Staco Insurance PlcNSENG: STACO

Quarter 3 - financial statement for 2020

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STACO INSURANCE PLC MANAGEMENT ACCOUNTS FOR THE PERIOD ENDED 30TH SEPTEMBER 2020

FINANCIAL HIGHLIGHTS

2020

2019

Growth

N'000

N'000

%

Major statement of financial position

Total assets

5,773,423

5,926,419

(2.58)

Shareholders' funds

(4,067,413)

(3,232,696)

25.82

Major statement of comprehensive income

Gross premium

530,946

2,044,347

(74.03)

Net premium earned

568,474

1,701,621

(66.59)

Investment income

116,429

78,116

49.05

Other income

43,836

9,262

373.29

Net underwriting and claims expenses

(357,960)

(1,045,843)

(65.77)

(Loss)/profit before taxation

(765,616)

(695,094)

(10.15)

(Loss)/profit after taxation

(834,716)

(760,092)

(9.82)

Information per 50k ordinary share

Earnings per share (kobo)

(9)

(8)

(5.97)

Net assets (kobo)

1

1

(0.03)

Stock exchange quotation (kobo) at 30

September

50

50

-

Price earning ratio

(0.18)

(0.17)

-

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

30

31

September

December

2020

2019

ASSETS

Note

N'000

N'000

Cash and cash equivalents

8

143,232

185,028

Financial assets

9

138,998

201,171

Trade receivables

10

31,846

17,393

Reinsurance assets

11

1,293,310

1,300,753

Other receivables and prepayments

12

94,355

83,579

Deferred acquisition cost

13

32,894

62,171

Investment in subsidiary

14

327,937

327,937

Investment properties

15

1,520,000

1,520,000

Deffered tax assets

16.1

-

-

Leased assets

17

3,149.91

3,150

Property ,plant and equipment

18

1,881,835

1,919,260

Statutory deposit

19

300,000

300,000

Intangible asset

20

5,866

5,976

Total assets

5,773,423

5,926,419

LIABILITIES

Insurance contract liabilities

21

3,271,870

3,307,748

Financial Liabilities

22

4,900,806

4,900,282

Trade payables

23

356,235

238,087

Other payables

24a

1,104,268

574,441

Deferred tax liabilities

16.1

98,050

98,050

Employee benefit liability

26

-

-

Taxation

27

109,606

40,506

Total liabilities

9,840,836

9,159,115

EQUITY

28

Issued share capital

28a

4,670,544

4,670,544

Share premium

28c

434,164

434,164

Revaluation reserve

28d

1,407,622

1,407,622

Fair value reserve

28e

333,904

333,904

Contingency reserve

28f

2,288,125

2,272,197

Retained earnings

28g

(13,201,773)

(12,351,129)

Shareholders' funds

(4,067,413) (3,232,696)

Total Liabilities and Equity

5,773,423 5,926,419

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY :

…………………………………..

……………………………………

……………………………………

Jide Omotere

Bayo Fakorede

Muhammad Sidi Aliyu

Chief Finance Officer

Ag. Managing Director

Chairman

FRC/2013/ICAN/00000002180

FRC/2013/CIIN/00000004099

FRC/2020/003/00000021442









STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

01.07 -

30

01.07 -

30

30.09

September

30.09

September

2020

2020

2019

2019

Note

N'000

N'000

N'000

N'000

Gross Premiums written

29

149,037

530,946

294,918

2,044,347

Gross Premium Income

29a

184,344

754,978

580,397

2,244,377

Reinsurance expenses

29b

(89,790)

(186,504)

(129,105)

(542,756)

Net Premium Income

29

94,553

568,474

451,292

1,701,621

Fees and Commission Income

30

4,260

25,306

30,071

129,761

Net underwriting Income

98,814

593,780

481,362

1,831,381

Claims expense

31

(35,414)

(209,909)

(184,806)

(556,252)

Underwriting expenses

32

(53,518)

(148,051)

(165,138)

(489,591)

Net underwriting and claims expenses

(88,932)

(357,960)

(349,944)

(1,045,843)

Underwriting results

7

9,881

235,819

131,419

785,538

Investment income

33

17,469

116,429

44,965

78,116

Net realised gain/(loss) on financial assets

34

-

-

-

-

Other income

35

30,603

43,836

3,236

9,262

Operating and administrative expenses

36

(518,428)

(1,038,609)

(818,291)

(1,497,418)

Interest on convertible bond

37

(41,030)

(123,091)

(23,531)

(70,593)

Impairment loss on trade receivables

38

-

-

-

-

Profit / (Loss) before taxation

(501,505)

(765,616)

(662,202)

(695,094)

Taxation

27.1

(59,100)

(69,100)

(50,000)

(64,998)

Profit / (Loss) for the year

(560,605)

(834,716)

(712,202)

(760,092)

Other comprehensive income

Net fair value gain (loss) on available for sale financial assets

28e

-

-

-

(27,619)

Foreign exchange translation gain/(loss)

28f

-

-

-

-

Appreciation on investment in subsidiary

-

-

-

Total comprehensive income/(loss) for the year

(560,605)

(834,716)

(712,202)

(787,711)

Profit/(Loss) attributable to:

Owner of equity

(560,605)

(834,716)

(712,202)

(760,092)

Non controlling interest

-

-

(560,605)

(834,716)

(712,202)

(760,092)

Total comprehensive income/(loss) attributable to :

Owner of equity

(560,605)

(834,716)

(712,202)

(787,711)

Non controlling interest

-

-

(560,605)

(834,716)

(712,202)

(787,711)

Earning per share(kobo)

- Actual

(6)

(9)

(7)

(8)

- Adjusted

(6)

(9)

(7)

(8)

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

Share

Share

Revaluation

Fair value (Available for

Contigency

Retained

Total

Capital

Premium

Reserve

sale) Reserve

Reserve

Earnings

Equity

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Balance as at 1 January 2019 4,670,544

434,164

1,595,299

368,475

2,204,156

(11,364,963)

(2,092,325)

-

-

-

-

- (27,619)

- -

-

-

-

-

(27,619)

-

-

-

- -

61,330

(61,330)

-

-

-

- -

-

(760,092)

(760,092)

-

-

- -

-

-

-

-

-

- -

-

-

-

Total comprehensive income for the year

Issue of share capital

Transfer to contigency reserve Transfer from (to) retained earning Dividend

Revaluation surplus

Balance as at 30 September 2019

4,670,544

434,164

1,595,299

340,856

2,265,486

(12,186,386)

(2,880,036)

Balance as at 1 January 2020

4,670,544

434,164

1,407,622

333,904

2,272,197

(12,351,129)

(3,232,697)

Total comprehensive income for the year

-

-

-

-

-

-

-

Issue of share capital

-

-

-

-

-

-

-

Transfer to contigency reserve

-

-

-

-

15,928

(15,928)

-

Transfer from (to) retained earning

-

-

-

-

-

(834,716)

(834,716)

Dividend

-

-

-

-

-

-

-

Revaluation surplus

-

-

-

-

-

-

-

Balance as at 30 September 2020 4,670,544 434,164 1,407,622 333,904 2,288,125 (13,201,773) (4,067,413)

STACO INSURANCE PLC

STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

30

September

September

2020

2019

Cash flow from operating activities

Note

N'000

N'000

Premium received from policy holders

516,493

2,041,541

Reinsurance receipts in respect of claims

226,460

356,027

Reinsurance cost

(179,060)

(531,881)

Cash paid to and on behalf of employees

(177,043)

(606,503)

Other operating cash payments/receipts

(172,602)

(306,273)

Commission paid

(31,161)

(55,208)

Claims paid

(248,216)

(822,353)

Tax paid

-

(59,998)

Net cash provided by operating activities

(65,129)

15,351

Cash flow from investing activities

Purchase of property,plant and equipment

18

(1,187)

(4,968)

Purchase of intangible asset

(500)

-

Fund placement proceed

16,606

61,135

Dividend received

76,312

37,147

Interest received

40,117

40,970

Proceeds from sales of assets

14,700

-

Net cash provided by investing activities

146,048

134,283

Cash flow from financing activities

Change in borrowings

(122,715) 0

(267,285)

Proceeds from issue of share capital Repayment of finance lease liabilities

-

-

-

-

Net cash used in financing activities

(122,715)

(267,285)

Net increase/(decrease) in cash and cash

equivalents

(41,796)

(117,651)

Cash and cash equivalents at the beginning of the year

185,028

395,682

Cash and cash equivalents at the end of the year

143,232

278,031

Represented by:

Cash at bank and in hand Cashbook overdrawn

8

143,232

-

143,232

278,031

-

278,031

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

RISK MANAGEMENT FRAMEWORK (CON'TD) CAPITAL MANAGEMENT

The Group's objectives with respect to capital management are to maintain a capital base that is structured to exceed regulatory and to best utilize capital allocations

Insurance industry regulator measures the financial strength of Non-life insurers using a solvency margin model, NAICOM generally expects non-life insurer to comply with this capital adequacy requirement.

Section 24 of the Insurance Act 2003 defines Solvency Margin of a Non-life insurer as the difference between the admissible assets and liabilities and this shall not be less than 15% of net premium income (gross premium income less re-insurance premium paid) or the minimum capital base (3 billion) whichever is higher.

The test compares insurers' capital against the risk profile. The regulator indicated that the insurer should produce a minimum solvency margin of 100%. During the period, the Group consistently operated above the minimum. The regulator has the authority to request more extensive reporting and can place restrictions on the Group's operations as deemed necessary if the Group falls below this requirement.

The solvency margin for the Company as at 30 September 2020 is as follows:

ASSETS:

ADMISSIBLE

IN ADMISSIBLE

TOTAL

N'000

N'000

N'000

Cash and cash equivalents

143,232

-

143,232

Financial assets

138,998

-

138,998

Insurance receivables

31,846

31,846

Reinsurance assets

1,293,310

-

1,293,310

Other receivables

-

94,355

94,355

Deferred acquisition cost

32,894

-

32,894

Investment in subsidiary

-

327,937

327,937

Investment properties and land

1,520,000

-

1,520,000

Leased assets

3,150

3,150

Property and equipment

1,881,835

-

1,881,835

Statutory deposit

300,000

-

300,000

Intangible assets

-

5,866

5,866

Total assets

5,345,265

428,158

5,773,423

LIABILITIES

Investment contract liabilities

-

-

Insurance ccontract liabilities

3,271,870

-

3,271,870

Borrowings

4,900,806

-

4,900,806

Trade payables

356,235

-

356,235

Other payables

1,104,268

-

1,104,268

Deferred tax liabilities

-

98,050

98,050

Current income tax liabilities

109,606

-

109,606

Total liabilities

9,742,786

98,050

9,840,836

SOLVENCY MARGIN

(4,397,521)

MINIMUM REQUIRED

3,000,000

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020 RISK MANAGEMENT FRAMEWORK (CON'TD) CAPITAL MANAGEMENT

The Company further developed an internal capital adequacy model that assesses the risk of assets, policy liabilities and other exposures by applying various factors. The model calculates the capital required for each class of the broad risks identified by the Company and aggregates through co-variance methodology that considers the relationship between these risk categories.

As at period end, the Company showed a negative solvency margin of N4,397,521.54 and a solvency ratio of (146.58)%

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

7 SEGMENT INFORMATION- COMPANY

Segment Information

Following the management approach of IFRS 8, the company is organised into eight operating segments. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. Management identifies its reportable segments by product line. These segments and their respective operations for the period ended 30 September, 2020 are as follows:

Fire

General accident Motor vehicle

Oil and gas Marine Aviation Bond

Engineering

General

Motor

Oil and

Fire

Accident

Vehicle

Gas

Marine

Aviation

Bond

Engineering

Total

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Gross premium written

121,397

98,291

203,920

7,765

70,038

2,695

11,058

15,781

530,946

Gross premium income

174,727

119,292

344,985

30,531

48,419

3,014

7,331

26,680

754,978

Re-insurance expenses

(110,427)

-

(37,339)

(20,939)

(10,391)

(1,746)

(1,137)

(4,525)

(186,504)

Net premium income

64,300

119,292

307,646

9,591

38,028

1,268

6,194

22,154

568,474

Fee Income and commission

14,271

-

1,209

5,026

2,217

844

328

1,412

25,306

Investment returns -

Net underwritting income

78,570

119,292

308,855

14,617

40,245

2,112

6,521

23,566

593,780

Claim expenses(Gross)

(9,938)

(19,205)

(50,113)

(164,288)

(2,300)

(1,483)

-

(887)

(248,216)

Insurance claims recovered /

recoverable from reinsurers

18,184

(23,541)

(23,445)

152,636

(71,811)

(1,088)

(4,173)

(8,456)

38,306

Net insurance benefits and claims

8,246

(42,746)

(73,558)

(11,653)

(74,111)

(2,571)

(4,173)

(9,343)

(209,909)

Underwriting expenses

(30,728)

(24,124)

(48,368)

(6,372)

(31,119)

(766)

(1,378)

(5,196)

(148,051)

Total expenses

(22,482)

(66,871)

(121,926)

(18,024)

(105,230)

(3,338)

(5,551)

(14,539)

(357,960)

Reportable segment profit

56,088 52,421 186,928

(3,407)

(64,984)

(1,226)

971

9,027

235,819

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

SEGMENT INFORMATION CONT'D- COMPANY

The segment information provided by Management for the reporting segments for the year ended 30 September 2019

General

Motor

Oil and

Fire Accident

Vehicle

Gas

Marine

Aviation

Bond

Engineering

Total

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Gross premium written

545,671 324,599

649,626 158,239 282,396 166

18,557

65,093 2,044,347

Gross premium income

631,635

357,670

741,939

230,020

192,584

(271)

11,262

79,539

2,244,377

Re-insurance expenses

(302,026)

(4,720)

(20,948)

(83,884)

(96,308)

(4,691)

(4,517)

(25,662)

(542,756)

Net premium income

329,609

352,950

720,991

146,135

96,277

(4,962)

6,745

53,877

1,701,621

Fee Income and commission

69,109

1,354

3,592

20,551

24,653

1,012

1,328

8,162

129,761

Investment returns

-

-

- -

- -

-

-

-

Net underwritting income

398,718 354,303

724,583 166,686 120,930 (3,950)

8,073

62,038 1,831,381

Claim expenses(Gross)

(213,557)

(109,947)

(194,051)

(149,413)

(76,224)

(46,438)

(3,760)

(28,963)

(822,353)

Insurance claims recovered from reinsurers

324,648 81,079

171,676 (368,772)

98,581 695

330

(42,136)

266,101

Net insurance benefits and claims

111,091

(28,868)

(22,375)

(518,185)

22,357

(45,743)

(3,430)

(71,099)

(556,252)

Underwriting expenses

(179,312)

(72,400)

(110,024)

(50,541)

(57,840)

(140)

(2,040)

(17,295)

(489,591)

Total expenses

(68,221)

(101,268)

(132,399)

(568,725)

(35,484)

(45,882)

(5,471)

(88,394)

(1,045,843)

Reportable segment profit

330,497

253,036

592,184 (402,039)

85,446 (49,832)

2,602

(26,355)

785,538

STACO INSURANCE PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

31

December

2020

2019

N'000

N'000

8 CASH AND CASH EQUIVALENTS

Cash in hand

257

2,844

Due from banks and other financial institutions

(note 8.1)

142,974

182,184

143,232

185,028

8.1 Due from banks and other financial

institutions

Balances held with banks

54,272

22,111

Placement with banks

88,702

160,073

142,974

182,184

Short-term deposits are made for varying

period of one day and three months depending

on the immediate cash requirement of the

group.

For the purpose of cash flows, cash and cash

equivalents comprises include cash and bank

balances (as above)

143,232

185,028

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

31

December

2020

2019

9

N'000

FINANCIAL ASSETS

The group financial assets are summarised below by measurement category :

Held to maturity (Note 9.1) 25,260

N'000

86,693

Loans and receivables (Note 9.2) 17,147

17,887

Available for sale financial asset (Note 9.3) 96,591

96,591

138,998

201,171

9.1

Held to maturity

Government securities 19,581

81,015

Treasury bills 5,679

5,679

25,260

86,693

Due within 12 months -

1,350

Due after 12 months 25,260

85,343

25,260

86,693

There are no impaired held to maturity investments at 30

September 2020 (2019 nil)

9.2

Loan and receivables

Staff loan 17,147

17,887

17,147

17,887

17,147

17,887

Due within 12 months 3,210

3,950

Due after 12 months 13,937

13,937

17,147

17,887

9.2a

Staff loan 114,337

115,077

Allowance for impairment (Note 9.2c) (97,190)

(97,190)

17,147

17,887

For loans and receivables exceeding 12 months, the estimated fair values

of the loans and

receivables are the discounted amount of the estimated future cash flows expected to be received. Expected cash flows are discounted factor at current market rates to determine fair value. For loans and receivables with maturity period of below 12 months, no discounting was applied.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

  1. b Movement on the provision for impaired loans and receivables are as follows :

    Company Staff loan Total

    N'000

    N'000

    At beginning of year

    97,190

    97,190

    Provision for impairment

    -

    -

    Provision no longer required

    -

    Amount written off during the year as uncollectible -Unused amount reversed 97,190 - 97,190

    30

    September

    2020

    31

    December

    2019

    N'000 N'000

  2. Available for sale investment

Listed - -

Unlisted 96,591 96,591

96,591 96,591

Due within 12 months - -

Due after 12 months 96,591 96,591

96,591 96,591

The Group investment in unquoted equity financial instrument could not be fair valued as there were no observable data for which the entity could be fair valued,the carrying amount was based on cost less impairment.

The quoted equity financial instrument are measured at market value,the cummulative gain or loss are recognised in other comprehensive income.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

31

September

December

2020

2019

N'000

N'000

10 TRADE RECEIVABLES

Due from agents

-

-

Due from brokers

1,632,037

1,617,584

Due from Reinsurance companies

-

-

1,632,037

1,617,584

Allowance for impairment (Note 10.1)

(1,600,191)

(1,600,191)

31,846

17,393

Due within 12months

31,846

17,393

Due after 12 months

-

-

31,846

17,393

10.1 Movement on the allowance for impairment of receivables arising out of direct insurance arrangements are as follows:

N'000

At beginning of year 1,600,191

Provision for impairment -

Provision no longer required -

Amount written off during the year as uncollectible -

At end of period 1,600,191

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

31

December

2020

2019

N'000

N'000

11 REINSURANCE ASSETS

Prepaid reinsurance (note 11.1)

79,070

79,070

Reinsurance recoverable

1,211,759

1,211,759

Prepaid M&D Deposit - Re-Insurance

2,481

9,925

1,293,310

1,300,753

Due within 12months

1,005,909

765,607

Due after 12 months

287,401

287,401

1,293,310

1,053,008

11.1 Movement in prepaid reinsurance At beginning of year

258,355

258,355

Additions during the year

1,008,732

644,232

Amortisation during the year

(186,504)

(823,516)

At end of period

1,080,583

79,070

There were no indicators of impairment

for re-insurance assets.Therefore

,no impairment

allowance is required in respect of these assets.The carrying amounts disclosed above is in respect of the reinsurance contracts which approximate the fair value at the reporting date.

30

September

31

December

2020

2019

12 OTHER RECEIVABLES AND

PREPAYMENTS

Accrued income (Note 12.2)

(123)

-

Prepayment (Note 12.2)

11,446

1,096

Other receivables (Note 12.1)

83,032

82,483

94,355

83,579

Due within 12months

94,355

83,579

Due after 12 months

-

-

94,355

83,579

12.1 Other receivables

Stock- consumables

-

-

Deposit for assets

-

-

Other sundry debtors

2,303,198

2,302,437

2,303,198

2,302,437

Allowance for impairment (Note 9.2c)

(2,220,166)

(2,220,166)

83,032

82,271

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

2020

31

December

2019

13 DEFERRED ACQUISITION COST

At begining of year

62,171

158,291

Additions during the year

79,445

381,135

Amortisation during the year

(108,722)

(477,255)

At end of period

32,894

62,171

Due within 12months Due after 12 months

32,894

-

62,171

-

32,894

62,171

14 INVESTMENT IN SUBSIDIARY

14.1 The following table illustrates the summarized financial information of the company's

investment in Staco Sierra Leone Limited

Share of the Subsidiary's statement of

financial position:

Assets

-

920,133

Liabilities

-

- 733,504

Equity

-

186,629

Share of Subsidiary's reserves and

156,741

profit or loss:

Contingency reserve

-

41,747

Retained earnings

-

99,561

-

141,308

Carrying amount of the investment

327,937

327,937

14.2 Appreciation/(Diminition) in investment

Carrying amount of the investment

327,937

327,937

Cost of investment

74,733

74,733

Appreciation in investment

253,204

253,204

This represents 60% holding in the ordinary share capital of Staco Sierra Leone Limited, a subsidiary incorporated and operating in Sierra Leone

15

INVESTMENT PROPERTIES

At 1 January

1,520,000

1,520,000

Addition during the year

Revaluation surplus

-

-

-

-

At end of period

1,520,000

1,520,000

Cost/Valuation at 30 September, 2020 is represented by:

Valuation

495,000

495,000

Cost

1,025,000

1,025,000

1,520,000

1,520,000

Investment properties are carried at fair value which are determined by independent professional valuers .The determination of fair value of the investment properties was supported by market evidence. The modalities and process utilized extensive analysis of market data and other sector specific peculiarities corroborated with available database derived from previous experience.

The investment property is a landed property held for the purpose of capital appreciation.It is a bare land located at No 13 Glover Road ,Ikoyi in Eti Osa Local Government Area of Lagos State.

The property was independently valued by Dennis Osamudiame (FRC/2013/NIESV/00000003727) for Dennis Osamudiame & Co on 13th December 2017 at N1,520,000,000(2015 : N1,520,000,000) on the basis of open market value .

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

31

December

2020

2019

16 DEFERRED TAX ASSETS

N'000

N'000

At 1 January

-

-

Charge for the period At 30 September 2020

-

-

-

-

The movement in defered income tax liabilities

during the year is as follows:

16.1 DEFERRED TAX LIABILITY

N'000

N'000

At 1 January

98,050

98,050

Charge for the period

-

-

At 30 September 2020

98,050

98,050

The movement in defered income tax liabilities

during the year is as follows:

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

17

LEASED ASSETS

Furniture

Fittings and

Motor

Cost

equipment N'000

Vehicle N'000

TOTAL N'000

At 1 January 2020 Additions Disposal

At 30 September 2020

-

-

-

-

71,150

-

-

71,150

71,150

-

-

71,150

Accumulated depreciation

At 1 January 2020

-

68,000

68,000

Charge for the period Disposal

At 30 September 2020

-

-

-

-

-

68,000

-

-

68,000

Carrying value

At 30 September 2020

-

3,150

3,150

At 31 December 2019

-

3,150

3,150

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

18 PROPERTY, PLANT AND EQUIPMENT

Furniture

Land and

Plant and

Fittings and

Motor

Work in

Building

Machinery

equipment

Vehicle

Progress

TOTAL

N'000

N'000

N'000

N'000

N'000

N'000

Cost

At 1 January 2020

1,950,101

32,254

363,186

1,236,869

4,226

3,586,635

Additions

-

-

1,187

-

-

1,187

Reclassification

4,226

(4,226)

-

Disposal

(2,683)

(2,683)

Revaluation surplus (Note 27d) -

At 30 September 2020

1,954,327

32,254

361,690

1,236,869

-

3,585,139

Accumulated depreciation

At 1 January 2020

94,064

19,806

337,643

1,215,861

-

1,667,375

Charge for the period

25,414

1,263

6,201

5,220

-

38,099

Disposal

(2,170)

(2,170)

At 30 September 2020

119,479

21,069

341,675

1,221,081

-

1,703,304

Carrying value

At 30 September 2020

1,834,848 11,185 20,015

15,787

- 1,881,835

At 31 December 2019

1,856,037

12,448

25,543

21,007

4,226

1,919,260

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

2020

31

December

2019

N'000 N'000

19 STATUTORY DEPOSIT

This represents amount deposited with Central Bank of Nigeria (CBN) in accordance with section 10(3) of the Insurance Act, 2003

300,000 300,000

Due within 12 months - -

Due after 12 months 300,000 300,000

300,000 300,000

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

2020

31

December

2019

N'000 N'000

  1. INTANGIBLE ASSET

    Goodwill (Note 20.1) - -

    Software (Note 20.2) 5,866 5,976

    5,866 5,976

    1. Intangible Asset - Goodwill Cost

      At 1 January

      Addition - -

      At 30 September 2020 - -

      Amortisation

      At 1 January - -

      Amortisation - -

      At 30 September 2020 - -

      Carrying value

      At 30 September 2020 - -

    2. Intangible Asset - Software Cost

At 1 January 9,876 9,876

Cost capitalised 500 -

At 30 September 2020 10,376 9,876

Amortisation

At 1 January 3,901 2,689

Amortisation 610 1,212

At 30 September 2020 4,510 3,901

Carrying value

At 30 September 2020 5,866 5,976

The intangible assets of the company comprised of goodwill and computer software.The computer softwares are accounted for using the cost model of IAS 38 i.e cost less accumulated amortization and less accumulated impairment.The amortization is charged to income statement in line with the Company's policy.

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

31

December

2020

2019

N'000

N'000

21 INSURANCE CONTRACT LIABILITIES

General business (note 21.1)

3,271,870

3,307,748

Life business (note 21.2)

-

-

Total insurance liabilities

3,271,870

3,307,748

Due within 12 months

3,271,870

3,307,748

Due after 12 months

-

-

3,271,870

3,307,748

21.1 General business liabilities

Outstanding claims provision (note 21.1a)

2,776,483

2,605,435

Claims incurred but not reported (note 20.1b)

277,648

260,544

Provision for unearned premium (note 21.1c)

217,738

441,770

Total general business insurance contract liability

3,271,870

3,307,748

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

September

2020

31

December

2019

N'000

N'000

Outstanding claims provision - General

21.1a business

Movement in outstanding claims provision

At 1 January

2,605,435

2,253,059

Claims incurred in the current year

419,264

1,293,892

Claims paid during the year (248,216) (941,516)

At 30 September 2020 2,776,483 2,605,435

21.1b

Claims incurred but not reported (IBNR) provision

Movement in IBNR provision

At 1 January 260,544 225,306

Movement during the year 17,105 35,238

At 30 September 2020 277,648 260,544

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

21.1c

Unearned Premium

Unearned

Unearned

premium

Movement

premium

2020

2019

Fire

37,213

(53,330)

90,543

Engineering

6,643

(10,899)

17,542

Motor

97,569

(141,065)

238,633

General Accident

45,673

(21,001)

66,674

Marine

26,552

21,619

4,933

Bond

3,770

3,727

43

Oil and gas

287

(22,766)

23,053

Aviation

31

(318)

349

217,738

(224,032)

441,770

These provision represent the liability for short term insurance contracts for which the Group's obligations are not expired at period end,The unearned premuim provision relates to the casuality insurance contracts for which the group expect tp pay claims in excess of the related unearned premium provision.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER, 2020

30

31

September

December

2020

2019

N'000

N'000

21.2 Life insurance liabilities

Provision for outstanding claims

-

-

Life liability (note 20.2a)

-

-

-

-

21.2a The movement on the life funds account during the year was as follows :

At 1 January

-

-

Increase/(decrease) during the year

-

-

At 30 September 2020

-

-

22 FINANCIAL LIABILITIES

Convertible bond (Note 21.1)

3,984,759

3,861,668

Short term loan

916,047

1,038,614

4,900,806

4,900,282

22.1 Convertible Bond

This represents zero coupon JPY 1,200,000,000 direct, unconditional, unsubordinated and unsecured European bond with option issued on 9 November, 2007 to Daewoo Securities Europe Limited. The Bonds were issued with the option to subscribe for the ordinary Shares of the company with a yield of 4.25% per annum while the tenor of the convertible option is valid up to year 2029.

As 1 January

3,861,668

3,762,063

Movement during the year(Note 22.2)

123,091

99,605

At 30 September 2020

3,984,759

3,861,668

22.2

Movement during the year

Interest and default charges on the bond

123,091

99,605

Exchage gain / loss - -

Payments during the year - -Provision no longer required - -

123,091 99,605

22.3 Short term loan 916,047 1,038,614

23

TRADE PAYABLES

N'000

N'000

Insurance companies

41,407

11,868

Reinsurance payables (Note 23.1)

314,828

226,219

356,235

238,087

23.1

Reinsurance payables

Reinsurance premium payable

314,828

226,219

Minimum deposit payable

-

-

314,828

226,219

24a

OTHER PAYABLES

Lease obligation

22,098

22,098

Accruals

253,012

110,805

Other creditors (note 24.1)

829,158

441,538

1,104,268

574,441

24.1

The breakdown of other creditors is as below:

Tax payables

-

-

Unclaimed Dividend

43,078

43,078

Other payables

786,080

398,461

829,158

441,538

The carrying amounts disclosed above approximate the fair value at the reporting date.All amount are payable within one year.

Due within 12 months

829,158

441,538

Due after 12 months

-

-

829,158

441,538

30

September

2020

31

December

2019

N'000 N'000

26 EMPLOYEE BENEFIT LIABILITY

Gratuity scheme

The Group has a post emploment benefit scheme

which is not funded

The movement in the defined benefit obligation over

the year is as follows:

At beginning of year

-

-

Current service cost

Benefits paid

-

-

At 30 September 2020

-

-

Due within 12 months

-

-

Due after 12 months

-

-

-

-

27 TAXATION

N'000

N'000

27.1 Charge

Income

10,000

15,000

Education tax

Tax audit/Prior year under provision

59,100

54,998

Technology tax

69,100

69,998

Deferred tax (note 15) - -

Charge for the period 69,100 69,998

27.2 Tax liability

The movement on tax payable account during the year is as follows:

At 1 January 40,506 25,506

Payments during the year - (54,998) Charge for the period 69,100 69,998

At 30 September 2020 109,60640,506

30

September

2020

31

December

2019

28 EQUITY

28a Share capital

Authorised

9 billion(2012 -7 billion) ordinary shares of 5ok each

N'000 N'000

6,500,000 6,500,000

Issued and fully paid

9,341,087,609 units of ordinary shares of 50k each

4,670,544 4,670,544

At 1 January

Issued during the year

At 30 September 2020

4,670,544

-

4,670,544

4,670,544

-

4,670,544

28c

Share premium

434,164

434,164

Premium arising from the issue of shares are reported in the share premium account.

28d

Revaluation reserve

At 1 January

1,407,622

1,595,299

Addition during the year (Note 18)

-

-

Disposal during the year

(187,677)

At 30 September 2020

1,407,622

1,407,622

Under current regulations, assets revaluation reserve

is not available for

distribution to

shareholders either as dividends or bonus shares.

No provision was made for deferred capital gains tax as the property is not meant for sale in the foreseeable future.

28e

Fair value reserves

At the beginning of the year

333,904

368,475

Additions during the year

-

(34,571)

Appreciation on investment in Subsidiary(Note 14.2)

-

-

At end of the period

333,904

333,904

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