Transcorp Hotel IPO - Fidelity Securities Limited

Transcription

This document is important and should be read carefully. If you are in any doubt about its contents or the action to take, kindly
consult your Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor or any other professional adviser for guidance
immediately.
INVESTING IN THIS OFFER INVOLVES RISKS. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS, PLEASE SEE “RISKS & MITIGATING FACTORS” ON PAGES 24 AND 25
Transcorp Hotels Plc
RC248514
Initial Public Offer
Of
800,000,000
Ordinary shares of 50 kobo each
at
N10.00 per share
Payable in full on Application
APPLICATION LIST OPENS: Thursday, September 25, 2014
APPLICATION LIST CLOSES: Friday, October 17, 2014
Lead Issuing House
RC444999
Joint Issuing House
Joint Issuing House
LeadCapital Plc
RC 116443
This Prospectus and the securities which it offers have been cleared and registered by the Securities &
Exchange Commission. It is a civil wrong and a criminal offence under the Investments and Securities Act
No 29 of 2007 to issue a Prospectus which contains false or misleading information. Clearance and
registration of this Prospectus and the securities which it offers do not relieve the parties from any liability
arising under the Act for false and misleading statements contained herein or for any omission of a material
fact in this Prospectus.
T h i s P r o s p e c t u s i s d a t e d Friday, September 19, 2014
TABLE OF CONTENT
DEFINITION OF TERMS
4
ABRIDGED TIMETABLE
6
SUMMARY OF THE OFFER
7
THE OFFER
10
DIRECTORS, COMPANY SECRETARY AND OTHER PARTIES TO THE OFFER
11
THE CHAIRMAN’S LETTER
13
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
History of the Company....................................................................................................................... 13
Our Business........................................................................................................................................... 13
Vision and Strategy .............................................................................................................................. 14
Our People ............................................................................................................................................ 15
Premises ................................................................................................................................................. 18
SWOT Analysis ....................................................................................................................................... 18
The Offer................................................................................................................................................ 19
Purpose of the Offer and Use of Proceeds ........................................................................................ 19
Review of the Nigerian Macroeconomic Environment.................................................................... 19
The Nigerian Hospitality Segment ....................................................................................................... 21
Summary of the Projects ...................................................................................................................... 22
Project Funding Strategy (US$)............................................................................................................ 23
Risks and Mitigating Factors ................................................................................................................ 24
Compliance with Code of Corporate Governance ........................................................................ 25
Composition of the Board ................................................................................................................... 25
Future Plans ........................................................................................................................................... 26
Conclusion ............................................................................................................................................ 27
FINANCIAL FORECAST
1.
2.
3.
4.
5.
6.
7.
28
Letter from the Directors on the Financial Forecasts ........................................................................ 28
Basis and Assumptions ......................................................................................................................... 29
Profit Forecast ....................................................................................................................................... 32
Balance Sheet ...................................................................................................................................... 33
Cashflow Statement............................................................................................................................. 34
Letter from the Financial Advisers/Issuing Houses ............................................................................. 35
Letter from the Reporting Accountants ............................................................................................. 36
HISTORICL FINANCIAL INFORMATION
1.
2.
3.
4.
5.
6.
7.
8.
37
Letter from the Reporting Accountants on the Offer ....................................................................... 37
Letter from the Reporting Accountants on Going Concern ........................................................... 38
Letter from the Directors on Going Concern..................................................................................... 39
Statement of Significant Accounting Policies ................................................................................... 40
Statement of Profit and Loss................................................................................................................ 48
Balance Sheet ...................................................................................................................................... 49
Cashflow Statement............................................................................................................................. 50
Notes to the Accounts ......................................................................................................................... 51
STATUTORY AND GENERAL INFORMATION
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
60
Incorporation and Share Capital History ........................................................................................... 60
Shareholding Structure ........................................................................................................................ 60
Directors’ Beneficial Interests .............................................................................................................. 60
Statement of Indebtedness................................................................................................................. 60
Subsidiaries and Associated Companies........................................................................................... 60
Statement of Compliance with Corporate Governance ................................................................ 61
Unclaimed Dividends ........................................................................................................................... 61
Claims and Litigation ........................................................................................................................... 61
Extract from the Memorandum and Articles of Association of Transcorp Hotels Plc .................... 61
Material Contracts ............................................................................................................................... 65
Costs and Expenses.............................................................................................................................. 66
2
Prospectus
TABLE OF CONTENT
12.
13.
14.
15.
16.
17.
18.
19.
Declarations.......................................................................................................................................... 66
Relationship between the Issuer and the Issuing Houses/Other Advisers ....................................... 66
Mergers and Acquisitions .................................................................................................................... 66
Research and Development............................................................................................................... 66
Land and Property Schedule .............................................................................................................. 66
Consents................................................................................................................................................ 67
Related Party Transactions .................................................................................................................. 68
Documents Available for Inspection .................................................................................................. 68
PROCEDURE FOR APPLICATION AND ALLOTMENT
1.
2.
3.
4.
69
Application ........................................................................................................................................... 69
Allotment ............................................................................................................................................... 69
Share Certificate/E-allotment ............................................................................................................. 69
Application Monies .............................................................................................................................. 69
RECEIVING AGENTS
70
APPLICATION FORM
72
INSTRUCTIONS FOR COMPLETING THE APPLICATION FORM
73
3
Prospectus
DEFINITION OF TERMS
DEFINITION OF TERMS
Name
Definition/Explanation
“Allotment Date”
The date on which the
approved/cleared by SEC
“Business Day”
Any day other than a Saturday, Sunday or official Public
holiday in Nigeria
“CAC”
Corporate Affairs Commission
“CAMA”
Companies and Allied Matters Act Cap C20 LFN 2004
“Company” or “THP” or “Transcorp Hotels”
“CHN”
Clearing House Number
“CSCS”
Central Securities Clearing System Plc
“Directors”
The members of the Board of Directors of Transcorp Hotels Plc
who as at the date of this document are those persons whose
names are set out on page 11 of this Prospectus
“Daily Official List”
The Daily Official List of the NSE which provides on a daily basis,
transactions that take place on the Floor of The Exchange
“EPS”
Earnings Per Share
“FGN”
Federal Government of Nigeria
“ISA” or “The Act”
Investments & Securities Act No. 29 of 2007
“Issuing Houses”
UBA Capital Plc, LeadCapital Plc and BGL Capital Limited
“Joint-Issuing House”
LeadCapital Plc and BGL Capital Limited
“Lead Issuing House”
UBA Capital Plc
“LFN”
Laws of the Federation of Nigeria
“Offer Price”
The price at which the shares will be offered to investors under
the Initial Public Offering
“Pari Passu”
Equally
“Parties”
Professional advisers, who have been engaged by the
Company and whose roles will ensure the success of the Offer.
“PAT”
Profit After Tax
“PBT”
Profit Before Tax
“Receiving Agents”
Market operators authorized to receive
Forms/Monies from investors for the Offer
“Registrars”
Africa Prudential Registrars Plc
“Prospectus”
This document, which is issued in accordance with the Rules
and Regulations of the Commission in respect of the Offer.
“SEC” or “The Commission”
Securities and Exchange Commission
“Stockbrokers”
BGL Securities Limited; UBA Securities Limited; Cowry Securities
Limited; and Milestone Capital Management Limited
allotment
of
the
shares
is
Application
4
Prospectus
DEFINITION OF TERMS
Name
Definition/Explanation
“The Offer”
Initial Public Offer of 800,000,000 Ordinary Shares of 50 Kobo
each at N10.00 per share
“The NSE” or “The Exchange”
The Nigerian Stock Exchange
“TMHCL”
Transcorp Metropolitan Hotels and Conferencing Limited
“Transcorp”
Transnational Corporation of Nigeria Plc or Transcorp Plc
5
Prospectus
ABRIDGED TIMETABLE
ABRIDGED TIMETABLE
The dates given below are indicative only. The timetable has been prepared on the assumption that certain key
events for the Offer will be achieved as stated. If not, then the dates surrounding key events in the timetable
may be subject to adjustments.
Date
Activity
Responsibility
September 25, 2014
Application List opens
Issuing Houses/Stockbrokers
October 17, 2014
Application List closes
Issuing Houses/Stockbrokers
October 31, 2014
Receiving Agents make returns
Issuing
Agents
November 04, 2014
Receive Range Analysis and schedule of subscribers
from Registrar
Registrar/Issuing Houses
November 10, 2014
Prepare and File allotment proposal
newspaper announcement with SEC
Issuing Houses
November 13, 2014
Receive SEC clearance of Allotment
Issuing Houses
November 14, 2014
Pay net proceeds from The Offer to THP
Receiving Bank
November 17, 2014
Publish Allotment announcement
Issuing Houses
November 17, 2014
Return excess/rejected Application monies
Issuing Houses /Registrars
November 17, 2014
Dispatch Share Certificates/Commence arrangements
to credit CSCS accounts
Registrars
November 20, 2014
Forward Declaration of Compliance to The Exchange
Stockbrokers
November 24, 2014
List the newly issued shares of THP on the floor of The
Exchange
Stockbrokers
November 28, 2014
File Post Completion Report with SEC
Issuing Houses
and
draft
Houses/Receiving
6
Prospectus
MMARY OF THE OFFER
The summary draws attention to information contained elsewhere in this document and should be read in
conjunction with the full text of this Prospectus from which it was derived:
ISSUER:
LEAD ISSUING HOUSE:
UBA Capital Plc
JOINT ISSUING HOUSE:
LeadCapital Plc and BGL Capital Limited
SHARE CAPITAL:
(AS AT THE DATE OF THE PROSPECTUS)
Authorised
N7,500,000,000 made up of 15,000,000,000 ordinary shares of 50 kobo each
Issued and fully paid
N3,591,000,000 made up of 7,182,000,000 ordinary shares of 50 kobo each
Now being offered
800,000,000 ordinary shares of 50 kobo each
METHOD OF OFFER:
Offer for subscription
MINIMUM SUBSCRIPTION:
Minimum of 1,000 ordinary Shares and multiples of 100 ordinary Shares
thereafter
OFFER PRICE:
N10.00 per share
OFFER SIZE:
N8,000,000,000
MARKET CAPITALIZATION
At Offer Price:
Pre Offer:
N71,820,000,000
Post Offer:
N79,820,000,000
PAYMENT:
In full on application
PURPOSE:
The estimated net proceeds of N7,704,275,850 after deduction of the estimated
cost and expenses of the offer at N295,724,150 representing approximately
3.70% of the total offer size (includes cost of printing and advertising) shall be
applied in part financing the development of the following hotel projects:
Utilisation of Offer Proceeds
N
%
Estimated
Completion
Year
Transcorp Hilton Ikoyi Project*
4,314,394,476
56%
2017
Transcorp Hilton Port Harcourt
Project*
3,389,881,374
44%
2017
Total
N7,704,275,850
100%
*Further details on the projects are provided on page 22 and 23 of the Prospectus
APPLICATION LIST OPENS:
September 25, 2014
APPLICATION LIST CLOSES:
October 17, 2014
QUOTATION:
Application has been made to the Council of The Exchange for the admission
to its Daily Official List, the 800,000,000 ordinary shares of 50 kobo each now
7
Prospectus
being offered for subscription and 7,182,000,000 ordinary shares of 50 kobo
each representing the issued and fully paid shares of THP.
STATUS:
The ordinary shares being offered shall rank pari-passu in all respects with the
issued ordinary shares of the Company.
UNDERWRITING:
No portion of the Offer will be underwritten
INDEBTEDNESS:
As at December 31, 2013, the date of the audited financial statement of the
Company, Transcorp Hotels Plc had no outstanding bank loans, debentures,
mortgages, charges or similar indebtedness or material contingent liabilities
other than in the ordinary course of business.
CLAIMS AND LITIGATION:
As at the date of this Prospectus, the Company in the ordinary course of
business is involved in ten (10) cases. All the cases were instituted against the
Company. The aggregate monetary claims in respect of the cases amounts to
N29,912,000 and $23,000. The Directors of the Company are of the opinion that
none of the pending claims by or against the Company is likely to have any
material adverse effect on the Offer and are not aware of any other
threatened or pending claims and litigation which may be material to the
exercise.
E-ALLOTMENT/
SHARE CERTIFICATE:
The CSCS accounts of successful subscribers will be credited not later than 15
working days from the date of allotment. Investors are thereby advised to state
the name of their respective stockbrokers, Clearing House Number and CSCS
Account Number in the relevant spaces on the Application Form on page 72
of this Prospectus. Certificates will be issued and dispatched by registered post
to investors who do not provide CSCS account details within 15 working days of
allotment.
SUMMARIZED (FIRST FIVE YEARS) FORECAST OFFER STATISTICS:
31 December
2014
31 December
2015
31 December
2016
31 December
2017
31 December
2018
N’mn
N’mn
N’mn
N’mn
N’mn
16,829
19,515
21,506
32,200
36,202
EBITDA*
8,461
9,699
10,472
15,237
17,122
Profit/(Loss) before
Taxation*
7,448
8,666
9,420
10,430
12,729
Profit/(loss) after
Taxation*
5,064
5,893
6,406
7,087
8,656
Dividend*
1,012
1,988
2,815
3,510
4,450
0.63
0.74
0.80
0.89
1.08
Forecast earnings Yield
at offer price (ord.) (%)
6.30
7.40
8.00
8.90
10.80
Forecast Dividends per
share (N)
0.13
0.25
0.35
0.44
0.56
Forecast dividend yield
at offer price (%)
1.30
2.50
3.50
4.40
5.60
Forecast price/earnings
ratio at offer price
15.87x
13.51x
12.50x
11.23x
9.25x
For the year ending
Turnover*
Forecast earnings per
share (N)
(*Extracted from the Reporting Accountants Report)
8
Prospectus
FINANCIAL SUMMARY:
31 December
2013
31 December
2012
31 December
2011
31 December
2010
31 December
2009
N’mn
N’mn
N’mn
N’mn
N’mn
15,349
13,258
13,725
13,641
12,995
Profit/(Loss) before
Taxation
6,122
4,050
5,426
6,001
5,919
Profit/(loss) after
Taxation
4,409
2,910
6,957
4, 454
3,996
Dividend
4,200
4,560
5,555
4,455
4,355
5
5
5
5
5
43,514
43,305
44,774
7,655
7,655
Earnings per share (N)–
Basic
882
582
1,391
891
799
Dividend per share (N)
840
912
1,111
891
871
For the year ending
Turnover
Share Capital
Net Assets
DESCRIPTION OF GROUP STRUCTURE:
Please refer to the Group Structure of the Company below:
Transcorp Plc
88%
THP
12%
Federal Government of
Nigeria
100%
TMHCL
76%
Transcorp Hotels
Ikoyi Limited
100%
Transcorp Hotels
Port Harcourt Limited
9
Prospectus
THE OFFER
THE OFFER
Copies of this Prospectus and the documents specified herein have been delivered to the Securities and
Exchange Commission for Clearance and Registration.
This Prospectus is being issued in compliance with the provisions of the Act and in compliance with the
requirements of the Rules and Regulations of the Commission and the listing requirements of The NSE and
contains particulars in compliance with the requirements of The Commission and The Exchange, for the purpose
of giving information to the public with regard to the Initial Public Offering of 800,000,000 Ordinary Shares of 50
kobo each in Transcorp Hotels Plc by UBA Capital Plc, LeadCapital Plc and BGL Capital Limited. An application
has been made to the Council of The Exchange for the admission to its Daily Official List, the 800,000,000 ordinary
shares of 50 kobo each now being offered for subscription and 7,182,000,000 ordinary shares of 50 kobo each
representing the issued and fully paid shares of THP.
The Directors of Transcorp Hotels Plc individually and collectively accept full responsibility for the accuracy of the
information contained in this Prospectus. The Directors have taken reasonable care to ensure that the facts
contained herein are true and accurate in all respects and confirm, having made all reasonable enquiries that
to the best of their knowledge and belief there are no material facts, the omission of which make any statement
herein misleading or untrue.
Lead Issuing House
RC444999
Joint Issuing House
Joint Issuing House
LeadCapital Plc
RC 116443
On behalf of
RC 248514
Are authorized to receive applications for the
Initial Public Offering of 800,000,000 Ordinary Shares of 50 kobo each at N10.00 per share
The Application List for the shares now being offered will open on
September 25, 2014 and close on October 17, 2014
SHARE CAPITAL AND RESERVE OF THE COMPANY AS AT 31 DECEMBER, 2013
(Extract from the 2013 full year audited accounts)
Authorized Share Capital1
Issued and Fully Paid
Equity and Reserves
10,000,000 Ordinary Shares of N1.00 each
5,000,000 Ordinary Shares of N1.00 each
Share Capital
N
10,000,000
5,000,000
5,000,000
Retained Earnings
TOTAL EQUITY
43,508,991,000
43,513,991,000
1The
authorized share capital of the Company was increased in March 2014 from N10 million (made up of 10,000,000 ordinary shares of N1 each) to N30 million (made
up of 30,000,000 ordinary shares of N1 each) by the creation of an additional 20,000,000 ordinary shares of N1each. The Company’s authorized share capital was
subsequently increased in June 2014, to N7.5 billion (made up of 15,000,000,000 ordinary shares of 50 kobo each) by the creation of an additional 14,940,000,000
ordinary shares of 50 kobo.
10
Prospectus
ECTORS, COMPANY SECRETARY AND OTHER PARTIES TO THE OFFER
Directors and Company Secretary
CHAIRMAN
Olorogun O’tega Emerhor, OON
1 Aguiyi Ironsi Street, Maitama, Abuja
MANAGING DIRECTOR/CEO
Mr. Valentine Ozigbo
EXECUTIVE DIRECTOR
Okaima Ohizua
NON EXECUTIVE DIRECTORS
Mr. Obinna Ufudo
Mr. Emmanuel Nnorom
Mr. Gogo Kurubo
Mr. Abubakar A. Giza
Mr. Baba Mohammed
Mr. Benjamin Dikki
COMPANY SECRETARY
Mr. Chinedu Eze
38 GloverRoad,Ikoyi, Lagos
11
Prospectus
Professional Parties to the Offer:
LEAD ISSUING HOUSE
JOINT ISSUING HOUSES
UBA Capital Plc
UBA House (12th Floor),
57 Marina,
Lagos
LeadCapital Plc
Plot 281 Ajose Adeogun Street,
Victoria,
Lagos
BGL Capital Limited
12A Catholic Mission Street,
Lagos Island,
Lagos
LEAD STOCKBROKER TO THE OFFER
BGL Securities Limited
12A Catholic Mission Street,
Lagos Island,
Lagos
JOINT STOCKBROKERS TO THE OFFER
UBA Securities Limited
57 Marina,
Lagos
Cowry Securities Limited
Plot 1319 Karimu Kotun Street,
Victoria Island,
Lagos
Milestone Capital Management Limited
2nd Floor, Eleganza Building,
15B Joseph Street,
Lagos Island,
Lagos
JOINT SOLICITORS TO THE OFFER
Ajumogobia & Okeke
2nd Floor, Sterling Towers, 20 Marina, Lagos
M.E. Esonanjor& Co
27 Oyewole Street, Palmgrove, Ilupeju, Lagos
REPORTING ACCOUNTANT
Akintola Williams Deloitte
235 Ikorodu Road, Ilupeju, Lagos
AUDITORS TO THE COMPANY
Price WaterhouseCoopers
252E Muri Okunola Street, Victoria island, Lagos
REGISTRARS TO THE OFFER
220B, Ikorodu Road, Palmgrove, Lagos
RECEIVING BANK
United Bank for Africa Plc
UBA House,57 Marina, Lagos
SOLICITORS TO THE COMPANY
Templars
The Octagon (4th Floor),
13A A. J. Marinho Drive,
P.O. Box 72252,
Victoria Island,
Lagos
12
Prospectus
THE CHARIMAN’S LETTER
THE CHAIRMAN’S LETTER
The following is text of a letter from Olorogun O’tega Emerhor OON, Chairman, Board of Directors of Transcorp
Hotels Plc
RC 248514
August 15, 2014
The Directors
UBA Capital Plc
57 Marina
Marina
Lagos
The Directors
LeadCapital Plc
Plot 281 Ajose Adeogun Street,
Victoria
Lagos
The Directors
BGL Capital Limited
12A, Catholic Mission Street
Lagos Island
Lagos
Dear Sirs,
INITIAL PUBLIC OFFER OF 800,000,000 ORDINARY SHARES OF 50 KOBO EACH AT N10.00 PER SHARE BY TRANSCORP
HOTELS PLC
On behalf of the Board of Directors of Transcorp Hotels Plc, I am pleased to provide the following information
relating to the Initial Public Offer for subscription of 800,00,000 ordinary shares of 50 Kobo each at N10.00 kobo
per share.
1.
History of the Company
Transcorp Hotels Plc (formerly Transnational Hotels and Tourism Services Limited) is the hospitality subsidiary of
Transnational Corporation of Nigeria Plc (“Transcorp Plc”). Transcorp Plc holds an 88% ownership interest in
the Company – based on the Company’s current issued share capital of N3,591,000,000 as at the date of
Prospectus – through a wholly owned entity named Capital Leisure and Hospitality Limited. The remaining
12% is owned by the Federal Government of Nigeria. The vision of THP is to be a leading hospitality
company in Nigeria and across Africa creating maximum and sustainable value for its stakeholders.
Transcorp Plc is quoted on the Nigerian Stock Exchange–has been quoted since November 2006 - and was
incorporated in 2004 with the goal of creating a truly Nigerian conglomerate, able to compete with other
global multinational companies. Transcorp Plc is a diversified conglomerate with strategic investments and
core interests in the hospitality, agriculture and energy sectors of the Nigerian economy. In 2011, Heirs
Holdings Limited, a strategic investor acquired a major stake in Transcorp Plc and has since progressively
increased the company’s footprint in its core businesses.
2.
Our Business
The Company currently owns two hotels -Transcorp Hilton Abuja and Transcorp Hotels Calabar.
Transcorp Hilton Abuja:
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Prospectus
Transcorp Hilton Abuja is adjudged the best hotel in Nigeria with 670 rooms, including 427 standard rooms,
116 deluxe rooms and 127 executive suites. This hotel also boasts of 24 meeting rooms, one banquet hall
and 7 restaurants and bars. Located in the heart of Nigeria's Federal Capital, Transcorp Hilton Abuja offers
easy access to the commercial district, Abuja tourist attractions, and is only 40 minutes from Nnamdi Azikiwe
International Airport. Set on beautifully landscaped gardens, this hotel offers a wide range of leisure facilities
including swimming pool, tennis and squash courts, gymnasium, wellness center, shopping arcade and
casino all onsite.
The hotel also offers an eclectic variety of dining options, including the 24-hour Piano Lounge and the Fulani
Pool Bar. With seven restaurants and bars featuring poolside barbecue, garden views, live entertainment
and fine dining, this hotels appeals to every taste and occasion.
Transcorp Hilton Abuja is also an ideal venue for meetings or events, as it offers 24 multi-purpose meeting
rooms and an expansive 1200-capacity Congress Hall - connected by a covered walkway and designed
with modern technical and lighting facilities.
Transcorp Hotels Calabar:
Transcorp Hotels Calabar (formerly The Metropolitan) is adjudged the best hotel in Calabar with 132 rooms.
This hotel has 102 standard rooms, 8 Royal rooms, 4 Ambassadorial rooms, 2 Executive and 16 Chalets; 2
conference rooms and one meeting room. It is located in the heart of Calabar, a few metres away from U.J.
Esuene Stadium and Government House.
Transcorp Hotels Calabar, is a premier destination hotel, a well-known landmark for both locals and visitors,
and is fast becoming the destination stop for vacations and conferences in Nigeria. It is the perfect meeting
ground for business and pleasure. The hotel provides outstanding conferencing facilities: fine dining, 24-hour
room service, a fitness centre, complimentary airport pick up, complimentary Wi-Fi connection in all guest
rooms and guest discounts with local merchants.
Transcorp Hilton Abuja and Transcorp Hotels Calabar were acquired as fully developed properties in 2005
and 2012 respectively.
3.
Vision and Strategy
THP’s aim is to be the premier hospitality company in Africa, creating maximum and sustainable value for
stakeholders as well as to build Africa’s choice hospitality assets underpinned by excellence,
entrepreneurship and execution.
The Company will focus on Nigeria in the first instance and thereafter develop strong African footprints in
high population and competitive cities.
For this purpose, over the next five years, the Company will take a phased approach in developing highend hotels in Ikoyi, Port Harcourt, Ikeja and Warri as well as a convention center and apartment complex in
Abuja. THP will also leverage on the Hilton brand and strong customer base to provide excellent guests
experience and achieve superior returns from the new assets.
In addition to the new developments, the Company has also commenced the renovation of the Transcorp
Hilton Abuja with a view to consolidating its position as the premier hotel destination in Nigeria. This
renovation involves the modernization of core facilities of the hotel, for which the Company plans to spend
approximately $57.5 million (equivalent of N9.2 billion) over the next three years. The funding for this
renovation will be sourced from the Company’s cash flows from operations.
14
Prospectus
4.
Our People
The strategic direction of the Company is determined by a Board of nine (9) Directors who are highly
experienced professionals, and I, Olorogun O’Tega Emerhor, lead the Board as the Chairman.
Profile of the Company’s Board of Directors:

Olorogun O’tega Emerhor, OON - Chairman
Olorogun O’tega Emerhor, OON, is the Vice Chairman/Group CEO of Standard Alliance Insurance Plc;
Vice Chairman of former First Inland Bank Plc; Chairman Synetics Technologies Ltd and Heroes Group.
He holds a First Class degree in Accountancy from University of Nigeria, Nsukka (1983). He holds
fellowships from Institute of Chartered Accountants of Nigeria, Institute of Credit and Risk Management
of Nigeria and Academy for Entrepreneurial Studies. He is also a member of the Institute of Marketing
Consultants.
He trained as a chartered accountant at the renowned PriceWaterhouseCoopers and has worked in
several Banks including Citi Bank, Fidelity Bank Plc, GTBank and as Managing Director of erstwhile Crystal
Bank. He holds directorships in a number of companies and has received various prestigious awards.

Mr. Valentine Ozigbo – MD/CEO
Valentine Ozigbo is the MD/CEO of THP. He is a banker and accountant with over 20 years experience
in commercial, retail, investment and international banking.
Valentine graduated from Lancaster University, UK, as a British Chevening Scholar, where he bagged a
Distinction in M.Sc Finance in 2004. He also has an MBA in Banking & Finance and a B.Sc. in Accounting
both from the University of Nigeria, Nsukka (graduated in 1998 and 1993 respectively).
Prior to joining THP, Valentine was General Manager and Divisional Head in charge of Global
Transaction Banking at Keystone Bank Plc, successor to Bank PHB. His remit covered product
development, international business, global trade and eBusiness. Before then, he was the Divisional
Head of International Banking and Head of Global Strategic Alliances at United Bank for Africa Plc.
Valentine has also worked with FSB International Bank Plc (now Fidelity Bank Plc), Continental Trust Bank
Ltd (now part of UBA) and Diamond Bank Plc.
He is a Fellow of the Institute of Chartered Accountants of Nigeria and the Chartered Institute of
Taxation of Nigeria.

Okaima Ohizua – Executive Director
Okaima Ohizua is the Executive Director of THP.
She is a qualified Lawyer from the University of Benin, the Nigerian Law School and has an Advanced
Management Program Certificate from the Pan-African University - Lagos Business School. She obtained
an LLB (Hons) Law degree in 1990 and BL (Hons) Law degree in 1991.
Until her appointment, she served as the Chief of Staff to the Chairman of Heirs Holdings, and was
responsible for providing support to the Chairman and assisting with the co-ordination and
implementation of goals of investee companies.
Before she joined the Heirs Group, she served in various capacities within the financial services sector
with institutions such as United Bank for Africa Plc (UBA), where she was Director for Customer Service
and Citi Group where she was Assistant Vice President and Head of Electronic Banking &
Implementation.

Mr. Obinna Ufudo – Non-Executive Director
Obinna Ufudo is the immediate past President/CEO of Transcorp Plc. He is a financial industry veteran
who has held senior level positions in trading, investment management and advisory capacities.
He holds a M.Sc. in International Securities, Investment & Banking from the University of Reading, UK, as a
British Chevening Scholar (graduated in 2006). He also has an Executive Master of Business
Administration (EMBA) from the IESE Business School, University of Navarra, Barcelona Spain (also
15
Prospectus
graduated in 2006) and a B.Sc. in Finance from the Enugu State University of Technology, Enugu State
Nigeria in 1993.
Prior to his appointment as President/CEO of Transcorp Plc, he was the Chief Operating Officer of the
Heirs Holdings Group where he optimized day-to-day operations of the Group and supervised its various
subsidiaries. Obinna is also Chairman of Afri-Pay Limited, the parent company of U-Mo – a CBN
approved mobile payment solutions provider.
Mr. Ufudo is an Associate Member of the Chartered Institute of Bankers of Nigeria and is an I nternational
Fixed Income & Derivatives Certified Professional.

Mr. Emmanuel Nnorom – Non-Executive Director
Emmanuel Nnorom is the President and CEO of Transcorp Plc. Prior to this position, he was the President
and COO of Heirs Holdings. Prior to that position, he was an Executive Director at UBA and Managing
Director/CEO of UBA Africa, where he oversaw the Group’s African subsidiaries. He has also held the
position of UBA Group Chief Operating Officer with responsibility over information technology,
operations, corporate services, marketing and corporate communications, customer service, UBA
Properties, human resources and regulatory affairs.
He has an Advanced Management Program Certificate from Templeton College, Oxford University
(1996) and is a Fellow of both the Institute of Chartered Accountants of Nigeria (ICAN) and the
Chartered Institute of Bankers of Nigeria (CIBN). He trained as an accountant with Peat Marwick
Castleton Elliot & Co., winning the First Prize in the finals of the May 1982 diet of ICAN examinations.
Mr. Emmanuel N. Nnorom is a seasoned auditor and accountant with over 2 decades of experience
working with several companies quoted on the Exchange.

Mr. Gogo Kurubo – Non-Executive Director
Gogo Kurubo is President/CEO of Hartlite Energy Limited. He is a highly motivated and result oriented
business professional with a wealth of experience and knowledge spanning investment analysis,
corporate finance, capital markets, hospitality and energy. He has over 20 years proven track record of
value delivery to leading global organisations.
Mr. Kurubo earned a B.Sc Hons. in Management from the University of Port-Harcourt, Rivers State in 1991.
He is a Member of the Chartered Institute of Stockbrokers.
Mr. Kurubo has worked as the Executive Secretary of Corporate Nigeria Ltd Gte. He was the Director of
Business Development of EFFBEEGEE Services Limited from 2000-2002, the Relationship Manager of ENTO
Enterprises Inc, New Jersey and the Nigeria-Investment Analyst of Negotiable Finance Ltd.

Mr. Abubakar A. Giza – Non-Executive Director
Alhaji Abubakar Abdu Giza is a Certified National Accountant with over 36 years broad experience in
Finance, Accounting and Pension Accounts Management. He is the Director of Revenue and
Investment of the Office of the Accountant-General of the Federation. Prior to this role, he held
specialized and management positions in the Nigerian Immigration Service and the Public Complaints
Commission as the Director of Finance and Accounts and Acting Director of Finance and Pension
Accounts respectively.
Alhaji Giza holds a B.Sc degree in Accounting from the University of North Carolina, Greensboro, USA
(1983) and an Associate Degree in Accounting from the Asheson College in North Carolina, USA (1983).
He is a Fellow of the Certified National Accountant (FCNA), a Certified National Accountant (CNA) and
a member of the Chartered Institute of Taxation of Nigeria.

Mr. Baba Mohammed – Non-Executive Director
HRH Baba Mohammed is the Head, National Parks & Capital Market at the Presidency, Bureau of Public
Enterprises (BPE). He has spent over 20 years working at the BPE as a representative of the Federal
Government on the Boards of companies including Nigerdock Nigeria Plc, Afribank Nigeria Plc,
Nigerian Security Printing & Minting (NSPM), NITEL, Mtel, Nigeria Reinsurance, NICON Insurance and THP.
16
Prospectus
He has also worked as Member/Secretary, African Privatisation Network (APN), Member, committee for
the establishment of National Depository in Nigeria. He also acted as Director, Mines and Steel
Development at the BPE.
Mohammed holds a B.Sc (Hons) Degree in Accountancy from University of Jos in, (graduated in1991).
He also holds a Masters in Business Administration (MBA) from Ahmadu Bello University Zaria (graduated
in 1999), and a Certificate in Financial Management from Stanford Graduate School of Business, San
Francisco, California USA (graduate in 2006).
He is a member of the National Accountants of Nigeria (ANAN) and the Nigerian Institute of
Management (NIM).

Mr. Benjamin Dikki – Non-Executive Director
Mr Benjamin Ezra Dikki is the Director General of the Bureau of Public Enterprises (“BPE”). He was until his
appointment by President Goodluck Jonathan, the Director of Industries and Services at the same
agency.
Born on December 30, 1958, Mr Dikki is a 1980 Accounting graduate of Ahmadu Bello University (“ABU”),
Zaria. He also holds an M.B.A from ABU (1985). He became a licensed stockbroker in June 1993 and is a
Fellow of Chartered Institute of Stock Brokers (CIS). He has attended several courses and seminars in
Nigeria and abroad.
Mr Dikki joined the BPE as a Director on December 1, 2004 and has served in many departments, starting
as Director of Power and Communications. He has also served as Director, Finance and Management
Support; Director Transport and Aviation; Director Communications and Capital Market; Director
Information and Communication; and Director Oil and Gas. He is married with three biological children
and other adopted ones.
Profile of Key Management Team:

Mr. Adekunle Elumaro – Chief Financial Officer
Mr. Adekunle is the Chief Financial Officer of THP.
He graduated with a B.Sc. (Honours) degree in Accounting from University of Ado Ekiti in Ekiti State in
1999. He graduated with First Class Honours.
Adekunle started his professional career with Ernst & Young in 2001. He had both tax and audit
experience before joining Nestle Nigeria Plc and Neptune Software Plc where he gained both financial
accounting and information technology experiences respectively. He returned to professional practice
in 2005 with Deloitte.
At Deloitte, Adekunle worked as a financial adviser for 7 years advising organizations across industries.
His professional skills range from valuation, due diligence, financial modelling, forensic auditing, and
special financial investigation to buy side/sell side advisory. He joined THP in 2012 as the CFO.
He is a Fellow of the Institute of Chartered Accountants of Nigeria. He is a level 3 Candidate of
Chartered Financial Analysts (CFA) Institute. He is currently undertaking a Masters degree in Finance &
Control with the SMC University, Switzerland.

Mrs. Helen Iwuchukwu – Government Relations Officer
Helen Iwuchukwu is the Government Relations Officer of THP.
She graduated with an LL.B (Honours) degree in Law from Abia State University, Uturu (Class of ’92). She
was called to the Nigerian Bar in 1993. Helen holds a Master of Laws degree (2003) from Middlesex
University Business School, London (2003) where she specialized in Employment Law.
She began her legal career in 1995 with the firm of Banwo & Ighodalo. In 1998, she joined Fieldcrest
Attorneys as a law development officer in which position she gained wide exposure in the development
of training and mentoring programs for legal departments in the energy and financial services sectors as
well as private practitioners.
17
Prospectus
In 2001, Helen moved to the UK to pursue an advanced degree. While abroad, she enriched her
relevant professional experience at Samuel Davis Solicitors, and later, Pinnacle Solicitors. In 2004, she
joined the Northwest London Hospitals NHS Trust as an administrative officer, where she rose to the
position of human resources manager.
Helen has held a number of sensitive and senior positions at Transcorp and its subsidiaries in both her
specialties: Legal and Human Capital Management. She has served as the Head of Human Resources
at Nigerian Telecommunications Limited (“NITEL”) (August 2006 – November 2007), Legal Adviser at NITEL
(August 2008 – April 2009), Acting Company Secretary at NITEL (May 2009 – June 2009), and Company
Secretary/Legal Adviser for Transcorp from October 2009 to February 2012.
5.
Premises
Transcorp Hotels Plc currently operates from its Corporate Head Office at Transcorp Hilton Abuja located at
1 Aguiyi Ironsi Street, Maitama, Abuja (Telephone number: 234-708-060-3000, Email address:
[email protected] and Website address: www.transcorpnigeria.com) and has two (2) other office
locations in Nigeria. Details of the Company’s premises are provided below:
S/N
Branch
Office
Address
State
Status
1
Ikoyi
38 Glover Road, Ikoyi
Lagos
Leasehold
2
Calabar
1 Murtala Mohammed Highway, Calabar Municipal
Cross River
Freehold
6.
SWOT Analysis:
Strengths

Owner of the most prestigious hotel in
Nigeria
o Highest occupancy level in Abuja
o Rated as the best Hilton managed
hotel in Africa, Asia and Middle East in
2010
o Rated as the best Hilton Sales Team in
Africa, Asia and Middle East for 2012

Strong cash flows & brand image

Zero loans

Strong, long-term relationships established
with suppliers

Strong Corporate Governance structure

2013 and 2014 WTA Hotel Award Winner
Weaknesses

High maintenance and Power generation
costs

Age of the Abuja property requires
additional investments
Opportunities

Leveraging balance sheet for expansion

Available space for further development –
60% of 20 Hectares of land unutilized

Strong average room rate lends to higher
revenues

Strong brand & success in Abuja opens
avenue for new hotels project in other
locations

Discount packages for leisure guests

Partner with other hotels to attract large
conventions

Cooperate with national sports clubs for
event hosting at nearby stadium

Unused large expanse of land for future
expansion and business development
Threats

Safety and health issues in the country

Low entry barrier: global brands can
easily penetrate the market with a similar
product

Substitutes: fully furnished and serviced
business apartments offering lower daily
rates

Staff unions
18
Prospectus
7.
The Offer
At the Extraordinary General Meeting of THP properly convened and at which a quorum was duly formed
on March 13, 2014, Shareholders authorized Management to effect the following:

Conversion from a private company to a public company;

Change of name from Transnational Hotels and Tourism Services Limited to Transcorp Hotels Plc; and

Increase in authorized share capital to N7,500,000,000.
Consequently, the Shareholders via a Shareholders Resolution dated March 13, 2014 decided to raise
additional capital via an Initial Public Offering of 800,000,000 ordinary shares of 50 kobo each at N10.00 per
share.
8.
Purpose of the Offer and Use of Proceeds
The primary purpose of the Offer is to enable THP capitalize the development of two (2) new hotels (“the
Projects”) at prime locations within Nigeria.
The estimated net proceeds of N7,704,275,850 after deduction of the estimated cost and expenses of the
offer at N295,724,150 (includes cost of printing and advertising) representing approximately 3.70% of the
total offer size shall be applied in part financing the construction of following hotels as set out in the table
below:
Estimated
Utilisation of Offer Proceeds
N
%
Completion
Year
Transcorp Hilton Ikoyi Project*
4,314,394,476
56%
2017
Transcorp Hilton Port Harcourt Project*
3,389,881,374
44%
2017
Total
N7,704,275,850
100%
*Further details on the projects are provided on page 22 and 23 of the Prospectus
9.
Review of the Nigerian Macroeconomic Environment
Economic Growth
According to the National Bureau of Statistics (NBS), growth in Gross Domestic Product was 7.67% in the last
quarter of 2013 compared with 6.81% recorded in the third quarter of the same year and 6.99 percent
growth in the corresponding period of 2012.For 2013, annual growth rate was estimated at 6.87 percent, up
from 6.58 percent in 2012. The resilience of the Nigerian economy was again sustained in the first three
months of 2014despite the myriad of global and domestic events that contributed to significant volatilities in
key macroeconomic and sociopolitical environments during the period.
Nigerian economy should consolidate on recent momentum, with a projected 6.9% growth for 2014, having
achieved 6.8% cumulative run rate for 2013Q4. With the dampening impact of pipeline vandalism and oil
theft on oil sector output, the non oil segment has been the driver of growth for the Nigerian economy; with
traditional growth sectors like agriculture and wholesale trade pacing forward, complemented by the
sustained progression among other rising stars including; hotels & restaurants, building & construction and
telecommunications sectors. The pressure on petroleum production and oil and gas sector revenue
stemmed from rising political tension in the oil producing Niger-delta region of Nigeria, especially in the run
up to the 2015 general elections. Overall, oil contribution to GDP shed 3.1 percent in 2013 Q4, albeit with a
promise of gradual recovery from the Federal Government and Nigerian National Petroleum Corporation
(NNPC). Majorly, riding accelerated expansion in building and construction, real estate, consumer non
durables (food items, clothing material etc.) and consumer durable (automobiles, electronics, etc.), Nigeria
should outperform regional peers and attract greater share of Africa bound foreign direct investment(FDI)
in the near to medium term. Nigeria represented c.20% of aggregate FDI into Sub Saharan Africa in the
previous year.
Foreign Exchange Market
Demand pressure in the Nigerian foreign exchange market increased at the end of 2013 when compared
to the preceding year. The total amount sold at the Wholesale Dutch Auction System (WDAS) increased
19
Prospectus
from $19.54 billion in 2012 to $25.87 billion in 2013, representing a 32.40% increase. Over the last quarter of
2013, the Naira was under severe pressure. Although there were some measures of stability in the official
market, the rate in the interbank market, Bureau de Change and parallel market depreciated
betweenN165 and N172 per dollar, as against N160 to the dollar in January 2014.The pressure on the Naira
was partially caused by factors such as capital flow reversals arising from developments in the global
economy especially the fiscal tapering in the United States, declining capacity to fund the foreign
exchange market because of the declining foreign exchange inflows, huge foreign exchange demand for
the importation of petroleum products.
Monetary Policy Tightening
The Central Bank of Nigeria has continued to sustain monetary policy tightening with the Monetary Policy
Rate {MPR} retained at 12%; the Cash Reserve Requirement {CRR} on public sector deposits was also
retained at 75% while the CRR on private sector deposit was increased from 12% to 15%. The liquidity ratio
remains at 30% as at 30th May, 2014
GDP Rebasing
The Nigerian economy after rebasing in April 2014 has a GDP of $510 billionup from $286 billion. Inflationary
pressures also reduced in 2014, as Year-on-Year head line inflation figures reduced from 12.24% in
December 2012 to 8.52% in December 2013 and as at April 2014 stands at 7.85%. Following the successful
completion of the GDP rebasing exercise, the Nigerian economy is the largest economy on the African
continent. Nigeria’s economy is now revealed to be bigger than a number of Euro-area economies
including, Norway, Poland and Belgium. Likewise, other emerging market stars including: Argentina, South
Africa and Mexico now look up to the revealed economic size of Nigeria. Beyond the nominal size
nonetheless, the rebalancing and exercise brings to light the changing structure of the Nigerian economy,
a major shift in dynamics - from an agrarian economy (c.40% agriculture sector) to a modern market with
22% agriculture representation. The broader services sector is now the lion share of the GDP basket at more
than 50% of aggregate economic activities. Majorly, the size of the sample frame for GDP computation was
expanded from 83,733 to 851,628 establishments, to reflect new growth poles and underlying drivers of the
economy especially in the current transition phase. In addition, the number of economic activities reported
in the GDP computation framework increased to 46 compared to 33 in the previous series. Thus, the new
GDP estimate is more credible as a presentation of aggregate macroeconomic activities across the key
sectors in Nigeria.
The Nigerian Stock Market
Despite the various global and domestic economic
challenges, Nigeria's financial markets remained
resilient in 2013 as the NSE and the Nigerian Bond
markets performed remarkably. The NSE recorded
an impressive growth in 2013 when compared to the
previous year. The All-Share Index increased from
the 35.45% increase recorded in 2012 to post a
significant gain of 47.19% and surpassing the 28,000
mark on the last trading day of 2012 to rise above
the 41,000 mark in 2013.
Similarly, Market Capitalization rose from N8.97 trillion
in 2012 to N13.23 trillion in 2013, representing a
47.49% growth when compared to the 37.38%
increase posted in 2012. Total volume of shares
traded increased significantly by 129%, from 93.08
million shares in 2012, to 105.08 billion shares in 2013,
just as the value of deals appreciated by 51.35%
from N660.34billion to N1,072.4 billion in 2013. In
addition to the gains posted by most of the market
indicators, the total number of deals executed
increased by 47.97%in 2013, from 977,000 deals in
2012, to 1.44 million deals. Still a bright horizon for
gains in equities at the end of December 2013:
at13.6x price-to-earning, the Nigerian equities
remained attractive, notwithstanding impressive
performance in the Q4 2013 which reinforced the
strong 2013 performance.
The following chart shows the value of deals in 2013, analyzed by
quarter:
Source: UBA Capital Research
20
Prospectus
10. The Nigerian Hospitality Segment
The Nigerian hotel industry is a service based industry, largely driven by business travel and supported by
tourism. International travel arrivals into Nigeria have shown a positive trend over the past few years, due to
increasing economic activity in the financial services, telecommunications and construction industries.
International travel into the nation continues to rise with an estimated one million international travellers
arriving into the nation in H1 2012. The Nigerian Hotels & Restaurants subsector has benefited from these
travellers reflected by a real GDP growth rate of 12.33% for third quarter 2012 (Q3 2011: 11.96%).
Despite the growth in the hotel industry, its contributions to the gross domestic product (GDP) remain
marginal at 0.53% in third quarter 2012 (Q3 2011: 0.50%). However due to the government’s stance to curb
it’s over reliance on the oil & gas sector for revenue generation through the prioritization of travel & tourism
in Nigeria, we believe the hotel industry’s contribution to the GDP would increase moderately in the next five
years.
In order to boost the Industry’s international profile, the Nigerian Tourism Development Corporation (NTDC)
and state governments embarked on a registration and classification exercise for all hotels operating in
Nigeria. As at July 2012, there were an estimated 6,000 hotels operating in Nigeria with an estimated total
room supply at 602,288. These hotels are classified based on location, accommodation type, room
capacity, amenities, and target market.
Over the last four years, the Nigerian hotel industry has witnessed an influx of international brand hotels. As at
December 2013, Nigeria had eight out of the top 10 international hotel management groups. These
international hotel management groups manage the international brand hotels in Nigeria.
Size and Strategic Importance
In 2012, the Nigerian hotel industry generated estimated revenue of N505 billion and employed about
200,000 people (directly & indirectly). In the past five years, the hospitality industry has been a recipient of
foreign investment to the tune of over $500 million. According to industry sources, about two-thirds of this
investment comes from international hotel brands particularly in cases where the international hospitality
group acquires a significant interest in the hotel. The presence of international brand hotels in Nigeria has
doubled over the past ten years from 16 hotels in 2001 to 35 hotels in 2012 supplying an estimated 5,593
rooms. This number is set to rise with new hotel development deals being signed in Nigeria by International
hospitality groups such as InterContinental Hotels Group, Marriot International, Accor, Hilton Worldwide and
Protea Hotel Group. It is estimated that these pipeline projects will result in 43 new hotels contributing 6,808
rooms in Nigeria in the next five to six years. As at the date of this Prospectus, only 39% of the construction
has been completed.
.
Nevertheless, local brand hotels continue to
dominate
the
Nigerian
Hotel
industry
accounting for 91% of hotel rooms in supply.As
at October 2012, the Nigerian hotel industry The following chart shows the market occupancy performance of a
had an estimated 6,000 hotels with 60,228 sample of the leading hotels in Abuja from 2005 to 2011, compared to
the occupancy performance of the Transcorp Hilton, which dominated
standard hotel rooms in supply. Four main
the market:
market sectors generate demand for hotel
accommodation in Nigeria, including: business
visitors, government business, conference
delegates and airport-related (including
aircrew). Because of the growth in recent years
in Nigeria’s economy and relative political
stability, occupancies in the past decade have
been high and growing. The average
occupancy rate for Nigerian hotels is estimated
at 60%, with average daily rates as high as
N90,000 ($545) for international brands. Lagos
and Port Harcourt markets both recorded
occupancy rates of 70% each in 2013, while
Abuja recorded a lower occupancy rate of
40% in the same year. However, the Transcorp
Hilton Abuja far surpassed the Abuja market
average in 2013 with an occupancy rate of Source: W Hospitality Group
62.5%. The demand for hotel rooms in Nigeria is
driven primarily by business travellers and corporate organizations in industries such as oil & gas, banking,
aviation, construction and telecommunication. According to industry sources, corporate organizations and
business travellers’ account for 80% of hotel guests, leisure travellers (tourist) 5% and locals at 15%. Corporate
21
Prospectus
organizations not only use hotels for temporary accommodation but also rely on the hotel’s conference and
meeting room facilities for business events, corporate retreats and meetings
Outlook
Nigeria continues to draw in foreign direct investments and international brand hotels who seek to gain from
the profitable nature of the Industry and attractive market. However with the influx of international brand
hotels into the Nigerian market coupled with the growing number of local brand hotels, there is an
expectation of overall room rate reduction in the hotel industry. Other impediments to the hotel industry
such as civil disturbances in the northern regions of Nigeria and underlying contagion effects to other
regions of the nation might impact the industry’s key driver namely business tourism.
11. Summary of the Projects
THP plans to develop two (2) new hotels, details of the Projects are provided below:
Transcorp Hotels Ikoyi:
Project Description:
This project is the proposed development of an upscale hotel
on a 5,868 square meter site at 39 Glover Road, Ikoyi. This hotel
will include 300 rooms and suites, with conference and leisure
facilities, gym and spa, and a swimming pool in an iconic
design. The project site is on the south side of Glover road (highbrow street with many notable apartment complexes). The
project will answer the demand for world class luxury hotels in
Lagos, and is expected to be supported by a growing
population of young and wealthy Nigerians and business
travellers. The hotel will be jointly owned by THP and Heirs
Holdings, the Pan African Investment Company.
Operator:
Hilton Worldwide
Estimated Project Cost (does not
include financing charges):
US$140 Million or N22.68 Billion*
Cost of Land
Construction Cost:
Projected Commencement Date:
Q4 2014
Construction Period
3 Years
View of the Project Site:
3rd
Mainland
Bridge
Project
Site
*Based on exchange rate of $1/N162
22
Prospectus
Transcorp Hotels Port Harcourt:
Project Description:
This project is the proposed development of a 250 room
hotel with conference and leisure facilities to be located
in Evo Road, Port Harcourt GRA. The project will be built
on 10,141 square meters of land.
Operator:
Hilton Worldwide
Estimated Project Cost (does not include
financing charges):
Cost of Land
US$5 Million or N810 Million*
Construction Cost:
Projected Commencement Date:
Q4 2014
Construction Period:
3 Years
View of Evo Road:
12. Project Funding Strategy (US$)
Debt
Projects
Equity
Equity
THP
Other Party
Ikoyi - Hotel
88,727,000
47,776,000
Port-Harcourt Hotel
70,982,000
43,221,000
159,709,000
90,997,000
Total
Total Project Cost
15,000,000
15,000,000
151,503,000
114,203,000
265,706,000
*includes estimated financing charges
12.1 Project Funding Strategy (N’bn)*
Debt
Projects
Total Project Cost
Equity
Equity
THP
Other Party
Ikoyi - Hotel
14.37
7.74
Port-Harcourt Hotel
11.50
7.00
Total
25.87
14.74
2.43
24.54
-
18.50
2.43
43.04
23
Prospectus
13. Risks and Mitigating Factors
Government/Political Risks
The Company is faced with potential changes in government policies and the risk of nationalization,
currency risk, and other government actions that can affect the business negatively.
Mitigating Factor: Nigeria has experienced stable democracy over the past 13 years. Foreign perception of
the operating environment has been fair as the Government has very little history of interfering with the
operations of private companies. In addition, around 20% of the Foreign Direct Investments in Africa goes to
Nigeria. Furthermore, the Federal Government is a shareholder of THP at 12% and receives regular dividends.
Industry/Segment Risks
The Nigerian hospitality industry is fast becoming more competitive with the development of several new
upscale hotels and entry of global brands. There is a risk that the Company may not be able to compete
favourably with other competitors in some areas of its business.
Mitigating Factor: The Company has a recognized brand which it can continue to leverage on within the
industry. The Company has also drawn out plans towards preserving and increasing its market shares in the
relevant sectors, including the full renovation of the Transcorp Hilton Abuja. The renovation will involve the
modernization of core facilities of the hotel, for which the Company plans to spend approximately $57.5
million (N9.2 billion) over the next three years. These strategies will ensure that the Company continues to
remain relevant in the industry as well as to consolidate its position.
Demand Risks
This is the risk that demand for the Company’s existent hotel rooms will decline and projected demand for
the yet to be developed hotel rooms, conference center and apartments will not come to fruition.
Mitigating Factor: The political stability in Nigeria, the country’s economic prospects and GDP growth of
about 7% over the past decade has made Nigeria an ideal destination for business and conferences. Most
of the business and conference traffic are situated around Lagos, Abuja and Port Harcourt (locations of the
Company’s current and proposed assets).The Company will leverage on the global reach and recognition
of the Hilton brand to secure a considerable portion of the said traffic, which should translate into adequate
guest patronage. In addition, the economic development is having a positive impact on the growing
middle class, whom will constitute the domestic demand for said rooms, conference space rentals and
apartments. The
Security Risks
This is the risk that the insecurity in certain parts of the country would affect travel therefore affect demand
for hotel rooms
Mitigating Factor: This is mitigated by the location of most of the projects; they are located in highly secured
areas such as Maitama, Abuja and Ikoyi, Lagos with considerable Police and Military personnel presence. It
is also useful to mention that the Federal Government of Nigeria is taking the necessary measures to resolve
the unrest in Northern Nigeria.
Environmental Risks
These are losses that arise due to natural occurrences in the environment. Such events include earthquakes,
volcanic eruptions, floods and other natural disasters within the operating environment of the Company.
Non-compliance with the established environmental rules and regulations is also a threat to the Company.
Mitigating Factor: The Company has a disaster recovery and business continuity plan in order to address
these risks and also policies to ensure compliance with all relevant environmental rules and regulations.
Other than floods, Nigeria’s geographical terrain remains insusceptible to major environmental disasters.
Financing Risk
The banking sector has been hit by various reforms which have made banks more cautious. The tightening
stance of the Central Bank of Nigeria which has resulted in the prevailing high interest rate environment
presents challenges for businesses seeking relatively long term funds. As a result of these, THP could be faced
24
Prospectus
with depressed earnings due to more stringent financing terms charged the Company and/or the
Company’s subsidiaries to fund the proposed projects.
Mitigating Factor: THP will typically employ diverse funding sources for its operations and capital projects.
The Company’s existing track record along with Transcorp’s support will help attract financing at
competitive terms to fund its expansion plans.
Project Completion Risk
The risk that the projects may not be completed and/or produce revenue, either because financing was cut
off before completion or because the projects' construction was not done to specifications
Mitigating Factor: The Company has already secured adequate funding from several banks and has put
together a strong project team of advisers, designers, architects, project managers and contractors with
verifiable track record of successfully executing similar projects.
Currency Risks
The Company plans to source debt funding in foreign currency but the Company’s revenues will be in
denominated in Naira. There is the risk that the Company’s earnings might be depressed due to an
unfavourable movement in foreign exchange rates.
Mitigating Factor: Room rates would be quoted in USD and converted to Naira using the prevailing
exchange rate for a majority of the hotel guests, except for guests in which the hotel has executed longterm stay contracts with such as the airlines.
14. Compliance with Code of Corporate Governance
THP is fully committed to implementing best practice Corporate Governance standards. The Company
recognizes that Corporate Governance Practices must achieve two goals – protecting the interest of
shareholders and guiding the Board and Management to direct and manage the affairs of the Company
effectively and efficiently. The Board has committed substantial time and resources towards the
development and implementation of a code of Business Principles and Professional Responsibility for
directors, managers and employees of the Company.
15. Composition of the Board
The Board of THP is comprised of seven (7) non-executive and two (2) executive directors. Board members
are professionals and business men with vast experience and credible track records. To enhance corporate
governance, Board sub-committees are constituted to help the Board properly assess management reports,
proposals and oversight functions and make recommendations to the main Board.
The Board has three (3) standing committees, namely: the Nomination & Governance Committee; the Audit
Committee; and The Financial & Investment Committee.

The Nomination & Governance Committee (NGC) ensures compliance with Corporate Governance
- monitoring compliance with actions, policies and decisions of the Company – and evaluates
remuneration and appointment of executive management personnel and board members;

The Audit committee deals with risk management; and

The Financial & Investment Committee makes recommendations to the Board on financeand
investments by the Company.
Kindly refer to a visual depiction of the Company’s Corporate Governance structure overleaf:
25
Prospectus
THP Corporate Governance Structure
The Board of Directors
Finance & Investment
Nomination and
Governance
Managing
Director/CEO
Audit
Board
Committees
Head, Audit and
Control
Office Manager/
Technical
Support
Executive Director
CFO
GMs of Hotel
SBUs
Project
Accountant
Government
Relations
Project Director
16. Future Plans
The Company’s vision is to create long-term and sustainable value for our stakeholders in our chosen
markets. In order to realise this long-term objectives, the Company’s strategy will involve the following:
investing in high end hotels, apartments & other ancillary assets in Lagos, Abuja, Port Harcourt and other
choice cities; improving Occupancy Rates, Revenue per Available Room and Average Daily Rates on
existing assets; leverage Transcorp Hilton Brand and strong customers base to provide excellent guests
experience in the new projects; and capitalise on the growing investors’ confidence and success of
Transcorp Plc.
The Company’s implementation strategy will be based on five (5) key pillars:

Funding–Required funding will be sourced from a combination of internal and external sources, and
in the form of both equity and debt. For the new developments optimal capital structure will be
60% debt and 40% equity. Equity will be provided primarily by the Company while debt will be from
various Funding Partners, which will include Development Finance Institutions, Fund Managers and
Commercial banks. Tenor spectrum will include Short-term, Medium-term and Long-term Financing.
The Company will also look to tap into the Capital Markets within the medium term horizon via a
Bond Issuance.

Human Capital – The Company will seek to engage and retain competent staff who are fully
immersed in the THP culture, which is defined by our core values: Humility, Excellence, Integrity and
Resilience. Selection criteria for potential staff will be both measurable (e.g. Skillset exhibited by
educational background and experience) and immeasurable (e.g. Characteristics/Behavior). In
order to retain qualified staff, the Company, will institute competitive compensation packages and
reward/recognition programs, continuous learning opportunities, cross-functional training and
regular performance appraisals.

Technology – THP will assess the technological requirements of our business and deploy technology
required on need basis. We will ensure that information technology is used to integrate our business
to generate timely and adequate information for decision making. We will develop a functional
website for the Company that will provide links to all our hotels and, guests will be able to make
reservation from our website to each of the hotel reservation portals. Accounting/financial
information will be available on real time basis, all daily transactions will be centralized into THP’s
data base. Sun Accounting system will be deployed in each asset (new assets) to harmonize
accounting and management systems across the hotels.
26
Prospectus

Marketing – THP’s aim is to continue to communicate our strategic objectives to our target markets
effectively; provide a positive hotel experience to all our guests; accomplish our growth targets
within the given time and budget; and expand our markets and identify new markets for our
product and services. Our marketing strategy is to focus customers' attention on the high quality of
the services we offer. Within this strategy are three main points aimed at different market segments.
The Company will provide: best business facilities, Personalized Services, Luxurious Amenities;
implement web marketing, hard advert in dailies and other strategic publications- Arik in-flight
magazine, business day and other crowd pulling print media. The Company’s internal structure will
be executed at two levels: Marketing at the operating office and marketing at the asset level.
Marketing at the operating office will be coordinated by the Head of Business Development, who
will also oversee marketing office at the asset level. Marketing officers reporting to the Business
Development Manager will be located in each of zone - Lagos to oversee South West and Port
Harcourt to oversee South-South and South East – to oversee marketing activities. The marketing
team will constantly demonstrate clear and good understanding of the market, assist in
development of innovative products/incentives to meet market expectations and provide regular
sensitization to Senior Management on potential changes/consequences of such changes to our
hospitality assets and how best to respond to these changes.

Risk Management – Risk management will form an integral part of THP’s implementation strategy.
Along with other measures, the Company will also review together with the Hilton the management
of potential risks, including the following: property risk, facility risk, reputation risk, product liability risk,
workmen compensation.In addition to risk transfer in the form of insurance policy we will also seek to
actively manage these risks on a day today basis.
17. Conclusion
The future of our Company is full of great opportunities, and the Company has decided to take proactive
steps to take advantage of these opportunities to create maximum and sustainable value for all our
stakeholders while attaining our vision of being the premier hospitality company in Africa.
I therefore wish to invite you to acquire a stake in the substantial opportunity this Offer presents.
Thank you.
Yours faithfully,
OlorogunO’tega Emerhor, OON
CHAIRMAN
27
Prospectus
FINANCIAL FORECAST
FINANCIAL FORECAST
1. Letter from the Directors on the Financial Forecasts
28
Prospectus
FINANCIAL FORECAST
2.
Basis and Assumptions
Basis:
i.
The actual results per the management accounts for the three months ended 31 March 2014 and
the forecasts for the remaining nine months of the year ending 31 December 2014; and the years
ending 31 December 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023 have been prepared
on a basis consistent with the accounting policies normally adopted by the Company
ii.
The financial projections include results shown by the management accounts of THP for the three
months ended 31 March 2014. We must emphasize that management accounts are not expected
to produce the same level of assurance as audited financial statements.
iii.
It should be noted that the projections have been prepared using a set of assumptions that include
hypothetical assumptions about future events and management's action that are not necessarily
expected to occur. Consequently, investors are cautioned that the projections may not be
appropriate for purposes other than that described above.
iv.
THP currently owns Transcorp Hilton Abuja and owns and operates Transcorp Hotels Calabar both of
which provide luxury accommodation, exotic cuisines, meeting rooms and leisure facilities to
business travelers and tourists. The Company is in the process of developing two new hotels in Ikoyi
and Port-Harcourt and is seeking to raise funds through the IPO.
Assumptions:
i.
Subject to the attainment of the budgeted revenue for the year ending 31 December 2014,
revenue for the year ending 31 December 2015 will grow by 16% to N19.52 billion. A cumulative
average growth of 14% is expected to take revenue to N53.39 billion in 2023.
ii.
Revenue is projected to grow at the following rates:
Year
iii.
Transcorp Hilton
Abuja
Transcorp Hotels
Calabar
Transcorp Hilton
Ikoyi
Transcorp Hilton
Port Harcourt
%
%
%
%
-
2014
8
40
-
2015
16
14
-
-
2016
10
8
-
2017
10
(8)
-
-
2018
10
0
20
20
2019
2
(7)
19
19
2020
10
0
14
2021
10
0
2022
10
0
5
-
11
11
2023
10
0
-
4
-
The ratio of cost of sales to revenue during the projection period is as follows:
Year
2014
Transcorp Hilton
Abuja
Transcorp Hotels
Calabar
Transcorp Hilton
Ikoyi
Transcorp Hilton
Port Harcourt
%
%
%
%
20
20
-
-
2015
20
20
-
2016
20
20
-
29
Prospectus
FINANCIAL FORECAST
iv.
Year
Transcorp Hilton
Abuja
Transcorp Hotels
Calabar
Transcorp Hilton
Ikoyi
Transcorp Hilton
Port Harcourt
2017
20
20
23
23
2018
20
20
23
23
2019
20
20
23
23
2020
20
20
23
23
2021
20
20
23
23
2022
20
20
23
23
2023
20
20
23
23
Operating costs as a percentage of revenue is projected to be as follows:
Year
v.
Transcorp Hilton
Abuja
Transcorp Hotels
Calabar
Transcorp Hilton
Ikoyi
Transcorp Hilton
Port Harcourt
%
%
%
%
-
2014
30
30
-
2015
30
30
-
2016
31
31
-
-
2017
32
32
26
26
2018
32
32
26
26
2019
32
32
26
26
2020
33
33
28
28
2021
34
34
29
29
2022
35
35
30
30
2023
36
36
30
30
Average debtor and creditor days will be as follows during the projection period:
Projects
Transcorp Hilton, Abuja
Transcorp Hotels, Calabar
Transcorp Hilton, Ikoyi
Transcorp Hilton, Port Harcourt
Average
Debtor
Days
Average
Creditor
Days
30
30
30
30
40
40
40
40
vi.
Equity financing for Transcorp Hilton Abuja and Transcorp Hotels Calabar will be 100% throughout
the projection period.
vii.
Debt financing for Transcorp Hilton Ikoyi will be 40%, 66%, 56%, 46%, 34% and 19% of total capital
respectively from 2015 to 2020; while for Transcorp Hilton Port-Harcourt, it will be 40%, 66%, 56%, 47%,
36% and 21% of total capital respectively over the same period. Debt shall be fixed with interest rate
set at LIBOR plus 8%. The debt will have a tenor of 8 years, moratorium on principal of 3 years and
interest capitalization of 3 years.
viii.
Average occupancy rate will be as follows during the projection period:
Projects
Transcorp Hilton, Abuja
Average
Occupancy
Rate
%
69
30
Prospectus
FINANCIAL FORECAST
Projects
Transcorp Hotels, Calabar
Transcorp Hilton, Ikoyi
Transcorp Hilton, Port Harcourt
Average
Occupancy
Rate
%
54
62
62
ix.
THP shall adopt a dividend policy of 20% of distributable profits during the projection period. This will
however be limited to the lower of 20% of distributable profits and 90% of distributable cash.
Dividend payable for the current year will be accrued for and paid during the subsequent year.
x.
The Projects will be financed by both debt and equity; debt financing will be required to meet cash
flow requirements as the need arises.
xi.
Exchange rate of Nigerian Naira to United States' Dollar will be as follows during the projection
period:
Year
2014
2015
2016
2017
2018
2019 – 2023
Naira (N) to US
Dollar ($)
Exchange
%
162.5
167.5
172.5
177.5
182.5
185.0
xii.
The rate of inflation in the economy will be 10% throughout the projection period.
xiii.
Company income tax will be maintained at 32% throughout the projection period.
xiv.
There will be no material changes in the accounting policies currently adopted by THP.
xv.
The quality of the Company's management will be sustained during the projection period.
xvi.
There will be no significant changes in the Federal Government’s monetary and fiscal policies that
will adversely affect the operations of the Company.
xvii.
There will be no drastic change in the political and economic environment that will adversely affect
the operations of the Company.
xviii.
Operating results will not be affected by industrial disputes within the hospitality business sector in
the country.
xix.
There will be no litigation with material adverse consequence to the Company.
xx.
THP will continue to enjoy the goodwill of its present and potential customers.
31
Prospectus
FINANCIAL FORECAST
3.
Profit Forecast
<----------------
Projected for the years ending 31 December
-------------------------->
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
Revenue
16.83
19.52
21.51
32.20
36.20
38.65
42.81
46.64
50.02
53.39
Cost of sales
(3.37)
(3.90)
(4.30)
(7.11)
(8.05)
(8.55)
(9.43)
(10.17)
(10.86)
(11.54)
Gross profit
13.46
15.61
17.21
25.09
28.16
30.09
33.38
36.47
39.16
41.85
Operating
costs
(5.00)
(5.91)
(6.73)
(9.85)
(11.03)
(11.70)
(13.45)
(15.13)
(16.77)
(18.44)
8.46
9.70
10.47
15.24
17.12
18.39
19.93
21.34
22.39
23.41
(0.76)
(0.78)
(0.80)
(2.22)
(2.22)
(2.22)
(2.22)
(2.02)
(2.02)
(2.02)
(0.25)
(0.25)
(0.25)
(0.25)
(0.25)
(0.25)
(0.25)
(0.25)
-
-
7.45
8.67
9.42
12.76
14.65
15.92
17.45
19.06
20.36
21.39
-
-
-
(2.33)
(1.92)
(1.46)
(0.97)
(0.49)
-
-
7.45
8.67
9.42
10.43
12.73
14.46
16.48
18.57
20.36
21.39
(2.38)
(2.77)
(3.01)
(3.34)
(4.07)
(4.63)
(5.27)
(5.94)
(6.51)
(6.85)
-
-
-
-
0.08
0.16
0.21
0.23
0.25
0.24
5.06
5.89
6.41
7.09
8.58
9.67
11.00
12.40
13.60
14.30
0.63
0.74
0.80
0.89
1.08
1.23
1.40
1.58
1.73
1.82
Gross profit
margin
80.0%
80.0%
80.0%
77.9%
77.8%
77.9%
78.0%
78.2%
78.3%
78.4%
EBIT margin
44.3%
44.4%
43.8%
39.6%
40.5%
41.2%
40.8%
40.9%
40.7%
40.1%
EBITDA
Depreciation
Amortisation
of Intangible
assets
EBIT
Finance
charges
Profit before
taxation
Taxation
Profit for the
year
attributable
to:
Noncontrolling
interest
Owners of
parent
Key
performance
indicators:
Basic EPS (N)
32
Prospectus
FINANCIAL FORECAST
4.
Balance Sheet
<-------------------------
Projected for the years ending 31 December -------------------------->
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
10.51
29.78
50.64
-
-
-
-
-
-
-
50.06
49.38
48.98
97.41
95.19
92.97
90.85
89.23
87.20
85.18
1.78
1.53
1.27
1.02
0.76
0.51
0.25
-
-
-
62.35
80.69
100.90
98.43
95.95
93.48
91.10
89.23
87.20
85.18
Inventory
1.26
1.48
1.66
1.86
2.03
2.07
2.32
2.60
2.92
3.27
Trade debtors
Other debtors and
prepayments
1.38
1.60
1.76
2.65
2.98
3.18
3.51
3.83
4.11
4.34
6.31
5.20
4.08
2.97
1.86
0.74
-
-
-
-
Cash and bank
8.55
4.56
6.50
7.10
9.54
13.45
18.96
25.36
38.68
51.74
Total current assets
17.50
12.84
14.01
14.57
16.41
19.44
24.79
31.80
45.71
59.35
Total assets
79.85
93.53
114.90
113.00
112.36
112.91
115.89
121.02
132.91
144.53
Trade creditors
0.55
0.65
0.74
1.06
1.19
1.25
1.42
1.60
1.76
1.93
Other creditors
6.60
5.44
4.27
3.11
1.94
0.78
-
-
-
-
Taxation
2.38
2.77
3.01
3.34
4.43
6.57
10.31
15.14
20.82
26.75
Dividends payable
1.01
1.99
2.82
3.51
4.41
5.45
6.60
7.81
9.01
10.07
Total current liabilities
10.55
10.85
10.84
11.02
11.97
14.05
18.33
24.54
31.60
38.75
Total assets less
current liabilities
69.31
82.68
104.07
101.97
100.39
98.87
97.56
96.48
101.31
105.78
Non-current assets:
Construction work in
progress
Property Plant &
Equipment
Intangible assets
Total Non-current
Assets
Current assets:
Current liabilities:
Non-current liabilities:
Term loans
Deferred tax
Total non-current
liabilities:
Net assets
-
9.48
27.55
22.68
17.49
11.82
5.91
-
-
-
7.60
7.60
7.60
7.60
7.60
7.60
7.60
7.60
7.60
7.60
7.60
17.07
35.15
30.28
25.09
19.42
13.51
7.60
7.60
7.60
61.71
65.61
68.92
71.70
75.30
79.45
84.06
88.88
93.71
98.18
Shareholders' funds:
Share capital
3.99
3.99
3.99
3.99
3.99
3.99
3.99
3.99
3.99
3.99
Share premium
7.72
7.72
7.72
7.72
7.72
7.72
7.72
7.72
7.72
7.72
Retained earnings
47.56
51.46
54.81
57.68
61.27
65.28
69.68
74.27
78.85
83.07
Owners Parent
Non controlling
interest
59.27
63.17
66.52
69.39
72.98
76.99
81.39
85.98
90.56
94.78
2.44
2.44
2.40
2.31
2.32
2.46
2.67
2.90
3.15
3.40
Total equity:
61.71
65.61
68.92
71.70
75.30
79.45
84.06
88.88
93.71
98.18
33
Prospectus
FINANCIAL FORECAST
5.
Cashflow Statement
<--------------------------
Cash flows from
operating activities:
EBITDA
Change in working
capital
(Increase)/decrease in
inventory
trade debtors
other debtors
Increase/(decrease) in
creditors
Increase/ decrease in
other creditors
Tax paid
Cash flow from
operations
Cash flows from
investing activities:
Capital expenditure
Cash flows from
investing activities
Cash flows from
financing activities:
Debt draw down
Proceeds from IPO
Share issue expenses
Debt interest payment
Debt principal
repayment
Dividend paid
Cash flows from
financing activities:
Cash in period
Cash and cash
equivalents as at 1
January
Cash & cash equivalents
as at 31 December
Projected for the years ending 31 December
-------------------------->
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
N'bn
8.46
9.70
10.47
15.24
17.12
18.39
19.93
21.34
22.39
23.41
(0.33)
(0.22)
(0.18)
(0.19)
(0.18)
(0.04)
(0.25)
(0.28)
(0.31)
(0.35)
(0.20)
(0.22)
(0.16)
(0.88)
(0.33)
(0.20)
(0.33)
(0.32)
(0.28)
(0.23)
(0.07)
1.11
1.11
1.11
1.11
1.11
0.74
-
-
-
0.08
0.10
0.09
0.32
0.13
0.07
0.17
0.17
0.17
0.16
(0.70)
(1.17)
(1.17)
(1.17)
(1.17)
(1.17)
(0.78)
-
-
-
(3.71)
(2.38)
(2.77)
(3.01)
(2.98)
(2.49)
(1.53)
(1.11)
(0.83)
(0.92)
3.53
6.92
7.39
11.42
13.70
15.68
17.94
19.79
21.13
22.07
(11.32)
(19.38)
(21.26)
-
-
-
(0.10)
(0.40)
-
-
(11.32)
(19.38)
(21.26)
-
-
-
(0.10)
(0.40)
-
-
8.00
(0.30)
-
9.48
-
17.79
-
(2.33)
(1.92)
(1.46)
(0.97)
(0.48)
-
-
-
-
-
(5.67)
(5.83)
(5.91)
(5.91)
(5.91)
-
-
-
(1.01)
(1.99)
(2.82)
(3.51)
(4.41)
(5.45)
(6.60)
(7.81)
(9.01)
7.70
8.46
15.80
(10.82)
(11.26)
(11.78)
(12.33)
(12.99)
(7.81)
(9.01)
(0.09)
(3.99)
1.94
0.60
2.44
3.90
5.51
6.40
13.32
13.06
8.64
8.55
4.56
6.50
7.10
9.54
13.45
18.96
25.36
38.68
8.55
4.56
6.50
7.10
9.54
13.45
18.96
25.36
38.68
51.74
34
Prospectus
FINANCIAL FORECAST
6.
Letter from the Financial Advisers/Issuing Houses
The following is a copy of the letter on Profit Forecast from the Issuing Houses
35
Prospectus
FINANCIAL FORECAST
7.
Letter from the Reporting Accountants
The following is a copy of the letter on Profit Forecast from the Reporting Accountants to the Offer, Akintola
Williams Deloitte on the Profit Forecast of Transcorp Hotels Plc for the years ending December 31, 2014, 2015,
2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023.
36
Prospectus
HISTORICAL FINANCIAL INFORMATION
HISTORICL FINANCIAL INFORMATION
1. Letter from the Reporting Accountants on the Offer
This is a letter from Akintola Williams Deloitte, the Reporting Accountants to the Offer.
37
Prospectus
2.
Letter from the Reporting Accountants on Going Concern
This is a letter from the Reporting Accountants on the going concern status of the Company:
38
Prospectus
3.
Letter from the Directors on Going Concern
This is a letter from the Directors on the going concern status of the Company:
39
Prospectus
4.
Statement of Significant Accounting Policies
The following significant accounting policies have been applied by the Group and Company consistently
throughout the period under review:
(a) Basis of preparation
The financial statements are the consolidated financial statements of Transcorp Hotels Plc (formerly known
as NIRMSCO Properties Limited), and its subsidiary, Transcorp Metropolitan Hotels and Conferencing Limited
(herein collectively referred to as "the Group").
2012 and 2013 financial statements
The financial statements for the year ended 31 December 2013 have been prepared in compliance with
the Companies and Allied Matters Act (CAMA) and the International Financial Reporting Standards (IFRS),
including International Accounting Standards (IAS) and interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC). Further standards may be issued by the International
Accounting Standards Board (IASB) and may be subject to interpretations issued by the IFRIC. IFRS 1, Firsttime Adoption of International Financial Reporting Standards, has been applied in preparing these financial
statements. These financial statements are the first financial statements to be prepared in accordance with
IFRS.
Until 31 December 2012, the consolidated financial statements of THP were prepared in accordance with
the Statements of Accounting Standards. Subject to certain transition elections and exceptions, the
company has consistently applied the accounting policies used in the preparation of its opening IFRS
statement of financial position at the transition date, 1 January 2012, throughout all periods presented, as if
these policies had always been in effect.
2009 - 2012 Financial statements
The financial statements for the years ended 31 December 2009, 2010, 2011 and 2012 were prepared under
the historical cost convention and complied with Statement of Accounting Standards (issued by the
Nigerian Accounting Standards Board), and the requirements of the Companies and Allied Matters Act of
Nigeria and the Financial Reporting Council of Nigeria Act.
The preparation of financial statements in conformity with IFRS, requires the directors to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Although these estimates
are based on the directors' best knowledge of the amount, event or actions, actual results ultimately may
differ from those estimates. The financial statements have been prepared on a historical cost basis except
for the fair value basis applied to certain property plant and equipment and intangible assets. These assets
are subsequently carried at cost less accumulated depreciation.
(b) Changes in accounting policies
i. New standards and interpretations not yet adopted
There are no IFRS or IFRIC interpretations that are effective for the first time for the financial year beginning
after 1 January, 2013 that would be expected to have a material impact on the Group.
ii. Early adoption of standards
The Group did not adopt new or amended standards in 2013.
(c) Consolidation
The financial statements of the subsidiary used to prepare the consolidated financial statements were
prepared as of the parent company’s reporting date.
i. Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the group has control over. Control
exists when the Group has power over the investee, is exposed to, or has rights to variable returns from its
40
Prospectus
involvement with investee, and has the ability to use its power to affect the returns. Subsidiaries are
accounted for at cost in the separate financial statements of Transcorp Hotels Plc. In the consolidated
financial statements, subsidiaries are fully consolidated from the date on which control is transferred to the
group. They are de-consolidated from the date that control ceases. The Group applies the acquisition
method to account for business combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the
acquiree and the equity interests issued by the group. The consideration transferred includes the fair value
of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the present ownership instrument’s proportionate
share of the recognised amounts of acquiree’s identifiable net assets for components that are present and
entitle their holders to a proportionate share of net assets in the events of liquidation. All other components
of non-controlling interests are measured at fair value. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains
or losses arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset
or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its
subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair
value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is
recognised in profit or loss.
Inter-company transactions, balances, income and expenses on transactions between group companies
are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are
also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
ii. Disposal of Subsidiaries
The Group did not adopt new or amended standards in 2013. When the group ceases to have control, any
retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change
in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In
addition, any amounts previously recognised in other comprehensive income in respect of that entity are
accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
iii. Separate Financial Statements
In line with Nigerian company regulations, the company prepares separate financials. In the separate
financial statements, investments in subsidiaries are accounted for at cost.
(d) Foreign Currency Translation
i. Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The
consolidated financial statements are presented in thousands (Naira), which is the Group’s presentation and
functional currency.
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Prospectus
ii. Transactions and Balances
Foreign currency transactions which are transactions denominated, or that requires settlement, in a foreign
currency are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions, or valuation where items are re-measured. Foreign exchange gain and losses resulting from the
settlement of such transactions, and from the translation of year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for
sale are analysed between translation differences resulting from changes in the amortized cost of the
security and other changes in the carrying amount of the security. Translation differences relating to
amortized cost are recognised in income statement and other changes in the carrying amount are
recognised in Other Comprehensive Income.
Translation differences on non-monetary financial assets and liabilities (such as equities) which are held at
fair value through profit or loss are recognised in statement of comprehensive income as part of the fair
value gain or loss. Translation differences on non-monetary financial assets classified as available for sale are
included in Other Comprehensive income.
(e) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
group and the cost can be measured reliably. All other repairs and maintenance are charged to the
Statement of Profit or loss during the financial period in which they are incurred land is not depreciated.
Depreciation on other assets is calculated using the straight line method to allocate their costs or revalued
amounts to their residual values over their estimated useful lives, as follows:
Hotel building
Plant and machinery
Furniture & fittings
Computer equipment
Motor vehicles
-
2% - 5%
10% -33.3%
20%
10% - 33.33%
20% - 25%
The group allocates the amount initially recognized in respect of an item of property, plant and equipment
to its significant parts and depreciates separately each such part. The carrying amount of a replaced part is
derecognized when replaced. Residual values, method of amortization and useful lives of the assets are
reviewed annually and adjusted if appropriate.
Where an indication of impairment exists, an asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. The
gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in other income or expense - net in
the Statement of profit or loss for the period.
(f) Intangible Assets
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred
over Transcorp Hotels Plc's interest in the net fair value of the net identifiable assets, liabilities and contingent
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is
recognised immediately as an expense and is not subsequently reversed.
The Goodwill in the books arose from the purchase of Transcorp Metropolitan Hotels and Conferencing
Limited which operates Transcorp Hotels Calabar.
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Prospectus
For purposes of impairment testing, the entire business is treated as one cash generating unit (CGU). Costs
associated with maintaining computer software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique
software products controlled by the group.
It is technically feasible to complete the software product so that it will be available for use; The directors
intend to complete the software product and use it or sell it; There is an ability to use or sell the software
product; it can be demonstrated how the software product will generate probable future economic
benefits; adequate technical, financial and other resources to complete the development and to use or sell
the software product are available; and the expenditure attributable to the software product during its
development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software
development employee costs and an appropriate portion of relevant overheads. Other development
expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period. Computer
software development costs recognised as assets are amortized over their estimated useful lives. The
estimated useful lives of the software of the group is between three to eight years.
(g) Impairment of Non-financial Assets
Assets that have an indefinite useful life – for example, goodwill are not subject to amortization and are
tested annually for impairment. Assets that are subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill
that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(h) Financial Instruments
Financial assets and liabilities are recognized when the group becomes a party to the contractual provisions
of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets
have expired or have been transferred and the group has transferred substantially all risks and rewards of
ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged,
cancelled or expires.
i. Classification of Financial Instruments
The directors determine the classification of its financial instruments at initial recognition. The Group's
financial instruments fall into the following classes:
a.
b.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the end of the reporting period. These are classified as non-current
assets.
Held-to-Maturity Investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities that the directors have the positive intention and ability to hold to
maturity, other than:

those that the group upon initial recognition designates as at fair value through profit or
loss;

those that the group designates as available-for-sale; and

those that meet the definition of loans and receivables.
The Group's held to maturity investments is its investment in treasury bills held during the year.
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Prospectus
c.
ii.
Financial Liabilities at Amortized Cost
Financial liabilities at amortized cost consists of trade payables. Trade payables are obligations to
pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Accounts payables are classified as current liabilities if payment is due within one year or less.
Recognition and Measurement
a. Loans and Receivables
Loans and receivables are initially recognized at the amount expected to be received, less, when
material, a discount to reduce the loans and receivables to fair value. Subsequently, loans and
receivables are measured at amortized cost using the effective interest method less a provision for
impairment. Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest rate method, less provision for impairment.
b. Held-to-Maturity Investments
Held-to-maturity investments are initially recognised at fair value including direct and incremental
transaction costs and measured subsequently at amortized cost, using the effective interest
method.
c. Financial Liabilities at Amortized Cost
Trade payables are initially recognized at the amount required to be paid, less, when material, a
discount to reduce the payables to fair value. Subsequently, trade payables are measured at
amortized cost using the effective interest method.
iii. Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
(i) Impairment of Financial Instruments
Assets Carried at Amortized Cost
The group assesses at the end of each reporting period whether there is objective evidence that a financial
asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events)
has an impact on the estimated future cash flows of the financial asset or group of financial assets that can
be reliably estimated.
The criteria that the group uses to determine that there is objective evidence of an impairment loss include:

it becomes probable that the borrower will enter bankruptcy or other financial
reorganization;

the disappearance of an active market for that financial asset because of financial
difficulties; or

loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current assets,
except for maturities greater than 12 months after the end of the reporting period. These
are classified as non-current assets.

observable data indicating that there is a measurable decrease in the estimated future
cash flows from a portfolio of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial assets in the
portfolio, including:
o adverse changes in the payment status of borrowers in the portfolio; and
o national or local economic conditions that correlate with defaults on the assets in
the portfolio.
Amortized Cost
For loans and receivables category, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses
that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying
amount of the asset is reduced and the amount of the loss is recognised in the consolidated statement of
profit or loss. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for
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Prospectus
measuring any impairment loss is the current effective interest rate determined under the contract. As a
practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an
observable market price.
A provision for impairment of trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of the receivables. If
collection is expected in one year or less, they are classified as current assets. If not, they are presented as
non-current assets. If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment was recognised (such as
an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is
recognised in the consolidated statement of profit or loss.
(j) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined by the weighted
average method and is the cost of direct materials to the Company's premises and other direct costs. Net
realizable value is the estimated selling price in the ordinary course of business, less selling expenses.
(k) Cash, cash equivalents and bank overdrafts
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term
highly liquid investments with original maturities of three months or less and bank overdrafts.
(l) Borrowings
Borrowings are recognised initially net of transaction costs incurred, and interest and fees are charged to
the profit and loss account over the life of the loan.
Borrowings are classified as current or non-current liabilities as deemed applicable.
(m) Borrowing Costs
Borrowing costs are recognised as an expense in the period in which they are incurred, except when they
are directly attributable to the acquisition, construction or production of a qualifying asset. These are
included as part of additions to fixed asset. A qualifying asset is an asset that takes a substantial period of
time to get ready for its intended use or sale.
Currently the Group has no qualifying assets on which borrowing costs are being capitalised.
(n) Provisions
Provisions are recognized when the Company has a present obligation, whether legal or constructive, as a
result of a past event for which it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest
expense
(o) Current and Deferred Tax
The tax for the period comprises current and deferred tax. Tax is recognised in the Statement of profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
In this case the tax is recognised in other comprehensive income or directly in equity, respectively.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as
reported in the Statement of profit or loss because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s
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Prospectus
liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
except where the Group is able to control the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the
liability is settled or the asset is realised. Deferred tax is charged or credited to the Statement of profit or loss,
except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax liabilities on a net basis.
Deferred tax assets and liabilities are presented as non-current in the statement of financial position.
(p) Employee Benefits
i. Gratuity Scheme
The Group operated a gratuity scheme which was a defined benefit scheme. The scheme was discontinued
on 31 December 2012. The cost of defined benefit plans was determined using the projected unit credit
method. The related pension liability recognized in the statement of financial position is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
Actuarial valuations for defined benefit plans are carried out annually. The discount rate applied in arriving
at the present value of the pension liability represents the yield on high quality corporate bonds
denominated in the currency in which the benefits will be paid, and that have terms to maturity
approximating the terms of the related pension liability.
Actuarial gains and losses are recognized in full in the period in which they occur, in other comprehensive
income. Current service cost, the recognized element of any past service cost and the interest expense
arising on the pension liability are included in the same line items in the Statement of profit or loss as the
related compensation cost.
ii. Defined Contribution Scheme
The group operates a defined contributory pension scheme in line with the provisions of the Pension Reform
Act 2004. The employer’s contributions are recognised as employee benefit expenses when they are due.
The group has no further payment obligation once the contributions have been paid.
(q) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable stated net of discounts,
returns and value added taxes. The group earns revenue from the sale of goods and services. Income from
investments is recognized when it is earned. Income is earned as follows:
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Prospectus
i) Dividends are earned in the profit and loss account on the date the company's right to receive payment is
established; and
ii) Interest earned on cash investments in money market instruments is recognized in the profit and loss
account as it accrues evenly over the period of the investment.
Recognition of revenue for goods and services is recognised when it is earned. Revenue is earned when:
- The significant risks and rewards of ownership have been transferred to the customer or the service has
been rendered
- The group does not retain effective control over goods sold
- The amount of revenue can be reliably measured
- It is possible that the economic benefits associated with the transaction will flow to the Company
- The costs incurred in respect of the sale can be measured reliably
For goods and services, this implies when the goods have been delivered to the customer and when the
service has been performed.
The Transcorp Hilton Hotel Abuja offers a customer loyalty programme called the ‘Hilton Honors’ guest
reward programme on behalf of the Hilton International. Under this programme, registered members earn
points when they pay for rooms or services at the Hotel. The group accounts for the points as a separately
identifiable component of the sales transaction in which they are granted (the 'initial sale' of rooms or
service). The consideration received or receivable in respect of the initial sale is allocated between the
points and the sale of rooms or service with reference to the fair value of the points. Revenue is measured as
the net amount retained by the hotel, i.e. the difference between the considerations allocated to the
award credits and the amount payable to Hilton International for supplying the awards.
(r) Leases
i. Operating Lease
Leases in which a significant portion of the risks and rewards of ownership are retained by another party, the
lessor, are classified as operating leases. Payments, including prepayments, made under operating leases
(net of any incentives received from the lessor) are charged to the profit or loss on a straight-line basis over
the period of the lease. When an operating lease is terminated before the lease period has expired, any
payment required to be made to the lessor by way of penalty is recognised as an expense in the period in
which termination takes place.
ii. Finance Lease
Leases of items by the group where the group has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of
the fair value of the asset and the present value of the minimum lease payments. Each lease payment is
allocated between the liability and finance charges. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. The interest element of the finance cost is charged to
the Statement of profit or loss over the lease period so as to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. The property, plant and equipment acquired under
finance leases is depreciated over the shorter of the useful life of the asset and the lease term.
(s) Dividend Distribution
Dividend distribution to the shareholders is recognised as a liability in the Group’s financial statements in the
period in which the dividends are approved by the group's shareholders. In respect of interim dividends,
these are recognised when declared by the Board of Directors.
(t) Share Capital
Ordinary shares are classified as ‘share capital’ in equity. Any premium received over and above the par
value of the shares is classified as ‘share premium’ in equity.
(u) Critical Accounting Estimates and Judgements
The preparation of financial statements requires management to use judgment in applying its accounting
policies and estimates and assumptions about the future. Estimates and other judgments are continuously
evaluated and are based on management's experience and other factors, including expectations about
future events that are believed to be reasonable under the circumstances.
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Prospectus
5.
Statement of Profit and Loss
<---------------- Group----->
<------------------ Company ----------->
<------------------------ IFRS---------------->
<---------- N-GAAP ------>
<---------------------------- Year ended 31 December---------------------->
Notes
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
Revenue
6.2
15,348,722
13,258,127
13,724,724
13,641,192
12,995,153
Cost of sales
6.3
(3,316,983)
(3,439,262)
(3,027,535)
(4,490,484)
(4,744,610)
12,031,739
9,818,865
10,697,189
9,150,708
8,250,543
Gross profit
Administrative expenses
6.4
(6,359,176)
(6,247,493)
(5,590,694)
(3,510,617)
(3,098,074)
Other operating income
6.5
46,613
24,469
59,284
144,733
212,375
5,719,176
3,595,841
5,165,779
5,784,824
5,364,844
402,878
453,702
260,099
216,438
554,568
6,122,054
4,049,543
5,425,878
6,001,262
5,919,412
(1,712,749)
(1,139,749)
1,531,142
(1,547,499)
(1,922,983)
4,409,305
2,909,794
6,957,020
4,453,763
3,996,429
-
261,365
-
-
-
-
(80,446)
-
-
-
-
180,919
-
-
-
4,409,305
3,090,713
-
-
-
882
582
1,391
891
799
882
582
1,391
891
799
Operating profit
Finance income
6.6
Profit before taxation
Income tax
(expense)/credit
6.7.1
Profit for the year
attributable to owners of
parent company
Other comprehensive
income:
Actuarial gains/(losses)
Deferred tax on actuarial
gains
Other comprehensive
income for the year net of
tax
Total comprehensive
income for the year
attributable to owners of
the parent entity
Earnings per share - basic
(kobo)
Earnings per share diluted (kobo)
6.14.2
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Prospectus
6.
Balance Sheet
Notes
ASSETS
Non-current assets:
<---------------- Group ---->
<------------------ Company ---------->
<------------------------ IFRS---------------->
<---------- N-GAAP ----->
<------------------------------ As at 31 December----------------------->
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
Property, plant and
equipment
6.8
47,567,390
48,422,766
47,353,068
6,434,622
6,176,550
Intangible assets
6.9
2,037,220
2,047,428
80,533
-
-
49,604,610
50,470,194
47,433,601
6,434,622
6,176,550
6.10
923,931
986,309
1,085,962
658,095
654,941
6.11
6.12
7,422,689
8,638,854
16,985,474
5,148,205
5,129,959
11,264,473
5,976,638
6,710,731
13,773,331
7,155,915
7,286,913
15,100,923
7,670,765
4,420,133
12,745,839
66,590,084
61,734,667
61,206,931
21,535,545
18,922,389
6.13
7,598,293
7,279,408
7,277,134
1,435,911
1,950,093
6.14
-
1,037,762
1,632,537
959,840
831,420
7,598,293
8,317,170
8,909,671
2,395,751
2,781,513
6.15
6.7.3
11,767,837
3,709,963
5,516,910
3,880,866
3,078,431
4,444,666
5,307,036
6,177,490
4,369,799
4,115,809
6.14
-
715,035
-
-
-
Total current liabilities
15,477,800
10,112,811
7,523,097
11,484,526
8,485,608
Total liabilities
23,076,093
18,429,981
16,432,768
13,880,277
11,267,121
5,000
43,508,991
-
5,000
43,299,686
-
5,000
44,769,163
-
5,000
7,650,268
5,000
7,650,268
43,513,991
43,304,686
44,774,163
7,655,268
7,655,268
66,590,084
61,734,667
61,206,931
21,535,545
18,922,389
Total non-current assets
Current assets:
Inventories
Trade and other
receivables
Cash and bank balances
Total current assets
Total assets
LIABILITIES
Non-current liabilities:
Deferred tax liability
Retirement benefit
obligation
Total non-current liabilities
Current liabilities:
Trade and other payables
Tax liabilities
Defined benefits
obligation
EQUITY
Ordinary share capital
Retained earnings
Capital reserves
Total equity attributable to
owners
Total equity and liabilities
6.16
6.17
49
Prospectus
7.
Cashflow Statement
<------------ Group ---->
<------------------ Company----------->
<-------------------- IFRS---------------->
<---------- N-GAAP----->
Notes
<--------------------------- Year ended 31 December---------------------->
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
8,956,534
(1,202,174)
6,977,250
(1,729,561)
5,882,814
(1,224,208)
9,103,746
(515,997)
4,698,055
(532,409)
7,754,360
5,247,689
4,658,606
8,587,749
4,165,646
3,036
33,489
2,525
10,347
3,035
-
(2,137,298)
-
-
-
(450,224)
(641,945)
(497,412)
(1,493,991)
(872,139)
(1,155)
(4,000)
-
-
-
402,878
453,702
260,099
216,438
554,568
(45,465)
(2,296,052)
(234,788)
(1,267,206)
(314,536)
(4,200,000)
(4,560,190)
(5,000,000)
(4,453,763)
(4,356,007)
(4,200,000)
(4,560,190)
(5,000,000)
(4,453,763)
(4,356,007)
Net increase/(decrease)
in cash and cash
equivalents
3,508,895
(1,608,553)
(576,182)
2,866,780
(504,897)
Cash and cash
equivalents at start of year
5,129,959
6,738,512
7,286,913
4,420,133
4,925,030
8,638,854
5,129,959
6,710,731
7,286,913
4,420,133
Cash flows from
operations
Cash generated from
operations
Tax paid
6.20
Net cash from operations
Cash flows from investing
activities
Proceeds from sale of
property, plant and
equipment
Acquisition of subsidiary
net of cash and cash
equivalents acquired
Purchase of property,
plant and equipment
Purchase of intangible
assets
Finance income (Interest
received)
Net cash used in investing
activities
6.18
6.6
Cash flows from financing
activities
Payment of dividends
Net cash (used
in)/generated from
financing activities
Cash and cash
equivalents at end of year
6.12
50
Prospectus
8.
Notes to the Accounts
Brief History
Transcorp Hotels Plc - THP (formerly known as Transnational Hotels and Tourism Services Limited) was
incorporated as a private limited liability company in Nigeria on 12 July 1994 under the Companies and
Allied Matters Act. The Company owns and operates Transcorp Hilton Hotels, Abuja, which provides luxury
accommodation, exotic cuisines, meeting rooms and leisure facilities to business travellers and tourists from
all over the world. The Company acquired in 2012 and holds 100% interest in Transcorp Metropolitan Hotels
and Conferencing Limited, which owns and operates the Transcorp Hotel in Calabar. The subsidiary's
financial results were consolidated with that of the Company from the financial year ended 31 December
2012.
<---------- Group ------>
<----------- Company ------------->
<-------------------- IFRS ------------>
<-------N-GAAP--------->
<-----------------------Year ended 31 December ------------------->
6.2
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
Rooms
9,740,808
8,354,846
8,857,857
8,804,371
8,461,965
Food and beverages
4,406,057
3,791,542
3,732,835
3,802,668
3,480,103
Shop rental
460,088
439,756
391,542
367,399
293,726
Service charge
356,546
281,618
183,006
185,235
186,846
Other operating revenue
385,223
390,365
559,484
481,519
572,513
15,348,722
13,258,127
13,724,724
13,641,192
12,995,153
Revenue
All the revenues were generated in Nigeria. THP has no particular customer from which it received
proceeds that accounted for 10% or more of The Company’s total revenues.
6.3
Cost of Sales
Rooms
Food and beverage
598,687
574,707
592,128
588,467
559,762
1,582,050
1,347,874
1,389,377
1,373,625
1,417,521
6,336
5,468
5,620
1,593,014
1,861,960
1,129,910
1,511,213
1,040,410
935,378
905,367
3,316,983
3,439,262
3,027,535
4,490,484
4,744,610
966,872
961,804
1,915,054
655,298
492,439
1,302,864
1,360,868
1,371,178
1,235,100
1,086,659
40,000
37,500
21,500
18,000
8,200
1,024,283
782,836
1,424,900
1,119,193
1,093,745
147,345
76,897
89,747
67,949
112,646
2,877,812
3,027,588
768,315
415,077
304,385
6,359,176
6,247,493
5,590,694
3,510,617
3,098,074
Other operating departments
Staff costs
6.4
Administrative and General Expenses
Staff costs
Depreciation
Auditors' remuneration
Management and incentive
fees
Directors' remuneration
Other operating expenses
51
Prospectus
Notes to the Accounts (cont’d)
<--------Group--------->
<---------------Company ----------->
<--------------------IFRS ------------->
<--------- N-GAAP------->
<-----------------------Year ended 31 December ------------------->
6.5
6.7
Taxation
6.7.1
Tax expense/(credit):
Income tax
Education tax
Deferred tax
Income and education taxes
write-back
2010
N'000
2009
N'000
346
46,267
46,613
715
23,754
24,469
1,484
57,800
59,284
9,528
135,205
144,733
17,827
194,548
212,375
311,145
90,922
811
402,878
453,702
453,702
260,099
260,099
216,438
216,438
554,568
554,568
1,292,800
101,065
318,884
1,252,736
107,565
(220,552)
1,859,481
141,679
(534,859)
1,915,154
146,527
(514,182)
1,423,856
140,697
358,430
1,712,749
1,139,749
(2,997,443)
(1,531,142)
1,547,499
1,922,983
Current and Deferred Tax
A reconciliation between tax expense and the product of accounting profit multiplied by Nigeria’s
domestic tax rate for the years ended 31 December 2012 and 31 December 2013 is as follows:
Profit before taxation
Income Tax
Education tax
Income and education taxes
write back
Deferred tax
Tax losses for which there is no
deferred income tax
Tax charge for the year
6.7.3
2011
N'000
Finance Income
Interest on bank deposit
Interest on treasury bills
Interest on intercompany loan
6.7.2
2012
N'000
Other Operating Income
Profit on asset disposal
Foreign exchange gains
6.6
2013
N'000
6,122,054
1,836,616
93,377
4,049,543
1,214,863
107,565
5,425,878
1,859,481
141,679
6,001,262
1,915,154
146,527
5,919,412
1,423,856
140,697
-
-
(2,997,443)
(534,859)
(514,182)
358,430
(217,244)
1,712,749
(182,679)
1,139,749
(1,531,142)
1,547,499
1,922,983
Tax liabilities
As at 1 January
Opening balance- TMHCL
Prior year under provision/(over
provision)
Provisions during the period
Payment during the period
As at 31 December
3,880,866
-
4,444,666
1,174
6,177,490
-
4,115,809
-
2,626,256
-
(681,478)
1,712,749
(1,202,174)
24,838
1,139,749
(1,729,561)
(2,997,443)
2,001,160
(736,541)
2,061,681
-
1,564,553
(75,000)
3,709,963
3,880,866
4,444,666
6,177,490
4,115,809
52
Prospectus
<-------- Group -------->
<------------ Company ------------>
<----------------- IFRS --------------->
<-------- N-GAAP ----->
<--------------------------As at 31 December------------------------>
6.8
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
31,358,513
15,267,007
1,949,574
2,429,506
345,700
58,676
31,358,513
15,262,502
1,765,270
2,232,019
274,724
68,458
30,872,625
14,133,217
1,391,769
1,814,349
232,379
-
2,055,686
2,419,285
9,825,380
382,958
144,130
2,055,686
1,433,405
9,560,846
331,845
-
51,408,976
50,961,486
48,444,339
14,827,439
13,381,782
1,047,931
1,519,896
1,051,027
222,732
3,841,586
702,260
1,029,118
669,446
137,896
2,538,720
328,679
416,779
286,315
59,498
1,091,271
808,108
1,101,230
6,240,392
243,087
8,392,817
766,995
849,580
5,376,145
212,512
7,205,232
31,358,513
14,219,076
429,678
1,378,479
122,968
58,676
31,358,513
14,560,242
736,152
1,562,573
136,828
68,458
30,872,625
13,804,538
974,990
1,528,034
172,881
-
1,247,578
1,318,055
3,584,988
139,871
144,130
1,288,691
583,825
4,184,701
119,333
-
47,567,390
48,422,766
47,353,068
6,434,622
6,176,550
62,464
1,974,756
2,037,220
72,672
1,974,756
2,047,428
80,533
80,533
-
-
Intangible Asset (Computer
software)
Cost:
As at 1 January
Additions
As at 31 December
90,899
1,155
92,054
86,899
4,000
90,899
86,899
86,899
-
-
Accumulated Amortisation:
As at 1 January
Charge for the year
As at 31 December
18,227
11,363
29,590
6,366
11,861
18,227
6,366
6,366
-
-
Net Book Value as at 31
December
62,464
72,672
80,533
-
-
1,974,756
1,974,756
-
-
-
Property, Plant and Equipment
Cost:
Freehold land
Building
Computer, Furniture & fittings
Plant and machinery
Motor vehicles
Capital work-in-progress
Accumulated depreciation:
Freehold land
Building
Plant and machinery
Motor vehicles
Net Book Value:
Freehold land
Building
Plant and machinery
Motor vehicles
6.9
Intangible Assets
Computer software (note 6.9.1)
Goodwill (note 6.9.2)
6.9.1
6.9.2
Intangible asset (Goodwill)
As at 31 December
The Group determines at each reporting date whether there is any objective evidence that investment in
subsidiary is impaired. At reporting date, the statutory auditors indicated that the goodwill was not
impaired. The amortisation period for computer software cost is between 3 to 6 years .
53
Prospectus
<--------- Group ------>
<------------ Company ----------->
<---------------IFRS ----------------->
<-------- N-GAAP------>
<----------------------As at 31 December --------------------------->
6.10
Less impairment
Prepayments
Due from related companies
(note 6.19.2)
Other receivables
2009
N'000
148,244
9,020
627,523
169,744
954,531
(30,600)
923,931
103,993
6,222
751,337
155,357
1,016,909
(30,600)
986,309
139,751
2,941
788,797
184,108
1,115,597
(29,635)
1,085,962
106,271
3,534
344,546
203,744
658,095
658,095
144,368
4,261
377,032
129,280
654,941
654,941
1,323,932
(140,562)
1,183,370
56,876
1,585,634
(177,659)
1,407,975
32,736
1,492,993
(107,456)
1,385,537
54,951
798,495
(61,536)
736,959
143,031
698,976
(56,005)
642,971
71,202
5,303,657
878,786
7,422,689
3,461,538
245,956
5,148,205
4,438,649
97,501
5,976,638
6,208,328
67,597
7,155,915
5,081,332
1,875,260
7,670,765
10,968
8,627,886
8,638,854
9,290
5,120,669
5,129,959
6,710,731
6,710,731
7,286,913
7,286,913
4,420,133
4,420,133
7,279,408
7,580,406
7,277,134
318,885
(220,552)
-
7,598,293
(80,446)
7,279,408
7,277,134
Deferred Tax Liability
As at 1 January
Charged/ (credited) to income
statement
Credited to other
comprehensive income
As at 31 December
6.14
2010
N'000
Cash and Bank Balances
Cash in hand
Cash at bank
6.13
2011
N'000
Trade and Receivables
Trade receivables
Provision for impairment
6.12
2012
N'000
Inventories
Food and beverage
Fuel
Engineering spares
Guest supplies
6.11
2013
N'000
Retirement Benefit Obligations
Transcorp Hotels Plc operated a gratuity scheme for employees. The Scheme provided gratuity benefits
to all staff that had spent 2 years or more at exit date. The Scheme was unfunded and was a defined
benefit scheme. The defined benefit scheme was discontinued with effect from 31 December 2012,
based on an agreement was entered with employees of the Company. The outstanding liabilities were
to be settled by 1 January 2014, failure of which would result in the liability accruing interest at 10% per
annum. Planned liability is based on independent actuarial valuation performed by HR Nigeria &
Associates Ltd as at 1 January 2012 and 31 December 2012. The Projected Unit Credit Method was used
to determine the liability as at 31 December 2010 and 2011. The obligation as at 31 December 2012 was
computed on a discontinuance basis because the scheme was terminated at 31 December 2012.
54
Prospectus
<----------Group------->
<------------ Company ----------->
<---------------- IFRS --------------->
<-------N-GAAP ------->
<-------------------- As at 31 December ------------------------>
6.14.1
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
-
1,037,762
1,632,537
959,840
831,420
-
715,035
-
-
-
-
1,752,797
1,632,537
959,840
831,420
Current service cost
Interest cost
Benefits paid
Re-measurement (gain)/loss
-
231,176
219,002
225,048
557,751
(208,674)
-
180,000
(51,580)
-
-
Curtailment (gain)/loss
Total included in employee
benefits expense
-
(317,142)
-
-
-
-
358,084
349,077
128,420
-
-
261,365
261,365
-
-
-
Trade payables
467,092
1,119,186
1,046,312
1,212,503
1,059,751
VAT payable
316,258
124,219
131,340
577,935
3,271,435
Accrued liabilities
Due to related companies
(6.19.3)
700,580
1,370,289
1,820,996
3,466,785
38,613
3,857,206
2,254,060
33,743
-
-
859,610
454,104
-
49,813
-
4,000,000
1,514,874
52,217
195,052
46,040
-
-
11,767,837
5,516,910
3,078,431
5,307,036
4,369,799
Amounts recognised in the
Statement of financial position:
Retirement benefits obligations
due after one year
Defined benefits obligations due
within one year
Gratuity (defined benefit plan)
6.14.2
Amounts recognised in the
Statement of profit or loss:
Amounts recognised under other
comprehensive income:
Actuarial gains
6.15
Trade and Other Payables
Deposits from guests
Deposit for shares (note i)
WHT payable
Unearned income
Deposit for shares
During the year ended 31 December 2013, THP offered shares to its existing shareholders by way of
rights of 32 units for every 10 shares held. Transnational Corporation of Nigeria Plc made a deposit N4
billion towards the rights issue. The exercise was subsequently concluded in 2014 and the deposit was
converted to 16,000,000 units of shares of N1 each at N250 per share.
6.16
Share Capital
Authorised:
10,000,000 Ordinary shares of N1
each
Issued:
5,000,000 ordinary shares of N1
each allotted and fully paid up
10,000
10,000
10,000
10,000
10,000
5,000
5,000
5,000
5,000
5,000
55
Prospectus
<--------- Group ------>
<------------ Company ----------->
<---------------IFRS ----------------->
<-------- N-GAAP----->
<-------------------------As at 31 December ------------------------->
6.17
Capital Reserve
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
As at 1 January
-
7,650,268
7,650,268
7,650,268
7,650,268
Movement during the year
As at 31 December
-
(7,650,268)
-
7,650,268
7,650,268
7,650,268
The reserve arose from the purchase of THP from the Federal Government in 2004. However, in line
with IFRS requirements, it was transferred to revenue reserve during the process of conversion of the of
the Company's financial statements from NGAAP to IFRS in 2012.
6.18.1
Investment in subsidiary
On 30 September 2012, THP acquired 100% shareholding in TMHCL. The fair values of the assets and
liabilities of the subsidiary as at date of acquisition is shown below:
N'000
Non-current assets
Current assets (excluding cash
and cash equivalents)
1,816,319
83,101
Cash and cash equivalents
26,232
Total assets
1,925,652
Current liabilities
(1,736,787)
Net assets
188,865
Purchase consideration
2,163,621
Goodwill
1,974,756
Cash flow on acquisition
6.18.2
Purchase consideration
Net cash and cash equivalents
acquired
2,163,621
Net cash flow on acquisition
2,137,389
26,232
Audit Opinion
In 2012 financial statements, the auditors indicated in the audit report that the records for fixed assets for
the Subsidiary were not properly maintained as they did not contain certain relevant information on the
assets. In the absence of the relevant information, there were no alternative procedures the auditors
could perform to confirm the accuracy, completeness and valuation of fixed assets of the Subsidiary.
In 2012 and 2013 financial statements, the auditors issued "Emphasis of matter" opinion on the ability of
TMHCL to continue to operate as a going concern. This was due to the fact that TMHCL incurred losses
of N151.5 million and N31.7 million and had working capital deficits of N1.5 billion and N344.2 million in
2012 and 2013 respectively. TMHCL will therefore require additional financing to fund operating losses,
which it will seek to raise through capital and/or loan injection by Transcorp Hotels Plc. TMCHL’s failure to
raise capital as and when needed could therefore have a negative impact on its financial condition
and its ability to pursue its business strategies.
56
Prospectus
However, the Directors' plans to address the issue through the injection of more funds into the business
through capital and/or loans and advances and cash flows from revenue generated from operations.
6.19
Related Party Transactions
The parent company of THP is Transnational Corporation Nigeria Plc, which is owned by Nigerians. Heirs
Holding Limited has controlling interest in Transnational Corporation of Nigeria hence the ultimate
controlling power over the Group. A number of transactions are entered into with related parties in the
normal course of business. Intercompany sales, receivables and payables are disclosed below:
<--------- Group ------>
<------------ Company ----------->
<---------------IFRS ----------------->
<-------- N-GAAP----->
<----------------------As at 31 December --------------------->
6.19.1
2013
N'000
2012
N'000
2011
N'000
Sales to Transnational Corporation of
Nigeria Plc and Transcorp Metropolitan
Hotels and Conferencing Limited
63,416
34,045
51,932
29,539
95,448
Hilton International LLC (Related Party)
48,910
-
1,588,111
1,628,461
1,614,503
Heirs Real Estate
30,000
-
-
-
-
Heirs Holdings
10,539
-
-
-
-
8,182
-
-
-
-
-
-
22,796
16,150
15,216
Transcorp Plc
3,478,110
3,461,538
-
-
Due from other subsidiaries
1,825,547
-
-
-
Advances to shareholders
-
-
4,438,649
6,208,328
5,081,332
Due from TMHCL
-
-
-
-
-
5,303,657
3,461,538
4,438,649
6,208,328
5,081,332
1,956,096
833,725
33,743
-
-
48,910
99,894
-
-
-
1,852,200
1,320,441
-
-
-
3,857,206
2,254,060
33,743
-
-
Bureau for Public Enterprise
6.19.3
2009
N'000
Intercompany sales
Avon Healthcare Limited
6.19.2
2010
N'000
Receivables from related parties
Due to related companies
Transcorp Plc (Parent)
Hilton LLC (Related party)
BPE/MOFI (Shareholder)
These are loans which are interest-free and are repayable on demand by Transcorp Hotels Plc. There are
no written terms for amounts due to all related parties.
57
Prospectus
<---------- Group ----->
<------------ Company ------------>
<--------------------IFRS -------------->
<------N-GAAP ------->
<-------------------------As at 31 December-------------------------->
6.20
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
Profit before income tax
Adjustments for:
5,719,176
3,595,841
5,165,779
5,784,824
5,364,844
– Depreciation
1,302,866
1,360,868
1,371,178
1,235,100
1,086,659
11,363
11,861
-
-
-
(346)
(715)
(1,484)
(9,528)
-
(2,274,483)
(540,297)
1,179,277
514,850
(3,271,114)
62,378
114,489
(105,058)
(3,154)
59,804
5,888,377
2,510,186
(1,726,878)
1,581,654
1,457,862
(1,752,797)
(74,983)
-
-
-
8,956,534
6,977,250
5,882,814
9,103,746
4,698,055
Cash Generated from
Operations
– Amortization
– (Profit) on disposal of property
and equipment
Other adjustments to reconcile
expenses for the year to cash
from operating activities
Increase/ (decrease) in debtors
and prepayments
Decrease/(increase) in
inventory
Increase/ (decrease) in
payables and accrued
expenses
Decrease in retirement benefit
obligations
Net cash generated from
operations
6.21
Employee Matters
6.21.1
Number of employees by
category
Managerial staff
Senior staff
Others
6.21.2
28
63
1,570
1,661
28
59
1,509
1,596
19
41
1,370
1,430
16
39
1,237
1,292
10
50
1,175
1,235
The number of employees (excluding directors) who earned over N240,000 as emoluments and were
within specified bonds are stated below:
N200,000 - N500,000
N500,001 - N1,000,000
N1,000,001 - N2,000,000
N2000,001 - N4,000,000
Above N5,000,000
2013
Number
2012
Number
2011
Number
2010
Number
2009
Number
747
715
106
61
32
1,661
1,136
411
24
9
16
1,596
611
759
35
6
19
1,430
492
745
33
6
16
1,292
330
10
835
50
10
1,235
58
Prospectus
<------ Group-------->
<-------- Company------------->
<-------- IFRS ---------> <--------- N-GAAP---------------->
<----------------------- As at 31 December------------------>
6.21.3
2013
N'000
2012
N'000
2011
N'000
2010
N'000
2009
N'000
1,615,559
1,450,307
1,238,991
1,314,768
1,024,263
Gratuity, termination and severance pay
368,647
866,764
557,751
180,000
291,350
Pension costs
112,486
106,436
118,312
95,908
82,193
2,096,692
2,423,507
1,915,054
1,590,676
1,397,806
Salaries
88,348
48,507
-
-
-
Fees and sitting allowances
64,016
76,897
86,747
67,949
112,646
Exit package
83,280
-
-
-
-
235,644
125,404
86,747
67,949
112,646
Staff Costs (excluding executive directors)
Salaries and wages
6.21.4
6.22
Directors' Remuneration
Commitments and Contingencies
Capital commitments
The Group and Company has committed N507 million (2012: N150 million) in capital expenditure for hotel
expansion.
Litigation
The Group is involved in 10 litigation cases, instituted against it in the ordinary course of business. The
aggregate monetary claim in respect of the cases amounted to N29,912,000 and $23,000. However, based
on the advice of the Group's legal counsel, the Directors are of the opinion that the Group has good
defence against the claims and no material loss is anticipated.
6.23
Post Balance Sheet Events
6.23.1
Increase in Authorized Share Capital/Stock Split
By a resolution passed by the board on 13 March 2014, the authorised share capital of the Company was
increased from N30 million made up of ordinary shares of N1 each to N7.5 billion made up of ordinary
shares of N1 each.
At the same date and by the same resolution, the share capital of the Company was sub-divided into 1.5
billion units of 50k each. The sub-division of the shares has also been registered with the Corporate Affairs
Commission. These two resolutions led to the creation of additional 14.94 billion ordinary shares of 50k
each.
6.23.2
Bonus Issue
At the meeting of the Board of Directors of the Company held on 13 March 2014, the directors resolved
that a bonus of 170 for every one share held by existing shareholders as at 20 January 2014 be issued by a
capitalisation of N3.57 billion from the share premium account. The new ordinary shares are to rank parri
passu with the existing ordinary shares of the Company.
6.23.3
Rights Issue
During the year ended 31 December 2013, THP offered its shares to existing shareholders by way of rights
of 32 units of ordinary shares for every 10 held. The parent Company, Transnational Corporation of Nigeria
Plc made a deposit N4 billion towards the rights issue. The exercise was concluded in January 2014 and
resulted in the conversion of the deposit to 16,000,000 units of shares of N1 each at N250 per share.
Subsequently the issued share capital increased from 5 million units to 21 million units.
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Prospectus
1. Incorporation and Share Capital History
THP (formerly Transnational Hotels and Tourism Services Limited, which was previously called NIRMSCO
Properties Limited) was incorporated as a Limited Company on 12 July, 1994 with an authorized share
capital of N10,000,000 divided into 10,000,000 ordinary shares of N1.00 each. At present, the authorized
share capital of the Company is N7,500,000,000 divided into 15,000,000,000 ordinary shares of 50 kobo each,
of which N3,591,000,000divided into 7,182,000,000 ordinary shares of 50 kobo each, is fully paid up. The
following changes have taken place in the Company’s authorized and issued capital:
Date
Authorized
Authorized
Issued
Issued Consideration
Increase
Units
Cumulative
Units
Increase
Units
12-Jul-1994
10,000,000
10,000,000
5,000,000
5,000,000 Cash
13-Jan-2014
20,000,000
30,000,000
16,000,000
21,000,000 Cash
13-Mar-2014
7,470,000,000
7,500,000,000
3,570,000,000
3,591,000,000 Bonus Issue
13-Mar-2014
7,500,000,000
15,000,000,000
3,591,000,000
7,182,000,000 Stock Split
Cumulative
Units
Source: THP
2.
Shareholding Structure
The Authorised Share Capital of the Company is N7,500,000,000, comprising 15,000,000,000 ordinary shares of
50kobo each, while its issued and paid up capital is N3,591,000,000 comprising 7,182,000,000 ordinary shares
of 50 kobo each was beneficially held as follows as at the date of this Prospectus:
Shareholder
No of Ordinary Shares
% Holding

Capital Leisure and Hospitality
Limited*
6,344,100,000
88%

Ministry of Finance Incorporated
837,900,000
12%
7,182,000,000
100%
Total
Source: THP Board of Directors
*Wholly owned by Transcorp Plc, which is the beneficial holder of the 88% shares
Except as stated above, no other shareholder held up to 5% of the issued share capital of THP as at the date
of this Prospectus.
3.
Directors’ Beneficial Interests
None of the Directors of THP have direct or indirect beneficial interest in the issued share capital of the
Company as at the date of this Prospectus
Source: THP Board of Directors
4.
Statement of Indebtedness
As at December 31, 2013, the date of the audited financial statement of THP, the Company had no
outstanding bank loans, debentures, mortgages, charges or similar indebtedness or material contingent
liabilities other than in the ordinary course of business.
5.
Subsidiaries and Associated Companies
As at the date of this Prospectus, the Company had 3 subsidiaries:
Subsidiary:
Shareholding%
TMHCL
100%
Transcorp Hotels Ikoyi Limited
76%
100%
Transcorp Hotels Port Harcourt Limited
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Prospectus
The Company’s associated companies include; Transcorp Plc which has an 88% interest in the Company of
which Heirs Holdings Limited has controlling interest and is therefore the ultimate controlling party of the
Group. Other related party include Afriland Properties Limited.
6.
Statement of Compliance with Corporate Governance
Transcorp Hotels Plc is fully committed to implementing best practice Corporate Governance standards.
The Company recognizes that Corporate Governance Practices must achieve two goals – protecting the
interest of Shareholders and guiding the Board and Management to direct and manage the affairs of the
Company effectively and efficiently. The Board has committed substantial time and resources towards the
development and implementation of a code of Business Principles and Professional Responsibility for
directors, managers and employees of the Company.
6.1 Composition of the Board
The Board of THP is comprised of seven (7) non-executive and two (2) executive directors. Board
members are professionals and business men with vast experience and credible track records. To
enhance corporate governance, Board sub-committees are constituted to help the Board properly
assess management reports, proposals and oversight functions and make recommendations to the
main Board. The Board has three (3) standing committees, namely: the Nomination & Governance
Committee; the Audit Committee; and the Financial & Investment Committee. The Nomination &
Governance Committee (NGC) ensures compliance with Corporate Governance - monitoring
compliance with actions, policies and decisions of the Company; the Audit committee deals with risk
management; and the Financial & Investment Committee makes recommendations to the Board
on financeand investments by the Company.
7.
Unclaimed Dividends
As at the date of this Prospectus, unclaimed dividends of Transcorp Hotels Plc amounted to zero (0).
8.
Claims and Litigation
As at the date of this Prospectus, the Company in the ordinary course of business is involved in ten (10)
cases. All the cases were instituted against the Company. The aggregate monetary claim in respect of the
cases amounted to N29,912,000 and $23,000. The Directors of the Company are of the opinion that none of
the pending claims against the Company is likely to have any material adverse effect on the Offer and are
not aware of any other threatened or pending claims and litigation which may be material to the exercise.
9.
Extract from the Memorandum and Articles of Association of Transcorp Hotels Plc
The following are the relevant extracts of the Company’s Memorandum and Articles of Association.
Public Company
1.
The Objects for which the Company is established include:
(a)
To carry on the business as managers of hotels, motels, hostels, rest houses and lodging
establishments of every description in its branches and in particular to provide services and
facilities and to act on matters relating to hospitality industry and to carry out research,
investigations and experimental works of every description in relation to hotel management
with a view to introducing high technology and advance management techniques into the
hospitality industry in Nigeria.
(b)
To carry on in all the state of the Federation including the Federal Capital Territory the business
of hotel, restaurant, refreshment rooms and lodging housekeepers licensed victuallers, beer
house, refreshment keepers caterers and contractors in all its respective branches, caterers for
public amusement.
(c)
To provide suitable rooms, building, ground for recreation and to permit the same or any part
thereof to be used on such terms as the Company shall think fit, for any purpose, public or
private and in particular for public meetings, exhibitions, concert and lectures.
(d)
To carry on the business of investing in real estate and for that purpose to acquire by purchase,
exchange or otherwise any interests in lands and buildings and any forms of real estate,
encumbered or not, and to deal with such interests in any manner, whether by disposal or
61
Prospectus
otherwise and to develop and enhance the value of such real estate whether by constructing
infrastructure and erecting buildings and works thereon.
(e)
To develop and turn into account any land acquired by the Company or which the Company
is interested and in particular by laying out and preparing the same for building purposes,
construction, altering, demolishing, furnishing, decorating and improving building and by
paving lathering on building lease or building agreement and by advancing money to and
entering into contracts and agreements of all kinds with builders, tenants and others.
(f)
To engage in general building construction, including steel construction projects, roads, bridges
and water related projects, concrete and brick products, furniture and fittings and general
woodwork.
(g)
To purchase or otherwise acquire and takeover any business or undertakings which may be
deemed expedient or become interested in and to carry on or dispose or remove or put to an
end to the same or otherwise deal with any such businesses or undertakings as may be thought
desirable.
(h)
To borrow and raise money in any manner and to secure the repayment of any money
borrowed, raised or owing by mortgage, charge, standard security, lien or other security upon
the whole or any part of the Company’s property or assets (whether present or future), including
its uncalled capital and also by a similar lien or security to secure and guarantee the
performance by the Company or any obligation or liability in may undertake or which may
become binding on it.
2.
The Company is a Public Company.
3.
The liability of the members is limited by Shares.
4.
The share capital of the Company is N7,500,000,000 divided into 15,000,000,000 Ordinary shares of 50
Kobo each with the power to increase the share capital and to divide the shares into several classes to
attach thereto, any preferential, deferred, qualified or other special rights, privileges and conditions.
Classes of Shares
5.
The Company may from time to time issue classes of shares. It shall be the responsibility of the Directors
to determine the classes to be issued. All the rights or restrictions attached to each particular class of
shares will be specified in the terms of issue but such rights may at any time be varied in accordance
with the provisions of section 141 of the Act.
Transfer and Transmission
6.
Subject to the provisions hereinafter contained, any member may transfer all or any of his shares by
instruments in writing in any usual or common form or any form approved by the Directors. The
instrument of transfer of any share shall be executed by or on behalf of the transferor and in the case of
partly paid shares by or on behalf of the transferee, and the transferor shall be deemed to remain the
holder of the share until the name of the transferee is entered in the register of members in respect
thereof.
7.
No fee shall be payable in respect of any transfer lodged for registration.
8.
The personal representatives of a deceased sole holder of a share shall be the only person recognized
by the Company as having any title to the share. In the case of a share registered in the names of two
or more holders, the survivor, or survivors, and the personal representatives of the deceased survivor,
shall be the only persons recognised by the Company as having any title to the share.
9.
Any person becoming entitled to a share in consequence of the death or bankruptcy of a member shall
upon such evidence being produced as may from time to time be required by the Directors have the
right either to be registered as a member in respect of the share or, instead of being registered himself,
to make such transfer of the share as the deceased or bankrupt person could have made.
10. Any person becoming entitled to a share in consequence of the death or bankruptcy of a member shall
be entitled to the same dividends and other advantages to which he would be entitled if he were the
registered holder of the share except that he shall not, before being registered as a member in respect
of the share, be entitled in respect of it, to exercise any rights conferred by membership in relation to
62
Prospectus
meetings of the Company.
Alteration of Capital
11. The Company may from time to time by ordinary resolution increase or reduce the share capital of the
Company by such sum to be divided into shares of such amount as the resolution shall prescribe and in
accordance with section 102, and Section 103 of the Act.
12. Except so far as otherwise provided by the conditions of issue or by these presents any capital raised by
the creation of new shares shall be considered part of the original capital ranking pari passu with the
existing shares and shall be subject to the provisions herein contained with reference to the payment of
calls and instalments, transfer and transmission, forfeiture, lien, surrender and otherwise.
13. The Company in general meeting may by special resolution reduce its share capital, any capital
redemption fund reserve fund and any share premium account in any manner authorized by law.
Notice of General Meeting
14. The notice required for all types of general meetings shall be twenty-one days from the date on which
the notice was sent out. Provided that a meeting of the Company shall, notwithstanding that it is called
by shorter notice than that specified in this regulation be deemed to have been duly called if is so
agreed:
(a)
In the case of a meeting called as the Annual General Meeting, by all the members entitled to
attend and vote thereat; and
(b)
In case of any other meeting, by a majority in number of the members having a right to attend
and vote at the meeting being a majority together holding not less than 95 percent in nominal
value of the shares giving that right.
15. The accidental omission to give notice of a meeting to or non-receipt of notice of a meeting by any
person entitled to receive notice shall not invalidate proceedings at that meeting.
16. The Directors may, whenever they think fit convene an extra ordinary general meeting and extra
ordinary general meetings shall also be convened in accordance with the Act.
Proceedings at General Meeting
17. All business shall be deemed special that it transacted at an Extraordinary General Meeting and also all
that is transacted at an Annual General Meeting with the exception of declaring a dividend, the
consideration of the accounts, balance sheets and the reports of the Directors and Auditors, the
election of Directors in the place of those retiring and the appointment, of and the fixing of the
remuneration of the Auditors.
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 hereof, unless it is otherwise provided
the quorum shall be one-third of the total number of members of the Company or twenty-five members
(whichever is less) present in person or by proxy provided that where the number is not a multiple of
three, then the number nearest to one-third shall be the quorum , and where the number of members is
six or less, the quorum shall be two members.
19. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting if
convened upon the requisition of members shall be dissolved, in any other case, it shall stand adjourned
to the same day in the next week, at the same time and place and if at the adjourned meeting a
quorum is not present within half an hour from the time appointed for the meeting, the members of
whatever class present shall be a quorum.
20. The Chairman, if any, of the Board of Directors shall preside at every General Meeting, but if at any
meeting he shall not be present within fifteen minutes after the time appointed for holding the same or
shall be unwilling to act as a Chairman, the members present shall choose one Director or if no Directors
be present or if all the Directors present decline to take the chair, they shall choose a member present
to be Chairman of the Meeting. .
21. At any General Meeting, a resolution put to the vote of the meeting shall be decided on a show of
hands unless a poll is (before or on declaration of the result of show of hands) demanded
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Prospectus
(a) by the Chairman where he is a shareholder or a proxy, or
(b) by at least three members present or by proxy entitled to vote at the meeting, or
(c) by the holders present in person or by proxy representing at least one-tenth of the total voting
rights of all the members having the right to vote at the meeting, or
(d) by a member or members holding shares in the Company conferring a right to vote at the
meeting being shares on which an aggregate sum has been paid up equal to not less than
one-tenth of the total sum paid up upon all the shares conferring that right
Unless a poll be so demanded, a declaration by the Chairman that a resolution has, on a show of
hands, been carried or carried unanimously, or by a particular majority or lost, and an entry to that
effect entered in the minutes book of the Company shall be conclusive evidence thereof, without proof
of the number or proportion of the votes recorded in favour of or against such resolution. The demand
for a poll may be withdrawn. A proxy need not be a member of the Company. A proxy may take part
in the proceedings of a General Meeting as if he were the member who he had come to represent.
If a poll is duly demanded it shall be taken in such manner as the Chairman directs, and the result of the
poll shall be deemed to be the resolution of the meeting at which the poll was demanded.
22. Any corporation which is a member of the Company may, by resolution of its Directors or other
governing body, authorize any person to act as its representative at any meeting or meetings of the
Company or of any class of members thereof and such representative shall be entitled to exercise the
same powers on behalf of the corporation which he represents as if he had been an individual
shareholder, including power when personally present, to vote on a show of hands.
Votes of Members
23. On a show of hands, every member present in person or by proxy shall have one vote. On a poll, every
member shall have one vote for each share of which he is the holder.
Directors
24. (i)
Unless and until otherwise determined by the Company in the general meeting, the number of
directors shall not be less than five or more than twelve.
(ii)
At the Annual General Meeting in every year, one third of the Non-Executive Directors for the time
being or if their number is not three or a multiple of three, then the number nearest one third, shall
retire from office.
(iii) The Non-Executive Directors to retire in every year shall be those who have been longest in office
since their last election, but as between persons who become Non-Executive Directors on the same
day those to retire shall (unless they otherwise agree amongst themselves) be determined by lot.
(iv) A retiring Non – Executive Director shall be eligible for re-election.
25. Existing Directors shall have power, at any time, and from time to time, to appoint any person as an
alternate Director.
26. The Company in general meeting may from time to time direct such sums as may be thought fit to be
paid as and by way of remuneration to the Directors and any such remuneration shall be divided
amongst them as they may agree, or failing agreement, equally. The Directors shall also be entitled to
be repaid all expenses, reasonably incurred by them respectively in or relating to the performance of
their duties as Directors.
27. It shall not be necessary for any Director 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
28. The Directors may, subject to the provision of the Act, create such committees of the Board and
delegate such powers to the committees so created as the Directors shall deem necessary. Where
powers of the Board are exercised or delegated to a committee of the Board, the Board or such
committees shall operate in conformity with the approved Board Governance Charter and Board
Committee Governance Charter.
29. The Directors from time to time, and at any time, may provide through its Advisory Boards, Technical
Board, Consultants, Attorney or other professional bodies or agencies for management of the affairs of
the Company outside Nigeria and may appoint any persons to be members of such Advisory Boards,
64
Prospectus
Technical Board of attorneys or agents and may remove any person so appointed and appoint others
in their place, and may fix their remuneration.
30. The Directors may from time to time, and at any time delegate to any such Advisory Boards, Technical
Board, Consultants, Attorneys or other professional bodies or agencies any of the powers, authorities
and discretions for the time being vested in the Directors, other than the power to make calls, forfeit
shares, borrow money or issue debentures and any such delegations 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 or variation shall be affected thereby.
31. The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to
any Director who has held any other salaried office or place of profit with the Company or to his widow
or dependants and may make contribution to any fund and pay premiums for the provision or purchase
of any such gratuity, pension and allowance.
32. The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their
number is reduced below the number fixed by or pursuant to these Articles and Regulations of the
Company as the necessary quorum of Directors, the continuing directors may act for the purpose of
increasing the number of Directors to that number, or of summoning a general meeting of the
Company, but for no other purpose.
Borrowing Powers
33. Directors may exercise all 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.
The Seal
34. The Seal of the Company shall be affixed to any instrument except by the authority of a resolution of the
Board of Directors and in the presence of at least one Director and the Secretary or such other person
as the Directors may appoint for the purpose, and the Director and Secretary or other person as
aforesaid shall sign every instrument to which the seal of the Company is so affixed in their presence.
10. Material Contracts
The following agreements have been entered into and are considered material to the Offer:
i.
A Vending Agreement dated 19th September, 2014 by which UBA Capital Plc, LeadCapital Plc and BGL
Capital Limited have agreed to offer for subscription 800,000,000Ordinary Shares of 50 Kobo each at
N10.00 per share in Transcorp Hotels Plc;
ii. A Project Directorate Agreement dated 2nd October, 2013 by which Afriland Properties Plc has agreed
to provide Project Directorate services on the development of Transcorp Hilton Apartments, Abuja;
iii. A Design Consultancy Services Agreement dated 30th September, 2013 by which Design Group Nigeria
Limited has agreed to provide architectural, structural, civil engineering, mechanical, electrical,
ventilation and sundry technical services on the expansion of Transcorp Hilton Hotel, Abuja;
iv. A Project Management Agreement dated 30th September, 2013 by which Gassim Services Limited has
agreed to manage the development of the Transcorp Hilton Apartments and Transcorp Hilton
Convention Centre both in Abuja;
v. A Project Management Agreement dated 25th September, 2013 by which Gassim Services Limited has
agreed to manage the upgrade of the Transcorp Hilton Hotel, Abuja;
vi. A Deed of Assignment Agreement dated 8th November, 2013 by which Transcorp Hotels Ikoyi Limited
(formerly Multi Mega Investments and Properties Limited) acquired 5,886.87 square metres of land at 39
Glover Road, Ikoyi, Lagos State; and
vii. A Deed of Assignment Agreement dated 7th November, 2013 by which the Company acquired 10,141
square metres of land in Port Harcourt, Rivers State.
Other than as stated above, THP or its subsidiaries have not entered into any contracts material to this
proposed Initial Public Offering except in the ordinary course of business.
65
Prospectus
11. Costs and Expenses
The costs and expenses of the Offer including fees payable to the SEC, the NSE and The Parties, filing fees,
legal fees, and other expenses, brokerage commission but excluding the costs of printing and advertising
the Offer are estimated at N250,724,150 representing approximately 3.13% of the gross offer size.
12. Declarations
Except as otherwise disclosed in this Prospectus:
1. No share of Transcorp Hotels Plc is under option or agreed conditionally or unconditionally to be put
under option created or issued by THP;
2. No commissions, discounts, brokerages or other special terms have been granted by Transcorp Hotels Plc
to any person in connection with the Offer or sale of any share of the Company;
3. Save as disclosed herein, the Directors of THP have not been informed of any holding representing 5% or
more of the issued share capital of the Company;
4. There are no founders’, management or deferred shares or any options outstanding in THP;
5. There are no material service agreements between THP or any of its Directors and employees other than
in the ordinary course of business;
6. No Director of the Company has had any interest, direct or indirect, in property purchased or proposed
to be purchased by the Company in the five years prior to the date of this Prospectus;
7. No Director or key management staff of the Company is or has been involved in any of the following:
a. A petition under any bankruptcy or insolvency laws filed (and not struck out) against such
person or any partnership in which he was a partner or any company of which he was a
director or key personnel;
b.
A conviction in a criminal proceeding or is named subject of pending criminal proceedings
relating to fraud or dishonesty; and
c.
The subject of any order, judgment or ruling of any court of competent jurisdiction or regulatory
body relating to fraud or dishonesty, restraining him from acting as an investment adviser,
dealer in securities, director or employee of a financial institution and engaging in any type of
business practice or activity.
8. There are no amounts or benefits paid or intended to be paid or given to any promoter within the two
years preceding the date of the Prospectus.
13. Relationship between the Issuer and the Issuing Houses/Other Advisers
.
As at the date of this Prospectus, there was no relationship between Transcorp Hotels Plc and any of the
Issuing Houses/other advisers except in the ordinary course of business.
14. Mergers and Acquisitions
As at the date of this Prospectus, the Company has not received any merger or take-over offer by a third
party in respect of its securities nor has the Company made any merger or take-over offer to any other
company in respect of another company’s securities within the current or preceding financial years.
15. Research and Development
The Company has not expended on Research and Development in the past 3 years but intends to do so in
the future as part of its growth strategy.
16. Land and Property Schedule
As at the date of this Prospectus the Company had N56,597,500,000 in land and property, below schedule
sets out key particulars of the Company’s fixed assets:
66
Prospectus
Address
Plot 1151 Aguiyi Ironsi Street
Maitama, Abuja
Owned
/Leased
Leased
Lease Tenure
Age and Use
99 Years
20 Years
Commercial Use
Market Value (N)
Total
56,597,500,000
N56,597,500,000
17. Consents
The following have given and have not withdrawn their written consents to the issue of this Prospectus with
the inclusion of their names and reports (where applicable) in the form and context in which they appear:
Directors of the Company:
CHAIRMAN
Olorogun O’tega Emerhor, OON
MANAGING DIRECTOR/CEO
Mr. Valentine Ozigbo
EXECUTIVE DIRECTOR
Okaima Ohizua
NON EXECUTIVE DIRECTORS
Mr. Obinna Ufudo
Mr. Emmanuel Nnorom
Mr. Gogo Kurubo
Mr. Abubakar A. Giza
Mr. Baba Mohammed
Mr. Benjamin Dikki
COMPANY SECRETARY
Mr Chinedu Eze
38 Glover Road, Ikoyi, Lagos
Professional Parties:
LEAD ISSUING HOUSE
UBA Capital Plc
JOINT ISSUING HOUSES
LeadCapital Plc
BGL Capital Limited
LEAD STOCKBROKER TO THE OFFER
JOINT STOCKBROKERS TO THE OFFER
UBA Securities Limited
Cowry Securities Limited
Milestone Capital Management Limited
JOINT SOLICITORS TO THE OFFER
Ajumogobia & Okeke
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Prospectus
M.E. Esonanjor & Co
REPORTING ACCOUNTANT
Akintola Williams Deloitte
REGISTRARS TO THE OFFER
AUDITORS TO THE COMPANY
Price WaterhouseCoopers
RECEIVING BANK
SOLICITORS TO THE COMPANY
Templars
18. Related Party Transactions
A number of transactions are entered into with related parties in the normal course of business. These
parties include: Transcorp Plc which has an 88% interest in the Company and Heirs Holdings Limited; and
Afriland Properties Limited. All of these transactions are executed at “arms length” basis and do not pose
any conflict of interest.
19. Documents Available for Inspection
Copies of the following documents may be inspected at the offices of Transcorp Hotels Plc, 1Aguiyi Ironsi
Street, Maitama, Abuja, UBA Capital Plc, UBA House (12th floor), 57 Marina, Lagos, LeadCapital Plc, Plot 281
Ajose Adeogun Street, Victoria Island, Lagos and BGL Capital Limited, 12A Catholic Mission Street, Lagos
Island, Lagos during normal business hours on any weekday (except public holidays), throughout the
duration of the Offer.
(a) Certificate of Incorporation of the Company;
(b) Memorandum and Articles of Association of the Company;
(c) The Company’s Form CAC 7 (Particulars of Directors);
(d) The Company’s Form CAC 2 (Statement of Share Capital and Returns of Allotment of Shares);
(e) The Prospectus issued in respect of this Initial Public Offering;
(f) Shareholders’ Resolution authorising the Offer;
(g) Board Resolution recommending the Offer;
(h) The Certificate of registration of increase in share capital obtained from the Corporate Affairs
Commission;
(i)
The audited accounts of the Company for each of the five years ended, 31 December, 2013 and the
Management Accounts for the quarter ended 31 March 2014;
(j)
The Letter from The Exchange approving the Offer;
(k) The letter from SEC approving the Offer;
(l)
The Certificate of Exemption from the Exchange
(m) The list of Claims and Litigation referred to above;
(n) The Material Contracts referred to above; and
(o) The written Consents referred to above.
68
Prospectus
1. Application
1.1. The general investing public is hereby invited to apply for the shares through any of the
Receiving Agents listed on Page 70 and 71 of this Prospectus.
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 which do
not comply will be rejected.
1.3. The Application List for the shares will be opened from September 25, 2014 to October 17, 2014.
Applications must be for a minimum of 1,000 shares and in multiples of 100 thereafter. The
number of shares for which an application is made and the value of the cheque or bank draft
attached should be entered in the boxes provided.
1.4. A single applicant should sign the declaration and write his/her full names, address, daytime
telephone number and occupation in item “1” on the application form. Item “2” should be used
by joint applicants. Corporate applicants should affix their seal in the space provided and state
their incorporation (RC) number or in the case of a corporate foreign subscriber, its appropriate
identification number in the jurisdiction in which it was constituted.
1.5. Each application should be forwarded together with the cheque or bank draft for the full
amount of the purchase price to any of the Receiving Agents listed. The cheque or draft must be
drawn on a bank in the same town or city in which the Receiving Agent is located and crossed
“TRANSCORP HOTELS IPO” with the name, address and daytime telephone number of the
applicant written on the back. All transfer charges to Lagos, if any, must be paid by the
applicant and no application will be accepted unless this has been done. All cheques and
drafts will be presented upon receipt and all applications in respect of which cheques are
returned unpaid will be rejected and returned through the registered post.
2.
Allotment
2.1 UBA Capital Plc, LeadCapital Plc, BGL Capital Limited and the Directors of the Company reserve
the right to accept or reject any application in whole or in part for not meeting the conditions of
the Offer. The allotment proposal will be subject to the clearance of the Securities & Exchange
Commission.
3.
Share Certificate/E-allotment
At the completion of the Offer, the ordinary shares will be registered and transferable in units of 50
kobo each. The CSCS accounts of successful subscribers will be credited by electronic-transfer not
later than 15 working days from the date of allotment. Investors are hereby advised to state the
name of their stockbrokers as well as their CSCS account number in the spaces provided on the
Application Form on page 72. Certificates will be dispatched to investors that do not provide his/her
CSCS account details by registered post not later than 15 working days from date of allotment.
4.
Application Monies
All application monies will be retained in separate interest yielding 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 crossed cheque for the full amount or the balance of the amount paid
(including accrued interest) will be returned by registered post within 5 working days of allotment.
Where monies are not sent within the stipulated 5 days, accrued interest shall be paid to the
unsuccessful applicants at the rate not below Central Bank of Nigeria MPR plus 5%.
69
Prospectus
RECEIVING AGENTS
RECEIVING AGENTS
Application Forms may be obtained free of charge from any of the following Receiving Agents registered as market operators by SEC,
to whom brokerage will be paid at the rate of N 0.75 per N100 worth of stock allotted in respect of applications bearing their official
stamps
The Issuing Houses cannot accept responsibility for the conduct of any of the institutions listed below. Investors are therefore advised to
conduct their own enquiries before choosing an agent to act on their behalf. Evidence of lodgement of funds at any of the Receiving
Agents listed below, in the absence of corresponding evidence of receipt by the Issuing Houses, cannot give rise to a liability on the part of
the Issuing Houses under any circumstances.
Access Bank Plc
Diamond Bank Plc
Ecobank Nigeria Plc
Enterprise Bank Limited
Fidelity Bank Plc
First Bank of Nigeria Plc
First City Monument Bank Plc
Guaranty Trust Bank Plc
Keystone Bank Limited
Mainstreet Bank Limited
Adamawa Securities Limited.
Adonai Stockbrokers Ltd.
Afrinvest West Afrca Ltd
AIL Securities Limited
AIMS Asset Mgt. Ltd
Alangrange Sec. Ltd
Allbond Investment Limited
Alliance Capital Mgt. Co. Ltd.
Altrade Securities Limited
AMYN Investment Limited
Anchorage Securities & Finance Ltd
Anchoria Inv. & Sec. Ltd.
Apel Asset & Trust Ltd
APT Sec. & Funds Limited
Arian Capital Management Ltd
ARM Securities Ltd
Associated Asset Managers Ltd
Atlass Portfolio Ltd
Belfry Invest. & Sec. Limited
Best Link Investment Limited
Bestworth Assets & Trust Limited
BFCL Assets & Sec. Ltd.
Bic Securities Limited
Bytofel Trust & Securities Ltd
Cadington Securities Ltd
Calyx Securities Limited
Camry Securities Ltd
Capital Asset Limited
Capital Bancorp Limited.
Capital Express Sec. Limited
Capital Trust Brokers Ltd.
Cashcraft Securities Ltd
Cashville Inv. & Sec. Ltd
Century Securities Limited
Chapel Hill Advisory Services
Chapel Hill Denham Securities Ltd
Chartwell Securities Ltd
Citi Investment Capital Ltd
City Fin. & Sec. Limited
City Investment Management. Ltd
City-Code Trust & Inv. Co.
Clearview Inv. Co. Limited
Colvia Securities Ltd
Compass Investment & Securities Ltd
Consolidated Inv. Limited
Consortium Investments Ltd
Convenant Sec. & Asset Mgt. Ltd
Cordros Capital Limited
Core Trust & Inv. Limited
Cowry Securities Ltd
Cradle Trust Finnance& Sec. Ltd
Crane Securities Limited
Crossworld Securities Ltd.
Crown Capital Ltd (Crown Wealth Assets Mgt
Ltd.)
CSL Stockbrokers Limited
BANKS
Skye Bank Plc
Stanbic IBTC Bank Plc
Standard Chartered Bank Plc
Sterling Bank Plc
Union Bank of Nigeria Plc
Unity Bank Plc
Wema Bank Plc
Zenith Bank Plc
STOCKBROKERS AND OTHERS
Dakal Services Limited
Davandy Finance & Sec. Ltd.
DBSL Securities Limited
De-Canon Investment Ltd.
Deep Trust Investment Ltd
De-Lords Securities Limited
Dependable Securities Ltd.
Diamond Securities Ltd
Dolbic Finance Limited
Dominion Trust Limited
DSU Brokerage Services Ltd
Dynamic Portfolio Limited
ECL Asset Management Ltd
EDC Securities Ltd
Emerging Capital Ltd
EMI Capital Resources Ltd.
Empire Securities Limited
Enterprise Stockbroker Plc.
EPIC Investment & Trust Limited
Equator Stockbrokers Ltd
Equity Capital Solutions Ltd
ESS Investment & Trust Ltd.
Eurocomm Securities Ltd.
Excel Securities Limited
Express Discount Asset Management Ltd
Express Portfolio Services Ltd.
F&C Securities Limited
Falcon Securities Limited
FBC Trust & Securities Ltd
FBN Securities Ltd
Foresight Sec. Inv. Limited
Forte Financial Ltd
Forthright Sec. & Inv. Limited
Fortress Capital Limited
Fountain Securities Limited
FSDH Securities Ltd
Fund Matrix & Assets MGT. Ltd.
Future View Financial Services Ltd
Future View Securities Ltd
Gem Assets Management Ltd
Genesis Securities & Inv. Ltd.
Gidauniya Inv. & Sec. Ltd.
Global Assets Mgt (Nig) Ltd
Global Inv. & Sec. Ltd.
Global View Consult & Investment Ltd
Golden Securities Ltd.
Gombe Securities Ltd
Gosord Securities Ltd
Greenwich Securities Ltd
GTB Securities Ltd
GTI Capital Limited
Harmony Securities Ltd.
Heartbeat Investments Ltd.
Hedge Sec. & Inv. Co. Ltd
Heritage Capital Markets Ltd
I.T.I.S. Securities Limited
ICMG Securities Limited
Icon Stockbrokers Limited.
Ideal Securities &Invt. Ltd
Imperial Assets Managers Ltd
IMTL Securities Ltd
Independent Securities Ltd.
Integrated Trust & Inv. Ltd.
Intercontinental Securities Limited
International Standard Sec. Ltd.
Interstate Securities Ltd
Investment Centre Ltd (ICL)
Investors & Trust Co. Ltd.
Jamkol Investment Ltd.
Kapital Care Trust & Sec. Ltd
Kinley Securities Limited
Kofana Securities & Inv. Ltd
Kundila Finance Services Ltd.
Laksworth Inv. & Sec. Ltd.
Lambeth Trust & Inv. Co. Ltd
LB Securities Limited
Lead Capital Ltd.
Lead Securities & Investment Ltd
Lighthouse Asset Mgt. Ltd
Lion Stockbrokers Limited
LMB Stockbrokers Limited
Lynac Securities Limited
Mact Securities Ltd
Magnartis Finance & Inv. Ltd.
Mainland Trust Limited
Maninvest Asset Mgt. Plc
Marimpex Fin. & Inv. Ltd.
Marina Securities Limited
Marriot Sec. & Inv. Co.
Maven Asset Management Ltd
Maxifund Invest & Sec. Ltd.
Mayfield Investment Limited
MBC Securities Limited
MBL Financial Services Ltd
Mega Equities Limited
Mercov Securities Limited
Mission Securities Limited
Mountain Inv. & Sec. Limited
Mutual Alliance Inv. & Sec. Ltd.
Networth Securities & Finance Ltd.
Newdevco Invest. & Sec. Co. Ltd
Niche Securities Limited
Nigerian International Sec. Ltd.
Nigerian Stockbrokers Ltd.
Northbridge Investment & Trust
Ltd
Nova Finance & Securities Ltd.
OASIS Capital
Omas Inv. & Trust Limited
Options Securities Limited
PAC Securities Limited
HP Securities Limited
Pilot Securities Ltd.
70
Prospectus
RECEIVING AGENTS
Reading Investments Ltd
Redasel Investment Ltd
Regency Assets Mgt. Ltd.
Regency Financings Limited
Rencap Securities Nigeria Ltd
Resano Securities Limited
Resort Securities & Trust Ltd.
Reward Inv. & Sec. Ltd.
Rivtrust Securities Limited
Rolex Securities Limited
Rostrum Inv. Securities Ltd
Royal Crest Finance Limited
Royal Trust Securities Ltd
Santrust Securities Limited
Securities Solutions Limited
Securities Trading & Invest. Ltd
Security Swaps Limited
Shelong Invest. Ltd
Sigma Securities Limited
Signet Investments Sec. Ltd.
Resort Securities & Trust Ltd.
Trans Africa Financial Services Ltd
Transglobe Inv. & Fin. Co. Ltd.
Royal Crest Finance Limited
Royal Trust Securities Ltd
Santrust Securities Limited
Securities Solutions Limited
Transworld Investment & Securities Ltd
Tropics Securities Limited
Trust Yeild Securities Limited
Trusthouse Investment Ltd.
TRW Stockbrokers Limited
UBA Stockbrokers Ltd
UIDC Securities Limited
Unex Capital Ltd
Transworld Investment & Securities Ltd
Union Capital Markets Ltd
Valmon Securities Limited
Valueline Sec. & Inv. Limited
Vetiva Capital Mgt. Limited
Vetiva Securities Ltd
Vision Trust & Inv. Limited
Waila Securities & Funds Ltd
Wizetrade Capital Asset & Mgt. Ltd
Woodland Capital Market Ltd
WSTC Financial Services
WT Securities Ltd
Zenith Securities Limited
71
Prospectus
APPLICATION FORM
APPLICATION FORM
Application List Opens
September 25, 2014
Application List closes
October 17, 2014
TRANSCORP HOTELS PLC
RC: 248514
Lead Issuing House:
Initial Public Offering
of
800,000,000 Ordinary Shares of 50 Kobo each
At N10.00 per share
FOR REGISTRARS’ USE ONLY
No. of Shares Applied
No. Shares Allotted
Payable in Full on Acceptance
Joint Issuing House:
Amount Paid
LeadCapital PlcRC 116443
Value of Shares allotted
Amount to be returned
Application must be 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.
Cheque Number
CONTROL NO:
DECLARATION
• I am/We are 18 years of age or over.
• I/We attach the amount payable in full on application for the number of shares below in Transcorp Hotels Plc at 50 kobo
• I/we agree to accept the same or smaller number of shares in respect of which allotment may be made upon the Terms of the Offer
dated September 19, 2014 and subject to the provisions of the Memorandum and Articles of Association of Transcorp Hotels Plc
• I/We authorize you to send a Share Certificate and/or cheque for any amount overpaid, by registered post at my/our risk to the address given below
and to produce registration in my/our name as holder(s) of such number of shares or smaller number as aforesaid.
• I/We declare that I/We have read the Offer Prospectus dated September 19, 2014, issued by [the Issuing House] on
behalf of Transcorp Hotels Plc.
GUIDE TO APPLICATION
Number of Units Applied For:
1,000
Minimum
Subsequent multiples of 100
DATE (DD/MM/YYYY)
Amount Payable:
N10,000
N100
Value of Units Applied For / Amount Paid
Number of Units Applied For
1. INDIVIDUAL/CORPORATE APPLICANT
Title:
Surname/Company Name:
.
PLEASE COMPLETE IN BLOCK LETTERS
Mr.
Mrs.
Others.
Miss.
Other Names (for Individual Applicant Only )
Full Postal Address
City
State
Land Phone Number
Mobile (GSM) Phone
E – mail address:
Next of Kin:
Clearing House Number (CHN):
2. Joint Applicant:
Surname
Name of Your Stockbroker
Title:
Mr
.
Mrs.
Miss.
Others.
Other Names
3. Bank Details (For E-dividend)
Bank Name
Account Number
Branch Name
Company Seal & Incorporation Number (Corporate Applicant)
Signature or thumbprint
Signature or thumbprint
Stamp of Receiving Agent
220B, Ikorodu Road, Palmgrove
Lagos.
A
PPLICA
Tel: +234 (0)7080606400 |
72
Prospectus
1. Applications should be made only on the Application Form or photocopies or scanned copies of
the Application Form.
2.
Applications must be for not less than the minimum number of units stated on the Application
Form. Applications for more than the minimum number of units must be in the multiples stated on
the Application Form. The number of Units for which applications are made and the amount of
the cheque or bank draft attached should be entered in the boxes provided.
3.
The Application Form when completed should be lodged with any of the Receiving Agents listed
herein. Applications must be accompanied by cheque or bank draft made payable to the
Receiving Agent with whom the application is submitted, for the full amount payable on
application. The cheque or draft must be drawn on a bank in the same town or city in which the
Receiving Agent is located and crossed “TRANSCORP HOTELS IPO” with the name(s) and
address(es) and daytime telephone number (where available) of the applicant(s) on the back.
All cheques and drafts will be presented for payment on receipt and applications in respect of
which cheques are returned unpaid for any reason will be rejected.
4.
The applicant(s) should make only one application, whether in his own name or in the name of a
nominee. Multiple or suspected multiple applications will be rejected.
5.
Joint applicants must all sign the Application Form.
6.
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.
7.
An application from a corporate body must bear the corporate body’s seal and be completed
under the hand of a duly authorized official.
8.
An application by an illiterate should bear his right thumb print on the application form and be
witnessed by an official of the bank or stock broking firm at which the application is lodged who
must first have explained the meaning and effect of the Application Form to the illiterate in the
illiterate’s 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 the same before affixing his thumb
impression.
9.
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 Offer as an illiterate and his right thumbprint should be clearly
impressed on the Application Form.
73
Prospectus

Transcorp Hotel IPO - Fidelity Securities Limited

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