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FIDSON HEALTHCARE PLC (RC 267435)

(INCORPORATED WITH LIMITED LIABILITY IN THE FEDERAL REPUBLIC OF NIGERIA)

₦10,000,000,000 (Ten Billion Naira)

COMMERCIAL PAPER ISSUANCE PROGRAMME

Fidson Healthcare PLC (“Fidson”, the “Issuer” or the “Company”), a public limited liability company incorporated in Nigeria and listed on the

Nigerian Stock Exchange, has established this ₦10,000,000,000 (Ten Billion Naira) commercial paper issuance programme (the “CP Programme”), under which Fidson may from time to time issue Commercial Paper notes (“CP Notes” or “Notes”), denominated in Nigerian Naira or in such other currency as may be agreed between the Issuer and each relevant Dealer and/or the Arrangers (as defined in the section

entitled, “Summary of the Programme”, in separate series or tranches subject to the terms and conditions (“Terms and Conditions”) contained in this Programme Memorandum ( the “Programme Memorandum”).

Each Series or Tranche (as defined under the Terms and Conditions) will be issued in such amounts, and will have such discounts, period of maturity and other terms and conditions as set out in the Pricing Supplement applicable to such series or tranche (the “Applicable Pricing Supplement”). The maximum aggregate nominal amount of all CP Notes from time to time outstanding under the CP Programme shall not

exceed ₦10,000,000,000 (Ten Billion Naira) over the three-year period that this Programme Memorandum, including any amendments thereto, shall remain valid.

This Programme Memorandum is to be read and construed in conjunction with any supplement hereto and all documents which are incorporated herein by reference and, in relation to any Series or Tranche (as defined herein), together with the Applicable Pricing Supplement.

This Programme Memorandum shall be read and construed on the basis that such documents are incorporated and form part of this Programme Memorandum.

This Programme Memorandum, the Applicable Pricing Supplement and the Notes have not been and will not be registered with the Securities

and Exchange Commission, or under the Investment and Securities Act, No. 29 of 2007.

The Notes issued under this Programme shall be issued in dematerialised form, registered, quoted and traded over the counter via the FMDQ

Securities Exchange Limited (“FMDQ Exchange” or the “Exchange”) platform in accordance with the rules, guidelines and such other regulation with respect to the issuance, registration and quotation of commercial paper as may be prescribed by the Central Bank of Nigeria (“CBN”) and

FMDQ Exchange from time to time, or any other recognized trading platform as approved by the CBN. The securities will settle via the Central Securities Clearing System PLC ("CSCS"), FMDQ Depository Limited (“FMDQ Depository”) or any other recognized depository, acting as central securities depositary for the Notes.

This Programme Memorandum and the Applicable Pricing Supplement shall be the sole concern of the Issuer and the party to whom this Programme Memorandum and the Applicable Pricing Supplement is delivered (the “Recipient”) and shall not be capable of distribution and

should not be distributed by the Recipient to any other parties nor shall any offer made on behalf of the Issuer to the Recipient be capable of renunciation and assignment by the Recipient in favour of any other party.

In the event of any occurrence of a significant factor, material mistake or inaccuracy relating to the information included in the Programme Memorandum, the Issuer will prepare a supplement to this Programme Memorandum or publish a new Programme Memorandum for use in connection with any subsequent issue of Notes.

This Programme Memorandum has been prepared in accordance with the Central Bank of Nigeria Guidelines on the Issuance and Treatment of Bankers Acceptances and Commercial Papers issued on September 11 2019, and the Commercial Paper Registration and Quotation Rules (the

“Rules”) of FMDQ Exchange in force as of the date thereof. The document is important and should be read carefully, if any recipient is in any doubt about its contents or the actions to be taken, such recipient should please consult his/her banker, stockbroker, accountant, solicitor and/or any other professional adviser for guidance immediately.

LEAD ARRANGER AND DEALER

FSDH CAPITAL LIMITED

RC: 276208

JOINT ARRANGER AND DEALER

CARDINALSTONE PARTNERS LIMITED RC: 739441

ISSUING, CALCULATION AND

PAYING AGENT

FSDH MERCHANT BANK LIMITED

RC: 199528

THIS PROGRAMME MEMORANDUM IS DATED 02 MARCH 2021

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CONTENTS

DEFINITIONS AND INTERPRETATIONS ................................................................................................................. 3

IMPORTANT NOTICES ................................................................................................................................................. 7

SUMMARY OF THE PROGRAMME ............................................................................................................................ 9

USE OF THE PROCEEDS .............................................................................................................................................. 11

OVERVIEW OF FIDSON HEALTHCARE PLC .......................................................................................................... 12

REVISED CBN GUIDELINES ON ISSUANCE OF CPs…………………………………………………………………………………….20

TERMS AND CONDITIONS OF THE NOTES .......................................................................................................... 22

TAX CONSIDERATIONS ............................................................................................................................................. 28

RISK FACTORS .............................................................................................................................................................. 29

SETTLEMENT, CLEARING AND TRANSFER OF NOTES ..................................................................................... 33

PROFORMA APPLICABLE PRICING SUPPLEMENT ............................................................................................. 36

AUDITOR’S COMFORT LETTER ............................................................................................................................... 40

HISTORICAL FINANCIAL INFORMATION ............................................................................................................ 41

EXTRACT FROM ISSUER’S RATING REPORT ....................................................................................................... 44

LEGAL OPINION ON THE NOTES ............................................................................................................................ 45

GENERAL INFORMATION ......................................................................................................................................... 55

PARTIES TO THE PROGRAMME .............................................................................................................................. 57

DEFINITIONS AND INTERPRETATIONS

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In this Programme Memorandum, unless a contrary indication appears, the following expressions shall have the meanings

indicated in the table below. Words in the singular shall include the plural and vice versa, references to a person shall include

references to a body corporate, and reference to a gender includes the other gender.

Terms/ Abbreviations Description

“Agency Agreement” The Issuing, Calculation and Paying Agency Agreement dated on or about the date of this Programme Memorandum executed by the Issuer and the Issuing, Calculation and Paying Agent

“Applicable Pricing Supplement” or “Pricing Supplement”

The pricing supplement applicable to a particular Series or Tranche issued under the CP Programme

“Arrangers” or “Dealers” FSDH Capital Limited CardinalStone Partners Limited And/or any other additional dealer appointed pursuant to the

Dealer Agreement from time to time, which appointment may be for a specific issue or on an ongoing basis, subject to the Issuer’s right to terminate the appointment of any Dealer pursuant to the Dealer Agreement

“BA” Banker’s Acceptance

“Board” or “Directors” Board of Directors of Fidson Healthcare PLC

“Business Day” Any day other than a Saturday, Sunday or a public holiday on which commercial banks are open for general banking business in Lagos, Nigeria

“Business Hours” 8.00 am to 5.00 pm on any Business Day

“CAMA” Companies and Allied Matters Act, Cap C20, LFN 2004

“CBN” Central Bank of Nigeria

“CBN Guidelines” CBN’s Guidelines on the Issuance and Treatment of Bankers Acceptances and Commercial Paper, issued on September 11 2019, and the CBN Circular of 12 July 2016 on Mandatory Registration and Listing of Commercial Papers as amended or supplemented from time to time

“CGT” Capital Gains Tax as provided for under the Capital Gains Tax Act, Cap C1, LFN 2004 as amended

“CITA” Companies Income Tax Act, Cap C21, LFN, 2004 (as amended by the Companies Income Tax Act No 11 of 2007 and the Finance Act 2020)

“Central Securities Depository” or “CSD”

Central Securities Clearing System Plc, FMDQ Depository Limited, and/or any other Central Securities Depository determined by the Issuer, and which expression shall include its successors or any additional or alternative clearing system or any clearing system as may otherwise be specified in the Applicable Pricing Supplement

“Commercial Paper”, “CP”, “CP Notes”, or “Notes”

Senior unsecured commercial paper notes to be issued by the Issuer in the form of short-term zero-coupon notes under the CP Programme.

“Conditions” or “Terms and Conditions”

Terms and conditions, in accordance with which the Notes will be issued, set out in the section headed “Terms and Conditions of the Notes”

“Co-Arranger” or “Co-Dealer” CardinalStone Partners Limited and/or any other Co-Arranger appointed by the Issuer

“CP Programme” or “Programme” The CP Programme described in this Programme Memorandum pursuant to which the Issuer may issue several, separate series of Notes from time to time with varying maturities and discount rates, provided, however, that the aggregate Face Value of Notes in issue does not exceed ₦ 10,000,000,000 (Ten Billion Naira)

DEFINITIONS AND INTERPRETATIONS

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“CSCS” Central Securities Clearing System PLC

“Day Count Fraction” Such method of calculating the interest/discount as specified in the Applicable Pricing Supplement

“Deed of Covenant” The Deed of Covenant dated on or about the date of this Programme Memorandum executed by the Issuer in favour of the Noteholders

“Dealer Agreement” The agreement dated on or about the date of this Programme Memorandum between the Issuer and the Dealers

“Eligible Investor” or “EI” An investor that is not a Qualified Institutional Investor as defined by the FMDQ Exchange Commercial Paper Registration and Quotation Rules, that has executed a declaration attesting to his or her eligibility in the manner prescribed in the FMDQ Exchange Rules

“Face Value” or “Nominal Amount” The par value of the Notes

“FGN” Federal Government of Nigeria

“Fidson”, “Issuer”, or the “Company” Fidson Healthcare PLC

“FIRS” Federal Inland Revenue Service

"FMDQ Exchange” or the “Exchange FMDQ Securities Exchange Limited, a securities exchange and self-regulatory organisation licensed by the Securities and Exchange Commission to provide a platform for, amongst others, listing, quotation, registration and trading of debt securities

“FMDQ Exchange Rules” The FMDQ Exchange Commercial Paper Registration and Quotation Rules, July 2020 (as may be amended from time to time) and such other regulations (including but not limited to market bulletins) with respect to the issuance, registration and quotation of commercial papers as may be prescribed by FMDQ Exchange from time to time

“Force Majeure” Any event or circumstance (or combination of events or circumstances) that is beyond the control of the Issuer which materially and adversely affects its ability to perform its obligations as stated in the Conditions, which could not have been reasonably foreseen, including without limitation, nationwide strikes, national emergency, lockout, plague, epidemic, pandemic, an outbreak of infectious disease or any other public health crisis, including quarantine or other restrictions, riot, war, embargo, legislation, acts of God, acts of terrorism, and industrial unrest

“Government” Any federal, state, or local government of the Federal Republic of Nigeria

“Implied Yield” The yield accruing on the Issue Price of a Note, as specified in the Applicable Pricing Supplement

“ISIN” International Securities Identification Number

“Issue Date” The date upon which the relevant Series/Tranche is issued as specified in the Applicable Pricing Supplement

“Issue Price” The price at which the relevant Series/Tranche is issued, as specified in the Applicable Pricing Supplement

“Issuing, Calculation and Paying Agent” or “Agent” or “ICPA” or “IPA”

FSDH Merchant Bank Limited and/or any successor Issuing, Calculation and Paying Agent appointed in accordance with the Agency Agreement

“Lead Arranger” FSDH Capital Limited

“LFN” Laws of the Federation of Nigeria

“Material Adverse Change” Means a material adverse effect on the ability of the Issuer to perform and comply with its payment obligations under the CP Programme

“Maturity Date” The date as specified in each Applicable Pricing Supplement on which the Principal Amount is due

DEFINITIONS AND INTERPRETATIONS

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“Naira”, “NGN”, or “₦” The Nigerian Naira, the lawful currency of Nigeria

“Nigeria” The Federal Republic of Nigeria and “Nigeria” shall be construed accordingly

“Noteholder” or “Holder” The holder of a Note as recorded in the Register in accordance with the Terms and Conditions

“Notes” The commercial paper issued by the Issuer from time to time pursuant to the Programme Memorandum and any Applicable Pricing Supplement as promissory notes and held in a dematerialised form by the Noteholders through the CSCS and/or any other Central Securities Depository determined by the Issuer

“OTC” Over-the-Counter

“Outstanding” means, in relation to the Notes, all the Notes issued, other than:

i. those Notes which have been redeemed pursuant to these conditions ii. those Notes in respect of which the date (including, where

applicable, any deferred date) for its redemption in accordance with the relevant conditions has occurred and the redemption moneys have been duly paid in accordance with the provisions of this Deed and

iii. those Notes which have become void under the provisions of this Deed

“PITA” Personal Income Tax Act (Chapter P8) LFN 2004 (as amended by the Personal Income Tax (Amendment) Act of 2011 and the Finance Act, 2020)

“Principal Amount” The nominal amount of each Note, as specified in the Applicable Pricing Supplement

“Programme” The N10,000,000,000 (Ten Billion Naira) commercial paper issuance programme established by the Issuer which allows for the multiple issuances of Notes from time to time

“Programme Memorandum” This information memorandum dated 02 March 2021 which details the aggregate size and broad terms and conditions of the CP Programme

“Qualified Institutional Investor” or “QII”

Banks, fund managers, pension fund administrators, insurance companies, investment/unit trusts, multilateral and bilateral institutions, registered private equity funds, registered hedge funds, market makers, staff schemes, trustees/custodians, stockbroking firms and any other category of investors as may be determined by FMDQ Exchange from time to time

“Redemption Amount” The amount specified in the Applicable Pricing Supplement as the amount payable in respect of each Note on the Redemption Date

“Redemption Date” Means in relation to any Series or Tranche, the date on which redemption monies are due and payable in respect of the Notes as specified in these Conditions and the Applicable Pricing Supplement

“Register” The register of Noteholders, maintained by the Issuing, Calculation and Paying Agent

“Registrar” The CSD or such other Registrar as may be appointed by the Issuer in respect of the Notes issued under the Programme

“Relevant Date” The payment date of any obligation due on the Notes

“Relevant Last Date” The date stipulated by the CSD and specified in the Applicable Pricing Supplement, after which transfer of the Notes will not be registered

“Series” A Tranche of Notes together with any further Tranche or Tranches of Notes which are (i) expressed to be consolidated and form a single series

DEFINITIONS AND INTERPRETATIONS

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and (ii) are identical in all respects except for their respective Issue Dates, and/or Issue Prices

“Special Resolution” A resolution passed by at least three fourths (3/4) majority of the total number of Noteholders at any point in time

“The NSE” The Nigerian Stock Exchange

“Tranche” Notes which are identical in all respects

“Validity Period” The period of 36 months commencing from 02 March 2021 to 02 March 2024, during which the CP Programme is valid. Provided that the tenor of every issue (including any rollover of such issue) shall not exceed 270

(Two Hundred and Seventy) days. The maturity date of all outstanding

issues shall also not exceed the validity period of the applicable Issuer/CP Programme rating designated at the commencement of the registration of the CP Programme

“VAT” Value Added Tax as provided for in the Value Added Tax Act, Cap VI, LFN, 2004 (as amended by the Value Added Tax Act No 12 of 2007 and the Finance Act, 2020)

“WHT” Withholding Tax as provided for in section 78(2) of CITA and Section 70 (2) PITA

“Zero Coupon Note” A Note which will be offered and sold at a discount to its Face Value and which will not bear interest, other than in the case of late payment

IMPORTANT NOTICES

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This Programme Memorandum contains information provided by the Issuer in connection with the CP Programme

under which the Issuer may issue and have outstanding at any time Notes up to a maximum aggregate amount of

₦10,000,000,000 (Ten Billion Naira). The Notes shall be issued subject to the Terms and Conditions contained in this

Programme Memorandum.

The Issuer shall not require the consent of the Noteholders for the issue of Notes under the Programme.

The Issuer accepts responsibility for the information contained in this Programme Memorandum. To the best of the

knowledge and belief of the Issuer (who has taken all reasonable care to ensure that such is the case), the

information contained or incorporated in this Programme Memorandum is correct and does not omit anything

likely to affect the import of such information.

The Issuer, having made all reasonable enquiries, confirms that this Programme Memorandum contains or

incorporates all information which is material in the context of the CP Programme and the offering of the Notes,

that the information contained in this Programme Memorandum is true and accurate in all material respects and is

not misleading and that there are no other facts the omission of which would make this document or any of such

information misleading in any material respect.

To the fullest extent permitted by law, neither the Lead Arranger nor the Co-Arranger and other professional

advisers accepts any responsibility for the contents of this Programme Memorandum or for any other statement,

made or purported to be made by either the Lead Arranger or the Co-Arranger or on its behalf in connection with

the Issuer or the issue and offering of the Notes. The Lead and Co-Arrangers and other professional advisers

accordingly disclaim all and any liability whether arising in tort or contract or otherwise (save to the extent

precluded by law) which it might otherwise have in respect of this Programme Memorandum or any such

statement.

No person has been authorised by the Issuer to give any information or to make any representation not contained

or not consistent with this Programme Memorandum or any information supplied in connection with the CP

Programme and if given or made, such information or representation must not be relied upon as having been

authorised by the Issuer, unless explicitly delivered by the Issuer.

Neither this Programme Memorandum nor any other information supplied in connection with the CP Programme

is intended to provide a basis for any credit or other evaluation or should be considered as a recommendation by

the Issuer, the Lead and Co-Arrangers or any other professional adviser that any recipient of this Programme

Memorandum or any other information supplied in connection with the CP Programme should purchase any

Notes.

Each person contemplating the purchase of any Notes should make his/her own independent investigation of the

financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and the terms of the

offering and its own determination of the suitability of any such investment and any other factors which may be

relevant to it in connection with such investment. Neither this Programme Memorandum nor any other information

supplied in connection with the CP Programme constitutes the rendering of financial or investment advice or an

offer or invitation by, or on behalf of, the Issuer, the Lead or Co-Arrangers or any other professional adviser, to any

person to subscribe for or to purchase any Notes.

The delivery of this Programme Memorandum does not at any time imply that the information contained herein

concerning the Issuer is correct at any time subsequent to the date hereof. Neither the Lead Arranger nor the Co-

IMPORTANT NOTICES

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Arranger and the other professional advisers expressly or impliedly undertakes to review the financial information

or affairs of the Issuer during the life of the Programme. Investors should review, among other things, the most

recent audited annual financial statements of the Issuer prior to taking any investment decision.

The commercial paper is a Nigerian Naira denominated instrument and all currency risks assumed by investors

upon purchase of the commercial paper issue are borne by the individual investors.

FMDQ Securities Exchange Limited takes no responsibility for the contents of this Programme Memorandum, nor

any other information supplied in connection with this CP Programme makes no representation as to its accuracy

or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in

reliance upon the whole or any part of the contents of this Programme Memorandum.

This Programme Memorandum should be read and construed in conjunction with:

1. Each Applicable Pricing Supplement relating to any Series or Tranche of Notes issued under the

Programme; and

2. The audited annual financial statements of the Issuer for the financial years prior to each issue of Notes

under this Programme,

which shall be deemed to be incorporated into, and to form part of, this Programme Memorandum and which shall

be deemed to modify and supersede the contents of this Programme Memorandum as appropriate.

The Issuer shall make the audited financial statements and documents incorporated by reference available.

Requests for such documents shall be directed to the Issuer or Arranger at its specified offices as set out in this

Programme Memorandum.

SUMMARY OF THE PROGRAMME

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The following summary does not purport to be complete and is taken from, and is qualified in its entirety by the remainder of

this Programme Memorandum and the Applicable Pricing Supplement:

1. ISSUER Fidson Healthcare PLC

2. PROGRAMME DESCRIPTION Commercial Paper Issuance Programme

3. SIZE OF PROGRAMME ₦10,000,000,000 (Ten Billion Naira)

4. ISSUANCE IN SERIES

The Notes will be issued in Series or Tranches, and each Series may comprise one or more Tranches issued on different dates. The Notes in each Series will have the same maturity date and identical terms (except that the Issue Dates and Issue Price may be different). Details applicable to each Series or Tranche will be specified in the Applicable Pricing Supplement

5. LEAD ARRANGER FSDH Capital Limited

6. CO-ARRANGER CardinalStone Partners Limited

7. DEALERS

FSDH Capital Limited, CardinalStone Partners Limited, and/or any other additional dealer appointed pursuant to the Dealer Agreement from time to time, which appointment may be for a specific issue or on an ongoing basis, subject to the Issuer’s right to terminate the appointment of any Dealer pursuant to the Dealer Agreement

8. ISSUING, CALCULATION AND PAYING AGENT

FSDH Merchant Bank Limited

9. AUDITORS Deloitte & Touche

10. SOLICITOR G Elias & Co

11. CUSTODIAN Central Securities Clearing System PLC or FMDQ Depository Limited

12. USE OF PROCEEDS The net proceeds from each issue of Notes will be used to augment the Issuer’s working capital requirements and for the Issuer’s business or as may otherwise be described in the Applicable Pricing Supplement

13. METHOD OF ISSUE

The Notes may be offered and sold by way of a fixed price offer for subscription or through a book-building process and/or any other methods as described in the Applicable Pricing Supplement, within Nigeria or otherwise, in each case as specified in the Applicable Pricing Supplement

14. MATURITY DATE

As specified in the Applicable Pricing Supplement, subject to a minimum tenor of 15 (Fifteen) days and a maximum of 270 (Two Hundred and Seventy) days (including rollover, from date of issue). The maturity date of all outstanding CPs shall also not exceed the validity period of the applicable Issuer/CP Programme rating designated at the commencement of the registration of the CP Programme.

15. INTEREST PAYMENTS Notes issued will be in the form of Zero-Coupon Notes and will not pay interest prior to final maturity.

16. SOURCE OF REPAYMENT The repayment of all obligations under the Programme will be funded from the cash flows of the Issuer unless otherwise specified in the Applicable Pricing Supplement

17. ISSUE PRICE The Notes shall be issued at a discount. The effective rate of interest will be calculated on the basis of such Day Count Fraction specified in the Applicable Pricing Supplement

18. ISSUE SIZE As specified in the Applicable Pricing Supplement

SUMMARY OF THE PROGRAMME

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19. CURRENCY OF ISSUE Nigerian Naira

20. REDEMPTION As stated in the Applicable Pricing Supplement, subject to the CBN Guidelines and FMDQ Exchange Rules

21. RATING

Pursuant to the to the CBN Guidelines and FMDQ Exchange Rules, either the issuer or the specific issue itself shall be rated by a rating agency registered in Nigeria or any international rating agency acceptable to the CBN. The issuer has been assigned a rating of BBB+ by Global Credit Ratings Company Limited. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency

22. STATUS OF THE NOTES

Each Note constitutes a senior, direct, unconditional, unsubordinated and unsecured obligation of the Issuer and the Notes rank pari passu

among themselves and, save for certain debt obligations preferred by law, pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer outstanding from time to time

23. QUOTATION

The Notes will be quoted on the FMDQ Exchange Platform or any other recognized trading platform. All secondary market trading of the Notes shall be done in accordance with the rules in relation to the quotation or listing of any Series or Tranche of Notes quoted or listed on the relevant trading platform

24. TAXATION Refer to the section of this Programme Memorandum titled “Tax Considerations”

25. GOVERNING LAW The notes issued under the Programme and all related contractual documentation will be governed by and construed in accordance with Nigerian law.

26. SETTLEMENT PROCEDURES Purchases will be settled via direct debit, electronic funds transfers, NIBBS Instant Payment (NIP), NIBBS Electronic Funds Transfer (“NEFT”) or Real Time Gross Settlement (“RTGS”)

USE OF PROCEEDS AND SOURCES OF REPAYMENT

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Use of Proceeds The net proceeds from each issue of Notes will be used to augment the Issuer’s working capital requirements and for the Issuer’s business or as may otherwise be described in the Applicable Pricing Supplement.

Sources of Repayment

The repayment of all obligations under the Programme will be funded from the cash flows of the Issuer unless otherwise specified in the Applicable Pricing Supplement

OVERVIEW OF FIDSON HEALTHCARE PLC

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1. HISTORICAL OVERVIEW

Fidson was incorporated in 1995 and commenced operations as a local drug distributor. The Company has since

evolved into manufacturing and marketing of its branded pharmaceutical products. The Company is also publicly

listed on the NSE.

The Company currently sells over 150 unique drug products and formulations across different therapeutic classes

and pharmacological segments and has a strong distribution infrastructure with wide geographical spread across

Nigeria.

Fidson made the transition into production in 2002 and commissioned its first manufacturing plant in the same

year; the Company subsequently increased its production capacity with the acquisition of a new factory in 2007.

In 2016, Fidson commissioned its World Health Organisation (“WHO”) compliant, ultra-modern facility with high-

tech machinery for manufacturing pharmaceutical products and built-in compliance with global standards. Fidson

has also continuously maintained its high standards of processing and operations as evidenced by its longstanding

NIS:ISO 9001:2008 certification.

On a financial note, Fidson’s revenue has been relatively stable in recent operating periods, with a CAGR of about

14.4% from FY 15 – FY 19, while EBITDA attained a CAGR of 12.9% in the same period.

The impact of the 2019 elections in Nigeria drove a decline in revenue (-13.4%) for the year ended 31 December

2019. The reduction in turnover was also driven by lower sales to certain institutional clients and a drive to control

and reduce trade receivables. Sales orders from customers with debts above the credit days were not attended to

in order to bring the receivables down and this in turn affected the turnover. Despite the reduction in turnover,

operating profit increased because of improvement in cost of sales and savings in operating expenses driven by

several cost optimization initiatives across all segments of the business. We intend to continue in this direction into

the future.

On a positive note, the COVID-19 pandemic is providing opportunities to explore development of new products

for treating infectious diseases. The pandemic has also compelled the government to prioritize the healthcare sector,

with the pharmaceutical industry set to benefit from these policy changes. Growing demand for Fidson’s existing

products are expected to drive top line growth in the near and medium term.

Fidson also expects an increase in its operational and financial efficiency in the years ahead. This will be largely

driven by an optimal operating cost structure and a significant decline in financing costs as the Company operates

a more efficient working capital cycle.

2. PRODUCT OFFERINGS

Arthemed Tablet is an orally active Artemisinin Combination Therapy (ACT)

medication for the treatment of acute, uncomplicated malaria. It contains

Arthemeter and Lumefantrine in a twice-daily (12 hourly) dosage regimen.

Arthocare Forte is specially formulated with Chondroitin, Glucosamine, MSM as

major ingredients. The product is used in the management of mild to moderate

osteoarthritis, relief of pain and regeneration of articular cartilage.

OVERVIEW OF FIDSON HEALTHCARE PLC

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Astymin is one of Fidson’s most notable products and a unique combination of

essential amino-acids and multivitamins formulated with nutrients that improve

energy metabolism, accelerate physical and mental growth, improve the body's

immune systems and quicken recovery from sickness. Astymin is available in

liquid, capsules, drops. It is also available as an amino acid infusion (Astymin SN)

for the critically ill.

Ciprotab is one of our flagship brands and a market leader among quinolone

antibiotics in Nigeria. A premium brand of Ciprofloxacin, Ciprotab is highly

differentiated in the market as the only brand of Ciprofloxacin tablet enrobed in

soft gelatin. It is presented in several SKUs, including CIPROTAB-TN (a

combination of Ciprofloxacin and Tinidazole).

Avipol® is a brand of Paracetamol paediatric suspension. It is pleasantly flavoured

and alcohol-free. It is used as an antipyretic (to relieve feverish conditions) as well

as an analgesic agent. Avipol suspension is indicated for the relief of headaches,

aches, and pains in children.

Emal is a brand of α/b - arteether used for the curative treatment of severe malaria,

including cerebral malaria in adults and children. Its convenient dosage of one

injection (150mg/2ml) per day for 3 days and excellent efficacy profile make the

product a favourite among clinicians for the treatment of malaria in the tropics.

Cestra is a range of premium nutritional and probiotic supplements that provide

health benefits including the prevention and treatment of diseases. Cestra comes in

unique variants: Cestra 50 Plus Once A Day, Cestra Multi-nutrient Once A Day,

Cestra Omega 3 & 6, Cestra Pre Natal Once a Day and Cestra ProBiotix

Ferobin is a complete everyday blood builder, which is used for the treatment and

prevention of anaemia in pregnancy, folic acid deficiency, poor nutritional status,

and other conditions where there is a need for rapid restoration of haemoglobin

level. It comes as Ferobin Syrup, Ferobin Plus Syrup and Ferobin capsules.

Gascol is a range of pleasantly flavoured antacid (Suspension and chewable tablets)

for quick and effective relief from acid-induced pain (due to ulcer of the stomach

and duodenum), indigestion, flatulence and heartburn. Gascol suspension has a

gel-like consistency and is currently available in four (4) flavours: Gascol Classic,

Gascol Strawberry, Gascol Banana and Gascol Sugar-free.

Meprasil (capsules and Injection) is a brand of Omeprazole, a proton pump

inhibitor (PPI) used for the management of peptic and duodenal ulcer diseases and

other acid-related disorders. Meprasil's unique features include its quick onset,

reliable acid control and convenient dosage regimen. Meprasil capsules is the first

PPI to be locally produced in Nigeria, making it the flagship brand of Omeprazole

in the market.

OVERVIEW OF FIDSON HEALTHCARE PLC

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Pladox® is a brand of Clopdogrel, an orally active antiplatelet agent (blood thinner)

used in the management of cardiovascular conditions. It prevents platelets from

clumping together and forming blood clots, thus playing a critically important role

in the prevention of heart attack, ischemic stroke, and peripheral vascular disease.

Tribotan is a topical preparation with effective antifungal and anti-itching

properties. Tribotan comes in two variants: Triboban Baby cream (for itchy skin and

nappy rash in babies) and Tribotan Adult cream (for itchy skin, jock itch, fungal

infections and itchy conditions under the breast, armpit and rubbing thighs.

Tuxil is a range of cough syrups for adults and children. It is an effective remedy

for symptoms of cough and congestion, runny nose and sneezing associated with

hay fever and allergies. It comes as Tuxil D (Children and Adult), Tuxil N (Children

and Adult), Tuxil Runny Nose and Catarrh, Tuxil 4 and Tuxil C. For every type of

cough, there is a Tuxil that is specially made to provide fast and effective relief for

children and adults.

3. DESCRIPTION OF SHAREHOLDING

The Registrar has advised that according to the register of members as of 31 December 2019, the following held

more than 5% of the issued share capital of the Company:

Shareholder No of Shares % Holding

Dr. Fidelis Ayebae 689,585,227 33.05%

Stanbic IBTC Nominee Ltd 496,710,303 23.81%

Aside from the shareholders listed above, no other shareholder or institution has a 5% or more holding in the

Company.

4. CORPORATE GOVERNANCE

Fidson’s corporate governance strategy and initiatives are geared towards complying with the Nigerian Code of

Corporate Governance 2018 and maintaining an amicable relationship with its various stakeholders. The Company

uses the doctrines of good governance to engender the sustainability of its business.

Fidson continues to subject operations to periodic examinations and audits by independent auditors which include

current Good Manufacturing Practice (GMP) and National Agency for Food and Drugs Administration and Control

(NAFDAC). Each audit/examination report is made the subject for consideration by a committee headed by an

executive director for proper review and implementation.

Overseen by the Board of Directors, Corporate Governance practices are constantly under review in line with the

dynamics of the business environment. The Corporate Governance policies adopted by the Board of Directors are

designed to ensure that the Company's business is conducted in a fair, honest and transparent manner that

conforms to high ethical standards. The day-to-day affairs of the company are run by the Executive Management

with regular meetings to brainstorm on the company's operations and to also give departmental reports for reviews.

The framework for Fidson’s Corporate Governance is hinged on:

The Nigerian Code of Corporate Governance 2018

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15 | P a g e

Various Standard Operations Procedure (SOP) and the International Standard Organisation's compliance

requirements

Provisions of the Companies and Allied Maers Act, 2004

Financial Reporting Council Act, 2011

International Financial Reporting Standards (IFRS)

The listing rules of the Nigerian Stock Exchange

Rules of the Securities and Exchange Commission

Good Manufacturing Practice

International best practices

5. GOVERNANCE STRUCTURE

Board of Directors

The Board is responsible for the oversight of the business, long-term strategy and objectives, and the oversight of

the Company’s risks while evaluating and directing implementation of Company controls and procedures

including maintaining a sound system of internal controls to safeguard shareholders’ investments and the

Company’s assets. Matters reserved for the Board include:

Strategy and management

Structure and capital

Financial reporting and controls

Internal controls

Contracts

Communication

Board membership and other appointments

Remuneration

Delegation of authority

Corporate governance matters.

Profile of Directors

Mr Olusegun Adebanji - Chairman

Mr Adebanji attended Yaba College of Technology and obtained his Ordinary National Diploma (Accounting) in

1973. He completed the Chartered Association of Certi ed Accountants' examinations in June 1975 and served his

articles with Peat, Marwick Cassleton Elliot & Co in Nigeria between June 1973 and May 1976. He was admitted a

Fellow of both the Chartered Association of Certi ed Accountants (FCCA) and the Institute of Chartered

Accountants of Nigeria (FCA) in December 1982 and November 1988 respectively.

Mr Adebanji joined UAC of Nigeria in 1976 and carried out various assignments within the UAC Group until he

was seconded to Unilever Plc, London as Management Group Accountant in 1988. He returned to UAC at the end

of 1990 as the Group Treasurer. In 1992, Mr Adebanji was seconded to Unilever South Africa as Audit Manager

with sub-regional responsibilities for Unilever Plc subsidiaries in South Africa, Zimbabwe, Malawi, Tanzania,

Kenya and Ghana.

He returned to Nigeria in October1995 to serve as the Financial Director of Nigerian Breweries Plc (appointed in

January 1996), and was later seconded to Heineken International in the Netherlands as Group Treasurer from 1998

to 2001. He also served Heineken as Managing Director of Ghana Breweries Ltd and Namibia Breweries Ltd

between 2001 and 2007. He retired from the Heineken Group after his assignment in Namibia, and practiced as a

OVERVIEW OF FIDSON HEALTHCARE PLC

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Financial Consultant until he joined African Capital Alliance in January 2011 as a Principal. He retired from African

Capital Alliance in January, 2019.

Mr Adebanji is a Non-Executive Director of Daraju Industries Ltd, Cornerstone Insurance Plc, Multimedia Ghana

Ltd, ARM Holdings Ltd, and Bankers Warehouse Ltd. He also serves as the Chairman of Filmhouse Ltd and Crest

Agro Products Ltd. He was until 2018 a Non-Executive Director of Nigerian Breweries Plc.

Dr Fidelis Ayebae – Managing Director / Chief Executive Officer

Fidelis Ayebae graduated from the Mainland Institute of Technology in 1976 with a Diploma in Civil Engineering.

He obtained Advanced Diploma in Business Administration from the University of Lagos in 1999. He is an

Associate of the Chartered Institute of Administration and a member of the Nigeria Institute of Management. After

working in various capacities in a few organizations, including Citibank Limited, he started as the Founder and

Pioneer Chief Executive Of cer at Fidson Healthcare Limited in 1995.

He is also the Chairman and Director of many other companies. He has attended many courses, both locally and

internationally including banking operation, organisation development skills, selling skills e.t.c.

Mrs Olufunmilola Ayebae – Non-Executive Director

Mrs. Olufunmilola O Ayebae completed her Professional Secretaries Diploma from The London College of

Secretaries in the United Kingdom. She worked in many organizations in various capacities for a number of years

before establishing her own business – Goodness Supermarket in 1995 and served as the Managing Director/CEO

for 3 years, she is also the MD/CEO of Townhouse Limited. She became a director of Fidson Healthcare PLC in

2001.

Chief (Mrs) A.P. Sadauki, OON - Non-Executive Director

(Chief) Mrs. Sadauki holds a Bsc. Degree in Home Economics with a Major in Community Nutrition from Iowa

State University, Iowa USA in 1968. She has attended several courses and seminars on board development

evaluation within and outside the country.

Chief (Mrs) Sadauki was an accomplished civil servant who rose from the position of Chief Agricultural Officer

(State Home Economist) in 1964 to the position of Chief Agricultural Officer (State Home Economist) in 1986. She

was appointed Kaduna State Commissioner, Social Development, Youth and Sports in 1988, Commissioner of

Education in 1989 and Deputy Governor Kaduna State from 1990 to 1992.

Chief Mrs Sadauki is a Director of many companies including Zazzau Ginnery Limited, D. A. Sadauki Investments

Limited, Hillside Company Limited and MTN Foundation amongst others. She was conferred with Merit Award

by Nigerian Veterinary Medical Association of Farmers in 1999 and National Honour of Of cer of the Order of the

Federal Republic of Nigeria (OON) in 2000.

Mr E. E. Imoagene – Non-Executive Director

Mr. Emmanuel Imoagene was appointed to the Board of Directors effective February 2011. He is the Founder and

Lead Consultant of Multivaluedge Consulting Limited, a rm that is focused on working with the leadership and

management teams of largely indigenous businesses with aspirations for sustainable long term value. He has

diverse experience spanning over three decades in several blue-chip companies including Shell Petroleum

Development Company of Nigeria Limited, Nigerian Breweries Plc, Unilever Ghana Limited, Cadbury Nigeria Plc,

Dangote Cement Plc, amongst others. In the course of his career, he held several senior leadership positions in

human resources, logistics and procurement. He also has significant experience in corporate governance and

general management practice.

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Mr. Imoagene received his undergraduate degree from the University of Benin, and his graduate degree from the

University of Ibadan. He is a fellow of the Chartered Institute of Personnel Management of Nigeria.

Dr Vincent Ahonkhai, FAAP – Independent Non-Executive Director

Dr Ahonkhai is an expert in Global Health and Biopharmaceutical Research and Development. He is currently an

Independent Consultant and Principal at Gwynedd Consultancy, LLC in Pennsylvania, USA from where he

consults for organisations like the Bills & Melinda Gates Foundation amongst others. Prior to his current position,

he was at the Bill & Melinda Gates Foundation as the founding Head, Regulatory Affairs, Global Health. He later

retired as Senior Advisor, Global Health.

Dr. Ahonkhai has three (3) decades of experience in multi-national biopharmaceutical companies contributing to,

or leading teams that developed innovative products across disease groups. He also managed cross-cutting

functions in Clinical Research, Medical Affairs, and product life cycle. He was in academic medicine and bench

research earlier in his career and has authored numerous scientific publications. He brings to the Board experience

in Research & Development which is crucial to the development of the pharmaceutical industry.

Dr Akonkhai received his undergraduate degree in Medicine from the University of Lagos College of Medicine,

Nigeria.

Mr Ekwunife Okoli – Independent Non-Executive Director

Mr Ekwunife has over 30 years consumer goods industry experience in over 20 African countries including Nigeria,

Ghana, Cameroun, Ethiopia, Angola, Mozambique etc. He has held executive and non-executive board positions

in various Diageo Publicly quoted subsidiaries including Guinness Nigeria plc, Guinness Ghana and Seychelles

Breweries Ltd.

His addition to the Board and the Company brings to fore his honed experience and expertise in sales and

marketing in the consumer goods industry.

Mr Okoli received his undergraduate degree in Marketing from the University of Nigeria, Nsukka and his Master’s

in Business Administration (MBA) from the University of Benin, Nigeria.

Mr Ola Ijimakin – Executive Director, Commercial

Mr Ijimakin is a seasoned professional, having served in large corporations both at home and abroad. He joined the

Company in July 2002 as a Regional Manager in the North-eastern region. Mr Ola served as Group Marketing

Manager from May 2005 to December 2006; General Manager, Marketing from April 2011 to May 2016 and General

Manager, Sales and Marketing from May 2016 till date.

He graduated from the University of Jos in 1994 where he was awarded a Bachelor of Pharmacy (B.Pharm) degree.

He holds a Master of Business Administration (MBA) degree from the Business School Netherlands. He is a fellow

of the Pharmaceutical Society of Nigeria.

Mr Olugbenga Olayeye – Director, Sales & Marketing

A Pharmacist educated at Nigeria’s premier University- the University of Ibadan and the Stanford Graduate School

of Business. He has pursued a career in the pharmaceutical industry since graduation with Fidson Healthcare PLC.

He has worked across diverse functions (Sales and Marketing, Business development, Manufacturing, Research

and Development and Operations) in the company since inception and has been pivotal in determining her policy

direction, strategy execution and has managed organizational change and transformation over the period.

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In his present role, he leads a team of over 200 salesmen and has the responsibility to formulate and implement the

company’s sales and marketing strategies. An exciting person to have on a team, he is committed to team building

and development of leadership skills and ability which he believes is the critical requirement for organizational

growth and corporate success.

Mr Biola Adebayo – Director, Operations

Mr Adebayo graduated from the School of Pharmacy, University of Lagos in 1988. He also has a Diploma in

Advanced Computer Techniques and Applications (1998) from the University of Ibadan (Consultancy Unit). He

worked with the Federal Ministry of Health in Lagos as an intern pharmacist. He began his career with Glaxo

Nigeria Plc in April 1991 as a medical representative. He later on joined the pharmaceutical division of CAP PLC

in July 1994 where he developed his skills and competencies in the sales and marketing of healthcare products and

FMCGs.

He continued his career with Fidson Healthcare PLC in 1996 and held various positions in the sales and marketing

division and rose through the ranks to become the Sales and Marketing Manager in April 2001. In 2004, he became

the Sales and Marketing Director, the position he occupied till July 2009. He is currently the Operations Director in

the company. He is a member of the Institute of Directors (IOD). He also completed a top executive leadership

programme jointly organized by Nigeria Institute of Management (NIM) and Manchester Business School in

Manchester, England, United Kingdom in 2007.

Board Committees

Board committees as of the year ended 31 December 2019 were constituted as follows:

S/N NAME OF COMMITTEE MEMBERS

1 Nomination Committee

Mrs. O. O Ayebae (Chairman)

Mr. E. E Imoagene

Mrs. A. P. Sadauki

2 Remuneration & Governance Committee

Mrs. A.P Sadauki (Chairman)

Mr. E. E Imoagene

Mr. O. S Adebanji, FCA

Mrs. O. O Ayebae

3 Finance and General-purpose Committee

Mr. E. E Imoagene (Chairman)

Mr. O. S Adebanji, FCA

Dr. F. A Ayebae

Mr. O. O. Olaleye

Mr. A. A. Adebayo

4 Risk Management & Credit Control Committee

Mr. O. S Adebanji, FCA (Chairman)

Mr. E. E Imoagene

Dr. F. A Ayebae

Mr. O. O. Olaleye

Mr. A. A. Adebayo

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6. CORPORATE SOCIAL RESPONSIBILTY

Over the years, the Company has adopted a distinctive corporate sustainability approach that focused on the

impacts of its operations on the immediate environment in line with the United Nation's Sustainable Development

Goals 12 and 15, which centres on Responsible Production and Consumption and the Environment respectively.

Fidson complies with the International Organization for Standardization (ISO) 14001:2015, the world's most widely

recognized standard for Environmental Management Systems which seeks to minimize the negative impact of the

organisation’s operations, products, and services on the environment. Fidson’s commitment to maintaining this

standard puts the Company ahead of the pack, demonstrating its commitment to humanity and environmental

preservation.

CSR projects supported in 2019 are as follows:

OOA Private Ward donated to Federal Medical Centre, Abeokuta

Grants to Children Emergency Relief Foundation (CERF)

Donations to Support Children Developmental Centre (CDC)

Donations to Pacelli School for the Blind and Demonstration School for Deaf Children

Astymin Brilliance Reward (ABR) Programme

Fidson “End Malaria for Good” Social Media Campaign

REVISED CBN GUIDELINES ON ISSUANCE OF CPs

20 | P a g e

Background

In July 2009, the CBN suspended the use of Commercial Papers and Bankers Acceptances as off-balance-sheet

instruments by Nigerian banks and discount houses, citing concerns over abuse of their use as financing

instruments. The ban was subsequently lifted on 16 November 2009. On 18 November 2009, the CBN issued the

CBN Guidelines to facilitate the effective and efficient functioning of the Nigerian money market and provide a

regulatory framework for the issuance of CPs and BAs in Nigeria. An updated guideline was subsequently issued

on 11 September, 2019. The CBN also issued a circular on mandatory registration and listing of commercial papers

on July 12, 2016.

Regulatory Framework

Issuance, registration, quotation of and investment in CPs by Banks in Nigeria is subject to the provisions of the

CBN Guidelines and the FMDQ Exchange Rules as highlighted below:

Size and Tenor

CPs shall be issued at the primary market for a minimum value of ₦100,000,000 (One Hundred Million Naira) and

multiples of ₦50,000,000 (Fifty Million Naira) thereafter or as otherwise determined.

Furthermore, they shall be issued for maturities of between 15 (Fifteen) days and 270 (Two Hundred and Seventy),

including rollover, from the date of issue. The maturity period of such outstanding CPs shall also subject to the

validity of the Programme. The interest or discount element on maturing CPs may not be capitalised and rolled

over.

Rating

Either the issuer of CP or the specific issue shall have an investment grade rating (minimum of Bbb- or similar

rating) by a rating agency registered in Nigeria or any international rating agency acceptable to the CBN. An

indicative rating should have been obtained prior to the submission of declarations and information to the FMDQ

Exchange.

Investors in Commercial Papers

CPs may be issued to and held by individuals, deposit money banks, other corporate bodies registered or

incorporated in Nigeria and unincorporated bodies, non-resident Nigerians and foreign institutional investors.

Clean CPs (i.e. CPs not backed by a guarantee or such other credit enhancement shall only be sold to Qualified

Institutional Investors, and Eligible Investors (i.e. means an investor that is not a QII as defined by the FMDQ

Exchange Rules, that has executed a declaration attesting to his/her/its eligibility in the manner prescribed in the

FMDQ Exchange Rules).

Forms of Maintaining CPs

Issuers and investors in CPs may issue or hold CPs in dematerialized or physical form. Issuers and investors in CPs

are encouraged to issue or hold CPs in dematerialised form.

Calculation and Paying Agent

Only a deposit money bank (licensed by the CBN) that is a registered member of the Exchange may act as a CPA

for the issuance of CP.

General Requirements

i. CPs are only redeemable at maturity and as such cannot be pre-liquidated. ii. Investors may rediscount the paper with the Issuer before maturity at new market terms if the Issuer

is willing to purchase the risk. iii. Any proposed issue of CPs shall be completed within the period of two (2) weeks from the date of

opening of the issue for subscription.

REVISED CBN GUIDELINES ON ISSUANCE OF CPs

21 | P a g e

iv. All CPs issued in Nigeria shall be registered with a depository, which shall serve as the custodian of all issues and central depositary for all dematerialised instruments.

Compliance with the CBN Guidelines and FMDQ Exchange Rules

The Issuer has complied with all applicable provisions as stated in the CBN Guidelines and FMDQ Exchange Rules.

Compliance with Securities Regulations

There is no obligation for the Issuer to register the Notes with the SEC. This is by virtue of Rule 8 of the SEC Rules,

which exempts short-term securities (including notes) with maturity dates not exceeding 9 months from the date

of issuance from registration with the SEC.

Mandatory Registration and Quotation

The CBN circular on CPs, effective July 12, 2016, require CPs to be registered and quoted on authorised securities

exchanges. Accordingly, banks are prohibited from transacting in CPs (that are not quoted or intended for quotation

on an authorised securities exchange), in any capacity whatsoever, including but not limited to as Issuer, Guarantor,

Issuing, Placing, Paying and Collecting Agent (“IPPCA”), Collecting and Paying Agent (“CPA”); etc.

The CBN having approved the quotation rules of the FMDQ Exchange, has cleared it for the quotation of CPs in

Nigeria.

TERMS AND CONDITIONS OF THE NOTES

22 | P a g e

The following are the Terms and Conditions of the Notes to be issued by the Issuer under the Programme. The provisions of

the Applicable Pricing Supplement to be issued in respect of any Note are incorporated by reference herein and will supplement

these Terms and Conditions for the purposes of that Note. The Applicable Pricing Supplement in relation to any Series may

specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with the Terms and

Conditions contained herein, replace or modify the following Terms and Conditions for the purpose of such Series.

1. ISSUANCE OF NOTES

The Issuer may from time to time, subject to these Conditions, issue Notes in one or more Series on a

continuous basis under the Programme in an aggregate principal amount not exceeding the Programme

Limit. Any Series issued under the Programme shall be constituted by, subject to, and benefit from, the

Deed of Covenant.

2. FORM, DENOMINATION AND TITLE

2.1 Form and Denomination

a) Unless otherwise specified in the Applicable Pricing Supplement, the Notes shall be issued in

registered, electronic, and serially numbered and denominated in a minimum amount of ₦1,000

(One Thousand Naira).

b) The Notes issued under the Programme shall be denominated in Naira or as stated in the

Applicable Pricing Supplement.

c) The Notes shall be issued in the form of Zero-Coupon Notes and as such will be issued at a

discount. The rate of discount will be calculated on the basis of such Day Count Fraction specified

in Applicable Pricing Supplement.

d) The Notes shall be issued through book-entry deposit by crediting the CSD Account of the

Noteholder and a Register shall be maintained by the CSD and the Issuing, Calculation and

Paying Agent.

2.2 Title

Title to the Notes shall pass upon first entry into the Register and subsequent credit to the CSD

Account of each Noteholder. Transfer of title to the Notes shall be effected in accordance with the

rules of the CSD and the rules governing transfer of securities traded on the FMDQ Exchange. The

Issuer, the Issuing, Calculation and Paying Agent may deem and treat the person indicated as the

registered holder of any Notes in the records of the Custodian, in the absence of manifest error, as

the absolute owner thereof for all purposes, including but not limited to the payment of outstanding

obligations in respect of the Notes.

3. STATUS OF THE NOTES

The Notes constitute [senior unsecured] obligations of the Issuer and the Notes rank pari passu among

themselves and, save for certain debts preferred by law, pari passu with all other present and future senior

unsecured obligations of the Issuer outstanding from time to time.

4. REDEMPTION

The Notes are only redeemable at maturity and will be redeemed at the Face Value specified in the

Applicable Pricing Supplement.

TERMS AND CONDITIONS OF THE NOTES

23 | P a g e

5. PAYMENTS

The Face Value of the Notes shall be paid on the Maturity Date to the Noteholders shown on the Register

at the close of business on the Relevant Last Date. The registered Noteholder shall be the only person

entitled to receive payments in respect of the Notes and the Issuer will be discharged by payment to, or to

the order of, the registered Noteholder in respect of each amount so paid.

5.1 Method of Payments

a) Only Noteholders named in the Register at the close of business on the Relevant Last Date specified

in the Applicable Pricing Supplement shall be entitled to payment of amounts due and payable in

respect of the Notes.

b) Payment of outstanding obligations in respect of the Notes will be made by electronic funds

transfer in the currency of the Notes specified in the Applicable Pricing Supplement.

c) All monies payable in respect of the Notes shall be paid to or to the order of the Noteholders by

the Issuing, Calculation and Paying Agent. Noteholders shall not be required to present and/or

surrender any documents of title to the Issuing, Calculation and Paying Agent.

d) In the case of joint Noteholders, payment by electronic transfers will be made to the account of the

Noteholder first named in the Register. Payment to the Noteholder first named in the Register by

electronic transfer shall discharge the Issuer of its relevant payment obligations to joint

Noteholders under the Notes.

e) In the case of Nominees, the Nominee shall be paid as the registered Noteholder, and the Nominee

shall in turn be responsible for transferring such funds to the holders of the beneficial interests.

f) Neither the Issuer nor its agents shall be responsible for any loss in transmission of funds paid in

respect of each Note.

g) If the Issuer is prevented or restricted directly or indirectly from making any payment by electronic

funds transfer by reason of a Force Majeure event, the Issuer shall make such payment by cheque

(or by such number of cheques as may be required in accordance with applicable banking law and

practice). Such payment by cheque shall be sent through a reputable and registered courier

operator to the address of the Noteholder as set forth in the Register.

h) Cheques may be posted by registered mail, provided that neither the Issuer nor the Dealers shall

be responsible for any loss in transmission and the postal authority of the Noteholders for the

purposes of all cheques posted in terms of this Condition.

5.2 Payment Day

Any payment in respect of the Notes shall be made on a Business Day. If the due date for payment of

any amount in respect of the Notes is not a Business Day, then the Noteholders thereof shall not be

entitled to payment of the amount due until the next Business Day. The Noteholders shall not be

entitled to any further interest or other payment in respect of such delay. Provided that where the next

Business Day falls in a different calendar month, that payment shall be made on the immediately

preceding Business Day.

TERMS AND CONDITIONS OF THE NOTES

24 | P a g e

6. EVENT OF DEFAULT

6.1. Event of Default

An event of default in relation to the Notes (each an “Event of Default”) shall arise if any one or more

of the following events shall have occurred and is continuing if:

a) the Issuer fails to make payment in full by the Maturity Date;

b) the Issuer fails to perform or observe any of its other obligations under the Notes and such failure

has continued for a period of seven (7) days following the service on the Issuer of a written notice

requiring that breach to be remedied;

c) any representation, warranty or undertaking made in connection with any documentation supplied

by the Issuer is, in the Dealer’s opinion, materially incorrect;

d) the Issuer or a creditor initiates bankruptcy or insolvency proceedings or the Issuer becomes

insolvent, or is provisionally or finally sequestrated, or is provisionally or finally wound up, or is

unable to pay its debts as they become due, or is placed under provisional or final judicial

management, or enters into a scheme of arrangement or compromise with its creditors;

e) the shareholders of the Issuer pass a resolution for the winding up of the Issuer;

f) an attachment, execution or other legal process is levied, enforced upon, issued on or against a

material or substantial part of any assets of the Issuer and is not discharged or stayed within 90

(ninety) days of service by the relevant officer of the court of such attachment, execution or other

legal process; or

g) a writ of execution is issued by any court of competent jurisdiction attaching any material or

substantial part of assets belonging to the Issuer and it remains unsatisfied for more than 10 (ten)

Business Days after the date on which it is issued.

6.2. Action upon Event of Default

Upon the occurrence of a Potential Event of Default or an Event of Default which is continuing, any

Noteholder may by written notice to the Issuer at its specified office, effective upon the date of receipt

thereof by the Issuer, declare the Notes held by the Noteholder to be forthwith due and payable,

provided that no such action shall be taken if the Issuer withholds or refuses to make any payment in

order to comply with any law or regulation of Nigeria or to comply with any order of a court of

competent jurisdiction. Upon the occurrence of an Event of Default, the Issuer shall pay Noteholders

interest at the Default Rate on the outstanding debt obligations until such debt obligations to the

Noteholders have been settled in full.

In addition, the Noteholders shall have the right to exercise all other remedies available to them under

the laws of Nigeria.

TERMS AND CONDITIONS OF THE NOTES

25 | P a g e

7. REGISTER

7.1. The Register shall be maintained by the CSD and the Issuing, Calculation and Paying Agent. The

Register shall reflect the number of Notes issued and shall contain the name, address, and bank

account details of the registered Noteholders. The Register shall set out the aggregate Principal

Amount of the Notes issued to such Noteholder and the date of issue.

7.2. Statements issued by the CSD as to the aggregate number of Notes standing to the CSD Account of

any person shall be conclusive and binding for all purposes save in the case of manifest error and such

person shall be treated by the Issuer and the Dealers as the legal and beneficial owner of such

aggregate number of Notes for all purposes.

7.3. The Issuing, Calculation and Paying Agent shall alter the Register in respect of any change in name,

address or bank account number of any of the registered Noteholders of which it is notified in

accordance with these Conditions.

7.4. The Register shall be open for inspection during the normal business hours of Issuing, Calculation

and Paying Agent to any Noteholder or any person authored by the Noteholder

8. NOTICES

8.1 Notice to the Noteholders

(a) All Notices to Noteholders shall be sent by the Issuing, Calculation and Paying Agent registered mail

or delivered by hand to the address appearing in the Register.

(b) Any notice shall be deemed to have been given on the seventh (7th) day after the day on which it is

mailed by pre-paid registered mail and on the day of delivery, if delivered by hand.

(c) Notices to Noteholders shall also be published in a daily newspaper with nationwide circulation in

Nigeria, and any such notices shall be deemed to have been given and received on the date of first

publication. A notice to be given by any Noteholder to the Issuer shall be in writing and given by

lodging (either by hand delivery or posting by registered mail) that notice with the Issuer at its

registered office.

9. MODIFICATION

9.1 The Dealers and the Issuer may agree, without the consent of the Noteholders, to any modification of

the Conditions which is of a formal, minor or technical nature or is made to correct a manifest error

or to comply with the mandatory provisions of any law in Nigeria and which is not prejudicial to the

interest of the Noteholders.

9.2 Save as provided in condition 9.1 above, no amendment of the Conditions may be affected unless:

(a) such amendment is in writing and signed by or on behalf of the Issuer; and

(b) such amendment:

(i) if it affects the rights, under the Conditions, of all the Noteholders, is approved by a Special

Resolution of Noteholders, holding not less than 75% of the outstanding Principal Amount of

all the Notes; or

TERMS AND CONDITIONS OF THE NOTES

26 | P a g e

(ii) if it affects only the rights, under Conditions, of a particular group (or groups) of Noteholders,

is approved by a Special Resolution of the Noteholders in that group (or groups) holding not

less than 75% of the outstanding Principal Amount of all the Notes held by that group.

9.3 Any such modification shall be binding on the affected Noteholders and shall be notified to the

Noteholders in accordance with Condition 8 (Notices) as practicable thereafter.

10. MEETING OF NOTEHOLDERS

10.1 The Issuer may at any time convene a meeting of all Noteholders upon at least twenty-one (21) days

prior written notice to such Noteholders. The notice is required to be given in terms of Condition 9.

Such Notice shall specify the agenda, special resolution, date, place and time of the meeting to be held,

which place shall be in Nigeria.

10.2 Any director and/ or duly appointed representative of the Issuer may attend and speak at a meeting

of the Noteholders but shall not be entitled to vote, other than as a Noteholder or as a proxy or

representative of a Noteholder.

10.3 Noteholders holding not less than 50% in Principal Amount of the outstanding Notes shall be able to

request the Issuer to convene such meeting within ten (10) days of such a request being received by

the Issuer, the Noteholders requesting the meeting may convene such a meeting.

10.4 A Noteholder may by an instrument in writing (a “Form of Proxy”) signed by the holder or, in the

case of a corporation executed under its common seal or signed on its behalf by an attorney or a duly

authorized officer of the corporation, appoint any person (a “Proxy”) to act on his or its behalf in

connection with any meeting or proposed meeting of the Noteholders.

10.5 Any Noteholder which is a corporation, may by resolution of its directors or other governing body

authorize any person to act as tis representative (a “Representative”) in connection with any meeting

or proposed meeting of the Noteholders.

10.6 Any Proxy or Representative appointed shall, so long as the appointment remains in force, be deemed

for all purposes in connection with any meeting or proposed meeting of the Noteholder specified in

the appointment, to be the holder of the Notes to which the appointment relates and the holder of the

Notes shall be deemed for such purposes not to be the holder of the Notes shall be deemed for such

purposes not to be the holder.

10.7 The chairman of the meeting shall be appointed by the Issuer. The procedures to be followed at the

meeting shall be as determined by the chairman subject to the remaining provisions of this Condition

12. Should the Noteholders request a meeting, and the Issuer fails to convene such a meeting within

10 (ten) days of such request, then the chairman of the meeting held at the instance of the Noteholders,

shall be selected by a majority of Noteholders present in person or by Proxy.

10.8 At any such meeting two (2) or more Noteholders present in person, by Representative or by Proxy,

holding in aggregate not less than 1/3 of the Principal Amount of Notes outstanding shall form a

quorum.

TERMS AND CONDITIONS OF THE NOTES

27 | P a g e

10.9 On a poll, each Noteholder present in person or by Proxy at the time of the meeting shall have the

number of votes equal to the number of Notes, by denomination held by the Noteholder.

10.10If within 30 minutes after the time appointed for any such meeting a quorum is not formed, the

meeting shall, if convened upon the requisition of Noteholders, be dissolved. In any other case, the

meeting shall be adjourned to such date and time not being less than fourteen (14) days nor more than

twenty-one (21) days thereafter and at the same time and place. At such adjourned, two (2) or more

Noteholders present or represented by Proxy shall form a quorum and shall have the power to pass

any Special Resolution and to decide upon all matters which could properly have been dealt with at

the original meeting had the requisite quorum been present.

11. CHANGE OF AGENT

11.1 The Issuer is entitled to vary or terminate the appointment of the Issuing, Calculation and Paying

Agent and/ or appoint additional or other agents and/ or approve any change in the specified office

through which any agent acts, provided that there will at all times during the subsistence of the

Programme, be an agent with specified offices.

11.2 The Issuing, Calculation and Paying Agent acts solely as agent of the Issuer and does not assume any

obligation toward or any relationship of agency or trust for or with any Noteholder.

12. FURTHER ISSUES

The Issuer shall be at liberty from time to time without the consent of the Noteholders to issue further Notes

under the Programme.

13. GOVERNING LAW

These Conditions and the provisions of the Programme Memorandum and the Notes are governed by and

shall be construed in accordance with the laws of the Federal Republic of Nigeria.

TAX CONSIDERATIONS

28 | P a g e

The Notes issued under the Programme will be Zero Coupon Notes and as such, will be offered and sold at a

discount to Face Value. The Notes will thus not bear interest and the Issuer will not be required to withhold or

deduct tax from payments in respect of the Notes to the Noteholders. However, the discount on the Notes may be

taxed in accordance with applicable Nigerian tax laws.

The foregoing summary does not purport to be comprehensive and does not constitute advice on tax to any actual

or prospective purchaser of Notes issued under the Programme. In particular, it does not constitute a representation

by the Issuer or its advisers on the tax consequences attaching to a subscription or purchase of Notes issued under

the Programme. Tax considerations that may be relevant to a decision to acquire, hold or dispose of Notes issued

under the Programme and the tax consequences applicable to each actual or prospective purchaser of the Notes

may vary. Any actual or prospective purchaser of the Notes who intends to ascertain his/her tax position should

seek professional advice from his/her preferred professional advisers as to the tax consequences arising from

subscribing to or purchasing the Notes, bearing in mind his/her peculiarities. Neither the Issuer nor its advisers

shall be liable to any subscriber or purchaser of the Notes in any manner for placing reliance upon the contents of

this section.

RISK FACTORS

29 | P a g e

The following section does not describe all the risks (including those relating to each prospective investor’s particular

circumstances) with respect to an investment in the Notes. The risks in the following section are provided as general

information only. Prospective investors should refer to and carefully consider the risks described below and the information

contained elsewhere in this Programme Memorandum, which may describe additional risks associated with the Notes. Investors

should also seek professional advice before making investment decisions in respect of the Notes.

RISKS RELATING TO THE COMPANY’S BUSINESS ACTIVITIES AND INDUSTRY

Public health outbreaks, epidemics or pandemics, such as the coronavirus, could adversely impact the business.

Public health outbreaks, epidemics or pandemics, such as the coronavirus, could adversely impact the business

activities of the Company. In December 2019, a novel strain of coronavirus emerged in Wuhan, Hubei Province,

China. While initially the outbreak was largely concentrated in China and caused significant disruptions to its

economy, it has now spread to many other countries and infections have been reported globally, including Nigeria.

The impact on the Company’s operations is highly uncertain and cannot be predicted with confidence. Factors that

will influence the impact include the economic consequences and duration of the outbreak, new information that

emerges concerning the severity of the coronavirus and actions taken to contain the outbreak or treat its impact,

among others.

Despite the pandemic, the Company has remained operative even during the lockdown period, given the focus on

the healthcare sector and the growth in sales year-to-date compared with the prior year’s sales. However, the extent

of the adverse impact on business operations, including, among others, manufacturing and supply chain, sales and

marketing and research and development, will depend on the extent and severity of the continued spread of the

virus globally and could have a material adverse impact on the Company’s business and financial results.

Over-reliance on drug imports may jeopardize local manufacturing capacity and be detrimental to the

pharmaceutical industry.

Over-reliance on foreign medicines may jeopardize local manufacturing capacity due to a lack of profitability for

local manufacturers. Nigeria has a very high dependency on imported drugs. 70% of drug consumed in the

country are brought in from abroad, typically from China and India. In addition, Nigeria relies on imported active

pharmaceutical ingredients as well as equipment used in drug manufacturing.

This dependency threatens the growth of local manufacturing as the demand for locally made pharmaceutical

products may be insufficient to support the development of a robust and profitable pharmaceutical industry.

The Company’s market share could be reduced by the activities of other competitors in the industry.

The pharmaceutical industry in Nigeria is highly competitive and import dependent, with imports accounting for

up to 70% of total supply. Local production remains fragmented and is dominated by about ten (10) – fifteen (15)

companies.

Fidson Healthcare PLC is one of the leading pharmaceutical manufacturing companies in Nigeria and was the

second-largest pharmaceutical company in the country by Q2 2020 revenue. However, failure to successfully

compete with its competitors through the development of commercially successful products or develop additional

uses or increase customer penetration for existing products may cause it to cede market share to other competitors,

thereby adversely affecting its financial performance and prospects. Fidson also faces competition from low-cost

generic drug producers in emerging Asian markets and larger multinational companies with greater brand

perception.

RISKS RELATING TO THE NOTES

30 | P a g e

Failure to adequately protect the Company’s brand and intellectual property may adversely affect the

Company’s business.

The Company has intellectual property rights to its brand names. Protection of these brand names, trademarks and

intellectual property rights is important to maintaining its distinctive corporate and market identity. Although the

Company has vigorously protected its intellectual property, the Company’s products and brand names remain

susceptible to counterfeiting. In addition, if third parties sell products that use counterfeit versions of the

Company’s brands, consumers may confuse the Company’s products with its imitations, thereby negatively

impacting the Company’s brand image, sales volume and general operations.

Increasing Reliance on Out-of-pocket (OOP) Health Payments

Out-of-pocket payments (OOPs) are defined as direct payments made by individuals to health care providers at

the time of service use. With rising incidences of communicable and non-communicable diseases, elevated rates of

infant and maternal mortality among others, there is still high reliance on out-of-pocket health payments as a means

of financing the health system in Nigeria. This has continued for many years, despite a consensus to move closer to

Universal Health Coverage (UHC) and to sustain it when achieved.

Unregulated direct charges often constitute a major access barrier to needed healthcare. This makes it increasingly

attractive for more Nigerians to seek alternative means of treatment, thereby eroding the Nigerian healthcare sector

of its much-needed revenue. This may hamper sales throughout the pharmaceutical industry, thinning margins

and leading to unprofitable business activity.

Operational Risks

Operational risk is the potential for financial and reputational loss arising from a breakdown in internal controls,

operational processes or the various systems that support them. This risk ranges from human errors, criminal acts

to natural disasters amongst others and could arise from internal or external factors.

Environmental Risks

These are losses that may arise due to significant natural occurrences in the environment. The operations of the

Company are exposed to certain environmental challenges which include but are not limited to pollution,

environmental degradation, global warming, severe flooding and other natural hazards.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its

financial liabilities that are settled by delivering cash or other financial assets.

LEGAL AND REGULATORY RISK

Failure to manage environmental, health and safety risks could lead to litigation and regulatory actions which

could adversely affect the Company’s reputation and financial performance.

The Company is subject to health, safety and environmental laws in Nigeria. These laws impose duties to protect

people, the environment and the communities in which the Company operates. In addition, the Company is under

the regulatory purview of the National Agency for Food and Drug Administration and Control (“NAFDAC”), thus

new and existing products, plants and machineries are subject to inspection and approval by NAFDAC. Failure to

manage and comply with these regulatory, environmental, health and safety requirements properly could result in

litigation, fines, closure of factory or other regulatory action which may materially and adversely affect the

Company’s financial results.

RISKS RELATING TO THE NOTES

31 | P a g e

COUNTRY RISK

The Company faces risks associated with the political climate in Nigeria, which could adversely impact its

business and financial performance.

Nigeria’s diverse political, religious and ethnic landscape has led to struggles for power between rival groups,

which has consistently hindered the smooth governance of the country. In addition, frustrations over poor living

conditions and economic hardships can potentially fuel further conflict. The continued criminal activity, security

challenges as well as political and religious tensions in the country could lead to increased political instability. This

could have a material adverse effect on Nigeria’s economy and, therefore, the operations of Fidson Healthcare PLC.

Insurgency and other forms of Social Unrest in Nigeria

Nigeria's Ease of Doing Business ranking improved by 39 places from 170 in 2015 to 131 in 2019, which underscores

the government's effort at ensuring an improved ranking to attract foreign investment into the country. Despite

this achievement, doing business in Nigeria remains challenging.

Nigeria is facing an increased security crisis laced with terrorism disguised in the form of armed banditry,

herdsmen/farmer clashes and insurgency. The attacks by Boko Haram insurgents, along with waves of kidnapping,

armed robbery and other crimes across the nation, increased in 2019. Nigeria also experienced a wave of

Nationwide riots in 2020 during protests against police brutality, making the environment increasingly hostile for

business owners. These social unrests create an unattractive environment for doing business in Nigeria. Such

uncertainty and insecurity are largely responsible for the decline in inflows of foreign investments as no business

can thrive without adequate security.

Recession of domestic economy may adversely impact the Company’s financial performance.

Oil production which is the mainstay of the Nigerian economy has remained unpredictable primarily as a result of

the impact of fluctuation of global oil prices and local sabotage of oil-related facilities. The recent significant decline

in the oil price has resulted in dwindling revenues and foreign reserves. The Company is exposed to the risks of a

prolonged economic recession in Nigeria which could adversely affect the demand for its products. The Nigerian

pharmaceutical industry is typically less impacted by general economic conditions as drugs are an essential

commodity. However, a prolonged economic downturn may put constraints on business spending, investments

and lending which in turn could impact the Company’s revenues or growth prospects.

Foreign exchange volatility – The Company is exposed to currency risks and is affected by changes in the value

of the Naira against other currencies.

Fidson Healthcare PLC is exposed to foreign exchange volatility risk mainly through the importation of raw

materials, spares and equipment. The Company’s operations are consequently affected by the relative movements

of Naira inflation and exchange rates. Further depreciation or devaluation of the Naira will increase the Company’s

imported input costs which could negatively impact profits, if the increase in cost is not fully passed on to

consumers.

Underdeveloped power and transport infrastructure continue to add to the cost of doing business.

Pharmaceutical companies, like other manufacturers in Nigeria are impacted by the intermittent supply of

electricity and the underdeveloped transport infrastructure in the country. Despite ongoing efforts by the Nigerian

Government to privatize the power sector, problems with power generation, transmission and distribution and

congested ports persist and severely constrain the development of the manufacturing sector. Many manufacturers

rely on alternative electricity and water supplies, increasing overall business costs. The unstable pricing and,

oftentimes, scarcity of fuel for power generation also increases operational challenges, contributing to the potential

fluctuation of overheads. In addition, poor rail and road networks limit land-based transport, further increasing

the overall business costs for manufacturers.

RISKS RELATING TO THE NOTES

32 | P a g e

The Notes are unsecured, thus will rank junior to secured indebtedness to the extent of the collateral thereof.

The Notes will constitute senior unsecured obligations of the Issuer. Therefore, holders of secured indebtedness, if

any, will have claims that are prior to the claims of the holders of the Notes, to the extent of the assets securing such

indebtedness. Thus, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding, the

pledged assets would be available to satisfy obligations on the secured indebtedness before any payment could be

made on the Notes.

Credit Risk

The Notes may be issued without any external credit enhancement. In such cases, investors, in undertaking the

investment, would be relying solely on the creditworthiness of the Issuer for the repayment of his or her investment.

As such, any subsequent change(s) in the actual or perceived creditworthiness of the Issuer may adversely affect

the value of the Notes and the likelihood of repayment.

Credit ratings may not reflect all risks

The Company has been assigned ratings by two Rating Agencies. The ratings may not reflect all the risks to which

the prospective investor may be exposed in purchasing the Notes. The credit ratings are not therefore a

recommendation to buy, sell or hold securities and may be revised or withdrawn by the Rating Agencies at any

time.

Liquidity risk for the Notes

Although the listing of the Notes increases the possibility of trading activity, there may not be very active two-way

quote trading in the Notes once issued. The liquidity of the Notes may be limited, and investors may not be able to

trade the Notes actively or realise a yield comparable to that of similar instruments, if any, in developed secondary

markets. The trading market for debt securities may be volatile and may be adversely impacted by many events.

The market for debt securities is influenced by economic and market conditions, interest rates, currency exchange

rates as well as global events, which may also have an adverse effect on the price of the Notes.

SETTLEMENT, CLEARING AND TRANSFER OF NOTES

33 | P a g e

Words used in this section shall bear the same meanings as used in the section headed “Definitions and Interpretations”, except

to the extent that they are separately defined in this section or the meaning if applied, would be clearly inappropriate for the

context.

CLEARING SYSTEM

The Notes will be issued in dematerialised form and will not be represented by any certificate or written instrument.

As stipulated by the CBN Guidelines, each Series or Tranche will be held in custody by the CSD, either in the name

of the beneficial owner or nominee.

All transactions in the Notes shall be cleared and settled electronically in accordance with the rules and operating

procedures of the CSD. Subject as aforesaid, each Tranche will be issued, cleared and transferred in accordance

with the Terms and Conditions and will be settled through Authorised Participants (as defined below) who will

follow the electronic settlement procedures prescribed by the CSD.

AUTHORISED PARTICIPANTS

The CSD will maintain a central securities account for only banks (the “Authorised Participants”) and each

beneficial owner of the Notes is required to have a sub-account under the Authorised Participants. Noteholders

may exercise their rights in respect of the Notes held in the custody of the CSD only through the Authorised

Participants.

For purposes of Notes issued under this Programme, the Authorised Participant is FSDH Merchant Bank Limited

and any other bank appointed by the Issuer to act as ICPA.

REGISTRATION

i. The Authorised Participant is required to register with the CSD before dealing in CPs.

ii. Noteholders are required to route their account opening applications and transactions through the

Authorised Participant who would then notify the CSD to create a relevant sub-account for the Noteholder.

iii. The CSD will assign a unique identification number (the “Trade Member Code”) to the Authorised

Participant and also open the account(s) requested by the Authorised Participant.

iv. FMDQ Exchange will request for the CP to be registered with the CSD, who in turn will furnish FMDQ

Exchange and the Authorised Participant with the CP symbol and ISIN Codes for the registered CP, subject

to receipt of CP registration fees from the Authorised Participant.

v. The CSD will re-open the existing ISIN code for all Tranches with same maturity dates, however new ISIN

codes will be issued for Tranches with different maturity dates.

LODGEMENT

i. The Authorised Participant will electronically lodge CPs with the Clearing Agent and advise the CSD after

lodgement to transfer the CPs to the sub-account of the beneficial owners of the Notes.

ii. The CSD shall process same within 24 hours of receipt.

SETTLEMENT, CLEARING AND TRANSFER OF NOTES

34 | P a g e

REDEMPTION

i. No transactions or trades may be effected for any CPs five (5) working days prior to its maturity date.

ii. The Authorised Participant will submit a letter to the CSD confirming the intention of the Issuer to repay

the Noteholders on the Maturity Date by 12.00 noon on the date which is two (2) Business Days before the

Maturity Date. The Authorised Participant must notify the CSD to expunge (knock-off) matured CPs latest

by 3.00pm on the Maturity Date of the CP.

iii. In case of default by the Issuer, the Issuing, Calculation and Paying Agent must notify the CSD and FMDQ

Exchange latest by 3.00pm on the Maturity Date to make public, the default status of the CP to the market.

iv. In case of (iv) above, the CP must remain with the CSD until the ICPA pays off the Noteholders and notifies

the CSD and the FMDQ Exchange with evidence.

v. Thereafter, the CSD will notify the public and expunge the CP accordingly.

SECONDARY MARKET TRADING (OTC) GUIDELINES

i. The Authorised Participant will submit CP transaction instructions/details to the CSD via the authorised

data-exchange platform.

ii. CP transactions are to be submitted to the CSD by the applicable cut off time on the settlement date and

the Authorised Participant is to state the particular account number where the CP(s) should be traded from

or deposited into.

iii. The CSD shall deliver securities and send confirmation of transfers via the authorised platform by 2.00 p.m.

on the settlement date to the Nigeria Inter-Bank Settlement System ("NIBSS") and to the FMDQ Exchange

simultaneously.

iv. NIBSS shall transfer settlement amounts to respective accounts and send confirmation to the CSD, and the

Authorised Participant simultaneously.

v. Transactions for standard settlement (T+2) shall stop five (5) Business Days before the Maturity Date.

Therefore, the last applicable settlement shall be before close of business on the date which is five Business

Days before the Maturity Date.

REPORTING

i. The CSD will affect the transfer of CPs on the settlement date as advised by the buyer and seller

(“Transaction Parties”) and also keep records of consideration for each transaction.

ii. The CSD will advise the Authorised Participant or the FMDQ Exchange for onward communication to the

Authorised Participant, as applicable, of successful and failed transactions on each settlement day.

iii. The Authorised Participant and Noteholders can ascertain their CP balances after each day’s trade via the

CSD’s website (if applicable).

SETTLEMENT, CLEARING AND TRANSFER OF NOTES

35 | P a g e

TRANSFER OF NOTES

Title to beneficial interest in the Notes will pass on transfer thereof by electronic book entry in the securities

accounts maintained by the CSD and may be transferred only in accordance with rules and operating procedures

of the CSD.

CASH SETTLEMENT

Transaction parties will be responsible for effecting the payment transfers either via Real Time Gross Settlement,

National Electronic Funds Transfer or any other transfer mode agreed by the Transaction Parties and recognised

by the CBN.

PROFORMA APPLICABLE PRICING SUPPLEMENT

36 | P a g e

FIDSON HEALTHCARE PLC (RC 267435)

(INCORPORATED WITH LIMITED LIABILITY IN THE FEDERAL REPUBLIC OF NIGERIA)

ISSUE OF UP TO ₦ 4,000,000,000 SERIES 1 COMMERCIAL PAPER NOTES

UNDER ITS ₦10,000,000,000 (TEN BILLION NAIRA) COMMERCIAL PAPER ISSUANCE PROGRAMME

This Applicable Pricing Supplement must be read in conjunction with the Programme Memorandum, originally dated [ ], prepared by FSDH Capital Limited and CardinalStone Partners Limited on behalf of Fidson Healthcare PLC in connection with its ₦10,000,000,000 (Ten Billion Naira) commercial paper issuance programme, as amended and/or supplemented from time to time (“the Programme Memorandum”).

Any capitalised terms not defined in this Applicable Pricing Supplement shall have the meanings ascribed to them in the Programme Memorandum. This document constitutes the Applicable Pricing Supplement relating to the issue of commercial paper notes (“CP Notes” or “the Notes”) described herein. The Notes described herein are issued on and subject to the Terms and Conditions as amended and/or supplemented by the Terms and Conditions contained in this Applicable Pricing Supplement. To the extent that there is any conflict or inconsistency between the contents of this Applicable Pricing Supplement and the Programme Memorandum, the provisions of this Applicable Pricing Supplement shall prevail. This document has been prepared in accordance with the Central Bank of Nigeria Guidelines on the Issuance and Treatment of Bankers Acceptances and Commercial Paper, issued on September 11 2019 and the Commercial Paper Registration and Quotation Rules (the “Rules”) of FMDQ Securities Exchange Limited (“FMDQ Exchange”). The document is not required to be registered with The Nigerian Stock Exchange (“NSE”) or the Securities and Exchange Commission (“SEC”). This document is important and should be read carefully. If any recipient is in any doubt about its contents or the actions to be taken, such recipient should consult his/her banker, stockbroker,

accountant, solicitor or any other professional adviser for guidance immediately.

LEAD ARRANGER AND DEALER JOINT ARRANGER AND DEALER ISSUING, CALCULATION AND PAYING AGENT

FSDH CAPITAL LIMITED

RC: 276208

CARDINALSTONE PARTNERS LIMITED

RC: 739441

FSDH MERCHANT BANK LIMITED

RC: 199528

THIS PRICING SUPPLEMENT IS DATED [ ]

PROFORMA APPLICABLE PRICING SUPPLEMENT

37 | P a g e

PARTIES

1. ISSUER Fidson Healthcare PLC

2. LEAD ARRANGER/DEALER FSDH Capital Limited

3. CO-ARRANGER/DEALER CardinalStone Partners Limited

4. LEAD SPONSOR FSDH Capital Limited

5. CO-SPONSOR CardinalStone Partners Limited

6. ISSUING, CALCULATION AND

PAYING AGENT

FSDH Merchant Bank Limited

7. AUDITOR Deloitte & Touche

8. CUSTODIAN [ ]

9. SOLICITOR G Elias & Co

PROVISIONS RELATING TO THE NOTES

10. a) PROGRAMME SIZE

b) ISSUED AND OUTSTANDING AT

THE DATE OF THE PRICING

SUPPLEMENT PROGRAMME SIZE

[ ]

[ ]

11. AGGREGATE NOMINAL AMOUNT

a) SERIES NUMBER

b) TRANCHE

[ ]

[ ]

[ ]

12. FACE VALUE [ ]

13. DISCOUNTED VALUE [ ]

14. NOMINAL AMOUNT PER NOTE [ ]

15. ISSUE PRICE [ ]

16. TENOR [ ]

17. ISSUE DATE [ ]

18. MATURITY DATE [ ]

19. FINAL REDEMPTION AMOUNT [ ]

20. USE OF PROCEEDS To finance Fidson’s short-term working capital requirements

21. SOURCE OF REPAYMENT The CPs will be repaid from the cash flows of the Issuer

22. SPECIFIED DENOMINATION Nigerian Naira (₦)

23. SPECIFIED CURRENCY Nigerian Naira (₦)

PROFORMA APPLICABLE PRICING SUPPLEMENT

38 | P a g e

24. ISSUER RATING [ ]

25. STATUS OF NOTES Each Note constitutes a senior unsecured obligation of the

Issuer and save for certain debts mandatorily preferred by

law, the Notes rank pari passu among themselves, and with

other present and future senior unsecured obligations of the

Issuer outstanding from time to time

26. FORM OF NOTES Uncertified

27. QUOTATION Notes may be quoted on FMDQ Securities Exchange or any

other recognised exchange

28. TAXATION Please refer to the ‘Tax Considerations’ section in the

Programme Memorandum

29. METHOD OF OFFER [ ]

30. BOOK CLOSED PERIOD The Register will be closed from [ ] to [ ] until the Maturity

Date

ZERO COUPON NOTES

31. a) DISCOUNT RATE (“DR”)

b) IMPLIED YIELD

c) ANY OTHER FORMULA OR BASIS

FOR DETERMINING THE AMOUNTS

PAYABLE

[ ]

[ ]

PV=FV*(1-(DR*t/365)

32. DAY COUNT FRACTION Actual/Actual (actual number of days in a month and actual

number of days in a year)

33. BUSINESS DAY CONVENTION Any day except Saturdays, Sundays and public holidays

declared by the Federal Government of Nigeria on which

banks are open for business in Nigeria

PROVISIONS REGARDING REDEMPTION

34. REDEMPTION/PAYMENT BASIS Redemption at Par

35. ISSUER’S EARLY REDEMPTION Not Applicable

36. ISSUER’S OPTIONAL REDEMPTION Not Applicable

37. OTHER TERMS APPLICABLE ON

REDEMPTION

Not Applicable

GENERAL INFORMATION

38. OFFER OPENS [ ]

39. OFFER CLOSES [ ]

40. ALLOTMENT DATE All applicants will be notified through an email and/or

telephone of their allotment by no later than [ ]

41. NOTIFICATION OF ALLOTMENT [ ]

42. PAYMENT DATE [ ]

PROFORMA APPLICABLE PRICING SUPPLEMENT

39 | P a g e

MATERIAL ADVERSE CHANGE STATEMENT Except as disclosed in this document, there has been no significant change in the financial position of the Issuer since [insert date of last audited accounts or interim accounts (if later)] and no material adverse change in the financial position or prospects of the Issuer since [insert date of last published annual account.] RESPONSIBILITY The Issuer and its board of directors accept responsibility for the information contained in this Applicable Pricing Supplement which, when read together with the Programme Memorandum [and supplemental Programme Memorandum, if any], contains all information that is material in the context of the issue of the Notes. Signed at ________________ on this ___________________ day of _______________________ [], 2021 For and on behalf of Fidson Healthcare PLC ___________________________________ ___________________________________ Name: Name: Capacity: Director Capacity: Company Secretary Who warrants his/her authority hereto Who warrants his/her authority hereto

43. DETAILS OF BANK ACCOUNT(S) TO

WHICH PAYMENTS ARE TO BE

MADE IN RESPECT OF THE NOTES

[ ]

44. SETTLEMENT PROCEDURES AND

SETTLEMENT INSTRUCTIONS

Purchases will be settled via direct debit, electronic funds

transfer (NIBBS, NEFT/, RTGS, etc.)

45. DELIVERY DATE Credit to CSD accounts to be effected no later than 1 month

after the settlement date

46. SPECIFIED OFFICE OF CO-

ARRANGERS

FSDH Capital Limited

8th Floor, UAC House 1/5 Odunlami Street, Lagos Island,

Lagos

CardinalStone Partners Limited

5 Okotie Eboh Street, Off Awolowo Road, Ikoyi, Lagos,

Nigeria

AUDITOR’S COMFORT LETTER

40 | P a g e

HISTORICAL FINANCIAL INFORMATION

41 | P a g e

The financial information set out on pages [ ] of this Programme Memorandum has been extracted from the audited annual

financial statements of the Issuer and is available at the specified office(s) of the Issuer. This section should be read and construed

in conjunction with any audited interim financial statements published subsequently, for the financial years prior to each issue

of Notes under this Programme.

Income Statement for the year ended 30 December 2019, 2018 and 2017

2019 2018 2017

₦’000 ₦’000 ₦’000

Revenue 14,062,015 16,229,903 14,057,394

Cost of Sales (8,186,458) (9,910,218) (6,902,227)

Gross Profit 5,875,557 6,319,683 7,155,167

Other Income 296,642 247,790 103,145

Administrative Expenses (2,520,319) (2,614,354) (2,360,681)

Selling and Distribution (1,398,476) (1,905,330) (2,348,506)

Operating Profit/(Loss) 2,253,404 2,047,789 2,549,125

Finance Income 57,360 38,080 31,072

Less: Finance Expense (1,735,098) (1,925,002) (1,001,650)

Profit/(Loss) before Income Tax 575,666 160,867 1,578,547

Income Tax (Charge) / Credit (168,478) (258,314) (517,758)

Profit/(Loss) for the Year 407,188 (97,447) 1,060,789

Earnings Per Share

Basic and Diluted Earnings Per Share (Kobo) 20 (6) 71

HISTORICAL FINANCIAL INFORMATION

42 | P a g e

Statement of Financial Position for the year ended 30 December 2019, 2018 and 2017

2019 2018 2017

₦’000 ₦’000 ₦’000

Assets

Non-Current Assets

Property, Plant and Equipment 11,996,884 12,371,006 12,363,213

Right-of-Use Assets 703,182 - -

Investment Property 33,586 34,504 35,347

Intangible Assets 27,736 54,475 60,184

Available-for-Sale Investments 3,720 4,610 5,128

Loans and Receivables 10,172 50,038 47,805

Other Non-Current Financial Assets 441,337 393,209 294,423

Total Non-Current Assets 13,216,617 12,907,842 12,806,100

Current Assets

Inventories 3,412,639 2,875,133 1,756,629

Trade and Other Receivables 3,263,707 3,803,982 2,502,642

Prepayments 167,469 354,294 22,691

Cash and Cash Equivalents 303,919 542,074 359,656

Current Assets 7,147,734 7,575,483 4,641,618

Total Assets 20,364,351 20,483,325 17,447,718

Equity

Issued Share Capital 1,043,180 750,000 750,000

Share Premium 4,933,932 2,973,043 2,973,043

Retained Earnings 3,643,921 3,430,573 3,899,194

Available-for-Sale Reserve (725) 165 683

Total Equity 9,620,308 7,153,781 7,622,920

Liabilities

Non-Current Liabilities

Long-Term Borrowings 2,695,082 1,124,287 1,246,254

Lease Liabilities 313,409 159,921 218,303

Employee Benefit Obligations 278,533 300,957 309,831

Government Grants 245,975 156,068 143,124

Deferred Revenue 7,916 - 1,000

Deferred Tax Liabilities 1,085,534 999,167 817,544

Total Non-Current Liabilities 4,626,449 2,745,400 2,736,056

Current Liabilities

Trade and Other Payables 1,399,045 3,682,712 3,637,147

Short-Term Borrowings 3,627,583 4,708,688 1,746,349

Bank Overdraft 546,604 571,653 954,819

Other Financial Liabilities 65,000 1,094,789 65,000 Lease Liabilities 215,507 244,178 386,076

Government Grants 121,900 150,161 91,982

Deferred Revenue 3,167 1,000 2,000

Income Tax Liabilities 99,851 93,797 149,261

Unclaimed Dividend 38,937 42,166 56,108

Total Current Liabilities 6,117,594 10,589,144 7,088,742

Total Liabilities 10,744,043 13,329,544 9,824,798

Total Equity and Liabilities 20,364,351 20,483,325 17,447,718

HISTORICAL FINANCIAL INFORMATION

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Statement of Cash Flows for the year ended 30 December 2019, 2018 and 2017

2019 2018 2017

₦’000 ₦’000 ₦’000

Cash flows from operating activities:

Profit before tax 575,666 160,867 1,578,547

Adjustments to reconcile profit before tax to net cash flows

Depreciation of property, plant and equipment 635,224 704,634 639,849 Depreciation of right of use assets 79,703 - - Impairment loss (12,414) 81,466 301,563 (Gain)/loss on disposal of plant, property and equipment (6,216) (16,504) (161) Net exchange difference (3.093) (1,960) 77,878 Depreciation of investment property 918 843 918 Grant income (159,645) (141,671) (91,982) Amortization of Intangible assets 61,729 34,907 48,500 Interest income on loans and receivables (36,977) (26,858) (28,795) Interest income on fixed deposit (20,383) (11,222) (2,277) Finance costs 1,735,098 1,925,002 1,001,650 Employee benefit expense 44,514 42,458 46,669 Amortization of deferred revenue (2,583) (2,000) (2,000)

Changes in working capital: Decrease/(Increase) in trade and other receivables 540,275 (1,378,835) (383,714) (Increase)/Decrease in prepayments 186,825 (331,603) 95,763 (Increase)/Decrease in inventories (537,506) (1,118,504) (671,095) Increase in government grant 61,646 212,794 - Increase in other financial liabilities (1,029,789) 1,029,789 - (Decrease)/Increase in trade and other payables (2,108,611) 45,565 (591,976)

4,381 1,209,168 2,019,337 Income tax paid (89,411) (144,875) (288,633) Benefits paid (22,424) (8,933) (20,052) Net cash flow from operating activities (107,454) 1,055,360 1,710,652

Cash flows from investing activities: Purchase of property, plant & equipment (658,270) (722,930) (372,955) Additions to intangible assets (34,990) (29,198) (16,201) Interest received 20,383 11,222 2,277 Additions to loans and receivables (366,218) (612,201) (704,665) Drawdown on loans and receivables 407,958 633,510 739,119 Proceeds from sale of property, plant and equipment 20,750 26,983 5,249 Investment in other financial assets (571,079) (711,045) (706,667) Liquidation of investment in other financial assets 558,072 635,575 729,117

Net cash utilized by investing activities (623,394) (768,084) (324,726)

Cash flows from financing activities:

Payments of finance lease liabilities (265,783) (325,080) (267,212) Interest paid on loans & borrowings (1,735,098) (1,925,002) (1,001,650) Dividend paid (225,000) (300,000) (75,000) Payment of unclaimed dividend (3,229) (13,942) (6,003) Proceed from loans & borrowings 4,134,756 4,025,926 713,490 Proceed from right issues 2,345,441 - - Right issues cost (91,372) - - Loan repayment (3,645,066) (1,185,554) (1,236,171)

Net cash utilized by financing activities 514,649 276,348 (1,872,146)

Net increase/(decrease) in cash and cash equivalents (216,199) 563,622 (486,220) Net foreign exchange difference 3,093 1,960 (77,878) Cash and cash equivalents at the beginning of the year (29,579) (595,163) (31,065) Cash and cash equivalents at the end of the year (242,685) (29,579) (595,163)

EXTRACT FROM ISSUER’S RATING REPORT

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LEGAL OPINION ON THE NOTES

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6 Broad Street, Lagos, Nigeria

T: +234 1 4607890 | +234 1 2806970

E: gelias@gelias.com

W: www.gelias.com

www.africalegalnetwork.com/nigeria

March 4, 2021

To:

FSDH Capital Limited

UAC House

1/5 Odunlami Street

Lagos, Nigeria

Attn.: Taiwo Olatunji

Email: tolatunji@fsdhgroup.com

CardinalStone Partners Limited

5, Okotie Eboh Street,

Ikoyi, Lagos,

Nigeria

Attn.: Onyebuchim Obiyemi

Email: onyebuchim.obiyemi@cardinalstone.com

Dear Sir and Madam,

Legal Opinion in Respect of the N10,000,000,000

Commercial Paper Issuance Programme by Fidson Healthcare Plc

1. INTRODUCTION

1.1 We have acted as legal counsel in respect of the N10,000,000,000 Commercial Paper Issuance

Programme established by Fidson Healthcare Plc (the “Issuer”) (the “Programme”).

1.2 In this legal opinion (this “Opinion”), unless otherwise defined or the context otherwise

requires, terms defined in the Programme Memorandum (defined below) shall be applicable,

and the following capitalised terms shall have the following meanings:

1.2.1 “Agent” means FSDH Merchant Bank Limited in its capacity as the issuing, calculation

and paying agent in connection with the Programme;

1.2.2 “Applicable Pricing Supplement” means the pricing supplement applicable to a

particular series or tranche issued under the Programme;

1.2.3 “Arranger” means FSDH Capital Limited and CardinalStone Partners Limited (each,

an “Arranger” and both the “Arrangers”) in their capacity as arrangers in connection

with the Programme;

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1.2.4 “Board” means the board of directors of the Issuer as constituted from time to

time;

1.2.5 “CBN” means the Central Bank of Nigeria;

1.2.6 “CSD” means the securities depository appointed by the Issuer as may be specified in

the Applicable Pricing Supplement;

1.2.7 “Dealer” means FSDH Capital Limited and CardinalStone Partners Limited (each a

“Dealer” and both the “Dealers”) in their capacity as dealers in connection with the

Programme;

1.2.8 “Dealer and Arranger Agreement” means an agreement of the same name dated on or

about the date of this Opinion and executed by the Issuer and the Dealers in connection

with the Programme;

1.2.9 “Deed of Covenant” means a deed of the same name dated on or about the date of this

Opinion and executed by the Issuer as a deed poll in favour of the Noteholders;

1.2.10 “Guidelines” means the CBN Guidelines on the Issuance and Treatment of Bankers’

Acceptances and Commercial Papers dated September 11, 2019 and the FMDQ

Commercial Paper Registration and Quotation Rules dated July 2020;

1.2.11 “Issuing, Calculation and Paying Agency Agreement” or “ICPA Agreement” means

the agreement of the same name dated on or about the date hereof executed between

the Issuer and the Agent with respect to the issuing and payment of amounts due

under the Notes;

1.2.12 “Nigerian Authority” means any governmental, official or judicial authority or body

in Nigeria;

1.2.13 “Nigerian Courts” means the Supreme Court of Nigeria, the Court of Appeal, the

Federal High Court, and the various State High Courts;

1.2.14 “Nigerian Law” includes without limitation any statutes or regulations made or

imposed by any Nigerian Authority and any treaty or international convention, which

the Federal Republic of Nigeria has ratified and incorporated into domestic law;

1.2.15 “Notes” means the commercial papers issued by the Issuer under the Programme;

1.2.16 “Noteholders” means the persons who have invested in the Notes;

1.2.17 “Programme Memorandum” means the memorandum dated on or about the date

hereof disclosing details of a programme for the issuance by the Issuer of Notes for

tenors not exceeding 270 days;

1.2.18 “SEC” means the Securities and Exchange Commission; and

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1.2.19 “Transaction Documents” means the Programme Memorandum, the Dealer and

Arranger Agreement, the Deed of Covenant and the ICPA Agreement.

2. DOCUMENTS

In our capacity as legal counsel to the Programme, we have reviewed various executed

agreements, documents and matters of law as we have deemed necessary, including the

following documents:

2.1 a copy of the certificate of incorporation of the Issuer;

2.2 a copy of the memorandum and articles of association of the Issuer;

2.3 the resolution of the Board passed on October 22, 2020 approving the Programme, authorizing

the terms of, and the transactions contemplated by the Transaction Documents, authorising the

directors of the Issuer to execute the Transaction Documents on the Issuer’s behalf and to do

all acts and things as may be necessary for or incidental to the attainment of the Programme;

and

2.4 the Transaction Documents.

3. SCOPE

3.1 This Opinion is confined to Nigerian Law as interpreted and applied by Nigerian Courts and

we neither express nor imply any opinion on any matter insofar as it may be affected by the

law of a country other than Nigerian Law, or as to matters of fact. We express no opinion nor

make any comment on the content, adequacy or sufficiency of the commercial terms negotiated

by the parties to the Transaction Documents.

3.2 We have not assisted in the investigation or verification of the facts, or the reasonableness of

any assumption or statement of opinion (including, without limitation, as to the solvency of

any other person expressed to be a party to the Transaction Documents or any other person),

contained in the Transaction Documents or in determining whether any material fact has been

omitted therefrom.

4. EXTENT OF REVIEW AND EXAMINATION

4.1 For the purpose of providing this Opinion, we have examined only agreed forms of the

Transaction Documents, but not any document or agreement cross-referenced in any of the

Transaction Documents.

4.2 We have made no searches or enquiries concerning any person or on any corporate records of

a person nor have we examined any documents, other than the documents referred to in Clause

2 (Documents) of this Opinion.

5. ASSUMPTIONS

The Opinion set out herein is based upon the following assumptions:

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5.1 Genuineness and Authenticity

5.1.1 the genuineness of all signatures and seals on all and any document reviewed by us;

5.1.2 the completeness and conformity to the originals of all Transaction Documents and

other documents supplied to us as certified, electronic, faxed or photocopies;

5.1.3 the genuineness and authenticity of all approval letters, consents and authorizations

sighted;

5.1.4 the accuracy and completeness of all corporate minutes, resolutions, certificates, and

records which we have seen;

5.1.5 the accuracy of all representations of facts expressed in or implied by the documents

we have examined;

5.1.6 the absence of any amendments or variations to the terms of the Transaction

Documents and the authenticity of the originals of such Transaction Documents;

5.1.7 the terms of the Transaction Documents are or will be observed and performed by the

Issuer; and

5.1.8 the absence of any other contractual or similar arrangements between any of the parties

to the Transaction Documents which modify or supersede any of the terms of the

Transaction Documents.

5.2 Completeness

All statements as to matters of fact contained in the Transaction Documents are correct, save

to the extent that they relate to matters specifically opined upon herein.

5.3 Good Faith, etc.

The lack of bad faith and absence of fraud, coercion, duress, or undue influence on the part of

any of the parties to the Transaction Documents, their respective directors, officers, employees,

agents and advisers.

5.4 Restrictions

There are no agreements, letters or other arrangements having contractual effect which render

a party to the Transaction Documents incapable of performing its obligations under such

documents and there are no contractual or similar restrictions contained in any agreement or

arrangement (other than those in the Transaction Documents) that are binding on any party to

such Transaction Document which would affect the conclusions made in this Opinion.

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6. OUR OPINION

Based on the foregoing assumptions and subject to the qualifications set out below, we opine

as follows:

6.1 Enforceability

6.1.1 There is no provision in the Issuer’s constitutional documents and no Nigerian Law

which will be contravened by:

(i) any provision in any Transaction Document; or

(ii) the carrying out of any relevant transactions contemplated by the

Transaction Documents.

6.1.2 There has been obtained and there is in full force and effect every consent, approval or

authorisation by any Nigerian Authority which is either necessary or desirable in

connection with:

(i) the execution by the Issuer of any of the Transaction Documents; or

(ii) the validity or enforceability of any of the Transaction Documents.

6.1.3 All the Transaction Documents are governed by Nigerian Law, are in a proper form to

be enforced under Nigerian law and would be recognised by Nigerian law to

constitute legal, valid, and binding obligations of the parties thereto and enforceable

against the parties thereto in accordance with their terms.

6.1.4 Each Note when issued by the Issuer will constitute legal, valid, and binding

obligations of the Issuer enforceable in accordance with its terms.

6.1.5 It is not necessary under the laws of Nigeria (i) in order to enable Noteholders to

enforce their respective rights under the Notes, or (ii) by reason only of the holding of

the Notes, that any of the Noteholders should be licensed, qualified or entitled to carry

on business in Nigeria. Noteholders that are not resident or domiciled in Nigeria will

not be deemed to be resident, domiciled or carrying on business in Nigeria by reason

only of their holding of the Notes.

6.2 Legal Status of the Issuer

6.2.1 The Issuer is duly incorporated and validly exists under Nigerian Law. To the best of

our knowledge as at the date of this Opinion, no steps have been taken to wind up the

Issuer, to terminate its existence or to appoint a receiver in respect of it or otherwise to

place its business or any of its assets outside the control of its directors.

6.2.2 The Issuer is empowered to issue the Notes in compliance with the Guidelines and

perform its obligations under the Transaction Documents.

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6.2.3 The Issuer holds all licences, approvals, and authorizations from all governmental

authorities in Nigeria necessary for the conduct of its business as set out in the

Programme Memorandum.

6.3 Authorisation

6.3.1 Subject to the Issuer obtaining the written consent of Nigerian Export-Import Bank

(“NEXIM”) for the Programme 1, the Issuer has the full power, authority, and capacity

to execute, deliver, perform, and observe the terms and conditions of the Transaction

Documents.

6.3.2 Subject to 6.3.1 above, all corporate actions that are necessary or advisable to authorise

the Issuer to enter into, execute, deliver, perform and observe the terms and conditions

of the Transaction Documents have been taken.

6.3.3 The resolution referred to under Clause 2 (Documents) is valid under the Issuer’s

constitutional documents and Nigerian Law. The resolution is sufficient corporate

authorisation for the Issuer to execute the Transaction Documents and to carry out all

relevant transactions; and the resolution need not be filed, recorded, or registered with

any Nigerian Authority.

6.4 SEC Matters

It is permissible for the Issuer as a public limited liability company to issue the Notes and invite

the investing public to invest in the Notes without requiring registration with the SEC.

6.5 CBN Compliance

6.5.1 The Notes have been issued in compliance with the Guidelines.

6.5.2 The Issuer has been rated as required by and in compliance with the Guidelines.

6.6 Exchange Control Compliance

6.6.1 The issuance of the Notes in Nigerian Naira or in such other currency as may be agreed

between the Arranger and the Issuer is permitted by law.

6.6.2 Residents and non-residents of Nigeria may deal in, invest in, acquire, or dispose of

the Notes.

6.6.3 An investor in a foreign currency denominated commercial paper may invest, subject

to the following documentation requirements:

1 Pursuant to an Offer Letter dated May 27, 2020 NEXIM approved an equipment finance of N1,500,000,000 (One Billion, Five Hundred Million Naira) and working capital finance of N1,500,000,000 (One Billion, Five Hundred Million Naira) to the Issuer. One of the conditions subsequent and covenant under the Offer Letter is that no further borrowings shall be made by the Issuer without NEXIM’s prior written

consent.

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(a) tested SWIFT message evidencing the remittance of funds and specifying the purpose of the capital importation (where applicable);

(b) obtaining an electronic certificate of capital importation;

(c) board resolution of the Investor authorising the investment (in the case of a

company); and

(d) evidence of incorporation, where applicable.

6.6.4 Non-residents of Nigeria who have brought funds into Nigeria for subscription to the

Notes through approved and lawful channels may upon liquidating their investment in the Notes repatriate the proceeds of their investment upon presentation of electronic certificates of capital importation issued in respect of the funds brought into Nigeria.

6.6.5 Nigerian Courts will give judgment in foreign currency.

6.7 Registration

6.7.1 Other than the stamping of the Transaction Documents at the Stamp Duties Office of

the Federal Inland Revenue Service, it is not necessary or desirable for any further action to be taken in the future (including the making of any registrations or filings) in order to preserve as a matter of law, the interests of the Noteholders.

6.7.2 Save for the stamping of the Transaction Documents, no consent, licence, authorization

or similar approval or other action by, and no notice to or filing or registration with, any governmental authority or regulatory body is required in Nigeria for the due execution, delivery, and performance by the Issuer of the Transaction Documents.

6.8 Insolvency

6.8.1 Subject to insolvency laws generally applicable to Nigerian companies, in insolvency

proceedings involving the Issuer, the obligations of the Issuer under the Transaction Documents will remain valid, binding and enforceable.

6.8.2 Subject to insolvency laws generally applicable to Nigerian companies, upon the

maturity of the Notes, in the event that the Issuer is unable to discharge any of its obligations to the Noteholders, the unsatisfied Noteholders as creditors of the Issuer are entitled to apply for the winding up of the Issuer on the grounds of the Issuer’s inability to pay its debts.

6.8.3 The Notes are unsecured, and no security interests have been created in favour of the

Noteholders by any Transaction Documents.

6.8.4 Upon the insolvency of the Issuer, Nigerian Law would treat the Noteholders as

unsecured unsubordinated creditors of the Issuer for all purposes.

6.9 Tax Matters

6.9.1 The Issuer is not entitled or required to withhold tax on payments to any Noteholder

on the zero-coupon Notes.

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6.9.2 The Noteholders will not be required to pay income taxes on the discount enjoyed on the Notes.2

6.9.3 Save for the Dealer and Arranger Agreement which will be charged at an ad valorem

stamp duties rate, the Transaction Documents will be charged with nominal stamp duties at the rate of N500 per Transaction Document and N50 for every additional copy of each Transaction Document.

6.9.4 On buying or selling the Notes, investors will pay no value added tax.3 6.9.5 A sale of a Note by a Noteholder will not give rise to a charge to capital gains tax.

6.9.6 Value added tax will be payable on the commission payable to the CSD.4

6.9.7 The Notes will be issued in dematerialised form and as book entries in the register of

the CSD. The Notes may be subject to stamp duty charges.

6.10 Pari passu ranking

The obligations of the Issuer under the Transaction Documents to which it is a party and the Notes (when issued) will rank at least pari passu with all present and future unsecured and unsubordinated obligations of the Issuer, other than those claims which are preferred by any bankruptcy, insolvency, liquidation, or other similar laws of general application.

6.11 Choice of Law and Jurisdiction

The choice of Nigerian law as the governing law of the Transaction Documents is a valid choice of law and a Nigerian court or arbitral tribunal will apply the relevant governing law of a Transaction Document to give effect to the provisions contained therein.

6.12 Dispute Resolution

The submission to arbitration by the parties under the Dealer and Arranger Agreement and the ICPA Agreement is permitted under the laws of Nigeria and an arbitral award rendered by a recognised arbitral tribunal would be enforced by the courts of Nigeria as a legal, valid, and binding submission to arbitration subject to the provisions of the Arbitration and Conciliation Act, Chapter A18, Laws of the Federation of Nigeria 2004.

6.13 Miscellaneous

6.13.1 The Issuer’s assets are not entitled to any immunity from service or process, suit, judgment, execution, or attachment (including pre-judgment attachment) in respect of any obligation under any of the Transaction Documents; and

2 Order 1(iv) of the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011 (“CITA”) and Personal Income Tax (Amendment) Act, 2011 (Amendment to the Third Schedule) (“PITA”) exempt interest earned by holders of short-term securities issued by corporate bodies from the imposition of companies’ income tax and personal income tax respectively. The exemption granted under the CITA is for a period of 10 years commencing from January 2, 2012, whilst the exemption under PITA is for an indefinite duration. Upon expiration o f the CITA order in January 2022, Noteholders may be liable to pay income tax on profits or returns accrued on the Notes as zero-coupon debt securities. Noteholders may also be liable to capital gains tax if the difference between the discount price at issue and redemption value at par is treated as an appreciation in value of the Notes. This is, however, subject to the decision of the tax authority.

3 Value Added Tax Act (Modification) Order, 2011. This order commenced on January 2, 2012 and exempts income and proceeds from the disposal of debt securities from value added tax for a period of 10(ten) years from the commencement date. The order expires in 2022. In view of the duration of the Programme, investors will be required to pay value added tax upon the expiration of the order.

4 Note that Value Added Tax is payable at the rate of 7.5%, Section 34, of the Finance Act 2019 which came into force on February 1, 2020.

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6.13.2 The Transaction Documents do not contain any provision or provide for any transaction or other action which could have the consequence of making the Noteholders liable in Nigeria in respect of any debt, liability, or obligation of the Issuer or in respect of any non-compliance by the Issuer with any Nigerian Law.

7. QUALIFICATIONS

This Opinion is subject to the following qualifications:

7.1 our opinion that an obligation or document is enforceable means that the obligation or document is of a type and form which Nigerian Courts generally will enforce. It does not mean that the obligation or document can necessarily be enforced in all circumstances and with regards to a final judgment or award, certain defences to its application or grounds for setting it aside may be accepted or applied, in spite of an agreement to the contrary;

7.2 a judgment given in any foreign currency may be satisfied by the payment of the Naira

equivalent thereof at the time of payment;

7.3 the assessment of stamp duties on documents by the Stamp Duties Office is erratic and largely

untested in Nigerian Courts;

7.4 upon the presentation of a winding-up petition against a Nigerian company, proceedings

commenced against it to enforce a liability may be stayed or restrained by a Nigerian Court;

7.5 no attachment or execution can be levied against the assets of a Nigerian bank after the

commencement of its winding-up;

7.6 the enforcement of the rights of the parties under the Transaction Documents may with the

passage of time become statute-barred under the limitation laws of the Federal Republic of Nigeria; and

7.7 the power of Nigerian Courts to order specific performance of an obligation or to order any other equitable remedy is discretionary and, accordingly, a Nigerian Court might make an award of damages where specific performance of an obligation or any other equitable remedy was sought.

8. BENEFIT OF OPINION

This Opinion is prepared exclusively for the purpose of the Notes issuance and for the benefit of the Arrangers, the Issuer, and persons seeking to invest in the Notes. Other than for the Notes issuance and for the benefit of the persons to whom it is meant, it is not to be used by any other person or for other purposes or quoted or referred to in any public document or filed with anyone without our express consent. We do not undertake to update this Opinion and this Opinion is not to be distributed, in whole or in part, to any person other than as agreed between the Issuer and us and then only for purposes directly relating to the Programme; provided however that this Opinion may be disclosed without our consent to:

(a) any person to whom disclosure is required to be made by applicable law or court order

or arbitral award or pursuant to the rules or regulations of any supervisory or regulatory body, or the rules of any applicable stock exchange or any rating agency; or

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(b) to the officers, employees, auditors, rating agencies, regulators, and professional advisers of the Issuer on a strict need-to-know basis and only in relation to the Programme.

Where this Opinion is sought to be disclosed in connection with any potential or actual judicial proceedings, prior written notice of its intended disclosure must be given to us.

Yours faithfully,

For G. Elias & Co.

GENERAL INFORMATION

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Authorisation

The establishment of this CP Programme and issuance of Notes thereunder was approved by the resolution of the

Board of Fidson Healthcare PLC dated 30 October 2020.

Going Concern

The Directors have made an assessment of the Company’s ability to continue as a going concern and have no reason

to believe the Company will not remain a going concern in the year ahead.

Auditors

Deloitte & Touche Chartered Accountants acted as auditors of the annual financial statements of the Issuer for the

financial years ended 30 December 2018 and 2019. The auditors have in respect of those years for which they were

responsible for the audit, issued unqualified reports.

Ernst & Young Chartered Accountants acted as auditors of the annual financial statements of the Issuer for the

financial year ended 30 December 2017. The auditors have in respect of this year for which they were responsible

for the audit, issued an unqualified report.

Litigation

As at the completion of the legal due diligence, the issuer in ordinary course of business was involved in two (2)

cases as a defendant. The legal counsel to the transaction has reported no cases considered as material litigation,

based on the minimum monetary claim of N100,000,000.00 (One Hundred Million Naira) (Material Litigation) of

which the Issuer is a defendant.

The Directors of the Issuer are of the opinion that the claims against the Issuer will not have a significant effect on

its financial health nor adversely affect the Transaction.

Material Contracts

The following agreements have been entered into and are considered material to this Programme:

i. An Issuing, Calculation and Paying Agency Agreement dated 04 March 2021 between the Issuer and

Stanbic IBTC Bank PLC;

ii. A Deed of Covenant dated 04 March 2021 issued by the Issuer as a deed poll in favour of the Noteholders;

and

iii. A Dealer Agreement dated 04 March 2021 between the Issuer and the Joint Lead Arrangers/Dealers.

Other material contracts in respect of any issuance of Notes under the Programme will be disclosed in the

Applicable Pricing Supplement issued in respect of that Series or Tranche.

Relationship between the Company and its Advisers

The Lead and Joint Arrangers, Dealers and/or their respective affiliates have engaged, and might in the future

engage, in investment banking and/or commercial banking transactions with, and may perform services for, the

Issuer and/or the Issuer’s affiliates in the ordinary course of business. The Lead and Joint Arrangers, Dealers and

their respective affiliates that have a credit relationship with the Issuer might from time to time hedge their credit

exposure to the Issuer consistent with their customary risk management policies.

In addition, in the ordinary course of their business activities, the Lead and Joint Arrangers, Dealers and their

respective affiliates might make or hold a broad array of investments and actively trade debt and equity securities

(or related derivative securities) and financial instruments (including bank loans) for their own account and for the

accounts of their customers.

GENERAL INFORMATION

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Such investments and securities activities might involve securities and/or instruments of the Issuer or its affiliates.

The Lead and Joint Arrangers, Dealers and their respective affiliates might also make investment recommendations

and/or publish or express independent research views in respect of such securities or financial instruments and

might hold or recommend to clients that they acquire or sell their positions in such securities and instruments.

Ultimate Borrower

The Issuer is the borrower in respect of the Notes.