Quarter 5 financial statement for 2024

VERITAS KAPITAL ASSURANCE PLC

ANNUAL REPORT AND

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

VERITAS KAPITAL ASSURANCE PLC

Annual Report and

Consolidated and Separate Financial Statements

For the year ended 31 December 2024

TABLE OF CONTENTS

PAGE

Corporate Information

Results at a glance

Vision, Mission and Values

Our Commitments

Enterprise Risk Management

Risk Management Declaration

Audit Committee Report

Sustainabilty Report

Directors' Report

Corporate Governance Report

Statement of Directors' Responsibilities in Relation to the Preparation of the Consolidated and Separate Financial Statements

Statement of Corporate Responsibility for the Consolidated and Separate Financial Statements

Management Certification for Internal Control Over Financial Reporting

Independent Auditor's Attestation Report On Management's Assessment Of Internal Control Over Financial Reporting

3 4 5 6 8 15 16 17 25 34

43 44

45

50

Independent Auditor's Report

Consolidated and Separate Statements of Financial Position

Consolidated and Separate Statements Profit or Loss and Other Comprehensive Income

Consolidated and Separate Statements of Changes in Equity

Consolidated and Separate Statements of Cash Flows

Notes to the Consolidated and Separate Financial Statements

Other National Disclosures:

Value Added Statement

Five-Year Financial Summary

53 58 59 60 62 63

202 203

VERITAS KAPITAL ASSURANCE PLC

Annual Report and

CORPORATE INFORMATION

DIRECTORS

Mr. Nahim Abe Ibraheem

Dr. Oluwafunsho A. Obasanjo Mr. Aminu Babangida

Hajia Yabawa Lawan Wabi (MNI) Mrs Priya Heal (British)

Mr. Emmanuel Etuh Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director

Chairman

Sen. Maj. Gen. M. Magoro (OFR) Mr. Paul Oki

Non-Executive Director (tenure expired 22 May 2024) Independent Non-Executive Director

Mr. Sunkanmi Adekeye Dr. Adaobi Nwakuche

Executive Director, Operations Managing Director/CEO COMPANY SECRETARY Ms. Saratu Umar Garba FRC/2019/NBA/00000019159

RE-INSURERS

REGISTERED OFFICE

Plot 497, Abogo Largema Street, Off Constitution Avenue,

African Reinsurance Corporation Continental Reinsurance Corporation WAICA Reinsurance Corporation Nigerian Reinsurance Corporation Alwen Hough Johnson (AHJ) Limited CK Reinsurance Limited

Central Business District Abuja.

Meridian Risk Solutions Ltd, London Score Re.

CICA Re.

www.veritaskapital.com RC NO: 11785

ACTUARIES

O & A Hedge Actuarial Consulting (Consulting Actuaries & Chartered Insurers) Suite 28, Motorways Centre

FRC REGISTRATION NO: FRC/2013/0000000000717

(Opposite 7UP Bottling Plant) 1 Motorways Avenue

Alausa Ikeja - Lagos, Nigeria

BANKERS

REGISTRARS

Unity Bank Plc

Guaranty Trust Bank Limited First Bank Limited

Unity Registrars Limited 25 Ogunlana Drive Surulere Lagos.

Fidelity Bank Plc Keystone Bank Limited Sterling Bank Plc Access Bank Limited

AUDITOR

Zenith Bank Plc

Ernst & Young Nigeria 10th & 13th Floor, UBA House, 57 Marina, Lagos, Nigeria

PROPERTY VALUERS Jide Taiwo & Co

No 70 Abidjan Street Wuse Zone 3, Abuja Abuja-FCT

TAX CONSULTANTS Pedabo Professional Services Lagos

REGULATORY AUTHORITY National Insurance Commission Tax Identification Number

01129230-0001

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VERITAS KAPITAL ASSURANCE PLC

Annual Report and FINANCIAL RESULT AT A GLANCE

Gross premium 23,694,266

Insurance revenue 23,310,885

Insurance service expense

Insurance service result before reinsurance contracts held Net expenses from reinsurance contracts held

(Loss)/profit before income tax (623,716)

Income Tax (161,687)

(Loss)/profit after income tax (785,403)

(18,757,127)

4,553,758 (8,923,025)

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VERITAS KAPITAL ASSURANCE PLC

Annual Report and

VISION MISSION AND VALUES

MISSION

To help our Stakeholders have peace of mind

VISION

To be one of the top Insurance Companies of choice in Africa

PRINCIPLES

Integrity

We will act with openness, fairness, integrity and diligence. We will always adhere to the applicable laws, regulations and standards of doing business.

Performance

We will promote a positive and challenging high performance culture. We will do this by encouraging personal accountability, development and measuring, reward and recognizing success.

Responsibilty

We will act responsibly as individuals and as a Company. This applies to the management of our business, our approach to corporate interaction with key external stakeholders.

Values

Working in teams Servicing our Customers Respecting each other Being proactive Growing our people Delivering to our Shareholders Guarding against arrogance

Upholding the highest levels of integrity

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VERITAS KAPITAL ASSURANCE PLC

Annual Report and

OUR COMMITMENTS

Customers

A satisfied and loyal customer base is core to our business.

We are committed to:

• - Delivering the consistent and reliable levels of customer service.

- Acting with integrity, due care and diligence.

- Communicating openly, honestly and with sensitivity and understanding.

- Listening to our customers.

- Handling complaints fairly and promptly.

- Respecting our customers' rights to privacy and confidentiality.

- Protecting our customers and our business from fraud.

Business Partners

We demand high standards from the companies we work with and believe that they should expect the same from us.

We are committed to:

- - - - -

Carrying out our business with fairness and integrity. Being reliable and quick to respond.

Awarding contracts and selecting business partners solely on the basis of fair and objective business criteria and having regards to high ethical standards.

Respecting all obligations and confidentiality. Protecting our customers and our business from fraud.

Employees

Motivated and skilled employees are critical to our success.

We are committed to:

- - - - - - - -

Fostering a positive and challenging high performance culture. Rewarding superior performance.

Encouraging personal development.

Encouraging a culture of frank and honest communication. Encouraging teamwork and strong leadership.

Providing a safe and secure working environment. Encouraging diversity and equal opportunities.

Ensuring that grievances and unethical behaviour can be raised without fear of discrimination.

In return we expect our employees to:

- - - - - - - -

Act with integrity.

Take responsibility and accountability for their own actions. Show support and commitment for change.

Focus their energy in getting the best from themselves and others. Have the confidence and courage to act with conviction.

Show understanding for and meet external and internal customers needs. Show a relentless desire for success.

Create positive and effective working relationships.

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VERITAS KAPITAL ASSURANCE PLC

Annual Report and

OUR COMMITMENTS - CONTINUED

Regulators

We have an open, cooperative and transparent relationship with our regulators.

We are committed to:

• - Dealing with our regulators in an open, cooperative and transparent manner.

• - Managing our business with appropriate standards of risk management and controls.

• - Preventing and reporting any instances of significant financial crime.

• - Preventing breaches of relevant regulatory requirements.

• - Complying with all set standards.

  Community & Environment

  We believe in continuous improvement of our environmental performance and in taking action around emerging environmental issues. Whenever we operate, we will seek positive engagement with local communities.

  We are committed to:

• - As a business, we have a responsibilty to manage our impacts on the environment through appropriate use of resources such as energy, paper and water and the investment of our assets.

• - We also have a responsibility to take proactive action on environmental issues that are likely to affect our business and community at large.

• - In each of these areas, we will look to make continuous improvement and actively monitor our performance.

  Shareholders

  We are committed to fufilling the aspirations of our shareholders through a commitment to business performance, and high standards of transparency, communication and corporate governance.

  We are committed to:

• - A culture of business performance, focused on delivering returns to shareholders.

• - Comprehensive and transparent disclosure.

• - Aiding Shareholder's understanding through the disclosure of relevant financial and non-financial information.

• - Listening to the views of our shareholders.

• - Managing our business with appropriate standards of risk and control.

• - Ensuring due care in the selection of our third party advisers, including our auditors.

• - Preventing and reporting any market abuse.

• - Acting with due sense of responsibilty on confidence entrusted to us.

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For the year ended 31 December 2024

ENTERPRISE RISK MANAGEMENT FRAMEWORK

Veritas Kapital Assurance Plc has a robust enterprise risk management framework designed along the requirements of NAICOM and the Committee of Sponsoring Organization of the Treadway Commission (COSO). Priority is placed on proper risk management of the business activities of the company. The framework upholds a risk management culture where everyone is involved from the levels of the Board and Executive committees down to risk owners and respective risk units.

The Company's Enterprise Risk Management framework establishes the context, identifies, analyses, evaluates, treats, monitors, communicates, and reviews the key risks it assumes in carrying on its business. These risks include legal, compliance, underwriting, reinsurance, claims, operational, market, credit, liquidity, business, reserve, reputational and pandemic risks. Enterprise risk management risk includes management's approach to managing inherent risks in the business and its appetite for these risk exposures. Under this approach, the Company constantly assesses its key risks and monitors the risk profile against the acceptable limits. The main strategies for managing and mitigating risks include the implementation of policies, and procedures and the utilisation of tools that target specific and broad risk categories.

Enterprise Risk Management Principles

The Company's risk management principles optimize value creation and returns on investments. They assist the company in achieving its vision and delivery of business objectives. As part of the risk strategy to manage all the foreseeable key risk exposures, our guiding principles are:

• a. Support compliance with regulatory requirements

• b. Uphold the Company's integrity and value system

• c. Aid the understanding of the potential upside and downside of key risks

• d. Increase the probability of success and reduce the uncertainty of achieving the organization's overall objectives

• e. Add sustainable value to all the activities of the organization

• f. Assure business growth with financial stability

• g. Support the culture that "managing risk is everybody's responsibility"

Our risk management context is incorporated in our mission statement of becoming one of the top insurance companies of choice in Africa through wealth protection by a team of risk and investment managers that provide our customers and other stakeholders with effective, creative solutions, assuring their financial security with our superior strength and capacity in the Nigerian insurance market space.

The Risk Culture

• a. The responsibility for risk management in the Company is fully vested in the Board which in turn delegates such to senior management.

• b. The Board and Senior Management consciously promote a proactive approach to risk management, ensuring that the sustainability and reputation of the Company are not adversely impacted while expanding its market share.

• c. The Company's management creates awareness of risk and risk management across the board.

• d. The Company continually subjects its products, distribution channels, locations and customers to effective risk assessment. It will not engage in any business until it has objectively assessed and determined how to manage the associated risks.

• e. The Company pays adequate attention to both quantifiable and unquantifiable risks as well as internal and external risk exposures.

Risk Management Framework

Our risk management framework was structured and imbedded in our culture and processes. There are clear levels of responsibilities (from the Board of Directors to the Unit Staff) assigned for adequate management of our business risks.

We operate and maintain three levels of risk governance structure for the oversight and management of risks. These are:

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For the year ended 31 December 2024

ENTERPRISE RISK MANAGEMENT FRAMEWORK - Continued

1st line of defence (Risk Ownership):

The Board of Directors and the Board Risk Committee are charged with the responsibility for oversight of the Enterprise Risk Management process, proposing and approving the Risk Appetite level for the business, and ensuring that appropriate controls are established and maintained. It also comprises senior management, front-line management and staff (process or the risk owners) who execute the controls to enhance the likelihood that the organization's objectives will be achieved.

2nd line of defence: Risk Control:

This comprises the Risk Management Department of the Company. The department is responsible for designing the risk framework methodologies and tools which support the evaluation and management of the gross risks within the business while ensuring that they are appropriately included in the Risk Profile. The Chief Risk Officer ensures an understanding of the risk management process throughout the organization by embedding, improving continuously a risk awareness culture, and working with process owners to review and update the risk and control register.

The Chief Risk Officer (CRO) is also responsible for implementing the policies and procedures contained in the risk framework. The role of the Chief Risk officer includes consulting and advising the Board, Management and staff on the identification, control and mitigation of risks.

3rd line of defence: Risk Assurance:

It encompasses the internal audit which provides independent, objective assurance that the efforts of the first and second lines are consistent with expectations as well as the effectiveness, adequacy of risk management, control and governance processes.

Risk Appetite

The company drives its business initiatives cautiously to mitigate loss of value or exposures to inherent risks. To improve the value of shareholders' wealth and remain profitable, the company designed its appetite with adequate consideration of risk exposures in any given situation. The risk appetite represents the amount of risk exposure or potential adverse impact from an event that the company is willing to accept or retain. The risk appetite of the Company is set by the Board of Directors annually, and it is aimed at minimizing erosion of earnings or capital due to avoidable losses in investment and underwriting records, or from frauds and operational inefficiencies. The company's risk appetite objectives include:

• a. Consistently striving to minimize the overall cost of risk exposure and its management through effective risk mitigation practices.

• b. Optimization of capital employed through enhanced returns on equity.

• c. Low appetite for operational risk. These risks are mitigated and controlled where the cost of control is less than or equal to the cost or impact of the risk.

d.

Zero appetite for internal fraud activities.

Risk Management Policies and Procedures

The Enterprise Risk Management policies and procedures which have been strategically instituted aim at managing potential, inherent and residual risk categories in our operations.

The Board recognizes that risk management is critical to the achievement of corporate objectives and has actively encouraged a risk culture that embraces innovation and opportunity, calculated risk-taking and acceptance of risk which is inherent in all our activities, whilst reducing barriers to a successful implementation of risk controls.

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For the year ended 31 December 2024

ENTERPRISE RISK MANAGEMENT FRAMEWORK - Continued

Risk Classification

The Company can be exposed to many types of risks while carrying on its business. Some of these include:

Market Risk/Investment Risk

This is the risk to a Company's financial condition resulting from adverse movements in the level or volatility of market prices. The Company has a structured process and basis for measuring and calculating the probability of loss and possible impact on the Company's capital resources caused by adverse changes in the price of stocks/ shares, property, exchange rates and other relevant market conditions. The Company has established investment limits in its operational guidelines and policy of asset diversification in line with NAICOM regulations to prevent over-concentration and overexposure to any particular market. The controls on exchange rate risk are also conspicuous in the risk register.

Management of crystallised Market Risk/Investment Risk: The Head of the (Finance and Investment) department has the responsibility of liaising with all relevant departments/ stakeholders to report the exact type of risk, the magnitude of the loss, the cause of loss, remedial action to Management for necessary recovery actions and future preventive controls. Depending on the magnitude of the impact, management can escalate it to the Board before or after recovery actions.

Credit Risk

This is the risk that the counterparty will default on payment or fail to perform any obligation to the Company. The Company has a system for conducting due diligence on the creditworthiness of any party to which it has credit exposure. The Company does not ordinarily grant credit facilities to third parties in the course of its business but could have low credit risk associated with redeeming credit notes by Insurance Brokers following "No Premium No Cover" by NAICOM.

Our placements in banks are also determined by the rating (strength) of the bank and consider NAICOM guideline on the (single obligor) limit of exposure

to a single bank.

Management of crystallised

Credit Risk: The Team Lead, Credit Control has the responsibility of reporting materialised risk to the Head of the (Finance and Investment) department who will further liaise with all relevant departments/ stakeholders to report the exact type of risk, the magnitude of loss, the cause of loss, remedial action to Management for necessary recovery actions and future preventive controls. Depending on the magnitude of the impact, management can escalate it to the Board before or after recovery actions.

Operational Risk

This is the risk of loss from inadequate or failed internal processes, people and systems or from external events which arise from the potential that inadequate information systems, operational problems, breaches in internal controls, fraud, or unforeseen disasters will result in unexpected losses. The company has policies that cover the risk that may arise from people, systems and internal process failures. The policies include staff recruitment, training, retention plans, succession plans, remuneration and welfare benefits, designing standard operating procedures and policies, driving compliance culture, process automation, Information Technology (IT) support systems, data integrity, IT systems access controls, cloud storage of data etc.

Management of crystallised Operational Risk: The Head of the department where the operational risk (which could arise from system, process or people) materialised has the responsibility of liaising with all relevant departments/ stakeholders to report the exact type of risk, the magnitude of loss, the cause of loss, remedial action to Management for necessary recovery actions and future preventive controls. Depending on the magnitude of the impact, management can escalate it to the Board before or after recovery actions.

Liquidity Risk

Liquidity risk exists when there is insufficient cash flow to meet the Company's operational and financial

Reinsurance Risk

This is the risk of inadequate reinsurance cover to mitigate underwriting risk. It usually

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