Aiico Insurance PlcAiico Insurance PlcAiico Insurance Plc 5 KEY TERMS AND ABBREVIATIONS “Aiico “...
Transcript of Aiico Insurance PlcAiico Insurance PlcAiico Insurance Plc 5 KEY TERMS AND ABBREVIATIONS “Aiico “...
This document is important and should be read carefully. If you are in any doubt about its contents or the action to take,
please consult your stockbroker, accountant, banker, solicitor or any other professional adviser for guidance immediately.
“For information concerning certain risk factors which should be considered by prospective investor, see “Risk Factors” on
pages 23 & 24”
Aiico Insurance PlcAiico Insurance PlcAiico Insurance PlcAiico Insurance Plc RC. 7340
PUBLIC OFFER FOR SUBSCRIPTION
of
2,500,000,000 Ordinary Shares of 50 kobo each
AT N2.20 PER SHARE
payable in full on application
ISSUING HOUSE
RC: 189502
APPLICATION LIST OPENS ON DECEMBER 10, 2007
APPLICATION LIST CLOSES ON DECEMBER 31, 2007
This Prospectus and the securities which it offers have been cleared and registered by the Securities & Exchange
Commission. It is a civil wrong and a criminal offence under the Investments and Securities Act Cap I24 Laws of the
Federation of Nigeria 2004 to issue a Prospectus which contains false or misleading information. Clearance and registration
of this Prospectus and the securities which it offers do not relieve the parties from any liability arising under the Act for
false and misleading statements contained herein or for any omission of a material fact.
This Prospectus is dated the 6th day of December, 2007
OFFER FOR SUBSCRIPTION OF 2,500,000,000 ORDINARY SHARES OF 50 KOBO EACH AT AN ISSUE PRICE OF
N2.20 PER SHARE PAYABLE IN FULL ON APPLICATION, APPLICATION LIST OPENS 26th November, 2007 AND
CLOSES 31st DECEMBER, 2007
This Prospectus relates to an Offer for Subscription (“the Offer”) by Aiico Insurance Plc (“Aiico” or “the Company”), of an
aggregate of 2,500,000,000 ordinary shares of 50kobo each in the capital of Aiico Insurance Plc at an offer price (“the Offer
Price”) of N2.20 per share. The Shares being offered under the Offer are hereinafter referred to as “the Shares”.
The Shares have been cleared and registered with the Securities and Exchange Commission (“the SEC” or “the
Commission”). It is expected that admission of the Shares to the Daily Official List of the Nigerian Stock Exchange will
become effective on 3rd March 2008 and that unconditional dealings in the shares on the Nigerian Stock Exchange (“NSE”
or “the Exchange”) will commence immediately thereafter. This date is subject to change. The Shares on Offer will only be
tradable on the floor of the Nigerian Stock Exchange upon listing on the NSE (see summary of Offer). Under the Offer, A
maximum of 800,000,000 shares, representing Forty Percent (40%) of the Offer will be preferentially allotted to Aiico
Bahamas Limited from the 2,000,000,000 ordinary shares underwritten by the joint-underwriters.
Aiico accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the
Company (which has taken all reasonable care to ensure that such is the case) the information contained in this Prospectus
is in accordance with the facts and contains no omission likely to affect its import. Greenwich Trust Limited a company
registered with the Securities and Exchange Commission in Nigeria, is acting exclusively for the Company, and no-one else
in connection with the Offer and will not be responsible to any other person for providing the protections afforded to their
respective clients or for providing advice in relation to the Offer.
This document comprises a prospectus relating to the Company in respect of the Offer prepared in accordance with the ISA
and the Rules and Regulations of the Securities and Exchange Commission.
The Issuing House and any of its affiliates, acting as investors for their own accounts, may take up shares in the Offer and
in that capacity may retain, purchase, sell, offer to sell or otherwise deal in for their own account such securities and any
other securities of the Company or related investments and may offer or sell such securities or other investments other than
in connection with the Offer. Accordingly, references in this Prospectus to the Offer being issued, offered, subscribed,
placed or otherwise dealt in should be read as including any issue or offer to, or subscription, dealing or placing by the
Issuing House and any of its affiliates acting as investors or underwriters for their own account. The Issuing House does
not intend to disclose the extent of any such investments or transactions other than in accordance with any legal or
regulatory obligation to do so.
The shares will rank pari passu in all respects with all other existing shares of the Company, including the right to receive
dividends or other distributions declared, made or paid on the shares. Investors should rely only on the information in this
Prospectus and then only to the extent applicable. No person has been authorized to give any information or make any
representations other than those contained in this Prospectus and, if given or made, such information or representations
must not be relied on as having been authorized by the Company and/or the Issuing House or any affiliate of any thereof.
The Issuing House is not making any representation to any offeree or purchaser of the shares regarding the legality of an
investment by such offeree or purchaser. The information contained in this Prospectus has been provided by the Company
and other sources identified herein. The Issuing House does not make any representation, express or implied, or accepts
any responsibility, with respect to the accuracy or completeness of any of the information in this Prospectus. Each potential
investor in the Offer should read this Prospectus in its entirety and determine for itself the relevance of the information
contained herein and its subscription of the Offer should be based upon such investigation as it deems necessary. In making
an investment decision, prospective investors must rely upon their own examination of the Company and the terms of this
Prospectus, including the risks involved.
The distribution of this Prospectus and the Offer of the shares in certain jurisdiction may be restricted by law. No action has
been taken by the Company or the Issuing House that would permit a public offer of shares or possession, publication or
distribution of this Prospectus (or any other offer or publicity material or application form relating to the Offer) in any
jurisdiction where action for that purpose is required, other than in Nigeria. Persons into whose possession this prospectus
comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute an offer of or
invitation to subscribe or purchase, any shares being offered in any jurisdiction in which such an offer would be unlawful.
2
TABLE OF CONTENTS PAGES
1. CORPORATE DIRECTORY 4
2. KEY TERMS AND ABBREVIATIONS 5
3. ABRIDGED TIMETABLE 6
4. SUMMARY OF THE OFFER 7
5. HISTORICAL FINANCIAL SUMMARY 8
6. THE OFFER 10
7. DIRECTORS AND OTHER PARTIES TO THE OFFER 11
8. CHAIRMAN’S LETTER 14
8.1 Economic Environment 14
8.2 Political Environment 14
8.3 History 15
8.4 Business 15
8.5 Overview of Aiico Subsidiaries 16
8.6 Board of Directors 17
8.7 Management Staff 19
8.8 Premises & Properties 21
8.9 Purpose of the Offer 22
8.10 Working Capital 23
8.11 Risk Factors and Mitigants 23
8.12 Unclaimed Dividend 24
8.10 Training, Research & Development 24
8.11 Corporate Governance 24
8.12 Future Plans 25
8.13 Conclusion 26
9. THE PROFIT FORECAST 27
9.1 Letter from the Reporting Accountants 27
9.2 Forecast Profit Assuming full subscription 28
9.3 Basis and Assumptions underlying forecasted Financial Statements 34
9.4 Letter from the Issuing House 36
10. REPORTING ACCOUNTANTS’ REPORT ON THE AUDITED FINANCIAL INFORMATION 37
10.1 Reporting Accountants’ Report 37
10.2 Statement of Significant Accounting Policies 38
10.3 Balance Sheets 40
10.4 Profit & Loss Accounts 42
10.5 Cashflow Statements 45
10.6 Notes to the Financial Statements 46
11. STATUTORY AND GENERAL INFORMATION 60
11.1 Incorporation & Share Capital History 60
11.2 Shareholding Structure 60
11.3 Directors’ Beneficial Interests 61
11.4 Subsidiaries & Investments 61
11.5 Statement of Indebtedness 61
11.6 Extracts From The Articles Of Association 62
11.7 Claims & Litigation 71
11.8 Material Contracts 71
11.9 Merger & Acquisition 72
11.10Off Balance Sheet items 72
11.11Cost & Expenses 72
11.12Declarations 72
11.13Relationship Between the Issuer, Issuing House and other Parties 72
11.14Consents 73
11.15Documents Available For Inspection 73
PROCEDURE FOR APPLICATION AND ALLOTMENT 74
RECEIVING AGENTS 75
APPLICATION FORM 76
INSTRUCTIONS FOR COMPLETING APPLICATION FORM 77
3
Aiico Insurance Plc
ORPORATE DIRECTORY
Aiico Insurance Plc has branches and area offices in 18 locations within Nigeria. The Corporate Head
Office and Regional Offices are listed below with their respective addresses and telephone numbers.
Head Office
Aiico Plaza, Plot PC 12, Afribank Street
Victoria Island, P.O. Box 2577, Lagos
Tel: 234-01-2614699, 2617593, 4753360-3
08022921804
E-mail: [email protected]
Website: http://www.aiicoplc.com
Regional Offices
Abuja (B/A) Kano State (A)
Reinsurance Plaza 8, Post Office Road, Kano
Plot 784A, Herbert Macaulay Way Tel.: 08028338804
Central Business District, Abuja
Tel.: 09-5237613, 08056174975 Kaduna State (A)
1, Constitution Road
Abia State (A) Kaduna
7, Factory Road, Aba
P.M.B. 7249, Aba Lagos State (A)
Tel.: 082-221134, 08036665695 143/146, Broad Street, Lagos
Tel.: 01-2664232
2A, Library Avenue, Umuahia (A)
Tel.: 082-221134, 08036665695 Aiico House (A)
36/38, Industrial Avenue, Ilupeju
Anambra State (A) Tel.: 01-4963890, 4976589,
NIPOST Building, Old Market Road, Onitsha 4960427, 4931993
Tel.: 046-212830
Aiico House (B/A)
Cross River State (A) Plot 2, Oba Akran Avenue,
17, Harcourt Bassey Duke Street, Calabar Opposite Dunlop, Ikeja, Lagos
Tel.: 087-238223 Tel.: 01-4970537-8
Delta State (A) Osun State (A)
11, Efurun – Sapele Road, Warri 10, Obafemi Awolowo Road
Tel.: 053-254987 Igbona, Oshogbo
Edo State (B/A) Oyo State (A)
40, Uselu-Lagos Road, 12, Ring Road,
P.O. Box 795, Akpakpava Street, Ibadan
Benin City Tel.: 08033038527
Tel.: 052-253019, 252680
08035027683 Plateau State (A)
4, Beach Road, Jos
Enugu State Tel.: 073-453997, 459529-30
39/35, Chime Avenue Fax: 073-459531
New Haven, Enugu
Tel.: 042-254443 Rivers State (B/A)
112E, Aba Road,
Imo State (A) Port Harcourt
65/67, Douglas Road, Owerri Tel.: 084-231251-2, 579572,
Tel.: 082-221134, 08036665695 08023235371
Note: (A) Agency Office
(B) Branch Office
4
Aiico Insurance Plc 5
KEY TERMS AND ABBREVIATIONS
“Aiico “ or “ the Company” or “ the
Issuer”
Aiico Insurance Plc
“Greenwich” or “Issuing House” Greenwich Trust Limited
“ISA” Investments and Securities Act Cap I24 LFN 2004
“NAICOM” National Insurance Commission
“NSE” or the “The Exchange The Nigerian Stock Exchange
“Pari Passu” Equally
“Parties” Professionals engaged, whose roles will ensure the success
of the Offer
“Prospectus” This legal document issued in respect of the Offer for
Subscription
“Receiving Agent” Market Operators authorized to receive Application
Forms/monies from investors
“Registrars” United Securities Limited
“Related Parties” Any body corporate, which is the Company’s subsidiary or
holding company
“SEC” or “the Commission” Securities and Exchange Commission
“The Offer” Offer for Subscription of 2,500,000,000 Ordinary shares of
50 kobo each at N2.20 per share
“Underwriting” An Undertaking to buy unsubscribed shares
Aiico Insurance Plc 6
ABRIDGED TIMETABLE
DATE ACTIVITY RESPONSIBILITY
10/12/07 Application list Opens Issuing House
31/12/07 Application list Closes Issuing House
15/01/08 Receiving Agents make returns Receiving Agents
17/01/08 Lifting the technical suspension on existing shares of Aiico Stockbrokers
17/01/08 Submit allotment proposal and draft newspaper
announcement to SEC
Issuing House
30/01/08 Receive SEC Clearance of allotment Issuing House
31/01/08 Pay net proceeds of the Offer to Aiico Issuing House
04/02/08 Allotment announcement Issuing House
04/02/08 Return rejected/excess application monies Receiving Banker/Issuing
House
18/02/08 Distribute share certificates Registrars
29/02/08 Forward Declaration of compliance to The Nigerian Stock
Exchange
Stockbrokers
03/03/08 Listing of the newly issued Aiico shares on the floor of the
NSE
Stockbrokers
05/03/08 Forward Summary of Post Completion Report to SEC Issuing House
The dates assigned for above activities may change or be extended upon application by the issuer and approval of the regulatory authorities.
Aiico Insurance Plc 7
SUMMARY OF THE OFFER
This summary draws attention to information contained elsewhere in the Prospectus, it does not contain all of the
information you need in making your investment decision. It should be read in conjunction with more detailed
information in the full text of the prospectus from which it is derived: -
Issuer: Aiico Insurance Plc (“Aiico”)
Issuing House: Greenwich Trust Limited (“Greenwich”)
Share Capital:
Authorised N5,000,000,000 divided into 10,000,000,000 Ordinary Shares of 50k each
Issued and Fully paid N1,554,893,143 divided into 3,109,786,287 Ordinary Shares of 50k each.
Now being offered N1,250,000,000 divided into 2,500,000,000 Ordinary Shares of 50k each .
Purpose: The Offer is being undertaken to increase the Company’s Shareholders’ Funds and
strengthen its capital base, expand retail infrastructure and branch network, and
deepen capacity to underwrite risks within the Power, Oil & Gas, Real Estate and
Telecommunications sectors.
Utilisation of Proceeds: The net proceeds of the total Offer of N5,275,630,700.00 (after deducting the total
cost of the Offer, which is estimated at N224,369,300 representing 4.08% of the
gross offer proceeds) will be utilized for upgrading and expansion of branches,
Information Technology and enhancement of the Company’s working capital. The
net proceeds is expected to be utilized as follows:
Estimated
completion
-N’ Billion %tage period
Upgrading and Expansion
of Branches* 2,005 38.0 26months
Upgrading of IT Systems 1,055 20.0 12months
Working Capital 2,215 42.0 Ongoing
5,275 100.0
*Abuja, Ibadan, Port Harcourt, Kano, Kaduna, Calabar, Onitsha, Enugu, Benin,
Aba, Umuahia, Imo, Isolo (Lagos)
Method of Offer: Offer for Subscription of 2,500,000,000 ordinary shares of 50 kobo each.
Units of sale: Minimum of 5,000 Ordinary Shares and multiples of 500 Ordinary Shares
thereafter
Offer Price: N2.20 per share
Total Offer Size: N5,500,000,000
Market capitalization at
Offer price (Pre-Offer): N6,841,527,404.80
Market capitalization at
Offer price (Post-Offer): N12,341,527,404.80
Underwriting: The offer is 80% underwritten on a firm basis in line with regulatory stipulations.
Below is table showing the list of Underwriters and the amount underwritten:
Payment Terms: In full on application.
Opening Date: December 10, 2007
Closing Date: December 31, 2007
Underwriters Underwriting Exposure (N)
Greenwich Trust Limited 3,650,000,000.00
Spring Capital Limited 750,000,000.00
Total 4,400,000,000.00
Aiico Insurance Plc 8
SUMMARY OF THE OFFER
Historical Financial Summary:
(Extracted from the Reporting Accountants’ Report)
Forecast Statistics
(Extracted from the Reporting Accountants’ Report)
Assuming Full Subscription
Year ending December 31 2008
N’000
2009
N’000
2010
N’000
Gross Earnings 5,684,919 7,173,292 8,680,338
Profit Before Tax 1,322,560 2,487,448 3,399,939
Profit After Tax 1,204,352 2,331,114 3,210,686
Dividend 454,979 670,979 1,006,468
Forecast earnings per share (Kobo)* 21 42 57
Forecast dividend per share (Kobo)* 8 12 18
Forecast earnings yield at the Offer Price (%) 10 19 26
Forecast dividend Yield at the Offer Price (%) 4 5 8
Forecast Price/Earning Ratio at the Offer Price 10.48 5.24 3.86
*The earnings and dividend per share for year 2008 to 2010 are based on 5,609,786,287 ordinary shares of 50 kobo
each (being the post offer shares expected to be in use).
The National Insurance Commission Status Report as at September 5th 2007, confirmed that, from records
available to them there has been no adverse material change in the Company’s key financial indicators from the
Company’s audited financial statements for the 3 months ended March 31st, 2007.
Quotation: Aiico’s existing issued and paid up share capital comprising 3,109,786,287
Ordinary Shares of 50 kobo each are listed on The Nigerian Stock Exchange.
An application has been made to The Nigerian Stock Exchange for admission
to its Daily Official list the 2,500,000,000 Ordinary Shares now being offered
for subscription.
Status: The new shares will rank pari- passu in all respects with the existing Ordinary
Shares of Aiico. The shares also qualify as securities in which Trustees may
invest under the Trustees Investment Act cap T22 LFN 2004
Supplementary Allotment: In the event of oversubscription, shares in amount not exceeding 25% in
excess of the Issue proceed in line with SEC’s Rules and Regulation, subject to
the approval of the Board of Aiico Insurance Plc and the subsequent approval
of the Securities & Exchange Commission will be absorbed. The proceeds of
the supplementary allotment will be utilized in the same proportion as earlier
stated and a revised forecast and Supplementary information shall be filed
with SEC.
Preferential Allotment: A maximum of 800,000,000 shares, representing Forty Percent (40%) of the
Offer will be preferentially allotted to Aiico Bahamas Limited from the
2,000,000,000 ordinary shares underwritten by the joint-underwriters.
Year ending December 31 3months
31/3/2007
N’000
2006
N’000
2005
N’000
2004
N’000
2003
N’000
2002
N’000
Gross Premium 1,039,477 3,030,487 2,931,822 2,356,794 1,723,200 1,454,046
Profit Before Tax 62,394 348,799 86,947 74,789 204,221 150,210
Profit After Tax 42,428 483,702 81,810 72,519 183,221 133,089
Dividend - - 51,469 41,728 70,000 30,000
Earnings per share (Kobo)* 2 13 6 11 26 44
Dividend per share (Kobo)* - - 0.04 0.06 0.10 0.10
Earnings yield (%) 0.8 5.2 2.4 4.4 10.4 17.6
Dividend Yield (%) - - 0.01 0.02 0.04 0.04
Aiico Insurance Plc 9
SUMMARY OF THE OFFER
Group Structure: The Aiico Group comprise of Aiico Insurance Plc and two subsidiaries
namely: Aiico General Company Limited and Aiico Asset Managers Limited.
AIICO Insurance Plc
AIICO General Ins. Co. Ltd
(100% Subsidiary)
AIICO Asset Managers Ltd
(100% Subsidiary)
Aiico Insurance Plc 10
THE OFFER
A copy of this Prospectus and the documents specified herein have been delivered to the Securities and Exchange Commission
(“SEC” or “the Commission”) for clearance and registration.
This Prospectus is being issued in compliance with the provisions of the Investments and Securities Act Cap I24 LFN 2004, the
Rules and Regulations of the Commission and the Listing Requirements of The Nigerian Stock Exchange (“The Exchange”) and
contains particulars in compliance with the requirements of the Commission and The Exchange, for the purpose of giving
information to the public with regard to the Offer for Subscription of 2,500,000,000 Ordinary Shares of Aiico Insurance Plc by
Greenwich Trust Limited. An application has been made to the Council of The Exchange for the admission to its Daily Official
List of the 2,500,000,000 Ordinary Shares now being offered for subscription.
The Directors of Aiico Insurance Plc individually and collectively 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 all reasonable enquiries that, to the best of their knowledge and belief, there
are no material facts, the omission of which would make any statements herein misleading or untrue.
ISSUING HOUSE
Greenwich Trust Limited
RC 189502
On behalf of
Aiico Insurance Plc
RC 7340
Offer for Subscription
is authorized to receive applications for
2,500,000,000 Ordinary Shares of 50 kobo each
at N2.20 per share
Payable in full on Application
The Application List for the shares now being offered will Open on December 10, 2007 and Close on
December 31, 2007 .
SHARE CAPITAL AND RESERVES OF THE COMPANY AS AT 31 MARCH 2007
(EXTRACTED FROM THE REPORTING ACCOUNTANTS’ REPORT)
N000
AUTHORISED 10,000,000,000 Ordinary Shares of 50kobo each 5,000,000
========
ISSUED AND FULLY PAID 3,109,786,287 Ordinary shares of 50kobo each 1,554,893
Contigency reserve 368,619
Fixed assets revaluation reserve 2,323,454
Quoted Investment revaluation reserve 645,170
General reserve 583,878
Share Premium 674,177
-------------
SHAREHOLDERS’ FUNDS 6,150,191
=========
INDEBTEDNESS:
As at the 31st of March 2007, the Company has no outstanding debentures, mortgages, charges or
similar indebtedness or material contingent liabilities other than in the ordinary course of business.
However, contingent liabilities in respect of the 15 pending litigations involving the company is
approximately N206,425,510.54.
Aiico Insurance Plc 11
DIRECTORS AND PARTIES TO THE OFFER
Directors Chief (Dr.) Oladele Fajemirokun (Chairman)
34, Onikoyi Street
Ikoyi,
Lagos
Mr. Sobandele D. A. Sobanjo (Managing Director)
Plot PC 12, Afribank Street
Victoria Island
Lagos
Mr. Egejuru Emmanuel Uzoma (Executive Director)
Plot PC 12, Afribank Street
Victoria Island
Lagos
Chief (Dr.) Rasheed Gbadamosi
3rd Floor, 13 Biadou Street
Off Keffi Street
South West Ikoyi
Lagos
Dr. Rilwanu Lukman
2, Jagal Close
Oregun
Lagos
Prince (Dr.) Omoregie Akenzua
10-12, Omoregie Akenzua Way
Off Textile Mill Road
By Capitol Cinema
Benin City
Mr. Haresh Aswani
Lagoon View Plaza
Plot A4, Ozumba Mbadiwe Street
Victoria Island, Lagos
Senator Tokunbo Ogunbanjo
2, Ilabere Avenue
Ikoyi
Lagos
Mr. Eugene Okwor
23A, HFP Way
Dolphin Estate
Lagos
Mr. Olatunji Simeon Oyedokun (Executive Director)
Plot PC 12, Afribank Street
Victoria Island,
Lagos
Aiico Insurance Plc 12
DIRECTORS AND PARTIES TO THE OFFER (CONTD)
Company Secretary & Mr. Olatunji Simeon Oyedokun
Registered Office Plot PC 12, Afribank Street
Victoria Island
Lagos
Issuing House: Greenwich Trust Limited
Plot 1698A Oyin Jolayemi Street
Victoria Island
Lagos
Joint Stockbrokers: Magnartis Finance & Investment Limited
16, Boyle Street
Onikan
Lagos
Compass Investments & Securities Limited
16th floor, Stock Exchange House
2/4, Customs Street, Lagos
Falcon Securities Limited
31, Marina
Lagos
Independent Securities Limited
42/43 Marina
Lagos
Signet Investment & Securities Limited
Church House
29, Marina
Lagos
Auditors Ernst & Young
(Chartered Accountants)
325, Ikorodu Road
Lagos
Reporting Accountants: SIAO
(Chartered Accountants)
18B, Temple Road
Ikoyi
Lagos
Solicitors to the Company Rickey Tarfa & Co.
53B, Mainland Way
Dolphin Estate, Ikoyi
Lagos
Solicitors to the Offer: Banwo & Ighodalo
98, Awolowo Road
South-West Ikoyi
Lagos
Aiico Insurance Plc 13
DIRECTORS AND PARTIES TO THE OFFER (CONTD)
Registrar & Transfer Office: United Securities Limited
5th Floor, Niger House
3/5 Odunlami Street
Lagos
Joint Underwriters Greenwich Trust Limited
Plot 1698A Oyin Jolayemi Street
Victoria Island
Lagos
Spring Capital Markets Limited
Plot 1611, Adeola Hopewell Street
Victoria Island
Lagos
Receiving Bankers: Skye Bank Plc
3, Akin Adesola Street
Victoria Island
Lagos
Intercontinental Bank Plc
Plot 999c, Danmole Street
Victoria Island
Lagos
Aiico Insurance Plc 14
CHAIRMAN’S LETTER
The following is the text of a letter received by the Issuing House from Chief (Dr.) Oladele
Fajemirokun, Chairman, Board of Directors of the Company on the Offer:-
Aiico Insurance Plc Aiico Plaza plot Pc 12, Afribank Street, Vicoria Island P. O. Box 2577, Lagos. Nigeria
November 20, 2007
The Directors
Greenwich Trust Limited
Plot 1698A Oyin Jolayemi Street
Victoria Island
Lagos
Gentlemen,
OFFER FOR SUBSCRIPTION OF 2,500,000,000 ORDINARY SHARES OF 50 KOBO EACH AT
N2.20 PER SHARE IN AIICO INSURANCE PLC
On behalf of the Directors of Aiico Insurance Plc (“Aiico”), I am pleased to provide you with the
following information in connection with our Offer for subscription of 2,500,000,000 Ordinary Shares
of 50k each in Aiico at N2.20 per share, which you are making on our behalf.
Economic Environment:
Nigeria has witnessed substantial economic and political reform activities since the restoration of
democratic rule in 1999. The Federal Government has embarked on a series of reforms over the past 6
years to spur economic growth. Examples include the financial sector recapitalization, privatization &
liberalization, promotion of agriculture and anti-corruption campaigns. These reforms were enacted
with a special focus on monetary and fiscal policies to achieve and sustain a low inflation and stable
exchange rate as well as strengthening the exchange rate and encouraging lower rates of interest.
Consequently, the national currency has continued to record appreciation against the dollar and a
number of other major currencies to the extent that exchange rate which, as at end of 2006 stood at
N129 to the US$, declining further to N127 to the US$ in June, 2007.Similarly, year-on-year inflation
rate dropped from as high as 17.80% as at December 2005 to as low as 8.20% as at the same period in
2006. It has further dropped to about 6.40% as at June, 2007.
Finally, the introduction of Monetary Policy Rate (MPR) in December 2006, interest rate volatility has
been dampened considerably. A combination of all of these accounts for the relative current economic
stability.
Political Environment:
The country just witnessed a peaceful transition from one civilian administration to another. Although
there are cases of post election petitions and electoral tribunals revisiting certain cases of alleged
electoral malpractices, the respect for the rule of law under present administration in Nigeria, is an
indication that the nation is moving towards sustainable political stability, making the economy
conducive for investment. In addition, the present administration is also a stern advocate of anti-
corruption which indicates that the government intends to be transparent in order to make the
economy a choice of investors.
Aiico Insurance Plc 15
CHAIRMAN’S LETTER (CONTD)
History
Aiico commenced operations in Nigeria as an Agency office of American Life Insurance Company
(ALICO), Wilmington Delaware USA in 1963. ALICO was granted operational licence in Nigeria as a
private limited liability company and a full subsidiary of its parent company in 1970 to offer Life and
Pension products and insurance services as American Life Insurance Company Limited. However,
following the Indigenization Decree, which affected all foreign owned companies in Nigeria at that
time, 60% of the Foreign Shareholding of ALICO was acquired by the Federal Government of Nigeria
and the name of the company subsequently changed to American International Insurance Company
Limited (Aiico). It converted to a public liability company in 1989, and quoted its shares on the floor of
the Nigerian Stock Exchange in December 1990. The Federal Government of Nigeria subsequently
divested its 60% holding in the company while ALICO retained its 40% interest.
Aiico which recently concluded a merger arrangement with two medium sized insurance companies
(NFI Insurance Plc and Lamda Insurance Company Limited) currently has Shareholder’s Funds in
excess of N6 billion and an Asset Base in excess of N10 Billion.
Following the conclusion of the financial sector reforms embarked upon by the Federal Government of
Nigeria, AIICO has been re-certified as both a General Insurance and a Life Assurance company and
has thus been duly licensed by the regulatory body - National Insurance Commission (NAICOM).
In terms of recognition, Aiico Insurance Plc was given an International Certification of A+ by Global
Credit Rating Company (GCR) of South Africa. Also in 2004, Agusto & Company rated Aiico
Insurance Plc as second in Nigeria in all the performance indices among other 114 Insurers.
In order to boost its management competence, Aiico signed a Technical Assistance Agreement with
Aiico Bahamas limited, paving the way to the privilege of tapping from the knowledge and expertise
of seasoned insurance professionals with multinational experience.
Aiico Insurance Plc also maintains a first class pool of Re-insurers, such as Munich Re, Swiss Re, Africa
Re, Continental Re, etc.
Backed up by a technically-sound professional and vibrant board, management and professionally
qualified staff with wide experience as well as a strong field force to fortify its operations. Aiico in
addition enjoys the confidence and loyalty of its customers, brokers and the insuring public.
With branches and agency offices spread all over Nigeria, Aiico is well positioned to achieve its future
growth potentials, through investible assets and income in the coming years.
Business
Aiico’s range of products/services are tailored to meet clients’ specific needs, at competitive rates that
are commensurate with the risk presented. They include:
LIFE Products
• Group Life Insurance
• Ordinary Life Insurance
• Annuity
Aiico Insurance Plc 16
CHAIRMAN’S LETTER (CONTD)
GENERAL Products
• Fire and Special Perils
• Consequential Loss
• Householders/House owners
• Burglary/House Breaking
• All Risk
• Cash-In-Transit
• Goods-In-Transit
• Workmen’s Compensation
• Public Liability/Product Liability
• Marine
• Contractor’s-All-Risk
• Industrial-All-Risk Insurance
• Automobile Insurance
• Fidelity Guarantee
• Health Insurance
• Personal Accident Insurance
• Combined Workmen’s Compensation/Group Personal Accident
• Travel Insurance
• Machinery Breakdown
• Plant-All-Risk
• Bond Insurance
• Electronic Equipment Insurance
• Professional Indemnity
• Oil & Gas
Overview of Aiico Subsidiaries
Aiico has incorporated the following subsidiaries to increase its visibility and add value for its clients:
AIICO General Insurance Limited
Aiico General Insurance Company Limited (“Aiico General”) is the General Insurance arm of Aiico
Insurance Plc. This new addition into the Aiico Insurance family is in response to the directive of the
National Insurance Commission (NAICOM) on the separation of Insurance business, and the resolve
of Aiico Insurance Plc to align with global best practice. Aiico General will therefore leverage on the
Federal Government’s directive on the Nigerian Content Policy in growing its Oil and Energy business
because of its international affiliation and partnership in this regard as the leading Oil and Gas
insurance company within the sub-region.
AIICO Asset Management Limited
AIICO Asset Management Company Limited (“Aiico Asset”) was recently incorporated to optimize
the asset management practices within the AIICO Group and to offer world class services to
individuals, corporate and institutional investors in the following areas:
• Portfolio Management Services
• Equity & Fixed income
• Private Equity; and
• Real Estate
Aiico Insurance Plc 17
CHAIRMAN’S LETTER (CONTD)
DIRECTORS AND KEY MANAGEMENT
The Board of Directors is headed by me, as the Chairman. I have over 30 years of extensive experience
in, building and growing Companies as well as in wealth creation within and outside Nigeria.
I have cultivated and invested in a number of best-in-class companies in Nigeria, amassing a forte of
high-performance enterprises in key sectors of the economy including Telecommunications, Oil & Gas,
Agriculture, Manufacturing and Financial Services. I am currently serving as the Chairman on the
Board of these companies which include Henry Stephens & Sons Ltd, Nigerian Maritime Services Ltd,
Food Concept and Entertainment Ltd, Logic Science Ltd, FSS Gases Ltd, Blue-Chip Communications
Ltd and Kings Guards Securities Group Ltd.
Furthermore, I am also a core investor in several renowned international companies (including Xerox
Nigeria and Johnson Wax Nigeria), where I am currently Chairman and Director respectively.
I obtained a Bachelor of Science degree in Economics from the University of Ife in 1974. I have also
received various awards and international honors such as a Honorary Doctorate Degree in Business
Administration from City University, Los-Angeles (USA). I am a Fellow of the Institute of
Administrative Management of Nigeria and the Institute of Directors respectively.
CHIEF (DR.) RASHEED GBADAMOSI, OFR - DIRECTOR
Chief (Dr.) Rasheed Gbadamosi graduated with a Bachelor of Arts (Honours) degree in Economics
from the University of Manchester, England in 1966. He obtained an Advanced Diploma in Economic
Development, also from the same University in 1967, and thereafter proceeded to the University of
New Hampshire, USA where he obtained his Masters degree in Economics (1969). In 2005, he was
awarded an Honorary Doctorate degree by Lagos State University.
He is currently the chairman of the board of these Companies - Ragolis Waters Ltd, Vono Products
Nigeria Plc, BHN Plc, and Lucky Fibers Plc. He was the chairman of the board of directors of Nigerian
Industrial Development Bank (now Bank of Industry) between 1986 and 1994. He is a director of
many companies, including Commercial and Scientific Computing of Nigeria Limited, Syndicated
Metal Industries Limited, Cappa & D’Alberto Plc and Sparnoon Nigeria Limited.
Chief Gbadamosi has an outstanding record of public service. He served as the Commissioner for
Economic Development and Establishment in Lagos State between 1967 and 1969 and was the
Honourable Minister for National Planning between 1988 and 1989. He is the current Chairman of
Petroleum Products Pricing Regulatory Agency (PPPRA). A trustee of the Musical Society of Nigeria,
Chief Gbadamosi was conferred with the National Merit Award of the Order of the Federal Republic
(OFR) In 1995.
DR. RILWANU LUKMAN, CFR - DIRECTOR
Dr. Rilwanu Lukman attended the Royal School of Mines, Imperial College of Science & Technology,
University of London, where he bagged a Bachelors degree in Engineering (Mining), and also an
Associateship Diploma in the same discipline in 1962.
He then proceeded on to the Institute of Prospecting & Mineral Deposits, University of Mining &
Metallurgy Leoben, Austria, where he obtained a Postgraduate Certificate in Mining & Mineral
Exploration (1968). Thereafter he attended McGill University, Montreal, where he studied Mineral
Economics between 1977 to 1978. He obtained his Doctorate (Ph.D) degree in Chemical Engineering
from University of Bologna, Italy in 1988.
Aiico Insurance Plc 18
CHAIRMAN’S LETTER (CONTD)
His working career which spanned over 40 years began at AB Statsgruvor, Sweden in 1962. He was
employed at the Mines Division of the Federal Ministry of Mines & Power, Jos, Plateau State in 1964,
as an Assistant Mining Engineer. He later rose to become an Assistant Chief Inspector. In 1970, he
became the General Manager, Cement Company of Northern Nigeria Limited Sokoto, and later, the
General Manager/Chief Executive, Nigerian Mining Corporation, Jos. Between 1984 and 1990, he was
appointed at various times as the Honourable Minister of Mines, Power and Steel, Petroleum
Resources, and Foreign Affairs. He was the President of the Organization of Petroleum Exporting
Countries (OPEC) Conference for eight consecutive times, from 1986 to 1989. He also became the
Chairman Board of Directors, NEPA between 1993 and 1994.
In 1995, his enviable profile both locally and internationally, (especially in International Diplomacy),
earned him the exalted position of the Secretary-General, Organization of Petroleum Exporting
Countries (OPEC). He however bowed out in 2001 after 15 years of meritorious service to the
Organization. He was again invited by the government of former President Olusegun Obasanjo to
become the Presidential Adviser on Petroleum & Energy.
A distinguished academia, Dr. Lukman is a Fellow of the Imperial College, University of London (the
first African to be so honored), he also has two Honorary Doctorate Degrees from Moore House
College, Atlanta USA and University of Benin. He is a Knight of the British Empire (KBE), an Officer
of the legion d’Honneur of France, and a First Class Citizen of the Republic of Venezuela. At home,
was conferred with the National Award of Commander of the Federal Republic of Nigeria (CFR). He
is widely traveled and is happily married with children.
PRINCE (DR.) OMOREGIE AKENZUA - DIRECTOR
Prince O. Akenzua was born on 1st April 1941. He obtained a B.Sc (Hons) from the University of
Keele, U.K in 1972. He was appointed to the board of Aiico on the 28th of September, 1992. Before
joining the Board of AIICO, he worked with Marex Industries (Nig.) Ltd. He is a seasoned
businessman, and a director of several companies amongst which are Presco Oil Plc, Hal Christie
Investment Ltd, Bencrof Ltd, Catech Plant & Engineering Ltd and Marex Industries (Nig.) Ltd.
MR HARESH ASWANI - DIRECTOR
Mr. Haresh Aswani, a successful businessman, is a member of the famous Aswani family which
operates a large business empire in Asia and Africa. He obtained a Bachelor of Business
Administration (BBA) from the University of Houston in 1981. He is a director in Tolaram Group of
Companies which was established in the 1960s in Indonesia. The group’s business activities range
from Manufacturing to Trading in all sectors of the economy, including telecommunication, consumer
electronics, chemicals and dyestuffs, paper, foodstuffs, furnishings and carpets, household products,
textiles, capital goods and sundries.
Mr. Aswani is also a director in companies where Tolam Group has substantial investments in Nigeria;
these include - Horizon Fibres (Nig) Plc, Lucky Fibres (Nig) Ltd., Multichem Industries Ltd, Nikko
Industries (Nig) Ltd, De-United Foods Industries Ltd, BHN Plc, Panabiz International Ltd, and Multi-
Pro Enterprises Ltd. Mr. Aswani also has investments in East European countries and USA.
CHIEF EUGENE AMECHI OKWOR - DIRECTOR
Chief Eugene Amechi Okwor had his elementary education at St. Patrick’s Catholic School, Oke Padi,
Ibadan. His Secondary education at St. John’s College Eleta Ibadan between 1957 and 1958. He
completed his Secondary education at St. Leo’s College, Abeokuta, Ogun State in 1960.
He proceeded to Holborn College of Law, London England from 1963 to 1966 and later to Inner
Temple London from 1967 to 1969. In 1982 Chief Eugene Okwor was called to Bar in Nigerian Law
School, Lagos.
Aiico Insurance Plc 19
CHAIRMAN’S LETTER (CONTD)
He started his working career in 1963 as a clerk with Fire Auto & Marine Insurance Co. Ltd, London.
Between 1968 to 1970 he worked as an Underwriting Assistant with Sun Alliance & London Insurance
Group, London. Between 1971 – 1972, he moved on to Co-operative Insurance Society, London as the
Claims Superintendent.
On arrival in Nigeria, Chief Okwor was the Claims Manager for NEM Insurance Co. Ltd, Lagos (1973 –
1974). In 1974, Chief Eugene was Registrar of Insurance, Federal Ministry of Trade, Lagos. He was
later appointed Director of Insurance, Federal Ministry of Finance Lagos from 1977 to 1992. To crown
it all, Chief Eugene Okwor became the Commissioner for Insurance, National Insurance Supervisory
Board, the capacity in which he served meritoriously from 1993 – 1997 when he voluntarily retired.
Chief Eugene is a Chairman of five Companies and on the Board of seven other companies among
which are Chairman Firstlink Insurance Brokers Ltd, Chairman Secure Loss Adjusters Ltd.
SENATOR OLATOKUNBO OGUNBANJO - DIRECTOR
He was educated at St. Saviours School, Ebute Metta, Lagos (1961-1963), Corona School Apapa (1963-
1966), International School Ibadan, (1966 – 1972). Between 1972 and 1976, he attended Trent College,
Long Eaton, Notts England and Cherwell Tutorial College, Oxford England where he had his GCE
Ordinary and Advance levels.
He also attended the University of Buckingham in England where he bagged LLB (Bucks) between
1980 – 1982. He was in the Nigerian Law School in 1983.
Before his appointment as a Director of Aiico Insurance Plc in 2007, he has been a member of Board of
Directors of the following Companies; BNL (formerly) Bouygues Nigeria Limited, Dragages
Engineering Company Limited, Johnson Wax Nigeria Limited, NFI Insurance Plc, IPI Plc and IDEaS
(Information Display Exhibit and Systems Ltd).
Senator Tokunbo Ogunbajo became a Senator of the National Assembly representing Ogun East
Senitorial District in April 2003.
SOBANDELE DAVID AYODEJI SOBANJO – MANAGING DIRECTOR/CEO
He obtained a B.Sc (Hons) in Actuarial Science (1981) and M.Sc Business Administration (General
Management 1995) both from the University of Lagos. He also holds an MBA (Marketing) from Enugu
State University of Science and Technology (ESUT). Mr. Sobanjo is a Chartered Insurer, a fellow of the
Chartered Insurance Institute of London and Nigeria and a member Nigeria Institute of Management.
He has been holding top Management Positions for well over 15 (fifteen) years. His wealth of
experience cut across Pension Management, Group Life, Life Assurance, General Insurance and
Special Risks. He served as Managing Director, Highgate Insurance Brokers Ltd from 1993 to 2000,
from where he moved to Aiico, Lagos as Deputy General Manager – Life Operations. In January 2005,
he was appointed managing Director, African Alliance Insurance Co. Ltd, a position he held till his
appointment as Managing Director Aiico.
Currently he is the chairman of the Executive Management Committee of Aiico Insurance Plc, whose
responsibilities includes policy formulation, policy implementation, marketing strategy, underwriting
guide lives Reinsurance, prompt claim payment and corporate affairs management.
Mr. Sobanjo has attended several courses both locally and abroad including “Managing the People” at
Missenden Abbey Management Centre at Buckinghamshire in the United Kingdom. “Fit for Executive
Decision” by Swiss Reinsurance Corporation.
Aiico Insurance Plc 20
CHAIRMAN’S LETTER (CONTD)
SIMEON OLATUNJI OYEDOKUN - EXECUTIVE DIRECTOR/COMPANY SECRETARY
Mr. Oyedokun is the Company Secretary / Legal Adviser. He was appointed Acting Managing
Director on 5th October, 2005. Before his appointment he was the General Manager, Human
Resources and Administration/Company Secretary/Legal Adviser. He is a 1981 Sociology graduate of
University of Lagos. He has a Masters degree in Industrial Relations and Personnel Management from
the same University (1985).
A Barrister at Law, Mr. Oyedokun completed his law programme at the University of Lagos in 2001
and was called to Bar in 2002. He is a Fellow of the Institute of Personnel Management of Nigeria and
a member of Nigerian Institute of Management and Institute of Directors of Nigeria. He has attended
Management courses at University of Michigan Ann Arbor USA. He has over 21 years working
experience.
EMMANUEL UZOMA EGEJURU - EXECUTIVE DIRECTOR – FINANCIAL SERVICES
Mr. Emmanuel Egejuru joined AIICO in 1990 as a Senior Manager in the Finance Division. He holds a
Bachelor of Science (Honours) degree from the University of Nigeria (1979). He became a Fellow of
the Institute of Chartered Accountants of Nigeria (FCA) in 1986. He has over 23 years working
experience. He has attended several Management development courses both locally and abroad and
also attended Technical and Reinsurance Accounting courses both locally and abroad. He is an
Alumnus of the Executive Management Programme (AMP) of the Lagos Business School. He has
responsibilities for all Finance, Investment and Information Technology functions of Aiico Insurance
Plc.
He was appointed a member of the Board of Directors of the Company on the 29th of November, 2006.
MANAGEMENT
The management of the Company is headed by the Managing Director/Chief Executive Officer, Mr.
David Sobanjo.
OLUSEGUN OMOSEHIN - MANAGING DIRECTOR/CEO-AIICO GENERAL
Segun is currently the Managing Director and Chief Executive Officer of Aiico General Insurance
Company Limited, the general insurance arm of Aiico Insurance Plc. He is one of the very few multi-
disciplinary professionals in the insurance industry. He holds a 1989 Bachelor of Science (Honours)
degree in Political Science (Second Class Upper Division) from the Ondo State University (now
University of Ado-Ekiti) and a Masters degree in International Law and Diplomacy (MILD) from the
University of Lagos (1991). He also holds a Master of Science (M.Sc) degree in Economics from
University of Lagos (1996) and a Post Graduate Diploma in Manpower Economics & Planning from
the same University (1999).
Segun is an Associate of the Chartered Insurance Institute of Nigeria where he left a record of
completing all the levels of the professional examinations at only two sittings. He is a member of the
Nigerian Institute of Management. He is also a member of the Nigerian Society of International
Law, as well as a member of the Institute of Directors (IoD). Segun is equally an Alumnus of the
prestigious Lagos Business School.
He has attended several local and International courses on strategic planning, marketing, Management
and Insurance. His wealth of experience and versatile background stand him in good stead in the
strategic repositioning of Aiico Insurance Plc.
Aiico Insurance Plc 21
CHAIRMAN’S LETTER (CONTD)
FESTUS IDOWU OLABIYI - DEPUTY GENERAL MANAGER (LIFE OPERATIONS)
Mr. Olabiyi joined the Company as a Deputy General Manager on the 1st March, 2006. An Associate of the
Chartered Insurance Institute of Nigeria, he holds a 1983 Bachelor of Science (Honours) and 1985 Masters of
Science in Mathematics from the University of Lagos. He has a Post Graduate Diploma in Actuarial Science
from Heriot Watt University, Edinburgh U.K. He worked with Crusader Insurance Plc before joining the
Company.
OMOTAYO OLATUYI – ASSISTANT GENERAL MANAGER (LIFE OPERATIONS)
Mr. Olatuyi was employed in 1979, promoted a Senior Manager in 1997 and Assistant General Manager
in January, 2001. He obtained a Higher National Diploma in Business Administration (1992) from Yaba
College of Technology and a 1999 Masters in Business Administration (MBA) from the University of
Ado Ekiti. He became an Associate member of the Chartered Institute of Insurance, (ACII) London in
1990. He is an Alumnus of the Advance Management programme of the Lagos Business School and has
attended several Management Conferences both at home and abroad.
OLALEKAN OLADIMEJI OTUSANYA – ASSISTANT GENERAL MANAGER (FINANCIAL
SERVICES)
Olalekan Oladimeji Otusanya the Assistant General Manager Finance Division attended the University
of Warwick, England where he obtained a B.A (Combined Honours) in Politics/Sociology (Second Class
Upper) 1982. On his return to Nigeria he had his NYSC scheme with Union Bank of Nigeria, Agodi
Branch Ibadan. He later joined the firm of Chartered Accountants, Peat Marwick Ani Ogunde & Co. as a
trainee accountant in 1985 and qualified as a Chartered Account (ACA) in 1990. He was promoted
Audit Senior in 1991.
Between 1992 and 1994 he worked with Home Foundation & Investment Mortgage Limited and Refuge
Savings & Loans Limited where he was the Head of Finance & Treasury. He joined the Aiico Insurance Plc
in 1995 as a deputy Manager in the Audit department of the Company and was later transferred to the
Budget and Financial Reporting section of the Company in 1986. He was again moved to the Investment
department in April 2005. Presently, he supervises both the Budget and Financial Reporting and
Investment departments.
Financial Performance
Aiico Insurance Plc is positioning itself as a customer-centric and flexible financial institution capable of
providing one stop financial solutions to its customers. In line with the Company’s vision of capturing 10%
market share of the insurance industry and doubling profits in the next 3 years, Aiico has positioned itself
in the high growth areas of General Insurance and Group Life Assurance businesses.
Premises
The Company’s Head Office is at Aiico Plaza, Plot PC 12, Afribank Street, Victoria Island, Lagos. It also has
premises held on lease of varying duration in different parts of the country. The details of the premises are
given hereunder:
LOCATION ADDRESS TITLE EXPIRATION DATE
Lagos Island
Mciver House 143/145 Broad Street
Lagos
Leasehold 30 November 2007
Ibadan 59, Oyo Road Sango, Ibadan, Oyo State Leasehold 30th November, 2007
Jos 4, Beach Road Jos Plateau State Leasehold 14 December 2007
Aba 7 Factorv Road Aba Abia State
Leasehold 28 February. 2008
Warri 11 Effurun Road Warri Delta State
Leasehold 31 December 2007
Onitsha Nipost Building, Old Market Rd,
Onisha.Anambra State Leasehold 31 December, 2007
Aiico Insurance Plc 22
CHAIRMAN’S LETTER (CONTD)
Enugu
39/35 Chiwe Avenue, New Haven,
Enugu
Leasehold 31 July, 2008
Port-Harcourt
112E, Aba Road Port-Harcourt (New
Office)
Leasehold 30 April, 2009
Calabar 17, Harcourt Street, Calabar
Leasehold 30 April,2008
Port-Harcourt
26B King Amachkree Road Port-
Harcourt
Leasehold 30 April 2008
Owerri 65/67 Douala Road Owerri Imo State
Leasehold 1 December. 2007
Benin 40. Uselu-Lagos Road Benin
Leasehold 31 June 2008
Kaduna 1, Constitution Road, Kaduna
Leasehold 31st January 2009
Abuja Plot 784A Herbert Macaulav Abuia
Leasehold 28 February. 2008
Abuja 235" Cadestral Zone, Havista Close
Asokoro Leasehold 19 June, 2008
Isolo 203/205 Anana Oshodi Expressway lsolo
Leasehold 31st December 2007
Properties
The Company owns 7 properties. The details of these properties are stated below:
LOCATION ADDRESS TITLE
Victoria Island Aiico Plaza, Afribank Street, Victoria
Island Deed of Assignment
Ilupeju Aiico Hose, 36/38 Industrial Avenue,
Ilupeju, Lagos Deed of Assignment
Ikeja Oba Akran Avenue, Ikeja, Lagos Certificate of Occupancy
Lekki Seagate Estate Property, Lekki Deed of Sub-Lease
Victoria Island 42, Balarabe Muse Crescent, Victoria
Island Land Certificate
Lagos Island 200/206 Broad Street, Lagos Deed of Sub-Lease
Ibadan 12, Ring Road, Ibadan, Oyo Deed of Conveyance
Purpose of the Offer
The Offer is being undertaken to increase the Company’s Shareholders’ Funds and strengthen its capital
base, expand retail infrastructure and branch network, and deepen participation in Power, Oil & Gas, Real
Estate and Telecommunications sectors.
The net proceeds of the total Offer of N5,275,630,700 (after deducting the total cost of the Offer, which is
estimated at N224,369,300 or 4.08% of the offer proceeds) will be utilized for upgrading and expansion of
branches, Information Technology and enhancement of the Company’s working capital. The net proceeds is
expected to be utilized as follows:
Estimated
completion
N’ Billion % periods
Upgrading and Expansion of Branch* 2,005 38.0 26months
Upgrading of IT Systems 1,055 20.0 12months
Working Capital 2,215 42.0 Ongoing
5,275 100.0
*Abuja, Ibadan, Port Harcourt, Kano, Kaduna, Calabar, Onitsha, Enugu, Benin, Aba, Umuahia, Imo, Isolo (Lagos)
Aiico Insurance Plc 23
CHAIRMAN’S LETTER (CONTD)
Working Capital, Profits and Dividend Forecast
The Directors of Aiico are of the opinion that having regard to the Company’s liquidity position and
the proceeds of this Offer, the Company has adequate working capital to meet its immediate and
future obligations as and when due.
The Directors estimate that, subject to unforeseen circumstances, the profit after taxation for the three
years ending 31 December, 2008, 2009 and 2010 will not be less than N1.204bn, N2.33bn and N3.21bn
respectively.
Risk Factors and Mitigants
1. Political Risk
Nigeria being an emerging democracy is not completely immuned from such uncertainties
like frequent changes in government policies, religious instability, ethnic disturbances, etc.
However, the Nigerian government over the past six years has instituted reforms which we
expect should outlive the present regime. The country has obtained sovereign rating BB- by
Fitch. Aiico is an enduring business concern with diversified portfolio of customers. Adverse
changes in macro-economic, socio-political and regulatory environment may therefore only
have minimum effect on the risk attributed to further exposure to the company.
2. Macroeconomic Risk
Nigeria has had a history of sub-optimal fiscal management with obvious negative economic
consequences. This was largely changed by the last government with measured doses of
economic reforms in almost every sector of the economy. The current administration is an
extension of the previous and has shown a commitment for continuity.
In this regard, the economic reforms encapsulated in the National Economic Empowerment
and Development Strategy (NEEDS), the favourable BB- sovereign rating by Fitch, an
International Rating Agency, and the delisting of Nigeria by the Financial Action Task Force
(FATF) from the list of Non Cooperating Countries and Territories (NCCTs) on money
laundering and narcotics trade will continue to boost the investment climate with continuous
inflow of Foreign Direct Investment (FDI). Aiico Insurance Plc expects this trend to continue
into the foreseeable future.
3. Industry Risk
Insurance industry consolidation has created bigger companies with a redefined and keener
competitive landscape. This has further given rise to the need for insurance companies to have
deep pockets in order to partake in the big deals that the opportunities created by the various
economic reforms have continued to present. However, we envisage that with this Public
Offer, Aiico will emerge as a stronger company in the insurance industry.
4. Currency Risk
Nigeria has continued to reap the benefits of prudent monetary and fiscal management in the
very recent past in terms of stability in exchange rates despite its exposure to serious
fluctuations in dollar receipts owing to its overdependence on oil exports.
The continuous favourable crude oil price which has boosted Nigeria’s foreign reserve has
helped to maintain stable exchange rate over the past three years. This trend is expected to
Aiico Insurance Plc 24
CHAIRMAN’S LETTER (CONTD)
continue and any material and sudden adverse occurrences are largely unforeseeable.
Notwithstanding, Aiico Insurance Plc has, as part of its internal policy, an exchange risk
modulation mechanism which minimises currency risks through constant monitoring of
economic and market dynamics in the local and global currency markets.
5. Environmental Risk
Aiico complies with and would continue to adhere to all international environmental
standards and procedure and is adequately equipped to deal with any environmental
threat/incidence that may arise in the ordinary course of business.
In addition, Aiico operates in compliance with all environmental standards and procedure
and has adequate safety devices to combat fire and other environmental threats like flooding
that could arise in the normal course of business.
Unclaimed Dividend
As at 31st March, 2007, the Company has unclaimed dividend totaling N10.19 million. Monies
representing the unclaimed dividend are maintained in a separate interest yielding account by the
Company.
The company intends to publish on an ongoing basis procedure/mechanism for the settlement of
dividends.
Training, Research and Development
The Company currently has devoted enormous resources to training, researching and continuous
development of its manpower and processes. This is to ensure that the company provides unrivalled
service delivery given the increased competition in the industry.
Corporate Governance
Aiico’s operations have always been guided by time-honoured principles of good corporate
governance, with the objective of achieving improved corporate performance, whilst ensuring
adherence to the highest ethical standards. The core values of our abiding corporate governance
philosophy are accountability, fairness, transparency, responsibility and achievement of the
overall corporate strategy.
The Company’s corporate governance strategy is hinged on its internal governance framework,
which is executed through the following organs:
(a) The Board of Directors
(b) Board Committees and the Shareholders Audit Committee
(c) Management Committees
As a public quoted company, Aiico also complies with the Code of Corporate Governance for
Public Companies in Nigeria issued by the Securities & Exchange Commission Committee on
Corporate Governance
At Aiico, all Board Members participate in various training programmes and periodic Board
Retreats aimed at engendering the development of an effective Board.
Aiico Insurance Plc 25
CHAIRMAN’S LETTER (CONTD)
Board Independence and Effectiveness
Aiico currently operates a unitary board system in which the Board has both Supervisory and
Management functions. These functions are split between the Executive Board, which comprises three
(3) Executive Directors and the Supervisory Board or full Board, which comprises ten Directors (i.e.
the three Executive Directors and seven Non Executive Directors).
Aiico currently has three (3) Board Committees, as detailed below:
1. Board Real Estate Committee
2. Board Investment Committee
3. Board Audit Committee
The Board non-executive members serve in various capacities in the sub-committee mentioned above
and involved in setting emoluments of the Managing Director and other Directors of the company.
Future Plans
Being one of the leaders in Life Assurance business in Nigeria, Aiico plans to significantly deepen its
hold on the individual Life segment of the market through a thoroughly thought out programme of
expansion of its Agency and Field Workforce in all major cities and state capitals of the federation.
The group will also take full advantage of the compulsory Group Life policies to be taken by all
employers of labour with five employees and above.
Various annuity products have been developed to enable the company compete favourably in that
segment in view of the Pension Reform Act.
The resurgence of the middle class in Nigeria has also brought about the need for very vibrant
products in the area of mortgage protection insurance in view of the increasing housing needs of the
populace.
In the area of short term insurance, that is Non-Life, Aiico General has mapped out strategies aimed at
significantly capturing the Personal lines and the Retail segment of the market.
The company has also concluded plans to dominate the Oil and Energy insurance market through its
strategic alliance with reputable Oil and Energy insurance specialists leveraging on the Nigerian
content directive of the Federal Government.
In the same vein, the group will also leverage on the huge opportunities presented in the consumer
finance segment through appropriate tailor-made products and policies targeted at the emerging
middle class.
Aiico general has also positioned itself for the massive infrastructure roll out which will attract
reasonable insurance elements in the area of construction as well as the operational policies in view of
its rich experience and solid reinsurance backing.
Aiico Insurance Plc 26
CHAIRMAN’S LETTER (CONTD)
CONCLUSION
The Board of Directors, Management and Staff are committed to continuous improvement in the
performance of the Company. The current capital raising exercise will expand the Company’s branch
network, increase its retention capacity and participation in high risk and large premium insurance
businesses from the Power, Oil & Gas, Real Estate and Telecommunications sectors. The Company is
thus poised to consolidate its position in the industry with a dependable and stable resource base, thus
ensuring growth and good returns on your investment in Aiico.
Yours Sincerely,
Chief (Dr.) Oladele Fajemirokun
Chairman
Aiico Insurance Plc 27
THE PROFIT FORECAST
LETTER FROM THE REPORTING ACCOUNTANTS ON THE PROFIT FORECASTS
October 11, 2007
The Directors
AIICO Insurance Plc
AIICO Plaza
Afribank Street
Lagos
And
The Directors,
Greenwich Trust Limited
Plot 1698A Oyin Jolayemi Street
P.M.B. 80074, Victoria Island
Lagos, Nigeria.
Dear Sirs,
RE: OFFER FOR SUBSCRIPTION OF 2,500,000,000 ORDINARY SHARES OF 50 KOBO EACH AT
N2.20 PER SHARE BY AIICO INSURANCE PLC
We have reviewed the accounting policies and calculations of the financial forecast of AIICO
Insurance Plc (for which the Directors of AIICO Insurance Plc are solely responsible) for the years
ending December 31, 2008, 2009, and 2010.
In our opinion, the financial forecast, so far as the accounting policies and calculations are concerned,
have been properly compiled on the footing of the assumptions made by the Directors and are
presented on a basis consistent with the accounting policies normally adopted by the Company.
However, there will usually be differences between forecast and actual results, because events and
circumstances frequently do not occur as expected, and those 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,
SIAO
Aiico Insurance Plc 28
FINANCIAL FORECAST AIICO INSURANCE PLC
3 - YEAR CONSOLIDATED INCOME STATEMENT FORECAST
2008 2009 2010
N'000 N'000 N'000
Premium - General Insurance 2,118,276 2,584,297 3,101,157
Oil & Gas 130,418 172,152 206,582
Premium - Individual Life 2,907,848 3,692,966 4,431,560
Group Life 528,377 723,877 941,040
Pension Deposit -
5,684,919 7,173,292 8,680,338
Investment Income & Other Income 482,574 874,545 1,202,614
Commission Received 253,081 346,721 468,074
profit on sale of investment 26,158 76,124 21,749
Profit on sale of Fixed Asset 165 182 200
(A) 6,446,897 8,470,865 10,372,975
Reinsurance 724,420 830,403 996,483
Claims Paid 617,539 677,967 805,934
Commissions Paid 1,006,968 1,277,206 1,548,341
Other Direct Expenses 281,728 286,303 291,644
Overhead Expenses 1,067,292 1,247,380 1,453,472
Depreciation 255,638 251,342 197,995
Increase/ (Decrease) in unexpired premium/Ins Funds 303,639 395,255 475,563
Increase/ (Decrease) in Claims Reserve 49,149 52,366 64,673
Maturities, Surrenders and Bonuses 817,963 965,196 1,138,931
Withdrawals -
Guaranteed Interest on Group Pension -
(B) 5,124,337 5,983,417 6,973,036
Profit before Taxation (A) - (B) 1,322,560 2,487,448 3,399,939
Taxation (118,208) (156,334) (189,254)
Profit after Taxation 1,204,352 2,331,114 3,210,686
Appropriation:
Dividend 454,979 670,979 1,006,468
Transfer to Contingency Reserve 209,850 376,445 513,290
Bonus Reserve - - -
Transfer to General Reserve 539,523 1,283,691 1,690,928
Retained Profit 1,204,352 2,331,114 3,210,686
Aiico Insurance Plc 29
FINANCIAL FORECAST AIICO INSURANCE PLC
3- YEAR CONSOLIDATED BALANCE SHEET FORECAST
2008 2009 2010
ASSETS N'000 N'000 N'000
Cash & Bank 1,108,467 958,140 1,124,609
Short - Term Investments 4,005,666 4,154,916 4,876,801
Debtors & Prepayments 1,453,571 1,772,378 2,811,030
Loans To Policy Holders 1,653,658 1,984,390 2,944,757
Long Term Investments 5,290,661 8,200,524 9,674,860
Statutory Deposit 570,000 570,000 570,000
Fixed Assets 4,086,054 3,144,899 2,548,248
TOTAL ASSETS 18,168,076 20,785,246 24,550,305
LIABILITIES
Creditors & Accruals 3,087,444 2,903,066 2,855,783
Outstanding Claims 198,281 225,647 290,320
Taxation 118,208 156,334 190,959
Dividend 410,979 560,979 841,468
Insurance Funds 1,966,826 2,240,483 2,634,819
TOTAL LIABILITIES 5,781,738 6,086,509 6,813,349
NET ASSETS 12,386,338 14,698,737 17,736,956
CAPITAL AND RESERVES
Called - Up Share Capital 2,804,893 2,804,893 2,804,893
Contingency Reserve 703,460 824,616 993,844
Fixed Assets Revaluation Reserve 2,323,454 2,323,454 2,323,454
Quoted Investment Revaluation
Reserve 553,111 1,349,666 2,341,665
Bonus issue reserve - - -
General Reserve 1,352,243 2,746,931 4,623,923
Share Premium 4,649,177 4,649,177 4,649,177
12,386,338 14,698,737 17,736,956
Aiico Insurance Plc 30
FINANCIAL FORECAST AIICO INSURANCE PLC
3 - YEAR GENERAL BUSINESS INCOME STATEMENT FORECAST
2008 2009 2010
N'000 N'000 N'000
Premium - General Insurance 2,118,276 2,584,297 3,101,157
Oil & Gas 130,418 172,152 206,582
Investment Income & Other Income 209,360 393,527 529,189
Commission Received 253,081 346,721 468,074
profit on sale of investment 15,760 18,912 21,749
profit on sale of fixed asset 165 182 199.65
2,727,061 3,515,791 4,326,951
Reinsurance 384,596 398,826 478,592
Claims Paid 502,131 612,599 735,119
Commissions Paid 261,987 319,624 383,549
Other Direct Expenses 158,433 167,939 178,015
Overhead Expenses (less depreciation) 400,803 460,923 525,453
Depreciation 54,996 60,842 33,598
Increase/ (Decrease) in unexpired
premium 160,211 203,800 244,560
Increase/ (Decrease) in Claims Reserve 27,966 14,237 15,106
1,951,123 2,238,792 2,593,992
775,938 1,277,000 1,732,959
Appropriation
Dividend (164,932) (380,932) (571,398)
Taxation (101,191) - (124,040) - (148,848)
Transfer to Contingency Reserve (155,188) (255,400) (346,592)
Transfer to Bonus Issue Reserve
- -
Transfer to Revenue Reserve (354,627) (516,628) (666,121)
(775,938) (1,277,000) (1,732,959)
Aiico Insurance Plc 31
FINANCIAL FORECAST AIICO INSURANCE PLC
3 - YEAR GENERAL BUSINESS BALANCE SHEET FORECAST
2008 2009 2010
=N=000 =N=000 =N=000
ASSETS
Cash & Bank 554,233 383,256 449,844
Short - Term Investments 1,602,267 1,661,966 1,950,720
Debtors & Prepayments 1,156,333 1,445,416 1,951,372
Loans To Policy Holders - - -
Long Term Investments 2,829,923 4,386,380 5,395,248
Statutory Deposit 258,000 258,000 258,000
Fixed Assets 1,171,052 539,940 445,230
7,571,808 8,674,959 10,450,414
LIABILITIES
Creditors & Accruals 621,786 488,531 610,664
Outstanding Claims 71,187 60,424 75,531
Taxation 101,191 124,040 148,848
Dividend 164,932 314,932 472,398
Insurance Funds 415,826 499,136 659,347
1,374,923 1,487,064 1,966,788
NET ASSETS 6,196,886 7,187,895 8,483,626
CAPITAL AND RESERVES
Called - Up Share Capital 1,574,659 1,574,659 1,574,659
Contingency Reserve 527,635 527,635 527,635
Fixed Assets Revaluation Reserve 413,507 413,507 413,507
Quoted Investment Revaluation Reserve 157,602 565,985 1,096,595
Bonus Issue - -
General Reserve 599,084 1,181,712 1,946,833
Share Premium 2,924,397 2,924,397 2,924,397
6,196,885 7,187,895 8,483,626
Aiico Insurance Plc 32
FINANCIAL FORECAST AIICO INSURANCE PLC
FINANCIAL FORECAST AIICO INSURANCE PLC
3 - YEAR LIFE INCOME STATEMENT FORECAST
2008 2009 2010
=N=000 =N=000 =N=000
Premium - Individual Life 2,907,848 3,692,966 4,431,560
Group Life 528,377 723,877 941,040
Pension Deposit -
Investment Income & Other Income 273,213 481,018 673,426
profit on sale of investment 10,397 57,212 -
3,719,836 4,955,073 6,046,025
Reinsurance 339,824 431,576 517,891
Maturities, Surrenders and Bonuses 817,963 965,196 1,138,931
Withdrawals -
Claims Paid 115,409 65,367 70,815
Commissions Paid 744,981 957,581 1,164,791
Guaranteed Interest on Group Pension -
Other Direct Expenses 123,295 118,364 113,629
Overhead Expenses (less depreciation) 666,489 786,457 928,019
Depreciation 200,643 190,500 164,397
Increase/ (Decrease) in Insurance Funds 143,428 191,455 231,003
Increase/ (Decrease) in Claims Reserve 21,182 38,128 49,567
3,173,214 3,744,625 4,379,044
Profit/(Loss) 546,622 1,210,449 1,666,980
Appropriation
Dividend (290,047) (290,047) (435,070)
Taxation (17,017) (32,294) (40,406)
T ransfer to Contingency Reserve (54,662) (121,045) (166,698)
T ransfer to Bonus Issue Reserve - - -
T ransfer to Revenue Reserve (184,896) (767,063) (1,024,807)
Aiico Insurance Plc 33
FINANCIAL FORECAST AIICO INSURANCE PLC
3 -YEAR LIFE BALANCE SHEET FORECAST
2008 2009 2010
=N=000 =N=000 =N=000
ASSETS
Cash & Bank 554,233 574,884 674,765
Short - Term Investments 2,403,400 2,492,950 2,926,080
Debtors & Prepayments 297,239 326,962 859,658
Loans To Policy Holders 1,653,658 1,984,390 2,944,757
Long Term Investments 2,460,738 3,814,144 4,279,612
Statutory Deposit 312,000 312,000 312,000
Fixed Assets 2,915,002 2,604,958 2,103,018
10,596,270 12,110,288 14,099,889
LIABILITIES
Creditors & Accruals 2,465,658 2,414,535 2,245,119
Outstanding Claims 127,095 165,223 214,790
Taxation 17,017 32,294 42,111
Dividend 246,047 246,047 369,070
Insurance Funds 1,551,000 1,741,347 1,975,471
4,406,816 4,599,446 4,846,561
NET ASSETS 6,189,454 7,510,842 9,253,329
CAPITAL AND RESERVES
Called - Up Share Capital 1,230,234 1,230,234 1,230,234
Contingency Reserve 175,825 296,980 466,208
Fixed Assets Revaluation Reserve 1,909,947 1,909,947 1,909,947
Quoted Investment Revaluation
Reserve 395,509 783,682 1,245,070
Bonus issue reserve - - -
General Reserve 753,159 1,565,219 2,677,090
Share Premium 1,724,780 1,724,780 1,724,780
6,189,454 7,510,842 9,253,329
Aiico Insurance Plc 34
Bases and Assumptions for the Profit Forecasts of Aiico Insurance Plc
i. The total earnings for the years ending 31 December 2008, 2009 and 2010 will be N 6.447, N
8.471 and N 10.372 respectively.
ii. Gross income will grow by 21.5% in 2008 while 26.2% and 21% for the ending 31 December
2009 and 2010 respectively, is expected.
iii. Premium written is expected to grow by 21.5% for both life and non life business for the year
ending 31 December 2008 over 2007. While in years ending 31 December, 2009 and 2010, life
and non life premiums are expected to grow by 26.2% and 21.0% respectively.
iv. Expenses are projected to be 79.5% during the year ending 31 December 2008, while growth of
70.6% and 67.2% for 2009 and 2010 respectively is expected. It is expected that planned
improvement of skills, Staff efficiency and the strategic cost reduction scheme embarked upon
by the company will reduce operating expenses considerably.
v. The Company income tax and education tax will remain at 30% and 2% respectively. The
company’s effective tax rate will be at an average rate of 25% for 2008, 28% for 2009 and 31%
for 2010 because of deferred tax assets carried forward from the previous years. The effective
tax rate has incorporated the effect of tax on dividend.
vi. Projected investments in fixed assets between 2008 and 2010 will be skewed towards assets
that have high depreciation rates e.g. motor vehicles for marketing as against investment in
land and buildings that are as low as 2%.
vii. The company made a bonus issue in the year ending 31st Dec 2006, while the dividend
payment will be approximately 34%, 26%, and 29% of profit after tax for 2008, 2009, and 2010
respectively.
viii. The short-term investment is expected to grow by 45% for both life and non-life business for
year ending 31st December 2008 over 2007.A decline of 18% in 2009 is expected due to increase
in long-term investment. Thereafter, this will grow by 15% in 2010.
ix. Long term investment is expected to grow by 203% for both life and non-life business for the
year ending 31 December 2008 from a 6% declined experienced in 2007. The drastic increase in
2008 occurred as a result of additional capital raised in the capital market. While in years
ending 2009 and 2010, life and non-life business are expected to grow by 55% and 18%
respectively.
x. The company is having 244 employees and no substantial change is expected during the
forecast period.
xi. That the new increase in capital base of insurance company will boost the earning capacity of
the industry due to public confidence in the company and that the recapitalization will put it
in a better position to underwrite larger volumes of insurance and increase its retention
contracts resulting to an increase in premium income.
xii. The government policies on the domestication of insurance business cum the local content in
the energy sector will further enhance the generation of more premium income for the
indigenous insurance companies.
xiii. That the Federal Government anti-corruption crusade through the activities of EFCC and
ICPC will continue and restore fully public confidence in the economy.
Aiico Insurance Plc 35
Bases and Assumptions for the Profit Forecasts of Aiico Insurance Plc (cont’d)
xiv. That the diversification of power source and advent of independent power project by state
will result in drastic improvement in electricity supply.
xv. That the projected inflation rate will be 7% for year 2008,7%,5%, for years 2009, and 2010
respectively.
xvi. The quality of the company management will be sustained during the forecast period.
xvii. There will be no litigation with adverse material consequence to the company.
xviii. That there will be no legislation materially affecting the Insurance industry.
xix. The company will continue to enjoy the goodwill of its present and potential customers.
Aiico Insurance Plc 36
LETTER FROM THE ISSUING HOUSE
Letter from the Issuing House
November 27, 2007
The Directors
Aiico Insurance Plc
Plot PC 12, Afribank Street
Victoria Island
Lagos
Dear Sir,
OFFER FOR SUBSCRIPTION OF 2,500,000,000 ORDINARY SHARES OF 50 KOBO EACH AT
N2.20.00 PER SHARE BY AIICO INSURANCE PLC
We write with reference to the Prospectus dated November 26, 2007 issued in respect of the Offer for
Subscription of 2,500,000,000 Ordinary Shares of 50 kobo each at N2.20 per share in Aiico Insurance
Plc for which we have the privilege of acting as Issuing House. The Prospectus contains forecast of the
profit of the Company for the years ended 31, December 2008, 2009 and 2010 respectively.
We have discussed with you the assumptions upon which the forecasts were made. We have also
considered the letter from SIAO, the Reporting Accountants, regarding the accounting basis and
calculations upon which the forecasts were compiled.
Having considered the assumptions made by you, as well as the accounting basis and calculations
reviewed by the Reporting Accountants, we consider that the forecast (for which you as Directors are
solely responsible) have been made by you after due and careful enquiry.
Yours faithfully,
KAYODE FALOWO
Managing Director
Greenwich Trust Limited
Advisors Issuing House Stockbrokers Asset Managers Management Consultants
Aiico Insurance Plc 37
REPORTING ACCOUNTANTS REPORT ON THE AUDITED FINANCIAL STATEMENTS
October 11, 2007
The Directors
AIICO Insurance Plc
AIICO Plaza
Afribank Street
Lagos
And
The Directors,
Greenwich Trust Limited.
Plot 1698a Oyin Jolayemi Street
P.M.B. 800074, Victoria Island
Lagos, Nigeria.
Dear Sirs,
ACCOUNTANTS' REPORT ON THE AUDITED FINANCIAL STATEMENTS OF AIICO INSURANCE PLC
FOR FIVE YEARS ENDED 31ST DECEMBER 2006
We have reviewed the audited Financial Statements of AIICO Insurance Plc for the five years ended 31st
December 2006. The Financial Statements were prepared under the Historical Cost Convention. It is our
understanding that this report will be included in the prospectus to be issued in connection with the proposed
public offer of AIICO Insurance Plc.
The Financial information is based on the Audited Financial Statements of the Company for the five years ended
31st December 2006, and 3 months ended 31st March 2007 and has been prepared in accordance with the
Accounting Policies set out on page 3 of this report. The Financial Statements on which the financial information
is based are the responsibility of the Directors of the Company who approved their issue. The Directors of the
Company are responsible for the contents of the prospectus in which this report is included.
Our review of the Financial Statements has been limited primarily to the work papers of the External Auditors
(Ernst & Young) of the Company and enquiries of the Company’s personnel and analytical procedures applied to
the financial data. We have not performed an audit and thus our assignment provides less assurance than an
Audit: as such we are not expressing an Audit Opinion.
Our review was conducted in accordance with International Auditing Standards applicable to review
engagements. This Standard requires that we plan and perform the review to obtain moderate assurance as to
whether the Financial Statements are free of material misstatement. As stated earlier, we have not performed an
Audit and, accordingly, we do not express an Audit Opinion.
In our opinion, the Financial Statements prepared on the basis of Accounting Policies normally adopted by the
Company give a True and Fair View of the state of affairs of AIICO Insurance Plc. for each of the years ended
December 31,2002,2003,2004, 2005, 2006 and 3 months ended 31st March, 2007.
Yours faithfully,
SIAO (Chartered Accountants)
Aiico Insurance Plc 38
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
For the year ended December 31, 2006
The following is a summary of the significant Accounting Policies adopted by the company in the
preparation of these Financial Statements.
a) Basis of accounting
The Financial Statements are prepared under the Historical Cost Convention as modified by
the revaluation of land and buildings.
b) Depreciation
Depreciation of Fixed Assets is provided on a straight-line basis at such rates that will
amortize cost over the period of the estimated useful lives as follows:
Leasehold land and building 2 or over the unexpired period of the lease
Furniture, Fixtures and equipment 20 %
Motor Vehicles 20 %
Assets in progress not depreciated
c) Fixed Assets
Fixed Assets are stated at cost or valuation less depreciation.
d) Long term investments
• Quoted investments-These are stated at market value. Differences between the cost
and the market value are transferred to a quoted investment revaluation reserve
account.
• Unquoted investments-These are stated at cost less provisions for doubtful
investments.
• Investment in Associated Company-Investment in the Associated Company is stated
at cost.
• The accounts of the Associated Company are not consolidated in view of the
insignificant amount involved.
e) Income from investments
Interest income is shown gross and is recognized on an accrual basis. Dividends are accounted
for on the basis of the amounts actually received during the year.
f) Debtors
Debtors are stated after deductions of specific provisions for debts considered doubtful of
collection
g) Premium
Premium represents total amount invoiced to policy holders. The annual basis of accounting
for non-life was adopted.
h) Provisions for unexpired risks
Provisions for Unexpired Risks are based on time apportionment in accordance with the
Insurance Act, No. 1 of 2003.
Aiico Insurance Plc 39
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
i) Claims incurred but not reported
Provisions are made for Claims Incurred But not Reported to the company at the balance sheet
date in accordance with Section 20(1) (b) of the Insurance Act, 2003 on the basis of 10% of net
outstanding claims.
j) Contingency Reserve
Contingency reserve is calculated, in the case of Non-Life business, at the rate of the higher of
3% of total premium receivable during the year or 20% of net profits in accordance with
Section 21(2) of Insurance Act, 2003 and, in respect of Life Insurance business, at the rate of the
higher of 1% of the gross premium and 10% of net profits, in accordance with Sections 22(1)
(b) of the Insurance Act, 2003.
k) Retirement benefit scheme
The company has a non-contributory pension scheme for the benefit of its employees. These
benefits are based on the employees’ years of service.
l) Deferred taxation
Deferred Income Tax is provided using the liability method for all temporary differences
arising between the tax bases of assets and liabilities and their carrying values for financial
reporting purpose. Current tax rates are used to determine differed tax.
m) Foreign currencies
Transactions in foreign currencies are recorded at the rates of exchange ruling at the respective
dates of the transactions. Assets and Liabilities in foreign currencies are translated to Naira at
rates of exchange ruling at the Balance sheet date. Profits or losses arising from the translation
are included in the Profit and Loss Account
n) Management expenses
Except for the expenses directly related to Life and General businesses, all other management
expenses are shared between Life and Non-Life businesses in the proportion of their contribution to
the overall retained premium.
Aiico Insurance Plc 40
COMPANY BALANCE SHEET
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
Notes 31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
ASSETS
Cash and bank 360,705 474,922 316,427 150,111 275,703 552,480
Short-term Investment 1 1,797,927 2,259,037 1,523,325 2,037,130 2,266,224 1,360,227
Debtors and Prepayments 2 385,816 588,815 959,319 686,262 1,309,112 544,208
Loans to Policy Holder 455,721 425,651 332,111 241,622 206,704 211,696
Long-term Investments 3 1,984,932 1,754,758 4,474,866 4,975,351 2,996,257 2,342,460
Statutory Deposit 4 445,000 35,000 35,000 35,000 13,500 13,500
Fixed Assets 5 2,965,847 2,982,081 3,088,640 1,541,446 1,468,990 1,207,374
Pre-Incorporation expenses 6a 115,057 - - - - -
Deferred Tax 6b 183,891 183,891 - - - -
Total 8,694,896 8,704,155 10,729,688 9,666,922 8,536,490 6,231,945
Less: Current Liabilities:
Creditors and Accruals 7 1,421,122 1,637,344 1,157,347 1,146,298 838,854 689,231
Outstanding Claims 8 196,383 165,944 172,533 200,213 167,223 117,240
Taxation 9 70,084 51,008 6,253 3,931 22,451 11,048
Dividend 10 10,194 10,199 3,788 10,349 73,986 30,846
Insurance Funds 11 1,553,663 1,500,358 1,354,269 1,086,927 4,782,510 3,859,396
Deposit Admin & Pension Fund 11 (686,775) (530,662) 3,765,427 4,256,344 - -
2,564,671 2,834,191 6,459,617 6,704,062 5,885,024 4,707,761
6,130,225 5,869,964 4,270,071 2,962,860 2,651,466 1,524,184
CAPITAL AND RESERVES:
Called-up Share Capital 12 1,554,893 1,332,765 700,000 350,000 350,000 150,000
Contingency Reserve 13 387,974 368,619 299,654 248,185 206,457 175,136
Fixed Assets Revaluation
Reserve 14 2,323,454 2,323,454 2,323,454 731,912 731,912 731,912
Quoted Investment Revaluation
Reserve 15 645,170 427,337 661,180 1,011,974 773,098 317,541
Bonus Issue Reserve 16 - 222,128 175,000 350,000 - 50,000
General Reserve 17 544,557 521,484 106,747 212,286 181,495 99,595
Share Premium 18 674,177 674,177 4,036 58,503 408,503 -
Share Holders' Funds 6,130,225 5,869,964 4,270,071 2,962,860 2,651,465 1,524,184
Aiico Insurance Plc 41
BALANCE SHEET FOR LIFE BUSINESS
FOR THE YEAR ENDED 31ST DECEMBER
3months
Notes 31/3/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
ASSETS
Cash and bank 116,593 244,169 316,427 150,111 189,817 325,871
Short-term Investment 1 1,738,433 2,204,424 1,403,613 1,834,689 2,170,966 1,236,542
Debtors and Prepayments 2 102,573 257,349 569,239 475,847 1,079,266 366,575
Loans to Policy Holder 455,721 425,652 332,111 241,622 206,704 211,696
Long-term Investments 3 1,094,738 914,302 3,744,690 4,516,050 2,736,574 2,166,333
Statutory Deposit 4 183,000 13,000 13,000 13,000 3,000 3,000
Fixed Assets 5 2,446,474 2,458,149 2,551,042 1,247,792 1,161,249 984,038
Deferred Tax 6 183,891 183,891 - - - -
Total 6,321,423 6,700,936 8,930,122 8,479,111 7,547,576 5,294,055
Less: Current Liabilities:
Creditors and Accruals 7 1,632,057 2,157,808 669,677 862,351 715,518 66,514
Outstanding Claims 8 103,962 88,260 124,873 86,877 56,193 43,700
Taxation 9 37,541 17,575 1,116 3,931 22,451 11,048
Dividend 10 10,194 10,199 3,788 10,349 73,986 30,846
Insurance Funds 11 1,369,305 1,291,298 1,213,826 970,382 4,592,700 3,711,686
Deposit Admin & Pension Fund 11 (686,775) (530,662) 3,765,427 4,256,344 - -
2,466,284 3,034,478 5,778,707 6,190,234 5,460,848 3,863,794
3,855,139 3,666,458 3,151,415 2,288,877 2,086,728 1,430,261
CAPITAL AND RESERVES:
Called-up Share Capital 12 730,234 508,106 150,000 150,000 150,000 80,000
Contingency Reserve 13 94,699 89,731 71,557 56,000 43,943 35,799
Fixed Assets Revaluation Reserve 14 1,909,947 1,909,947 1,909,947 573,677 573,677 573,677
Quoted Investment Revaluation
Reserve 15 459,217 291,534 592,411 958,183 732,742 307,170
Bonus Issue Reserve 16 - 222,128 175,000 - - 50,000
General Reserve 17 526,262 510,232 252,500 496,550 531,899 383,615
Share Premium 18 134,780 134,780 - 54,467 54,467 -
Share Holders' Funds 3,855,139 3,666,458 3,151,415 2,288,877 2,086,728 1,430,261
Aiico Insurance Plc 42
COMPANY PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
Notes 31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
Premium 19 1,039,477 3,030,487 2,931,822 2,356,794 1,723,200 1,454,046
Deposits - - - 1,301,025 1,216,641 1,084,179
1,039,477 3,030,487 2,931,822 3,657,819 2,939,841 2,538,225
Investment and Other Income 20 93,529 385,366 210,872 1,041,230 1,054,729 674,085
1,133,006 3,415,853 3,142,694 4,699,049 3,994,570 3,212,310
Reinsurance (63,122) (456,056) (658,426) (512,591) (431,356) (385,616)
Maturities, Surrenders and Bonuses (167,207) (545,816) (410,291) (1,607,818) (896,633) (613,996)
Claims Paid and Admitted (96,560) (320,859) (202,472) (252,145) (196,881) (147,948)
Net Commission (115,582) (460,318) (335,091) (321,450) (277,030) (164,666)
Guaranteed Interest on Group Pension - - - (448,313) (341,224) (316,575)
Other direct Expenses (77,657) (220,785) (229,624) (234,622) (208,230) (142,707)
Overhead Expenses (217,029) (884,915) (961,860) (1,089,747) (807,122) (623,077)
Increase in insurance Fund (163,029) (146,088) (267,343) (112,447) (581,890) (645,336)
Increase/(Decrease) in Claims Reserve (170,426) 7,009 27,760 (33,068) (49,983) (22,179)
Bad Debt Provision - (39,226) (18,400) (12,059) - -
Profit before Taxation 21 62,394 348,799 86,947 74,789 204,221 150,210
Taxation 9 (19,966) 134,903 (5,137) (2,270) (21,000) (17,121)
Profit after Taxation 42,428 483,702 81,810 72,519 183,221 133,089
Appropriation:
Dividend 13 - - 51,469 41,728 70,000 30,000
Transfer to Contingency Reserve 17 19,355 68,965 30,341 30,791 31,321 27,948
Bonus Reserve - - - - - 50,000
Transfer to General Reserve 23,073 414,737 - - 81,900 25,141
42,428 483,702 81,810 72,519 183,221 133,089
Earning per Share 2K 13K 6K 11K 26K 44K
Aiico Insurance Plc 43
LIFE REVENUE ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
Premium 496,774 1,963,942 1,834,368 1,367,740 950,260 798,688
Life Reinsurance Ceded - (197,549) (209,492) (105,518) (93,514) (66,469)
496,774 1,766,393 1,624,876 1,262,222 857,106 732,219
Less Direct Expenses:
Claims Paid (26,877) (77,011) (13,442) (15,017) (54,409) (26,878)
Maturity Surrendered and Bonuses (167,205) (545,818) (410,291) (216,160) (155,560) (74,279)
Commission (108,020) (425,787) (372,971) (325,098) (239,443) (177,754)
Other direct Expenses (34,669) (133,784) (118,460) (103,077) (95,003) (67,207)
Increase in Insurance Funds 21,331 (77,471) (243,444) (234,108) (65,232) (129,785)
Increase in Outstanding Claims (78,008) 37,033 (37,916) (30,763) (12,493) (4,001)
103,326 543,555 428,352 337,999 234,966 252,315
Aiico Insurance Plc 44
NON-LIFE REVENUE ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
Gross Premium 542,703 1,066,545 1,097,454 989,054 772,580 655,357
Outward Reinsurance (63,122) (258,505) (448,934) (407,073) (337,842) (319,147)
Net Premium 479,581 808,040 648,520 581,981 434,738 336,210
Commission Received 20,737 92,697 155,396 123,325 96,127 94,633
500,318 900,737 803,916 705,306 530,865 430,843
Direct Expenses
Claim Paid less Reinsurance 69,683 243,847 189,030 237,128 142,471 121,070
Increase/(Decrease) in Unexpired Premium 184,360 68,617 23,899 (73,266) 42,101 23,551
Increase/(Decrease) in Outstanding Claims
Reserves 92,420 30,024 (65,676) 2,305 37,490 18,177
Commission 28,299 127,228 117,516 69,590 91,770 41,352
Other direct Expenses 42,988 126,226 111,164 108,741 83,668 66,717
417,750 595,942 375,933 344,498 397,500 270,867
Transfer to Profit and Loss 82,568 304,795 427,983 360,808 133,365 159,976
Aiico Insurance Plc 45
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
Notes N'000 N'000 N'000 N'000 N'000 N'000
Cash Flows From Operating Activities
Premium received from policy holders 1,039,477 3,030,487 2,931,822 3,657,819 1,723,200 1,454,046
Reinsurance receipts in respect of claims - 178,406 134,850 72,900
Cash paid to and on behalf of employees (70,003) (232,715) (237,222) (231,289)
Reinsurance Premium paid (63,122) (456,055) (658,426) (512,591) (431,356) (385,616)
Other operating cash payments (859,975) (5,388,128) (2,068,335) (1,185,733)
Claims paid (96,560) (320,859) (202,472) (252,145) (196,881) (147,948)
Company income tax paid (890) (4,233) (2,815) (20,790) (9,597) (3,000)
Net Cash Flow From Operating Activities 22 (51,073) (3,193,097) (102,598) 1,528,171 1,085,366 917,482
Cash Flows From Investing Activities
Purchase of Fixed Assets (22,786) (65,529) (109,976) (199,948) (360,283) (271,828)
Purchase of Liquid Investment (100,047) (415,268) (687,866) (2,578,818) (689,500) (378,248)
Sales of Liquid Investment 88,049 3,045,143 621,955 859,590 753,690 449,360
Statutory Deposit (410,000) - - 21,500 - -
Proceeds from sale of Fixed Assets 5,398 12,124 812 10,197 1,532 4,601
Net Cash Used In Investing Activities (439,386) 2,576,470 (175,075) (1,887,479) (294,561) (196,115)
Cash Flow From Financing Activities
Proceed from Right and Public Issue - 1,525,034
Dividend Paid (5) (2,590) (6,561) (63,637)
Bonus Issue - (175,000)
Net Cash Provided By Financing Activities (5) 1,347,444 (6,561) (63,637) - -
Net Decrease In Cash And Bank Equivalent (490,464) 730,817 (284,234) (422,945) 1,952,098 3,173,379
Cash and Bank Equivalent at Jan. 1. 2,544,519 1,813,702 2,097,936 2,520,881
Cash and Bank Equivalent At Dec. 31 23 2,054,055 2,544,519 1,813,702 2,097,936 1,952,098 3,173,379
Aiico Insurance Plc 46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
1 SHORT - TERM INVESTMENTS
Tresury Bill - - - 450,141 290,531 283,685
Term Deposit 1,437,984 1,898,309 61,601 194,257 263,938 172,835
Commercial Paper and Bankers Acceptance 378,180 378,965 1,479,961 1,410,969 1,720,610 912,563
1,816,164 2,277,274 1,541,562 2,055,367 2,275,079 1,369,083
Less Provision (18,237) (18,237) (18,237) (18,237) (8,856) (8,856)
1,797,927 2,259,037 1,523,325 2,037,130 2,266,223 1,360,227
2 DEBTORS AND PREPAYMENTS
Outstanding Premium 313,432 362,554 288,045 220,172 145,572 134,758
Other Debtors (16,418) 201,523 630,609 411,403 - -
Prepayment 88,802 24,738 40,665 54,687 1,163,540 409,450
385,816 588,815 959,319 686,262 1,309,112 544,208
Outstanding Premium represent Net Premium Due as advised by Hymans Robertson (HR) Limited (Actuary and
Consultants) during an evaluation of the company's life policies as at December 31.
Aiico Insurance Plc 47
NOTES TO THE FINANCIAL STATEMENTS
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
3 LONG TERM INVESTMENT
A. Life
(i) Quoted Investments at market value
Debenture stock (cost: N188,969,000) - - 190,064 134,437 104,225 102,818
Ordinary share (cost: N1,009,699,978) 845,163 677,478 1,615,611 2,369,581 1,548,595 1,088,398
845163 677,478 1,805,675 2,504,018 1,652,820 1,191,216
(ii) Unquoted Investment at cost
Government Bond - - 40,760 44,295 10,000 -
Debenture Stock - - - 98,945 120,697 110,026
Ordinary Share 286,479 286,479 345,313 280,303 244,338 137,442
Preference Share 179,100 179,100 63,450 63,450 63,450 63,450
Mortgage Loan 153,223 140,472 269,527 63,390 56,480 70,023
Lease or Gurantee Stock - - 1,575,692 1,617,376 544,516 549,903
618,802 606,051 2,294,742 2,167,759 1,039,481 930,844
(iii) Investment in Associated Company at cost
Nigerian French Insurance Company Limited
36% holding of 75,187,226 ordinary shares of
N'1 each 44,773 44,773 44,773 44,773 44,773 44,773
663,575 650,824 2,339,515 2,212,532 1,084,254 957,617
Less: Provision for Diminution in Value (414,000) (414,000) (400,500) (200,500) (500) (500)
249,575 236,824 1,939,015 2,012,032 1,083,754 975,117
Total 1,094,738 914,302 3,744,690 4,516,050 2,736,574 2,166,333
B. Non-Life
(i) Quoted Investment at Market Price
Debenture Stock (cost: N1,250,094,000) - - 1,250 1,250 3,779 6,308
Ordinary Share (cost: N62,909,339.66) 263,678 213,527 131,679 103,205 70,447 32,834
263,678 213,527 132,929 104,455 74,226 39,142
(ii) Unquoted Investment at cost
Debenture Stock - - - 74 74 74
Ordinary Shares 469,927 470,178 420,227 118,850 113,597 91,275
Preference Share 88,512 88,512 113,865 86,955 62,655 32,100
Mortgage Loans 67,736 67,736 53,673 4,494 7,127 13,536
Lease or guarantee stock 341 503 9,482 144,473 2,004 -
626,516 626,929 597,247 354,846 185,457 136,985
890,194 840,456 730,176 459,301 259,683 176,127
Life 1,094,738 914,302 3,744,690 4,516,050 2,736,574 2,166,333
Non-Life 890,194 840,456 730,176 459,301 259,683 176,127
1,984,932 1,754,758 4,474,866 4,975,351 2,996,257 2,342,460
Aiico Insurance Plc 48
NOTES TO THE FINANCIAL STATEMENTS
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
4 STATUTORY DEPOSIT
At December 31 445,000 35,000 35,000 35,000 13,500 13,500
This represent deposit with the Central Bank of Nigeria in accordance with section 10(3) of the insurance Act 2003
5 FIXED ASSETS
SUMMARY OF MOVEMENT
SCHEDULE
31/03/07
LEASEHOLD & BUILDING 2007 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 3,046,134 3,041,553 1,418,537 1,366,456 1,062,947 674,858
Revaluation - 3,347 1,591,542 282,277
Additions 118 1,234 31,474 60,971 303,509 109,419
Disposals - - - (8,890) (3,607)
As at December 31 3,046,252 3,046,134 3,041,553 1,418,537 1,366,456 1,062,947
DEPRECIATION
As at January 1 276,833 218,055 165,889 107,220 80,626 63,614
Charge for the year 14,730 58,778 52,166 59,334 26,594 17,846
Disposal - - - (665) - (834)
As at December 31 291,563 276,833 218,055 165,889 107,220 80,626
NET BOOK VALUE
As at December 31 2,754,689 2,769,301 2,823,498 1,252,648 1,259,236 982,321
Aiico Insurance Plc 49
NOTES TO THE FINANCIAL STATEMENTS
3 Months
FURNITURE & EQUIPMENTS 31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 597,816 598,769 537,255 449,720 405,357 292,933
Revaluation - (2,816) -
Additions 12,568 29,889 75,683 87,827 47,387 114,330
Disposals (426) (28,026) (14,169) (292) (3,024) (1,906)
As at December 31 609,958 597,816 598,769 537,255 449,720 405,357
DEPRECIATION
As at January 1 440,507 386,004 324,153 285,685 232,589 190,102
Charge for the year 18,343 77,798 75,870 38,695 55,650 44,227
Disposal (197) (23,295) (14,019) (227) (2,554) (1,740)
As at December 31 458,653 440,507 386,004 324,153 285,685 232,589
NET BOOK VALUE
As at December 31 151,305 157,309 212,765 213,102 164,035 172,768
MOTOR 31/03/07 2006 2005 2004 2003 2002
VEHICLE N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 155,864 147,832 149,725 105,797 100,454 61,452
Revaluation - 1,582 -
Additions 10,100 32,293 2,819 51,150 9,387 48,079
Disposals (4,443) (25,843) (4,712) (7,222) (4,044) (9,077)
As at December 31 161,521 155,864 147,832 149,725 105,797 100,454
DEPRECIATION
As at January 1 100,393 95,455 74,029 60,078 48,169 42,332
Charge for the year 5,686 22,687 24,750 21,161 15,605 14,095
Disposal (4,411) (17,749) (3,324) (7,210) (3,696) (8,258)
As at December 31 101,668 100,393 95,455 74,029 60,078 48,169
NET BOOK VALUE
As at December 31 59,853 55,471 52,377 75,696 45,719 52,285
TOTAL NET BOOK VALUE 2,965,847 2,982,081 3,088,640 1,541,446 1,468,990 1,207,374
Aiico Insurance Plc 50
NOTES TO THE FINANCIAL STATEMENTS
5a.
MOVEMENT SCHEDULE (NON-
LIFE)
3 Months
LEASEHOLD & 31/03/07 2006 2005 2004 2003 2002
BUILDING N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 556,703 555,469 296841 303,106 208,251 150,576
Revaluation - 1,234 255272 57,675
Additions - - 3356 2,625 94,855 -
Disposals - - - (8,890) - -
As at December 31 556,703 556,703 555,469 296,841 303,106 208,251
DEPRECIATION
As at January 1 51,410 39,768 30,287 21,353 16,583 13,130
Charge for the year 2,911 11,642 9,481 9,599 4,770 3,453
Disposal - - - (665) - -
As at December 31 54,321 51,410 39,768 30,287 21,353 16,583
NET BOOK VALUE
As at December 31 502,382 505,293 515,701 266,554 281,753 191,668
FURNITURE & 31/03/07 2006 2005 2,004 2003 2002
EQUIPMENTS N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 59,725 59,071 54263 48,119 44,921 31,655
Revaluation - (2,816) 0 -
Additions 277 4,282 5067 6,144 3,625 13,266
Disposals - (812) -259 (427) -
As at December 31 60,002 59,725 59,071 54,263 48,119 44,921
DEPRECIATION
As at January 1 45,653 40,047 34438 33,030 28,423 23,128
Charge for the year 1,141 6,418 5840 1,408 5,014 5,295
Disposal - (812) -231 (407) -
As at December 31 46,794 45,653 40,047 34,438 33,030 28,423
NET BOOK VALUE
As at December 31 13,208 14,072 19,024 19,825 15,089 16,498
Aiico Insurance Plc 51
NOTES TO THE FINANCIAL STATEMENTS
5b. MOVEMENT SCHEDULE (LIFE) - CONTD
3 Months
FURNITURE & 31/03/07 2006 2005 2004 2003 2002
EQUIPMENTS N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 538,091 539,698 482,992 401,601 360,436 261,278
Revaluation - -
Additions 12,291 25,607 70,616 81,683 43,762 101,064
Disposals (426) (27,214) (13,910) (292) (2,597) (1,906)
As at December 31 549,956 538,091 539,698 482,992 401,601 360,436
DEPRECIATION
As at January 1 394,854 345,957 289,715 252,655 204,166 166,974
Charge for the year 17,202 71,380 70,030 37,287 50,636 38,932
Disposal (197) (22,483) (13,788) (227) (2,147) (1,740)
As at December 31 411,859 394,854 345,957 289,715 252,655 204,166
NET BOOK VALUE
As at December 31 138,097 143,237 193,741 193,277 148,946 156,270
MOTOR 31/03/07 2006 2005 2004 2003 2002
VEHICLE N'000 N'000 N'000 N'000 N'000 N'000
COST/VALUATION
As at January 1 125,732 119,623 121,516 77,299 70,954 44,867
Revaluation - -
Additions 10,100 29,193 2,819 51,150 9,387 33,658
Disposals (2,497) (23,084) (4,712) (6,933) (3,042) (7,571)
As at December 31 133,335 125,732 119,623 121,516 77,299 70,954
DEPRECIATION
As at January 1 74,826 70,119 53,095 42,479 33,839 29,607
Charge for the year 4,902 19,699 20,348 17,549 11,333 10,984
Disposal
(2,465)
(14,990)
(3,324)
(6,933)
(2,693)
(6,752)
As at December 31 77,263 74,828 70,119 53,095 42,479 33,839
NET BOOK VALUE
As at December 31 56,072 50,904 49,504 68,421 34,820 37,115
TOTAL NET BOOK VALUE 2,446,476 2,458,149 2,551,042 1,247,792 1,161,249 984,038
Aiico Insurance Plc 52
NOTES TO THE FINANCIAL STATEMENTS
6a PRE OPERATIONAL EXPENSES
These are expenditure incurred prior to the commencement of operation of AIICO General Insurance Company
Limited which amounted to N115,057,000.00
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
6b DEFERRED TAX
Balance at January 1 183,891 - - - - -
Provision for the year Note 9 (i) - 183,891 - - - -
Balance at December 31 183,891 183,891 - - - -
Deferred tax as at March 31, 2007 as a result of reversible timing difference between the net book value of assets
qualifying for capital allowance and their corresponding income tax written down value amounting to
N183,890,973.00 (2006 - N183,890,973.00)
7 CREDITORS AND ACCRUALS
Due to reinsurance abroad 95,204 69,744 82,816 66,212 55,429 22,931
Due to policy holder 383,110 33,496 275,041 172,516 135,612 128,557
Sundry creditors and accruals 838,231 1,044,664 773,440 568,265 626,768 458,879
Current account - - - - - -
Bank Overdraft 104,577 189,440 26,050 89,305 21,045 78,864
Treasury bill - OBB - - - 250,000 - -
1,421,122 1,337,344 1,157,347 1,146,298 838,854 689,231
8 OUTSTANDING CLAIMS
(a) Life
Whole life and endowment 93,375 77,673 114,286 76,291 45,607 33,114
Group life 10,587 10,587 10,587 10,586 10,586 10,586
103,962 88,260 124,873 86,877 56,193 43,700
(b) Non - Life
Fire 7,395 4,169 2,737 21,414 29,230 18,457
Motor 40,407 19,320 5,401 13,543 16,991 11,326
Workmen Compensation 1,473 1,486 1,169 1,995 1,805 2,176
Marine 4,006 12,715 5,680 5,787 1,650 1,747
Personal Accident 8,536 11,070 3,961 14,123 21,020 6,616
Casualty Accident 30,604 28,924 28,712 56,474 40,334 33,218
92,421 77,684 47,660 113,336 111,030 73,540
196,383 165,944 172,533 200,213 167,223 117,240
Aiico Insurance Plc 53
NOTES TO THE FINANCIAL STATEMENTS
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
9 TAXATION
(i) Per Profit and Loss Account
Income tax for the year 18,718 (43,704) 3,932 - 21,000 9,000
Education tax for the year 1,248 (5,284) 1,205 2,270 - -
19,966 (48,988) 5,137 2,270 21,000 9,000
Deferred Tax - 183,891 - - - 8,121
19,966 134,903 5,137 2,270 21,000 17,121
(ii) Per Balance Sheet
Balance as at January 1 51,008 6,253 3,931 22,451 11,048 5,048
Income tax for the year 19,966 48,988 5,137 2,270 21,000 9,000
Tax paid (890) (4,233) (2,815) (20,790) (9,597) (3,000)
70,084 51,008 6,253 3,931 22,451 11,048
(iii) The charge for taxation has been computed in accordance with the provision of the Companies
Income Tax Act as amended to date.
(iv) Income tax deferred as at December 31, as a result of reversible timing differences between the net book value of asset qualifying for capital allowance and their corresponding income tax written down value amounting to Nil (2004 - Nil)
3 Months
31/03/07 2006 2005 2004 2003 2002
10 N'000 N'000 N'000 N'000 N'000 N'000
DIVIDEND
Unclaimed in respect of previous year 10,199 3,788 3,788 10,349 3,986 846
Proposed for the year - - - - 70,000 30,000
Reclassification from creditors - 9,001 - - - -
Payments (5) (2,590) - - - -
10,194 10,199 3,788 10,349 73,986 30,846
Aiico Insurance Plc 54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
11 INSURANCE FUNDS
a. Non - Life
Fire 21,531 24,740 10,196 5,993 27,781 25,290
Motor 50,184 50,524 57,690 50,538 69,528 60,500
Workman compensation 4,265 3,134 3,926 2,187 4,616 4,815
Marine 68,037 89,812 27,790 16,229 4,713 4,481
Personal accident 18,649 12,167 18,195 9,558 34,339 24,658
Casualty accident 21,692 28,683 22,646 32,040 48,833 27,966
184,358 209,060 140,443 116,545 189,810 147,710
b. Life
Whole life and endowment and group life 1,369,305 1,291,298 1,213,826 970,382 736,274 671,041
Group pension - - - - 3,162,853 2,480,498
AIICO managed invetment fund (AMIF) - - - - 693,573 560,147
1,369,305 1,291,298 1,213,826 970,382 4,592,700 3,711,686
Total 1,553,663 1,500,358 1,354,269 1,086,927 4,782,510 3,859,396
c. Deposit Admin & Pension Fund
AIICO Managed Investment Fund (AMIF) Reserve 571,097 586,181 3,869,932 3,474,815 - -
Deposit Administration (DA) Reserve 814,197 828,515 (104,505) - - -
1,385,294 1,414,696 3,765,427 3,474,815 - -
Group Pension Division Net Operations (2,072,069) (1,945,358) 60,183 781,529 - -
(686,775) (530,662) 3,825,610 4,256,344 - -
At the end of the financial year, the AIICO Management Investment Fund (AMIF), had a closing units of 224,142,032 valued at
N1,019,846,245 (N571,096,920.41 at cost) not yet provided for in these Financial Statements on June 7, 2007 in compliance with the
Pension Reform Act 2004 all Pension related liabilities have been transferred company to its Pension Administrators, AIICO Pension
Management Limited and the corresponding assets transferred to First Pension Custodian Limited.
12 SHARE CAPITAL
Authorised:
10,000,000,000 Ordinary Share of 50 kobo each 5,000,000 5,000,000 2,500,000 1,000,000 500,000 500,000
Issued and fully paid:
3,109,786,000 (2006: 2,665,530,000),
(2005: 1,400,000,000), (2004: 700,000,000)
(2003: 300,000,000), (2002: 200,000,000)
Ordinary Share of 50k each at January 1, 1,332,765 700,000 700,000 350,000 150,000 100,000
Transfer from Bonus Reserve 222,128 632,765
Bonus issued:
100,000 ordinary shares of 50 kobo each - - - - 50,000 50,000
Right issued:
300,000,000 ordinary shares of 50 kobo each - - - - 150,000 -
At March 31 1,554,893 1,332,765 700,000 350,000 350,000 150,000
Aiico Insurance Plc 55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
13 CONTINGENCY RESERVE
At January 1 368,619 299,654 248,185 206,457 175,136 147,188
Transfer from profit & loss account 19,355 68,965 51,469 41,728 31,321 27,948
Balance at December 31, 387,974 368,619 299,654 248,185 206,457 175,136
14 FIXED ASSETS REVALUATION
At January 1 2,323,454 2,323,454 731,913 731,913 731,912 449,636
Revaluation surplus for the year - - 1,591,542 - - 282,276
At December 31, 2,323,454 2,323,454 2,323,455 731,913 731,912 731,912
15 QUOTED INVESTMENT
REVALUATION RESERVE
At January 1 427,337 661,180 1,011,974 773,098 317,541 293,956
(Decrese)/Increse during the year 217,853 (233,843) (350,794) 238,876 455,557 23,585
At December 31, 645,190 427,337 661,180 1,011,974 773,098 317,541
16 BONUS ISSUE RESERVE
At January 1 222,128 175,000 - 50,000 -
Transfer from Share Premium Account - 222,128 54,467 350,000 - -
Transfer (to)/from Share Capital and P& L (222,128) (175,000) 120,533 - (50,000) 50,000
- 222,128 175,000 350,000 - 50,000
17 GENERAL RESERVE
At January 1 521,484 106,747 212,286 181,495 99,595 74,454
Transfer from Profit &Loss 21,073 414,737 30,341 30,791 81,900 25,141
Prior year adjustment (15,347) - - -
Transfer to Bonus Issue Reserve (120,533) - - -
At December 31 542,557 521,484 106,747 212,286 181,495 99,595
18 SHARE PREMIUM
At January 1 674,177 4,036 58,503 408,503 - -
Transfer to Bonus Issue Reserve - (222,128) (54,467) (350,000) - -
Transfer from Right & Public Issues - 892,269 - - 600,000 -
Transfer to Share Capital - - - - (150,000) -
Expenses - - - - (41,497) -
674,177 674,177 4,036 58,503 408,503 -
Aiico Insurance Plc 56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
19 ANALYSIS OF INCOME
The analysis of premium and profit by business
class are as follows:
PREMIUM
Life 496,774 1,963,942 1,834,368 1,367,740 950,620 798,688
Non-Life 542,703 1,066,545 1,097,454 989,054 772,580 655,358
Group Pension (Deposit) - - - 1,301,025 1,216,641 1,084,179
1,039,477 3,030,487 2,931,822 3,657,819 2,939,841 2,538,225
PROFIT/(LOSS)
Life 40,964 108,474 (92,613) (36,367) (67,364) 1,155
Non-Life 21,430 240,325 179,560 95,809 (43,204) 22
- 15,347 314,789 149,033
62,394 348,799 86,947 74,789 204,221 150,210
20 INVESTMENTS AND OTHER INCOME
Investments 88,049 230,809 178,453 759,920 756,048 591,001
Profit/(Loss) on sale of Investments 343 148,110 (256) 263,982 262,223 41,086
Others 5,137 6,447 32,675 17,328 36,251 41,998
93,529 385,366 210,872 1,041,230 1,054,522 674,085
21 PROFITS BEFORE TAXATION
This is stated after charging / (crediting):
Depreciation of Fixed assets 38,759 159,263 152,786 119,190 97,849 76,168
Auditors' remuneration 4,500 8,500 8,000 7,500 5,500 5,500
Directors' emoluments - 15,792 7,770 8,750 7,377 5,730
Profit on sale of investments (343) (148,110) 256 (263,982) (262,430) (41,086)
(Profit)/Loss on sale of Fixed Assets (5,137) 701 725 (1,903) (714) 844
(Income)/Loss from quoted investment - (27,145) (6,290) (22,866) (48,352) (59,015)
Pension contribution - 38,773 36,910 34,351 - -
Aiico Insurance Plc 57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
22 Reconciliation Of Operating Profit
To Cash Provided By Operating Activities
Operating profit before tax 62,934 348,799 86,947 74,789 204,221 150,210
(Profit)/Loss on sale of fixed assets (5,137) 701 725 (1,903) (714) 844
Depreciation 38,759 159,263 152,786 119,190 97,849 76,168
Increase in Loan to Policy Holders (30,070) (93,540) (90,489) (34,918) (4,992) (15,468)
Decrease/(Increase) in Creditors (131,359) 316,607 74,304 239,184 (149,623) 39,707
Increase /(Decrease) in Outstanding claim 30,439 (6,589) (27,680) 32,990 49,983 22,178
(Increase)/Decrease in Debtors 202,999 370,504 (273,057) 622,850 (764,904) 23,581
Increase in Pre operational Expenses (115,057) - - - - -
Investments Provision - 13,500 200,000 200,000 500 500
(Decrease)/Increase in Insurance Fund (102,808) (4,149,999) (223,575) 560,761 923,114 961,909
Tax Paid (890) (4,233) (2,815) (20,790) (9,597) (3,000)
Profit/(Loss) on Disposal of Investment (343) (148,110) 256 (263,982) (262,430) (41,086)
Cash Provided by Operating Activities (50,533) (3,193,097) (102,598) 1,528,171 83,407 1,215,543
23 Cash And Cash Equivalent
Cash and Bank Balances 360,705 474,922 316,427 150,111 275,048 552,480
Short-term Investment 1,797,927 2,259,037 1,523,325 2,037,130 2,266,223 1,360,227
Bank Overdraft (104,577) (189,440) (26,050) (89,305) (21,045) (78,864)
2,054,055 2,544,519 1,813,702 2,097,936 2,520,226 1,833,843
24 Chairman's And Directors' Emoluments
i) Emolument 3,798 15,192 6,995 7,903 6,257 5,040
Fees 150 600 775 847 1,120 690
As Executive 3,948 15,792 7,770 8,750 7,377 5,730
Chairman 73 290 190 190 190 90
The Highest Paid Director 3,948 15,792 6,995 7,903 6,257 5,040
The Least Paid Director 39 155 155 155 155 75
ii) The number of Directors (including the Chairman) emoluments in the following ranges was:
Number Number Number Number Number Number
N50,001 - N155,000 4 4 5 7 9 9
N1,990,001 - N2,000,000 1 1 0 0 0 0
N4,790,001 - N4,800,000 0 0 0 0 0 0
N5,370,001 - N9,700,000 1 1 1 1 1 1
Aiico Insurance Plc 58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 N'000 N'000 N'000 N'000 N'000
25 STAFF
The average number of persons employed by the Company during the year was:
Managerial 24 24 30 34 223 234
Senior Staff 197 197 203 209 - -
Junior Staff 60 60 65 84 88 111
281 281 298 327 311 345
The Staff costs for the above persons were:
Wages an Salaries 61,898 199,908 191,702 180,990 200,923 140,401
Other Staff Cost 8,150 32,807 45,520 50,299 39,375 29,225
70,048 232,715 237,222 231,289 240,298 169,626
The number of employees of the company in receipt of emoluments (excluding pensions and allowances)
above N60,000 in the year were:
Number Number Number Number Number Number
N60,001 - N70,000 - - - - 6 69
N70,001 - N80,000 - - - - 28 48
N80,001 - N90,000 1 1 - 12 40 43
N90,001 - N100,000 6 6 11 22 61 29
N100,001 - N110,000 22 22 19 46 24 26
N110,001 - N120,000 29 29 34 34 31 8
N120,001 - N130,000 28 28 34 55 21 9
N130,001 - N140,000 19 19 25 21 15 7
N140,001 - N150,000 47 47 39 22 13 3
N150,001 - N160,000 8 8 15 17 10 1
N160,001 - N170,000 16 16 13 - - -
N170,001 - N180,000 14 14 17 15 12 3
N180,001 - N190,000 10 10 14 - - -
N190,001 - N200,000 15 15 5 19 11 9
N200,001 - N210,000 7 7 9 13 2 -
N210,001 - N220,000 6 6 4 - - -
N220,001 - N230,000 5 5 9 2 8 5
N230,001 - N240,000 5 5 5 8 2 0
N240,001 - N250,000 7 7 3 - - -
N250,001 - N260,000 0 0 2 3 - 1
N260,001 - N270,000 2 2 4 1 - -
N270,001 - N280,000 1 1 2 9 2 5
N280,001 - N290,000 1 1 2 - - -
N290,001 - N300,000 5 5 5 2 4 -
N300,001 - N310,000 0 0 2 - -
N310,001 - N320,000 0 0 1 - - -
N320,001 - N330,000 0 0 - - - -
N330,001 - N350,000 0 0 - - - -
N350,001 - N360,000 0 0 - - - -
N360,001 - N370,000 0 0 - - - -
N370,001 - N380,000 0 0 - 3 - 9
N380,001 -N400,000 1 1 2 - - -
N400,001 - N410,000 0 0 - 1 8 2
N410,001 - above 20 20 20 20 9 8
Aiico Insurance Plc 59
NOTES TO THE FINANCIAL STATEMENTS
26. GUARANTEES & OTHER FINANCIAL COMMITMENTS
1. Contingent Liabilities
Contingent liabilities in respect of pending litigations involving the company amounted to
N206,425,510.54 (2006 – N1,856,130,476). The Directors have been advised by counsel that no
liability will arise there from. This has not been provided for in these financial statements. The
actions are being defended and the directors are of the opinion that no material liability would
arise there from.
2. Financial Commitments
The Directors are of the opinion that all known liabilities and commitments relevant in
assessing the company’s state of affairs have been taken into account in the preparation of
these financial statements.
27. CAPITAL COMMITMENTS
There were no capital commitments at March 31, 2007 (2006- Nil)
28. RELATED PARTY TRANSACTION
AIICO Insurance Plc. has a Technical Service Agreement with AIICO Bahamas who owns
26.26% of the company’s equity.
29. RELATED PARTY TRANSACTION
AIICO Insurance Plc was hitherto a composite company, but in line with National Insurance
Commission (NAICOM) directives, incorporated a new company AIICO General insurance
Company Limited, which has now taken over the general insurance business.
.
30. APPROVAL OF FINANCIAL STATEMENTS
The board of directors of the company approved these financial statements on May 25, 2007.
Aiico Insurance Plc 60
NOTES TO THE FINANCIAL STATEMENTS
VALUE ADDED STATEMENT
FOR THE YEAR ENDED 31ST DECEMBER
3 Months
31/03/07 2006 2005 2004 2003 2002
N'000 % N'000 % N'000 % N'000 % N'000 % N'000 %
Premium Earned 1,039,477 3,030,487 2,931,822 2,356,794 1,723,200 1,454,046
Deposit - - - 1,301,025 1,216,641 1,084,179
Investment and Other
Income 93,529 385,366 210,872 1,041,230 1,054,729 674,085
1,133,006 3,415,853 3,142,694 4,699,049 3,994,570 3,212,310
Reinsurances, claims,
maturities,
surrenders,
commission and
services (961,850) (2,675,076) (2,665,739) (4,273,781) (3,452,202) (2,816,236)
Value Added 171,156 100 740,777 100 476,955 100 425,268 100 542,368 100 396,074 100
VALUE ADDED IS APPLIED AS FOLLOWS:
In payment of
employees:
Salaries, wages and
other benefits 70,003 41 232,715 31 237,222 50 231,289 54 240,298 44 169,696 43
In payment of
provider of capital
Dividend - - - - 70,000 13 30,000 8
In payment of
Government
Taxation 19,966 12 (134,903) (18) 5,137 1 2,270 1 21,000 4 17,121 4
Retained for
replacement of asset
and
Expansion of the
business:
Depreciation 38,759 23 159,263 21 152,786 32 119,190 28 97,849 18 76,168 19
Contingency Reserve 19,355 11 68,965 9 51,469 11 41,728 10 31,321 6 27,948 7
Bonus issue reserve - - - - - 0 50,000 13
Retained Profit 23,073 13 414,737 56 30,341 6 30,791 7 81,900 15 25,141 6
171,156 100 740,777 99 476,955 100 425,268 100 542,368 100 396,074 100
Aiico Insurance Plc 61
STATUTORY & GENERAL INFORMATION
Incorporation and Share Capital History
AIICO was established in 1963 as an Agency office of American Life Insurance Company, Wilmington
Delaware USA and was incorporated in Nigeria on July 14, 1970 as a Private Limited Liability
Company. The Company’s principal activities are Life, General Insurance and Special Risks Business.
It became a Public Liability Company in 1989 and has its registered Head Office at Plot PC 12,
Afribank Street, Victoria Island, Lagos.
The initial authorized share capital of the Company at incorporation was N200, 000.00 divided into
100,000 ordinary shares of N2.00 each. The original foreign investment of American Life Insurance
Company (ALICO) capitalized as paid-up was N57,304 divided into 28,652 ordinary shares of N1.00
each. This was transferred to AIICO as its capital base. At present, the authorized share capital of the
company is N5,000,000,000 divided into 10,000,000,000 ordinary shares of 50 kobo each of which
N1,554,893,143 divided into 3,109,786,287 ordinary shares of 50 kobo each is fully paid.
The following changes have taken place in the Company’s authorized and issued capital:
Date Authorised
Share Capital
Cumulative Issued Share
Capital
Cumulative Consideratio
n
Increase Increase
N’000 N’000 N’000 N’000
1970 200,000 200,000 57,304 57,304 Cash
1976 400,000 600,000 394,212 451,516 Bonus
1977 1,400,000 2,000,000 748,484 1,200,000 Bonus
1987 - 2,000,000 800,000 2,000,000 Bonus
1989 8,000,000 10,000,000 2,000,000 4,000,000 Bonus
1993 15,000,000 25,000,000 6,000,000 10,000,000 Cash
1994 75,000,000 100,000,000 10,000,000 20,000,000 Bonus
1995 - 100,000,000 10,000,000 30,000,000 Bonus
1996 - 100,000,000 20,000,000 50,000,000 Bonus
1997 100,000,000 200,000,000 50,000,000 100,000,000 Bonus
2002 300,000,000 500,000,000 50,000,000 150,000,000 Bonus
2003 - 500,000,000 200,000,000 350,000,000 Bonus/Cash
2004 500,000,000 1,000,000,000 - 350,000,000 -
2005 1,500,000,000 2,500,000,000 350,000,000 700,000,000 Bonus
2005 2,500,000,000 5,000,000,000
2006 - 5,000,000,000 175,000,000 875,000,000 Bonus
2006 - 5,000,000,000 457,765,000 1,332,765,552 Cash
2007 - 5,000,000,000 222,127,592 1,554,893,143 Bonus
SHAREHOLDING STRUCTURE
As at the date of this Prospectus, the issued and fully paid up capital of Aiico were beneficially held by
Nigerians as follows:
Shareholder Shareholding % Holding
Aiico Bahamas Limited 816,666,667 26.26%
Ciscon Nigeria Limited 204,166,667 6.57%
DF Holdings Limited 396,316,667 12.74%
Other 1,692,636,287 54.43%
3,109,786,287 100.00%
Aiico Insurance Plc 62
STATUTORY & GENERAL INFORMATION (CONTD)
DIRECTORS’ BENEFICIAL INTEREST
As at the date of this Prospectus, the Directors who have interest in the issued Share capital of Aiico as
recorded in the register of members and/or as notified by them under section 275 of the Companies
and Allied Matters Act 1990 are as follows:
S/No Names
Direct
Holdings
Indirect
Holdings
Total
Holdings
%
Holding
1 Fajemirokun Oladele 88,921,936 396,317,487 485,239,423 15.60
2 Sobanjo Ayodeji 534,917 - 534,917 0.02
3 Akenzua Omoregie 1,461,443 - 1,461,443 0.05
4 Gbadamosi Rasheed Abiodun 1,954,313 - 1,954,313 0.06
5 Lukman Riwanu 9,718 - 9,718 0.00
6 Egejuru Emmanuel Uzoma 527,333 - 527,333 0.02
7 Oyedokun Olatunji Simeon 265,417 - 265,417 0.01
8 Okwor Eugene 29,167 - 29,167 0.00
9 Tokunbo Ogunbanjo - - - 0.00
10 Haresh Aswani - - - 0.00
93,704,244 396,317,487 490,021,731 15.76
Subsidiaries, Associated Companies & Equity Investments
Aiico Insurance Plc maintains equity investments in the following institutions:
� Aiico General Ins. Co Ltd 100%
� Aiico Asset Management Limited 100%
STATEMENT OF INDEBTEDNESS
As at the 31st of March 2007, the Company has no outstanding debentures, mortgages, charges or
similar indebtedness or material contingent liabilities other than in the ordinary course of business.
However, contingent liabilities in respect of 15 pending litigations involving the company is
approximately N206,425,510.54.
Aiico Insurance Plc 63
STATUTORY & GENERAL INFORMATION (CONTD)
Extracts from the Memorandum and Articles of Association
3.(16) To borrow or raise money in such a manner as the Company shall think fit, and in
particular by the issue of debentures, or debenture stock (perpetual or otherwise) and
to secure the repayment of any money borrowed, raised or owing, by mortgage,
charge or lien upon the whole or any part of the Company’s property or assets
(whether present or future), including its uncalled capital and also similar mortgage,
charge or lien to secure and guarantee the performance by the Company of any
obligation or liability it may undertake.
SHARE CAPITAL AND VARIATION OF RIGHTS
4. Without prejudice to any special rights previously conferred on holders of any existing shares
or class of shares, any shares in the company may be issued with such preferred, deferred or
other special rights or such restrictions, whether in regard to dividend, voting or otherwise or
on the basis that the same is, or at the option of the Company liable, to be redeemed as the
Company may from time to time by ordinary resolution determine.
5. Subject to the provisions of Section 74 of the Decree or any amendments thereof, if at any time
the share capital is divided into different classes of shares, the rights attached to any class
(unless otherwise provided by the terms of issue of the shares of that class) may, whether or
not the Company is being wound up, be varied with the sanction of an extraordinary
resolution passed at a separate general meeting of the holders of the shares of that class. To
every such separate general meeting the provisions of these Articles relating to general
meetings shall apply but so that the necessary quorum shall be two persons at least holding or
representing by proxy one third of the issued shares or the class and that any holder of shares
of the class present in person or by proxy may demand a poll.
8. Except as required by law, no person shall be recognised by the Company as holding any
shares upon any trust, and the Company shall not be bound by or be compelled in any way to
recognise (even when having notice thereof) any equitable, contingent, future or partial
interest in any share or any interest in any fractional part of a share or (except only as by these
regulations or by law otherwise provided) any other rights in respect of any share except an
absolute right to the entirety thereof in the registered holder.
9. Every person whose name is entered as a member in the register of members shall be entitled
without payment to receive within one month after allotment or lodgment of transfer (or
within such other period as the conditions of issue shall provide) one certificate for all his
shares upon payment of ten kobo for every certificate after the first or such less sum as the
Directors shall from time to time determine. Every certificate shall specify the shares to which
it relates and the amount paid up thereon. Provided that in respect of a share or shares held
jointly by several persons the Company shall not be bound to issue more than one of
certificate, and delivery of a certificate for a share to one of several joint holders shall be
sufficient delivery to all such holders.
LIEN
12. The Company shall have first and paramount lien on every share (not being a fully paid
share) for all moneys (whether presently payable or not) called or payable at a fixed time
in respect of that share, and the Company shall also have a first and paramount lien on all
shares (other than a fully paid shares) standing registered in the name of a single person
for
Aiico Insurance Plc 64
STATUTORY & GENERAL INFORMATION (CONTD)
all moneys presently payable by him or his estate to the Company. The Company’s lien, if any,
on a share shall extend to all dividends payable thereon.
13. The Company may sell, in such manner as the Directors think fit, any shares on which the
Company has a lien, but no sale shall be made unless a sum in respect of which the lien exists
is presently payable, nor until the expiration of fourteen days after a notice in writing, stating
and demanding payment of such part of the amount in respect of which the lien exists as is
presently payable, has been given to the registered holder for the time being of the share, or
the persons entitled thereto by reason of his death or bankruptcy.
TRANSMISSION OF SHARES
30. In case of the death of a member the survivor where the deceased was a joint holder and the
legal personal representatives of the deceased where he was a sole holder, shall be the only
person recognized by the Company as having any title to his interest in the shares; but
nothing herein contained shall release the estate of a deceased joint holder from any liability in
respect of any share which had been held jointly by him with other persons.
ALTERATION OF CAPITAL
45. The Company may from time to time, in General Meeting, whether all the shares for the time
being authorized shall have been issued, or all the shares for the time being issued shall have
been fully called up or not, increase its capital by the creation of new shares, such aggregate
increase to be of such amount and to be divided into shares of such respective amounts as the
General Meeting resolving upon the creation thereof shall direct. Subject and without
prejudice to any rights for the time being attached to the shares of any special class, any shares
in such increased capital may have attached thereto such special rights or privileges as the
General Meeting resolving upon the creation thereof shall by resolution determine, and in
+particular any such shares may be issued with a preferential, deterred or qualified right to
dividends or in the distribution of assets and with a special or without any right of voting.
GENERAL MEETINGS
49. The Company shall in each calendar year hold a general meeting as its Annual General
Meeting in addition to any other meetings in that year, and shall specify the meeting as such
in the notice calling it; and not more than fifteen months shall elapse between the date of one
Annual General Meeting of the Company and that of the next. The Annual General Meeting
shall be held at such time and place as the Directors shall appoint.
50. All general meetings other than Annual General Meetings shall be called Extraordinary
General Meeting.
51. The Directors may whenever they think fit, convene an Extraordinary General Meetings, and
Extraordinary General Meetings shall also be convened on such requisition, or, in default may
be convened by such requisitionists, as provided by Section 125 of the Decree. If at any time
there are not available sufficient Directors capable of acting to form a quorum, any Director or
any two members of the Company may convene an Extraordinary General Meeting in the
same manner as nearly as possible as that in which meetings may be convened by the
Directors.
Aiico Insurance Plc 65
STATUTORY & GENERAL INFORMATION (CONTD)
NOTICE OF GENERAL MEETINGS
52. An Annual General Meeting and a meeting called for the passing of a special resolution shall
be called by twenty-one days’ notice in writing at the least and a meeting of the Company
other than an Annual General Meeting or a meeting for passing of a special resolution shall be
called by fourteen days notice in writing at least. The notice shall be exclusive of the day on
which it is given and shall be exclusive of the day on which it is served or deemed to be
served and of the day for which it is given and shall specify the place and day and the hour of
meeting and, in case of special business the general nature of that business, and shall be given,
in manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the
Company in general meeting, to such persons as are under the regulations of the Company,
entitled to receive such notice from the Company.
Provided that a meeting of the Company shall, notwithstanding that it is called by shorter
notice than that specified in the Article, be deemed to have been duly called if it is so agreed:
(a) in the case of a meeting called as the Annual General Meeting, by all the members
entitled to attend and vote thereat; and
(b) in the case of any other meeting, by a majority in number of the members having a
right to attend and vote at the meeting, being a majority together holding not less
than 95 per cent in nominal value of the shares giving that right.
PROCEEDINGS AT GENERAL MEETING
54. All business shall be deemed special that is transacted at an Extra-ordinary General Meeting,
and also all that is transacted at an Annual General Meeting with the exception of declaring a
dividend, the consideration of the accounts, balance sheets, and the reports of the Directors
and auditors, the election of Directors in the place of those retiring and the appointment of,
and the fixing of the remuneration of, the auditors.
55. Save as herein otherwise provided, three members present in person or by proxy and holding
at least 50% of the shares shall be a quorum; and no business shall be transacted at any general
meeting unless a quorum of members is present at the time when the meeting proceeds to
business.
60. At any general meeting a resolution put to the vote of the meeting shall be decided on a show
of hands unless a poll is demanded;
(a) by the Chairman, or
(b) by at least three members present in person or by proxy; or
(c) by any member or members holding shares in the company conferring a right to vote
at the meeting, being shares on which an aggregate sum has been paid up equal to not
less than one-tenth of the total sum paid up on all the shares conferring that right.
Unless a poll be so demanded a declaration by the Chairman, that a resolution has on a show
of hands been carried or carried unanimously, or by a particular majority, or lost, and an entry
to that effect in the book containing the minutes of the proceedings of the company shall be
conclusive evidence of the fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution. The demand for a poll may be withdrawn
before or on the declaration of the result of the show of hands.
Aiico Insurance Plc 66
STATUTORY & GENERAL INFORMATION (CONTD)
61. Except as provided in Article 63, if a poll is dully demanded it shall be taken in such manner
as the chairman directs, and the result of the poll shall be deemed to be the resolution of the
meeting at which the poll was demanded.
62. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of
the meeting at which the show of hands takes place or at which the poll is demanded, shall
not be entitled to a second or casting vote.
63. A poll demanded on the election of a chairman or on a question of adjournment shall be taken
forthwith. A poll demanded on any other question shall be taken at such time as the Chairman
of the meeting directs, and any business other than that upon which a poll has been
demanded may be proceeded with pending the taking of the poll.
VOTES OF MEMBERS
64. Subject to any rights or restrictions for the time being attached to any class or classes of shares,
on a show of hands every member present in person or by proxy shall have one vote, and on a
poll every member shall have one vote for each share of which he is the holder.
65. In the case of joint holders the vote of the senior who tenders a vote, whether in person or by
proxy shall be accepted to the exclusion of the votes of the other joint holders; and for this
purpose seniority shall be determined by the order in which the names stand in the Register of
Members.
67. No member shall be entitled to vote at any general meeting unless all calls or other sums
presently payable by him in respect of shares in the company have been paid.
70. The instrument appointing a proxy shall be in writing under the hand of the appointor or of
his attorney, duly authorized in writing, or, if the appointor is a corporation, either under seal,
or under the hand of an officer or attorney duly authorized. A proxy need not be a member of
the company.
71. The instrument appointing a proxy and the power of attorney or other authority, if any, under
which it is signed, a notarially certified copy of that power or authority shall be deposited at
the office or at such other place within Nigeria as may be specified for that purpose in the
notice convening the meeting, not less than 48 hours before the time for holding the meeting
or adjourned meeting, at which the person named in the instrument proposes to vote, or in the
case of a poll, not less than 48 hours before the time appointed for taking of the poll, and in
default the instrument of proxy shall not be treated as valid.
72. An instrument appointing a proxy shall be in the following form or a form as near thereto as
circumstances admit:
” AIICO INSURANCE PLC
I/We __________________________________________________________ of
_____________________________ being a member/members of the above-named Company,
hereby appoint _________________ of ___________ or failing him,
___________________________ of ____________________________ as my/or proxy to vote for
me/us on my/our behalf at the (Annual or Extraordinary, as the case may be) General Meeting
of the Company to be held on the ________________ day of _________________ 19
________________________ and at any adjournment thereof.
Signed this __________ day of _________________ 19 ____________”.
Aiico Insurance Plc 67
STATUTORY & GENERAL INFORMATION (CONTD)
73. Where it is desired to afford members an opportunity of voting for or against a resolution the
instrument appointing a proxy shall be in the following form or as near thereto as
circumstances admit:
” AIICO INSURANCE PLC
I/We __________________________________________________________ of
_____________________________, being a member/members of the above-named Company,
hereby appoint _________________ of ___________________ as my/our proxy to vote for me/us
on my/our behalf at the (Annual or as my/our proxy to vote for me/us on my/our behalf at the
(Annual or Extraordinary, as the case may be) General Meeting of the Company to be held on
the ________________ day of __________ 19 ______________ and at any adjournment thereof.
Signed this __________ day of _________________ 19 ____________”.
This form is to be used *in favour of the resolution.
Against
Unless otherwise instructed, the proxy will note as it thinks fit or abstain from voting.
*Strike out whichever is not desired.
DIRECTORS
77. Unless and until otherwise determined by the Company in general meeting the number of
Directors shall not be less than four nor more than twelve.
78. The remuneration of the Directors shall from time to time be determined by the Company
in general meeting. Such remuneration shall be deemed to accrue from day to day. The
Directors may also be paid all traveling, hotel and other expenses properly incurred by them
in attending and returning from meetings of the Directors or any committee of the directors or
general meetings of the Company or in connection with the business of the Company.
79. A director shall not be required to hold any share qualification.
80. A Director of the Company may be or become a director or hold other office of, or
otherwise interested in, any company promoted by the Company or in which the Company
may be interested as shareholder or otherwise, and no such Director shall be accountable to
the Company for any remuneration or other benefit received by him as a director or officer of,
or from his interest in, such other company unless the Company otherwise directs.
BORROWING POWERS
81. The Directors may exercise all the powers of the Company to borrow money, and to
mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and to
issue debentures, debenture stock and other securities whether outright or as security for any
debt, liability, or obligation of the Company or of any third party. Provided that the amount
for the time being remaining undischarged of moneys borrowed or secured by or on behalf of
the Company (apart from temporary loans obtained from the Company’s bankers in the
ordinary course of business) shall not at any time without the previous sanction of the
Company in general meeting exceed 1½ times the aggregate of the amount for the time being
paid up on the share capital of the Company and of its reserves so
Aiico Insurance Plc 68
STATUTORY & GENERAL INFORMATION (CONTD)
however that no lender or other person dealing with the Company shall be concerned to see
or enquire whether this limit is observed.
POWERS AND DUTIES OF DIRECTORS
82. The business of the Company shall be managed by the Directors, who may pay all
expenses incurred in promoting and registering the Company, and may exercise all such
powers of the Company as are not, by the Decree or by these Articles, required to be exercised
by the Company in general meeting, subject, nevertheless, to any of these Articles, to the
provisions of the Decree and to such regulations being not inconsistent with the aforesaid
Articles or regulation made by the Company in general meeting shall invalidate any prior act
of the Directors which would have been valid if that regulation had not been made. Provided
that they shall lease or otherwise dispose of the whole or substantial part of the undertaking
or of the assets of the Company to any person or body corporate whether or not associated
with the Company.
DISQUALIFICATION OF DIRECTORS
89. The office of Director shall be vacated if the Director:
(a) ceases to be a Director by virtue of Section 176 of the Decree; or
(b) becomes bankrupt or makes any arrangement or composition with his creditors
generally;
(c) becomes prohibited from being a Director by reason of any order made under Section
179 of the Decree;
(d) becomes of unsound mind;
(e) resigns his office by notice in writing to the Company; and
(f) is removed from office pursuant to Article 96 hereof.
APPOINTMENT AND REMOVAL OF DIRECTORS
95. The Directors shall have power at any time, and from time to time to appoint any person to be
a Director, either to fill a casual vacancy or an addition to the existing Directors, but so that
total number of Directors shall not at any time exceed the number fixed in accordance with
these Articles. Any Director so appointed shall hold office only until the next following annual
general meeting, and shall then be eligible for re-election but shall not be taken into account in
determining the Directors who are to be retire by rotation at such meeting.
PROCEEDINGS OF DIRECTORS
98. The Directors may meet together for the despatch of business, adjourn, and otherwise regulate
their meetings, as they think fit. Questions arising at any meeting shall be decided by a
majority of votes.
99. The Chairman may, and the Secretary shall, on the requisition of the Chairman or any two
Directors, at anytime summons a meeting of the Directors, provided there shall be given
fourteen (14) days prior notice in writing to all directors, including any for the time being
absent from or not resident in Nigeria. Notice to any Directors outside Nigeria shall be sent
by courier or telex, telefax and e-mail through the address or telex, telefax and e-mail numbers
given by such absent or non-resident Directors.
An emergency or extra-ordinary meeting of the directors may however be convened by giving
seven (7) days notice in writing to all directors provided one-third of the total
Aiico Insurance Plc 69
STATUTORY & GENERAL INFORMATION (CONTD)
number of directors which must include the Chairman and the Managing director agree in
writing that the matters to be considered are of such urgency to the Company that a shorter
notice period is necessary.
100. The quorum necessary for the transaction of the business of the Directors at any meeting
whatsoever shall be three-fourths of the total number of appointed Directors. Where the total
number of Directors is not a multiple of 4 then the quorum shall be three-fourths to the nearest
number.
DIVIDENDS AND RESERVE
114. The Company in general meeting may declare dividends, but no dividend shall exceed the
amount recommended by the Directors.
115. The Directors may from time to time pay to the members such interim dividends as appear to
the Directors to be justified by the profits of the Company.
116. No dividends shall be paid otherwise that out of profits
117 The Directors may, before recommending any dividend, set aside out of the profits of the
Company such sums as they think proper as a reserve or reserves which shall, at the
discretion of the Directors, be applicable for any purpose to which the profits of the Company
may be properly applied, and pending such application may, at the like discretion, either be
employed in the business of the Company or be invested in such investments (other than
shares of the Company) as the Directors may from time to time think fit. The Directors may
also without placing the same to reserve carry forward any profits which they may think
prudent not to distribute
118 Subject to the rights of persons, if any, entitled to shares with special rights as to
dividends, all dividends shall be declared and paid according to the amounts paid or credited
as paid on the shares in respect whereof the dividend is paid, but no amount paid or credited
as paid on a share in advance of calls shall be treated for the purpose of this regulation as paid
on the share. All dividends shall be apportioned and paid proportionately to the amounts
paid or credited as paid on the shares during any portion or portions of the period in respect
of which the dividend is paid; but if any share is issued on terms providing that it shall rank
for dividends as from a particular date, such share shall rank for dividend accordingly.
120 Any general meeting declaring a dividend or bonus may direct payment of such dividend or
bonus wholly or partly by the distribution of specific assets and in particular of paid shares,
debentures or debenture stock of any other company or in any one or more of such ways, and
the Directors shall give effect to such resolution, and where any difficulty arises in regard to
such distribution, the Directors may settle the same as they think expedient, and in particular
may fix the value for distribution of such specific assets or any part thereof, and may
determine that cash payments shall be made to any members upon the footing of the value so
fixed in order to adjust the rights of all parties, and may vest any such specific assets in
trustees as may seem expedient to the Directors.
121 Any dividend, interest or other moneys payable in cash in respect of shares may be paid by
cheque or warrant sent through the post directed to the registered address of the holder or, in
the case of joint holders, to the registered address of that one of the joint holders who is first
named on the Register or to such person and to such address as the holder or joint holders
may in writing direct. Every such cheque or warrant shall be made payable to the
Aiico Insurance Plc 70
STATUTORY & GENERAL INFORMATION (CONTD)
order of the person to whom it is sent. Any one of two or more joint holders may give
effectual receipts for any dividends, bonuses or other moneys payable in respect of the shares
held by them as joint holders.
CAPITALISATION OF PROFITS
128. The Company in general meeting may upon the recommendation of the Directors resolve that
it is desirable to capitalize any part of the amount for the time being standing to the credit of
any of the Company’s reserve accounts or to the credit of the profit and loss account or
otherwise available for distribution, and accordingly that such sum be set free for distribution
amongst the members who would have been entitled thereto if distributed by way of dividend
and in who have been entitled thereto if distributed by way of dividend and in the same
proportions on condition that the same be not paid in cash but be applied either in or towards
paying up any amounts for the time being unpaid on any shares held by such members
respectively or paying up in full unissued shares or debentures of the Company to be allotted
and distributed credited as fully paid up to and amongst such members in the proportion
aforesaid or partly in the one way and partly in the other, and the Directors shall give effect to
such resolution.
Provided that a share premium account and a capital redemption reserve fund may, for the
purposes of this Article, only be applied in the paying up of unissued shares to be issued to
the members of the company as fully paid bonus shares.
NOTICES
131. A notice may be given by the Company to any member either personally or by sending it by
post to him at his last registered address.
132. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly
addressing, prepaying, and posting a letter containing the notice, and to have been effected
on the third day following that on which the letter containing the same is put in the post.
133. A notice may be given by the Company to the joint holders of a share by giving the notice to
the joint holder first named in the Register in respect of the shares.
134. A notice may be given by the Company to the persons entitled to a share in consequence of
the death or bankruptcy of a member by sending it through the post in a prepaid letter
address to them by name, or by the title of representatives of the deceased, or trustees of the
bankrupt, or by any like description at the address, if any, supplied for the purpose by the
persons claiming to be so entitled, or (until such an address has been so supplied) by giving
the notice in any manner in which the same might have been given if the death or bankruptcy
had not occurred.
135. Notice of every general meeting shall be given in any manner hereinbefore authorized to:
(a) every member;
(b) every person upon whom the ownership of a share devolves by reason of his being a
legal personal representative or a trustee in bankruptcy of a member where the
member but for his death or bankruptcy would be entitled to receive notice of the
meeting; and
(c) the auditor for the time being of the Company.
No other person shall be entitled to receive notices of general meetings.
Aiico Insurance Plc 71
STATUTORY & GENERAL INFORMATION (CONTD)
Claims and Litigation
The Company is, in the ordinary course of business is presently involved in a total of 16 (sixteen)
cases. The total amount claimed in the 6 (five) cases instituted against the Company is estimated at
N47,932,150.54 (Forty-Seven Million, Nine Hundred and Thirty-Two Thousand, One Hundred Fifty
Naira, Fifty Four Kobo). The total amount claimed in the 9 (nine) cases instituted against third parties
who are insured by the Company is N158,493,360 (One Hundred and Fifty Eight Million, Four
Hundred and Ninety Three Thousand, Three Hundred and Sixty Naira). However while the
Company’s contingent liability in these cases will be as determined by the court upon conclusion of
the matter, its contingent liability in cases against parties insured by it should not exceed the
respective limit of cover provided by the Company. The Company has instituted 1 (one) case against a
third party, with a claim of N346,524.33, (Three Hundred and Forty-Six Thousand, Five Hundred and
Twenty-Four Naira, Thirty-Three kobo).
The Company’s Solicitors are of the opinion that the liability that may accrue to the Company from the
cases instituted against it would not have any material adverse effect on the contemplated transaction.
The Directors of the Company are of the opinion that none of the aforementioned cases is likely to
have any material adverse effect on the Company and or the contemplated transaction, and are not
aware of any other pending and or threatened claims or litigation.
Material Contracts
The Company has entered into the following agreements considered material to the Offer:
1. A vending agreement dated December 6, 2007 with the Issuing House (Greenwich Trust
Limited) under which the Issuing House agreed to Offer for Subscription on behalf of the
Company a total of 2,500,000,000 ordinary shares of 50 kobo each by offer for subscription at
N2.20 per share.
2. An underwriting agreement dated December 6, 2007 with the Joint Underwriters under which
the Joint Underwriters agreed to underwrite 80% of the Company’s offer for subscription of
2,500,000,000 ordinary shares at N2.20 per share.
3. A Technical Agreement dated October 5, 2005 with Aiico Bahamas Limited (Technical
Consultant) under which Aiico Bahamas agreed to provide insurance consulting and training
services, and Management expertise to the Company.
Merger & Acquisition
The Company merged with Nfi Insurance Plc and Lamda Insurance Company Limited in 2007.
Off Balance Sheet items
As at the date of this Prospectus, the Company had no off balance sheet items.
Estimated Cost of Issue
The total costs and expenses of this Offer, including fees payable to SEC, The Nigerian Stock
Exchange, Issuing House fees, Stockbrokers, legal and accountancy fees, printing, etc. is estimated at
N224,369,300.00 being 4.08% of the gross proceeds of the Offer and is payable by Aiico.
Aiico Insurance Plc 72
STATUTORY & GENERAL INFORMATION (CONTD)
Declarations
Except as otherwise disclosed in this Prospectus:
a) No share of Aiico Insurance Plc is under option or agreed conditionally or unconditionally to
be put under option;
b) No commissions, discounts, brokerages or other special terms have been granted by Aiico
Insurance Plc to any person in connection with the offer or sale of any share of the Company;
c) Save as disclosed herein, the Directors of Aiico Insurance Plc have not been informed of any
holding representing 10% or more of the issued share capital of the Company;
d) There are no founders’, management or deferred shares or any options outstanding in Aiico
Insurance Plc;
e) There are no material service agreements between Aiico Insurance Plc or any of its Directors
and employees other than in the ordinary course of business;
f) There are no long term service agreements between Aiico Insurance Plc and any of its
Directors and employees except Pension Agreements;
g) No Director of the Company has had any interest, direct or indirect, in any property purchased
or proposed to be acquired by the Company in the five years prior to the date of this
Prospectus.
Relationship with the Issuing House/Financial Advisers and other Parties
As at the date of this Prospectus, there is no relationship between the Company, the Issuing House
and other parties.
Consents
The following parties have given and not withdrawn their written consents to the Offer of this
Prospectus with their names and reports (where applicable) included in the form and context in which
they appear:
The Directors of the Company.
The Company Secretary/Legal Adviser (The Company)
Greenwich Trust Limited - Issuing House
Magnartis Finance & Investments Limited - Joint Stockbrokers
Compass Investments & Securities Ltd - Joint Stockbrokers
Falcon Securities Limited - Joint Stockbrokers
Independent Securities Limited - Joint Stockbrokers
Signet Investments & Securities Ltd - Joint Stockbrokers
SIAO Partners - Reporting Accountants to the Offer
Ernst & Young - Auditors to Aiico
Rickey Tarfa & Co. - Solicitors to the Company
Banwo & ighodalo - Solicitors to the Offer
United Securities Limited - Registrar
Greenwich Trust Limited - Underwriter
Spring Capital Markets Limited - Underwriter
Skye Bank Plc - Receiving Bankers.
Intercontinental Bank Plc - Receiving Bankers
Aiico Insurance Plc 73
STATUTORY & GENERAL INFORMATION (CONTD)
Documents Available for Inspection
Copies of the following documents may be inspected at the office of Greenwich Trust Limited, Plot
1698A, Oyin Jolayemi Street, Victoria Island, Lagos during normal business hours on any week day
(except public holidays) while the Offer remains open.
1. Certificate of Incorporation of the Company.
2. The Memorandum & Articles of Association of the Company.
3. The Company’s License issued by the National Insurance Commission.
4. Shareholders and Board Resolutions authorizing the Offer
5. The Company’s Audited Accounts for the five years ended 31 December, 2006 and three months
to 31 March, 2007 and the Reporting Accountants’ report on the five years audited account to 31
December, 2006 and three months to 31 March, 2007.
6. Memorandum of profit forecast for year ended 31 December, 2007 and three years ending 31
December, 2008, 2009 and 2010 and the Reporting Accountants’ Report thereon.
7. SEC letter of approval of the Offer.
8. Letter from the Nigerian Stock Exchange approving the Total Offer and the listing of the shares.
9. Consents referred to above
10. Claims and litigation referred to above
11. The material contracts referred to in the Prospectus.
12. The Prospectus issued in connection with the Offer.
13. Certificate of increase in Share Capital
14. Vending Agreement and the Underwriting Agreement
Aiico Insurance Plc 74
PROCEDURE FOR APPLICATION AND ALLOTMENT
1. APPLICATION
1.1 The general investing public is hereby invited to apply for the shares through any of
the Receiving Agents listed on Page 75.
1.2 Applications for the shares 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 that do not comply will be rejected.
1.3 The Application List for the shares will be open from December 10, 2007 to December
31, 2007. Applications must be for a minimum of 5,000 shares and in multiples of 500
thereafter. The number of shares for which an application is made and the value of
the cheque or bank draft attached should be entered in the boxes provided.
1.4 A single applicant should sign the declaration and write his/her full names, address,
daytime telephone number and occupation in item “1” on the application form. Item
“2” should be used by joint applicants. A corporate applicant should affix its seal in
item “3” in the box and state its Incorporation (RC) Number or in the case of a
corporate foreign subscriber its appropriate identification number in the jurisdiction
in which it was constituted.
1.5 Each application should be forwarded together with the cheque or bank draft for the
full amount of the purchase price to any of the Receiving Agents listed on Page 75.
The cheque or draft must be drawn on a bank in the same town or city in which the
Receiving Agent is located and crossed “ Aiico Offer” with the name, address and
daytime telephone number of the applicant written on the back. All transfer charges
to Lagos, if any, must be paid by the applicant and no application will be accepted
unless this has been done. All cheques and drafts will be presented upon receipt and
all applications in respect of which cheques are returned unpaid will be rejected and
returned through the post at the applicant’s risk.
1.6 All returns must also include photocopies of the payment instruments as well as
corresponding schedules containing particulars of applicants
1.7 Foreign currency subscribers are advised to contact the receiving Bankers for the
applicable US Dollar exchange rate on the day the remittance is being effected.
2. ALLOTMENT
Greenwich Trust Limited and the Directors of the Company reserve the right to accept or
reject any application in whole or in part. All irregular or suspected multiple applications will
be rejected.
3. APPLICATION MONIES
All application monies will be retained in a separate interest bearing bank account by the
Receiving Bankers pending allotment. If any application is not accepted, or is accepted for
fewer shares than the number applied for, a crossed cheque for the full amount or the balance
of the amount paid (as the case may be) together with the accrued interest will be returned by
registered post within 5 working days of allotment. A share certificate will be sent by
registered post not later than 15 working days from the date of allotment. Any investor who
does not want to receive a physical certificate, should state the name of his/her stockbroker
and his/her CSCS account number in the space provided in the Application Form
Aiico Insurance Plc 75
RECEIVING AGENTS Application Forms may be obtained free of charge from any of the following Receiving Agents , to whom brokerage will be paid at the
rate of N0.75 per N100 worth of shares allotted in respect of applications bearing their official stamps.
The Issuing House cannot accept responsibility for the conduct of any of the institutions listed below. Investors are therefore advised to
conduct their own independent enquiries before choosing an agent to act on their behalf. Evidence of lodgement of funds at any of the Receiving
Agents listed below, in the absence of corresponding evidence of receipt by any of the Issuing House, cannot give rise to a liability on the part of
the Issuing House under any circumstances. BANKS
Access Bank Plc Guaranty Trust Bank Plc Stanbic Bank Nigeria Limited Afribank Nigeria Plc Intercontinental Bank Plc Standard Chartered Bank Limited Diamond Bank Ltd IBTC-Chartered Bank Plc Sterling Bank Plc Eco Bank Nigeria Plc Oceanic Bank International Plc United Bank for Africa Plc Equitorial Trust Bank Ltd Platinum Habib bank Plc Union Bank of Nigeria Plc Fidelity Bank Plc Nigeria International Bank Limited Unity Bank Plc First Bank of Nigeria Plc Skye bank Plc Wema Bank Plc First City Monument Bank Plc Spring Bank Plc Zenith Bank Plc First Inland Bank Plc
STOCKBROKERS AND OTHERS AAA Stockbrokers Ltd Forte Asset Management Ltd Professional Stockbrokers Ltd Adamawa Securities Ltd Forthright Securities & Investments Ltd Pivot Trust & Investment Ltd Afribank Capital Markets Limited Fountain Securities Ltd Profund Securities Ltd AIL Securities Ltd FSDH Securities Limited PSL Securities Ltd Alangrange Securities Limited Future View Financial Services Ltd Pyramid Securities Ltd Alliance Capital Mgt co. Ltd Gidauniya Investments & Securities Ltd Quantum Securities Ltd Altrade Securities Ltd Global Assets & Management Ltd Reading Investments Ltd AMYN Investments Ltd Golden Securities Ltd Regency Assets Management Ltd Anchoria Investment & Securities Ltd Greenwich Trust Ltd Resano Securities Ltd APT Securities & Funds Ltd GTI Capital Ltd Resort Securities & Trust Ltd Associated Asset Managers Ltd Heartbeat Investments Ltd Reward Investments & Securities Ltd Atlas Portfolio Ltd Hedge Securities & Investments Ltd Rivtrust Securities Ltd Belfry Investment & Sec. Ltd Horizon Stockbrokers Ltd Rolex Securities Ltd Best Link Investment Ltd IBTC Asset Management Ltd Rostrum Investments & Securities Ltd Bestworth Assets & Trust Ltd ICMG Securities Ltd Royal Crest Finance Ltd BFCL Assets & Securities Ltd ICON Stockbrokers Ltd Santrust & Securities Ltd BGL Securities Ltd Ideal Securities & Investments Ltd Securities Solutions Ltd BSD Securities Ltd Independent Securities Securities Trading & Investment Ltd Bytofel Trust & Securities Ltd Intercontinental Securities Ltd Securities Transaction & trust Co Ltd Calyx Securities Limited Integrated Trust & Investments Ltd Security Swaps Ltd Cashcraft Asset Management Limited International Standard Securities Ltd Shelong Investment Ltd Camry Securities Limited Interstate Securities Ltd Sigma Securities Ltd Capital Assets Ltd Investment Centre Ltd Signet Investments Securities Ltd Capital Bancorp Ltd Investment Masters & Trust Ltd SMADAC Securities Ltd Capital Express Securities Ltd Jenkins Investment Ltd Solid Rock Securities & Investment Ltd Capital Trust Brokers Ltd Kapital Care Trust & Securities Ltd Spring Stockbrokers Limited Calyx Securities Ltd. Kinley Securities Ltd Springboard Trust & Investment Ltd Centre Point Investment Ltd Kundila Finance Services Ltd Stanbic Equities Nigeria Ltd Century Securities Ltd Lambeth Trust & Investment Co Ltd Stanwal Securities Ltd Chapel Hill Advisory Partners Limited LB Securities Ltd Strategy & Arbitrage Ltd Clearview Investment Company Ltd. Lead Capital Ltd Summa Guaranty & Trust Co Ltd Citi Investment Capital Limited Lighthouse Asset Management Ltd Summit Finance Company Ltd City-Code Trust & Investment Co Ltd Lion Stockbrokers Limited Supra Commercial Trust Ltd Compass Investment & Securities Limited Maclaize Trust & Securities Ltd TFS Securities Ltd Consolidated Investment Ltd Magnartis Finance & Investment Limited Tiddo Securities Ltd Cooper Fleming Stockbrokers Ltd Mainland Trust Ltd Tomil Trust Ltd Core Trust & Investment Ltd Maninvest Securities Ltd Topmost Finance & Investment Ltd Counters Trust Securities Ltd Marimpex Finance & Investment Ltd Tower Assets Management Ltd Cowry Asset Management Ltd Marina Securities Ltd Tower Assets Management Ltd Crossworld Securities Ltd Maven Asset Management Ltd Tower Securities & Investment Co Ltd CSL Stockbrokers Ltd Maxifund Investments & Securities Ltd Traders Trust & Investment Co Ltd Davandy Finance & Sec. Ltd Mayfield Investment Ltd Trans Africa Financial Services Ltd De-Canon Investment Ltd MBC Securities Ltd Transworld Investment Ltd De-Lords Securities Ltd MBL Financial Services Ltd Tropics Securities Ltd Denham Management Ltd Mega Equities Ltd Trust Yield Securities Ltd Dependable Securities Ltd Mercov Securities Ltd Trusthouse Investment Ltd Dynamic Portfolio Ltd Meristem Securities Ltd TRW Stockbrokers Ltd EBN Securities Ltd Metropolitan Trust Nigeria Ltd UBA Global Markets Ltd Emerging Capital Ltd Midas Stockbrokers Ltd UIDC Securities limited Empire Securities Ltd Midland Capital Markets Limited UNEX Securities & Investment Ltd Enterprise Stockbroker Plc Mission Securities Ltd Union Capital Markets Ltd ESL Securities Limited Molten Trust Ltd Valmon Securities Ltd ESS Investment & Trust Ltd Mountain Investment & Securities Ltd Valueline Securities & Investment Ltd Eurocomm Securities Ltd Newdevco Finance Securities Ltd Vetiva Capital Management Limited Excel Securities Ltd Nigerian International Securities Ltd Vision Trust & Investment Ltd Express Portfolio Services Ltd Nigerian Stockbrokers Ltd Viva Securities Ltd F & C Securities Ltd Omas Investments & Trust Ltd Wizetrade Capital Asset Management Ltd Falcon Securities Ltd OMF Securities & Finance Ltd WSTC Financial Services Ltd FBN Capital Limited Options Securities Ltd Yobe Investment & Securities Ltd Finmal Finance Services Ltd P.S.I. Securities Ltd Zenith Securities Limited Fidelity Union Securities Ltd Partnership Investment Co Ltd First Alstate Securities Peninsula Asset Management & Inv. Co. Ltd First Equity Securities Ltd Perfecta Investment Trust Ltd First Stockbrokers Ltd Pilot Securities Limited FIS Securities Ltd Pinefields Investment Services Ltd Foresight Securities Investments Ltd Premium Securities Ltd
Aiico Insurance Plc 76
APPLICATION FORM
Aiico Insurance Plc RC. 7340
Offer for Subscription
of
2,500,000,000 Ordinary Shares of 50 kobo each at N2.20 per share
Payable in full on Application
Issuing House:
RC: 189502
Applications must be made in accordance with the instructions set out on the back of this application form. Care must be taken to follow these
instructions as applications that do not comply may be rejected.
To: Greenwich Trust Limited
DECLARATION
1 IN D I V ID U A L /F IR S T A P P L IC A N T
T itle : M r M rs M is s O th e r (p le a s e s p e c ify )
S u rn a m e / C o m p a n y N a m e
S u rn a m e
F irs t N a m e O th e r N a m e s
F u ll P o s ta l A d d re s s
S ta te T e l. N o
E m a il A d d r e s s
N e x t o f K in
C S C S N o .: N a m e o f S to c k b r o k e r
B a n k d e ta ils (fo r E -d iv id e n d s )
N a m e o f B a n k
B ra n c h A c c o u n t N u m b e r
2 JO IN T A P P L IC A N T ( IF A P P L IC A B L E )
T itle : M r M rs M is s O th e r (p le a s e s p e c ify )
S u rn a m e
F irs t N a m e O th e r N a m e s
3 B A N K D E T A IL S ( fo r E -D IV ID E N D )
N a m e o f B a n k
B ra n c h A c c o u n t N u m b e r
C o r p o ra te S e a l & In c o r p o ra tio n N u m b e r (C o rp o r a te A p p lic a n t )
S ig n a tu re o f T h u m b p r in t S ig n a tu re o f T h u m b p r in t
U n ite d S e c u r itie s L im te d S ta m p o f R e c e iv in g A g e n t
� I/We am/are 18 years of age and above.
� I/We attach the amount payable in full on application for the above number of shares in the above-mentioned Aiico
Insurance Plc Offer for Subscription of 2,500,000,000 ordinary shares of 50 kobo each at N2.20 each
� I/We agree to accept the same or any smaller number of shares of the Offer in respect of which allotment may be made upon
the terms of the Prospectus dated xxx x, 2006.
� I/We authorise you to send a Share certificate and/or cheque for any amount overpaid, by post to the address given below
and to procure registration in my/our name as the holder(s) of such number of Shares or such smaller number aforesaid.
� I/We declare that I/we have read a copy of the Prospectus for the Offer dated xxxx x, 2006 issued by Greenwich Trust
Limited, on behalf of Aiico Insurance Plc.
Number of shares applied for_____________________________
Value of shares applied for:N_____________________________
Value of cheque/bank draft:N_____________________________
Cheque details: - ________________________________
Name of bank/branch
_____________________________________________________
Cheque number:________________________________________
Account Number_______________________________________
GUIDE TO APPLICATION
Number of Shares applied for Amount Payable
5000 Minimum N11,000.00
Subsequent Multiples of 500 N1,100.00
Offer Opens
December 10, 2007
Offer closes
December 31, 2007
Aiico Insurance Plc 77
INSTRUCTIONS FOR COMPLETING APPLICATION FORM
1. Applications should be made only on the Application Form, or Photostat, or scanned copies of the
Application Form.
2. Applications must not be for less than the minimum number of units and in the multiples stated
on the Application Form. The number of shares for which application is made and the value in
Naira of cheque or bank draft or cash attached should be entered in the boxes provided.
3. Application Forms when completed should be lodged with any of the Receiving Agents listed on
page 75. Applications must be accompanied by a cheque or draft made payable to the Receiving
Agent to whom the application is submitted, for the full amount payable on application. The
cheque or draft must be drawn on a bank in the same town or city in which the Receiving agent is
located and crossed “ Aiico Offer” with the name, address and daytime telephone number of the
applicant at the back. All cheques will be presented for payment on receipt and applications in
respect of which cheques are returned unpaid for any reason will be rejected.
4. Each applicant should make only one application, whether in his own name or in the name of a
nominee. Multiple or suspected multiple applications will be rejected.
5. Joint applicants must all sign the Application Form.
6. Applicants must be 18 years of age or over and must not be applying as nominees for persons who
do not meet this requirement.
7. Applications from corporations must bear the corporation’s seal and completed under the hand of
a duly authorised official who should also state his designation. The Corporate Applicant should
also state its RC number.
8. Application from a group of individuals which is not incorporated 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 in accordance with the Companies and Allied Matters Act. 1990, should be made
whether 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.
9. Application from Pension or Provident Funds must be in the name of each individual trustee
unless the trustee is a limited liability company.
10. Applications by an illiterate should bear his/her right thumbprint on the Application Form and be
witnessed by an official of the Company or stockbroker at which the application is lodged. The
witness must record in writing that he has given this explanation to the illiterate in a language
understandable to them and that the illiterate appeared to have understood the same before
affixing his/her thumb impression. The witness should then sign below the thumb print and add
above his signature, the date and words “FREE OF CHARGE”.
11. An applicant should not print his signature. If he is unable to sign in the normal manner, he should
be treated for the purpose of the Offer as an illiterate and his right thumbprint should be clearly
impressed on the Application Form.