The document summarizes Aaron Alasa's internship recap from November 28, 2018. It outlines the various research assignments and practice area training completed during the internship. Research assignments included interest rate hedging, pioneer status in Nigeria, and summarizing rules of the Nigerian Stock Exchange. Practice area training covered power, oil and gas, real estate, finance, and corporate and commercial law. The internship provided exposure to key areas of Nigerian law and business.

1. MY DETAIL INTERNSHIP
RECAP
AARON ALASA
28TH NOVEMBER 2018

2. OUTLINE
1. Research Assignments
a. Interest Rate Hedging
b. Pioneer Status in Nigeria
c. Summary of Nigerian Stock Exchange Rules and Amendments on
(Securities Lending)
2. Practice Area Training
a. Power Practice
b. Oil and Gas
c. Real Estate
d. Finance
e. Corporate & Commercial
3. Closing

3. INTEREST RATE HEDGING
• The assignment given to me was to find out the reasons why people hedge
interest rates.
• I conducted research on hedging (a new area for me) and why it was done
generally.
• Hedging is a financial strategy, method or position taken with regards to a
particular investment to safeguard against sudden loss such as price
fluctuations etc.
• It is a risk-reward situation. High Cost. Insured Losses.
• People want loss they have prepared for.
• Interest rates are subject to change, especially when they’re floating or they
depend on the Monetary Policy Rates. The loss that can be sustained during
long-term loans is frightening. Banks can increase interest rates on
outstanding loans.
• Hedging interest rates provides some form of insurance against potential
risk.
• Advantages: Reliability, Simplicity, Flexibility, Speed and Termination.

4. PIONEER STATUS IN NIGERIA AND ITS BENEFITS
• I was asked to research on Pioneer Status in Nigeria an its benefits.
• Pioneer Status is a fiscal incentive in form of a status given to companies in
industries, or producing products that are designated by the Federal
Government to be pioneer industries and products.
• The Government amends the list of pioneer products and industries from
time to time. The current list includes 99 pioneer industries.
• These companies are given tax reliefs for an initial period of three years,
which upon expiration, can be extended for a further one or two years.
• It benefits the companies as ample space is given to these companies to grow
and reach a comfortable level of production.
• The Government benefits primarily from the success of these companies due
to diversity of the economy which increases foreign investment and revenue.
Also, the more taxable income they generate after the period of the pioneer
status is granted, the better for the government. More income is achieved as
a result of reinvesting their profits into the business without payment of tax.
Also, foreign investors will be willing to invest their money and technology
into companies and industries that they see as viable.

5. LEGAL AND REGULATORY FRAMEWORK FOR
PIONEER STATUS IN NIGERIA
LAWS, REGULATIONS AND GUIDELINES
• Industrial Development (Income Tax Relief) Act of 1971 (“IDITRA”)
• Companies Income Tax Act (CITA) CAP C21 LFN 2004
• Pioneer Status Incentive Regulations of 2014
• Application Guidelines for Pioneer Status Incentive of August 2017
• Nigerian Investment Promotion Commission Act of 1995
REGULATOR
• The Nigerian Investment Promotion Commission (NIPC) regulates,
administers and monitors the grant of pioneer status in Nigeria.

6. BENEFITS OF PIONEER STATUS IN NIGERIA
1. Tax holidays: The IDTRA grants to companies who are in pioneer
industries, tax holidays of three years which can be extended for a further
one or two years, during which they don’t pay corporate income tax under
the CITA (Section 10 and 16(1) of the IDITRA). The company may invest in
securities or otherwise, or put the money back into the business to increase
profits, without paying corporate income tax.
2. Dividends free from withholding tax and personal income tax: The
dividends paid of the exempt income made during the tax holiday will not
be subject to withholding tax in the hands of the company before paying to
the shareholders. Also, when it is paid to the shareholders, the dividends
will be free from personal income tax in the hands of the shareholders.
(Section 17(3) of the IDITRA). This remains so whether the dividends are
paid during or after the tax holiday.

7. BENEFITS OF PIONEER STATUS IN NIGERIA
3. Net losses are deductible after tax holidays: Any net losses made by the
company during the tax holiday will be deemed to have been incurred on
the day after the tax holiday ends and can then be treated as a deductible
under the CITA when the company's tax is being assessed. (Section 14(3)
of the IDITRA).
4. Capital allowances are deductible after tax holidays: Capital
expenditures/allowance the amount spent in acquiring tangible capital
assets such as buildings, generators, machinery etc., that can be claimed
against the taxable income of the company post-tax holiday. Section 14(2)
of the IDITRA provides that any capital expenditure undertaken during
the tax holiday period will be deemed to have been incurred on the day
after the holiday ends. Thus, the expenditure will be able to be deducted
from the company’s income tax payment under the CITA after the tax
holiday is over.

8. SECURITIES LENDING

9. SUMMARY OF NSE RULES AND AMENDMENTS
• I was asked to summarize rules of the Nigeria Stock Exchange that had been
approved by the Securities and Exchange Commission.
• The first was the NSE Rules Governing the Inclusion of Retail
Participants in Securities Lending Transactions. I summarised the
highlights of he rules
• This regulation was focused on clearly defining the roles of parties in a
Securities Lending Transaction, especially that of Intermediary Agents and
Retail Lenders (i.e. The beneficial owners of securities). Prior to this, Retail
Lenders participated through their Agent.
• It also provides for the steps and procedure to be taken by the major parties
to the transaction and sanctions to be meted out where the rules are
violated.
OBSERVATIONS
• The main thing Retail Lenders really must do is ensure they are
knowledgeable about the Nigerian Capital market and they enter a Securities
Lending Agreement with the Intermediary Agent. After that, they must give
mandates (instructions) on which securities are to be lent, and consent to
allocation of securities.

10. SUMMARY OF NSE RULES AND AMENDMENTS
• The next was the NSE Amendments to the Securities Lending Guidelines
of the Nigerian Stock Exchange. I summarised the highlights of the
amendments.
• The amendments are focused on clearly providing for Intermediary Agents
(“agents other than the lending agent”), Securities Lending Agents (“Lending
Agents”) and the roles of Lending Agents as Principal Intermediaries and
Agents Intermediaries in securities lending.
• “Agent or Principal” deleted.
• Intermediary Agents or “agents other than the lending agent” act for the
principal (beneficial owner of the shares) with regards to dealing with the
Lending Agent. They are Dealing Members who a beneficial owner has
authorized to lend securities on its behalf. Their roles and responsibilities
are found in the NSE Rules Governing the Inclusion of Retail Participants in
Securities Lending Transactions 2018.

11. SUMMARY OF NSE RULES AND AMENDMENTS
OBSERVATIONS
• It can be hard to differentiate between Intermediary Agents (called “agents
other than the Lending Agent”) and the Lending Agent without reading and
understanding the NSE Rules on the Inclusion of Retail Participants in
Securities Lending Transactions.
• It seems the general purport of these amendments were to include the effect
of the above stated Rules (NSE Rules on the Inclusion of Retail Participants
in Securities Lending Transactions) in the Security Lending Guidelines.
• The best interest of the beneficial owner of the shares and a smooth security
lending process, seems to be the spirit of these amendments.

12. POWER PRACTICE – INTRODUCTION

13. POWER PRACTICE – INTRODUCTION
• National Electrical Power Authority (NEPA) – 1972. The Electricity
Corporation of Nigeria and the Nigeria Dams Authority were merged. NEPA
was the regulator so to speak in the Power sector and at the same time
handled Generation, Transmission and Distribution of electricity. It wasn’t
working out. Monopoly hindered growth and effectiveness
• In 2005, there was a power sector reform. The provisions of the Nigeria
Electrical Power Policy (NEPP) 2001 were encoded in the Electrical Power
Sector Reform Act (EPSRA).
• The EPSRA unbundled NEPA into 1 initial successor company of NEPA and
provided for successor companies of the initial successor companies.
• NEPA was rendered defunct in 2005. PHCN took over. When the successor
companies were formed and privatised to some extent, PHCN teased to exist
(2013)
• There were 18 successor companies to come out of the PHCN. This consists
of 6 generating companies (GenCos), 11 distributing companies (DisCos)
and the Transmission Company of Nigeria (TCN).
• An independent sector regulator was created: The Nigerian Electricity
Regulatory Commission (NERC)

14. POWER PRACTICE – KEY REGULATORS
• Federal Ministry of Power (FMP)
• Energy Commission of Nigeria (ECN)
• Nigerian Electricity Regulatory Commission (NERC)
• Nigeria Bulk Electricity Trading Company (NBET)
• Transmission Company of Nigeria (TCN)
• Nigeria Electricity Management Services Authority (NEMSA)
• Gas Aggregation Company of Nigeria (GACN)
• Bureau of Public Enterprise (BPE)
• Federal Ministry of Environment (FME)

15. POWER PRACTICE – GENERATION OPTIONS
• Captive Generation: Regulated by NERC Captive Power Generation
Regulations 2008.
• Mini Grid Generation: Regulated by NERC Mini Grid Regulations 2016.
• Embedded Generation: NERC Regulation on Embedded Generation 2012.
• Off Grid Independent Power Production: Regulated by the EPSRA and the
NERC Application for License (Generation, Transmission, System Operation,
Distribution and Trading) Regulation 2010.
• On Grid Independent Power Generation: Same as Off Grid.
• IEDN: Isolated; Isolated Off Grid Urban; Isolated Off Grid Rural.

16. POWER PRACTICE – KEY CONTRACTS AND SERVICES
• Gencos and TCN – Connection Agreement
• Gencos, IPP, NIPP, with NGC, GACN, Independents and Gas Suppliers – Gas
Supply Agreements
• Gencos and NBET – Sale and Purchase Agreement
• Discos and NBET – Sale and Purchase Agreement
• BPE and Gencos – Performance Agreement
• Discos and TCN – Connection Agreement and Market Participation
Agreement
• Discos and Consumers – Connection services
• The TCN provides some technical services to the Generating Companies and
Distributing companies.

17. OIL AND GAS
OIL AND GAS
LAW/
REGULATION
REGULATOR REGULATOR’S FUNCTIONS
1. Petroleum Act Ministry of
Petroleum Resources
1. Acts as the Federal
Government in dealings
between the Government and
any group or individual with
regards to any matter in the
Petroleum Industry.
2. Exercises supervisory
functions over affairs and
operations in the Petroleum
Industry.
3. Advises the Government on
matter relating to Oil and Gas.
4. Represents Nigeria in
International Organisations
relating to the Nigerian Oil
and Gas sector.

18. OIL AND GAS
OIL AND GAS
LAW/
REGULATION
REGULATOR REGULATOR’S FUNCTIONS
1. Petroleum Act Ministry of
Petroleum Resources
5. Granting of permits, licences
and leases in the exploration,
production and
transportation of onshore
and offshore oil and gas.
6. Document and report
development in the
Petroleum Ministry to the
Federal Executive Council
every year.
7. Formulate National Policy on
Oil and Gas.
8. Issue Regulations pursuant to
Laws (Acts).
9. Directing other agencies in
the industry.

19. OIL AND GAS
OIL AND GAS
LAW/REGULATION
REGULATOR REGULATOR’S FUNCTIONS
2. Department of
Petroleum
Resources
Guidelines
Department of
Petroleum
Resources
Main responsibility is to ensure
compliance with laws,
regulations and policies in the Oil
and Gas Industry. Others include:
1. Ensuring that Health, Safety
& Environment Regulations
keep up with the national and
international standards of
good oilfield practice in
exploration and production of
petroleum.
2. Monitoring and supervising
day-to-day Oil and Gas
operations at drilling sites,
production platforms, storage
terminals, retail outlets etc.,
which require leases and
licenses.

20. OIL AND GAS
OIL AND GAS
LAW/REGULATION
REGULATOR REGULATOR’S FUNCTIONS
2. Department of
Petroleum
Resources
Guidelines
Department of
Petroleum
Resources
3. Provide regulatory guidelines
for operations across the
entire oil and gas value chain
such as guidelines for
bunkering operations,
guidelines for acquiring
approval to construct and
operate petroleum fulling
stations etc.
4. Ensure timely payments of
rents, royalties and other
revenues.
5. Maintain and administer the
National Data Repository
(NDR).

21. OIL AND GAS
OIL AND GAS
LAW/REGULATION
REGULATOR REGULATOR’S FUNCTIONS
2. Department of
Petroleum
Resources
Guidelines
Department of
Petroleum
Resources
6. Maintain records of
operations in the Oil and Gas
Industry, such as oil
exploration, oil prospecting,
oil mining, construction and
operation of oil pipelines and
refineries, and matters
relating to oil and gas
reserves and exportation of
production.

22. OIL AND GAS
OIL AND GAS
LAW/REGULATION
REGULATOR REGULATOR’S FUNCTIONS
3. Oil Pipelines Act Ministry of
Petroleum
Resources
Stated above
4. Petroleum Profits
Tax Act
Federal Inland
Services Revenue
Board
1. Assessment of tax
2. Collection of tax.
3. Account for taxes

23. OIL AND GAS
OTHER LAWS/REGULATIONS
• National Gas Supply and Pricing Policy 2008
• Petroleum (Drilling and Production) Regulations 1968
• Associated Gas Reinjection Act 1979
• Companies Income Tax Act 2007
• Inland Basin (Production Sharing Contract) Act 1993
• Nigerian Oil and Gas Industry Content Development Act 2010
• National Oil Spill Detection and Response Agency Act 2006
OTHER REGULATORS
• Federal Ministry of Environment (FME)
• Nigerian National Petroleum Company (NNPC)
• National Petroleum Investment Management Services (NAPIMS)
• Nigerian Content Development and Monitoring Board (NCDMB)
• National Oil Spill Detection and Response Agency (NOSDRA)

24. OIL AND GAS – KEY TRANSACTIONS
• Production Sharing Contracts
• Sale and Purchase Agreements
• Oil Mining Lease
• Gas Sale Agreements
• Crude Off-take Agreement
• Gas Transportation Agreements
• Farm-out Agreements (Disposing)
• Farm-in Agreements (Acquiring)

25. OIL AND GAS – VALUE CHAIN TRANSACTIONS
UPSTREAM
• Crude Handling Agreement
• Terminaling Agreement
• Offtake Agreement
DOWNSTREAM
• Basic Contracts
GAS OPERATIONS
• Gas Sales Agreement
• Gas Transportation Agreement
• Gas Sales Aggregation Agreement

26. REAL ESTATE AND CONSTRUCTION
LAWS AND REGULATIONS
• Constitution of the Federal Republic of Nigeria 1999 (as amended)
• Land Use Act 1978 – Key Provisions
• Property and Conveyancing Law 1959
• Land Instrument Registration Laws of States
• Conveyancing Act 1881
• Stamp Duties Act 1939
• Tenancy Laws of States
• Planning and Development Law of States
• Companies and Allied Matters Act 1990

27. REAL ESTATE AND CONSTRUCTION
LAWS AND REGULATIONS
• Constitution of the Federal Republic of Nigeria 1999 (as amended)
• Land Use Act 1978 – Key Provisions
• Property and Conveyancing Law 1959
• Land Instrument Registration Laws of States
• Conveyancing Act 1881
• Stamp Duties Act 1939
• Tenancy Laws of States
• Planning and Development Law of States
• Companies and Allied Matters Act 1990

28. REAL ESTATE AND CONSTRUCTION –
ROLES OF A SOLICITOR
• Due Diligence. This comprises:
1. Physical inspection;
2. Search of the title at:
i. Land Registry;
ii. CAC;
iii. Probate Registry; and
iv. Surveyor General’s office;
3. Redoing a survey of the land; and
4. Verifying the landowner’s identity.
• Negotiates and Drafts relevant documents.
• Ensures perfection of title.
• Advises on compliance with the law and relevant regulations.
• Facilitates communications between parties.

29. FINANCE
• I was tutored on Debt Finance, the types, legal and regulatory framework
and contractual framework.
• Debt Finance – What is it? Differentiate from Equity Financing.
• Corporate Finance – on the balance sheet of the company borrowing.
• Project Finance – off the balance sheet of the sponsor company. Use of SPV.

30. FINANCE
KEY REGULATORY AGENCIES
• The Corporate Affairs Commission
• Central Bank of Nigeria
• Federal Inland Revenue Service
• Ministry of Lands/ Lands Bureau
• National Collateral Registry
LEGAL FRAMEWORK
• Common Law – With regards to Law of Contract
• Companies and Allied Matters Act
• Stamp Duties Act
• Companies Income Tax Act
• State Property Laws
• Central Bank of Nigeria Act
• State Insolvency Laws

31. FINANCE - ASPECTS
• Bilateral or Syndicate
• Secured or Unsecured
• Bullet or Amortized
• Term Loans or Revolving Facilities
• Question on Recourse financing.

32. FINANCE - AGREEMENTS
• Facility Agreements. Could include a guarantor.
• Security Agreements.
• Inter-creditor Agreement.
• Security Trust Deed.

33. FINANCE - AGREEMENTS
• Agent – like in Securities Lending
• Arranger
• Availability Period
• Bilateral Facility
• Charge
• Commitment – dependent on
satisfaction of CP
• Conditions Precedent (CP)
• Conditions Subsequent (CS)
• Crystallization
• Fixed Charge
• Facility Agreement
• Floating Charge
• Guarantee
• Intercreditor Agreement
• Interest
• Lead Arranger
• Moratorium
• Obligor
• Principal
• Security Trustee
• Tranche
• Syndicate
• Security
• Term Sheet

34. CORPORATE COMMERCIAL PRACTICE
• Was tutored on these main areas:
• Regulatory and Compliance
• Corporate Restructuring
• Sale and Purchase of Assets
• Transaction Agreements

35. CORPORATE COMMERCIAL PRACTICE
REGULATORY AND COMPLIANCE
• Involves liaising with regulatory agencies and ensuring that companies have
complied with the laws and regulations of these agencies. They include the
CAC, CBN, NOTAP, SEC, NIPC.
CORPORATE RESTRUCTURING.
• It could be external or internal.
• Internal: Operations, processes, departments of the company.
• External: The company and third parties.
TRANSACTION AGREEMENTS
• Side Letters
• Company Incorporation
• CAC Forms
• Articles of Associations
• Memorandum of Association
• Board Resolutions

36. CORPORATE COMMERCIAL PRACTICE
SALE AND PURCHASE OF ASSETS
• Capital Market activities
• Real Estate transactions
• Transaction structuring
• Drafting and Review of Documentation
• Advising on licencing and registration process.
MERGERS AND ACQUISITIONS
• Scheme of arrangement
• Statement of actual cost of the scheme
• Financial Services Agreement
• Information Memorandum

37. CORPORATE COMMERCIAL PRACTICE
KEY CONSIDERATIONS
• Request for information
• Due diligence
• Here you should try to identify inherent risks.
• Do a report advising on options in avoiding the risk identified. Also
advice on the client’s liability.
• Transaction structures
• Documentation
• Protecting the client using
• Indemnities
• Guarantees
• Representations and Warranties

38. CORPORATE COMMERCIAL PRACTICE
STANDARD TERMS IN TRANSACTIONS
• Amendment or Variation
• Announcement
• Assignment or Novation
• Confidentiality
• Cost
• Dispute Resolution
• Entire Agreement
• Force Majeure
• Further Assurances
• Governing Law and Jurisdiction
• Notice
• Representation
• Representation and Warranties
• Survival or Terms
• Termination
• Third Party Rights

39. QUESTIONS?

40. THANKS FOR LISTENING