LINKAGE ASSURANCE : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

Unaudited Financial Statements

for the Period Ended

30 Sep, 2023

	Linkage Assurance Plc
	Unaudited Financial Statements
	for the period ended 30 September 2023
Table of contents	Page
Corporate Information	2
Financial Highlights	3
Cerification of Financial Statements	4
Notes to the Financial Statements and Summary of accounting policies	5
Float	23
Statement of Financial Position	24
Statement of Profit or Loss and Other Comprehensive Income	25
Statement of Changes in Equity	26
Statement of Cashflows	27
Notes to the Financial Statements	28-53
Other National Disclosures:
- Valued Added Statement	55
- Financial Summary	56
Other Information:
- Revenue Account	57

Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Corporate Information

Mission Statement Linkage Assurance Plc. is in business to provide first class insurance and other financial services to the African Insurance market. To achieve this, it has deployed exemplary management, best in class information technology infrastructure and well trained and motivated work force as vehicle for achieving the superior returns expected by shareholders.

Board of Directors
Chairman	Chief Joshua Bernard Fumudoh
Other Directors	Mr. Daniel Braie
	Mr. Okanlawon Adelagun
	Mr. Bernard Nicolaas Griesel
	Mrs. Funkazi Koroye-Crooks
	Mr. Maxwell Ebibai
	Mrs Valentina Marinho
	Mr. Pius Otia
Managing Director	Mr. Daniel Braie
Company Secretary	Mr. Moses Omorogbe
Registered Office	Linkage Plaza
	Plot 20, Block 94, Providence Street
	Off Adewunmi Adebimpe Street
	Lekki-Epe Expressway, Lekki, Lagos
Registrars	Centurion Registrars
	33C, Cameron Road,
	Ikoyi, Lagos.
	www.centurionregistrars.com
Auditor	Ernst & Young
	10th Floor, UBA House
	57, Marina
	Marina, Lagos
	www.ey.com
Reinsurers	African Reinsurance Corporation, Lagos, Nigeria
	Swiss Reinsurance Company Ltd, Zurich, Switzerland
	Continental Reinsurance Plc, Lagos, Nigeria
	WAICA Reinsurance, Sierra Leone
	Arab Insurance Company, Bahrain
	Cathedral @ Underwriter Syndicates No. 2010 MMX, London
	ZEP-RE (PTA Reinsurance Company), Nairobi, Kenya
	Atrium Underwriting Limited @ Lloyd's Underwriter Syndicate, UK
	Hannover Ruck SE, Hannover, Germany
Principal Bankers	Access Bank Plc.	Keystone Bank Limited.
	Ecobank Nigeria Plc.	Polaris Bank Limited.
	FCMB Limited.	Stanbic IBTC Bank Limited.
	Fidelity Bank Plc.	Union Bank Plc.
	First Bank of Nigeria Limited.	United Bank for Africa Plc.
	Guaranty Trust Bank Plc.	Unity Bank Plc.
	Heritage Bank Limited.	Zenith Bank Plc.
Actuary	Ernst & Young
RC No.	162306
FRC Registered No.	FRC/2012/0000000000339

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

FINANCIAL HIGHLIGHTS	30 Sep 2023	30 Sep 2022		Changes
Comprehensive income statement	₦'000	₦'000		(%)
Gross premium written	12,941,723	10,688,969		21
Gross premium income	10,215,265	8,994,298		14
Net premium income	5,066,545	4,820,017		5
Underwriting Profit	609,955	356,236		71
Investment and other income	5,747,040	4,269,769		35
Profit before taxation	3,649,589	2,194,440	-	66
Profit after taxation	3,404,862	2,084,496	-	63

Statement of financial position	30 Sep 2023	31 Dec 2022
Total assets	48,536,178	39,996,868	21
Insurance contract liabilities	15,922,534	12,811,727	24
Key Ratios	30 Sep 2023	30 Sep 2022

%		%
Claims ratio	29	27
Claims ratio (net)	47	35
Underwriting expenses ratio	30	38
Fees and Commission income ratio	19	16
Management expenses ratio	21	23
Underwriting Profit margin	5	3

Our Performance

Gross premium written grew by 21% to N12.9billion as at Aug 2023 from N10.7billion recorded in prior year comparative. The Company posted an underwriting profit of N610million on account of growth in premium revenue. PBT stood at N3.6billion as at Sep 2023 against N2.2billion in the prior period.

The investment and other operating income was buoyed by thefollowing.

• Dividend income of N1.5billion received from Stanbic IBTC Pension Managers Ltd.
• Sundry income of N333million received from NDIC inrespect of share subscription.
• Foreign exchange gain of N1.7billion

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Certification Pursuant to Section 60(2) of Investment and Securities Act No. 29 of 2007

We the undersigned, hereby certify the following with regards to our unaudited financial statements for the period ended 30 September 2023 that:

1. We have reviewed the report and to the best of our knowledge, the report does not contain:
2. • any untrue statement of a material fact, or
   • omission to state a material fact, which would make the financial statements misleading in the light of circumstances under which such statements were made;
   • to the best of our knowledge, the financial statements and other financial information included in the report fairly present in all material respects the financial condition and results of operation of the Company as of, and for the periods presented in the report.
3. We:
4. • are responsible for establishing and maintaining internal controls.
   • have designed such internal controls to ensure that material information relating to the Company is made known to such officers by others within those entities particularly during the period in which the periodic reports are being prepared;
   • have evaluated the effectiveness of the Company's internal controls as of date within 90 days prior to the report;
   • have presented in the report our conclusions about the effectiveness of our internal controls based on our evaluation as of that date;
5. We have disclosed to the auditors of the Company and audit committee:
6. • all significant deficiencies in the design or operation of internal controls which would adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the Company's auditors any material weakness in internal controls, and
   • any fraud, whether or not material, that involves management or other employees who have significant role in the
     Company's internal controls;

We have identified in the report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Mr. Daniel Braie		Emmanuel Otitolaiye
Managing Director/CEO	Chief Financial Officer
FRC/2018/CIIN/00000018082	FRC/2014/ICAN/00000008524
26 Oct 2023	26 Oct 2023

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Notes to the financial statements

1 Corporate Information

1.1 Reporting entity

Linkage Assurance Plc. ("LINKAGE" or "the Company") was incorporated in Nigeria on 26th of March 1991 as a private limited liability company domiciled in Nigeria. It was registered by the National Insurance Commission on the 7th of October 1993 to transact general insurance business and commenced operations in January, 1994. The Company became a public limited liability company in 2003 and the Company's shares, which were quoted on the Nigerian Stock

Exchange were first listed on 18 November 2003. The registered office of the Company is Plot 20 Block 94 Lekki Epe Express way, Lekki, Lagos, Nigeria.

The Company's high standard in corporate policies and governance are designed to encourage transparency in all its activities as well as ensure the protection of the long term interest of all stakeholders. The business of the Company is conducted with high level of integrity.

1.2. Principal activities

The Company was registered to transact all classes of life and non-life insurance business, insurance claims payment and investments. Subsequently it disposed its life business in February 2007 and concentrated on the non-life insurance business.

2 Basis of Preparation

1. Statement of compliance
   The financial statements of Linkage Assurance Plc. have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act (CAMA), 2020, the Financial Reporting Council of Nigeria Act, 2011, the Insurance Act 2003 and relevant National Insurance Commission (NAICOM) circulars.
   The financial statements were authorized for issue by the Company's board of directors on 9 March 2021. Details of the Company's accounting policies are included in Note 4.
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. The Directors believe 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 business. Liquidity ratio and continuous evaluation of current ratio of the Company is carried out to ensure that there are no going concern threats to the operations of the Company.
3. Basis of measurement
   The financial statements have been prepared under the historical cost basis except for the following:
4. 1. Financial instruments at fair value through profit or loss are measured at fair value;
   2. Available-for-salefinancial assets are measured at fair value;
   3. Land and buildings are carried at fair value;
   4. Investment properties are measured at fair value;
   5. Insurance contract liabilities at fair value and
   6. Defined benefit obligation measured at present value.
5. Use of judgments and estimates
   In preparation of these financial statements, management has made judgments and estimates that affect the application of the Company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
   The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

1. Judgments
   The following are the critical judgments, apart from those involving estimations (which are dealt with separately below), that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in financial statements:

1. Note 4.14 - Lease term: whether the Company is reasonably certain to exercise extension options.

1. Assumptions and estimation uncertainties
   Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have a significant of risk of resulting in material adjustment on the amounts recognized in the financial statements are included in the following notes to the financial statements:

1. Note 13 - determining the fair value of investment properties on the basis of significant unobservable inputs.

1. Note 15 - determining the useful life of property and equipment.

1. Note 6.2 and 17- valuation of insurance contract liabilities: key actuarial assumptions.

1. Note 22 - measurement of defined benefits obligations; key actuarial assumptions.

1. Note 8.1 - determining the fair value of unquoted equity instruments on the basis of significant unobservable inputs.

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Notes to the financial statements

2.5 Functional and presentation Currency

The financial statements are presented in Nigerian Naira (₦) and amounts presented / disclosed are rounded to the nearest thousands unless otherwise stated. Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the "functional currency"). The Company is incorporated in

Nigeria and has adopted Naira as its functional currency.

1. Changes in accounting policies
   The Company has consistently applied the accounting policies set out in Note 4.1 to 4.28 to all periods presented in these financial statements. A number of other new standards are effective from 1 January 2020 but do not have a material effect on the Company's financial statements.
2. Significant accounting policies
   The Company has consistently applied the following accounting policies to all periods presented in these financial statements.

1. Cash and cash equivalents
   Cash and cash equivalents include cash in hand and bank, unrestricted balances held with Central Bank, call deposits and short term highly liquid financial assets (including money market funds) with original maturities of three months or less from the acquisition date, which are subject to insignificant risk of changes in their value and used by the Company in the management of its short-term commitments.
   For the purpose of the statement of cash flow, cash and cash equivalents consist of cash and cash equivalents as defined above.
2. Financial instruments
   Financial instruments include all financial assets and liabilities. These instruments are typically held for liquidity, investment and strategic planning purposes. All financial instruments are initially recognized at fair value plus (or minus) directly attributable transaction costs, except those carried at fair value through profit or loss where transaction costs are recognized immediately in profit or loss. Financial instruments are recognized when the Company becomes a party to the contractual provisions of the instrument.

4.2.1 Classification of financial assets

The Company classifies its financial assets into the following categories:

• Financial assets at fair value through profit or loss
• Held-to-maturityinvestments
• Loans and receivables
• Available-for-salefinancial assets

Management determines the appropriate classification of its investments at initial recognition and the classification depends on the purpose for which the investments were acquired or originated. The Company's financial assets include cash and short-term deposits, trade and other receivables, quoted and unquoted financial instruments.

Financial assets at fair value through profit or loss

A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and subsequent changes in fair value, including any interest or dividend income, are recognized in profit or loss.

Held to maturity

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that management has the positive intention and ability to hold to maturity. Where a sale occurs, other than of an insignificant amount of held-to-maturity assets, the entire category would be tainted and classified as available-for-sale. These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortized cost using the effective interest method.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides money, goods or services directly to a debtor with no intention of trading the receivable. These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortized cost using the effective interest method.

Available-for-sale financial assets (AFS)

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss. Available- for-sale financial instruments are securities that are intended to be held for an indefinite period of time and which may be sold in response to liquidity needs or in response to changes in market conditions.

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Notes to the financial statements

These assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on debt instruments, are recognized in OCI and accumulated in the fair value reserve. When these assets are derecognized or impaired, the gain or loss accumulated in equity is reclassified to profit or loss.

1. Non-derivativefinancial liabilities -Measurement
   Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method.
2. Impairment of non derivative financial assets
   The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset is impaired. Objective evidence of impairment is established as a result of one or more events that occurred after initial recognition of the asset
   (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.
   A financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence of impairment.
   Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security because of financial difficulties, adverse changes in the status of borrowers or issuers, or observable data indicating that there is a measurable decrease in the expected cashflow from a group of financial assets.
   For an investment in an equity security, objective evidence of impairment includes a significant or prolonged decline in its fair value below its costs. The Company considers a decline of 20% to be significant and a period of nine months to be prolonged. The Company considers evidence of impairment for receivables and held-to-maturity investment securities at both specific and collective level. Those not to be specifically impaired are collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.
   In assessing collective impairment, the Company uses historical information on the timing of recoveries and the amount of loss incurred, and makes adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.
   An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss.
   An impairment loss on available-for-sale (AFS) financial assets is recognized by reclassifying the gains and losses accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference between the acquisition cost (net of any principal repayments and amortization) and the current fair value less any impairment loss previously recognized in profit or loss. If the fair value of an impaired AFS debt security subsequently increased and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed through profit or loss. Impairment losses recognized in profit or loss for an investment in an equity instrument classified as available for sale is not reversed though profit or loss.
3. De-recognitionof financial assets
   The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or has assumed an obligation to pay those cash flows to one or more recipients, subject to certain criteria. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability.
4. Financial liabilities
   Financial liabilities are classified as either financial liabilities at fair value through profit or loss (at FVTPL) or 'other financial liabilities'. Financial liabilities are recognized initially at fair value and in the case of other financial liabilities, less directly attributable transaction costs.
   The Company's financial liabilities include trade and other payables, insurance payables and investment contracts. The
   Company's financial liabilities are classified as other financial liabilities.

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Notes to the financial statements

Other financial liabilities which includes creditors arising out of reinsurance arrangements, direct insurance arrangement and other payable, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective interest basis.

The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

De-recognition

The Company de-recognizes financial liabilities when, and only when, the obligations are discharged, cancelled or they expire. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the profit or loss.

4.2.6 Offsetting financial instruments

1. Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, the Company has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

2. Fair value measurement
   'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.
   A number of the Company's accounting policies and disclosures require the measurements of fair values for both the financial and non-financial assets and liabilities.
   When one is available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
   If there is no quoted price in an active market, then the Company uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.
   If an asset or a liability measured at fair value has a bid price and an ask price, then the Company measures assets and long positions at a bid price and liabilities and short positions at an ask price.
   The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price - i.e. the fair value of the consideration given or received. If the Company determines that the fair value at initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value at initial recognition and the transaction price. Subsequently, that difference is recognized in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.
   Portfolios of financial assets and financial liabilities that are exposed to market risk and credit risk that are managed by the Company on the basis of the net exposure to either market or credit risk are measured on the basis of a price that would be received to sell a net long position (or paid to transfer a net short position) for a particular risk exposure. Those portfolio level adjustments are allocated to the individual assets and liabilities on the basis of the relative risk adjustment of each of the individual instruments in the portfolio.
3. Financial guarantee contracts
   Financial guarantee contracts are contracts that require the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
   Financial guarantee liabilities are initially recognized at fair value, which is the premium received and then amortized over the life of the financial guarantee. Subsequent to initial recognition, the financial guarantee liability is measured at the higher of (i) the amount determined n accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and (ii) the amount initially recognized less, when appropriate, cumulative amortization recognized in accordance with IFRS 15. Financial guarantees are included within other liabilities.

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Linkage Assurance Plc Unaudited Financial Statements for the period ended 30 September 2023

Notes to the financial statements 4.5 Trade receivables

Trade receivables arising from insurance contracts represent premium receivable with determinable payments that are not quoted in an active market and the Company has no intention to sell. Premium receivables are those for which credit notes issued by brokers are within 30 days, in conformity with the "NO PREMIUM NO COVER" policy.

Trade receivables are classified as loans and receivables.

The Company assesses at each reporting date whether there is objective evidence that an insurance receivable is impaired. If there is objective evidence that the insurance receivable is impaired, the carrying amount of the insurance receivable is reduced accordingly through an allowance account and recognized as impairment loss in profit or loss.

Trade receivables include amounts due from agents, brokers and insurance contract holders. Trade receivables are recognized when due.

4.6 Reinsurance

The Company cedes business to reinsurers in the normal course of business for the purpose of limiting its net loss potential through the transfer of risks. Premium ceded comprise gross written premiums. Reinsurance arrangements do not relieve the Company from its direct obligations to its policyholders. In the course of ceding out business to reinsurers, the Company incurs expenses. This is recognized as reinsurance expense in the statement of profit or loss.

4.7 Deferred acquisition costs and revenue

The incremental costs directly attributable to the acquisition of new business are deferred by recognizing an asset. For other insurance contracts, acquisition costs including both incremental acquisition costs and other indirect costs of acquiring and processing new business are deferred (deferred acquisition costs).

Where such business is reinsured the reinsurers' share is carried forward as deferred income.

Deferred acquisition costs and deferred origination costs are amortized systematically over the life of the contracts and tested for impairment at each reporting date. Any amount not recoverable is expensed. They are derecognized when the related contracts are settled or disposed of.

Deferred Acquisition Revenue

The Company recognizes commissions receivable on outwards reinsurance contracts as a deferred income and amortized over the average term of the expected premiums payable.

4.8 Investment property

Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the cost of the day-to-day servicing of an investment property.

Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the year/period in which they arise.

Investment properties are de-recognized either when they have been disposed of, or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognized in the income statement in the year/period of retirement or disposal.

Transfers are made to or from investment properties only when there is a change in use evidenced by the end of owner- occupation, commencement of an operating lease to another party or completion of construction or development. When the use of property changes from owner-occupied to investment property the property is re-measured to fair value and reclassified accordingly. Any gain arising from this re-measurement is recognized in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognized in OCI and presented in the revaluation reserve. Any loss recognized in profit or loss.

4.9 Intangible assets

The intangible assets include computer software acquired for use in the Company's operation.

Software acquired by the Company is stated at cost less accumulated amortization and accumulated impairment losses (where this exists). Acquired intangible assets are recognized at cost on acquisition date. Subsequent to initial recognition, these assets are carried at cost less accumulated amortization and impairment losses in value, where appropriate.

Subsequent expenditure on software assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

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