Dangote Sugar Refinery Plc Prospectus

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CONTENTS

DEFINITIONS 3 ABRIDGED TIMETABLE 4 SUMMARY OF THE OFFER 5 THE OFFER 8 DIRECTORS AND OTHER PARTIES TO THE OFFER 9 THE CHAIRMAN’S LETTER 13

1. History and Business of the Company ............................................................................................................................ 14 2. Risk Factors and Mitigants ............................................................................................................................................. 20 3. Board of Directors........................................................................................................................................................... 22 4. Management and Staff .................................................................................................................................................... 24 5. Premises.......................................................................................................................................................................... 26 6. Purpose of the Offer........................................................................................................................................................ 26 7. Financial Summary ......................................................................................................................................................... 26 8. Working Capital, Profit and Dividend Forecasts ............................................................................................................ 28 9. Unclaimed Dividends...................................................................................................................................................... 28 10. Corporate Governance .................................................................................................................................................... 28 11. Research and Development............................................................................................................................................. 29 12. Mergers and Takeovers................................................................................................................................................... 29 13. Future Plans .................................................................................................................................................................... 29

THE PROFIT FORECAST 30 1. Letter from the Reporting Accountants........................................................................................................................... 30 2. Profit Forecast for the Years Ending 31 December 2006, 2007, 2008 and 2009 ............................................................ 32 3. Bases and Assumptions................................................................................................................................................... 32 4. Letter from the Reporting Accountants in respect of the Going Concern Status............................................................. 35 5. Letter from the Issuing Houses ....................................................................................................................................... 36

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 38 1. Reporting Accountants’ Report....................................................................................................................................... 38 2. Statement of Accounting Policies ................................................................................................................................... 40 3. Profit And Loss Account................................................................................................................................................. 41 4. Balance Sheet.................................................................................................................................................................. 42 5. Cash Flow Statement ...................................................................................................................................................... 43 6. Notes to the Financial Statements ................................................................................................................................... 44

STATUTORY AND GENERAL INFORMATION 47 1. Incorporation and Share Capital History......................................................................................................................... 47 2. Shareholding Structure.................................................................................................................................................... 47 3. Directors’ Beneficial Interests......................................................................................................................................... 47 4. Indebtedness.................................................................................................................................................................... 48 5. Subsidiaries and Associated Companies ......................................................................................................................... 48 6. Extracts from the Memorandum and Articles of Association ......................................................................................... 48 7. Claims and Litigation...................................................................................................................................................... 56 8. Material Contracts........................................................................................................................................................... 56 9. Costs and Expenses......................................................................................................................................................... 56 10. Declarations .................................................................................................................................................................... 56 11. Relationship between the Issuer and its Advisers ........................................................................................................... 57 12. Related Party Transactions.............................................................................................................................................. 57 13. Consents.......................................................................................................................................................................... 57 14. Documents Available for Inspection............................................................................................................................... 59

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 61 1. Reporting Accountants’ Report....................................................................................................................................... 61 2. Statement of Accounting Policies ................................................................................................................................... 63 3. Profit And Loss Account................................................................................................................................................. 64 4. Balance Sheet.................................................................................................................................................................. 65 5. Cash Flow Statement ...................................................................................................................................................... 66 6. Notes to the Financial Statements ................................................................................................................................... 67 7. Segmental Financial Information .................................................................................................................................... 71

PROCEDURE FOR APPLICATION AND ALLOTMENT 76 RECEIVING AGENTS 77 APPLICATION FORM 78

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DEFINITIONS

“Access Bank” Access Bank Plc “BGL” BGL Securities Limited “CAC” Corporate Affairs Commission “CAGR” Compound Annual Growth Rate “CAPEX” Capital Expenditure “CSCS” Central Securities Clearing Systems Limited “Dangote Sugar” or “the Company” Dangote Sugar Refinery Plc “Deutsche Bank” Deutsche Bank AG, London

“DIL” Dangote Industries Limited “DPS” Dividend Per Share “EBITDA” Earnings Before Interest, Taxes, Depreciation and Amortisation “Ecobank” Ecobank Nigeria Plc “ECOWAS” Economic Community of West African States “EGM” Extra-Ordinary General Meeting “EPS” Earnings Per Share “EU” European Union “FBN Capital” FBN Capital Limited “FCMB-CM” FCMB Capital Markets Limited “FEPA” Federal Environmental Protection Agency “Fidelity Bank” Fidelity Bank Plc “FGN” Federal Government of Nigeria “GDP” Gross Domestic Product “IBTC” IBTC Chartered Bank Plc “ICML” Intercontinental Capital Markets Limited “JIH” Joint Issuing Houses “JPMorgan” JPMorgan Chase Bank, N.A., Johannesburg Branch “LFN” Laws of the Federation of Nigeria “MBA” Masters degree in Business Administration “NAFDAC” National Agency for Food, Drug Administration and Control “Oceanic Bank” Oceanic Bank International Plc “PAT” Profit After Taxation “PBT” Profit Before Taxation “Savannah Sugar” Savannah Sugar Company Limited “SEC” or “the Commission” Securities & Exchange Commission “SON” Standards Organisation of Nigeria “The NSE” or “The Exchange” The Nigerian Stock Exchange “The Offer” or “IPO” Offer for Sale of 3,000,000,000 Ordinary Shares of 50 kobo

each in Dangote Sugar Refinery Plc at N=18.00 per share “Vetiva” Vetiva Capital Management Limited “Zenith Bank” Zenith Bank Plc

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ABRIDGED TIMETABLE

DATE ACTIVITY RESPONSIBILITY

15/11/2006 Application List opens JIH

22/12/2006 Application List closes JIH

10/01/2007 Receiving Agents make returns JIH/Registrars

07/02/2007 Forward allotment proposal and draft newspaper advertisement to SEC

JIH

21/02/2007 Receive SEC authorisation of allotment JIH

22/02/2007 Pay net proceeds of the Offer to DIL JIH

26/02/2007 Announce allotment JIH

28/02/2007 Return surplus/rejected application moneys JIH/Registrars

14/03/2007 Distribute share certificates Registrars

16/03/2007 Forward Declaration of Compliance to The Exchange JIH/Stockbrokers

19/03/2007 Listing of Dangote Sugar shares and trading commences JIH/Stockbrokers

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SUMMARY OF THE OFFER The following information should be read in conjunction with the full text of this Prospectus, from which it is derived: 1. ISSUER: Dangote Sugar Refinery Plc.

2. SELLER: Dangote Industries Limited.

3. ISSUING HOUSES: IBTC Chartered Bank Plc Vetiva Capital Management Limited Access Bank Plc BGL Securities Limited Ecobank Nigeria Plc FBN Capital Limited FCMB Capital Markets Limited Fidelity Bank Plc Intercontinental Capital Markets Limited Oceanic Bank International Plc Zenith Bank Plc

4. SHARE CAPITAL:

Authorised: N=6 billion comprising 12 billion Ordinary Shares of 50k each.

Issued and fully paid: N=5 billion comprising 10 billion Ordinary Shares of 50k each.

Now being offered: 3 billion Ordinary Shares of 50k each.

5. METHOD OF OFFER: Offer for Sale.

6. PURPOSE: The IPO is being undertaken to give investors an opportunity to become part owners of Dangote Sugar, the market leader in the Nigerian sugar industry, which is currently 99% owned by Dangote Industries Limited. The IPO will also enable the Company meet the requirements for a listing on The Nigerian Stock Exchange.

7. UNITS OF SALE: Minimum of 500 Ordinary Shares and multiples of 50 Ordinary Shares thereafter.

8. OFFER PRICE: N=18.00 per share.

9. OFFER SIZE: N=54 billion.

10. MARKET CAPITALISATION AT OFFER PRICE:

N=180 billion.

11. PAYMENT: In full on application.

12. PREFERENTIAL ALLOTMENT: A maximum of 1,800,000,000 shares, representing 60% of the Offer, will be preferentially allotted to identified investors.

13. UNDERWRITING: The Offer is fully underwritten by the Joint Underwriters on a stand-by basis.

14. OPENING DATE: Wednesday, 15 November 2006.

15. CLOSING DATE: Friday, 22 December 2006.

16. QUOTATION: An application has been made to The Council of The Exchange for the admission to its Daily Official List of the whole of Dangote Sugar’s issued and paid-up share capital.

17. STATUS: The shares being offered rank pari passu in all respects with the other existing issued Ordinary Shares of the Company.

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SUMMARY OF THE OFFER 18. FINANCIAL SUMMARY:

(Extracted from the Reporting Accountants’ Report)

N=’000

6 months

ended PRE-SCHEME OF ARRANGEMENT

--- Dangote Sugar Division - Segmental financial summary as at--- 30/06/06 31/12/05 31/12/04 31/12/03 31/12/02 31/12/01

Turnover 42,406,432 58,494,709 36,576,150 27,879,762 13,540,091 14,806,249 Profit before taxation 7,811,435 9,379,697 7,371,106 4,546,733 1,219,430 1,571,695 Profit after taxation 7,811,435 9,379,697 7,371,106 4,543,515 1,219,430 1,499,095 Dividend - - - - - - Shareholders funds 19,131,959 34,716,493 25,336,796 17,965,690 13,422,175 1,278,727 Total assets 18,863,106 29,953,682 21,399,578 15,910,164 4,234,774 3,710,160 Adjusted earnings per share (kobo)* 78.11 93.80 73.71 45.44 12.19 14.99

* Calculations of adjusted earnings and dividend per share are based on the issued and paid-up capital of N=5 billion comprising

10 billion Ordinary Shares of 50 kobo each as at the date of this Prospectus.

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

Year ending 31 December 2006 2007 2008 2009

Forecast EBITDA per share (kobo)* 197.32 254.15 287.95 318.39

Forecast earnings per share (kobo)* 179.31 177.49 203.21 226.26

Forecast dividend per share (kobo)* 100.00 120.00 150.00 170.00

Forecast earnings yield at the Offer price 9.96% 9.86% 11.29% 12.57%

Forecast dividend yield at the Offer price 5.56% 6.67% 8.33% 9.44%

Forecast price/earnings ratio at the Offer price 10.04 10.14 8.86 7.96

* Calculations of forecast EBITDA, earnings and dividend per share for the years ending 31 December 2006, 2007, 2008 and 2009 are based on the 10 billion Ordinary Shares of 50 kobo each expected to be in issue on those dates.

20. CORPORATE DIRECTORY: Dangote Sugar currently operates from its Corporate Office and a

factory, both located in Apapa, details of which are provided below:

Head Office: Modandola House 42/44 Warehouse Road Apapa Lagos Tel: +234 1 5804646-8 Fax: +234 1 2714466, 5804654 Email: [email protected] Factory: Shed 20 Apapa Wharf Lagos Tel: +234 1 5873162, 5873091, 5454468 Fax: +234 1 5454466

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SUMMARY OF THE OFFER 21. GROUP STRUCTURE: Dangote Sugar currently has no subsidiary or associated company. The

Company is currently 99% owned by DIL and operated as a division of DIL until January 2006, when it was spun-off via a Scheme of Arrangement. DIL’s shareholding is expected to reduce to 69% at the conclusion of the IPO.

22. CLAIMS AND LITIGATIONS: The Company in its ordinary course of business is presently involved in one (1) suit. The amount claimed in the said suit is N=6,550,597.00 (six million five hundred and fifty thousand five hundred and ninety seven naira) plus interest accrued thereon. The Solicitors to the Offer and the Directors of the Company are of the opinion that the aforementioned suit is not likely to have any material adverse effect on the Company and or the Offer, and are not aware of any other pending and or threatened suits involving the Company.

23. INDEBTEDNESS: As at 30 June 2006, the Company had secured bank overdrafts in the ordinary course of business amounting to N=105.8 million. However, the Company had no outstanding debenture, mortgages, charges or similar indebtedness or contingent liabilities as at 30 June 2006.

24. SHARE CERTIFICATE Share certificate in respect of shares allotted will be sent by registered post not later than 15 working days from the date of allotment. Any investor who does not want to receive a physical share certificate, should state the name of his/her stockbroker and his/her CSCS account number in the space provided on the Application Form.

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THE OFFER A copy of this Prospectus and the documents specified herein have been delivered to the Securities and Exchange Commission for clearance and registration.

This Prospectus is being issued in compliance with the provisions of the Investments and Securities Act Cap I24 LFN 2004, the Rules and Regulations of the Commission and the listing requirements of The Exchange and contains particulars in compliance with the requirements of the Commission and The Exchange, for the purpose of giving information to the public with regard to the Initial Public Offering of 3,000,000,000 Ordinary Shares of Dangote Sugar Refinery Plc by IBTC Chartered Bank Plc, Vetiva Capital Management Limited, Access Bank Plc, BGL Securities Limited, Ecobank Nigeria Plc, FBN Capital Limited, FCMB Capital Markets Limited, Fidelity Bank Plc, Intercontinental Capital Markets Limited, Oceanic Bank International Plc and Zenith Bank Plc. An application has been made to The Council of The Exchange for the admission to its Daily Official List of the whole of the Company’s paid-up share capital.

The Directors of Dangote Sugar individually and collectively accept full responsibility for the accuracy of the information contained in this Prospectus. The Directors have taken reasonable care to ensure that the facts contained herein are true and accurate in all respects and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no material facts the omission of which would make any statement herein misleading or untrue.

IBTC CHARTERED BANK PLC RC 125097

VETIVA CAPITAL MANAGEMENT LIMITED RC 485600

ACCESS BANK PLC RC 125384

BGL SECURITIES LIMITED RC 269666

ECOBANK NIGERIA PLC RC 89773

FBN CAPITAL LIMITED RC 446599

FCMB CAPITAL MARKETS LIMITED RC 446561

FIDELITY BANK PLC RC 103022

INTERCONTINENTAL CAPITAL MARKETS LIMITED RC 428270

OCEANIC BANK INTERNATIONAL PLC RC 147269

ZENITH BANK PLC RC 150224

on behalf of

DANGOTE INDUSTRIES LIMITED RC 71242

Offer for Sale and are authorised to receive applications for

3,000,000,000 Ordinary Shares of 50 kobo each

at N=18.00 per Share

in

DANGOTE SUGAR REFINERY PLC RC 613748

Payable in full on Application

The Application List for the shares now being offered will open on Wednesday, 15 November 2006 and close on Friday, 22 December 2006

SHARE CAPITAL AND RESERVES OF THE COMPANY AS AT 30 JUNE 2006: (EXTRACTED FROM THE REPORTING ACCOUNTANTS’ REPORT) N=‘000 AUTHORISED* 50 million Ordinary Shares of N=1 each 50,000

ISSUED AND FULLY PAID** 50 million Ordinary Shares of N=1 each 50,000

EQUITY Called-up share capital 50,000 Share premium 11,270,524 Revenue reserve 7,811,435 SHAREHOLDERS’ FUNDS 19,131,959

* At an Extra-Ordinary General Meeting held on 26 July 2006, the authorised share capital was increased from N=50 million to N=6 billion and the Company’s shares were subdivided from N=1 to 50 kobo.

** At an Extra-Ordinary General Meeting held on 20 August 2006, the issued share capital was increased from N=50 million to N=5 billion through the allotment of 9.9 billion ordinary shares to existing shareholders via a bonus issue.

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DIRECTORS AND OTHER PARTIES TO THE OFFER DIRECTORS Alhaji Aliko Dangote C O N (Chairman) 4 Karimu Kotun Street Victoria Island Lagos

Mr Narendra Kumar Somani (Indian) (Managing) Modandola House 42/44 Warehouse Road Apapa Lagos

Mr Suleiman Oladapo Olarinde (Executive) Modandola House 42/44 Warehouse Road Apapa Lagos

Dr Konyinsola Ajayi SAN 4 Goriola Street Off Adeola Odeku Street Victoria Island Lagos

Mr Olakunle Alake 8 Theophilus Orji Street Lekki Phase 1 Lagos

Alhaji Sani Dangote (representing Dangote Industries Limited) Plot 245 Muri Okunola Street Victoria Island Lagos

Alhaji Abdu Garba Dantata 34B Agodogba Avenue Parkview Estate Ikoyi Lagos

Ms Bennedikter China Molokwu 313A Ikorodu Crescent Dolphin Estate Ikoyi Lagos

Mr Uzoma Nwankwo 14C Temple Road Ikoyi Lagos

COMPANY SECRETARY Mr Adewale Adebayo Agboola Modandola House 42/44 Warehouse Road Apapa Lagos

REGISTERED OFFICE: Marble House 1 Alfred Rewane Road Ikoyi Lagos

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

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

Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos BGL Securities Limited Plot 1061 Abagbon Close Off Ologun Agbaje Street Victoria Island Lagos Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos FBN Capital Limited 16 Keffi Street South West Ikoyi Lagos FCMB Capital Markets Limited Primrose Tower 17A Tinubu Street Lagos Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island Lagos Intercontinental Capital Markets Limited Wesley House 21/22 Marina Lagos Oceanic Bank International Plc Waterfront Plaza 270 Ozumba Mbadiwe Avenue Victoria Island Lagos Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

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DIRECTORS AND OTHER PARTIES TO THE OFFER

JOINT STOCKBROKERS TO THE OFFER Future View Financial Services Limited Future View Plaza Plot 161D Aufu Talyor Close, Off Idejo Street Victoria Island Lagos

AMYN Investments Limited 19th Floor, Stock Exchange House 2/4 Customs Street Lagos

APT Securities Limited 3rd Floor, Church House 29 Marina Lagos

BFCL Assets & Securities Limited 5th Floor, UBA House 57 Marina Lagos

BGL Securities Limited Plot 1061 Abagbon Close Off Ologun Agbaje Street Victoria Island Lagos

Camry Securities Limited Wesley House Annex 21/22 Marina Lagos

Capital Assets Limited 8th Floor, Bookshop House 50/52 Broad Street Lagos

Capital Express Securities Limited 2nd Floor, Crusader House 23/25 Martins Street Lagos

Clearview Investments Company Limited 6th Floor, NCR Building 6 Broad Street Lagos

CSL Stockbrokers Limited 3rd Floor, Primrose Tower 17A Tinubu Street Lagos

De-Canon Investment Limited 4th Floor, Wesley House 21/22 Marina Lagos

Diamond Securities Limited 3 Elsie Femi Pearse Street Off Adeola Odeku Road Victoria Island, Lagos

Greenwich Trust Limited Plot 1698A Oyin Jolayemi Street Victoria Island, Lagos

EMI Capital Resources Limited 45A Campbell Street Lagos

ESL Securities Limited 3rd Floor, Cowrie House 27/29 Adeyemo Alakija Street Victoria Island Lagos

Fidelity Union Securities Limited 36 Adeola Hopewell Street Victoria Island Lagos

Finmal Finance Services Limited 10 Ijora Causeway Lagos

Heartbeat Investments Limited 7th Floor, Wesley House 21/22 Marina Lagos

IBTC Asset Management Limited I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos

ICMG Securities Limited 8B Ademola Street South West Ikoyi Lagos

International Standard Securities Limited 144A Association Road Dolphin Estate, Ikoyi Lagos

Lambeth Trust & Investment Company Limited 1st Floor, 4/6 Mobolaji Bank Anthony Street Off Broad Street Lagos

LB Securities Limited Plot 932 Idejo Street Victoria Island Lagos

Marina Securities Limited 45 Saka Tinubu Street Victoria Island Lagos

MBC Securities Limited 2nd Floor, South Atlantic Petroleum Towers 7 Adeola Odeku Street Victoria Island Lagos

Meristem Securities Limited 23A Ribadu Road Off Awolowo Road Ikoyi Lagos

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DIRECTORS AND OTHER PARTIES TO THE OFFER Mutual Alliance Investment & Securities Limited Mutual Alliance House 207B Ikorodu Road Obanikoro Lagos

Nova Finance & Securities Limited 1st Floor, Speedway House 21 Araromi Street Off Macarthy Street Onikan Lagos Partnership Investment Company Limited 37 Ademola Street South West Ikoyi Lagos Pilot Securities Limited 1st Floor, Wing E Elephant Cement House Business District Centre Alausa Lagos Premium Securities Limited 16 Keffi Street South West Ikoyi Lagos PSL Limited 3rd Floor, Cathedral House 2 Odunlami Street Lagos SanTrust Securities Limited 4th Floor, 28 Berkley Street Onikan Lagos Signet Investments & Securities Limited Signet Suite Church House 29 Marina Lagos SMADAC Securities Limited 2nd Floor, Kingsway Building 51/52 Marina Lagos Spring Stockbrokers Limited Plot 1611 Adeola Hopewell Street Victoria Island Lagos Summit Finance Company Limited Summit House 6 Ajele Street Lagos

Tower Assets Management Limited 2nd Floor, Suite 6, Maina Court Plot 252A Herbert Macaulay Way Opposite NNPC Tower Abuja

UNEX Securities & Investment Limited 3 Biaduo Street Off Keffi Street South-West Ikoyi Lagos


Zenith Securities Limited Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

AUDITORS Akintola Williams Deloitte Akintola Williams Deloitte House 235 Ikorodu Road Ilupeju Lagos

REPORTING ACCOUNTANTS Ahmed Zakari & Co (Chartered Accountants) African Alliance Building F1 Sani Abacha Way Kano

SOLICITORS TO THE COMPANY ǼLEX Legal Practitioners & Arbitrators 7th Floor, Union Marble House 1 Alfred Rewane Road Ikoyi Lagos

JOINT SOLICITORS TO THE OFFER Banwo & Ighodalo 98 Awolowo Road Ikoyi Lagos

Wali-Uwais & Co 1st Floor Right Wing Afri-Investment House Plot 2669 Aguiyi Ironsi Street Maitama Abuja

REGISTRARS Zenith Registrars Limited 1 Prince Ade Odedina Street Off Sinari Daranijo Street Victoria Island Lagos

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DIRECTORS AND OTHER PARTIES TO THE OFFER

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


Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos

BGL Limited Plot 1061 Abagbon Close Off Ologun Agbaje Street Victoria Island Lagos

Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos

Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island Lagos

First Bank of Nigeria Plc Samuel Asabia House 35 Marina Lagos

First City Monument Bank Plc Primrose Tower 17A Tinubu Street Lagos

Intercontinental Capital Markets Limited Wesley House 21/22 Marina Lagos

Oceanic Bank International Plc 270 Ozumba Mbadiwe Avenue Victoria Island Lagos

Skye Bank Plc Plot 708/709 Adeola Hopewell Street Victoria Island Lagos

Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

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

Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos

Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos

Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island Lagos

First Bank of Nigeria Plc Samuel Asabia House 35 Marina Lagos

First City Monument Bank Plc Primrose Tower 17A Tinubu Street Lagos

Intercontinental Bank Plc Intercontinental Plaza Plot 999C Danmole Street Victoria Island Lagos

Oceanic Bank International Plc 270 Ozumba Mbadiwe Avenue Victoria Island Lagos

Skye Bank Plc Plot 708/709 Adeola Hopewell Street Victoria Island Lagos

Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos

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THE CHAIRMAN’S LETTER The following is the text of a letter received by the Joint Issuing Houses from the Chairman of the Board of Directors of Dangote Sugar Refinery Plc, Alhaji Aliko Dangote C O N:

01 November 2006 The Directors IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos

and

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

and

The Directors Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos

and

The Directors BGL Securities Limited Plot 1061 Abagbon Close Victoria Island Lagos

and

The Directors Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos

and

The Directors FBN Capital Limited 16 Keffi Street South West Ikoyi Lagos

and

The Directors FCMB Capital Markets Limited Primrose Tower 17A Tinubu Street Lagos

and

The Directors Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island, Lagos

and

The Directors Intercontinental Capital Markets Limited Wesley House 21/22 Marina Lagos

and

The Directors Oceanic Bank International Plc Waterfront Plaza 270 Ozumba Mbadiwe Avenue Victoria Island, Lagos

and

The Directors Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island, Lagos

Dear Sirs INITIAL PUBLIC OFFERING OF 3,000,000,000 ORDINARY SHARES OF 50 KOBO EACH IN DANGOTE SUGAR REFINERY PLC AT N=18.00 PER SHARE At an Extra-Ordinary General Meeting of Dangote Sugar Refinery Plc held on 05 September 2006, the shareholders authorised the Board of Directors to undertake an Initial Public Offering to give every interested investor the opportunity to own shares in the Company, which is 99% owned by Dangote Industries Limited, and also enable the Company meet the requirements for a listing on The Nigerian Stock Exchange. JP Morgan and Deutsche Bank, two leading international investment banks, were engaged to provide certain pre-Offer financial advisory services to the Company along with the Lead Issuing Houses. At a subsequent Board Meeting held on 06 September 2006, the Directors approved an Offer for Sale of 3,000,000,000 Ordinary Shares of 50 kobo each at N=18.00 per share. On behalf of the Directors of Dangote Sugar, I am pleased to provide you with information relating to the Company and the Offer, which you are making on our behalf.

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THE CHAIRMAN’S LETTER 1. HISTORY AND BUSINESS OF THE COMPANY

1.1 History Dangote Sugar commenced business in March 2000 as the sugar division of Dangote Industries Limited. DIL had initially entered the sugar business in 1978 through the importation and trading of white sugar. DIL decided to commence white sugar production in 2000 and commissioned the sugar refining factory located at Apapa port in 2001. The sugar division was spun-off as Dangote Sugar Refinery Plc via a Scheme of Arrangement in January 2006 which transferred all the assets, liabilities and undertakings attributable to the sugar division of DIL to Dangote Sugar. 1.2 Business Dangote Sugar is in the business of sugar refining. Our objective from the onset was to expand local sugar production by refining raw sugar for direct consumption and industrial needs, thereby reducing the country’s dependence on refined sugar importation. The Company imports raw sugar from Brazil, refines it into Vitamin A fortified white sugar at its Apapa factory and sells its products under the brand name “Dangote Sugar” across Nigeria. The Company produces Vitamin A fortified white sugar to comply with the policy of NAFDAC, which makes the fortification of staple foods with Vitamin A mandatory in Nigeria. Dangote Sugar is one of the very few sugar refiners in the world that produce Vitamin A fortified white sugar. Dangote Sugar employs the talo-phosphatation and ion exchange resin technologies to purify sugar to internationally accepted quality standards. The Company’s sugar refining factory was built using Tate & Lyle’s technology, with an initial installed capacity to process 600,000 metric tonnes of raw sugar per annum. Tate & Lyle is the largest sugar refiner in Europe and its refining technology is widely regarded as one of the best in the world. The factory has undergone two expansions that have increased installed capacity to about 1.44 million metric tonnes per annum. These expansions were necessitated by a growing national demand for white sugar and the need to ensure that the factory’s capacity is well above demand. The factory’s capacity utilisation is currently above 75%, making Dangote Sugar the largest sugar refinery in sub Saharan Africa and one of the largest in the world. The Company’s operations comprise two key business areas: Refining Process Marketing and Distribution

Refining Process The refining process comprises the following: Raw Sugar Handling Raw sugar is discharged from the vessels using movable Colby cranes, and delivered to the refinery by dump trunks loaded from sugar hoppers located close to the ship at the seaside. The hoppers are fed by sugar scooped from the ship hatches using the clamshell buckets located on the ship. Raw sugar is continuously sampled for quality laboratory testing as it is discharged from the vessel. Once the incoming raw sugar is weighed and sampled, it is conveyed via belts to storage facilities called the Raw Sugar Shed from where it is introduced into the refining process with large front-end loaders. Melting Raw sugar is made up of sugar crystals that have a film of impurities on the surface. It is mixed with warm sweetwater in a pre-melter to soften the film and is then fed sequentially into the melter followed by the addition of water and steam to complete the dissolution process and obtain a consistent liquor.

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THE CHAIRMAN’S LETTER

Taloclarification and Filtration Hydrated lime and phosphoric acid are added to the raw melter liquor to attract impurities. This is further aerated to produce a flocculated precipitate which floats to the surface of the liquor, where it is scraped off. A secondary clarification process referred to as scum desweetening is carried out to separate scums or muds from sugar. As the cake from the filtration still contains some sugar, it is converted to slurry and passed through a second filtration stage to recover the sugar, which is then sent back to the melting process. The clarified liquor passes through deep bed filters to ensure that any carry-over of flocculated precipitates from the clarifiers is taken out of the liquor.

Decolorisation The pressed liquor from the filters is pumped through resin to remove colour molecules. The resin takes out impurities not substantially removed by the taloclarification and filtration process. The decolorised solution is known as fine liquor.

Evaporation and Crystallisation An evaporator is used to remove some of the water prior to crystallisation. This fine liquor is fed into 10 large vacuum pans where the sugar crystals are grown. The crystallisation operation is completely automated which ensures the production of uniformly grained sugar crystals in batch-wise quantities.

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Separation and Drying The sugar crystals are separated from the mother syrup using 16 batch centrifuges. During the cycle, a wash is applied to remove residual syrup adhering to the crystals. The separated liquor which still contains significant amounts of sugar is sent to a second, and then a third crystallisation stage, to ensure that the yield is maximised without compromising quality. The separated white sugar crystals discharged from the centrifuges still contain up to 1% moisture. This is removed by passing the sugar into a rotating two-stage dryer through which filtered, heated air is passed. Further drying occurs during conveying to the silos or packing areas and in conditioning silos.

Sugar Recovery A three-strike boiling scheme is used in producing three grades of remelt or recovery sugar that are recycled through the melting operation. The final exhaust syrup is sent out as blackstrap molasses.

Sugar Conditioning The dried sugar discharged from the granulators is then screened by three Rotex Screeners to meet the particle size requirements and conveyed to conditioning silos equipped with dehumidified air. The conditioned white sugar leaves the silos at a moisture of less than 0.04%.

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Fortification The white sugar is mixed with Vitamin A in compliance with NAFDAC regulations.

Packaging Fortified refined white sugar is packed from bagging hoppers through a Simon Richard weigher, which discharges a minimum weight of 50kg of sugar into well labelled bags utilising the seven packing machines in the Packaging station.

Laboratory, Maintenance & Engineering Around the clock laboratory services are provided. Technical control, finished products, microbiological and environmental testing are all carried out at the refinery. Incoming raw sugar and other incoming products are tested in the special analysis unit of the refinery laboratory. Complete engineering and maintenance support is provided by skilled craftsmen (staff and engineering contracting firms). Inventories of parts necessary to maintain the refinery are kept on-site.

Boiler, Power & Water Plants The Boiler plant has a total generating capacity of 280 tons of steam per hour. Three steam turbo generators with a total capacity of 16 megawatts are used to provide the refinery with its own electrical power requirements as well as other sister companies within the Apapa port. The water treatment plant provides portable water for drinking, processing, fire protection and other uses, and can produce 8,000 cubic meters of water per day.

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Marketing and Distribution The refined white sugar is sold in 50kg bags to a variety of customers which can be grouped as follows: Large industrial users - these are leading blue chip companies in Nigeria, and include Nestle

Nigeria Plc, Cadbury Nigeria Plc, Seven-Up Bottling Company Plc and Nigerian Bottling Company Plc. This group typically accounts for 18% of the Company’s sales.

Distributors - This group buys white sugar wholesale from Dangote Sugar for retail to

households and small industrial users. Distributors account for about 82% of the Company’s sales.

All the white sugar produced by Dangote Sugar is sold in Nigeria. Although the Company does not formally export, its products find their way into neighbouring West African countries through informal cross-border trading. The Company’s main marketing strategy is market development, relying on its growing distribution network to reach every nook and cranny of the country in the most cost effective manner. Dangote Sugar’s parent company, DIL, has been in the sugar business since 1978 and engaged in the importation of white sugar before commencing sugar refining in 2001. DIL and Dangote Sugar have developed a deep understanding of the Nigerian sugar market, based on the experience gained from over 28 years of selling white sugar in Nigeria.

1.3 Operating Environment Dangote Sugar’s prevailing operating environment and that expected in the foreseeable future appear very promising for the sustainable growth and profitability of the Company. The following are examples of positive developments in the Company’s operating environment which should have a positive impact on its profitability: Nigeria’s economic growth Nigeria, which boasts of Africa’s largest population and one of the continent’s richest natural resource endowments, is well positioned to generate substantial domestic sources of growth. The country’s economic growth has been fairly rapid in recent years after decades of weak economic performance characterised by boom-bust cycles. GDP grew by 6.9% in 2005, after growing by approximately 6% in the previous year. The strong economic performance has been broad-based and is expected to continue into the foreseeable future. The continuing growth of Nigeria’s middle class is boosting the country’s consumption potential, as it is widely believed that real growth in wages and a rapid urbanisation rate underpin greater consumer spending power. Current dynamics of the world sugar market: Developments in the world sugar market point to a widening supply-demand gap that will greatly favour producers of refined sugar such as Dangote Sugar. Some of these developments include: EU sugar policy changes: Changes in EU’s sugar policy will result in gradual reductions in

subsidies to EU producers and selected importers. Subsidy cuts will result in EU sugar industry becoming less competitive. Thus EU sugar production is expected to decline significantly over the next two to three years.

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Increasing demand for biofuels: Rising oil prices and environmental concerns are driving

strong demand for biofuels. Initiatives to use ethanol as a transport fuel are on the rise worldwide and this is likely to drive diversion of sugarcane from sugar to ethanol production. Brazil, a key manufacturer and consumer of ethanol, is witnessing strong ethanol demand, driven by flexi-fuel vehicles. This may ultimately result in a decline in white sugar supply.

India and China becoming net sugar importers: India and China consume almost a quarter

of annual global sugar output, with demand in these countries growing 4.5% faster than global demand. Over the next few years, domestic demand in India and China are expected to surpass the maximum domestic production thresholds of these countries, resulting in a move towards import dependence.

The ECOWAS free trade zone: The ECOWAS market is now a free-trade zone and goods produced in any country within the zone can be freely circulated without tariffs. Given that there are no refiners of a significant size in the region or any developed plantation, other ECOWAS countries constitute a sizeable market which the Company intends to explore in the near future at international market prices. Scope for increased sugar consumption per capita Nigeria currently has a sugar consumption rate of 7.5kg per capita, which is one of the lowest sugar consumption rates in the world.

Country Sugar consumption (kg/capita)

Brazil 58.7 Russia 46.1 Morocco 37.0 Egypt 35.1 South Africa 33.0 Sudan 24.7 Kenya 22.1 India 18.0 China 9.0 Tanzania 9.0 Nigeria 7.5

Source: ISO Statistical Bulletin We expect that in the foreseeable future, the per capita sugar consumption in Nigeria will grow in line with expected growth in GDP per capita and urbanisation rate, as research has shown a strong positive correlation between per capita sugar consumption and GDP per capita. With increased urbanisation, there is an increased demand for processed foods most of which have sugar as an ingredient. Thus with an increasing population and an increasing per capita sugar consumption, the Nigerian sugar market should witness an exponential increase in the foreseeable future. Strong barriers to entry: The leading position of Dangote Sugar in the Nigerian sugar business is preserved by the following barriers to entry: High import duties: The import substitution strategy of the Federal Government of Nigeria is

designed to promote the development of local industries by setting low tariffs on raw materials and complete knocked down parts, and high tariffs on finished goods. Accordingly, raw sugar is taxed at 5% compared to 50% (plus 10% sugar development levy) for white sugar. This tariff differential makes imported white sugar very uncompetitive in the Nigerian market.

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Vitamin A fortification requirements: Nigeria has been a pioneer in the developing world in mandating the fortification of staple foods (such as flour, vegetable oil and sugar) with Vitamin A as a means to eradicate Vitamin A deficiency and malnutrition amongst Nigerian masses.

Dangote Sugar has perfected and patented its Vitamin A fortification technology and fully complies with the fortification requirement. Very few countries in the world have similar requirements. None of the white sugar exporting countries has this requirement. Thus, for a Nigerian importer to meet the Vitamin A fortification requirement, it has to make a special request which will attract significant additional cost because of required customised production. In addition, Vitamin A is relatively unstable and difficult to transport, which makes the importation of fortified sugar more difficult.

High investment requirements: The cost of setting up a sugar refinery in Nigeria is quite

high. The Company has spent approximately US$250 million to set up its refinery at current production capacity. Lower capacity factories are possible but may be less efficient because of reduced economies of scale.

2. RISK FACTORS AND MITIGANTS Political Risk Nigeria faces economic and political challenges that can undermine the business environment. Nigeria has experienced over 7 years of uninterrupted democratic rule for the first time since our independence in 1960. We expect a smooth transition to another civilian government in 2007 and a continuation of this trend. Nigeria’s recent BB- rating by both Standard & Poors and Fitch which puts the country at par with Turkey, Brazil and Ukraine, and the commendations the Federal Government’s economic reforms have received from the international community should stimulate increased interest in the Nigerian economy. Currency Risk Fluctuations in the value of the naira can make costs unpredictable for Dangote Sugar given its heavy dependence on imported raw sugar. In view of the Central Bank of Nigeria’s proactive and effective management of the exchange rate and the country’s huge foreign reserves, the exchange rate between the naira and the US dollar is expected to be stable in the foreseeable future. In addition, Dangote Sugar is able to effectively price its white sugar in US$, thus minimising the impact of any exchange rate fluctuation. Regulatory Risk Dangote Sugar is exposed to changes in the regulatory environment. Quality: White sugar produced by Dangote Sugar complies with international quality

standards. Fortification: The NAFDAC requirement to fortify sugar with Vitamin A is supported by the

United Nations as a means to eradicate malnutrition in children. This policy is expected to continue in the foreseeable future.

Tariff protection: The difference in tariffs between white and raw sugar imports aims to promote

local white sugar production rather than importation, and the narrowing of this differential is unlikely to occur. The wide disparity between the import duty levied on raw materials/complete knocked down parts and that levied on corresponding finished goods is an essential part of the import substitution policy of the FGN. The entire manufacturing sector (not just sugar refining) in Nigeria is protected by this policy, and the sector’s survival is hinged on the continuity of this policy. We do not therefore expect that the FGN will expose the manufacturing sector to unfair competition by discarding this policy. We also do not expect a selective amendment of this policy to the detriment of the sugar refining industry.

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Business Risk Dangote Sugar is exposed to fluctuations in raw sugar prices. Like most leading manufacturing companies in Nigeria, Dangote Sugar is able to pass on any raw material price increases to its consumers. A new entrant to the market would be exposed to the same raw sugar price fluctuations. This should ensure that white sugar prices are market driven and follow fluctuations of raw sugar prices, and margins remain constant. In addition, Dangote Sugar hedges one-third of its purchases. Dangote Sugar faces competition from importers. NAFDAC regulations make it mandatory for refined sugar to be fortified with Vitamin A, making importation of substitutes more difficult as Vitamin A is relatively unstable and degrades quickly during transportation. In addition, imported white sugar is taxed at 50% plus a further 10% sugar development levy, making it more expensive than locally refined white sugar. Dangote Sugar faces the threat of potential new entrants. The construction of a sugar refinery requires significant investments. The difficult trading environment in Nigeria arising from a lack of basic infrastructure (such as uninterrupted power, etc) makes such large investments very risky and less attractive. This will make it less economically viable than Dangote Sugar. Dangote Sugar could face a shutdown resulting in a shortage of its products, which would have a detrimental impact on its reputation. Following the shutdown during the 2005 expansion of the refinery, Dangote Sugar consistently stocks 15 days of finished goods. In addition, the Company does not operate at full capacity which enables it to increase production temporarily to catch up on any order backlog. Refining is a cost and investment intensive process More than 95% of Dangote Sugar’s costs are variable. In addition, the Company has completed its investment cycle thus making CAPEX required to maintain the factory minimal. Dangote Sugar could face a shortage of raw sugar supply Dangote Sugar purchases raw sugar on the international market and it has supply contracts with Sucden. France and Cargill, which guarantee the Company raw sugar supply for 3 years at market price. Dangote Sugar could face technical challenges which it does not have the expertise to deal with. The technology for sugar refining is standard and stable. The current refinery was commissioned by Tate & Lyle and Dangote Sugar has operated it for over 5 years without any issues. The Company employs one of the nation’s largest contingent of engineers, including a team of expatriates with wide experience in the sugar industry in key emerging markets. Sectoral Risk If prices are too high, demand could reduce. There are no effective substitutes for sugar. Dangote Sugar could face a slowdown in the Nigerian sugar market and may not be able to meet its revenue projections. At 7.5kg/capita, sugar consumption in Nigeria is low compared to African and emerging markets. Consumption is expected to rise in view of current and expected future growth of the Nigerian economy. There should be an exponential growth in the Nigerian sugar market, with the expected population growth. Dangote Sugar has access to only one market – the Nigerian market Dangote Sugar could actually export to any ECOWAS market at no duties, effectively providing the Company access to about 250 million people.

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Environmental Risk Industrial operations cause pollution. Only about 1,000 tonnes per annum of solid waste are produced by the factory, and the Company uses a government designated site at Sagamu in Ogun State for waste dumping. A full conversion to gas will soon be completed at the factory, which will completely eliminate smoke emissions. In addition, FEPA carries out a weekly environmental compliance audit of the factory. Dangote Sugar faces the threat of product contamination. NAFDAC and SON carry out quarterly independent quality control checks on the Company. Nigerian Bottling Company Plc, one of the Company’s biggest industrial customers, also carries out regularly independent quality control checks.

3. BOARD OF DIRECTORS

The Board of Directors of Dangote Sugar consists of nine members, two of whom act in executive capacities.

I, Alhaji Aliko Dangote C O N, am the Chairman of the Board. I am a graduate of Business Studies from the Al-Azahar University, Cairo, Egypt (1977). I am an entrepreneur and the founder/Chief Executive Officer of the Dangote Group, which I transformed from a small trading business I started in 1978 to a multi-billion naira conglomerate spanning the West African sub region. The Dangote Group has remained committed to creating and sustaining excellence in the Nigerian economy.

In recognition of my contributions to the growth of the Nigerian economy and my philanthropy, I have been conferred with several awards including the prestigious ZIK Award for professional leadership (1992), the International Award of Sir Ahmadu Bello, the Cross River State Roll of Honour Award (2002), the Thisday Newspapers Award for Chief Executive Officer of the Year (2005) and the PricewaterhouseCoopers Award for Nigeria’s Most Respected CEO (2005). I was conferred with the national honour of Officer of the Order of the Niger (O O N) in 2000 and Commander of the Order of the Niger (C O N) in 2005. I am also on the Boards of the National Council of Nigerian Vision, Mohammed Bello Endowment for Justice and Jurisprudence, Kano Foundation, the Nigerian Economic Summit Group, African Petroleum Plc, National Investment Promotion Council and the Heart of Africa (a management group on Nigeria Image Project), amongst others. The other Directors on the Board are:

Mr Narendra Kumar Somani is the Managing Director of Dangote Sugar. He is an Indian national with over 30 years management experience in running conglomerates and multinational organisations. Before assuming his current position in February 2005, he was the Group Chief Executive Officer of the Churchgate Group from 2002 to 2005 having earlier served as the Group General Manager of the same company from 1980 to 1989. He also earlier served as the Managing Director of Auditex System India Limited (an

educational aid company) from 1990 to 2002 and as a Commercial Executive with Birla Group (a large textile mill) from 1975 to 1980. Mr Somani holds a Bachelors degree in Physics, Chemistry and Mathematics from the University of Rajasthan, India (1972) and is a Fellow of the Institute of Chartered Accountants of India (1982).

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Mr Suleiman Oladapo Olarinde is the Finance Director of Dangote Sugar. He holds a Bachelors degree in Economics from Ahmadu Bello University, Zaria (1983) and is a Fellow of the Institute of Chartered Accountants of Nigeria. He started his professional career with PriceWaterhouse in 1984, where he worked as an External Auditor and Financial Advisory Services Consultant to various organisations especially banks and conglomerates. He resigned in 1990 to join the Dangote Group.

Mr Olarinde has attended various local and international courses and his experience within the Dangote Group spans Internal Auditing, Acquisitions and General Management. Dr Konyinsola Ajayi SAN is a non-Executive Director of Dangote Sugar. He

holds an LLM from Harvard Law School, USA (1982) and a PhD from University of Cambridge, England (1990). He is presently the Managing Partner of the law firm of Olaniwun Ajayi and is a Senior Advocate of Nigeria. He has been a legal counsel in Nigeria since 1980 and has over 25 years legal expertise in Energy and Natural Resources, International Business Transactions, Banking, Capital Markets, Construction and Engineering, Privatisation as well as Litigation and Arbitration.

Dr Ajayi is a member of the International Bar Association, London, the Nigerian Bar Association and the Nigerian Economic Summit Group. He is also a Fellow of the Institute of Advanced Legal Studies and a member of the Chartered Institute of Arbitrators, London. Mr Olakunle Alake is a non-Executive Director of Dangote Sugar. He holds a

Bachelors degree in Civil Engineering from Obafemi Awolowo University, Ile-Ife (1983) and is a Fellow of the Institute of Chartered Accountants of Nigeria.

He started his career with PriceWaterhouse, a firm of Chartered Accountants, in September 1984 and resigned in 1990 to join Liberty Merchant Bank Limited as the Financial Controller. In August 1993, Mr Alake was appointed Managing Director/Chief Executive of Liberty Merchant Securities Limited. He was a

Management Consultant and part of the team that provided turn around services for the smooth take-over of International Trust Bank Plc by the Dangote Group in August 1996. He later joined the Dangote Group in July 1997 as the Financial Controller and Head of Strategic Services. He was promoted to the position of Group Strategist/Executive Director in 2001.

Alhaji Sani Dangote is a non-Executive Director of Dangote Sugar. He is an alumnus of Harvard Business School, USA. He is an established businessman with investments in key sectors of the economy including manufacturing, agriculture, banking and oil services. He is currently the Group Vice President of the Dangote Group. He also sits on the Board of several other companies including Nigerian Textile Mills Plc, Nutra Sweet Limited, Gum Arabic Limited, Dangote Textile Mills Limited, Alsan Insurance Brokers, Dan-Hydro Company Limited, Dansa Food Processing Company Limited and Dangote

Farms Limited. Alhaji Sani Dangote is also the Deputy Chairman of African Gum Arabic Producers Association and a two-time President of Lagos Polo Club in addition to being a professional polo player. In recognition of his sterling leadership qualities, he was recently appointed as the Consul-General of the Romanian Embassy in Nigeria. He is a member of several Chambers of Commerce, a Fellow of the Chartered Institute of Shipping of Nigeria and President of the Fertiliser Producers and Suppliers Association.

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Alhaji Abdu Garba Dantata is a non-Executive Director of Dangote Sugar. He is currently the Executive Director, Sales & Marketing of the Dangote Group, a position he has held since the Group was established more than 20 years ago. He has responsibility for coordinating the sales and marketing of all products manufactured or imported by the Group. He is responsible for coordinating the distribution of the Group’s products to reach every corner of the Nigerian market. He is the Chairman of Agad Nigeria Limited, a trading and transportation company operating throughout Nigeria.

Ms Bennedikter China Molokwu is a non-Executive Director of Dangote Sugar. She holds a LLB from University of Nigeria, Nsukka (1975) and was called to the Nigerian Bar in 1976. She also holds a Masters Degree (Cum Laude) in International & Comparative Law from Vrije Universiteit Brussel, Belgium (1978), and certificates in Management from Columbia University, USA (1988) and in International Banking from Manchester Business School, United Kingdom (1991). She has worked in the telecommunication and banking sectors and has built a reputation for her analytical, planning,

organisational and negotiating skills. Her experience spans administration, law, public relations, planning, financial services and corporate finance. She is a Fellow of the Institute of Directors and a Member of the Nigerian Bar Association, International Bar Association, International Federation of Women Lawyers and Chartered Institute of Bankers.

Mr Uzoma Nwankwo is a non-Executive Director of Dangote Sugar. He graduated from University of Nigeria, Nsukka in 1980 with a Second Class Honours (Upper Division) in Engineering. He holds a Masters of Science degree in Agricultural Engineering from Michigan State University, USA (1983) and an MBA with specialization in Financial and International Business Management from University of Michigan, USA (1987).

He has held positions in several international organizations. He was Vice President/Unit Head at Citicorp North America (1992) with responsibility for

developing and managing asset based and structured finance for the middle market in the US. In 1994 he joined Nigeria International Bank Limited (i.e. Citibank Nigeria) as Executive Director Corporate Bank and Citibank Africa Division in 1997 as Africa Head of Structured and Asset Based Finance. He was Director for Structured Finance Africa LOITA Capital Partners, Johannesburg, a boutique investment bank. He returned to Nigeria in 2000 and joined First Bank of Nigeria Plc as Executive Director (Risk and Management Control). He has been Consultant/Lead Advisor to many companies both locally and internationally in the areas of financial management, mergers and acquisitions and business process improvement. He joined Dangote Industries Limited in 2005 as Executive Director, Corporate Finance and Treasury.

4. MANAGEMENT AND STAFF The management team, comprising the Managing Director, the Finance Director and other management staff, oversees the day to day affairs of the Company and is responsible to the Board of Directors. The Company had a total of 672 employees as at 30 June 2006, comprising 37 managerial and 635 non-managerial staff. Key management staff of the Company are as follows: Engineer Diego Cortes is the General Manager, Refinery. He was trained as an Engineering Technician in Panama (1965). He has over 30 years experience in Maintenance and Personnel Training Management and is well learned in Boiler Operations, Sugar Technology, Welding and Steam Turbine. Prior to joining the Company in 2000, he worked at Chiriqui Sugar Mill, Panama (1978 to 1980) as Assistant Factory Superintendent responsible for the maintenance and operations of

Page 25


the boilers; Kenana Sugar Complex, Sudan (1980 to 1988) as Chief Engineer responsible for boiler operation machine shop operations; F. C. Shaffer & Associates (1988 to 1989) as Consultant to study power core regeneration from bagasse for sugar mills; and Alma Plantation, Panama (1989 to 2000) as Assistant Chief Engineer responsible for boilers operations, machine shop operations and day-to-day maintenance. He has attended courses in these fields in the United Kingdom and USA. Engineer Braimoh Ogunwale is the Chief Engineer. He holds a Diploma in Mechanical Engineering from University of Science & Technology, Kumasi, Ghana (1969) and a Diploma in Financial Management from University of Ibadan Consultancy Unit (1998). He is a Member of the Council of Registered Engineers of Nigeria and the Nigeria Society of Engineers, and an Associate of the British Institution of Mechanical Engineers. Before joining Dangote Sugar in 1998, Engineer Ogunwale worked for 21 years (1971 to 1992) at the Nigerian Sugar Company, Bacita, where he rose from the position of Shift Engineer to Assistant General Manager (Production) and gained considerable experience in the erection, commissioning, maintenance and management of sugar plants. He was involved in consultancy services between 1992 and 1998. Mr Tony Nya Duke is the Assistant General Manager, Administration and Human Resources. He holds an HND in Accountancy from Calabar Polytechnic (1985), a Post Graduate Degree in Public Administration from University of Ibadan (1999) and an MBA in Management from Ambrose Alli University, Ekpoma (2003). He is a Member of the Chartered Institute of Personnel Management, Nigerian Institute of Management, the Chartered Institute of Taxation of Nigeria, the Institute of Certified Public Accountants of Nigeria and the Institute of Industrial Security & Safety of Nigeria. His experience spans treasury, finance, audit and risk management. Mr Christopher Ikechukwu Okoh is the Chief Chemist. He holds a Bachelor of Science degree in Biochemistry from University of Benin (1990) and a Masters of Science Degree in Analytical Chemistry from University of Ibadan (1997). He has 13 years manufacturing experience involving quality management, plant commissioning, plant upgrades and food projects implementation. He is a Member of the Institute of Chartered Chemists of Nigeria, the Institute of Public Analysts of Nigeria, the Nigerian Institute of Food Science & Technology, the Association of Analytical Chemists and the American Society of Sugarcane Technologists. Mr Tunde Enitan Mabogunje is the General Manager, Sales & Marketing. He holds a Bachelors degree in History from Ahmadu Bello University, Zaria (1984) and an MBA from Ogun State University (2004). He has over 20 years experience in field sales and marketing, working for organisations such as Tate Industries Plc and Dunlop Nigeria Plc. He is a Member of the National Institute of Marketing of Nigeria. Mrs Aderoju Olanrewaju Akinsanya is the Head, Audit/Risk. She holds an HND in Accountancy/Finance from Lagos State Polytechnic (1981) and an MBA from Ado-Ekiti University (2001). She is a Fellow of the Institute of Chartered Accountants of Nigeria and a Chartered Member of the Nigerian Institute of Management. She worked as an Accountant for Akintola Williams & Co (1992 to 1994) and was the Head of Internal Audit at Nationwide Merchant Bank Limited before joining DIL in 1999. Mr Agboola Adewale Adebayo is the Company Secretary. He holds a LLB (Civil Law) from Obafemi Awolowo University, Ile-Ife (1990) and a BL from the Nigerian Law School in 1991. He started his career with Prince Yomi Oshikoya & Co (1992 to 1994) and joined Akinjide & Co as a Counsel (1995 to 1998). He joined Bode Wilfred & Co as Senior Counsel in 1998 and was appointed the Human Resource Manager and Company Secretary/Legal Adviser to Daayad Group of Companies in 2001. He joined the Dangote Group in 2005.

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5. PREMISES

Dangote Sugar currently operates from a Corporate Office and a factory, which are both located in Apapa, Lagos. Details of the Company’s premises are provided below:

Location Address Nature of holding Date of expiration

Lagos (Corporate Office)

Modandola House 42/44 Warehouse Road Apapa

Short term tenancy

14 July 2007

Lagos (Factory)

Shed 20 Apapa Wharf

Leasehold

31 May 2020

6. PURPOSE OF THE OFFER The IPO is being undertaken to give investors an opportunity to become part owners of Dangote Sugar, the market leader in the Nigerian sugar industry, which is currently 99% owned by DIL. The IPO will also enable the Company meet the requirements for a listing on The Nigerian Stock Exchange.

7. FINANCIAL SUMMARY The financial summary provided below has been prepared from information extracted from the Reporting Accountants’ Report on segmental financial statements of the erstwhile Sugar Division of DIL for the five years ended 31 December 2005, the audited financial information of Dangote Sugar for the six months ended 30 June 2006 and the Reporting Accountants’ Report on the Profit Forecast of Dangote Sugar for the years ending 31 December 2006, 2007, 2008 and 2009.

2 1

5

7

9

18

24

27

30

2 1

5

7

9

18 18

20

23

0

10

20

30

2001 2002 2003 2004 2005 2006E 2007E 2008E 2009E

PBT

PAT

Dangote Sugar currently enjoys pioneer status and is not liable to taxation until the pioneer status expires on 01 January 2007. The Company’s PAT for the year ended 31 December 2007 will therefore be subject to taxation.

Earnings (N=’billion)

CAGR (2001 - 2005): 41%

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3 2

7

10

13

20

26

29

32

17%24% 27%

22% 23%29% 29%

19%29%

0

10

20

30

2001 2002 2003 2004 2005 2006E 2007E 2008E 2009E

EBITDA (N'b)

EBITDA Margins

Growth in EBITDA margins from 2006 to 2007 will be driven by a complete switch from liquid fuels to gas by 2006 ending thereby reducing operating cost and enhancing overall efficiency. The Company intends maintaining a cost efficient structure by keeping EBITDA margins at an average of 29% from 2007.

15 14

28

37

59

86 88

98

110

0

20

40

60

80

100

120

2001 2002 2003 2004 2005 2006E 2007E 2008E 2009E Growth in turnover will be driven by anticipated growth in the Nigerian sugar market.

Turnover (N=’billion)

EBITDA and EBITDA margins (N=’billion)

CAGR (2001 - 2005): 46%

CAGR (2001 - 2005): 41%

Page 28

THE CHAIRMAN’S LETTER 8. WORKING CAPITAL, PROFIT AND DIVIDEND FORECASTS

The Directors of Dangote Sugar, after due consideration of the Company’s present financial position, are of the opinion that the Company will have adequate working capital for its immediate and foreseeable future obligations and funding requirements. The Directors estimate that in the absence of unforeseen circumstances, the profit before taxation for the years ending 31 December 2006, 2007, 2008 and 2009 will be in the order of N=17.9 billion, N=23.7 billion, N=27.1 billion and N=30.2 billion respectively. If these estimates are achieved, the appropriations thereof will be approximately as follows:

N=’000 Year Ending 31 December 2006 2007 2008 2009

Profit before taxation 17,930,597 23,665,328 27,094,542 30,168,553 Taxation - (5,916,332) (6,773,635) (7,542,138)

Profit after taxation 17,930,597 17,748,996 20,320,906 22,626,414

Dividend proposed (10,000,000) (12,000,000) (15,000,000) (17,000,000)

Retained profit for the year 7,930,597 5,748,996 5,320,906 5,626,414

Forecast earnings per share (kobo)* 179.31 177.49 203.21 226.26

Forecast dividend per share (kobo)* 100.00 120.00 150.00 170.00

* Calculations of forecast earnings and dividend per share for the years ending 31 December 2006, 2007, 2008 and 2009 are based on the 10 billion Ordinary Shares of 50 kobo each expected to be in issue on those dates.

9. UNCLAIMED DIVIDENDS There are no unclaimed dividends accruing to shareholders of Dangote Sugar as at the date of this Prospectus.

10. CORPORATE GOVERNANCE Dangote Sugar recognises the importance of effective Corporate Governance to corporate and economic performance. Accordingly, the Company is in compliance with the Code of Best Practices on Corporate Governance in Nigeria. The full extent of the Company’s compliance with the Code is provided as follows: Responsibility of the Board of Directors The Company is fully compliant with all the duties and responsibilities stated under Parts A, B and C of the Code. Composition of the Board The Board of Dangote Sugar is composed of 9 members made up of 2 Executive Directors and 7 non-Executive Directors. The Board members are professionals and entrepreneurs with vast experience and credible track records. Chairman and Chief Executive Officer Positions Responsibilities at the top of the Company are well defined and the Board is not dominated by one individual. The position of the Chairman is separate from the Chief Executive. The Chairman is not involved in the day to day operations of the company. Proceedings and Frequency of Meetings The Board meets regularly. Sufficient clear agenda/reports are given ahead of such meetings. All Directors have access to the Company Secretary who can only be appointed or removed by the Board and is also responsible to the Board.

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Non-Executive Directors Dangote Sugar’s non-Executive Directors are of strong calibre and contribute actively to Board deliberations and decision-making. However, non-Executive Directors are not appointed for a fixed period, but shall instead remain in office until the Company determines their tenure or by operation of law. Executive Directors The remuneration of the Chief Executive Officer is fixed by the Board. The Board Establishment Committee will be chaired by a non-Executive Director and composed of other non-Executive Directors. Full disclosure is provided for Directors’ remuneration i.e. highest paid Director and the remuneration of the Chairman. Reporting and Control The Board is responsible for and ensures proper finance reporting as well as the establishment of strong internal control procedures. The Board Audit Committee comprising Executive and non-Executive Directors and representatives of shareholders will be set up on completion of this Offer. The Audit Committee will be chaired by a shareholder. Shareholders’ Rights and Privileges The Directors ensure that shareholders’ statutory and general rights are protected at all times. Shareholders are responsible for electing the Directors at Annual General Meetings for which at least notice of 21 working days have been given before the meeting. Shareholders holding at least 10% of the equity can be represented on the Board. The Board of the Company accepts that the new shareholders to be admitted by the Company after the IPO may nominate new members to the Board, to ensure that the Board appropriately reflects the enlarged shareholding structure.

11. RESEARCH AND DEVELOPMENT Dangote Sugar was a division of DIL until January 2006 and all its research activities were undertaken jointly with other divisions of DIL. However, the Company is now solely responsible for its research and development and intends to continuously research into ways of improving efficiency in its operations and market opportunities well into the foreseeable future, to enhance its profitability and maximise returns to shareholders.

12. MERGERS AND TAKEOVERS As at the date of this Prospectus, there were no known merger or take over attempts of the Company’s securities by a third party or by the Company in respect of another company’s securities.

13. FUTURE PLANS Dangote Sugar will in the near future explore the possibility of exporting white sugar to other West African countries, to take advantage of the incentives offered by the ECOWAS free trade zone. The Company also intends to get involved in the upstream segment of the sugar business by acquiring and developing Savannah Sugar Company Limited, a subsidiary of DIL, to create synergies and increase overall capacity. Savannah Sugar currently has capacity to produce 100,000 metric tonnes of white sugar from own grown sugarcane. Post acquisition, Dangote Sugar can expand Savannah Sugar to produce up to 600,000 metric tonnes of white sugar from own grown sugarcane.. The Apapa refinery will continue to refine imported raw sugar, while Savannah Sugar will continue to operate as a separate enterprise engaged in the business of producing sugarcane and processing it into white sugar.

Dangote Sugar’s historical performance and its unique position as the largest sugar refiner in Sub Saharan Africa clearly confirm the Company’s leadership in the Nigerian sugar industry. I encourage prospective investors to take advantage of the unique opportunity this IPO presents to become shareholders of Dangote Sugar. Yours faithfully Alhaji Aliko Dangote C O N Chairman

Page 30

THE PROFIT FORECAST 1. LETTER FROM THE REPORTING ACCOUNTANTS The following is a copy of the letter on the Profit Forecast by Ahmed Zakari & Co (Chartered Accountants), the Reporting Accountants to the Offer:

AHM ED ZAKARI & CO. 5th Floor African Alliance HouseF1 Sani Abacha WayP O Box 6500 (064) 645400, 646447, 647888E-mail: ahm [email protected]

20B(2) Keffi StreetSouth West IkoyiP O Box 55757 FalomoTel 080-36918838Lagos.

29 September 2006 The Directors Dangote Sugar Refinery Plc Modandola House 42/44 Warehouse Road Apapa Lagos And

The Directors BGL Securities Limited Plot 1061 Abagbon Close Victoria Island, Lagos

And


And

The Directors Intercontinental Capital Markets Ltd Wesley House 21/22 Marina, Lagos

And

The Directors Zenith Bank Plc Plot 87 Ajose Adeogun Street Victoria Island, Lagos

And

The Directors Dangote Industries Plc Marble House 1 Alfred Rewane Road Ikoyi, Lagos

And

The Directors Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island, Lagos

And


And

The Directors Oceanic Bank International Plc 270 Ozumba Mbadiwe Avenue Victoria Island, Lagos

And


And

The Directors FBN Capital Limited 16 Keffi Street South West Ikoyi, Lagos

And

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

And

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

Dear Sirs We have reviewed the accounting bases and calculations for the profit forecast set out on page 32, of Dangote Sugar Refinery Plc for the years ending 31 December 2006, 2007, 2008 and 2009 (for which the Directors of Dangote Sugar Refinery Plc are solely responsible). The forecast includes results shown by the Company’s audited financial statements for the six month period ended 30 June 2006. In our opinion the forecast, so far as the accounting policies and calculations are concerned, has been properly compiled on the basis of the assumptions made by the Directors of the Company as set out on pages 32 to 34 and are presented on a basis consistent with the accounting policies normally adopted by the Company and in accordance with generally accepted accounting principles applicable in Nigeria.

Page 31

THE PROFIT FORECAST However, there will usually be differences between forecast and actual results, because events and circumstances frequently do not occur as expected and these differences may be material. We have no responsibility to update this report for events and circumstances occurring after the date of this report. Yours faithfully

Page 32

THE PROFIT FORECAST 2. PROFIT FORECAST FOR THE YEARS ENDING 31 DECEMBER 2006, 2007, 2008 AND 2009

The Directors are of the opinion that subject to unforeseen circumstances, and based on the assumptions stated below and on pages 33 to 34, the profit before taxation for the years ending 31 December 2006, 2007, 2008 and 2009 will be of the order of N=17.93 billion, N=23.67 billion, N=27.09 billion and N=30.17 billion respectively as detailed below:

For the year ending 31 December 2006 2007 2008 2009

N=’000 N=’000 N=’000 N=’000

Turnover 85,807,873 87,601,888 98,187,207 110,520,019

Cost of Sales (63,137,729) (59,704,790) (66,626,217) (75,588,090)

Gross Profit 22,670,144 27,897,098 31,560,990 34,931,928

Other Income 57,537 - - -

Distribution and Administrative Expenses (1,279,856) (729,732) (802,705) (882,975)

Management fees (1,716,157) (1,752,038) (1,963,744) (2,210,400)

Profit before interest, tax and depreciation 19,731,668 25,415,328 28,794,542 31,838,553

Interest payable and similar charges (1,061,892) (850,000) (850,000) (850,000)

Profit on ordinary activities before depreciation 18,669,776 24,565,328 27,944,542 30,988,553

Depreciation (739,179) (900,000) (850,000) (820,000)

Profit on ordinary activities before taxation 17,930,597 23,665,328 27,094,542 30,168,553

Taxation - (5,916,332) (6,773,635) (7,542,138)

Profit on ordinary activities after tax 17,930,597 17,748,996 20,320,906 22,626,414

Dividend (10,000,000) (12,000,000) (15,000,000) (17,000,000)

Retained profit for the year 7,930,597 5,748,996 5,320,906 5,626,414

Forecast ratios

Forecast earnings per 50 share (kobo)* 179.31 177.49 203.21 226.26

Forecast earnings yield at offer price (%) 9.96 9.86 11.29 12.57

Forecast EBITDA per 50 share (kobo)* 197.32 254.15 287.95 318.39

Forecast dividend per 50 share (kobo)* 100.00 120.00 150.00 170.00

Forecast dividend yield at offer price (%) 5.56 6.67 8.33 9.44

Forecast price/earnings ratio at offer price 10.04 10.14 8.86 7.96

* Forecast earnings and dividend per share for the year ending 31 December 2006, 2007, 2008 and 2009 are based on the 10 billion Ordinary Shares expected to be in issue on those dates.

3. BASES AND ASSUMPTIONS

3.1 Bases (a) Previous years’ actual performances of the erstwhile Dangote Sugar Division of Dangote

Industries Limited and the Company’s actual results for six months ended 30 June 2006 have been used as a basis for measuring the reasonableness of the forecasts for the 2nd half year 2006 and the 2007, 2008 and 2009 financial years.

(b) The forecast includes results as shown by the audited financial statements for the six months

period ended 30 June 2006.

Page 33

THE PROFIT FORECAST

(c) The results for the six months period ended 30 June 2006 and the estimates for the remaining six months of the year ending 31 December 2006 and the years ending 31 December 2007, 2008 and 2009 have been prepared on a basis consistent with the Company’s accounting policies.

3.2 Assumptions

(a) At the current selling prices and based on projected level of demand and production

capacity, the turnover of the company for the years ending 31 December 2006, 2007, 2008 and 2009 will be approximately N=85.81 billion, N=87.60 billion, N=98.19 billion and N=110.52 billion respectively.

(b) Turnover will grow by 2.1% over that of 2006 during the year ending 31 December 2007

and by 12.1% and 12.6% for the years ending 31 December 2008 and 2009 respectively. (c) Cost of sales percentage is expected to be at 73.6%, 68.2%, 67.9% and 68.4% in 2006, 2007,

2008 and 2009 respectively. (d) Operating expenses including selling and distribution costs, management fees and finance

charges are projected to be 4.7%, 3.8%, 3.7% and 3.6% of turnover during the years ending 31 December 2006, 2007, 2008 and 2009 respectively.

(e) Taxation (comprising income and education taxes) will be at an average rate of 25% of net

profit before tax for 2007, 2008 and 2009. (f) Dividend payout will be approximately 56%, 68%, 74% and 75% of profit after tax in 2006,

2007, 2008 and 2009 respectively. (g) There will be no adverse change in the existing price structure for the Company’s products,

other than as provided in the forecast. (h) There will be no changes in the current accounting policies. (i) The total national demand for the Company’s product will be sustained, and its share of the

market will not show a significant reduction. (j) No import restriction or ban will be imposed on the raw materials and machinery spares

requirements of the Company. (k) The principal raw materials will be available in sufficient quantity. (l) There will be no change in the existing production cost structure. (m) There will be no material change in international currency exchange rates, or import duties

pertaining to the Company’s business.

(n) Shipping arrangements with overseas suppliers of raw materials and spares will be executed on schedule.

(o) Interest rates and bases of taxation, both direct and indirect, will not change materially. (p) There will be no material acquisitions or disposal of fixed assets, other than as shown in the

forecast. (q) The political situation in this country, and in the country of suppliers of essential raw

materials and spare parts, will remain stable.

Page 34

THE PROFIT FORECAST

(r) Trading results will not be affected by industrial disputes within the Company, or in those of

its principal suppliers. (s) The Company will suffer no major uninsured catastrophe. (t) The quality of the Company’s management will be sustained during the forecast period. (u) There will be no drastic change in the legal, political and economic environment that will

adversely affect the operations of the company. (v) There will be no material successful claims for damages against the Company.

Page 35

THE PROFIT FORECAST 4. LETTER FROM THE REPORTING ACCOUNTANTS IN RESPECT OF THE GOING CONCERN STATUS



29 September 2006

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

The Directors BGL Securities Limited Plot 1061 Abagbon Close Victoria Island Lagos

And


And

The Directors Oceanic Bank International Plc 270 Ozumba Mbadiwe Avenue Victoria Island Lagos

And


And

The Directors Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos

And


And

The Directors Zenith Bank Plc Plot 87 Ajose Adeogun Street Victoria Island Lagos

And


And

The Directors FBN Capital Limited 16 Keffi Street South West Ikoyi Lagos

And

The Directors Intercontinental Capital Markets Ltd Wesley House 21/22 Marina Lagos

Dear Sirs CONFIRMATION OF THE GOING CONCERN STATUS OF DANGOTE SUGAR REFINERY PLC Based on confirmation received from the Directors of Dangote Sugar Refinery Plc and on the review of the past results of the Company and its existing operations, we do not have reasons to doubt that the Company will continue in operation in the foreseeable future. Yours faithfully

Page 36

THE PROFIT FORECAST 5. LETTER FROM THE ISSUING HOUSES The following is a copy of the letter from the Issuing Houses on the Profit Forecast:

I.B.T.C. Place Walter Carrington Crescent P O Box 71707 Victoria Island Lagos Nigeria

Telephone: +234 1 2626520 2712400 Fascimile: +234 1 2626541/2 E-Mail: [email protected]

Plot 266B Kofo Abayomi Street, P.O. Box 73530, Victoria Island, Lagos, Nigeria

Tel: +234 (1) 4617521-3, 2700657-8 Fax: +234 (1) 4617524 Email: [email protected]

PRIMROSE TOWER, 17A, Tinubu Street, P.O. BOX 9117, Lagos, Nigeria Telephone 2665944-53 Telex 28428, 28894 Fecity Ng; Facsimile 2641296, 2665126 E-mail: [email protected]

FCMB CAPITAL MARKETS LIMITED(A MEMBER OF THE FIRST CITY GROUP) RC 446561

ZENITH BANK PLCHEAD OFFICE: Plot 84 Ajose Adeogun Street P. O. Box 75315 Victoria Island, LagosTel: 2620727, 4618301, 4618311, 2703141, 2703161, 2610249 Fax: 01-2618212 www.zenithbank.com E-mail: [email protected]

01 November 2006 The Directors Dangote Sugar Refinery Plc Modandola House 42/44 Warehouse Road Apapa Lagos Dear Sirs INITIAL PUBLIC OFFERING OF 3,000,000,000 ORDINARY SHARES OF 50 KOBO EACH IN DANGOTE SUGAR REFINERY PLC AT N=18 PER SHARE We write further to the Prospectus issued in respect of the Initial Public Offering of 3,000,000,000 Ordinary Shares of 50 kobo each in Dangote Sugar Refinery Plc, which contains forecasts of the profits of the Company for the years ending 31 December 2006, 2007, 2008 and 2009. We have discussed the bases and assumptions upon which the forecasts were made with you and with Ahmed Zakari & Co (Chartered Accountants), the Reporting Accountants. We have also considered the letter dated 29 September 2006 from the Reporting Accountants regarding the accounting bases and calculations upon which the forecasts were compiled. Having considered the assumptions made by you as well as the accounting bases and calculations reviewed by Ahmed Zakari & Co (Chartered Accountants), we consider that the forecasts (for which you as Directors are solely responsible) have been made by you after due and careful enquiry. Yours faithfully Atedo N. A. Peterside O O N Chief Executive Officer IBTC Chartered Bank Plc

Chuka Eseka Managing Director/CEO Vetiva Capital Management Limited

Page 37

THE PROFIT FORECAST Aigboje Aig-Imoukhuede Managing Director/CEO Access Bank Plc

Albert E. Okumagba Executive Chairman BGL Securities Limited

Adebayo Adeleke Managing Director/CEO FBN Capital Limited

Offong Ambah Managing Director/CEO Ecobank Nigeria Plc

Jonathan A. D. Long Executive Vice Chairman FCMB Capital Markets Limited

Reginald Ihejiahi Managing Director/CEO Fidelity Bank Plc

Ayodele Thomas Managing Director & CEO Intercontinental Capital Markets Limited

Dr (Mrs) Cecilia A. O. Ibru Managing Director/CEO Oceanic Bank International Plc

Jim Ovia M F R Managing Director/Chief Executive Zenith Bank Plc

Page 38

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 1. REPORTING ACCOUNTANTS’ REPORT The following is a copy of the report of Ahmed Zakari & Co, the Reporting Accountants to the Offer:





And


And

The Directors Intercontinental Capital Markets Limited Wesley House 21/22 Marina, Lagos

And


And


And


And


And


And


And


And


And


Dear Sirs We report on the financial information set out on pages 41 to 46, which have been prepared for inclusion in the Prospectus to be issued in connection with the proposed Offer for Sale of 3,000,000,000 ordinary shares of 50 kobo each of Dangote Industries Limited’s shareholding in Dangote Sugar Refinery Plc. Sequel to a Court Order dated 23 January 2006 sanctioning the Scheme of Arrangement of Dangote Industries Limited, the assets, liabilities and rights attached to DIL’s Sugar Division were transferred to Dangote Sugar Refinery Plc with effect from 01 January 2006.

Page 39

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR The financial information is based on the audited financial statements of Dangote Sugar Refinery Plc for the six month period ended 30 June 2006, and incorporates, for comparative purposes only, the segmental financial statement summaries of the erstwhile Sugar Division of Dangote Industries Limited for the five years ended 31 December 2005. The financial statements were prepared under the historical cost convention. Messrs Akintola Williams Deloitte were the Company’s auditors for the six month period ended 30 June 2006. The financial information have been prepared in accordance with the accounting policies set out on page 40 after making such adjustments we considered necessary. The financial statements on which the information is based are the responsibility of the Directors of the Company who approved their issue. The Directors of the Company are responsible for the contents of the Prospectus in which this report is included. We conducted our work in accordance with the International Standard on Auditing applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatements. Our review was limited primarily to examination of the work papers of the external auditors, inquiries of the Company’s personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information does not give a true and fair view of the state of affairs of Dangote Sugar Refinery Plc as at 30 June 2006 and of its profit and cash flows for the six months period then ended in accordance with generally acceptable accounting principles in Nigeria. Yours faithfully

Page 40

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 2. STATEMENT OF ACCOUNTING POLICIES

The following are the principal accounting policies adopted in the preparation of these financial statements.

(a) Basis of preparation of financial statements The financial statements are prepared under the historical cost convention as modified by the revaluation of certain fixed assets.

(b) Turnover

Turnover represents the invoiced value of goods to third parties less discounts and value added tax.

(c) Fixed assets Fixed assets are stated at cost or valuation less accumulated depreciation.

(d) Depreciation of fixed assets

Depreciation is calculated to write off the cost of fixed assets on a straight line basis over their expected useful lives. The principal annual rates used for this purpose were:

2006 2005 2004 2003 2002 2001

Leasehold land and buildings 2% 2% 2% 2% 2% 2% Plant and Machinery 6.67% 6.67% 6.67% 15% 15% 15% Tools and equipment 12.5% 12.5% 20% 20% 20% 20% Motor vehicles 25% 25% 25% 25% 25% 25% Furniture and fittings 20% 20% 20% 20% 20% 20% Computer equipment/software 33.33% 33.33% 33.33% 33.33% 33.33% 33.33%

In the case of revalued properties, depreciation is calculated by reference to the enhanced values of the properties concerned. No depreciation is charged on fixed assets until they are brought into use.

(e) Repairs and renewals All repairs and renewals are written off as incurred but major repairs are capitalized.

(f) Stock and work-in-progress

Stock and work-in-progress are valued at the lower of cost and net realizable value. (g) Rate of exchange

Transactions in foreign currencies are recorded in Naira at the rates of exchange ruling at the time they arise.

Assets and liabilities existing in foreign currencies are converted to Naira at the rates of exchange ruling at the balance sheet date. Gains or losses arising there-from are included in the profit and loss account.

(h) Debtors

Bad debts are written off and specific provisions are made for those debts considered doubtful.

(i) Deferred taxation Deferred taxation is provided using the liability method at the current rate of income tax on all timing differences between the treatment of certain items for accounting purposes and their treatment for taxation.

(j) Long-term investments

Long-term Investments are shown at cost.

(k) Employees' retirement benefits The Company makes provision for retirement benefits in accordance with the Pension Reform Act of 2004. The contribution of the employer is 8.5% while that of the employee is 7.5% of relevant emoluments.

The company also operates a gratuity scheme for its permanent Nigerian staff, the benefits under which are related to employees’ length of service and remuneration. The provision for liability in respect thereof based on actuarial valuation is provided in full in the financial statements.

Page 41

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 3. PROFIT AND LOSS ACCOUNT

2006 2005 2004 2003 2002 2001

Notes N'000 N'000 N'000 N'000 N'000 N'000

Turnover 6.2 42,406,432 58,494,709 36,576,150 27,879,762 13,540,091 14,806,249

Cost of sales (32,912,156) (44,458,574) (25,803,504) (21,538,565) (11,291,911) (11,918,912)

Gross profit 9,494,276 14,036,135 10,772,646 6,341,196 2,248,180 2,887,337

Operating expenses (1,103,075) (2,433,417) (2,167,502) (743,182) (496,096) (580,603)

Trading profit 8,391,201 11,602,719 8,605,144 5,598,014 1,752,084 2,306,734

Other income 6.3 57,126 345 56,005 25,473 20,668 7,552

Profit before interest and similar charges 8,448,327 11,603,064 8,661,149 5,623,487 1,772,752 2,314,286

Interest expense and similar charges (636,892) (2,223,367) (1,290,043) (1,076,753) (553,322) (742,591)

Profit on ordinary activities before taxation 6.4 7,811,435 9,379,697 7,371,106 4,546,733 1,219,430 1,571,695

Taxation 6.5 - - - (3,218) - (72,600)

Retained profit for the year 7,811,435 9,379,697 7,371,106 4,543,515 1,219,430 1,499,095

PRE- SCHEME OF ARRANGEMENT <-------DANGOTE SUGAR DIVISION - SEGMENTAL PROFIT AND LOSS ACCOUNTS------->

FOR THE YEARS ENDED 31 DECEMBERSIX MONTHS TO

JUNE

The accounting policies on pages 40 and the notes on pages 44 to 46 form part of these accounts.

Page 42

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 4. BALANCE SHEET

AS AT

2006 2005 2004 2003 2002 2001Notes N'000 N'000 N'000 N'000 N'000 N'000

FIXED ASSETS 6.6 14,225,282 14,533,581 14,683,408 15,080,766 15,778,947 3,980,390

Current AssetsStock and work-in-progress 6.7 3,842,384 3,089,203 2,956,514 311,112 3,612,105 2,346,652Debtors and prepayments 6.8 11,097,567 26,859,994 16,166,097 13,770,221 (473,648) 565,509 Cash and bank balances 3,923,155 4,485 2,276,967 1,828,831 1,096,317 797,999

18,863,106 29,953,682 21,399,578 15,910,164 4,234,774 3,710,160

Creditors: Amounts falling duewithin one year

Bank Borrowings (Secured) 6.9 105,829 - - 12,288,446 5,073,781 3,587,306Trade and other creditors 6.10 13,739,201 9,682,868 10,691,850 736,792 1,517,764 2,824,516

13,845,030 9,682,868 10,691,850 13,025,238 6,591,545 6,411,822Net Current Assets/Liabilities 5,018,076 20,270,814 10,707,728 2,884,926 (2,356,771) (2,701,662)

Total Assets Less Current Liabilities 19,243,358 34,804,395 25,391,136 17,965,690 13,422,175 1,278,727

Provision for Liabilities & Charges 6.11 (111,399) (87,902) (54,338) - - -

NET ASSETS 19,131,959 34,716,493 25,336,796 17,965,690 13,422,175 1,278,727

CAPITAL AND RESERVESShare Capital 6.12 50,000 - - - - - Share Premium Account 11,270,524 - - - - - Revaluation Reserve 6.13 - 10,924,018 10,924,018 10,924,018 10,924,018 - General Reserve 6.14 7,811,435 23,792,475 14,412,778 7,041,672 2,498,157 1,278,727

19,131,959 34,716,493 25,336,796 17,965,690 13,422,175 1,278,727

<-----DANGOTE SUGAR DIVISION - SEGMENTAL BALANCE SHEETS AS AT 31 DECEMBER----->SIX MONTHS TO JUNE

PRE-SCHEME OF ARRANGEMENT

The accounting policies on page 40 and the notes on pages 44 to 46 form part of these accounts.

Page 43

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 5. CASH FLOW STATEMENT

2006 2005 2004 2003 2002 2001N'000 N'000 N'000 N'000 N'000 N'000

CASH FLOW FROM OPERATING ACTIVITIESOperating profit before taxation 7,811,435 9,379,697 7,371,106 4,546,733 1,219,430 1,571,695

Adjustment for non-cash items:Depreciation of fixed assets 369,179 1,242,058 1,234,153 1,156,391 588,860 501,005 Cash Flow before changes in working capital 8,180,614 10,621,755 8,605,259 5,703,124 1,808,290 2,072,700

Decrease/[Increase] in stock & work in progress (3,842,384) (132,689) (2,645,402) 3,300,993 (1,265,453) (1,327,158) Decrease/[Increase] in debtors & prepayment (11,097,567) 3,040,638 4,003,680 (13,643,390) 734,967 (429,841) Decrease/[Increase] in due from related companies - (13,734,537) (6,399,556) (600,479) 304,190 (1,071,865) [Decrease]/Increase in creditors & accruals 13,850,600 (1,000,920) 10,110,716 (784,190) (1,306,753) (846,294) (Decrease)/Increase in taxation payable - 25,502 (101,320) - - - Cash generated from/[absorbed] in operations 7,091,263 (1,180,251) 13,573,377 (6,023,942) 275,241 (1,602,458)

CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (14,594,461) (1,092,231) (836,795) (458,210) (1,463,398) (161,538) Preoperation expenses - - - - - 169,181 Net cash outflow from investing activities (14,594,461) (1,092,231) (836,795) (458,210) (1,463,398) 7,643

CASH FLOW FROM FINANCING ACTIVITIESShares 50,000 - - - - - Share premium account 11,270,524 - - - - - Net cash provided by financing activities 11,320,524 - - - - -

Net decrease in cash and cash equivalents 3,817,326 (2,272,482) 12,736,582 (6,482,151) (1,188,157) (1,594,815)

CASH AND CASH EQUIVALENT AT 1 JANBank and Cash Balances - 2,276,967 1,828,831 1,096,317 797,999 161,927 Bank Overdraft - - (12,288,446) (5,073,781) (3,587,306) (1,356,419) Short Term Loans - - - - - -

- 2,276,967 (10,459,615) (3,977,464) (2,789,307) (1,194,492)

3,817,326 4,485 2,276,967 (10,459,615) (3,977,464) (2,789,307)

CASH AND CASH EQUIVALENT AT 31 DECBank and Cash Balances 3,923,155 4,485 2,276,967 1,828,831 1,096,317 797,999 Bank Overdraft (105,829) - - (12,288,446) (5,073,781) (3,587,306) Short Term Loans - - - - - -

3,817,326 4,485 2,276,967 (10,459,615) (3,977,464) (2,789,307)

<----DANGOTE SUGAR DIVISION - SEGMENTAL CASH FLOW STATEMENTS----> FOR THE YEARS ENDED 31 DECEMBER

SIX MONTHS TO JUNE

PRE-SCHEME OF ARRANGEMENT

Page 44

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 6. NOTES TO THE FINANCIAL STATEMENTS

6.1 The Company

2006 2005 2004 2003 2002 2001N'000 N'000 N'000 N'000 N'000 N'000

6.2 TurnoverProducts:Sugar 42,332,773 58,468,988 36,544,070 27,851,208 13,497,334 14,789,200Molasses 73,659 25,721 32,080 28,554 42,757 17,049

42,406,432 58,494,709 36,576,150 27,879,762 13,540,091 14,806,249

6.3 Other IncomeInsurance claims (412) - - - - - Sundry income 57,538 345 56,005 25,473 20,668 7,552

57,126 345 56,005 25,473 20,668 7,552

6.4 Profit on Ordinary Activitiesbefore Taxation

This is arrived at after charging:Depreciation of fixed assets 369,179 1,242,058 1,234,153 1,156,391 588,860 501,005Auditors' remuneration 7,000 15,188 11,626 3,531 1,640 1,930Interest and similar charges 636,892 2,223,367 1,290,043 1,076,753 553,322 742,591

6.5 TaxationCharge for the year: - - - 3,218 - 72,600 Per Profit and Loss Account: - - - 3,218 - 72,600

6.6 Fixed assets

Cost / ValuationLand & Buildings 3,273,286 3,550,638 3,550,638 3,560,033 3,954,049 625,905 Plant & Machinery 9,585,384 14,811,153 12,097,715 11,266,045 10,618,360 3,884,325 Tools & Equipment 87,917 1,022,939 2,669,508 2,661,016 2,480,791 158,894 Computer Hardware/Software 4,597 19,803 14,061 13,165 10,315 7,313 Motor Vehicles 32,942 69,871 61,357 61,357 42,815 35,414 Furniture & Fittings 8,964 65,781 54,676 49,543 46,619 53,683 Work in Progress 1,601,371 - - - - - At 31 December 14,594,461 19,540,186 18,447,954 17,611,159 17,152,949 4,765,533

Accumulated depreciationLand & Buildings 32,733 278,108 207,095 136,105 62,982 22,947 Plant & Machinery 319,676 3,656,477 2,774,285 1,894,968 1,033,098 590,796 Tools & Equipment 10,990 939,651 683,916 431,031 224,963 134,886 Computer Hardware/Software 766 15,975 13,481 8,794 5,589 3,188 Motor Vehicles 4,118 59,206 41,738 26,399 19,946 13,406 Furniture & Fittings 896 57,187 44,031 33,096 27,425 19,920 Work in Progress - - - - - - At 31 December 369,179 5,006,604 3,764,547 2,530,394 1,374,003 785,143

Net book valueLand & Buildings 3,240,553 3,272,530 3,343,543 3,423,928 3,891,067 602,959 Plant & Machinery 9,265,708 11,154,676 9,323,430 9,371,076 9,585,262 3,293,529 Tools & Equipment 76,927 83,288 1,985,591 2,229,985 2,255,828 24,008 Computer Hardware/Software 3,831 3,828 580 4,370 4,725 4,124 Motor Vehicles 28,824 10,665 19,619 34,958 22,870 22,008 Furniture & Fittings 8,068 8,594 10,645 16,448 19,194 33,762 Work in Progress 1,601,371 - - - - - At 31 December 14,225,282 14,533,581 14,683,408 15,080,766 15,778,947 3,980,390

The Company has short leasehold land and buildings at Apapa Port Complex. The lease is for a term of 21 years withcommencement date of 1 June 1999. The lease is subject to renewal on expiration of the initial tenure.

The Company is not liable to taxation as it acquired pioneer status through a Scheme of Arrangement with its holdingcompany Dangote Industries Limited which had since 1 January, 2002 been granted pioneer status by the NigerianInvestments Promotion Commission. The pioneer status expires on January 01, 2007.

DANGOTE SUGAR DIVISION - SEGMENTAL FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER

<---------------------PRE-SCHEME OF ARRANGEMENT--------------------->SIX

MONTHS TO

The Company was incorporated on 04 January 2005. It commenced operation in January 2006. Prior to commencement ofoperation it operated as the Sugar Division of Dangote Industries Limited from March 2000. Its principal activity is theprocessing and marketing of sugar.

Page 45

HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR

2006 2005 2004 2003 2002 2001N'000 N'000 N'000 N'000 N'000 N'000

6.7 Stock and Work-in-progressRaw materials and work-in-progress 3,385,804 2,582,950 2,354,074 71,387 1,396,255 555,991 Finished Goods - - - - 2,082,288 1,678,463 Others 456,580 506,253 602,440 239,725 133,562 112,198

3,842,384 3,089,203 2,956,514 311,112 3,612,105 2,346,652

6.8 Debtors and PrepaymentsTrade Debtors 7,841,767 1,354,180 5,767,248 3,249,837 - 760,210 Due from associated companies - 20,134,091 6,399,556 - (600,479) (296,289) Other debtors 3,191,103 4,933,481 3,958,610 9,363,915 26,965 13,821 Prepayments 64,697 438,242 40,683 1,156,469 99,866 87,767

11,097,567 26,859,994 16,166,097 13,770,221 (473,648) 565,509

6.9 Borrowings(i) Overdrafts 105,829 - - 12,288,446 5,073,781 3,587,306 (ii) Short term Loans - - - - - -

105,829 - - 12,288,446 5,073,781 3,587,306

6.10 Trade and Other CreditorsTrade creditors 11,040,700 7,738,123 3,003,699 189,463 - - Due to associated companies 111,471 - - - - - Taxation - - (25,502) 75,818 72,600 72,600 Other creditors and accruals 2,587,030 1,944,745 7,713,653 471,511 1,445,164 2,751,916

13,739,201 9,682,868 10,691,850 736,792 1,517,764 2,824,516

6.11 Provisions for Liabilities & ChargesLiability in respect of staff terminal gratuityAt 1 January 87,902 54,338 - - - - Provision during the year 29,108 33,564 54,338 - - - Payments during the year (5,611) - - - - - At 31 December 111,399 87,902 54,338 - - -

6.12 Share CapitalOrdinary Shares N1.00 each

a. Authorised, Issued and fully paid:50,000,000 Ordinary Shares of N1.00 each 50,000 - - - - -

b. Share premium 11,270,524 - - - - -

6.13 Revaluation ReserveRevaluation Surplus: - 10,924,018 10,924,018 10,924,018 10,924,018 -

The Fixed Assets were revalued in year 2002 and the revalued figures were incorporated in the Financial Statements.

6.14 General ReserveProfit brought forward - 14,412,778 7,041,672 2,498,157 1,278,727 (220,367)

Transferred from profit and loss account 7,811,435 9,379,697 7,371,106 4,543,515 1,219,430 1,499,094 7,811,435 23,792,475 14,412,778 7,041,672 2,498,157 1,278,727

6.15 Contingent Liabilities1

2

6.16 Capital CommitmentsThere were no capital commitments authorised by the directors during the years under review.

SIX MONTHS TO JUNE

DANGOTE SUGAR DIVISION - SEGMENTAL FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER

<-----------------------PRE-SCHEME OF ARRANGEMENT---------------------

This represents the value of net assets of Dangote Sugar Division transferred as at January 01, 2006 over and above theCompany's authorised share capital in accordance with the Scheme of Arrangement of Dangote Industries Limited.

There are no material contingent liabilities in respect of pending litigation against the Company.

The Directors are of the opinion that all known commitments and liabilities which are relevant in assessing the state of affairsof the Company have been taken into consideration in the preparation of these financial statements.

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HISTORICAL FINANCIAL INFORMATION ON DANGOTE SUGAR 6.17 POST BALANCE SHEET EVENTS

6.17.1 Increase in Authorised Share Capital

6.17.2 Increase in paid up Capital

6.18 Related Party TransactionsThere were no inter-company sales. However, related party transactions arose as a result of collections from customers andpayments to suppliers by Dangote Industries Limited on behalf of Dangote Sugar Refinery Plc. Net balance due to DangoteIndustries Limited from these transactions amounted to N111.47 million as at 30 June, 2006.

At an extra ordinary meeting of the Company held on 26 July 2006, it was unanimously resolved that the present share capital ofthe Company be subdivided into 2 shares of 50 kobo each and the authorised share capital be increased from N50,000,000 toN6,000,000,000 by the creation of 11,900,000,000 ordinary shares of 50 kobo each, such new shares to rank pari passu in allrespects with the existing ordinary shares in the capital of the Company.

At the Extraordinary General Meeting of the Company held on 20 August 2006, the paid up capital was increased to N5 billionthrough bonus issues by the allottment of 9,900,000,000 ordinary shares to existing shareholders.

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STATUTORY AND GENERAL INFORMATION 1. INCORPORATION AND SHARE CAPITAL HISTORY

Dangote Sugar commenced business in March 2000 as the sugar division of DIL. The sugar division was spun-off as Dangote Sugar Refinery Plc via a Scheme of Arrangement in January 2006 which transferred all the assets, liabilities and undertakings attributable to the sugar division of DIL to Dangote Sugar. The Company was formally incorporated on 04 January 2005. The Company had an initial authorised share capital of N=50 million comprising 50 million Ordinary Shares of N=1 each, and an issued share capital of N=50 million which comprised 500,000 Ordinary Shares allotted to Alhaji Aliko Dangote which were fully paid-up, and 49,500,000 Ordinary Shares allotted to DIL which were unpaid. In 2006, the 49,500,000 shares allotted to DIL were credited as fully paid-up pursuant to the Scheme of Arrangement. The Company’s shares were subsequently subdivided from N=1 shares into 50 kobo shares and the authorised share capital was increased to N=6 billion comprising 12 billion Ordinary Shares of 50 kobo each, of which 10 billion Ordinary Shares of 50 kobo each have now been issued and fully paid. The changes in the Company’s authorised and paid-up share capital since incorporation are summarised below:

Year Authorised (N=’000) Issued & Fully Paid-up (N=’000) Consideration Increase Cumulative Increase Cumulative

2005 50,000 50,000 500 500 Cash

2006 0 50,000 49,500 50,000 Scheme shares

2006 5,950,000 6,000,000 4,950,000 5,000,000 Bonus 2. SHAREHOLDING STRUCTURE

As the date of this Prospectus, the 10 billion Ordinary Shares of 50 kobo each in the issued ordinary share capital of the Company were beneficially held as follows:

Shareholder Number of Ordinary Shares held

%

Dangote Industries Limited 9,900,000,000 99 Alhaji Aliko Dangote C O N 100,000,000 1 10,000,000,000 100

3. DIRECTORS’ BENEFICIAL INTERESTS

The interests of the Directors of Dangote Sugar in the issued share capital of the Company as recorded in the Register of Members as at the date of this Prospectus and as notified by them for the purpose of Section 275 (1) of the Companies & Allied Matters Act Cap C20 LFN 2004 are as follows:

Director Direct Shareholding

Indirect Shareholding

%

Alhaji Aliko Dangote C O N 100,000,000 9,603,000,000 97.03 Mr Narendra Kumar Somani Nil Nil 0.00 Mr Suleiman Oladapo Olarinde Nil Nil 0.00 Dr Konyinsola Ajayi SAN Nil Nil 0.00 Mr Olakunle Alake Nil Nil 0.00 Alhaji Sani Dangote Nil 297,000,000 2.97 Alhaji Abdu Garba Dantata Nil Nil 0.00 Ms Bennedikter China Molokwu Nil Nil 0.00 Mr Uzoma Nwankwo Nil Nil 0.00

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STATUTORY AND GENERAL INFORMATION 4. INDEBTEDNESS

As at 30 June 2006, the Company had secured bank overdrafts in the ordinary course of business amounting to N=105.8 million. However, the Company had no outstanding debenture, mortgages, charges or similar indebtedness or contingent liabilities as at 30 June 2006.

5. SUBSIDIARIES AND ASSOCIATED COMPANIES

As at the date of this Prospectus, the Company had no subsidiary or associated company.

6. EXTRACTS FROM THE MEMORANDUM AND ARTICLES OF ASSOCIATION

The following are the relevant extracts from the Company’s Memorandum of Association: 4: The Company is a public liability company. 5: The liability of the members is limited by shares. 6: The Share Capital of the Company is Six Billion Naira (N=6,000,000,000) divided into

Twelve Billion (12,000,000,000) Ordinary Shares of 50 kobo (N=0.50) each. The following are the relevant extracts from the Company’s Articles of Association:

PUBLIC COMPANY Art 3 The Company shall be a public liability company and accordingly:

(a) the right to transfer shares is unrestricted.

(b) the number of members of the Company is unlimited; PROVIDED that where two or

more persons hold one or more shares in the Company jointly, they shall for the purpose of this registration be treated as a single member;

(c) any invitation to the public to subscribe for any shares or debentures of the Company is

authorized if done in accordance with the laws promulgated by the relevant statutory bodies charged with the responsibility .

TRANSFER AND TRANSMISSION OF SHARES

Art 4.1 Subject to the provisions hereinafter contained, shares in the Company shall be transferable

by a written instrument in the common form or such other form as the Directors may approve signed by both the transferor and the transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect thereof.

Art 4.2 The Board may refuse in their absolute discretion and without referring ay (sic) reason

therefore decline to register any transfer of shares on which the Company has a lien. The Board may also suspend the register of transfers during the fourteen days immediately preceding the Ordinary General Meeting each year.

Art 4.3 The Company in General Meeting shall refuse to register any instrument of transfer unless:

(a) Such fee as the Company may from time to time require, is paid to the Company in

respect thereof; and (b) the instrument of transfer is accompanied by the certificate of the shares to which it

relates, and such other evidence as the Company in General Meeting may reasonably require to show the right of the transferor to make the transfer, and

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STATUTORY AND GENERAL INFORMATION

(c) the instrument of transfer is in respect of only one class of shares. Art 5 The personal representatives of a deceased sole holder of a share shall be the only persons

recognised by the Company as having any title to the shares. In the case of a share registered in the names of two or more holders, the survivor(s) or personal representative(s) of the deceased shall be the only person(s) recognised by the Company as having title to the share.

Art 6 Any person becoming entitled to a share in consequence of the death or bankruptcy of a

member shall, upon such evidence being produced as may from time to time be required by the Directors, have the right either to be registered as a member in respect of the share or, instead of being registered himself, to make such transfer of the share as the deceased or bankrupt person could have made; PROVIDED that the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by the deceased or bankrupt person before the death or bankruptcy.

Art 7 Any person becoming entitled to a share in consequence of the death, or bankruptcy of a

member shall be entitled to the same dividend and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any rights conferred by membership in relation to meetings of the Company.

NO TRUSTS RECOGNIZED

Art 12 Except as required by law, no person shall be recognized by the Company as holding any

share upon any trust, and the Company shall not be bound by or be compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any fractional part of a share, or any rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

ALTERATION OF CAPITAL

Art 28 The Company may from time to time by Ordinary Resolution increase the share capital of

the Company by such sum to be divided into shares of such amount as the Resolution shall prescribe.

MEETINGS

Art 30 A general Meeting to be known as the Annual General Meeting shall be held once in every calendar year at such time (not being more than fifteen (15) months after the holding of the last preceding Annual General Meeting) and place as may be determined by the Directors; and shall specify the Meeting as such in the notices calling it.

Art 31 All General Meetings other than Annual General Meetings shall be called Extraordinary

General Meetings.

Art 32 The directors may convene an Extraordinary General Meeting whenever they deem fit, and if at any time there are not within Nigeria sufficient directors capable of acting to form a quorum, any director may convene an Extraordinary General Meeting.

NOTICE OF GENERAL MEETING

Art 33 A General Meeting and a meeting called for the passing of a special resolution shall be

called by twenty-one (21) days notice in writing at the least. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given and shall specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business shall be given, in such a manner, if any, as may be prescribed by the Company in General Meeting to such persons as are, under regulations of the Company, entitled to receive such notices from the Company;

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PROVIDED that a General Meeting of the Company shall notwithstanding that it is called by a shorter notice than that specified in this regulation, be deemed to have been duly called if it is so agreed.

(a) in the case of a meeting called as the Annual General Meeting by all the members

entitled to attend and vote thereat; and

(b) in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting being a majority together holding not less than ninety-five per cent (95%) in nominal value of the shares giving that right.

Art 34 The accidental omission to give notice of a meeting to, or non-receipt of notice of a meeting,

by, any person entitled to receive the notice shall not invalidate the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

Art 35 All business shall be deemed special that is transacted at an Extra-ordinary General Meeting, and also all that is transacted at an Annual General Meeting, with the exception of the declaration of dividends, the consideration of the Accounts, Balance Sheet, and the Reports of the Directors and Auditors, the election of directors in the place of those retiring and the appointment and or fixing of the remuneration of the Auditors.

Art 36 Unless otherwise provided, no business shall be transacted at any General Meeting unless a

quorum of members is present at the time when the meeting proceeds to business. Two (2) members present in person or by proxy shall be a quorum.

Art 37 If within half an hour from the time appointed for the meeting a quorum is not present, the

meeting, if convened upon the requisition of members, shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week, at the same time and place as that specified in the notice convening the meeting, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present shall be a quorum.

Art 38 The Chairman, if any, of the Board shall preside at every General Meeting, but if at any

meeting he shall not be present within fifteen minutes after the time appointed for holding the same or shall be unwilling to act as Chairman, the members present shall choose one of the Directors or, if no Director be present or if all the Directors present decline to take the chair, they shall choose one of the members to be the Chairman of the meeting.

Art 39 At any General Meeting, a resolution put to the vote of the meeting shall be decided on a

slow of hands by a unanimous vote of all the members present in person or by their proxy, unless a poll is (before or on the declaration of the result of show of hands) demanded by or at least member entitled to cote at the meeting, or by the holders present in person or by proxy, of at least one-tenth part of the total voting rights of all the members having the right to vote at the meeting, or by a member or members holding shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid upon all the shares conferring that right. Unless a poll is so demanded, a declaration by the Chairman that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the minutes book of the Company shall be conclusive evidence thereof without proof of the number or proportion of the votes recorded in favour of or against such resolution. A proxy need not be a member of the Company.

Art 40 Any corporation, trust, partnership or other legal entity which is a member of the Company

may, by resolution of its directors or other governing body, authorise any person to act as its representative at any meeting or meetings of the Company or of any class of members thereof, and such representative shall be entitled to exercise the same powers on behalf of the entity which he represents as if he had been an individual shareholder, including power, when personally present, to vote on a show of hands.

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Art 41 Subject to the provisions of the Act, a resolution in writing signed by all the members for the

time being entitled to receive notice of, and to attend and vote at, General Meetings (or being corporations by their duly authorised representatives) shall be valid and effectual as if the same had been passed at a General Meeting of the Company duly convened and held.

Art 42 A proxy may take part in the proceedings of a General Meeting as if he were the member

whom he represents. VOTE OF MEMBERS

Art 43 On a show of hands, every member present in person or by proxy shall have one (1) vote.

On a poll, every member shall have one (1) vote for each share of which he is the holder.

Art 44 If any member be a lunatic, idiot or non compos mentis, he may vote, whether on a show of hands or at a poll, by his committee, curator bonis, or other legal curator, and such last-mentioned person may give their votes by proxy on a poll.

Art 45 If two or more persons are jointly entitled to a share, then, in voting upon any question, the

vote of a senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other registered holders of the shares, and for this purpose seniority shall be determined by the order in which the names stand in the register of members.

Art 46 Save as herein expressly provided, no person other than a member duly registered shall, after

a call shall have been made, paid all amounts for the time being due from him and payable to the company in respect of his shares, shall be entitled to be present or to vote on any question either personally or by proxy, or as proxy for another member, at any General Meeting.

Art 47 Votes may be given either personally or by proxy. On a show of hands a member present

only by proxy shall not be entitled to vote except that member is a corporation.

Art 49 Any corporation which is a member of this Company may, by resolution of its Directors or other governing body, authorize any person to act as its representative at any meeting of this Company or of any class of members thereof, and such representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as if he had been an individual shareholder, including power, when personally present, to vote on a show of hands.

Art 50 The instrument appointing a proxy shall be in writing under the hand of the appointer or his

attorney duly authorized in writing, or if such appointer is a corporation, either under its Common Seal, or under the hand of an officer or attorney duly authorized.

Art 51 The instrument appointing a proxy and the power of attorney or other authority, if any, under

which it is signed, or a certified copy of that power or authority, shall be deposited at the registered office or head office of the company or at such other place within Nigeria as is specified for that purpose in the notice convening the meeting, not less than 48 hours before the time for holding the meeting or adjourned meeting, at which the person named in the instrument proposed to vote, or in the case of a poll, not less than 24 hours before the time appointed for the taking of a poll: and in default, the instrument of proxy shall not be treated as valid and the person named therein shall not be entitled to vote.

Art 52 A vote given in accordance with the terms of an instrument of proxy shall be valid

notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which it was executed, or the transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, insanity, revocation or transfer shall have been received by the Company before the commencement of the meeting or adjourned meeting at which the proxy is used.

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Art 53 Any instrument appointing a proxy shall be in the following form or as near thereto as circumstances will admit:

"DANGOTE SUGAR REFINERY PLC "I "being a member of DANGOTE SUGAR REFINERY PLC "appoint, "of "and failing him "of "to vote for me and "on my behalf at the (Annual, Extraordinary "or adjourned, as the case may be) General "Meeting of the Company to be held on the " day of , and at every "adjournment thereof. "As witness my hand this________day of_____________, ,” or such other form as the Directors may from time to time approve.

DIRECTORS

Art 54 The subscribers to the Memorandum of Association shall appoint the first Directors of the

Company.

Art 55 The members at a general meeting shall have the power to re-elect or reject Directors and appoint new ones.

Art 56 A shareholder holding not less than ten per cent of the issued and paid up shares of the

Company shall be entitled to nominate in writing to the Board one Director for each ten per cent of shares held by him provided that the number of Directors nominated by a shareholder under this sub-clause shall not be more than two persons. Such shareholder shall have the power to remove and re-appoint a nominee as he thinks fit. Any nomination for appointment or removal of a Director shall be in writing.

Art 58 All other shareholders, each of whom may hold less than ten per cent of the issued and paid

shares of the Company shall be entitled to nominate to the Board one Director for each ten per cent of the shares held in aggregate by them.

Art 59 Unless and until otherwise determined by the Company in General Meeting, the number of

Directors of the Company shall not be less than two (2) nor more than fifteen (15).

Art 60 It shall not be necessary for any Director of the Company to acquire or hold any share qualification, but a Director shall be entitled to receive notice of, and to attend, all General Meetings.

REMUNERATION OF DIRECTORS

Art 61 The Company in General Meeting may from time to time direct such sums as may be thought fit to be paid as and by way of remuneration to the Directors, and any such sum shall be divided amongst them as they may agree or, failing agreement, equally. The Directors shall also be entitled to be repaid all expenses reasonably incurred by them respectively in or about the performance of their duties as Directors.

MANAGING DIRECTOR

Art 63 The Directors may, from time to time, appoint one of their number to be Managing Director

for such period, at such remuneration and upon such terms as to the duties to be performed, the powers to be exercised and all such other matters as they think fit, but so that no Managing Director shall be invested with any powers or entrusted with any duties which the Directors themselves could not have exercised or performed and so also that there shall not

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be more than one Managing Director holding Office at any one time. The remuneration of a Managing Director may be by way of salary and or bonus or commission or participation in profits, or by any or all of those modes, and it may be made a term of his appointment that he be paid a pension or gratuity on retirement from his office.

RETIREMENT BY ROTATION

Art 64 The provisions of the Act pertaining to the retirement of Directors by rotation, or any

statutory modification or replacement thereof shall not apply to the Company. Accordingly, the Directors of the Company shall not retire by rotation, but shall instead remain in office until the Company determines their tenure or by operation of law.

POWERS AND DUTIES OF DIRECTORS

Art 65 The Directors may, from time to time, and at any time, provide through Local Boards,

Attorneys or Agencies for the management of the Company outside Nigeria, and may appoint any person to be members of such Local Boards, or as Attorneys or Agents and may remove any person so appointed and appoint others in their place, and may fix their remuneration.

Art 66 The Directors may, from time to time, and at any time, delegate to any such Local Board,

Attorney or Agent any of the powers, authorities and discretion for the time being vested in the Directors, other than the power to make calls, forfeit shares, borrow money or issue debentures and any such delegation may be made on such terms and subject to such conditions as the Directors may think fit, and may include a power to sub-delegate. The Directors may annul the powers so delegated, as they deem fit, provided that no person dealing in good faith and without notice of such annulment or variation shall be affected thereby.

Art 67 Any Director may at any time appoint any other Director or appoint any other person

approved by a majority of the other Directors for the time being to be his alternate and may at any time remove any alternate Director appointed by him, and (subject to such approval as aforesaid) appoint another in his place. An alternate Director shall not be entitled to receive any remuneration from the Company, nor shall it be necessary for him to acquire or hold any qualification share, but he shall be entitled (subject to his giving to the Company an address within Nigeria at which notices may be served on him) to receive notice of meetings of the Directors and to attend and vote as a Director at any such meeting, at which the Director appointing him is not present and at such meeting, to exercise all powers, duties and authorities of the Director appointing him. A Director who is also an alternate Director shall be entitled, in addition to his vote, to a separate vote on behalf of the Director he is representing. An alternate Director, if his appointor ceases for any reason to be a Director shall, ipso facto, cease to be an alternate Director. Every person acting as an alternate Director shall be an officer of the Company and shall alone be responsible to the Company for his own acts and defaults, and he shall not be deemed to be an agent of, or for, the Director appointing him. Every appointment and removal of an alternate Director made by any Director in pursuance of this regulation shall be in writing under the hand of the Director making the same and shall be sent to or left at the Office of the Company.

PROCEEDINGS OF DIRECTORS

Art 68: All the decisions of the Board shall be made by a simple majority of votes of the Directors

present at a meeting. In case of equality of votes, the Chairman shall have a second or casting vote.

Art 69 The General Meeting may fix the quorum necessary for the transaction of the business of the

Directors and unless so fixed shall be two.

Art 70 A resolution in writing signed by all Directors entitled to notice of a meeting of Directors shall have the same effect and validity as a resolution of the Board duly passed at a meeting of the Board duly convened and held.

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CASUAL VACANCIES

Art 71 In the event of a vacancy on the Board by reason of death or resignation of a Director, the Board may appoint new Director(s). Where a casual vacancy is filled by the Board, the person appointed may be approved by the members at the next Annual General meeting and if not so approved, shall forthwith cease to be a Director. This however does not affect the validity of prior acts of such Director(s).

DISQUALIFICATION OF DIRECTORS

Art 72 A Director shall vacate his office if:

(a) he is removed in accordance with the provisions of Article 76 hereof;

(b) by notice in writing to the Company, he resigns his office;

(c) he becomes bankrupt or makes any arrangement or composition with his creditors;

(d) he is prohibited from being a Director by an order made under any of the provisions of

the Act or other enactment;

(e) once he attains the age of 70 (seventy) years; or

(f) he is found to be a lunatic or of unsound mind.

Art 76 The Company may, by Ordinary Resolution, remove any Director and may appoint another person in his stead. Such removal shall be without prejudice to any claim such Director may have as to damages for breach of any contract of service between him and the Company.

BORROWING POWERS

Art 80 The Directors may exercise all the powers of the company to borrow money and to mortgage

or charge its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debentures stock, and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party.

DIVIDENDS

Art 83 Subject to any rights or privileges for the time being attached to any share in the capital of

the Company having preferential, deferred or other special rights in regard to dividends, the profits for the Company which it shall from time to time be determined to distribute by way of dividend shall be applied in payment of dividends upon the shares of the Company in proportion to the amounts paid up thereon respectively otherwise than in advance of calls.

Art 84 The Directors may, with the sanction of a General Meeting, from time to time declare

dividends, but no such dividend shall (except as by the Statutes expressly authorised) be payable otherwise than out of the profits of the Company. No higher dividend shall be paid than is recommended by the Directors and a declaration by the Directors as to the amount of profits at any time available for dividends shall be conclusive. The Directors may, if they think fit, and if in their opinion the position of the Company justifies such payment, without any such sanction as aforesaid, from time to time declare and pay an interim dividend, or pay any preferential dividends on shares issued upon the terms that the preferential dividends thereon shall be payable on fixed dates.

Art 85 With the sanction of a General Meeting, dividends may be paid wholly or in part in specie, and

may be satisfied in whole or in part by the distribution amongst the members in accordance with their rights of fully paid shares, stock or debentures of any other company, or of any other property suitable for distribution as aforesaid. The Directors shall have full liberty to make all such valuations, adjustments and arrangements, and to issue all such certificates or

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documents of title as may in their opinion be necessary or expedient with a view to facilitating the equitable distribution amongst members of any dividends or portions of dividends to be satisfied as aforesaid or to giving them the benefit of their proper shares and interests in the property, and no valuation, adjustment or arrangement so made shall be questioned by any member.

Art 86 The Directors may deduct from any dividend or other moneys payable in respect of any

shares held by members either alone or jointly with any other member, all such sums of money (if any) as may be due and payable by him either alone or jointly with any other person to the Company on account of calls or otherwise.

Art 87 A transfer of a share shall not pass the right to any dividend declared in respect thereof

before the transfer has been registered.

Art 88 Any dividend, instalment of dividend or interest in respect of any share may be paid by cheque or warrant payable to the order of the member entitled thereto, or (in the case of joint holders) of that member whose name stands first on the register in respect of the joint holding. Every such cheque or warrant shall (unless otherwise directed) be sent by post to the last registered address of the member entitled thereto, and the receipt of the person whose name appears on the register of members as the owner of any share, or, in the case of joint holders of any one of such holders, or of his or their agent duly appointed in writing, shall be a good discharge of the Company for all dividends or other payments made in respect of such share. Every such cheque or warrant shall be sent at the risk of the person entitled to the money represented thereby.

CAPITALIZATION OF PROFITS AND RESERVE

Art 89 The Director may, before recommending any dividend, set aside out of the profits of the

Company such sum as they think proper as a reserve fund, which shall at the discretion of the Directors be applicable for meeting contingencies, or for repairing or maintaining any works connected with the business of the Company, or for any other purposes for which the profits of the Company may lawfully be applied, or shall, with the sanction of the Company in General Meeting, be as to the whole or in part applicable for equalising dividends, or for distribution by way of special dividend or bonus and the Directors may divide the reserve fund into separate funds for special purposes, and may either employ the sums from time to time carried to the credit of such fund or funds in the business of the company or invest the same in such investments, (other than the shares of the Company) as they may select. The Directors may also from time to time carry forward such sums, as they may deem expedient in the interest of the Company.

Art 90 The Company in General Meeting may, upon the recommendation of the Directors, resolve

that it is desirable to capitalize any part of the amount for the time being standing to the credit of any of the Company's reserve accounts or to the credit of the profit and loss account, otherwise available for distribution; and accordingly that such sum be set free for distribution amongst the members who would have been entitled thereto if distributed by way of dividend, and in the same proportions, on the condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively, or paying up in full unissued shares or debentures of the Company to be allotted and distributed credited as full paid up to and amongst such members in the proportions aforesaid, or partly in the one way and partly in the other, and the directors shall give effect to such resolution.

NOTICES

Art 91 A notice may be given by the company to any member either personally or by sending it by

post to him or to his registered address, or if he has no registered address within Nigeria, to the address, if any, within Nigeria supplied by him to (the Company for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected at the expiration of the day after the letter containing the same is posted.

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7. CLAIMS AND LITIGATION

The Company in its ordinary course of business is presently involved in one (1) suit. The amount claimed in the said suit is N=6,550,597.00 (six million five hundred and fifty thousand five hundred and ninety seven naira) plus interest accrued thereon. The Solicitors to the Offer and the Directors of the Company are of the opinion that the aforementioned suit is not likely to have any material adverse effect on the Company and or the Offer, and are not aware of any other pending and or threatened suits involving the Company.

8. MATERIAL CONTRACTS The following agreements have been entered into and are considered material to this Offer: (i) A Vending Agreement dated 01 November 2006 under the terms of which IBTC Chartered

Bank Plc, Vetiva Capital Management Limited, Access Bank Plc, BGL Securities Limited, Ecobank Nigeria Plc, FBN Capital Limited, FCMB Capital Markets Limited, Fidelity Bank Plc, Intercontinental Capital Markets Limited, Oceanic Bank International Plc and Zenith Bank Plc have agreed to Offer for Sale 3,000,000,000 Ordinary Shares of 50 kobo each in Dangote Sugar Refinery Plc.

(ii) An Underwriting Agreement dated 01 November 2006 under the terms of which IBTC

Chartered Bank Plc, Vetiva Capital Management Limited, Access Bank Plc, BGL Limited, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Intercontinental Capital Markets Limited, Oceanic Bank International Plc, Skye Bank Plc and Zenith Bank Plc have agreed to underwrite 100% of the Offer on a stand-by basis.

Other than as stated above, the Company has not entered into any material contracts except in the ordinary course of business.

9. COSTS AND EXPENSES The costs, charges and expenses of and incidental to the Offer including fees payable to the Securities and Exchange Commission, The Nigerian Stock Exchange, the Central Securities Clearing Systems Limited and professional parties, brokerage commission, and printing and distribution expenses are estimated at N=2.7 billion, representing 5% of the gross Offer proceeds and are payable by Dangote Industries Limited.

10. DECLARATIONS Except as otherwise disclosed in this Prospectus: (a) No share of Dangote Sugar is under option or agreed conditionally or unconditionally to be

put under option; (b) No commissions, discounts, brokerages or other special terms have been granted by Dangote

Sugar to any person in connection with the offer or sale of any share of the Company; (c) Save as disclosed herein, the Directors of Dangote Sugar have not been informed of any

holding representing 5% or more of the issued share capital of the Company; (d) There are no founders, management or deferred shares or any options outstanding in

Dangote Sugar; (e) There are no material service agreements between Dangote Sugar or any of its Directors and

employees other than in the ordinary course of business;

(f) There are no long term service agreements between Dangote Sugar and any of its Directors and employees except Pension Agreements;

(g) No Director of the Company has had any interest, direct or indirect, in any property

purchased or proposed to be purchased by the Company in the five years prior to the date of this Prospectus; and

Page 57


(h) No Director or key management staff of the Company is or has been involved in any of the

following:

a. A petition under any bankruptcy or insolvency laws filed (and not struck out) against him/her or any partnership in which he/she is or was a partner or any company of which he/she is or was a Director or key personnel.

b. A conviction in a criminal proceeding or is named subject of pending criminal

proceedings relating to fraud or dishonesty.

c. The subject of any order, judgement or ruling of any court of competent jurisdiction or regulatory body relating to fraud or dishonesty, restraining him/her from acting as an investment adviser, dealer in securities, Director or employee of a financial institution and engaging in any type of business or activity.

11. RELATIONSHIP BETWEEN THE ISSUER AND ITS ADVISERS

As at the date of this Prospectus, there is no relationship between Dangote Sugar and any of its Advisers except in the ordinary course of business.

12. RELATED PARTY TRANSACTIONS

Dangote Sugar entered into a Management and Technical Service Agreement dated 02 January 2006 with DIL. The Agreement is for an initial period of 5 years with an option to renew for a further period of 5 years, subject to termination by either party in accordance with the terms of the Agreement. As consideration for the services provided by DIL, Dangote Sugar is to pay to DIL, a sum equivalent to 2% of the net revenue from its total sales for any given month, net of discounts, taxes, rebates and value added tax (VAT). Dangote Sugar will also bear all out of pocket expenses incurred by DIL in relation to the provision of their services under the agreement. From January 2006 to the end of August 2006, Dangote Sugar has paid to DIL a total sum of N=1,186,289,113.92.

13. CONSENTS

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

Directors of the Company Alhaji Aliko Dangote C O N Mr Narendra Kumar Somani Mr Suleiman Oladapo Olarinde Dr Konyinsola Ajayi SAN Mr Olakunle Alake Alhaji Sani Dangote (representing Dangote Industries Limited) Alhaji Abdu Garba Dantata Ms Bennedikter China Molokwu Mr Uzoma Nwankwo

Company Secretary Mr Adewale Adebayo Agboola

Joint Issuing Houses IBTC Chartered Bank Plc Vetiva Capital Management Limited Access Bank Plc BGL Securities Limited Ecobank Nigeria Plc FBN Capital Limited FCMB Capital Markets Limited Fidelity Bank Plc Intercontinental Capital Markets Limited Oceanic Bank International Plc Zenith Bank Plc

Page 58


Joint Stockbrokers to the Offer Future View Financial Services Limited AMYN Investments Limited APT Securities Limited BFCL Assets & Securities Limited BGL Securities Limited Camry Securities Limited Capital Assets Limited Capital Express Securities Limited Clearview Investments Company Limited CSL Stockbrokers Limited De-Canon Investment Limited Diamond Securities Limited EMI Capital Resources Limited ESL Securities Limited Fidelity Union Securities Limited Finmal Finance Services Limited Greenwich Trust Limited Heartbeat Investments Limited IBTC Asset Management Limited ICMG Securities Limited International Standard Securities Limited Lambeth Trust & Investment Company Limited LB Securities Limited Marina Securities Limited MBC Securities Limited Meristem Securities Limited Mutual Alliance Investment & Securities Limited Nova Finance & Securities Limited Partnership Investment Company Limited Pilot Securities Limited Premium Securities Limited PSL Limited SanTrust Securities Limited Signet Investments & Securities Limited SMADAC Securities Limited Spring Stockbrokers Limited Summit Finance Company Limited Tower Assets Management Limited UNEX Securities & Investment Limited Vetiva Capital Management Limited Zenith Securities Limited

Auditors Akintola Williams Deloitte

Reporting Accountants Ahmed Zakari & Co (Chartered Accountants)

Solicitors to the Company ǼLEX Legal Practitioners & Arbitrators

Joint Solicitors to the Offer Banwo & Ighodalo Wali-Uwais & Co

Registrars Zenith Registrars Limited

Joint Underwriters IBTC Chartered Bank Plc Vetiva Capital Management Limited Access Bank Plc BGL Limited Ecobank Nigeria Plc Fidelity Bank Plc First Bank of Nigeria Plc

Page 59


First City Monument Bank Plc Intercontinental Capital Markets Limited Oceanic Bank International Plc Skye Bank Plc Zenith Bank Plc

Joint Receiving Bankers IBTC Chartered Bank Plc Access Bank Plc Ecobank Nigeria Plc Fidelity Bank Plc First Bank of Nigeria Plc First City Monument Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Zenith Bank Plc

14. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the documents listed may be inspected at the offices of the Joint Issuing Houses listed on page 9 during normal business hours on any weekday (except public holidays), from Wednesday, 15 November 2006 until Friday, 22 November 2006: (i) Certificate of Incorporation of the Company; (ii) Memorandum and Articles of Association of the Company; (iii) The Prospectus issued in respect of the Offer; (iv) The Shareholders’ Resolution authorising the Offer; (v) The Board Resolution confirming the details of the Offer; (vi) The audited financial statements of the Company for the six months ended 30 June 2006; (vii) The audited financial statements of DIL for each of the five years ended 31 December 2005; (viii) The Report of Ahmed Zakari & Co (Chartered Accountants), Reporting Accountants, on the

financial information of the Company for the six months period ended 30 June 2006; (ix) The Report of Ahmed Zakari & Co (Chartered Accountants), Reporting Accountants, on the

financial information of DIL: for the five years ending 31 December 2005; (x) The Report of Ahmed Zakari & Co (Chartered Accountants), Reporting Accountants, on the

Profit Forecast of the Company for the years ending 31 December 2006, 2007, 2008 and 2009; (xi) A certified true copy of the Federal High Court Order sanctioning the Scheme of

Arrangement between DIL, Dangote Flour Mills Limited, Dangote Salt Plc, Dangote Pasta Plc and the Company;

(xii) The list of outstanding claims and litigation referred to in Section 7 on page 56; (xiii) The material contracts referred to in Section 8 on page 56; (xiv) The written consents referred to in Section 13 on page 57; (xv) The letter of approval from the Securities & Exchange Commission; and (xvi) The letter of approval from The Nigerian Stock Exchange.

Page 60

SUPPLEMENTARY INFORMATION

Page 61

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 1. REPORTING ACCOUNTANTS’ REPORT The following is a copy of the report of Ahmed Zakari & Co (Reporting Accountants), the Reporting Accountants to the Offer:





And


And

The Directors Intercontinental Capital Markets Limited Wesley House 21/22 Marina, Lagos

And


And


And


And


And


And


And


And


And


Dear Sirs We report on the financial information set out on pages 64 to 75, which have been prepared for inclusion in the Prospectus to be issued in connection with the proposed Offer for Sale of Dangote Industries Limited’s 3,000,000,000 ordinary shares of 50 kobo each in the issued share capital of Dangote Sugar Refinery Plc. Sequel to a Court Order dated 23rd January, 2006 sanctioning the Scheme of Arrangement of Dangote Industries Limited (DIL), the assets, liabilities and rights attached to DIL’s Sugar Division were transferred to Dangote Sugar Refinery Plc with effect from 01 January 2006.

Page 62

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED The financial information is based on the audited financial statements of Dangote Industries Limited, and incorporates segmental financial statement summaries of its Flour Mills Division, Sugar Division, Salt Division, DIL Head Office/Cement Division and Pasta Division, for the five years ended 31 December 2005. The financial statements were prepared under the historical cost convention, modified to include the revaluation of certain fixed assets. Messrs Lanre Odede & Co., were the auditors of the Company for the years ended 31 December 2001, 2002 and 2003 while Morrison Odede & Co. and Akintola Williams Deloitte were the joint auditors for the years ended 31 December 2004 and 2005. The financial information has been prepared in accordance with the accounting policies set out on page 63 after making such adjustments we considered necessary. The financial statements on which the information is based are the responsibility of the Directors of Dangote Industries Limited who approved their issue. The Directors of the company are responsible for the contents of the prospectus in which this report is included. We conducted our work in accordance with the International Standard on Auditing applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatements. Our review was limited primarily to examination of the work papers of the external auditors, inquiries of the company’s personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the accompanying financial information does not give a true and fair view of the state of affairs of Dangote Industries Limited and its Divisions as at the dates stated and of the profit and loss and cash flows for the years then ended in accordance with generally acceptable accounting principles in Nigeria. Yours faithfully

Page 63

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED

2. STATEMENT OF ACCOUNTING POLICIES

The following are the principal accounting policies adopted in the preparation of these financial statements.

(a) Basis of preparation of financial statements The financial statements are prepared under the historical cost convention as modified by the revaluation of certain fixed assets.

(b) Turnover Turnover represents the invoiced value of goods to third parties less discounts and value added tax.

(c) Fixed assets Fixed assets are stated at cost or valuation less accumulated depreciation.

(d) Depreciation of fixed assets Depreciation is calculated to write off the cost of fixed assets on a straight line basis over their expected useful lives. The principal annual rates used for this purpose were:

2005 2004 2003 2002 2001

Leasehold land and buildings 2% 2% 2% 2% 2% Plant and Machinery 6.67% 6.67% 15% 15% 15% Tools and equipment 12.5% 20% 20% 20% 20% Office equipment 12.5% 20% 20% 20% 20% Motor vehicles 25% 25% 25% 25% 25% Mobile cranes 10% 10% 10% 10% 10% Furniture and fittings 20% 20% 20% 20% 20% Computer equipment/software 33.33% 33.33% 33.33% 33.33% 33.33%

In the case of revalued properties, depreciation is calculated by reference to the enhanced values of the properties concerned. No depreciation is charged on fixed assets until they are brought into use.

(e) Repairs and renewals All repairs and renewals are written off as incurred but major repairs are capitalized.

(f) Stock and work-in-progress Stock and work-in-progress are valued at the lower of cost and net realizable value.

(g) Rate of exchange Transactions in foreign currencies are recorded in Naira at the rates of exchange ruling at the time they arise.

Assets and liabilities existing in foreign currencies are converted to Naira at the rates of exchange ruling at the balance sheet date. Gains or losses arising therefrom are included in the profit and loss account.

(h) Debtors Bad debts are written off and specific provisions are made for those debts considered doubtful.

(i) Deferred taxation Deferred taxation is provided using the liability method at the current rate of income tax on all timing differences between the treatment of certain items for accounting purposes and their treatment for taxation.

(j) Long-term investments Long-term Investments are shown at cost.

(k) Employees' retirement benefits The Company makes provision for retirement benefits in accordance with the Pension Reform Act of 2004. The contribution of the employer is 8.5% while that of the employee is 7.5% of relevant emoluments.

The Company also operates a gratuity scheme for its permanent Nigerian staff, the benefits under which are related to employees’ length of service and remuneration. The provision for liability in respect thereof based on actuarial valuation is provided in full in the financial statements.

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SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 3. PROFIT AND LOSS ACCOUNT

Year ended 31 December 2005 2004 2003 2002 2001

Notes N'000 N'000 N'000 N'000 N'000

Turnover 6.3 138,643,914 113,249,062 94,728,575 61,924,749 46,039,099

Cost of sales (111,337,091) (87,586,803) (77,115,190) (51,757,130) (37,289,690)

Gross profit 27,306,822 25,662,259 17,613,385 10,167,619 8,749,409

Operating expenses (7,862,291) (9,478,877) (5,928,426) (2,395,999) (2,623,055)

Operating profit 19,444,532 16,183,382 11,684,959 7,771,620 6,126,354

Other income 18,131 212,012 150,039 147,817 40,727

Profit before interest and similar charges 19,462,663 16,395,394 11,834,998 7,919,437 6,167,081

Interest expense and similar charges (8,346,779) (7,325,553) (4,466,897) (2,633,366) (2,021,720)

Profit on ordinary activities before taxation 6.4 11,115,884 9,069,841 7,368,101 5,286,071 4,145,361

Taxation 6.6 - - (484,743) (139,600) (300,000)

Retained profit for the year 11,115,884 9,069,841 6,883,358 5,146,471 3,845,361

Profit brought forward 25,234,976 16,165,135 9,281,777 4,135,306 289,945

General Reserve 6.16 36,350,860 25,234,976 16,165,135 9,281,777 4,135,306


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SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 4. BALANCE SHEET As at 31 December 2005 2004 2003 2002 2001

Notes N'000 N'000 N'000 N'000 N'000

Fixed assets 6.7 37,937,853 36,486,641 37,516,819 30,616,996 10,630,365

Investment in subsidiaries 6.8 51,846,902 57,306,941 24,861,210 417,378 - 89,784,755 93,793,582 62,378,029 31,034,374 10,630,365

Current assetsStock and work-in-progress 6.9 9,624,665 6,351,785 4,020,310 6,219,895 3,922,017 Debtors and prepayments 6.10 49,596,992 49,540,871 26,597,243 11,258,721 15,611,808 Cash and bank balances 1,130,761 1,079,456 4,788,618 4,786,732 2,586,861

60,352,418 56,972,112 35,406,171 22,265,348 22,120,686

Creditors: Amounts falling duewithin one year

Bank borrowings (secured) 6.11 24,913,012 44,920,538 26,778,023 15,718,233 8,439,400 Trade and other creditors 6.12 43,709,877 35,576,667 13,241,124 11,993,106 19,104,480

68,622,889 80,497,205 40,019,147 27,711,339 27,543,880

Net current liabilities (8,270,471) (23,525,093) (4,612,976) (5,445,991) (5,423,194)

Total assets less current liabilities 81,514,284 70,268,489 57,765,053 25,588,383 5,207,171

Provision for liabilities & charges 6.13 (433,519) (303,608) - - - NET ASSETS 81,080,765 69,964,881 57,765,053 25,588,383 5,207,171

CAPITAL AND RESERVESShare capital 6.14a 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Deposit for shares 6.14b 71,865 71,865 71,865 71,865 71,865 Revaluation reserve 6.15 21,469,896 21,469,896 21,469,896 15,234,741 - General reserve 6.16 36,350,860 25,234,976 16,165,135 9,281,777 4,135,306 Shareholders' funds 58,892,621 47,776,737 38,706,896 25,588,383 5,207,171

Convertible loan stock 6.17 22,188,144 22,188,144 19,058,157 - - 81,080,765 69,964,881 57,765,053 25,588,383 5,207,171


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SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 5. CASH FLOW STATEMENT Year Ended 31 December 2005 2004 2003 2002 2001

N'000 N'000 N'000 N'000 N'000CASH FLOW FROM OPERATING ACTIVITIESOperating profit before taxation 11,115,884 9,069,841 7,368,101 5,286,071 4,145,361

Adjustment for non-cash items:Depreciation of fixed assets 2,941,523 3,133,408 2,759,772 1,322,427 1,215,856 Prior year adjustmentCash Flow before changes in working capital 14,057,407 12,203,249 10,127,873 6,608,498 5,361,217

Decrease/[Increase] in stock & work in progress (3,272,880) (2,331,475) 2,199,585 (2,297,878) (1,815,933) Decrease/[Increase] in debtors & prepayment 7,906,069 (8,137,042) (10,272,868) (1,511,969) (2,625,922) [Increase] / Decrease in due from related companies (7,962,190) (14,806,586) (5,065,654) 5,865,056 (9,466,985) [Decrease]/Increase in creditors & accruals 8,260,264 22,926,321 763,276 (7,250,974) 10,393,800 [Decrease]/Increase in taxation payable 2,857 (287,170) - - -

Cash generated from/[absorbed] in operations 18,991,527 9,567,297 (2,247,788) 1,412,733 1,846,177

CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (4,392,735) (2,103,230) (3,424,440) (6,074,317) (2,945,257) Pre-Operation expensesLong term investments 5,460,040 (32,445,731) (24,443,832) (417,378) - Proceeds from sale of fixed assets - - 801 Net cash inflow / [outflow] from investing activities 1,067,305 (34,548,961) (27,868,272) (6,491,695) (2,944,456)

CASH FLOW FROM FINANCING ACTIVITIESDeposit for Shares - - - - - Covertible Loan - 3,129,987 19,058,157 - - Net cash provided by financing activities - 3,129,987 19,058,157 - -

Net increase/[decrease] in cash and cash equivalents 20,058,832 (21,851,677) (11,057,903) (5,078,962) (1,098,279)

CASH AND CASH EQUIVALENT AT 1 JANBank and Cash Balances 1,079,456 4,788,618 4,786,732 2,586,861 687,190 Bank Overdraft (26,174,557) (12,461,040) (8,553,453) (6,809,999) (2,990,853) Short Term Loans (18,745,981) (14,316,983) (7,164,780) (1,629,401) (2,450,597)

(43,841,082) (21,989,405) (10,931,501) (5,852,539) (4,754,260)

(23,782,251) (43,841,082) (21,989,405) (10,931,501) (5,852,539)

CASH AND CASH EQUIVALENT AT 31 DECBank and Cash Balances 1,130,761 1,079,456 4,788,618 4,786,732 2,586,861 Bank Overdraft (18,445,557) (26,174,557) (12,461,040) (8,553,453) (6,809,999) Short Term Loans (6,467,455) (18,745,981) (14,316,983) (7,164,780) (1,629,401)

(23,782,251) (43,841,082) (21,989,405) (10,931,501) (5,852,539)

Page 67

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 6. NOTES TO THE FINANCIAL STATEMENTS 6.1 The Company

6.2 Business and Geographical Segments

Principal activities are as follows:

Sugar Division Refining of raw sugar is carried out in Apapa Sugar Refinery.

Flour Division

Cement Division

Pasta Division

Salt Division Production of edible salt is carried out in Apapa, Oregun and Port Harcourt.

Refines flour in 4 plants located in Lagos, Calabar, Ilorin and Kano. Flour is also used asmajor raw material in the Pasta factory which is located in Ikorodu.

Pasta factory is located in Ikorodu. Pasta is into production of Macaroni and Spaghetti.

For management purposes the company is currently organised into 8 operating units or divisions producing 5main products - Sugar, Flour, Cement, Salt and Pasta. These divisions form the basis on which the groupreports its primary segment information

Dangote Industries Limited was incorporated as a private limited liability company on 18 April 1985 to carry outthe production and sale of food products and building materials

Produces cement from bulk cement. During the year the company operated from 4 plants-Apapa, Port Harcourt, Continental Cement Terminal and Aliko Terminal Lagos. However PortHarcourt plant merged with Bonny Allied Cement Port Harcourt in June 2004.

Segmented financial information about these business units are presented on pages 71 to 75.

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

6.3 TurnoverAnalysis by Products:Food products 104,354,548 76,763,284 55,450,035 28,539,639 23,588,168 Building Materials 34,289,366 36,485,778 39,278,540 33,385,110 22,450,931

138,643,914 113,249,062 94,728,575 61,924,749 46,039,099

6.4 Profit before taxationProfit before taxation is arrived at after charging:Auditors' fee 36,000 36,000 12,000 7,500 6,000 Depreciation of fixed assets 2,941,523 3,133,408 2,759,772 1,322,427 1,215,575 Directors' emoluments (Note 5a) 41,033 41,033 30,188 25,736 22,370 Interest on borrowing 8,346,779 7,325,553 3,493,714 2,227,410 -

6.5 Particulars of Directors and Staffa) President and Directors emolument: President 10,845 10,845 10,845 10,100 NA Other Directors 30,188 30,188 19,343 15,636 22,370

b) The number of Directors excluding the President whose emoluments were within the following ranges are:

N'000 N'000 Number Number Number Number Number2,800 - 3,400 0 0 0 3 -3,401 - 3,500 0 0 0 1 -3,501 - 3,600 0 0 0 1 -3,601 - 3,700 0 0 0 0 -3,701 - 3,800 3 3 3 0 -3,801 - 3,900 0 0 0 0 -3,901 - 4,000 0 1 1 0 -4,001 and Above 4 1 1 0 -

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2005 2004 2003 2002 2001Employees' Remunerationc) The number of employees other than Directors and their emoluments within the following range were:

N'000 N'000 Number Number Number Number Number220 - 240 2,516 3,760 2,062 2,038 -241 - 250 2,771 2,079 1,747 1,703 -251 - 300 250 250 234 219 -301 - 400 750 825 639 602 -401 - 500 75 353 845 776 -501 - 600 535 - 395 353 -601 - 700 438 - 552 337 -701 - 1000 958 - 210 181 -1001 - 1500 606 - 118 103 -1510 - 2000 648 - 43 44 -2001 - Above 322 - 7 12 -

Total 9,869 7,267 6,852 6,368 NA

d) The average number of persons employed during the year is as follows: Number Number Number Number Number

Managerial 322 513 168 159 - Senior Staff 1,648 1,709 2,641 2,249 - Junior Staff 7,723 9,093 4,043 3,960 -

9,693 11,315 6,852 6,368 -

6.6 Taxation N'000 N'000 N'000 N'000 N'000

(I) Per Profit and Loss Account:Charge for the year:Income tax - - 337,500 130,000 280,000 Education tax - - 22,500 9,600 20,000 Prior year's tax - - 124,743 - -

- - 484,743 139,600 300,000

(ii) Per Balance Sheet:

At 1st JanuaryIncome tax 585,072 872,243 410,000 280,000 - Education tax 52,100 52,100 29,600 20,000 - Payment during the year (287,171) - - - Adjustments during the year 2,857 - - - -

Charge for the year:Income tax - - 337,500 130,000 280,000 Education tax - - 22,500 9,600 20,000 Prior year's tax - - 124,743 - - At 31st December (Note 12) 640,029 637,172 924,343 439,600 300,000

(iii) Deferred Taxation:

Total Net Book Value - - 37,516,819 30,616,996 - Deduct: Revaluation Reserve plus WIP - - (23,859,137) (17,742,446) - Net Book Value - - 13,657,682 12,874,550 - Less: Tax Written Down Value - - (4,928,436) (4,210,415) -

- - 8,729,246 8,664,135 -

As a result of accelerated written down allowances on fixed assets, the total net book value of the company's fixed assets exceeded the corresponding tax written down value at the balance sheet date by the following:

As a result of the present tax holiday, no provision has been made in 2004 and 2005 financial statements for deferred taxarising on the above timing differences of approximately N2,625,211,000 in 2003. (2002: N2,605,678,000)

NA - Indicates that comparative information was not available

The Company was granted a pioneer status by Nigerian Investment Promotion Commission with effect from itsproduction date - 1 January, 2002 for a period of 5 years. Accordingly, no provision for taxation has been made in 2004and 2005 financial statements.

Page 69


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

6.7 Fixed assets

Cost / ValuationLand & Buildings 6,581,494 6,187,015 5,744,563 5,395,918 1,276,648 Plant & Machinery 37,369,208 33,808,251 30,336,600 21,627,058 9,532,861 Crane 5,498 5,498 19,343 19,343 17,631 Tools & Equipment 2,824,420 2,756,698 4,304,830 3,628,353 602,092 Computer Hardware / Software 77,724 47,445 46,511 31,977 21,136 Motor Vehicles 651,992 513,582 426,329 369,938 296,323 Furniture & Fittings 288,458 260,351 211,427 233,276 132,367 Research & Development - - - 5,681 5,681 Work in Progress 2,154,559 1,981,778 2,367,785 2,486,249 603,996 At 31 December 49,953,353 45,560,618 43,457,388 33,797,793 12,488,735

Accumulated depreciationLand & Buildings 460,196 313,024 192,001 69,673 37,766 Plant & Machinery 8,512,687 6,511,444 4,316,455 2,369,852 1,360,547 Crane 5,497 5,422 5,023 4,472 617 Tools & Equipment 2,359,125 1,704,700 1,069,014 531,705 379,530 Computer Hardware / Software 58,239 45,607 32,882 20,274 8,924 Motor Vehicles 405,209 328,291 205,318 105,280 26,818 Furniture & Fittings 214,547 165,489 119,876 79,541 44,168 Research & Development - - - - - Work in Progress - - - - - At 31 December 12,015,500 9,073,977 5,940,569 3,180,797 1,858,370

Net book valueLand & Buildings 6,121,298 5,873,991 5,552,562 5,326,245 1,238,882 Plant & Machinery 28,856,521 27,296,807 26,020,145 19,257,206 8,172,314 Crane 1 76 14,320 14,871 17,014 Tools & Equipment 465,295 1,051,998 3,235,816 3,096,648 222,562 Computer Hardware / Software 19,485 1,838 13,629 11,703 12,212 Motor Vehicles 246,783 185,291 221,011 264,658 269,505 Furniture & Fittings 73,911 94,862 91,551 153,735 88,199 Research & Development - - - 5,681 5,681 Work in Progress 2,154,559 1,981,778 2,367,785 2,486,249 603,996 At 31 December 37,937,853 36,486,641 37,516,819 30,616,996 10,630,365

6.8 Investment in Subsidiaries(i) Benue Cement Company Plc 4,022,399 2,348,747 4,378 4,378 - (ii) Odukpani Cement Company Ltd 1,341,596 1,331,280 54,354 54,354 - (iii) Obajana Cement Company Plc - 52,679,371 24,554,100 110,268 - (iv) Obajana Holding S.A 42,928,712 - - - - (v) Dangote Cement Works Ltd 894,587 894,586 225,269 225,269 - (vi) Savannah Sugar Company Plc 429,544 11,957 1,240 1,240 - (vii) Greenview Cement Ltd - - 413 413 - (viii) West African Popular Foods Com - - 21,456 21,456 - (ix) Jaiz International Plc 41,000 41,000 - - - (x) Other deposits for shares 2,189,064 - - - -

51,846,902 57,306,941 24,861,210 417,378 -

6.9 Stock and Work-in-progressRaw materials and work-in-progress 7,804,541 4,930,838 2,016,113 2,962,417 1,819,470 Finished Goods 762,582 402,952 569,505 2,532,913 1,803,369 Engineering spares and other stock 889,706 1,011,702 448,542 724,565 299,178 Goods - in - transit 167,836 6,293 986,150 - -

9,624,665 6,351,785 4,020,310 6,219,895 3,922,017

The Company revalued its Lagos Fixed Assets in 2002 while the Up-Country Fixed Assets were revalued in 2003.The revaluation was carried by Messrs Alagbe & Partners, Estate Surveyors and Valuers on the basis of openmarket value between a willing buyer and a willing seller. The resulting surplus on revaluation was credited to aFixed Assets Revaluation Reserve Account. Subsequent additions to the revalued assets are stated at cost.

Page 70


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

6.10 Debtors and PrepaymentsTrade Debtors 9,329,673 14,742,742 11,697,142 4,916,220 2,359,384 Due from associated companies 33,382,619 25,420,429 10,613,843 5,548,189 11,413,245 Other debtors 6,884,700 9,377,700 2,740,622 425,511 928,497 Prepayments - - 1,545,636 368,801 910,682

49,596,992 49,540,871 26,597,243 11,258,721 15,611,808

6.11 Bank Borrowings(i) Overdrafts 18,445,557 26,174,557 12,461,040 8,553,453 6,809,999 (ii) Short term loans 6,467,455 18,745,981 14,316,983 7,164,780 1,629,401

24,913,012 44,920,538 26,778,023 15,718,233 8,439,400

6.12 Trade and Other CreditorsTrade creditors 17,574,632 9,490,086 9,459,880 10,619,530 16,257,547 Taxation (Note 6ii) 640,029 637,172 924,342 439,600 300,000 Other creditors and accruals 25,495,216 25,449,409 2,856,902 933,976 2,546,933

43,709,877 35,576,667 13,241,124 11,993,106 19,104,480

6.13 Provisions for Liabilities & ChargesLiability in respect of staff terminal gratuityAt 1 January 303,608 - - - - Provision during the year 138,781 303,608 - - - Payments during the year (8,870) - - - -At 31 December 433,519 303,608 - - -

6.14 Share CapitalOrdinary Shares N1.00 eacha. Authorised, Issued and fully paid:

1,000,000,000 Ordinary Shares of N1.00 each 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

b. Deposit for SharesFunds Transferred by Greenview International 971,865 971,865 971,865 971,865 971,865 Shares Allotted and Fully Paid (900,000) (900,000) (900,000) (900,000) (900,000) Foreign Exchange Surplus 71,865 71,865 71,865 71,865 71,865

6.15 Revaluation ReserveRevaluation Surplus:

Lagos Assets 15,234,741 15,234,741 15,234,741 15,234,741 - Up-country Assets 6,235,155 6,235,155 6,235,155 - -

21,469,896 21,469,896 21,469,896 15,234,741 -

6.16 General ReserveProfit brought forward 25,234,976 16,165,135 9,281,777 4,135,306 289,945 Transferred from profit and loss account 11,115,884 9,069,841 6,883,358 5,146,471 3,845,361

36,350,860 25,234,976 16,165,135 9,281,777 4,135,306

6.17 Convertible Loan Stock

Funds utilised out of convertible debenture 22,188,144 22,188,144 19,058,157 - -

6.18 Contingent Liabilities

6.19 Capital Commitments

- 2,113,124 437,848 3,810 4,400

6.20 Plants TransferredPort Harcourt Cement Plant

6.21 Related Party TransactionsAll related party transactions were done at arm's length.

Certain Fixed Assets which were not revalued in year 2002 were revalued in year 2003 and the revalued figures wereincorporated in the respective Financial Statements.

This plant, which was part of the business, merged with Bonny Allied Limited on 23 June, 2004 although the formalitiesfor the consummation is yet to be completed. The net asset at 31 December 2005 was N4,523,758,330 (30 June, 2004:

There were contingent liabilities of about N60million as at 31 December 2002, (N15million in 2001) in the ordinarycourse of business arising out of litigation. The Directors have been advised by the company's solicitors that no materialloss is expected to arise.

Capital expenditure authorised by theDirectors but not yet contracted for:

The Convertible Debenture of USD 250,000,000 was obtained at a zero coupon rate from Development ProjectsCorporation. There is an agreed option of convertibility.

Page 71

SUPPLEMENTARY INFORMATION - DANGOTE INDUSTRIES LIMITED 7. SEGMENTAL FINANCIAL INFORMATION

FLOURDIL HEAD

OFFICE/CEMENT SUGAR SALT PASTA TOTALYEAR ENDED 31 DECEMBER 2005 N'000 N'000 N'000 N'000 N'000 N'000

TURNOVER 34,017,095 34,289,366 58,494,709 5,105,124 6,737,620 138,643,914

Cost of Sales (29,534,417) (28,311,869) (44,458,574) (3,880,043) (5,152,188) (111,337,091)

Gross Profit 4,482,678 5,977,497 14,036,135 1,225,081 1,585,431 27,306,822

Direct Expenses (2,847,045) (1,092,096) (2,433,417) (554,497) (935,236) (7,862,291)

Profit from Operations 1,635,633 4,885,401 11,602,719 670,584 650,195 19,444,532

Other Income 2,829 5,870 345 894 8,192 18,131

Profit Before Interest & Similar Charges 1,638,461 4,891,271 11,603,064 671,479 658,388 19,462,663

Interest Expenses & Similar Charges (2,207,757) (3,191,643) (2,223,367) (293,427) (430,584) (8,346,779)

Profit on Ordinary Activities Before Tax (569,295) 1,699,628 9,379,697 378,052 227,803 11,115,884

Taxation - - - - - -

Profit After Tax (569,295) 1,699,628 9,379,697 378,052 227,803 11,115,884 Profit Brought Forward 7,832,847 1,763,211 14,412,778 1,328,610 (102,469) 25,234,976

Per Balance Sheet 7,263,551 3,462,839 23,792,475 1,706,661 125,334 36,350,860

YEAR ENDED 31 DECEMBER 2004

TURNOVER 31,194,184 36,485,778 36,576,150 4,315,316 4,677,634 113,249,062

Cost of Sales (25,872,395) (28,666,793) (25,803,504) (3,432,969) (3,811,142) (87,586,803)

Gross Profit 5,321,789 7,818,985 10,772,646 882,347 866,492 25,662,259

Direct Expenses (1,910,793) (4,397,552) (2,167,502) (449,660) (553,369) (9,478,877)


Other Income 90,642 55,282 56,005 46 10,038 212,012


Interest Expenses & Similar Charges (1,900,714) (3,731,782) (1,290,043) (219,626) (183,389) (7,325,553)

Profit on Ordinary Activities Before Tax 1,600,924 (255,067) 7,371,106 213,106 139,772 9,069,841

Taxation - - - - - -

Profit After Tax 1,600,924 (255,067) 7,371,106 213,106 139,772 9,069,841

Profit Brought Forward 6,231,922 2,018,278 7,041,672 1,115,504 (242,241) 16,165,135

Per Balance Sheet 7,832,847 1,763,211 14,412,778 1,328,610 (102,469) 25,234,976


TURNOVER 22,403,243 39,278,540 27,879,762 2,656,096 2,510,935 94,728,575

Cost of Sales (18,267,228) (32,762,801) (21,538,565) (2,626,290) (1,920,307) (77,115,190)

Gross Profit 4,136,015 6,515,739 6,341,196 29,806 590,628 17,613,385

Direct Expenses (820,924) (3,730,084) (743,182) (218,612) (415,622) (5,928,426)

Profit from Operations 3,315,091 2,785,655 5,598,014 (188,807) 175,006 11,684,959

Other Income 46,136 32,645 25,473 45,183 603 150,039

Profit Before Interest & Similar Charges 3,361,226 2,818,300 5,623,487 (143,623) 175,609 11,834,998

Interest Expenses & Similar Charges (521,936) (2,559,096) (1,076,753) (238,501) (70,611) (4,466,897)

Profit on Ordinary Activities Before Tax 2,839,290 259,204 4,546,733 (382,124) 104,998 7,368,101

Taxation (5,489) (365,677) (3,218) (110,359) - (484,743)

Profit After Tax 2,833,801 (106,473) 4,543,515 (492,483) 104,998 6,883,358

Profit Brought Forward 3,398,121 2,124,751 2,498,157 1,607,986 (347,239) 9,281,777


DANGOTE INDUSTRIES LIMITEDPROFIT AND LOSS ACCOUNT - BY SEGMENT

Page 72


FLOURDIL HEAD

OFFICE/CEMENT SUGAR SALT PASTA TOTALYEAR ENDED 31 DECEMBER 2002 N'000 N'000 N'000 N'000 N'000 N'000

TURNOVER 11,468,685 33,385,110 13,540,091 2,260,005 1,270,858 61,924,749

Cost of Sales (8,092,823) (29,554,655) (11,291,911) (1,716,804) (1,100,936) (51,757,130)

Gross Profit 3,375,861 3,830,454 2,248,180 543,202 169,921 10,167,619

Direct Expenses (459,725) (1,165,331) (496,096) (148,200) (126,647) (2,395,999)


Other Income 58,836 37,452 20,668 29,769 1,091 147,817


Interest Expenses & Similar Charges (801,046) (1,126,207) (553,322) (110,796) (41,995) (2,633,366)

Profit on Ordinary Activities Before Tax 2,173,927 1,576,368 1,219,430 313,975 2,370 5,286,071

Taxation - (139,600) - - - (139,600)

Profit After Tax 2,173,927 1,436,768 1,219,430 313,975 2,370 5,146,471

Profit Brought Forward 1,224,194 687,983 1,278,727 1,294,011 (349,609) 4,135,306



TURNOVER 6,154,038 21,693,941 14,806,249 2,547,450 837,421 46,039,099

Cost of Sales (4,338,103) (18,480,352) (11,918,912) (1,642,897) (909,425) (37,289,690)

Gross Profit 1,815,935 3,213,588 2,887,337 904,553 (72,004) 8,749,409

Direct Expenses (296,512) (1,564,443) (580,603) (90,779) (90,718) (2,623,055)

Profit from Operations 1,519,422 1,649,145 2,306,734 813,774 (162,721) 6,126,354

Other Income 11,602 15,367 7,552 5,795 410 40,727

Profit Before Interest & Similar Charges 1,531,025 1,664,512 2,314,286 819,569 (162,311) 6,167,081

Interest Expenses & Similar Charges (318,345) (827,588) (742,591) (77,981) (55,215) (2,021,720)

Profit on Ordinary Activities Before Tax 1,212,680 836,924 1,571,695 741,588 (217,526) 4,145,361

Taxation (108,400) (53,000) (72,600) (66,000) - (300,000)

Profit After Tax 1,104,280 783,924 1,499,095 675,588 (217,526) 3,845,361

Profit Brought Forward 119,914 (95,941) (220,368) 618,423 (132,083) 289,945

Per Balance Sheet 1,224,194 687,983 1,278,727 1,294,011 (349,609) 4,135,306

DANGOTE INDUSTRIES LIMITEDPROFIT AND LOSS ACCOUNT - BY SEGMENT

Page 73


FLOUR DIL HEAD

OFFICE/CEMENT SUGAR SALT PASTA TOTALN'000 N'000 N'000 N'000 N'000 N'000

AS AT 31 DECEMBER 2005

ASSETS EMPLOYEDFixed Assets 13,426,053 4,998,425 14,533,581 800,775 4,179,019 37,937,853 Investments 80,335 51,737,712 - 28,854 - 51,846,902

13,506,388 56,736,137 14,533,581 829,629 4,179,019 89,784,755 CURRENT ASSETS:Stock 5,106,133 363,219 3,089,203 811,402 254,709 9,624,665 Debtors and Prepayments 14,231,404 5,685,623 26,859,994 4,280,038 (1,460,068) 49,596,992 Cash and Bank Balances 1,026,243 98,888 4,485 1,000 145 1,130,761

20,363,780 6,147,729 29,953,682 5,092,440 (1,205,214) 60,352,418 LESS: CURRENT LIABILITIESCreditors 10,209,160 17,334,472 9,682,868 2,704,758 (11,466) 39,919,792 Accruals and Provisions 3,139,643 542,044 87,902 407,904 46,117 4,223,610 Bank Overdraft 7,089,827 10,070,954 - 571,669 713,109 18,445,558 Short - Term Loan - 6,467,455 - - - 6,467,455

20,438,631 34,414,925 9,770,770 3,684,330 747,760 69,056,416

Net Current Assets/(Liabilities) (74,850) (28,267,195) 20,182,912 1,408,110 (1,952,974) (8,703,997)

Net Assets 13,431,537 28,468,941 34,716,493 2,237,739 2,226,045 81,080,765

SHARE CAPITAL & RESERVESShare Capital - 1,000,000 - - - 1,000,000 Deposit for Shares - 71,865 - - - 71,865 Revaluation Reserves 6,167,986 1,746,102 10,924,018 531,078 2,100,711 21,469,896 Profit and Loss Account 7,263,551 3,462,839 23,792,475 1,706,661 125,334 36,350,860

13,431,537 6,280,797 34,716,493 2,237,739 2,226,045 58,892,621 Convertible Loan Stock - 22,188,144 - - - 22,188,144

13,431,537 28,468,941 34,716,493 2,237,739 2,226,045 81,080,765


Fixed Assets 11,142,003 5,607,437 14,683,408 731,157 4,322,636 36,486,641 Investments 469,778 56,517,039 - 70,123 250,000 57,306,941

11,611,781 62,124,476 14,683,408 801,280 4,572,636 93,793,582 CURRENT ASSETS:Stock 2,138,288 666,508 2,956,514 478,111 112,364 6,351,785 Debtors and Prepayments 6,760,276 24,732,002 16,166,097 4,714,312 (2,831,816) 49,540,871 Cash and Bank Balances 901,146 (2,842,472) 2,276,967 229,007 514,807 1,079,456

9,799,710 22,556,038 21,399,578 5,421,430 (2,204,645) 56,972,112 LESS: CURRENT LIABILITIESCreditors 6,356,486 14,472,067 10,746,188 3,647,610 354,316 35,576,667 Accruals and Provisions - 303,608 - - - 303,608 Bank Overdraft 1,054,172 24,389,538 - 715,413 15,434 26,174,557 Short - Term Loan - 18,745,981 - - - 18,745,981

7,410,658 57,911,194 10,746,188 4,363,023 369,750 80,800,813

Net Current Assets/(Liabilities) 2,389,052 (35,355,156) 10,653,390 1,058,407 (2,574,395) (23,828,701)

Net Assets 14,000,833 26,769,321 25,336,796 1,859,687 1,998,242 69,964,881

SHARE CAPITAL & RESERVESShare Capital - 1,000,000 - - - 1,000,000 Deposit for Shares - 71,865 - - - 71,865 Revaluation Reserves 6,167,986 1,746,101 10,924,018 531,077 2,100,711 21,469,896 Profit and Loss Account 7,832,847 1,763,211 14,412,778 1,328,610 (102,469) 25,234,976 Convertible Loan Stock - 22,188,144 - - - 22,188,144

14,000,833 26,769,321 25,336,796 1,859,687 1,998,242 69,964,881

DANGOTE INDUSTRIES LIMITED BALANCE SHEET BY SEGMENT

Page 74


FLOURDIL HEAD



ASSETS EMPLOYEDFixed Assets 11,753,724 5,697,921 15,080,766 608,315 4,376,094 37,516,819 Investments 177,362 24,626,585 - 57,263 - 24,861,210

11,931,086 30,324,506 15,080,766 665,578 4,376,094 62,378,029 CURRENT ASSETS:Stock 1,674,928 1,245,432 311,112 276,947 511,892 4,020,310 Debtors and Prepayments 1,487,221 9,636,551 13,770,221 2,932,751 (1,229,502) 26,597,243 Cash and Bank Balances 711,958 1,819,314 1,828,831 226,727 201,788 4,788,618

3,874,107 12,701,297 15,910,164 3,436,425 (515,822) 35,406,171 LESS: CURRENT LIABILITIESCreditors and Accruals 2,048,220 6,304,195 736,792 2,252,385 1,899,532 13,241,124 Bank Overdraft 1,357,064 (1,489,776) 12,288,446 203,037 102,269 12,461,040 Short - Term Loan - 14,316,983 - - - 14,316,983

3,405,284 19,131,402 13,025,238 2,455,422 2,001,801 40,019,147

Net Current Assets/(Liabilities) 468,823 (6,430,105) 2,884,926 981,003 (2,517,623) (4,612,976)

Net Assets 12,399,908 23,894,402 17,965,690 1,646,582 1,858,470 57,765,053

SHARE CAPITAL & RESERVESShare Capital - 1,000,000 - - - 1,000,000 Deposit for Shares - 71,865 - - - 71,865 Revaluation Reserves 6,167,986 1,746,102 10,924,018 531,078 2,100,711 21,469,896 Profit and Loss Account 6,231,922 2,018,278 7,041,672 1,115,504 (242,241) 16,165,135 Convertible Loan Stock - 19,058,157 - - - 19,058,157

12,399,908 23,894,402 17,965,690 1,646,582 1,858,470 57,765,053


ASSETS EMPLOYEDFixed Assets 7,492,739 4,835,530 15,778,947 629,773 1,880,008 30,616,996 Investments 26,905 361,824 - 28,649 - 417,378 Work - In - Progress - - - - - -

7,519,644 5,197,354 15,778,947 658,422 1,880,008 31,034,374 CURRENT ASSETS:Stock 1,327,294 749,675 3,612,105 450,353 80,468 6,219,895 Debtors and Prepayments 4,086,526 6,462,647 (473,648) 3,133,976 (1,950,780) 11,258,721 Cash and Bank Balances 1,479,896 2,057,128 1,096,317 91,062 62,328 4,786,732

6,893,716 9,269,450 4,234,774 3,675,391 (1,807,984) 22,265,348 LESS: CURRENT LIABILITIESCreditors and Accruals 4,603,541 4,388,431 1,517,764 1,453,609 29,761 11,993,106 Bank Overdraft 3,711,253 6,033,745 5,073,781 741,140 158,315 15,718,233

8,314,794 10,422,176 6,591,545 2,194,749 188,076 27,711,339

Net Current Assets/(Liabilities) (1,421,078) (1,152,726) (2,356,771) 1,480,642 (1,996,060) (5,445,991)

Net Assets 6,098,567 4,044,628 13,422,175 2,139,064 (116,052) 25,588,383

SHARE CAPITAL & RESERVESShare Capital - 1,000,000 - - - 1,000,000 Deposit for Shares - 71,865 - - - 71,865 Revaluation Reserves 2,700,446 848,012 10,924,018 531,078 231,187 15,234,741 Profit and Loss Account 3,398,121 2,124,751 2,498,157 1,607,986 (347,239) 9,281,777

6,098,567 4,044,628 13,422,175 2,139,064 (116,052) 25,588,383

BALANCE SHEET BY SEGMENTDANGOTE INDUSTRIES LIMITED

Page 75


FLOURDIL HEAD



ASSETS EMPLOYEDFixed Assets 2,718,248 2,895,447 3,980,390 116,280 920,000 10,630,365 Investments - - - - - - Work - In - Progress - - - - - -

2,718,248 2,895,447 3,980,390 116,280 920,000 10,630,365 CURRENT ASSETS:Stock 295,805 1,001,327 2,346,652 142,424 135,809 3,922,017 Debtors and Prepayments 2,237,582 10,028,743 565,509 2,705,868 74,106 15,611,808 Cash and Bank Balances 809,751 900,321 797,999 36,137 42,653 2,586,861

3,343,138 11,930,391 3,710,160 2,884,429 252,568 22,120,686 LESS: CURRENT LIABILITIESCreditors and Accruals 3,096,177 10,422,019 2,824,516 1,260,303 1,501,464 19,104,480 Bank Overdraft 1,741,015 2,643,971 3,587,306 446,395 20,713 8,439,400

4,837,192 13,065,990 6,411,822 1,706,698 1,522,177 27,543,880

Net Current Assets/(Liabilities) (1,494,054) (1,135,599) (2,701,662) 1,177,731 (1,269,609) (5,423,194) Pre - Operation Expenses - - - - - -

Net Assets 1,224,194 1,759,848 1,278,727 1,294,011 (349,609) 5,207,171

SHARE CAPITAL & RESERVESShare Capital - 1,000,000 - - - 1,000,000 Deposit for Shares - 71,865 - - - 71,865 Profit and Loss Account 1,224,194 687,983 1,278,727 1,294,011 (349,609) 4,135,306

1,224,194 1,759,848 1,278,727 1,294,011 (349,609) 5,207,171

DANGOTE INDUSTRIES LIMITED BALANCE SHEET BY SEGMENT

Page 76

PROCEDURE FOR APPLICATION AND ALLOTMENT 1. APPLICATION

1.1 The general investing public is hereby invited to apply for the shares through any of the Receiving Agents listed on Page 77.

1.2 Applications for the Ordinary Shares must be made in accordance with the instructions set

out at the back of the Application Form. Care must be taken to follow these instructions, as applications which do not comply will be rejected.

1.3 The Application List for the Ordinary Shares now being offered will open from Wednesday,

15 November 2006 to Friday, 22 December 2006. Applications must be for a minimum of 500 shares and in multiples of 50 thereafter. The number of shares for which an application is made and the value of the cheque or bank draft attached should be entered in the boxes provided.

Any investor who does not want to receive a physical share certificate and would rather have his/her CSCS account credited, should state the name of his/her stockbroker and his/her CSCS account number in the space provided on the Application Form.

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

telephone number and mobile telephone number in item “1” on the Application Form. Item “2” should be used by joint applicants. A corporate applicant should affix its seal in the box provided and state its Incorporation/Registration Number.

1.5 An applicant should make only one application, whether in his/her own name or in the name

of a nominee. Multiple or suspected multiple applications will be rejected.

1.6 Each application should be forwarded together with the cheque or bank draft for the full amount of the purchase price to any of the Receiving Agents listed on Page 77. Applications must be accompanied by a cheque or bank draft made payable to the Receiving Agent to whom the application is submitted, for the full amount payable on application. The cheque or draft must be drawn on a bank in the same town or city in which the Receiving Agent is located and crossed “DANGOTE SUGAR IPO” with the name, address and daytime telephone number of the applicant written on the back. All bank commissions and transfer charges must be prepaid by the applicant. All cheques and drafts will be presented upon receipt and all applications in respect of which cheques are returned unpaid will be rejected and returned through the post.

2. ALLOTMENT

The Issuing Houses and the Directors of the Company reserve the right to accept or reject any application in whole or in part, for not meeting the conditions of the Offer. The allotment proposal will be subject to the clearance of the Securities & Exchange Commission.

3. APPLICATION MONIES

All application monies will be retained in separate interest yielding bank accounts by the Receiving Bankers pending allotment. If any application is not accepted, or is accepted for fewer shares than the number applied for, a crossed cheque for the full amount or the balance of the amount paid (as the case may be) will be returned by registered post within 5 working days of allotment. A share certificate will be sent by registered post not later than 15 working days from the date of allotment. Any investor who does not want to receive a physical share certificate, should state the name of his/her stockbroker and his/her CSCS account number in the space provided on the Application Form.

Page 77

RECEIVING AGENTS Application Forms may be obtained free of charge from any of the following Receiving Agents, who are registered as capital market operators by SEC, to whom brokerage will be paid at the rate of N=1 per N=100 worth of shares allotted in respect of applications bearing their official stamps. The Joint Issuing Houses cannot accept responsibility for the conduct of any of the institutions listed below. Investors are therefore advised to conduct their own independent enquiries before choosing an agent to act on their behalf. Evidence of lodgement of funds at any of the Receiving Agents listed below, in the absence of corresponding evidence of receipt by any of the Joint Issuing Houses, cannot give rise to a liability on the part of the Joint Issuing Houses under any circumstances.

BANKS Access Bank Plc Afribank Nigeria Plc Diamond Bank Plc Equitorial Trust Bank Limited Ecobank Nigeria Plc Fidelity Bank Plc First Inland Bank Plc First Bank of Nigeria Plc First City Monument Bank Plc

Guaranty Trust Bank Plc IBTC Chartered Bank Plc Intercontinental Bank Plc Nigeria International Bank Limited Oceanic Bank International Plc PlatinumHabib Bank Plc Skye Bank Plc Stanbic Bank Nigeria Limited

Standard Chartered Bank Nigeria Limited Spring Bank Plc Sterling Bank Plc Union Bank of Nigeria Plc United Bank for Africa Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

STOCKBROKERS AND OTHERS

A.A.A Stockbrokers Ltd Adonai Stockbrokers Ltd Afribank Capital Markets Ltd AMYN Investments Ltd Apel Asset & Trust Ltd APT Securities & Funds Ltd Asset & Resource Management Ltd Associated Asset Managers Ltd Atlas Portfolio Ltd Belfry Investment & Securities Ltd Best Link Investment Ltd BFCL Assets & Securities Ltd BGL Ltd BGL Securities Ltd BSD Securities Ltd Bytofel Trust & Securities Ltd Calyx Securities Ltd Camry Securities Ltd Capital Assets Ltd Capital Bancorp Ltd Capital Express Securities Ltd Capital Trust Brokers Ltd Century Securities Ltd Chapel Hill Advisory Partners Clearview Investments Company Ltd Cooper Fleming Stockbrokers Ltd Core Trust & Investment Ltd Cowry Asset Management Ltd Crane Securities Ltd Crossworld Securities Ltd CSL Stockbrokers Ltd Davandy Finance & Securities Ltd De-Canon Investment Ltd De-Lords Securities Ltd Denham Management Ltd Dependable Securities Ltd Diamond Securities Ltd Dynamic Portfolio Ltd EBN Securities Ltd Emerging Capital Ltd EMI Capital Resources Ltd Empire Securities Ltd Enterprise Stockbrokers Plc EPIC Investment Trust Ltd Equity Capital Solutions Ltd ESL Securities Ltd ESS Investment & Trust Ltd Eurocomm Securities Ltd Excel Securities Ltd Express Portfolio Services Ltd F & C Securities Ltd Falcon Securities Ltd FBC Trust & Securities Ltd FBN Capital Ltd FCMB Capital Markets Ltd Fidelity Union Securities Ltd Finmal Finance Services Ltd First Equity Securities Ltd First Stockbrokers Ltd FIS Securities Ltd Foresight Securities and Investment Ltd Forte Asset Management Ltd Forthright Securities & Investment Ltd

Fountain Securities Ltd Future View Financial Services Ltd Gidauniya Investment & Securities Ltd Global Assets Management (Nig) Ltd Golden Securities Ltd Goldman Asset Management Ltd Greenwich Trust Ltd GTI Capital Ltd Hamilton Hammer & Co Ltd Heartbeat Investments Ltd Hedge Securities & Investment Ltd Horizon Stockbrokers Ltd IBTC Asset Management Ltd ICMG Securities Limited ICON Stockbrokers Ltd Ideal Securities & Investments Ltd Independent Securities Ltd Intercontinental Capital Markets Ltd Intercontinental Securities Ltd Integrated Trust & Investments Ltd International Standard Securities Ltd Interstate Securities Ltd Investment Centre Ltd Investment Masters & Trust Ltd Kapital Care Trust & Securities Ltd Kinley Securities Ltd Kundila Finance Services Ltd Lambeth Trust & Investment Company Ltd LB Securities Ltd Lead Capital Ltd Maclaize Trust & Securities Ltd Mainland Trust Ltd Maninvest Asset Management Ltd Marina Securities Ltd Marriot Securities & Investment Ltd Maven Asset Management Ltd Maxifund Investments & Securities Ltd Mayfield Investment Ltd MBC Securities Ltd MBL Financial Services Ltd Mercov Securities Ltd Meristem Securities Ltd Metropolitan Trust Nigeria Ltd Midas Stockbrokers Ltd Midlands Investment & Trust Co Ltd Mission Securities Ltd Molten Trust Ltd Mountain Investment & Securities Ltd Mutual Alliance Investment & Securities Ltd Newdevco Investment & Securities Ltd Nigerian International Securities Ltd Nigerian Stockbrokers Ltd Nova Finance & Securities Ltd Omas Investment & Trust Ltd Options Securities Ltd Partnership Investment Company Ltd Peninsula Assets Management & Inv Co Ltd Pilot Securities Ltd Pine Fields Investment Services Ltd Pivot Trust & Investment Company Ltd PML Securities Company Ltd Premium Securities Ltd Professional Stockbrokers Ltd

Profund Securities Ltd Prominent Securities Ltd PSI Securities Ltd PSL Ltd Pyramid Securities Ltd Quantum Securities Ltd Rainbow Securities & Investment Company Ltd Reading Investments Ltd Resano Securities Limited Resort Securities & Trusts Ltd Reward Investment & Securities Ltd Rivtrust Securities Ltd Rolex Securities Ltd Rostrum Investment & Securities Ltd Royal Crest Finance Ltd SanTrust & Securities Ltd Securities Solutions Ltd Securities Trading & Investment Ltd Securities Transaction & Trust Company Ltd Security Swaps Ltd Shelong Investment Ltd Sigma Securities Ltd Signet Investments Securities Ltd SMADAC Securities Ltd Solid Rock Securities & Investment Ltd Spring Capital Markets Ltd Spring Stockbrokers Ltd Spring Trust & Securities Ltd Springboard Trust & Investment Ltd Stanbic Equities Nigeria Ltd Stanwal Securities Ltd Sterling Capital Markets Ltd Strategy & Arbitrage Ltd Summa Guaranty & Trust Company Ltd Summit Finance Company Ltd Supra Commercial Trust Ltd TFS Securities & Investment Company Ltd Tiddo Securities Ltd Tomil Trust Ltd Tower Assets Management Ltd Tower Securities & Investment Company Ltd Traders Trust & Investment Company Ltd Trans Africa Financial Services Ltd Transworld Investment Ltd Trust Yield Securities Ltd Trusthouse Investments Ltd TRW Stockbrokers Ltd UBA Global Markets Ltd UBA Stockbrokers Ltd UNEX Securities & Investment Ltd Union Capital Markets Ltd Valmon Securities Ltd Valueline Securities & Investment Ltd Vetiva Capital Management Ltd Vision Trust & Investment Ltd Viva Securities Ltd Wema Securities & Finance Plc Wizetrade Capital Asset & Management Ltd WSTC Financial Services Ltd Yobe Investment & Securities Ltd Yuderb Investment & Securities Ltd Zenith Securities Ltd

Initial Public Offeringby way of an Offer for Sale of

3,000,000,000 Ordinary Shares of 50 kobo each at N18.00 per sharePayable in Full on Application

Joint Issuing Houses:

DECLARATION

GUIDE TO APPLICATIONNumber of units applied for500 minimumSubsequent multiples of 50

Amount payableN9,000.00

N900.00

Applications must be made in accordance with the instructions set out on the back of this Application Form. Care must be taken to follow these instructions as applications that do not comply may be rejected.If you are in doubt as to the action to take, please consult your Stockbroker, Accountant, Banker, Solicitor, or any other professional adviser for guidance immediately.

Application List Opens

Wednesday15 November 2006

Number of Units Applied for:

PLEASE COMPLETE IN BLOCK LETTERS AND IN BLACK INK

Surname / Company Name

Other Names

Full Postal Address

State

Mobile (GSM) Telephone Number

Surname

Other Names

2. JOINT APPLICANT

1. INDIVIDUAL / CORPORATE APPLICANT

Company Seal /Incorporation Number (Corporate Applicant)

Signature or Thumbprint Signature or Thumbprint

Title : Mr. Mrs. Miss Others

(for individual applicants only)

City

Daytime Telephone Number

Stamp of Receiving Agent

Title: Mr. Mrs. Miss Others

Next of Kin

Application List Closes

Friday22 December 2006

Issuing Houses:

Name of Bank/Branch:........................................ ....................................................................Account Number:.........................................

Date

/ / 2 0 0 6Control No: (REGISTRAR'S USE ONLY)

Value of Shares applied for/Amount Paid:

.

GROUP

Dangote Sugar Refinery PlcRC 613748

N=

Email Address

CSCS No (if you want shares allotted credited to your CSCS A/c) Name of your Stockbroker

Zenith Registrars Limited

=I/We declare that I/we have read a copy of the Prospectus for the Offer dated 01 November 2006 issued by the JointIssuing Houses on behalf of Dangote Sugar Refinery Plc.

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

I/We am/are 18 years of age or over

I/We agree to accept the same or any smaller number of shares in respect of which allotment may be madeupon the terms of the Prospectus dated 01 November 2006 and subject to the Memorandum and Articles ofAssociation of Dangote Sugar Refinery Plc.

I/We attach the amount payable in full on application for the number of shares indicated in Dangote SugarRefinery Plc at N18.00 per share.

==

=

9155347374

INSTRUCTIONS FOR COMPLETING THE APPLICATION FORM 1. Applications should be made only on the Application Form or a photocopy, downloaded or

scanned copy of the Application Form. 2. Applications must not be for less than the minimum number of shares stated on the Application

Form. Applications for more than the minimum number of shares must be in the multiples stated on the Application Form. The number of Ordinary Shares for which an application is made and the amount of the cheque or bank draft attached should be entered in the boxes provided.

3. The Application Form when completed should be lodged with any of the Receiving Agents listed

on Page 77. Applications must be accompanied by a cheque or bank draft made payable to the Receiving Agent to whom the application is submitted, for the full amount payable on application. The cheque or draft must be drawn on a bank in the same town or city in which the Receiving Agent is located and crossed “DANGOTE SUGAR IPO” with the name, address and daytime telephone number of the applicant written on the back. All bank commissions and transfer charges must be prepaid by the applicant. All cheques and drafts will be presented upon receipt and all applications in respect of which cheques are returned unpaid will be rejected and returned through the post.

4. The applicant should make only one application, whether in his own name or in the name of a

nominee. Multiple or suspected multiple applications will be rejected. 5. Joint applicants must all sign the Application Form. 6. An application from a group of individuals should be made in the names of those individuals with

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

7. An application from a corporate body must bear the corporate body’s seal and be completed under

the hand of a duly authorised official. 8. An application by an illiterate should bear his right thumbprint on the Application Form and be

witnessed by an official of the Bank or stockbroker at which the application is lodged who must first have explained the meaning and effect of the Application Form to the illiterate in his own language. Above the thumb print of the illiterate, the witness must record in writing that he has given this explanation to the illiterate in a language understandable to him and that the illiterate appeared to have understood same before affixing his thumb impression.

9. The applicant should not print his signature. If he is unable to sign in the normal manner he should

be treated for the purpose of this Offer as an illiterate and his right thumbprint should be clearly impressed on the Application Form.

Application Form

DANGOTE SUGAR REFINERY PLC

Dangote Sugar Refinery Plc Prospectus

Documents

chairmans letter

profit forecast

reporting accountants

financial summary

board of directors

abridged timetable

contents definitions

going concern status