.
Mr. Gbenga Alli
Mr. Gbenga Alli is the Head of Reconciliation and Reporting in Investor Services Operations. He has over 10 years of experience spanning across Audit & Taxation, Nostro & Central Bank of Nigeria’s reconciliation, E- Business (Cards Settlement and Reconciliation), Securities Reconciliation and Reporting. Mr. Alli is a pioneer member of Credit Card Project in Stanbic IBTC Bank Plc.
He holds a Bachelor’s Degree in Accounting from University of Ado-Ekiti. A member of Association of Chartered Certified Accountants, United Kingdom. He is certified in Prince2 Project Management (Foundation) and currently studying for his Executive MBA from Business School Netherlands.
Mrs. Ifedayo Akintomiwa
Mrs. Ifedayo Akintomiwa is the Head of Queries Management in Investor Services. She has over 8 years banking experience spanning across foreign operations, Client Services and Client Relationship Management. Mrs. Akintomiwa started her banking career in Zenith Bank Plc as a customer service officer.
She holds a Bachelor’s Degree in Actuarial science from the University of Lagos. An associate member of the Chartered Institute of Securities and Investment, UK. She holds a Certificate in International Wealth and Investment management and an advanced certificate in wealth management (applied financial advice and management) from the CISI, UK.
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The Property Manager
Profile
Messrs Tunji Ologbon Partnership is a seasoned firm of Chartered Estate Surveyors, Valuers and facilities Manager, duly registered by the government Establishment Estate Surveyors and Valuers Registration Board of Nigeria The partnership was established in 1995.
The Company’s vision is to be among the best global valuation practitioners and set the pace in the provision of real estate services especially in Physical Assets Valuation and Property Investment Analysis. While its mission is to exceed clients’ expectations always.
Types of Properties Managed
Purpose built commercial office complexes Residential houses, flats, etc. Shops
Services Offered
The firm provides a range of services across the real estate chain such as: Valuation of Properties and Assets, management of properties of several types [residential and commercial], facility management, feasibility/viability appraisal on proposed projects, project development and management and general real estate consultancy services including advice on Land Use planning/administration and processing title perfection/registration. The scope of the services rendered includes: a. Physical Asset Valuation: Involves determining the values of physical assets which covers landed properties, plants and machineries, fixtures and fittings; and equipment for various purposes e.g. financial, disposal, mortgage etc. b. Property Investment Analysis: carrying out viability appraisals on landed property to determine and advise on the best use and development it could be put into. The firm also carries out sensitivity analysis to ensure clients are adequately advised in taking decision on property investments. c. Project Monitoring: They provide risk, financial and quality management services to their clients during project developments. The client types include;
funding institutions, tenants/purchaser who would enter into a lease/purchase agreement upon conclusion, A bank or other development financial institution where a loan matures at the end of the development period
Although, the risk borne by each of these client groups differ, in each case, the development will be designed, constructed and supervised by a developer who will employ a design and construction team. The appointment of a project monitor does not replace any of these primary functions, but protects the client’s interests by monitoring the performance of the developer and its team. d. Property Investment Managers: This involves the administration and supervision of real estate investment to ensure regular and maximum returns to clients. The services provided here are: Determination of rental value, negotiation of rent payable based on the above and renewal of lease on successful negotiation. Routine inspection to prevent any damage (social, economic and physical) to the property and its fittings. Advising property owners on improvements required to enhance the property. Administer and ensure that covenants in the lease agreement are reasonable adhered to Collection of rent on behalf of the property owner Remittance of same less our professional fee Regular routine report on the property to client
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The Property Manager e. Property Broker: Assist clients to source or dispose of interest in real property assets or investment at best market price. It could either be in respect of lease or outright sale. Early performance in client brief is aided by our keeping and updating listing of various properties available for lease or sale in addition to requests from various sources.
The roles of the Property Manager shall be as follows:
Ensuring that the properties are adequately tenanted. This involves taking proactive stance of securing replacements for out-going tenants before the lease expires. Maintaining good human relations and interaction with tenants enhances prompt notification from out-going tenants.
Collection of rent from tenants as at when due, hence ensuring optimal cash flow.
Keeping thorough records regarding the property. This should include all income and expenses; list of all inspections, signed leases, maintenance requests, complaints file, records of repairs, costs of repairs, maintenance costs, record of rent collection and insurance costs.
Managing existing tenants, securing new tenants, ensuring satisfactory habitation, dealing with complaints and initiating evictions.
Ensuring that all real estate assets remain in good physical condition and are properly maintained and tenantable.
Supervising and enforcing compliance by tenants and other occupiers.
Co-ordination of leasing agents and negotiations for leasing of vacant accommodation.
Conducting background checks on tenants
Carrying out routine checks on the property and to make repairs where necessary.
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Market and Industry Information
The information in this section has been extracted from publicly available documents and publications which have previously been released by various public and private organisations including the Central Bank Nigeria (“CBN”), the Economic Intelligence Unit, the World Bank, the International Monetary Fund, the National Bureau of Statistics, KPMG Research, PWC Research, Detail Solicitors, Knight Frank Africa Report, FACL Research; as well as other financial and economic publications. Neither the Issuer nor its advisers are able to ascertain the omission of any facts, and whether such omission would render any extracted information inaccurate or misleading.
GENERAL
Nigeria is the largest country in Africa, with a population of about 183 million people (2015 estimates) and accounts for 47% of West Africa’s population. Nigeria gained independence on October 1, 1960 and became a federal republic in 1963. It consists of 36 states with its capital as the Federal Capital Territory (“FCT”) Abuja. After many years of military rule, a successful and sustained transition to civilian government was completed under the leadership of President Olusegun Obasanjo in 1999.
Through each successive election thereafter, the Federal Government of Nigeria (“FGN”) has attempted to reconstruct Nigeria’s political institutions, improve its international image, reform the economy, manage its oil wealth in a more sustainable way and diversify the economy beyond the oil industry.
The presidential elections conducted in 2015 was generally reported to be peaceful, free and fair. The election resulted into President Muhammadu Buhari emerging as the president, displacing the incumbent president, Dr. Goodluck Ebele Jonathan.
The Economy
Nigeria, which has the largest economy in Sub-Saharan Africa, is the largest oil producing country in Africa (based on the rebased GDP figures), the 13th largest oil producing country and holds the third largest natural gas reserves in the world. Nigeria recorded an annual Gross Domestic Product (GDP) of $481.07 billion in 2015, which resulted in a ranking of the 24th economy in the world.
In view of the size of the economy, the country’s large reserves of human and natural resources, Nigeria is poised to become a prosperous economy once it increases its investment in infrastructure, education, and provision of quality healthcare services. These activities will attract foreign investment into the country as well as significantly reduce poverty.
The relative stability in the political environment, the increase in economic diversification, privatisation of key sectors by the government are some structural changes that have occurred within the country over the past few years and these changes are expected to continue and foster increased economic growth in the future.
Gross Domestic Product
The Nigerian economy witnessed numerous macroeconomic challenges in 2016 which resulted in the economy falling into a recession by Q2 2016. The challenges were largely attributed to falling crude oil prices and production volumes, scarcity of Forex, rising inflation and the delayed implementation of the 2016 Budget by the Federal Government.
Nigeria’s exports are dominated by petroleum products which account for 95% of the country’s foreign exchange earnings. The falling global oil prices contributed to the decline in the GDP growth rates during the year. The fall in real growth rates of economic activity were experienced in both the oil and non-oil sectors.
The GDP growth rate fell to 2.24% in Q3, 2016, from -2.06% in Q2, 2016 and -0.36% recorded in Q1 2016. This was lower by 1.70% points from the preceding quarter, and by 4.41% points from the growth rate of 2.35% recorded in Q2 2015. This officially confirmed that the economy was in a recession.
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Market and Industry Information
GDP Growth Rate 10
8
6
4 % 2
0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
-2 2014 2015 2016
Source: FACL Research, NBS
-4
Apart from the decreasing volume of production and decline in price of crude oil, other factors responsible for this huge fall in GDP figures include the late implementation of 2016 budget which reduced government’s spending at the time, lopsided supply of foreign exchange (which significantly increased cost of manufacturing), increasing cost-push inflation rates and declining external reserves, bearing in mind that Nigeria is an import dependent country, importing a considerable amount of goods through both formal and informal channels.
The GDP growth rate has been forecasted to decline further by 1.7% in Q4 2016, given the continued slide in the production of crude as a result of continued sabotage to oil installations across the country and worsening economic situation from foreign exchange scarcity. The government however plans to stimulate the country through expansionary fiscal and monetary policies.
Oil & Gas
Crude Oil production also witnessed considerable reduction over the years, largely due to the activities of
the militants, oil theft and pipeline vandalism. Production averaged 2.47mbpd in 2010, 2.38mbpd in 2011, 2.32mbpd in 2012, 2.39mbpd in 2013, 2.42mbpd in 2014 and 2.317mbpd in 2015.
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Market and Industry Information
In the same vein, oil prices declined from $102.05 per barrel in October 2013 to $51.38 in December 2016, representing about 50% fall over the three-year period. However, since its year low of $29.42 recorded in January 2016, the price has been on a relatively upward trend.
Source: FACL Research, Trading Economics
The oil and gas sector is a major driver of Foreign Direct Investment (“FDI”) into Nigeria. FDI generation had slowed down considerably in recent years, owing to the plummeting volume of oil production which had declined from 1.812mbpd in October 2015 to 1.456mbbd in October 2016, uncertainties in the sector particularly in relation to the passage of the Petroleum Industry Bill (PIB), current macroeconomic uncertainty, as well as continuing insecurity within the country.
External Reserves
Due to the mono cultural nature of the Nigerian economy, the external sector, like in most other oil producing economies has been under severe pressure and this is reflected in the decline in external reserves, capital withdrawals by portfolio investors and a lower trade balance
In addition to the declining revenues from oil, the country has also recorded a decline in foreign direct investment arising from lack of favorable fundamentals and the uncertainty trailing the valuation of the naira. All of this has contributed to the decline in external reserves by 33% from $32.92billion in 2011, to $24.74billion as at September 2016.
Annual Foreign Reserves
50 43.83 43.63
40 32.92 34.47 29.06 30 24.74
20 US$ billion US$ 10 Source: CBN, FACL Research 0 2011 2012 2013 2014 2015 Sep-16
Source: CBN, FACL Research
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Market and Industry Information
Inflation In line with the challenges and pressures witnessed in the economy, there has been a persistent rise in inflation, reflecting a continuing rise in prices of goods and services. The year-on-year headline inflation, which was 8.0% in 2014 rose steadily to 9.55% during the year 2015. By Q1 2016, inflation had increased to double digits of 13.7% and had soared to 18.3% by October 2016, owing to the continuing adverse macroeconomic condition in the country.
Source: CBN, FACL Research Source: CBN, FACL Research
Exchange Rate In response to dwindling receipts from oil export and continued scarcity of foreign exchange, the Central Bank of Nigeria (CBN) in June 2016, introduced the Flexible FX Regime in Nigeria, aimed at attracting international investors into the economy and improve liquidity in the Forex market. However, the flexible regime continues to face various challenges and has not fully achieved its aim of improving forex scarcity, improving the valuation of the Naira and attracting foreign investors. The average naira exchange rate remained relatively stable at the inter-bank market, but significantly volatile in the parallel markets.
The interbank exchange rate which opened at an average of N181.78/US$1 in January 2015 and closed at an average of N199.98/US$1 in December 2015, traded at N305/ US$1 in September 2016. At the parallel market, the exchange rate opened at N196.13/US$1 in January 2015, closed at N258.30 and traded at N475/ US$1 in September 30, 2016 which indicates about 45% gap from N305/ US$ at the interbank exchange.
Monthly Average Exchange Rates of NGN/USD 500.00
450.00
400.00
350.00
300.00
250.00
200.00
150.00
100.00
July
May
April
June
March
August
January
October October
February
November December Interbank Parallel Market September
Source: CBN, FACL Research
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Market and Industry Information
Monetary Policies
In a bid to moderate the effects of the drop in revenues and external reserves and spur growth in the real sector, in November 2015, the MPC reduced the Monetary Policy Rate (MPR) by 200 basis points from 13% to 11% while the Cash Reserve Ratio (CRR) on private and public sector deposits was reduced from 25% to 20%.
In 2015 also, the Central Bank of Nigeria (CBN) effected the implementation of the Treasury Single Account (TSA); which was aimed at consolidating all in flows from all the ministries, departments and agencies (MDAs) in the country into a single account at the CBN.
This action significantly reduced the liquidity within the economy. Also, to ease up liquidity pressures on the States, federal government authorized the conversion of State Government loans held by commercial banks into bonds.
Bothered with market expectations of the impact of the floated Naira and/or policy easing at the interbank market, the MPC meeting held in July 2016, unanimously voted to increase the MPR by 200bps from 12% to 14% while retaining the CRR at 22.5% with the asymmetrical corridor of +200/-500 bps around the MPR and the Liquidity ratio at 30% in a bid to boost financial activities in the economy.
Also, in its September 2016 meeting, the MPC maintained status quo on all monetary policy rates. This position was to stabilize the economy, ease inflation growth and stimulate real sector lending and encourage Monetary and Fiscal policies convergence.
Fixed Income Markets
In view of the severe economic situation and poor outlook, investors at the short end of the market, flew to safety in the fixed income market. This was evidenced by increased transaction turnover in the Fixed income markets in April 2016. The market turnover increased by 9.907% from N8.58trillion to N9.43trillion.
Average yield on treasury bills increased by 1.24% between the start of the year and the end of February and closed at 18.89% on October 10, 2016, while average NIBOR increased to 18.30% in October 2016, relative to 14.16% in December 2015, representing a 29% increase. In the Bond market also, average yields across tenors have been on an increase in 2016 averaging 16.01% on October 10, 2016.
Rising yields in this market reflects investors’ risk-off sentiment given the Naira’s continued depreciation and the increasing poor performance of stocks in the equities’ market. In view of this, domestic demand for government securities is likely to remain strong due to high real returns supported by the tight monetary policy.
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Market and Industry Information
Economic Outlook
The present administration is taking crucial steps to revive the economy in view of the global decline in oil prices by reducing the nation’s budget as well as adopting and implementing a number of reforms designed to make her one of the largest economies in the world. The reforms are aimed at a number of areas, primarily diversifying the economy away from dependence on oil by addressing infrastructure and related issues, in a bid to create a more favourable environment for the rejuvenation and growth of the non-oil sectors of the economy.
Years prior to 2015, the Nigerian economy was largely supported by the non-oil sector as supply disruptions hampered oil output. In 2015 however, various factors weighted on both oil and non-oil output, causing the entire economy to take a hit. Growth in 2016 is expected to be tepid at best. The declines in prices of crude oil and related refined products give the Nigerian government the opportunity for some potential savings as subsidies payments on PMS and other refined products may be diverted into more productive aspects of the economy. As it stands there are no subsidies on PMS and this should bode well for government coffers going forward. The government has also taken steps to repeal subsidies on Kerosene products.
The FGN has renewed its commitment to foster agricultural practices as well as revive the solid minerals sector by investing in technical development, encouraging private sector participation and supporting small and medium scale businesses within the economy. These developments would ultimately increase total exports.
In the near term, support to the non-oil sector is expected to come through initiatives by the Central Bank of Nigeria and the Government at Federal and State levels. One of such initiatives is the N300bn export stimulation fund by the CBN. Increased efforts by State governments to boost internally-generated revenue, when combined with more prudent and targeted infrastructure spending, is likely to lead to better output performance.
In particular, plans by the government authorities to increase power supply by developing critical infrastructure to transport gas to the power plants in order to add 2,000 MW to the country's stock of power within the next few months will have multiple effects on both the manufacturing and services sectors.
Speculative pressure on the Naira is likely to exist in 2017 in light of the current state of foreign reserves and inflation may continue to rise in the short term. While administrative measures will help provide some cover, the downside risk of such measures is that by making imported goods more difficult to obtain, they increase the price of such goods, leading to higher inflation. We expect that the Central Bank’s adjustment of the foreign exchange management framework will be steady in the year and will thus mean a gradual easing in prices beyond 2017.
Other measures expected to spur growth include fiscal measures such as the implementation of the Treasury Single Account (TSA), improvements in tax collection efforts and the creation of an Efficiency unit in the Federal Ministry of Finance to ensure that scare resources are adequately deployed.
The revival of the refineries is another important step taken by the government to improve the outlook of the economy.
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Market and Industry Information
The Real Estate Market
A recent study by Standard Bank indicated that by 2030 the number of middle-class households across the 11 fastest-growing countries in Africa will have increased to 40 million from today’s 15 million households. Many of the largest cities in Africa are growing rapidly. Nairobi, Kinshasa and Dar es Salaam, for example, are expected to see population growth of over 70% by 2025. Nigeria alone will add 7.6 million middle-class households. On a scale of urban population and GDP growth, Nigeria is far ahead of the rest.
The change in demographics and increasing urbanisation create significant infrastructure needs and funding requirements. It is estimated that there is a shortfall of 17 million housing units in Nigeria alone, with a funding requirement of US$363 billion. The significant investment shortfall creates opportunities for investors in the long run.
The Nigerian Real Estate Sector has recorded steady and consistent growth over the last four years becoming one of the greatest contributors to the Nation’s rebased GDP from the non-oil sector - having contributed 8.03% in 2013, 11% in 2014, 9.40% in 2015 and 8.64% as at Q2 2016. The market which is currently valued at approximately N6.5 Trillion is estimated to grow at an average of 10% over the next few years. The major growth drivers in the sector have been credited to: an increased inflow of foreign investment (especially from South Africa, MEA and the United States); increased institutional investment from local companies including PFAs and Mutual Funds; the growing population of High Net Worth Individuals; and the targeted intervention of the Federal Government in the housing finance sector.
The Retail Real Estate Market
Africa’s retail market is fast developing. This is supported by Africa’s buying strength, which is expected to increase from US$860 million in 2008 to US$1.4 trillion by 2020. Significant construction activities in respect of shopping malls are underway in Africa – in Nigeria there are currently over ten under construction.
Nigeria offers huge potential, where a substantial population and a fast-growing economy and middle class are creating significant demand for retail options. Most of the demand is seen in metropolitan areas where retail space is currently undersupplied.
The majority of Retail real estate in Nigeria are mostly open air markets and “lock up” shops built and managed by the local governments. These markets are a great source of revenue to the governments. The more organized retail companies especially “white goods” and electronics retailers usually build and maintain their own trading stores. The value of the real estate investment is not explicitly captured.
Organized retailers prefer to lease space and deploy their capital into inventory. Malls, are the preferred location as the mix of retailers generates “foot traffic”. Investment in malls requires large patient capital and has been dominated by large speciality funds (mostly foreign). Retail real estate investments be it individual shop ownership or mall’s has proven to be recession proof, safe and delivers superior returns.
As a result of the proliferation of modern trading stores in various locations, the country has seen the growth of local brands into national retail chains. (ex. Medplus, HealthPlus and Park N Shop). White goods wholesalers have also begun to build out distribution networks to better serve their clients amid growing competition.
Actis pioneered modern shopping mall development in Nigeria, building the Palms Mall in Lagos in partnership with the Persianas Group, and Ikeja City Mall. There is still considerable room for further development. UACN has entered the retail mall sector with the development of Festival Mall and Victoria Mall Plaza. Abuja has also begun to see increased mall construction, most notably the 30,000 sqm Jabi Lake Mall. Other malls have been developed in different parts of the country as shown below;
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Market and Industry Information
Mall Lettable Area Location Operations Stakeholders (SQM) Commencement Date
Palms Shopping 19,520 Lagos 2005 Persianas Group (Nigeria) Mall Ceddi Plaza 10,000 Abuja 2004 Ceddi Corporation (Nigeria) Silverbird 23,000 Abuja 2009 Silverbird Group Entertainment Centre
Adeniran 15,000 Lagos 2010 Top Services Limited Ogunsanya Mall Ikeja City Mall 22,000 Lagos 2011 Gruppo Investment (Nigeria) Polo Park Mall 22,530 Enugu 2011 Persianas Group and Enugu State (PPP) Kwara Mall 12,000 Ilorin 2012 Persianas Group and Kwara State (PPP) Cocoa Mall 8,500 Ibadan 2013 Top Services Limited Ado Bayero Mall 23,000 Kano 2014 Alpine Investment (Nigeria)
Ibadan Mall 18,500 Ibadan 2014 Persianas Group and Oyo State (PPP) Port Harcourt Mall 16,000 Port Harcourt 2014 Artee Group (Nigeria) Apapa Mall 10,000 Lagos 2014 Top Services Limited Delta City Mall 13,980 Effurun 2015 Resilient Africa (South Africa) Jabi Lake Mall 26,478 Abuja 2015 Actis/Duval (UK/Nigeria) Akure Mall 10,000 Akure 2015 Top Services Limited Festival Mall 10,900 Lagos 2015 UAC property Nigeria Circle Mall 10,539 Lagos 2016 RMB Westport (South Africa) Owerri Mall 12,100 Owerri 2016 Resilient Africa (South Africa) Palms Shopping 40,000 Lagos Under Construction Persianas Group (Nigeria) Mall Capital Mall 21,500 Abuja Under Construction Churchgate Group (Nigeria) Lekki Pennisula 22,000 Lagos Under Construction Novare Private Partners Mall Benin City Mall 13,980 Benin Under Construction Resilient Africa (South Africa) Abia Mall 11,000 Abia Under Construction Abia Retail Company
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Market and Industry Information
The Opportunity
Retail related Real Estate has not been an investment available to small or non-institutional investors. While the returns have been impressive, the investment size, tenor and private nature of these transactions has left it to a select few investors.
Investments in retail related Real Estate has proven itself to be a strong performer with steady cash flows across strong and weak economic periods. The “neighbourhood malls” in particular, like the markets of old have consistently held their value, operated at close to full capacity and suffered very low rates of non- payment.
The opportunity on offer is to participate in this strong and time tested investment that has been unavailable to most investors until now.
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Statutory and General Information
A. Extract from the Trust Deed
2. APPOINTMENT OF TRUSTEE The Fund Manager hereby appoints ARM Trustees Limited as trustee for the REIT to act on behalf of the Unit Holders, to hold the benefit of the covenants and other obligations on the part of the Fund Manager herein contained on behalf of the Unit Holders and itself (according to its and their respective interests) in accordance with the terms of this Deed. The Trustee hereby agrees to act as trustee for the benefit of the Unit Holders on the terms and conditions contained in this Trust Deed.
3. DECLARATION OF TRUST 3.1 The Trustee hereby declares itself as Trustee for the Unit Holders with effect from the date of this Deed to hold the benefit of the covenants and other obligations on the part of the Fund Manager herein contained in trust for the Unit Holders, and itself according to their respective interests, subject to the terms of this Deed, the Prospectus, the SEC Rules and Regulations, and the conditions which may be imposed by the Commission from time to time. 3.2 The trust created by this Deed shall remain in full force and effect until the date on which the Fund Manager receives unconditional release in writing from the Trustee from all of its obligations under this Deed.
4. PURPOSE 4.1 Subject to the costs of the issue of the Units, the Offer proceeds shall be applied exclusively towards purchasing the Trust Properties and liquid assets.
5. INVESTMENT OBJECTIVE OF THE TRUST The objective of the Trust is to achieve a long-term appreciation of its assets and maximize returns on capital employed. The Fund Manager shall seek to maintain a balance between realized income and capital growth to ensure regular distribution payments and continuous appreciation in asset values while ensuring optimal safety of assets and adequate liquidity to meet the Trust’s obligation as they fall due.
6. INVESTMENT POLICY 6.1 To achieve the objectives of the Trust, the Fund Manager shall adopt and maintain an investment policy that is designed to ensure a steady return on capital and assured capital gains. Subject to the terms and conditions hereinafter contained and in accordance with the regulatory framework of the Commission and within the context of the Nigerian legal system, the Trust’s investment policy shall be to build up a balanced and diversified portfolio of Authorized Investments. 6.2 The investment outlets through which this policy will be achieved shall be structured as follows: Investment of a minimum of 90% in real estate assets and a maximum of 10% in liquid assets. 6.3 Investment Committee 6.3.1 The Fund Manager shall constitute an Investment Committee for the Trust for the purpose of ensuring compliance with the investment policy of the Trust. 6.3.2 The Investment Committee shall be made up of a representative of the Trustee and two representatives of the Fund Manager, one representative of the Sponsor and at least one independent member who shall be independent of any of the parties to the REIT. 6.3.3 The Chairman of the Investment Committee shall be appointed at the first meeting of the Committee and he shall not chair any other committee of the Trust. At least three members of the Committee, including an independent member, shall have a background in the business of financial advisory services/investments. 6.3.4 The Investment Committee shall set appropriate policies, review and assess processes and controls, which would include but not be limited to tenure of
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committee members, permitted investment etc to guide investment proposals by the Fund Manager. The powers of the Committee shall include but not be limited to; 6.3.4.1 Reviewing the investment, or reinvestment options of the Trust; 6.3.4.2 Considering and if deemed necessary, taking action to buy or sell any of the REIT’s assets; 6.3.4.3 Taking decisions on cash allocation for investment purposes; 6.3.4.4 Overseeing the performance of the Fund Manager and the investment performance of the Trust’s assets and investments, 6.3.4.5 Approving and or ratifying investment decisions of the Fund Manager; and 6.3.4.6 Considering and subsequently reporting and making recommendations to the Fund Manager on matters pertinent to the investment of funds, the receipt of income, incurring of expenses and the management of the REIT. 6.3.5 The Investment Committee shall be entitled to receive quarterly reports from the Fund Manager on matters that may impact on the Trust and the assets contained within the investment portfolio.
7. INVESTMENT PROHIBITIONS 7.1 The Trustee, and any Affiliate of the Trustee, shall not deal as principal in the sale of any asset that forms part of the Held Assets. 7.2 The Fund Manager and any company which is an Affiliate of the Fund Manager shall not: 7.2.1 deal in nor retain any assets or underlying securities of any company in which any of its individual officers are the beneficial owners each of more than 0.5% or collectively of more than 5 % of the securities of such company; 7.2.2 invest any part of the Held Assets in any investment scheme to which the Fund Manager or a subsidiary or holding company of the Fund Manager acts as manager thereof; 7.2.3 deal in or invest in its in-house, trustees or other associations’ instruments; 7.2.4 carry out transactions that expose any part of the Held Assets to unlimited liabilities or results in the Held Assets being encumbered in any way; and 7.2.5 invest in any assets or securities that are not freely transferable. 7.3 The powers of the Fund Manager in relation to the investment and management of the Held Assets shall be subject to the consent of the Trustee in writing.
8. RISK FACTORS 8.1 The Fund Manager shall exercise all necessary duty of care and take all precautionary steps in investing the Trust’s money although it does not guarantee that such objective of the Trust will be attained. 8.2 To provide fundamental information to the market which is necessary to assess the Fund’s risks adequately, the Trust shall be rated biennially by a Rating Agency appointed by the Fund Manager subject to the consent of the Trustee, and no such rating agency appointed by the Trustee shall be removed by the Fund Manager without the written consent of the Trustee. 8.3 The Rating Agency appointed by the Fund Manager subject to the consent of the Trustee and pursuant to this clause shall not be related to, or be an Affiliate of, the Fund Manager, the Sponsor or the Trustee.
9. TAXATION The income accruing to the Trust may be subject to income tax. Tax on dividend incomes earned by the Trust shall be subject to withholding tax at source. Such incomes shall be treated as franked investment incomes and shall not suffer further tax as the withholding tax, in line with the law, is deemed final.
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10. CONSTITUTION OF THE TRUST The Trust shall be constituted as a Real Estate Investment Trust domiciled in Nigeria and shall be denominated in Nigerian Naira. The net proceeds of the Offer when received shall be paid into a Subscription Account to be maintained with the Account Bank in the name of the Trustee/Fund and shall, with all other property and assets of the Trust, at all times be vested in the Trustee and shall constitute the Trust in the first instance.
11. ISSUE OF UNITS AND SUBSCRIPTION 11.1 The Fund Manager shall issue 20,000,000 Units by way of a public offering to potential investors at N1,000 per Unit; Provided that in the event of an oversubscription, the Fund Manager may, subject to the approval of the SEC, allot additional units in any case not exceeding 15% of the Offer size to investors. 11.2 The minimum investment that one or joint Unit Holder(s) may make in the Trust is N1,000,000.00 representing 1,000 Units of the Trust at a par price of N1,000 per Unit. Thereafter, additional Units in the Trust shall be issued in multiples of 500Units and shall be subscribed for in those multiples. 11.3 The Units offered under the Offer shall be payable at par in full upon application by prospective investors and the Sponsor shall subscribe to up to 30% of the Offer. 11.4 Subject to the approval of the Commission and the Trustees, the Fund Manager may make subsequent offers of Units in the Trust to the public of such number and of such value as the Fund Manager may from time to time determine; PROVIDED THAT any new Units so issued, shall rank pari passu in all respects with the Units issued pursuant to this Trust Deed and shall represent an undivided part of the Held Assets.
13. VESTING OF THE ASSETS OF THE TRUST IN THE TRUSTEE The Trustee shall stand possessed of the Held Assets upon trust for the Unit Holders. The Held Assets shall be possessed as a single common Trust and no unit shall confer any interest or share in any particular part of the Trust.
14. CUSTODY OF TITLE DOCUMENTS All the instruments relating to the Trust Properties and all documents of title or value connected therewith received by the Trustee or its nominees or such agents appointed by it shall be deposited with the Custodian and the Custodian shall be responsible for the safe custody of such part of the instruments as may be within their or their nominees’ or agents’ control.
15. MANAGEMENT OF THE TRUST 15.1 The effective control over the affairs of Trust is vested in and will be exercised independently by the Trustee on behalf of the Unit Holders. 15.2 The Fund Manager shall obtain the prior consent of the Trustee and where applicable the consent of the Investment Committee before finalizing any investment it wishes to make in respect of the Trust Properties. 15.3 There shall be appointed a Custodian to provide custodial services to the Trust in relation to the Held Assets and subject to the conditions contained in the Custodial Agreement, such appointment being conditional upon the issue of the Units and taking effect upon and from the Closing Date. 15.4 The Custodian, on the instructions of the Fund Manager, shall open and maintain the Permitted Accounts with the Account Banks. 15.5 All Trust expenses including the annual management fee shall not exceed 5% of the Net Asset Value of the Trust.
16. INVESTMENT OF THE HELD ASSETS 16.1 All property including cash, which ought to, in accordance with the provisions of this Deed form part of the Held Assets shall forthwith after receipt by the Fund Manager be vested in the Trust. Monies forming part of the Held Assets shall be invested in Authorized Investments at the discretion of the Fund Manager but after consultation with the Trustee and upon recommendation of the Investment Committee or shall be retained in cash or placed
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on deposit or in short- term Authorized Investments and shall not exceed 10% of the Held Assets 16.2 It shall not be necessary for either the Fund Manager or the Trustee to effect or cause to be effected changes of investment by reason of any appreciation in the value of or the aggregate of the values of any investments or any depreciation in the value or the aggregate of the values of any investments causing the limits imposed by this Deed to be exceeded. 16.3 If and so long as the said limits shall be exceeded, the Fund Manager shall not make any additional investments which would result in any of the said limits being exceeded further and if at any time when any of the said limits shall be exceeded, the Fund Manager determines to sell any investments for the purpose of a reduction of the Trust it shall before selling any other investments sell so much of the investment or investments in respect of which any of the said limits is exceeded as is necessary to effect the reduction; PROVIDED THAT if the Fund Manager is satisfied and the Trustee agrees that the sale of such investment or investments at that time would be against the interest of Unit Holders such investment or investments need not be sold until such time as would benefit the Unit Holders. For the purpose of this clause the word “value” when applied to quoted securities shall mean in relation to quoted investments, the value calculated by reference to the Exchange’s current offered price of an investment or investments. 16.4 All documents required to effect investments or realization of investments made with the Held Assets which shall include but not be limited to deeds of assignment; deeds of lease; certificates of occupancy; deeds of mortgage; share/stock transfer forms; contracts of sale or exchange; and lease or other agreements shall be executed by the Fund Manager on behalf of the Trustee. Such documents and (where appropriate) the evidence issued with regards to the proprietary interest in the investments to which they relate shall also indicate that the Trustee is holding such investments “in trust for the Trust”; PROVIDED THAT the Fund Manager shall be liable for any investments or realizations executed without the prior approval of the Trustee.
19. REALIZATION OF INVESTMENTS 19.1 Any investment comprised in the Held Assets may at any time be realized at the discretion of the Fund Manager, subject to the approval of the Trustee and/or recommendation of the Investment Committee, either in order to invest the proceeds of such realization in other Authorized Investments or to provide the cash required for the purpose of satisfying obligations contained in this Deed or in order to retain the proceeds in cash or on deposit as aforesaid or partly one and partly another. 19.2 Without prejudice to the foregoing provision, investments comprised in Held Assets and which at any time or for any reason ceased to be Authorized Investments shall be realized by the Fund Manager and the net proceeds of realization shall be applied in accordance with the provisions of this Deed but the Fund Manager may postpone the realization of any such investment for such period as it may determine to be in the interest of the Unit Holders upon consultation with the Trustee and shall be required to immediately realize such investments upon the directive of the Trustee.
21 REGISTRATION OF UNIT HOLDERS 21.1 The Fund Manager shall with the prior consent of the Trustee appoint a Registrar who shall create, maintain and keep on behalf of the Trustee, a Register containing the names of all Unit Holders. 21.2 The Register shall be in such form and be kept in such manner as the Trustee may from time to time direct and shall permit no alteration in its form or conduct without the prior consent in writing of the Trustee, which consent the Trustee shall be entitled to give or to withhold at its absolute discretion. 21.3 The Fund Manager shall procure the compliance by the Registrar with all the requirements, which may be notified to it from time to time by the Trustee as to the form and conduct of the Register.
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21.4 The Fund Manager shall ensure that the Registrar shall at all times at the request of the Trustee, supply to the Trustee all such information and explanations in relation to the Register and the conduct thereof as the Trustee may require. 21.5 The Trustee and the Fund Manager or any authorized persons representing them, shall have access at all reasonable times to the Register and to all subsidiary records and all documents, orders, transfers, cancelled certificates or other papers relating to the conduct of the Register. 21.6 The Trustee, the Fund Manager or any authorized persons representing them shall be entitled to attend the Registrar’s premises at any time with or without previous notice to inspect any documents it may request and to carry out such checks as may seem to it to be necessary. 21.7 The Fund Manager shall procure the Registrar to cause details of the following information to be entered in the Register: 21.7.1 The full names and addresses of all Unit Holders. 21.7.2 The number of units held, their nominal value and the reference number of the certificate issued in respect of them. 21.7.3 The dates the units were purchased or if the units were acquired in a manner other than by direct purchase the date and nature of such acquisition. 21.7.4 Details of any change in the name or address of any Unit Holder. 21.8 Any Unit Holder or his nominee shall be entitled at all reasonable times during business hours and without charge, to inspect the Register; PROVIDED THAT if the Register is kept in accordance with some mechanical or electronic system the provision of this sub-clause will be satisfied by the production of legible evidence of the contents of the Register. 21.9 The Register shall be closed for a maximum period of thirty (30) days in any one calendar year and for such periods as the Trustee may from time to time determine, and Unit Holders shall be entitled to receive at least three weeks’ notification of any intended closure by notices of such intention being published on the Trust’s website and in at least two Nigerian national daily newspapers as the Fund Manager may from time to time determine. 21.10 The Register shall be conclusive evidence as to the persons, respectively entitled to the units represented in the Unit Statements issued thereto and no notice of any trust express, impress, implied or constructive shall be entered upon the Register in respect of any such units, nor shall the Registrar, save as herein otherwise provided and except as ordered by a court of competent jurisdiction or statutorily required, be bound to recognize (even when having notice thereof) any trust or equity affecting the ownership of such units or the rights incidental thereto. 21.11 On the death of any one of joint Unit Holders, the survivor or survivors shall be the only person or persons recognized by the Registrar and the Trustee as having any title to or interest in the units represented in such Unit Statements and upon producing such evidence of death as the Registrar may require he or they shall be entitled to have the Unit Statement replaced with a fresh Unit Statement duly issued in his or their name or names as may be appropriate. 21.12 A body corporate may be registered as a Unit Holder or as one of two or more joint Unit Holders. 21.13 The executors or administrators or successors-in-title of a deceased/dissolved/wound-up Unit Holder (not being one of two or more joint Unit Holders) or of the survivors of joint Unit Holders as the case may be shall be the only person recognized by the Registrar and the Trustee as having any title to or interest in his units. 21.14 Any person becoming entitled to any units in consequence of the death or bankruptcy or dissolution or winding up of any Unit Holder or the survivor of joint Unit Holders shall upon producing such evidence that he is duly authorized to act in the capacity in respect of which he proposes to act under this sub-clause or of his title as the Registrar shall consider sufficient shall be entitled to elect either to be registered as the holder of such units and to have a new Unit Statement issued in his name or to nominate some other person or persons in whose name such new Unit Statement should be issued. 21.15 If the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Registrar a notice in writing in a form to be prescribed by the Registrar signed by him stating that he so elects. If he shall elect to have some other person nominated by him registered, he shall testify his election by executing to such other person an assignment of
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such units. All the provisions of this Deed relating to transfers of units shall be applicable to any such notice or assignment aforesaid as if the death or bankruptcy or dissolution or winding-up of the Unit Holder had not occurred and the notice or assignment was an assignment executed by such Unit Holder. 21.16 A person becoming entitled to units in consequence of the death or bankruptcy or dissolution or winding-up of a Unit Holder or the survivor of joint Unit Holders shall be entitled to receive and may give a discharge for all moneys payable in respect of such units, but he shall not be entitled to the rights of a Unit Holder with regard to the receipt of notices of or attendance or voting at any meetings of Unit Holders until he shall have had his name entered in the Register as a Unit Holder in respect of such units. 21.17 No fee shall be charged in respect of registration of any grant of probate, letters of administration, power of attorney, certificates of marriage or death, orders of court, deeds, resolutions or other documents affecting the transmission or distribution in respect of any units. 21.18 Notwithstanding any other provision of this Deed, the Registrar in keeping the Register shall act solely as agent for the Trustee as required by the foregoing provisions of this clause and the Trustee shall have same responsibility towards Unit Holders as if the Register were kept by it.
22. DUTIES OF THE REGISTRAR 22.1 Notwithstanding anything hereinbefore contained, it shall be the duty of the Registrar to prepare all Unit Statements, cheques, payment instructions, warrants, notices, accounts, summaries, declarations, offers or statements which the Trustee under the provisions herein contained is required to prepare, issue, serve or send as hereby provided, to stamp the same and dispatch them on the day they ought to be dispatched. 22.2 It shall also be the duty of the Registrar to keep and maintain the Register of the Unit Holders in accordance with the provisions of this Deed.
23. ISSUANCE OF UNIT STATEMENTS 24.1 All Units allotted to a Unit Holder shall be delivered in dematerialized (uncertificated) form and held in electronic book-entry form with the CSCS. 24.2 Every Unit Holder shall be entitled to receive a Unit Statement and also to have its CSCS account credited with the number of units bought by such Unit Holder, however, joint Unit Holders shall be entitled to only one Unit Statement in respect of the units held jointly by them. 24.3 Statements issued by the CSCS as to the aggregate number of Units standing to the CSCS account of any person shall be conclusive and binding for all purposes save in the case of manifest error, and such person shall be treated by the Fund Manager, the Trustee and the Registrar as the legal and beneficial owner of such aggregate number of Units for all purposes. The Unit Holders shown in the records of CSCS are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of this Deed. 24.4 Unit Statements shall be issued by the Trustee and the Fund Manager, and the Unit Statements may bear their respective digital seals and the digital signatures of their respective authorized representatives. 24.5 In the event that the Trustee or Fund Manager shall cease to be Trustee or Fund Manager respectively of the Trust or in case any person whose signature shall appear on any Unit Statement shall die or shall cease to be an official so authorized after the said Unit Statement shall have been issued, but before it is received by the Unit Holder to whom it was issued, such certificate shall be as valid and binding as though the Trustee or Fund Manager had continued to be the Trustee or Fund Manager or the person whose signature so appeared had lived or continued to be an official so authorized up to the date of the Unit Holder’s receipt of such certificate. 24.6 A certificate issued under this Trust, shall bear a serial number and specify the amount of units represented thereby and shall be in the form set out in the Third Schedule hereto or in such other form as the Trustee and Fund Manager may agree.
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24.7 A Unit Holder shall be entitled to replace his Unit Statement with another representing in the aggregate a like number of units of the same type; PROVIDED THAT Unit Statements shall only be issued in respect of such minimum number of units as may for the time being generally or otherwise be prescribed in writing by the Fund Manager with the approval of the Trustee.
26 TRANSFER OF UNITS 26.1 Where a Unit Holder intends to transfer all or any part of his units, such transfer will be effected on the automated trading system of the NSE and settled in accordance with the CSCS Rules. 26.2 Where a Unit Holder intends to transfer all or any part of his units, such transfer will be effected on the automated trading system of the NSE and settled in accordance with the CSCS Rules. 26.3 The transferee shall not be deemed by the Trustee and the Fund Manager to be entitled to the Units intended to be transferred by any such transfer as aforesaid until such time as the name of the transferee is entered in the Register in respect thereof. 26.4 No transfer or purported transfer of a Unit other than a transfer made in accordance with this clause shall entitle the transferee to be registered in respect thereof, and neither shall any notice of such transfer or purported transfer (other than as aforesaid) be entered upon the Register.
27. DEALINGS ON BEHALF OF UNIT HOLDERS Notwithstanding anything herein contained, neither the Trustee nor the Fund Manager, nor any other party shall be required or obliged to effect any transaction or dealing with any part of the investments or of the Held Assets on behalf of or for the benefit of or at the request of any Unit Holder or joint Unit Holders unless such Unit Holder or joint Unit Holders shall first have paid in cash to the Trustee or the Fund Manager or to any such party or otherwise provided to their or its satisfaction as the case may be for all duties and charges, and any necessary stamp duty which may have become or may be payable in respect of or prior to or upon the occasion of such transaction or dealing, PROVIDED ALWAYS THAT the Trustee or the Fund Manager or such other party shall be entitled if it or they (as the case may be) so think fit, to pay and discharge all or any of such duties, charges or stamp duty on behalf of the Unit Holder, and to retain the amount so paid out of any moneys or property to which such Unit Holder may be or become entitled in respect of his Units or otherwise howsoever hereunder.
28. FEES AND CHARGES 28.1 The Trust shall bear the following fees and expenses; 28.1.1 The Fund Manager’s Fee Management Fee A quarterly management fee of 0.25% of the Net Asset Value of the Trust payable in arrears and (ii) an incentive fee which shall not exceed 10% of the total returns in excess of 10% of the Net Asset Value of the Trust payable per annum;
Incentive Fee Subject to Trustee’s approval, the Fund Manager shall be entitled to, annually in arrears, commencing from the second anniversary of the Trust and not exceeding 10 % of total returns in excess of 10% of the Net Asset Value of the Trust per annum.
28.1.2 Trustee’s Fee Annual fee amounting to 0.050% of the Net Asset Value of the Trust, payable to the Trustee.
28.1.3 Registrar’s Fee An annual fee of N500,000 payable to the Registrar
28.1.4 Custodian’s Fees An annual fee of 0.075% of the Net Asset Value of the Trust payable to the Custodian.
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28.1.5 Property Manager’s Fees An annual fee of N1,000,000 payable to the property manager
28.1.6 Rating Agency Fees The sum of N3,000,000.00 payable every 2 years to the rating agency
28.1.7 Insurer Fees An annual fee of 0.10% of the value of the properties to the insurer
28.1.8 Estate Valuer Fees The sum of N4,000,000 payable upon valuation every 2 years
28.1.9 Auditor’s Fees The sum N5,000,000 payable annually to the Auditor.
28.1.10 Miscellaneous Expenses The initial costs of establishing the Trust, estimated at N411,534,375.00 will be offset from the proceeds of the Offer.
29. APPOINTMENT OF AUDITORS 29.1 The Fund Manager shall with the consent of the Trustee appoint the Auditors. The Auditor so appointed must be a person who is qualified for appointment as an auditor of a company under Section 358 of CAMA and Section 184 of ISA. 29.2 In addition to the provisions of sub-Clause 29.1 of this clause, none of the following persons shall be qualified for appointment as Auditor: 29.2.1 An officer or servant of the Fund Manager. 29.2.2 A person who is a partner of or in the employment of an officer or servant of the Fund Manager. 29.3 Notwithstanding any agreement between the Fund Manager and the Auditor, the Unit Holders may by an ordinary resolution remove the Auditor appointed by the Fund Manager before the expiration of its term of appointment. 29.4 Upon the removal of the Auditor by the Unit Holders in accordance with the terms of this clause, the Fund Manager in consultation with the Trustee shall, within 7 days appoint another suitably qualified Auditor to replace the one so removed. 29.5 Where an Auditor is removed and replaced, the Fund Manager shall within fourteen (14) days of such removal give formal notice of the removal and replacement in the prescribed form to the Commission.
31. REPORTS AND RETURNS 31.1 The Fund Manager shall provide specified information on the Trust at least once in every Financial Year to all Unit Holders which information shall be included in the copy of the annual accounts of the Trust which may be circulated electronically to Unit Holders not later than 4 months (or such extended period not exceeding a further period of three months as the Commission may in exceptional circumstances allow), after the end of the period to which they relate. The specified information shall include such information as the Fund Manager shall in consultation with the Trustee, Investment Committee and upon the advice of the Auditors deem appropriate to report on. 31.2 The Fund Manager shall also make such periodic returns to the Commission as may be specified by the Commission from time to time.
36. ADMINISTRATION OF THE TRUST 36.1 The Fund Manager shall be responsible for the payment out of the Trust of all expenses incurred or to be met from time to time in connection with the management or trusteeship of the Trust including but not limited to the Management fee, Offer expenses, Trustee’s fees and expenses, the Registrar’s fees and expenses, Rating Agency fees, Property Manager’s
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fees, Auditor’s fees, Custodian’s fees, Insurance Premium and all such other reasonable expenses to be incurred by or on behalf of the Trust; PROVIDED THAT all the fund’s expenses including the annual management fee in any given year shall not exceed 5% of the Net Asset Value of the Trust. 36.2 All or any of such expenses shall be payable out of the Held Assets, and the Fund Manager shall where it deems it necessary request that the Custodian make provision therefore by depositing and keeping deposited in the name of the Trustee in a fund (in this Deed referred to as the Administration Fund) of such amount as shall in the opinion of the Fund Manager in consultation with the Trustee and the Custodian be from time to time adequate (having regard to any other provisions which may from time to time be made for securing the same) out of the capital and income thereof and to provide for all such expenses during the continuance of the Trust. 36.3 The Administration Fund shall be held by the Trustee in agreement with the Fund Manager and the Custodian upon trust out of the capital and income of the Trust, to pay all such expenses if and so far as the same are not duly paid or provided by the Fund Manager. 36.4 If at any time owing to the growth of the Trust or for any other reason the Trustee shall form the opinion and shall notify the Fund Manager and the Custodian that the Administration Fund for the time being is not adequate as aforesaid, then the Fund Manager and the Custodian shall forthwith deposit with the Trustee by way of addition to the Administration Fund such amount as shall in the opinion of the Trustee and the Fund Manager be required to render the same adequate. 36.5 Subject as aforesaid, the Administration Fund shall be held by the Trustee upon and subject to such trusts and provisions (including provisions as to the manner of investment thereof and for periodical and other payments to be made therefrom to the Fund Manager) as may be agreed between the Trustee and the Fund Manager being trusts and provisions not inconsistent with the maintenance of the Administration Fund at an amount adequate as aforesaid. 36.6 Except for charges or fees expressly authorized by this Deed, the Trustee and the Fund Manager shall not make any further charge against the Unit Holders or against the Held Assets or against any Distribution, for their services or for their administrative expenses hereunder save with the approval of the Commission.
38. REMOVAL, RESIGNATION AND RETIREMENT OF FUND MANAGER 38.1 The Trustee shall in consultation with and with the approval of the Commission remove the Fund Manager upon the occurrence of any one or more of the following events: 38.1.1 Its certificate of registration as a capital market operator is withdrawn or revoked by the Commission; 38.1.2 It is in the process of going into liquidation other than a voluntary liquidation for the purpose of amalgamation or reconstruction on terms previously approved in writing by the Trustee or if a Receiver is appointed to take charge of the affairs and undertaking of the Fund Manager or any part thereof; 38.1.3 There has been a consistent breach of the terms of the Trust by the Fund Manager as provided in Clause 37 above. 38.2 The Unit Holders should pass a valid extraordinary resolution approving the removal of the Fund Manager. 38.3 The Fund Manager’s voluntary resignation; PROVIDED THAT the Fund Manager shall not be permitted to so resign save upon the appointment of a new Fund Manager. 38.4 On the happening of any of the events stated in this clause, the Trustee shall, subject to the provisions of the ISA appoint, with the approval of the Commission, some other body corporate to be Fund Manager hereof, and the Trustee shall inform the Commission of the suitability of the Fund Manager after satisfying itself that the new Fund Manager has sufficient capacity and expertise to manage the Trust. 38.5 Following the appointment of a new Fund Manager, it shall enter into such deed or deeds as shall be deemed necessary to ensure its due performance of all the duties and obligations required of it during the remainder of the Trust period.
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39. REMOVAL, RESIGNATION AND RETIREMENT OF TRUSTEE 39.1 The Fund Manager shall with the approval of the Commission remove the Trustee if: 39.1.1 Its certificate of registration as a capital market operator is withdrawn or revoked by the Commission. 39.1.2 It is in the process of going into liquidation other than a voluntary liquidation for the purpose of amalgamation or reconstruction on terms previously approved in writing by the Fund Manager, or if a Receiver is appointed to take charge of the affairs and undertaking of the Trustee or any part thereof. 39.1.3 If the Unit Holders should pass a valid Extraordinary Resolution approving its removal as Trustee. 39.1.4 The Trustee’s voluntarily resigns; PROVIDED THAT the Trustee shall not be permitted to so resign save upon the appointment of a new Trustee within three (3) months of the notice. 39.2 On the happening of any of the events stated in this clause, the Fund Manager shall subject to the provisions of the ISA appoint with the approval of the Commission some other body corporate to be the Trustee hereof and the Fund Manager shall inform the Commission of the suitability of the new Trustee after satisfying itself that the new Trustee has a valid registration with the Commission and has at least ten (10) years’ experience in Trusteeship. 39.3 Following the appointment of a new Trustee, it shall enter into such deed or deeds as shall be deemed necessary to ensure its due performance of all the duties and obligations required of it during the remainder of the Trust period.
41. DISTRIBUTIONS 41.1 The amount available for distribution in respect of any Distribution Period shall be, subject as hereinafter provided, a sum equal to 97.5% of the aggregate of:- 41.1.1 the Net Income Proceeds received by the Trust in Cash during the Distribution Period; 41.1.2 the amount (if any) recovered or estimated by the Fund Manager and the Auditors to be receivable by the Trust in respect of relief from tax and double tax on Income Proceeds, less a sum equal to the aggregate of the amount of expenses paid or estimated by the Trustee to be payable out of the Held Assets and which in the opinion of the Fund Manager and the Trustee after consulting the Auditors are properly chargeable against Income Proceeds; excluding 41.1.3 the amount (if any) paid or estimated by the Fund Manager and Auditors to be payable by the Trust in respect of Tax on Income Proceeds other than tax already deducted in determining the amount of the Net Income Proceeds. 41.2 On the fifth month of every year (or such other dates as may be fixed in a manner hereinafter provided), until the final Distribution made pursuant to Clause 41.3 hereof, there shall be distributed to all Unit Holders whose names are entered in the Register as at the commencement of business on the day immediately preceding Post-Distribution Date in proportion to the number of Units then held by them, the proportion available for distribution in respect of the Distribution Period commencing immediately after to the said Post- Distribution Date. 41.3 As at each Post-Distribution Date, the amount of cash required to effect such distribution shall be transferred from the Held Assets to the Distribution Account. 41.4 The Registrar shall when making every allocation, issue to each Unit Holder or in the case of joint holders, to that one who is first named on the Register, a statement in a form acceptable to the inland revenue authorities showing what part of the amount allocated in respect of the Distribution Period represents income and the amount of withholding tax (if any) which has been deducted and containing a declaration to the effect that all withholding tax payable in respect of such part has been deducted and either had been or will be paid.
42. TERMINATION OF TRUST 42.1 The Trusts hereby created may be terminated on the happening of all or any of the following events:
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42.1.1 If the Trustee is advised in writing by the Fund Manager that it reasonably believes, having had due regard to the prevailing circumstances and the purposes for which the Trust was established, that the investment objective of the scheme can no longer be reasonably achieved; 42.1.2 If any law is passed or regulations or decision of a court of competent jurisdiction or government policy is made which in the decision of the Fund Manager and/or the Trustee renders it illegal or impracticable to continue the Trust; 42.1.3 If the Commission revokes the authorization of the Trust; or 42.1.4 If a request for termination is made by the Unit Holders pursuant to an extraordinary resolution duly passed at a meeting validly held in accordance with the terms of the Second Schedule hereto. 42.2 Subject only to a prior termination in accordance with above provisions, the Trust herein created shall continue for a period of 99 years subject to termination in accordance with Clause 42.1.
43. PROVISIONS ON THE TERMINATION OF TRUST 43.1 The Trustee shall not later than two months before the termination of the Trust under any of the relevant provisions of this Deed give notice to the Unit Holders advising them of the impending distribution of the Held Assets, if any. 43.2 In the event of termination of the Trust, the Fund Manager shall use its best efforts to procure a market sale of all the assets of the Trust for the best price available at such time and shall thereupon pay all the cash proceeds derived from the realization of the assets of the Trust to the Unit Holders in proportion to their interests in the Trust through the Trustee.
44. NOTICES 44.1 Any notices, demand or other communication to the Fund Manager or Trustee to be given, made or served for any purposes under this Deed shall be in writing and shall be signed by the person giving, issuing or making it or that party’s authorized agent or representative and shall be served personally, by email or registered or recorded delivery. 44.2 The addresses for the notices are as follows: THE FUND MANAGER: First Ally Asset Management Limited Address: 7th Floor, Architects’ Place, 2 Idowu Taylor Street, Victoria Island, Lagos Attention: Winston Osuchukwu Telephone: +2348084956102 Email: [email protected]
THE TRUSTEES: ARM Trustees Limited Address: No. 1 Mekunwen Road, Off Oyinkan Abayomi Drive, Ikoyi, Lagos Attention: Folashade Adeloye Telephone: +23408033615766 Email: [email protected]
44.3 Any notice or other document referred to in clause 43.1 above shall be served by personally delivering the same by hand to the registered office or to the address of the person to be served as specified in this Deed or previously notified for this purpose, or by sending same by prepaid first class post to such address or by dispatching the same by legible facsimile transmission or other means of communication in permanent written form, and due service shall be deemed to have been made at the time of actual receipt save that in the case of any facsimile transmission sent after 5.00pm, it shall be deemed to have been served at 9.00am on the next Business Day.
45. TRUST DEED BINDING ON ALL PARTIES The provision of this Deed and of any duly executed Deed supplemental hereto shall be binding on the Trustee, the Fund Manager and all parties to this Deed and such supplemental Deed.
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46. RIGHTS OF UNIT HOLDERS Unit Holders shall not have or acquire any right against the Fund Manager or the Trustee in respect of units save as are expressly conferred upon them by this Deed or by any laws, regulations or court orders.
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1. The Fund Manager or the Trustee may at any time, at their discretion, or the Trustee, upon a requisition in writing in English language signed by the holders of not less than one tenth in nominal amount of the Units for the time being outstanding, may request the Fund Manager to convene a meeting of the Unit Holders, and if the Fund Manager makes default for a period of seven days in convening such a meeting the same may be convened by the Trustees. Every such meeting shall be held at such time and place as the Trustees may appoint or approve.
2. At least ten (10) days' notice (exclusive of the day on which the notice is given and the day on which the meeting is to be held) specifying the place, day and hour of meeting shall be given to the holders of the relevant Units prior to any meeting of such holders in the manner provided by Clause 43 (Notices). Such notice, which shall be in the English language, shall state generally the nature of the business to be transacted at the meeting thereby convened but (except for an Extraordinary Resolution) it shall not be necessary to specify in such notice the terms of any resolution to be proposed. Such notice shall include statements, if applicable, to the effect that the Unit Holders may appoint proxies by executing and delivering a form of proxy in the English language to the specified office of the Registrar not less than 48 hours before the time fixed for the meeting or, in the case of corporations, may appoint representatives by resolution of their directors or other governing body. A copy of the notice shall be sent by post to the Trustees (unless the meeting is convened by the Trustee), and to the Fund Manager (unless the meeting is convened by the Fund Manager).
3. A person (who may but need not be a Unit Holder) nominated in writing by the Trustees shall be entitled to take the chair at the relevant meeting or adjourned meeting but if no such nomination is made or if at any meeting or adjourned meeting the person nominated shall not be present within 15 minutes after the time appointed for holding the meeting or adjourned meeting, the Unit Holders present shall choose one of their number to be Chairman, failing which the Fund Manager may appoint a Chairman. The Chairman of an adjourned meeting need not be the same person as was Chairman of the meeting from which the adjournment took place.
4. At any such meeting five or more persons present being Unit Holders or being proxies or representatives and holding or representing in the aggregate not less than twenty-five percent of the nominal amount of the Units for the time being outstanding shall (except for the purpose of passing an Extraordinary Resolution) form a quorum for the transaction of business and no business (other than the choosing of a Chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of the relevant business. The quorum at any such meeting for passing an Extraordinary Resolution shall (subject as provided below) be two or more persons present being Unit Holders or being proxies or representatives and holding or representing in the aggregate a clear majority in nominal amount of the Units for the time being outstanding provided that at any meeting the business of which includes any of the following matters (each of which shall only be capable of being effected after having been approved by Extraordinary Resolution) namely: a. to vary any method of, or basis for, calculating any amount due on the Units; b. to modify the provisions concerning the quorum required at any meeting of Unit Holders or the majority required to pass the Extraordinary Resolution, in which case the quorum shall be two or more persons present being Unit Holders or being proxies or representatives and holding or representing in the aggregate not less than three-fourths of the nominal amount of the Units for the time being outstanding.
5. If within fifteen (15) minutes (or such longer period not exceeding thirty (30) minutes as the Chairman may decide) after the time appointed for any such meeting a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the meeting shall if convened upon the requisition of Unit Holders be dissolved. In any other case it shall stand adjourned to the same day in the next week (or if such day is a public holiday the next succeeding Business Day) at the same time and place (except in the case of a meeting at which an Extraordinary Resolution is to be proposed in
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which case it shall stand adjourned for such period, being not less than three (3) clear days nor more than seven (7) clear days, and to such place as may be appointed by the Chairman either at or subsequent to such meeting and approved by the Trustees). If within fifteen (15) minutes (or such longer period not exceeding thirty (30) minutes as the Chairman may decide) after the time appointed for any adjourned meeting, a quorum is not present for the transaction of any particular business, then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the Chairman may either (with the approval of the Trustees) dissolve such meeting or adjourn the same for such period, being not less than three (3) clear days (but without any maximum number of clear days), and to such place as may be appointed by the Chairman either at or subsequent to such adjourned meeting and approved by the Trustee, and the provisions of this sentence shall apply to all further adjourned such meetings. At any adjourned meeting the Unit Holder or proxies or representatives (whatever the nominal amount of the Units so held or represented by them) shall (subject as provided below) form a quorum and shall have power to pass any Extraordinary Resolution or other resolution and to decide upon all matters which could properly have been dealt with at the meeting from which the adjournment took place had the requisite quorum been present provided that at any adjourned meeting the quorum for the transaction of business comprising any of the matters specified in the proviso to paragraph 4 above shall be two or more Unit Holders or being proxies or representatives and holding or representing in the aggregate not less than one third of the nominal amount of the Units for the time being outstanding.
6. Notice of any adjourned meeting at which an Extraordinary Resolution is to be submitted shall be given in the same manner as notice of an original meeting but as if three (3) were substituted for 10 in paragraph 2 above and such notice shall state the relevant quorum. Subject as aforesaid it shall not be necessary to give any notice of an adjourned meeting.
7. Every question submitted to a meeting shall be decided in the first instance by a show of hands and in case of equality of votes the Chairman shall both on a show of hands and on a poll, have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a Unit Holder or as a holder of a voting certificate or as a proxy or as a representative.
8. At any meeting unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman, the Fund Manager, the Trustee or any Unit Holder or representative (whatever the nominal amount of the Units so held or represented by him) a declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
9. Subject to paragraph 12 below, if at any such meeting a poll is so demanded it shall be taken in such manner and subject as hereinafter provided either at once or after an adjournment as the Chairman directs and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the motion on which the poll has been demanded.
10. The Chairman may with the consent of (and shall if directed by) any such meeting adjourn the same from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully (but for lack of required quorum) have been transacted at the meeting from which the adjournment took place.
11. Any poll demanded at any such meeting on the election of a Chairman or on any question of adjournment shall be taken at the meeting without adjournment.
12. The Trustee and their respective lawyers and any director, officer or employee of a corporation being a Trustee of this Deed and any director or officer of the Fund Manager and its lawyers and any other person authorized so to do by the Trustees may attend and speak at any meeting. Save
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as aforesaid, no person shall be entitled to attend and speak, nor shall any person be entitled to vote at any meeting of Unit Holders or join with others in requesting the convening of such a meeting, or to exercise the rights conferred on Unit Holder by the Trust Deed unless he is a Unit Holder.
13. Subject as provided in paragraph 13 hereof at any meeting: (a) on a show of hands every Unit Holder or a proxy or representative shall have one vote; and (b) on a poll every person who is so present shall have one vote in respect of each N1,000 or such other amount as the Trustee may in its absolute discretion stipulate in nominal amount of the Units so produced or represented by the voting certificate so produced or in respect of which he is a proxy or representative.
14. A meeting of the Unit Holders shall in addition to the powers hereinbefore given have the following powers exercisable only by Extraordinary Resolution (subject to the provisions relating to quorum contained in paragraphs 5 and 6 above) namely: (a) Power to sanction any compromise or arrangement proposed to be made between the Fund Manager, the Trustee, and the Unit Holders. (b) Power to sanction any abrogation, modification, compromise or arrangement in respect of the rights of the Trustee, the Unit Holders, the Fund Manager or against any other of them or against any of their property whether such rights shall arise under this Deed or otherwise. (c) Power to assent to any modification of the provisions of this Deed which shall be proposed by the Fund Manager, the Trustee or any Unit Holder. (d) Power to give any authority or sanction which under the provisions of this Deed is required to be given by Extraordinary Resolution. (e) Power to appoint any persons (whether Unit Holders or not) as a committee or committees to represent the interests of the Unit Holders and to confer upon such committee or committees any powers or discretions which the Unit Holders could themselves exercise by Extraordinary Resolution. (f) Power to approve of a person to be appointed a fund manager or a trustee and power to remove any fund manager or trustee or trustees for the time being of this Deed. (g) Power to discharge or exonerate any of the Fund Manager or Trustee and/or any appointee from all liability in respect of any act or omission for which the Fund Manager or Trustee and/or such appointee may have become responsible under this Deed. (h) Power to authorize the Fund Manager and Trustees to concur in and execute and do all such deeds, instruments, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution. (i) Power to sanction any scheme or proposal for the exchange or sale of the Trust Property & Held Assets in accordance with clause [•] of this Deed
15. Any resolution passed at a meeting of the Unit Holders duly convened and held in accordance with this Deed shall be binding upon all the Unit Holders whether present or not present at such meeting and whether or not voting, and the Unit Holders shall be bound to give effect thereto accordingly and the passing of any such resolution shall be conclusive evidence that the circumstances justify the passing thereof. Notice of the result of the voting on any resolution duly considered by the Unit Holders shall be published by the Fund Manager within 14 days of such result being known provided that the non-publication of such notice shall not invalidate such result.
16. The expression Extraordinary Resolution when used in this Deed means: (a) a resolution passed at a meeting of the Unit Holders duly convened and held in accordance with this Deed by a majority consisting of not less than three-fourths of the persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll; or (b) a resolution in writing signed by or on behalf of all the Unit Holders, which resolution in writing may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the Unit Holders.
17. Minutes of all resolutions and proceedings at every meeting of the Unit Holders shall be made and entered in books to be from time to time provided for that purpose by the Fund Manager and any
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such minutes as aforesaid if purporting to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings transacted shall be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly held and convened and all resolutions passed or proceedings transacted thereat to have been duly passed or transacted.
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B. Extract from Deed of Declaration of Trust
2. Declaration of Trust 2.1 In furtherance of the establishment of the TSL REIT, the Bare Trustee hereby unconditionally and irrevocably declares and constitutes a trust over all its beneficial and equitable interests in the Trust Properties in favour and for the benefit of the Beneficiary, such trust to take effect from the Effective Date and in accordance with the provisions of this Deed. 2.2 The Bare Trustee further undertakes to retain and hold the legal interest in the Trust Properties exclusively in trust for and on behalf of the Beneficiary until such time when the whole of the Trust Properties are conveyed, free of the trusts constituted by this Deed, to the Beneficiary or to such other third parties as the Beneficiary may direct. For the avoidance of doubt, from the Effective Date, the Trust Properties in relation with the Bare Trustee, which has been constituted in this Trust, shall cease to form part of and shall not be deemed to constitute part of the assets of the Bare Trustee. 2.3 Notwithstanding anything to the contrary contained in this Deed, this Deed of Declaration of Trust shall become effective on the Effective Date.
3. Purpose of the Trust 3.1 The purpose for which this Trust has been constituted is for the Bare Trustee to hold the Trust Properties in trust for the Beneficiary, and to protect and conserve the legal title to the Trust Properties until such time when the Beneficiary may decide to Dispose of the Trust Properties pursuant to the Trust Deed. 3.2 From the Execution Date, the Bare Trustee shall not undertake any activity which is not strictly necessary for attaining the purpose of this Trust as stated in clause 3.1 above, nor shall the Bare Trustee transact any other business in relation to, or with, the Trust Properties except as contemplated under the provisions of this Deed and only upon the receipt of written instructions or approval from the Beneficiary. 3.3 The Beneficiary shall be entitled to all earnings, rents, avails, capital appreciation, and proceeds of any alienation or use and any other income whatsoever and howsoever derived that shall be derived from, or in respect of the Trust Properties.
4. Rights and Interests of the Beneficiary 4.1 The exclusive rights and interest of the Beneficiary over and in relation to the Trust Properties (subject to the provisions of the Trust Deed) shall include but not be limited to the following: 4.1.1 the right to direct the Bare Trustee to Dispose or otherwise deal with the Trust Properties; 4.1.2 the right to issue directions to the Bare Trustee or any other party in relation to the management and control of the Trust Properties; 4.1.3 the right to control the Bare Trustee in the management of the Trust Properties, and the full power to do all things, perform all acts which in the Beneficiary’s absolute discretion (subject to the provisions of the Trust Deed) are necessary and proper for the protection of the Trust Properties and to deal generally with the Trust Properties in accordance with the provisions of this Deed; 4.1.4 the right to receive all the proceeds and income generated from the Trust Properties in accordance with the provisions of the Trust Deed; 4.1.5 the right to receive all proceeds from the Disposal of the Trust Properties; 4.1.6 the right to appoint consultants, advisers or other professionals in relation to the Trust Properties; 4.1.7 Subject to clause 10 of this Deed (Retention of Liabilities), the right to take responsibility for the performance of any obligation(s) created by any competent authority in relation to the Trust Properties including payment of taxes, utilities, insurance premiums, maintenance fees and outgoings or to otherwise direct the Bare Trustee to so act on its behalf;
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4.1.8 the right to do all acts, perform all obligations and observe all regulations with respect to the Trust Properties as fully and effectually as the Bare Trustee could itself act. 4.2 The Beneficiary shall have the right to assign or otherwise transfer its rights under this Deed to a third party. 4.3 The Beneficiary shall have the power to do all things and perform all acts, which in its absolute discretion are necessary and proper for the protection of the Trust Properties, and to deal generally with the Trust Properties in accordance with the provisions of this Deed and the Trust Deed. 4.4 The Beneficiary shall have the right to terminate the Trust herein created, whereupon the Bare Trustee shall be under an obligation to outrightly transfer the legal interest in the Trust Properties, to the Beneficiary or to such other person designated by the Beneficiary, PROVIDED THAT the cost of any such transfer shall be borne by the Beneficiary from the proceeds generated from the Trust Properties. 4.5 The Bare Trustee shall affirm or ratify, and does hereby affirm and ratify, all actions taken by the Beneficiary in relation to the Trust Properties, and permitted by the terms of this Deed which could lawfully have been taken by the Beneficiary if the Beneficiary had been vested with the legal interest to the Trust Properties.
5. Powers and Obligations of the Bare trustee 5.1 In addition to its obligations under clause 10 of this Deed, the Bare Trustee shall bear all Pre- Effective Date Obligations relating to the Trust Properties and shall indemnify the Beneficiary against any loss, claims or damages suffered by the Beneficiary as a result of the non- performance by the Bare Trustee of any such Pre-Effective Date Obligations. 5.2 The Bare Trustee agrees that this Agreement creates only a bare trust in which the Bare Trustee holds legal title in the Trust Properties for the benefit of the Beneficiary. The Bare Trustee further agrees that it shall have no powers and shall not exercise any powers available to a trustee in law and shall only have, or exercise, such rights and powers of a trustee as are expressly permitted and spelt out in this Deed. 5.3 The Bare Trustee shall not have the authority to Dispose of the Trust Properties without the prior written consent of the Beneficiary. 5.4 The Bare Trustee acting solely as instructed by the Beneficiary and in accordance with the Trust Deed, shall have: 5.4.1 the power to perform any obligations imposed by any Government Authority in relation to the Trust Properties including the payment of Taxes, utility bills, insurance premiums, maintenance fees and all outgoings; 5.4.2 the power to do all acts and perform all obligations which are necessary for the preservation of the interest of the Beneficiary in the Trust Properties; and 5.4.3 the power to Dispose any of the Trust Properties upon the written instruction of the Beneficiary, subject to such restrictions and for such consideration for cash or otherwise, and generally upon such terms and conditions as the Beneficiary may impose. 5.5 Subject to the direction or instruction from the Beneficiary in writing, to settle, sue or defend claims in respect of any Trust Property provided that no persons dealing with the Bare Trustee shall be bound to inquire about any propriety or regularity in the exercise of the Bare Trustee’s power. For the avoidance of doubt, no action may be taken with regards to any litigation or claim against any of the Trust Properties without the prior written authorization of the Beneficiary. In particular, the Bare Trustee shall not without the consent of the Beneficiary compromise, adjust, arbitrate, sue, defend, or otherwise deal with and settle claims in respect of the Trust Properties. 5.6 The Bare Trustee shall inform the Beneficiary within five (5) Business Days of becoming aware of any claim, litigation, regulatory audit, administrative procedure, (threatened or filed in any court) which relates to any of the Trust Properties or may likely impact on the trust created under this Deed.
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5.7 The duty and cost of prosecuting or defending any actions, claims or demands that are (i) a Pre-Effective Date Obligation; or (ii) instituted by the Principals and arising from the Sub- Lease Agreements or the Contracts, shall be borne by the Bare Trustee, while the costs and expense relating to actions served on the Bare Trustee from the Effective Date and not arising from (ii) above shall be borne by the Beneficiary from the proceeds and income generated from the Trust Properties, Provided That any such action instituted from the Effective Date is not as a result of a defect in the Bare Trustee’s title to the Trust Properties or any act, omission or negligence on the part of the Bare Trustee. 5.8 Subject to the Beneficiary’s written instructions or directives, to carry out and maintain such policies of insurance for such hazards and in such amounts as the Beneficiary may from time to time advise and where required, execute any insurance contracts and policies required in relation to the Trust Properties upon written authorization by the Beneficiary; Provided however, that the Beneficiary shall bear the cost of any premiums payable on the insurance and the Beneficiary shall be named as sole loss payee in respect of such insurance policies. 5.9 The Bare Trustee shall enter into contracts and execute such instruments as may be necessary for purposes of the Trust, such contract or instrument to be executed only upon the instruction of the Beneficiary. 5.10 The Bare Trustee shall when requested by the Beneficiary, facilitate any mortgage or loan transaction entered into by the Beneficiary by acting as surety or pledging the Trust Properties as security for any such credit facility. 5.11 Upon the termination of the Trust pursuant to clause 4.5 of this Deed, the Bare Trustee shall execute all such instrument and do all such things as are required to transfer the legal interest in the Trust Properties to the Beneficiary or to such other person as the Beneficiary may designate, together with any other interest in the Trust Properties that may at that time be held by the Bare Trustee. 5.12 The Bare Trustee shall separate the Trust Properties from its assets and from other investments held for the benefit of any other party or for itself. 5.13 The Bare Trustee shall within 5 Business Days of the Effective Date, notify in writing, the tenants, insurers and other obligors under any existing contracts relating to the Trust Properties, of the rights of Beneficiary hereunder in such manner or form instructed by the Beneficiary and provide copies of all such notices to the Beneficiary or such other 3rd party as the Beneficiary may designate. 5.14 The Bare Trustee shall report the service or receipt of any notices, demands, orders or information in relation to the Trust Properties to the Beneficiary not later than two (2) Business Days from the receipt of same or within such other shorter period as may be deemed reasonable in the case of matters that require urgent attention. 5.15 The Bare Trustee shall renew all rights in the Trust Properties as well as other privileges to which it may be entitled as holder of the legal title in the Trust Properties, for the sole benefit of the Beneficiary. 5.16 The Bare Trustee shall do all such acts that are necessary for the protection and preservation of the Trust Properties as permitted under Nigerian Law.
6. Representations and Warranties of The Bare Trustee 6.1 The Bare Trustee hereby represents and warrants to the Beneficiary that as of the Effective Date of this Deed: 6.1.1 It is the sub lessee of and has a valid legal and interest in the Trust Properties. 6.1.2 Save for the Equitable Mortgages, it has not created or attempted to create or has permitted to subsist any other security interest or other encumbrances on the Trust Properties or any part thereof nor has it sold or assigned, any of the Trust Properties other than under this Deed. 6.1.3 It has performed all its obligations under any relevant contracts, laws or instruments in respect of the Trust Properties and there will be no set-off, counterclaim or deduction applicable to the Trust Properties, and no other person has or could have any claim or interest in relation to the Trust Properties.
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6.1.4 All existing contracts in relation to the Trust Properties are legal, valid, binding and enforceable. 6.1.5 It has not dealt and will not for so long as this trust subsists, deal with the Trust Properties in a manner detrimental to the interest of the Beneficiary.
7. Fiduciary Obligations of the Bare Trustee 7.1 The Bare Trustee hereby agrees to act in fiduciary manner in carrying out its obligations under this Deed and as such will; 7.1.1 act with diligence, prudence, care, utmost good faith and in an impartial manner in relation to the Trust Properties and the Beneficiary; and 7.1.2 execute the instructions of, and exercise any powers conferred on it by the Beneficiary, with the utmost good faith and to the best of its abilities.
8. The Bare Trustee’s Indemnity 8.1 The Bare Trustee hereby indemnifies the Beneficiary against any costs, expenses and losses incurred or suffered by the Beneficiary as a result of any of the following events: 8.1.1 The proof by a third party of an adverse title regarding any of the Trust Properties; 8.1.2 The failure by the Bare Trustee to provide or execute any documents as instructed by the Beneficiary within the specified time or at all; 8.1.3 Any judgment or order against the Bare Trustee which adversely affects the Trust Properties or any interest or benefits accruing to the Beneficiary under this Deed; or 8.1.4 The consequences of any failure or error on the part of the Bare Trustee to meet all or any of its obligations under this Deed. 8.1.5 Any acts or actions instituted by the Principals or any of their agents to which the Beneficiary becomes a Party by virtue of this Deed. 8.2 The Bare Trustee hereby agrees to indemnify and hold the Beneficiary harmless from and against any claims, loss, liability, damage and costs (whether direct, indirect,) which the Beneficiary may suffer or incur in the implementation and/or enforcement of the provisions of this Deed.
9. Undertakings of The Bare Trustee 9.1 On or about the Effective Date, the Bare Trustee shall deliver, or cause to be delivered, the following documents to the Custodian: 9.1.1 all the original copies of the Title Documents to the Trust Properties; 9.1.2 a resolution of the Board of Directors of the Bare Trustee authorizing the Bare Trustee to enter into this declaration of trust which resolution has been duly filed at the Corporate Affairs Commission; 9.1.3 a duly executed standard form, but undated, deeds of assignment between the Bare Trustee and the Beneficiary in respect of each of the Trust properties; 9.1.4 duly executed, but undated, application forms for Governors Consent (Form 1c in Lagos) in respect of the Trust Properties in Lagos, Oyo and Ondo States; 9.1.5 copies of the Bare Trustee’s tax clearance certificate for the past three years; 9.1.6 copies of the tax clearance certificate for at least two of the Bare Trustees directors for the past three years; 9.1.7 a copy of the consent obtained from the Ondo State Government (OSG) as required under the relevant deed of sub-lease entered into between the Bare Trustee and (OSG); and 91.8 any other document that the Beneficiary may require, to perfect its title to the Trust Properties, from time to time. 9.2 On or about the Effective Date the Bare Trustee shall; 9.2.1 to the extent permitted under the applicable law of the State where each of the Trust Properties is domiciled, register a caution indicating the interest of the TSL REIT at the appropriate land’s registry; and 9.2.2 affix plaques and such other notices in a visible location on each of the Trust Properties indicating the interests of the TSL REIT as beneficial owner of the property.
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9.3 The Bare Trustee shall procure the release of the Trust Properties from all existing encumbrances. 9.4 The Bare Trustee shall not, without prior written consent of the Beneficiary, enter into any scheme of arrangement that may have an impact on the Trust Properties, including but not limited to, an arrangement or composition with its creditors, a voluntary liquidation or a winding up. 9.5 The Bare Trustee shall in each subsequent year after the execution of this Deed deliver the following documents to the Beneficiaries: 9.5.1 copies of the Bare Trustee’s tax clearance certificate for the past three years; 9.5.2 copies of the tax clearance certificate for at least two of the Bare Trustees directors for the past three years; and 9.5.3 any other document that the Beneficiary may require from time to time. 9.6 In the event of the Bare Trustee ceasing to carry on business on the orders of the court pursuant to a winding up petition or in the event that a receiver or a manager is appointed over the Bare Trustee, the Bare Trustee shall, immediately, following such an order or the appointment of the receiver or manager: 9.6.1 inform the Beneficiary and provide any related documents in relation thereto and any other information or documents requested by the Beneficiary, and the Beneficiary shall immediately take all necessary steps to procure the perfection of the titles of the Trust Properties in its name on behalf of the TSL REIT; Provided That, the Bare Trustee shall be under an obligation to execute all necessary documents and perform all such other acts as are required by the Bare Trustee to ensure that the titles to the Trust Properties are perfected in the name of the Beneficiary; and 9.5.2 inform the receiver, manager, liquidator (as the case may be) of the existence and terms of this Deed and of the legislative protection conferred on the Trust Properties under section 493 of the Companies and Allied Matters Act Cap C20 LFN 2004 and Section 41(2)(a) of the Bankruptcy Act, Cap B1 LFN 2004.
10. RETENTION OF LIABILITIES 10.1 Any Liability arising under the Sub-Lease Agreements shall continue to be an obligation solely of, and shall solely be legally and financially borne by the Bare Trustee and shall not, in any manner, be deemed as part of the title, rights or interests in the Trust Properties which is the subject matter of this Deed. In furtherance (and not in limitation) of the foregoing, the Beneficiary is not, and shall not be treated or viewed as, a successor of the Bare Trustee as a matter of Law and the Bare Trustee shall indemnify and hold the Beneficiary harmless from and against any Losses arising as a result of any such treatment. 10.2 Notwithstanding this Deed, the Bare Trustee shall remain irrevocably and exclusively bound to fulfil and perform all the Bare Trustee’s obligations and duties to the Principals under the Contracts without any responsibility or liability whatsoever to the Beneficiary. Nothing herein shall obligate Beneficiary to perform the Contracts or to assume any responsibility with respect to the Contracts. 11. Costs and Expenses 11.1 The Beneficiary shall, from the proceeds and income generated from the Trust Properties, pay, or reimburse the Bare Trustee for, any reasonable costs, fees, premiums and other outgoings paid or reasonably incurred by the Bare Trustee in connection with the performance of its duties (as authorized in writing by the Beneficiary) under Clause 5 (Powers and Obligations of the Bare Trustee) of this Deed.
12. Sanctity of the Trust In the event that 12.1 the Bare Trustee enters into an arrangement or composition with its creditors; or 12.2 the Bare Trustee goes into voluntary liquidation or is wound up on the orders of the court and ceases to carry on business for any reason; or
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12.3 a receiver or a manager is appointed over the whole or a substantial part of the Bare Trustee’s properties or assets pursuant to the orders of the court or pursuant to the powers exercisable by a creditor under any agreement or deed; the liquidator, receivers, official receiver, manager, of the Bare Trustee shall not have the powers to terminate this Deed and the Trust Properties shall not be available for the benefit of the Bare Trustee’s creditors.
13. Binding Effect 13.1 The terms and conditions of this Deed shall inure to the benefit of the Beneficiary and be binding upon the administrators, assigns and all other successors in title of the Beneficiary. 13.2 This Deed, and the obligations of the Bare Trustee created under it shall be binding on the Bare Trustee its receivers, successors in title and assigns.
14. Counterparts This Deed may be executed in counterparts each of which shall be an original, and such counterpart shall together constitute a single document.
15. Severability Where any provision of this Deed is prohibited by law or construed to be unlawful, void or unenforceable, the provision shall to that extent be severed from this Deed as far as possible without modifying the remaining provisions and shall not in any way affect the validity or enforcement of the other provisions of this Deed.
16. Termination This Deed shall come into force on the Effective Date and shall remain in force until the Trust Deed is terminated by the Beneficiary or until all of the Trust Properties is Disposed; Provided That Clauses 8 and 16 of this Deed shall become binding and of full effect from Execution Date and shall survive the termination of this Deed.
17. Governing Law & Dispute Resolution 17.1 This Deed and all rights and obligation arising therefrom shall be governed by and construed in accordance with the laws of the Federal Republic of Nigeria. 17.2 Notification of any dispute arising out of or relating to or connected with this Deed shall be given to the SEC within ten (10) Business Days of the occurrence of such dispute. 17.3 The Parties shall endeavor to resolve any such dispute by mutual consultation, within twenty (20) Business Days of the occurrence of same. 17.4 Where a dispute cannot be mutually resolved by the parties within the twenty (20) Business Days stipulated in clause 16.3 above, any of the Parties to this Agreement may within such period, refer such dispute to arbitration in accordance with the provisions of the Arbitration and Conciliation Act Cap. A18 Laws of the Federation of Nigeria 2004. 17.5 The arbitral tribunal shall consist of three (3) arbitrators, one appointed by the Bare Trustee, and a second arbitrator appointed by the Beneficiary. The two arbitrators shall jointly appoint a third arbitrator who shall preside over the tribunal. Where the two (2) appointed arbitrators are unable to agree on the choice of the third arbitrator within two (2) Business Days of their own independent appointments, the choice of same shall be referred to the Director-General of the SEC, who shall nominate the third arbitrator. The arbitral proceedings shall be held in Lagos, Nigeria, and shall be conducted in the English language. 17.6 The arbitrators shall have a maximum period of ten (10) Business Days following the parties’ exchange of pleadings, to resolve the dispute; failing which the said dispute shall be referred to the SEC for resolution. 17.7 Any party aggrieved by the decision of the SEC reached in accordance with clause 16.6 above may then refer the matter to the Investments and Securities Tribunal established in accordance with the provisions of the ISA, for resolution.
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Schedule 2 – Conditions Precedent to Effective Date
1. This Trust shall come into force upon the Bare Trustee transferring all rights to rental payments, proceeds of sale, capital appreciation and all other pecuniary benefits in relation to the Trust Properties to the Beneficiary.
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C. Extract of Deed of Assignment of Receivables
2. ASSIGNMENT OF RECEIVABLES
2.1 In consideration of the Assignee paying the Consideration to the Assignor, and with effect from the Effective Date, the Assignor as the legal and beneficial owner of the Receivables, hereby assigns, transfers and conveys to the Assignee absolutely, irrevocably and unconditionally, all its rights, title, benefits and interests whatsoever, both present and future, whether proprietary, contractual or otherwise under or arising out of the Receivables with the full benefit of all negotiable or non- negotiable instruments, guarantees, indemnities, debentures including, but not limited to, all claims for damages or other remedies in respect of any breach thereof and all reservation of proprietary rights, rights of tracing and all other rights now or hereafter arising in connection with the Receivables.
2.2 With effect from the Effective Date, all of the Assignor’s rights, title, benefits or interests, whether present or future, in the Receivables shall cease and the Assignee shall be entitled to direct, manage and control all future contracts and activities with respect to the Receivables.
2.3 The Receivables assigned under this Deed are the receivables over the Trust Properties to which the Assignor is entitled under the Sub-Lease Agreements and the Contracts. The Assignee shall not, by virtue of this Deed acquire any rights or liabilities with respect to the Excluded Receivables unless expressly granted by the Principal in writing.
2.4 The Parties hereby agree and acknowledge that the transfer of Receivables does not include or amount to an Alienation of the Rights of Occupancy.
2.5 The Assignor shall deliver to the Assignee, all existing documents and contracts that may relate to the assigned Receivables including but not limited to:
(a) subsisting leases or tenancy agreements;
(b) subsisting insurance policies;
(c) court orders establishing damages or claims in favour of TSL;
(d) negotiable or non-negotiable instruments; or
(e) such other contracts or documents that establish TSL’s right to any Receivables.
2.6 The Assignee shall be entitled to:
(a) all Receivables that have crystallised as of the Effective Date as well as any that may become payable thereafter; and
(b) the balance of any prepayments made to the Assignor for the credit of any tenant or lessee as of the Effective Date.
2.7 Notwithstanding anything to the contrary contained in this Deed, this Deed shall become effective on the Effective Date.
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3 COVENANTS
3.1 The Assignor agrees and acknowledges that by virtue of this Deed, all its rights in and over the Receivables have been extinguished in favour of the Assignee.
3.2. The Assignor hereby covenants that the Receivables herein assigned shall be quietly enjoyed by the Assignee and its successors-in-title without any interruption or disturbance from the Assignor, its servants, agents, privies or any person claiming in trust for it and that the Receivables herein assigned is free of any legal or equitable encumbrances.
3.3 The Assignor, shall within five business days from the Effective Date of this Deed, immediately notify the tenants or other obligors under any existing contracts relating to the Receivables of the rights of the Assignee hereunder in as manner and form as instructed by the Assignee.
3.4 All consents, authorisations, approvals, licenses, exemptions, filings, registrations, notarisations, in connection with the execution, delivery, performance or validity, admissibility in evidence and enforceability of each Contract and this assignment thereof, have been obtained or effected (or, in the case of registrations, will be effected within any applicable required period) and (if obtained or effected) are in full force and effect; all fees and registration and similar tax (if any) payable in connection with them have been paid if due; and there has been no default in the performance of any of their terms and conditions.
4. The Assignor’s INDEMNITY
4.1 The Assignor hereby agrees to indemnify, and does hereby indemnify, and make whole the Assignee against all costs and expenses incurred or suffered by the Assignee as a result of any of the following events:
(a) the proof by a third party of adverse title regarding the Receivables;
(b) the failure by the Assignor to provide or execute any documents as instructed by the Assignee within the specified time or at all;
(c) any judgment or order against the Assignor that adversely affects the Receivables; or
(a) the consequences of any failure or error on the part of the Assignor in meeting its obligations under this Deed.
4.2 The Assignor hereby agrees to indemnify and hold the Assignee harmless from and against any claims, loss, liability, damage and costs (whether direct, indirect, consequential or otherwise and including, without limitation, all legal costs) which the Assignee may suffer or incur in the implementation and/or enforcement of the provisions of this Deed.
5 THE ASSIGNOR’S REPRESENTATIONS AND WARRANTIES
5.1 The Assignor hereby represents and warrants to the Assignee that:
(a) it is the legal and beneficial owner of and is entitled to the Receivables;
(b) it has not created or attempted to create or permitted to subsist any interest in or encumbrances over the Receivables or any part of them nor has it sold, assigned,
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discounted, factored or otherwise disposed of any of the Receivables or attempted or agreed to do so other than under this Deed;
(c) it has performed all its obligations under any relevant contracts, laws or instruments in respect of the Receivables and there will be no set-off, counterclaim or deduction applicable to the Receivables and that no other person has or could have any claim or interest in relation to any such Receivables; and
(b) all existing contracts in relation to the Receivables are: a. legally valid, binding and enforceable; and b. that the obligors in the Contract that have given rise to the Receivables will make the assigned payments to the Assignee in full and at the due time without any delay whatsoever, whether for cause or not.
5.2 Further assurances
The Assignor shall, at the request of the Assignee and at its expense, promptly do or permit to be done anything, and execute and deliver any and all such further instruments or documents that the Assignee may from time to time consider necessary or expedient in order to:
(a) preserve or protect the interests of the Assignee in the Receivables;
(b) perfect or protect the interest created (or intended to be created) by this Deed;
(c) establish, perfect, preserve or enforce the Assignee rights under or in respect of this Deed or any related documents; or exercise any power, authority or discretion vested in the Assignee under this Deed.
(d) exercise any power, authority or discretion vested in the Assignee under this Deed.
6. RETENTION OF LIABILITIES 6.1 Notwithstanding this Deed, the Assignor shall remain irrevocably and exclusively bound to fulfil and perform all the Assignor obligations and duties to the Principals under the Contracts and Sub-Lease Agreements without any responsibility or liability whatsoever to the Assignee. Nothing herein shall obligate the Assignee to perform the Contracts or to assume any responsibility with respect to the Contracts.
6.2 Where the Assignee or any of the Assignee’s Agents receive the Excluded Receivables into its custody, it shall immediately forward the same to the Assignor in order to enable it perform its obligation under the Contracts. The receipt of the Excluded Receivables by the Assignee or the Assignee’s Agents shall not create any obligations on the Assignee under the Contracts or Sub-Lease Agreements.
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D. Extract Opinion on Due Diligence Report
S/N Property Existing Encumbrance Claims and Litigation
1 Adeniran Ogunsanya Mall There are no Encumbrances By a letter dated August 9, 2016, the on this property. Sponsor confirmed that there are no existing claims and/or litigation on this property
2 Apapa Mall Equitable mortgage in favor By a letter dated August 9, 2016, the of First Bank of Nigeria Sponsor confirmed that there are no Limited existing claims and/or litigation on this property
3 Cocoa Mall Ibadan Equitable mortgage in favor By a letter dated August 9, 2016, the of Wema Bank Plc Sponsor confirmed that there are no existing claims and/or litigation on this property
4 Akure Mall Equitable mortgage in favor By a letter dated August 9, 2016, the of Wema Bank Plc Sponsor confirmed that there are no existing claims and/or litigation on this property
OPINION ON PROPERTY TO BE VESTED IN THE REIT
Olaniwun Ajayi has provided the opinion below based on the outcome of the due diligence conducted on the initial underlying assets of the TSL REIT, relying primarily on information provided by the Sponsor.
This opinion is made on the basis of the following assumptions:
That the Sponsor, Top Services Limited have not withheld any information which is material to the proposed acquisition of the Properties. That copies of documents reviewed are true and complete and that their originals are authentic and complete. That the documents reviewed have been duly executed by the persons stated to have executed them.
“Based on the outcome of the due diligence and information provided by the Sponsor, Top Services Limited, the Solicitors to the Trustees are not aware of any encumbrances, claims or litigation existing in relation to the Properties save for those which have been disclosed in this report”.
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E. Corporate Governance and Operating Structure
On conclusion of the offering, the TSL REIT will be managed by First Ally Asset Management Limited. The day to day management of the Fund will be subject to the managerial efficiency, strategies and Corporate Governance principles put in place by the Fund Manager. The Fund Manager working in tandem with the objectives of the REIT and best practice strategizes for profitable growth of the Net asset value and generation of enviable returns to the Unit holders.
The Fund Manager strategically focuses on the asset portfolio of the REIT and keenly observes performance, growth, variations and deviation from the approved objectives on a regular basis.
In executing its role of monitoring the portfolio for performance, the Fund Manager embarks on the following:
Regular review of the asset composition Objective assessment of each asset in the REIT portfolio measuring current performance with projected performance and analysing the associated risks in order to take proactive measures to mitigate the risks and maximise returns Proactive monitoring of economic and market events that could foster or inhibit portfolio performance and taking necessary steps Professionally maintaining a fundamentally sound and balanced capital structure Regular information dissemination to the market for awareness creation and participation in the REIT by investors.
In order to achieve the above, the Fund Manager puts controls in place to ensure a balanced and efficient portfolio and on-going performance of the REIT.
These are captured below: i. Limits: The Trust Deed imposes limits and restrictions to the investment decisions of the Fund manager in order to combat the REIT‘s exposure to risk. In addition to this, the Fund Manager employs its risk management framework to check and reduce risks effectively for the protection of the Fund. ii. Reporting: The Fund Manager will ensure that Unit Holders and investors are kept abreast of the performance of the REIT. The Fund manager will ensure that Annual report of the activities and performance of the REIT is prepared in accordance with approved financial standard and filed with the SEC. Monthly and quarterly reports will also be filed with the SEC. Annual financial reports will be published for investor information and distributed to Unit holders. iii. Board of Directors of the Fund Manager: The Board of Directors of the Fund Manager sets strategy and objectives for profitable growth, protecting the interests of shareholders through the establishment of sound corporate governance, investment and risk management principles. iv. External Auditor: The Board of Directors of the Fund Manager appoints external auditors who are independent for the audit of the Fund accounts and operation. The external auditing firm appointed shall be approved by the Trustee. v. Investment risk management: The REIT will rely on the Fund Manager‘s Enterprise risk management framework for monitoring and managing investment risk. It is expected that the risk management mechanism put in place by the Fund Manager for monitoring of investment risk will be adopted for the Trust.
The Risk management framework will adhere to all laid down regulatory requirements regarding investment risk management and the Trust Deed governing the creation of the REIT. The risk management framework will be such that will facilitate measurement, monitoring and up to date reporting.
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Statutory and General Information vi. Internal Audit: The Investment Committee through an Audit Committee regularly review compliance with overall risk management policies and procedures. This helps to regularly review the integrity, adequacy and effectiveness of the REIT‘s internal controls and financial disclosure process and assess the adherence of the Fund Manager to policies.
F. Indebtedness
As at the date of this Prospectus, the Fund Manager had no outstanding debentures, mortgages, loans, charges or other similar indebtedness, other than in the ordinary course of business.
G. Shareholding Structure of the Fund Manager
As at 31st December, 2015, the N250,000,000 issued Ordinary shares of N1.00 each in the share capital of the Company were beneficially held as follows:
Name of Shareholder Number of Shares % Holding
First Ally Capital Limited 249,999,998 99.90
Other Nigerians 2 0.10
Total 250,000,000 100.00
Except as stated above, no other shareholder held more than 5% of the issued share capital of the Company.
H. Shareholding Structure of the Sponsor
As at 31st December, 2015, the 5,000,000 issued Ordinary shares of N1.00 each in the share capital of the Company were beneficially held as follows:
Name of Shareholder Number of Shares % Holding
Chief Tokunbo Omisore 4,200,000 84.00
Oyindamola Kokoricha 400,000 8.00
Oluseyi Omisore 400,000 8.00
Total 5,000,000 100.00
Except as stated above, no other shareholder held more than 5% of the issued share capital of the Company.
I. Estimated Cost of the Offer
The cost, charges and expenses incidental to the Offer, including fees payable to the Securities & Exchange Commission, Nigerian Stock Exchange, professional parties, brokerage, advertising, printing and distribution expenses are estimated at N411,534,375.00 representing (2.05%)of the Offer proceeds and are payable by the TSL REIT.
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J. Foreign Currency Investors
Foreign currency subscriptions will be processed at the autonomous exchange rate prescribed by Access Bank Plc for the applicable US Dollar exchange rate on the day the remittance is being effected. Access Bank Plc will issue Certificate of Capital Importations to foreign currency subscribers within 24hours of the receipt of payment. CCIs are required to enable subsequent repatriation, in a freely convertible currency, of any surplus or return monies, the distributions from or proceeds of any future sale of the units acquired in this Initial Public Offering.
K. Unit Statements
When fully paid up and allotted, the CSCS account of investors will be credited. Electronic fund statements will be issued to the Unitholders.
L. Relationship Between Fund Manager and Sponsor Regarding Real Estate to be Vested in the REIT
Interest in four of the properties to be vested in the REIT is held by the Sponsor. Other than this, there exists no relationship between the Fund Manager and the Sponsor as at the date of this Prospectus except in the ordinary course of business.
M. Relationship Between Fund Manager and its Advisers
The Fund Manager is a 100% subsidiary of the Lead Issuing House. Other than as stated, there exists no relationship between the Fund Manager and its advisers as at the date of this Prospectus except in the ordinary course of business.
N. Relationship between Sponsor and its Advisers
There exists no relationship between the Sponsor and its advisers as at the date of this Prospectus except in the ordinary course of business.
O. Material Contracts
The following agreements have been entered into and are considered material to this Offer:
A Trust Deed dated January 19, 2017 between First Ally Asset Management Limited and ARM Trustees Limited under which the Trustee has agreed to act as Trustee to the REIT for the benefit of the Unitholders A pre-signed Deed of Assignment of Receivables dated January 19, 2017 under which the legal title and interest accruing from the receivables under the Trust Property are assigned to the Trustee A Pre- Signed Deed of Declaration of Trust dated January 19, 2017 under which Sponsor has agreed to vest in the Trustee the beneficial interest in the Trust properties A Property Management Service Agreement dated January 19, 2017 under the terms of which Tunji Ologbon Partnership has agreed to act as Property Manager A Safe Custody Agreement dated January 19, 2017 under the term of which Stanbic IBTC Bank Plc (Custodial Services Section) agreed to act as Custodian to the REIT A Vending Agreement dated January 19, 2017 under the terms of which the Issuing Houses have agreed to Offer 20,000,000 units at N1,000 per Unit in the TSL Real Estate Investment Trust Letter of indemnity from the Sponsor to the REIT.
P. Consents
The following have given and not withdrawn their written consents to the issue of this Prospectus and to have their names mentioned in the form and context in which they appear therein:
Fund Manager: First Ally Asset Management Limited
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Directors of the Manager: Mr. Abiodun Arokodare (Chairman) Mr Winston Osuchukwu (Managing Director) Mr. Ebenezer Olufowose (Director) Mr. Obeahon Ohiwerei (Director) Mr. Ken Aghoghovbia (Director) Mr. Kyari Bukar (Director)
Fund Manager’s Company Secretary: Titi Savage
Sponsor: Top Services Limited
Directors of the Sponsor: Chief Tokunbo Omisore Mrs Oyinkan Kokoricha
Company Secretary of Sponsor: Babatunde Oshikoya & Co.
Financial Adviser/ Lead Issuing House: First Ally Capital Limited
Joint Issuing Houses: Cowry Asset Management Limited Futureview Financial Services Limited Greenwich Trust Limited
Trustee: ARM Trustees Limited
Custodian: Stanbic IBTC Bank Plc (Custodial Services)
Solicitors to the Transaction: Udo Udoma & Belo-Osagie
Reporting Accountant: Pedabo Audit Services
Registrars: United Securities Limited
Receiving Bankers: Access Bank Plc
Rating Agency: Agusto & Co
Stockbrokers to the Issue & Market Maker: FSDH Stockbrokers Limited
Estate Valuer: Jide Taiwo & Co.
Property Manager: Tunji Ologbon Partnership
Q. Documents Available for Inspection
Copies of the following documents are available for inspection during the usual business hours on any week day (except public holidays) at the office of First Ally Capital Limited from Wednesday, February 1, 2017 to Friday, March 10, 2017.
Certificate of Incorporation of the Fund Manager Memorandum and Articles of Association of the Fund Manager Certificate of Incorporation of the Trustee Memorandum and Articles of Association of the Trustee The Prospectus issued in respect of the Offer The Abridged Prospectus issued in respect of the Offer The Resolution of the Board of Directors of First Ally Asset Management Limited authorizing the issuance of 20,000,000 ordinary shares at N1,000 per unit
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The Resolution of the Board of Directors of Top Services Limited authorizing the creation of the REIT and the issuance of 20,000,000 ordinary shares at N1,000 per unit The Audited financial statement of the Fund Manager as at 31st December 2015 The report of the Reporting accountant on the Financial forecast of the REIT for the years ended December 31 2017, 2018, 2019, 2020 and 2021. The Rating Report issued by Agusto & Co. in respect of the REIT Fund’s Rating The Valuation report issued by Jide Taiwo and Co. in respect of the Properties to be acquired by the REIT. The material contracts referred to on page 114 The written Consents referred to on page 114-115 The Letter of authorization from the Securities & Exchange Commission.
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Application and Allotment
Procedure for Application and Allotment
1. Application
1.1. The general investing public is hereby invited to apply for the units of the TSL REIT through any of the Receiving Agents listed on Page 114.
1.2. Application for the Units now being offered must be made in accordance with the instructions set out at the back of the Application Form. Care must be taken to follow these instructions, as applications, which do not comply with the instructions, will be rejected.
1.3. The Application list for the Units now being offered for subscription will be open on Wednesday, February 1, 2017 and close Friday March 10, 2017. Applications for the units must be for a minimum of 1,000 Units by subscribers and in multiples of 500 Units thereafter. The number of units for which an application is made and the value of the cheques or bank draft attached should be entered in the boxes provided.
1.4. Individual/Corporate applicants should sign the declaration and write his/her name, address and mobile number in the section marked (1) on the Application Form, whilst section (2) should be completed in the case of joint applicants. A corporate applicant should affix its seal in the box provided and state its Incorporation (“RC”) Number. Applicants should specify the name of stockbroker, CSCS account number and CHN number in the boxes provided.
1.5. Each application should be forwarded with the cash, cheque, certified cheque, bank draft for the full amount of the purchase price to any of the Banks or the Receiving Agents listed on page 114. Bank drafts for the full amount applied for must be crossed “TSL REIT” and made payable to the Banks or Receiving Agents to whom the application is submitted. All transfer charges if any, must be paid by the applicant and no application will be accepted unless this has been done. All drafts will be presented upon receipt.
1.6. An application from a pensions or provident fund must be in the name of each individual trustee unless the Trustee is a limited liability company.
1.7. Foreign currency subscribers are advised to contact the Receiving Banks for the applicable US Dollar exchange rate on the day the remittance is being effected.
2. Allotment
The Issuing Houses and the directors of the Fund Manager reserve the right to accept or reject any application in whole or in part if it falls short of the conditions of the Offer. The allotment proposal will be subject to the clearance of the Securities & Exchange Commission.
3. Application Monies
All application monies will be retained in separate Bank accounts with the Receiving Bank pending allotment. If any application is not accepted, or is accepted for fewer Units than the number applied for, a cheque for the full amount or the balance (as the case may be) of the amount paid on application will be returned via RTGS or NEFT into the bank account number stated on the Application Form within 5 working days of allotment.
The CSCS account of applicants will be credited not later than 15 working days from the date of allotment.
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Receiving Agents
Receiving Banks
Access Bank Plc
Other Receiving Agents
ADONAI STOCKBROKERS LTD PINEFIELDS INVESTMENTS SERVICES LTD COVENANT SECURITIES & ASSET AFRICAN ALLIANCE STOCKBROKERS LTD PIPC SECURITIES LTD MANAGEMENT LTD AFRINVEST SECURITIES LTD PORTFOLIO ADVISERS LTD CRADLE TRUST FINANCE & SECURITIES LTD AMYN INVESTMENTS LTD PRIMERA AFRICA SECURITIES LTD DBSL SECURITIES LTD ANCHORIA INVESTMENT AND SECURITIES LTD PRIMEWEALTH CAPITAL LTD DEPENDABLE SECURITIES LTD ARM SECURITIES LTD PROMINENT SECURITIES LTD INVESTMENT CENTRE LTD ARTHUR STEVEN ASSET MANAGEMENT LTD PYRAMID SECURITIES LTD PROFESSIONAL STOCKBROKERS LIMITED BAUCHI INVESTMENT CORPORATION LTD QUANTUM SECURITIES LTD REDASEL INVESTMENT LTD BELFRY INVESTMENTS AND SECURITIES LTD RAINBOW SECURITIES AND INVESTMENT CO. SURPORT SERVICES LIMITED BESTWORTH ASSET AND TRUST LTD LTD YOBE INVESTMENT AND SECURITIES LTD CALYX SECURITIES LTD READINGS INVESTMENTS LTD SUPRA COMMERCIAL TRUST LTD CAPITAL EXPRESS SECURITIES LTD REGENCY ASSETS MANAGEMENT LTD DSU BROKERAGE SERVICES LTD CAPITAL TRUST BROKERS LTD RENCAP (SECURITIES) NIGERIA LTD WOODLAND CAPITAL MARKET PLC CARDINALSTONE SECURITIES LTD REWARD INVESTMENTS & SERVICES LTD CHARTWELL SECURITIES LTD CASHCRAFT SECURITIES LTD RMB NIGERIA STOCKBROKERS LTD STANDARD ALLIANCE CAPITAL & ASSET CDL CAPITAL MARKETS LTD ROSTRUM INVESTMENT AND SECURITIES LTD MANAGEMENT LTD CENTRE POINT INVESTMENTS LTD ROYAL GUARANTY AND TRUST LTD PSI SECURITIES LTD CHAPELHILL DENHAM SECURITIES LTD ROYAL TRUST SECURITIES LTD EDGEFIELD CAPITAL MANAGEMENT LTD CITY CODE TRUST & INVESTMENT COMPANY SANTRUST SECURITIES LTD FINANCIAL & ANALYTICS CAPITAL LTD LTD SECURITIES AFRICA FINANCIAL LTD MAXIFUND INVESTMENTS AND SECURITIES PLC COMPASS INVESTMENT & SECURITIES LTD SECURITIES AND CAPITAL MGT. COMPANY PAC SECURITIES LTD CORONATION SECURITIES LTD LTD PILOT SECURITIES LTD COWRY SECURITIES LTD SECURITY SWAPS LTD TYNDALE SECURITIES LTD DE LORDS SECURITIES LTD SFC SECURITIES LTD FBN SECURITIES LTD DEEP TRUST INVESTMENT LTD SIGMA SECURITIES LTD INVESTMENT ONE FUNDS MANAGEMENT LTD DUNBELL SECURITIES LTD SKYVIEW CAPITAL LTD LIGHTHOUSE ASSETS MANAGEMENT LTD DUNN LOREN MERRIFIELD SECURITIES LTD SOLID-ROCK SECURITIES & INVESTMENT PLC CSL STOCKBROKERS LTD ECL ASSET MANAGEMENT LTD SPRINGBOARD TRUST & INVESTMENT LTD SMADAC SECURITIES LTD EDC SECURITIES LTD STANBIC IBTC STOCKBROKERS LTD EXPRESS DISCOUNT ASSET MANAGEMENT LTD EFCP LTD STANDARD UNION SECURITIES LTD CORE TRUST AND INVESTMENT LTD EL-ELYON ALLIANCE & SECURITIES LTD THE BRIDGE SECURITIES LTD FIDELITY SECURITIES LTD ELIXIR SECURITIES LTD TRADELINK SECURITIES LTD APEL ASSET LTD ENTERPRISE STOCKBROKERS PLC TRANSAFRICA FINANCIAL SERVICES LTD APT SECURITIES AND FUNDS LTD EUROCOMM SECURITIES LTD TRUST YIELDS SECURITIES LTD CORDROS CAPITAL LTD FCSL ASSET MANAGEMENT COMPANY LTD TRUSTBANC CAPITAL MANAGEMENT LTD DOMINION TRUST LTD FINANCIAL TRUST COMPANY NIG. LTD TRUSTHOUSE INVESTMENTS LTD DYNAMIC PORTFOLIO LTD FORESIGHT SECURITIES & INVESTMENT LTD TRW STOCKBROKERS LTD EQUITY CAPITAL SOLUTIONS LTD FORTE FINANCIAL LTD UNITED CAPITAL SECURITIES LTD FALCON SECURITIES LTD FORTHRIGHT SECURITIES AND INVESTMENTS VALMON SECURITIES LTD FIDELITY FINANCE COMPANY LTD LTD VALUELINE SECURITIES & INVESTMENT LIMITED FINMAL FINANCE SERVICES LTD FORTRESS CAPITAL LTD VETIVA SECURITIES LTD FSDH SECURITIES LTD FUNDS MATRIX AND ASSETS MANAGEMENT ZENITH SECURITIES LTD ICMG SECURITIES LTD LTD ZION STOCK BROKERS & SECURITIES LTD INDEPENDENT SECURITIES LTD FUNDVINE CAPITAL AND SECURITIES LTD ANCHORAGE SECURITIES AND FINANCE LTD INTEGRATED TRUST & INVESTMENTS LTD GIDAUNIYA INVESTMENT AND SECURITIES LTD ATLASS PORTFOLIOS LTD INTERNATIONAL STANDARD SECURITIES LTD GLOBAL ASSET MANAGEMENT NIG. LTD CAMRY SECURITIES LTD INTERSTATE SECURITIES LTD GLOBALVIEW CAPITAL LTD CASHVILLE INVESTMENTS & SECURITIES LTD LONGTERM GLOBAL CAPITAL LTD GOLDEN SECURITIES LTD CENTURY SECURITIES LIMITED MERISTEM SECURITIES LTD GREENWICH SECURITIES LTD CITI INVESTMENT CAPITAL LIMITED MORGAN CAPITAL SECURITIES LTD GRUENE CAPITAL LIMITED CLEARVIEW INVESTMENTS CO. 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TSL REIT 118
Application Form
APPLICATION FORM
Opening Date Closing Date Passport February 01, 2017 March 10, 2017
GUIDE TO APPLICATION Number of Units applied for Amount payable 1,000 Minimum N1,000,000 Subsequent Multiples of 500 N500,000 Number of Units applied for Value of Units applied for PLEASE COMPLETE IN BLOCK LETTERS AND IN BLACK Cheque details Value of Cheque/Bank draft APPLICANTS DETAILS Name of Bank /branch Cheque Number CSCS CHN Surname/Corporate Names: FOR REGISTRARS USE ONLY Other Names (for Individual Applicant Only): CONTROL NUMBER
Full Postal Address: Number of Units Applied for City: State:
Land phone Number: Mobile (GSM) Phone: Number of Units Alloted
Email Address: Amount Paid Date of Birth N
Value of Units Alloted ALLOTMENT PREFERENCE N
Amount to be Returned Please tick in the box to allocate allotment preference - Certificate Electronic (Book Entry) N
Cheque No/Transfer Details Next of Kin
Relationship with Next of Kin Stamp of Issuing House
Next of Kin Email and Telephone Number
SIGNATORY (IES) (CORPORATE ONLY) 1. Name (Surname first) 2. Name(Surname First)
Designation: Signature & Date: Designation: Signature & Date:
BANK DETAILS Name of bank/branch Bank Account Number
Bank Verification Number
INCORPORATION NUMBER & COMPANY SEAL OF CORPORATE APPLICANT STAMP OF RECEIVING AGENT
United Securities Limited Registrars' office: 10 Amodu Ojikutu Street, Off Bishop Oluwole Street Victoria Island, Lagos Tel; 01-2714566-7 [email protected]
TSL REIT 119
Application Form
Declaration by Applicant(s) I/We declare that I/We am/are 18 years and over I/We attach a bank draft made payable to The TSL REIT, with my /our name, address and telephone numbers written at the back of that I/We forwarded evidence of payment or evidence of in accordance with the bank details provided overleaf I/We understand that as with all money market investment, the yeilds of investible securities including the changes in fund and the past performance is not necessarily an indication of future performance. "I/We hereby confirm that the information provided above is true, accurate and complete. Subject to applicable local law. I hereby consent and authorize the fund manager to share my information with domestic and overseas tax authorities where necessary to establish my tax liability in any jusrisdiction. I agree to notify the Registrars/Fund Manager with 30 calendar days if there is a change in any information which I have provided on the fund.
For Fund Manager Only KYC (Know Your Customer) Document Checklist Individual Investor Completed Subscription Form One Passport Photograph Utility Bill of Applicant(s) Proof of Identification
Corporate Investor Copy of Certificate of Incorporation Mean of Identification of Signatories
This completed form should be sent with evidence of payment/remittance to:
First Ally Asset Management Limited 7th floor , Architect's Place 2, Idowu Taylor Street Victoria Island Lagos
Control No. (for Registrars Use only)
TSL REIT 120
Instructions For Completing the Application Form
a) Application should be made only on the Application Form or photocopy downloaded or scanned copies of the Application Form. b) Application must be for a minimum of 1,000 units. Applications for more than 1,000 units must be in the multiples of 500 units stated on the Application Form. The number of units for which an application is made and the details of the bank draft attached should be entered in the boxes provided. c) The Application Form when completed should be lodged with any of the Receiving Agents listed on page 114. The application must be accompanied by a bank draft made payable to the Receiving Agent to whom the application is submitted, for the full amount payable on application. The draft must be drawn on a bank in the same town or city in which the Receiving agent is located and crossed “TSL REIT” with the name(s), address(es) and daytime telephone number of the applicant(s) written at the back. All bank commissions and transfer charges must be prepaid by the applicant. All drafts will be presented for payment on receipt and application. d) The Applicant should make only one application, whether in his/her own name or in the name of a nominee. Multiple or suspected multiple applications will be rejected. e) Any application from N10million and above must be transferred via RTGS or NEFT into the designated offer proceeds account domiciled with the receiving bank with the following details:
Account Name: TSL REIT IPO Account Number: 0723729176 NGN A/C Narration: (‘Name of subscribers) investment in the TSL REIT
f) Foreign currency subscribers are advised to contact the Receiving Bank for the applicable US Dollar exchange rate on the day the remittance is being effected. Payment can be made in US Dollars, for credit to:
Account Name: TSL REIT IPO Account Number: 0723730259 USD A/C Narration: (‘Name of subscribers) investment in the TSL REIT
g) The Receiving Banks will issue CCIs to foreign currency subscribers. CCIs are required to enable subsequent repatriation, in a freely convertible currency, of the distributions from or proceeds of any future sale of the units acquired in this Initial Public Offering. h) Joint applicants must sign the application form. i) An application from a corporate entity must bear its seal and be completed under the hand(s) of a duly authorized official(s) who should state also his (their) designation(s). j) An application from a pension or provident fund must be in the name or in the name of each individual trustee unless the Trustee are a limited liability company. k) Applications from associations and interest groups that are incorporated should state the names of the associations or the groups. l) An application from a group of individuals should be made in the names of those individuals with no mention of the name of the group. An application by a firm which is not registered under the ISA No. 29 2007 should be made either in the name of the proprietor or in the names of the individual partners. In neither case should the name of the firm be mentioned. m) An application by an illiterate should bear his/her right thumbprint on the Application Form and be witnessed by an official of the Bank or Stockbroker with whom the application is lodged who must first have explained the meaning and effect of the Application Form to the illiterate in a language understandable to him/her and that the illiterate appears to have understood same before affixing his thumb impression. n) Applicants should not print their signature. Applicants not able to sign in the normal manner would be treated for the purpose of this Offer as an illiterate and their right thumb print should be clearly impressed on the Application Form.
TSL REIT 121