SOVEREIGN TRUST INSU

SOVRENINS
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SOVEREIGN TRUST INSURANCE : AUDITED FINANCIAL STATEMENT FOR 2021

01/29/2022 | 07:01am

SOVEREIGN TRUST INSURANCE PLC

MANAGEMENT ACCOUNTS

FOR THE PERIOD ENDED DECEMBER 31, 2021

SOVEREIGN TRUST INSURANCE PLC

UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2021

Contents

Page

Financial Highlights

2

Summary of Significant Accounting Policies

3

Statement of Financial Position

22

Statement of Comprehensive Income

23

Statement of Change in Equity

24

Statement of Cash Flows

25

Notes to the Financial Statements

26

Segment Reports

38

STI December 2021

1

SOVEREIGN TRUST INSURANCE PLC

UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2021

FINANCIAL HIGHLIGHTS

Dec.2021

Dec.2020

N'000

N'000

%

Total Assets

16,429,675

14,833,236

11

Total Equity

9,441,944

8,626,100

9

Gross Premium Written

12,718,526

11,120,684

14

Net Premium Written

7,301,882

6,541,908

12

Claim Paid

3,758,514

2,900,626

(30)

Net Claims Expense

3,169,009

3,485,777

9

Profit Before Income Tax

933,352

796,107

17

Profit After Income Tax

814,777

687,698

18

Earnings Per Share (Kobo)

8.21

7.01

Net Assets Per Share (

Kobo)

83.4

57.1

STI December 2021

2

SOVEREIGN TRUST INSURANCE PLC

UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2021

Statement of Significant Accounting Policies

  1. General information
    The company was incorporated as a limited liability company on February 26, 1980, but was reorganized and commenced business as a reorganized non-life insurance company on 2nd January 1995 with an authorized share capital of N30 million and a fully paid up capital of the N20 million following the acquisition and recapitalization of the then Grand Union Assurances Limited.
    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 Policy Holders' Fund. The Company, currently having its corporate head office at 17 Ademola Adetokunbo Street, Victoria Island, Lagos with 17 other branches spread across major cities and commercial centers in Nigeria, became a Public Limited Company (Plc) on the 7th of April 2004 and was listed on the Nigerian Stock Exchange on 29th November 2006.
  2. Going Concern

These financial statements have been prepared on the going concern basis. The Company has no intention or need to reduce substantially its business operations and management believes that the going concern assumption is appropriate for the Company due to sufficient capital adequacy ratio and projected liquidity, based on historical experience that short-term obligations will be refinanced in the normal course of the business. Liquidity ratio and continuous evaluation of current ratio of the Company is carried out by the Company to ensure that there are no going concerns threats to the operation of the Company.

3 Summary of significant accounting policies

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

3.1 Basis of Preparation and Compliance with IFRS

These financial statements are the stand alone financial statements of Sovereign Trust Insurance. The Company's financial statements for the year 2014 have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB. Additional information required by national regulations is included where appropriate.

Functional and Presentation of Currency

The financial statements are presented in Nigerian currency (Naira) which is the Company's functional currency. Except otherwise indicated, financial information presented in Naira have been rounded to the nearest thousand.

Basis of Measurement

The financial statements have been prepared under the historical cost basis except for the following:

  • Financial instruments at fair value through profit or loss which are measured at fair value through profit or loss.
  • Financial assets classified as available for sale which are measured at fair value through other comprehensive income.
  • Loans and receivables and held to maturity financial assets and financial liabilities which are measured at amortised cost.
  • Investment properties which are measured at fair value.

STI December 2021

3

SOVEREIGN TRUST INSURANCE PLC

UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2021

Summary of Significant Accounting Policies (Cont'd)

3.2 Critical Accounting Estimates, Judgments and Assumptions

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. Management believes that the underlying assumptions are appropriate and that the Company's financial statements therefore present the financial position and results fairly.

.

3.3 Judgement, Estimates and Assumption

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period or if the revision affects both current and future periods.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described below:

  1. Income Taxes
    Significant estimates are required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions.
  2. Retirement benefits

The present value of the retirement benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Any changes in these assumptions will impact the carrying amount of gratuity obligations. The assumptions used in determining the net cost (income) for gratuity include the discount rate, rate of return on assets, future salary increments and mortality rates. The Company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the gratuity obligations. In determining the appropriate discount rate, the Company considers the interest rates of high- quality government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related gratuity liability. Other key assumptions for gratuity obligations are based in part on current market conditions.

STI December 2021

4

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Disclaimer

Sovereign Trust Insurance plc published this content on 29 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2022 12:00:05 UTC.

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