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In light of the recent publication of NASD’s 11th AGM, our attention has been directed to some strong views on expectations of the planned AGM and VFD Group PLC’s (“VFD” or “VFD Group”) assessment of NASD’s performance. As stakeholders to the issue at hand, we are compelled to provide following insights:

1. As a proprietary investment company, VFD Group seeks opportunities to invest in companies with prospects. Our goal is to collaborate with fellow investors on the Board of our investee companies to drive value creation for both shareholders and the broader community.

2. NASD is one of such companies and we believe it is uniquely positioned to serve the investment needs of the younger generation that has grown to embrace sophisticated alternative assets and investment channels.

3. Although this may diverge from the original business model envisioned by the Company’s founders, adapting to today’s economic realities is crucial. A refreshed business model could bridge the gap left by FMDQ and NGX, yielding substantial benefits for NASD and the larger economy.

4. We are quite concerned with trends in NASD’s financial performance over the years. Here are some key highlights:

a. In its over eleven years of operation, NASD has reported losses in eight of those years. Specific reference is made to the fact that the Company has recorded consecutive losses of N79 million ($60,000) and N69 million ($43,000) in 2022 and 2023 respectively.

b. NASD’s revenue declined from N660 million ($2.2 million) five years ago to N557 million ($348,000) in 2023.

c. Most of NASD’s 2023 revenue, totaling N295 million ($0.184 million), came from trading fees and commissions, predominantly from two companies: CSCS Plc and VFD Group Plc. It is worth noting that VFD has since exited the NASD Board to join the NGX Main Board for enhanced visibility and benefits, thus increasing the concentration risk of their main revenue line.

5. VFD remains the only major shareholder in NASD which is not one of the founding investors and as such, we are more returns-driven in our considerations and outlook.

6. While we recognize the Board and Management’s commitment to delivering shareholder value, we advocate for a strategic refresh. The current strategy has not achieved the desired results, and a revised approach is necessary to improve performance.

7. We have identified a procedural issue in the nomination of Directors for retirement/re-election. Specifically, Directors with recent appointment dates have been presented for re-election despite having longer-serving Directors on the Board. We recommend that this issue should be addressed in accordance with the Securities & Exchange Commission’s guidelines, to set appropriate precedence.

8. Despite our concerns, we will support all resolutions proposed at the 11th AGM and continue to back the Company’s efforts, as our primary investment objective is to maximize returns and create value for our investee companies and their shareholders. We operate with a clear focus on this mandate and hold no biases beyond this objective.

9. Our guiding considerations in interacting with our investee companies is encapsulated in our ‘governance as a strategy’ doctrine. Our main objective is to signal to the market, particularly the retail spectrum of the market, that we actively safeguard minority interests while pushing for value enhancement delivery to all Shareholders in Companies that we invest in.

10. We wish the NASD’s Board, Management, and Shareholders a successful AGM and look forward to improved financial performance in the 2024 fiscal year.

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