SOVEREIGN TRUST INSURANCE PLC
IFRS 17 FINANCIAL STATEMENTS 30 SEPTEMBER 2023
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SOVEREIGN TRUST INSURANCE PLC
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
CONTENTS | PAGE |
Corporate Information | 1 |
Financial Highlights | 3 |
Summary of Significant of Accounting Policies | 5 |
Statement of Profit or Loss and Other Comprehensive Income | 59 |
Statement of Financial Position | 60 |
Statement of Changes in Equity | 61 |
Statement of Cashflows | 62 |
Notes to the Financial Statements | 63 |
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SOVEREIGN TRUST INSURANCE PLC
FINANCIAL HIGHLIGHTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
2023 | 2022 | ||
₦'000 | ₦'000 | % Change | |
Statement of profit or loss and other | |||
comprehensive income | |||
Insurance revenue | 16,838,812 | 11,861,092 | 42% |
Insurance service expenses | (6,356,724) | (3,248,336) | 96% |
Net expenses from reinsurance contract held | (8,306,209) | (6,784,147) | 22% |
Profit before income tax | 710,267 | 630,762 | 13% |
Profit after income tax | 592,828 | 527,087 | 12% |
Statement of financial position | |||
Total assets | 17,584,996 | 17,480,282 | 1% |
Total liabilities | 6,396,236 | 6,884,350 | -7% |
Total equity | 11,188,760 | 10,595,932 | 6% |
Insurance contract liabilities | 3,802,067 | 4,220,515 | -10% |
Per share data: | |||
Basic earnings per share (kobo) | 5 | 5 | 12% |
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SOVEREIGN TRUST INSURANCE PLC
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
CERTIFICATION PURSUANT TO SECTION 6 0(2) OF INVESTMENT AND SECURITIES ACT NO. 29 of 2007
We the undersigned hereby certify the following with regards to our financial statements for the year ended 31 September 2023 that:
- We have reviewed the report;
- To the best of our knowledge, the report does not contain:
- Any untrue statement of a material fact, or
- Omit to state a material fact, which would make the financial statements misleading in the light of circumstances under which such statements were made;
- To the best of our knowledge, the financial statements and other financial information included in the report fairly present in all material respects the financial condition and results of operation of the Company as of, and for the years presented in the report.
- We:
(i) Are responsible for establishing and maintaining internal controls.
(ii) Have designed such internal controls to ensure that material information relating to the Company is made known to such officers by others within those entries particularly during the period in which the periodic reports are being prepared;
(iii) Have evaluated the effectiveness of the company's internal controls as of date within 90 days prior to the report;
(iv) Have presented in the report our conclusions about the effectiveness of our internal controls based on our evaluation as of that date;- We have disclosed to the auditors of the Company and Finance, Investment and General-Purpose Committee:
(i) All significant deficiencies in the design or operation of internal controls which would adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the company's auditors any material weakness in internal controls, and
(ii) Any fraud, whether or not material, that involves management or other employees who have significant role in the Company's internal controls;- We have identified in the report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Mr. Kayode Adigun | Mr. Olaotan Soyinka | |
Chief Financial Officer | Managing Director/CEO | |
FRC/2013/ICAN/00000002652 | FRC/2013/ClIN/00000002671 | |
Dated: 30th October, 2023 | Dated: 30th October, 2023 |
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
1. Corporate information
Sovereign Trust Insurance Plc ("The Company") was incorporated as a limited liability company on 26 February reorganized and commenced business as a reorganized non-life insurance company on 2 January 1995 with an capital of ₦30 million and a fully paid up capital of the ₦20 million following the acquisition and recapitalizatio Union Assurance Limited. The Company was listed on the Nigerian Stock Exchange on 29 November 2006.
Sovereign Trust Insurance Plc is regulated by the National Insurance Commission of Nigeria.
The principal activity of the Company continues to be the provision of all classes of non-life insurance and spec settlement of claims and Insurance of Policyholders' Fund. The Company's head office is at 17, Ademola Adetok Island, Lagos with 17 other branches spread across major cities.
2. Summary of significant accounting policies
2.1 Introduction to summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. Th consistently applied to all the periods presented, unless otherwise stated.
2.2 Basis of preparation 2.2.1 Basis for measurement
The preparation of these financial statements have been based on historical cost basis except for the undermen measured on an alternative basis on each reporting date:
- Equity instruments at fair value through profit or loss measured at fair value
- Debt securities at amortised cost
- Equity instrument at fair value through other comprehensive income
- Investment properties measured at fair value
- Land and buildings are carried at revalued amount.
- Insurance contract liabilities measured at present value of projected cash flows
The financial statements were approved by the board of Directors and authorised for issue on 14th March 2023
2.2.2 Statement of compliance with IFRS
These financial statements have been prepared in accordance with the International Financial Reporting Stand the International Accounting Standards Board and IFRS Interpretations Committee (IFRIC) for Interpretations reporting under IFRS and in the manner required by the Companies and Allied Matters Act, 2020, the Financia the Insurance Act 2003 and relevant National Insurance Commission (NAICOM) Circulars and Guidelines.
In accordance with IFRS 4 Insurance Contracts, the Company has applied existing accounting policies for Non modified as appropriate to comply with the IFRS framework.
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
The preparation of financial statements in conformity with IFRS requires the Company's Board of Directors to e applying the Company's accounting policies. The areas involving a higher degree of judgments or complexity, o assumptions or estimates are significant to the financial statements are as disclosed in Note 3.
The financial statements of Sovereign Trust Insurance Plc have been prepared on a going concern basis. The D have a reasonable expectation that the Company has adequate resources to continue in operational existence f future.
2.3 Presentation currency
The financial statements are presented in Nigerian Naira (₦) and are rounded to the nearest thousand unless o
2.4 Foreign currencies Transactions and balances
Transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in translated at the rates prevailing at that date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using th the date of the initial transaction and are not subsequently restated. Non-monetary items measured at fair val are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising monetary items measured at fair value is treated in line with the recognition of a gain or loss on change in fair translation differences on items whose fair value gain or loss is recognised in other comprehensive income (OC also recognised in OCI or profit or loss, respectively).
Functional currency
Items included in the financial statements of the Company are measured using the currency of the primary eco which the Company operates (the "functional currency"). The Company is incorporated in Nigeria and has ado functional currency.
- Summary of Standards and Interpretations effective for the first time
-
Amendments to IAS 16 - Proceeds before intended use
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. Early applica amends the standard to prohibit deducting from the cost of an item of property, plant and equipment any proc produced while bringing that asset to the location and condition necessary for it to be capable of operating in t management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing tho loss.
The Company does not expect these amendments to have impact on its financial statements when it becomes e
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
2.5.1.2. Amendments to IAS 37 - Onerous contracts - Cost of fulfilling a contract
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. Early applica
The changes in Onerous Contracts - Cost of Fulfilling a Contract specify that the 'cost of fulfilling' a contract co relate directly to the contract'. Costs that relate directly to a contract can either be incremental costs of fulfillin (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contr be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the c
The Company will not be affected by these amendments on the date of transition.
2.5.1.3. Amendments to IFRS 16 - COVID-19-related rent concessions
The amendment is effective for annual reporting periods beginning on or after 1 June 2021. Earlier application in financial statements not yet authorised for issue at 28 May 2021. The amendment is also available for interi in Covid-19-Related Rent Concessions (Amendment to IFRS 16) amend IFRS 16 to:
- provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease mo
- require lessees that apply the exemption to account for COVID-19-related rent concessions as if they were n
- require lessees that apply the exemption to disclose that fact; and require lessees to apply the exemption ret accordance with IAS 8, but not require them to restate prior period figures.
The main change from the proposal in the exposure draft is that the IASB had proposed that the practical expe available for lease payments originally due in 2021. However, after having considered the feedback to the expos decided to extend this period to June 2021 to also capture rent concessions granted now and lasting for 12 mo
The Company does not expect these amendments to have impact on its financial statements when they become
2.5.1.4. Amendments to IFRS 3 - Reference to the conceptual framework
Minor amendments were made to îFRS 3 Business Combinatîons to update the reference to the Conceptual Fr Reporting and add an exception for the recognition of liabilities and contingent liabilities within the scope of IA Contingent Liabilities and Contingent Aesets and lnterpretation 21 Levies. The amendments also confirm that not be recognised at the acquisition date.
The effective date is 1 January 2022.
The amendment will have no material effect on the Company's financial statements.
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
2.5.1.5. Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its
Venture
The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subs contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sa assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is reco of unrelated investors' interests in the associate or joint venture. The IASB has deferred the effective date of the indefinitely, but an entity that early adopts the amendments must apply them prospectively.
The Company will apply these amendments when they become effective.
2.5.1.6. Annual lmprovementn to IFRS Standards 2018 - 2020 The following Improvements were finalised in May 2020:
- IFRS 9 Financial Instruments - clarifies which fees should be included in the 10% test for derecognition of fi
- IFRS 16 Leases - To remove the illustration of payments from the lessor relating to leasehold improvements, about the treatment of lease incentives.
The effective date is 1 January 2022.
2.5.2 Standards Issued and Effective on or after 1 January 2023 a) IFRS 17 Insurance Contracts
IFRS 17 creates one accounting model for all insurance contracts in all jurisdictions that apply IFRS.
This standard replaces IFRS 4 - Insurance contracts.
The key principles in IFRS 17 are that an entity:
- identifies as insurance contracts those contracts under which the entity accepts significant insurance risk fr policyholder) by agreeing to compensate the policyholder if a specified uncertain, future event (the insured ev the policyholder;
- separates specified embedded derivatives, distinct investment components and distinct performance obligati contracts;
- divides the contracts into groups it will recognise and measure;
- recognises and measures groups of insurance contracts at a risk-adjusted present value of the future cash fl flows) that incorporates all the available information about the fulfilment cash flows in a way that is consiste market information plus (if this value is a liability) or minus (if this value is an asset) an amount representin the group of contracts (the contractual service margin);
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
- recognises the profit from a group of insurance contracts over the period the entity provides insurance cover released from risk, if a group of contracts is or becomes loss-making, an entity recognises the loss immediate
f). presents separately insurance revenue, insurance service expenses and insurance finance income or expens
- discloses information to enable users of financial statements to assess the effect that contracts within the sc the financial position, financial performance and cash flows of the entity. To do this, an entity discloses qual information about:
- the amounts recognised in its financial statements from insurance contracts;
- the significant judgements, and changes in those judgements, made when applying the Standard; and
- the nature and extent of the risks from contracts within the scope of this Standard.
2.5.3 Narrow Scope Amendments deferred until further notice a) IFRS 10 consolidated financial statements
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 scope amendment address an acknowledged inconsistency between the requirements in IFRS 10 and those in I with the sale or contribution of assets between an investor and its associate or joint venture.
b) IAS 28 Investments in Associates and Joint Ventures
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 scope amendment to address an acknowledged inconsistency between the requirements in IFRS 10 and those i dealing with the sale or contribution of assets between an investor and its associate or joint venture.
2.5.4 New standards, amendments and interpretations issued but without an effective date
At the date of authorisation of these financial statements the following standards, amendments to existing stan interpretations were in issue, but without an effective: This includes:
Amendments to IFRS 10 and IAS 28 consolidated financial statements and Investments in Associates a
Amends IFRS 10 consolidated financial statements and IAS 28 Investments in Associates and Joint Ventures (2 treatment of the sale or contribution of assets from an investor to its associate or joint venture, as follows:
- Require full recognition in the investor's financial statements of gains and losses arising on the sale or contri constitute a business (as defined in IFRS 3 Business Combinations);
- Require the partial recognition of gains and losses where the assets do not constitute a business, i.e. a gain to the extent of the unrelated investors' interests in that associate or joint venture.
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SOVEREIGN TRUST INSURANCE PLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOR THE PERIOD ENDED 30 SEPTEMBER 2023
These requirements apply regardless of the legal form of the transaction, e.g. whether the sale or contribution o investor transferring shares in a subsidiary that holds the assets (resulting in loss of control of the subsidiary), the assets themselves.
2.6 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short term highly These assets are readily convertible into known amounts of cash.
2.6.1 Cash and cash equivalents for the purpose of Statement of Cashflow
The cash and cash equivalents for the purpose of the statement of cashflow comprise of cash on hand, deposits and other short term highly liquid investments with original maturities of three months or less and bank overd
2.7 Financial assets
2.7.1.Initial recognition and measurement
Financial assets are classified, at initial recognition and subsequently measured at amortised cost, fair value th comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initia the financial asset's contractual cash flow characteristics and the Company's business model for managing the trade receivables that do not contain a significant financing component or for which the Company has applied the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fai loss, transaction costs. Trade receivables that do not contain a significant financing component or for which th the practical expedient are measured at the transaction price determined under IFRS 15. Refer to the accounti from noninsurance contracts with customers.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it need cashflows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This to as the SPPI test and is performed at an instrument level.
The Company's business model for managing financial assets refers to how it manages its financial assets in or cashflows. The business model determines whether cashflows will result from collecting contractual cashflows, assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulati market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to asset.
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Sovereign Trust Insurance plc published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 21:03:06 UTC.