INDUSTRIAL AND GENERAL INSURANCE COMPANY … · Management and Key Staff ... ordinary shares to the...

This document is important and should be read carefully. If you are in any doubt about its contents or action to take, please consult your Stockbroker, Accountant, Banker, Solicitor, or any professional adviser for guidance immediately.

For information concerning certain risk factors which should be considered by prospective investors, see Risk Factors on Page 27

CONFIDENTIAL

INDUSTRIAL AND GENERAL INSURANCE COMPANY LIMITED RC 178140

Private Placement of

2,900,000,000

ordinary shares of 50 kobo each

at

N2.00 per share

Payable in full on Application

ISSUING HOUSES:

This Private Placement Memorandum is dated 31st July 2006

Private Placement Memorandum 2

CONTENTS

Contents 2

Definitions 3

Notice to Invited Investors 4

Summary of the Placement 5

Investment Case 8

Directors and Other Parties to the Placement 10

The Chairman’s Letter 12 History and Background .................................................................................. 12 Organisational Structure.................................................................................. 13 Industry Analysis............................................................................................ 15 External Rating and Awards ............................................................................. 16 Growth Strategy............................................................................................. 16 Board of Directors .......................................................................................... 17 Management and Key Staff .............................................................................. 18 Financial summary.......................................................................................... 21 Premises ....................................................................................................... 22 Products and Services ..................................................................................... 23 Our Clientele.................................................................................................. 23 Corporate citizenship and social responsibility..................................................... 24 Information Technology................................................................................... 24 Purpose of the Placement ................................................................................ 25 Working capital, profit and dividend forecasts ..................................................... 25 Future Plans .................................................................................................. 26

Profit Forecast 29

Five Year Financial Information 38

Statutory and General Information 57 Incorporation and Share Capital History............................................................. 57 Shareholding Structure.................................................................................... 58 Directors’ Beneficial Interests ........................................................................... 58 Indebtedness ................................................................................................. 58 Subsidiaries and Associated Companies ............................................................. 58 Extracts from the Articles of Association............................................................. 59 Estimated Cost of Issue................................................................................... 61 Declaration.................................................................................................... 61 Consents....................................................................................................... 61

Documents Available for Inspection 62

Procedure for Application and Allotment 63

Application Form 66

Instructions for Completing the Application Form 67


DEFINITIONS

ACRONYM DESCRIPTION IGI Industrial And General Insurance Company Limited SEC Securities & Exchange Commission

NSE or The Exchange The Nigerian Stock Exchange

NIPOST Nigerian Postal Service NNPC Nigerian National Petroleum Corporation

MIS Management Information System IT Information Technology

EMEA Europe, Middle East and Africa EVC Executive Vice Chairman

ACII Associate, Chartered Insurance Institute, London AIMLT Associate of the Institute of Medical Laboratory Technology

ACI-arb Associate, Chartered Institute of Arbitrators, London

MCI-arb Member, Chartered Institute of Arbitrators, London FCII Fellow, Chartered Insurance Institute, London

SITC Swiss Insurance Training Centre

AON AON Limited

ACIIN Associate, Chartered Insurance Institute of Nigeria A(RISAN) Associate Member of Risk Surveyors Association of Nigeria

MEDEX Medical Expenses/Health Insurance The Placement Private Placement of 2,900,000,000 ordinary shares of 50 kobo

each in Industrial And General Insurance Company Limited at N2.00 per share

PL&G Postal Life and General Insurance Company Limited

NIC Uganda National Insurance Corporation Limited, Uganda Africa Re African Reinsurance Corporation


NOTICE TO INVITED INVESTORS This Placement Memorandum (“the Memorandum”) contains confidential information about Industrial And General Insurance Company Limited (“IGI”, or “the Company”) a duly licenced composite insurance company incorporated and regulated in Nigeria and is intended mainly for the purpose of giving information to the select list of potential investors to whom it is addressed. The document provides relevant background and other information on the Company, for the sole purpose of facilitating a decision to proceed with further evaluation of the Company in connection with an equity investment. This document has been prepared with information supplied by IGI. By accepting the Memorandum, the recipient, its directors, officers, employees, representatives and advisers agree to use the document and all such information included in the said document for no other purpose than in connection with the consideration and/or evaluation of a possible investment in the shares of the Company and that the information contained herein is of a confidential nature and will be treated in a confidential manner and that the recipient will not, directly or indirectly, disclose, divulge or permit its affiliates or representatives to disclose any information contained herein to any other person or to reproduce the Memorandum, in whole or in part, without the prior written consent of the Company or the Issuing Houses. No application has been filed with the Securities & Exchange Commission (“SEC”) for the clearance of the Memorandum or the securities offered herein. The SEC has also not issued any regulatory statement regarding the accuracy or adequacy of the Memorandum. In addition, no application has been made to the Council of The Nigerian Stock Exchange (“The Exchange”) for the admission of IGI’s ordinary shares to the Daily Official List of The Exchange. The Board of Directors however intends to apply for quotation in the future. The Directors of IGI have taken all reasonable care to ensure that information contained herein is, to the best of their knowledge and belief, true and accurate in all material respects. The Directors confirm that to the best of their knowledge and belief, there are no other facts, the omission of which would make misleading any statement of fact or opinion contained herein. The Directors of IGI accept full responsibility for the information provided in the Memorandum. This document is not a Prospectus and does not constitute an offer or an invitation to the general public to subscribe to the securities presented herein. Subscription to the shares being offered may only be made by the potential investors who have been invited to take up shares in the Company in accordance with the terms and conditions contained in the Memorandum. Every prospective investor to whom the Memorandum has been addressed is expected to scrutinise the information contained in the Memorandum independently and evaluate the securities which it offers. Contact Information

All enquiries/correspondence should be directed to:

Industrial And General Insurance Company Limited Plot 741 Adeola Hopewell Street Victoria Island Lagos, Nigeria Contact Persons: Doyin Adebambo Remi Olowude Tel.: +234-1-2622919, 6215001, 6215023

+234-1-6215010-14 Fax: +234-1-2621146, 2610406 E-mail: [email protected], [email protected]

IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos Nigeria Contact Persons: Yewande Sadiku Sola David-Borha Tel :+234-1-2626520 Fax: +234-1-2626541/2 E-mail: [email protected]

Vetiva Capital Management Limited Plot 266B Kofo Abayomi Street Victoria Island Lagos, Nigeria Contact Persons: Yemisi Deji-Bejide Chuka Eseka Tel.: +234-1-4617521-3, 2700657-8 Fax:: +234-1-4617524 E-mail: [email protected]

FORECAST STATEMENTS The statements contained herein that are not historical facts are forecast statements based on the current expectations and beliefs of IGI’s management with respect to future developments and their potential effects on the Company. There is no assurance that future developments affecting the Company will be the same as those anticipated by Management. Actual results may differ from those projected in the forecast statements. Forecast statements involve risks and uncertainties. These include, but are not necessarily limited to, the following risks: (1) changes in the performance of the financial markets (2) changes in the demand for and market acceptance of the Company’s products and services (3) changes in general economic conditions, including interest rates, presence of competitors with greater financial resources, and the impact of competitive products and pricing (4) the effect of the Company’s policies (5) the continued availability of adequate funding sources and (8) various legal, regulatory and litigation risks. .


SUMMARY OF THE PLACEMENT

The subsequent information should be read in conjunction with the full text of this Private Placement Memorandum, from which it is derived.

1. ISSUER: Industrial And General Insurance Company Limited

2. ISSUING HOUSES: IBTC Chartered Bank Plc and Vetiva Capital Management Limited 3. SHARE CAPITAL:

Authorised N3,000,000,000.00 comprising 6,000,000,000 Ordinary Shares of 50 kobo each

Issued and fully paid: N1,550,000,000.00 comprising 3,100,000,000 Ordinary

Shares of 50 kobo each1 Now being offered for sale: 2,900,000,000 Ordinary Shares of 50 kobo each

4. PURPOSE: This private placement is to enable IGI raise funds to implement its business development and expansion programme, improvement in information technology infrastructure, staff development and working capital requirements.

5. Use of Proceeds: The estimated net proceeds of N5,568,000,000 after deducting the cost of the Placement, estimated at N232,000,000 (representing 4.0% of the gross proceeds), will be utilised as follows:

Utilisation N bn %

Business Development & Expansion 2.78 50

Working Capital 1.11 20

Information Technology Improvements 0.84 15

Staff Development 0.84 15

Total 5.57 100

6. UNITS OF SALE: Minimum of 25,000 Ordinary Shares and multiples of 10,000 thereafter. However, the Directors may allot shares to prospective investors who are members of staff or other stakeholders of the Company and who wish to subscribe for less than the minimum units of sale.

7. PLACEMENT PRICE: N2.00 per share

8. PAYMENT: In full on application

9. MARKET CAPITALISATION AT PLACEMENT PRICE (PRE-OFFER): N6,200,000,000.00

10. MARKET CAPITALISATION AT PLACEMENT PRICE (POST-OFFER): N12,720,643,000.00 11. SUPPLEMENTARY ALLOTMENT: In the event of an over-subscription, the excess monies will

be capitalised upon an increase in the authorised share capital of IGI and such additional shares shall be allotted to accommodate the excess monies.

1 The Company recently carried out a Rights Issue which was concluded in June 2006. On allotment of the Rights Issue, the Issued and Paid-up share capital of the company increased to N1,550,000,000.00 comprising of 3,100,000,000 ordinary shares of 50kobo each



12. OPENING DATE: 7th August 2006 13. CLOSING DATE: 6th September 2006 14. FINANCIAL SUMMARY:

Extract from the Reporting Accountant’s Report.

Year ended Year ended Year ended Year ended Year ended Year ended

31/12/05 31/12/04 31/12/03 31/12/02 31/12/01 31/12/00

N’000 N’000 N’000 N’000 N’000 N’000

Profit/Loss Before Taxation and Exceptional Charges 649,945 376,740 324,209 250,278

192,924

176,219

Profit After Taxation 520,368 281,981 233,950 193,287

158,056 161,308

Total Assets 12,654,908 10,774,952 7,032,083 5,684,975 4,164,935 3,728,826

Net Assets 5,420,200 5,099,861 1,854,150 1,239,181 1,034,964 982,171

Earnings per share – Actual (kobo) 72 45 47 39

45 64

Dividend per share - Actual (kobo) 25 20 15 28

30 30

15. FORECAST OFFER STATISTICS:

Extract from the Reporting Accountant’s report

Year Ending 31st December 2006 2007 2008

Forecast earnings per share (Kobo) 20 30 36

Forecast earnings yield at offer price 10% 15% 18%

Forecast dividend per share (Kobo) 10 20 25

Forecast dividend yield at offer price 5% 10% 13%

Forecast price/earnings ratio at offer price 10 7 6

16. STATUS: The shares being offered for subscription rank pari passu in all

respects with the issued ordinary shares of the Company. 17. INDEBTEDNESS: As at the date of the Memorandum, the Company had no

outstanding debentures, mortgages, loans, charges or similar indebtedness other than in the ordinary course of business.

18. CLAIMS AND LITIGATIONS: As at June 30, 2006, Industrial and General Insurance Company Limited (“IGI”) in its ordinary course of business is presently involved in a total of twenty (20) cases out of which seventeen (17) were instituted against IGI whilst three (3) were brought by the Company IGI having made provision for claims arising from the ordinary course of insurance business as statutorily required, the Solicitors to the Company are of the opinion that the contingent liabilities that may crystallise from the outstanding cases are unlikely to exceed the sum of N62,941,979.00. The Directors are of the opinion that none of the claims or litigations is likely to have any material adverse effect on the Company or the Private Placement.



19. GROUP STRUCTURE:

Industrial And General Insurance Company Limited

Global Trust

Savings & Loans

LimitedPostal Life &

General Insurance Company Limited

International Health

Management Services Limited

Monarch Communications

Limited

Industrial Trustees Limited

Bendel Wood

Industries Limited

National Insurance

Corporation Uganda

86.00%

85.78%

74.43%75.81% 70.00%

55.00%

60.00%


INVESTMENT CASE

i) IGI’s Profile • IGI brought a fresh breath of dynamism and innovation into the industry in

January 1992. The Company has since established a reputation for the provision and delivery of products and services of high use value not only in general insurance but especially in the specialised areas of oil, energy, aviation, engineering and industrial risks management

• A key source of IGI’s staying-power is the stability of the Board of Directors and management. Under the leadership and direction of the Board, the Company’s corporate governance principles have continued to impact positively on IGI’s growth, earnings capacity and financial strength.

ii) Market Share

• IGI is a market leader with a market share of 5.94%1 which puts the Company as the second largest insurance company in the industry. This is supported by a Gross Premium Income of about N4.5billion and paid up capital of N720.6million as at 31st December, 2005.

iii) The Placement

• This private placement provides opportunities for institutional and individual investors who had hitherto expressed interest to have ownership stakes in IGI, a leader in the insurance sub-sector.

iv) Branch Network & Global Presence

• As a market leader, IGI commenced the implementation of its 10 year strategic business expansion programme in 2004. This coincidentally falls in line with the new minimum capital base prescribed by the regulatory authorities under the current consolidation programme and is a testimony to IGI’s forward-looking approach and long term perspective of insurance business.

• With 24 branches, IGI is the second largest insurance company in terms of branch network in the insurance industry in Nigeria. This number should increase to a minimum of 100 worldwide before the end of 2010.

• As part of IGI’s 10 year strategic business plan, the Company’s branch network

will be complimented with an online presence which is part of its e-commerce strategy.

v) Strategic Vision

• In 2005, IGI acquired 60% shareholding in National Insurance Corporation of Uganda with additional responsibility to manage the foremost insurance company in that country. Income is expected from this investment by way of dividend, technical management fees and re-insurance premium.

• IGI has also submitted a bid for 100% acquisition of the government

shareholding in National Insurance Corporation of Tanzania.

• IGI has a long-term view of the insurance business vis-à-vis the opportunities in the East and West African sub-regions where insurance density and penetration are still low. Investments in these areas are expected to generate handsome income and liquidity.

1 Source: Nigeria Insurance Digest, 2005

INVESTMENT CASE


vi) Consolidation Postal Life and General Insurance Company Limited (“PL&G”), a subsidiary of IGI is in partnership with NIPOST to exploit the business of retail insurance. NIPOST has over 4000 outlets which are used as distribution channels across the country. In view of the new capitalisation requirement, PL&G will merge with the wholesale insurance business of IGI towards evolving a unified insurance institution that would maintain a premiership position in the post consolidation era. Shareholders of IGI and PL&G would benefit from the operating synergies, economies of scale and geographical spread of the enlarged IGI.

vii) Historical Returns

IGI has a history of handsome returns to shareholders and the Company’s strategic plan for the future is designed to improve on this. Below are some highlights on returns over the years:

• IGI has consistently paid dividend ranging from 10 kobo to 30 kobo per N1

share since 1994. A shareholder who invested N100,000 in IGI in 1995 has received a cumulative dividend of N499,167 representing a 499% return on investment;

• The Company also issued bonus shares of 1 for 3 in 1996; 1 for 4 in 1997; 1 for

4 in 1999; 2 for 5 in 2000; 1 for 4 in 2003 and 1 for 7 in 2004 to its shareholders. A shareholder who invested N100,000 in 1995 has received total bonus shares worth N257,143 in 2004 representing a 257% return on investment; and

• Consequently, a shareholder who invested N100,000 in 1995 has made a total

return on investment of 756% in 2004 thus making the Company attractive to investors.

This private placement is a unique opportunity for investors to be a part of IGI’s current and future success.


DIRECTORS AND OTHER PARTIES TO THE PLACEMENT

ISSUING HOUSES

IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos

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

DIRECTORS Gen. Dr. Yakubu Gowon GCFR, Ph.D, psc, jssc (Chairman) 11, Okotie Eboh Crescent Ikoyi, Lagos

Mr. Remi Olowude (Executive Vice Chairman) Plot 741, Adeola Hopewell Street Victoria Island, Lagos

Mrs. Folasade O. Adetiba (Executive/Company Secretary) Plot 741, Adeola Hopewell Street Victoria Island, Lagos

Mr. Rotimi Fashola (Executive) Plot 741, Adeola Hopewell Street Victoria Island, Lagos

Mr. O. Ola Vincent CFR 8, Balarabe Musa Crescent Victoria Island Lagos

Dr. Lateef Adegbite CON 174, Muritala Mohammed Way Ebute Metta Lagos Mrs. Olubunmi O. Olowude 25A Bourdillon Road Ikoyi, Lagos

Apostle Hayford I. Alile OFR 1, Harmony Crescent Lekki Peninsula Lagos

Chief Gaffar K. Animashawun KM 1, Ota/Idi-iroko Road Sango Ota

REGISTERED OFFICE Plot 741, Adeola Hopewell Street Victoria Island, Lagos P. M. B. 80181 Lagos

DIRECTORS AND OTHER PARTIES TO THE PLACEMENT


AUDITORS REPORTING ACCOUNTANTS SOLICITORS TO THE COMPANY

Akintola Williams Deloitte (Chartered Accountants) 235 Ikorodu Road Ilupeju Lagos J. K. Randle & Co. (Chartered Accountants) Lisa Court 61, Oduduwa Crescent GRA Ikeja Lagos Aina, Blankson & Co. 133, Igbosere Road Lagos

JOINT SOLICITORS TO THE

PLACEMENT Freshfields 94, Femi Ayantuga Crescent Surulere Lagos Olaniwun Ajayi UBA House (4th Floor) 57, Marina Lagos

RECEIVING BANKS Afribank Nigeria Plc 51/55 Broad Street Lagos First Bank of Nigeria Plc Samuel Asabia House 35 Marina Lagos IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos

Intercontinental Bank Plc Plot 999c, Danmole Street Victoria Island Lagos Sterling Bank Plc Nathaniel Idowu House 228A Awolowo Road Ikoyi Lagos Union Bank of Nigeria Plc Stallion Plaza, 36 Marina Lagos


THE CHAIRMAN’S LETTER The following is the text of a letter received by IBTC Chartered Bank Plc and Vetiva Capital Management Limited from the Chairman of the Board of Directors of IGI, General Dr. Yakubu Gowon GCFR, Ph.D, psc, jssc:

31 July, 2006 The Chief Executive Officer IBTC Chartered Bank Plc IBTC Place Walter Carrington Crescent Victoria Island Lagos and The Managing Director/CEO Vetiva Capital Management Limited Plot 266B Kofo Abayomi Street Victoria Island Lagos Dear Sirs, On behalf of the Directors of Industrial And General Insurance Company Limited (“IGI”), I am pleased to provide the following information relating to the Private Placement of 2,900,000,000 ordinary shares of 50 kobo each at N2.00 per share, which you are making on our behalf.

HISTORY AND BACKGROUND

IGI commenced business in 1992 as a composite insurer to transact the business of Life and General Insurance (including Pensions and Special Risks). The Company quickly established a reputation for exceptional competence in the delivery of customer-centric services as well as product innovation.

With a strong capital base, highly qualified professionals and deployment of modern technology for speed and efficiency, IGI has become the preferred insurer for individual and corporate clients seeking premium insurance and related financial services. In 1996 - four years after it commenced operations – IGI became the first private insurance company in Nigeria to achieve N1 billion in premium income.

We have, within our few years of existence, been able to prove ourselves as market leaders in the insurance industry. In 2004, IGI maintained its leadership position in the industry with a premium income in excess of N4 billion – the highest in terms of volume of business by any private insurance company in Nigeria. IGI also has a wide and diversified investment profile which includes ownership and majority equity holding in companies engaged in telecommunication services, mortgage banking, aviation, oil and engineering services, forestry, and health care delivery services, amongst others.

THE CHAIRMAN’S LETTER


IGI HISTORICAL 5 YEAR GROSS PREMIUM INCOME (N million)

3465

4572

1471

3101

19121690 1107

1024982816803

4125

28942506

2274

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2001 2002 2003 2004 2005

non-life life life+non-life

From inception, IGI has demonstrated exceptional competence and expertise in the underwriting of specialised risks in Oil & Energy, Marine, Aviation, Engineering and Industrial Risk Management.

This reputation earned the Company national recognition in 1996 when it was appointed by the Federal Government as the leading member of a consortium of four insurance companies to handle the insurance programme of the Nigerian National Petroleum Corporation (NNPC), the Federal Government owned oil exploration and refining company. The remarkable performance achieved in 1996 led to the re-appointment of the IGI-led Consortium for the underwriting of the NNPC Insurance programme for 1997 and 1998.

IGI also handles the insurance programmes of foreign oil companies operating in Nigeria including The Shell Petroleum Development Company of Nigeria, Elf Petroleum Nigeria, Agip Oil Company, Addax Petroleum and Pan Ocean Oil Corporation, amongst others.

In 2005, IGI underlined its resolve to be a key player in the African insurance market when it acquired 60 percent majority shareholding in the National Insurance Corporation Limited (NICL) of Uganda after a competitive international bidding exercise. Through recruiting and deploying people with diverse talents and capabilities, the Company has been able to build solid and sustainable value added relationships with customers and other stakeholders.

ORGANISATIONAL STRUCTURE The Company’s affairs are conducted through seven key divisions, namely: Marketing Division

The Marketing Division is the pivot of IGI’s robust and innovative approach to insurance marketing. Apart from giving the Company the edge in premium revenues, the Division was the first in the industry to introduce Maintenance Marketing services through which it provides unique after-sale advisory services to clients.



Technical Division

The Technical Division provides IGI with its cutting edge insurance underwriting skills. Fully computerized, the division comprises risk management, oil and energy, claims, motor, marine & aviation, re-insurance, fire & accident and contractors-all-risks (CAR)/engineering departments. The Division is the anchor of the Company’s product innovation efforts. Some of the new products developed by the division are Environmental Insurance, School Fees Insurance Scheme, IGI Leasecare, IGI Estate Fire Insurance Scheme, IGI Morecare, IGI Estate Comprehensive Insurance Scheme, IGI Integrated Benefits Plan, IGI Dividend Plus Plan and IGI Personal Pension and Annuity. Life and Pensions Division This Division provides high quality Life Assurance and Fund Management services to individuals and corporate clients. Apart from being a major premium income earner through its various innovative products, it serves as a vehicle for the payment of the pensions of retirees of several government establishments and private sector organizations in Nigeria. The Division provides quality financial planning services to its teeming individual policyholders, pensioners and corporate clients.

Some of the products of the Division are: IGI Integrated Benefits Plan, IGI Dividend Plus Plan, IGI Personal Pension and Annuity Plus Plan, IGI Multi-Investment Plan, IGI School Fees Policy, Education Endowment Assurance, Mortgage Protection Assurance, Individual Term Assurance, Group Term Assurance, Endowment Assurance, Whole Life Assurance and Deposit Administration. Corporate & Legal Services Division

This Division provides high quality corporate back-up services for IGI and its subsidiaries and associated companies. Serving as Corporate Secretariat for the Company, the Division also provides in-house legal services and coordinates the activities of the Administration, Human Resources and Corporate Communications Departments.

The Corporate and Legal Services Division has grown to become a cost saving centre for IGI by providing expert legal advisory and consultancy services to the Company and its subsidiaries. Finance Division

The Finance Division is structured into two departments responsible for Accounts and Investment functions. This Division is staffed with highly experienced investment bankers, financial analysts and professionally qualified accountants. The diversified investment portfolio and remarkable growth in investment income has resulted from the investment and finance policies initiated and executed by the Division. Management Information System / Information Technology Division

The MIS/IT Division is responsible for the overall management of our Information Systems and Technology Infrastructure. In addition, the division also manages the data centre which is linked to both internal and external systems. This division is manned by highly qualified and certified personnel both in hardware and software. The division is in the process of upgrading our IT platform to an enterprise wide system that will be able to integrate all processes within the group with multi currency and multi country capabilities. International Division

The group’s International Division is responsible for managing our foreign interests and presence across the globe. The Division is divided into regional and product focus areas. The regional focus areas are: EMEA (Europe, Middle East & Africa), Asia and North America and our product focus areas are Insurance, Telecommunication and Banking. These areas are managed by experienced professionals with years of international experience both in the insurance industry and other investment areas that we are currently engaged in.



VISION The vision of Industrial And General Insurance Company Limited is to be the professional Insurance Company that leads in the provision of the highest standard of Financial Protection and Risk Management Services. MISSION We are a company with a global outlook, employing highly skilled and motivated professionals for efficient delivery of excellent services and products which are designed for customer satisfaction and creating wealth for national development.

INDUSTRY ANALYSIS The Nigerian insurance industry has been faced with several reforms especially the recent announcement of increases in the minimum capital base of insurance companies from N200million, N300million and N500million for life, general and composite insurers to N2billion, N3billion and N5billion respectively. This sector reform has triggered strategic actions by insurers to raise their capital base to meet the minimum capital requirements before the deadline of February, 2007. The implementation of this reform is expected to significantly reduce the number of insurance companies which presently stands at 103. Although, IGI’s shareholders funds are in excess of N5billion, the Company has decided to further shore up its capital base through a rights issue that was over subscribed and this private placement of 2,900,000,000 ordinary shares of 50 kobo each at N 2.00 per share.

Another major reform is the Pension Reform Act of 2004 which grants authority to the National Pension Commission to licence Pension Funds Administrators (PFA) to manage pension funds liabilities through a contributory pension scheme. IGI Pension Fund Managers Limited, a PFA sponsored by IGI and other partners, has submitted its application for licence with the National Pension Commission and has started putting the necessary infrastructure in place preparatory to receiving an Approval-in-Principle.

Competition

With the adoption of a policy of deregulation and liberalisation by the government and the introduction of reforms on recapitalisation and regulatory oversight by the National Insurance Commission, the insurance industry has undergone positive transformation over the years resulting in increased competition and standards. Furthermore, the privatisation of NICON Insurance Corporation has opened another phase of competition in the insurance market.

Threat of New Entrants

With the current reforms being undertaken and the liberalisation efforts of the Government, the insurance sector is more attractive and new insurance companies may apply for licences to operate in the Nigerian insurance industry. Some banks have already decided to set up insurance companies to support and protect their businesses but we foresee that this is still a fraction of the potentials of the market and thus does not pose a serious threat, since IGI has an edge in the specialised insurance business.

In addition, insurance penetration and awareness are low in Nigeria. There is also little product differentiation and brand loyalty. New entrants may wish to take advantage of this gap.

The Bargaining Power of Customers

Product differences will register positively with customers and the competition in the industry will give more bargaining power to customers. Threat of Substitutes

There is no direct substitute to insurance.



EXTERNAL RATING AND AWARDS

Awards

IGI has continued to earn coveted accolades at home and abroad from reputable organisations in recognition of its outstanding services. For two years in a row, IGI clinched the 2000 and 2001 Euromarket Award of the European Market Research Centre (EMRC) Belgium for its “outstanding management quality, technical innovation, services, business level and prestige in the Euromarket”.

IGI also won the 2005 ‘Best Insurance Company In Nigeria’ Presidential Award of the Nigerian Corporation of Insurance Brokers.

GROWTH STRATEGY

IGI’s growth strategy can be summarised as follows:

Organic Growth Plans

This will be addressed through the Company’s planned branch expansion. IGI’s branch network currently stands at 24 with locations in Lagos (3), Abeokuta, Akure, Ibadan, Oshogbo, Ife, Ilorin, Abuja (3), Kaduna, Kano, Enugu, Onitsha, Port-Harcourt (2), Eket, Warri, Benin, Jos, Makurdi and Maiduguri. We have plans to increase this by opening ten (10) branches every year for the next three years and five (5) branches in the fourth year.

One of IGI’s key strengths is its wide branch network; its branch spread being the second largest in Nigeria. We foresee that with the current reforms, while other survivors are trying to setup and work on improving their structures in terms of spread and reach, IGI would have the advantage of speed in accessing the increased opportunities in the insurance sector.

IGI has built an investment strategy which is focused on creating optimum value for its shareholders. It invests in green field companies with huge potential and unrealised value, and after the required gestation period for these companies has run its course, it expects to dispose of its stake in the companies, hence unlocking massive value for the shareholders of IGI.

Inorganic Growth Plans

Regional Reach - Globalisation cannot be ignored in any economy and industry, and it is especially relevant in the insurance sector, taking into consideration the volumes of insurance business that are transacted across borders and the actual premium ceded abroad to foreign organisations.

IGI has been involved in a number of business expansion projects in the East African sub-region. With its recent acquisition of a 60% stake in the National Insurance Corporation of Uganda, IGI is positioning itself to be a major player in the African market. Accordingly, IGI is gradually implementing its regional acquisition strategy in the East African sub region. There are already other similar transactions in the pipeline. IGI also has plans to expand to countries in the West African sub-region. Revenues from such investments are expected to accrue in form of:

1. Management/Technical Fees;

2. Re-insurance premiums; and

3. Dividends.

These are expected to contribute significantly to IGI’s streams of income flow, now and in the future.

Again with the on-going West African regional expansion strategy being implemented by Nigerian banks, there would be potential insurance business transactions which IGI can tap into and benefit from, as the banks position themselves to maintain very visible presence in the West African region.



Consequently, in addition to our plans of growing the Company internally, we also intend to explore the merger & acquisition route of growing the Company as we realise that this represents a faster route of growth. Our plans in this direction are discussed in detail in the section on future plans.

BOARD OF DIRECTORS

General Dr. Yakubu Gowon GCFR, Ph.D, psc, jssc

I have been the Chairman of the Board of IGI since its inception and currently lead a board of 9 members that lends its skill and years of experience to directing the strategy of the Company. I was Nigeria’s Head of State and Commander-in-Chief of the Armed Forces from 1966 to 1975.

With a doctorate degree in Political Science, I have spent the past three decades providing leadership for projects designed to promote peace and progress in Nigeria and internationally.

I am the President and Chairman, Board of Trustees of Yakubu Gowon Centre, Abuja, a non-governmental organisation set up to promote the cause of Nigerian unity, nation-building, national integration and conflict resolution through dialogue and involvement in Humanitarian organisations and projects. I am also a recipient of the national honour, Grand Commander of the Federal Republic.

Another recent initiative of mine is the “Nigeria Prays” project, which is a vehicle for promoting peace and canvassing for spiritual and moral rebirth in the country.

The other Directors on the IGI Board are:

Mr. Remi Olowude, M.Sc (Econs), ACII - the Vice Chairman and Chief Executive Officer of IGI, he has a very rich inter-disciplinary background. He had his formal education in Economics both at the University of Lagos (1970-73) and the University of Santa Clara, California, United States (1976). He is also an Associate of the Chartered Insurance Institute of London. A self-motivated achiever, Mr. Olowude has deployed his multi-disciplinary background, professionalism and vision to build a conglomerate with interests in various sectors of the Nigerian Economy. Mr. Olowude has delivered papers at various fora on wide ranging topics. He has a total of 28 years cognate experience in Insurance Management.

Apostle Hayford I. Alile, OFR, B.A., MBA (Hon), D.Sc – As well as being a Director on the IGI board, he was a Director of the Central Bank of Nigeria (1999-2005). Since retirement as the Director General/Chief Executive Officer of the Nigerian Stock Exchange, he still serves on the Governing Council of the Exchange as well as on the Board of the Nigeria Security Printing and Minting Company Plc. A former President of the Harvard Business School Association of Nigeria, Apostle Alile is a fellow of each of the Institute of Directors, the Nigerian Institute of Management as well as the Chartered Institute of Stockbrokers. He is a leading investment analyst who has, in the last three decades, made valuable contributions to national economic growth and public policy formulation. He was for 12 years a Trustee and Treasurer of the Nigeria Olympic Committee. He is the Spiritual Leader of St. Joseph Chosen Church of God.

Chief Gaffar K. Animashawun, LL.B (London), B.L - holds an LL.B degree from the University of London and is a Barrister of the Middle Temple. He has run his own law practice successfully for several decades.

His business interests include insurance and construction services, amongst others.

Mr. O. Ola Vincent, CFR, B.Com (Hons) D.Sc - served as the Governor of the Central Bank of Nigeria between 1977 and 1982. He performed this national duty meritoriously, setting exemplary standards in accountability, probity and efficiency. An elder statesman and respected opinion leader, Mr. Vincent's views on critical national issues are highly valued. He is Chairman of the City Business Computers Ltd. He is a member of the National Executive Council of the Nigerian Conservation Foundation (NCF); Chairman, Lagos State Chapter of the Nigerian Conservation Foundation for over 10 years; past President of the Metropolitan Club and past President of Victoria Island Lions Club; and Patron of the African Church. He was a Vice President, African Development Bank Abidjan, Cote d’ivoire (1966-1973).



Dr. Lateef Adegbite, CON, PhD (London) - is a highly respected Legal Practitioner, businessman as well as a social and religious leader. He has enjoyed a distinguished career as a Law teacher, and sports administrator. A former Attorney General of the Western State of Nigeria, he is the Secretary-General of the Nigerian Supreme Council for Islamic Affairs. Dr. Adegbite belongs to several national, international, professional and business organisations. He is the Principal Partner of Lateef Adegbite & Co., a leading Law Firm, which specialises in Commercial Law Practice. He brings his wealth of knowledge and experience to the IGI board.

Mrs Olubunmi Olowude, AIMLT - is a Laboratory Scientist by profession and has had a distinguished career at the Nigerian National Petroleum Corporation (NNPC) from which she retired as Head of the Medical Laboratory Department. She is Member, Institute of Medical Laboratory Technologists. Now a businesswoman, Mrs. Olowude is on the Board of Directors of several companies including Orbital Computer Services Limited and Bimrax Limited.

Mr. Rotimi Fashola, MBA, ACII (London), ACI.arb - is the Executive Director, Marketing. He is a Chartered Insurance Practitioner with over two decades of distinguished professional practice. With more than 22 years cognate insurance experience, Mr. Fashola was the General Manager/Chief Executive of Liberty Assurance Company Limited before joining IGI in 1993. An alumnus of the Obafemi Awolowo University, he is an Associate of the Chartered Insurance Institute of London, and Associate, Chartered Institute of Arbitrators, London. Mr. Fashola is a member of the Academic Board of the West African Insurance Institute of The Gambia.

He is also a member of the Chartered Insurance Institute of Nigeria and holds, with distinction, the Diploma of West African College of Insurance and Risk Management. He has attended numerous courses, seminars and conferences on issues relevant to the industry.

Mrs. Folasade O. Adetiba, LL.B (Hons), B.L MCI.arb - is the Executive Director, Corporate & Legal Services. She had a distinguished legal career at the Federal Ministry of Justice where she rose to the position of Deputy Director before joining IGI in 1996. A Legal Practitioner with over 29 years post call experience, Mrs. Adetiba is also the Company Secretary and Legal Adviser to IGI and its subsidiaries. A Member of the Chartered Institute of Arbitrators, U K, a member of the Board of Directors of the Nigerian Export-Import Bank (NEXIM) 1990-1991, Member of the Task Force for the Revision of the Laws of the Federation of Nigeria (1990), she has made significant contributions to policy formulation in the insurance industry, especially in the content and interpretation of insurance legislation and regulations.

MANAGEMENT AND KEY STAFF Key management staff of IGI includes:

Martin Baines, B A (Hons), FCII

Martin is Director, Special Risks. He joined IGI in 2004 as energy underwriter in the Company’s London Office. He is a graduate of Leeds University and a Fellow of the Chartered Insurance Institute, London. He has a total of 29 years work experience, with renowned international insurance companies including the Sun Alliance Insurance Company, UK and Allianz Insurance where, as Energy Underwriting Manager, he managed a strategic unit which underwrote offshore oil and gas risk on a global basis. Martin was a member of the IGI Team that handled the Company’s successful acquisition of the majority ownership of the National Insurance Corporation of Uganda. Yinka Obalade, B.Sc , MBA, FCA Yinka is the Director of Finance. He was until August 2005, the Managing Director and Chief Executive Officer of Global Bank Plc. He joined IGI bringing to the team his vast professional and skill knowledge gained over various areas of core banking activities such as packaging and administration of credits, foreign and domestic operations, treasury activities, corporate finance, branch co-ordination and general planning and administration of finance services.

A First Class Honours graduate of Mathematics of Obafemi Awolowo University, Ile-Ife, he also holds a Master of Business Administration, MBA (Finance) degree, and is a Fellow of the Institute of Chartered Accountants of Nigeria.



Ilesanmi Fabode, B.Sc (Hons) Econs, FCA Ilesanmi obtained a B.Sc degree in Economics from the University of Ibadan in 1971. He is also a fellow of the Institute of Chartered Accountants of Nigeria (FCA). Ilesanmi is Special Assistant to the Executive Vice Chairman on International Investments and has over 32 years work experience. Wole Awolaja, B.Sc, MBA

Wole is a Deputy Director currently engaged as a Special Assistant to the Executive Vice Chairman for Business Development, Strategy and Financial Engineering. Wole has 16 years work experience as a Banker and Management Consultant with a broad international experience with institutions including ABN AMRO Bank, ING Bank and PricewaterhouseCoopers all in the Netherlands. He holds an MBA in Financial Management from University of Bradford in the UK, Certified Professional Consultant (CPC) from the Academy of Business Strategy, London UK, Banking certifications from the Dutch Institute of Banking and Securities and numerous IT/IS certifications in Business Intelligence, Total Quality Management, Business Process Improvement to name a few.

Dr. (Mrs.) Violet Arene, B.A History, M. A. (Ed), PhD (Ed)

Violet is the Group Coordinator, IGI Training School, with over 45 years experience as Educationist, Trainer and Human Resources Development practitioner. Her experience ranges from the Public Service as teacher; Education Administrator with the Federal Ministry of Education, to Consultancy with the Nigerian National Petroleum Corporation, from where she retired as General Manager, Consultancy & Corporate Total Quality Management & Development and Executive Secretary, Corporate Total Quality Management Council.

Kasali Salami, B.Sc, MIS, FSS

Kasali is Director, Research and Strategic Planning. He has over 35 years experience in Research and Development. Prior to joining IGI, he was the Deputy Director of Research and Development and later Director of Technical Operations of Africa Re. He once served as a consultant to the Association of Tanzanian Insurers. Kasali established and served as the Head of Research and Development of NICON Plc and the State Insurance Corporation, Ghana.

He is a member/Associate of the Institute of Statistics and a fellow of the Royal Statistical Society, London. He studied Mathematics at the University of Ghana and Statistics (including Actuarial Statistics) at the University of Kent at Canterbury, England.

Patrick Aimiosior, B. Sc (Hons), MBA, ACII Patrick is Deputy Director, Special Risks. He holds BSc in Economics, Master of Business Administration, Marketing, and is an Associate of Chartered Insurance Institute, London. He has a total of 25 years work experience in the insurance industry.

Lanre Balogun, ACII, MBA, Dip (Ins.) Lanre is Deputy Director; Motor Department He holds an MBA and is an Associate of the Chartered Insurance Institute, Nigeria. He has a total of 30 years work experience.

Abiodun Alao, HND, ACII, MBA, FIIN Abiodun is Deputy Director in charge of Parastatals Marketing and overseeing the Zonal Operations of the Company. He holds an MBA and is an Associate of the Chartered Insurance Institute, Nigeria. He has extensive cognate experience of over 25 years and was Managing Director/Chief Executive of another insurance firm before joining IGI.

Doyin Adebambo, B.Sc, M.Sc. Doyin is Deputy Director, Finance & Investment. He holds a Masters degree in Finance from the University of Lagos and has over 23 years work experience. With his vast experience in banking and investment, Doyin has responsibility for the investment operations of the Company which has witnessed tremendous growth over the years as recorded in our annual financial returns.

Reuben A. Gbijah, Dip. Public Admin. Reuben is Zonal Director, North East Operations. A graduate of the University of Jos, he has vast experience in insurance marketing, and has a total of 21 years work experience in the insurance industry.



Ralph Falokun, ACII, Dip. Insurance Ralph, a pioneer staff of IGI is the Assistant Director, Marine and Aviation. A graduate of the Prestigious West African Insurance Institute & College of Risk Management, Monrovia, he is also an Associate member of the Chartered Insurance Institute of London and Nigeria. He has a rich career in the insurance industry spanning a period over 25 years and has headed the Insurance Industry Aviation pool. Ralph is one of the very few underwriters in Nigeria with experience in Aviation Insurance and he has had extensive training at international fora.

Samuel T. Fred, ACII, MBA Samuel is Assistant Director, General Business. He holds an MBA in Insurance and Risk Management and is an associate of the Chartered Insurance Institute, London. He has over 31 years practical experience in the insurance industry and having worked in virtually all the technical departments of the Company, he currently heads the Company’s General Business Department.

Felix Ojo Aladejana, B.Sc. (Hons), FCA, FCMA Felix is a seasoned accountant with over 28 years post-qualification experience as professional accountant in various capacities in the banking industry, commerce, accounting practice and management consultancy. He is the Special Assistant to the Executive Vice Chairman on Management matters.

Seyi Shadare, B.A (Hons), M.Ed, Ph.D Seyi is Assistant Director, West Operations. He holds a PhD in Industrial Relations, and is an Associate of the Chartered Institute of Personnel Management (AIPM). He has work experience of over 14 years and is an astute marketer.

Olanrewaju Adeyemi Adenuga, M.Sc., MBA Olanrewaju is the Assistant Director, Administration for IGI. He holds a Masters degree in Textile Engineering and MBA in Business Administration. He has over 23 years work experience, and he is a member of the Chartered Institute of Personnel Management. He was the Honourable Secretary, Lagos State Institute of Personnel Management of Nigeria from 1993 to 1995.

Niyi Adeboyejo, HND, MBA, FCII Niyi is Assistant Director, Life Marketing and currently manages the Life Agency network of IGI. He is a Fellow of the Chartered Insurance Institute, London, and Associate of the Chartered Institute of Marketing of Nigeria. He holds a Masters degree in Business Administration and with work experience spanning over 23 years, has considerable expertise in marketing, underwriting and human resource management.

Babatunde Adeyemi Adesola, B.Sc, ACA, ACIB Babatunde is Assistant Director, Finance & Accounts. He holds a BSc in Business Administration from the University of Lagos and is an Associate of the Chartered Institute of Accountants and the Chartered Institute of Bankers of Nigeria. He has a total of 16 years work experience in various top positions in the banking industry.

Femi Tayo, Dip.(R.Eng), A(RISAN) Femi is the Head of Claims Department. An SITC Certified Risk Engineer, he is an Associate Member of Risk Surveyors Association of Nigeria as well as an Accredited Risk Engineering Representative of XL Insurance Global Risk of Winterthur, Zurich Re-Insurance Company and AON Limited.

With a total work experience of 24 years, Femi is an alumnus of the prestigious Swiss Insurance Training Centre in Zurich, Switzerland and a beneficiary of the Specialist Engineering Insurance Underwriting training programme given by Swiss Re, Switzerland.

Gideon Abiodun Ogundipe, M.Sc, ACT Gideon is Assistant Director, Management Information Services. He holds a Masters of Science degree, First Class Division from Kiev Institute of Civil Aviation Engineering in Ukraine. With a total work experience of 11 years, he has acquired considerable expertise in various computer software programmes and platforms. He is a Cisco certified Network Administrator and Microsoft Certified System Developer.



Kolawole Oyegoke, HND, MBA, FCA, ACITN

Kolawole has responsibility for the Group Internal and Systems Control. A Fellow of the Institute of Chartered Accountants of Nigeria, he has a total of 24 years work experience.

Danjuma Michael Dogo, B.Sc, MBA, ACII Danjuma heads the Company’s Northern Operations. He holds a B.Sc degree in Chemistry from Ahmadu Bello University, Zaria and an MBA from Bayero University, Kano. He is also a Fellow of the Chartered Insurance Institute of London. He has a total of 18 years work experience.

Assumpta Ifeoma Udoh, B.A (Ed), ACII Assumpta is Senior Manager in charge of Direct Marketing. A First Class graduate of the Obafemi Awolowo University, Assumpta recently bagged an Award of Associate of Chartered Insurance Institute of London from the Metropolitan University, London. She is an astute marketer and has 13 years work experience in the insurance industry.

Remigius Ogomuegbunam Oluoma, B.SC, MBA, ACIIN Remigius is Senior Manager, Life Technical. With a total work experience spanning 18 years in various top capacities in insurance institutions in Nigeria, he has acquired significant expertise in insurance underwriting.

Rita Elizabeth Paul-Okhae, FCII Rita is Senior Manager, Financial Institutions Marketing. She is a Fellow of the Chartered Insurance Institute of London. She has 16 years of extensive insurance practice and work experience in insurance institutions both within and outside Nigeria.

Godwin Evwaire, B.Sc, Dip. WAII Godwin is Senior Manager in the Oil and Energy Department. He holds a B.Sc degree in Finance and a diploma of the West African Insurance Institute, Banjul, Gambia. With a work experience spanning over 15 years, Godwin has attended various courses in Oil and Energy including the prestigious Energy course of Marsh (London) UK. Abisola Oluwatoyin Oluwalaiye, LL.B, B.L, B.Sc, MPA Abisola currently heads the Human Resource Department of the Company. She holds LL.B, BSc in Sociology and Masters of Public Administration degrees. She is a member of the Nigerian Bar Association as well as an Associate of the Chartered Institute of Personnel Management. She has wide experience of over 18 years in human resources management both from the public and private sectors.

FINANCIAL SUMMARY

The financial summary presented below is an extract from the Reporting Accountant’s Report on the audited financial statements of IGI for the five (5) years ended December 2004, as well as the Reporting Accountants’ Report on the management accounts for the twelve months ended 31 December, 2005 and the Profit forecasts for 2006, 2007 and 2008.

Profit Before Tax

IGI posted a Profit Before Tax (PBT) of N377 million for the year ended 31 December 2004, and its un-audited twelve (12) months accounts for the period ended December, 2005, show PBT figures of N649.95million. This represents a 72% increase over the previous year’s 12 months performance of N377 million. This increase is mainly attributable to the 123% increase in investment income from N391million in 2004 to N873million in 2005. The 2006, 2007 and 2008 PBT forecasts are put at N1.63billion, N2.40billion and N3.54billion respectively. Dividends

In 2004, dividend paid was N126 million with a dividend per share of 20 Kobo compared with total dividends of N75 million and dividend per share of 15 Kobo in the previous year. Dividends for the year 2006, 2007 and 2008 are projected to be N636million, N1.27billion and N1.99billion respectively.



Shareholders’ Funds

The Company’s shareholders funds (SHF) were reported at N5.1 billion as at the year ended 31 December 2004 and at N5.42 billion for year ended 31st December, 2005. This represents an increase of 6.3% in SHF.

IGI - Projected financial performance 2006- 2008 (N million)

5,832

7,966

10,986

3,226

2,0921,377

1,1251,601

2,042

0

2,000

4,000

6,000

8,000

10,000

2006 2007 2008

Gross premium Profit before taxation Overhead expenses

PREMISES IGI’s head office is situated at Plot 741, Adeola Hopewell Street, Victoria Island, Lagos, with a head office Annex in the Central Business District, Abuja. In the United Kingdom, its contact/liaison office is at Suite 67/68, 2nd floor, 65 London Wall, London, EC2M 5TU, and the Company operates from 24 branches in Nigeria.

Details of the Company’s branches in Nigeria are provided below:

No. Branch Address 1. Abuja I Plot 758, Cadastral Zone AO, Central Business District, Abuja 2. Abuja II Plot 107 Warri Street, Area II Garki, Abuja 3. Abuja III IGI House, Plot 2186 Wuse Zone 4, Abuja 4. Kaduna Plot 41/42 Independence Way, Kaduna 5. Kano 4th Floor, African Alliance Building, Plot F1 Sanni Abacha Way, Kano 6. Ikeja 174 Obafemi Awolowo Way, Ikeja, Lagos 7. Ikoyi 180, Awolowo Road Ikoyi, Lagos 8. Apapa 22 Warehouse Road, Apapa, Lagos 9. Ibadan IGI House, 9 Lebanon Street, Dugbe, Ibadan 10. Ilorin 229A Ibrahim Taiwo Road, Ilorin 11. Ile-Ife Sports Centre, Obafemi Awolowo University, Ile-Ife 12. Akure 47B, Oba Adesida Road, Akure 13. Abeokuta Kay Plaza, 18 Lalubu Street, Oke-Ilewo, Ibara, Abeokuta 14. Oshogbo 1, MDS Road, Alekuwodo Junction, Opposite Sawmill,Oshogbo 15. Port-Harcourt I 2 Ikwerre Road, Port-Harcourt, Rivers State 16. Port-Harcourt II 2 Temple Ejekwu Close, Rumuogba, Port-Harcourt, Rivers State 17. Enugu African Continental Bank Building, 9 Ogui Road, Enugu, Enugu State 18. Onitsha 83 Old Market Road, Onitsha, Anambra State 19. Warri Gboruwa Towers, 43 Airport Road, Effurun, Warri, Delta State 20. Benin 44, Akpakpava Road, Benin City, Edo State 21. Eket 26 Afaha Uqua Road, Eket, Akwa Ibom State 22. Jos 75/C3 Yakubu Gowon Way, Jos, Plateau State 23. Maiduguri 80 Shehu Hashimi Road, Kofa Biyu, Maiduguri, Bornu State 24. Makurdi 23, Railway Bye pass, Makurdi



PRODUCTS AND SERVICES IGI has taken the provision of customised value-added insurance services to new heights while remaining a leader not only in Life and General Insurance business but especially in the specialised areas of Oil, Energy, Aviation, Engineering and Industrial Risk Management. The Company focuses on understanding each individual client’s peculiar needs to assess the risks which the client is exposed to, in order to proffer tailor made insurance solutions. The range and classes of products and services offered by IGI include:

Non-Life Insurance

The Company provides all classes of non-life insurance business with emphasis on the under-explored hi-tech areas of:

• Oil and Energy • Marine and Aviation • Engineering and Contractors All Risks Insurance • Environmental Insurance

Life Assurance

The life assurance products include: • Group/Individual Life Assurance • Whole Life Assurance • Term Assurance • Mortgage Protection and Home Ownership Assurance • Family Income Benefit • Children’s Endowment Assurance • Keyman’s Insurance • Pensions/Provident Scheme • Death in Service Benefit • Gratuity • Medical Expenses/Health Insurance (MEDEX)

In addition, IGI provides high quality insurance services in the following areas: • Group Personal Accident • Workman’s Compensation • Employer’s Liability • Public and Product Liability • Motor • Fire and Allied Perils • Theft/Burglary (Private and Business) • All Risks • Cash – In – Transit • Fidelity Guarantee • Bid Bonds, Supply Bonds and Performance Bonds

IGI also offers • Product Innovation Services • Superior Claims Management • Sophisticated Risks Management Services • Mergers And Acquisition Services

OUR CLIENTELE IGI has gained the confidence of discerning individuals and corporate clients as the provider of premium risk and benefit related insurance services. With cutting edge processes which guarantee exceptional response time, IGI has been able to meet the growing needs of clients which include banks, oil companies and government establishments, among others.



CORPORATE CITIZENSHIP AND SOCIAL RESPONSIBILITY IGI has earned a robust profile in social responsibility which emerged from its enviable reputation as the foremost sports-friendly insurance institution and one of the nation’s leading sports sponsors and promoters.

The Company provides opportunities for youths to develop positively, through sponsorship of football, athletics, tennis, basketball and other games endorsement.

IGI has been a major sponsor of club football at the local and continental levels as clubs in all parts of the country have enjoyed the Company’s endorsement in local and international competitions. The clubs include - 3SC Shooting Stars, Kano Pillars, Enyimba of Aba, Lobi Stars of Makurdi among others.

The Company has also provided support for individual athletes – Kanu Nwankwo (Football), Chioma Ajunwa (Athletics), through endorsement packages, to develop their careers.

In recognition of its roles in sports development, IGI is the NFA appointed Official Insurer of the five national football teams – U–17, U23, Flying Eagles, Super Eagles and the Falcons. In consonance with its environment-friendly outlook, IGI has continued to support organisations involved in environment protection activities.

INTERNATIONAL BUSINESS PARTNERS From its inception, IGI has enjoyed co-operation and support from the international insurance and re-insurance markets. IGI’s business partners include: Re-insurance Brokers

• Marsh Limited, U.K • Aon Group • Alexander Forbes, U.K. • United Insurance Brokers, U.K. • Benfield Group • Jardin Lloyd Thompson • Health Lambert • Willis • HSBC

International Re-insurers • Lloyds of London • SCOR, France • Swiss Re • Africa Reinsurance Corporation • AIG • SOMPO, Japan

Local Re-insurers • Nigeria Reinsurance Plc. • Continental Reinsurance Company Limited • Globe Reinsurance Company Limited • Universe Reinsurance Company Limited

INFORMATION TECHNOLOGY IGI has continued to deploy the latest information technology to stay ahead of competition in computerised operations and processes. The Company has thus been able to constantly improve response time as well as provide first-rate insurance services, tailored to meet the specific requirements of our coveted clientele.



The Company is able to create a niche both in using Information Technology (IT) as an efficient operations support tool and as distribution and communication channel to stakeholders. The IT and Information Systems are used to streamline operational processes and procedures. Below are some of our IT initiatives:

• We make IT literacy an important prerequisite in our staff recruitment processes and ensure that every employee of the organization is IT literate;

• We ensure that IT user training is a continuous exercise so as to leverage on the Company’s huge investment in Information Technology and keep up-to-date with the dynamics of the IT world;

• The software application supports all major classes of business including Fire, General Accidents, Engineering, Marine Cargo and Hull, Aviation, and Motor. These all have linkages with our corporate website to deal with enquiries, policy administration, quotation, claims notifications and e-marketing;

• IGI is now embarking on the implementation of its Enterprise Wide software that will integrate all functions within the organisation including Customer Relation Management, workflow Management and this will interface with our corporate web Portal

• The Company has acquired a 450MHz transmission frequency for its enterprise wide area network.

PURPOSE OF THE PLACEMENT The private placement is being undertaken to finance IGI’s strategic business development, which involves business development and expansion, strengthening of working capital base, information technology and staff development.

The proceeds will be utilized in the business development and expansion initiatives which include opening ten branches per annum in the next three (3) years. The proceeds will also be used to finance IGI’s on-going business expansion into the East and West African sub-region.

In addition, the proceeds will be utilised to upgrade IGI’s current IT infrastructure in readiness for delivering top scale customer service for our clients and in preparation for the challenges post-capitalisation. In the light of the new challenges facing the industry and the need for skilled expertise to manage the funds that will be raised, IGI will embark on implementing comprehensive training programmes to equip the staff with the requisite skills.

The estimated net proceeds of N5.568billion after deducting the cost of the Placement, estimated to be N232 million, will be utilised as follows:

Item N billion %

Business Development & Expansion: 2.78 50

Information technology improvements 0.84 15

Staff Development 0.84 15

Working capital 1.11 20

Total 5.57 100

WORKING CAPITAL, PROFIT AND DIVIDEND FORECASTS The Directors of IGI having considered its present financial position and the expected proceeds from the private placement, as well as the emerging opportunities within the insurance sector and the Nigerian economy as a whole, are of the opinion that the Company will have adequate working capital for its immediate and foreseeable future obligations and funding requirements. The Directors estimate that in the absence of unforeseen circumstances, the Company’s earnings, profit and appropriations thereof for the years ending 31st December 2006, 2007 and 2008 will approximately be as follows:



N=’000

Year Ending 31st December 2006 2007 2008

Profit Before Taxation 1,625,612 2,400,395 3,535,458

Provision for Income Tax (342,610) (476,821) (672,082)

Profit After Tax 1,283,002 1,923,574 2,863,375

Appropriation:

Transfer to Contingency Reserve (267,303) (399,163) (591,458)

Proposed Dividend (636,032) (1,272,064) (1,987,601)

Retained Profit 379,667 252,347 284,317

Forecast Earnings Per 50k Share (in Kobo) 20 30 36

Forecast Dividend Per 50k Share (in Kobo) 10 20 25

N.B.: Calculations of forecast earnings and dividend per share are based on 6,360,322,000, 6,360,322,000, and 7,950,403,000 ordinary shares of 50kobo each in 2006, 2007, and 2008 respectively. Included in these shares is the proposed bonus issue of 360,322,000 ordinary shares of 50k each for the year ended December 31, 2005.

FUTURE PLANS In the light of current industry reforms, this private placement represents one of the steps we are taking to properly position ourselves as leaders in the industry. We have recently concluded a Rights Issue which has enhanced our Capital Base and we intend to subsequently conclude merger arrangements with some companies whom we have been in discussions with.

Strategic Business Objective

Our business strategy is one that is focused on growth through a continually increasing market share as well as increasing profitability and efficiency in our operations, to ensure increased returns to the Company as well as its shareholders.

Our growth is intended to be both organic, through internal growth, as well as inorganic, through mergers & acquisitions. Our plans include acquisition of some insurance companies in Africa and an aggressive increase in our branch network, business diversification as well as focusing on the business development areas of research, product development, investment management and marketing.

All these strategies have the singular aim of harmonising demographics, location and market realities to enable the Company deliver excellent services, suitable for our clients.

IGI has also been involved in several cross border investments; we recently acquired 60% shareholding of the National Insurance Corporation Limited of Uganda, which is currently being managed by IGI under a technical management agreement.

Merger/Consolidation Plans

We plan to conclude merger arrangements with Postal Life and General Insurance Company Limited (PL&G), in which we have majority shareholding. The objective of this merger will be to consolidate IGI’s equity in PL&G thereby creating a unified insurance institution well positioned as a leader in the post-consolidation era. This merger will result in significant synergies to be created by a more efficient utilisation of resources and the elimination of hitherto duplicated administrative and marketing efforts.

We also intend to identify and enter into merger arrangements with other smaller and profitable insurance companies, whom we see as being well aligned with our future strategic plans.

With our present network of 24 branches, we have the second largest branch network in Nigeria. We plan to further enhance this spread by identifying and executing merger arrangements with insurance companies who have a presence in locations where we are currently not situated.



RISK FACTORS AND MITIGATING STRATEGIES In formulating the consolidation and future plans of the Company, management has taken reasonable steps to identify the potential risks of the business and has devised effective strategies to mitigate the impact of those risks. The following are the risks peculiar to our business and the attendant strategies to mitigate the controllable risks: Company-Specific Risk This is the risk of loss due to failed internal processes, peoples and systems that can be adduced to poor management, lack of supervision, disruption of technological systems and inadequate accounting systems and controls. These risks are critical as they preclude organisations from achieving their business objectives. Mitigating Strategy: As IGI pursues its capitalisation and expansion plans, the Company is also reviewing its internal processes and systems to ensure improved customer services, deployment of cutting-edge technologies, engaging and retaining professionals as well as consolidating on its financial strength

Sectoral Risks The new recapitalisation directive in the Insurance Industry has introduced new challenges for Insurance companies and our Company in particular. The post-recapitalisation era will witness the emergence of few big players and hence increase the likelihood of market domination by these players. Consequently, we foresee an era where few firms compete to gain significant market share. Mitigants: IGI has taken a bold step to comply with the recapitalisation directive and has also formulated strategies aimed at consolidating its leadership position in the market. Political Risks Political risks may arise from the actions or inaction of a foreign or domestic government, or a third party country which affect private business. Mitigants: Nigeria is under democratic rule and therefore guided by the rule of law. The current government has put in place various policies tailored towards building a vibrant private sector led economy that should be sustained. It is anticipated that the transition to a new elected government in 2007 will be smooth and successful. Currency Risks This is the risk associated with the volatility in the exchange rate of the Naira to other currencies of the world. Mitigants: The Central Bank of Nigeria has taken steps to promote the stability of the Naira via the introduction of the Wholesale Dutch Auction System (WDAS). Another factor supporting the stability of the Naira is the increasing volume of the Nigeria’s foreign reserve which can be attributed mostly to high oil prices which we estimate will be sustained in the near future Environmental Risks

Environmental issues such as pollution, natural disasters and fire outbreaks are a growing concern for many organisations because of the potential impact of disrupting business activities. The enforcement of environmental regulations through the criminal courts and, to a lesser degree, civil courts have raised its awareness.

Mitigants: IGI has formulated and implemented a policy to manage the potential impact of environmental risks. The Company is also ensuring compliance with all the environmental rules and regulations.

In conclusion, the Board and Management of IGI intend to consciously work towards maintaining the Company’s position as an industry leader at the end of the current industry reforms. This private placement of our shares is a preface to several other strategies that we intend to execute in the near future and beyond.



I encourage all prospective shareholders to participate fully and take advantage of this exceptional opportunity to invest in IGI. Yours faithfully,

Gen. Dr. Yakubu Gowon GCFR, Ph.d, psc, jssc Chairman


PROFIT FORECAST The following is an extract of the report of J. K. Randle & Co., the Reporting Accountants to the Private Placement on the profit forecast of IGI for the years ending 31 December 2006, 2007 and 2008.

1. LETTER FROM THE REPORTING ACCOUNTANTS

19 June, 2006

The Directors Industrial And General Insurance Company Limited Plot 741 Adeola Hopewell Street Victoria Island Lagos and The Directors IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos and The Directors Vetiva Capital Management Limited Plot 226B Kofo Abayomi Street Victoria Island Lagos Gentlemen, We have reviewed the accounting bases and calculations for the profit forecast of Industrial and General Insurance Company Limited (for which the Directors are solely responsible) for the years ending 31 December 2006, 2007 and 2008. The forecast includes results shown by the unaudited management accounts for the year ended 31 December 2005.

In our opinion, the annexed forecast, so far as the accounting bases and calculations are concerned, has been properly compiled based on the bases and assumptions made by the Directors as set out on pages 30 to 32 and is presented on a basis consistent with the accounting policies normally adopted by the company. However, there will usually be differences between forecasts and actual results, because events and circumstances frequently do not occur as expected and these differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report.

Yours faithfully

J. K. Randle & Co. (Chartered Accountants) Reporting Accountants

PROFIT FORECAST


MEMORANDUM ON THE PROFIT FORECAST FOR THE YEARS ENDING 31 DECEMBER

2006, 2007 AND 2008 2. INTRODUCTION

2.1 This Memorandum has been prepared to summarise and outline the information

available to the Directors and their basic assumptions at the time of their forecast of the pre-tax profits for the years ending 31 December 2006, 2007 and 2008.

2.2 The Directors of the Company are of the opinion that subject to unforeseen circumstances, the profit before taxation for the years ending 31 December 2006, 2007 and 2008 after allowing for contingencies will be approximately N1,625,612,000 N2,400,395,000 and N3,535,458,000 respectively.

2.3 The basis and principal assumptions used by the Directors in the preparation of the

profit forecast are stated below. 3. BASES AND ASSUMPTIONS

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

3.1 Bases

The projected profit & loss accounts for the three-year period ending 31 December 2008 have been prepared on a basis consistent with the accounting policies normally adopted by the Company and in line with relevant International Accounting Standards (IAS).

.1 GROSS PREMIUMS The gross premiums for the various classes of insurance business are expected to grow

at the following rates: YEAR General Business Life Business 2006 40% 30% 2007 40% 35% 2008 35% 30% The above rates are on incremental basis. The above targets mentioned will be achieved by adopting the under listed business

strategies: a) Introduction of new products in addition to the existing products. b) Branch expansion that will increase insurance awareness and patronage. c) Deployment of aggressive, dynamic and customer oriented marketing strategies in order

to achieve and sustain the leadership position in the industry.

.2 REINSURANCE

The ratio of gross premium ceded is as follows: YEAR LIFE NON-LIFE 2006 7% 59% 2007 7% 58% 2008 7% 55%

The reduction in the rate of premium ceded is as a result of increase in paid-up capital, which is expected to improve the retention capacity.

PROFIT FORECAST


.3 CLAIMS PAID & ADMITTED

Claims as a percentage of gross and net premium income over the projection period is as given below:

YEAR Gross Prem % Net Prem %

2006 11% 21%

2007 11% 20%

2008 12% 21%

.4 INVESTMENT INCOME

The investment income will be at an average of 10% of average investment held by the company for the respective financial years. This will also include the following incomes from our investment in subsidiaries

• 60% of projected dividend income from National Insurance Corporation Limited, Uganda (“NIC Uganda”)

• Technical management fee from NIC Uganda.

• Other income from other subsidiaries.

.5 MANAGEMENT EXPENSES

The management expenses are expected to be at the rates of 20% of gross premium or 30% of net premium income.

.6 COMMISSIONS Commission allowed and commission received are projected at the following percentage

of Gross Premium and Reinsurance premium respectively: Class of business Average Comm. Allowable Average Comm. Receivable Life 20% 25% Non-Life 6% 9% .7 DIVIDEND POLICY Dividend policy is based on prudence and the need to increase shareholders fund

through retention of earnings. .8 PROPOSED DIVIDENDS

The Company proposes to pay dividend of 10k in 2006; 20k in 2007 and 25k in 2008;

.9 BONUS ISSUE

Bonus or scrip issue of 1 for 4 shares will be made in 2007 and 1 for 5 in 2008 from the outstanding amount in share premium account. These bonus issues will rank for dividend in 2008 and 2009 respectively.

.10 EARNINGS PER SHARE The Earnings per share (EPS) is based on the number of ordinary shares of 50 kobo

each in issue in each year.

PROFIT FORECAST


.11 RECAPITALISATION PLAN

The Company is expected to have a total deposit for shares of N5.8 billion through private placement of 2.9 billion ordinary shares of 50 kobo each at N2.00 per share in 2006.

.12 PURPOSE OF THE PLACEMENT

The proceeds of the Funds mobilised though Private Placement is to be utilised as follows:

N '000

Gross Proceeds 5,800,000

Less: Cost of Issue 232,000

--------------

Net Proceeds 5,568,000

========

To be Utilised as follows: Business Development & Expansion

50% 2,784,000

Working Capital 20% 1,113,600

Information Technology 15% 835,200

Staff Development 15% 835,200

100% 5,568,000

3.2 Assumptions

The projected financials are based on the premise that the following economic and social factors will hold sway:

(i) There will be no significant changes in monetary and fiscal policies of the Government that will adversely affect the Company.

(ii) Changes in the general political and economic climate will not adversely affect the operations of the Company.

(iii) Operating results will not be materially affected by industrial disputes within the insurance industry and/or in the country.

(iv) The Company will continue to enjoy the goodwill and confidence of present and future customers, and demand from customers will continue to grow at least at steady rates.

(v) The quality of management and efficiency of staff will improve steadily during the forecast period.

(vi) There will be no material acquisitions or disposal of fixed assets other than as shown in the forecast.

(vii) There will be no material changes in the accounting policies currently being used by the Company.

(viii) Our investments in NIC Uganda and the income there from have been incorporated in our projections

(ix) We plan to make more acquisition of insurance companies and new cross border investments.

PROFIT FORECAST


4. STATEMENT OF ACCOUNTING POLICIES

The following are the significant accounting policies adopted by the Company in the preparation of its financial statements:

4.1 Basis of Accounting

These financial statements are prepared under the historical cost convention modified by the inclusion of certain land and buildings, investment properties and quoted securities as well as market instruments at professional valuation.

4.2 Fixed Assets Fixed Assets are stated at cost or valuation less accumulated depreciation.

4.3 Depreciation of Fixed Assets Depreciation is provided on a straight line basis at the following annual rates which are expected to write off the cost or valuation of fixed assets over their estimated useful lives:

Land and Buildings 2% Leasehold improvements - 20% Furniture & fittings - 15% Motor vehicles - 25% Computer equipment - 331/3% Office equipment - 20%

4.4 Change in accounting policy for investments There was a change in year 2004 in respect of accounting for investment in quoted securities, from cost method to market valuation method.

4.5 Investments .1 Investments in long term quoted securities are stated at valuation. Surplus on

revaluation of quoted securities is credited to a Revaluation Reserve Account. Diminution in value of the quoted stock is considered to be temporary and is set against the balance in the Revaluation Reserve Account.

.2 Short term investments and all unquoted securities are stated at cost less diminution in

the value thereof. .3 Some real estate properties are stated at revalued amount and revaluation surpluses

are included in a Revaluation Reserve Account. All real estate properties are not subject to periodic depreciation charges.

4.6 Investment Income

.1 Interest receivable on fixed interest investments is credited as and when due; and

.2 Dividend receivable on equities is credited when received.

4.7 Debtors

Debtors are stated after deduction of specific provision for debts considered to be doubtful of collection.

The amount of provision made each year, net of recoveries, is charged against income in the profit and loss account.

PROFIT FORECAST


4.8 Revenue Accounts .1 Basis of accounting The Company adopts the annual basis of accounting in case of the general insurance

business and the fund accounting basis for the life assurance business.

.2 Premium Net premium represents the total amount invoiced to policy holders less reinsurances and is recognized as income from the date of risks.

.3 Management expenses Except for certain expenses which are directly related to each class of business, other management expenses are apportioned between the classes of insurance in the proportion of their retained premium.

.4 Underwriting results The underwriting results are stated after recognizing claims, commission, expenses and reserves as outlined in 4.8.5 below.

.5 Statutory reserves (i) Reserve for outstanding claims

Provision for outstanding claims shall be credited with an amount equal to the total estimated amount of all outstanding claims with a further amount representing 10% of the estimated figure for outstanding claims in respect of claims incurred but not reported at the end of the year under review.

(ii) Reserve for unexpired risks In accordance with section 20(1)(a) of Insurance Act, 2003, the reserve for unexpired risks is made on time apportionment basis of the risks accepted.

(iii) Contingency reserve Contingency reserve in respect of non-life business is the higher of 20% of profit after tax or 3% of net premium as specified by section 21(2) of the Insurance Act, 2003 while the contingency reserve for life business is 1% of the net premium or 10% of profit after tax whichever is higher as specified by section 22(1)(b) of the Insurance Act.

(iv) Life fund

In accordance with section 22(1)(a) of the Insurance Act, 2003, the Life fund should be equal to the net liabilities on Life policies in force at the time of the actuarial valuation.

4.9 Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange ruling at

the dates of the transactions. Assets and liabilities in foreign currency balances are converted to Naira at the rate of exchange ruling at the balance sheet date. All differences rising from the conversion of balances in foreign currencies are taken to the profit and loss account

PROFIT FORECAST


4.10 Taxation .1 Income Taxation

Provision for income taxes is made in accordance with the provisions of the relevant tax laws.

.2 Deferred Taxation Provision for deferred taxation is made using the liability method and is

calculated at 30% on the timing differences between the net book value of fixed assets and their corresponding tax written down values

4.11 Investments in Subsidiaries and Associated Companies

.1 Investments in subsidiary and associated companies are stated at cost

.2 The financial statements of the subsidiary companies are not consolidated in these financial statements.

4.12 Administered Deposits

Funds received from customers under Deposit Administration Scheme are held strictly for investments and are accounted for as liabilities in the financial records of the company.

Guaranteed interest payable thereon is credited to the deposit accounts annually at rates agreed mutually with the respective customers and is shown as an expense in Life profit and loss account while income accruing on the investment of the funds is credited as an income in Life profit and loss account.

4.13 Staff Retirement Benefits

The Company maintains a staff provident fund which is contributory on behalf of its staff. Each member of staff contributes 5% of his/her basic salary while the Company contributes 10%. The Company’s contribution is charged against income and is included in staff cost.

PROFIT FORECAST


5.1 The Directors are of the opinion that subject to unforeseen circumstances, and based

on the assumptions in note 3.2 above, the profit before taxation for the years ending 31 December 2006; 2007; and 2008 will be in the order of N1,625,612,000; N2,400,395,000; and N3,535,457,000 respectively as detailed below:

2006 2007 2008

INCOME N'000 N'000 N'000Gross premium written 6,289,386 8,733,217 11,692,745 Outward re-insurance (2,938,471) (4,040,912) (5,219,230)

------------ ------------ ------------Net premium 3,350,915 4,692,305 6,473,515 Unexpired premium reserve (124,539) (155,674) (202,376)

------------ ------------ ------------Earned premium 3,226,376 4,536,631 6,271,139 Investment income 1,476,941 2,139,409 2,892,570 Commission earned 257,522 345,910 446,967 Claims recovered 278,258 358,711 490,907

------------ ------------ ------------5,239,097 7,380,661 10,101,583

------------ ------------ ------------EXPENSESClaims paid (Net) 678,159 928,725 1,338,957 Commission allowed 612,422 808,550 1,042,527 Overhead expenses 1,124,688 1,601,388 2,041,973 Guaranteed interest charges 374,975 404,973 429,271 Other life expenses 17,794 30,379 46,493 Outstanding claims 17,029 20,434 26,565 Transfer to life fund 788,418 1,185,817 1,640,340

------------ ------------ ------------3,613,485 4,980,266 6,566,126

------------ ------------ ------------Profit before taxation 1,625,612 2,400,395 3,535,457Provision for income tax (342,610) (476,821) (672,082)

----------- ----------- -----------Profit after taxation 1,283,002 1,923,574 2,863,375Transfer to contingency reserve (267,303) (399,163) (591,458) Proposed dividend (636,032) (1,272,064) (1,987,601)

----------- ----------- -----------Retained profit for the period 379,667 252,347 284,316Retained profit at 1 January 56,931 436,598 688,945

--------- --------- ---------Retained profit at 31 December 436,598 688,945 973,261

===== ===== ===== 5.2 Forecast ratios o ecast at os

2006 2007 2008

Forecast earnings per 50kobo share (kobo) 20 30 36

Forecast dividend per 50kobo share (kobo) 10 20 25 5.3 Forecast earnings and dividend per share are based on 6,360,322,000; 6,360,322,000;

and 7,950,403,000 ordinary shares of 50kobo each in 2006; 2007; and 2008 respectively. Included in these shares is the proposed bonus issue of 360,322,000 ordinary shares of 50k each for the year ended December 31, 2005.

5.4 Appendix I to this memorandum show detailed analyses of the Directors' forecast for the

years ending 31 December 2006, 2007 and 2008

PROFIT FORECAST


Appendix I

TREND ANALYSIS OF PROFIT FORECAST FOR THE YEARS ENDING 31 DECEMBER 2006, 2007 AND 2008.

Per unauditedmanagement accounts Forecast Forecast Forecast

for the year endedr the year endingr the year ending the year ending31-Dec-2005 31-Dec-2006 31-Dec-2007 31-Dec-2008

INCOME N'000 N'000 N'000 N'000Gross premium written 4,571,456 6,289,386 8,733,217 11,692,745 Outward re-insurance (2,549,334) (2,938,471) (4,040,912) (5,219,230) Net premium 2,022,122 3,350,915 4,692,305 6,473,515 Unexpired premium reserve 118,609 (124,539) (155,674) (202,376)

------------ ------------ ------------ ------------Earned premium 2,140,731 3,226,376 4,536,631 6,271,139 Investment income 872,675 1,476,941 2,139,409 2,892,570 Other income/Reinsurance recovery 79,891 - - - Commission earned 153,016 257,522 345,910 446,967 Claims recovered 33,360 278,258 358,711 490,907

3,279,673 5,239,097 7,380,661 10,101,583 ------------ ------------ ------------ --------------

EXPENSESClaims paid (Net) 527,522 678,159 928,725 1,338,957 Commission allowed 307,693 612,422 808,550 1,042,527 Overhead expenses 915,280 1,124,688 1,601,388 2,041,973 Guaranteed interest charges 340,886 374,975 404,973 429,271 Other life expenses 11,357 17,794 30,379 46,493 Outstanding claims (15,481) 17,029 20,434 26,565 Transfer to life fund 542,471 788,418 1,185,817 1,640,340

------------ ------------ ------------ ------------2,629,728 3,613,485 4,980,266 6,566,126

------------ ------------ ------------ ------------Profit before taxation 649,945 1,625,612 2,400,395 3,535,457Provision for income tax (129,576) (342,610) (476,821) (672,082)

------------ ------------ ------------ ------------Profit after taxation 520,369 1,283,002 1,923,574 2,863,375Transfer to contingency reserve (112,306) (267,303) (399,163) (591,458) Proposed dividend (180,161) (636,032) (1,272,064) (1,987,601)

------------ ------------ ------------ ------------Retained profit for the period 227,902 379,667 252,347 284,316Proposed bonus issue (180,161) - - - Retained profit at 1 January 9,020 56,931 436,598 688,945

--------- --------- --------- ---------Retained profit at 31 December 56,761 436,598 688,945 973,261

===== ===== ===== =====


FIVE YEAR FINANCIAL INFORMATION

The following is a copy of the report of J. K. Randle & Co., the Reporting Accountants to the Private Placement:

19 June 2006

The Directors Industrial and General Insurance Company Limited Plot 741 Adeola Hopewell Street Victoria Island Lagos

and

The Directors IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos and

The Directors Vetiva Capital Management Limited Plot 226B Kofo Abayomi Street Victoria Island Lagos Gentlemen, We have examined the audited financial statements of Industrial and General Insurance Company Limited ("the Company") for the five years ended 31 December 2004 and the unaudited management accounts for the year ended 31 December 2005. The financial statements were prepared under the historical cost convention modified to include the revaluation of certain fixed assets. Messrs. KPMG Audit(Chartered Accountants) were the auditors for the years ended 31 December 2000 and 2001 while Messrs. Akintola Williams (Chartered Accountants) were the auditors for the years ended 31 December 2002, 2003, 2004 and 2005. The summarised profit and loss account, balance sheet and cash flow statements are based on the audited financial statements of the company for the five years ended 31 December 2004 and the unaudited management accounts for the year ended 31 December 2005 after making adjustments we considered appropriate.

No audited financial statements of the company have been made up in respect of any period subsequent to 31 December 2004. Our work included an assessment of evidence relevant to the amount and disclosure in the financial information. The tax figures in the financial statements are provisional figures.

Based on our review and except for the possible effect of the tax matter discussed above, in our opinion, these summaries together with the notes thereon give under the convention stated above, a true and fair view of the profits of the company and of the cash flows for the period stated and of the state of the company at each of the balance sheet dates.

J.K Randle & Co. (Chartered Accountants) Reporting Accountants



1. STATEMENT OF ACCOUNTING POLICIES

This is as already set out in pages 33-35

2. PROFIT AND LOSS ACCOUNT (COMPOSITE)

Unaudited management

accounts for the year ended 31

December <------------ Year ended 31 December ------------>2005 2004 2003 2002 2001 2000

Notes N'000 N'000 N'000 N'000 N'000 N'000INCOMEGross premium written 5.2 4,571,456 4,125,284 2,894,177 2,506,205 2,273,462 2,238,116Outward re-insurance (2,549,334) (2,189,630) (1,066,188) (1,004,438) (821,199) (678,590)

------------- ------------- ------------- ------------- ------------- -------------Net premium 2,022,122 1,935,654 1,827,989 1,501,767 1,452,263 1,559,526Unexpired premium reserve 5.3.1 118,609 38,278 (54,389) (9,451) 3,435 (78,344)

------------- ------------- ------------- ------------- ------------- -------------Earned premium 2,140,731 1,973,932 1,773,600 1,492,316 1,455,698 1,481,182Investment income 872,675 390,968 361,063 258,879 214,169 103,339Other income 5.4 79,891 88,780 118,389 77,291 18,915 68,978Commission earned 153,016 181,222 157,414 141,226 113,413 91,703Claims recovered 33,360 - - - - -

------------- ------------- ------------- ------------- ------------- -------------3,279,673 2,634,902 2,410,466 1,969,712 1,802,195 1,745,202

------------- ------------- ------------- ------------- ------------- -------------EXPENSESClaims paid (Net) 512,041 428,919 373,276 338,336 207,133 418,294Commission allowed 307,693 302,614 270,586 108,234 152,483 113,113Interest on administered deposits 340,886 274,435 291,887 249,026 126,045 145,344 Provision for doubtful debts - 44,314 26,371 - - - Overhead expenses 926,637 734,727 685,146 656,961 633,475 527,722Transfer to life fund 542,471 473,153 438,991 366,877 490,135 364,510

------------- ------------- ------------- ------------- ------------- -------------2,629,728 2,258,162 2,086,257 1,719,434 1,609,271 1,568,983

------------- ------------- ------------- ------------- ------------- -------------

Profit before taxation 5.5 649,945 376,740 324,209 250,278 192,924 176,219Taxation 5.6 (111,376) (49,759) (46,534) (31,545) (34,868) (14,911) Deferred taxation (18,201) (45,000) (43,725) (25,446) - -

--------- --------- --------- ----------- ----------- -----------Profit after taxation 520,368 281,981 233,950 193,287 158,056 161,308 APPROPRIATION :Proposed dividend (180,161) (126,113) (75,188) (140,350) (105,263) (75,188) Transfer to contingency reserve (112,306) (64,051) (56,806) (44,766) (37,607) (49,270)

--------- --------- --------- --------- --------- -----------Retained profit for the year 227,901 91,817 101,956 8,171 15,186 36,850Retained profit at 1 January 9,020 7,283 26,733 18,562 3,376 58,571

--------- --------- --------- --------- --------- ---------236,921 99,100 128,689 26,733 18,562 95,421

Transfer to bonus issue reserve (180,161) (90,080) (121,407) - - (92,046) ---------- -------- -------- ---------- ---------- --------

Retained profit at 31 December 56,760 9,020 7,282 26,733 18,562 3,376 ====== ===== ===== ====== ====== =====

Earnings per share (kobo) 72 45 47 39 45 64 === === === === === ===

Dividend per share (kobo) 25 20 15 28 30 30 === === === === === ===

Adjusted earnings per N1.00 share based 720,643,000 ordinary shares issued as at 31December 2005 (kobo) 72 39 32 27 22 22

=== === === === === ===

Adjusted dividend per N1.00 share based on based on 720,643,000 ordinary shares issued as at 31 December 2005 (kobo) 25 18 10 19 15 10

=== === === === === ===



2.1 PROFIT AND LOSS ACCOUNT (NON-LIFE)



December <---------- Year ended 31 December --------------->2005 2004 2003 2002 2001 2000

Notes N'000 N'000 N'000 N'000 N'000 N'000INCOMEGross premium written 5.2 3,464,929 3,101,498 1,911,950 1,690,200 2,273,462 2,238,116 Outward re-insurance (2,471,877) (2,122,740) (1,002,013) (952,012) (821,199) (678,590)

------------- ----------- ----------- ----------- ----------- -----------Net premium 993,052 978,758 909,937 738,188 1,452,263 1,559,526Unexpired premium reserve 5.3.1 118,609 38,278 (54,389) (9,451) 3,435 (78,344)

------------- ------------- ------------- ------------- ----------- -----------Earned premium 1,111,661 1,017,036 855,548 728,737 1,455,698 1,481,182Investment income 497,358 91,660 61,102 51,964 214,169 103,339 Other income - 11,381 118,389 27,365 18,915 67,977 Commission earned 133,921 104,131 141,593 121,551 113,413 91,703 Claim recovered 33,360 - - - - -

------------- ------------- ------------- ----------- ----------- -----------1,776,300 1,224,208 1,176,632 929,617 1,802,195 1,744,201

------------- ------------- ------------- ----------- ----------- -----------EXPENSESClaims paid (Net) 331,510 192,235 213,725 141,825 207,133 418,294 Commission allowed 153,374 149,012 142,617 54,760 152,483 113,113 Provision for doubtful debts - 29,504 26,371 - - - Overhead expenses 651,761 486,286 505,261 490,390 759,520 673,066

------------- ----------- ----------- ----------- ----------- -----------1,136,645 857,037 887,974 686,975 1,119,136 1,204,473

------------- ----------- ----------- ----------- ----------- -----------

Profit before taxation 5.5 639,655 367,172 315,029 242,642 192,924 176,220 Taxation 5.6 (111,376) (49,759) (46,534) (31,545) (34,868) (14,911) Deferred taxation (18,201) (45,000) (43,725) (25,446) - -

--------- --------- --------- --------- --------- ---------Profit after taxation 510,078 272,413 224,770 185,651 158,056 161,309

APPROPRIATION :Proposed dividend (180,161) (126,113) (75,188) (140,350) (105,263) (75,188) Transfer to contingency reserve (102,016) (54,483) (47,626) (37,130) (37,607) (49,270)

--------- --------- --------- --------- --------- ---------Retained profit for the year 227,901 91,817 101,956 8,171 15,186 36,851Retained profit at 1 January 9,020 7,283 26,733 18,562 3,376 58,571

---------- --------- --------- --------- --------- ---------236,921 99,100 128,689 26,733 18,562 95,422

Transfer to bonus issue reserve (180,161) (90,080) (121,407) - - (92,046) ---------- --------- --------- --------- --------- ---------

Retained profit at 31 December 56,760 9,020 7,282 26,733 18,562 3,376 ====== ===== ====== ====== ====== =====



2.2 PROFIT AND LOSS ACCOUNT (LIFE)

Unaudited management accounts for

the year ended 31 December <----------- Year ended 31 December ----------->

2005 2004 2003 2002 2001 2000INCOME Notes N'000 N'000 N'000 N'000 N'000 N'000Gross premium written 5.2 1,106,527 1,023,786 982,227 816,005 802,788 891,660 Outward re-insurance (77,457) (66,890) (64,175) (52,426) (53,298) (48,723)

------------- ------------- ------------- ------------- ----------- -----------Net premium 1,029,070 956,896 918,052 763,579 749,490 842,937Unexpired premium reserve - - - - - -

------------- ------------- ------------- ------------- ----------- -----------Earned premium 1,029,070 956,896 918,052 763,579 749,490 842,937Investment income 375,318 299,309 299,961 206,915 175,034 146,700 Other income 79,891 77,399 - 49,926 - - Commission earned 19,095 77,091 15,821 19,675 11,184 6,080

------------- ------------- ------------- ------------- ----------- -----------1,503,374 1,410,695 1,233,834 1,040,095 935,708 995,717

------------- ------------- ------------- ------------- ----------- -----------

EXPENSESClaims paid (Net) 180,532 236,684 159,551 196,511 92,647 309,143 Commission allowed 154,319 153,602 127,969 53,474 56,148 21,826 Interest on administered deposits 340,886 274,435 - - 126,044 145,344 Provision for doubtful debts - 14,810 - - - - Overhead expenses 274,876 248,441 498,143 415,597 163,279 145,978 Transfer to life fund 542,471 473,153 438,991 366,877 490,135 364,510

------------- ------------- ------------- ------------- ----------- -----------1,493,084 1,401,125 1,224,654 1,032,459 928,253 986,801

------------- ------------- ------------- ------------- ----------- -----------Profit before taxation 10,290 9,570 9,180 7,636 7,455 8,916Taxation - - - - - - Deferred taxation - - - - - -

--------- -------- -------- -------- -------- --------Profit after taxation 10,290 9,570 9,180 7,636 7,455 8,916

APPROPRIATION :Proposed dividend - - - - - - Transfer to bonus issue reserve - - - - - - Transfer to contingency reserve (10,290) (9,570) (9,180) (7,636) (7,495) (8,916)

---------- ---------- ---------- ---------- -------- --------Retained profit for the year - - - - - - Retained profit at 1 January - - - - - -

--------- ---------- ---------- ---------- -------- --------Retained profit at 31 December - - - - - -

====== ====== ====== ====== ====== ======



3. COMPOSITE BALANCE SHEET



December <------------- Year ended 31 December -------------->2005 2004 2003 2002 2001 2000

Notes N'000 N'000 N'000 N'000 N'000 N'000ASSETSCash and bank balances 5.7 149,353 174,192 226,041 141,775 95,362 48,379Debtors & prepayments 5.8 684,964 589,695 546,683 551,457 464,162 352,760Short-term investments 5.9 873,212 722,744 1,404,314 1,041,064 982,151 1,038,746Long-term investments 5.10 4,835,049 4,066,292 2,875,228 2,257,692 1,385,284 1,172,916Real estate investments 5.11 3,207,479 2,328,886 724,823 533,574 409,923 373,205Statutory deposit with CBN 5.12 35,000 35,000 35,000 13,500 13,500 13,500Fixed assets 5.13 2,869,851 2,858,143 1,219,994 1,145,913 814,553 729,320

-------------- -------------- ------------ ------------ ------------ ------------12,654,908 10,774,952 7,032,083 5,684,975 4,164,935 3,728,826

======== ======== ======== ======= ======= ======= LIABILITIESOutstanding claims 5.14 146,243 161,724 146,827 137,013 124,454 121,828 Creditors and accruals 5.15 612,136 240,959 213,648 420,401 188,093 209,549Taxation 309,300 195,983 166,224 124,690 102,577 67,709Dividend 5.16 264,491 200,290 115,563 204,688 130,470 119,171Deferred taxation 5.17 132,372 114,171 69,171 25,446 - - Term loan 425,119 - - - - -

------------- ---------- ---------- ---------- ---------- ----------1,889,661 913,127 711,433 912,238 545,594 518,257

------------- ---------- ---------- ---------- ---------- ----------

CAPITAL AND RESERVESShare capital 5.18 720,643 630,562 501,250 501,250 350,875 250,625Deposit for shares 5.19 88,361 - 10,000 - - - Bonus issue reserve 5.20 180,161 90,080 125,312 - - 100,250Share premium 5.21 6,000 6,000 - 3,905 - - Contingency reserve 5.22 487,856 375,549 311,497 254,691 209,925 172,318Asset revaluation reserve 5.23 3,374,419 3,374,419 452,602 452,602 455,602 455,602Quoted investment revaluation reserve 505,998 614,232 446,207 - - - Retained profit 56,762 9,019 7,282 26,733 18,562 3,376

------------- ------------- ------------- ------------- ------------- -------------SHAREHOLDERS' FUNDS 5,420,200 5,099,861 1,854,150 1,239,181 1,034,964 982,171

Insurance funds 5.3 3,035,166 2,611,304 2,176,349 1,682,969 1,306,641 819,941Deposit administered fund 5.24 2,309,881 2,150,660 2,290,151 1,850,587 1,277,736 1,408,457

---------------- --------------- --------------- --------------- --------------- ---------------10,765,247 9,861,825 6,320,650 4,772,737 3,619,341 3,210,569

---------------- --------------- --------------- --------------- --------------- ---------------12,654,908 10,774,952 7,032,083 5,684,975 4,164,935 3,728,826

========== =============================================



3.1 LIFE BALANCE SHEET


the year ended 31 December <------------- Year ended 31 December ------------>

2005 2004 2003 2002 2001 2000Notes N'000 N'000 N'000 N'000 N'000 N'000

ASSETSCash and bank balances 5.7 16,714 8,684 40,996 18,886 20,589 29,756Debtors and prepayments 5.8.2 29,364 38,544 133,550 182,034 42,997 9,497Short-term investments 5.9.2 453,350 366,885 975,294 652,335 858,620 833,926Long-term investments 5.10.1 3,536,995 3,200,911 2,099,348 1,934,070 1,166,341 991,998Real estate investments 5.11.2 3,117,093 2,238,500 678,687 492,688 347,688 311,870Statutory deposit 5.12.2 15,000 15,000 15,000 3,000 3,000 3,000Fixed asset 5.13 1,110,200 1,127,590 560,526 530,674 242,863 216,445

------------ ------------ ------------ ------------ ------------ ------------TOTAL ASSETS 8,278,716 6,996,114 4,503,401 3,813,687 2,682,098 2,396,492

======= ======= ======= ======= ======= ======= LIABILITIESCreditors and accruals 5.15.2 286,195 100,388 14,382 212,403 25,178 148,789Term loan 425,119 - - - - -

---------- ---------- -------- ---------- -------- ----------711,314 100,388 14,382 212,403 25,178 148,789

---------- ---------- -------- ---------- -------- ----------

CAPITAL AND RESERVESShare capital 215,535 188,593 150,875 150,875 150,875 108,567Contingency reserve 5.22.2 57,651 47,360 37,791 28,611 20,975 13,480Asset revaluation reserve 5.23.2 2,007,118 2,007,117 208,734 208,734 211,734 211,734Quoted investment revaluation reserve 160,045 227,296 - - - -

------------ ------------ ------------ ------------ ------------ ------------SHAREHOLDERS' FUNDS 2,440,349 2,470,366 397,400 388,220 383,584 333,781

Insurance funds 5.3.2 2,817,172 2,274,701 1,801,468 1,362,477 995,600 505,465Deposit administered fund 5.24 2,309,881 2,150,659 2,290,151 1,850,587 1,277,736 1,408,457

-------------- -------------- -------------- -------------- -------------- --------------7,567,402 6,895,726 4,489,019 3,601,284 2,656,920 2,247,703

-------------- -------------- -------------- -------------- -------------- --------------

8,278,716 6,996,114 4,503,401 3,813,687 2,682,098 2,396,492 ======== ======== ======== ========================



3.2 NON-LIFE BALANCE SHEET


the year ended 31 December <------------ Year ended 31 December ------------->

2005 2004 2003 2002 2001 2000Notes N'000 N'000 N'000 N'000 N'000 N'000

ASSETSCash and bank balances 5.7 132,638 165,508 185,045 122,889 74,773 18,623Debtors and prepayments 5.8.1 832,039 551,151 413,133 369,423 421,165 343,263Short-term investments 5.9.1 419,862 355,859 429,020 388,729 123,531 204,820Long-term investments 5.10.1 1,298,054 865,380 329,673 323,622 218,943 180,918Real estate investments 5.11.1 90,386 90,386 46,136 40,886 62,235 61,335Statutory deposit with CBN 5.12.1 20,000 20,000 20,000 10,500 10,500 10,500Fixed assets 5.13 1,759,651 1,730,553 659,468 615,239 571,690 512,875

------------- ------------- ------------- ------------- ------------- -------------TOTAL ASSETS 4,552,630 3,778,837 2,082,475 1,871,288 1,482,837 1,332,334

------------- ------------- ------------- ------------- ------------- ------------- LIABILITIESOutstanding claims 5.14 146,243 161,724 146,827 137,013 124,454 121,828 Creditors and accruals 5.15.1 502,379 140,571 199,266 207,998 162,915 60,760Taxation 309,300 195,983 166,224 124,690 102,577 67,709Dividend 5.16 264,491 200,289 115,563 204,688 130,470 119,171Deferred taxation 5.17 132,372 114,171 69,171 25,446 - -

------------ ---------- ---------- ---------- ---------- ----------1,354,785 812,738 697,051 699,835 520,416 369,468

------------ ---------- ---------- ---------- ---------- ----------

TOTAL ASSETS LESS LIABILITIES 3,197,845 2,966,099 1,385,424 1,171,453 962,421 962,866 ======== ======== ======== ======== ======== ========

CAPITAL AND RESERVESShare capital 505,108 441,970 350,375 350,375 200,000 142,058Deposit for shares 5.19 88,361 - 10,000 - - - Bonus issue reserve 5.20 180,161 90,080 125,312 - - 100,250Share premium 5.21 6,000 6,000 - 3,905 - - Contingency reserve 5.22.1 430,205 328,189 273,706 226,080 188,950 158,838Asset revaluation reserve 5.23.1 1,367,301 1,367,302 243,868 243,868 243,868 243,868Quoted investment revaluation reserve 345,953 386,936 - - - - Retained profit 56,762 9,019 7,282 26,733 18,562 3,376

------------ ------------ ------------ ------------ ------------ ------------SHAREHOLDERS' FUNDS 2,979,851 2,629,496 1,010,543 850,961 651,380 648,390

Insurance funds 5.3.1 217,994 336,603 374,881 320,492 311,041 314,476 --------------- --------------- --------------- --------------- ------------ ------------

3,197,845 2,966,099 1,385,424 1,171,453 962,421 962,866 ======== ======== ======== ======== ======= =======



4 STATEMENT OF CASHFLOW


accounts for the year ended 31 <----------- Year ended 31 December ------------->

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

CASHFLOWS FROM OPERATING ACTIVITIES:Premium receipt from policy holders 4,531,713 4,125,284 2,871,170 2,490,553 2,227,198 1,746,050Re-insurance premium paid (2,619,923) (2,189,630) (1,078,689) (967,353) (885,599) (678,590) Commission receipt 232,907 181,222 157,414 141,226 113,413 91,703Commission paid (307,693) (302,614) (270,586) (108,234) (152,483) (113,113) Payment of claims (543,003) (443,816) (363,462) (325,777) (149,857) (405,852) Sundry receipts 82,874 88,780 118,389 77,291 18,915 67,977Payments to employees and other operating costs (1,077,157) (884,045) (922,456) (806,214) (661,051) (673,066)

-------------- -------------- -------------- -------------- -------------- --------------Operating profit before changes in operating assets / liabilities 299,718 575,181 511,780 501,492 510,536 35,109

Changes in operating assets / liabilitiesSundry debtors and prepayments (144,251) (113,697) 27,781 (71,643) (65,138) 86,814Other creditors and accruals 255,944 126,803 (229,898) 194,521 9,262 (70,759) Deposit Administration Fund 162,315 (139,491) 439,564 572,851 (130,721) 283,576Term loan 425,119

------------ ------------ ------------ ------------ ------------ ------------998,845 448,796 749,227 1,197,221 323,939 334,740

Taxation paid (12,094) (20,000) (5,000) (9,432) - (169) ------------ ------------ ------------ ------------ ------------ ------------

Net cash flows from operations 986,751 428,796 744,227 1,187,789 323,939 334,571 ------------ ------------ ------------ ------------ ------------ ------------

CASHFLOWS FROM INVESTING ACTIVITIES:Proceeds on sale of fixed assets 4,784 - 900 512 - 1,001Increase in long-term investments (722,807) (1,023,039) (171,329) (888,330) (212,368) (8,398) Purchase of investments in real estate (878,593) (294,670) (191,250) (205,000) (66,000) (51,000) Purchase of fixed assets (143,669) (166,119) (197,027) (431,647) (187,420) (148,469) Investment income 785,432 390,968 394,593 194,615 214,169 103,339Proceed of real estate sold - - - 100,687 33,000 - Statutory deposit - - (21,500) - - - Proceed of investment sold - - 8,000 57,849 - -

------------ ------------- ----------- ------------ ----------- -----------Net cash flows from investing activities (954,853) (1,092,860) (177,613) (1,171,314) (218,619) (103,527)

------------ ------------- ----------- ------------ ----------- -----------CASHFLOWS FROM FINANCING ACTIVITIES:Dividend paid (115,960) (41,386) (164,313) (66,131) (93,964) (24,789) Proceeds of rights issue made - - - 154,280 - - Share premium - 6,000 - - - - Deposit for shares 88,361 - 10,000 - - -

----------- ----------- ----------- ----------- ----------- -----------Net cash flows from financing activities : (27,599) (35,386) (154,313) 88,149 (93,964) (24,789)

----------- ----------- ----------- ----------- ----------- -----------Net (decrease)/increase in cash and cashequivalents 4,299 (699,450) 412,301 104,624 11,356 206,255 Cash and cash equivalents at 1 January 893,688 1,593,138 1,180,837 1,076,213 1,064,857 858,602

------------ ---------------- ---------------- ------------------------------------------------Cash and cash equivalents at 31 December 897,987 893,688 1,593,138 1,180,837 1,076,213 1,064,857

------------ ---------------- ---------------- ------------------------------------------------Cash and cash equivalent comprise :Bank balances and cash 149,682 174,192 226,041 141,775 95,362 48,379Short term investments 873,212 722,744 1,404,314 1,041,064 982,151 1,038,746Bank overdrafts (124,907) (3,248) (37,217) (2,002) (1,300) (22,268)

------------ ------------ -------------- -------------- -------------- --------------897,987 893,688 1,593,138 1,180,837 1,076,213 1,064,857

======= ======= ======== ======== ======== ========



5 NOTES TO THE FINANCIAL STATEMENTS 5.1 The Company was incorporated as a private limited liability company on 31 October 1991

and was licenced to carry on insurance business on 29 December 1991. It commenced business on January 1992. The shares are not quoted on the Nigerian Stock Exchange.

5.2


accounts for the year ended 31 <--------------- Year ended 31 December -------------->

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

Analysis of gross premiumClasses of business :General: - Special risk 2,579,884 2,350,767 1,164,510 873,545 786,661 685,808 - Others 885,045 750,732 747,440 816,655 684,013 660,648 Life 1,106,527 1,023,786 982,227 816,005 802,788 891,660

-------------- -------------- -------------- -------------- -------------- --------------4,571,456 4,125,285 2,894,177 2,506,205 2,273,462 2,238,116

======== ======== ======== ======== ======== ======== 5.3 5.3.1

Non-lifeFunds at 01 JanuaryFire 47,205 36,167 49,952 26,736 23,001 12,062General accident 76,205 99,058 73,492 56,119 46,709 30,699Motor 131,829 115,686 151,315 151,244 150,294 160,088Contractors' all risk / engineering 10,054 59,386 26,340 70,434 84,485 18,403Marine 5,946 29,804 14,614 6,508 9,987 14,880 Oil & Energy 65,364 34,780 4,779 0 0 0

----------- ---------- ---------- ---------- ---------- ----------336,603 374,881 320,492 311,041 314,476 236,132 ---------- ---------- ---------- ---------- ---------- ----------

Increase/(Decrease)Fire 6,839 11,038 (13,785) 23,216 3,735 10,939General accident 27,293 (22,853) 25,566 17,373 9,410 16,010Motor 64,380 16,143 (35,629) 71 950 (9,794) Contractors' all risk / engineering 7,095 (49,332) 33,046 (44,094) (14,051) 66,082Marine 4,493 (23,858) 15,190 8,106 (3,479) (4,893) Oil & Energy 8,507 30,584 30,001 4,779 - -

----------- ---------- ---------- ---------- ---------- ----------118,607 (38,278) 54,389 9,451 (3,435) 78,344

----------- ---------- ---------- ---------- ---------- ---------- Funds at 31 DecemberFire 40,366 47,205 36,167 49,952 26,736 23,001General accident 48,912 76,205 99,058 73,492 56,119 46,709Motor 67,449 131,829 115,686 151,315 151,244 150,294Contractors' all risk / engineering 2,959 10,054 59,386 26,340 70,434 84,485Marine 1,453 5,946 29,804 14,614 6,508 9,987Oil & Energy 56,857 65,364 34,780 4,779 - -

----------- ----------- ----------- ----------- ----------- -----------217,996 336,603 374,881 320,492 311,041 314,476

----------- ----------- ----------- ----------- ----------- -----------



5.3.2 Unaudited

management accounts for the year ended 31 <------------ Year ended 31 December ------------->

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

LifeFunds at 01 JanuaryIndividual business 500,487 396,303 299,775 219,488 112,323 63,042Group business 1,774,214 1,405,165 1,062,702 776,112 393,142 77,913

------------- ------------- ------------- ------------- ------------- -------------2,274,701 1,801,468 1,362,477 995,600 505,465 140,955

------------- ------------- ------------- ---------- ---------- ----------Increase/(Decrease)Individual business 119,291 104,184 96,528 80,287 107,165 49,281Group business 423,180 369,049 342,463 286,590 382,970 315,229

---------- ---------- ---------- ---------- ---------- ----------542,471 473,233 438,991 366,877 490,135 364,510 ---------- ---------- ---------- ---------- ---------- ----------

Funds at 31 DecemberIndividual business 619,778 500,487 396,303 299,775 219,488 112,323Group business 2,197,394 1,774,214 1,405,165 1,062,702 776,112 393,142

------------- ------------- ------------- ------------- ---------- ----------2,817,172 2,274,701 1,801,468 1,362,477 995,600 505,465

------------- ------------- ------------- ------------- ---------- ----------

3,035,168 2,611,304 2,176,349 1,682,969 1,306,641 819,941 ======== ======== ======== ======== ======= =======

5.4

Other incomeExceptional income on 1996: NNPC account - - 106,195 - - - Sundry receipts 79,891 88,780 12,194 77,291 18,915 67,977Profit from sale of fixed assets - - - - - 1,001

----------- ---------- ----------- ---------- ---------- ----------79,891 88,780 118,389 77,291 18,915 68,978

======= ====== ======= ====== ====== ====== 5.5

Profit before taxationThis is stated after charging/(crediting) :Depreciation 129,576 140,397 121,967 99,773 98,469 78,962Directors' emoluments 10,972 8,972 8,972 8,972 6,972 6,972Auditors remuneration 5,800 5,000 3,850 3,500 2,500 2,200(Profit)/Loss on sale of investments (497,358) - 85 (64,264) (41,251) (39,859) (Loss)/gain on foreign currencies (1,095) (2,591) 8,467 - - (24,142) Loss/(Profit) on sale of fixed assets (4,784) - 79 - - (1,001)

====== ====== ====== ====== ====== ====== 5.6

Taxation Income based on the result of the year 96,307 41,466 38,778 26,135 29,993 12,426Education tax for the year 15,069 8,293 7,756 5,410 4,875 2,485Deferred taxation 18,201 45,000 43,725 25,446 - -

-------- -------- -------- -------- -------- --------Per profit and loss account 129,577 94,759 90,259 56,991 34,868 14,911

----------- ----------- ----------- ----------- ----------- -----------Balance brought forward 210,018 180,259 124,690 102,577 67,709 52,967Payment during the year (12,094) (20,000) (5,000) (9,432) - (169) Deferred tax - - (43,725) (25,446) - - Charge for the year 111,375 49,759 - - - -

----------- ----------- ----------- ----------- ----------- -----------Per balance sheet 309,299 210,018 75,965 67,699 67,709 52,798

======= ======= ======= ======= ======= =======

The charge for taxation in these financial statements has been computed in accordance with the provisions of the Companies Income Tax Act (LFN Cap 60) as amended and Education Tax Act 1993.



5.7


the year ended <-------------- Year ended 31 December ------------>2005 2004 2003 2002 2001 2000

N'000 N'000 N'000 N'000 N'000 N'000Cash and short term funds This comprises of current account with Banks.

5.8

5.8.1 Non-lifeOutstanding premiums 314,833 275,090 279,518 256,511 240,849 194,585Due from subsidiaries & associated companies 119,515 244,857 102,627 97,545 99,648 62,072Staff loans - 3,600 47,044 38,079 - - Prepayments - 43,405 43,433 48,092 - 75,281Other debtors 221,252 40,073 58,326 58,966 80,668 -Joint ventures - - - - - 11,325Intra - Business balances 176,439 - (117,815) (129,770) - -

----------- ----------- ----------- ----------- ----------- -----------832,039 607,025 413,133 369,423 421,165 343,263

Provision for doubtful debt - (55,875) - - - - ----------- ----------- ----------- ----------- ----------- -----------

832,039 551,150 413,133 369,423 421,165 343,263 ----------- ----------- ----------- ----------- ----------- -----------

5.8.2 LifeOutstanding premiums - - - - - -Due from subsidiaries & associated companies 19,734 1,909 3,761 3,352 - -Staff loans - 7,226 5,260 3,730 - -Prepayments - - - 4,511 - -Other debtors 9,629 44,220 6,714 40,671 42,997 9,497Joint ventures - - - - - - Intra - Business balances (176,439) - 117,815 129,770 - -

----------- ----------- ----------- ----------- ----------- -----------(147,076) 53,355 133,550 182,034 42,997 9,497

Provision for doubtful debt - (14,811) - - - - ----------- ----------- ----------- ----------- ----------- -----------

(147,076) 38,544 133,550 182,034 42,997 9,497 ----------- ----------- ----------- ----------- ----------- -----------

684,963 589,694 546,683 551,457 464,162 352,760 ======= ======= ======= ======= ======= =======

5.9 SHORT TERM INVESTMENTS

5.9.1 Non-Life Treasury bills 165,000 100,000 100,000 135,000 50,000 50,000Short term deposits 254,862 255,859 329,020 254,329 73,531 154,820Provision for doubtful deposits - - - (600) - -

----------- ----------- ----------- ----------- ----------- -----------419,862 355,859 429,020 388,729 123,531 204,820

----------- ----------- ----------- ----------- ----------- -----------

5.9.2 Life

Treasury bills 400,000 350,000 350,000 505,000 325,000 250,000Short term deposits 53,350 16,885 625,294 147,335 533,620 583,926

----------- ----------- ----------- ----------- ----------- -----------453,350 366,885 975,294 652,335 858,620 833,926

----------- ----------- ----------- ----------- ----------- -----------873,212 722,744 1,404,314 1,041,064 982,151 1,038,746

======= ======= ======== ======== ===============



5.10

5.10.1Unaudited

management accounts for the year ended 31 <----------- Year ended 31 December ------------>

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

LONG-TERM INVESTMENTSNon-lifeSummaryQuoted ordinary shares at valuation 797,424 529,372 534,656 81,479 53,229 50,387

----------- ----------- ----------- -------- -------- --------

Unquoted investment (at cost):Ordinary shares 346,036 176,414 108,063 101,949 38,470 30,293Commercial loans 30,950 35,950 9,517 16,550 3,600 23,599

376,986 212,364 117,580 118,499 42,070 53,892

Subsidiary company (at cost):Bendel Wood Industry Limited 12,500 12,500 12,500 12,500 12,500 12,500Monarch Communication Limited 46,271 46,271 46,271 46,271 46,271 46,271Global Trust Savings & Loans Ltd. 64,873 64,873 64,873 64,873 64,873 17,868

----------- ----------- ----------- ----------- ----------- -----------123,644 123,644 123,644 123,644 123,644 76,639

----------- ----------- ----------- ----------- ----------- -----------1,298,054 865,380 775,880 323,622 218,943 180,918

======== ======= ======= ======= ======= =======LifeSummaryQuoted ordinary shares at (valuation) 259,216 382,253 272,440 266,765 282,686 263,963

---------- ---------- ---------- ---------- ---------- ----------Unquoted investment (at cost):Ordinary shares 45,527 45,527 92,563 92,563 64,688 52,665Debenture stock 350,000 400,000 400,000 300,000 - - Government bonds - - - 200 200 200Commercial loans 509,268 500,000 214,810 246,681 5,919 16,441

-------------- -------------- -------------- -------------- ---------- ----------904,795 945,527 707,373 639,444 70,807 69,306

-------------- -------------- -------------- -------------- ---------- ----------Subsidiary company (at cost):Monarch Communication Limited 1,535,600 1,535,600 1,086,540 994,866 779,853 658,729Postal Life and General Insurance Company Ltd 304,536 304,536 - - - - Global Trust Savings & Loans Ltd. 32,995 32,995 32,995 32,995 32,995 - National Insurance Corporation Uganda 499,852 - - - - -

------------- ------------- ------------- ------------- ---------- ----------2,372,983 1,873,131 1,119,535 1,027,861 812,848 658,729

------------- ------------- ------------- ------------- ---------- ----------3,536,994 3,200,911 2,099,348 1,934,070 1,166,341 991,998

======== ======== ======== ======== ======== =======4,835,048 4,066,291 2,875,228 2,257,692 1,385,284 1,172,916

======== ======== ======== ======== ======== ========

5.10.2 The accounts of the subsidiary and associated companies have not been consolidated with these financial statements. The directors are however of the opinion that the realisable value of the unquoted investments are not below cost

5.10.3 Quoted investments are stated at market value.



5.11 Real Estate Investments 5.11.1 Non Life



December <----------- Year ended 31 December -------------->2005 2004 2003 2002 2001 2000

N'000 N'000 N'000 N'000 N'000 N'000

At valuation:At 1 January 90,386 46,136 40,886 62,235 61,335 95,963Additions - - 5,250 - - 18,000Reclassification - (3,450) - - - (50,660) Revaluation surplus - 47,700 - - - 7,265Transfer from/(to) fixed assets - - - - 900 (9,233) Disposal - - - (21,349) - -

--------- --------- --------- --------- --------- ---------At 31 December 90,386 90,386 46,136 40,886 62,235 61,335

--------- --------- --------- --------- --------- --------- 5.11.2 Life

At valuation:At 1 January 2,238,500 678,687 492,687 347,688 311,870 129,204Additions 878,593 294,670 186,000 205,000 66,000 33,000Reclassification - 7,727 - - - 50,660Revaluation surplus - 1,257,416 - - - - Disposal - - - - (33,000) 99,006Transfer from/(to) fixed assets - - - (60,000) 2,818 -

------------- ------------- -------------- -------------- -------------- --------------At 31 December 3,117,093 2,238,500 678,687 492,688 347,688 311,870

------------- ------------- -------------- -------------- -------------- --------------3,207,479 2,328,886 724,823 533,574 409,923 373,205

======== ======== ======= ======= ======= ======= 5.11.3. Certain real estates properties were revalued on 31 December 2004 by Messrs.Ora

Egbunike & Associates, Chartered Surveyors and Estate Valuers. The valuation which was based on open market value between a willing buyer and a willing seller produced a surplus. This revaluation surplus has been credited to revaluation reserve.

5.11.4 The legal formalities in respect of registering the title deeds of some of the real

estate properties are in the process of being perfected in the name of the Company. 5.12



December <------------- Year ended 31 December ---------->2005 2004 2003 2002 2001 2000

Statutory deposit with CBN N'000 N'000 N'000 N'000 N'000 N'000 Non-Life 20,000 20,000 20,000 10,500 10,500 10,500Life 15,000 15,000 15,000 3,000 3,000 3,000

--------- --------- --------- --------- --------- ---------At 31 Decenber 35,000 35,000 35,000 13,500 13,500 13,500

======= ======= ======= ======= ====== =======



5.13



December <-------- Year ended 31 December ------------->2005 2004 2003 2002 2001 2000

FIXED ASSETS N'000 N'000 N'000 N'000 N'000 N'000Non-life and LifeCost/valuation:Land,building and leasehold improvements 2,697,786 2,689,316 1,049,012 999,736 674,441 622,205Computer equipment 176,646 142,333 129,275 118,395 106,751 88,550Motor vehicles 459,668 423,577 371,348 294,934 236,055 179,320Office equipment,furniture and fixtures 389,531 349,336 278,057 219,558 184,412 127,883

------------- ------------- ------------- ------------- ------------- -------------At 31 December 3,723,631 3,604,562 1,827,692 1,632,623 1,201,659 1,017,958

------------- ------------- ------------- ------------- ------------- -------------Depreciation:Land,building and leasehold improvements 91,245 72,774 53,134 36,816 22,899 17,608Computer equipment 137,662 121,462 117,461 103,982 92,136 75,824Motor vehicles 360,394 329,079 269,263 214,239 164,165 112,284Office equipment,furniture and fixtures 264,479 223,105 167,840 131,673 107,907 82,922

----------- ----------- ----------- ----------- ----------- -----------At 31 December 853,780 746,420 607,698 486,710 387,107 288,638

----------- ----------- ----------- ----------- ----------- -----------Net book value:Land,building and leasehold improvements 2,606,541 2,616,542 995,878 962,920 651,542 604,597Computer equipment 38,984 20,871 11,814 14,413 14,615 12,726Motor vehicles 99,274 94,498 102,085 80,695 71,890 67,036Office equipment,furniture and fixtures 125,052 126,231 110,217 87,885 76,505 44,961

-------------- -------------- -------------- -------------- ------------ ------------At 31 December 2,869,851 2,858,142 1,219,994 1,145,913 814,552 729,320

======== ======== ======== ======== ======= ======= 5.13.1 Depreciation for the year is included in the overhead expenses. 5.13.2 Certain land and building were revalued on 31 December 2004 by Messrs Ora

Egbunike & Associates, Chartered Surveyors and Estate Valuers. The valuation which was based on open market value between a willing buyer and a willing seller produced a surplus which has been credited to assets revaluation reserve in these financial statements. Subsequent additions to land and buildings are stated at cost.

5.13.3


the year ended <----------- Year ended 31 December --------------->2005 2004 2003 2002 2001 2000

N'000 N'000 N'000 N'000 N'000 N'000The cost/valuation of land, buildings and leasehold improvements are as follows :Freehold 2,697,668 2,636,935 745,289 876,440 576,440 434,737Long lease - - 259,275 92,964 74,102 166,487Short lease - 52,381 44,450 30,332 23,899 20,981

------------- ------------- ------------- ----------- ----------- -----------2,697,668 2,689,316 1,049,014 999,736 674,441 622,205

======= ======= ======= ====== ====== ====== 5.14 Outstanding claims

Fire 22,989 28,340 23,014 10,056 6,752 5,184General accident 76,369 69,268 61,901 54,884 50,311 43,990Motor 40,794 54,834 53,690 64,580 61,077 64,746Engineering 2,407 5,982 1,939 2,030 1,564 5,829Marine 3,685 3,300 6,283 5,463 4,750 2,079

---------- ---------- ---------- ---------- ---------- ----------146,244 161,724 146,827 137,013 124,454 121,828

====== ====== ====== ====== ====== ======



Unaudited

management accounts for

the year ended 31 December <------------- Year ended 31 December -------------->

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

5.15 Creditors & Accruals

5.15.1 Non-life Amount due to Re-insurers - 17,829 52,673 40,060 - - Sundry creditors 458,246 149,451 62,451 119,731 161,615 38,492Staff retirement pension fund - 39,890 31,403 23,606 - - Intra-Business Balances - (78,558) - - - - Accruals - 8,719 15,522 22,599 - - Bank overdraft 44,133 3,241 37,217 2,002 1,300 22,268

---------- ---------- ---------- ---------- ---------- ----------502,379 140,572 199,266 207,998 162,915 60,760

---------- ---------- ---------- ---------- ---------- ---------- 5.15.2 Life

Amount due to Re-insurers - 12,459 5,411 30,525 - - Sundry creditors 28,983 9,363 8,971 181,878 25,178 148,789Staff retirement pension fund - - - - - - Intra-Business Balances - 78,558 - - - - Accruals - - - - - - Bank overdraft 80,774 8 - - - -

--------- ---------- ------------ ---------- ---------- ----------109,757 100,388 14,382 212,403 25,178 148,789

--------- ---------- ------------ ---------- ---------- ----------612,136 240,960 213,648 420,401 188,093 209,549

======= ======= ======= ======= ======= =======

5.15.3 Staff Retirement Pension fund

At January 39,890 31,403 31,403 - - - Charge per profit and loss - 17,763 - - - - Payment during the year - (9,276) - - - - At December 39,890 39,890 31,403 - - -

====== ====== ====== ====== ====== ======

5.16 Dividend Payable

Dividend payableAt 1 January 200,290 115,563 204,688 130,470 119,171 43,983Payment during the year (115,960) (41,386) (164,313) (66,132) (93,964) - Proposed for the year 180,161 126,113 75,188 140,350 105,263 75,188

---------- ---------- ---------- ---------- ---------- ----------At 31 December 264,491 200,290 115,563 204,688 130,470 119,171

====== ====== ====== ====== ====== ======

5.17 Deferred Taxation At 1 January 114,171 69,171 25,446 - - - Arising during the year 18,201 19,554 18,279 25,446 - - Prior year under provision - 25,446 25,446 - - -

---------- ---------- ---------- ---------- ---------- ----------At 31 December 132,372 114,171 69,171 25,446 - -

====== ====== ====== ====== ====== ======

5.18 Share Capital

5.18.1 Authorized: 1,000,000,000 ordinary shares of N 1 each 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 500,000

======== ======== ======== ======== ======== ====== 5.18.2.1 Issued and fully paid:

At 1 January 630,563 501,250 501,250 350,875 250,625 200,500Transfer from deposit for share - 4,000 - - - Transfer from bonus issue reserve 90,080 125,313 - - 100,250 50,125Rights issue during the year - - - 150,375 -

------------ ------------ ------------ ------------ ------------ ------------At 31 December 720,643 630,563 501,250 501,250 350,875 250,625

======= ======= ======= ======= ======= =======



Unaudited



2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

5.18.2.2 LifeAt 1 January 188,593 150,875 150,875 150,875 108,567 86,854Transfer from bonus issue reserve 26,942 37,718 - - 42,308 21,713

---------- ---------- ---------- ---------- ---------- ----------At 31 December 215,535 188,593 150,875 150,875 150,875 108,567

====== ====== ====== ====== ====== ====== 5.19 Deposit for shares

At 1 January - 10,000 - - - - Payment during the year 88,361 - 10,000 - - - Transfer to share capital - (4,000) - - - - Transfer to share premium - (6,000) - - - -

------- ------- ------- ------- ------- -------At 31 December 88,361 - 10,000 - - -

===== ===== ===== ===== ===== ===== 5.20 Bonus Issue Reserve

At 1 January 90,080 125,312 - - 100,250 50,125Transfer from profit and loss 180,161 90,080 121,407 - - 92,046Transferred from share premium - 0 3,905 - - 8,204Transfer to share capital (90,080) (125,312) - - (100,250) (50,125)

-------- -------- -------- -------- --------- --------At 31 December 180,161 90,080 125,312 - - 100,250

====== ====== ====== ====== ====== ====== 5.21 Share Premium

At 1 January 6,000 - 3,905 - - 8,204 Transfer to bonus issue reserve - - (3,905) - - (8,204) Transfer from deposit for share - 6,000 - - - - Arising during the year - - - 3,905 - -

------- ------- ------- ------- ------- -------At 31 December 6,000 6,000 - 3,905 - -

===== ===== ==== ===== ===== ===== 5.22 Contingency Reserve 5.22.1

Non-lifeAt 1 January 328,189 273,706 226,080 188,950 158,838 118,485Transfer from profit and loss account 102,016 54,483 47,626 37,130 30,112 40,353

---------- ---------- ---------- ---------- ---------- ----------At 31 December 430,205 328,189 273,706 226,080 188,950 158,838

====== ====== ====== ====== ====== ====== 5.22.2

LifeAt 1 January 47,360 37,791 28,611 20,975 13,480 4,563Transfer from profit and loss account 10,291 9,569 9,180 7,636 7,495 8,917

--------- -------- -------- -------- -------- --------At 31 December 57,651 47,360 37,791 28,611 20,975 13,480

====== ====== ====== ====== ====== ======487,856 375,549 311,497 254,691 209,925 172,318

======= ====== ====== ====== ====== ======



Unaudited



2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

5.23 Assets revaluation reserve

5.23.1 Non-lifeFixed assets 1,312,337 1,312,337 236,603 236,603 236,603 349,331Real estate 54,965 54,965 7,265 7,265 7,265 7,265

------------- ------------- ---------- ---------- ---------- ----------1,367,302 1,367,302 243,868 243,868 243,868 356,596

======= ======= ====== ====== ====== ====== 5.23.2

LifeFixed assets 653,696 653,696 112,728 112,728 112,728 - Real estate 1,353,421 1,353,421 96,006 99,006 99,006 99,006 Disposal- Real Estate - - - (3,000) - -

------------- ------------- ---------- ---------- ---------- ----------2,007,117 2,007,117 208,734 208,734 211,734 99,006

======= ======= ====== ====== ====== =====3,374,419 3,374,419 452,602 452,602 455,602 455,602

======== ======== ======= ======= ======= ======= 5.24

Deposit administration fundsAt 1 January 2,150,659 2,290,151 1,850,587 1,277,736 1,408,457 1,124,881Deposit received 2,598,071 2,913,095 3,665,446 2,925,582 2,078,932 830,788Withdrawals (2,779,735) (3,327,020) (3,517,769) (2,601,756) (2,335,697) (692,556) Guaranteed interest paid 340,886 274,435 291,887 249,025 126,044 145,344

------------- ------------- ------------- ------------- ------------- -------------2,309,881 2,150,661 2,290,151 1,850,587 1,277,736 1,408,457

======== ======== ======== ======= ======= ======= 5.25 Earnings per share

The basic earnings per share is calculated by using the profit after taxation of the year on ordinary shares of N1 each in issue as at 31 December.

5.26 Chairman and directors emoluments 5.26.1

Fees :Chairman 300 300 300 300 300 300Other directors 672 672 672 672 672 672

------- ------- ------- ------- ------- -------972 972 972 972 972 972

Emoluments as executives 10,000 8,000 8,000 8,000 6,000 6,000 ------- ------- ------- ------- ------- -------10,972 8,972 8,972 8,972 6,972 6,972

===== ===== ===== ===== ===== =====The number of Directors excluding the chairman whose emoluments fell within the following :N N Number Number Number Number Number Number130,0001 - 140,000 5 5 5 5 5 51,990,001 - 2,000,000 2 2 2 2 2 23,990,001 - 4,000,000 1 1 1 1 1 1

== == == == == == 5.27 Guaranty and other financial commitments

5.27.1 Contingent Liabilities (a) Contingent liabilities in respect of guarantees given for customers' advance

payments and performance bonds in the ordinary course of business.

(b) There are pending litigations against the Company. No provision has been made in these accounts for the pending litigations as the directors are of the opinion that they will not succeed.



5.27.2 Financial Commitments The Directors are of the opinion that all known liabilities and commitments which are relevant in assessing the state of affairs of the company have been taken into consideration in the preparation of these financial statements.



2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

5.28 Staff 5.28.1

Number Number Number Number Number NumberAverage number of persons employed in thefinancial year and the relevant staff costs were as follows :Managerial and senior staff 274 269 270 243 234 222Junior staff 243 216 151 129 176 166

----- ------ ------ ------ ------ ------517 485 421 372 410 388

=== === === === === === 5.28.2

Number Number Number Number Number NumberThe number of employees in receipt of emolumentsexcluding allowances and pension costs withinthe following ranges were :N N60,001 - 70,000 45 44 28 15 13 2970,001 - 80,000 4 4 8 9 44 1680,001 - 90,000 8 - 26 26 16 51100,001 - 110,000 10 19 56 52 47 30130,001 - 140,000 112 115 33 13 29 -170,001 - 180,000 - - - - 29 28190,001 - 200,000 - - 39 35 - -220,001 - 230,000 18 16 34 35 - 26230,001 - 240,000 38 41 33 30 26 -270,001 - 280,000 30 28 23 22 - 14280,001 - 300,000 - - 10 10 13 10320,001 - 350,000 - - - - 6 11390,001 - 400,000 38 36 11 10 14 6440,001 - 450,000 12 10 18 15 - -450,001 - 550,000 18 17 9 7 10 -590,001 - 600,000 - - - - 2 2790,001 - 800,000 4 3 2 2 - -800,001 - 900,000 - - - - 2 -990,001 - 1,000,000 - - - 2 - -

=== === === === === === 5.29

N'000 N'000 N'000 N'000 N'000 N'000Cash and cash equivalent comprise :Bank balances and cash 149,353 174,192 226,041 141,775 95,362 48,379Short term investments 873,212 722,744 1,404,314 1,041,064 982,151 1,038,746Bank overdrafts (124,907) (3,248) (37,217) (2,002) (1,300) (22,268)

--------- --------- --------- --------- --------- ---------897,658 893,688 1,593,138 1,180,837 1,076,213 1,064,857

====== ====== ======= ======= ======= ======= 5.30

Reconciliation of cashflow statementProfit before tax 649,945 376,740 324,209 - - - Adjustment for non-cash itemsDepreciation 155,747 140,397 121,966 - - - Provision for bad debt - 44,314 40,000 - - - Provisionfor un-expired risk reserve (118,609) (38,278) 54,389 - - - Other non-cash items (387,365) 52,007 (28,784) - - -

--------- --------- --------- --------- --------- ---------299,718 575,180 511,780 - - -

======= ======= ======= ============== =======



5.31


the year ended 31 December <---------- Year ended 31 December ------------>

2005 2004 2003 2002 2001 2000N'000 N'000 N'000 N'000 N'000 N'000

REVENUE ACCOUNTS (NON-LIFE)

RevenueGross premium written 3,464,929 3,101,498 1,911,950 1,690,200 1,470,675 1,346,456 Outward reinsurance (2,471,877) (2,122,740) (1,002,013) (952,012) (767,901) (629,867) Movement in insurance funds 167,449 38,278 (54,389) 9,451 3,435 (78,343) Commission received 133,921 104,131 141,593 121,551 102,229 85,623

---------- ---------- ---------- ---------- ---------- ----------1,294,422 1,121,167 997,141 869,190 808,438 723,869

---------- ---------- ---------- ---------- ---------- ----------ExpensesClaims paid (Net) (346,990) (192,235) (213,725) (141,825) (114,486) (96,710) Commission paid (153,374) (149,012) (142,617) (54,760) (96,335) (91,287) Underwriting expenses (619,900) (515,790) (505,261) (490,390) (470,197) (381,744)

---------- ---------- ---------- ----------- ----------- -----------

(1,120,264) (857,037) (861,603) (686,975) (681,018) (569,741) ---------- ---------- ---------- ----------- ----------- -----------

Profit transferred to general profit and loss a/c 2,414,686 264,130 135,538 182,215 127,420 154,128 ======== ======== ======== ======== ======== ========

5.32 LIFE AND PENSIONS REVENUE AND PROFIT AND LOSS ACCOUNT

Gross premium 1,106,527 1,023,786 982,227 816,005 802,788 891,660 Reinsurance ceded (77,457) (66,890) (64,175) (52,426) (53,298) (48,723)

---------- ---------- ----------- ----------- ----------- -----------Net premium 1,029,070 956,896 918,052 763,579 749,490 842,937

Commission received 19,095 16,490 15,821 10,485 11,184 6,080 Investment income 375,318 299,309 187,019 256,841 175,074 146,700 Reinsurance recovery 79,891 60,601 68,704 9,190 - - Other income - 77,399 112,942 - - -

--------- --------- --------- --------- --------- ---------1,503,374 1,410,695 1,302,538 1,040,095 935,748 995,717

Claims paid/withdrawals (180,532) (236,684) (228,255) (196,511) (92,647) (309,143) Commission (154,319) (153,602) (127,969) (53,474) (56,148) (21,826) Overhead expenses (263,519) (251,336) (196,529) (156,383) (156,438) (139,575) Medical examiners' expenses (1,730) (4,039) (3,545) (2,831) (1,411) (2,740) Agents' trainning allowances (4,521) (4,987) (4,035) (3,288) (1,930) (549) Stamp duties (3,929) (1,985) (1,647) (1,569) (1,200) (1,014) Guaranteed interest (340,886) (274,435) (291,887) (249,026) (126,044) (145,344) Actuarial expenses (1,178) (905) (500) (2,500) (2,300) (2,100) Transfer to life fund (542,471) (473,153) (438,991) (366,877) (490,135) (364,510)

--------- -------- -------- -------- -------- --------Transfer to general profit and loss account 10,289 9,569 9,180 7,636 7,495 8,916

--------- -------- -------- -------- -------- --------10,289 9,569 9,180 7,636 7,495 8,916

===== ===== ===== ===== ===== =====


STATUTORY AND GENERAL INFORMATION

INCORPORATION AND SHARE CAPITAL HISTORY IGI was incorporated as a limited liability company on 31st October 1991. The Company was licenced to carry on Non-Life and Life insurance business on the 24th December 1991 and commenced business on 31st January 1992. As at 30th June 2006, the authorised share capital stood at N3,000,000,000.00 comprising 6,000,000,000 ordinary shares of 50 kobo each, of which N1,550,000,000 comprising 3,100,000,000 ordinary shares of 50 kobo each have been issued and fully paid up.

The changes in the share capital of the Company are summarised below:

Year Authorised (N=) Issued & Fully Paid-up (N=) Consideration

Increase Cumulative Increase Cumulative Cash/Bonus

1991 20,000,000 5,000,000 -

1994 20,000,000 20,000,000 Cash

1995 30,000,000 50,000,000 20,000,000 -

1996 50,000,000 100,000,000 20,000,000 -

1996 100,000,000 31,943,333 51,943,333 Cash

1996 100,000,000 6,413,750 58,357,083 Cash

1996 100,000,000 1,642,917 60,000,000 Cash

1996 100,000,000 20,000,000 80,000,000 Bonus

1997 400,000,000 500,000,000 80,000,000 -

1997 500,000,000 40,000,000 120,000,000 Cash

1997 500,000,000 40,000,000 160,000,000 Bonus

1997 500,000,000 40,000,000 200,000,000 Bonus

1998 500,000,000 500,000 200,500,000 Cash

1999 500,000,000 50,125,000 250,625,000 Bonus

2000 500,000,000 100,250,000 350,875,000 Bonus

2002 500,000,000 1,000,000,000 350,875,000 -

2002 1,000,000,000 132,859,559 483,734,559 Cash

2002 1,000,000,000 10,000,000 493,734,559 Cash

2002 1,000,000,000 7,515,441 501,250,000 Cash

2003 1,000,000,000 125,312,510 626,562,510 Bonus

2004 1,000,000,000 4,000,000 630,562,510 Cash

2004 1,000,000,000 90,080,359 720,642,869 Bonus

2006 2,000,000,000 3,000,000,000 829,357,131 1,550,000,000 Cash



SHAREHOLDING STRUCTURE As at 30th June 2006, except as stated below, no shareholder holds up to 5% of the issued share capital of the Company:

Shareholder No. of shares held % Holding

General Dr. Yakubu Gowon 180,143,578 5.81%

Kayotunde Investment Limited 200,000,000 6.45%

First Industrial Investments 340,622,734 10.99%

Investment Profiles Limited 410,666,424 13.25%

Mrs. Bunmi Olowude 426,071,428 13.74%

Mr. Remi Olowude 496,071,428 16.00% Other Nigerian Individuals and Institutions

1,046,424,408 33.76%

TOTAL 3,100,000,000 100%

DIRECTORS’ BENEFICIAL INTERESTS The interest of the Directors of IGI in the issued share capital of the Company as recorded in the Register of Members as at 30th June 2006 is as follows:

Shareholding Name of Directors Direct Indirect Total General Dr. Yakubu Gowon 180,143,578 - 180,143,578

Mr. Remi Olowude 496,071,428 - 496,071,428

Chief G.K. Animashawun* - 200,000,000 200,000,000

Dr. Lateef Adegbite 55,833,332 - 55,833,332

Mr. Ola Vincent 132,427,052 - 132,427,052

Apostle Hayford Alile 72,714,420 - 72,714,420

Mrs. Bunmi Olowude 426,071,428 - 426,071,428

Mrs. Sade Adetiba 25,428,572 - 25,428,572

Mr. Rotimi Fashola 39,428,572 - 39,428,572 *Chief G.K. Animashawun has beneficial interests in Kayotunde Investments which holds 200,000,000 shares in the Company.

INDEBTEDNESS As at the date of this Memorandum, the Company had no material indebtedness other than in the ordinary course of business.

SUBSIDIARIES AND ASSOCIATED COMPANIES As at the date of this Placement Memorandum, IGI had the following subsidiaries and associated companies:

S/No Subsidiary % Shareholding

1. Global Trust Savings & Loans Limited 86.00

2. Postal Life and General Insurance Company Limited 85.78

3. International Health Management Services Limited 74.43

4. Monarch Communications Limited 75.81

5. Industrial Trustees Limited 70.00

6. Bendel Wood Industries Limited 55.00

7. National Insurance Corporation Limited, Uganda 60.00



EXTRACTS FROM THE ARTICLES OF ASSOCIATION The following are the relevant extracts from the Company’s Articles of Association:

Classes Of Shares

2. The Company may from time to time issue classes of shares. It shall be the responsibility of the directors to determine the classes of shares to be issued. All the right or restrictions attached to each particular class of shares shall be specified in the terms of issue but such right may at any time be varied in accordance with the provisions of section 141 of the Decree.

Restriction on Transfer of Shares

3. The directors may in their discretion and without giving any reason, refuse to register any transfer of any share whether or not it is a fully paid share.

Pre-emptive Rights Of Shareholders Of The Company

4. The Company shall not allot any new or un-issued shares unless the same are offered in the first instance to all shareholders or to all the shareholders of the class or classes being issued in proportion as nearly as may be to their existing holdings.

5. The offer to existing shareholders shall be by notice specifying the number of shares to which the shareholders is entitled to subscribe and limiting a time, not being less than 28 days after the service of the notice, after the expiration of which the offer, if not accepted, will be deemed to be declined.

6. On the receipt of an intimation from the shareholder that he declines to accept the shares offered or after the expiration of the stipulated time as the case may be, the board of directors may, subject to the terms of any resolution of the Company, dispose of the shares of the company at a price not less than that specified in the offer, in such manner as they think most beneficial to the company.

Alteration Of Capital

11. The Company may from time to time by ordinary resolution effect an alteration of its share capital in any of the ways set out in section 100 of the Decree.

12. Subject to the provisions of the Decree on reduction of capital, the company may, whenever it considers it expedient to do so, by special resolution reduce its share capital, any redemption fund or any share premium account.

Meetings

14. The annual general meeting shall be held at such time and place, as the directors shall appoint.

Proceedings At General Meeting

17. All business shall be deemed special that is transacted at an Extra-ordinary General Meeting and also all that is transacted at an Annual General Meeting, with the exception of declaring a dividend, the consideration of account, Balance sheets, and the reports of the directors and auditors, the election of directors in the place of those retiring and the appointment of, and the fixing of the remuneration of the auditors.

18. No business shall be transacted at any General Meeting unless a quorum of members is present at the time when the meeting proceeds to business and for the purpose thereof, unless it is otherwise provided, two members present in person or by proxy shall be a quorum.

Directors

25. Unless and otherwise determined by the company in General Meeting the number of Directors shall not be less than five nor more than twelve.



28. It shall not be necessary for any Directors of the Company to acquire or hold any share qualification but a Director shall be entitled to receive notice, and to attend all General Meetings.

Powers and Duties of Directors

32. The Directors from time to time and at any time may provide through Local Boards, Attorney or Agencies for the management of the affairs of the Company outside Nigeria and appoint any persons to be members of such Local Boards or as Attorneys or Agents and may remove any person so appointed and appoint others in their place and may fix their remuneration.

33. The Directors from time to time and at any time may delegate to any such Local Board Attorney or Agent any powers, authorities and discretion for the time being vested in the Directors, other than the power to make call, forfeit shares, borrow money or issue debentures and such delegation may be made on such terms and subject to such conditions as the Directors may think fit, and may include a power to sub-delegate and the Directors may at any time annul or vary such delegation, but no person dealing in good faith and without notice of such annulment of variation shall be effected thereby.

Borrowing Powers

34. The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, and to issue debentures, debenture stock, and other securities whether outright or as security for any debt liability or obligation of the Company or of any third party.

35. The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, and to issue debentures, debenture stock, and other securities whether outright or as security for any debt liability or obligation of the Company or of any third party.

Proceedings of Directors

37. No business shall be transacted at any Board meeting unless a quorum is present at the time when the meeting proceeds to business. Three members of the Board including the Director, who is the Chief Executive Officer of the Company, shall form a quorum. The Chairman of the Board of Directors shall preside, and in his absence, the Directors present shall choose one of them to preside.

Indemnity

42. Every Director, Managing Director, Agent, Auditors, Secretary and other Officer for the time being of the Company shall be indemnified out of the assets of the Company against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted.

WAIVER OF PRE-EMPTIVE RIGHTS

All the shareholders in the register of the Company as at the date of the private placement, have waived their individual pre-emptive rights and have consented to the offer of new shares in the Company to other investors through this Private Placement. CLAIMS AND LITIGATIONS:

As at June 30 2006, IGI in its ordinary course of business is presently involved in a total of twenty (20) cases out of which seventeen (17) were instituted against IGI whilst three (3) were brought by the Company.

IGI having made provision for claims arising from the ordinary course of insurance business as statutorily required, the Solicitors to the Company are of the opinion that the contingent liabilities that may crystallise from the outstanding cases are unlikely to exceed the sum of N62,941,979.00.



The Directors are of the opinion that none of the claims or litigations is likely to have any material adverse effects on the Company or the Private Placement.

MATERIAL CONTRACTS: The following agreement has been entered into and is considered material to this Private Placement: A Vending Agreement dated 1st June 2006, under the terms of which IBTC Chartered Bank PLC and Vetiva Capital Management Limited have agreed to offer via Private Placement, 2,900,000,000 ordinary shares of 50 kobo each in Industrial and General Insurance Company Limited.

Save as stated above IGI has not entered into any material contract except in the ordinary course of business.

ESTIMATED COST OF ISSUE The costs, charges and expenses of and incidental to the Placement including fees payable to the professional parties, brokerage commission and printing and distribution expenses are estimated at N232 million or 4% of the gross proceeds and are payable by IGI.

DECLARATION Except as otherwise disclosed herein: • No share of the Company is under option or agreed conditionally or unconditionally to be

put under option; • No commissions, discounts, brokerages or other special terms have been granted to any

person in connection with the placement or sale of any share of the Company; • There are no founders, management or deferred shares or options outstanding.

CONSENTS The following have given and not withdrawn their written consents to the issue of this Private Placement Memorandum with their names and reports (where applicable) included in the form and context in which they appear:

General Dr. Yakubu Gowon, GCFR, Ph.D, psc, jsc Mr. Remi Olowude Mrs. Folasade Adetiba Mr. Rotimi Fashola Mr. O. Ola Vincent, CFR Dr. Lateef Adegbite, CON Mrs. Bunmi Olowude Apostle Hayford I. Alile, OFR

The Directors of the Company:

Chief G.K. Animashawun

Company Secretary /Legal Adviser:

Mrs. Folasade Adetiba

Issuing Houses: IBTC Chartered Bank Plc Vetiva Capital Management Limited

Auditors: Akintola Williams Deloitte (Chartered Accountants)

Reporting Accountants: J.K. Randle & Co. (Chartered Accountants)

Solicitors to the Company: Aina, Blankson & Co.

Joint Solicitors to the Placement: Freshfields Olaniwun Ajayi

Receiving Bankers: Afribank Nigeria Plc First Bank of Nigeria Plc IBTC Chartered Bank Plc Intercontinental Bank Plc Sterling Bank Plc Union Bank of Nigeria Plc


DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents may be inspected at the offices of IBTC Chartered Bank Plc (“IBTC”), IBTC Place, Walter Carrington Crescent, Victoria Island, Lagos and Vetiva Capital Management Limited, Plot 266B Kofo Abayomi Street, Victoria Island, Lagos during normal business hours on any weekday (except public holidays), from 7th August 2006 to 6th September 2006. (a) Certificate of Incorporation of the Company; (b) Memorandum and Articles of Association of the Company; (c) The Private Placement Memorandum issued in respect of this Placement; (d) Shareholders’ Resolution authorising the Placement; (e) Board Resolution authorising the Placement; (f) The audited financial statements of the Company for each of the five years ended 31st

December 2000 - 2004; (g) The un-audited management accounts of the Company for the year ended 31st

December 2005; (h) The financial projections for the years ending 31st December 2006, 2007 and 2008; (i) The list of claims and litigations referred to above; (j) The material contracts referred to above; and (k) The written consents referred to above.


PROCEDURE FOR APPLICATION AND ALLOTMENT 1. APPLICATION 1.1 Prospective Investors to whom this Private Placement Memorandum has been

addressed are hereby invited to apply for the shares through Vetiva, IBTC or IGI. 1.2 Applications for the shares must be made in accordance with the instructions set out at

the back of the application form. Care must be taken to follow these instructions, as applications that do not comply will be rejected.

1.3 The Application List for the shares will be open to each prospective investor from 7th

August 2006 to 6th September 2006. Applications must be for a minimum of 25,000 shares and in multiples of 10,000 shares thereafter. The number of shares for which an application is made and the value of the cheque or bank draft attached should be entered in the boxes provided.

1.4 A single applicant should sign the declaration and write his/her full names, address,

daytime telephone number and occupation in Item 1A on the application form, while joint applicants should fill in Item 1B. A corporate applicant should fill in Item 2, affix its seal and state its incorporation (RC) number or in the case of a foreign subscriber, its appropriate identification number in the jurisdiction in which it was constituted. Applicants should sign the form and write their full names, address and daytime telephone number(s) in the boxes provided.

1.5 Each application should be forwarded together with a cheque or bank draft for the full

amount of the purchase price to any branch of IGI or IBTC listed herein, or Vetiva. The cheque or draft should be in favour of either IBTC or Vetiva and crossed “IGI PRIVATE

PLACEMENT” with the name, address and daytime telephone number of the applicant(s) written on the back. All cheques and drafts will be presented upon receipt and all applications in respect of which cheques are returned unpaid will be rejected.

1.6 Foreign currency subscribers are advised to contact IBTC for the applicable US Dollar

exchange rate on the day the remittance is being effected. Payment can be made in US Dollars for credit to:

Industrial And General Insurance Company Limited; with the narrative “(Name of Subscriber)’s investment in IGI Private Placement”.

2. ALLOTMENT 2.1 The Directors of the Company reserve the right to accept or reject any application in

whole or in part. All irregular or suspected multiple applications will be rejected. 2.2 It is intended that the shares may be allotted on a “first come first served” basis. 3. APPLICATION MONIES

All application monies will be retained in separate bank accounts by the Receiving Banks pending allotment. If any application is not accepted, or is accepted for fewer shares than the number applied for, a cheque for the full amount or the balance of the amount paid (as the case may be) will be returned by post at the applicant’s risk within one week of allotment. Share certificates will be sent by post at the applicants’ risk not later than 4 weeks from the date of allotment.

PLACEMENT LOCATIONS


Completed Application Forms must be submitted to the Issuing Houses and payments may be made through them or any of the IGI branches listed on Page 22 . Payments can also be made to any of the IBTC Chartered Bank Plc branches listed below: ISSUING HOUSES IBTC Chartered Bank Plc

I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos Contact: Yewande Sadiku Tel.: 01-2626520, 2712400 Fax: 01-2626451/2

Vetiva Capital Management Limited Plot 266b Kofo Abayomi Street Victoria Island Lagos Contact: Yemisi Deji-Bejide Tel: 01- 4617521-3, 2700657-8 Fax: 01- 4617524

IBTC BRANCHES IDEJO BRANCH Plot 1712 Idejo Street Victoria Island, Lagos State

ADETOKUNBO ADEMOLA BRANCH 76 Adetokunbo Ademola Street Victoria Island, Lagos State

AFRIBANK STREET BRANCH Churchgate Building PC 30 Afribank Street Victoria Island, Lagos State

MURI OKUNOLA BRANCH Plot 226A Muri Okunola Street Victoria Island, Annex Lagos State

AWOLOWO ROAD BRANCH 85 Awolowo Road Ikoyi, Lagos State

MARTINS STREET BRANCH 19 Martins Street Lagos State

NNAMDI AZIKIWE STREET BRANCH 106 Nnamdi Azikiwe Street Lagos State

OFFIN ROAD BRANCH 25 Offin Road Apongbon, Lagos State

IDUMAGBO BRANCH 61 Idumagbo Avenue Lagos State

WAREHOUSE ROAD, APAPA BRANCH 10/12 Warehouse Road Apapa, Lagos State

YINKA FOLAWIYO PLAZA, APAPA BRANCH 38 Warehouse Road Folawiyo Plaza Apapa, Lagos State

TOYIN STREET BRANCH 36A Toyin Street Ikeja Lagos State

ALLEN AVENUE BRANCH 80 Allen Avenue Ikeja, Lagos State

ALAUSA BRANCH Elephant House, Alausa Ikeja, Lagos State

OBA AKRAN AVENUE BRANCH 20 Oba Akran Avenue Ikeja, Lagos State

SURULERE BRANCH 39 Adeniran Ogunsanya Street Surulere, Lagos State

M/M AIRPORT BRANCH Muritala Mohammed Airport Ikeja Lagos State

TRADE FAIR BRANCH Obasanjo Hall / Hall 2 ASPAMDA Plaza Intl Trade Fair Complex Ojo, Lagos State

ALABA BRANCH H48 / H49 Alaba Int'l Market Ojo Lagos State

NPA BRANCH Account Block Nig. Port Authority, Wharf Road Lagos State

BALOGUN BUSINESS ASSOCIATION (BBA) BRANCH Opposite Sokoto Plaza Balogun Business Association Trade Fair Complex Lagos State

AKURE BRANCH Great Nigeria Insurance House Owo / Ado Ekiti Road Akure Ondo State

PLACEMENT LOCATIONS


TINCAN ISLAND BRANCH Suite 7 & 27 Container Complex Lagos State GBAGI (IBADAN) BRANCH 15 Jimoh Odutola Street Ogunpa/Dugbe Ibadan, Oyo State

IWO ROAD (IBADAN) BRANCH Baloon House, Iwo Road Ibadan, Oyo State IFE BRANCH 5 Obalufon-Lagere Road Beside Catholic Church Lagere Junction, Ile-Ife, Osun State

IBADAN MAIN BRANCH UCH-Secretariat Road By Total Garden Ibadan, Oyo State

ILORIN BRANCH 11 Unity Road, (Amosu House) Ilorin Kwara State

ABEOKUTA BRANCH 2A Lantoro Road, Isale-Ake Abeokuta Ogun State

KANO BRANCH 13E Bello Road Kano Kano State

BENIN CITY BRANCH 71 Akpakpava Street Benin City Edo State

ZARIA BRANCH 9 Kaduna Road Zaria Kaduna State

KADUNA BRANCH 14 Ahmadu Bello Way Kaduna Kaduna State

KATSINA BRANCH 193 IBB Way Katsina Katsina State

SOKOTO BRANCH 8 Maiduguri Road Sokoto Sokoto State

GARKI (AREA 7) BRANCH Plot 593 Area 7 Ringim Close, Garki Abuja

GARKI (AREA 3) BRANCH Plot 437, No. 8, Langtang Close Off Tafawa Balewa Way Area 3, Garki, Abuja

MAKURDI BRANCH 12 Ali Aliku Rd Makurdi Benue State

MAITAMA BRANCH Plot 2777 Cadastral Zone A6 Maitama District, Abuja

MAIDUGURI BRANCH 38 Baga Road Maiduguri, Borno State

MINNA BRANCH Paiko Road Minna, Niger State

YOLA BRANCH 1 Muhammed Mustapha Way, Jimeta Yola, Adamawa State

JOS BRANCH 34 Ahmadu Bello Way Jos, Plateau State

ABA MARKET BRANCH 7 Aba-Owerri Road Aba, Abia State

BAUCHI BRANCH 16 Yandoka Road Bauchi, Bauchi State

P/H AIRPORT BRANCH International Airport Port Harcourt, Rivers State

ABA MAIN BRANCH 7 Aba-Owerri Road Aba, Abia State

ONITSHA BRANCH 13 Bright Street Onitsha, Anambra State

TRANS AMADI – P/H BRANCH 7 Trans Amadi Road Port Harcourt, Rivers State

UYO BRANCH 65B Nwaniba Road, Uyo Akwa Ibom State

OLU OBASANJO - P/H BRANCH 58 Oluobasanjo Road Port Harcourt, Rivers State

OWERRI BRANCH 8 Wethedral Road Owerri, Imo State

WARRI BRANCH 98 Effurun - Warri Road Effurun Near Warri, Edo State

ENUGU BRANCH 252 Ogui Road Ebeano Housing Estate Enugu, Enugu State

CALABAR BRANCH 71 Ndidem Usang Iso Road Calabar, Cross River State


APPLICATION FORM FOR REGISTRAR’S USE ONLY

Number of Shares Applied For

Application List Opens

7th August 2006

Number of Shares Allotted

Amount Paid (N=) ↓

Value of Shares Allotted (N=)

Amount to be Returned (N=) Application List Closes

6th September 2006

Industrial And General Insurance Company Limited

RC 178140

Private Placement

2,900,000,000 Ordinary Shares of 50 Kobo each

at N=2.00 per share

Payable in Full on Application

Issuing Houses: Cheque Number

Applications must be made in accordance with the instructions set out on the back of this Application Form. Care must be taken to follow these instructions as applications that do not comply may be rejected. 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.

TO: IBTC CHARTERED BANK PLC AND VETIVA CAPITAL MANAGEMENT LIMITED

Date: …………/…………/2006 Number of shares applied for Value of shares applied for

N=

Value of cheque/bank draft attached:

Cheque details - cheque number:

Name of bank/branch:

Account Number: Guide To Application

Number of shares applied for Amount payable

25,000 minimum N=50,000.00

Subsequent multiples of 10,000 N=20,000.00

DECLARATION I/We am/are 18 years of age or over I/We attach the amount payable in full on application for the number of

shares indicated in IGI at N=2.00 per share. I/We agree to accept the same or any smaller number of shares in respect

of which allotment may be made upon the terms of the Placement Memorandum dated 31st July 2006 and subject to the Memorandum and Articles of Association of IGI.

I/We authorise you to send a share certificate and/or a cheque for any amount overpaid, by registered post to the address first given below and to procure registration in my/our name as holder(s) of such number of shares or such smaller number, as aforesaid.

I/We declare that I/we have read a copy of the Placement Memorandum for the Placement dated 31st July 2006 issued by IBTC and Vetiva on behalf of IGI

PLEASE COMPLETE IN CAPITAL LETTERS AND IN BLACK INK

1A. INDIVIDUAL/FIRST APPLICANT

Title: Mr Mrs Miss Other (please

state)

Surname Signature or Thumbprint

First Name Other Names

Full Postal Address

City State

Daytime Telephone Number Next of Kin

1B. SECOND/JOINT APPLICANT (IF APPLICABLE)

Title: Mr Mrs Miss Other (please

state)

Surname Signature or Thumbprint

First Name Other Names

Daytime Telephone Number Next of Kin

2. CORPORATE APPLICANT

Company’s Name:

Full Postal Address

City State

Daytime Telephone Number

Incorporation Number

Authorised Signature Authorised Signature

Designation: Designation: Corporate Seal

Stamp of Receiving Agent

&


INSTRUCTIONS FOR COMPLETING THE APPLICATION FORM

1. Applications must be made only on the Application form or photocopied or scanned copies of the Application form.

2. The Application List for the shares will be open from 7th August 2006 to 6th September 2006

3. Applications must be for a minimum of 25,000 shares and in multiples of 10,000 shares thereafter. The number of shares for which an application is made and the value of the cheque or bank draft attached should be entered in the boxes provided.

4. Applications must not be for less than the minimum number of shares stated on the Application form. Applications for more than the minimum number of shares must be in the multiples stated on the Application form. The number of ordinary shares for which an application is made and the amount of the cheque or bank draft attached should be entered in the boxes provided.

4. The Application Form when completed should be lodged with any branch of IGI listed herein, IBTC, or Vetiva together with cheque or bank draft made payable to IBTC Chartered Bank Plc or Vetiva Capital Management Limited for the full amount of the purchase price and crossed “IGI PRIVATE PLACEMENT”. Cheques or drafts should be drawn on a bank in the same town as the IGI or IBTC branch at which the application forms and cheques or drafts will be lodged. All cheques and drafts will be presented upon receipt and all applications in respect of which cheques are returned unpaid will be rejected.

5. Foreign currency subscribers are advised to contact IBTC Chartered Bank Plc for the applicable US Dollar exchange rate on the day the remittance is being effected. Payment can be made in US Dollars for credit to: Industrial And General Insurance Company Limited; with the narrative, “(Name of Subscriber)’s investment in IGI Private Placement”.

6. The applicant should make only one application, whether in his own name or in the name of a nominee. Multiple or suspected multiple applications will be rejected.

7. Joint applicants must all sign the Application Form.

8. An application from a group of individuals should be made in the names of those individuals with no mention of the name of the group. An application by a firm which is not registered under the Companies and Allied Matters Act Cap C20 LFN 2004 should be made either in the name of the proprietor or in the names of the individual partners. In neither case should the name of the firm be mentioned.

9. An application from a corporate body must bear the corporate body’s seal and be completed under the hand of a duly authorised official.

10. An application from a trustee must be in the name of each individual trustee unless the trustee is a limited liability company.

11. An application by an illiterate should bear his right thumb print on the Application Form and be witnessed by an official of the Company or any of the Issuing Houses at which the application is lodged, who must first have explained the meaning and effect of the Application Form to the illiterate in his own language. Above the thumb print 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.

12. The 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 Private Placement as an illiterate and his right thumbprint should be clearly impressed on the Application Form.

Application Form

INDUSTRIAL AND GENERAL INSURANCE COMPANY LIMITED

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