2006

OUR MISSION
To administer a Social Security Scheme that provides financial security to all employees in Sierra Leone in the form of Old Age Benefits, Invalidity Benefits and Survivors Benefits based on Social Insurance Principles.

Annual Report and Accounts OnCourse

OUR VISION
The National Social Security and Insurance Trust will be the centre of excellence providing quality social security protection through promoting a culture of high quality performance among its staff.

OUR CORE VALUES RESPECT ACCOUNTABILITY TEAMWORK EXCELLENCE

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The National Social Security and Insurance Trust (NASSIT) is a statutory Public Trust established by Parliament charged with the responsibility of administering Sierra Leone’s National Pension Scheme The Scheme covers the fundamental contingencies of Old age, Invalidity and Death, and provides the following benefits: Retirement/Old age Pension, Retirement grant, Early or Reduced pension, Invalidity pension, Invalidity grant, Survivors pension and Survivors grant.

TYPES OF BENEFIT

QUALIFYING CONDITIONS
Age 60 (men and women) with at least 15 years of insurance coverage Total incapacity for any work and younger than age 60 with at least five (5) years of contribution of which 12 months’ contributions were paid in the three (3) years preceding the onset of invalidity. The disability must be assessed by the Medical Board

CONTACT US Head Office 35A Lightfoot Boston Street, Freetown, Sierra Leone. Tel: 232 (22) 225365 NDB Building, 21 Siaka Stevens Street, Freetown Tel: 220246 West Region Formerly Parcel Post Building, Wallace Johnson Street, Freetown, Tel: 232 (22) 292235 / 222774 North Region 6 Makama Road, Makeni Tel: 232 (33) 619044 South Region 2 Lyon Street, Bo, Tel: 232 (032-320)260/293) East Region 83 Maxwell Street, Kenema, Tel: 232 (032-420)518

Old age Pension Invalidity Pension

Survivors Pension The

insured person met the qualifying conditions or was receiving an old age pension or invalidity pension or had at least five (5) years of contributions of which 12 months were paid in the three (3) years preceding death

w w w. n a s s i t s l . o r g

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Annual Report & Accounts 2006

WHERE TO FIND US

HEAD OFFICE
35A Lightfoot Boston Street Freetown Tel: 225365/223814 Email:publicaffairs@nassitsl.org Website: www.nassitsl.org NDB Building 21 Siaka Stevens Street Freetown Tel:222329/228935

West Area Office
Formerly Parcel Post Building Wallace-Johnson Street Freetown Tel: 292235 / 222774 Email: westregion@nassitsl.org

North Area Office
8 Makama Road Makeni Tel: 232 33 619044 Email: northregion@nassitsl.org

East Area Office
83 Maxwell Khobe Street Kenema Tel: 032 420 518 Email: eastregion@nassitsl.org

South Area Office
2 Lyon Street Bo Tel: 032 320 260 / 293 Email: southregion@nassitsl.org

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Corporate Data
HEAD OFFICE 35A Lightfoot Boston Street Freetown Tel: 225365/220246 Email: publicaffairs@nassitsl.org Website: www.nassitsl.org Auditors PKF Regent House, 12 Wilberforce Street Freetown Bankers Bank of Sierra Leone Sierra Leone Commercial Bank Limited Rokel Commercial Bank Limited Standard Chartered Bank Guarantee Trust Bank First International Bank International Commercial Bank Union Trust Bank Limited Ecobank Sierra Leone Limited Discount Houses First Discount House Capital Discount House Sengu M. Koroma Solicitor/Secretary

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Annual Report & Accounts 2006

CONTENTS
Submission Letter Message from the Chairman Message from the Director General Board of Trustees Management Team 1.0 1.1 1.2 2.0 2.1 2.2 3.0 3.1 3.2 3.3 3.4 4.0 4.1 4.2 4.3 5.0 5.1 5.2 5.3 5.4 6.0 6.1 6.2 6.3 7.0 8.0 9.0 9.1 9.2 9.3 9.4 REGISTRATION Employers Insured Persons CONTRIBUTION INCOME Current Contribution Income Arrears of Contributions BENEFIT PAYMENTS Scheme Benefits Processed Pensions Processed Government Pension-in-Payment Gratuity, Ex-gratia and Death Payments FINANCIAL PERFORMANCE Income Expenditure Income Surplus INVESTMENT PERFORMANCE Portfolio Composition Changes in Asset Composition Income from Investment Return on Investment HUMAN RESOURCES Staff Strength by Category Staff Training and Development Employee Attitude Survey INFORMATION AND COMMUNICATION TECHNOLOGY ACTUARIAL VALUATION PUBLIC AFFAIRS & CUSTOMER SERVICES Public Education Public Awareness and Perception Survey Customer Services Customer Satisfaction Survey 7 8 10 12 13 15

17

19

21

22

26

29 30 31

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10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0

MAJOR ACHIEVEMENTS IN 2006 RISK MANAGEMENT RISKS FACING THE TRUST LOOKING TO THE YEAR AHEAD 2007 PERFORMANCE TARGETS FOR 2007 REPORT FROM THE BOARD OF TRUSTEES AUDITORS' REPORT INCOME AND EXPENDITURE ACCOUNT BALANCE SHEET CASH FLOW STATEMENT PHOTO NEWS

33 34 35 36 37 38 40 41 42 43 53

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Annual Report & Accounts 2006

SUBMISSION LETTER
Hon. Alpha O. Timbo Minister of Labour, Social Security and Industrial Relations Ministry of Labour, Social Security and Industrial Relations New England Ville Freetown

Honourable Minister, RE: ANNUAL REPORT OF THE NATIONAL SOCIAL SECURITY AND INSURANCE TRUST FOR THE YEAR 2006 As required by Section 16(1) of the NASSIT Act No. 5 of 2001, I hereby submit the Annual Report and Accounts of the National Social Security and Insurance Trust for the year 2006. The Report summarises: a) the Trust's Operational Performance for the Financial Year 2006; and b) the audited Financial Accounts for the same period. I look forward to our continued cooperation.

Yours Sincerely,

………………………………… Andrew Keili Chairman, Board of Trustees

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MESSAGE FROM THE CHAIRMAN

O

n behalf of the Board of Trustees of the National Social Security and Insurance Trust, (NASSIT), I have the honour to present the Trust's Annual Report for the period 1st January 2006 to 31st December 2006. On the national scene, relatively impressive economic performance figures have been reflected in increased employment especially in the mining, construction and service sectors. The paucity of infrastructural services however continues to mar the development of other sectors. There are however signs that the intensification of work on initiatives on removing barriers to doing business will augur well for the economy in future.

The year under review was marked by improved figures for salient performance indicators, including membership, contributions, magnitude of investments and income from investments. These achievements over the 2005 figures shows a 10.7% increase in the insured population to 126,749, a 29.2% increase in active employer participation, a 22.2% increase in contribution income to Le 49.6 billion in 2006, an investment income of Le 18.4 billion in 2006 and total accumulated reserves of Le 169.1 billion in 2006 are reflective of the markedly improved performance. A substantial portion (74%) of the Trust's investments continues to be in short term fixed securities, with corporate debenture, property and equity (preponderantly real-estate-related) constituting, 5.5%, 0.5% and 20% respectively of the investment portfolio. The real return on the Trust's investments stood at 7.2% We continue to strengthen our governance structure in several areas. The vetting of investment decisions by a private sector-constituted Investment Committee and more rigorous due diligence exercises for major investments complement the work of the Investment Department. A quarterly risk assessment exercise carried out in accordance with the Trust's revised risk management framework has become an integral part of the Trust's operation. A perception survey of the public and employees carried out during the year indicates favourable views on the Trust's management and operations in many spheres. The implementation of the biometric registration system is at an advanced stage. The Trust's training programme continues to accord the opportunity to staff to undergo training to meet the myriad challenges of implementing the scheme. All infrastructural projects including the construction of the new Area Offices have been undertaken with recourse to the Trust's rigorous Project Management guidelines. This has impacted positively on time and cost schedules for such projects. Despite these achievements, we are not oblivious of the fact that challenges would have to be met headlong if the Trust is to achieve its future objectives. The national challenges of creating more formal sector jobs, removing barriers to doing business and tackling the

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Annual Report & Accounts 2006

problem of the excessive informality of the economy would require the concerted efforts of Government and the private sector; efforts which must be actively supported by the Trust. The pending review of The NASSIT Act will incorporate lessons learned during the initial years of the scheme. The new capital market, increased number of Banking Institutions and the introduction of more varied financial instruments, though challenging could bode well for the scheme, depending on our response to these changes. Attempts at shifting from an investment portfolio predominantly in Government securities would need a concomitant improvement in the absorptive capacity of the private sector in other investment areas, which is thwarted by several factors for which the Trust should be mindful. The Trust should be supportive of attempts to address such issues. The support of various stakeholders has been active and sustained. Without the support of employers and employees, such a scheme would flounder, even with the best of intentions. The management and staff of NASSIT have responded to challenges posed by the Trust's operations and risen up to them. Their hard work, tenacity and professionalism during the year are very much appreciated. The Government, apart from nurturing a stable political environment and a conducive investment climate has also been instrumental for the realisation of our various infrastructure-related and investment projects. We are extremely grateful for this support. Lastly, I would like to thank fellow Board members for their continued commitment in guiding the affairs of The Trust.

Andrew K.Keili Chairman, Board of Trustees

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MESSAGE FROM THE DIRECTOR GENERAL

A

s we start another year, it is important to take stock of our achievements and reflect on the tasks and challenges ahead of us. More importantly, we need to reassure ourselves of our new resolve and renewed commitment to face up to the challenges as well as grab the opportunities that some of these challenges also bring to provide effective social security in Sierra Leone. Given our exceptional performance in 2006, I am convinced that we will continue to do well to promote social security in Sierra Leone in the years ahead. At NASSIT, no task is daunting for us. We are a family with a great passion for excellence. Every time we reach a goal, we raise the bar and go on to the next level while sticking to our principles and ethics.

During 2006, the first actuarial valuation of the Scheme as at end December 2004 was completed by Regie des Rentes De Quebec (RRQ). The results show that the Scheme is currently financially sound. More importantly that the current contribution rates are adequate to finance the scheme over the entire equilibrium period. Our Strategic Plan for the period 2007-2009 sets out our commitments for improving performance and delivering our vision in the coming years. I hope that the goals and objectives set out in this Plan would bring about the improvements we seek within our present structure. The Key Performance Indicators and Targets are reviewed regularly to make sure that they continue to meet the needs and expectation of our esteemed members. As in the past, we will continue to place great importance on our most important resourceyou the staff. In this regard, as part of our corporate social responsibility, the Board approved funding for in-country training programmes to improve on staff qualifications for increased productivity from 2007 onwards. From January 2007, we are also introducing an employee recognition programme for excellence. The aim is to provide an environment and culture that encourages employee retention and motivate employees to deliver timely, quality, customer centered service. NASSIT will be five years in May 2007.Our programme of celebrations will culminate in the dedication of ultra modern buildings for all the Area Offices. Our ultra modern buildings will assure the safety of staff, our members and customers. The design of the buildings provides us the environment to deliver excellent customer services in a friendly and inviting surrounding to our members.

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Annual Report & Accounts 2006

His Excellency the President will also launch the NASSIT Pensioners Association during the dedication ceremony of the West Region Office. Finally, I would like to thank the Board, Management and Staff for their wonderful support to the work we do. I look forward to their renewed commitment as we strive to improve on our efforts to extend the Scheme to all those who need it most.

Edmund Koroma Director General

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The Board of Trustees

Mr. Andrew Keili
Chairman

Mr. Edmund Koroma
Director General

Dr. J.D. Rogers
Rep. The Central Bank Trustee

Ms. Teresa A. Vamboi
Rep. Min. Soc. Wel., Gender & Childern Affairs Trustee

Dr. S.M.W. Kamara
Rep. Min. of Finance Trustee

Mr. Brima A. Kamara
Rep. Forces Trustee

Mr. Kandeh B. Yillah
Rep. S.L. Lab. Congress Trustee

Mrs. G. Strasser-King
Rep. S.L. Ins. Ass. Trustee

Mr. L.E. Johnson
Rep. Employers Federation Trustee

Mr. Joseph P. Genda
Rep. Min. of Labour, Soc. Security and Ind. Relations Trustee

Mr. Festus Minah
Rep. SLTU Trustee

Mr. M. S. Tawallie
Rep. Civil Servants Trustee

Mr. Muctarr Williams
Rep. S.L. Lab. Congress Trustee

Mr. Felix Rhodes
Rep. Employers Federation Trustee

Mr. Sengu M. Koroma
Solicitor/Secretary

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Annual Report & Accounts 2006

The Management Team

Mr. Edmund Koroma
Director General

Mr. Gibril Saccoh
Dep. Director General MFST

Mr. S. J. B. Ngayenga Mr. S. Gbawuru Mansaray
Dep. Director General AHPACS Director, Systems & Technology

Mr. Ibrahim Bah
Director, Finance

Mrs. G. Stevens
Director, Public Affairs & Customer Service

Mr. Sengu M. Koroma
Director, Legal Affairs and Board Secretariat

Mr. Mohammed Gondoe Director, Operations

Ms. Mahawah Silla
Head, Benefits

Mr. Davidson Peters John Head, Internal Audit

Mr. Mahmoud Idriss
Head, Investments & Projects

Mr. Joseph Mans Jr.
Head, Admin. & Facilities

Mr. Amara Kargbo
Head, IT & Records

Mrs. V.A. Mansaray
Head, Government Operations

Mr. Peter Kenah
Head, Public Affairs

Mr. Julius Michael
Head, Accounts

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The Management Team

Mr. John Bosco Allieu
Head, Prosecutions

Mr. Momodu Maligi
Head, Customer Service

Mr. Sam Jalloh
Head, Compliance

Mr. Joseph Kamara
Ag. Head, Research, Planning & Actuarial

Mr. Idris Turay
Area Manager, West Region

Mr. Sadique Fofanah
Area Manager, North Region

Mr. Ismail B.Kandeh
Ag. Area Manager, South Region

Mr. Bai E. Tarawalie
Ag. Area Manager, East Region

Mr. Ahmed Kamara
Senior Manager, Investments

Ms. Dewo Ngombu
Manager, Human Resource Development

Mr. Daniel S. Kanu
Manager, Investment & Projects

Mr. Edwin Kamara
Manager, Benefits

Mr. Foday Koroma
Manager, Facilities

Mr. Hassan M. Bangura
Manager, Internal Audit

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Annual Report & Accounts 2006

1.0 REGISTRATION
1.1 Employers The number of establishments registered increased to 2,924 in 2006 from 2,251 in 2005, an increase of about 29.2 percent. About 645 new establishments were registered in the private sector. For the formal public sector, the number of new establishment registered was 28. By economic sector, about 45 percent of registered employers are in the Service sector followed by Wholesale and Retail Trade, 37.67 percent. The trend in employer registration from 2004 - 2006 is shown in Table 1.1

Table 1.1: Registered Employers by Type and Region, 2004-2006 Employers Region/

No. of Registered Employers

No. of New Employers Registered 2004 8 550 189 52 142 167 558 2005 7 646 428 79 93 46 653 2006 28 645 462 69 73 41 673

2004 FORMAL PUBLIC FORMAL PRIVATE West North South East TOTAL 18 1,580 1,219 52 142 167 1,598

2005 25 2,226 1,647 131 235 213 2,251

2006 53 2,871 2109 200 308 254 2,924

Note: All figures are end period unless otherwise stated

1.2 Insured Persons The number of Insured Persons registered increased substantially from 114,503 in 2005 to 126,749 in 2006, an increase of about 10.7 percent. The number of newly registered insured persons in 2006 equals 12,246. The compliance rate improved from 67.5% in 2005 to 77.5% in 2006.

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In the Formal Private sector, including the self-employed, there were 7,548 new registrations and 4,698 new registrations In the Formal Public Sector. The number of self employed registered increased from 439 in 2005 to 539 as at end December 2006, an increase of 22.7 percent.

Table 1.2: Insured Employees by Employer Category, 2004 - 2006 Employer Category No. of Employees 2004 FORMAL PUBLIC FORMAL PRIVATE West North South East TOTAL 64,990 37,877 33,925 715 1,665 1,572 102,867 2005 68,069 46,434 38,921 2,817 2,451 2,245 114,503 2006 72,767 53,982 44,164 4,078 3,243 2,497 126,749 No. of New Employees 2004 1,659 5,906 1,957 715 1,663 1,571 7,565 2005 3,079 8,557 4,996 2,102 786 673 11,636 2006 4,698 7,548 5,243 1,261 792 252 12,246

Note: All figures are end period unless otherwise stated

Chart 1

INSURED POPULATION, 2004 - 2006
140,000
INSURED POPULATION

120,000 100,000 80,000 60,000 40,000 20,000 0 2004 2005 YEAR 2006 TOTAL FORMAL PUBLIC FORMAL PRIVATE

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Annual Report & Accounts 2006

2.0

CONTRIBUTION INCOME

2.1 Current Contribution Income Contribution income increased to Le 49.6 billion in 2006 from Le 40.6 billion in 2005, an increase of about 22.2 percent. Of this, an amount of Le 22.9 billion was collected as contribution income from the formal Public Sector; Le 25.1 billion was collected from the Formal Private Sector; and Le 1.5 billion was received for the purchase of credits. The increase in contribution income is largely attributed to increases in employee registration and increasing compliance by employers. The trend in contribution income from 2004 2006 by type of employer is shown in Table 2.1 Table 2.1: Contribution Income Collected, 2004 - 2006 EMPLOYER CATEGORY
FORMAL PUBLIC SECTOR FORMAL PRIVATE SECTOR PENALTIES & INTEREST PURCHASE OF CREDITS TOTAL

CURRENT CONTRIBUTIONS (Le 000) 2004 14,217,003 14,674,023 28,891,026 2005 20,604,097 20,063,169 40,667,266 2006 22,924,249 25,113,820 66,206 1,534,307 49,638,582

Note: All figures are end period unless otherwise stated

Chart 2.1 CURRENT CONTRIBUTION INCOME BY CONTRIBUTION INCOME BY EMPLOYER EMPLOYER CATEGORY, 2004 - 2006 CATEGORY, 2004 - 2006
60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2004 2005 YEAR 2006 TOTAL FORMAL PRIVATE SECTOR FORMAL PUBLIC SECTOR PURCHASE OF CREDIT PENALTIES & INTEREST

Le 000

S

Annual Report & Accounts 2006

17

2.2 Arrears of Contributions Total contribution arrears increased from Le 9.1 billion in 2004 to Le 12.9 billion in 2006. The huge indebtedness is largely due to continuing non-compliance by government Parastatals and Subvented institutions whose arrears rose to about Le 5.5 billion in 2006 from about Le 2.1 billion in 2004. Arrears for the validation of past services of government employees due from the Accountant General's Department amount to Le 4.5 billion. The indebtedness of Formal Private Sector establishments is estimated at Le 2.6 billion. The Trust is instituting proactive compliance actions to recover arrears especially from government parastatals and subvented institutions.

Table 2.2: Indebtedness by Type of Employer, 2004 - 2006 EMPLOYER CATEGORY Arrears of Contributions (Le ‘000) 2004 FORMAL PUBLIC SECTOR Accountant General's Department Validation of past Service Other Parastatals Subvented Institutions FORMAL PRIVATE SECTOR West Region North Region South Region East Region TOTAL
Note: All figures are end period unless otherwise stated

2005 7,539,499 4,515,317 4,515,317 1,150,078 1,874,104 1,948,645 1,524,376 76,440 305,375 42,454 9,488,144

2006 10,331,849 4,809,941 4,515,317 294,624 2,146,960 3,374,948 2,565,235 1,957,215 225,019 305,235 77,765 12,897,084

6,686,666 4,515,317 4,515,317 583,671 1,587,678 2,400,598 1,943,479 42,827 402,786 11,506 9,087,264

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3.0

BENEFIT PAYMENTS

3.1 SCHEME BENEFITS PROCESSED Benefits processed during 2006 increased to Le 1.995 billion from Le 625.8 million in 2005 due to an increase in uptake of benefits. The number of benefit claimants increased from 732 in 2005 to 974 in 2006 due to the additional credits received from the grandfathering and validation provisions for the formal private and formal public sectors respectively. The amount and type of benefits processed for the period 2004 - 2006 is shown in Table 3.1

Table 3.1: Scheme Benefits* Processed, 2004 - 2006 2004 TYPE OF BENEFIT RETIREMENT SURVIVORS INVALIDITY REFUND TOTAL
* Pensions Included Note: All figures are end period unless otherwise stated

2005 ROLL AMOUNT (NO) (LE 000) 631 90 11 732 547,024 73,638 5,174 625,837

2006 ROLL (NO) AMOUNT (LE 000)

ROLL (NO) 373 19 392

AMOUNT (LE 000) 157,968 14,271 172,239

700 1,329,987 267 7 520,525 17,571 113,287 974 1,981,370

3.2 Pensions Processed During 2006, the first set of insured members who qualified for full pension were processed. Pensioners in 2006 totalled 263 as shown in Table 3.2 below. The aveerage pension was Le129,000 in 2006. Table 3.2: Pensions Processed 2006 Benefit Type Retirement Survivors Invalidity Total Roll (No) 234 25 4 263 Amount (Le 000) 385,700 14,959 7,083 407,742

2006 Average monthly Pension = Le 129,000.00

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3.3 Government Pension-in-Payment The government pension roll increased from 17,575 in 2005 to 18,585 in 2006. Total expenditure for government pensions amounted to Le 7.6 billion. The number and amount of pensions paid by region is shown in Table 3.3 Table 3.3: Government Pension in Payment, 2005 - 2006 2005 Roll (No) Bank - All Regions Bank - K.I.A East Region - Cash North Region - Cash South Region - Cash West Region - Cash K.I.A - Cash Total
Note: All figures are end period unless otherwise stated

AREA OFFICE

2006 Amount (Le 000) 1,810,979 2,843 171,877 131,675 425,050 3,200,011 263,940 6,006,375 Roll (No) 3,147 19 639 692 1,447 11,155 1,486 18,585 Amount (Le 000) 2,490,165 3,703 222,478 234,350 561,685 3,798,117 315,809 7,626,307

2,439 16 580 574 1,425 11,102 1,439 17,575

3.4 Gratuity, Ex-gratia and Death Payments In 2006, the expenditure in respect of end of service gratuity benefits amounted to Le 3.8 billion. Of this, an amount of Le 2.1 billion was paid as end of year service benefits and Le 1.0 billion was paid for gratuity and ex-gratia benefits. Arrears paid in 2006 amounted to Le 0.6 billion.

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Annual Report & Accounts 2006

4.0
4.1 Income

FINANCIAL PERFORMANCE

Current Contribution Income Contribution Income increased to Le 49.6 billion as at end December 2006 from Le 40.7 billion in 2005, an increase of 22.2 percent. Contribution income comprises Le 22.9 billion received from the formal Public Sector - Government employees and Government Assisted Institutions and Le 25.1 billion from private sector establishments. An amount of Le 1.5 billion was received for the purchase of credits. The formal private sector accounted for 51% of total contribution income received during the year. Investment Income In 2006, the cumulative income from investments amounted to Le 18.4 billion. The income from investment is mainly from fixed income securities. Other Income Government Pension - A cumulative amount of Le 7.6 billion was received from Government for Pension payments in 2006. Government Gratuity - An amount of Le 3.9 billion was also received from Government during the period for gratuity payments.

4.2 Expenditure Benefit Payments Scheme - Scheme benefits processed amounted to Le 1.9 billion during 2006. Government Pension - Gratuity/end of service and pension payments amounted to Le 11.5 billion during 2006. General Administrative Expenses Administrative expenses, including depreciation costs, amounted to Le 15.3 billion in 2006. 4.3 Income Surplus The surplus increased to Le 52.4 billion as at 31st December 2006 from Le 42.6 billion as at 31st December 2005. Thus, the accumulated surplus increased from Le 118.3 billion as at end December 2005 to Le 170.7 billion as at end December 2006.

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5.0

INVESTMENT PERFORMANCE

5.1 Portfolio Composition The Trust's investment portfolio comprises Fixed Income Securities, Corporate Debenture, Equity and Property. A substantial proportion of the investment portfolio is in Short Term Fixed Income (SFI) Securities, which comprise Treasury Bills, Treasury Bearer Bonds, Fixed Deposits and Call Deposits. As at end 2006, the proportion of asset holdings in the portfolio is as follows: SFI is 74%, Corporate Debenture being 5.5%, while property and Equity represents 0.5 and 20% respectively. The composition of the Investment Portfolio for 2005 - 2006 is shown in Table 5.1 and illustrated in Chart 5.1 for 2006. Table 5.1: Asset Mix, 2005 - 2006 (Le 000)

Asset Type

2005 Amount (Le 000) Share %

2006 Amount (Le 000) Share %

Call Deposits Treasury Bills Fixed Deposits Treasury Bearer Bonds Corporate Debentures Equity Property Total

300,000 76,633,950 4,000,000 13,806,550 6,000,000 12,991,364 694,001 114,425,865

1.7 67.0 3.5 10.6 5.2 11.4 0.6 100

79,678,450 16,500,000 16,085,600 8,266,607 30,277,328 771,853 151,579,838

52.5 10.9 10.6 5.5 20.0 0.5 100

Note: All figures are end period unless otherwise stated

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Annual Report & Accounts 2006

Chart 5.1 Asset Mix Composition Investment Portfolio2006
EQUITY 20% LAND 1% CORPORATE DEBENTURE 5% CALL DEPOSITS 0% TREASURY BILLS 52% FIXED DEPOSITS 11% TREASURY BEARER BONDS 11%

Chart 5.2
NASSIT FUND, 2002 - 2006
200000000 AMOUNT (Le 000) 150000000 100000000 50000000 0 2002 2003 2004 2005 2006 YEAR Property Equity Corporate Debentures Fixed Deposits Government Securities Call Deposits

5.2 Changes in Asset Composition Total assets increased to Le 151.836 Billion as at 31st December 2006 from Le 114.425 billion as at 31st December 2005, an increase of 33 percent. The increase in assets during the period is attributed mainly to the accumulation of surplus contributions due to rising membership and lower than projected scheme pension payments as well as higher investment income.

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Table 5.2: Changes in Asset Composition, 2005 - 2006

Asset Type

FY 2005 Amount (Le 000)

FY 2006 Amount (Le 000) 0 79,678,450 16,500,000 16,085,600 8,266,607 30,277,327 771,853 151,579,838

Change (%)

Call Deposits Treasury Bills Fixed Deposits Treasury Bearer Bonds Corporate Debentures Equity Property Total
Note: All figures are end period unless otherwise stated

300,000 76,633,950 4,000,000 13,806,550 6,000,000 12,991,364 694,001 114,425,865

(100) 3.97 312.5 16.51 37.78 135.4 5.0 32.7

5.3 Income from Investment In 2006, investment income increased to Le 18.43 billion from Le 16.94 billion in 2005. Investment income from Treasury Bearer Bonds, Treasury Bills and Fixed deposits amounted to Le 3.0 billion, Le 11.8 billion, and Le 1.42 billion respectively. Investment income earned from government securities is lower in 2006 compared to 2005 given lower interest rates on TBs and TBBs during the year.

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Annual Report & Accounts 2006

Table 5.3: Investment Income, 2005 - 2006 Fixed Income Assets 2005 Amount (Le 000) 161,459 13,062,008 42,253 3,679,235 16,944,955 2006 Amount (Le 000) 231,626 11,843,601 1,407,791 3,083,383 1,861,354 18,427,755

Call Deposits Treasury Bills Fixed Deposits Treasury Bearer Bonds Corporate Debenture Total

Note: All figures are end period unless otherwise stated

5.4 Return on Investment The Average Return on short-term-fixed income securities is 15 percent. The annualised yield from these securities is 32.87 percent. The return from the Corporate Debenture is about 30 percent. The real return on investment averaged about 7 percent during the period.

Table 5.4: Return on Investment, 2005-2006 Asset Type Average Return (%) 2005 STFI1 5-Yr Debenture Equity Property Portfolio Returns 23.37 n/a n/a n/a 19.71 2006 17.4 16.0 n/a n/a 15 Real Return (%) 2005 8.19 n/a n/a n/a 6 2006 9.38 5.0 n/a n/a 7.2

n/a - not available Note: All figures are end period unless otherwise stated

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6.0
CATEGORY

HUMAN RESOURCES

6.1 Staff Strength by Category The number of staff as at end December 2006 stood at 227. About 28 percent of staff are females and 72 percent males. However, only 4.8 percent females are in the management cadre. Table 6.1: Staff Distribution by Sex & Level, 2006 MALE No. (%) Executive Senior Management Middle Management Senior Support Intermediate Support Junior Support TOTAL
Note: All figures are end period unless otherwise stated

FEMALE Share 3.1 4.8 7.0 32.2 8.8 16.3 72.2 No. (%) 1 2 8 15 36 1 63 0.4 0.9 3.5 6.6 16.0 0.4 27.8 Share

TOTAL (No) 8 13 24 88 56 38 227

7 11 16 73 20 37 164

6.2 Staff Training and Development The Board recognises that achieving the targets set out in the strategic plan would require a continuous upgrading of the technical competences and personal skills of our staff. Thus, a good number of staff at all levels received training in various aspects of social security. Training and seminars attended during the period include:

A. Training in Social Protection Financing / Policy Two staff are pursuing the Master programmes in Social Protection Policy and Financing respectively at the Maastricht Graduate School of Governance. B. Governance and Financial Reporting for Funded Projects Course - Banjul, The Gambia Two staff from the Finance Division attended this course in Banjul, The Gambia. The training was aimed at providing an in - depth understanding of the roles and responsibilities of Directors and to examine the new statement of recommended practice and its applica-

26

Annual Report & Accounts 2006

bility to public benefit entities. C. Quality Management Seminar, London Three Management staff attended this seminar resulting in the preparation of a quality manual for the Organisation. D. Sustainable Business Community & Disaster Recovery Conference, Malaysia A senior staff participated in this conference geared towards providing practical experience and best practice on how an organization should deal with business continuity and be adequately prepared to deal with a disaster. E. Course on Real Estate Investment Products, Management Strategies and Performance Measurement Methodologies - Nigeria The Chairman, Board of Trustees and the Head, Investments attended this programme to enhance skills in real estate Investment. F. ISSA Technical Sessions, Seminars and Conferences Several Staffs participated in the various technical sessions, seminars and conferences organized by ISSA. G. In - House Training Various in - house programmes were also conducted for staff on different topics relating to social security, customer care and legal issues. H. Study Tours A number of staff participated in various study tours in regional organizations. On the invitation of the President of ISSA, staff participated in the ISSA Regional Conference for Asia and the Pacific and undertook study tours in India and Philippines. 6.3 Employee Attitude Survey The Trust contracted a private research firm to conduct an employee attitude survey during the last quarter of 2006. The survey is designed to measure employee satisfaction levels, track changes in employee satisfaction over time and improve overall satisfaction and retention. While there are many factors that can affect employee satisfaction, an attitude survey can pinpoint the main concerns of employees. The key findings are: a) On Employee/ Management relations and team work: i. A significant high level of respect (72.6%) and trust (80%) exist between management and staff; and ii. Supervision is highly encouraged due to teamwork and regular feedback on staff performance. b) On employee motivation: i. Employees agree only highly competent staff should be rewarded; and ii. Fifty percent of employees claim to have received in-house training relating to their job.
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27

c) On employee morale: i. Employee morale is good as over 65% agree to this; and ii. Over 80% employees are happy and satisfied working for the organisation. d) On information and communication: i. About 98% of employees use the notice board to get information about the organisation; and ii. About 66% of employees say they are involved with changes in the workplace. e) i. ii. On employee perception: About 88% of employees say NASSIT is a good employer; and About 98% of employees say they are proud to work for NASSIT.

28

Annual Report & Accounts 2006

7.0

INFORMATION & COMMUNICATION TECHNOLOGY

The Implementation of the Integrated Biometric Registration System/Operational software NASSIT Area Pensioners operating System (NAPOS) is at an advanced stage. This system will be deployed in all NASSIT offices and operational by end March 2007. When fully implemented, the system would re-enrol members of the scheme; capture personal, photograph and fingerprint details, be capable of searching, verifying and retrieving individual records from a large database, without duplicating search results. A Wide Area Network integratable solution is being implemented in all the new Area Offices. When fully completed by April 2007, the solution would incorporate a full telephone network (VOIP), an IP- based security Close Circuit Television (CCTV) network and a biometric door access system.

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29

8.0

ACTUARIAL VALUATION

The first actuarial valuation since the implementation of the scheme in 2002 was conducted during 2005 by Regie des Rentes du Quebec (RRQ), an actuarial firm based in Canada recommended by the International Labour Organisation (ILO). The actuarial valuation date was 31 December 2004. The objective of the actuarial valuation was to verify the financial viability of the scheme. The main findings of the review are: a) The scheme is currently financially sound; b) The contribution rates are adequate to finance the scheme over the equilibrium period of 20 years. Therefore, there is no need to adjust the contribution rate in the very short - term; The reserve ratio is presently 9.5, and will be higher than 3.0 until 2045. The reserves will be exhausted in 2052; and The investment policy is well designed with a detailed risk analysis structure and defined investment brackets including margins for deviation and strategic objectives for investment.

c)

d)

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Annual Report & Accounts 2006

9.0

PUBLIC AFFAIRS & CUSTOMER SERVICE

9.1 Public Education During 2006, a significant improvement was observed in benefits uptake and queries and complaints due to better understanding by our esteemed members on the benefits of the scheme and the operations of the Trust. This followed a proactive, rigorous and aggressive sensitization campaign covering the entire country. The services of major radio stations (UNAMSIL, FM 98.1, KISS 104 FM, FM 93.5 Station in Kenema) as well as TV stations across the country are being utilized to feature weekly sensitization messages as well as panel discussions. The Trust also sponsored the 2006 FIFA World Cup tournament on the SLBS and ABC television stations. The adverts shown during breaks yielded the desired result of deepening understanding of our members and the general public on scheme benefits and the operations of the Scheme. Furthermore, NASSIT in collaboration with the Ministry of Labour, Social Security and Industrial Relations, also organized the World Day for Safety and Health at Work during April 2006. NASSIT also participated in a ten-day trade fair organized by the Sierra Leone Chamber of Commerce, Agriculture and Industry. These activities continue to sustain awareness of our role in the social wellbeing of the working population and retirees as well as increasing public confidence in the scheme.

9.2 Public Awareness and Perception Survey The second public awareness and perception survey was conducted during the last quarter of 2006. The aim of the survey was to: a) Ascertain the levels of public awareness and understanding of NASSIT's role in providing Social Security and its benefits; and b) Assess the perception of members and non-members on the operations of NASSIT. Overall, the evidence from the survey shows that most people across regions and categories have all heard of NASSIT through one or more of the media of communication in Sierra Leone- (Newspaper, radio, TV, NASSIT staff and individuals). It also suggests a significant level of awareness of the activities of NASSIT. The awareness levels attained shows a pay-off from the massive awareness campaign undertaken during 2005 and 2006. The main findings are: a) About 80% of respondents say they are aware that NASSIT was established by an Act of Parliament; b) About 75.5% of respondents say they are aware membership to NASSIT is compulsory for formal employment;

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31

c) d) e)

About 60% of employers say they are aware of the penalties associated with failing to comply with regards contributions. About 97% of respondents are aware of the benefits paid by NASSIT; and About 80% of the employees in the public sector consider the scheme as good and 70% in the formal private sector consider the scheme as good.

9.3 Customer Services During the period, the Customer service department, in collaboration with other departments, developed various complaint processes and procedures aimed at improving the handling of customer complaints and queries. The department also keeps track of all complaints and enquiries to ensure proper monitoring and reduction of turnaround time. The Customer service centre will continue to provide a speedy and efficient response to all customer enquiries and complaints. It will also identify areas of customer service deficiencies and provide improvements. 9.4 Customer Satisfaction Survey The first customer satisfaction survey was conducted during the last quarter of 2006. The aim of the survey was to: a) Ascertain the levels of customer satisfaction viz -a viz Excellence, Teamwork and Respect; b) Assessed our customer expectations; c) Analyse the standard of service we currently provide our customers; and d) Ascertain whether our service meets our customer expectations and if not, identify problems. The main findings from the survey are: a) About 80% of respondents reported achieving the purpose of their visit; b) About 21.7% of respondents reported to complain about the service they received; c) About 25% of respondents reported facing a delay at the office; d) About 82.1% of respondents consider the speed of response, standard of work, effectiveness and competence of staff to be excellent; e) About 89% of customers are generally satisfied with NASSIT's services; f) About 78.5% of customers rated NASSIT's staff competence as quite high; g) About 88.3% of customers rated the attitude of staff to customers as good; and h) On the attitude of staff: i) About 95% of customers interviewed rated staff as friendly; ii) About 90% of customers were satisfied with the receptiveness of NASSIT staff; and iii) About 85% of customers rated NASSIT offices as comfortable and customer - friendly environment.

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Annual Report & Accounts 2006

10.0

MAJOR ACHIEVEMENTS IN 2006

Our performance Scorecard below details some of our major achievements in 2006: a) the insured population increased from 114,503 in December 2005 to 126,749 as at end December 2006, an increase of 10.7 percent; b) active employer population increased from 2,251 employers in December 2005 to 2,924 employers as at end December 2006, an increase of 29.2 percent; c) contribution income increased from Le 40.6 billion in 2005 to Le 49.6 billion in 2006, an increase of 22.2 percent; d) Scheme benefit payments amounted to Le1,995 million as at end December 2006 compared to Le 625.8 million in 2005; e) investment income amounted to Le 18.4 billion as at end December 2006 compared to Le16.9 billion in 2005; and f) total accumulated reserves increased from Le 118.4 billion as at end 2005 to Le170.7 billion as at end 2006.

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33

11.0 RISK MANAGEMANT
Risk assessment is carried out each quarter in accordance with the Revised Risk Management Framework. The purpose of each risk assessment is to review and reevaluate risks facing the Trust at the end of each quarter, update the risk profile and proffer an action plan. A Risk Evaluation Matrix is computed which presents an assessment of current risks within the Trust as at the end of each quarter and appropriate controls to minimize these risks where they exist are recommended. Copies of completed risk assessments are made available to internal stakeholders and the Board of Trustees. The Board of Trustees monitors the Institutional risk profile through its Audit Committee. The Internal Audit & Quality Assurance Department ensures the overall assurance of the Risk Management Framework by collaborating with all Risk Coordinators in each category to ensure adherence to the Framework. In this way, an appropriate level of independent assurance on the whole process of risk identification, evaluation and control is guaranteed. Regular quality assurance audits are also undertaken to ensure compliance with policies and procedures and to monitor actions taken to implement recommended controls to mitigate risks on a timely basis.

34

Annual Report & Accounts 2006

12.0

RISKS FACING THE TRUST

Despite the achievements indicated above, the scheme faces numerous challenges, and risks going forward. A key challenge is extending coverage, especially to informal sector and family economy participants and the self - employed and the issue of non - compliance. Thus, a lower growth rate of the insured population especially for the private sector may result in lower contribution income and, lower accumulated reserves. Given the nascent nature of the domestic market, the Trust also faces investment risks in diversifying the portfolio as well as low returns on investments. Finally, achieving greater administrative and operational efficiency and increasing income by focusing on improving compliance and investment performance are additional challenges facing the trust.

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35

13.0

LOOKING TO THE YEAR AHEAD 2007

In 2007, we are faced with exciting challenges and opportunities. These include: a) the introduction of the Biometric registration system that will be integrated with our existing ICT platform. The Biometric system will ensure the prompt and secure payment of benefits to our members and their dependants; b) Increasing membership from the formal private sector as well as consolidate scheme management, including management of our members' records; c) monitor our investments to ensure decent returns from our current portfolio; d) communicating our key messages to our members and stakeholders on scheme management and our investment activities in an open and transparent manner; e) advocacy of social security programmes as sustainable instruments by stakeholders; f) ensure the staff performance assessment system is implemented fairly and objectively; g) secure reciprocal agreements with sister social security organizations in the WAMI zone so that our respective citizens who work in these countries do not loose their social security benefits when they return to their countries of origin; h) Initiate a study to identify social security priority needs for the informal sector; i) problem of HIV/ AIDS to be adequately addressed through sensitization on the rights of victims and provision of facilities; and j) Strengthen existing political will for scheme sustenance.

36

Annual Report & Accounts 2006

14.0
INDICATORS

PERFORMANCE TARGETS FOR 2007
2005 2006 2007 (Outcomes) (Outcomes) (Targets) 58 67,800 45,995 439 63.12 72,767 53,443 539 66.5 73,500 59,515 850

MEMBERSHIP Formal sector (coverage ratio ( % ) Formal Public (No.) Formal Private (No.) Self Employed (No.)

CONTRIBUTION INCOME (Le bn) COMPLIANCE RATE (%) Formal Public Formal Private Sector

40.7 67.5 75.0 60.0

49.6 77.5 90 65

52.86 80.0 90 70

PROCESSING AND PAYMENT OF BENEFITS Average claim handling time (No.Of Days)1 Old age Invalidity Survivor

15 30 15

15 30 15

15 30 15

ISSUANCE OF SS CARDS SS Cards (No. of days)

20

20

10

INVESTMENT PERFOMANCE Rates of Return (%) Average Return Real Return

19.7 5.95

15 3.91

12 n/a

1

The number of days is measured from the date of receipt of completed application form by the counter benefit officer.

Annual Report & Accounts 2006

37

15.0

REPORT FROM THE BOARD OF TRUSTEES

The Trustees are pleased to present this report as part of the financial statements for Financial Year 2006. Statement of the Trustees' Responsibilities The Board of Trustees is required to prepare financial statements for each financial year which give atrue and fair view of the state of affairs of the Trust and Changes in Net Assets of the Trust for the year. In preparing those financial statements, the Board of Trustees is required to: 1. 2. 3. Select suitable accounting policies and then apply them consistently; Make judgements and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Board of Trustees is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Trust and to enable them to ensure that the financial statements comply with the Companies Act and the National Social Security and Insurance Trust Act. They are responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In the preparation of the financial statements, the Trustees confirm that suitable accounting policies havebeen applied consistently and reasonably and prudent judgements and estimates made. Contributions and Membership During the financial year ended 31 December 2006, contribution income, including arrears amounted to Le64.3 billion. Membership stood at 126,749 employees; 72,767 are formal public sector and 53,982 formal private sector employees. The number of employers registered with the scheme for the period under review is 2,924. Benefits A total of Le2.13 billion was disbursed in respect of benefit and related expenses. Retirement benefits, including grants, amounted to Le424 million and survivors' grant and invalidity grant, Le505.4 million.

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Annual Report & Accounts 2006

Income Surplus The Net Increase in Assets for the year ended 31 December 2006 amounted to Le52.399 Billion. Investments Income received from investment for the year amounted to Le18.47 Billion. In 2006, Government Securities and Fixed Deposits accounted for 74 percent of our portfolio as shown below. The portfolio also includes land and equity and debenture.

Value Le'000 Government Securities and Call Accounts Equity and Debenture Property 112,264,050 38,851,202 728,469

Holding % 74 25 1

BY ORDER OF THE BOARD:

Mr. Andrew Keili Chairman, Board of Trustees

Mr. Leonard E. Johnson Trustee

Annual Report & Accounts 2006

39

16.0

AUDITOR’S REPORT

We have audited the financial statements of the National Social Security and Insurance Trust on pages 6 to16 which have been prepared in accordance with the accounting policies set out on pages 9 and 10. Respective Responsibilities of Directors and Auditors The Trustees of the Board are responsible for the preparation of the financial statements of the Social Security Pensions Scheme. It is our responsibility to form an independent opinion, based on our audit, on those statements, and to report our opinion to you. Basis of opinion We conducted our audit in accordance with International Standards on Auditing. An audit includes examination on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Trust's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence that the financial statements are in agreement with the books of account kept by the Trust and to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and correct view of the state of the Trust as at 31 December 2006 and of the disposition at that date of its assets and liabilities and have been properly prepared in accordance with the Sierra Leone Companies Act Cap 249 and the National Social Security and Insurance Trust Act 2001.

40

Annual Report & Accounts 2006

17.0
Income

INCOME & EXPENDITURE ACCOUNT
2006 Notes Le' 000 2005 Le' 000

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Contributions income

2

64,292,273

40,666,480

Investment income

3

18,473,377

16,945,061

Sierra Leone Government Receipts Other income

4 5

11,525,906 28,317 94,319,873

8,859,835 27,866 66,499,242

Expenditure Benefits and related expenses 6 2,128,145 822,451

Sierra Leone Government Payments

7

11,541,170

8,623,185

General and Administrative expenses

8

15,354,200

14,486,826

Provision for impairment of contributions receivable12

12,897,085 41,920,600

23,932,462 42,566,780 75,785,928 118,352,708

Net Increase in Assets Balance brought forward Balance carried forward

52,399,273 118,352,708 170,751,981

41

18.0 BALANCE SHEET
(All amounts are expressed in thousands of Leones) NOTES As at 2006 Le'000 39,579,672 As at 2005 Le'000 19,692,633 Assets Long Term Investments Non Current Assets Property, plant and equipment Current Assets Short term investments Inventories Assets transit account Receivables and prepayments Cash and cash equivalents 19

9

11,049,471

5,830,734

10 11 12 17

112,264,050 93,737 6,079,025 6,897,713 1,493,365 ___________ 126,827,890 (6,705,052)

94,740,700 40,876 209,713 3,808,973 1,847,790 __________ 100,648,052 (7,818,711)

Payables: amounts falling due within one year

13

Net Current Assets Net Assets

120,122,838 170,751,981

92,829,341 118,352,708

Net Assets Available for Benefits

18

170,751,981

118,352,708

Approved on behalf of the Board of Trustees

2007

42

Annual Report & Accounts 2006

19.0
Operating activities

CASH FLOW STATEMENT
2006 Notes Le'000 2005 Le'000

Cash receipts from customers Cash paid to suppliers and employees Cash Paid to Government of SL Net cash inflow from operating activities Investing activities Debenture Barock Investment Acquisition of plant and equipment Acquisition of short term investments Acquisition of Land Sierrablock Project Equity Investment Proceeds on disposal of Motor Vehicle Net cash outflow from investing activities Net (decrease)/increase in cash and cash equivalents

14 15

72,411,875 (17,021,009) (11,541,170) ___________ 43,849,696

67,767,326 (11,776,451) (9,468,930) __________ 46,521,945

(2,266,607) 9 10 (6,829,556) (17,523,350) (34,468) (518,636) (17,067,328) ___________ (44,239,945)

(6,000,000) (7,268) (5,023,514) (28,009,803) (96,828) (1,000) (6,400,000) 98,165 ___________ (45,440,248)

16

(390,249)

1,081,697

Annual Report & Accounts 2006

43

NOTES TO THE FINANCIAL STATEMENTS

1. Accounting Policies The principal accounting policies adopted by the Trust in the preparation of the financial statements are as follows: (a) Basis of Accounting The Financial Statements are prepared in accordance with the historical cost convention and standard pension accounting practice. (b) Contributions Contributions were accounted for on a cash basis up to 31 December 2005. However with effect from 1 January 2006, contributions are now accounted for on accruals basis.

The contribution rates are stipulated in the Social Security Act of 2001 and are as follows: Employee's contribution Employer's contribution - 5% of Earnings - 10% of Earnings

The Government pays an additional contribution at the rate of 2.5% of Civil Service payroll for 20 years for crediting past service. (c) Investment Income Investment securities are basically debt securities which the Trust intends to hold until maturity and are stated at nominal value. Interest earned on investment securities are reported as interest income as they fall due. (d) Actuarial position The financial statements summarise the transactions and net assets of the scheme. They do not take account of the liabilities to pay pensions and other benefits in the future. Section 47 of the National Social Security and Insurance Trust Act 2001 requires that an actuarial valuation be done every 3 years within the first 10 years of operations, and every 5years thereafter. In compliance with the provisions of the Act, an actuarial valuation was done as at 31 December 2004 by Regie des rentes du Quebec. The opinion of the actuary is that the scheme is financially sound.

44

Annual Report & Accounts 2006

(e) Non Current Assets and Depreciation Equipment, motor vehicles, furniture and fixtures and computer/software are stated at cost less accumulated depreciation. Depreciation is calculated to write off the cost or valuation of the assets in equal annual instalments on the following basis: Equipment Motor vehicles Furniture and Fixtures Computer hardware and software 33% 20% 20% 33%

(f) Foreign currencies Transactions in foreign currencies during the year are converted into Leones at rates ruling on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are restated in Leones using the rate ruling at the balance sheet date. Exchange gains and losses are dealt with in the Statement of Changes in Net Assets in the year in which they arise. (g) Cash and cash equivalents Cash and cash equivalents in the Statement of Net Assets comprised cash and bank balances. In the Cash Flow Statement, cash and cash equivalents is the balance in the Statement of Net Assets less overdraft balances. (h) Inventories These inventories which are non-trading in nature are valued at the lower of cost and net realisable value. Cost includes all direct expenditure incurred in bringing the items to their present location. 2006 Le'000 2. Contributions Income Sierra Leone Government Employees Purchase of credit Others 34,514,704 1,534,307 28,243,262 64,292,273 3. Investment Income Investment income represented interest received on short-term investments. 20,604,097 16,512 20,045,871 40,666,480 2005 Le'000

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45

4. Sierra Leone Government Receipts Sierra Leone Government administrative cost Sierra Leone Government pensions in payment Sierra Leone Government gratuity payment 5. Other Income Other income includes interest on staff loans and bid documentation fee. 6. Benefits and related expenses During the year ended 31 December 2006, benefits amounting to Le1,989,866,000 were paid as follows: Contributions Returned Old Age Pension/ Gratuity Retirement Grant Survivors' Grant/ Benefit Invalidity Grant/ Pension Benefit payment expenses 92,691 967,675 424,050 490,886 14,564 138,279 2,128,145 14,541 547,024 73,638 5,174 182,074 822,451 540,427 7,051,628 3,933,851 11,525,906 444,860 5,716,416 2,698,559 8,859,835

7.

Sierra Leone Government Payments Leone Leone Leone Leone Government Government Government Government pensions in payment 7,051,627 gratuity payment 3,933,851 pensions expenses 530,981 gratuity payment expenses 24,711 11,541,170 5,716,416 2,656,737 250,032 8,623,185

Sierra Sierra Sierra Sierra

The Trust took over the payment of the Sierra Leone Government pension roll in May 2004 and Gratuity Benefit Payments in June 2005. The Government opted to transfer the quarterly amount of the Pension and Gratuity rolls to NASSIT to be paid to the pensioners and other beneficiaries.

46

Annual Report & Accounts 2006

8.

General and Administrative expenses Trustees' fees and allowances Depreciation Staff costs Provision for Audit fees General expenses 154,217 1,610,819 8,281,438 50,000 5,257,726 15,354,200 334,002 1,077,503 5,111,183 40,000 7,924,138 14,486,826

9. Property, Plant and Equipment

Land and Buildings Le'000

Equipment Le'000

Furniture and Fixtures Le'000

Motor Vehicles Le'000

Computer/ Software Le'000

Work in progress Le'000

Total Le'000

Cost Beginning of year 149,520 958,396 716,782 1,306,706 2,705,016 2,139,961 7,976,381

Purchases during the year

244,607

94,784

504,105

437,843

5,548,217

6,829,556

End of year

149,520

1,203,003

811,566

1,810,811

3,142,859

7,688,178

14,805,937

Depreciation Beginning of year 486,281 289,527 435,020 934,819 2,145,647

Charge for the year

-

290,708

163,868

336,053

820,190

-

1,610,819

End of year

-

776,989

453,395

771,073

1,755,009

-

3,756,466

Net Book Value End of year 149,520 426,014 358,171 1,039,738 1,387,850 7,688,178 11,049,471

Beginning of year

149,520

472,115

427,255

871,686

1,770,197

2,139,961

5,830,734

Annual Report & Accounts 2006

47

10

Short-Term Investments During the year the major investments of the Trust Fund was on treasury bills issued by the Bank of Sierra Leone on behalf of the Government. Funds were also placed on fixed deposit.

2006 Le'000

2005 Le'000

Treasury Bearer Bonds Treasury Bills Call Deposits-Government Pensions Other Call Deposits Fixed Deposit

16,085,600 79,678,450 16,500,000 112,264,050

12,146,550 76,633,950 1,660,000 300,200 4,000,000 94,740,700

11

Inventories Stationery Technology Equipment 90,184 3,553 93,737 37,323 3,553 40,876

12

Receivables Interest receivable Staff Loans and Advances Staff Rent receivable Other receivables 3,630,266 652,190 18,609 553,952 4,855,017 Contributions: Sierra Leone Government Employees Others 11,589,641 3,048,818 19,493,476 3,430,448 2,650,768 313,432 17,772 448,476 3,430,448

Provision for impairment

(12,897,085) 6,596,391 3,430,448

48

Annual Report & Accounts 2006

2006 Le'000 Prepayments Insurance Rent Others 120,784 154,252 26,286 301,322

2005 Le'000

15,924 148,403 214,198 378,525

Other prepayments represent withholding taxes on interest on treasury bills/bonds and call account interest for which there is an intention to apply for waiver from the Sierra Leone Government.

13

Payables Amounts falling due within one year: Local creditors Interest on Treasury Bills/Bonds Sierra Leone Government Bank Overdraft Others

37,065 3,809,046 272,461 35,824 2,550,656 6,705,052

29,052 3,298,222 963,618 3,527,819 7,818,711

14 Cash receipts from customers Contributions income 64,292,273 Other operating income 30,027,600 Provision for impairment of contributions (12,897,085) (Increase)/decrease in receivables and prepayments (3,088,740) (Increase)/decrease in assets transit account (5,869,312) Increase in stocks (52,861) 72,411,875 40,666,480 25,832,762 1,111,903 191,636 (35,455) 67,767,326

Annual Report & Accounts 2006

49

15 Cash paid to suppliers and employees Benefits paid General and administrative expenses (Decrease)/increase in creditors Depreciation (2,128,145) (15,354,200) (1,149,483) 1,610,819 (17,021,009) 16 Cash and Cash Equivalents Cash and cash equivalents at 1 January Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 31 December 17 Cash and Cash Equivalents Cash at bank Cash in hand 964,220 529,145 1,493,365 1,498,248 349,542 1,847,790 1,847,790 (390,249) 1,457,541 766,093 1,081,697 1,847,790 (822,451) (14,486,826) 2,455,323 1,077,503 (11,776,451)

18

Net Assets Available for Benefits Balance at 1 January Net increase in Assets Prior Year Adjustment Balance at 31 December 118,352,708 52,399,273 170,751,981 76,626,641 42,566,780 (840,713) 118,352,708

19

Long-term Investments Long-term investments comprised: Land 728,469 Sierrablock Debenture 8,266,607 Equity Investment Sierrablocks Concrete Products Limited 7,110,000 Equity Investment-Barock Investment 7,268 Equity Investment- Regimanuel Gray SL Limited 6,000,000 Equity Investment-Gouji Property Investment 9,129,992 Equity Investment-Eco Bank 3,033,917 Equity Investment-Kimbima Hotel 5,296,414 Equity Investment-Sierra Leone Brewery Limited 7,005 39,579,672

694,001 6,000,000 6,591,364 7,268 6,400,000 19,692,633

50

Annual Report & Accounts 2006

In a bid to diversify the Trust's investments, land was acquired from different Communities in the country. Also the Trust agreed to hold sixty percent shares in a Joint Venture with REGIMANUEL GRAY (Ghana) LIMITED to form SIERRABLOCKS CONRETE PRODUCTS LIMITED (SCPL). 20. Taxation Under the provisions of The National Social Security and Insurance Trust Act 2001 which established the Fund, the Trust shall be exempted from stamp duty, and other such taxes and duties as the President may determine.

21.

Staff Costs

The average number of employees in the Trust during the year was 227 (2005-221).

The aggregate payroll cost was as follows: 2006 Le'000 Aggregate staff cost 8,281,438 2005 Le'000 5,111,183

22. Events after the Balance Sheet Date The Trust has recalled its investment in Gouji Property Development Company in respect of which $3,000,000 was refunded. The balance of its contribution to capital was in the form of tangible assets which are in the process of being recovered.

23. Employee Benefit Scheme All qualified staff (under the rules of NASSIT) participate in the end of service benefits scheme.

24. Related Party Disclosures Remuneration of key management personnel Salaries and allowances

2,243,604

1,643,029

Annual Report & Accounts 2006

51

25 Capital Commitmets Capital exenditure authorised but not yet expended as at 31 December 2006 amounted to Le2.9 billion (2005: Le6.8 billion).

26

Contigent Liabilites

There were no significant contigent liabilities as at 31 December 2006.

52

Annual Report & Accounts 2006

PHOTO NEWS
Opening Ceremony of the Area Offices

Annual Report & Accounts 2006

53

54

Annual Report & Accounts 2006

Annual Report & Accounts 2006

55

56

Annual Report & Accounts 2006