otus alal fixed income fund - lotuscapitallimited.comlotuscapitallimited.com/files/lotus halal...

You are advised to read and understand the contents of the Prospectus. Before subscribing, please consult your

Stockbroker, Solicitor, Banker or an Independent Investment Adviser registered by the Securities and Exchange

Commission. This Prospectus has been seen and approved by the Directors of Lotus Capital Limited and they jointly

and individually accept full responsibility for the accuracy of all information given and confirm that, after having

made all inquiries which are reasonable in the circumstances, and to the best of their knowledge and belief, there

are no other facts the omission of which would make any statement herein misleading.

FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE

INVESTORS, PLEASE SEE RISK FACTORS ON PAGE 16.

INITIAL PUBLIC OFFERING

OF

1,000,000 UNITS OF N1,000.00 EACH

AT PAR

IN THE

(AUTHORIZED AND REGISTERED IN NIGERIA AS A UNIT TRUST SCHEME)

PAYABLE IN FULL ON APPLICATION

FUND MANAGER

RC: 600195

LEAD ISSUING HOUSE: JOINT ISSUING HOUSE:

AND

APPLICATION LIST OPENS: WEDNESDAY, 11 MAY, 2016

APPLICATION LIST CLOSES: FRIDAY, 17 JUNE, 2016

This Prospectus and the Units which it offers have been registered by the Securities and Exchange Commission.

The Investments and Securities Act, 2007 provides for civil and criminal liabilities for the issue of a Prospectus

which contains false or misleading information. Registration of this Prospectus and the Units which it offers does

not relieve the parties of any liability arising under the Act for false or misleading statements contained or for any

omission of a material fact in any Prospectus.

RC: 1078362

This Prospectus is dated 14 April, 2016

LOTUS HALAL FIXED INCOME FUND

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Lotus Halal Fixed Income Fund | Initial Public Offering

TABLE OF CONTENTS

Definitions ............................................................................................................................ 3 Abridged Timetable ............................................................................................................... 5 Summary of the Offer ........................................................................................................... 6 The Offer .............................................................................................................................. 9 Directors of the Fund Manager and other Corporate Information ....................................... 10 Professional Parties to the Offer ......................................................................................... 11 The Lotus Halal Fixed Income Fund .................................................................................... 12

A Brief on the Fund .............................................................................................................. 12

Prospect of the Fund ............................................................................................................ 12

Constitution of the Fund ....................................................................................................... 12

Operation of the Fund .......................................................................................................... 12

Investment Objective and Policy ............................................................................................ 12

Asset Classes and Allocation ................................................................................................. 12

Investment Strategy ............................................................................................................ 13

Investment Incentives .......................................................................................................... 13

Target Investors .................................................................................................................. 13

Investment Discretion .......................................................................................................... 14

Investment Guidelines and Restrictions .................................................................................. 14

Subscription to the Fund ....................................................................................................... 14

Minimum Investment Period .................................................................................................. 14

Meeting of Unit Holders and Voting Rights .............................................................................. 14

Income and Distribution ....................................................................................................... 14

Distribution Option and Payments .......................................................................................... 14

Tax Considerations .............................................................................................................. 14

Statement of Unit Holding ..................................................................................................... 15

Redemption of Units ............................................................................................................. 15

Transfer and Transmission of Units ........................................................................................ 15

Valuation of Units of the Fund ............................................................................................... 15

Fees, Charges and Expenses of the Fund ................................................................................ 15

Risk Factors ........................................................................................................................ 16

Financial Projections .......................................................................................................... 17 Letter from the Reporting Accountants ................................................................................... 17

Memorandum on the Financial Forecasts for the Years Ending 31 December 2016, 2017 and 2018 18

Letter from the Issuing Houses .............................................................................................. 24

Historical Financial Information of Lotus Capital Limited .................................................... 25 Five Year Financial Summary ................................................................................................ 25

Information on the Fund Manager and the Trustee ............................................................. 27 Brief profile of the Fund Manager ........................................................................................... 27

Directors of the Fund Manager .............................................................................................. 27

The Fund Management Team ................................................................................................ 29

Brief Profile of the Trustees ................................................................................................... 30

Management Profile of the Trustees ....................................................................................... 31

Fund Investment Committee ................................................................................................. 32

Statutory and General Information ..................................................................................... 34 Authorisation ...................................................................................................................... 34

Extracts from the Trust Deed ................................................................................................ 34

Extracts from the Custody Agreement .................................................................................... 45

Indebtedness ...................................................................................................................... 50

Claims and Litigation ............................................................................................................ 50

Cost and Expenses ............................................................................................................... 50

Material Contracts................................................................................................................ 50

Consents ............................................................................................................................ 50

Procedure for Application and Allotment ............................................................................ 52 Receiving Agents ................................................................................................................ 53 Application Form ................................................................................................................. 54 Instructions for Completing the Application Form .............................................................. 55

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DEFINITIONS

Abbreviation Definition/Explanation

“Allotment Date” The date of clearance of the basis of allotment of the Offer by the SEC

“Bid Price” The price, on the most recent Valuation Day, at which a Unit shall be sold/redeemed by an investor and shall be calculated in accordance with the stipulated valuation methods contained in the SEC Rules and Regulations as amended from time to time

“Business/Working Day”

Any day other than a Saturday, Sunday or official public holiday declared by

the FGN from time to time on which commercial banks in Nigeria are open for non-automated business

“CBN” Central Bank of Nigeria

“Custodian” Citibank Nigeria Limited

“Custody Agreement”

The agreement, dated 14 April, 2016 between Lotus Capital Limited, Citibank Nigeria Limited and STL Trustees Limited, extracts of which are set out from page 45 to 49 of this Prospectus

“Deposited Property”

All assets, including cash held or deemed to be held in trust on behalf of the Fund by virtue of the Trust Deed

“Directors” or “Board”

The Directors of the Fund Manager, as at the date of this Prospectus, who comprise those persons whose names, are set out on pages 27 to 29

“Distributions” Income earned by the Fund and paid (less expenses and applicable taxes) to Unit-Holders

“FGN” Federal Government of Nigeria

“Fund Manager” or

“Manager” Lotus Capital Limited

“IPO” or “Offer” or “Offering”

The offer for subscription to the public of 1,000,000 Units of N1,000.00 each, in the Fund, at par

“Investment Committee”

The investment committee of the Fund, as constituted pursuant to the provisions of the Trust Deed

“ISA” The Investment & Securities Act, No. 29 of 2007 as may be modified or amended from time to time

“Issuing Houses” Vetiva Capital Management Limited and Lotus Financial Services Limited

“Issue Price” The price of one Unit of the Fund during the Offer Period

“Minimum Investment Period”

The minimum holding period for an investment in the Fund during the IPO is ninety (90) calendar days from the Allotment Date. Thereafter there shall be a minimum period of not less than thirty (30) days

“Minimum Holding” 5 Units or or such number of Units as may be determined from time to time

by the Fund Manager with the approval of the Trustee

“Naira” or “N” The Nigerian Naira, the official currency of the Federal Republic of Nigeria

“NEFT” Nigeria Inter-Bank Settlement System Electronic Fund Transfer, the CBN’s electronic platform for inter-bank transfer of funds

“Net Asset Value” or “NAV”

The total value of all investments, and other assets in the Fund’s portfolio, less all adjustments and/or deductions including fees, charges, expenses and other liabilities accrued by the Fund

“NIBBS” Nigerian Inter-Bank Settlement System

“Offer Documents” This document and any other document approved by the Commission, which disclose relevant information in respect of the Fund as required by the ISA

and the SEC Rules and Regulations for the purpose of inviting the general public to subscribe to the Offer

DEFINITIONS

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Abbreviation Definition/Explanation

“Offer Period” The period between the opening and the closing dates of the Application List of the Offer as approved by the Commission

“Offer Price” The price an investor will pay for one Unit when subscribing to the Fund during the Offer Period and subsequently, as computed in accordance with the

applicable SEC Rules and Regulations as amended from time to time

“Open-ended Fund”

A mutual fund that continuously creates additional units separate from its initial offering throughout its life. Investors can redeem units of such a fund in line with the provisions of the Trust Deed constituting the Fund

“Prospectus” This document, which is issued in accordance with the provisions of the ISA and the SEC Rules and Regulations and which discloses important information about the Fund and the Offer

“Receiving Agents”

All banks, issuing houses and stockbrokers authorised to distribute application forms and receive application forms and monies from subscribers to this Offer

for relay to the Fund Manager and Issuing Houses

“Receiving Bank” Guaranty Trust Bank Plc

“Register” The register of Unit holders to be maintained by the Fund Manager

“RTGS” Real Time Gross Settlement, the CBN’s electronic platform for inter-bank

transfer of funds

“SEC” or “Commission”

Securities & Exchange Commission

“Shari’ah Compliant or Compliant”

In relation to contracts, investments or assets, means that which complies with Islamic commercial jurisprudence on the prohibition of trade/investment/purchase of arms and ammunitions, gambling, piggery, alcohol, adult entertainment, speculative trades or excessive/unmitigated risks, interest bearing instruments and other items/trades that may be considered

unlawful under Islamic commercial jurisprudence

“The Fund” Lotus Halal Fixed Income Fund

“The NSE” or “The Exchange”

The Nigerian Stock Exchange

“Trust Deed” An agreement dated 14 April, 2016 (as may be amended) between the Fund Manager and Trustee which sets out the terms and conditions of the management and administration of the Fund, extracts of which are set out on pages 34 to 45 of this Prospectus

“Trustees” or “STL”

STL Trustees Limited

“Unit(s)” The Units of the Fund

“Unit Holder(s)” Any person(s) or company whose names appear in the Register as holder(s) of

Units of the Fund

“Valuation Day” Any day after conclusion of the Offer on which the Offer and Bid Prices are calculated

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ABRIDGED TIMETABLE

The dates given above are indicative only. The timetable has been prepared on the

assumption that certain key activities including, but not limited to the receipt of regulatory

approvals from the SEC for the Offer will be achieved as stated, if not, then dates

surrounding key events in the timetable may be subject to adjustments without prior

notice.

Date Responsibility Responsibility

11 May, 2016 Application List opens Issuing Houses

17 June, 2016 Application List closes Issuing Houses

01 July, 2016 Receiving Agents make returns Lotus Capital

22 July, 2016 Forward Basis of Allotment proposal to SEC Issuing Houses

08 August, 2016 Obtain SEC’s clearance of the Basis of Allotment Issuing Houses

9 August, 2016 Disburse net proceeds to Lotus Capital GTBank

10 August, 2016 Publish allotment announcement in two national daily newspapers

Lotus Capital/Issuing Houses

15 August, 2016 Return excess/rejected application monies Lotus Capital

16 August, 2016 Distribute statements of unit-holdings Lotus Capital

23 August, 2016 Forward Offer Summary Report to the SEC Issuing Houses

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SUMMARY OF THE OFFER

The following is a summary of the terms and conditions of an investment in the Lotus Halal Fixed

Income Fund. This summary draws attention to information contained elsewhere in the Prospectus; it

does not contain all of the information a prospective investor in the Fund should consider in making an

investment decision. This summary should be read together with the entire Prospectus. Investors

are advised to seek information on the applicable fees and charges before investing in the

Fund.

FUND MANAGER Lotus Capital Limited

LEAD ISSUING HOUSE

JOINT ISSUING HOUSE

Vetiva Capital Management Limited

Lotus Financial Services Limited

TRUSTEE TO THE FUND STL Trustees Limited

CUSTODIAN Citibank Nigeria Limited

THE OFFER 1,000,000 Units of N1,000.00 each in the Fund

METHOD OF OFFER Offer for Subscription

NATURE OF THE FUND The Fund is an open-ended unit trust scheme constituted under a Trust Deed. The Fund Manager will continuously offer Units to investors and

redeem Units at all times throughout the duration of the Fund.

UNIQUE FEATURE The Fund offers prospective investors the opportunity to invest in Shari’ah-compliant fixed income securities and investment products. Thus, the Fund affords investors the opportunity to earn competitive returns while avoiding exposure to the risks associated with equity investments.

The Fund also seeks to achieve capital preservation whilst maximising

returns through investing in strategically diversified portfolio of Shari’ah-compliant fixed income securities and products.

TARGET

INVESTORS/INVESTOR

SUITABILITY

The Fund is targeted at investors with low risk appetite, who seek safety

and capital preservation as well as relatively attractive returns. The Fund is aimed at ethical investors seeking competitive returns without compromising their beliefs. The Fund welcomes participation from retail

and institutional investors including Pension Funds Administrators (PFAs), non-profit organisations and collective investment schemes.

FUND SIZE N1,000,000,000.00

UNIT PRICE N1,000.00 per Unit

MINIMUM SUBSCRIPTION 5 Units (N5,000.00)

PAYMENT TERMS In full on application

MANDATORY SUBSCRIPTION In compliance with the SEC Rules and Regulations which states that

promoters of unit trust schemes in Nigeria must subscribe to a minimum of 5% of the initial issue of such schemes, the Fund Manager shall

subscribe to 5% of the Offer.

OPENING DATE Wednesday, 11 May, 2016

CLOSING DATE Friday, 17 June, 2016

INVESTMENT BASIS The Fund proposes to receive funds from investors based on a Wakalah (agency/investment management) contract between the Fund Manager

and the Investors. The Fund will receive funds from various investors and pool them together to invest in Shari’ah compliant instruments such as sukuk, non-tawarruq Shari’ah compliant fixed term investments and Shari’ah fixed income contracts such as murabaha (cost plus financing), ijara (asset lease) among others.

USE OF PROCEEDS

The Offer proceeds will be utilized in accordance with the Fund’s

investment objectives and policies. Accordingly, the Fund will invest only

in Compliant outlets and would not invest in interest bearing instruments such as treasury bills and conventional bank deposits The Offer costs and expenses amounting to N29,439,000.00 representing 2.94% of the Offer size shall be borne by the Fund. These costs shall be defrayed from the Offer proceeds.


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DISTRIBUTIONS All profits received from investment of funds would accrue to the Fund. The Fund does not guarantee any fixed return to Unit Holders. As the

Fund will be investing in high quality fixed return instruments or contracts, it will have an indicative return rate which would be reflected in the distribution made. Subject to prevailing economic conditions, the Fund Manager shall distribute up to eighty (80) per cent of the Fund’s net

income in any Financial Year to Unit Holders on a quarterly basis. Any undistributed profit shall be assigned to individual Unit Holders in proportion to the number of units they own and re-invested for their benefit and accounts. Unit Holders shall have the option to elect to receive their Distribution in cash or reinvest it in purchasing new Units at the offer price on the day the distribution is declared by the Fund

Manager. Unit Holders who elect to have their Distributions reinvested in new Units shall be entitled to an issue of Units that shall be equal in value to the amount they would have otherwise received in cash as their Distribution. The preferred distribution option shall be made at the point of subscription.

MINIMUM INVESTMENT

PERIOD The minimum holding period for an investment in the Fund during the IPO is ninety (90) calendar days from the Allotment Date. Thereafter,

there shall be minimum holding period of thirty (30) days.

REDEMPTION Redemption shall be effected on a continuous basis throughout the life of the Fund. Unit Holders shall have the right to redeem all or part of the Units held by them at the Bid Price on any Business Day immediately following the receipt of a redemption notice (in accordance with the instructions specified herein) by the Fund Manager from time to time.

Minimum permissible holding after partial redemption is 5 Units or such

unit as may be advised by the Manager from time to time.

The Fund will make redemption payments within five (5) Business Days of receipt of the Redemption Notice. No additional charges will be made

on Redemption. However, Units may be redeemed before the expiration of the Minimum Investment Period provided that the Fund Manager shall be entitled to deduct from the Unit Holder’s investment any charges

directly incurred as a result of such redemption.

QUALIFICATION The Units qualify as securities in which Trustees may invest under the Trustee Investment Act Cap T22 LFN 2004.

QUOTATION No application has been made to the Council of The NSE for the listing of the Fund. However, the Fund Manager on the successful completion of the Offer, or at a later date, may seek a Memorandum Listing of the Fund on The NSE.

STATUS The Units being offered for subscription shall rank pari-passu in all respects with other future Units to be issued by the Fund.

SPONSOR The Fund is sponsored by Lotus Capital Limited. Lotus Capital Limited is

duly registered with the SEC to carry out fund management services.


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FORECAST OFFER STATISTICS (Extracted from the Reporting Accountants’ Report)

2016 2017 2018

N'000 N'000 N'000

Income

Corporate Sukuk 25,145 27,580 32,384

Sovereign/Sub Sovereign/Supranational Sukuk 47,035 53,617 60,462

Murabaha and Ijara Contracts 33,093 46,922 69,653

Shari’ah Compliant Fixed Investments 57,125 67,132 87,066

Total income 162,398 195,251 249,565

Operating Expense

Management Fee 10,850 12,751 16,123

Fees and operating expenses 3,336 3,641 4,182

Offer expenses 29,439 - -

Total Expenses 43,625 16,392 20,305

Net Income 118,773 178,859 229,260

Less: Distribution to the investors (95,018) (143,087) (183,408)

Retained earnings for the year 23,755 35,772 45,852

FORECAST YIELD

(Extracted from the Reporting Accountants’ Report)

2016 2017 2018

N'000 N'000 N'000

Net assets at the beginning of the year 1,108,755 1,310,839

Offer proceeds 1,000,000 - -

Additional subscriptions during the year 100,000 221,751 393,252

Redemption of investments during the year (15,000) (55,438) (91,759)

Total Investors' deposits 1,085,000 1,275,068 1,612,332


Net Asset Value at the end of the year 1,108,755 1,310,839 1,658,184

Increase in Net Asset Value 108,755 202,085 347,345

Growth rate 11% 18% 26%

Forecast Net Asset Value per units of N1,000.00 1,022 1,048 1,068

The annual yield on the fund will be determined by the net income accrued to the Fund

(after the deduction of all applicable Fund charges), relative to the opening Net Asset Value for the year. The Fund cannot guarantee future returns and the value of its investments may rise and fall. The above forecast yield, therefore, has been provided for indicative purposes only and, should not be regarded by an investor as a promise or guarantee of returns. The actual future returns may be materially different from the forecast.

OVERSUBSCRIPTION Any oversubscription would be absorbed by the Fund subject to the

approval of the Commission.

INVESTMENT RISKS The risks associated with an investment in the Fund are set out in the section titled “Risk Factors” on page 16 of this Prospectus.

SELLING RESTRICTIONS Under no circumstances shall this Prospectus constitute an offer to sell or the solicitation of an offer to buy or shall there be any sale of these Units

in any jurisdiction in which such offer, solicitation or sale would be unlawful.

GOVERNING LAW The Offer Documents will be governed by and construed in accordance

with the laws of the Federal Republic of Nigeria.

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THE OFFER

A copy of this Prospectus and the documents specified herein have been approved by the Trustee, and

delivered to the Securities & Exchange Commission for clearance and registration.

This Prospectus is being issued in compliance with the provisions of the ISA, the Rules and Regulations

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

the purpose of giving information to the public with regard to the Initial Public Offering of 1,000,000

Units of N1,000.00 each at par in the Lotus Halal Fixed Income Fund by Vetiva Capital Management

Limited and Lotus Financial Services Limited on behalf of Lotus Capital Limited.

The Directors of the Fund Manager 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 statement herein misleading or untrue.

And

On behalf of

RC: 600195

Offer for Subscription

and are authorised to receive applications for

1,000,000

Units of N1,000.00 each

at par

in the

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

Payable in full on Application

The Application List for the Units being offered will open on Wednesday, 11 May, 2016, and close on

Friday, 17 June, 2016

RC: 1078362


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DIRECTORS OF THE FUND MANAGER AND OTHER CORPORATE INFORMATION

CHAIRMAN

TAJUDEEN AFOLABI ADEOLA

1b Udi Street Osborne Foreshore Estate

Osborne Road, Ikoyi, Lagos

MANAGING DIRECTOR HAJARA ABDULLAHI ADEOLA 1b Udi Street Osborne Foreshore Estate Osborne Road, Ikoyi, Lagos

DIRECTOR LATEEFAH OKUNNU

1b Udi Street Osborne Foreshore Estate Osborne Road, Ikoyi, Lagos

DIRECTOR AMINA OYAGBOLA 1b Udi Street

Osborne Foreshore Estate Osborne Road, Ikoyi, Lagos

DIRECTOR MUHAMMAD NURUDDEEN LEMU 1b Udi Street Osborne Foreshore Estate Osborne Road, Ikoyi, Lagos

CORPORATE DIRECTORY OF THE FUND MANAGER LOTUS CAPITAL LIMITED

1B, Udi Street

Osborne Foreshore Estate

Ikoyi

Lagos, Nigeria

Telephone: +234 1 2713280

Email: [email protected]

Website: www.lotuscapitallimited.com

COMPANY SECRETARY MAS’UD BALOGUN 1B, Udi Street Osborne Foreshore Estate

Ikoyi Lagos

PRINCIPAL OFFICERS OF THE FUND MANAGER Hajara Adeola

Mas’ud Balogun

Gregory Ogbebor

Adebola Samson-Fatokun

Ibitayo Ogbebor

Moshood Babatunde

MEMBERS OF THE FUND INVESTMENT COMMITTEE Hajara Adeola

Moshood Babatunde

Gregory Ogbebor

Ndako Mijindadi

Akin Oni (Trustee Representative)

Banke Orimolade (Independent Member)

Lateefah Oyefeso (Alternate Member)

MEMBERS OF THE FUND MANAGER’S SHARI’AH

BOARD Monzer Kahf

Muhammad Lawal Bashar

FINANCIAL SUMMARY The five year financial summary of Lotus Capital Limited is provided on pages 25 and 26 of this document

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PROFESSIONAL PARTIES TO THE OFFER

ISSUING HOUSES VETIVA CAPITAL MANAGEMENT LIMITED

Plot 266B, Kofo Abayomi Street

Victoria Island

Lagos

LOTUS FINANCIAL SERVICES LIMITED

1B, Udi Street


Ikoyi

Lagos

TRUSTEE TO THE FUND STL TRUSTEES LIMITED

3rd Floor, Skye Bank Plc

30, Marina Lagos

CUSTODIAN TO THE FUND CITIBANK NIGERIA LIMITED

Charles S. Sankey House

27, Kofo Abayomi Street

Victoria Island Lagos

SOLICITORS TO THE TRUSTEE G.ELIAS & CO.

6, Broad Street

Marina Lagos

SOLICITORS TO THE OFFER KOLA AWODEIN & CO.

6th Floor, UBA House

57, Marina

Lagos Island Lagos

REPORTING ACCOUNTANTS ROSEWATER PARTNERS

5, Shagamu Avenue

Off Association Avenue

Ilupeju

Lagos

RECEIVING BANK GUARANTY TRUST BANK PLC

178, Awolowo Road

Ikoyi

Lagos

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THE LOTUS HALAL FIXED INCOME FUND

A BRIEF ON THE FUND

The Lotus Halal Fixed Income Fund is duly authorised and registered as an open-ended collective

investment scheme under Section 160 of the ISA. The Fund is governed by a Trust Deed with STL

Trustees Limited as Trustees. The Fund is offering 1,000,000 Units for subscription at a price of

N1,000.00 per Unit. The subscription application is payable in full on application with a minimum

investment of 5 Units. Upon successful completion of the Offer, the net proceeds and the resultant

investments will constitute the Fund and will be held in trust for the beneficial interest of the Unit

Holders.

The Fund will invest strictly in Shari’ah-compliant fixed income instruments and contracts. Given the

open-ended structure of the Fund, the Fund Manager will continuously offer and redeem Units

throughout the life of the Fund.

PROSPECT OF THE FUND

The Fund offers investors the opportunity to invest in high quality Shari’ah-compliant fixed income

instruments and contracts. The Lotus Halal Fixed Income Fund will leverage on the bargaining power

derived from pooling funds to generate competitive returns while minimising risk. The Fund seeks to

attract investors with low risk appetite who require liquid investments. The Fund specifically targets

investors who desire to benefit from Shari’ah-compliant wholesale investment return.

CONSTITUTION OF THE FUND

The Fund shall be constituted out of the proceeds from the sale of Units in the Fund under the Initial

Public Offering (“IPO”). The net proceeds of the Offer and assets of the Fund will be vested in the

Trustee. The Trustee shall enforce the provisions of the Trust Deed as well as other regulatory

provisions. The assets of the Fund shall be held by the Custodian. The Fund Manager shall make all

required regulatory filings with the SEC in accordance with the SEC Rules and Regulations. The Fund

will bear all expenses incurred by it.

OPERATION OF THE FUND

The Fund Manager shall be responsible for the operations of the Fund and shall effect such operations

in accordance with the provisions of the Trust Deed.

INVESTMENT OBJECTIVE AND POLICY

The primary objective of the Fund is to generate competitive returns on investment in a Shari’ah

Compliant manner whilst ensuring capital preservation. This objective will be realised through

investments in a carefully selected and well diversified portfolio of Shari’ah-compliant fixed income

instruments and products while leveraging on the bargaining power from pooling funds to earn

competitive returns.

The Fund Manager shall deploy active fund management tools and seek quality investible assets to

optimise returns. To achieve this objective, the Fund Manager shall determine/adjust the investment

mix of the portfolio from time to time in accordance with the asset allocation guidelines stated below.

ASSET CLASSES AND ALLOCATION

The Fund shall invest in Shari’ah-compliant fixed income instruments. The permissible asset classes

within the Fund are as follows:

a. Sovereign and Sub-Sovereign Sukuk: Sukuk are certificates of equal value representing

undivided shares in the ownership of tangible assets, usufructs and services or (in the ownership

of) the assets of particular projects or special investment activity and entitle the holder to the

receipt of periodic returns derived from the underlying asset. Sovereign and sub-sovereign Sukuk

are Shari’ah-compliant certificates issued by the Federal Government or its agencies

(national/sovereign) or States or their agencies (sub-national/sub-sovereign).

b. Corporate Sukuk: These are sukuk issued by rated corporate national or supranational, local or

international organisations and multinationals.


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c. Shari’ah-Compliant Fixed Term Investments: These are term investments with reputable

financial institutions based on the Islamic contracts of, Murabaha (cost-plus financing), or other

Islamic financial contract structures. The Fund may use the instrument of Murabaha line of credit

with reputable financial houses, Islamic or conventional. The investment outlet by the financial

institution would be in trusted businesses with proven track record of certain yields.

d. Murabaha (cost-plus financing) Contracts: Murabaha contracts are stable return contracts

based on known and predetermined profit between the buyer and the seller. The Fund will enter

into an agreement for the purchase and sale of certain compliant assets at an agreed mark-up

price, with a deferred payment agreement.

e. Ijarah (lease) Contracts: These are contracts for the lease of certain compliant assets to

customers. Each customer will pay an agreed rent to the Fund for the use of the asset over a

specific period and will also undertake to buy the asset itself gradually.

The table below highlights the proposed asset allocation within the Fund:

Proposed Asset Class Asset Allocation

Range (%) Target Allocation

(%)

Cash 0 - 5 5

Sovereign and Sub-Sovereign Sukuk 0 - 90 30

Corporate Sukuk 0 - 60 15

Shari’ah Compliant Fixed Term Investments 0 - 100 30

Murabaha, Ijara and Other Fixed Income Contracts

0 - 70 20

INVESTMENT STRATEGY

The Fund Manager’s core objective is the generation of competitive returns on the Fund’s investment

while ensuring long-term capital protection, value creation and preservation. The Fund Manager

intends to achieve this objective by adopting a bottom-up investment approach and leveraging on its

expertise and extensive network to identify secure and high quality Shari’ah-compliant investments.

Comprehensive due diligence and robust research and analysis, will be carried out on prospective

investments prior to making a final investment decision. The Fund Manager also intends to make

investment decisions based on a continuous assessment of eligible investment opportunities whilst

maintaining strict adherence to the asset allocation policy.

INVESTMENT INCENTIVES

Investment in the Lotus Halal Fixed Income Fund will provide investors with:

Capital preservation;

Competitive returns;

Diversified portfolio; and

Regular and steady income stream not generally associated with other forms of investment.

TARGET INVESTORS

The Lotus Halal Fixed Income Fund targets investors who seek exposure to Shari’ah-compliant

investment opportunities but have low risk appetite and do not want exposure to the risks associated

with equity investments. The Fund specifically targets:

Investors with low risk appetite;

Investors with short/medium term investment horizon;

Investors who desire no exposure to stock market volatility;

Ethical investors;

Investors who seek capital preservation over the medium to long-term; and

Investors who wish to benefit from wholesale investment return.


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The Fund welcomes participation from retail and institutional investors such as Pension Fund

Administrators, not-for-profit organisations, and collective investment schemes.

INVESTMENT DISCRETION

Investments of the Fund will be undertaken at the discretion of the Fund Manager, subject to the

policies instituted by the Investment Committee, pursuant to the Trust Deed with such modifications

as may be made from time to time and in accordance with the provisions of the Investment and

Securities Act and the Rules and Regulations of the SEC, as prescribed from time to time. The Fund

Manager will be responsible for all decisions regarding investment strategies, assets, size and timing

of the Fund’s investments.

INVESTMENT GUIDELINES AND RESTRICTIONS

The Fund Manager shall adhere strictly to the investment objective of the Fund and shall invest only in

such instruments as are permissible under the Trust Deed and as authorised by the Investment

Committee. The Fund Manager is bound by certain restrictions contained in the Trust Deed, the main

provisions of which are summarised on pages 34 to 45 of this Prospectus.

SUBSCRIPTION TO THE FUND

Subsequent to the IPO, investors who desire to purchase Units of the Fund may do so through the

Fund Manager or any of its designated agents, representatives or any medium that may be approved

and provided by the Fund Manager from time to time. Purchase of Units after the Offer Period will be

at the offer price on the Valuation Day preceding the day on which the Fund Manager receives the

investor’s funds.

MINIMUM INVESTMENT PERIOD

The minimum investment period for investors who subscribe during the IPO shall be a period of ninety

(90) calendar days from the date of allotment and 30 days thereafter.

MEETING OF UNIT HOLDERS AND VOTING RIGHTS

The Fund Manager in consultation with the Trustee shall call a meeting of Unit Holders whenever this

is required. Each Unit Holder shall be entitled to vote in person or by proxy. The quorum for any

meeting of the Fund shall be 5 Unit Holders holding not less than 25% of the Fund’s outstanding Units

whether present in person or by proxy.

INCOME AND DISTRIBUTION

The Fund shall earn returns and other incomes and may also realise capital gains from its

investments. The distribution shall reflect the average accrued income to the Fund net of operating

expenses. Subject to prevailing economic conditions, the Fund Manager shall distribute up to eighty

(80) per cent of the Fund’s net income in any Financial Year to Unit Holders on a quarterly basis. Any

undistributed profit shall be assigned to individual Unit Holders in proportion to the number of Units

they own and re-invested for their benefit and accounts.

DISTRIBUTION OPTION AND PAYMENTS

Investors may select either of the following distribution methods:

Reinvestment Option: Distributions are automatically reinvested in additional Units of the

Fund at the Offer price on the day the Distribution is declared by the Fund Manager.

Cash Option: Distributions are paid via electronic transfer to the Unit Holder’s bank account.

TAX CONSIDERATIONS

Investment of Fund assets in sovereign and sub-sovereign sukuk bonds are tax exempt. However,

income derived from other investments may be subject to tax.

This summary does not purport to be a comprehensive description of all the tax considerations that

may be relevant to a decision to acquire, hold or dispose of Units of the Fund and does not purport to

deal with the tax consequences applicable to all categories of investors. In addition, the summary is

not intended to be, and should not be construed to be tax advice to any particular investor. Any

prospective investor who is in any doubt as to his/her tax position should consult his/her own


15 | P a g e


professional advisers as to the consequences of an investment in the Fund in view of his/her peculiar

circumstances. The Fund Manager, the Trustee or the Custodian shall not be liable to any investor in

any manner for placing reliance upon the contents of this section.

STATEMENT OF UNIT HOLDING

Except where a certificate is specifically requested, Holders shall be notified of their holding via

electronic mail, text messages or other electronic channel of communication. In addition, Holders may

be granted access to a portal where they can confirm their holdings.

REDEMPTION OF UNITS

The Fund Manager shall effect redemptions on a continuous basis throughout the life of the Fund at

the Bid Price on any Business Day immediately following the receipt of a valid redemption notice.

Minimum permissible holding after partial redemption is five Units. The Fund shall make redemption

payments within five (5) business days following the receipt of the redemption notice(s). Investments

made during the IPO will be subject to a ninety (90) calendar day lock-in period subsequent to the

Allotment date, while purchases made after the IPO will be subject to a lock-in period of thirty (30)

calendar days from the date of purchase. No fees will be charged on redemption for Units after the

lock-in period; however, any redemption during the lock-in period shall be subject to a deduction,

from the Unit Holders investment as a result of such redemption.

TRANSFER AND TRANSMISSION OF UNITS

Every Unit Holder shall be entitled to transfer the Units or any of the Units held by him through the

Fund Manager in accordance with the provisions of the Trust Deed. In the case of death of a Unit

Holder, the legal representative of such deceased may apply to have the Units transferred to

him/her/it or his/her/its nominee. Every Unit Holder shall be entitled to transfer its Units subject to a

minimum of five (5) Units and where the entire Units held are not being transferred, the balance Units

held by such holder shall also not be less than five Units.

VALUATION OF UNITS OF THE FUND

The Net Asset Value of the Fund shall be estimated at the close of each Business Day. The NAV of the

Fund shall be determined on the basis of the amortized cost method in line with the SEC Rules and

Regulations. The Fund Manager would publish the NAV, Bid and Offer price on its webpage:

www.lotuscapitallimited.com.

FEES, CHARGES AND EXPENSES OF THE FUND

All operating and management fees/ charges incurred in connection with the management of the Fund

shall not exceed 5% of the Fund’s NAV.

Offer Expenses: The Fund shall bear all charges and fees (including VAT where relevant)

for establishing the Fund, including regulatory fees payable to the SEC,

professional fees payable to the transaction parties, brokerage

commission, printing, distribution and other related administrative

expenses, amounting to and estimated at N29,439,000.00 (Twenty Nine

Million, Four Hundred and Thirty Nine Thousand Naira only) representing

2.94% of the Offer Size. These costs shall be defrayed from the Offer

proceeds.

Management Fee: The Fund Manager shall earn an annual management fee of 1% of the

Fund’s NAV before distribution to Unit Holders. The fee will accrue daily

and be paid quarterly in arrears. The Manager is also entitled to an

incentive fee of not more than 30% of the total returns in excess of 10%

of the Fund’s NAV per annum.

Operating Expenses: The Trustee and the Custodian shall each be entitled to annual fees

corresponding to 0.05% of the Fund’s NAV.

http://www.lotuscapitallimited.com/


16 | P a g e


RISK FACTORS

The Fund Manager will exercise all reasonable caution in investing monies mobilised by the Fund.

However, it should be noted that all investments carry an element of risk. While there are a number of

factors that may affect the performance of any given asset class, a summary of the major risks that

can significantly affect the Fund’s performance, and should therefore be considered when investing in

the Fund, are listed below:

Market Risk: The rates of fixed income securities which forms part of the asset class of the Fund are

influenced by market forces including the prevailing rates of the CBN and conventional financial

institutions. Fluctuations in the level of these rates may have a significant impact on the NAV of the

Fund. Fund managers cannot always fully estimate the impact of market risk on their portfolios.

Shari’ah Compliance Risk: Islamic finance is still an emerging and developing field. There are few

scholars knowledgeable in this field and sometimes there is no general consensus on issues relating to

the suitability of certain investment vehicles or instruments. Thus, a product may be Shari’ah

compliant and acceptable to one scholar and be non-compliant and objectionable to another.

Investment/Loss Risk: Investments in capital markets are generally volatile and there is no

assurance that any projected returns would be achieved. In accordance with the principles of Islamic

commercial jurisprudence, investment in the Fund is at the sole risk of the investor. The Fund

Manager shall use its skills and expertise to invest the Funds in safe and secured investments but does

not take responsibility nor provide any assurance or guarantee that any objective or any particular

returns would be achieved.

Operational Risk: The business operation of the Fund Manager may be affected by unpredictable

business risk factors and may thus impact the operations of the Fund.

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FINANCIAL PROJECTIONS

LETTER FROM THE REPORTING ACCOUNTANTS

The following is a copy of the letter on the Profit Forecast by RoseWater Partners, the Reporting

Accountants to the Offer:


18 | P a g e


MEMORANDUM ON THE FINANCIAL FORECASTS FOR THE YEARS ENDING 31 DECEMBER 2016,

2017 AND 2018

1 INTRODUCTION

1.1 This memorandum has been prepared to summarise and outline the information available to the Directors and their basic assumptions at the time of preparing the financial forecasts for the years ending 31 December 2016, 2017 and 2018.

1.2 The Directors are of the opinion that subject to unforeseen circumstances, the profit before taxation for the years ending 31 December 2016, 2017 and 2018 will be approximately N118,773,000; N178,859,000 and N229,260,000 respectively.

1.3 The bases and principal assumptions used by the Directors in the preparation of the

financial forecasts are stated below.

2. BASES AND ASSUMPTIONS

The forecasts have been arrived at on the following bases and assumptions:

2.1 Bases

(a) Subscription to the offer

The 1,000,000 Units of the Fund will be fully subscribed within the initial

subscription period under the terms and conditions of the Offer.

(b) Initial Cost of the Offer

Total cost associated with the Offer is estimated at 2.94% of the gross proceeds i.e. N29,439,000.00.

The amount will be deducted immediately from the Gross Offer Proceeds. Accordingly, net Offer proceeds will amount to approximately N0.971 billion.

(c) Investment of Funds

The Fund Manager will invest in a portfolio consisting of eligible securities including high quality Sovereign/Sub-sovereign/Supranational Sukuk, Corporate Sukuk, Murabaha and Ijara Contracts and Shari’ah compliant Fixed/Tenured Investments with eligible financial institutions and other instruments introduced and approved by the Central Bank of Nigeria from time to time and as permissible under Securities and Exchange Commission Rules & Regulations.

The portfolio may be rebalanced occasionally to reflect prevailing market conditions. However, the structure of the proposed investments by the Fund is generally expected to apply as follows:

Proposed Asset Class Asset Allocation Range (%)

Sovereign and Sub-sovereign Sukuk 0 - 90

Corporate Sukuk 0 - 60

Shari’ah Compliant Fixed Term Investments* 0 - 100

Murabaha and Ijara Contracts 0 - 70

Cash 0 – 5

*Please note that the Shari’ah Compliant Fixed Term Investments are transaction

based fixed return investments that do not relate to any conventional fixed deposit investment where a rate of interest is fixed on the cash deposited with the banks. The Shari’ah Compliant Fixed Term investments are structured in line with the principle of Murabaha contract.

(d) Fund Management Fees

The Fund Manager will receive an annual management fee of 1% of the Fund's Net

Assets Value before distribution to Unit Holders and it is payable at the end of each

quarter. In addition to this, the Fund Manager shall be entitled to an annual

incentive fee equivalent to 30% of total returns in excess of 10% of the Net Assets

of the Fund.


19 | P a g e


2.2 Assumptions

The following underlying general assumptions have been used for the forecasts:

(a) The Fund Manager will be successful at raising the required fund of approximately

N1 billion.

(b) The quality of the Fund Manager, Trustee, Custodian and Registrars will be

sustained during the forecast period.

(c) Returns on the proposed asset classes are estimated at the following average rates:

Proposed Asset Class 2016 (%)

2017 (%)

2018 (%)

Sovereign and Sub-sovereign Sukuk 14.45 14.50 15.00

Corporate Sukuk 15.45 15.45 15.45

Shari’ah compliant Fixed Term Investments 13.50 13.50 13.50

Murabaha and Ijara Contracts 15.25 16.00 16.00

Cash* 0 0 0

*Please note that the 0-5% cash provisioned in the proposed asset allocation is to be held as a working capital which would provide liquidity for the fund’s operation and redemption of investment. Hence, there would be “zero return” on cash that would be held at any point in time during the period.

(d) There will be no significant changes in Federal Government’s fiscal and monetary policies that will adversely affect the operations of the Fund. Also, there will be no significant change in the political and economic environment that will adversely

affect the operations of the Fund.

(e) The table below shows the projected movement in the investors’ deposit.

Detail 2016 (%) 2017 (%) 2018 (%)

Investment 10 20 30

Redemption 1.5 5 7

However, the size of the Fund (Net Asset Value) is projected to grow at 10%, 20% and 30% by the end of 2016, 2017 and 2018 respectively.

(f) The Fund’s investments in sovereign, sub sovereign, supranational and corporate

Sukuk bonds are generally exempted from income tax.

(g) Distributions to Unit Holders are estimated at 80% of the net income of the Fund in any year and income distributable to subscribers will be on a quarterly basis. Any undistributed profit shall be assigned to individual Unit Holders in proportion to the number of Units they own and re-invested for their benefit and accounts.

(h) The Fund will be responsible for all administrative, custodial, research and other

related expenses to be incurred in its day-to-day operations. This could entail

making payments to the Fund Manager and other professional parties in respect of specific services provided to the Fund. The operating expenses are estimated at 1.30%; 1.28% and 1.26% of the Net Assets Value of the Fund in 2016; 2017 and 2018 respectively.

(i) The remuneration of the Manager and all other administrative fees shall accrue on a daily basis.

(j) Return on Investment (ROI) is assumed to be 11%, 14% and 15% for 2016, 2017

and 2018 respectively.

(k) All charges and fees for establishing the Fund, including the fees payable to receiving agents, the Securities & Exchange Commission, legal and all other related expenses are estimated at 2.94% of the Offer proceeds amounting to N29,439,000.00, are payable by the Fund and deductible from the monies raised

by the Fund.


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3. STATEMENT OF ACCOUNTING POLICIES

A summary of the principal accounting policies of the Fund Manager, which have been applied

in the preparation of these financial projections for the Fund is set out below:

(a) Basis of accounting

The prospective financial information are prepared in compliance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB) and adopted by Financial Reporting Council of Nigeria (FRCN) and are presented in the reporting currency, Nigeria Naira (N) rounded to the nearest thousand.

(b) Income recognition

Income on investments in all the classes of Sukuk and other Shari’ah complaint fixed income contracts is recognized on an accrual basis.

(c) Investments

Investment transactions are recorded on the date of trade and are shown in the accounts at the market value, which are determined as follows:

Sukuk

Sukuk instruments are stated at principal value plus any accrued and unpaid return. Shari’ah Compliant Fixed Term Investments instruments

Shari’ah Compliant Fixed Term Investments instruments are stated at principal value plus any accrued and unpaid return.

Cash and cash equivalents

Cash and cash equivalents comprise the Fund’s cash deposits with banks in Nigeria.

(d) Taxation

Fund’s investment in Sovereign, Sub sovereign, Supranational or Corporate Sukuk bonds are generally tax exempt.


21 | P a g e


Statement of Financial Position

The table below shows Forecast Statement of Financial Position as at 31 December 2016, 2017 and

2018.

Forecast Statement of Financial Position

2016 2017 2018

N'000 N'000 N'000

Assets

Cash and cash equivalents

Cash at bank 7,852 11,508 14,850

Shariah Compliant Fixed Term Investments 423,150 497,276 644,933

Financial assets held to maturity

Corporate Sukuk 162,750 178,509 209,603


Financial assets available for sale


Finances and advances


Receivables 12,505 17,009 25,249

Total Assets 1,137,907 1,352,675 1,711,281

Equity and Liability

Equity

Investors' deposits 1,085,000 1,251,313 1,552,806

Retained earnings 23,755 59,526 105,378

Total Equity 1,108,755 1,310,839 1,658,184

Liabilities

Other creditors 29,152 41,836 53,097

Total Equity and Liabilities 1,137,907 1,352,675 1,711,281


22 | P a g e


Statement of Comprehensive Income

The table below shows forecast Statement of Comprehensive Income for the financial years ended 31

December 2016, 2017 and 2018. The Directors are of the opinion that subject to unforeseen

circumstances, and based on the assumptions in note 2.2, the forecast income after taxation for the

Lotus Halal Fixed Income Fund for the years ending 31 December 2016; 2017 and 2018 will be in the

order of N118,773,000.00; N178,859,000.00; and N229,260,000.00 respectively as detailed below:

Statement of Changes in Equity

The table below shows forecast Statement of Changes in Equity for the financial years ended 31

December 2016, 2017 and 2018.

Statement of Comprehensive Income Forecast

2016 2017 2018

N'000 N'000 N'000

Income

Income from financial assets held to maturity

Corporate Sukuk 25,145 27,580 32,384

Income from financial assets available for sale


Income from finances and advances


Shariah Compliant Fixed Term Investments 57,125 67,132 87,066

Total income 162,398 195,251 249,565

EXPENSES

Management Fee 10,850 12,751 16,123

Fees and operating expenses 3,336 3,641 4,182

Offer expenses 29,439 - -

Total Expenses 43,625 16,392 20,305

Net income for the year before taxation 118,773 178,859 229,260

Taxation - - -

Net income for the year after taxation 118,773 178,859 229,260

Distribution to the investors (95,018) (143,087) (183,408)


Forecast Return on Investment 11% 14% 14%

Statement of Change in Equity Forecast

2016 2017 2018

N'000 N'000 N'000

Net assets at the beginning of the year 1,108,755 1,310,839

Offer proceeds 1,000,000 - -

Additional subscriptions during the year 100,000 221,751 393,252


Total Investors' deposits 1,085,000 1,275,068 1,612,332


Net Asset Value at the end of the year 1,108,755 1,310,839 1,658,184

Increase in Net Asset Value 108,755 202,085 347,345

Growth rate 11% 18% 26%

Forecast Net Asset Value per units of N1,000 1,022 1,048 1,068


23 | P a g e


Statement of Cash Flows

The table below shows forecast Statement of Cash Flows for the financial years ended 31 December

2016, 2017 and 2018.

Statement of Cashflow Forecast

2016 2017 2018

N'000 N'000 N'000

Cash flows from operating activities

Net Operating income 118,773 178,859 229,260

Changes in other creditors 29,152 12,684 11,261

Changes in receivables (12,505) (4,505) (8,240)

Cash flows from operations 135,420 187,038 232,281

Cash flows from investing activities

Sovereign/Sub Sovereign/Supranational Sukuk (325,500) (44,271) (33,312)

Corporate Sukuk (162,750) (15,759) (31,094)

Shariah Compliant Fixed Term Investments (423,150) (74,126) (147,657)

Murabaha and Ijara Contracts (206,150) (72,452) (134,961)

Net cash used in investing activities (1,117,550) (206,608) (347,024)

Cash flows from financing activities

Initial proceeds raised 1,000,000 - -

Investment of returns during the year 100,000 221,751 393,252


Distribution paid to the investors (95,018) (143,087) (183,408)

Net cash used in investing activities 989,982 23,226 118,085

Net increase in cash and cash equivalents 7,852 3,656 3,342

Cash and cash equivalents at the beginning of the year - 7,852 11,508

Cash and cash equivalents at the end of the year 7,852 11,508 14,850

Represented by:

Cash at bank 7,852 11,508 14,850


24 | P a g e


LETTER FROM THE ISSUING HOUSES

The following is a copy of the letter from the Issuing Houses on the financial forecast:

Vetiva Capital Management Limited Plot 266B, Kofo Abayomi Street Victoria Island Lagos

Nigeria


1B, Udi Street


Ikoyi

Lagos, Nigeria

Monday, 31 August, 2015

The Directors

Lotus Capital Limited

1B, Udi Street


Ikoyi

Lagos, Nigeria

Dear Sirs,

OFFER FOR SUBSCRIPTION OF 1,000,000 UNITS OF N1,000.00 EACH AT PAR IN THE LOTUS HALAL FIXED

INCOME FUND (THE “FUND”)

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

the Fund. The Prospectus contains financial forecasts of the Fund for the three years ending 31

December 2016, 2017 and 2018.

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

RoseWater Partners, the Reporting Accountants. We have also considered the letter dated 10 August,

2015 from the Reporting Accountants regarding the accounting bases and calculations upon which the

forecasts were compiled.

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

reviewed by RoseWater Partners, we consider that the forecasts (for which you as Directors are solely

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

Yours faithfully,

For: The Issuing Houses

CHUKA ESEKA HAJARA ADEOLA

Managing Director/CEO Director

Vetiva Capital Management Limited Lotus Financial Services Limited

RC: 1078362

25 | P a g e


HISTORICAL FINANCIAL INFORMATION OF LOTUS CAPITAL LIMITED

FIVE YEAR FINANCIAL SUMMARY


The table below shows Lotus Capital’s Statement of Financial Position as at 30 April 2010, 30 April

2011, 30 April 2012, 30 April 2013, 31 December 2013 and 31 December 2014.


The table below shows Lotus Capital’s Statement of Comprehensive Income for the financial years

ended 30 April2010, 30 April 2011, 30 April 2012 and 30 April 2013; eight months ended 31

December 2013; and financial year ended 31 December, 2014.

December December April April April April

2014 2013 2013 2012 2011 2010

Assets

Cash and cash equivalents 250,227,050 68,446,571 337,085,590 539,398,534 10,312,424 40,270,802

Financial assets:

Fair Value through profit or loss 106,186,158 97,269,645 96,111,881 151,085,893

Investment Securities 27,658,783 494,543,277 224,157,483 254,930,670 488,116,163 491,653,591

Trade and other receivables 130,514,859 78,865,663 99,450,063 265,311,547 143,721,533 18,553,681

Prepayments 11,437,377 23,989,958 15,987,917 53,569,352 35,275,372 23,822,481

Property under construction 423,257,920 287,275,461 - - - -

Property and equipment 25,589,712 16,501,999 9,445,540 8,808,968 13,185,249 19,559,759

Intangible assets 12,407,163 9,556,210 5,663,515 6,440,535 7,094,992 -

Deferred tax assets 2,923,203 3,809,821 25,603,228 67,095,141 65,878,535 55,270,641

Total Assets 990,202,225 1,080,258,605 813,505,217 1,346,640,640 763,584,268 649,130,955

Liabilities

Current tax liabilities 20,512,395 10,300,370 9,793,918 14,472,496 9,090,000 3,402,795

Other liabilities 143,165,397 30,087,753 63,504,480 673,794,377 108,013,913 14,230,130

Financing liability - 187,500,007

Total Liabilities 163,677,792 227,888,130 73,298,398 688,266,873 117,103,913 17,632,925

Equity

Share Capital 505,000,000 505,000,000 505,000,000 505,000,000 505,000,000 505,000,000

Retained earnings 318,979,952 223,750,640 232,768,001 151,993,439 141,480,355 126,498,030

Fair value reserves 2,544,481 123,619,835 2,438,818 1,380,328 - -

Total equity 826,524,433 852,370,475 740,206,819 658,373,767 646,480,355 631,498,030

Total liabilities and equity 990,202,225 1,080,258,605 813,505,217 1,346,640,640 763,584,268 649,130,955



2014 2013 2013 2012 2011 2010

Mudaraba Profit 93,131,428 78,830,765 - - - -

Management fees 71,529,968 29,410,844 228,605,907 74,168,245 137,631,771 86,772,232

Financial advisory services fee income 33,858,947 54,493,735 81,451,856 277,557,566 72,882,671 11,526,274

Profit from investment 150,985,045 44,077,537 58,500,767 37,209,045 57,458,851 21,350,250

Net trading income 91,064,168 6,929,175 69,069,562 (55,451,469) 20,783,253 19,758,785

Other income 1,967,705 5,944,872 831,184 685,718 44,734,504 84,844,286

Operating income 442,537,261 219,686,928 438,459,276 334,169,105 333,491,050 224,251,827

Net impairment/write off of financial assets 7,337,455 (504,250) 24,001,250 81,468,816 14,886,931 2,125,236

Personnel expenses 178,868,190 105,971,462 171,813,860 151,192,543 194,878,451 104,109,297

Deprciation and amortisation 10,452,390 5,276,841 6,870,217 6,849,378 8,646,605 10,578,212

Other operating expenses 116,344,531 76,547,013 104,796,165 70,746,400 89,867,427 73,176,822

313,002,566 187,291,066 307,481,492 310,257,137 308,279,414 189,989,567

Profit before income tax 129,534,695 32,395,862 130,977,784 23,911,968 25,211,636 34,262,260

Minimum tax - - (4,459,399) (4,545,000) - -

Income tax (21,680,383) (28,788,223) (45,743,823) 979,856 4,920,689 7,244,225

Profit for the period 107,854,312 3,607,639 80,774,562 20,346,824 30,132,325 41,506,485


HISTORICAL FINANCIAL INFORMATION OF LOTUS CAPITAL LIMITED

26 | P a g e


Statement of Cash Flows

The table below shows Lotus Capital’s Statement of Cash Flows for the financial years ended 30 April

2010, 30 April 2011, 30 April 2012, 30 April 2013; eight months ended 31 December 2013; and

financial year ended 31 December, 2014.

];kkg


2014 2013 2013 2012 2011 2010

Cash flows from operating activities

Profit for the year 107,854,312 4,007,639 80,774,562 20,346,824 30,132,325 41,506,485

Adjustments for:

Depreciation and amortization 10,452,390 5,276,841 6,870,217 6,849,378 8,646,605 10,578,212

Loss on disposal of property and equipment (105,000) 323,177 487,377 - (216,185)

Dividend received (584,195) (405,648) (3,478,130) (6,154,189) (20,783,253) (19,758,785)

Exchange Gain (42,863,956) - - - - -

Net loss/(gain) on investment securities as fair

value through profit or loss 14,721,502 (6,999,376) - - - -

Other assets written off (13,795,783) - - - - 458,176

(Reversal of Impairment)/Impairment loss of other assets7,337,455 (504,250) 24,001,250 81,468,816 - -

Income tax expense 21,680,383 28,788,223 50,203,222 3,565,144 - -

104,697,108 30,486,606 158,858,498 106,075,973 17,995,677 32,567,903

Changes in trade and other receivables (45,190,868) 20,688,650 144,622,044 (193,654,040) - -

Changes in prepayments 12,552,581 (8,002,042) 37,581,435 (27,698,770) - -

Changes in other liabilities and provisions (69,923,620) 159,768,752 (610,289,897) 566,381,210 - -

2,135,201 202,941,966 (269,227,920) 451,104,373 17,995,677 32,567,903

Income tax paid (10,581,740) (6,488,364) (13,389,887) - (4,920,689) (7,244,225)

VAT paid (net) (4,498,743) (5,685,472) - - - -

Net cash (usd in)/from operating activities (12,945,282) 190,768,130 (282,617,807) 451,104,373 13,074,988 25,323,678

Cash flows from investing activities

Acquisition of property and equipment (16,282,479) (11,470,142) (8,672,900) (430,000) (9,367,087) (11,359,862)

Proceeds on disposal of fixed assets 316,120 500,000 - - - 550,000

Acquisition of intangible assets (6,319,697) (5,579,029) (1,306,056) (1,388,640) - -

Net (outflow)/Inflow on Investment securities 186,188,666 (430,638,626) 86,805,689 88,796,188 3,537,428 84,167,382

Dividend received 584,195 405,648 3,478,130 6,154,189 20,783,253 19,758,785

Net cash (used in)/from investing activities 164,486,805 (446,782,149) 80,304,863 93,131,737 14,953,594 93,116,305

Cash flows from financing activities

Dividends paid (12,625,000) (12,625,000) - (15,150,000) (15,150,000) (15,150,000)

Net cash (used in)/from financing activities (12,625,000) (12,625,000) - (15,150,000) (15,150,000) (15,150,000)

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year 68,446,571 337,085,590 539,398,534 10,312,424 40,270,802 178,630,616

Net (decrease)/increase in cash and short-term

funds 138,916,523 (268,639,019) (202,312,944) 529,086,110 (29,958,378) (138,359,814)

Impact of exchange differnce on cash yield 42,863,956 0 - - - -

Cash and cash equivalents at end of year 250,227,050 68,446,571 337,085,590 539,398,534 10,312,424 40,270,802

Statement of cashflows

27 | P a g e


INFORMATION ON THE FUND MANAGER AND THE TRUSTEE

BRIEF PROFILE OF THE FUND MANAGER

Lotus Capital Limited (“Lotus Capital”) is an Investment Management company specializing in Asset

Management according to the Islamic system of Financial Management. Lotus Capital was founded in

June 2004 with the objective of providing cost–effective ethical financial solutions to individuals,

businesses and organizations across West Africa. The Company is duly registered with the SEC as a

Fund Manager.

Lotus Capital is a Nigerian pioneer in the emerging financial niche with a unique equitable interest-free

solution for personal and business needs. Interest-free financial services, primarily known as “Islamic

Finance” is the world’s fastest growing financial sector with over US$1.067 trillion in assets worldwide

growing at 14 - 20% per annum and is virtually untapped in Nigeria. Lotus Capital provides value–

added alternative financial solutions in line with principles that most ethical investors share. It offers

investors a convenient way to link their money with their values in a competitively performing

portfolio.

The Company is dedicated to supporting individuals and independent businesses with honest, fair and

equitable solutions. It adheres to a strict code of ethics and does not deal in unethical businesses such

as alcohol, casinos, adult-entertainment, tobacco etc.

Lotus Capital manages financial assets for individual, institutional, retail and corporate clients. It offers

investment strategies in vehicles ranging from collective investments to institutional portfolios. As at

31 March 2015, the Company had assets worth N11.1billion under management.

Lotus Capital is managed by experienced and knowledgeable professionals who have global exposure

in the professional management of funds. In addition, the members of the Fund Manager’s Board of

Directors are highly respected professionals with strong backgrounds in finance, asset management

and capital markets.

DIRECTORS OF THE FUND MANAGER

The Board of Directors of the Fund Manager is currently constituted as follows:

Mr. Tajudeen Afolabi Adeola (Chairman)

Fola Adeola is the Founder and Chairman of Fate Foundation, a Non-Governmental Organization in

Nigeria which is dedicated to encouraging the creation of wealth through entrepreneurship. Mr. Adeola

is also the founder and first Managing Director/CEO of Guaranty Trust Bank Plc. He ran the bank from

inception until March 2003, during which period he firmly established the institution as a strong and

credible bank. Guaranty Trust Bank is quoted on the Nigerian Stock Exchange and has grown to

become one of Nigeria's largest and most profitable international financial institutions.

In 2004, he was appointed the pioneer Chairman of the National Pension Commission following the

promulgation into law of the Pension Bill (principally authored by him). He was a Council member, and

is a Fellow of the Institute of Chartered Accountants of Nigeria. He is a member of the Institute of

Directors of Nigeria and serves as a member of the Board of Directors of UTC Plc., a retail food

manufacturing company. Internationally, he serves as a member of the Global Advisory Committee on

Philanthropy at the World Economic Forum. From 2004-2005, Mr. Adeola was also a Commissioner on

the Commission for Africa established by the erstwhile British Prime Minister, Mr. Tony Blair.

Mrs. Hajara Abdullahi Adeola (Managing Director)

Mrs. Hajara Adeola is the Managing Director of Lotus Capital Limited, a Nigerian pioneer in Shari’ah

compliant Asset Management, Private Wealth Management Advisory Services and Financial Advisory

Services. She has over 20 years of international experience in research and analysis, investment

management and corporate finance. She worked with UBS Warburg where she was a Director heading

their London Islamic Finance Desk. Her responsibilities included structuring and trading Islamic

Finance investment instruments for European private clients and multi-currency money market

instruments for institutional clients (UK private banks). She was also responsible for structuring

innovative Islamic Finance instruments to meet evolving client requirements and liaising with the

Shari’ah consultants for approval.


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Prior to joining UBS, she was a Convertible Bond Research Analyst at BNP Paribas, London where her

primary responsibility was to analyze, write and publish daily and quarterly research on European

convertible bonds. In addition, she structured and priced primary convertible bond issues for corporate

clients and gained invaluable experience in the over the counter structured finance field.

Mrs. Hajara Adeola began her career as a consultant at Andersen Consulting (now Accenture). From

then, she joined ARM Investment Managers as a pioneer staff and rose to Vice-President and Head of

the Research and Financial Advisory Units. Her responsibilities included equity research, trading and

investment management of global equity portfolios and financial advisory assignments (feasibility

reports, business plans, project management and fund raising).

She holds an M.Sc degree in Finance (1st Class honours) from Durham University (2000) where she

specialized in Islamic Finance. She also holds an MBA in International Management from Exeter

University (1993) and a B.Sc in Pharmacology from King’s College, London (1992). Hajara Adeola was

the first President of the Fund Manager’s Association of Nigeria (FMAN) and a West African Fellow of

the Aspen Leadership Initiative.

Mrs. Lateefah Okunnu (Director)

Mrs. Lateefah Okunnu is a Non-Executive Director of the Company. She is a retired civil servant with a

wealth of administrative experience. After a fulfilling career in both the Lagos State and the Federal

Civil Service, in 1990, she was appointed Deputy Governor of Lagos State and later Chairman

Caretaker Committee of the National Republic Convention (NRC) till 1993 when the Party's Executive

Council took over. She retired from the Federal Civil Service in 1994.

Mrs. Okunnu is a founding member and one time National Amirah of the Federation of Muslim

Women's Associations in Nigeria (FOMWAN). She is presently the Assistant Secretary General for

Africa of the newly established International Muslim Women's Union as well as the National

Coordinator of Muslim League for Accountability (MULAC), a body established for championing

transparency and accountability in the private and public lives of Muslims and in the Nigeria society at

large. Mrs. Okunnu holds a B.A (Hons.) degree in Geography (University College London, 1964) and a

Diploma in Education (University of Lagos, 1968).

Mrs. Amina Oyagbola (Director)

Mrs. Oyagbola is a Non-Executive Director of the Company. Mrs. Oyagbola is a global business leader

and Human Resources Executive of MTN Nigeria Communications Limited. She has an LL.B (Hons)

from Ahmadu Bello University (1982), Nigeria, an LL.M from Cambridge University (1985), an MBA

from Lancaster University Management School UK (2000)and has completed the Advanced

Management Programme at Insead, executive programmes at Harvard and the MTN Global

Advancement Programme. She is a Chevening Scholar, a Chartered Fellow of CIPD UK and a member

of the Society for Human Resource Management USA.

Her long and distinguished career spans legal practice with Chief FRA Williams Chambers, banking

with Crystal Bank and UBA where she was successively Legal Adviser and Head, Human Capital

Division, before setting up and heading the Private Banking Division, and finally the oil sector with

Shell Petroleum Development Company as Head, Human Resource Strategy, Standards and Business

Planning prior to her current position with MTN. She is also an Executive Director of the MTN Nigeria

Foundation, which is a non-profit organization set up by MTN to drive its aggressive Corporate Social

Responsibility agenda.

She is a Fellow and Country Director of The Africa Leadership Initiative – West Africa –which is

involved in high impact leadership projects, designed to develop a new generation of global leaders. A

West Africa Fellow of the Aspen Global Leadership Network, a member of the Chartered Institute of

Personnel Management, a member of Women Corporate Directors (WCD) and a Member of the

Institute of Directors. She is the Founder of WISCAR (Women in Successful Careers) a not-for-profit,

gender empowerment and mentoring initiative for professional career women. She is on the Advisory

Board of BusinessDay, the premier business daily in Nigeria.


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Mr. Muhammad Nuruddeen Lemu (Director)

Mr. Muhammad Nuruddeen Lemu is a Director of Research and Training at the Dawah Institute of

Nigeria and the Assistant General Secretary of Islamic Education Trust (IET), Minna. He is the

Technical Adviser, Nigerian Environmental Society, Niger State branch; a Founding Member of the

Regional Centre for Expertise, Minna; and a member of the Advisory Board of the New Horizons

College, Minna. He has been a Member, National Awards Committee, Ford Foundation Jubilee

Transparency Awards, Nigeria; Chairman, Niger State Taekwondo Association; Teacher Trainer, Noor

Al-Houda Islamic College, Sydney, Australia.

Mr. Lemu serves on the Board of Directors of several organizations including Lotus Capital Limited,

and Prostart Consultants Limited. He is a Director of the Development Initiative of West Africa (DIWA),

the Inter-Faith Activity and Partners for Peace (IFAPP), and a member of various committees of

Jama’tu Nasril Islam (JNI) and the Da’wah Coordination Council of Nigeria (DCCN). He was one of

those nominated by the Nigeria Supreme Council for Islamic Affairs (NSCIA) to represent Nigerian

Muslims at the last National Conference (CONFAB 2014).

He develops contents and conducts train-the-trainers courses (TTC) in understanding the principles

and objectives of Islamic jurisprudence; enhancing inter-faith dialogue and engagement, intra-faith

cooperation, clarifying misconceptions about Islam, and countering various forms of religious

extremism. He has given talks and facilitated training programmes in more than 20 countries on all

continents, on topics related to Islam, Comparative Religion and inter-faith understanding,

Environment and Ecology, Resource Management, Agriculture, Social and Gender issues, Personal

Development and Leadership. He has also been a frequent guest speaker on radio and TV programs

both domestically and abroad, and has moderated a number of television programs.

He holds a Bachelor’s degree in Agriculture from Ahmadu Bello University, Zaria, Nigeria, a MSc.

Resource Management from Edinburgh University, United Kingdom, is a Fellow of the Africa Leadership

Initiative of West Africa (ALIWA), and of the Aspen Leadership Institute, Colorado, USA.

THE FUND MANAGEMENT TEAM

The Fund Management team is comprised of the following individuals:

Mrs. Hajara Adeola

Please refer to page 27 for Mrs. Adeola’s profile.

Mr. Gregory Ogbebor

Gregory Ogbebor is a pioneer staff of Lotus Capital Limited. He is a graduate of Banking & Finance

from University of Benin (2004). He has an M.Sc degree in Finance from University of Lagos, Akoka.

He is also an associate member of the Chartered Institute of Loan and Risk Management (2011).

His responsibilities include Credit Analysis, Risk Management and Portfolio construction and

management.

Mr. Ndako Mijindadi

Ndako Mijindadi holds a BSc. in Economics from Ahmadu Bello University, Zaria and an MSc. in

Financial Management from The Robert Gordon University, Aberdeen. He has over seven years’

cognate experience.

Prior to joining Lotus Capital, he was a Senior Analyst with Agusto & Co. Limited, where he led

research coverage of the Oil & Gas, Commodities, Real Estate, Aviation and Haulage sectors. He was

also the lead credit analyst on corporate and sub-sovereign debt with oversight on transactions in

excess of $3 billion. While at Agusto & Co., he was the Company’s Country Representative in East

Africa, responsible for driving business expansion and overseeing the business units within the region.

At Lotus, his responsibilities include research, investment analysis and fund management.

Ms. Lateefah Oyefeso

Lateefah Oyefeso holds a B.Sc degree in Accounting and Finance (First Class honours) from the

American University of Sharjah, United Arab Emirates (2011) and an M.Sc in Islamic Finance (First


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Class honours) from Aston University, Birmingham, United Kingdom (2012). She is a member of Beta

Gamma Sigma (a global organisation for the Best in Business) and a final level candidate of the

Association of Chartered Certified Accountants.

Prior to joining Lotus Capital, Lateefah worked as an intern at Ernst & Young, Dubai. At Lotus, she has

responsibilities which span research, investment analysis, fund and portfolio management.

BRIEF PROFILE OF THE TRUSTEES

STL Trustees Limited was incorporated on the 02 May, 1991 as EIB Trustees Limited before the

merger of EIB International Bank, Prudent Bank, Bond Bank, Reliance Bank and Cooperative Bank

which resulted in its former parent company (Skye Bank Plc) in 2005.

The Company is experienced in all aspects of trusteeship including Corporate Trusts, Private Trusts

and Estate Planning, Charitable Trusts, Endowments & Foundations. Clientele base cuts across State

Governments and Parastatals, corporate entities as well as private individuals whilst scope of business

spans the Money Market, Capital Market and Real Estate.

STL is registered with the Securities and Exchange Commission as Trustee and Funds/Portfolio

Managers. Skye Bank Plc recently divested its holdings in Skye Trustees Limited through a

management buy-out led by its MD/CEO, Funmi Ekundayo, following which its name was changed to

STL Trustees Limited.

Mr. Olawale Edun (Chairman)

Mr. Olawale Edun, was the Honourable Commissioner of Finance, Lagos State from 1999-2004. He

holds a B.Sc in Economics from the University of London, Queen Mary College, United Kingdom and a

Masters Degree in Development Economics from the University of Sussex, Brighton, United Kingdom.

He worked at Chase Merchant Bank Nigeria Limited (later Continental Bank Plc). He had a stint at

Lehman Brothers and Chase Manhattan Capital Markets in New York and the World Bank /

International Finance Corporation, Washington DC, USA.

He returned to Nigeria in 1989 as Co-founder and Executive Director of Investment Banking and Trust

Company (now Stanbic IBTC Bank Plc). He is the founder and current Chairman of Denham

Management Limited (now Chapel Hill Denham Group). He is also the Chairman of LiveWell Initiative,

a health education and literacy Non-Government Organization (NGO) and Sisters Unite for Children,

an NGO which assists street children. He serves on the Board of African Paints Nigeria Plc amongst

others.

Mrs. Funmi Ekundayo (Managing Director)

Funmi Ekundayo is an alumnus of the Harvard Business School, the Institute of Chartered Secretaries

& Administrators, United Kingdom; the Lagos Business School (Chief Executive Programme) and IESE

Business School, Barcelona, Spain. She holds a Bachelor of Law degree and a Master of Laws degree

from the University of Lagos. A member of the Nigerian Bar Association, Funmi is also a Fellow of the

Institute of Chartered Secretaries & Administrators of Nigeria (FCIS). Funmi serves as a Member of

the Governing Council of the Institute and she is the current Chairman of the Institute’s Roundtable on

Corporate Governance Committee.

Funmi began her career with the law firm of Bentley, Edu & Co (in association with IRVING &

BONNAR), where she spent close to a decade in law practice. She later joined Sterling Asset

Management & Trustees Limited (formerly NAL Asset Management & Trustees Limited) before moving

to UBA Trustees Limited as Head, Business Development & Marketing. Thereafter, she joined STL as

an Assistant General Manager, Business Development, from where she rose to become the MD/CEO of

the Company. Funmi has distinguished herself in her area of core competence as a seasoned trust

specialist engaging in the structuring of complex corporate finance, legal and trust instruments.

Funmi is currently the President of the Association of Corporate Trustees of Nigeria and a Fellow of the

Association of Investment Advisers & Portfolio Managers. She is a member of the Rules & Compliance

Sub-Committee of the Securities & Exchange Commission and an Executive Board member of the

National Investor Protection Fund. Funmi is a member of the Institute of Directors and she also serves


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as a Non-Executive Director on the Board of Directors of Law Union & Rock Insurance Plc. Funmi has

attended several courses locally and internationally.

Mr. Kayode Falowo (Director)

Mr. Kayode Falowo holds a Bachelor of Science degree (B.Sc) in Agricultural Engineering, from the

University of Ife now Obafemi Awolowo University, a Masters of Business Administration (MBA) from

the University of Benin and a Diploma in Information Management. He is a fellow of the Chartered

Institute of Stockbrokers, a member of the Institute of Management Consultants, Nigeria Society of

Engineers, Certified Pension Institute of Nigeria, Nigerian-British Chamber of Commerce and Nigerian-

Indian Chamber of Commerce.

He has over 26 years of work experience in the financial sector with a long track record in

management consultancy, privatization of public sector enterprises and debt issuance programmes

amongst others. He is the current Managing Director of Greenwich Trust Limited, a member of the

Presidential Advisory Committee on the Nigeria Capital Market and the immediate past Chairman of

the Association of Issuing Houses of Nigeria. He is also a member of the Technical Committee of the

Nigeria Council on Privatization and sits on the Board of DN Meyer Plc.

Mrs. Connie Ogundare (Director)

Mrs. Connie Ogundare holds a Bachelor of Science degree (B.Sc) in Chemistry (Major) and Psychology

(Minor) from the Marymount College, Tarrytown, New York, USA as well as Bachelor of Science (B.Sc)

degree in Pharmacy (1994) and a Master of Science (M.Sc) in Clinical Pharmacy from St. John

University, New York, USA. She has over 18 years of working experience in the United States of

America and Nigeria spanning clinical pharmacy, real estate, investment banking and consultancy. She

is currently the Managing Director of Business Objects Limited, and a partner in JASTCO Mayfair

International Property Management LLC and CSS Corporate Solution LLC, both located in New York,

USA. She is also a member of the Board of Directors of Fadco Investment Limited.

Mr. Afolabi Caxton-Martins (Director)

Mr. Afolabi Caxton-Martins is a founding Partner of the law firm Adepetun, Caxton-Martins, Agbor &

Segun. He holds a Bachelor of Law degree (LL.B) from the University of London (1983). He is a fellow

of the Chartered Institute of Arbitrators (FCIArb), a member of the Nigerian Bar Associations (NBA)

and the International Bar Association (IBA). He specializes in international commercial mergers and

acquisitions, corporate finance and international commercial arbitration.

Mrs. Chioma Jennifer Okee-Aguguo (Director)

Chioma Jennifer Okee-Aguguo holds a Bachelor of Law degree (LL.B) (1987) from the Abia State University and a Master of Law degree (LL.M) (1990) from the University of Lagos with emphasis in

Corporate and Commercial Law, Secured Credit transactions and International Economic Law. She had a stint at Steelways Limited (1991) before joining Midas Bank (which later merged with other banks to become FCMB) in 1992. She rose to become the Company Secretary/Legal Adviser in 1997 to 2006. She was appointed as the Head, Legal Department of Bank PHB in 2006 and in 2010 she left for

private law practice in the firm of Associated Attorneys where she is a Partner till date.

MANAGEMENT PROFILE OF THE TRUSTEES

The management team of STL is led by Mrs. Funmi Ekundayo. Other members of the management

team are:

Mr. Akin Oni (Head Trust Services)

Akin holds a Bachelor’s degree in Law and a Masters’ degree in Law from the Obafemi Awolowo

University, Ile Ife. He has several years of experience in private legal practice and as in-house counsel

to corporate organizations. He worked with Standard Alliance Insurance Plc before joining STL.

Mrs. Nimi Animashaun (Head, Marketing and Business Development)

Nimi holds a Bachelor’s degree in Accounting from the Obafemi Awolowo University, Ile-Ife. She is

also an Associate Member of the Institute of Chartered Accountants of Nigeria (ICAN). Nimi

commenced her banking career in 1992 and acquired experience in various areas including Money


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Market Trading, International Banking Services, Private Banking and Marketing. Prior to joining STL as

the Head of Marketing & Business Development, she worked with Express Discount Limited where she

rose to the position of Head, Marketing.

Mr. Oko U. Mba (Head, Accounts & Operations)

Oko attended Yaba College of Technology, Ondo State University and Lagos State University, Ojo at

different times where he graduated with HND Statistics, P.G.D Banking & Finance and Masters in

Business Administration respectively. An Associate Member of Institute of Chartered Accountants of

Nigeria (ICAN) and Nigerian Institute of Management, he has 18 years working experience. Before

joining STL, he worked with S. S. Afemikhe & Co (Chartered Accountants). He has attended several

local and international management and leadership courses.

Mrs. Sade Ademokunwa (Head, Human Capital Management & Administration)

Sade holds a Masters in Business Administration (MBA) from the Lagos State University and HND

Secretariat Studies from Federal Polytechnic, Ilaro. She worked with Armour Savings and Loans

Limited before joining STL. She has over 15 years working experience.

FUND INVESTMENT COMMITTEE

The Investment Committee has supervisory oversight over the activities of the Fund Manager. The

Investment Committee will provide robust advice and guidance to the Fund Manager on its investment

strategies and policies in order to ensure that its activities are in line with the Fund’s established

investment objectives and for the overall benefit of the Unit Holders. The Investment Committee will

also ensure that the Fund Manager’s activities with respect to the Fund are in line with the SEC’s

guidelines regarding permissible investments as well as investment restrictions as prescribed from

time to time. The Investment Committee will conduct a periodic review of the portfolio to assess its

liquidity position, evaluate its risk parameters and will, from time to time, rebalance the portfolio.

The Investment Committee is constituted as follows:

S/No Members

1. Mrs. Hajara Abdullahi Adeola

2. Gregory Ogbebor

3. Moshood Babatunde

4. Ndako Mijindadi

5. Akin Oni – Representative of the Trustees

6. Adebanke Orimolade – Independent member

7. Lateefah Oyefeso – Alternate member

Kindly refer to pages 27, 29, and 31 for the profiles of 1, 2, 5 and 7 respectively.

Mr. Moshood Babatunde

Moshood Babatunde heads the Financial Control Unit in Lotus Capital. He oversees and is responsible

for fund accounting, fund valuation, regulatory reporting, financial performance measurement,

strategic financial planning, budgeting and business analysis. Prior to joining Lotus Capital, he worked

in the consulting and project management firm of Mc Coy Zalm Nigeria Limited.

Moshood holds a Higher National Diploma (Distinction) in Accounting (2005) and is an Associate

Member of the Institute of Chartered Accountants of Nigeria (2010).

Mrs. Adebanke Orimolade

Adebanke Orimolade possesses over 22 years of corporate and commercial law experience and is

currently engaged in legal consulting, training and company secretarial practice. She graduated from

Obafemi Awolowo University in 1990, was called to the Nigerian Bar in 1991 and subsequently

obtained her M.Sc degree in Law from Kings College, University of London, United Kingdom.


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She has held other senior roles which include: Senior Vice President (legal and administration) at

Ocean & Oil Holdings Limited (the holding company for Oando Plc), Vice President, Legal and

Compliance at Asset & Resource Management Company Limited where she played a lead role in the

establishment and provision of legal support to the Discovery Fund.

She also worked with Travant Capital Partners Limited (an alternative investment firm) as General

Counsel. In that role, she oversaw the legal administration of Travant Private Equity Fund in

conjunction with offshore administrators and also participated in fund raising, investor relations and

transactions. She acted as company secretary to Travant Capital Partners Limited and some associate

companies during the period.

She is a graduate member of the Institute of Chartered Secretaries and Administrators, United

Kingdom and Nigeria and a member of the Global Outsourcing Association of Lawyers.

PROFILE OF SHARI’AH ADVISERS TO THE FUND

The Shari’ah Advisers to the Fund shall provide expert advice and guidance on the suitability of any

proposed investment(s) to be undertaken by the Fund with regards to its compliance with relevant

Shari’ah laws and requirements. The Shari’ah Advisers to the Fund are:

Professor Dr. Monzer Kahf

Professor Dr. Monzer Kahf has over 30 years’ experience in Islamic finance, Banking and Economics.

He is currently Professor of Islamic Finance at the M.Sc program in the Qatar Faculty of Islamic

Studies. He has been a private consultant, professional trainer and lecturer, in Islamic banking,

Finance and Economics. Between 1985 and 1999, he worked in the Islamic Research and Training

Institute (IRTI) of the Islamic Development Bank (IDB), Jeddah, Saudi Arabia, where he served as an

Economist, Senior Economist and finally Head of the Research Division of the Islamic Research and

Training Institute (IRTI).

Professor Dr. Kahf had years of intensive Shari’ah training under the Ulama of Damascus, is an Islamic

finance expert of the OIC Fiqh Academy and holds a Ph.D. in Economics from the University of Utah,

Salt Lake City, Utah (1975), a High Diploma in Social and Economic Planning, UN Institute of Planning,

Damascus, Syria (1967). Dr Kahf won the President of Syria Award for best University Graduating

Student (July 1962) and was also awarded the Islamic Development Bank (IDB) Prize for Islamic

Economics in 2001. He has over 34 books and more than 100 published articles on different areas of

Islamic finance and economics.

He speaks English, Arabic and intermediate French.

Professor Muhammed Lawal Bashar

Professor Muhammad Bashar is a well-published, prolific writer. He holds a B.A (Hons.) Economics,

from Jamia Millia Islamia, New Delhi (1981), an M.A Economics from Jawaharlal Nehru University, New

Delhi (1983), a Ph.D. in Economics from Usman Dan Fodio University, Sokoto (1991), a Certificate in

Arabic and Islamic Studies from University of Medina (1995) and a Certificate in Arabic from Usman

Dan Fodio University, Sokoto (1996). He studied the following courses at graduate level: Advanced

Macroeconomics, Fiqh (Islamic Jurisprudence) for Economists, Development Economics, Islamic

Banking and Finance and Public Finance.

He is proficient in Hausa, English, Hindi and Arabic.

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STATUTORY AND GENERAL INFORMATION

AUTHORISATION

The establishment of the Fund and the issuance of the Units pursuant to the IPO are duly and properly

authorised by a resolution passed on Friday, 2 May 2014, by the Board of Directors of the Fund

Manager. The Fund is also authorised and registered in Nigeria as a Collective Investment Scheme by

the SEC in accordance with Section 160 of the ISA.

EXTRACTS FROM THE TRUST DEED

3. Trust Deed

The provisions of this Deed and of any duly executed deed supplemental hereto shall be

binding on the Trustee, the Fund Manager, the Unit Holders and all persons claiming through

them respectively as if such Unit Holders and persons are parties to this Deed and such

supplemental deed.

4. Nature, Description and Objective of the Fund

4.1 The Fund is an actively managed open-ended unit trust scheme that offers Unit Holders the opportunity to invest in a diversified portfolio of good quality Shari’ah compliant fixed income instruments and products including but not limited to sovereign and sub-sovereign sukuk, corporate sukuk, Shari’ah compliant fixed term investments and money market instruments, Murabahah (cost-plus financing) contracts, Ijarah (lease) contracts

and other contracts of a similar nature.

4.2 Fund the investment objective and policy of the Fund is to generate stable investment returns to Holders while ensuring capital preservation and management in accordance with Shari’ah principles.

4.3 The Fund shall be invested at the discretion of the Fund Manager in Shari’ah compliant investments in the proportions specified below (the “Investment Policy”):

Proposed Asset Class Range Target Allocation

Cash 0 – 5% 5%

Sovereign and Sub-Sovereign Sukuk 0 – 90% 30%

Corporate Sukuk 0 – 60% 15%

Shari’ah compliant Fixed Term Investments 0 – 100% 30%

Murabaha, and Ijara Contracts and other Fixed Income Contracts

0 – 70% 20%

4.4 In the event of adverse market or economic conditions, the Fund Manager, in consultation with the Investment Committee, and with the approval of SEC, may revise the Investment Policy set forth above in order to protect the value of the Fund for the

benefit of Unit Holders.

5. Rights of Unit Holders

5.1 Unit Holders shall not have or acquire any right against the Manager or the Trustee in respect of their investment in the Fund save as are expressly conferred upon them by this Deed.

5.2 No person shall be recognized as a Unit Holder except in respect of Units registered in

such Unit Holder’s name.

5.3 Each Unit Holder shall have a beneficial interest in the Trust proportionate to the Units held by such Unit Holder. Unit Holders shall have such rights as are set out in Clause 5.4 of this Trust Deed.

5.4 A Unit Holder shall have a right to:

5.4.1 mortgage, pledge, charge or otherwise use his Unit holdings as security for any debt, loan or obligation entered into by him; provided that neither the Trustee

nor the Fund Manager shall be obliged to recognize or honour any such mortgage, pledge, charge or other encumbrance unless it has been duly notified in such manner as it may require from time to time.


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5.4.2 subject to the provisions of this Deed, request the Fund Manager to convene a

meeting of Unit Holders; and

5.4.3 receive Distributions, if any, in such form, manner and amount and for such periods and at such times as the Fund Manager may recommend.

6. Constitution of the Fund

6.1 The Fund shall initially be constituted out of the proceeds of the Offer.

6.2 The cash proceeds of the Offer and any other property of the Fund at all times will be vested in the Trustee and shall constitute the Fund after deduction of or provisions for the relevant fees and charges by the Fund Manager.

6.3 The Fund shall be held as a single common fund and no Unit shall confer any interest or share in any particular part of the Fund.

6.4 The powers hereby conferred on the Trustee shall be exercised in addition to any powers

which may from time to time be vested in it by general law or as holder of the Fund’s

assets in so far as they do not, and shall not, conflict with the powers vested in the Fund Manager under this Deed.

6.5 The Trustee and Fund Manager in the exercise of powers and discretions vested under this Deed shall comply with the provisions of the ISA, and all SEC Rules and Regulations made pursuant to it.

6.6 The Fund Manager and the Trustee shall not borrow upon the Fund or use the asset(s) of

the Fund as security for any borrowing save units owned by the Fund Manager or the Trustee where applicable. The Fund Manager and the Trustee shall not borrow on behalf of the Fund or Unit Holders and the Fund’s cash shall not be borrowed for the purpose of acquiring Units in the Fund.

6.7 The assets of the Fund will be vested in the Trustee or, subject to any prescribed conditions, in a nominee approved by the Commission, on trust for the benefit of the Unit Holders.

6.8 The Cash Account and Custody Account shall be managed in accordance with the Custodian Agreement.

6.9 Each Unit Holder shall invest in the Fund for the Minimum Investment Period.

7. Issuance and Sale of Units

7.1 The Fund Manager shall offer One million (1,000,000) Units of the Fund at the offer price of One Thousand Naira (N1,000.00) per unit to the public.

7.2 The minimum investment during the IPO shall be the Minimum Holding at an Offer Price of N1,000 (One Thousand Naira) per Unit.

7.3 Subsequent to the IPO, the Fund Manager shall subject to registration with and approval by the Commission, have the power to issue additional Units at the Offer Price.

7.6 The Fund Manager shall, in accordance with the SEC Rules, subscribe to a minimum of

five (5) per cent of the IPO and such minimum percentage as the SEC Rules may provide from time to time shall be held by the Fund Manager throughout the duration of the

Trust.

7.7 The Fund shall be domiciled in Nigeria and shall be denominated in Nigerian Naira.

8. Control of the Fund

8.1 The effective control over the affairs of the Trust is vested in and will be exercised independently by the Trustee on behalf of the Unit Holders.

8.2 The Fund Manager shall be entitled, subject to the consent of the Trustee, to delegate to any person, firm or corporation upon such terms and conditions as it may think fit, all or

any of its powers and discretion in relation to the selection, acquisition, holding and realization of investments and applications of any monies forming part of the Fund. PROVIDED THAT the Fund Manager shall remain liable hereunder for any act or omission of any such person, firm or corporation in relation to the exercise or non-exercise of any

powers or discretion so delegated as if the same were an act or omission of the Fund Manager.


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10. Risk Management Process

The Fund Manager will adopt appropriate risk management techniques and tools in the management of the Fund. In order to mitigate against risk, the Fund Manager shall determine or alter the investment mix of the portfolio from time to time in view of the developments in the component sectors or companies.

The Fund Manager has no control over future market or economic conditions and will not indemnify any investor on the occurrence of any adverse events or conditions affecting the performance of the Fund. Although the Fund Manager shall exercise due care in investing the

Trust’s money, it does not guarantee that the Fund’s objective will be attained.

13. Rebalancing of the Fund’s Portfolio

13.1 It shall not be necessary for either the Fund Manager or the Trustee to effect or cause to be effected, changes to the Investments by reason of any appreciation in the value or the aggregate value of any investments in any one company or body, or of any security or any depreciation in the value or aggregate values of any investments by

reason of any of the following:

13.1.1 Any scheme of arrangement for amalgamation, reconstruction, conversion or exchange; or

13.1.2 The receipt by the Trustee or its nominees of any rights, bonuses or benefits in the nature of capital,

Provided however that the Fund’s portfolio shall, as far as is practicable, be rebalanced within a reasonable time frame.

14. Rights Attaching to Investments

14.1 Subject to any direction from time to time given by a special resolution of the Unit Holders, all rights of voting conferred by any Investments shall be exercised by the Trustee in the best interest of the Unit Holders. Upon written request and at the expense of the Manager, the Trustee shall from time to time execute and deliver or

cause to be executed or delivered to the Manager or its nominees such powers of attorney or proxies in such names as the Manager may request authorising such attorneys and proxies to vote, consent or otherwise act in respect of all or any part of the Fund’s investments.

14.2 Subject to any such direction as aforesaid, the Trustee or its duly authorized representatives shall exercise or cause to be exercised the said rights in what it

considers to be the best interests of the Unit Holders.

14.3 Subject to Section 168 of the ISA, neither the Trustee nor any of its duly authorized representatives shall be under any liability or responsibility in respect of the management of the Investments nor in respect of any vote or action taken or omitted to be taken or consent given or omitted to be given by the Trustee whether in person or by such duly authorized representative or by the holder of any such proxy or power of attorney save for those actions or omissions which are prejudicial to the interests of

the Unit Holders.

14.4 The Trustee shall where necessary forward to the Fund Manager, all notices of meetings, reports, circulars and other documents of a like nature received by it or its nominees as holder of any investment of the Fund.

15. Registration of Unit Holders

The following provisions shall apply to the registration of Unit Holders:-

15.1 A Register of Unit Holders shall be kept by the Fund Manager.

15.2 The Register shall contain the names of Unit Holders, the respective number of Units held by each Unit Holder, the nominal value of the Units, the date of purchase, the certificate/account number (if applicable) and any other information that may be deemed necessary by the Fund Manager and the Trustee.

15.3 The number of Units held by a Unit Holder shall be registered and recorded as a book

entry.

15.4 A corporate body may be registered as a Unit Holder or one of joint Unit Holders.

15.5 Where there are joint Unit Holders, their respective names and addresses may be entered into the Register provided that no more than four joint Unit Holders shall be


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entered in the Register in respect of any specific holding of Units.

15.6 Any change of name or address by a Unit Holder shall forthwith be notified in writing to the Fund Manager, who on being satisfied that the Unit Holder has complied with all such formalities as it may require, effect the change in the Register.

15.7 Any Unit Holder or his nominee shall be entitled at all reasonable times during business hours to inspect the page of the Register on his Unit Holding.

15.8 The Register may be closed at such times and for such periods as the Fund Manager with the consent of the Trustee may determine and upon giving to the Unit Holders notice of intention to close same by advertisement in one or more of the following: a daily national newspaper, the Fund Manager’s website or by e-mail or other written notification to Unit Holders. PROVIDED always that the Register shall not be closed for more than 30 (thirty) days in any one calendar year.

15.9 The Register shall be conclusive evidence of ownership of Units of the Fund and no notice of any trust, express, implied or constructive shall be entered upon the Register

in respect of any such Units.

15.10 The Fund Manager shall not, save as herein otherwise provided and except as ordered by a court of competent jurisdiction or as required by statute, be bound to recognize (even when having notice thereof) any trust or equity affecting the ownership of such Units or the rights incidental thereto.

15.11 In the event of death of a unit holder, the Fund Manager shall suspend, without losing any contractual privileges, any withdrawal and distribution in regard to such units. The executors or administrators of the deceased unit holder shall present the Fund Manager with a death certificate duly issued by any relevant authority, a will, probate letter or letter of administration or such other documents to the satisfaction of the Fund Manager.

15.12 In the event of the death of any one of joint Unit Holders, the Fund Manager shall

divide the total units jointly held in equal parts between the deceased and surviving

holder, unless otherwise required under any legally binding document. No claim for redemption or distribution shall be made on the account of the deceased unit holder until the production of appropriate documents to the satisfaction of the Fund Manager. The right of the surviving joint holder in relation to his share of the unit shall not be affected in any way.

15.13 Any person becoming legally entitled to any Units in consequence of the death, bankruptcy, dissolution, or winding-up of any Unit Holder or the survivor of joint Unit Holders shall, upon producing such evidence that he is entitled to such Units as the Fund Manager shall think sufficient, or a resolution of dissolution or winding-up or court order as the case may be, to the Fund Manager be entitled to elect either to be registered as the holder of such Units or have the Units transferred to some other person. If the person so becoming entitled elects to be registered as the Holder, he

shall deliver or send to the Fund Manager, a notice in writing in a form to be prescribed by the Fund Manager signed by him stating that he so elects. If he elects to have some other person nominated by him registered, he shall testify his election by executing to

such other person an assignment of such Units. All the provisions of this Deed relating to transfers of Units shall be applicable to any such notice or transfer as aforesaid as if the death, bankruptcy, dissolution or winding-up of the Unit Holder had not occurred and the notice or transfer were a transfer executed by such Unit Holder.

15.14 A person becoming entitled to Units in consequence of the death, bankruptcy, dissolution or winding-up of a Unit Holder or the survivor of joint Unit Holders shall be entitled to receive and may give a discharge for all monies payable in respect of the Units but shall not be entitled to the rights of a Unit Holder with regard to the receipt of notices of, or attendance, or voting at any meetings of Unit Holders as holder of such Units until he shall have been registered as a Unit Holder in respect of such Units.

15.15 The Fund Manager may in respect of the registration of any probate, letters of administration, power of attorney, certificates of marriage or death, orders of the court, deed poll, resolutions or other document affecting the transmission of any Units or distribution in respect thereof charge reasonable administrative fees as it may

determine from time to time.

15.16 Notwithstanding any other provision of this Deed, the Fund Manager or any person appointed by it shall act solely as the agent of the Trustee in keeping the Register as

required by the foregoing provisions of this clause and the Trustee shall have the same


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responsibility towards Holders as if the Register were kept by the Trustee.

16. Evidence of Unit Holding

16.1 Except where a certificate is specifically requested, Holders shall be notified of their holding via electronic mail, text messages or other electronic channel of communication. In addition, Holders may be granted access to a portal where they can confirm their holdings.

16.2 The notification shall include a unique investment account number created for the Holder, the purchase price, and the number of units allotted. In the case of purchase of additional units or partial redemption, the Holder’s investment account shall be updated and the Holder notified accordingly.

16.3 A purchase statement sent electronically by the Fund Manager in relation to the Units purchased by an investor shall be prima facie indication of such investor’s holdings.

16.4 Joint Holders shall have a joint investor account into which Units shall be credited

17. Right of Assignment of Units

Every Unit Holder shall be entitled to assign, by way of security or otherwise, all or any part of his or her investment in the Fund to third parties subject to a minimum of five (5) Units or such other minimum number as the Fund Manager may prescribe from time to time. PROVIDED THAT the Fund Manager is notified of such assignment within three (3) Business days of the assignment.

18. Income Distribution

18.1 The Fund Manager may make distributions quarterly from the net income of the Fund in line with the provisions of this Deed and subject to the applicable laws, rules and regulations of the Commission.

18.2 Subject to prevailing economic conditions, the Fund Manager shall distribute eighty (80) per cent of the Fund’s net income in any Financial Year to Unit Holders. Any undistributed profit shall be assigned to individual unit holders in proportion to the

number of units owned by them and reinvested for their benefit and account. Provided however, that the Fund Manager shall within five Business Days of it becoming aware that the Fund may be unable to distribute eighty percent of the Fund’s income in any Financial Year, notify the Trustee in writing of the reason(s) for such inability to meet the target distribution percentage.

18.3 Unit Holders shall have the option to receive Distributions in cash or reinvested in

additional Units at the Offer Price on the day the Distribution is declared by the Fund Manager.

18.4 Unit Holders who elect to receive their Distributions in cash will have their Distributions paid into their specified bank account or any account advised by them or by warrant/cheque, where there is no account details supplied by such Unit Holders.

19. Annual Accounts

19.1 Within three (3) months from the end of every financial year (or such longer or shorter

period that may subsequently be prescribed by applicable regulation), the Manager shall cause the Fund’s accounts to be audited and certified by the Auditors and a Shari’ah auditor. A copy of the audited accounts shall be approved by the Shari’ah Advisers and signed by the Manager and the Trustee and thereafter forwarded to the Commission for approval.

19.2 The audited accounts shall be posted on the Fund Manager’s website within three (3) months from the receipt of the Commission’s approval.

19.3 The Fund’s financial year shall end on the 31st of December each year.

20. Auditors and Audited Statements

20.1 The Auditors shall be duly registered with the Commission and be appointed by the Fund Manager with the approval of the Trustee. No Auditor shall be a company or person who is not qualified for appointment as auditor of a company under Section 358 of CAMA.

20.2 No director or employee of the Fund Manager, Trustee or Custodian and no firm of which

any such director or employee is a member may be appointed as an Auditor in accordance with Section 184 (1) of the ISA.

20.3 The remuneration of the auditors shall be fixed by the Fund Manager with the approval


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of the Trustee.

20.4 Any auditor appointed may be removed by either the Trustee or the Fund Manager with the approval of the other party by notice thereof to the Auditor.

20.5 Notwithstanding any agreement between the Fund Manager and the Auditors, the Unit Holders may by resolution remove the Auditor before the expiration of the Auditors’ term of office; and where a resolution removing an Auditor is passed at a meeting of the

Unit Holders, the Fund Manager shall within 14 days of such meeting give formal notice of the removal of the Auditor to the Trustee, Auditors and SEC.

20.6 The Auditors may resign their office by serving a notice in writing to that effect at the registered office of the Trustee and any such notice shall operate to determine his office on the date on which such notice is received or on such later date as may be specified therein.

20.7 An Auditor’s notice of resignation shall not be effective unless it contains either:

20.7.1 A statement to the effect that there are no circumstances connected with his

resignation which he considers ought to be brought to the notice of the Unit Holders or SEC; or

20.7.2 A statement setting out circumstances connected with his resignation, which he considers should be brought to the notice of the Unit Holders or SEC.

20.8 Where a notice under sub-clause 20.6 is served at the Trustee’s registered office, the

Trustee shall within fourteen (14) days send a copy of the notice to the Fund Manager.

21. Unit Holders’ Right of Redemption

21.1 Except as provided in this Deed, Unit Holders may redeem all or part of their Units in the Fund by serving on the Fund Manager issuing a notice of intention to redeem such Units (“Redemption Notice”).

21.2 No Redemption Notice shall be valid where the units to be redeemed would result in the Holder holding less than the Minimum Holding. Provided that any such Redemption

Notice shall be treated as a notice of intention to redeem the entire Units held by such

Unit Holder.

21.3 Redemption shall be effected on a continuous basis throughout the life of the Fund and at the Bid Price on the Business Day immediately following the receipt of the

Redemption Notice by the Fund Manager.

21.4 Unit Holders who purchase their Units during the IPO will be unable to redeem their Units till the end of the applicable Minimum Investment Period. Units purchased after the IPO may be redeemed before the expiration of the applicable Minimum Investment Period provided that the Fund Manager shall be entitled to deduct from the Unit Holder’s investment any charges directly incurred as a result of such redemption.

21.5 Any Holder of Units who desires to redeem his Units or any part thereof, shall until one month prior to the termination of the Trust, be entitled by written notice delivered to the Fund Manager or in such other form as the Fund Manager may agree, require the Fund

Manager to redeem the Units at the current Bid Price at the expiration of the redemption period approved by the Commission from time to time (currently five business days). Subject to the Fund Managers discretion, redemption proceeds may be paid from the

liquidation of the Fund’s investments or by the depletion of its cash holdings. PROVIDED THAT no person shall be entitled to require the Fund Manager to purchase only part of the Units held by such person if such purchase would result in its being the Holder of less than the Minimum Holding.

21.6 Any moratorium which may at any time be applied to payments in respect of banking transactions shall apply equally to payments due from the Fund Manager pursuant to this Clause.

22. Transfer of Units

22.1 Every Holder shall be entitled to transfer its Units by an instrument in writing or in such other form as the Fund Manager may from time to time approve. PROVIDED THAT no

transfer of part of a holding of Units shall be registered if in consequence thereof, either the transferor or transferee would be the Holder of a number less than the Minimum Holding.


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22.2 Units shall only be transferred in multiples of five (5) or such number of Units as may for

the time being generally or otherwise be prescribed in writing by the Fund Manager with the approval of the Trustee.

22.3 Every instrument of transfer must be signed or otherwise authenticated to the Fund Manager’s satisfaction by the transferor (but need not be signed by the transferee). The transferor shall be deemed to remain the Holder of the Units transferred until the name

of the transferee is entered in the Register in respect thereof. The instrument of transfer need not be a deed.

22.4 A reasonable fee of such amount as the Manager and the Trustee may from time to time agree may be charged by the Manager upon any transfer of Units.

26. Fees and Charges

The Fund shall bear the following fees, charges and expenses.

26.1 Remuneration of Custodian, Shari’ah Adviser, Fund Manager and Trustee

26.1.1 The remuneration of the Manager and all other administrative fees shall accrue

on a daily basis.

26.1.2 The Fund Manager shall earn an annual management fee of 1.0% of the Net Asset Value which shall be payable quarterly in arrears.

26.1.3 The Fund Manager shall be entitled to an incentive fee which shall not exceed 30% of the total returns in excess of 10% of the Net Asset Value per annum or such other incentive fee as may be set by the Commission from time to time.

26.1.4 The Fund Manager shall, with the consent of the Trustee, be reimbursed for all

reasonable costs and expenses incurred in connection with the management of the Fund hereof and the exercise of the duties and discretions hereby vested in the Fund Manager; provided that the Manager provides the Trustee with invoices/receipts for all expenses incurred on behalf of the Fund.

26.1.5 The remuneration of the Trustee shall be an annual fee of 0.05% of the Net

Asset Value, net of applicable taxes as the remuneration due to it for its services provided under this Deed, except as otherwise directed by the

Commission. The Trustee’s remuneration shall be payable annually in arrears and shall accrue on a daily basis.

26.1.6 The Trustee shall be reimbursed for all traveling and other costs, charges and expenses reasonably incurred in connection with the execution of the Trust hereof and the exercise of the powers and discretion hereby vested in the Trustee; provided that the Trustee provides the Manager with invoices/receipts

for all expenses incurred on behalf of the Fund.

26.2 Custodian’s Fee

The Fund Manager shall pay to the Custodian an annual fee of 0.05% of the Net Asset Value net of applicable taxes as the remuneration due to it for its services provided under this Deed, except as otherwise directed by the Commission. The Custodian’s

remuneration shall accrue on a monthly basis and be payable quarterly in arrears.

26.3 Payments to the Shari’ah Adviser

The Fund Manager shall, on behalf of the Fund, fix the remuneration of the Shari’ah Advisers which shall be payable quarterly in arrears. The remuneration will be capped at the sum of N2,000,000.00 (Two Million Naira only) for the period of two (2) years from the date of this Deed. From the second anniversary of this Deed, the remuneration may be increased annually in line with the average inflation rate for the previous year as published by the National Bureau of Statistics.

26.4 Miscellaneous Expenses

26.4.1 The initial costs of establishing the Fund will be borne by the Fund.

26.4.2 The annual management fees and other fees and expenses incidental to the running of the Fund shall be payable out of the Fund. The Fund Manager shall,

where it deems it necessary, make provision for such expenses by depositing and keeping deposited in the name of the Fund and under the control of the Custodian such amount as shall in the opinion of the Fund Manager in

consultation with the Trustee be sufficient to meet the Fund’s expenses from time to time. PROVIDED THAT the annual management fees and other fees and


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expenses incidental to the running of the Fund shall not exceed 5% of the Net

Asset Value of the Fund or such other limit as may be set by the Commission from time to time.

27. Covenants of the Fund Manager

The Fund Manager hereby covenants with the Trustee as follows:

27.1 not to make a profit for itself from transactions in any assets held under the Fund;

27.2 to carry on and conduct the business of the Fund in a diligent manner;

27.3 to keep proper books of accounts for the Fund and therein make true and proper entries of the affairs of the Fund;

27.4 to procure that such books of accounts shall with not less than 3 Business Days

written notice at all reasonable times during business hours, be open for inspection by the Trustee;

27.5 not to borrow money on behalf of the Fund for the purpose of acquiring securities or other property for the Fund or otherwise;

27.6 to give to the Trustee timely information as to all matters relating to the affairs or business of the Fund which it shall reasonably require;

27.7 to furnish to the Trustee, not later than 3 months (or such extended period as SEC

may allow) after the end of the Financial Year, two copies of the Fund’s Statement of Financial Position and Statement of Other Comprehensive Income certified by the Auditors;

27.8 not to lend money that is subject to the trusts of the Fund to a person to enable him to purchase Units of the Fund;

27.9 not to mortgage, charge or impose any other encumbrance on any securities or other

property subject to the trust of the Fund;

27.10 not to engage in any transactions with respect to or for the Fund that are not, in its opinion, in the best interests of Unit Holders and of the Fund;

27.11 not to deviate from or alter the Investment Policy of the Trust without due recourse to the provisions of this Deed and the law regarding same; and

27.12 to give written notice to the Commission of any proposal to alter the scheme or replace the Trustee as required by Section 187 of the ISA.

28. Covenants of the Trustee

28.1 Except as otherwise set out in this Deed, the Trustee covenants that effective control over the affairs of the Fund shall be vested in the Trustee and will be independently exercised by the Trustee on behalf of the Unit Holders.

28.2 The Trustee undertakes to notify SEC of any breach of any of the provisions of this Deed not later than 10 Business Days of its knowledge of such breach or such other

time as may be prescribed by SEC rules. The Trustee undertakes further that

whenever it shall become necessary for it to enforce any of the provisions of this Deed it shall act within 30 Business Days to effect the enforcement.

28.3 The Trustee undertakes to notify the Fund Manager of any breach committed by the Fund Manager of any of the provisions of this Deed not later than 3 Business Days after such breach comes to the Trustees’ knowledge.

29. Neither Fund Manager nor Trustee Required to effect Transactions

Notwithstanding anything herein contained, neither the Trustee nor the Fund Manager nor any other party shall be required to effect any transaction or dealing with any Holder or with any part of the Fund’s Investments on behalf of or for the benefit of or at the request of any Unit Holder unless such Unit Holder shall first have paid in cash to the Trustee or the Fund Manager or to any such party or otherwise provided to its or their satisfaction as the case may be such amount as is sufficient to cover all duties and charges and any necessary stamp duty which may have become or may be payable in respect of or prior to or upon the occasion of such

transaction or dealing. PROVIDED always that the Trustee or the Fund Manager or such other party shall be entitled, if it or they (as the case may be), think fit to pay and discharge all or any of such duties, charges or stamp duty on behalf of the Unit Holder and to retain the amount so paid out of any monies or property to which such Unit Holder may be or become entitled in respect of his Units or otherwise howsoever hereunder.


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30. Retirement or Removal of Fund Manager and Appointment of New Fund Manager

30.1 Subject to the approval of the Commission, the Fund Manager shall retire from the management of the Trust on the occurrence of any of the following events:

30.1.1 if a Special Resolution is passed at a duly convened meeting of Unit Holders

holding at least 75% in value of the Registered Units requesting the Trustee in

writing that the Fund Manager should retire; or 30.1.2 if the Fund Manager goes into liquidation (except a voluntary liquidation for the

purpose of amalgamation or reconstruction on terms previously approved in writing by the Trustee) or if a Receiver is appointed over the undertaking of the Fund Manager or any part thereof.

30.2 On the happening of any of the events specified in this Clause, the Trustee shall be

entitled by writing under its seal to appoint another SEC registered fund manager to be the Fund Manager of the Trust subject to such newly appointed Fund Manager entering

into such deed or deeds as the Trustee may advise. PROVIDED THAT the Fund shall, as soon as practicable, cease to use the phrase “Lotus” in its name and that neither the Trustee nor the new manager shall hold themselves out as being connected with the retiring Manager in any way.

31. Voluntary Retirement of the Fund Manager

31.1 The Fund Manager shall have the right to voluntarily retire in favour of some other fund manager approved by the Trustee and SEC upon and subject to such other fund manager entering into such deed or deeds as mentioned in the preceding Clause.

31.2 Where no suitable replacement for the Fund Manager has been identified within six (6) months of the Trustee’s receipt of the Fund Manager’s notice of voluntary retirement, the Trustee may terminate the Trust and liquidate the Fund at the expiration of six (6)

months written notice to this effect issued to the Unit Holders, the Fund Manager and the Commission.

32. Retirement or Removal of Trustee and Appointment of the New Trustee

32.1 In the event of the Trustee desiring to retire, the Trustee shall first give a three (3) months’ notice to the SEC and the Fund Manager stating the reasons for its intention to retire.

32.2 The Fund Manager shall use its best endeavours to appoint a new Trustee within the

three (3) months’ notice period. The new Trustee shall be an incorporated company registered with the SEC If no new Trustee can be identified within that period, then the Fund Manager may terminate the Trust.

32.3 The Trustee shall not be entitled to retire voluntarily except upon the appointment of a new Trustee; provided that where a new Trustee is not appointed within 3 months after the Trustee has given the Fund Manager and the Commission notice of intention to retire, the Trustee shall be entitled to appoint an interim Trustee and notify the

Fund Manager and the Commission of such appointment. In the event of the Trustee

desiring to retire, the Fund Manager shall be entitled to appoint a new Trustee by Deed under the Seal of the Fund Manager. Any new Trustee so appointed shall be a company duly registered with the Commission and permitted by statute to act as a trustee of an authorized unit trust scheme.

32.4 The Trustee shall be subject to removal by notice in writing from the Fund Manager in

any of the following circumstances provided that in any case, the proposed removal has been approved by SEC or one (1) month has passed since the notice was served on SEC without SEC having notified the Fund Manager that the proposed removal is not approved, before service on the Trustee:

32.4.1 If Unit Holders holding not less than 75% of the Issued Units outstanding, deliver to the Fund Manager a request in writing that the Trustee retire from its role as trustee to the fund;

32.4.2If the Trustee goes into liquidation (except for voluntary liquidation for the

purpose of reconstruction or amalgamation upon terms previously approved in writing by the Fund Manager) or if a receiver is appointed over any of its assets;

32.4.3 If in the opinion of the Fund Manager, which opinion is confirmed by Unit Holders holding a simple majority of the Issued Units outstanding attending


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the Meeting in person or by proxy, the Trustee has become incapable of

performing or has in fact failed to perform its duties satisfactorily or shall have done any other thing which is calculated to bring the Fund into disrepute or be harmful to the best interests of the Unit Holders or is in breach of the Trustee’s fiduciary duties to the Fund. Upon removal of the Trustee, the Fund Manager shall by writing under its seal subject to the approval of SEC appoint some

other qualified corporation to be Trustee, and such corporation shall execute such Deed as the Fund Manager deems necessary or desirable to secure the due performance of its duties as Trustee.

32.5 The retiring Trustee shall, within one month, hand over all properties and documents of the Fund in its possession to the new Trustee.

33. Power of Trustee and the Fund Manager to terminate the Trust

Notwithstanding any other provision herein contained, the Trust hereby created may be terminated on the happening of all or any of the following circumstances:

33.1 If the Fund Manager considers that the investment objective of the Fund is no longer achievable.

33.2 If any law is passed or regulations or decision of a court of competent jurisdiction or government policy is made which in the judgment of the Fund Manager and/or the Trustee renders the continued existence of the Fund illegal or impractical.

33.3 If the Commission revokes the authorisation of the Fund in accordance with Section 180 of the ISA.

33.4 If at any General meeting it should be resolved by Special Resolution to determine the Trust on a date specified in such resolution (being a date not earlier than three months after the date of the resolution) the Trust shall accordingly be determined and this Trust Deed shall cease to be of effect.

33.5 If within a reasonable time (not exceeding six months) of the Fund Manager vacating

office under the provisions of Clauses 30 and 31 hereof, the Trustee fails to find

another fund manager ready to accept the office of Fund Manager of the Trust and of which the Trustee and SEC shall approve, or if no new Trustee was identified pursuant to clause 32.2 above, the Trustee may in its absolute discretion give notice to the Unit Holders forthwith terminating the Trust. Thereupon, the Trust shall terminate in all respects as on the Trustee’s issuance of the notice.

33.6 The Trustee or the Fund Manager may, by not less than six months’ notice given to the Fund Manager or the Trustee as the case may be, terminate the Trust in accordance with this Agreement. The Fund Manager shall give notice thereof to all Unit Holders not less than three months prior to any termination date.

34. Provisions upon Termination of Trust

Upon the Trust being terminated, the Trustee shall.

34.1 Procure the sale of the Fund’s assets then remaining in the Trustee’s possession and

repay from the proceeds of sale, all liabilities properly repayable. Such sale and

payment so far as is reasonably practicable, shall be completed within six months after the termination of the Trust.

34.2 Distribute to the Unit Holders, according to their respective interests in the Fund, the net cash proceeds derived from any realization of the Fund’s assets and available for the purpose of such distribution. PROVIDED THAT the Trustee shall be entitled to retain out of any monies in its hands, such sums as may be required for the purpose of

making full provision for all duties, charges and all other necessary expenses in connection with the sale of the Fund’s assets and distribution to the Unit Holders.

34.3 Every such Distribution shall be made only after the certificate (if any was issued) relating to the Units in respect of which the same is made shall have been lodged with the Trustee together with such form of request for payment and receipt as the Trustee shall in its absolute discretion require. Such certificate shall in the case of an interim

Distribution be enfaced by the Trustee with a memorandum of the payments made and

in the case of a final distribution shall be surrendered to the Trustee. PROVIDED THAT Unit holders will lose their entitlement to any unclaimed Distributions under the provisions of this clause at the expiration of six years from the date on which any Distribution becomes payable.


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36. Meetings

The Fund Manager in consultation with the Trustee, or upon the request of Holders of not less than twenty-five per cent in aggregate value of the Units for the time being outstanding of the Fund may call a General Meeting of Unit Holders.

39. Notices

39.1 All notices or other documents directed to be given or sent by the Trustee or the Fund

Manager to a Unit Holder may be sent by post, courier, short message service, fax, or electronic mail to the Holder at his address, or email address as appearing in the Register.

39.2 Any notice shall be deemed to have been received by the Holder on the same day as shown on the notice if sent by fax or via electronic mail or short message service or on the third day following the day on which the notice was sent, if it was sent by post.

39.3 In the case of joint Holders, notices shall be sent to the Holder named first in the Register. A notice so given shall be deemed sufficient notice to the other joint Holders.

39.4 Notices may also be given to Unit holders via publication on the Fund Manager’s website or in any newspaper or such other means as the Manager shall consider practicable or expedient.

39.5 A notice required to be given to the Trustee or the Manager shall be sent to the registered office of the Trustee or the Manager as the case may be, or their electronic

mail addresses or any other contact details for notices given by them.

39.6 Notices to the

39.6.1 Trustee shall be sent to:

The Managing Director

STL TRUSTEES LIMITED

Skye Bank Building (Third Floor)

30 Marina, Lagos

Email: [email protected] or [email protected]

Phone: 012718821

Attention: Funmi Ekundayo

39.6.2 Fund Manager shall be sent to:

LOTUS CAPITAL LIMITED

1B Udi Street, Osborne Foreshore Estate, Osborne Road, Ikoyi, Lagos

Email: [email protected]

Phone: 01-271 3280-2

Attention: The Company Secretary

40. Payments

40.1 All payments to Unit Holders under the provisions of this Deed may be made by

electronic transfer to the Unit Holder’s specified bank account. Unit Holders shall be required to ensure bank details stated on the application forms are correct and the Fund Manager shall not be liable for any error as a result of wrong account details. In the case of joint Unit Holders, payment will be made to the joint investor account pursuant to clause 16.4 of the Trust Deed.

40.2 Where an authority in writing shall have been received by the Trustee or Manager from the Holder in such form and signed or sealed in such manner as the Trustee or

Manager shall direct, authorising the Trustee or Manager to pay any monies due to the Holder to a bank, agent or nominee; the Trustee or Fund Manager shall pay the monies payable to the Holder as the case may be in the same manner and with the same effect as hereinbefore provided as if such banker, agent or nominee were the

Holder and such payment shall be a good discharge of the Trustee and Manager.

40.3 Without prejudice to the application of clauses 29.1 and 29.2 above, any confirmation whether generated electronically by the Custodian or the Manager evidencing the


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transfer of any monies to the Holder’s account shall be a good discharge to the

Trustee and Manager in respect of any monies the Holder is entitled to receive.

41. Copies of Deed to be made available

41.1 A copy of this Deed and of any deed supplemental hereto or a copy of this Deed as amended by such deeds shall at all times during usual business hours be made

available by the Fund Manager and by the Trustee at their head offices for inspection by Unit Holders and intending purchasers of Units. Any Unit Holder shall be entitled to receive from the Fund Manager, a copy of such Deeds aforesaid upon the submission of a written request and the payment of the prescribed amount for each copy of the deed as the Fund Manager may require.

41.2 The Trustee shall keep a counterpart copy of this Deed.

42. Power of Modification by Supplemental Trust Deed

The Trustee and the Fund Manager shall be entitled with the prior approval of SEC by deed

supplemental hereto to modify, alter or add to the provisions of this Deed in such manner and to such extent as they may consider expedient for any purpose. Any such amendment shall be communicated to the Unit Holders and a Unit Holder aggrieved with the amendment shall have a right to redeem the Units held by such Unit Holder.

EXTRACTS FROM THE CUSTODY AGREEMENT

Below are relevant extracts from the Custody Agreement:

A. EXTRACTS FROM THE CUSTODY AGREEMENT

2. Appointment of the Custodian

The Fund Manager and the Trustee have jointly appointed the Custodian to act as custodian of the assets of the Fund, and the Custodian has agreed to provide custodial services subject to

the terms and conditions set forth below.

5. Instructions

5.1 Authority

The Custodian is entitled to rely conclusively upon the authority of any Authorised Person to give Instructions until the Custodian has received written notice of any

change from the Fund Manager.

5.2 Communications

The Custodian is authorised to rely conclusively upon any Instructions received by any means, provided that the Custodian and the Fund Manager have agreed upon the means of transmission and the method of identification for the Instructions. In furtherance of the foregoing:

5.2.1 the Fund Manager and the Custodian will comply with certain agreed security procedures (the “Procedures”), designed to verify the origination of Instructions;

5.2.2 the Custodian is not obligated to do anything other than what is contained in the Procedures to establish the authority or identity of the person sending an Instruction. The Custodian is not responsible for errors or omissions made by

the Fund Manager or resulting from fraud or the duplication of any Instruction by the Fund Manager. The Custodian may act on an Instruction if it reasonably believes it contains sufficient information;

5.2.3 the Custodian may decide not to act on an Instruction where it reasonably doubts its contents, authorisation, origination or compliance with the Procedures and will promptly notify the Fund Manager of its decision;

5.2.4 if the Fund Manager informs the Custodian that it wishes to recall, cancel or

amend an Instruction, the Custodian will use its reasonable efforts to comply;

5.2.5 if the Custodian acts on any Instruction sent by any means requiring manual intervention (such as telephone, telex, electronic mail or disks emanating from the Fund Manager) then, if the Custodian complies with the Procedures, the Fund Manager will be responsible for any loss, excluding indirect and


46 | P a g e


consequential losses, the Custodian may incur in connection with that

Instruction PROVIDED THAT such loss is not caused by the Custodian’s negligence, willful misconduct or fraud. The Parties expressly acknowledge that they are aware that the use of manual forms of communication to convey Instructions increases the risk of error, security and privacy issues and fraudulent activities; and

5.2.6 instructions are to be given in English language.

5.3 Limitations

Instructions will be governed by and carried out subject to the prevailing laws, rules, operating procedures and practice of any relevant Stock Exchange, Clearance System or market where or through which they are to be executed or carried out. The

Custodian is obligated to act upon instructions only during banking hours (including applicable cut-off times) and on banking days when the applicable financial markets are open for business.

6. Performance by the Custodian

6.1 Custodial Duties Not Requiring Further Instructions

Subject to any contrary Instruction, the Custodian shall carry out the following without further Instructions:

6.1.1 collect, receive, and/or credit the Custody Account or Cash Account as appropriate with all income, payments and distributions in respect of the Property and any capital arising out of or in connection with the Property and take any action necessary and proper in connection therewith;

6.1.2 exchange interim or temporary receipts for definitive certificates, and old or over stamped certificates for new certificates;

6.1.3 make any payment by debiting the Cash Account or any other designated

account of the Fund with the Custodian as required to effect any Instruction

and to pay any fees, charges or amounts payable to the Custodian in accordance with Clause 16 of this Agreement or other agreement by the Fund Manager and Trustee;

6.1.4 attend to all non-discretionary details in connection with any matter provided in this Clause or any Instruction;

6.1.5 shall provide the Fund Manager and Trustee, monthly and quarterly, online statements via Citibank Securities and cash platform (‘CitiDirect’) or physical statements of the Accounts of the Fund which shall:

6.1.5.1 list the Property held in the Custody Account;

6.1.5.2 identify the entity having physical possession of such Property;

6.1.5.3 details of all transactions involving the Cash Account from the date of the last statement, including all transfers to or from the Cash

Account; and

6.1.6 provide the Commission with quarterly reports on the Accounts of the Fund.

6.2 Custodial Duties Requiring Instructions

The Custodian shall carry out the following actions only upon receipt of and in accordance with specific Instructions:

6.2.1 make payment for and/or receive any Property or deliver or dispose of any

Property except as otherwise specifically provided in this Agreement;

6.2.2 deal with rights, conversions, options, warrants and other similar interests or any other discretionary right in connection with the Property; and

6.2.3 carry out any action affecting the Property or the Custody Account or Cash Account other than those specified in Clause 6.1 above, but in each instance

subject to the agreement of the Custodian.

12. Scope of Responsibility

12.1 Standard of Care

The Custodian shall exercise the due care of a professional custodian in performing its


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duties under this Agreement.

12.2 Limitations on Losses

12.2.1 The Custodian will not be responsible for any loss or damage suffered by the Fund as a result of any act or failure to act by the Custodian unless the loss or damage results from the Custodian’s breach of this Agreement or because of

its negligence, wilful misconduct or fraud or the negligence, misconduct or fraud of its nominees, agents or any branch or subsidiary. The liability of the Custodian in connection with the loss or damage will not exceed:

12.2.1.1 the lesser of replacement of any Securities or the market value of the Client Securities to which such loss or damage relates at the time the Client reasonably should have been aware of such

breach; plus

12.2.1.2 compensatory interest up to that time at the rate applicable to the base currency of the Cash Account.

12.2.2 Under no circumstances will the Custodian be liable to the Client for indirect, incidental or consequential loss or damages, even if advised of the possibility of such damages.

12.3 Limitations on the Custodian’s Responsibility

12.3.1 General

The Custodian is responsible for the performance of only those duties as are expressly set forth herein, including the performance of any Instruction given as provided in Clause 5 of this Agreement and that is consistent with this Agreement. The Custodian shall have no implied duties or obligations except as may be required under applicable law.

12.3.2 Clearance Systems

The Custodian has no liability for the acts, omissions, defaults or insolvency of any Clearance System not resulting from the negligence, wilful misconduct or fraud of the Custodian. Except as required by applicable law or regulation, the Custodian has no responsibility for the selection or monitoring of any Clearance System.

12.3.3 No Liability for Third Parties

The Custodian is not responsible for the acts, omissions, defaults or insolvency of any third party including, but not limited to, any broker, counterparty or issuer of Securities.

12.3.4 Prevention of Performance

The Custodian will not be responsible for any failure to perform any of its obligations if such performance would result in it being in breach of any law,

regulation or other requirement of any governmental or other authority in

accordance with which it is required to act (including any rules or practice of any Stock Exchange, Clearance System, self-regulatory organisation or market) or if its performance is prevented, hindered or delayed by a Force Majeure Event, in such case its obligations will be suspended so long as the Force Majeure Event continues. “Force Majeure Event” means any event due to any cause beyond the reasonable control of the Custodian, such as restrictions

on convertibility or transferability, requisitions, involuntary transfers, unavailability of communications system, sabotage, fire, flood, explosion, acts of God, civil commotion, strikes or industrial action of any kind, riots, insurrection, war or acts of government. The Fund Manager and the Trustee shall be immediately notified of any Force Majeure Event.

12.3.5 The Fund Manager’s Reporting Obligations

The Fund Manager shall be solely responsible for all filings, tax returns and

reports on any transactions in respect of the Property or collections relating to the Property as may be required by any relevant authority, whether governmental or otherwise.


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12.3.6 Validity of Securities

The Custodian shall exercise reasonable care in receiving Securities but does not warrant or guarantee the form, authenticity, value or validity of any Security received by the Custodian. If the Custodian becomes aware of any defect in title or forgery of any Security, the Custodian shall within two (2) days following when it becomes aware of such defect notify the Fund Manager.

12.3.7 No Advice

The Custodian is not acting under this Agreement as an investment fund manager, nor as an investment, legal or tax adviser to the Fund, and the Custodian’s duty is solely to act as a Custodian in accordance with the terms of this Agreement.

12.3.8 Forwarded Information

The Custodian is not responsible for the form, accuracy or content of any notice, circular, report, announcement or other material not prepared by the

Custodian and forwarded to the Fund Manager or for the accuracy or completeness of any translation or summary provided by the Custodian in regard to such communication.

12.3.9 Payment and Delivery Instructions

The Fund Manager agrees that, notwithstanding the Fund Manager’s

Instruction to deliver Securities against payment or to pay for Securities against delivery, the Custodian may make or accept payment for or delivery of Securities at such time and in such form and manner as is in accordance with relevant local law and practice or with the customs prevailing in the relevant market among securities dealers. The Fund Manager shall bear the risk and expense that:

12.3.9.1 the recipient of Securities may fail to make payment, return such

Securities or hold such Securities or the proceeds of their sale in

trust for the Fund Manager, and

12.3.9.2 the recipient of payment for Securities may fail to deliver the Securities (such failure to include, without limitation, delivery of forged or stolen Securities) or to return such payment. In each case, whether such failure is total or partial or merely a failure to perform

on a timely basis; the Custodian shall not be liable to the Fund Manager for any loss resulting from the foregoing.

12.3.10 Foreign Currency Risks

The Fund Manager shall bear all risks and expenses associated with investing in Securities or holding cash denominated in a currency other than that of

the Fund Manager’s home jurisdiction. Neither the Custodian nor any member of the Citigroup Organisation shall be obligated to substitute another currency for a currency whose transferability, convertibility or availability has been

affected by any law, regulation, rule or procedure.

14. Indemnity

14.1 Indemnity to the Trustee and the Fund Manager

The Custodian shall be liable for and shall indemnify and hold harmless the Trustee and the Fund Manager from any breach of this Agreement or any loss or damage, excluding indirect and consequential losses, suffered in respect of money or other assets in the custody of the Custodian and which loss or damage is caused by fraud, or a wilful default or negligent act or omission by the Custodian. In no event will the

Trustee and the Fund Manager be indemnified by the Custodian for losses resulting from their own negligence, wilful misconduct or fraud.

14.2 Indemnity to the Custodian

The Trustee and the Fund Manager respectively, agree to indemnify the Custodian and

to defend and hold the Custodian harmless from all losses or damages, excluding indirect and consequential losses, incurred by the Custodian in connection with any

breach of this Agreement by the Trustee and the Fund Manager respectively, and in connection with the performance by the custodian of its obligations in this Agreement except any loss that results from the Custodian’s failure to exercise the standard of


49 | P a g e


care required by Clause 12.1 hereof. In no event will the Custodian be indemnified for

losses resulting from the Custodian’s own negligence, wilful misconduct or fraud.

14.3 Fund Manager’s Direct Liability

The disclosure by the Fund Manager to the Custodian that the Fund Manager has entered into this Agreement as the agent or representative of another person shall not relieve the Fund Manager of any of its obligations under this Agreement.

15. Lien and Set Off

15.1 Lien

In addition to any other remedies available to the Custodian under applicable law, the Custodian shall have, and the Trustee and the Fund Manager hereby grant a continuing lien on all Property until the satisfaction of any outstanding Custodian fees

and reasonably incurred expenses owed by the Fund Manager to the Custodian in respect of this Agreement.

15.2 Set-Off

To the extent permitted by applicable law and in addition to any other remedies available to the Custodian under applicable law, the Custodian may, with prior written notice to the Trustee and the Fund Manager, set off any undisputed payment obligation owed to it by the Fund against any payment obligation owed by it to the

Fund regardless of the place of payment or currency of either obligation (and for such purpose may make any currency conversion necessary).

15.3 Right of Sale

Parties agree that the Custodian, acting as the agent, may dispose of the Securities, in satisfaction of any payment obligation incurred by the Custodian in performance of its duties under this Agreement.

15..4 Parties acknowledge that they will have no claim against the Custodian in respect of

any loss on the sale of the Securities, however caused, irrespective of whether or not a better price could or might have been obtained on the sale of the Securities or any of them.

PROVIDED THAT where the Fund incurs any loss as a result of the exercise by the Custodian of its rights under Clauses 15.3 above, the Fund Manager shall fully

indemnify and restore the Fund to its original position as if such right was never exercised.

16. Fees and Expenses

The Fund Manager agrees to pay all fees and expenses reasonably incurred for any services pursuant to this Agreement including the Custodian’s fees which shall be as determined in accordance with the terms of the fee schedule specified from time to time by the Custodian upon prior written notice to the Fund Manager and approval of the Commission. The

Custodian’s fees shall be 0.05% of the Net Asset Value of the Fund which shall accrue monthly

and be payable quarterly in arrears.

21. Termination

21.1 Effect

Any of the Parties may terminate this Agreement in whole or as between itself and the other Parties hereto by giving not less than three months’ prior written notice to such other Parties and the Commission. The Fund Manager and or Trustee may terminate

this Agreement with immediate effect if the Custodian is in breach of its duties hereunder and the Custodian has failed to remedy such breach after a notice period at the sole discretion of the Fund Manager and or Trustee has been given to it to remedy the breach.

21.2 Termination on bankruptcy or insolvency

Notwithstanding the provisions of Clause 21.1 above, this Agreement shall terminate

upon notice or upon the bankruptcy or insolvency of any of the Parties.

21.3 Delivery of Property

Upon termination, the Custodian shall deliver the Property to the Trustee at its address specified for notices or deliver by electronic transfers according to the Fund


50 | P a g e


Manager’s instructions unless within sixty (60) days following the termination notice

referred to above, the Fund Manager gives the Custodian Instructions specifying the person (including appropriate delivery address) to whom such Custodian shall deliver the Property.

21.4 Surviving Terms

The rights and obligations contained in Clauses 12, 14, 15, 16, 17 and 21 of this

Agreement shall survive the termination of the Agreement.

21.5 Cost of Termination

The cost(s) of termination of the Agreement shall be met by the Party in breach. In all other cases, the costs shall be met by the Party giving notice of the termination of the Agreement. The Custodian shall be entitled to receive all fees due until the date of such termination.

INDEBTEDNESS

As at the date of this Prospectus, Lotus Capital has no material indebtedness or obligations.

CLAIMS AND LITIGATION

The Fund Manager is presently involved in one (1) suit. The total monetary claim jointly against the Fund Manager and the co-defendants are approximately US$458,040 (Four Hundred and Fifty-Eight Thousand and Forty Dollars) and N200,112,980.33 (Two Hundred Million, One Hundred and Twelve

Thousand, Nine Hundred and Eighty Naira, Thirty Three Kobo).

The solicitors are of the opinion that the claim against the Fund Manager is unlikely to have any material or adverse effect on the finances of the Fund Manager with respect to the Fund. The Fund Manager’s directors are also of the opinion that the cases mentioned above are not likely to have any material adverse effect on the Fund Manager and/ or the Fund, and are not aware of any other material pending and or threatened claims or litigation against it as at the date of this Prospectus.

COST AND EXPENSES

The costs, charges and expenses of and incidental to the Offer, including fees payable to the SEC, professional parties, brokerage, printing and distribution expenses, are estimated at about N29,439,000.00 representing 2.94% of the gross Offer proceeds and are payable by the Fund and deductible from the monies raised by the Fund.

MATERIAL CONTRACTS

The following agreements have been entered into and are considered material to this Offer:

1. A Trust Deed, dated 14 April, 2016, between Lotus Capital and STL, under which the Fund is constituted;

2. A Vending Agreement, dated 14 April , 2016, between Lotus Capital, Vetiva and Lotus

Financial Services Limited, under which the Issuing Houses have agreed to offer 1,000,000 Units of N1,000.00 each in the Fund to the general public; and

3. A Custody Agreement, dated 14 April, 2016, between STL, Lotus Capital and Citibank Nigeria

Limited, pursuant to which the Fund Manager has appointed Citibank Nigeria Limited to act as custodian of the Fund’s investments, cash and other assets and to accept responsibility for the safe custody of the Deposited Property which is delivered to and accepted by the Custodian.

Other than as stated above, the Fund Manager has not entered into any material contracts except in the ordinary course of business.

CONSENTS

The following have given and not withdrawn their written consents to the issue of this Prospectus with

their names and reports (where applicable) included in the form and context in which they appear:

DIRECTORS OF THE FUND MANAGER Mr. Tajudeen Afolabi Adeola (Chairman)

Mrs. Hajara Abdullahi Adeola (Managing Director)

Mrs. Lateefah Okunnu

Mrs. Amina Oyagbola

Mr. Muhammad Nuruddeen Lemu

COMPANY SECRETARY Mr. Mas’ud Balogun


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ISSUING HOUSES Vetiva Capital Management Limited


TRUSTEE TO THE FUND STL Trustees Limited

CUSTODIAN TO THE FUND Citibank Nigeria Limited

SOLICITORS TO THE TRUSTEE G.Elias & Co.

SOLICITORS TO THE OFFER Kola Awodein & Co.

REPORTING ACCOUNTANTS RoseWater Partners

RECEIVING BANK Guaranty Trust Bank Plc

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PROCEDURE FOR APPLICATION AND ALLOTMENT

1. Application

1.1 The general public is hereby invited to apply for Units of the Fund through any of the Receiving Agents

listed in this Prospectus.

1.2 Applications for Units must be made in accordance with the instructions set out at the back of the

Application Form attached hereto. Care must be taken to follow these instructions, as applications which

do not comply will be rejected.

1.3 The Application List for the Units now being offered will open on Wednesday, 11 May, 2016 and close on

Friday, 17 June, 2016. Applications must be for a minimum of 5 Units. The number of Units for which an

application is made and the value of the cheque or bank draft attached should be entered in the boxes

provided on the Application Form.

1.4 A single applicant should sign the declaration and write his/her full names, address, daytime telephone

number and mobile telephone number in the appropriate space on the Application Form. Where the

application is being made on behalf of a minor, the full names of the applicant and the minor as well as

the date of birth of the minor should be provided. Item “2” should be used by joint applicants. A corporate

applicant should affix its seal in the box provided and state its Incorporation Registration (RC) Number.

1.5 Applications in Naira below N10 million should be forwarded together with a bank draft for the full amount

of the purchase price made payable to any of the Receiving Agents listed in this Prospectus via NEFT or

RTGS to the Offer proceeds account indicated below. 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 “LOTUS HALAL FIXED INCOME

FUND” with the name, address and daytime telephone number of the applicant written on the back. All

bank commissions and transfer charges must be prepaid by the applicant. 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 Applications in Naira above N10 million should be transferred via RTGS into the Offer proceeds account

indicated below:

Bank Name: Guaranty Trust Bank PLC

Account Name: Lotus Capital Halal Fixed Income Account

Account Number/Sort Code: 0005364304 / 058152052

Applicant/Sender: Please complete as appropriate

2. Allotment

The Issuing Houses and the Directors of the Fund Manager reserve the right to accept or reject any application

in whole or in part for not meeting the conditions of the Offer. In the event of an over subscription, additional

Units of the Fund will be allotted, subject to the Commission’s approval.

3. Application Monies

All application monies will be retained in a separate bank account by the Receiving Bank pending allotment. If

any application is not accepted or is accepted for fewer Units than the number applied for, a crossed cheque

for the full amount paid or the balance of the amount paid (as the case may be) will be returned by registered

post within five (5) Business Days of allotment or through a bank transfer within 48 hours of allotment.

Statements of Unit Holding will be sent by registered post to the physical address provided by the subscriber

on the attached Application Form and/or by electronic mail to the email address provided on the attached

Application Form, not later than fifteen (15) Business Days from the date of allotment.

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RECEIVING AGENTS

All capital market operators with current SEC registration as at the date of this Prospectus

are eligible to act as Receiving Agents to the Issue. A brokerage commission of 0.50% will be

paid on the value of allotted Units in respect of applications bearing their official stamps.

The Issuing Houses/Receiving Bank cannot accept responsibility for the conduct of any Receiving Agent. Investors are therefore advised to conduct their own independent enquiries before choosing an agent to act on their behalf. Evidence of lodgement of funds with any Receiving Agent, in the absence of corresponding evidence of receipt by the Issuing Houses/ Receiving Bank, cannot give rise to a liability on the part of the Issuing Houses/Receiving Bank under any circumstances.

Banks

Access Bank PLC

Citi Bank Nigeria Limited

Diamond Bank PLC

EcoBank Transnational Incorporated

Enterprise Bank Limited

Fidelity Bank PLC

First Bank of Nigeria Limited

First City Monument Bank Limited

Guaranty Trust Bank PLC

Keystone Bank Limited

Skye Bank PLC

Stanbic IBTC Bank Limited

Standard Chartered Bank Nigeria Limited

Sterling Bank PLC

Union Bank of Nigeria PLC

United Bank for Africa PLC

Unity Bank PLC

Wema Bank PLC

Zenith Bank PLC

Stockbrokers and Others

Adamawa Securities Ltd

Adonai Stockbrokers Ltd

African Alliance Stockbrokers Ltd

Afrinvest Securities Ltd

Afrinvest West Africa Ltd

Aiico Capital Ltd

Alpha Morgan Capital Managers Ltd

Alternative Capital Partners Ltd

Altrade Securities Ltd

Amyn Investments Ltd

Anchorage Securities And Finance Ltd

Anchoria Investment And Securities Ltd

Apel Asset Ltd

Apt Securities And Funds Ltd

Aquila Asset Management Ltd

Argentil Capital Partners Ltd

Arian Capital Mgt Ltd

Arm Harith Infrastructure Investment Ltd

Arm Investment Managers Ltd

Arm Securities Ltd

Arthur Steven Asset Management Ltd

Asset & Resource Management Co. Ltd

Associated Asset Managers Ltd

Associated Discount House Ltd

Atlass Portfolios Ltd

Bauchi Investment Corporation Ltd

Belfry Investments And Securities Ltd

Bestlink Investment Ltd

Bestworth Asset And Trust Ltd

Boston Advisory Ltd

Calyx Securities Ltd

Camry Securities Ltd

Capital Assets Ltd

Capital Bancorp Plc

Capital Express Securities Ltd

Capital Trust Brokers Ltd

Capital Trust Investment & Asset

Management Ltd

Cardinalstone Partners Ltd

Cardinalstone Securities Ltd

Cashcraft Securities Ltd

Cashville Investments & Securities Ltd

Cdl Capital Markets Ltd

Centre Point Investments Ltd

Century Securities Limited

Chapelhill Denham Securities Ltd

Chartwell Securities Ltd

Citi Investment Capital Limited

City Code Trust & Investment Company

Ltd

Clearview Investments Co. Ltd

Compass Investment & Securities Ltd

Cordros Asset Management Ltd

Cordros Capital Ltd

Core Trust And Investment Ltd

Coronation Securities Ltd

Cowry Securities Ltd

Crane Securities Ltd

Crossworld Securities Ltd

Crown Capital Ltd

Crystal Trust Asset Management Ltd

Csl Stockbrokers Ltd

De Lords Securities Ltd

Deep Trust Investment Ltd

Diamond Securities Ltd

Dominion Trust Ltd

Dsu Brokerage Services Ltd

Dunbell Securities Ltd

Dunn Loren Merrifield Advisory Partners

Ltd

Dunn Loren Merrifield Securities Ltd

Dunnloren Merrifield Asset Mgt. &

Research Co. Ltd

Dynamic Portfolio Ltd

Eczellon Capital Ltd

Edc Fund Management Ltd

Edc Securities Ltd

Edgefield Capital Management Ltd

Efcp Ltd

Elixir Asset Management Ltd

Elixir Securities Ltd

Enterprise Stockbrokers Plc

Equity Capital Solutions Ltd

Eurocomm Securities Ltd

Express Discount Asset Management Ltd

Express Portfolio Services Ltd

Fbc Trust And Securities Ltd

Fbn Capital Asset Management Ltd

Fbn Capital Ltd

Fbn Securities Ltd

Fcmb Capital Markets Ltd

Fcsl Asset Management Company Ltd

Fidelity Finance Company Ltd

Fidelity Securities Ltd

Fiducia Capital Investment Advisers Ltd

Financial & Analytics Capital Ltd

Financial Derivatives Co. Ltd

Financial Trust Company Nig. Ltd

Finmal Finance Services Ltd

First Ally Capital Ltd

First Inland Capital Ltd

First Integrated Capital Management Ltd

Fis Securities Ltd

Foresight Securities & Investment Ltd

Forte Financial Ltd

Forthright Securities And Investments Ltd

Fortress Asset & Investment Management Ltd

Fortress Capital Ltd

Fsdh Asset Mgt. Ltd

Fsdh Securities Ltd

Funds Matrix And Assets Management Ltd

Future View Financial Services Ltd

Futureview Securities Ltd

Gem Asset Management Limited

Gidauniya Investment And Securities Ltd

Global Asset Management Nig. Ltd

Globalview Consult & Investments Ltd

Goldbanc Management Associates Ltd

Golden Securities Ltd

Greenwich Assets Management Ltd

Greenwich Securities Ltd

Greenwich Trust Ltd

Gresham Asset Mgt. Ltd

Gruene Capital Limited

Gti Capital Ltd

Gti Securities Ltd

Halo Nigeria Capital Ltd

Harmony Securities Ltd

Heartbeat Investments Ltd

Hedge Securities & Investments Company Ltd

Heritage Capital Market Ltd

Horizon Stockbrokers Ltd

Icmg Securities Ltd

Icon Stockbrokers Ltd

Imperial Asset Managers Ltd

Independent Securities Ltd

Integrated Trust & Investments Ltd

Interstate Securities Ltd

Investment One Financial Services Ltd

Investment One Funds Management Ltd

Investment One Stockbrokers Int'l Ltd

Investment Shark & Asset Management Ltd

Investors And Trust Company Ltd

Iroko Capital Advisory Ltd

Iworld Financial Services Ltd

Kapital Care Trust & Securities Ltd

Kedari Capital Ltd

Kellogs Assets Mgt Ltd

Kinley Securities Ltd

Kofana Securities & Investment Ltd

Kundila Finance Services Ltd

Lambeth Trust And Investment Co. Ltd

Lead Assets Management Ltd

Lambeth Trust And Investment Co. Ltd

Lead Assets Management Ltd

Lead Capital Ltd

Lead Securities & Investment Ltd

Lighthouse Assets Management Ltd

Longterm Global Capital Ltd

Lotus Financial Services Ltd

Magnartis Finance & Investment Ltd

Mainland Trust Ltd

Mainstreet Bank Capital Ltd

Mainstreet Bank Securities Ltd

Mansard Investment Ltd

Marimpex Finance & Investment Co. Ltd

Marina Securities Limited

Marriot Securities & Investment Co. Ltd

Maxifund Investments And Securities Plc

Mayfield Investment Ltd

Mbc Capital Ltd

Mbc Securities Ltd

Mbl Financial Services Ltd

Mega Capital Financial Services Ltd

Mega Equities Ltd

Meristem Securities Ltd

Meristem Stockbrokers Ltd

Meristem Wealth Management Ltd

Midas Stockbrokers Ltd

Milestone Capital Management Ltd

Mission Securities Ltd

Molten Trust Ltd

Morgan Capital Securities Ltd

Mountain Investment And Securities Ltd

Mutual Alliance Investment & Securities

Ltd

Network Capital Ltd

Networth Securities & Finance Ltd

Newdevco Investment & Securities Co.

Ltd

Nigerian International Securities Ltd

Nigerian Stockbrokers Ltd

Nova Finance & Securities Limited

Options Securities Ltd

Pac Asset Management Ltd

Pac Securities Ltd

Panafrican Capital Plc

Partnership Securities Ltd

Peace Capital Market Ltd

Perfecta Investment Trust Ltd

Phoenix Global Capital Markets Ltd

Phronesis Securities Ltd

Pinefields Investments Services Ltd

Pipc Securities Ltd

Pivot Trust & Investment Company Ltd

Planet Capital Ltd

Primera Africa Fund Managers Ltd

Primera Africa Securities Ltd

Primewealth Capital Ltd

Prominent Securities Ltd

Psi Securities Ltd

Pyramid Securities Ltd

Quantum Securities Ltd

Quest Advisory Services Ltd

Radix Capital Partners Ltd

Rainbow Securities And Investment Co.

Ltd

Rand Merchant Bank Nigeria Ltd

Readings Investments Ltd

Regency Assets Management Ltd

Renaissance Securities Ltd

Rencap (Securities) Nigeria Ltd

Resort Securities & Trust Ltd

Reward Investments & Services Ltd

Rostrum Investment And Securities

Ltd

Rowet Capital Management Ltd

Royal Crest Finance Ltd

Royal Guaranty And Trust Ltd

Royal Trust Securities Ltd

Santrust Securities Ltd

Securities Africa Financial Ltd

Securities And Capital Mgt. Company

Ltd

Security Swaps Ltd

Sfc Securities Ltd

Sfs Capital Nigeria Ltd

Sfs Financial Services Ltd

Shalom Investment Financial Services

Ltd

Shelong Investment Ltd

Sigma Securities Ltd

Signet Investments & Securities Ltd

Sim Capital Alliance Ltd

Skyview Capital Ltd

Smadac Securities Ltd

Solid-Rock Securities & Investment

Plc

Spring Trust & Securities Ltd

Springboard Trust & Investment Ltd

Stanbic Ibtc Capital Ltd

Stanbic Ibtc Stockbrokers Ltd

Standard Union Securities Ltd

Sterling Asset Management & Trustee

Ltd

Sterling Capital Markets Ltd

Strand Capital Partners Ltd

Tak Asset Management Ltd

Taraba Investment & Properties Ltd

Tfs Securities & Investment Company

Ltd

The Bridge Securities Ltd

Tib Asset Management Ltd

Tiddo Securities Ltd

Tomil Trust Limited

Topmost Securities Ltd

Tower Assets Management Ltd

Tower Securities & Investment

Company Ltd

Tradelink Securities Ltd

Traders Trust And Investment

Company Ltd

Transafrica Financial Services Ltd

Transworld Investment & Securities

Ltd

Treasure Capital & Trust Ltd

Trust Yields Securities Ltd

Trustbanc Asset Management Ltd

Trustbanc Capital Management Ltd

Trusthouse Investments Ltd

Trw Stockbrokers Ltd

Tyndale Securities Ltd

Unex Capital Ltd

Union Capital Markets Ltd

United Capital Asset Management Ltd

United Capital Plc

United Capital Securities Ltd

Valmon Securities Ltd

Value Capital Ltd

Valueline Securities & Investment Ltd

Vetiva Capital Mgt Ltd

Vetiva Securities Ltd

Woodland Capital Market Plc

Wstc Financial Services Ltd

Zenith Asset Management Ltd

Zenith Capital Ltd

Zenith Securities Ltd

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APPLICATION FORM

APPLICATION LIST

OPENS 11 MAY 2016

ISSUING HOUSES

INITIAL PUBLIC OFFERING OF 1,000,000 UNITS AT N1,000.00 PER UNIT

IN THE


(Authorised and registered in Nigeria as a Unit

Trust Scheme)

APPLICATION LIST

CLOSES 17 JUNE 2016

FUND MANAGER

Applications must be made in accordance with the instructions set out on the reverse side of this application from. Care must be taken to

follow these instructions as applications that do not comply may be rejected. If you are in doubt as to the action to take please consult

your Stockbroker, Accountant, Banker, Solicitor, or any other professional adviser for guidance immediately. Please Complete All Relevant Sections of This Form Using Block Letters Where Applicable Guide to Application Declaration Number of Units applied for Amount payable • I/We declare that I/We have read the Prospectus dated 14 April,

2016 issued by Vetiva Capital Management Limited and Lotus

Financial Services Limited on behalf of Lotus Capital Limited

• We the undersigned, confirm that we have full capacity to contract

and hereby irrevocably apply for the number of Units specified hereon • I/We attach the amount payable in full on application for the number

of units indicated in the Lotus Halal Fixed Income Fund at N1,000.00

per Unit

• I/We agree to accept the same or any smaller number of Units in respect of which allotment may be made upon the terms of the

Prospectus dated 14 April, 2016 and subject to the Trust Deed

constituting the Fund

5 minimum N5,000

Subsequent multiples of 5 N5,000

Units Applied

Value of Units Applied/ Amount Paid

N

Date (DD/MM/YYYY)

Control No. (For Fund Manager's Use Only)

Applicant Details (Individual/Corporate/Joint) (Please use one box per alphabet leaving one box blank between the first word and second)

Surname/Corporate Name

First Name (For Individuals Only) Other Names (For Individuals Only)

Joint Applicant's First Name (If Applicable) Other Names (For Joint Applicant Only)

Contact Person (For Corporate Applicant)/ Next of Kin (For Individual Applicant)

Occupation

Form of Identification Identification Number

Address In Full (Please Do Not Repeat Applicant(s)' Name. Post Office Box No. Alone Is Not Sufficient)

Tel.

City State Email

Beneficiary Details (For Individual Only)

Surname

Other Names


Tel.

City State Email

Please Complete This Section If This Application Is Being Made On Behalf Of A Minor :

Surname Of Minor Other Names

Date Of Birth (DD/MM/YYYY) Gender Nature of Relationship( Parent/Guardian)

/ / Male Female


Tel.

City State Email

Income

Please Tick The Box To Indicate The Preferred Option Cash Reinvestment

Bank Details (For E- Distribution)

Bank Name Branch

Account Number Bank Sort Code

Bank Verification Number CHN

Authorisations Signature 2nd Signature (Corporate/Joint) Official Seal / RC No.

OR *Thumbprint*

(For Illiterates Only)

Name of Authorised Signatory / Designation

(Corporate Only)

Name of Authorised Signatory / Designation

(Corporate Only)

Form of Attestation ( Compulsory requirement for a witness of a thumbprint impression only)

I,___________________________ [please insert full name of person attesting] of _______________________________ [insert address]

hereby testify that the above *thumbprint* was affixed in my presence this ________day of __________ 2016, and is the true right thumb

print of ___________________[insert name of person executing] who has acknowledged to me after due explanation of the Application Form

in the language understandable to him/her that (i) he/she has voluntarily executed this instrument and (ii) he/she understands the contents

and effect thereof.

As witness my hand this _______day of ______________,

2016.

Witness Signature:

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INSTRUCTIONS FOR COMPLETING THE APPLICATION FORM

1. Applications must be made only on this Application Form, or on a photocopy, downloaded or scanned copy of the Application Form.

2. The Application List for the Units will be open to prospective investors for the duration specified in the Prospectus.

3. Applications must be for a minimum of 5 Units in the first instance. The number of Units for which an application is made and the applicable value should be entered in the boxes provided.

4. An application for a minor must include the full names and date of birth of the minor, as well as the full names and address of the adult (Parent or Guardian) making the application on such minor’s

behalf.

5. Joint applicants must all sign the Application Form.

6. An application from a corporate body must bear the corporate body’s common seal and be completed under the hand of a duly authorized official.

7. An application by an illiterate should bear his right thumbprint on the Application Form and be

witnessed by an official of the Receiving Agent at which the application is lodged whom is to

have first explained the meaning and effect of the Application Form to the illiterate in his own language. Above the thumbprint of the illiterate, the witness must record in writing that he has given this explanation to the illiterate in a language understandable to him and that the illiterate appeared to have understood same before affixing his thumb impression.

8. 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 this Offer as an illiterate and his right thumbprint should be clearly impressed on the Application Form.

9. Applications in Naira below N10 million should be forwarded together with a bank draft for the full amount of the purchase price made payable to any of the Receiving Agents listed in this

Prospectus or via NEFT or RTGS into the Offer proceeds account specified on Page 52 of this Prospectus. 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 “LOTUS HALAL FIXED INCOME FUND” with the name, address and daytime telephone number of the applicant written on the back. All bank commissions and transfer charges must be prepaid by the applicant. 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.

10. Applications in Naira above N10 million should be transferred via RTGS into the Offer proceeds accounts specified on Page 52 of this Prospectus.

11. An applicant must provide bank details in the space provided in the Application Form (Applications without bank details will be treated as invalid and thus rejected).

APPLICATION FORM
