1,000,000,000 · CORPORATE DIRECTORY OF THE FUND MANAGER -----10 6. PROFESSIONAL PARTIES TO THE...

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.

“FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, PLEASE REFER TO “RISK FACTORS” ON PAGES 15 & 16

Offer for Subscription

of

1,000,000,000 Units of N1 each

at Par

Payable in full on Application

Fund Manager & Sponsor

Trustee Custodian

(Global Investors Services)

Issuing House and Financial Adviser

Application List Opens: Monday, March 25, 2019 Application List Closes: Wednesday, May 6, 2019

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 March 18, 2019

RC: 1204564

RC:125097

RC: 1191465

RC:882510

FAAM MONEY MARKET FUND

2

Table of Content

1. TERMS & DEFINITIONS ------------------------------------------------------------------------------------ 4

2. ABRIDGED TIMETABLE -------------------------------------------------------------------------------------5

3. SUMMARY OF THE OFFER -------------------------------------------------------------------------------------6

4. THE OFFER -------------------------------------------------------------------------------------9

5. CORPORATE DIRECTORY OF THE FUND MANAGER -------------------------------------------------------------------------------10

6. PROFESSIONAL PARTIES TO THE OFFER -----------------------------------------------------------------------------------11

7. THE FUND -----------------------------------------------------------------------------------12

7.1 Introduction to the Fund -----------------------------------------------------------------------------------12

7.2 Investment Objectives of the Fund -----------------------------------------------------------------------------------12

7.3 The Investment Strategies -----------------------------------------------------------------------------------12

7.4 Investment Policy -----------------------------------------------------------------------------------12

7.5 Investment Committee -----------------------------------------------------------------------------------12

7.6 Investment Management -----------------------------------------------------------------------------------13

7.7 Investment Discretion -----------------------------------------------------------------------------------13

7.8 Permissible Asset Classes and Asset Allocation Strategy ------------------------------------------------------- 13

7.9 Rebalancing Policy -----------------------------------------------------------------------------------14

7.10 Term to Maturity of Investment Asset -----------------------------------------------------------------------------------14

7.11 Portfolio Maturity -----------------------------------------------------------------------------------14

7.12 Target Investors -----------------------------------------------------------------------------------14

7.13 Foreign Currency Investors -----------------------------------------------------------------------------------14

7.14 Investment Incentives -----------------------------------------------------------------------------------15

7.15 Investment Restrictions -----------------------------------------------------------------------------------15

7.16 Approved Issuers -----------------------------------------------------------------------------------15

7.17 Principal Risk Factors -----------------------------------------------------------------------------------15

7.18 Risk Management Framework -----------------------------------------------------------------------------------16

7.19 Subscription to the Fund -----------------------------------------------------------------------------------16

7.19.1 Application to the Fund -----------------------------------------------------------------------------------16

7.19.2 Minimum Investment Amount -----------------------------------------------------------------------------------16

7.19.3 Electronic Fund Statement -----------------------------------------------------------------------------------17

7.19.4 Valuation -----------------------------------------------------------------------------------17

7.19.5 Redemption -----------------------------------------------------------------------------------17

7.19.6 Minimum Holding Period -----------------------------------------------------------------------------------17

7.19.7 E-Dividend Distribution -----------------------------------------------------------------------------------17

7.20 Tax Information -----------------------------------------------------------------------------------17

7.21 Meeting of Unit Holders and Voting Rights -----------------------------------------------------------------------------------18

7.22 Closure of Register of Unit Holders -----------------------------------------------------------------------------------18

7.23 Report of the Fund -----------------------------------------------------------------------------------18

7.24 Liquidation of the Fund -----------------------------------------------------------------------------------18

7.25 Rating Agency -----------------------------------------------------------------------------------18

7.26 Fees, Charges and Expenses of the Fund -----------------------------------------------------------------------------------18

7.27 The Rating Report -----------------------------------------------------------------------------------20

8. FINANCIAL FORECAST -----------------------------------------------------------------------------------22

8.1 Letter from the Reporting Accountants -----------------------------------------------------------------------------------22

8.2 Bases and Assumptions -----------------------------------------------------------------------------------23

8.3 Forecast Income Statement -----------------------------------------------------------------------------------25

8.4 Forecast Financial Statement -----------------------------------------------------------------------------------26

8.5 Statement of Significant Accounting Policies -----------------------------------------------------------------------------------27

8.6 Letter from the Issuing House -----------------------------------------------------------------------------------31

9. NIGERIA: COUNTRY PROFILE -----------------------------------------------------------------------------------32

9.1 Introduction -----------------------------------------------------------------------------------32

9.2 Gross Domestic Product -----------------------------------------------------------------------------------32

9.3 External Reserve -----------------------------------------------------------------------------------32

9.4 Inflation -----------------------------------------------------------------------------------33

9.5 Exchange Rate -----------------------------------------------------------------------------------33

9.6 The Capital Market -----------------------------------------------------------------------------------34

9.7 Fixed Income -----------------------------------------------------------------------------------35


3

Table of Content

10. INFORMATION ON THE FUND MANAGER -----------------------------------------------------------------------------------37

10.1 Profile of the Fund Manager -----------------------------------------------------------------------------------37

10.2 Board of Directors of the Fund Manager -----------------------------------------------------------------------------------37

10.3 Management of the Fund Manager -----------------------------------------------------------------------------------40

10.4 Four-Year Financial Summary -----------------------------------------------------------------------------------42

11. THE INVESTMENT COMMITTEE -----------------------------------------------------------------------------------43

12. THE TRUSTEE -----------------------------------------------------------------------------------45

13. THE CUSTODIAN -----------------------------------------------------------------------------------48

14. STATUTORY AND GENERAL INFORMATION -----------------------------------------------------------------------------------50

14.1 Extract from the Trust Deed -----------------------------------------------------------------------------------50

14.2 Extract from the Custody Agreement -----------------------------------------------------------------------------------69

14.3 Corporate Governance and Operating Structure ---------------------------------------------------------------------75

14.4 Indebtedness -----------------------------------------------------------------------------------76

14.5 Claims & Litigation -----------------------------------------------------------------------------------76

14.6 Shareholding Structure of the Fund Manager -----------------------------------------------------------------------------------76

14.7 Costs and Expenses -----------------------------------------------------------------------------------76

14.8 Relationship between the Issuer and the Professional Parties --------------------------------------------------------76

14.9 Material Contracts -----------------------------------------------------------------------------------76

14.10 Foreign Currency Investors -----------------------------------------------------------------------------------77

14.11 Unit Statements -----------------------------------------------------------------------------------77

14.12 Consents -----------------------------------------------------------------------------------77

14.13 Documents for Inspection -----------------------------------------------------------------------------------77

14.14 Fees and Expenses -----------------------------------------------------------------------------------78

15. PROCEDURE FOR APPLICATION AND ALLOTMENT---------------------------------------------------------------------------------79

15.1 Application -----------------------------------------------------------------------------------79

15.2 Allotment -----------------------------------------------------------------------------------79

15.3 Application Monies -----------------------------------------------------------------------------------79

16. RECIEVING AGENTS -----------------------------------------------------------------------------------80

17. APPLICATION FORM -----------------------------------------------------------------------------------81

18. INSTRUCTION FOR COMPLETING THE APPLICATION FORM ---------------------------------------------------------------------83


4

1 Terms and Definitions

The following definitions shall apply throughout this Prospectus

“ASI” All-Share Index

“CBN” Central Bank of Nigeria

“FMDQ OTC” FMDQ OTC Securities Exchange

“IPO” Initial Public Offer

“ISA” Investment and Securities Act No. 29 2007

“NAV” Net Asset Value

“SEC” or “The Commission” Securities & Exchange Commission

“Solicitors to the Transaction” Udo Udoma & Belo Osagie

“The Constitution” Constitution of the Federal Republic of Nigeria 1999

“The Custodian” United Bank of Africa Plc (Global Investor Services)

“The Fund” The FAAM Money Market Fund

“The Fund Manager & Sponsor” First Ally Asset Management Limited

“The Fund’s Financial Year End” December 31

“The Fund’s Financial Quarter” 31 March, 30 June, 31 October and 31 December

“The Rating Agent” Agusto & Co

“The Receiving Bank” Access Bank Plc

“The Financial Adviser/ Issuing House” First Ally Capital Limited

“The Trustee” Radix Trustees Limited

“The Registrar/Transfer Office” United Securities Limited

“Unit(s)” Unit(s) of participation in the Fund

“The 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.


5

2 Abridged Timetable

Date Activity Responsibility

25/03/19 Application List Opens FACL

06/05/19 Application List Closes FACL

20/05/19 Receiving Agents make Return FACL / FAAM

27/05/19 Forward allotment proposal and draft newspaper

advertisement to SEC

FACL

05/06/19 Receive SEC clearance of Allotment Proposal FACL

06/06/19 Payment of Net proceeds of the Offer to Custodian FACL / Receiving Bank

07/06/19 Allotment Announcement FACL

07/06/19 Return Rejected application monies FACL / FAAM

10/06/19 Distribution of Electronic Fund Statements FAAM

17/06/19 Forward Report on Completion of Offer to SEC FACL

24/06/19 List the MMF on the FMDQ FACL

*All dates provided are subject to change by the Issuing House in consultation with the Fund Manager and subject

to obtaining the relevant regulatory approvals


6

3. Summary of the Offer

The following information should be read in conjunction with the full text of this Prospectus, from which

it was derived. INVESTORS ARE ADVISED TO SEEK INFORMATION ON THE FEES AND CHARGES BEFORE

INVESTING IN THE FUND.

FUND MANAGER & SPONSOR: First Ally Asset Management Limited

(“FAAM” or “the Company”)

ISSUING HOUSE/FINANCIAL ADVISER: First Ally Capital Limited (“FACL”)

TRUSTEE TO THE FUND: Radix Trustees Limited

THE OFFER 1,000,000,000 Units of N1 each in the Fund

METHOD OF THE OFFER: Offer for Subscription, being the IPO Units in the Fund

NATURE OF THE FUND: The Fund is a Money Market Fund with the objective of

providing investors with regular income earned from

investments in high quality short term money market

instruments and debt securities issued by the Nigerian

Government.

The Fund will invest in securities such as:

Banker’s acceptances, certificates of deposits,

commercial papers, collaterised repurchase

agreements etc;

Deposits (Fixed/Tenured) with eligible financial

institutions;

Short term debt securities issued or guaranteed by any

Federal or State Government of Nigeria;

Other instruments introduced and approved by the

Central Bank of Nigeria (CBN) from time to time.

Other money market or fixed income instruments in

which the Fund is permitted to invest under the Trust

Deed

UNITS OF SALE: Minimum of 5,000 Units and not less than 5,000 Units

thereafter.

OFFER PRICE: N1.00 per Unit

OFFER SIZE: N1,000,000,000.00

PAYMENT TERMS: In full on Application

MANDATORY SUBSCRIPTION: 5% of the Offer will be subscribed to by First Ally Asset

Management Limited

This is in compliance with current regulations 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 Schemes

OPENING DATE: Monday, March 25, 2019


7


CLOSING DATE: Monday, May 6, 2019

REDEMPTION: Redemption will be paid within 5 working days after the

relevant documents have been submitted to the Fund

Manager. The number of Units redeemed shall not be less

than 5,000 units or such other number of units as the Fund

Manager may from time to time prescribe. Minimum

permissible holding after redemption is 5,000 units or such

balance as advised by the Manager from time to time.

Redemptions within 90 days from the date of subscription for

Units will attract a minimum fee in an amount not less than

10% of the dividend payable on the Units redeemed on the

day of redemption.

DIVIDEND PAYMENT: E-Dividend shall be distributed within 7 working days after the

end of every quarter of the Fund’s financial year. The first

dividend payment would be 90 days after SEC approval of

the allotment of this Offer and in subsequent financial

quarters after that.

RE-INVESTMENT OPTIONS: Investors may, either at the time of subscription for Units or

any time thereafter by written notice to the Manager, elect

to receive dividend payments or opt for reinvestment of such

dividends.

OVERSUBSCRIPTION: Any oversubscribed portion would be absorbed, subject to

the approval of the SEC

UNDERWRITING: At the instance of the Issuer, this Offer will not be

underwritten

FORECAST OFFER STATISTICS:

(Extracted from the Reporting

Accountants’ Report)

Year Ending 31st

December

2019

N’000

2020

N’000

2021

N’000

Opening Net Assets

Value 1,034,113 1,272,054 1,570,582

Gross Revenue 181,283 187,397 250,320

Net Additional

Investments during the

Year 200,000 246,823 303,775

Operating Expenses (34,460) (27,142) (32,618)

Dividend Payments 102,339 113,825 155,116

Closing Net Assets Value 1,234,113 1,518,877 1,874,358

Expenses to Gross Asset

Value 2.90% 1.90% 1.80%

Annualised Return on

Investment 14.70% 15.50% 17.10%


8


STATUS: The Units qualify as securities in which Trustees may invest

under the Trustee Investment Act Cap T22 Laws of the

Federation of Nigeria 2004.

USE OF PROCEEDS: The Offer proceeds would be invested in money market

instruments according to the asset classes below:

Asset Classes % Allocated Range

Short Term Government

Securities

40 +/-25

Other Money Market

Instruments

60 +/-25

CUSTODIAN: UBA Plc Global Investor Services.

The Custodian is responsible for the safe keeping of the

assets of the Fund. The Custodian or any of its affiliates may

contract or enter into any financial, banking or other

transactions with any individual or corporate entity whose

investment form part of the Fund or be interested in any such

contract or transactions and in particular without limitation,

may invest in and deal with Units relating to the Fund for their

respective individual accounts or for the account of

someone else.

QUOTATION: Application shall be made to the FMDQ OTC Securities

Exchange for the admission to its Memorandum List of the

1,000,000,000 Units being offered for subscription.


9

4. The Offer

A copy of this prospectus together with the documents specified herein having been approved by

the Trustee, has been delivered to the Securities & Exchange Commission (“SEC” or “the

Commission”) for clearance and registration.

This prospectus is issued in compliance with the Investments and Securities Act No. 29 2007, the Rules

and Regulations of the Commission and contains particulars in compliance with the requirements of

the Commission for the purpose of giving information to the public with regard to the Offer for

Subscription of 1,000,000,000 units of The Fund. The Fund has been authorised and registered by SEC

as a Unit Trust Scheme. An application has been made to FMDQ OTC Securities Exchange for the

admission of the 1,000,000,000 Units being offered for subscription to its Memorandum List.

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.

FIRST ALLY CAPITAL LIMITED RC 1191465

On behalf of

FIRST ALLY ASSET MANAGEMENT LIMITED RC 1204564

Offers for Subscription and is authorised to receive applications for

1,000,000,000 UNITS of N1.00 each in

In the

(Authorised and Registered in Nigeria as a Unit Trust Scheme)

At Par

Payable in full on application

The Application List for the Units now being offered will open on, Monday March 25, 2019 and close on

Monday, May 6, 2019


12

7 The Fund

7.1 Introduction of the Fund

The FAAM Money Market Fund is an open ended fund authorized and registered in Nigeria as a Unit

Trust Scheme under Section 160 of the Investment and Securities Act. The primary objective of the

Fund is the provision of a steady stream of income to investors by investing in high quality short term

money market instruments and government securities.

The FAAM Money Market Fund is governed by a Trust Deed with Radix Trustees Limited as Trustees. The

Fund is offering 1,000,000,000 units as the initial subscription to the public.

The Fund has a risk rating of “Af” as rated by Agusto & Co. This rating shall be subject to annual review

throughout the life of the Fund.

7.2 The Investment Objectives of the Fund

The Fund is an open-ended money market investment scheme that seeks to provide income

consistent with capital preservation and liquidity.

The Fund Manager shall seek to attain this objective within an acceptable level of investment risk.

7.3 Investment Strategies

The Fund seeks to achieve its objective by active security selection consistent with its daily assessment

of market liquidity and credit risks. It will maintain a weighted average portfolio maturity of 90 days

and will invest only in investment grade instruments that have a term to maturity of not greater than

366 days at the time of issuance.

7.4 Investment Policy

The Fund is an actively managed open-ended Money Market Unit Trust Scheme that will invest in

money market instruments subject to the approval of SEC and earn a consistent income stream. The

Fund seeks to achieve its stated objective of delivering fairly competitive returns by investing 100% of

its assets in low risk short-term securities such as Guaranteed Commercial Papers, Treasury Bills, CBN

Certificates, Commercial Papers, Banker’s Acceptances and Certificates of Deposit issued by rated

banks in Nigeria and acceptable financial institutions. The primary performance objective of the Fund

is to obtain as high a level of current income as is consistent with capital preservation. In selecting

securities for the portfolio, the Fund Manager shall seek to achieve an investment medium for unit-

holders which shall have as its primary objectives a reasonable level of current income and maximum

stability for capital invested.

7.5 Investment Committee

The Investment Committee shall be responsible for reviewing the performance of the Fund on a

regular basis. The responsibilities of the Investment Committee to the Fund are as stated below among

others:

Oversight of the Fund’s investment management activities

Ensuring adherence to the Fund’s investment policy as set out in the Trust Deed and other

statutory regulations.

Reviewing the investments of the Fund to assess whether policy guidelines and asset

allocation strategies are adhered to.

Monitoring the investment performance of the Fund by reviewing the investment risks and the

investment returns of the Fund’s assets.

The under listed shall constitute the Investment Committee;

Independent Member

Chief Executive Officer of First Ally Asset Management Limited


13

7. The Fund

Head, Trading and Portfolio Management

The Trustee

7.6 Investment Management

The FAAM Money Market Fund shall be managed by a team of professional portfolio managers. The

responsibilities of the Fund Managers among others are:

To exercise due diligence and care when investing the Fund’s assets.

To apply investment discretion, including maintenance of a minimum cash balance to meet

redemption requirements. Such discretion shall also include the decision to buy, hold, or sell

the Fund’s assets in line with the investment objectives and asset allocation guidelines

To monitor all transaction costs and consistently achieve best execution on transactions on

behalf of the Fund. Costs include all bank charges as they relate to the maintenance of

current accounts, trading charges, etc.

To undertake such other responsibilities as stated in the Trust Deed, ISA and the rules and

regulations made pursuant to the ISA (“SEC Rules”).

7.7 Investment Discretion

The investment of the Fund’s assets shall be undertaken at the discretion of the Fund Manager act ing

in accordance with the Trust Deed, the Fund’s stated objectives and its strategic asset allocation. The

Fund Manager shall be responsible for all the decisions regarding the investment strategies, types,

amounts and timing of the investments to be undertaken by the Fund. The strategy of the Fund shall

be reviewed periodically by the Fund Manager and modified in line with prevailing market conditions.

The investment strategy of the Fund shall be based on fundamental credit analysis of Issuers. Some of

the broad parameters for investment shall include credit rating, strength and track record of the Issuer,

competitive returns and market fundamentals and outlook.

7.8 Permissible Asset Classes and Asset Allocation Strategy

The assets of the Fund shall be fully invested in the under listed permissible short-term money market

instruments from Issuers with credit ratings of not less than investment grade assigned by SEC-

approved credit rating agencies:

Banker’s Acceptances

Certificate of Deposits

Commercial Papers

Fixed Deposit placements with eligible financial institutions

Collaterised Reverse Repurchase Agreements (Reverse Repos)

Treasury Bills and any other approved short-term debt instrument issued or guaranteed by the

Nigerian Government or the Central Bank of Nigeria

The major task of the Fund Manager is to ensure a steady stream of income from the investment

process. In line with this, the strategic asset allocation has been developed based on the principle

that specific asset classes have different investment characteristics and, as such, the fund’s assets can

be diversified to optimize the primary objective of the fund.

Asset Classes % Allocated Range

Short Term Government Securities 60 +/-25

Other Money Market Instruments 40 +/-25


14

7 The Fund

The Fund does not have a strategic allocation to cash but the Fund Manager will hold varying

amounts of cash in the normal course of managing the Fund, but not exceeding 5% except in cases

of significant withdrawals from the Fund.

7.9 Rebalancing Policy

The Fund Manager shall monitor the asset allocation of the Fund and shall take all the necessary

actions within the requirements of the policy to rebalance the portfolio on a periodic basis, subject to

the approval of the Commission.

7.10 Term to Maturity of Investment Asset

The Fund Manager shall ensure that the Fund’s assets meet the stipulated liquidity profile of the Fund

by:

Investing only in instruments that have a term to maturity of not greater than 366 days at the time

of issuance.

Undergoing regular yield adjustments within a period not exceeding 366 days

7.11 Portfolio Maturity

The weighted average maturity of the portfolio assets shall not exceed 90 days. Therefore, before an

asset is purchased, the Fund Manager shall analyse the implication of such asset addition to the

portfolio.

7.12 Target Investors

As an open-ended collective investment scheme, the Fund encourages periodic contributions and

may present a higher rate of return than other similar collective investment schemes because of its size

and underlying assets.

The Fund would be attractive to investors who desire a regular steady stream of income with minimum

risk appetite as the Fund is structured to pay dividend quarterly.

High net-worth individuals with idle cash balances can also take advantage of the Fund to earn

higher rates of return.

Investors concerned with capital preservation, require liquidity as well as who wish to reduce

concentration risk by diversifying their investments.

Institutional clients who desire higher returns with minimum risk appetite can also take advantage of

the potentially higher return that the Fund offers.

The Fund is open to individuals (irrespective of nationality), institutions, entities, firms, societies and

employee schemes amongst others. The Fund accepts participation of foreign and non-resident

investors.

7.13 Foreign Currency Investors

The Fund assets are denominated in Naira and, as such, capital inflows by foreign investors who

subscribe to the Fund shall be converted to Naira at the exchange rate as advised by the Fund

Manager’s Bankers. Certificates of Capital Importation (CCI) shall be issued by the Fund Manager’s

Bankers for foreign investors as evidence of capital inflow into the country, and this shall be kept by

the foreign investor or by the Custodian to the Fund if the investor so wishes. This certificate is

necessary for procurement of foreign exchange at the official market for repatriation of dividends

paid by the Fund and repatriation of proceeds from the redemption of Units.


15

7. The Fund

7.14 Investment Incentives

The Fund will, by the pooling together of funds to obtain better bargaining power, enable investors to

enjoy competitive returns (while minimising risk) that will otherwise not be obtainable by individual

investors.

The Fund also offers an opportunity to subscribe to units on behalf of and in the name of minors. When

such minors reach legal maturity (i.e. 18 years) they can either continue with the investment or

redeem all or some of the Units held in their name subject to the minimum permissible holding.

7.15 Investment Restrictions

The Fund shall invest in such instruments as are permissible within the ambit of the ISA, SEC Rules and

other applicable laws as stated in the Trust Deed and as approved by the Commission. The following

restrictions will, however, apply:

Investments shall be made for trading purposes only and shall not be intended for the purpose of

exercising control over the management or operating policies of Issuers of securities held.

The Fund shall not give loans except that it may buy and hold qualifying debt instruments in

accordance with its mandate.

7.16 Approved Issuers

The approved issuers that the Fund Manager can invest the money market fund with are stated

below;

Banks with investment grade ratings from any registered rating agency approved by the

Commission

Other financial institutions with investment grade ratings from any registered rating agency

approved by the Commission

Central Bank of Nigeria

Federal and State Governments of Nigeria

7.17 The Principal Risk Factors

The Fund Manager cannot guarantee the probability of incurring unforeseen financial losses as it is

possible to lose money by investing in the Fund. The Fund Manager shall however exercise necessary

precautions within its capacity by instilling appropriate risk management frameworks that will ensure

that the Fund’s monies are prudently invested while optimizing the overall yield of the Fund. The under

listed are the principal risk factors that the Fund Manager envisages would affect the Fund’s

investments:

Interest Rate Risk: The market value of the Fund would vary from day to day due to changes in

interest rates. A rise in interest rates would improve the returns to the Fund, while a fall in interest

rates would decrease returns of the Fund.

Default Risk: Changes in economic conditions, disruptions in the financial markets and political

instability could also cause an Issuer not to fulfil its financial obligations as and when due or

default completely.

Changes in Issuer/Instrument Credit Ratings: A downward credit rating of an Issuer and or

instruments by a rating agency in which the Fund has investment may make it difficult for the

Fund to sell such investments thereby impacting on the market value of the Fund.

Foreign Exposures: Foreign Investors who subscribe to the Fund are not immune to adverse

changes in exchange control regulation, exchange rate variations, political instability, statutory

and other government regulations, as the Fund’s assets are denominated in the Nigerian local

currency.


16

7. The Fund 7.18 Risk Management Framework

The Fund Manager is an active participant in the money market space and shall ensure that the risk

factors mentioned above are frequently monitored in order to minimize their potential effects, but

cannot guarantee full protection against these risk factors. The under-listed elements of the Risk

Management Framework shall be put in place by the Fund Manager;

The Fund Manager shall on a regular basis determine the current market value of the Fund’s

assets so as to frequently notice any deviation from the cost. The result of such analysis shall be

reported to the investment committee of the Fund and to the Trustees to the Fund.

Changes in market interest rates are expected to have an impact on money market instruments.

The Fund Manager shall ensure that the weighted average maturity of the Fund shall not exceed

90 days.

The Fund Manager shall ensure that the Fund’s assets are adequately diversified among the

approved issuers in the Money Market. The credit ratings of approved Issuers will also be

monitored on an ongoing basis. Cognisance shall however be given to the risk and return

objectives of the Fund.

The Fund Manager shall also stress test the portfolio on a regular basis by simulating various

scenarios of the potential impact of the principal risk factors on the Fund. The result of such stress

testing shall be reported to the investment committee of the Fund.

7.19 SUBSCRIPTION TO THE FUND

7.19.1 Application to the Fund

The Fund shall be issued in Units of N1.00 each during the offer, subject to an initial minimum

subscription of N5,000.00 and additional amounts of not less than N5,000.00.

Consistent with the open-ended nature of the Fund, any oversubscription would be absorbed in full.

The Fund Manager shall also be at liberty to create more units of the Fund from time to time as it

deems fit, subject to the registration of the additional units with the Commission.

Following the Offer, the Fund Manager shall issue new units for cash at the Offer Price of N1.00 on a

valuation date following the day on which cleared funds are received.

Subsequent to the Offer, units of the Fund can be subscribed:

From FAAM’s Office, as well as other approved channels and in such manner as the Fund

Manager may from time to time advise. Completed Forms should be returned to any of these

locations along with a bank draft/cheque for the amount being invested.

By downloading a Purchase Order Form from the First Ally Asset Management website, (www.first-

allyasset.com). The downloaded and duly completed form and bank draft/cheque should be

sent to the locations as provided in the prospectus. Payment for units of the Fund can also be

made by wire transfer, internet banking facilities and ATM as stated on the Subscription Form.

Subscription in foreign currency from foreign-based subscribers is also permissible. Such foreign

currency amounts shall be converted to Naira at the exchange rate prevailing on the date of

conversion.

7.19.2 Minimum Investment Amount

The minimum investment amount shall be N5,000.00 and any additional investment after the Offer shall

be in amounts not less than N5,000 (in multiples of N5,000). The Fund Manager is however at liberty to

review these amounts as the need arises.


17

7. The Fund

7.19.3 Electronic Fund Statement

Every Unitholder shall be entitled to receive from the Fund Manager an Electronic Fund Statement for

the number of units purchased by such Unitholder. The Electronic Fund Statement shall be conclusive

evidence of the number of units held.

The Electronic Fund Statements shall be made available via E-mail to all Fund subscribers.

7.19.4 Valuation

The Fund Manager shall work to ensure a stable Net Asset Value (NAV) per unit of N1.00 which is the

price at which investors purchase or redeem their Units in the Fund. The NAV of the Fund shall be

determined on the basis of the amortised cost method rather than at current market value. The cost is

the price the Fund pays for an instrument or security adjusted for accrual of discount and amortization

of premium.

7.19.5 Redemption

Unit holders shall be entitled to redeem all or part of the units held by them at the Fund’s NAV on any

business day upon a request to the Fund Manager. The estimated redemption period shall be 5

working days from the date of receipt of the redemption notice.

7.19.6 Minimum Holding Period

The initial minimum holding period in the Fund shall be 90 days. The Fund Manager is however aware

that investors might have need for their monies within the minimum holding period and as such would

be willing to redeem such investment from the investors. The Fund shall however charge a minimum

fee of 10% on the dividend earned to the day of redemption on the redeemed investment.

The proceeds of the redemption shall be paid into the designated account provided by the Unit

holder on the subscription form. However, indemnity would be required from any unit holder who

wishes;

The Fund Manager to credit the proceeds of the investment to another designated or third party

account other than the account indicated on the subscription form.

Any other circumstance that the Fund Manager determines to warrant the submission of the

above documents.

7.19.7 E- Dividend Distribution

The net income from investments in the Fund shall be declared monthly to unit holders, but paid

quarterly. Unit holders are required to specify on their subscription form the payment option for their E-

dividend distribution. Dividend can either be:

Reinvested into the Fund and additional Units allocated to Unit holders, or,

Credited into the Unit holders’ bank accounts via electronic means as specified in the

subscription forms.

E-Dividend shall be distributed within 7 working days after the end of every quarter of the Fund’s

financial year.

7.20 Tax Information

The Fund is structured to take full advantage of tax incentives granted by the Federal Government to

unit trusts in order to allow investors maximize their after-tax returns on investment. However, since tax

legislations are subject to changes, the Fund Manager is not in a position to guarantee their continued

effect on investors’ after-tax returns in subsequent years.


18

7. The Fund

7.21 Meeting of Unit Holders and Voting Rights

The Fund Manager shall hold a general Meeting of the Unitholders at least once every 5years to

consider the accounts and all matters affecting the Fund which meeting shall be in addition to any

other meeting of the Unitholders. Each unit of the Fund carries a right of one vote in all matters

requiring the decision of the unit holders. The units confer on the unit holders exclusive participation in

the returns on the assets of the Fund and a right to receive notices and vote at any General Meeting

of the Fund.

7.22 Closure of the Register of Unit Holders

The register of Unit Holders will be closed for a maximum of 30 days in a year. Within the period of such

closure, no disposal or sale will be recorded in the register. The Unit Holders will be given at least two

weeks’ notice of such closure by publication in at least two national dailies.

7.23 Report of the Fund

Copies of the audited annual reports of the Fund will be mailed to all Unit Holders at their registered

addresses within three months following the financial year end of the Fund.

The Fund’s fiscal year ends on December 31st of each year.

7.24 Liquidation of the Fund

The Fund has been established for a period of 21 years and shall subsist for that duration except on the

occurrence of any of the following events;

(a) If the Manager believes that the investment objective of the Fund is no longer achievable;

(b) If six months after the date on which the Offer opened for subscription the value of the Fund shall

be less than the minimum prescribed by SEC, the Manager may with the consent of the Trustee,

(which shall not be unreasonably withheld), terminate the Trust on a date to be agreed between

the Trustee and the Manager subject to the approval of the Commission.

(c) If any law is passed or regulations or decision of a court of competent jurisdiction or government

policy is made which in the judgment of the Manager and/or the Trustee renders it illegal or

impractical to continue the Fund.

(d) If the Commission revokes the authorisation of the Fund in accordance with the provisions of

section 163 of the ISA.

(e) If at any meeting held in accordance with the provisions of the Schedule IV of the Trust Deed, it

should be resolved by Special Resolution to determine the Trust on a date specified in such

Special Resolution (being a date not earlier than three months after the date of the Resolution)

the Trust shall accordingly be determined and this Deed shall cease to be of effect.

7.25 Rating Agency

The Fund has a risk rating of “Af” as rated by Agusto & Co. This rating shall be subject to annual review

throughout the life of the Fund.

7.26 Fees, Charges and Expenses of the Fund

The following fees and expenses shall be met from the assets/income accruing to the Fund.

1. The Trustee shall be paid a fee equal 0.05% per annum of the Net Asset Value of the Fund

payable every quarter in arrears.


19

7. The Fund

2. The Fund Manager, shall be paid a fee equal to 1% in 2019, 1.5% in 2020 and 2021, of the Net

Asset Value of the Fund exclusive of Value Added Tax, payable monthly in arrears. The Fund

Manager will also be entitled to reimbursement of reasonable out of pocket expenses

incurred whilst performing duties incidental to the management of the Fund.

The Manager is also entitled to an incentive fee of not more than 20% of total returns in excess

of 10% of the Net Asset Value of the Fund for the preceding year. The Management Fee shall

be borne by the Fund.

3. The Custodian shall be paid a fee equal 0.025% per annum of the Net Asset Value of the Fund,

exclusive of VAT, payable every quarter in arrears.


20

7. The Fund

7.26 Rating Report


21

7. The Fund


22

8.0 Financial Forecast

8.1 Letter from the Reporting Accountants

The following is a copy of the letter on the Profit Forecast by PKF Professional Services (Chartered

Accountants), the Reporting Accountants to the Offer;

February 11, 2019

The Directors

First Ally Asset Management Limited

7th Floor, Architects’ Place

2, Idowu Taylor Street

Victoria Island

Lagos

Gentlemen,

PROFIT FORECASTS ON THE OFFER FOR SUBSCRIPTION OF 1,000,000,000 UNITS OF THE FAAM MONEY

MARKET FUND ISSUED AT PAR

We have reviewed the accounting bases and assumptions for the financial forecast (profit forecast

and financial position forecast) of the FAAM Money Market Fund (for which the Directors of First Ally

Asset Management Limited {“the Fund Manager} are solely responsible) for the three years ending 31st

December 2019, 2020 and 2021.

In our opinion, the financial forecast, as far as the accounting policies and calculations are

concerned, have been properly compiled based on the bases of the assumptions made by the

Directors and are presented with generally accepted accounting principles normally adopted by the

Fund Manager. We planned and performed the review to obtain moderate assurance as to whether

the financial forecast is free from material misstatement and have made necessary adjustments to the

forecast, as we considered necessary.

However, the forecasts and actual results usually differ, because events and circumstances frequently

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,

Ayodeji Sonukan, FCA

FRC/2013/ICAN/02431

For PKF Professional Services

Reporting Accountants

Lagos, Nigeria


23

8 Financial Forecast

8.2 BASES AND ASSUMPTIONS

The following are the main bases and assumptions underlying the profit forecast for the three years

ending 31 December 2019, 2020 and 2021

A. Bases

The financial forecasts have been prepared on the assumption that the FAAM Money Market Fund

("the Fund") will operate on a basis consistent with the accounting policies normally adopted by First

Ally Asset Management Limited ("the Fund Manager") to ensure the reasonableness of the forecasts

for 2019, 2020 and 2021 financial years.

B. Assumption

i. Revenue

Expected forecast revenue of the Fund in the year end periods 31 December 2019, 2020, and

2021 will be approximately N181 million, N187 million and N250 million respectively.

ii. Accounting Policies

There will be no material change in the accounting policies currently in use by the Fund

Manager.

iii. Economic Factors

There will be no significant changes in Federal Government monetary and fiscal policies that

will adversely affect the operations of the Fund.

iv. Political Factors

There will be no drastic changes in the political and economic environment both local and

international that will adversely affect the operations of the Fund.

v. Taxation

Company income tax and education tax will remain at 30% and 2% respectively for the

forecast period. The Fund is exempted from company income tax on profits arising from its

investments. However, the Fund Manager assumes 10% withholding tax for 2019 to 2021 with

respect to income arising from tenored deposits.

vi. Offer for Subscription

There will be 1,000,000,000 units of N1 each of the Fund offered for subscription by the Fund

Manager and will be fully subscribed within the initial subscription period.

vii. Post Subscription of the Fund

Additional investments to the Fund are expected to be 20% of the opening Net Asset Value in

2019, 2020 and 2021 respectively.

viii. Proceeds of the Fund

Proceeds of the Fund will be invested as follows:

2019

Short Tem Nigerian Government Treasury Bills 30%

Tenored placements/deposits 52.5%

Other money market instruments 17.5%

2020 & 2021

Short Tem Nigerian Government Treasury Bills 60%

Tenored placements/deposits 39%

Other money market instruments 1%


24


ix. Management

The quality of the Fund Manager, Trustee and Registrar’s management will be sustained during

the forecast period.

x. Industrial Disputes

Operating results will not be affected by industrial disputes in the other financial services sector

of the banks and other financial institutions industry or in the country

xi. Inflation

Inflation has been taken into consideration in the preparation of the projections

xii. Operations of the Fund

The income from the Fund's investments is estimated as follows:

The investments in Federal Government securities will attract an average interest rate of

17% in 2019, 16.35% in 2020, 16.73% in 2021;

Income on tenored deposit is estimated at an average interest rate of 18.62% in 2019,

16.82% in 2020, 17.49% in 2021;

Income on other money market instruments is estimated at an average interest rate of

15% for Commercial Papers and 2.13% for cash in 2019, 2020, and 2021.

An annual management fee of 1% of the Gross Asset Value is payable in 2019 and 1.5% of the

gross assets value is payable in 2020 and 2021.

Other operating expenses including custodian, trustee, are estimated at 0.025% and 0.05%

respectively.

xiii. Initial Cost of the Offer

Total costs associated with the Offer are estimated at 1.7% of the gross proceeds, that is

N17million, and would be expensed in the first year.

xiv. Dividend

75% of the net income after tax of the Fund shall be distributed to all applicable unit holders at

the end of every quarter in arrears.


25


8.3 Forecast Income Statement

The Directors are of the opinion that barring unforeseen circumstances and based on the assumptions

for the three years ending 31 December 2019, 2020 and 2021, the net income before tax for the

forecast period will be in the order of N147million, N160million, and N218million respectively arrived at

as follows:

Financial Year Ending 31 December 2019 2020 2021

N'000 N'000 N'000

Income

Government Securities 50,860 102,558 141,507

Term Deposits 103,260 84,572 108,492

Commercial Papers 27,118 - -

Cash - 260 320

Total Revenue 181,238 187,391 250,320

Operating Expenses

Issue Expenses (17,009) - -

Listing Fees (653) (653) (653)

Fund Manager (11,812) (21,323) (26,538)

Trustee (591) (711) (885)

Custodian (295) (355) (442)

Audit (1,500) (1,500) (1,500)

Rating Agency (2,100) (2,100) (2,100)

Other Expenses (500) (500) (500)

Total operating Expenses (34,460) (27,142) (32,618)

Net Income before Taxation 146,778 160,249 217,702

Taxation (10,326) (8,483) (10,881)

Net Income after Taxation 136,452 151,766 206,821

Forecast Dividend 102,339 113,825 155,116

Forecast Statistics

Additional Funds 200,000 246,823 303,775

Net Assets Value ('000) 1,034,113 1,272,054 1,570,582

Closing Net Asset Value ('000) 1,234,113 1,518,877 1,874,358

Annualised Forecast Return on Investment (%) 14.7% 15.5% 17.1%

Expenses to gross asset value (%) 2.9% 1.9% 1.8%


26


8.4 Forecast Financial Position

The Directors are of the opinion that barring unforeseen circumstances and based on the assumptions

for the three years ending 31 December 2019, 2020 and 2021, the net assets for the forecast period

will be in the order of N1.13billion, N1.41billion and N1.72billion respectively arrived at as follows;

Financial Year Ending 31 December 2019 2020 2021

N'000 N'000 N'000

Assets

Cash and Cash equivalents 103,260 84,833 108,813

Money Market securities 1,130,853 1,434,044 1,765,545

Total assets 1,234,113 1,518,877 1,874,358

Liabilities

Accurals and other payables 102,339 113,825 155,116

Total Liabilities 102,339 113,825 155,116

Net Assets Attributable to Unitholders 1,131,774 1,405,052 1,719,242

Equity

Unit holders' Account 1,097,661 1,367,111 1,667,537

Retained Earnings 34,113 37,942 51,705

Net Assets Attributable to Unitholders 1,131,774 1,405,052 1,719,242


27


8.5 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 three 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. 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).

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.


28


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 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.

3. 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

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


29


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.

IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2017, with

early adoption permitted.

4. Improvements to IFRS

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.


30


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.


31


8.6 Letter from the Issuing House

October 16, 2018

The Directors


7th Floor, Architects Place


Victoria Island

Lagos

Dear Sirs,

OFFER FOR SUBSCRIPTION OF 1,000,000,000 UNITS OF FAAM MONEY MARKET FUND

We write in respect of the Prospectus issued for the Offer for Subscription of 1,000,000,000 Units in the FAAM

Money Market Fund (“The Fund”), the draft of which we have had the privilege of reviewing. The

Prospectus contains financial forecasts of the Fund for the years ending December 31, 2019, 2020 and

2021.

We have discussed the bases and assumptions upon which the forecasts were made with you and with

PKF Professional Services, the Reporting Accountants regarding the accounting bases and calculations

upon which the forecasts were compiled.

Having considered the assumptions made by you as well as the accounting bases and calculations

reviewed by PKF Professional Services, we consider that the forecasts (for which you as the Directors are

solely responsible) have been made by you after due and careful enquiry.

Yours faithfully,

Ebenezer Olufowose

Managing Director


32

9. NIGERIA: COUNTRY PROFILE The Information in this section has been extracted from documents and publications publicly available and released by various

public and private organisations such as the CBN, the Economic Intelligence Unit (EIU), the World Bank, the Nigerian Stock

Exchange, other financial magazines and various news articles/reports.

9.1 Introduction

In addition to being the most populous country in Africa (about 194million people according to 2017

estimates from the Nigerian Population Commission), Nigeria also doubles as the largest economy in

Africa following the 2014 GDP rebasing exercise. The economy is broadly categorized into oil and non-

oil sectors. The non-oil sector is further divided into 40 sectors - agriculture, financial services,

manufacturing, mining and quarrying, transportation and logistics, information and communication,

constructions and real estate etc.

Oil contributes about 90% of the country’s total revenue, which was one of the reasons the economy

plunged into a recession in 2016, following the fall in international crude oil production and prices,

which drastically reduced government’s revenue. The recovery in crude oil prices as well as increased

output in the non-oil sector, resulted in slow economic recovery in 2017 and an eventual recovery in

2018.

9.2 Gross Domestic Product

Over the last 5-years, Nigeria’s annual GDP growth rate fell, from 5.4% in 2013 to 0.83% in 2017. The

reason for this drastic fall was declining economic performance worsened by the fall in global crude

oil prices, which led to recession in 2016. The country’s GDP recorded a real annual growth of 0.83% in

2017 following its recovery from recession by Q2 2017, aided by the Federal Government’s

implementation of the Economic Growth and Recovery Plan (ERGP). During the year, aggregate real

GDP stood at N18.79 trillion, as the oil sector recorded annual growth rate of 4.79%, higher than 2016

growth of -1.45%. The non-oil sector recorded annual growth rate of 0.47% compared to the 2016

growth of -0.22%. Generally, the 2017 real GDP growth contribution was driven by non-oil sector that

contributed 92.83%, while the oil sector contributed 7.17% to total real GDP. The GDP growth rate

continued the positive trend to end Q2 2018 at 1.54%.

Source: NBS, FACL Research

9.3 External Reserve

Overall, the external reserves of the country declined over the 5-year period from $43.63 billion in 2013

to $37.92 billion in 2017. This decline mainly occurred as a result of the fall in global oil price which

began in 2014 and continued until 2016 when the country recorded its recession. However, by the 2nd

quarter of 2017, the economy had begun its slow path to recovery. Consequently, with rise in global

prices of oil and improved growth, the country’s external reserves position has been on the increase,

rising to $47.25 billion in July 2018.

5.4

6.3

2.7

-1.6

0.81.5

-2

-1

0

1

2

3

4

5

6

7

2013 2014 2015 2016 2017 2018 Q2

GDP Annual Growth rate%


33

9. NIGERIA: COUNTRY PROFILE

Sources: FACL Research, CBN

9.4 Inflation

Nigeria’s inflation rate has climbed 66.8% over the last five years. The CPI stood at 9.03% in January

2013 due to the impact of petroleum subsidy removal in the preceding year. However, effective

monetary tightening moderated inflation to 7.7% by February 2014. Thereafter, the impact of election

spending reflected on increasing demand, which created inflationary pressures on the economy. This

culminated to the Country’s inflation index growing into double digits by Q1 2016, following the drop in

revenue not matched with increased government expenditure resulting in currency devaluation and

hike in prices of goods and services.

Source: CBN, FACL Research

The Consumer Price Index (CPI) was at 18.72% as at January 2017 but soon began its decline in

February 2017, following government’s efforts to stabilize the economy by increasing local production

and the Central Bank’s drive to mop-up excess liquidity in the system. CPI in Nigeria eased to 15.13%

in January 2018 from 15.37% in December 2017, reporting at 11.14% by July 2018.

9.5 Exchange Rate

Between 2014 and 2016, Nigeria operated a fixed exchange rate regime that was regulated by the

Central Bank of Nigeria, who determined the exchange rate and regulated prices across board. In

2014, the exchange rate moderated between N150-N159/$1. The result of increased demand for

dollar saw a further review from N185 to N198/$1 in 2015 and 2016. During this time, the country

witnessed declining international prices of crude oil, reduced currency inflow into the Nigerian

43.63

34.47

29.0625.84

37.92

47.12

0

5

10

15

20

25

30

35

40

45

50

2013 2014 2015 2016 2017 Jul-18

US$ b

illio

nAnnual Foreign Reserves

- 2.00 4.00 6.00 8.00

10.00 12.00 14.00 16.00 18.00 20.00

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

2013 2014 2015 2016 2017 2018

Inflation Rates


34


economy, where demand for foreign exchange outstripped the limited supply by the CBN thereby

creating an atmosphere of artificial currency devaluation through the activities of parallel market

operators.

In 2016 however, CBN interbank exchange rate of a dollar to the Naira stood at N305/$1 and the

parallel market rate at N498/$1. In order to eliminate the volatility and the wide margin between

parallel market and CBN official rate, the Central Bank introduced different exchange rate windows

to facilitate business transactions, which culminated into the introduction of the Investors’ and

Exporters’ (“I&E”) FX Window in April 2017. This window achieved its expected aim of boosting liquidity

in the FX market and ensuring timely execution and settlement of eligible transactions. The CBN has

continued to sustain dollar supply intermittently, on the back of increasing external reserves.

Source FMDQ, FACL Research

Rates between the parallel market, interbank and I&E window has remained fairly stable since the

start of 2018. The interbank exchange rate, which opened at an average of N305.70/US$1 in January

2018, closed at N305.90/US$1 in July 2018 while exchange rates in the parallel market appreciated

from N364.00/US$1 in January 2018 to N360.00/US$1 in July 2018. Also, the I&E window which opened

in January 2018 at N360.00/US$1 depreciated to N362.40/US$1 in July 2018. This indicates a gap of

17.70% between the interbank rate and parallel market rate as well as 18.50% gap between interbank

rate and I&E fixing in July 2018.

9.6 The Capital Market

The Nigerian Stock Exchange has grown 82.9% over the last five years. The market’s growth

commenced in 2012 as the economy recovered from the impact of the 2008 global crisis and the

effects of fuel subsidy removal. Though inflation increased in 2012, the period experienced increased

economic growth as inflows from foreign investors and renewed appetite for local investors were

recorded in the Nigerian capital market. Thus, periods between Q2, 2012 and Q2, 2014 represented

high points on the NSE.

-

100.00

200.00

300.00

400.00

500.00

600.00

Jan

uar

y

Mar

ch

May

July

Sep

tem

ber

No

vem

ber Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

Sep

No

v

Jan

Mar

May Ju

l

2013 2014 2015 2016 2017 2018Interbank Parallel Market I&E


35


Source: NSE

However, in 2014, due to declining international oil prices, depleted excess crude account and the

impact of election, all of which contributed to reduced spending on infrastructural projects, the

market began to decline from Q3, 2014 and continued throughout the period of Nigeria’s recession in

2015, running until Q1 2017. The second quarter of 2017 marked the end of the 18-months economic

recession and the NSE gained considerably with the All Share Index recording 42.20%YTD 2017. The

NSE commenced year 2018 on a bullish outlook as the equity market gained 17% year-to-date on the

second trading week of the year. However, the equities market witnessed a continuing bearish trend

since February 2018 following the activities of early profit takers, as such, the NSE All Share Index

declined to close at 0.91% Ytd return as at July 2018.

The bearish trend is expected to continue in the short term as a result of the political risk associated

with the upcoming 2019 elections.

9.7 Fixed Income

Over the last five-years, the return on the prices of the FGN bonds have gone from 6.05% in 2013 to

3.52% in 2017, while the average bonds yield grew from 12.35% in 2013 to 16.18% in 2017. The increase

in yields was as a result of reduced liquidity in the system during the recession and afterwards, as the

economy began its road to recovery.

In recent time, rates in the fixed income space have begun to trend downwards as buying pressures

have increased due to lower interest rates, government redemptions, improved macroeconomic

conditions and increased investor confidence. The primary driver of yield moderation in Q1 2018 was

the low supply of fixed income instruments. In addition to this, the FGN adopted a borrowing strategy

of diversifying towards cheaper, longer-term external debt (Eurobonds) and reduced the more

expensive domestic debt. The FGN’s sale of $3 billion in Eurobonds in November 2017 was partially

used to fund the 2017 budget and to redeem outstanding treasury bills in December. This debt

restructuring led to a drop in rates by around 300 basis points between the auction in November 2017

and January 3, 2018.

The Federal Government also plans to redeem another tranche of N762.5 billion ($2.5 billion) worth of

treasury bills, from the proceeds of its recently concluded $2.5 billion Eurobond, in order to further

reduce Government’s borrowing costs. The implication of this event is that the yields on FGN debt

instruments are expected to drop further. This indicates that yield moderation is expected to continue

in the short term and would be buoyed by the spate of Open Market Operations (OMO) by the apex

bank during the period.

Improving corporate fundamentals, coupled with gradually declining bond yields is expected to

make the fixed income market a less attractive destination for investors in 2018. It is also expected

that overtime, corporates would look to raise funds by issuing bonds to enable them take advantage

of the prevalent low rates. Given its buoyant external reserves, moderating inflation outlook, and

need to support growth, it is expected that there will be a looser approach to liquidity management


36


in the coming months, even as caution needs to be exercised on the likelihood of a benchmark rate

cut in the near-term. Overall, it is expected that the CBN liquidity mop up and lower instrument supply,

will be the primary drivers of yield moderation in the near-term.

Source: FMDQ, FACL Research

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2013 2014 2015 2016 2017

FGN bond index Return Vs Yield

RETURN YIELD


37

10. Information on the Fund Manager

10.1 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 was incorporated in 2014 and was duly registered with the Securities &

Exchange Commission (SEC) as Fund and Portfolio Managers in 2015.

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’s 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 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 Af by Agusto & Co.

10.2 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.

Ebenezer Olufowose – Director

Mr Olufowose is the founding Managing Director/CEO of First Ally Capital Limited, the parent

company of FAAM. He commenced his banking career at NAL Merchant Bank Plc in 1985 and held

several leadership positions in leading Nigerian banks, including; General Manager and Head of

Investment Banking at GTBank, pioneer MD/CEO of GTBank’s first subsidiary outside of Nigeria

(GTBank Gambia), Executive Director at Access Bank Plc and Executive Director at Citibank Nigeria.

He was also Director/Head of Corporate Finance at Citigroup, where he led the origination,

structuring and execution of corporate finance deals in Nigeria.


38


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 Initial Public Offer 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, Ibru 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.

Okey Nwuke – Director

Dr. Nwuke has over 27 years of experience in finance and corporate governance from working with

top corporates and leading commercial banks in Nigeria. He is a Fellow of the Institute of Chartered

Accountants of Nigeria, an Associate of the Chartered Institute of Taxation of Nigeria, an honorary

member of the Chartered Institute of Bankers Nigeria and a member of Business Recovery and

Insolvency Practitioners (BRIPAN). Dr. Nwuke holds a B.Sc. degree in Accountancy from University of

Nigeria, Nsukka and MBA (Distinction) in International Banking and Finance from the Birmingham

Business School, United Kingdom. Out of concern on the high mortality rates of family businesses in

Nigeria, Dr. Nwuke was recently awarded Doctor of Business Administration (DBA) in Leadership at the

Walden University, Minnesota USA, with a research focus on leadership transition challenges in family

businesses.

Dr. Nwuke has acquired considerable expertise in credit analysis and bank financial management

through professional training as a chartered accountant, relevant training programmes and on-the-

job experience. Most importantly, he has deep skills in the management of financial institutions having

held Executive Director position in Access Bank from 2004 to 2013. He served as the Chairman of the

Board of Directors of Access Bank’s subsidiaries in Rwanda and Burundi and was also one of the

pioneer Non-Executive Directors of StanbicIBTC Pension Managers Limited. Key competencies include

marketing, negotiation, presentation skills, business restructuring and turn around management

developed over the years. He currently chairs the Shareholders’ Audit Committee of NASCON Plc.

He joined the Board of Coscharis Group in 2014 and is responsible for the strategic drive to optimize

the Group’s sales within the corporate sector and for reorganizing the Aftersales operations of the

Group to serve as a driver for sustained increases in repeat sales and referrals. He is also responsible

for the governance of key subsidiaries of the Group; Coscharis Farms Ltd, Coscharis Technologies Ltd,

Coscharis Mobility Ltd and Coscharis Ghana Ltd.

Dr. Nwuke has been exposed to several leadership and professional development programs at

renowned global institutions of excellence including; Harvard Business School, Boston (AMP 175),

Wharton Business School, Pennsylvania (both in U.S.A), INSEAD and IMD in Singapore and Switzerland

respectively. He also recently completed the Chief Executive Program (CEP) at the Lagos Business

School and IESE Barcelona, Spain. Dr. Nwuke is a member of the Society for Corporate Governance

and the Institute of Directors (IOD). He recently joined the Lagos Business School (LBS) as a part-time

faculty member, where he will be coordinating the Family Business Module.

Segun Omidele – Director

Mr Omidele is a seasoned professional with about 38 years of international exposure in technical,

managerial and executive roles in all facets of oil and gas exploration and production operations

with Shell E&P companies in Nigeria, United Kingdom (UK) and United States of America (USA) and 8

years at senior executive level with an independent oil company in the USA.


39


Mr Omidele started his career with Shell Petroleum Development Company of Nigeria in 1979 as a

well-site engineer. He had various technical, operational and managerial assignments in Nigeria, UK

and USA. In 2003, he was appointed as the Regional Resource Volume Manager for Shell E&P, Africa.

He occupied this position until 2008 and thereafter joined a USA based independent oil and gas

company as the Senior Vice President, Exploration and Production.

In 2011, he joined Camac Energy Inc./Erin Energy Corporation, USA as the Senior Vice President,

Business Development and New Ventures and became the Chief Executive Officer in 2016. He left Erin

Energy Corporation in 2017 and he is currently President of PolaSeo Group LLC, USA - a company he

founded in 2017.

He holds a Bachelor of Science degree and a Master of Science Degree in Petroleum Engineering

from the University of Ibadan (1979) and the University of Houston (2003) respectively. He also

attended an Advance Management Program (AMP) at Harvard Business School in 2010. He is a

Member of the Nigerian Society of Engineers and the Society of Petroleum Engineers.

Ojinika Olaghere – Director

Ojini is a seasoned professional with over 32 years’ experience in Bank Operations, Consumer and

Commercial Banking, Information Technology and General Administration spanning Audit and

Banking sectors. She is renowned for her impeccable analytical skills, astute leadership qualities and

the successful implementation of organizational strategies and achievement of goals.

She began her career with Tropical Farming magazine in 1985 where she took charge of developing

strategic communications for the publication whilst translating and editing articles for bilingual

audiences. In 1986, she had a stint at the Embassy of Guinea, where she handled key administrative

duties on behalf of the Embassy. In 1987, she joined Coopers and Lybrand & Associates (now

PricewaterhouseCoopers) as an Audit Trainee and qualified as a Chartered Accountant in 1990.

Ojini joined Ecobank Nigeria Plc in 1991 and worked in various roles including Operations, Consumer

and Commercial Banking and Branch Expansion. She successfully and effectively handled key

responsibilities influential to the achievement of the organization’s goals and objectives including

product development, credit review/appraisal, business development, branch supervision and

management, staff training and development, product marketing, and funds transfer supervision. She

left Ecobank Plc in 2007 as a Deputy General Manager.

She joined Access Bank Plc in August 2007 as a General Manager with responsibility for the bank’s

Enterprise Business Support Group. Her exceptional leadership and proficient management of the

Group was highly influential in driving the Bank to achieving continued business growth.

Upon the acquisition of Intercontinental Bank by Access Bank in 2011, she was seconded as part of

the team that spearheaded the successful integration of Intercontinental Bank with Access Bank. She

served as the Executive Director, Enterprise Division, Intercontinental Bank.

In November 2013, she was appointed Executive Director, Operations and Information Technology,

Access Bank Plc, with the responsibility to shape functions, policies, and procedures to deliver value in

the achievement of the overall corporate objectives of the bank.

In her career, Ojini has played a key role in the shaping and development of strategies that have led

to the success of multiple businesses across different industries. This, she has achieved through her

leadership roles in a number of companies such as Non-Executive Director, WAPIC Insurance; Non-

Executive Director Access Bank Cote d’Ivoire; Non-Executive Director Access Bank Congo DR, Non-

Executive Director Intercontinental Properties; Non-Executive Director Intercontinental Homes and

Secretary to the Governing Council, Bank Directors Association of Nigeria.

In June 2018, Ojini retired from Access Bank Plc as the Executive Director, Operations and Information

Technology and is currently the Managing Consultant Rickela Consultants Ltd.


40


In addition, she is a speaker/facilitator at trainings, workshops, seminars and conferences focused on

the education of the girl child, women economic empowerment and career development.

Ojini holds a Second Class Upper degree in French Language from University of Nigeria, Nsukka. She is

a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) – an ICAN 1988 Prize Winner and

a Member of the Chartered Institute of Bankers of Nigeria. She has attended several courses at

leading institutions including Harvard Business School, INSEAD, Massachusetts Institute of Technology,

London Business School and Lagos Business School.

Felix Johnson – Managing Director/CEO

Felix Johnson is a senior investment professional with over 15 years’ experience covering both buy and

sell side with significant international exposure. He possesses portfolio management expertise in

management of multi-asset funds and segregated accounts for Private and Institutional clients. He is

adept at driving performance by leveraging innovative solutions and supporting executive

management on buy-side investing across asset classes.

Felix commenced his career in the Financial Services industry in 1999 as a Graduate Trainee in EIB

International Bank, Nigeria after which he progressed to WhiteHouse Financial Services in the United

Kingdom as an equity analyst in 2005. He had a brief stint at Nex Rubica Analytics, London from 2006

to 2007 and moved to Oceanic Capital Company Limited in Nigeria in 2007 as Associate Investment

Banking and Capital Group. In 2009, Felix moved to Access Investment & Securities as a Portfolio

Manager where he managed a $25million portfolio for Private and Institutional clients. He joined

Access Bank Plc, Nigeria in 2011 as a Private Client Support Manager where he supported the Group

Head to design and implement a robust product engine of the Wealth Management group.

In 2013, Felix cofounded Clicks FX (UK) Ltd where he designed and implemented the propriety trading

strategy of the business which increased margin per trade from an average of 1% to 3% and grew

turnover from a nil position to over £2,000,000 mainly from retail client within 18 months of

commencing operations. He also started Ficus Cap Company Limited in 2013 with focus on providing

“best in class” advisory services for private and corporate clients. He joined First Ally Asset

Management in 2017 as the Managing Director and coordinates the day-to-day functioning of the

firm.

Felix, a SEC sponsored individual, holds a Master of Science degree in Investment Management from

the Cass Business School, London (2005) and in Business Management from Hull University Business

School (2004). He had his Bachelor’s Degree in Economics from the University of Ibadan in 1999.

10.3 Management of the Fund Manager

The management of FAAM is led by Felix Johnson. Other key management staff include;

Edwina Ugwu – Head, Client Coverage

Edwina joined First Ally Asset Management ("FAAM") Limited in 2017, from Xcellon Capital Advisors

Limited. She was the Senior Wealth Manager and was responsible for Client Service, Investment

Management, New Business Development, Marketing and Financial Planning. Prior to this, she was the

Head of Private Wealth Management at BGL Asset Management, between 2014 and 2015. She has a

broad experience in Financial Advisory and Asset Management.

She began her career in 2010 with Marina Securities Limited (now Coronation Securities) where she

worked in various capacities spanning Investment Management, Legal Advisory, Operations,

Corporate and Client Services before joining the Sales and Marketing team.

She holds a Bachelor of Law (LL.B) degree from Enugu State University of Science and Technology

(ESUT-2008) and a Barrister at Law (BL) degree from the Nigerian Law School, Abuja (2010). She is a

member of the Nigerian Bar Association (NBA).


41


Temitope Amodu – Head, Trading and Portfolio Management

Mr. Temitope Amodu joined First Ally Asset Management Limited in 2018 as the head of Trading and

Portfolio Management, responsible for portfolio management and all fixed income related

transaction.

He started his career in Guaranty Trust Bank in 2008 where he was offered employment during his

NYSC programme. Prior to joining GTBank, he was top of his training class at the GTBank Training

School. In his 8 years in Guaranty Trust Bank, he was exposed to all treasury products which has given

him extensive experience in the financial services industry. He then worked briefly with Parthian

Partners Limited between 2015 and 2016, as a Fixed Income trader/Senior Broker and later Cordros

Capital in 2016 as Portfolio Manager and Head of Fixed Income trading.

Temitope is an Associate member of Nigerian Institute of Marketers of Nigeria, a member of Nigeria

Institute of Management (Associate) and a member of Institute of Chartered Accountants of Nigerian

(ICAN). He holds a second-class upper degree in Accounting from Lagos State University, Ojo (2005).

Janet Agun – Compliance Officer

In 2014, Janet joined First Ally Capital Limited as the Human resources and Administrative personnel

where she initiated organizational recruitment processes and oversees the day-to-day administrative

activities of the firm. She became Company Secretary to First Ally Asset Management in 2015. She

possesses a vast experience which spans across human resources, administration and legal matters.

Janet started her career from the Ministry of Justice Abakaliki in 2009, after which she moved to Messrs

Rickey Tarfa & Co (Abuja) in 2010, where she practiced as a legal counsel and was part of the team

of lawyers that instituted and defended civil action on behalf of clients.

Ms Agun is a qualified legal practitioner with an LLB from the University of Benin (2008) and a Bachelor

of Law degree from the Nigerian Law School (2009). She obtained her Masters degree in Human

Resource Management from Aston Business School, Aston University Birmingham UK (2013). Janet is a

member of the Nigerian Bar Association (NBA) and the Chartered Institute of Personnel Development,

United Kingdom (CIPD).

Roles as the Fund Manager to the FAAM Money Market Fund

Responsible for implementing the Fund‘s investment strategy

Managing the Fund portfolio as outlined in the Fund’s Trust Deed and Investment Guidelines

Working closely with other parties in the Fund to identify potential liquid investments as per

Fund’s investment policy.

Reinvesting income arising from investments in the Fund

Taking proactive and prudent stance in maintaining a fundamentally sound and effective

capital structure.


42


10.4 Four Year Financial Summary

STATEMENT OF FINANCIAL POSITION

Unaudited

12 months to 12 months to 12 months to 6 months to

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

2018 2017 2016 2015

₦ ₦ ₦ ₦

Assets

Cash and balances with banks 342,872,000 29,256,852 14,548,056 241,914,465

Financial - assets held to maturity 4,765,850,000 2,267,541,863 661,844,181 -

Financial - assets held for Trading - 9,728,432 - -

Prepayments and other receivables 19,523,000 17,212,645 31,064,320 1,928,240

Property and equipment 32,835,170 5,450,855 15,505,848 15,883,682

Intangible assets - 4,265,905 5,627,042 5,453,275

Total assets 5,161,080,170 2,333,456,553 728,589,447 265,179,662

Liabilities

Trade and other payables 4,769,975,000 36,145,502 1,956,437,569 36,145,502

Income tax liabilities - - - -

Total liabilities 4,769,975,000 36,145,502 1,956,437,569 36,145,502

Equity

Share capital 500,000,000 250,000,000 750,000,000 250,000,000

Retained earnings 108,894,830- -122,981,017 -78,338,181 -20,965,840

Total Equity 391,105,170 127,018,983 671,661,819 229,034,160

Total equity and liabilities 5,161,080,170 163,164,485 2,628,099,388 265,179,662

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

12 months to 12 months to 6 months to

31 December 31 December 31 December

2017 2016 2015

₦ ₦ ₦

Gross earnings 106,654,000 85,281,998 23,094,686 15,735,507

Interest expense 107,000- - -120,821 -477,082

Net income 106,547,000 85,281,998 22,973,865 15,258,425

Profit/Loss before income tax expense 13,292,000 -44,642,836 -57,372,341 -20,965,840

Income tax expense - - -

Loss for the year/period 13,292,000 -44,642,836 -57,372,341 -20,965,840

Profit/Loss per share - Basic and diluted (Kobo) 2.7 (17.9) (22.9) (8.4)


43

11. The Investment Committee

The proposed Investment Committee members are as follows;

Dr. ‘Biodun Adedipe – Independent Member

Dr Adedipe is the founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult). With

almost four decades of post-graduate experience that cuts across university teaching, investment

banking, project finance, management and financial consulting as well as leadership in business and

not-for-profit organizations, Biodun has had a career that has taken him through the University of

Lagos, Enterprise Consulting Group, the World Bank (Africa Region), International Merchant Bank Plc,

and First City Monument Bank Plc.

‘Biodun’s technical expertise is wide ranging, covering corporate strategy, research and economic

analysis, solving complex business problems and assisting clients to execute business solutions in line

with their corporate strategies.

He is a highly sought after analyst and commentator on Government fiscal operations and economic

policies, and also been involved in strengthening the strategy and strategic management process in

several Nigerian banks, non-financial businesses and not-for-profit organizations. He has served in

various capacities in government, including Member of the Presidential committee of Experts on the

Redenomination of Naira (November 2008), Member of Federal Government Committee of Experts

on Expenditure Review (October 2010 to March 2011) and Senior Special Assistant to the President

(Financial Sector Development) in the Office of the Chief Economic Adviser (2011).

He received his Doctorate degree in Industrial Economics (specializing in Corporate Finance) from

University of Lagos in 1989 and B.Sc. in Economics (First Class) from Obafemi Awolowo University (OAU)

in 1980, and enjoyed bagged several awards in the process, including Sir Adam Thomson scholarship

as visiting doctoral student to the University of Sussex (1984). He is a member of several respected

professional bodies, including the Institute of Directors, Nigeria, The Nigeria Economic Society and

American Economic Association. ‘Biodun founded BAA Consult in 1993 and has been responsible for

charting and managing the firm’s strategy and activities since operations commenced in 1994

Felix Johnson – Managing Director/CEO

Felix Johnson is a senior investment professional with over 15 years’ experience covering both buy and

sell side with significant international exposure. He possesses portfolio management expertise in

management of multi-asset funds and segregated accounts for Private and Institutional clients. He is

adept at driving performance by leveraging innovative solutions and supporting executive

management on buy-side investing across asset classes.

Felix commenced his career in the Financial Services industry in 1999 as a Graduate Trainee in EIB

International Bank, Nigeria after which he progressed to WhiteHouse Financial Services in the United

Kingdom as an equity analyst in 2005. He had a brief stint at Nex Rubica Analytics, London from 2006

to 2007 and moved to Oceanic Capital Company Limited in Nigeria in 2007 as Associate Investment

Banking and Capital Group. In 2009, Felix moved to Access Investment & Securities as a Portfolio

Manager where he managed a $25million portfolio for Private and Institutional clients. He joined

Access Bank Plc, Nigeria in 2011 as a Private Client Support Manager where he supported the Group

Head to design and implement a robust product engine of the Wealth Management group.

In 2013, Felix cofounded Clicks FX (UK) Ltd where he designed and implemented the propriety trading

strategy of the business which increased margin per trade from an average of 1% to 3% and grew

turnover from a nil position to over £2,000,000 mainly from retail client within 18 months of

commencing operations. He also started Ficus Cap Company Limited in 2013 with focus on providing

“best in class” advisory services for private and corporate clients. He joined First Ally Asset

Management in 2017 as the Managing Director and coordinates the day-to-day functioning of the

firm.


44

11. The Investment Committee

Felix, a SEC sponsored individual, holds a Master of Science degree in Investment Management from

the Cass Business School, London (2005) and in Business Management from Hull University Business

School (2004). He had his Bachelor’s Degree in Economics from the University of Ibadan in 1999.

Temitope Amodu – Head, Fund and Portfolio Management

Mr. Temitope Amodu joined First Ally Asset Management Limited in 2018 as the head of Trading and

Portfolio Management, responsible for portfolio management and all fixed income related

transaction.

He started his career in Guaranty Trust Bank in 2008 where he was offered employment during his

NYSC programme. Prior to joining GTBank, he was with Bode Augusto training class where he came

top of the class and found his way to treasury department with the Bank. His 8 years in Guaranty Trust

Bank cut across all treasury products which has given him extensive experience in the financial

services industry. He then worked briefly with Parthian Partners Limited between 2015 and 2016, as a

Fixed Income trader/Senior Broker and later joined Cordros Capital in 2016 as a Portfolio Manager

and Head of Fixed Income trading.

Temitope is an Associate member of Nigerian Institute of Marketers of Nigeria, a member of Nigeria

Institute of Management (Associate) and a member of Institute of Chartered Accountant of Nigerian

(ICAN). He holds a second-class upper degree in Accounting from Lagos State University, Ojo (2005).

Etomilade Oduola – Representative of the Trustee

Etomilade possesses almost a decade experience in the Trust industry. His experience traverses both

corporate, public and private trust spheres of the business. Prior to his foray into the industry,

Etomilade was in active practice with the reputable firm of Ajumogobia & Okeke between 2007 and

2009, where he garnered robust experience in banking cum commercial transactions among others.

Etomilade subsequently joined First Trustees Ltd (now FBNQuest Trustees Ltd), a member of FBN

Holding Ltd. While in the Corporate Trust Unit of FBNQuest Trustees Ltd, Etomilade’s team was able to

close several big ticket institutional transactions relating to syndication lending and corporate bonds,

collective investment schemes among others. He also handled several sensitive Private Trust

transactions including very large and renown Estates.

He has over time, been involved in several sensitive Trust transactions and structuring both within

personal and institutional space. Until his exit from FBN Holding’s Group, Etomilade for more than half

a decade was an Editor of Legacy Series, a publication of FBNQuest Trustees Ltd in the dailies.

Etomilade later left FBNQuest Trustees Ltd to take over as the Managing Partner at Rocksmith Partners

Legal Practitioner in 2017, a boutique law firm in the heart of Lagos from where he joined the Radix

Trustees Ltd as the Managing Director in 2018.

Etomilade is an award winning Law graduate of Obafemi Awolowo University (2007) and obtained a

Barrister at Law degree from the Nigerian Law School (2008). He bagged an LLM from University of

Lagos (2016) and also is a graduate of London School of Economics and Leadership.


45

12. The Trustee

A. Profile

Radix Trustees Limited (RTL) is a Trust Company and a fully owned subsidiary of Radix Capital Partners

Limited. It was incorporated on April 22, 2010 and has since been actively involved in the business of

Trusteeship till date and is licensed and regulated by the Securities and Exchange Commission (SEC)

to provide Trust and Trust related services. Radix Trustees Limited acts as Trustee and Advisor to

Corporations, Parastatals, Government Agencies, Governments (Federal, State and Local Govt.),

High Networth Individuals, Families and Businesses.

Over the years, RTL has gradually built her reputation and evolved as a reliable Trust Outfit offering

innovative and bespoke trust services to clients within and outside the shore of Nigeria. They are result

oriented and have helped clients to innovate solutions across its business lines with the collaboration

of its members of staff and unwavering commitment of its group to excellence. The Company carries

out its services through institutional and personal trust.

i. Services offered under institutional trust include;

• Syndication

• Club Lending

• Debenture

• Government Services – Bonds & Reserve Fund

• Asset / Fund Management Services

• Collective Investment Schemes

• Real Estate/Construction cum Project Finance

ii. Services offered under personal trust include;

• Estate Planning

• Wealth Management

• Financial Planning

• Family Businesses

• Family Office

• Business and Succession Planning

B. The role of the Trustee includes but is not limited to:

- Monitoring the activities of the Fund Manager on behalf and in the interest of the Unitholders;

- Monitoring the register of the Unitholders or contributors;

- Ascertaining the Fund Manager’s compliance with the applicable regulations;

- Ascertaining that the monthly and other periodic returns/reports relating to the Investment

Scheme are sent by the Fund Manager to the Commission;

- Exercising any right of voting conferred on it as the registered holder of any investment

and/or forward to the Fund Manager within a reasonable time all notices of meetings, report,

circulars, proxy solicitations and any other document of a like nature for necessary action;

- Ensuring that all fees and expenses of the Fund are within the prescribed limits.

- Acting at all times in the interest and for the benefit of the Unitholders of the Investment

Scheme.

C. Board of Directors

The members of the Board of Directors of the Company include:

Biodun Dabiri: Mr. Dabiri is a consummate corporate finance specialist who has handled some of the

largest and most complex transactions in the Nigerian capital markets over a period spanning 24

years. He was involved in the conceptualization, capitalization and restructuring of a wide variety of

ideas and companies. He set up and nurtured a number of successful business units including the

Capital Consortium Limited, an asset management company and Security Swaps Limited, a

stockbroking firm and foremost player in the Nigerian capital market.


46

12. The Trustee

Biodun, in conjunction with a group of investors, packaged the corporate spin off of Guaranty Trust

Bank Plc’s shareholdings in Magnum Trust Bank Plc (now part of Sterling Bank Plc) and co -managed

the bank from 1999 to 2007. Pursuant to the Nigerian banking consolidation directives, he put

together the investment banking competencies of the banks that merged into Sterling Bank Plc, to

form Sterling Capital Markets Limited, which he managed until his resignation in 2008. During this

period, Sterling Capital Markets Limited rose to become one of the best known investment banking

institutions in Nigeria. He led a team that raised over N650billion in 25 transactions for the financial

services, oil and manufacturing sectors. He played a prominent role in merger and acquisition

activities, local and off shore fund raising activities consummated during the first and second rounds

of the financial sector consolidation exercises.

Biodun is a 1977 graduate of the University of Ibadan, a fellow of the Institute of Chartered

Accountant of Nigeria having trained with Deloitte, Haskins & Sells (now Deloitte Touche) Chartered

Accountants. He is a member of the Board of the Central Securities Clearing System (CSCS) [the

central depository of the Nigerian capital market, which he helped midwife], a fellow of the

Chartered Institute of Stockbrokers and a dealing member of the Nigerian Stock Exchange. He is also

a committee member of the Lagos Ogun Megacity Development Authority.

Olaseni Oduwole: Olaseni Oduwole is a highly experienced investment banker with extensive

experience in capital markets, privatization and divestitures, mergers and acquisition as well as

structured finance. He was part of the team that commenced investment banking in FBN (Merchant

Bankers) limited, now FBN Capital Limited in 1990 and at various times was Head of corporate

finance, Head of Credit and Marketing and Chief Executive Officer of Premium Securities, now FBN

Securities Limited. As the General Manager and head of Corporate Finance in Sterling Capital

Markets from 2017, he was also instrumental to the institution becoming a leading investment banking

brand in the country. He has assisted in the listing of a number of companies on the floor of the

Nigerian Stock Exchange and handled some landmark acquisitions and divestitures transactions.

During the consolidation of the financial industry, he played a prominent role in the mergers and

acquisitions of a number of banks and insurance companies and also the fund raising exercises of the

merged entities. A versatile credit officer, he was involved in the structuring of the financing model,

among others, for the construction of major Nigerian infrastructures, including the gas pipeline for the

Lagos metropolitan which involved a number of major financial institutions and entailed multi-

products instruments.

Olaseni holds a Bachelor’s degree in Economics from the University of Ibadan (1982) and an MBA with

specialization in finance from the University of Lagos (1999). He is a Council member of the Chartered

Institute of Stockbrokers and also a dealing member of the Nigerian Stock Exchange. He is widely

travelled and has attended a number of management and product training programmes organized

by INSEAD, Fountaine bleau, France, HASS School of Business, University of California, USA and

Euromoney, UK

Etomilade Oduola: Etomilade possesses almost a decade experience in the Trust industry. His

experience traverses both corporate, public and private trust spheres of the business. Prior to his foray

into the industry, Etomilade was in active practice with the reputable firm of Ajumogobia & Okeke

between 2007 and 2009, where he garnered robust experience in banking cum commercial

transactions among others. Etomilade subsequently joined First Trustees Ltd (now FBNQuest Trustees

Ltd), a member of FBN Holding Ltd. While in the Corporate Trust Unit of FBNQuest Trustees Ltd,

Etomilade’s team was able to close several big ticket institutional transactions relating to syndication

lending and corporate bonds, collective investment schemes among others. He also handled several

sensitive Private Trust transactions including very large and renown Estates.

He has over time, been involved in several sensitive Trust transactions and structuring both within

personal and institutional space. Until his exit from FBN Holding’s Group, Etomilade for more than half

a decade was an Editor of Legacy Series, a publication of FBNQuest Trustees Ltd in the dailies.

Etomilade later left FBNQuest Trustees Ltd to take over as the Managing Partner at Rocksmith Partners

Legal Practitioner in 2017, a boutique law firm in the heart of Lagos from where he joined the Radix

Trustees Ltd as the Managing Director in 2018.


47

12. The Trustee

Etomilade is an award winning Law graduate of Obafemi Awolowo University (2007) and obtained a

Barrister at Law degree from the Nigerian Law School (2008). He bagged an LLM from University of

Lagos (2016) and also is a graduate of London School of Economics and Leadership.

Oladipupo Tijani: has over nine years work experience in banking and consultancy services. He has

worked in various financial institutions including investment banks covering funds and asset

management, financial advisory, and corporate finance.

Oladipupo holds a degree in Accounting obtained from the University of Lagos (2006), a Master

Business Administration (MBA) from Obafemi Awolowo University (OAU) in 2008,a Master’s degree in

Accounting (2011) and a Master’s Degree in Economics (2014). Tijani is a Certified Financial Analyst

(CFA), he is a Member of the Chartered Certified Institute of Accountants UK (ACCA) Associate

Member of the Institute of Banker of Nigeria (CIBN), a Certified Information Systems Auditor (CISA-

USA). He has also attended trainings both locally and internationally in most areas of investment

banking.

Oladipupo is the Head of Corporate Finance and Trust Investment.


48

13 The Custodian

A. Profile

In September 2007, UBA decided to expand its custodial service offerings to meet the needs of

foreign and domestic institutional investors and therefore set up UBA Global Investor Services (GIS), a

Division of the Bank set up specifically to process securities trades, safe-keep financial assets and

service associated portfolios. UBA GIS is registered by the Securities & Exchange Commission (“SEC”)

for custody and securities lending, the appointed Custodian of the Central Bank of Nigeria (CBN) for

money market and other fixed income instruments and a licensed Custodian on the NASD OTC

platform.

The Company also possesses a Sub-Regional Custody License for the West African Economic and

Monetary Union, WAEMU all of which enable it provide custody services in Nigeria and eight

francophone countries namely: Senegal, Benin, Burkina Faso, Togo, Niger, Mali, Cote D’Ivoire and

Guinea Bissau.

They have an excellent track record in Custody services and currently provide custody services to

Global Custodians including The Bank of New York Mellon, the World’s largest Global Custodian, as

well as Banks, Insurance companies and other Institutional Investors and are the SEC approved

Custodian to over forty (40) registered Nigerian Collective Investment Schemes (or Mutual Funds)

including the largest Mutual Funds in the market.

B. Service Offerings

GIS offers a full range of safe-keeping, asset registration, trade settlements, valuation and reporting

services for investment assets and are able to provide transparency, independent reporting, and risk

management services in respect of assets within its custody. In addition, they provide multi-market

and multi-fund custody services under a common custody agreement and with a single account

opening process. Its core services include;

Safe custody: Offering centralized safekeeping of both electronic and physical securities, to enable a

more efficient securities management. Cost reduction is available on graduated scale based on size

of assets. While dematerialized assets are held via both entry records, physical instruments are kept in

safe vaults backed by comprehensive vault procedures.

Securities verification and settlement: Prompt settlement of trades in respect of investments. Their

securities process allows the use of multiple Brokers/Managers.

Asset registration: Client’s holdings are duly registered and reflected in segregated accounts with the

CSD according to the rules and procedures.

Corporate actions: GIS monitors, collects, report on and pays dividends, interest income and bonuses

to clients and also advise clients appropriately on rights issue. They pro-actively extract clients’

dividend and entitlements and follow through until actual collection, while maintaining electronic

records of outstanding corporate entitlements and monitor till full collection. They utilize second level

supervision and callovers to ensure corporate actions are not missed.

Portfolio valuation: They deploy superior technology and provide daily valuation of Clients’ funds

holdings on a daily basis with the current market price and send valuation report as frequently as may

be required in line with Service Level Agreements.

Client reporting – cash/securities: They provide a consolidated report of all securities and cash

positions either by mail/fax/SWIFT and tailor the composition and frequency to Clients’ requirement.

Other Services Include;

Cash management services: taking advantage of cost efficiencies on a wide range of accounts by

collecting dividends and interest payments, depositing or remitting income as directed and

automatically investing available cash in a money market fund to ensure competitive rate of return.


49

13 The Custodian

Euroclear account services: Its euroclear securities and clearance settlement system allows Clients

clear and settle transactions with counterparties in a large number of internationally traded securities.

Back office administration: Offer a comprehensive back office administration service that enables

Clients verify, match, authorize and effect settlements on their behalf, on schedule and confirm

obligations in full compliance with Service Level Agreements.

Credit lines: UBA provides credit to clients upon request and subject to terms and conditions to be

agreed.

Tax reclaim: This is provided on a best effort basis.

C. Members of the Management Team are:

Taiwo Sonola – Head, Global Investor Services

Taiwo holds a Bachelor of Law Degree LLB (Hons.) from Staffordshire University (1990) and Master of

Law Degree (LLM) from the University Of Manchester, UK (2001). She is a member of the Nigerian Bar

Association, the Acting President of the Association of Assets Custodians of Nigeria, an Associate

Member of the Portfolio Advisors of Nigeria, and member of the CMC Retreat Planning Committee

and sits on the Board of Trustees of the FMDQ Investor Protection Fund. She has several years’

experience in Treasury marketing and Relationship Management.

Tolulope Odita – Head, Custody operations

Tolu holds a Bachelor of Science Degree in Accounting from the Obafemi Awolowo University (1998)

and a Master of Business Administration from Bayero University Kano (MBA) (2002). She is an associate

of the Portfolio Advisors of Nigeria with over 17 (Seventeen) years’ experience in Banking Operations

and Customer Relationship Management. Prior to now, she was the Head of the Settlement and

Confirmations Unit of the Custody Department, Stanbic Bank Nigeria.

Seun Oduntan - Team Lead Corporate Actions & Relationship Management

Seun holds a Higher National Diploma in Quantity Surveying (1989) and a Master of Business

Administration degree (MBA) from the Federal University of Technology, Ondo State (2001). He is a

member of the Nigerian Institute of Management (ANIM) and has over 25 (twenty-five) years’

experience in Banking operations and accounts administration

Regina Asala – Reconciliation

Regina holds a Bachelor of Science Degree in Economics (BSc) from Benue State University, Makurdi

(2004), an MBA from the University of Roehampton, UK (2015), and a Member of the Chartered

Managers Institute, United Kingdom. She has over 10 (ten) years’ experience in Portfolio management

and Investor services.


50

14. Statutory and General Information

14.1 Extracts from the Trust Deed

2. THE TRUST DEED

The provisions of this Deed and of any duly executed Supplemental Trust Deed or Deed of Variation

shall be binding on the Trustee, the Manager, the Unitholders and on all persons claiming through

them respectively as if such persons were Parties to this Deed or such Supplemental Deed.

3. CONSTITUTION AND STRUCTURE OF THE FUND

3.1 Appointment of Trustee

The Trustee agrees to act as the trustee of the Fund and shall hold the same upon and

subject to the provisions of this Trust Deed.

3.2 Declaration of Trust

The Trustee hereby declares itself as trustee for the Unitholders with effect from the date of this

Deed to hold the Deposited Property, and the benefit of the covenants and other obligations

on the part of the Manager herein contained, in trust for the Unitholders and themselves,

subject to the terms of this Deed.

3.3 Constitution of the Fund

3.3.1 The net proceeds of the Offer with all other property and assets of the Trust shall be

paid directly into the Trading Accounts to be opened and managed by the

Custodian in the name of the Trustee and the Fund. The title to such assets shall, at all

times be vested in the Trustee and shall constitute the Trust in the first instance.

3.3.2 The ownership of the Deposited Property shall be vested in the Trustee subject to the

terms of this Trust Deed.

3.3.3 The Deposited Property of the Fund shall be held separate and distinct and shall not

be co-mingled with any other fund.

3.4 Division of the Fund into Units

3.4.1 The beneficial interest in the Fund shall be divided into interests of equal value

referred to as “Units”; and the units and fractions thereof shall be issued at a price

calculated in accordance with Clause 6.

3.4.2 The Units shall be issued only as fully paid units.

3.4.3 No Unit of the Fund shall have any rights, preferences or priorities over any other Unit

of the Fund.

3.4.4 The Trustee may be a Unitholder of the Fund and the Manager shall be a Unitholder

of the Fund.

4. APPOINTMENT OF THE CUSTODIAN AND THE DESIGNATED ACCOUNTS

4.1 The Manager has, with the consent of the Trustee, appointed the Custodian for the purposes

contemplated in this Clause 4 and shall enter into a Custody Agreement with the Custodian.

4.2 Where the Commission or the Manager, in consultation with the Trustee, for valid reasons, is of

the opinion that a change of Custodian is desirable in the interest of the Unitholders, the

custodial arrangement with the Custodian shall be terminated in accordance with the

custodial agreement and the Custodian shall, for no consideration, convey the Deposited


51


Property to the newly appointed custodian as instructed by the Manager or the Commission.

The Manager will immediately thereafter take such steps as may be necessary to appoint a

new Custodian for the Fund PROVIDED however that any appointment of a new Custodian

will be subject to the prior approval of the Commission and the termination of the Custodian

shall not take effect until the appointment of the new custodian.

4.3 The Custodian shall open and operate 2 (two) accounts in the name of the Trustee/the Fund

which shall be held in trust for the Unitholders, in respect of the Fund. These accounts shall be

designated as the “Trading Account” and the “Expense Account” respectively.

4.4 All cash proceeds of the sale of Units shall be paid into the Trading Account or into such other

designated cash account with the Custodian PROVIDED THAT for the initial public offering of

the Units, the Manager may open and maintain “receive only” bank accounts in respect of

the Fund with certain banks to be approved by the Trustee (“Receiving Bank”) into which the

proceeds of the sale of Units of the Fund shall be paid. The “receive only” accounts opened

with the Receiving Bank shall be utilised only for the purpose of receiving subscription

payments from the public and all sums received in such accounts shall be transferred to the

relevant Trading Account.

4.5 A portion of the proceeds from the sale of Units will from time to time, as hereinafter provided

for, be paid from the Trading Account into the Expense Account of the Fund (the “Expense

Account”) to be used for the payment of charges incidental to the administration of the

Fund.

4.6 The Designated Accounts shall be operated by the Custodian, who shall provide the

Manager and the Trustee with monthly and quarterly reports thereon as well as monthly and

quarterly valuations of the investments held by the Fund, and file quarterly returns to the

Commission.

4.7 All investments shall be made with monies drawn from the Trading Account of the Fund and

such investments shall be in the name of the Fund.

4.8 Monies paid to the Trustee for Units pursuant to Clause 6 hereof shall be paid into the Trading

Account and shall form part of the Deposited Property.

4.9 All stamp duty and all other duties and charges payable in respect of this Deed or upon the

constitution of the Units of the Fund and expenses incurred in respect of the Fund shall be

payable out of the Expense Account.

4.10 The Manager and Trustee shall not mortgage, pledge, charge or otherwise provide the assets

of the Fund as security for any borrowing, facility, guarantee, indemnity, lease or other

contractual obligation, whether on their own behalf or on behalf of the Fund or the

Unitholders and monies may not be lent out of the investments or assets of the Fund.

4.11 The Manager shall at any time and at the request of a Unitholder, exchange all or a stated

portion of his units in the Fund for units of any other unit trust or mutual fund in which the

Manager at that time acts as fund manager provided however that such exchange will be

effected using an exchange ratio that takes account of the prevailing offer price of the units

of the other unit trust or mutual fund and the prevailing bid price of the Units of the Fund

being exchanged (less any statutory deductions whether in respect of tax or otherwise that

may be applicable to an exchange of units).

4.12 The Manager, as promoter of the Fund, shall subscribe to and hold a minimum of 5 per cent of

the Initial Public Offer of Units of the Fund.


52


6. SALE AND ISSUE OF UNITS

6.1 Upon the establishment of the Fund and its division into Units, the Fund shall market up to

1,000, 000 000 (one billion) Units in the Fund and maintain the unit of the Fund at a stable net

asset value of N1.00 per unit.

6.2 The minimum investment one or joint Unitholder(s) may make in the FUND is as set out in

Schedule 1 of the Trust Deed.

6.3 A person who wants to subscribe for Units may do so at the Offer Price of the Fund and must

complete and deliver to the Manager an application form in the format prescribed by the

Manager. Every application in whatever form shall be accompanied with the subscription

money, or the document of transfer of the property to be vested in the Trustee. The Manager

shall apply its reasonable discretion in accepting or rejecting an application for Units.

6.4 Subject to any prescribed minimum investment requirement as agreed by the Trustee and

the Manager, the Manager may make offers of Units in the Fund to the public of such

number, and of such value, as the Manager may from time to time determine, subject to the

registration of such Units with the Commission. The Fund shall be open to the public for the

entire period of the existence of the Fund save for the periods where the Register is closed for

the purpose of making distributions to the Unitholders.

6.5 The Manager upon receipt of a subscription form shall accept or reject such subscription

within six (6) Business Days of such receipt and upon such acceptance or rejection will, in the

case of rejection, forthwith return the subscription form and any payment made without

interest thereon; and, in the case of acceptance, the Manager will forthwith forward a notice

to the subscriber indicating the number of Units of the Fund and fractions thereof, if any,

purchased by such subscriber.

6.6 Any new Units issued pursuant to Clause 6.4above, shall rank pari passu in all respects with the

Units issued pursuant to this Trust Deed and shall represent an undivided part of the Deposited

Property.

6.7 Subject to the approval of the Exchange, the Units shall be listed on the Exchange and/or

admitted to listing, trading and/or quotation by any other listing authority, securities

exchange and/or quotation system

8. RIGHTS OF UNITHOLDERS

8.1 The Unitholders shall not have or acquire any right against the Manager or the Trustee in

respect of their investments except such rights as are expressly conferred upon them by this

Trust Deed.

8.2 The ownership of all Property of the Fund shall be vested in the Trustee and, subject to the

terms of this Trust Deed, the right to conduct the affairs of the Fund will be exercised

independently by the Trustee on behalf of the Unitholders. The Unitholders of the Fund shall

have no interest other than the beneficial interest provided for in this Trust Deed and no Unit

of the Fund shall confer any interest or share in any particular part of the Deposited Property

of the Fund. The Unitholders shall have no right to call for any partition or division of any

portion of the property of the Fund nor shall they be called upon to share or assume any

losses of the Fund or suffer any assessment or further payments to the Fund or the Trustee of

any kind by virtue of their ownership of Units of the Fund.

8.3 A Unitholder shall have the right to share in the assets of the Fund proportionate to the

number of Units held by him in the Fund.


53


8.4 Only persons who have been duly registered as Unitholders shall have the right to be

recognised as such.

8.5 The Manager shall be treated for the purposes of this Deed as the Unitholder of each Unit

during such time that neither the Manager nor any other person is registered or entitled to be

registered as the Unitholder but nothing herein contained shall prevent the Manager from

subscribing for and becoming a registered holder of Units in the Fund.

8.6 Subject as hereinafter provided, a Unitholder shall be entitled to require payment of the Fund

Bid Price of all or any of his Units of the Fund by giving notice (either written or via agreed

electronic means) to the Manager.

8.7 A Unitholder shall have the right to pledge, charge, mortgage, or otherwise offer his units to

secure a debt, a loan or an obligation and in any such case shall notify the Manager of the

pledge, charge, mortgage or obligation.

8.8 A Unitholder shall have the right to receive the notice of meetings and attend such meetings

either in person or by proxy.

9. PAYMENT OF REMUNERATION AND FEES

9.1 The remuneration of the Manager and all other administrative fees shall accrue on a daily

basis. At the end of each quarter, all such sums as have accrued shall be transferred from

the Trading Account into the Expense Account of the Fund from which the relevant sums will

be paid to the Manager and respective service providers. The respective fees payable shall

be as follows:

9.1.1 management fee of 1% in 2019, 1.5% in 2020 and 2021 per annum of the Net Asset

Value of the Fund payable quarterly in arrears;

9.1.2 custodian fee of 0.025% per annum of the Net Asset Value of the Fund shall be

payable quarterly in arrears;

9.1.3 annual Trustee’s fee of 0.05% per annum of the Net Asset Value of the Fund shall be

payable quarterly in arrears; PROVIDED that the rate of remuneration shall be

reviewed on every second anniversary of the date of appointment.

9.2 The Auditors’ and the Rating Agency’s fees shall be due for payment at the end of the

financial year, and in the case of the Auditors’ fees, upon the completion of the audit of the

accounts of the Fund. Such fees shall be paid from the Expense Account.

9.3 The Manager shall pay or cause to be paid from the Expense Account all brokerage fees to

agents on the sale or issue of the Units as, and when, applicable.

9.4 Payment to the Trustee

9.4.1 The Manager shall on behalf of the Fund pay all travelling and other costs charges

and expenses that the Trustee shall reasonably incur in connection with the

execution of this Trust Deed and in the exercise of the powers and discretion hereby

vested in it.

9.4.2 All such costs, expenses, charges or remuneration due to the Trustee shall be

payable upon demand. However, the Trustee shall provide the Manager with

invoices/receipts for all expenses incurred.

9.4.3 The Manager shall, on behalf of the Fund, pay the Trustee all sums owing to the

Trustee in respect of the remuneration cost stated in Clause 9.1.3 above which shall


54


be paid in accordance with the clause 9.1 above except as otherwise directed by the

Commission.

9.5 Management, Advisory & Administrative Expenses

The Fund will pay the Manager 1.5% of the Net Asset Value plus expenses quarterly in arrears,

but subject to this fee being payable out of income. This fee represents the remuneration due

to the Manager for the management, advisory and administrative roles involved in the day to

day management of the Fund. The Fund will also pay an incentive fee to the Manager, of up

to 20% of total returns in excess of 10%.

10. REDEMPTION AND TRANSFER OF UNITS

Redemption of Units

10.1 Except as provided herein there is no restriction on Unitholders’ access to their investment

proceeds by way of redemption of Units.

10.2 All redemptions shall be made through the Manager or any of its agents as may be

appointed from time to time.

10.3 Subject to Clause 10.4 below, Units shall be redeemed at the Bid Price and in the event that a

Unitholder redeems its investments within the first 90days, an administrative fee of not less than

10% of the income earned on the investment will be charged by the Manager.

10.4 Notwithstanding anything contained in this Clause 10, a Unitholder shall not be entitled to

redeem part of his holding of Units if such redemption would result in his holding being reduced

to less than the Minimum investment requirement as determined by the Fund Manager and the

Trustees. Provided that in such instance, the Unitholder shall redeem the entirety of his

Unitholding.

10.5 Unitholders can redeem their Units in the Fund within 5 (five) Business Days of the Manager or

any of its agents receiving a Redemption Notice from such Unitholders.

10.5.1 The form of Redemption Notice shall be as set out in Schedule 3 of this Deed and the

Manager will notify the Unitholder of any deficiencies in the notice of redemption.

10.5.2. The Redemption Notice must be issued to the Manager between the hours of 9am

and 5pm on Business Days.

10.5.3 Redemption shall be effected, at the Bid Price subject to Clause 10.3 above and

Clause 10.6 below.

10.5.4 Unitholders seeking to redeem only a part of their holding shall be required to

maintain the Minimum investment requirement as determined by the Fund Manager

and the Trustees.

10.5.5 Payments in respect of each redemption shall be by electronic transfer sent within 5

(five) Business Days of receipt of the Unitholders Redemption Notice.

10.6 Where only part of the Units comprised in a Statement of Unitholding are to be redeemed, the

Unitholders shall pay to the Manager the stamp duty (if any) arising upon the issue of a new

revised Statement of Unitholding and thereupon the Manager shall procure a new Statement of

Unitholding to be issued free of charge reflecting the current balance of the Units owned by

such Unitholder.

10.7 The Trustee shall use all reasonable endeavours to ensure that the calculations with respect to

Unitholders’ interests are correct and where a Unitholder notifies it of an error in any computation


55


of such Unitholder’s interest, any such error shall be rectified as soon as possible. The Trustee shall

be entitled at any time to require the Manager to justify any errors in the computation of the

Unitholders interests.

10.8 In no event shall the Trustee be bound to make any payment to the Manager or any Unitholder

except out of the Deposited Property held by it for that purpose under the provisions of this

Deed.

10.9 The Manager shall be entitled in the name and on behalf of the Unitholder to execute an

instrument of transfer in respect of any Units to be redeemed hereunder and to provide an

amended Statement of Unitholding, in respect of the Units to be redeemed, such statement as

may be necessary or desirable as evidence that the Unitholder no longer has any interest in the

said Units PROVIDED that in either event the Manager shall within a reasonable period thereafter

furnish to the Trustee with the authority under which it acted.

10.10 Units redeemed may be re-sold to existing or incoming Unitholders.

10.11 All Units which the Fund is required to redeem shall be deemed to be outstanding until payment

for such units is made in accordance with this Clause 10.

Transfer of Units

10.12 Every Unitholder shall be entitled to transfer the Units or any of the Units held by him through

the Manager upon the execution by the transferor and the transferee and the delivery to the

Manager of such transfer instrument as may be prescribed by the Manager from time to time.

Provided, however that no transfer of part of a holding of Units shall be registered if in

consequence thereof either the transferor or the transferee would hold less than the Minimum

investment requirement as determined by the Fund Manager and the Trustees.

10.13 Every instrument of transfer must be signed by the transferor and the transferee and the

transferor shall be deemed to remain the holder of the Units transferred until the name of the

transferee is entered in the Register in respect thereof. The instrument of transfer need not be

a deed.

10.14 Every instrument of transfer must be duly stamped and lodged with the Manager for

transmission to the Registrar accompanied by any necessary declarations or other

documents that may be required in consequence of any regulation or legislation for the time

being in force and by the Statement of Unitholding(s) relating to the Units to be transferred

and or such other evidence as the Registrar may require to prove the title of the transferor or

his right to transfer the Units and thereupon the Registrar shall register the transferee as holder

of the Units referred to in such instrument of transfer and shall issue to such transferee a new

Statement of Unitholding representing the Units so transferred.

10.15 All instruments of transfer that shall be registered may be retained by the Manager or by the

Registrar on its behalf.

10.16 A reasonable fee of such amount as the Manager and the Trustee may from time to time

agree, may be charged by the Manager upon any transfer of Units and the Registrar shall

issue a new Statement of Unitholding for the transferee and a balance Statement of

Unitholding (if necessary) in the name of the transferor.

10.17 A receipt signed by the Unitholder in respect of any monies payable in respect of the Units

shall be a good discharge to the Trustee and the Manager and if several persons are

registered as joint Unitholders or in consequence of the death of a Unitholder, are entitled so

to be registered, any one of them may give an effectual receipt for any such monies.

10.18 Where the Units are listed, they shall be transferred on the Exchange in accordance with the

rules and regulation of the Exchange


56


12. RIGHT TO SELECT INVESTMENTS

12.1 The Fund shall have an Investment Committee which shall be responsible for reviewing and

advising the Manager on proposed investments generally. The Investment Committee shall

have a minimum of 4 (four) members comprising at least 1 (one) independent member with

no affiliation to either the Manager, the Trustee, or the Custodian, nominated by the

Manager and approved by the Trustee, together with a representative of the Trustee and the

Manager.

12.2 Subject to section 12.1 above and Section 171 of the Investments and Securities Act and

such other investments as the Commission may from time to time approve, the Manager shall

be responsible for decisions as to the purchase, selection, sale or alteration of any

investments under the provisions of this Trust Deed. The investments of the Fund shall be in

accordance with investment guidelines established by an Investment Committee and shall

be approved by the Trustee(s).

12.3 Save pursuant to an offer made jointly to all holders of units of another authorised unit trust

scheme (as defined by Section 152 of the Investments and Securities Act) for the exchange of

such units or the cash or other property represented thereby for Units of this Fund, neither the

Trustee nor the Manager nor any affiliate of either shall as principal sell or deal in the sale of

investments to the Trustee for account of the Fund or vest Authorised Investments in the Trustee

upon the issue of Units, and the Trustee and the Manager shall use their best endeavours to

procure that no such sale or dealing or vesting shall be made by any director of the Trustee or

the Manager or of any associate PROVIDED that the restriction imposed by this Clause shall not

apply to any sale or dealing or vesting in connection with the provision of the initial portfolio of

investments by the Manager.

12.4 The Manager shall not undertake any dealing in or retention of any underlying securities of any

company if the individual officers of the Manager or any of its affiliates or subsidiaries each have

beneficial ownership of more than ½ of 1 per cent (0.5%) of the securities of such company and

together more than 5 per cent of the securities of that particular company.

12.5 The Manager, Trustee and their affiliates shall not deal as principals in the sale of underlying

assets to the trust scheme.

14. INVESTMENT RESTRICTIONS

14.1 No investment by the Manager in respect of the Fund shall be made which would result in

either the value, or the aggregate of the values of any investment in any one company or

body or in any one security exceeding one-twentieth (1/20th) of the value of the Fund

immediately after such investment has been made or such other limits provided by the rules

of the Commission from time to time.

14.2 The Manager shall not invest any part of the Fund in its in-house, Trustee’s or associates’

instruments or securities that are not transferable.

14.3 In addition, no part of the Fund shall be invested in the units or securities of another collective

investment scheme being managed by the Fund Manager.

14.4 No more than [10]% of the Fund’s total assets may be invested in any single investment

except those issued by the Federal Government of Nigeria or the Central Bank of Nigeria.

14.5 Investments shall be made for trading purposes only and shall not be intended for the

purpose of exercising control over the management or operating policies of the issuers of the

securities.

14.6 The Fund shall not give loans except that it may buy and hold qualifying debt instruments in

accordance with its mandate.


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15. CHANGE IN INVESTMENTS

15.1 It shall not be necessary for either the Manager or the Trustee to effect any change in

investments by reason of any appreciation in the value or the aggregate value of any

investments in any one company or body or of any security or any depreciation in the value or

the aggregate of the value of any investments causing the limits referred to in Clause 14 to be

exceeded.

15.2 If and so long as the said limits shall be exceeded, the Manager shall within 3 (three) months of

exceeding the limit, sell so much of the investment or investments in respect of which any of the

said limits is exceeded thereby bringing it into conformity with Clause 14.

17. REGISTRATION OF UNITHOLDERS

17.1 The Manager, shall, pursuant to Clause 16 above, keep and maintain the Register of

Unitholders and carry out such duties as may be required of a registrar for the Fund.

17.2 The Register shall contain the names of Unitholders, the respective number of Units held, the

nominal value of the Units, the date of purchase, and any other information that may be

deemed necessary by the Manager.

17.3 The Registrar shall immediately be notified in writing of any change of name or address on

the part of any Unitholder and upon the Registrar’s satisfaction thereof and in compliance

with all such formalities as it may require shall cause the Register to be altered or the change

to be registered accordingly.

17.4 All Unitholders shall be entitled during business hours to freely inspect the Register at no cost.

However, a nominal fee may be payable where copies of any documents from the Register

are required by the Unitholder.

17.5 The Register shall be conclusive evidence of the persons entitled to the Units. Any person

claiming to be interested in any Units or the dividends on them may protect his interest by

serving on the Manager a notice and an affidavit of interest whereupon the Registrar shall

cause to be entered on the Register the existence of such notice and shall not register,

transfer or make a payment or return(s) in respect of the relevant Units contrary to the terms

of the notice until the expiration of thirty (30) days’ notice to the claimant of the proposed

transfer or payment.

17.6 A body corporate may be registered as a Unitholder or one of joint Unitholders.

17.7 In the event of the death of a Unitholder only the legally appointed executors or

administrators of the estate of the deceased Unitholder (not being one of joint Unitholders) or

the surviving Unitholder(s) of joint Unitholders shall be recognized by the Registrar as having

any title to or interest in the Units of the deceased Unitholder.

17.8 Any person becoming legally entitled to any Units in consequence of the death or

bankruptcy or dissolution or winding up of any Unitholder or upon the order of a court or

upon a declaration that a Unitholder is a lunatic shall upon producing such evidence to the

satisfaction of the Registrar, substantiating his claim and on delivering up such documentary

evidence of the deceased, bankrupt or lunatic Unitholder or resolution of dissolution or

winding up to the Registrar for cancellation, be entitled to elect either to be registered

himself or to have some other persons nominated by him registered as entitled to such Unit(s)

and to have a new Statement of Unitholding issued accordingly. If the person becoming so

entitled shall elect to be registered himself, he shall deliver or send to the Registrar a duly

signed written notice in a form to be prescribed by the Registrar stating that he elects to be

so registered, or if he shall elect to have some other person nominated by him shall testify

such election as if the death, bankruptcy or lunacy or the dissolution or winding up of the

Unitholder had not occurred and the notice or transfer were a transfer executed by such


58


Unitholder. Until such production is made, the Unitholder of record shall be deemed to be

the holder of such Units for all purposes hereof and the Trustee and the Manager shall not be

affected by any notice of such bankruptcy, insolvency or other event, and in particular shall

not be affected by reason that the Bid Price of the Units for the purposes of redemption is

calculated on the day when actual redemption occurs and not on the day when notice of

bankruptcy, insolvency or other event is received by the Trustee and the Manager.

17.9 Any person becoming entitled to Units in consequence of the death or bankruptcy or

dissolution or winding up of a Unitholder shall, once he has provided sufficient evidence of

such entitlement to the Registrar, even if actual registration has not yet taken place, be

entitled to receive and may give a discharge for monies payable in respect of the Units.

However, such person shall not be entitled to all the other rights of a Unitholder until his name

is entered in the register of Unitholders.

17.10 The number of Units held by a Unitholder shall be registered and recorded by the Registrar as

a book entry.

17.11 The Manager may, upon giving notice to the Unitholders by advertisement in a widely

circulated daily newspaper, close the Register, such periods of closure shall not, in

aggregate, exceed 30 (thirty) days in each year.

18. VOTING RIGHTS ON FUND ASSETS

18.1 All rights of voting conferred by any investments forming part of the Deposited Property shall be

exercised by the Trustee who may delegate it to the Manager in writing. The Trustee may refrain

at its own discretion from the exercise of any voting rights and no Unitholder shall have any right

to interfere or complain. Upon written request and at the expense of the Manager, the Trustee

shall from time to time execute and deliver or cause to be executed or delivered to the

Manager or its nominees such powers of attorney or proxies in such name and names as the

Manager may request authorising such attorneys and proxies to vote, consent or otherwise act

in respect of all or any part of the Deposited Property.

18.2 Upon delegation by the Trustee, the Manager shall be entitled to exercise the said rights in what

it considers to be the best interest of the Unitholders. Subject to section 168 of Investments and

Securities Act, neither the Manager nor the Trustee shall be under any liability or responsibility

thereof in respect of the management of the investment in question nor in respect of any vote,

action or consent given or taken or not given or taken by the Manager whether in person or by

proxy and neither the Trustee, the Manager, the Unitholder or any such proxy or attorney shall

incur any liability or responsibility by reason of any error of law or mistake of fact or any matter or

thing done or omitted or approval voted or given or withheld by the Trustee or Manager or by

the Unitholder and the Trustee shall be under no obligation to anyone with respect to any action

taken or caused to be taken or omitted by the Manager or by any such proxy or attorney.

18 .3 The phrase “right of voting” or the word “vote” used in this Clause shall be deemed to include

not only a vote at a meeting but any consent to or approval of any arrangement, scheme or

resolution or any alteration in or abandonment of any rights attaching to any part of the Fund’s

assets and the right to requisition or join in a requisition to convene any meeting or to give notice

of any resolution or to circulate any statement.

18.4 The Trustee shall, when necessary, forward to the Manager, all notices of meetings, reports,

circulars and other documents of a like nature received by it or its nominee with regard to any

investment of the Fund.

19. ISSUANCE OF STATEMENTS OF UNITHOLDING

19.1 Upon the issue of Units, the Manager shall notify the Unitholder of the number of Units, if any,

purchased by such Unitholder by issuing a Statement of Unitholding which shall indicate the


59


total holding of that Unitholder in respect of the Fund including any Units held prior to the

issue of such Units.

19.2 A Unitholder shall be issued with the Statement of Unitholding, evidencing its ownership of the

Units of the Fund.

19.3 All Unitholders will be sent quarterly statements indicating their Unitholding and any sale or

purchase of Units recorded in the period covered by the Statement of Unitholding.

19.4 Joint Unitholders shall be entitled to only one electronic Statement of Unitholding for Units

held jointly by them. Where a Statement of Unitholding is issued to the Joint Unitholders, it shall

be issued in the names of the joint Unitholders and delivery of a Statement of Unitholding to

one of the joint Unitholders shall be sufficient delivery to all such Unitholders.

19.5 Notwithstanding anything contained in these presents, a Unitholder shall only be entitled to

the issuance of a physical Statement of Unitholding upon an express request.

20. RIGHT OF ASSIGNMENT

Every Unitholder is entitled to assign, by way of security, all or any part of his or her

investments to third parties PROVIDED THAT the Manager is duly informed of such assignment

so that necessary documentation can be effected to reflect the change in the Unitholder’s

holding in the Fund. Such documentation shall be as prescribed by the Manager.

21. INCOME DISTRIBUTION/REINVESTMENT

The income of the Fund less any sums properly chargeable thereon or deductible therefrom

shall be distributed quarterly in accordance with Rule 480 of the SEC Rules. Unitholders may,

at the time of subscription, elect to receive their distributions either by electronic transfer to

their bank accounts or re-invest their distribution by purchasing additional units of the Fund.

Where the Unitholder fails to indicate whether their distributions should be reinvested in the

Fund or transferred to their bank account, such distribution shall be re-invested, and used to

purchase additional units of the Fund.

22. INDEMNITIES, RIGHTS AND DISCRETION OF TRUSTEE AND MANAGER

Without prejudice to any indemnity allowed by law or elsewhere herein given to the Trustee

or to the Manager the following provisions shall apply:

22.1 The Trustee, the Manager and the Registrar shall not be responsible for the authenticity of any

form of application, endorsement or other documents affecting the title to or transmission of

Units or be in any way liable for any forged or unauthorized signature on or a seal affixed to

such endorsement, transfer or other document or for acting on or giving effect to any such

forged or unauthorized signature or seal affixed PROVIDED that they have exercised due

care and diligence in examining the signature and/or document.

22.2 The Trustee, the Manager and the Registrar shall not incur liability in respect of any action or

omission by them in good faith in reliance upon any notice, resolution, direction, consent,

certificates, affidavit, statement, certificate of stock, plan or scheme of reorganisation or

other paper or document believed to be genuine and to have been passed, sealed or

signed by the proper parties.

22.3 Neither the Trustee nor the Manager shall incur liability to the Unitholders for doing or failing to

do any act or thing which by reason of any provision of any present or future law or

regulation made pursuant thereto or of any decree, order or judgment of any Court or by

action (whether of binding legal effect or not) which may be taken or made by any person

or body acting with or purporting to exercise the authority of any government (whether


60


legally or otherwise) where the Trustee or Manager shall be directed or requested to do or

perform or to forbear from doing or performing any act or thing.

22.4 The Trustee and Manager shall be entitled to require that the signature of any Unitholder or

joint Unitholder to any document required to be signed by him under or in connection with

this Deed shall be verified by a banker or broker or other responsible person or otherwise

authenticated to their reasonable satisfaction.

22.5 The Trustee, or a company affiliated with the Trustee shall not by reason of its office be

precluded from purchasing, holding, dealing in or disposing of Units nor from contracting or

entering any financial, banking or other transaction with the Manager, a company affiliated

with the Manager or any Unitholder or any company or body with an interest in any Unit(s) or

from being interested in any such contract or transaction or from holding any shares or any

investment in any such company or body. The Trustee shall not except as otherwise herein

provided be in any way liable to account either to the Manager or to the Unitholders or any

of them for any profits or benefits made or derived by the Trustee thereby or in connection

therewith.

22.6 The Trustee shall prosecute or defend any action or suit in respect of the provisions hereof or

in respect of the Deposited Property or any part thereof or take part in or consent to any

corporate action, provided that it is furnished with such reasonable indemnity against costs,

as it may require to carry out such action, by the Fund.

22.7 Subject to the prior consent of the Trustee in each case the Manager may from time to time for

the account of the Fund enter into underwriting and sub-underwriting contracts in relation to the

subscription or purchase of Authorised Investments upon such terms in all respects as it shall think

fit (but subject always to the SEC’s consent and the provisions of this Trust Deed and so that no

such contract shall relate to an investment which if acquired would constitute a holding in

excess of the limits specified in Clause 14 hereof) and all commissions or other fees received by

the Manager and all Authorised Investments or cash acquired pursuant to any such contract

shall form part of the Deposited Property.

22.8 Save for instances where the Trustee has been negligent, the Trustee shall not be liable to

account to any Unitholder or otherwise for any payment made or suffered by the Trustee in

good faith to any duly empowered fiscal authority of Nigeria or elsewhere for taxes or other

charges in any way arising out of or relating to any transactions under these presents

notwithstanding that any such payments need not have been made or suffered.

22.9 The Trustee shall not be under any liability on account of anything done or suffered by them

in good faith in accordance with or in pursuance of any request, notice, direction or advice

of the Manager. Whenever a notice or other communication is to be given by the Manager

to the Trustee, the latter accepts as sufficient evidence thereof, a document signed on

behalf of the Manager by any person whose signature the Trustee is for the time being

authorized in writing by the Manager to accept.

22.10 The Trustee may exercise all the powers and discretion vested in it by these presents and, in

the absence of fraud or negligence shall not in anyway be responsible for any loss, costs or

damages that may result from the exercise or non-exercise thereof.

22.11 The Trustee may act upon the advice of or statement or information obtained from

stockbrokers, accountants, lawyers, bankers or other persons believed by the Trustee in good

faith to be experts in the matters on which they have been consulted whether instructed by

the Trustee or Manager and the Trustee shall not be liable for anything done or omitted or

suffered to be done by it in reliance upon such advice statement or information.

22.12 The Trustee shall be responsible for the acts of its duly appointed lawyer, banker, accountant,

broker or any other agent acting on the instruction of the Trustee within the course and scope

of its appointment.


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22.13 The Manager shall in no way be liable to make any payment hereunder to any person

except out of the monies of the Fund set aside for that purpose.

22.14 If for any reason it becomes impossible or impracticable to carry out any of the provisions of

these presents neither the Manager nor the Trustee shall be under any liability. Neither shall

they incur liability for any error of law in the absence of fraud or negligence in connection

with any matter or thing done or suffered to be done or omitted to be done by them in good

faith hereunder PROVIDED ALWAYS that nothing in this section may be construed as

exempting the Trustee from or indemnifying the Trustee against liability for breach of trust

arising from any fraudulent or negligent act or omission on its part or any other breach of duty

hereunder.

22.15 The Manager shall not be under any liability except such liability as may be expressly

assumed by it under this Deed or imposed by law nor shall the Manager (save as herein

otherwise appears) be liable for any act or omission of the Trustee or for anything except its

own breach of duty hereunder.

22.16 Under no circumstances shall the Trustee be bound to make any payment to any person

except out of the funds held by it for that purpose under the provisions of this Deed.

22.17 The Trustee shall not be responsible for acting upon any resolution passed at a Meeting of the

Unitholders in respect of which minutes shall have been made and signed even though it

may be subsequently found that there was some defect in the constitution of the Meeting or

the passing of the resolution or that for any reason the resolution was not binding upon all the

Unitholders PROVIDED HOWEVER that nothing in this sub-clause 22.17 shall be construed to

relieve the Trustee from an obligation to exercise due care and diligence in carrying out its

obligation as trustee or to relive the Trustee from liability for any breach of trust.

22.18 With the exception of the selection of investments and except as otherwise set out herein, the

Trustee covenants that effective control over the affairs of this Fund shall be vested in the

Trustee and will be independently exercised by the Trustee on behalf of the Unitholders.

22.19 The Trustee undertakes to notify the Commission of any proposed change in the

management of the Fund during the entire period of existence of the Fund.

22.20 Subject to the provisions of this Deed, the selection of all investments, shall, in all respects, be

the sole responsibility of the Manager who shall exercise due diligence and prudence in its

selection process having due regard to the Investment Policy of the Fund in such selection.

22.21 The Manager shall be entitled, subject to the consent of the Trustee, to delegate to any

person, firm or corporation upon such terms and conditions as it may think fit, all or any of

their powers and discretion in relation to the selection, acquisition, holding and realisation of

investments and the application of any monies forming part of the Deposited Property

PROVIDED THAT the Manager shall remain liable hereunder for any act or omission of any

such person, firm or corporation in relation to the exercise or non-exercise of any powers or

discretion so delegated as if the same were an act or omission of the Manager.

23. DUTIES AND FUNCTIONS OF THE TRUSTEE AND MANAGER

23.1 Duties of the Trustee

The Trustee shall:

23.1.1 ensure that the basis on which the sale, issue, repurchase or cancellation, as the

case may be, of the Units effected by or on behalf of the Fund is carried out in

accordance with the Investments and Securities Act and this Deed;


62


23.1.2 ensure that the selling or repurchase price or participatory interests is calculated in

accordance with the Investments and Securities Act and this Trust Deed;

23.1.3 carry out the instructions of the Manager unless they are inconsistent with the

Investments and Securities Act or this Trust Deed;

23.1.4 verify that, in transactions involving the assets of the Fund any consideration is

remitted to it within time limits which are acceptable market practice in the context

of a particular transaction;

23.1.5 verify that the income accruals of the Fund are applied in accordance with the

Investments and Securities Act and this Trust Deed;

23.1.6 enquire into and prepare a report on the administration of the Fund by the Manager

during each annual accounting period, in which it shall be stated whether the Fund

has been administered in accordance with the provisions of the Investments and

Securities Act and this Trust Deed;

23.1.7 if the Manager does not comply with the limitations and provisions referred to in

Clause 23.1.6 of this Trust Deed, state the reason for the non-compliance and outline

the steps taken by the Manager to rectify the situation;

23.1.8 send the report referred to in Clause 23.1.6 of this Trust Deed to the Commission and

to the Manager in good time to enable the Manager include a copy of the report in

its annual report;

23.1.9 ensure that there is legal separation of assets held in trust and that the legal

entitlement of investors to such assets is assured;

23.1.10 ensure appropriate internal control systems are maintained and that records clearly

identify the nature and value of all assets held in trust, the ownership of each asset

and the place where documents of title pertaining to each asset are kept;

23.1.11 whenever it becomes necessary for the Trustee to enforce the terms and conditions

of this Trust Deed, the Trustee shall do so within 10 (ten) working days and shall inform

the Commission not later than 10 (ten) working days after the breach;

23.1.12 satisfy itself that every income statement, balance sheet or other return prepared by

the Manager in terms of section 169 of the Investments and Securities Act fairly

represents the assets and liabilities, as well as the income and distribution or income,

or every portfolio of the Fund administered by the Manager;

23.1.13 ascertain that the monthly, quarterly and other periodic returns/reports relating to the

Fund are sent by the Manager to the Commission and the Exchange;

23.1.14 ascertain the investment rationale for investment decision-making of the Manager;

23.1.15 monitor the Register of the Unitholders; and

23.1.16 generally monitor the activities of the Manager on behalf of and in the interest of the

Unitholders.

23.2 The Trustee may request that every director or employee of the Manager shall submit to the

Trustee any book or document or information relating to the administration of the Fund by the

Manager which is in its possession or at its disposal, and which the Trustee may consider


63


necessary to perform its functions and no person shall interfere with the performance by the

Trustee of its functions under the Investments and Securities Act.

23.3 Duties of the Manager

The Manager shall have the following duties:

23.3 1 selection and management of the portfolio of investment in accordance with this

Trust Deed;

23.3.2 redemption and issue of Units of the Fund;

23.3.3 maintenance of a schedule of Unitholders;

23.3.4 preparation of periodic accounting records of the Fund in accordance with the ISA

and the SEC Rules;

23.3.5 monitor all transaction costs and consistently achieve best execution on transactions

on behalf of the Fund;

23.3.6 filing of monthly and other periodic returns /reports with the Commission, the

Exchange, the Trustees, the Registrars and the Unitholders;

23.3.7 organising the Meetings of the Fund;

23.4.8 representing the interest of the Fund in both the national and the global market;

23.3.9 complying with the Investments and Securities Act, the Trustee Investments Act and

this Trust Deed;

23.3.10 avoiding conflict of interests between the Manager and the Unitholders;

23.3.11 disclosure of the interests of its directors and management to the Unitholders;

23.3.12 maintenance of adequate financial resources to meet its commitments to manage

the risks to which the Fund is exposed;

23.3.13 organise and control the Fund in a reasonable and responsible manner expected of

a fund manager;

23.3.14 keeping proper records in relation to the Fund;

23.3.15 employment of adequately trained staff for the operation of the Fund;

23.3.16 establishing well defined compliance procedures; and

23.3.17 to apply investment discretion, including maintenance of a minimum cash balance

to meet redemption requirements. Such discretion shall also include the decision to

buy, hold, sell the Fund’s assets in line with the investment objectives and asset

allocation guidelines.

23.3.18 ensuring a steady stream of income from the investment process.

25. CONDITIONS FOR EFFECTING TRANSACTIONS OR DEALINGS

Notwithstanding anything herein contained, neither the Trustee nor the Manager and/or any

other party shall be required to effect any transaction or dealing with any Unitholder or with

any part of the investments of the Deposited Property on behalf of or for the benefit of or at


64


the request of any Unitholder unless such Unitholder shall first have paid to the Trustee, the

Manager or such other party to its or their satisfaction, as the case may be, such amount

sufficient to cover 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, the Manager or such other party shall be

entitled to, as it or they may think fit, pay and discharge all or any of such duties charges or

stamp duty on behalf of the Unitholder and to retain the amount so paid out of any money or

property to which such Unitholder may be or become entitled in respect of his Unit or

otherwise however hereunder.

26. VARIATION OF PAR VALUE OF UNITS

Subject to the approval of the Trustee and the prior consent of the Commission, the Manager

shall have the right by notice to the Unitholders to vary the par value of the Units and in

consequence thereof to effect reductions or increases in the number of Units Outstanding of the

Fund. Such notice shall state the number of Units to be cancelled and the new par value of the

Units.

27. COVENANTS BY THE MANAGER

The Manager hereby covenants with the Trustee as follows:

27.1 It shall not make a profit for itself from transactions in any assets held under the Fund.

27.2 It shall not borrow money on behalf of the Fund for the purpose of acquiring securities or

other property for the Fund.

27.3 It shall not lend money that is subject to the trust of the Fund to any person to enable it

purchase Units of the Fund.

27.4 Further to clause 4.10 above, it shall not mortgage, charge or impose any other

encumbrance on any securities or other property subject to the trust of the Fund.

27.5 It shall not engage in any transactions with respect to or for the Fund that are not, in its

reasonable opinion, in the best interests of Unitholders and of the Fund.

27.6 It shall not deviate from or alter the Investment Policy of the Fund without due recourse to the

provisions of this Deed, and without the prior approval of the Commission, regarding the

same.

27.7 It shall exercise due prudence in all its dealings with the monies of the Fund.

27.8 It shall give written notice to the Commission of any proposal to alter the Trust Deed or replace

the Trustee as required by section 187 of the Investments and Securities Act.

27.9 use its best endeavours to maintain the quotation or listing of the Units on the Exchange or, if it is

unable to do so having used such endeavours, use its best endeavours to obtain and maintain a

quotation or listing of such Units on such exchange or securities market(s) as the Manager may

decide and also upon obtaining a quotation or listing of such Units issued by it on such other

exchange or exchange(s) or securities market(s) enter into a deed supplemental to this Trust

Deed or the relevant Series Trust Deed to effect such consequential amendments as the Trustees

may require or as shall be requisite to comply with the requirements of any such exchange or

securities market. Provided that the Manager shall not delist the Units from the Exchange without

the prior approval of the Majority Unitholders.


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28. REMOVAL, RETIREMENT AND APPOINTMENT OF MANAGER

28.1 In the event of the Manager desiring to retire, the Trustee shall use its best endeavours to find

a new Manager. If within 6 (six) months of notice by the Manager seeking to retire, no suitable

replacement is identified, the Trustee may terminate the Trust by giving 6 (six) months’ notice

to this effect to the Unitholders, the Manager and the Commission.

28.2 The Manager shall be subject to removal by notice in writing given by the Trustee in any of

the following circumstances PROVIDED THAT in every case the proposed removal has been

approved by the Commission or one month has passed since notice was served on the

Commission without the Commission having notified the Trustee that the proposed removal is

not approved before service on the Manager:

28.2.1 if the Unitholders representing more than 75% of the Units for the time being outstanding

of the Fund deliver to the Trustee a request in writing that the Manager should retire or;

28.2.2 if the Manager goes into liquidation (except for a voluntary liquidation for the

purpose of reconstruction or amalgamation upon terms previously approved in

writing by the Trustee) or if a receiver is appointed over any of its assets; or

28.2.3 if the Trustee certifies and provides evidence to the satisfaction of the Commission to

the effect that the Manager has been fraudulent or has acted with gross misconduct

in its management of the Fund and it is in the best interests of the Unitholders that the

Manager should be removed; or

28.2.4 if the licence of the Manager is suspended or withdrawn by the Commission.

28.3 In any of the cases, the Manager shall, upon notice by the Trustee, immediately cease to be

the manager and the Trustee shall by writing under its seal subject to approval by the

Commission appoint some other qualified corporation to be the manager. Such corporation

shall enter such Deed or Deeds as the Trustee may advise are necessary or desirable to be

entered by such corporation in order to secure the due performance of its duties as manager

which deed or deeds shall, if so required by the retiring manager, provide that the Fund shall

as soon as practicable cease to use the word “FAAM” in its name and that neither the

Trustee nor the new manager shall hold themselves out as being connected with the retiring

manager in any way and furthermore shall provide that the manager to be appointed

hereunder shall purchase from the retiring manager all Units of which it is Unitholder or

deemed to be Unitholder at the realisation price.

29. REMOVAL, RETIREMENT AND APPOINTMENT OF TRUSTEE

29.1 In the event of the Trustee desiring to retire, it shall give not less than 3 months’ notice in

writing to the Manager of its desire to retire, and the Manager shall use its best endeavours to

appoint a new Trustee within 3 (three) months of notice to both the Commission and the

Manager by the Trustee of its intention to retire. The new Trustee shall be an incorporated

company registered with the Commission and approved by a majority of the Unitholders. If

no new Trustee can be identified within that period, the Manager may terminate the Trust.

29.2 The Trustee shall be subject to removal by notice in writing from the Manager in any of the

following circumstances PROVIDED THAT in either case the proposed removal has been

approved by the Commission or 1 (one) month has passed since notice was served on the

Commission without the Commission having notified the Manager that the proposed removal

is not approved before service on the Trustee:

29.2.1 if Unitholders holding not less than 75% of the Units outstanding of the Fund deliver to

the Manager a request in writing that the Trustee should retire; or


66


29.2.2 if the Trustee goes into liquidation (except for a voluntary liquidation for the purpose

of reconstruction or amalgamation upon terms previously approved in writing by the

Manager) or if a receiver is appointed over any of its assets; or

29.2.3 if in the opinion of the Manager, which opinion is confirmed by Unitholders holding a

simple majority of the Units Outstanding attending the meeting in person or by proxy,

the Trustee shall be incapable of performing or shall have in fact failed to perform its

duties satisfactorily or shall have done any other thing which is calculated to bring

the Fund into disrepute or be harmful to the best interests of the Unitholders or is a

breach of the Trustees fiduciary duties to the Fund. Upon removal of the Trustee, the

Manager shall by writing under its seal subject to the approval of the Commission,

appoint some other qualified corporation to be the Trustee and such corporation

shall enter such Deed or Deeds as the Manager deems it necessary or desirable to

be entered by such corporation in order to secure the due performance of its duties

as Trustee; or

29.2.4 if the licence of the Trustee is suspended or withdrawn by the Commission.

29.3 The new Trustee taking the place of the Trustee retiring pursuant to Clause 29.1 or 29.2 above

shall sign a deed of accession.

33. DURATION AND TERMINATION OF THE TRUST

33.1 The Trust constituted by this Deed shall be for a period of 99 (ninety-nine) years subject only to

the provisions for termination as are herein contained.

33.2 The Trust may be terminated upon no less than 6 (six) months’ notice by the Trustee in writing

to the Manager, Unitholders of the Fund and the Commission, if the Trust becomes illegal or if

in the opinion of the Trustee it is impracticable or inadvisable to continue the Trust.

33.3 The Trust may at any time be terminated by a resolution of the Unitholders holding not less

than 90% of the Units at a joint meeting of the Fund duly convened and held in accordance

with the provisions herein contained in respect of the Fund regarding meetings and such

termination shall take effect no less than 6 (six) months from the date on which the said

Special Resolution is passed or on such later date (if any) as the said Special Resolution may

provide.

33.4 The Trust may be duly terminated by the Commission where any of the activities of the Trust is

outside the ambit of permissible activities as provided for by the Investments and Securities

Act, any relevant regulations enacted thereunder and/or any other applicable laws or where

the Commission’s approval of the Fund is withdrawn.

33.5 The Manager may, by notice to the Commission, Unitholders and the Trustee terminate the

Fund if, in the opinion of the Manager, the investment objective of the Fund is no longer

achievable or the value of the Fund’s assets is insufficient to justify the continued operation of

the Fund or if, due to a change in law or other circumstance deemed appropriate by the

Manager, the continued operation of the Fund is no longer justified.

33.6 In the event of termination, the liquidation of the Fund and redemption of the Unitholders’

Units will be satisfied solely out of the assets of the terminated Fund without recourse to the

assets of any other constituent Fund or the assets of the Manager.

34. PROCEDURE AFTER TERMINATION OF THE TRUST

Subject to compliance with the provisions of Rule 453 of the SEC Rules with respect to the

termination of the Trust, upon the Trust being terminated, the Trustee shall proceed as follows:


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34.1 procure the sale of all investments remaining as part of the Deposited Property and pay

therefrom all liabilities properly payable. Such sale shall be carried out in such manner and

within such period after the termination of the Trust as the Trustee deems fit.

34.2 distribute or effect the distribution to the Unitholders, in proportion to their Units, of all net cash

proceeds derived from the realisation of the Deposited Property available for the purpose of

such distribution. The Trustees may request for any additional information/document for the

purpose of making such terminal distribution. PROVIDED THAT the Trustee shall be entitled to

retain out of any monies in its hands as part of the Deposited Property a provision for all costs,

charges, expenses, claims and demands incurred or made by the Trustee in connection with

or arising out of the termination of this Trust and out of the monies so retained to be

indemnified against any such costs, charges, expenses, claims and demands.

34.3 keep the unclaimed money (if any) in an interest yielding account for the purpose of meeting

investors’ claims.

39. COPIES OF TRUST DEED TO BE MADE AVAILABLE

39.1 A copy of this Deed and of any Deed supplemental hereto shall, at all times, during usual

business hours be made available by the Manager and the Trustee at their respective head

offices and any Unitholder shall be entitled to receive from the Manager a copy of such

Deed(s) as aforesaid on production of such evidence satisfactory to the Manager or Trustee,

including a Statement of Unitholding, and making payment to the Manager of the prescribed

amount for each copy of the document.

39.2 The Trustee shall keep the original of the Trust Deed.

FIFTH SCHEDULE

PROVISIONS FOR MEETINGS OF THE UNITHOLDERS

1. The Fund Manager shall hold a general Meeting of the Unitholders at least once every 5years

to consider the accounts and all matters affecting the Fund which meeting shall be in

addition to any other meeting of the Unitholders. The Manager shall in the notice convening

such meeting specify that the meeting is a General Meeting and that the ordinary business of

the meeting shall include the presentation of the Audited Financial Accounts, the Manager’s

Reports and where applicable, the declaration of a distribution. Any other business

transacted at the Unitholders’ Meeting shall be deemed special business.

2. The Trustee or the Manager shall, on their own accord, or at the request, in writing, of at least

5 (five) of the Unitholders holding not less than 25% in value of the Units Outstanding convene

a meeting of Unitholders. Such meeting shall be held at such place as the Manager or the

Trustee shall determine or approve. The Court, on the application of a Unitholder where this

clause has not been complied with or, if satisfied that it is just and equitable to do so, may at

any time convene a meeting of the Unitholders in accordance this Trust Deed. Any trustee or

other duly authorised official of the Trustee and its solicitors, and any director, secretary,

solicitors or any other person authorized in that behalf by the Manager must attend the

meeting.

3. Notice of Meetings

3.1 At least twenty-one (21) Business Days' notice (exclusive of the day on which the notice is

served or deemed to be served and of the day on which the notice is provided) of every

meeting shall be provided to the Unitholders in the manner provided by Clause 39 of this

Deed. The notice shall specify the place, day and hour of the meeting, and the nature of

any business to be proposed at the meeting, and shall provide such further information, if

any, as the Manager and the Trustee shall deem fit. A copy of the notice shall be sent by post


68


or email. The accidental omission to provide, or the non-receipt of, any notice by any

Unitholder shall not invalidate the proceedings at any meeting.

3.2 A meeting of the Fund shall notwithstanding that it is called by a shorter notice than that

specified in sub-clause 3.1 above be deemed to have been duly called if it is so agreed by

Unitholders representing not less than ninety-five percent (95%) in nominal value of the Units

Outstanding.

The following persons shall be entitled to receive notice of meetings of Unitholders:

(i) every Unitholder;

(ii) the Fund Manager, where a meeting is called by the Trustee;

(iii) the Trustee, where a meeting is called by the Fund Manager;

(iv) the Custodian;

(v) the Auditor; and

(vi) the Commission.


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14.2 Extract of the Custody Agreement

2. Appointment and Role of the Custodian

2.1 The Custodian is hereby appointed to do the following:

(a) The settlement of Securities issued by entities in the Federal Republic of Nigeria from

time to time and to hold the same on behalf of the Trustee/Fund upon terms and

conditions hereof.

(b) Custody of all funds and assets (including all cash, securities and other property

transferred to the Custodian for safekeeping under the terms of this agreement) from

time to time on behalf of Unit holders.

(c) To ensure that all funds and assets held by it pursuant to this agreement are at all

times immediately identifiable by third parties as custody assets by the inclusion of

such words in the title to sufficiently describe same as such.

(d) The collection of dividends, interests and principal amounts due for redemption on

due date.

(e) The exercise or sale of subscription rights and attending to other related corporate

actions, provided that, it shall be liable to the Trustee/Fund in full for any losses

incurred due to its failure to carry out its obligation in relation to any corporate action

affecting all or any part of the funds or assets covered by this agreement.

(f) Transaction processing/settlement, monthly and quarterly reporting of status of

Fund’s assets to the Fund Manager, Trustee and the Commission.

(g) Carry out monitoring, oversight, administrative and other functions required in

accordance with the terms and conditions of this Agreement.

(h) Act independently of the Fund Manager and the Trustee, of the management of the

Scheme and solely in the interest of the Unit Holders in the Scheme and of the

Scheme itself.

(i) Be accountable to the Fund Manager, the Trustee and the Commission in the

performance of its obligations herein and such other functions it may reasonably be

expected to perform pursuant to upholding the best interest of Unit holders and the

scheme.

(j) Not create a charge on the assets or loan out the assets.

(k) Ensure that applicable accounting standards are maintained in preparation of the

Fund’s books.

(l) Ensure the financial statements are prepared on a going concern basis.

3. Role of the Fund Manager

3.1 The Fund Manager is the investment manager whose role is to administer its Financial Assets by

doing the following:

(a) Make investment decisions in relation to the funds and assets under the scheme or Fund

to which this agreement relates

(b) Keep proper books of account and prepare financial statements.

(c) Ensure that appropriate internal controls are established for the Funds.


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(d) Maintain adequate financial resources to meet its commitments and manage the risks

thereon.

4. Compliance with Relevant Regulation

Holding of Securities by the Custodian or any Securities Depository or Sub-Agent will be subject to

Relevant Regulation and practices. To the extent that such regulations conflict with the terms hereof, the

former shall prevail. The Custodian may take or omit to take any action it deems in its absolute discretion

fit in order to ensure compliance with any Relevant Regulation and neither the Custodian nor any of its

associates, directors, officers, agents, delegates or employees shall be liable in respect thereof.

5. The Account(s) and Record Keeping

5.1 The Custodian shall maintain the following Accounts/books for the Fund:-

(a) A Securities Account for all securities from time to time received by the Custodian which

have been designated for such Securities Account. Each Securities Account will be titled

‘Custody Securities Account Trustee/Fund’s name. The Trustee/Fund assets will be

separate from that of the Custodian in line with Rule 456(b) of the rules and regulations

of the Securities & Exchange Commission and

(b) A Cash Account shall be designated to receive all sums due to the Fund and shall be

titled “Trustee/Fund Name”.

5.2 The Custodian shall hold the Property in the Account on behalf of the Trustee/Fund.

5.3 The Property held in the Account shall be clearly recorded on the books of the Custodian as

belonging to the Trustee/Fund. The Custodian may treat Securities as fungible and therefore

identification of the specific Securities held by the Custodian on behalf of the Trustee/Fund for a

particular Unit holder may not be possible. The Custodian shall, however, maintain a complete

record of the number and type of Securities held by the Trustee/Fund for the account of the

Fund.

5.4 Safekeeping of Securities

(a) The Custodian shall arrange for the registration of Securities on behalf of the

Trustee/Fund. The Custodian shall conduct regular registry inspections, at least quarterly,

to confirm that the records of each registrar are identical to those of the Custodian with

respect to each Security held for the Account.

(b) The Custodian shall be responsible for obtaining the consent of each registrar to

conduct such inspection and shall provide a report of such inspection to the Trustee

and the Fund Manager. In addition, the Custodian shall advise the Trustee and Fund

Manager immediately upon discovery of any discrepancies between the records of a

registrar and the Custodian’s records regarding any Securities.

(c) The Custodian agrees to maintain those Securities capable of delivery in safe keeping at

its registered offices or such other offices as the Custodian may occupy at any time

hereafter subject to providing the Trustee and the Fund Manager with adequate notice

thereof.

(d) The Cash Account will be a sub-account within the Custodian's own United States

Dollar/Euro/Naira bank account for the purpose of receiving and distributing dividends

and interest payments and other income, payments, proceeds of sale, redemption

monies, or cash equivalent associated with the Trustee/Fund’s Securities. The Custodian

shall use its reasonable efforts to procure the receipt by it of the relevant evidence as

soon as practicable, whereupon the Custodian shall procure the remittance of such


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monies to the Account in the name of the Trustee/Fund or as otherwise instructed by the

Fund Manager.

(e) The Custodian shall maintain records of the details of the Property, including date and

amount, of debits and credits to the Property held in its custody. The Custodian shall

maintain a record in its own books of the Trustee/Fund and the number and type of

Property held by the Custodian for the Trustee/Fund.

(f) The Custodian shall provide the Trustee and the Fund Manager with a confirmation of

every change in the proportion of Property due to the Trustee/Fund since the last date

of such confirmation.

(g) The Custodian shall render the relevant reports in line with the rules and regulations of

the Securities & Exchange Commission as amended from time to time.

6. Use of Securities Depositories and Agents

6.1 The Custodian may upon giving the Fund Manager prior written notice and furnishing details of

the contemplated transaction thereof engage the services of a Securities Depository to hold

funds and assets deposited in the Account provided that the Fund Manager may generally

object to the use of any Securities or agent which it has reason to believe may not uphold the

fundamental objective of this agreement. Provided further that the Custodian shall not, without

the prior written approval of the Trustee/Fund, deposit Securities in any Securities Depository,

incorporated or organised under the laws of a country other than Nigeria.

6.2 If the Custodian deposits Property in a Securities Depository, the Custodian shall identify the

Property so deposited on the Custodian's books as belonging to the Trustee/Fund and shall

require that such Securities Depository identifies the Property so deposited on its books as

belonging to the Custodian for the benefit of the Trustee/Fund.

7. Authorised Signatories

7.1 Upon the execution of this Agreement the Fund Manager/ Trustee shall supply to the Custodian

a list of persons who are authorised to give instructions in respect of the Fund’s accounts,

operated by the Custodian and the said persons’ relative specimen signatures.

7.2 The Fund Manager and Trustee shall promptly notify the Custodian of any changes that may be

made to the persons authorised under Clause 7.1 above and shall in the case of new signatories

provide duly completed specimen signature cards in respect thereof.

8. Actions upon Authorised Instructions

8.1 Upon the receipt of Authorised Instructions (as hereinafter defined) the Custodian is authorised to

sell, assign, transfer, deliver or exchange, or to receive or purchase for the Account, Securities,

but only as provided in such Authorised Instructions.

8.2 Notwithstanding anything herein stated to the contrary, the Custodian shall not be responsible

for the performance of such duties as are set forth in this Agreement or contained in Authorised

Instructions given to the Custodian which are contrary to Relevant Regulation. The Custodian

shall promptly notify the Fund Manager if it cannot comply with Authorised Instructions.

8.3 For the purposes of this Agreement, Authorised Instructions means:

(a) Instructions issued by the Fund Manager to the Custodian by SWIFT;


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(b) Instructions issued by the Fund Manager to the Custodian via Electronic Mail;

(c) Instructions issued by the Fund Manager in writing signed by such persons as are

designated in writing by the Trustee;

(d) Tested telex instruction of the Fund Manager;

(e) Other forms of instruction issued by the Fund Manager in computer readable form as

shall be customarily utilised for the transmission of like information and acceptable to the

Custodian; and

(f) Such other forms of communication issued by the Fund Manager as from time to time to

be agreed upon by the Fund Manager and the Custodian.

8.4 Subject to Clause 7 hereof, the Custodian shall undertake to examine carefully the signatures of

the authorised signatories but shall not be bound to make any further examination with respect

to identity.

8.5 Authorised Instructions shall continue in full force and effect until cancelled or superseded.

8.6 The Fund Manager shall be responsible for safeguarding any testkeys, identification codes or

other security devices, which the Custodian may make available to the Fund Manager.

8.7 The Custodian shall only act upon written authorised instructions given by the Fund Manager.

8.8 If an Authorised Instruction is incomplete, unclear, ambiguous, and/or in conflict with another

Authorised Instruction, the Custodian must request for resolution, where the Fund Manager is

unable to provide clarification within 2 hours, the Custodian may in its reasonable discretion act

upon what it believes in good faith such Authorised Instructions to be or refuse to act on such

Authorised Instructions until any incompleteness, unclearness, ambiguity or conflict has been

resolved to its satisfaction.

8.9 Any Authorised Instructions validly given by the Fund Manager in accordance with this

agreement and received by the Custodian in such manner that it is reasonable to believe that it

is authentic (notwithstanding any error in the transmission thereof), shall, as against the Fund

Manager and in favour of the Custodian be conclusively deemed to be valid Authorised

Instructions from the Fund Manager to the Custodian, provided however that the Custodian may

in its reasonable discretion decline to act upon any Authorised Instructions where the Custodian

has reasonable grounds for concluding that the same have not been accurately transmitted or

are not genuine. The Fund Manager is responsible for any loss, claim or expense incurred by the

Custodian for following or attempting to follow the Authorised Instructions, provided that there

are grounds to conclude that same was validly issued by the Fund Manager.

9. Actions without Authorised Instructions

9.1 Unless the Custodian receives Authorised Instructions of the Fund Manager to the contrary, the

Custodian is authorised to:-

(a) Exchange Securities when the exchange is purely ministerial (including, without limitation,

the exchange of interim receipts or temporary Securities for Securities in definitive form and

the exchange of warrants, or other documents of entitlement to Securities, for the Securities

themselves);

(b) Surrender Securities at maturity or when called for redemption upon receiving payment

therefore;

(c) Take non-discretionary action on mandatory corporate actions; and


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(d) In general, attend to all non-discretionary details in connection with the custody, sale,

purchase, transfer and other dealings with the Property.

10. Settlement

In accordance with Authorised Instructions and subject to the receipt by the Custodian of any

outstanding fees, costs or expenses in connection with this Agreement the Custodian will

arrange for the settlement of the sale or other disposition of any security for the account of the

Fund and for the purchase of any securities for the account of the Fund (which securities, when

so purchased, will form part of the Securities) which have been executed by the Trustee.

Instructions shall be given to the Custodian for the settlement of any Securities transactions within

a reasonable time and in any case not less than 2 (two) business days’ notice shall be given to

the Custodian for the withdrawal of the Securities from the Accounts or from any eligible

depository.

11. Scope of Custodian's Responsibility

11.1 The Custodian shall be under no duty to take or omit to take any action with respect to the

Property or otherwise except in accordance with the terms of this Agreement.

11.2 The Custodian will exercise reasonable care and diligence in performing its obligations under this

Agreement acting in the best interest of Unit holders and the scheme to which this agreement

relates.

11.3 The Custodian shall maintain adequate policies of insurance covering any loss or damage to the

Property whilst under its possession. Provided that prior to the full execution of this agreement it

furnishes the Fund Manager evidence of a guarantee or other insurance policies covering the

full value of all funds and assets to be transferred to the Custodian.

11.4 The Custodian shall have a duty to make reasonable enquiries as to safekeeping arrangements,

collection thereof, delivery and/or transfer procedures of any Securities Depository or Agent that

it may appoint to act in any capacity in relation to the funds and assets to which this agreement

relates.

11.5 Although the Custodian shall have no duty of supervision or monitoring of any Securities

Depository or Agent other than to perform reasonable due diligence as to their selection as

herein provided, it shall take all reasonable steps to ensure that insofar as the acts and omissions

of such depository or agent affects the safekeeping and other custody roles regarding all or any

part of the funds or assets to which this agreement relates, the agent or securities depository shall

act in the best interest of Unit Holders and the Scheme.

11.6 Subject to the agreement of both parties, the Custodian will use its best endeavours to obtain

double tax treaty exemption certificates or otherwise provide tax reclamation services.

12. Reporting

The Custodian shall provide the Fund Manager and the Trustee with monthly and quarterly

reports, transaction advice and/or statements of accounts relating to the Property, the dates

and depth of reporting level of which shall be as expressly agreed in writing between the

Custodian and the Fund Manager from time to time. In the absence of the filing with the

Custodian by the Fund Manager of exceptions or objections to any information, report

statement, confirmation, note or other document within 21(Twenty-One) days of the date of

receipt thereof, the Custodian shall have no responsibility for any errors or omissions therein and

the Fund Manager shall be deemed to have approved the contents thereof and accepted

responsibility for all of its obligations appearing therein.


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16. Right of Inspection

The books, records, documents, accounting procedures and practices of the Custodian

relevant to this Agreement are subject to examination by the Trustee, the Fund Manager or their

lawful representatives during normal business hours. No notice is required to be given for such

inspections.

20. Termination

This Agreement remains valid until its termination upon 60 days prior written notice from any of

the parties subject to prior notice to the Commission. The Trustee may terminate this Agreement

with immediate effect if the Custodian is in breach of its duties hereunder and the Custodian has

failed to remedy such breach after a notice period at the sole discretion of the Trustee has been

given to it to remedy the breach.

20.1 Any such notice whether given by the Custodian or the Trustee shall be followed within 30 (thirty)

days by instructions specifying the names of the persons to whom the Cash in the Accounts shall

be paid and securities in the name of the Trustee/Fund shall be transferred. If within 30 (thirty)

days following the giving of such notice of termination the Custodian does not receive such

instructions, the Custodian shall continue to hold such Securities and Cash subject to this

Agreement until such instructions are given.

20.2 Upon receipt of any instructions as aforesaid, the Custodian shall effect any payment or transfer

as specified in the same after payment to the Custodian of all amounts due and outstanding to

it under this Agreement.

20.3 The parties agree that the termination of the Custodian shall not come into prior to the

appointment of another Custodian and the due transfer of the assets held in custody by the

leaving Custodian to the new Custodian.

22. Dispute Resolution

a) Whenever a dispute arises between the parties, the Commission shall be notified within 5

working days.

b) A maximum period of 10 working days will be allowed for the parties to resolve the dispute

themselves or to appoint arbitrators.

c) The arbitration panel shall consist of four (4) arbitrators, one appointed by each party, and

the fourth who shall preside over the panel shall be appointed by the three (3) arbitrators

appointed by the three (3) Parties. Where the three (3) appointed arbitrators are unable to

agree on the choice of the fourth arbitrator within two (2) Business days of their

appointment, the choice of such arbitrator shall be referred to the President of the

Chartered Institute of Arbitrators, Nigeria at the request of any of the Parties to this

Agreement.

d) The arbitrators shall have a maximum period of 10 working days to resolve the dispute after

the exchange of pleadings, failing which the matter shall be referred to the Commission for

resolution.

e) Any party aggrieved by the decision of the Commission may refer the matter to the

Investment and Securities Tribunal.

f) Arbitration pursuant to this agreement shall be in accordance with the Arbitration and

Conciliation Act CAP A18, Laws of the Federation of Nigeria and the place of arbitration

shall be Nigeria.


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14.3 Corporate Governance and Operating Structure

On conclusion of the offering, the Fund 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 employs

strategies desired to maximise profits of the Net Asset Value and generate enviable returns to the Unit

holders, whilst ensuring those strategies are in line with best practises and the objectives of the Fund.

The Fund Manager strategically focuses on the asset portfolio of the Fund 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 Fund 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 Fund 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 Fund.

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 Fund‘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 Fund. The Fund manager will ensure that Annual report of the

activities and performance of the Fund 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 Fund 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 Fund.

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


76


Fund. The risk management framework will be such that will facilitate measurement,

monitoring and up to date reporting.

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 Fund’s internal controls and financial

disclosure process and assess the adherence of the Fund Manager to policies.

14.4 Indebtedness

As at the date of this Prospectus, the Fund Manager has no outstanding debentures, mortgages,

loans, charges other than those arising in the ordinary course of business.

14.5 Claims and Litigation

The directors of First Ally Asset Management Limited are not aware of any pending and or threatened

claims or litigation arising in its ordinary course of business.

14.6 Shareholding Structure of the Fund Manager

As at 31st December, 2017, the N500,000,000 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 499,999,998 99.90

Other Nigerians 2 0.10

Total 500,000,000 100.00

Except as stated above, no other shareholder held more than 5% of the issued share capital of the

Company.

14.7 Costs and Expenses

The costs, charges and expenses of and incidental to the Offer including fees payable to the

Securities and Exchange Commission, professional parties’ fees, brokerage commission, printing and

distribution expenses are estimated at N17million or 1.7% of the gross Offer proceeds and are payable

by the Fund and deductible from the monies raised by the Fund.

14.8 Relationship between the Issuer and the Professional Parties

The Fund Manager, is a100% subsidiary of the 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.

14.9 Material Contracts

The following contracts entered into by the Fund are considered material to this offer

A Trust Deed dated March 18, 2019 between First Ally Asset Management Limited and Radix

Trustees Limited under which the Fund is constituted.

A Vending Agreement dated March 18, 2019 between First Ally Asset Management Limited and

First Ally Capital Limited, under the terms of which First Ally Capital Limited has agreed to offer

1,000,000,000 Units of N1 each of the FAAM Money Market Fund.


77


A Custodian Agreement dated March 18, 2019 between UBA Plc (Global Investor Services), Radix

Trustees Limited and First Ally Asset Management Limited.

Other than as stated above, the Fund Manager has not entered into any material contracts except in

the ordinary course of business.

14.10 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 Certificates of Capital Importations (“CCIs”) 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.

14.11 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.

14.12 Consents

The following have given and not withdrawn their written consents to the issue of this Prospectus with

their names and reports (where applicable) included in the form and context in which they appear;

a) The Fund Manager - First Ally Asset Management Limited

b) Directors of the Manager: Mr. Abiodun Arokodare (Chairman)

Mr. Ebenezer Olufowose (Director)

Dr. Okey Nwuke (Director)

Mrs Ojinika Olaghere (Director)

Mr Segun Omidele (Director)

Mr Felix Johnson (Managing Director)

c) Fund Manager’s Company Secretary: Janet Agun

d) Financial Adviser/ Issuing House: First Ally Capital Limited

e) Trustee: Radix Trustees Limited

f) Custodian: UBA Plc (Global Investor Services)

g) Solicitors to the Transaction: Udo Udoma & Belo-Osagie

h) Reporting Accountant: PKF Professional Services

i) Auditors Ernst & Young

j) Registrars/Transfer Office: United Securities Limited

k) Receiving Bankers: Access Bank Plc

l) Rating Agency: Agusto & Co

14.13 Documents 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 Monday, March 25,

2019 to Monday, May 6, 2019.


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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 1,000,000,000 ordinary shares at N1 per unit

The Audited financial statements of the Fund Manager as at 31st December 2015, 2016,

2017 and Management Accounts as at December 31, 2018

The report of the Reporting accountant on the Financial forecast of the Fund for the

years ended December 31 2019, 2020 and 2021

The Rating Report issued by Agusto & Co. in respect of the Fund Manager’s Rating

The material contracts referred to on page 76

The written Consents referred to on page 77

The Letter of authorization from and registration of the Units by the Securities & Exchange

Commission

The Trust Deed

The Custodian Agreement

14.14 Fees and Expenses

The following fees and expenses shall be met from the assets/income accruing to the Fund.

1. The Trustees shall be paid a fee equal 0.05% per annum of the Net Asset Value of the Fund, exclusive

of VAT, payable every quarter in arrears.

2. The Fund Manager shall be paid a fee equal to 1% in 2019 and 1.5% in years 2020 & 2021, of the Net

Asset Value of the Fund exclusive of Value Added Tax, payable monthly in arrears. The Fund Manager

will also be entitled to reimbursement of reasonable out of pocket expenses incurred whilst

performing duties incidental to the management of the Fund.

The Manager is also entitled to an incentive fee of not more than 20% of total returns in excess of

10% of the Net Asset Value of the Fund for the preceding year. The Management Fee shall be

borne by the Fund.

3. The Custodian shall be paid a fee equal 0.025% per annum of the Net Asset Value of the Fund,

exclusive of VAT, payable every quarter in arrears.

In addition to the fees, charges and expenses outlined above, the Fund shall also pay all reasonable

expenses incurred by the Fund or its managers in the normal course of business. Such costs include

but are not limited to taxes, legal expenses, auditing, financial advisory, research and other fees due

to the regulatory and other authorities.

The costs and expenses of establishing the Fund is estimated at N17million or 1.7% of the gross Offer

proceeds.


79

15. Procedure for Application and Allotment

15.1 Application

1.1. The general investing public is hereby invited to apply for the units of the Fund through

any of the Receiving Agents listed on Page 80.

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 March

25, 2019 and close May 6, 2019. Applications for the units must be for a minimum of 5,000

Units by subscribers and in multiples of 5,000 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 Bank or the Receiving

Agents listed on page 80. Bank drafts for the full amount applied for must be crossed

“FAAM MMF” and made payable to the Bank 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 Bank for the

applicable US Dollar exchange rate on the day the remittance is being effected.

15.2 Allotment

The Issuing House 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.

15.3 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.


80

16. Receiving Agents

Completed application forms can be submitted to any of the Access Bank branches nearest to you

and First Ally Asset Management Limited’s office as stated below;


7th Floor, Architects’ Place


Victoria Island

Lagos

Telephone: +234 (1) 464 2200, 464 2203

Email: [email protected]

Website: www.first-allyasset.com

mailto:[email protected]

http://www.first-allyasset.com/


81

17. APPLICATION FORM

APPLICATION FORM

Number of Units applied for Amount payable

5,000 Minimum N5,000 Number of Units applied for

Opening Date

GUIDE TO APPLICATION

Closing Date

March 25, 2019 May 6, 2019

Passp

ort

Subsequent Multiples of 5,000 N5,000 Value of Units applied for

Cheque details

Value of Cheque/Bank draft

Name of Bank /branch

Cheque Number

APPLICANTS DETAILS CSCS

CHN

FOR REGISTRARS USE ONLY

CONTROL NUMBER

Number of Units Applied for

City: State:

Land phone Number: Number of Units Alloted

Email Address:

Amount Paid

Date of Birth N

Value of Units Alloted

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

First Ally Asset Management gives you the option to reinvest your dividends. Bank Verification Number

Would you like to Reinvest? YES NO

INCORPORATION NUMBER & COMPANY SEAL OF CORPORATE APPLICANT

Full Postal Address:

Surname/Corporate Names:

PLEASE COMPLETE IN BLOCK LETTERS AND IN BLACK

STAMP OF RECEIVING AGENT

Mobile (GSM) Phone:

ALLOTMENT PREFERENCE

Other Names (for Individual Applicant Only):

RC: 1204564


82

17. APPLICATION FORM

I/We declare that

I/We am/are 18 years and over

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

Means of Identification of Signatories


7th floor , Architect's Place


Victoria Island

Lagos

I agree to notify the Transfer Office/Fund Manager with 30 calendar days if there is a change in any information which I have provided on the

For Fund Manager Only

This completed form should be sent with evidence of payment/remittance to:

"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.

Declaration by Applicant(s)

I/We attach a bank draft made payable to FAAM Money Market Fund, 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.

RC: 1204564


83

18. INSTRUCTIONS FOR COMPLETING 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 5,000 units. Applications for more than 5,000 units must

be in the multiples of 5,000 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 80. 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 “FAAM MMF” 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:

Details Access Bank Plc

Account Name: FAAM MMF IPO

Account Number: 0784517611

Account Narration: (‘Name of subscribers) investment in the FAAM MMF

f) Foreign currency subscribers are advised to contact the Access 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: FAAM MMF IPO

Account Number: 0800500401USD

A/C Narration: (‘Name of subscribers) investment in the FAAM MMF

g) The Receiving Bank 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.

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