SOVEREIGN TRUST INSURANCE : QUARTER 5 FINANCIAL STATEMENT FOR 2023

SOVEREIGN TRUST INSURANCE PLC

FINANCIAL STATEMENTS 31 DECEMBER 2023

SOVEREIGN TRUST INSURANCE PLC

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

CONTENTS	PAGE
Corporate Information	1
Financial Highlights	3
Report of the Directors	4
Report of the Audit Committee	11
Statement of Directors' Responsibilities in Relation to the Preparation of the
Financial Statements	12
Certification Pursuant to Section 60 (2) of Investment and Securities Act No.
29 of 2007	13
Independent Auditor's Report	14
Statement of Financial Position	20
Statement of Profit or Loss and Other Comprehensive Income	21
Statement of Changes in Equity	22
Statement of Cashflows	23
Notes to the Financial Statements	24
Other National Disclosures
Statement of Value Added	149
Five-Year Financial Summary	150

SOVEREIGN TRUST INSURANCE PLC

CORPORATE INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2023

RC No.

Nature of business

31962

The principal activity of the Company continues to be the provision of all classes of non-life insurance and special risk insurance, settlement of claims and insurance of policyholders' funds.

Directors	Mr. Oluseun O. Ajayi	-	Chairman
	Mr. Olaotan Soyinka	-	Managing Director/CEO
	Mrs. Ugochi Odemelam	-	Executive Director
	Mr. Jude Modilim		Executive Director (Resigned 15th
		-	June, 2003)
	Mr. Kayode Adigun		Executive Director (Appointed 30th
		-	October, 2023)
	Mr. Emmanuel Anikibe		Executive Director (Appointed 22nd
		-	November, 2003)
	Ms. Emi Faloughi	-	Non Executive Director
	Mr. Abimbola Oguntunde	-	Non Executive Director
	Mr. Odoh Shedrack Chidozie	-	Non Executive Director
	Mr. Eric Balogun		Independent Director
Company Secretary	Equity Union Limited
Registered Office	17, Adetokunbo Ademola Street
	Victoria Island, Lagos, Nigeria
	www.stiplc.com
Auditors	PKF Professional Services
	PKF House
	205A, Ikorodu Road
	Obanikoro
	Lagos
Bankers	First Bank of Nigeria Limited
	Standard Chartered Bank
	Zenith Bank Plc
	Access Bank Plc
	Guaranty Trust Bank Plc
	Ecobank Plc
	Providus Bank Limited
	First City Monument Bank Limited
	Fidelity Bank Plc
	Unity Bank Plc
	Heritage Bank Plc
	Sterling Bank Plc
Solicitors	Citipoint Chambers
Registrar	Meristem Registrars Limited
Reporting Actuary	O & A Hedge Actuarial Consulting

1

SOVEREIGN TRUST INSURANCE PLC

CORPORATE INFORMATION

FOR THE YEAR ENDED 31 DECEMBER 2023

Reinsurers	Aveni Reinsurance Company Limited
	African Reinsurance Corporation
	Continental Reinsurance Plc
	WAICA Reinsurance Corporation
Management Team	Olaotan Soyinka
	Managing Director/CEO
	Ugochi Odemelam
	Executive Director, Marketing & Business Development
	Kayode Adigun
	Executive Director, Finance & Corporate Services
	Emmanuel Anikibe
	Executive Director, Technical Operations
	Lucas Durojaiye
	GM/Head, Northern Area Operations
	Sanni Oladimeji
	DGM/Head, Risk Management & Compliance
	Segun Bankole
	DGM/Head, Sales & Corporate Communications
	Olajumoke Olatubosun
	DGM/Head, Martketing and Business Development
	Olalekan Oguntunde
	DGM/Head, ICT
	Samuel Oseni
	DGM/Head, Internal Audit
	Angela Uche-Onochie
	DGM/Head, Eastern Area Operations
	Abisola Asaju
	AGM/Head, General Internal Services
	Niyi Olaitan
	AGM/ Head, Finance and Accounts
	Victoria Eze
	AGM/ Head, Sales & Client Services 2
	Akinwunmi Akinrinmade
	AGM/ Head, Energy
	Kola Azeez
	AGM/Sales and Client Services
	Funmilayo Idodo
	AGM/Head, General Underwriting Department/ Branch Operations

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SOVEREIGN TRUST INSURANCE PLC

FINANCIAL HIGHLIGHTS

FOR THE YEAR ENDED 31 DECEMBER 2023

	2023	2022
	₦'000		₦'000	% Change
			Restated
Statement of profit or loss and other
comprehensive income
Insurance revenue	19,322,894	15,701,846	23%
Insurance service expenses	(7,355,237)	(6,038,816)	-22%
Net expenses from reinsurance contract	(8,636,324)		(6,337,460)	-36%
Insurance service result	3,331,333	3,325,571	0%
Investment return	819,474	548,727	49%
Net financial result	757,982	365,038	108%
Profit before income tax	1,415,761	1,448,474	-2%
Profit after income tax	1,273,973	1,386,788	-8%
Statement of financial position
Cash and cash equivalents	11,960,392	8,678,703	38%
Reinsurance contract assets	2,580,533	2,480,968	4%
Total assets	22,760,888	17,153,565	33%
Insurance contract liabilities	4,679,815	4,146,766	13%
Total liabilities	9,186,344	6,748,784	36%
Total equity	13,574,544	10,404,781	30%
Ratios
Basic earnings per share (kobo)	8.95	16.14	-45%
Claims and expenses over earning premiums	0.83	0.79	5%

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SOVEREIGN TRUST INSURANCE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

1.Legal Form And Principal Activity

In compliance with the relevant provisions of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004, the Insurance Act 2003, relevant policy guidelines issued by the National Insurance Commission (NAICOM) and the Financial Reporting Council of Nigeria Act No. 42, 2023 (as amended), the Directors have pleasure in submitting to the members their report together with the audited financial statements of Sovereign Trust Insurance Plc ("the Company") for the year ended 31 December 2023.

The Company was incorporated as a limited liability company on 26 February 1980 and commenced business on 2 January 1995 as a non-life insurer with an authorized share capital of ₦30 million and a fully paid up share capital of ₦20 million following the acquisition and recapitalization of the then Grand Union Assurance Limited.

The Company which was licensed to carry out business in all classes of non-life insurance and as special risk insurers currently has authorised share capital of ₦7.5 billion divided into 15 billion units of 50 kobo per share with a paid up capital of ₦7.11 billion (Dec 2022:5.68 billion) divided into 14.23 billion (Dec 2022:11.36 billion) units of 50 kobo per share.

The Company's corporate head office is at across major cities and commercial centers Company (PLC) on 7 April 2004, and November 2006.

Victoria Island, Lagos with 17 other branches spread in Nigeria. The Company became a Public Limited was listed on the Nigerian Stock Exchange on 29

	2023		2022
	₦'000		₦'000
			Restated
2. Operating Results
Insurance revenue	19,322,894	15,701,846
Insurance service expenses	(7,355,237)	(6,038,816)
Net expenses from reinsurance contract	(8,636,324)		(6,337,460)
Insurance service result	3,331,333	3,325,571
Profit before income tax	1,415,761	1,448,474
Income tax expense	(141,788)	(61,686)
Profit after income tax	1,273,973	1,386,788

3.Dividend

3kobo per ordinary share dividend is proposed in respect of the current year (2022 : Nil). This is subject to approval at the Annual General Meeting.

4.Business Review And Future Development

The Company carried out insurance activities in accordance with its Memorandum and Articles of Association. A comprehensive review of the business for the year and prospects for the ensuing year will be contained in the Managing Director's Report in the Annual Report.

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SOVEREIGN TRUST INSURANCE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

5.Directors

The names of the Directors at the date of this report and of those who held offices during the year are as follows:

Mr. Oluseun O. Ajayi	-	Chairman
Mr. Olaotan Soyinka	-	Managing Director/CEO
Mrs.Ugochi Odemelam	-	Executive Director
Mr. Jude Modilim	-	Executive Director (Resigned 15th June,2003)
Mr. Kayode Adigun	-	Executive Director (Appointed 30th October, 202
Mr. Emmanuel Anikibe	-	Executive Director (Appointed 22nd November,20
Ms.Emi Faloughi	-	Non Executive Director
Mr. Abimbola Oguntunde	-	Non Executive Director
Mr. Odoh Shedrack Chidozie	-	Non Executive Director
Mr. Eric Balogun		Independent Director
6.Directors's interests.

The names of the Directors and their interests in the issued and paid up share capital of the Company as recorded in the Register of Directors' shareholdings as at 31 December 2023 are as follows:

	Number of	Number of			Indirect
	direct Ordinary	indirect			Representat
	Shares held in	Ordinary Shares	Total	Total	ion on the
Name	2023	held in 2023	31 Dec 2023	31 Dec 2022	Board
					Sovereign
					Investments
Mr. Oluseun O. Ajayi	1,166,156,859	1,055,850,018	2,222,006,877	1,661,256,877	Ltd
Mr. Olaotan Soyinka	68,298,960	-	68,298,960	8,298,960	-
Mrs. Ugochi Odemelam	88,419,351	-	88,419,351	6,735,481	-
					Teeof
Ms. Emi Faloughi	27,024,097	881,572,742	908,596,839	848,596,839	Holdings Ltd
Mr. Abimbola Oguntunde	200,335,414	-	200,335,414	335,414	-
					Morning Side
Mr. Odoh Shedrack					Capital
Chidozie	-	2,499,000,000	2,499,000,000	2,499,000,000	Partners Ltd.
Mr. Kayode Adigun	66,926,116	-	66,926,116	43,950,395
Mr. Emmanuel Anikibe	20,604,971	-	20,604,971	483,977	-

7.Directors' Interest In Contracts

None of the Directors has notified the Company for the purposes of Section 277 of the Companies and Allied Matters Act,Laws of the Federation Nigeria 2020 of any disclosable interests in contracts in which the Company was involved as at 31 December 2023.

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SOVEREIGN TRUST INSURANCE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

8. Complaint Management Policy

In compliance with the Securities and Exchange Commission (SEC) rules relating to the Complaints Management Framework of the Nigerian Capital Market, Sovereign Trust Insurance Plc has adopted a Complaints Management Policy. The Company shall receive and entertain all Shareholders' complaints arising out of issues covered under the Investments and Securities Act (ISA), 2007 the Rules and Regulations made pursuant to the ISA, the rules and regulations of Securities Exchanges and guidelines of recognised trade associations as directed.

9. Acquisition Of Own Shares

The Company did not purchase any of its own shares during the year.

10. Company's Distributors

The Company's products are marketed by insurance brokers and agents throughout the country.The Company also employs the direct marketing method to source for insurance business.

11. Insurance Technical Agreements

The Company had reinsurance treaty arrangements with the following companies during the year:

• African Reinsurance Corporation
• Aveni Reinsurance Company Limited
• Continental Reinsurance Plc
• WAICA Reinsurance Corporation

12. Corporate Governance

The Company maintains corporate policies and standards designed to encourage good and transparent corporate governance, avoid potential conflicts of interest and promote ethical business practices. The business of the Company is conducted with integrity which pays due regard to the legitimate interests of our stakeholders.

13. Securities Trading Policy

In line with the Nigerian Stock Exchange amended rules, Sovereign Trust Insurance Plc has policy guiding Directors, officers, key management personnel, contractors and all other employees dealing in the securities of the Company.

The policy aims to ensure that the reputation of the Company is not adversely impacted by perceptions of trading in the Company's securities at inappropriate times or in an inappropriate manner.

The policy's intention is to ensure that Directors, officers and other Company personnels do not make improper use of "price sensitive information" gained their position or engagement in the Company.

14. Employment And Employees

a) Employee Involvement and Training

The Company is committed to keeping employees fully informed as much as possible regarding the Company's performance and progress. Views of employees are sought, where practicable, on matters which particularly affect them as employees. The Company runs an open door management policy. Management, professional and technical expertise are the Company's major assets and investment in developing such skills is continuous. The Company's expanding skills base is being brought about by a wide range of inhouse and external training. Opportunities for career development within the company have also been broadened.

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SOVEREIGN TRUST INSURANCE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include staff retirement benefit, productivity bonus, promotion and salary review.

b) Employment of Physically Challenged Persons

It is the policy of the Company that there is no discrimination in considering applications for employment including those of physically challenged persons. All employees whether physically challenged or not are given equal opportunities to develop their knowledge and to qualify for promotion in furtherance of their careers.

c) Health Safety and Welfare at Work

The Company strictly observes all health and safety regulations. The Company maintains business premises designed with a view to guaranteeing the safety and healthy living conditions of its employees and customers alike. Employees are adequately insured against occupational and other hazards. Financial provision is also made for all employees in respect of transportation, housing, medical expenses and meals.

15. Events After The Reporting Date

There were no events after the reporting date which could have a material effect on the financial position of the Company as at 31 December 2023 or its financial performance for the year then ended that have not been adequately provided for or disclosed.

16. Equity Range Analysis

The range of shareholding as at 31 December 2023 is as follows:

Range		No. of Holders	Percent		Unit		Percent
1 - 1,000	1,209	13%		514,666	0%
1,001 - 5,000	1,757	19%		5,184,148	0%
5,001 - 10,000	1,065	11%		7,978,693	0%
10,001	- 50,000	2,728	29%		68,846,393	0%
50,001	- 100,000	925	10%		66,410,093	0%
100,001 - 500,000	1,108	12%		229,606,281	2%
500,001 - 1,000,000	189	2%		139,801,414	1%
1,000,0001 - 5,000,000	202	2%		419,820,842	3%
5,000,001 - 10,000,000	27	0%		196,674,508	1%
10,000,001 - Above	63	1%		13,093,302,445	92%
Total		9,273	100%		14,228,139,483	100%
The range of shareholding as at 31 December 2022 is as follows:
Range		No. of Holders	Percent		Unit		Percent
1 - 1,000	1,181	13%		516,482	0%
1,001 - 5,000	1,735	19%		5,123,475	0%
5,001 - 10,000	1,058	11%		7,925,002	0%
10,001	- 50,000	2,761	30%		69,345,988	1%
50,001	- 100,000	930	10%		66,776,382	1%
100,001 - 500,000	1,134	12%		235,635,661	2%
500,001 - 1,000,000	181	2%		134,842,463	1%
1,000,0001 - 5,000,000	191	2%		406,314,065	4%
5,000,001 - 10,000,000	29	0%		211,318,125	2%
10,000,001 - Above	56	1%		10,226,668,371		90%
Total		9,256	100%		11,364,466,014	100%

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SOVEREIGN TRUST INSURANCE PLC

REPORT OF THE DIRECTORS

FOR THE YEAR ENDED 31 DECEMBER 2023

17. Substantial interest in shares

According to the register of members at 31 December 2023, no shareholder held more than 5% of the issued share capital of the Company except as disclosed as follows:

	2023		2022
		% of			% of
NAME	No. of Holding	Holding	No. of Holding		Holding
Morning Side Capital Partners Ltd	2,499,000,000	17.56%	2,499,000,000	21.99%
Sovereign Investments Limited	1,055,850,018	7.42%	995,100,018	8.76%
TrustBanc Nominee 4	900,000,000	6.33%	900,000,000	7.92%
Teeof Holdings Limited	881,572,742	6.20%	821,572,742	7.23%
Tripple Tees Endowment Limited	1,791,346,735	12.59%	684,381,657	6.02%
Ajayi Oluseun O.	1,166,156,859	8.20%	666,156,859	5.86%
Randwaves Ltd	1,218,341,894	8.56%	-	0.00%
Others	4,715,871,235	33.14%	4,798,254,738	42.22%
Total	14,228,139,483	100%	11,364,466,014	100%
18. Contributions And Sponsorship
The tax allowable donations and sponsorship made	during the	year was ₦2,350,000 (2022:
₦3,160,000). See analysis below:
			2023		2022
			₦'000		₦'000
ICOBCC Unveiling project 2022			-	200
Armed Forces remembrance day celebration		-	100
Investiture of Mr. Edwin Igbiti as the 51st President CIIN		-	300
Investiture of Mr. Samuel Agbeluyi as the 16th President CITN	500	-
Chartered Institute of Taxation of Nigeria VI and Lekki District
Society			-	250
PILA's 50th anniversary			300	-
Business Journal 15th anniversary lecture/awards		500	-
All Junior schools spelling BEE competition		250	-
NAIPE 2023 annual conference			300	-
Investiture of the 2023-25 executive committee		500	-
Nigeria Council of Registered insurance Brokers		-	2,000
Chartered Institute of Taxation of Nigeria		-		310
			2,350	3,160

19. Property and Equipment

Information relating to the Company's property and equipment is detailed in Note 25 to the financial statements.

20. Board Committees

The Board, in compliance with the guidelines of the National Insurance Commission carried out its oversight function through its standing committees, each which has a charter that clearly defines its purpose, composition and structure, frequency of meeting, duties, tenure and reporting lines to the Board.

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