CUSTODIAN INVESTMENT : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

UNAUDITED CONSOLIDATED

FINANCIAL REPORTS

FOR THE THIRD QUARTER ENDED

30TH SEPTEMBER 2023

					Custodian Investment Plc
					Financial Reports
					30 September 2023
Consolidated and separate statement of financial position
As at 30 September 2023
		Group	Group	Company	Company
In thousands of naira	Note	30-Sep-23	31-Dec-22	30-Sep-23	31-Dec-22
		Unaudited	Audited	Unaudited	Audited
Assets
Cash and cash equivalents	5	23,019,106	22,044,849	1,184,255	1,855,128
Trade receivables	7	2,430,579	1,653,611	-	-
Financial assets:	6	169,791,214	136,467,520	5,020,200	3,842,238
- Fair value through profit or loss		75,674,915	82,577,385	951,807	528,078
- Fair value through OCI		21,952,811	2,645,972	391,000	391,000
- Debt securities at amortised cost		72,163,488	51,244,163	3,677,393	2,923,160
Reinsurance assets	8	16,652,072	9,394,263	-	-
Inventories	9	3,515,754	5,265,758	-	-
Deferred acquisition costs	10	1,940,895	987,566	-	-
Other receivables and prepayments	11	5,044,360	5,846,664	4,155,364	2,334,405
Right-of-use-assets	19	18,640	28,397	-	-
Investment in subsidiaries	12	-	-	15,373,012	15,373,012
Investments in joint ventures	14	125,647	125,647	-	-
Equity accounted investee	13	3,259,127	3,290,257	3,109,987	3,109,987
Investment properties	15	11,913,734	11,901,485	7,081,416	7,081,416
Property, plant and equipment	17	13,441,046	13,279,230	325,283	401,425
Intangible assets	16	251,423	239,712	10,472	16,755
Statutory deposits	18	3,288,134	2,672,415	-	-
Total assets		254,691,731	213,197,374	36,259,989	34,014,366
Liabilities and equity
Liabilities
Current income tax payable	25	2,216,865	3,346,153	1,120,786	1,294,989
Trade payables	23	17,089,868	12,134,504	-	-
Other payables	24	12,601,905	11,637,870	1,485,225	1,523,843
Insurance contract liabilities	20	127,156,491	100,079,820	-	-
Investment contract liabilities	21	10,990,597	9,070,212	-	-
Interest bearing loans and borrowings	22	2,146,881	2,179,173	-	-
Deferred tax liabilities	26	2,629,225	2,066,875	659,695	636,163
Total liabilities		174,831,832	140,514,607	3,265,706	3,454,995
Equity
Issued share capital	27	2,940,933	2,940,933	2,940,933	2,940,933
Share premium	28	6,412,357	6,412,357	6,412,357	6,412,357
Retained earnings	29	45,943,114	39,114,585	23,640,993	21,206,081
Contingency reserve	29	14,219,839	13,594,424	-	-
Fair value reserves	29	90,207	477,604	-	-
Revaluation reserve	29	630,498	630,498	-	-
Equity attributable to owners of the parent	70,236,948	63,170,401	32,994,283	30,559,371
Non-controlling interests		9,622,951	9,512,366	-	-
Total equity		79,859,899	72,682,767	32,994,283	30,559,371
Total equity and liabilities		254,691,731	213,197,374	36,259,989	34,014,366

The accounts were approved by the Board of directors on 27 October 2023 and signed on its behalf by:

Dr. (Mrs.) Omobola Johnson	Wole Oshin	Ademola Ajuwon
Chairman	Managing Director	Chief Financial Officer
FRC/2018/IODN/00000018366	FRC/2013/CIIN/00000003054	FRC/2013/ICAN/00000002068

2

Custodian Investment Plc

Financial Reports

30 September 2023

Consolidated and separate statements of profit or loss and other comprehensive income

For the period ended 30 September 2023

		Group	Group	Group	Group	Company	Company	Company	Company
		Q3 ended	Q3 ended	Year to date	Year to date	Q3 ended	Q3 ended	Year to date	Year to date
In thousands of naira	Note	30-Sep-23	30-Sep-22	30-Sep-23	30-Sep-2230-Sep-23	30-Sep-22	30-Sep-23	30-Sep-22
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
Gross Revenue		32,148,553	27,034,114	91,032,390	75,532,111	2,824,067	985,768	7,716,582	5,080,737
Interest income	31	5,498,092	3,957,405	14,890,742	10,866,205	55,135	52,671	138,789	91,543
Operating and Investment Income	30	26,650,461	23,076,709	76,141,648	64,665,906	2,768,932	933,097	7,577,793	4,989,194
Operating Expenses	32	(18,058,202)	(15,295,423)	(48,194,356)	(42,548,595)	-	-	-	-
Change in Provision for Outstanding Claims and
Life Fund Estimate	32(iii)	(3,661,397)	(2,189,539)	(19,368,008)	(12,004,173)	-	-	-	-
Net income		10,428,954	9,549,152	23,470,026	20,979,343	2,824,067	985,768	7,716,582	5,080,737
Net fair value gains/(losses)	33	(1,272,647)	(4,862,155)	337,307	(6,295,127)	321,579	(41,684)	558,216	(162,399)
Net realised gains	34	455,565	204,702	564,783	2,026,328	71,972	-	72,491	28,515
Impairment allowance	36	(129,906)	(25,575)	(548,552)	(45,246)	-	-	-	-
Finance costs	37	(54,499)	(27,803)	(161,718)	(121,648)	-	-	-	-
Management expenses	35	(3,136,370)	(2,887,122)	(9,645,189)	(7,760,853)	(295,570)	(315,315)	(984,021)	(982,233)
Share of result of equity accounted investee	13	85,888	(451,316)	235,679	(1,209,793)	-	-	-	-
Profit before taxation		6,376,985	1,499,883	14,252,336	7,573,004	2,922,048	628,769	7,363,268	3,964,620
Income tax expenses	25	(869,974)	(516,966)	(2,460,253)	(1,839,226)	(276,180)	(321,854)	(811,051)	(458,854)
Profit from continuing operation		5,507,011	982,917	11,792,083	5,733,778	2,645,868	306,915	6,552,217	3,505,766
Profit/(Loss) from discontinued operation	39	-	28,287	-	-	-	-	-	-
Profit for the period		5,507,011	1,011,204	11,792,083	5,733,778	2,645,868	306,915	6,552,217	3,505,766
Other comprehensive income (OCI):
Items that will not be reclassified to profit or loss
Equity-accounted investee -share of OCI	13	(2,589)	-	(131)	(6,818)	-	-	-	-
Net gain/(loss) on equity instrument at FVOCI	38	(1,579,176)	(3,612)	(328,431)	(137,157)	-	-	-	-
Other comprehensive income for the period net
of tax		(1,581,765)	(3,612)	(328,562)	(143,975)	-	-	-	-
Total comprehensive income for the period		3,925,246	1,007,592	11,463,521	5,589,803	2,645,868	306,915	6,552,217	3,505,766
Profit for the period attributable to:
- Owners of the parent		5,294,372	1,016,301	11,571,249	5,572,488	2,645,868	306,915	6,552,217	3,505,766
- Non-controlling interests		212,639	(5,097)	220,834	161,290	-	-	-	-
		5,507,011	1,011,204	11,792,083	5,733,778	2,645,868	306,915	6,552,217	3,505,766
Total comprehensive income attributable to:
- Owners of the parent		3,691,770	901,665	11,152,060	5,483,876	2,645,868	306,915	6,552,217	3,505,766
- Non-controlling interests		233,476	105,927	311,461	105,927	-	-	-	-
		3,925,246	1,007,592	11,463,521	5,589,803	2,645,868	306,915	6,552,217	3,505,766
Earnings/(loss) per share:
Basic/diluted earnings per share (kobo)	40	90	17	197	95	45	9	111	60

3

Consolidated and separate statement of changes in equity

For the period ended 30 September 2023

Group			Attributable to owners of the Parent
	Issued share	Share	Retained	Contingency	Revaluation	Fair Value		Non-controlling
In thousands of naira	capital	premium	earnings	reserve	Reserve	Reserve	Total	interests	Total equity
At 1 January 2023	2,940,933	6,412,357	39,114,585	13,594,424	630,498	477,604	63,170,401	9,512,366	72,682,767
Profit for the period	-	-	11,571,249	-	-	-	11,571,249	220,834	11,792,083
Other comprehensive income		-	-	-	-	(387,397)	(387,397)	58,835	(328,562)
Transfer between reserves	-	-	(625,415)	625,415	-	-	-	-	-
	2,940,933	6,412,357	50,060,419	14,219,839	630,498	90,207	74,354,253	9,792,035	84,146,288
Dividend Paid	-	-	(4,117,305)	-	-	-	(4,117,305)	(169,084)	(4,286,389)
At 30 September 2023	2,940,933	6,412,357	45,943,114	14,219,839	630,498	90,207	70,236,948	9,622,951	79,859,899
	Issued share	Share	Retained	Contingency	Revaluation	Fair Value		Non-controlling
	capital	premium	earnings	reserve	Reserve	Reserve	Total	interests	Total equity
At 1 January 2022	2,940,933	6,412,357	31,653,284	12,961,014	685,081	504,196	55,156,865	9,180,499	64,337,364
Profit for the period	-	-	5,572,488	-		-	5,572,488	161,290	5,733,778
Other comprehensive income			-	-	-	(55,723)	(55,723)	(88,253)	(143,976)
Gain on reclassification of asset of disposal
group held for sale	-	-	364,617	-	-	-	364,617	350,318	714,935
Transfer between reserves	-	-	(471,366)	471,366	-	-	-	-	-
	2,940,933	6,412,357	37,119,023	13,432,380	685,081	448,473	61,038,247	9,603,854	70,642,101
Dividend Paid	-	-	(2,940,932)	-	-	-	(2,940,932)	(206,657)	(3,147,589)
At 30 September 2022	2,940,933	6,412,357	34,178,091	13,432,380	685,081	448,473	58,097,315	9,397,197	67,494,512
Company	Attributable to owners of the Company
	Issued share	Share	Retained
In thousands of naira	capital	premium	earnings	Total
At 1 January 2023	2,940,933	6,412,357	21,206,081	30,559,371
Profit for the period	-	-	6,552,217	6,552,217
Dividend Paid	-	-	(4,117,305)	(4,117,305)
At 30 September 2023	2,940,933	6,412,357	23,640,993	32,994,283
At 1 January 2022	2,940,933	6,412,357	19,187,018	28,540,308
Profit or loss for the period	-	-	3,505,766	3,505,766
Dividend Paid	-	-	(2,940,932)	(2,940,932)
At 30 September 2022	2,940,933	6,412,357	19,751,852	29,105,142

Custodian Investment Plc

Financial Reports

30 September 2023

4

Custodian Investment Plc

Financial Reports

30 September 2023

Consolidated and separate statement of cash flows

For the period ended 30 September 2023

			Group	Group	Company	Company
In thousands of naira	Note		30-Sep-23	30-Sep-22	30-Sep-23	30-Sep-22
Cash flows from operating activities
Profit/(loss) before taxation			14,252,336	7,573,004	7,363,268	3,964,620
Adjustments for non-cash items:
- Fair value (gain)/loss		33	6,519,390	6,539,624	(556,955)	162,386
- Depreciation		17	545,755	412,540	94,965	49,116
- Depreciation on right-of-use assets		19	39,626	30,193	-	-
- Impairment charge		36	548,552	45,246	-	-
- Amortisation of intangible assets and deferred expense		16	35,424	57,539	6,283	6,283
- Profit on disposal of property, plant and equipment			12,042	(6,605)	(519)	(1,200)
- (Gain)/loss on disposal equities & other investment		34	(481,432)	(1,474,340)	(71,972)	(27,315)
- Exchange rate differential			(6,856,697)	(244,497)	(1,261)	13
- Share of result of equity accounted investee		13	(235,679)	1,209,793	-	-
- WHT on dividend			-	-	688,519	-
- Dividend income			(742,398)	(714,446)	(7,281,440)	(3,694,529)
- Interest income			(1,547,355)	(845,704)	(129,750)	(63,431)
- Investment income			(13,343,387)	(10,020,501)	(9,039)	(28,113)
- Net gain/(losses) on fair value through OCI assets			387,397	55,723	-	-
Changes in working capital:
(Increase)/Decrease in reinsurance assets			(7,257,809)	(5,584,116)	-	-
(Increase)/Decrease in other receivables and prepayment		(109,533)	(1,158,269)	(500,998)	(1,080,040)
Decrease in trade receivables			(776,968)	(333,035)	-	-
Increase/(Decrease) in deferred acquisition cost			(953,329)	(706,375)	-	-
Increase/ (Decrease) in insurance contract liabilities			27,076,671	19,668,894	-	-
Increase /(Decrease) in investment contract liabilities			1,920,385	(567,911)	-	-
Increase / (Decrease) in other liabilities			964,035	1,094,306	(38,618)	1,877,021
Increase / (Decrease) in trade payable			4,955,364	(3,054,481)	-	-
Increase / (Decrease) in inventories			1,750,004	1,039,175	-	-
Increase / (Decrease) in statutory deposit			(615,719)	(313,392)	-	-
Increase / (Decrease) in borrowings			(32,292)	(112)	-	-
Income tax paid			(2,163,619)	(1,089,714)	(49,885)	(14,006)
Net cash provided/(utilised) by operating activities			23,890,764	11,612,539	(487,402)	1,150,805
Cash flows from investing activities
Purchase of property, plant and equipment		17	(740,815)	(462,625)	(25,347)	(157,526)
Purchase of ROU asset		19	(29,869)	(17,455)	-	-
Proceeds on disposal of property, plant and equipment			21,202	18,689	7,043	1,200
Proceed on disposal of long term investment securities			-	-	202,607	-
Purchase of intangible			(47,135)	(24,494)	-	-
Net (Purchase)/redemption to investments (financial assets)		(40,311,089)	(16,544,386)	(751,642)	352,098
Purchase of investment properties		15	(12,249)	(5,247)	-	-
Dividend received			742,398	714,446	4,361,123	3,694,529
Investment income received			14,890,742	10,866,205	138,789	91,544
Net cash provided/(used) in investing activities			(25,486,815)	(5,454,866)	3,932,573	3,981,845
Cash flows from financing activities
Dividend Paid during the period			(4,286,389)	(3,147,589)	(4,117,305)	(2,940,932)
			(4,286,389)	(3,147,589)	(4,117,305)	(2,940,932)
Net increase/(decrease) in cash and cash equivalents			(5,882,440)	3,010,084	(672,134)	2,191,718
Cash and cash equivalents at beginning of the period			22,044,849	17,176,184	1,855,128	(13)
Effect of change in exchange rate			6,856,697	244,497	1,261	601,326
Cash and cash equivalents at end of the period			23,019,106	20,430,765	1,184,255	2,793,031

5

Custodian Investment Plc

Financial Reports

30 September 2023

Notes to the consolidated and separate financial statements

For the period ended 30 September 2023

• Corporate information
• 1. Custodian Investment Plc. ("the Company") is the investment holding company that resulted from the successful merger of Custodian and Allied Insurance Plc and Crusader (Nigeria) Plc. Custodian Investment Plc was incorporated on 22 August 1991 as a private limited liability company under the name Accident and General Insurance Company Limited. It changed its name to Custodian and Allied Insurance Plc on 5 February 1993, became a public limited liability company on 29 September 2006 and later changed its name to Custodian Investment Plc on 24 May 2018.
     The Company is quoted on the Nigerian Stock Exchange and has its registered office at 16A Commercial Avenue, Sabo Yaba Lagos, Nigeria.
     The financial statements of Custodian Investment Plc have been prepared on a going concern basis. The Directors of the Company have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
     The financial statements of the Company and the consolidated and separate financial statements of the Group are as at, and for the period ended,31 August 2023.
  2. Principal activities
     Custodian Investment Plc is an investment holding company with significant interests in life and non-life insurance, pension fund administration, trusteeship and property holding companies. The subsidiaries are:
  3. • Custodian and Allied Insurance Limited - a wholly owned subsidiary that carries on general insurance business,
     • Custodian Life Assurance Limited - a wholly owned subsidiary that underwrites life insurance risks, such as those associated with death, disability and health liability. The Company also issues a diversified portfolio of investment contracts to provide its customers with fund management solutions for their savings and other long-term needs.
     • Custodian Trustees Limited - a wholly owned subsidiary that carries on the business of Trusteeship and Company Secretarial services.
     • Crusader Sterling Pensions Limited - a subsidiary that is involved in the administration and management of Pension Fund Assets. This is not a wholly owned subsidiary.
     • UPDC Plc - a subsidiary that engages in the acquisition, development, sale and management of a diverse mix of commercial, residential, hospitality and retail property assets across Nigeria. The group owns 51% UPDC.
  4. Going Concern
     These consolidated and separate financial statements have been prepared on the going concern basis. The Group has no intention or need to reduce substantially the scope of its business operations. The management believes that the going concern assumption is appropriate for the Group and Company due to sufficient capital adequacy ratio and projected liquidity, based on historical experience that short-term obligations will be financed in the normal course of business. Liquidity ratio and continuous evaluation of current ratio of the Group is carried out to ensure that there are no going concern threats to the operation of the Group.
  5. Statement of compliance
     The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board (IASB).
     The consolidated and separate financial statements comply with the requirement of the Companies and Allied Matters Act, Insurance Act, CAP I17 LFN 2004, the Financial Reporting Council Act, 2011 and the Guidelines issued by the National Insurance Commission to the extent that they are not in conflict with the International Financial Reporting Standards (IFRS).

• Significant accounting policies
  The principal accounting policies applied in the preparation of these consolidated and separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation and measurement

The financial statements comprise the consolidated and separate statements of financial position, the consolidated and separate statements of profit or loss and other comprehensive income, the consolidated and separate statements of changes in equity, the consolidated and separate statements of cash flows and summary of significant accounting policies and notes to the consolidated and separate financial statements which have been prepared in accordance with the going concern principle under the historical cost convention, except for financial assets measured at fair value through profit or loss, investment properties, investment in equity instruments at fair value through other comprehensive income and property plant and equipment, which have been measured at fair value.

The Group and the Company classifies their expenses by the nature of expense method.

The figures shown in the consolidated and separate financial statements are stated in thousands unless otherwise indicated.

The disclosures on risks from financial instruments are presented in the financial risk management report.

The consolidated and separate statements of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities. Cash and cash equivalents include short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Availabl

6

Custodian Investment Plc

Financial Reports

30 September 2023

Notes to the consolidated and separate financial statements

For the period ended 30 September 2023

The cash flows from operating activities are determined by using the indirect method and the net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, as well as changes from receivables and liabilities in the corresponding note. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated. Fees and commission received or paid, income tax paid are classified as operating cash flows.

Held to m

The Group's assignment of the cash flows to operating, investing and financing category depends on the Group's business model (management Loans an approach).

Financial assets and financial liabilities are offset and the net amount reported in the consolidated and separate statements of financial position only when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liability simultaneously.

2.2 Basis of consolidation

Subsidiaries

The financial statements of subsidiaries are consolidated from the date the Group acquires control, up to the date that such effective control ceases.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this

For the purpose of these financial statements, subsidiaries are entities over which the Group, directly or indirectly, has the power to govern the financial and operating policies so as to obtain benefits from their activities.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (transactions with owners). Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the Group.

Inter-company transactions, balances and unrealised gains on transactions between companies within the Group are eliminated on consolidation. Unrealised losses are also eliminated in the same manner as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. In the separate financial statements, investments in subsidiaries and associates are measured at cost.

Loss of Control

On loss of control, the Group derecognises the assets and liabilities of the subsidiary, any controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.

Subsequently, that retained interest is accounted for as an equity-accounted investee or as an financial asset at fair value through other comprehensive income (FVTOCI) depending on the level of influence retained.

Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equal or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Dilution gains and losses arising in investments in associates are recognised in profit or loss.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and it's carrying value, and then recognises the loss as Share of profit of an associate in profit or loss

7

Custodian Investment Plc

Financial Reports

30 September 2023

Notes to the consolidated and separate financial statements

For the period ended 30 September 2023

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

Non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on the proportionate amount of the net assets of the subsidiary.

Non-controlling interests are measured at their proportionate share of the acquirer's identifiable net assets at the acquisition date.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

1. Functional and presentation currency
   The financial statements are presented in Nigerian Naira, which is the Company's functional currency. Except where expressly indicated, financial information presented in Naira has been rounded to the nearest thousand.
2. Summary of significant accounting policies

1. Insurance contracts
   Classification of Insurance contracts
   *The Reclassification/Revaluations relate to the reclassification of assets of Festival Hotel, Conference Centre & Spa which were previously accounted for as assets of disposal group classified as held for sale but now accounted for as a subsidiary. See note 16.
   Recognition valuation and measurement
   Insurance contract liabilities are recognised at fair value, this being the transaction price excluding any transaction costs directly attributable to the issue of the contract.
2. Premiums
   Gross premium written comprise the premiums on insurance contracts entered into during the year, irrespective of whether they relate in whole or in part to a later accounting period. Premiums are disclosed gross of commission to intermediaries and exclude Value Added Tax. Premium income includes adjustments to premiums written in prior accounting periods.
   Premiums on reinsurance inward are included in gross written premiums and accounted for as if the reinsurance was considered direct business, taking into account the product classification of the reinsured business. Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance or reinsurance business assumed.
   The earned portion of premium written is recognized as revenue. Premiums are earned from the date of attachment of risk, over the indemnity period, based on the pattern of risk underwritten. Outward reinsurance premiums are recognized as an expense in accordance with the pattern of indemnity received.
3. Reinsurance
   The Group cedes reinsurance in the normal course of business for the purpose of limiting its net loss potential through the transferal of risks. Premium ceded comprise written premiums ceded to reinsurers, adjusted for the reinsurers' share of the movement in the gross provision for the unearned premiums. Reinsurance arrangements do not relieve the Company from its direct obligations to its policyholders.
   Premium ceded, claims reimbursed, and commission recovered are presented in the profit or loss and statement of financial position separately from the gross amounts. Premiums, losses and other amounts relating to reinsurance treaties are recognized over the period from inception of a treaty to expiration of the related business. The actual profit or loss on reinsurance business is therefore not recognized at the inception but as such profit or loss emerges.
   In particular, any initial reinsurance commissions are recognized on the same basis as the acquisition costs incurred. Amounts recoverable under reinsurance contracts are assessed for impairment at each statement of financial position date.
   Such assets are deemed impaired if there is objective evidence, as result of an event that occurred after its initial recognition, that the Company may not recover all amounts due and that the event has a reliably measurable impact on the amounts that the Company will receive from the reinsurer.
4. Claims incurred
   Claims incurred consist of claims and claims handling expenses paid during the financial year together with the movement in the provision for outstanding claims. The gross provision for claims represents the estimated liability arising from claims in current and preceding financial years which have not yet given rise to claims paid. The provision includes an allowance for claims management and handling expenses. The gross provision for claims is estimated based on current information and the ultimate liability may vary as a result of subsequent information and events and may result in significant adjustments to the amounts provided.
   Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made and disclosed separately, if material. The liability for Incurred but not Reported (IBNR) claims is calculated at the end of the reporting period, using a range of standard actuarial claim projection techniques, based on empirical data and current assumptions that may include a margin for adverse deviation. The liability was discounted for time value of money; and no further provision was made for equalisation or catastrophe reserves (as prohibited by IFRS 4).
   The methods used and estimates made for claims provisions are reviewed regularly.

8

Custodian Investment Plc

Financial Reports

30 September 2023

Notes to the consolidated and separate financial statements

For the period ended 30 September 2023

1. Acquisition costs
   Acquisition costs represent commissions payable and other expenses related to the acquisition of insurance contracts revenues written during the financial year. Deferred acquisition costs represent the proportion of acquisition costs incurred which corresponds to the unearned premium provision.
2. Deferred expenses
   Deferred acquisition costs (DAC)
   Those direct and indirect costs incurred during the financial period arising from the writing or renewing of insurance contracts and are deferred to the extent that these costs are recoverable out of future premiums. All other acquisition costs are recognized as an expense when incurred.
   Subsequent to initial recognition, DAC for general insurance are amortized over the period in which the related revenues are earned. The reinsurers' share of deferred acquisition costs is amortized in the same manner as the underlying asset amortization is recorded in the profit or loss. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period and are treated as a change in an accounting estimate.
   An impairment review is performed at each reporting date or more frequently when an indication of impairment arises. When the recoverable amount is less than the carrying value, an impairment loss is recognized in the profit or loss.
   DAC are also considered in the liability adequacy test for each reporting period. DAC are derecognized when the related contracts are either settled or disposed of.
   Deferred expenses - Reinsurance commissions
   Commissions receivable on outwards reinsurance contracts are deferred and amortized on a straight line basis over the term of the expected premiums payable.
3. Interest
   Interest income and expense for all interest-bearing financial instruments, except for those classified at fair value through profit or loss, are recognised within 'investment income' and 'finance cost' in the profit or loss using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the net carrying amount of the financial asset or liability. The effective interest rate is calculated on initial recognition of the financial asset and liability and is not revised subsequently.
   The calculation of the effective interest rate includes all fees and points paid or received transaction costs, and discounts or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability.
   Interest income and expense on all trading assets and liabilities are considered to be incidental to the Company's trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.
   Revenue from contract with customers
   The Group is also in the business of acquiring, developing, selling and managing high quality, serviced commercial and residential accommodation and retail space. These contracts are divided into three revenue streams namely:
4. • Sales of Goods - Sale of property stock
   • Facilities management services provided to the customer: Rendering of services - Management fees and service charge surcharge

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

The Group has applied IFRS 15 practical expedient to a portfolio of contracts (or performance obligations) with similar characteristics since the Group reasonably expect that the accounting result will not be materially different from the result of applying the standard to the individual contracts. The Group has been able to take a reasonable approach to determine the portfolios that would be representative of its types of customers and business lines. This has been used to categorise the different revenue stream detailed below:

Sale of goods - Sale of Property Stock

Revenue from Sale of Property Stock is recognised at the point in time when control of the asset is transferred to the customer, generally on transfer of the property. The normal credit term is 30 to 90 days upon transfer. The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (e.g., warranties). In determining the transaction price for the sale of

property, the Group considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any)

Significant financing component

Using the practical expedient in IFRS 15, the Group does not adjust the promised amount of consideration for the effects of a significant financing component since it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

9

Custodian Investment Plc

Financial Reports

30 September 2023

Notes to the consolidated and separate financial statements

For the period ended 30 September 2023

Contract Balances

Trade Receivables

A receivable represents the Group's right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract Liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract.

1. Rental income
   Rental income arising from operating leases on investment properties and land and building is accounted for on a straight-line basis over the lease terms and is included in other operating income.

1. Income tax expenses
   Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
   Current income tax
   Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date in Nigeria. Current income tax assets and liabilities also include adjustments for tax expected to be payable or recoverable in respect of previous periods.
   Current income tax relating to items recognized directly in equity or other comprehensive income is recognized in equity or other comprehensive income and not in the statement of profit or loss.
   Current tax assets and current tax liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
   Deferred tax
   Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
   Deferred tax liabilities are recognised for all taxable temporary differences, except:
   When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
   In respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
   Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
2. • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
   • In respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and deferred tax liabilities are off set if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

10