Notice to Shareholders of Pan Africa Insurance Holdings Limited

The Central Depository System came into effect on 1st June 2003. The CDS is a computer system that facilitates the holding of shares in electronic accounts created at the offices of the Central Depository and Settlements Corporation Limited, a company regulated by the Capital Markets Authority. The CDS functions shall include holding jumbo certificates, clearing and settlement for funds and securities, registration with transfer secretaries and corporate actions processing. What this means is that instead of the share registrar processing transfers for shareholders, preparing share certificates and processing dividend cheques, for example, these responsibilities now lie with the CDS.

The immediate impact of this is that trading in Pan Africa shares will have to be done when one has opened a CDS account with a stockbroker or a custodian bank. Upon opening an account, a shareholder or purchaser of shares will get an account number and a copy of the account opening form. This will be proof of the ownership of the shareholding. For those shareholders already with share certificates, the share certificates will be retained by the CDSC in a process termed as immobilisation. Once all share certificates have been immobilised, the Company will no longer issue share certificates.

Instead, shareholders will get monthly / quarterly statements (depending on the volumes of trading that they have been involved in) directly from the CDS. Communication to shareholders will be undertaken by the CDS directly to shareholders through press announcements and via the periodic statements. The role of the share registrar will be limited to confirming the authenticity of share certificates currently in issue and private transfers, for example, issuing share certificates to the administrators of the estate of a deceased shareholder.

The main advantage of the CDS is that it allows shareholders to trade faster. It is contemplated that it will take a maximum of 5 days to complete a trade. Another advantage of CDS trading is that it makes it easier for shareholders to trade. Trading will be done electronically and there will be no need for share certificates thereby reducing the time lag caused by the current manual trading system.

The Company is scheduled to go live in the last week of February 2005. Shareholders will be alerted through notices in the Daily Nation and/or the East African Standard at least three times by the CDSC. Additional information on the CDS can be obtained from the Nairobi Stock Exchange website: www.nse.co.ke

Company Secretary
3rd February 2005

INVESTMENT IN SUBSIDIARY COMPANIES

Panafrica Life Asssurance Ltd and Panafrica General Insurance Ltd are both wholly owned subsididiaries of Panafrica Insurance Holding Ltd.The two subsidiaries carry out the long term and general Insurance business, respectively. Panafrica general insurance ltd has the following subsidiary companies both incooporated in kenya :-








At 31st Dec 2003, the group held a 39.97% investment in APA Insurance Ltd and 25% investment in Runda water Ltd.