sacos group limited consolidated financial …€¦ · sacos group limited table of contents - 31...

SACOS GROUP LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2018

SACOS GROUP

GROUP VISION, MISSION AND VALUES

Vision:

• To be the insurer of choice in Seychelles;

• Increase market presence;

• Develop, retain, attract and inspire top talent;

• To attain optimal return on investments;

• Increase shareholder value;

• To be visible and relevant in the community;

• Provide memorable customer experience;

• Establish and develop strong and lasting; collaborative partnerships.

Mission:

Values:

• Service excellence

• Trust

• Accountability

• Innovation

• Respect

• Stewardship

Provide market leading insurance solutions by leveraging our financial strength and world class reinsurers, optimising investments to

strengthen our financial position, by remaining committed to innovation and service excellence, in partnership with our valued employees

and partners.

SACOS GROUP LIMITEDTABLE OF CONTENTS - 31 DECEMBER 2018

PAGES

CORPORATE INFORMATION 1

DIRECTORS' REPORT 2 - 3

AUDITOR'S REPORT 4 - 9

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 10 - 11

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 12

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY & STATEMENT OF LIFE ASSURANCE FUND 13

CONSOLIDATED STATEMENT OF CASH FLOWS 14 - 15

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS 16 - 68

SACOS GROUP LIMITED

CORPORATE INFORMATION 1

Board of Directors

Non-executive directors : Mrs. Lekha Nair Chairperson & C.E.O. Appointed April 22, 2015

Seychelles Pension Fund

Mr. Louis Rivalland C.E.O. Appointed July 16, 2007

Swan Group

Mr. Patrice Bastide Senior Manager Appointed March 28, 2013

Swan Group

Mr. Rod Thorrington Consultant Appointed April 2, 2015

Mrs. Ina Barbe Consultant Appointed October 19, 2015

Mr. Bernard Adonis Director Appointed September 25, 2017

Ms Doreen Bradburn Corporate Manager Appointed September 18, 2018

Executive Directors : Ms. Jennifer Morel Chief Executive Officer Appointed January 12, 2018

Ms Georgette Capricieuse Deputy Chief Executive Officer Appointed October 23, 2018

Mrs Tacey Furneau Chief Financial Officer Appointed March 25, 2019

Company Secretary Valsen Fiduciaries (Seychelles) Limited Company Secretary Appointed July 1, 2017

Registered Office : Maison Esplanade, Francis Rachel Street,

Victoria, Mahe, Seychelles

Legal Advisers : K.B Shah

Attorney-at-Law & Notary Public

S Aglae

Attorney-at-Law & Notary Public

Auditors : Pool and Patel

Chartered Accountants

Actuaries : QED Actuaries and Consultants South Africa

South Africa

Bankers : Barclays Bank (Seychelles) Limited

Bank of Baroda (Seychelles)

Seychelles International Mercantile Banking Corporation Limited [Nouvobanq]

Habib Bank (Seychelles)

Al Salam Bank Seychelles

Seychelles Commercial Bank Limited

The Mauritius Commercial Bank (Seychelles) Limited [MCB]

Sponsor Advisor : Constant Capital (Seychelles) Ltd

Eden Island

Seychelles

SACOS GROUP LIMITED

DIRECTORS' REPORT

2

PRINCIPAL ACTIVITIES & CURRENT YEAR EVENTS

(i) SACOS Insurance Company Limited (hereafter referred as 'SICL');

(ii) SACOS Life Assurance Company Limited (hereafter referred as 'SLACL'); and

(iii) Sun Investment (Seychelles) Limited (hereafter referred as 'SISL')

The activities of the subsidiaries are detailed in note 8 to the consolidated financial statements.

RESULTS

2018 2017 2018 2017

SCR SCR SCR SCR

Profit / (loss) for the year 16,205,022 9,341,773 (576,492) 12,471,910

Other comprehensive income (732,851) 4,479,355 - -

Total comprehensive income (page 12) 15,472,171 13,821,128 (576,492) 12,471,910

Retained earnings brought forward 37,263,750 56,256,546 27,060,649 28,588,739

1.

2.

3.

4.

5.

6.

DIVIDENDS

EQUIPMENT AND INVESTMENT PROPERTIES

The Directors confirm that in preparing these financial statements they have:

The Directors have estimated that the carrying amount of equipment and investment properties as at the date of the reporting period

approximate their fair values.

Dividends of SCR1.50 per share amounting to SCR3 million were proposed, approved in 2018 and paid in 2018 (2017: SCR7 per share

amounting to SCR14 million).

Additions to equipment during the year amounting to SCR 29,642,334 (2017: SCR 1,410,602) for the Group and Nil (2017: Nil) for the

Company and these comprised mainly motor vehicles, computer equipment and furniture & fittings.

DIRECTORS’ STATEMENT OF RESPONSIBILITIES

Selected suitable accounting policies that are compliant with International Financial Reporting Standards and applied them

consistently;

Made judgments and estimates that are reasonable and prudent;

Taken reasonable steps for the prevention and detection of fraud and other irregularities; and

Considered appropriate disclosures for all events after the reporting period.

Prepared the financial statements on a going-concern basis;

Taken appropriate measures to safeguard the assets of the Group through the application of appropriate internal control, risk

management systems and procedures;

31 DECEMBER 2018

The Directors are pleased to submit their report together with the audited financial statements of the Group and the Company for the year

ended 31 December 2018.

The principal activity of SACOS Group Limited (collectively "the Group" and referred as "the Company" for its separate financial statements

here-after) is underwriting of general and life assurance policies and the Company is that of an investment holding. These activities have

remained unchanged during the year under review. The Companies under SACOS Group Limited include:

The Group The Company

SACOS GROUP LIMITED DIRECTORS' REPORT 31 DECEMBER 2018 3

DIRECTORS AND DIRECTORS' INTERESTS

Number of shares held at year-end SGL SICL SLACL SISL 2018 2017

JC D'Offay 517 517 ., ., ., ., L Nair (Chairperson) 280 280 ., ., ., ., J Morel 120 120 v ., ., " R Thorrington ., ., ., ., I Barbe ., v ., ., M Sinovich ., v ., ., L Rivalland ., ., ., ., P Bastide " ., v ., B Adonis ., ., ., ., D Bradburn ., ., ., " G Capricieuse ., ., ., ., T Furneau 130 130 ., ., ., .,

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for the overall management of the affairs of the Group including its operations and making investment decisions. The Board is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (IFRS) and in compliance with the Seychelles Companies Act, 1972 and the Insurance Act 2008. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The Directors have the general responsibility of safeguarding the assets, both owned by the Group and those that are held in trust and used by the Group.

The Directors consider they have met the aforesaid responsibilities.

AUDITORS

Pool and Patel Chartered Accountants

These financial statements have been approved for issue by the Board of Directors on

R Thorrington Director

fLJ J Morel Director

P Bastide Director

06 ro\ M 4� JOJ'1

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Director

L Rivalland Director

� Director

L Nair Director

BOARD APPROVAL

I Barbe Director

G Capricieuse Director

T Furneau Director

Dated: 03( 0f>{i1 Victoria, Seychelles

Chartered Accountants Email: [email protected]

Bernard L. Pool FCA Suketu Patel FCA Gemma Roberts FCCA

INDEPENDENT AUDITOR'S REPORT

SACOS GROUP LIMITED

To the Shareholders of SACOS Group Limited

Fax: +248 4323518 Website: www.moorestephens.com

www.poolandpatel.com

Pao I & Pate I Maison La Rosiere, PO Box 117, Victoria, Mahe, Seychelles. Tel: +248 4323201

Opinion We have audited the consolidated financial statements of SACOS Group Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2018, and the consolidated statement of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2018, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and comply with Seychelles Companies Act, 1972 and the Insurance Act 2008.

Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs ). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements' section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Seychelles, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of consolidated financial statement of the current period. Key audit matters were selected from the matters communicated with the Directors but are not intended to represent all matters that were discussed with them.

Our procedures relating to these matters were designed in the context of the audit of the consolidated financial statement as a whole and our opinion on the consolidated financial statement is not modified with respect to any of the key audit matters. We do not express an opinion on these matters individually.

4

MOORE STEPHENS INTERNATIONAL LIMITED

An Independent member firm of Moore Stephens International Limited - members in principal cities throughout the world.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

SACOS GROUP LIMITED

Description of Key Audit Matter

Financial Reporting and Closure Process:

The Group uses standalone applications to record and process transactions. These transactions are journalized in batches to the general ledger, which is then used to prepare the consolidated financial statements. During the year we noted certain controls around the financial reporting and closure process including the reconciliation of certain balance sheet values did not operate effectively. Such lack of control could have resulted in significant risk of material misstatement for certain account balances : Trade and other receivable Note 14, Trade and other payable Note 24, Reinsurance assets and liabilities presented within Trade and other payable Note 24.

Investment property:

Audit response

We performed the following procedures:

• Obtained sufficient audit evidence to verify the accuracy of the figures posted as journal entries

• Schedules for the closing balances were obtained and the accuracy of such balances was verified referring the relevant supporting documents

• For closing schedules of significant reinsurance liabilities, we obtained confirmation from the re insurers to verify the accuracy of the balances

• Tested the controls related to the journal entries • Obtained an overall understanding on system

control over the journal entries and sample system users were tested to verify if the system controls are effective


The group's investment property reflects 40% of the group's total assets. It is the group's policy that investment property is stated at fair values. Fair values are determined by the management after obtaining inputs from the external valuers which are obtained every three years and then adjusted with reference to known market data.

The valuation of the group's investment property is inherently subjective due to the estimates used in determing the fair values, such as capitalization rate, forecast rental and property expenses.

Given the fact that fair valuation of the investment properties involved significant estimates and judgements, we consider this to be a Key Audit Matter.

Refer Note 6

•

•

•

Assessed the independent valuation expert's competency, experience, qualifications and independence We read the valuation reports of the properties valued by the independent external valuation expert and confirmed the valuation approach was in accordance with the International Financial Reporting Standards and suitable for use in the determining the fair value for the purpose consolidated financial statement Similarly, we assessed the appropriateness of the final fair values determined by the management, which includes;

- Verified the data used for the fair value computation including the assumptions used Verified the relevant supporting document related to the offer made by the the government of Seychelles to acquire the investment properties

5

• Obtained a written representation from the board of directors in regard to the valuation decision of the investment properties.


SACOS GROUP LIMITED

• Evaluated adequacy of the disclosures in the consolidated financials statement relating to the valuation of investment properties

Valuation of long-term insurance contract liabilities :

Valuation of the long-term insurance contract liabilities is highly judgmental and requires a number of key assumptions to be made that they have high estimation uncertainty. The accuracy and completeness of the data used 111 calculating insurance liabilities or forming judgements over key assumptions, would have material impact on the valuation of insurance liabilities. Valuation of the insurance liabilities also depends on the accuracy of the data used and amount and pattern of current and historical claims since they often used to form expectation about future claims.

Given the magnitude and subjectivity involved in the valuation, we consider this to be a Key Audit Matter.

Refer Note 19

6


• Tested the key controls around the claims handling and settling process of the Group. Examining the evidence of the operation of controls over the valuation of the individual claims reserve

• Testing of the key controls designed to ensure the integrity of the data used in the valuation of the long-term insurance contract liabilities

• Assessing the accuracy and completeness of the data used for estimates

• Assessing the reasonableness of the assumptions used in the valuation of the long-term insurance contract liabilities

• Assessing the adequacy of the disclosures in relation to the long-term insurance contract liabilities


SACOS GROUP LIMITED

Other Information Management is responsible for the other information. The other information comprises the director's report. Our opinion on the consolidated financial statements does not cover the other information and will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work that we have performed, we conclude that there is a material misstatement of this other information, then we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and requirements of the Seychelles Companies Act 1972 and the Insurance Act 2008, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As a part of an audit in accordance with IS As, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting

7


SACOS GROUP LIMITED

a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

8


SACOS GROUP LIMITED

Report on Other Legal and Regulatory Requirements The Seychelles Companies Act 1972 requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:

a. we have obtained all the information and explanations necessary for the performance of our audit, and

b. in our opinion

(i) proper books of accounting have been kept by the Group as far as appears from our examination of those records; and

(ii)the Group's consolidated statement of financial position and statement of comprehensive income are in agreement with the books of account and returns.

0�0l .- p . fl"' P&'OL&PATEL � I

CHARTERED ACCOUNTANTS 03 May 2019

9

SACOS GROUP LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018 10

2018 2017

Notes Non Life Life Consolidated Non Life Life Consolidated

SCR SCR SCR SCR SCR SCR SCR SCR

ASSETS

Non-current assets

Equipment 5 29,738,207 2,619,842 32,358,049 3,195,803 2,183,195 5,378,998 - -

Investment properties 6 85,173,940 218,381,147 303,555,087 99,198,941 236,381,147 335,580,088 - -

Intangible assets 7 4,165,039 441,004 4,606,043 5,659,639 22,212 5,681,851 - -

Investment in subsidiaries 8 - - - - - - 64,271,362 64,271,362

Investment in preference share 8 45,000,000 - - 45,000,000 - - 45,000,000 45,000,000

Investment in financial assets 9 21,390,457 76,906,329 98,296,786 16,096,019 65,357,248 81,453,267 - -

Loans and receivables 10 - 39,442,694 39,442,694 - 39,821,962 39,821,962 - -

Deferred lease rentals 11 - - - - - - - -

Deferred tax assets 12 - - - 602,488 - 602,488 - -

Investment in associates 13 - 20,508,967 20,508,967 - 19,628,783 19,628,783 - -

185,467,643 358,299,983 498,767,626 169,752,890 363,394,547 488,147,437 109,271,362 109,271,362

Current assets

Investment in financial assets 9 615,308 73,317,120 73,932,428 19,529,031 62,915,842 82,444,873 615,308 548,780

Loans and receivables 10 - 21,981,809 21,981,809 - 24,232,641 24,232,641 - -

Trade and other receivables 14 101,677,535 5,868,861 107,546,396 73,213,749 7,598,798 80,812,547 - 2,451,349

Intercompany receivables 15 - 17,346,108 - - 5,264,066 - - -

Cash and cash equivalents 16 32,342,752 24,525,786 56,868,538 16,519,962 18,120,990 34,640,952 1,305,597 5,966,482

Current tax asset 17 4,383,682 - 4,383,682 15,421,974 - 15,421,974 2,577,645 3,019,318

139,019,277 143,039,684 264,712,853 124,684,716 118,132,337 237,552,987 4,498,550 11,985,929

Total assets 324,486,920 501,339,667 763,480,479 294,437,606 481,526,884 725,700,424 113,769,912 121,257,291

EQUITY AND LIABILITIES

Capital and reserves

Share capital 18 67,000,000 3,000,000 70,000,000 67,000,000 3,000,000 70,000,000 70,000,000 70,000,000

Preference share - 45,000,000 - - 45,000,000 - - -

Capital contribution - - - - - - - -

Shareholder's loan - - - - - - - -

Retained earnings 53,395,159 (13,598,090) 39,797,069 51,177,321 (13,913,571) 37,263,750 23,484,156 27,060,649

Fair value reserve 2,395,310 - 2,395,310 2,395,310 - 2,395,310 - -

Total equity 122,790,469 34,401,910 112,192,379 120,572,631 34,086,429 109,659,060 93,484,156 97,060,649

Technical provisions

Life Assurance Fund 19 - 444,767,315 444,767,315 - 434,828,465 434,828,465 - -

Gross outstanding claims and IBNR 20/25 82,887,872 3,534,123 86,421,995 37,568,418 1,868,263 39,436,681 - -

Gross unearned premiums 20/25 64,123,960 - 64,123,960 67,731,265 - 67,731,265 - -

Mortgage protection fund 21 164,412 - 164,412 228,911 - 228,911 - -

Fisheries and agricultural fund 22 478,763 - 478,763 480,226 - 480,226 - -

Policy holders protection fund 1,678,109 - 1,678,109 1,633,901 - 1,633,901 - -

Total technical provisions 149,333,116 448,301,438 597,634,554 107,642,721 436,696,728 544,339,449 - -

LIABILITIES

Non-current liabilities

Retirement benefit obligations 23 4,204,115 919,112 5,123,227 4,260,819 927,135 5,187,954 - -

Deferred tax liabilities 12 1,202,468 - 1,202,468 - - - - -

5,406,583 919,112 6,325,695 4,260,819 927,135 5,187,954 - -

Current liabilities

Trade and other payables 24 29,610,644 17,717,207 47,327,851 56,697,369 9,089,227 65,786,596 20,285,756 24,196,642

Intercompany payables 15 17,346,108 - - 5,264,066 - - - -

Bank overdraft 16 - - - - 727,365 727,365 - -

46,956,752 17,717,207 47,327,851 61,961,435 9,816,592 66,513,961 20,285,756 24,196,642

Total liabilities 52,363,335 18,636,319 53,653,546 66,222,254 10,743,727 71,701,915 20,285,756 24,196,642

Total equity and liabilities 324,486,920 501,339,667 763,480,479 294,437,606 481,526,884 725,700,424 113,769,912 121,257,291

0.078600 - 0.078600 (0.855503) 0.086198 0.120695 (0.080000) 0.110000

THE COMPANYTHE GROUP

20172018

The notes on pages 16 to 68 form an integral part of these consolidated financial statements.

Auditors' report on pages 4 to 9.

SACOS GROUP LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018

BOARD APPROVAL

� fl�- � L Nair L Rivalland Director Director

k' � Director r

� '+Ui',;OOl:q G Capricieuse T Furneau Director Director

P Bastida Director

o3"d Mftj �oiq -�i_ l

__ R Thorrington Director

� J Morel Director

11

These financial statements have been approved for issue by the Board of Directors on

?-� ----- --s D Bradburn

Director

The notes on pages 16to 61f,form an integral part of these consolidated financial statements. Auditors· report on pages 4 toC,.

SACOS GROUP LIMITED

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018 12

2018 2017

Notes

Non Life Life

Consolidated Non Life Life Consolidated

SCR SCR SCR SCR SCR SCR SCR SCR

Turnover 162,552,080 64,503,589 227,055,669 161,109,429 60,930,796 221,094,411 - -

Gross written premiums 25(c) 162,552,080 64,503,589 227,055,669 161,109,429 60,930,796 221,094,411 - -

Premiums ceded to reinsurers 25(c) (56,040,429) (5,540,143) (61,580,572) (59,923,946) (4,012,835) (63,936,781) - -

Change in gross unearned premium 25(c) 3,607,304 - 3,607,304 (5,961,551) - (5,961,551) - -

Recoverable from reinsurers 25(c) (3,359,741) - (3,359,741) 3,029,768 - 3,029,768 - -

Net premium earned 106,759,214 58,963,446 165,722,660 98,253,700 56,917,961 154,225,848 - - -

Gross claims paid 25(a) (47,855,556) (48,668,083) (96,523,639) (71,322,000) (41,542,826) (112,864,826) - -

Claims paid recoverable from reinsurers 25(a) 4,712,297 - 4,712,297 14,355,977 - 14,355,977 - -

Movement in gross outstanding claims 25(a) (45,319,455) - (45,319,455) 4,738,878 - 4,738,878 - -

Movement recoverable from reinsurers 25(a) 34,956,510 - 34,956,510 1,634,749 - 1,634,749 - -

Net claims incurred (53,506,204) (48,668,083) (102,174,287) (50,592,396) (41,542,826) (92,135,222) - -

Commission receivable from reinsurers 5,812,093 1,137,367 6,949,460 6,006,553 846,349 6,852,902 - -

Commission paid to agents and brokers (9,216,222) (2,807,788) (12,024,010) (12,369,702) (2,367,834) (14,737,536) - -

Net commission paid (3,404,129) (1,670,421) (5,074,550) (6,363,149) (1,521,485) (7,884,634) - -

Underwriting surplus 49,848,881 8,624,942 58,473,823 41,298,155 13,853,650 54,205,992 - -

Rental income 6 8,504,323 15,750,316 24,254,639 7,172,022 16,317,713 23,489,735 - -

Investment income 26 622,145 10,641,866 11,264,011 1,748,473 8,643,431 10,391,904 1,255 12,906,282

Sundry income 27 3,478,538 582,325 4,060,863 2,124,418 1,707,372 3,831,790 2,682 194,195

Intercompany income - - - 2,624,662 - - 1,625,521 -

Total Other Income 12,605,006 26,974,507 39,579,513 13,669,575 26,668,516 37,713,429 1,629,458 13,100,477

Staff costs 28 (29,811,084) (3,063,506) (32,874,590) (31,321,394) (3,447,413) (34,768,807) - -

Sales and marketing expenses 29 (1,713,077) (325,124) (2,038,201) (2,971,099) (486,732) (3,457,831) -

Operating and administrative expenses 29 (19,783,542) (9,509,198) (29,292,740) (28,475,079) (11,866,988) (39,396,253) (122,635) (446,743)

Depreciation and amortisation charges 30 (3,637,354) (483,304) (4,120,658) (3,387,261) (587,328) (3,974,589) - -

Intercompany recharge 9,386,842 (9,386,842) - 6,845,365 (9,470,028) - - -

Profit / (loss) on disposal of investment

properties6 - (2,000,000) (2,000,000) - - -

- -

(Impairment) / reversal of impairment on

financial assets

10(a)

& 14 (2,866,274) - (2,866,274) - (439,555) (439,555) - -

Total Expenses (48,424,489) (24,767,974) (73,192,463) (59,309,468) (26,298,044) (82,037,035) (122,635) (446,743)

Transfer to life assurance fund - - - - - - - -

Share of Profit in associates 13(a) - 880,184 880,184 - 283,423 283,423 - - -

Profit / (loss) before taxation 14,029,398 11,711,658 25,741,057 (4,341,737) 14,507,544 10,165,809 1,506,823 12,653,734

Taxation 17 (8,811,559) (724,476) (9,536,035) (824,036) - (824,036) (2,083,315) (181,824) -

Profit / (loss) for the year 5,217,839 10,987,182 16,205,022 (5,165,773) 14,507,544 9,341,773 (576,492) 12,471,910

(732,851) (732,851) 2,395,310 2,084,045 4,479,355 - -

Total comprehensive income / (loss) for

the year 5,217,839 10,254,331 15,472,171 (2,770,463) 16,591,589 13,821,128 (576,492) 12,471,910

Earnings / (loss) per share (Basic and

diluted):

- - 2.61 - - (2.58) (0.29) 6.24

Profit / (loss) attributable to equity holders of the

parent

Other comprehensive income/(loss) for the

Fair value change on available-for-sale assets

THE COMPANY

20172018

THE GROUP



SACOS GROUP LIMITEDCONSOLIDATED STATEMENT OF CHANGES IN EQUITY & STATEMENT OF LIFE ASSURANCE FUNDAS AT 31 DECEMBER 2018 13

a) STATEMENT OF CHANGES IN EQUITY

THE GROUP

Share Retained Fair value

capital earnings reserve Total

SCR SCR SCR

At 1 January 2017 70,000,000 56,256,546 - 126,256,546

Share of Shareholder's Surplus/(Deficit) (i) - 172,977 - 172,977

Total comprehensive income for the year - (5,165,773) 2,395,310 (2,770,463)

Dividends (note 35) - (14,000,000) - (14,000,000)

At 31 December 2017 70,000,000 37,263,750 2,395,310 109,659,060

Issue of preference shares - - - -

Share of Shareholder's Surplus/(Deficit) (note 2.2.43) - 315,480 - 315,480

Total comprehensive income for the year - 5,217,839 - 5,217,839

Dividends (note 35) - (3,000,000) - (3,000,000)

At 31 December 2018 70,000,000 39,797,069 2,395,310 112,192,379

70,000,000 39,797,069 2,395,310 112,192,379

THE COMPANY

SCR SCR SCR SCR

At 1 January 2017 70,000,000 28,588,739 - 98,588,739

Total comprehensive income for the year - 12,471,910 - 12,471,910

Dividends (note 35) - (14,000,000) - (14,000,000)

At 31 December 2017 70,000,000 27,060,649 - 97,060,649

Total comprehensive income for the year - (576,492) - (576,492)

Dividends (note 35) - (3,000,000) - (3,000,000)

At 31 December 2018 70,000,000 23,484,157 - 93,484,157

23,484,156 93,484,156

1

b) STATEMENT OF LIFE ASSURANCE FUND 2017

SCR SCR

At 1 January 2018 434,828,465 418,409,853

Fair value change on available-for-sale assets (Note 9(a)) (732,851) 2,084,045

Surplus the year 10,987,182 14,507,544

Share of surplus / (deficit) to shareholder for the year (note 2.4.23) (315,480) (172,977)

At 31 December 2018 444,767,315 434,828,465

2018



SACOS GROUP LIMITED

CONSOLIDATED STATEMENT OF CASH FLOW


2018 2017 2018 2017

Notes SCR SCR

S SCR SCR

Cash flows from operating activities:

Profit/(Loss) before taxation 25,741,057 10,165,807 1,506,823 12,653,734

Profit/(Loss) before taxation attributable to shareholders 25,741,057 10,165,807 1,506,823 12,653,734

Adjustments for:

Depreciation of equipment 30 2,556,375 2,368,696 - -

(Profit) / loss on disposal of equipment 27 (343,092) - - -

Change in fair value of investment properties 6 2,000,000 - - -

Change in fair value of investment in financial assets - -

Profit from associate (880,184) (283,423)

Amortisation of intangible asset 30 1,564,285 1,605,894 - -

Impairment of intangible asset 30 - - - -

Release of mortgage protection fund 21 (64,499) (30,169) - -

Release of fisheries and agricultural fund 22 (1,463) (392,981) - -

Release of policy protection fund 44,208 1,633,901 - -

Provision for retirement benefit obligations 23 538,717 1,685,323 - -

Interest income 26 (11,264,011) (10,391,904) (1,255) (906,282)

Dividend income 26 - - - (12,000,000)

Charge of impairment provision 10 2,866,273 - - -

Impairment on trade and other receivables 29 - - - -

Net movement in life assurance fund - - - -

Effect of change in exchange rates 27 (247,244) (288,820) - -

22,510,422 6,072,324 3,012,391 12,401,186

Changes in working capital:

- (Increase) / Decrease in Trade and other receivables 14 (29,600,121) 1,481,930 2,319,549 7,319,447

- Increase / (Decrease) in Trade and other payables 24 (18,458,745) 29,642,056 (3,910,886) 1,908,916

- Gross claims liabilities 25(a) 46,985,314 (5,198,210) - -

- Recoverable from reinsurers

- share of notified claims 14 - -

- unearned premium 14 - -

- Unearned premium 25(b) (3,607,305) 5,961,559 - -

17,829,565 37,959,659 1,421,054 21,629,549

Net tax paid 17 3,307,212 (9,330,330) (1,641,642) (1,528,460)

Interest received 9 & 26 4,765,739 5,076,121 66,528 49,581

Retirement benefit obligation paid 23 (603,443) (3,885,385) - -

Net cash inflow / (outflow) from operating activities 25,299,073 29,820,065 (154,060) 20,150,670

THE GROUP THE COMPANY



SACOS GROUP LIMITED

CONSOLIDATED STATEMENT OF CASH FLOW


2018 2017 2018 2017

Notes SCR SCR

S SCR SCR

Cash flows from investing activities:

Purchase of equipment 5 (29,642,333) (1,410,602) - -

Proceeds from disposal of equipment 450,000 - - -

Disposal of non-current asset held for sale - -

Decrease in deferred lease rental 11

Purchase of intangible assets 7 (488,477) (57,378) - -

Proceed from loans and receivables 10 26,223,808 23,413,171 - -

Disbursement loans and receivables 10 (22,470,023) (50,963,855) - -

Additions to investment in Subsidiary - (45,000,000)

Additions to investment in Associates (19,345,360) - -

Additions to investment in financial assets 9 (144,949,217) (173,942,478) - (21,344,732)

Reclassification/additions to investment properties 6 - - - -

Proceeds from sale of investment properties 30,025,000 - - -

Redemption of investment in financial assets 9 141,507,120 205,614,244 - 45,663,039

Net cash inflow from investing activities 655,878 (16,692,258) - (20,681,693)

Cash flows from financing activity:

Dividend received 26 - - 12,000,000

Dividends paid 35 (3,000,000) (14,000,000) (3,000,000) -

Net cash outflow from financing activity (3,000,000) (14,000,000) (3,000,000) 12,000,000

Net change in cash and cash equivalents 22,954,951 (872,192) (3,154,060) 11,468,977

Movement in cash and cash equivalents:

At 1 January 33,913,587 34,785,779 18,620,217 7,151,239

Change 22,954,951 (872,192) (3,154,060) 11,468,977

At 31 December 16 56,868,538 33,913,587 15,466,157 18,620,217

56,868,538

(0)




SACOS GROUP LIMITED

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

FOR YEAR ENDED 31 DECEMBER 2018 16

1. GENERAL INFORMATION

(i) SACOS Insurance Company Limited (hereafter referred as 'SICL');

(ii) SACOS Life Assurance Company Limited (hereafter referred as 'SLACL'); and

(iii) Sun Investment (Seychelles) Limited (hereafter referred as 'SISL')

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

Statement of compliance

Basis of consolidation

SACOS Group Limited (collectively "the Group" and referred as "the Company" for its separate financial statements here-after)

was incorporated under the Companies Act, 1972 on 22 November 2005. The principal activity of the Company is that of

investment holding. Acivities of its 100% owned subsidiaries are listed below:

Principal Activity

Short-term insurance business

Long-term insurance business

The consolidated and separate financial statements are presented in Seychellois rupee (SCR), unless otherwise indicated.

The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting

Standards (“IFRS”) and comply with the Companies Act 1972 and the Insurance Act 2008.

The principal accounting policies adopted in the preparation of these consolidated and separate financial statements are set out

below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The consolidated and separate financial statements comprise the financial statements of the Group and its subsidiaries as at 31

December 2018. The Group controls an investee if and only if the Group has:

• Power over the investee (i.e.it holds existing rights that give it the current ability to direct the relevant activities of the investee)

• Exposure, or rights, to variable returns from its involvement with the investee, and

• The ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and

circumstances in assessing whether it has power over an investee, including:

Investment property management

The Group is domiciled in Republic of Seychelles and its registered office is Maison Esplanade, Francis Rachel Street, Victoria,

Mahe, Seychelles.

These consolidated and separate financial statements will be submitted for approval at the forthcoming Annual General Meeting

of the shareholders of the Group.

The consolidated and separate financial statements have been prepared under the historical cost basis except for the revaluation

of land and buildings and financial assets and investment properties which are stated at their fair values.

• The contractual arrangement with the other vote holders of the investee

• Rights arising from other contractual arrangements

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or

more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary

and ceases when the Group loses control of the subsidiary.

Assets, liabilities, income and expenses of a subsidiary are included in the consolidated financial statements from the date the

Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the

Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When

necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the

Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions

between members of the Group are eliminated in full upon consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group

loses control over a subsidiary, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary

• Derecognises the carrying amount of any non-controlling interests

• Derecognises the cumulative translation differences recorded in equity

• Recognises the fair value of the consideration received

• Recognises the fair value of any investment retained

• Recognises any surplus or deficit in profit or loss

• Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as

appropriate, as would be required if the Group had directly disposed of the related assets or liabilities

SACOS GROUP LIMITED



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.2 Changes in accounting policies and disclosures

Amendments

01-Jan-17

Disclosure Initiative - Amendments to IAS 7 01-Jan-17

Annual Improvements 2014-2016 Cycle

IFRS 12 Disclosure of interests in other entities 01-Jan-17

Amendments to IAS 7 - Disclosure initiative

Annual improvements 2014 - 2016 cycle

These amendments had no impact on the consolidated and separate financial statements.

2.3 Accounting standards and interpretations issued but not yet effective

New or revised standards

IAS 28 Investments in associates and joint ventures – clarification that measuring investees

at fair value through profit or loss is an investment by investment choice 01-Jan-18

IFRS 9 Financial instruments 01-Jan-18

IFRS 15 Revenue from contracts with customers 01-Jan-18

IFRS 16 Leases 01-Jan-19

IFRS 17 Insurance Contracts 01-Jan-21

IFRIC Interpretation 22 Foreign currency transactions and advance consideration 01-Jan-18

Amendments

Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an

investor and its associate or joint venture

Amendments to IAS 40 - Transfers of investment property 01-Jan-18

01-Jan-18

The accounting policies adopted are consistent with those of the previous financial year except for the following new and

amended IFRSs and IFRIC interpretations adopted in the year commencing 1 Jan 2017:

Effective for accounting period

Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12

Where the adoption of the standard or interpretation or inrovement is deemed to have an impact on the statements or

performance of the Group, its impact is described below:

Amendments made to IAS 12 in January 2016 clarify the accounting for deferred tax where an asset is measured at fair value and

that fair value is below the asset's tax base. Specifically, the amendments confirm that:

• A temporary difference exists whenever the carrying amount of an asset is less than its tax base at the end of the reporting

period.

• An entity can assume that it will recover an amount higher than the carrying amount of an asset to estimate its future taxable

profit.

• Where the tax law restricts the source of taxable profits against which particular types of deferred tax assets can be recovered,

the recoverability of the deferred tax assets can only be assessed in combination with other deferred tax assets of the same type.

• Tax deductions resulting from the reversal of deferred tax assets are excluded from the estimated future taxable profit that is

used to evaluate the recoverability of those assets.

The amendments to IAS 7 Statement of cash flows are part of the IASB’s disclosure initiative and require an entity to provide

disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including

both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to

provide comparative information for preceding periods.

Amendments to IFRS 4 - Applying IFRS 9 Financial instruments with IFRS 4 Insurance

IFRS 12 Disclosure of interests in other entities - Clarification of the scope of the disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10–B16, apply to an

entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is

classified or included in a disposal Group that is classified) as held for sale.

The following standards, amendments to existing standards and interpretations were in issue but not 'yet effective. They are

mandatory for accounting periods beginning on the specified dates, but the Group has not early adopted them:

Where the adoption of the standard or interpretation or improvement is deemed to have an impact on the financial statements or

performance of the Group when applicable, its impact is described below:

Effective date

postponed indefinitely

SACOS GROUP LIMITED




2.3 Accounting standards and interpretations issued but not yet effective (continued)

The amendments clarify that:

These amendments will not have an impact on the Group’s consolidated and separate financial statements.

IFRS 9 Financial instruments-effective 1 January 2018

IAS 28 Investments in associates and joint ventures – Clarification that measuring investees at fair value through profit

or loss is an investment by investment choice

An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-

investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity that is

not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when

applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture

to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each

investment entity associate or joint venture, at the later of the date on which:

(a) the investment entity associate or joint venture is initially recognised;

(b) the associate or joint venture becomes an investment entity; and

(c) the investment entity associate or joint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from 1 January 2018, with earlier application permitted. If

an entity applies those amendments for an earlier period, it must disclose that fact.

Financial assets are classified by reference to the business model within which they are held and their contractual cash flow

characteristics. The 2014 version of IFRS 9 introduces a “fair value through other comprehensive income” category for certain

debt instruments. Financial liabilities are classified in a similar manner as under IAS 39; however there are differences in the

requirements applying to the measurement of an entity’s own credit risk.

The 2014 version of IFRS 9 introduces an “expected credit loss” model for the measurement of the impairment of financial assets,

so it is no longer necessary for a credit event to have occurred before a credit loss is recognised. A new hedge model is designed

to be more closely aligned with how entities undertake risk management activities when hedging financial and non-financial risk

exposures.

The overlay approach

The overlay approach is an option for companies that adopt IFRS 9 and issue insurance contracts, to adjust profit or loss for

eligible financial assets; effectively resulting in IAS 39 accounting for those designated financial assets. The adjustment

eliminates accounting volatility that may arise from applying IFRS 9 without the new insurance contracts standard. Under this

approach, an entity is permitted to reclassify amounts between profit or loss and other comprehensive income (OCI) for

designated financial assets.

Company must present a separate line item for the amount of the overlay adjustment in profit or loss, as well as a separate line

item for the corresponding adjustment in OCI.

The requirements for derecognition of financial assets and liabilities are carried forward from IAS 39.

The application of IFRS 9 has been deferred until the effective adoption and application of the new standard on insurance

contracts. The Company plans to adopt the new standard on the required effective date. However, the Group is assessing the

impact of the full adoption of IFRS 9, which it intends to adopt on the effective date, on the financial statements.

Amendments to IFRS 4 - Applying IFRS 9 Financial instruments with IFRS 4 Insurance contracts

The amendments address concerns arising from implementing the new financial instruments Standard, IFRS 9, before

implementing the new insurance contracts standard that International Accounting Standard Board (IASB) is developing to replace

IFRS 4. The amendments introduce two options for entities issuing insurance contracts: a temporary exemption from applying

IFRS 9 and an overlay approach.

Temporary exemption from IFRS 9

The optional temporary exemption from IFRS 9 is available to the Companies whose activities are predominantly connected with

insurance. The temporary exemption permits such companies to continue to apply IAS 39 Financial Instruments: Recognition and

Measurement while they defer the application of IFRS 9 until 1 January 2021 at the latest. Predominance must be initially

assessed at the annual reporting date that immediately precedes 1 April 2016 and before IFRS 9 is implemented. Also the

evaluation of predominance can only be reassessed in rare cases. Companies applying the temporary exemption will be required

to make additional disclosures.

SACOS GROUP LIMITED





IFRS 15 Revenue from contracts with customers - effective 1 January 2018

IFRS 15 provides a single, principles based five-step model to be applied to all contracts with customers.

The five steps in the model are as follows:

• Identify the contract with the customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations in the contracts; and

• Recognise revenue when (or as) the entity satisfies a performance obligation.

The Group is assessing the impact of this new standard.

IFRS 16 Leases – effective 1 January 2019


IFRS 17 Insurance Contracts - effective 1 January 2021


IFRIC Interpretation 22 Foreign currency transactions and advance consideration

Transition

The temporary exemption is first applied for reporting periods beginning on or after 1 January 2018. The Company may elect the

overlay approach when it first applies IFRS 9 and apply that approach retrospectively to financial assets designated on transition

to IFRS 9. The Company restates comparative information reflecting the overlay approach if, and only if, the Company restates

comparative information when applying IFRS 9.

The Group plans to defer the application of IFRS 9 until the earlier of the effective date of the new insurance contract standard

(IFRS 17) of 1 January 2021, opting the temporary exemption from applying IFRS 9 by the amendments to IFRS 4.

Guidance is provided on topics such as the point in which revenue is recognised, accounting for variable consideration, costs of

fulfilling and obtaining a contract and various related matters. New disclosures about revenue are also introduced.

The IASB has redrafted this new leasing standard that would require lessees to recognise assets and liabilities for most leases.

Lessees applying IFRS would have a single recognition and measurement model for all leases (with certain exemptions). Lessors

applying IFRS would classify leases using the principle in IAS 17; in essence, lessor accounting would not change.

IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current measurement model where

estimates are re-measured each reporting period. Contracts are measured using the building blocks of:

• discounted probability-weighted cash flows

• an explicit risk adjustment, and

• profit of the contract which is recognised as revenue over the coverage period.

The standard allows a choice between recognising changes in discount rates either in profit or loss or directly in other

comprehensive income. The choice is likely to reflect how insurers account for their financial assets under IFRS 9.

An optional, simplified premium allocation approach is permitted for the liability for the remaining coverage for short duration

contracts, which are often written by non-life insurers. There is a modification of the general measurement model called the

policyholders share in the returns from underlying items. When applying, the underlying items are included in the contractual

service margin, The results of insurers using this model are therefore likely to be less volatile than under the general model.

The new rules will affect the financial statements and key performance indicators of all entities that issue insurance contracts or

investment contracts with discretionary participation features.

The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or

income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the

date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising

from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of

the transactions for each payment or receipt of advance consideration.

SACOS GROUP LIMITED





(i) The beginning of the reporting period in which the entity first applies the interpretation; or

These amendments will not have an impact on the consolidated and separate financial statements.

These amendments will not have an impact on the consolidated and separate financial statements.

Amendments to IAS 40 - Transfers of investment property

The amendments will eliminate diversity in practice.

The amendments are effective for annual periods beginning on or after 1 January 2018.

2.4 Significant accounting policies

2.4.1

Transactions and balances

Early application of interpretation is permitted and must be disclosed. First-time adopters of IFRS are also permitted to apply the

interpretation prospectively to all assets, expenses and income initially recognised on or after the date of transition to IFRS. The

amendments are intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it)

on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration received or paid in

foreign currency.

Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its

associate or joint venture

The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is sold

or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution

of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in

full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is recognised

only to the extent of unrelated investors’ interests in the associate or joint venture. The IASB has deferred the effective date of

these amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively.

The amendments clarify when an entity should transfer property, including property under construction or development into, or out

of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the

definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the

use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting

period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date

and, if applicable, reclassify property to reflect the conditions that exist at that date.

Retrospective application in accordance with IAS 8 is only permitted if that is possible without the use of hindsight. Early

application of the amendments is permitted and must be disclosed.

Entities may apply the amendments on a fully retrospective basis. Alternatively, an entity may apply the interpretation

prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting

period in which the entity first applies the interpretation.

Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using Seychellois rupee (SCR), the

currency of the primary economic environment in which the Group operates (“functional currency”). The consolidated and

separate financial statements are presented in Seychellois rupee (SCR).

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of the

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at

year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date

of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange

rates at the date the fair value was determined.

SACOS GROUP LIMITED




2.4 Significant accounting policies (continued)

2.4.2 Insurance contracts

Classification of insurance contracts

Insurance contracts issued by the Group are classified within the following main categories:

(i) Short-term insurance contracts

(ii) Long-term insurance contracts with fixed and guaranteed terms

(iii) Long-Term insurance contracts without fixed terms and with DPF

- which are likely to be significant portion of the total contractual benefits; and

- whose amount or timing is contractually at the discretion of the issuer;

and which are contractually based on the:

- performance of specified pool of contracts or a specified type of contract; and

- realised and unrealised investment returns on a specified pool of assets held by the Group.

These contracts insure events associated with human life, i.e. death, disability or survival over a long term. Life insurance

liabilities are recognised when contracts are entered into and premiums are charged. These liabilities are measured by using the

Gross Premium method. The liability is determined as the sum of the discounted value of the expected future benefits, claims

handling and policy administration expenses, policyholder options and guarantees and investment income from assets backing

such liabilities, which are directly related to the contract, less the discounted value of the expected premiums that would be

required to meet the future cash outflows based on the valuation assumptions used. The liability is either based on current

assumptions or calculated using the assumptions established at the time the contract was issued, in which case, a margin for risk

and adverse deviation is generally included. A separate reserve for longevity may be established and included in the

measurement of the liability. Furthermore, the liability for life insurance contracts comprises the provision for claims outstanding.

Adjustments to the liabilities at the end of each reporting period are recorded in profit or loss in Transfer to life assurance fund’.

The liability is derecognised when the contract expires, is discharged or is cancelled.

Insurance contracts are further classified as being either with or without Discretionary Participation Features (DPF). DPF is a

contractual right to receive, as a supplement to guaranteed benefits, additional benefits:

These contracts also insure events associated with human life (i.e. death or survival) over a long duration. Premiums are

recognised directly as liabilities which are increased by credited interest and decreased by administration fees, mortality,

surrender charges and any withdrawals. These types of contracts entitles the contract holders to a minimum guaranteed amount

per annum. They contain a DPF which entitles the contract holders, in supplement to the minimum guaranteed amount, a

contractual right to receive additional bonuses. A bonus is declared when the actual return on backing assets is higher than the

expected return at inception of the contract.

The amount and timing of the settlement of the DPF element is however at the discretion of the Group. The bonus is derived from

the DPF eligible surplus available arising mainly upon revaluation of backing assets, carried out by independent actuaries on a

yearly basis.

The Group has legal obligation to eventually pay to contract holders at least 90% of the DPF eligible surplus. Any portion of the

DPF eligible surplus that is not declared as a bonus and not credited to individual contract holders accounts is retained as a

liability in the life assurance fund for the benefit of all contract holders until declared and credited to them individually in future

periods.

Equity holders' share of the DPF eligible surplus equally to 10%, is transferred from the Life Assurance Fund to them on a yearly

basis when bonuses are declared.

The Group issues contracts which transfer insurance risk. Insurance contracts are those contracts which transfer significant

insurance risk at the inception of the contract. Such contracts remain insurance contracts until all rights and obligations are

extinguished or expired. Investment contracts are those contracts that transfer financial risk with no significant insurance risk.

Short-term insurance contracts are mainly in respect of motor business but the Group also sells fire and allied perils, health,

marine, engineering and other miscellaneous insurance contracts. These contracts protect the Group’s customers from damage

suffered to property or goods, value of property and equipment lost, losses and expenses incurred, sickness and loss of earnings

resulting from the occurrence of the insured events.

SACOS GROUP LIMITED





2.4.2 Insurance contracts (continued)

(iv) Reinsurance contracts

(v) Receivables and payables related to insurance contracts

(vi) Impairment of reinsurance assets

2.4.3 Claims expenses and outstanding claims provisions

2.4.4 Salvage and subrogation reimbursements

2.4.5 Provision for unearned premiums

Outstanding claims provisions are based on the ultimate costs of all claims incurred but not settled at the end of financial

reporting period, whether reported or Incurred But Not Reported (IBNR). Notified claims are only recognised when the Group

considers that it has a contractual liability to settle the claims. IBNR has been provided for on the South African bechmark. Claims

expenses are charged to profit or loss as incurred based on the estimated liability for compensation owed to contract holders or

There are often delays between the occurrence of the insured event and the time it is actually reported to the Group, particularly

in respect of liability business, the ultimate cost of which cannot be known with certainty at the end of the financial reporting

period. Following the identification and notification of the insured loss, there may still be uncertainty as to the magnitude and

timing of the settlement of the claim. Outstanding claim provisions are not discounted and exclude any allowances for expected

future recoveries. Recoveries represent claims recoverable from third party insurers. Recoveries are accounted for as and when

received. However, non-insurance assets that have been acquired by exercising rights to sell, salvage or subrogate under the

terms of the insurance contracts are included when providing for outstanding claims. The liability is not discounted due to the fact

that the exact timing and actual amount to be paid cannot be determined.

Estimates of salvage recoveries are included as an allowance in the measurement of the insurance liabilities for claims, and

salvage property is recognised in other assets when the liability is settled. The allowance is the amount that can reasonably be

recovered from the disposal of the property.

The provision for unearned premiums represents the portion of premiums written on short-term insurance contracts relating to

periods of insurance risks subsequent to the reporting date. It is calculated on the inception basis (daily method). The movement

on the provision is taken to profit or loss in order for revenue to be recognised over the period of the risk. The provision is

derecognized when the contract expires, discharged or cancelled.

Contracts entered into by the Group with reinsurers under which the Group is compensated for losses on one or more contracts

issued by the Group are classified as reinsurance contracts held. Insurance contracts entered into by the Group under which the

contract holder is another insurer (inwards reinsurance) are included with insurance contracts.

Reinsurance contracts used by the Group are proportional and non-proportional treaties and facultative arrangements.

Proportional reinsurance can be either ‘quota share’ where the proportion of each risk reinsured is stated or “surplus” which is a

more flexible form of reinsurance and where the Group can fix its retention limit. Non-proportional reinsurance is mainly ‘excess of

loss’ reinsurance where, in consideration for a premium, the reinsurer agrees to pay all claims in excess of a specified amount,

i.e. the retention, and up to a maximum amount. Facultative insurance contracts generally relate to specific insured risks which

are underwritten separately. Under treaty arrangements, risks underwritten by the Group falling under the terms and limits of the

treaties are reinsured automatically.

Reinsurance assets or liabilities are derecognized when the contractual rights are extinguished or expired or when the contract is

transferred to another party.

Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its life time,

even if insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expired.

Investment can, however, be classified as insurance contracts after inception if insurance risk becomes significant.

Receivables and payables are recognised when due. These include amounts due to and from agents, brokers and insurance

contract holders.

Reinsurance assets are reviewed for impairment at each reporting date or more frequently when an indication of impairment

arises during the reporting year. If a reinsurance asset is impaired, the Group reduces the carrying amount accordingly and

recognizes that impairment in profit or loss. A reinsurance asset is impaired if there is objective evidence, as a result of an event

that occurred after initial recognition of that asset, that the Group may not recover all amounts due under the terms of the contract

and that the event has a measurable impact on the amounts that the Group will receive from the reinsurer.

SACOS GROUP LIMITED





2.4.6 Liability adequacy test

(a) Short-term insurance

(b) Long-term insurance

2.4.7 Financial instruments

(a) Categories of financial assets

(b) Financial assets at fair value through profit or loss (FVTPL)

(c) Loans and receivables

(d) Held-to-maturity financial assets

(e) Available-for-sale financial assets

(i) Measurement

Financial assets at fair value through profit or loss (FVTPL)

At end of financial reporting period, a liability adequacy test is performed to ensure the adequacy of the contract liabilities. In

performing the test, current best estimates of future contractual cash flows (including claims handling and administration

The Group’s Independent Actuaries review the adequacy of insurance liabilities for long term contracts on an annual basis and

ensure that provisions made by the Group are adequate.

Financial instruments carried on the statement of financial position include financial assets classified into the following categories:

Financial assets within the scope of IAS 39 are classified as loans and receivables and investment in financial assets which

comprise of held-to-maturity and available for sales investments as appropriate. The Group determines the classification of its

financial assets at initial recognition.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention

in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell

the asset.

All financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss,

directly attributable transaction costs.

This category has two sub-categories: ‘financial assets held for trading and those designated at fair value through profit or loss at

inception’. A financial asset is classified into the ‘financial assets at fair value through profit or loss category at inception if

acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is

evidence of short-term profit-taking, or if so designated by management.

Loans and receivables are non-derivative financial assets with fixed or determinable payments. They are recognised initially at

fair value plus any directly attributable transactions costs. Subsequent to initial recognition, loans and receivables are measured

at amortised cost using the effective interest method, less any impairment. Interest on loans and receivables financial assets are

included in the income statement.

Held-to-maturity financial assets are non-derivative instruments with fixed or determinable payments and fixed maturities that the

Group has the positive intention and ability to hold to maturity. Interest on held-to-maturity financial assets are included in the

statement of profit or loss and other comprehensive income. Held-to-maturity financial assets are treasury bonds which are

recognised initially at fair value and subsequently at amortised cost using the effective interest method.

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the

other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve

months of the end of the reporting period.

Subsequent to initial recognition, they are re-measured at fair value. Changes in fair value are recorded in profit or loss on

financial assets at fair value through profit or loss.

Loans and receivables and held-to-maturity investments

These are subsequently carried at amortised cost using the effective interest method.

SACOS GROUP LIMITED





2.4.7 Financial instruments (continued)

(i) Measurement (continued)

(ii) Derecognition

(f) Financial assets carried at amortised cost

(g) Financial assets classified as available-for-sale

• The rights to receive cash flows from the asset have expired;

• The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without

material delay to a third party under a ‘pass through’ arrangement; and either

(a) has transferred substantially all the risks and rewards of the asset, or

(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the

asset.

When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained

substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the

Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset

is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group

could be required to repay.

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of

financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if

there is objective evidence of impairment as a result of one or more events that occurred after the 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 or group of

financial assets that can be reliably estimated.

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually

significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset,

whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively

assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or

continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred on loans and receivables carried at amortised cost, the

amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future

cash flows discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through

the use of an allowance account and the amount of the loss is recognised in consolidated statement of profit or loss and other

comprehensive income. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of

interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded

as part of investment income in profit and loss.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event

occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allowance

account. The amount of the reversal is recognised in profit or loss.

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of

financial assets is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in

the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence

exists for available-for-sale financial assets, the cumulative loss, measured as the difference between acquisition cost and the

current fair value, less any impairment loss on that financial asset is recognised in the statement of life assurance fund for life

business and profit or loss for group excluding life business. Impairment losses for life business previously recognised in Life

Assurance Fund for an investment in an equity instrument classified as available-for-sale is also reversed through the statement

of life assurance fund and for group excluding life business reversal of impairment is reversed through profit or loss in statement

of profit or loss and other comprehensive income.

These are subsequently carried at their fair values. Changes in fair value are recorded in statement of life assurance fund for life

business and other comprehensive income for group excluding life business.

Available-for-sale financial assets

A financial asset (or, where applicable a part of a financial asset or part of the Group of similar financial assets) is derecognised

when:

SACOS GROUP LIMITED





2.4.7 Financial instruments (continued)

(g) Financial assets classified as available-for-sale (continued)

2.4.8 Financial liabilities

(a) Categories of financial liabilities

(b) Measurement

(c) Derecognition

(d) Offsetting of financial instruments

2.4.9 Investment in subsidiary companies

Separate financial statements

2.4.10 Equity

The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of life assurance fund for

life business and profit or loss for group excluding life business. If an available for sale investment has a variable interest rate,

the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

If, in a subsequent period, the amount of the impairment loss decreases and the decreases can be related objectively to an event

occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the previously recognised

impairment loss is reversed through the statement of life assurance fund for life business and profit or loss for group excluding life

business to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what

the amortised cost would have been had the impairment not been recognised.

The Group determines the classification of its financial liabilities at initial recognition. Financial liabilities within the scope of IAS 39

are classified as either fair value through profit or loss or amortised cost as appropriate. All financial liabilities are recognised

initially at fair value minus directly attributable transaction costs.

The Group's financial liabilities include trade and other financial payables and bank overdrafts.

After initial recognition, financial liabilities of the Group are subsequently measured at amortised cost using the effective interest

rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the

effective interest rate method (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral

part of the EIR. The EIR amortisation is included in finance cost in profit or loss.

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. Where 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 recognised in profit or loss.

Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position if, and

only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net

basis, or to realize the assets and settle the liabilities simultaneously. Income and expenses will not be offset in the profit or loss

unless required or permitted by any accounting standard or interpretation, as specifically disclosed in the accounting policies of

Subsidiaries are all entities (including structured entities) over which the Group has control. Subsidiaries are fully consolidated

from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Investments in subsidiaries in the separate financial statements of the Company are carried at cost, net of any impairment. Where

the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its

recoverable amount and the difference is recognised in profit or loss. Upon disposal of the investment, the difference between the

net disposal proceeds and the carrying amount is recognised in profit or loss.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Shares issued by the Group are recognised at the proceeds received, net of direct issue costs.

SACOS GROUP LIMITED





2.4.11 Dividends

2.4.12 Property and equipment

Rates

Furniture and fittings 10%

Computer and equipment 15% - 20%

Motor vehicles 25%

2.4.13 Investment properties

2.4.14 Intangible assets

Computer software

Website

Dividends on ordinary shares are recognised as a liability and deducted from equity when they are approved by the Group’s

shareholders.

Property and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost

excludes the cost of day to day servicing. Replacement or major inspection costs are capitalized when incurred and if probable

that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent costs are included in the assets' carrying amount or recognised as a separate asset as appropriate, only when it is

probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured

reliably.

Depreciation on property and equipment is calculated on the straight line method to write off the cost of each asset to their

residual values over their estimated useful life as follows:

The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Where the carrying amount is greater than its recoverable amount, it is written down to its recoverable amount.

Acquired computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific

software and are amortised using the straight line method over the estimated useful life of 3⅓ years.

Costs that are directly associated with the development of the Group's website and which will probably generate economic

benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff costs of the software

development team and an appropriate portion of relevant overheads. Website development costs recognised as assets are

amortised using a straight-line method over their useful lives of 3⅓ years.

Gains and losses on disposal of property and equipment are determined by reference to their carrying amounts and are taken into

profit or loss . On disposal of revalued assets, any amounts in revaluation reserve relating to those assets are transferred to

retained earnings.

Investment properties held to earn rentals/or for capital appreciation or both and not substantially occupied by the Group are

initially stated at cost, including transaction costs and then are subsequently carried at fair value, representing open market value

determined annually by external valuers and or the Directors as appropriate.

Gains or losses arising from changes in fair values of investment properties are recognised in the consolidated statement of profit

or loss and other comprehensive income.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an

indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset

with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the

expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization

period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible

assets with finite lives are recognised in consolidated statement of profit or loss and other comprehensive income in the expense

category that is consistent with the function of the intangible assets.

SACOS GROUP LIMITED





2.4.15 Impairment of non-financial assets

2.4.16 Cash and cash equivalents

2.4.17 Provisions

2.4.18 Segment reporting

2.4.19 Trade and other receivables

2.4.20 Trade and other payables

2.4.21 Taxes

(a) Current tax

(b) Deferred tax

Segments reported are consistent with the historical Group structure.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication

exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An

asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use.

The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely

independent of those from other assets or groups of assets. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into

account, if available.

Cash and short-term deposits in the consolidated statement of financial position comprise cash at banks, in hand and short-term

deposits with a maturity of less than three months. Cash and cash equivalents are measured at fair value.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate

can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the

reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to

any provision is presented in consolidated statement of profit or loss and other comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where

appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time

is recognised as a borrowing cost.

Trade and other receivables are recognised at fair value less provision for impairment.

Interest on loans and receivables financial assets are recognised in the consolidated statement of profit or loss and other

comprehensive income.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or

paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or

substantively enacted by the reporting date, in the countries where the Group operates and generates taxable income. The tax is

recognised as a charge in consolidated statement of profit or loss and other comprehensive income.

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets

and liabilities and their carrying amounts for financial reporting purposes.

Trade and other payables financial liabilities are recognised at fair value minus directly attributable transaction costs (transaction

costs are only taken into account or the financial liability instruments not classified as fair value through profit and loss). Interest

paid on loans and other payables is recognised in the consolidated statement of profit or loss and other comprehensive income.

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired. Where 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 recognised in the consolidated profit or loss.

SACOS GROUP LIMITED





2.4.21 Taxes (continued)

2.4.22 Retirement benefit obligations

Defined benefit plans

2.4.23 Shareholders’ share of the surplus generated by the Life Business

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a

business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint

ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary

differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax

losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and

the carry-forward of unused tax credits and unused tax losses can be utilized except:

• where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset

or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting

profit nor taxable profit or loss; and

• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint

ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will

reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no

longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Unrecognized deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has

become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised

or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss are not recognised in profit or loss. Deferred tax items are

recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

Deferred income tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax

assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation

authority.

The Group and the Company have disclosed deferred tax assets and deferred tax liabilities separately as it does not meet the

above criteria.

The Group provides for a payment of compensation to permanent employees as is required by Regulation 24(2) of S.I. 34 of 1991

read with section 47(2)(b)(i) of the Employment Act as amended by Act 18 of 2010. The amount provisioned every year is based

on the number of months the employee has worked. This type of employee benefits has the characteristics of a defined benefit

plan. The liability recognised in the statement of financial position in respect of the defined benefit plan is the value of the defined

obligation at the reporting date. The value of the defined benefit obligation is determined by use of the formula as required by the

Act, being "the rate of five-sixths of one day's wage for each completed month of service in the case of continuous employment".

Payments, reflecting the obligation are made on termination of employment.

The Group does not carry out an actuarial valuation since the obligation is calculated on the method as prescribed by the

Seychelles Employment Act and frequently adjusted to reflect the present obligation using the current salary and months of

service. Movements in the compensation obligation are recognised as part of staff costs in the consolidated statement of profit or

loss and other comprehensive income.

As per the Insurance Act 2008, the surplus of the Life Assurance Fund is to be shared by the policyholders and shareholders in

the maximum ratio of 90:10 respectively and as prescribed by our independent actuaries. The share of surplus due to the

shareholders has been calculated by the Actuary and recorded in thier valuation report amounting to SCR 315,481 in 2018. This

has been recognised in the statement of changes in equity and Life assurace Fund. As the life business made a profit during the

current year, the SCR 10.2m is duly recognised in the life assurance fund.

SACOS GROUP LIMITED





2.4.24 Life Assurance Fund

2.4.25 Mortgage protection fund

2.4.26 Fisheries and Agricultural fund

2.4.27 Revenue recognition

(a) Gross written premiums

(i) Short-term insurance

(ii) Long-term insurance

Life insurance liabilities are recognised when contracts are entered into and premiums are charged. These liabilities are

measured using the net premium method. The liabilitiy is determined as the sum of the discounted value of the expected future

benefits, claims handling and policy administration expenses, policyholder options and guarantees and investment income from

assets backing such liabilities , which are directly related to the contract, less the discounted value of the expected premiums that

would be required to meet furture cash outflows based on the valuatin assumptions used. The liability is either based on current

assumptions or calculated using the assumptions established at the time the cotract was issued, in which case,a margin for risk

and adverse deviation is generally included. Furthermore, the liability for the life insurance contracts includes claims outstanding.

Profits originated from margins for adverse deviations on run-off contracts are recognised in the statement of profit or loss over

the life of the contract, whereas losses are fully recognised in the statement of profit and loss during the first year of runoff. The

liability is derecognised whe the contract expires, is discharged or cancelled.

At each reporting date, an assesment is maded of whether the recognised life insurance liabilities are adequate by using an

existing liability adequacy test. The liability value is adjusted to the extent that it is insufficient to meet expected future benefits

and expenses. In performing the adequacy test, current best estimates of future contractual cash flows such as claims handling

and policy administration expenses, policyholder options and guarantees, as well as investment income from assets backing

such liabilities are used. A number of valuation methods are applied, including discounted cash flows, option pricing models and

stochastic modelling. To the extent that the test involves discounting of cash flows, the interest rate applied may be prescribed or

may be based on managements prudent expectation of current market interest rates. Any inadequacy is recorded in the

statement of profit or loss by establishing an additional insurance liability for the remaining loss.

The Fund is designated for Mortgage Protection Insurance under a Home Ownership Scheme. Under this scheme, upon

approval of their mortgage loan, borrowers are automatically charged 6% of the nominal value of the loan towards mortgage

protection which is expected to cover the loan repayments in case of death or permanent disability. The 6% consists of 4% risk

premium and 2% management fee for the Group.

The Fund is designated for contributions to premiums payable under a Government sponsored / subsidised voluntary scheme.

Under this Agricultural Disaster and Fisheries Voluntary Insurance Scheme, farmers registered with the Seychelles Agriculture

Agency (SAA) and boat owners registered with the Seychelles Fishires Authorities (SFA) are charged 4% of the insured values, to

which the fund contributes 50%. The contributions would cover the insured items (crop, livestock, boats and employees / crew) in

case of loss or damage, death following natural disasters and accidents, depending on the scheme applicable.

Gross written premium comprise the total premium for the whole period of cover provided by contracts entered into and are

recognised as revenue (earned premiums) on the date on which the policy commences, proportionally over the period of

coverage.

Premiums earned on long-term life contracts are recognised as revenue when they become payable by the policyholder, i.e. the

date when payments are due.

The Life Assurance Fund represents the net assets of the Company attributable to policy holders of the Fund. At each reporting

date the amount of the liabilities of the life assurance fund is established and the adequacy of the fund is determined by actuarial

valuation. A portion of the surplus or deficit between the value of the assets and the value of the liabilities is trasnferred to the

statement of profit or loss. When the actuarial valution of the liability exceeds the value of the fund, the difference is recognised

immediately in income statement. The movement in the fund is recognised in other comprehensive income to the extent of the fair

value gains on available-for-sale financial assets.

Premiums on long term insurance contracts which have been in force for less than three years and for which not all premium

have been received are accrued for three months. When these policies lapse due to non receipt of premium after three months,

then all related premium income accrued but not received from the date they are deemed to have lapsed is released to the

consolidated statement of profit or loss and other comprehensive income.

SACOS GROUP LIMITED





2.4.27 Revenue recognition (continued)

(b) Earned premiums

(c) Underwriting surplus

2.4.28 Other income

Other income earned by the Group is recognised on the following bases:

- Interest income

- Investment income

- Commission

- Rental Income

-

2.4.29 Fair value measurement:

Management fees

Management fees are charged to subsidiaries and are recognised in the separate financial statements when the services are

rendered.

Earned premiums represent gross written premiums net of reinsurance ceded to reinsurers and adjusted for unearned premiums,

if any.

Underwriting surplus is determined for each class of business after taking into account inter alia, unearned premium reserves,

outstanding claims and additional reserves.

Interest income is recognised in profit or loss using the effective interest rate method. Fees and commissions that are an

integral part of the effective yield of the financial asset or liability are recognised as an adjustment to the effective interest rate

of the instrument.

Investment income comprises dividend and rental income from investment property business. Dividend income is

recognised when the shareholders' right to receive payment is established while rental income is recognised on an accrual

basis.

Commission income is recognised as it accrues in accordance with the substance of the relevant agreements.

Rental income comprises of income from the lease of the Group's investment properties. Rental income is recognised on an

accrual basis and where appropriate using the straight line methodology over the lease term.

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. The fair value measurement is based on the presumption that the transaction to sell the

asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use.

When pricing the asset or liability, it is assumed that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits

by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest

and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to

measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

The Company measures available for sale financial assets and investment properties in non-financial assets at fair value.

SACOS GROUP LIMITED





2.4.29 Fair value measurement (continued)

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the

basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value

measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a

Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires

judgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the Company. Management considers

observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not

proprietary, and provided by independent sources that are actively involved in the relevant market.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether

transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is

significant to the fair value measurement as a whole) at the end of each reporting period. If there is a transfer occurred between

the levels, it is deemed to have occured from the date of assessment.

For fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics

and risks of the asset or liability and the level of the fair value hierarchy as explained above.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair

value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable

- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

SACOS GROUP LIMITEDCONSOLIDATED NOTES TO THE FINANCIAL STATEMENTSFOR YEAR ENDED 31 DECEMBER 2018 32

3. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS

3.1 Insurance risk

3.1.1 Insurance contracts

Concentration, frequency and severity of claims



The reinsurance arrangements for proportional and non-proportional treaties are such that the Group is adequately protected and

would only suffer predetermined amounts.

The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the

resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.

For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the

Group faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the

insurance liabilities.

The Group has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of

these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.

The frequency and severity of claims can be affected by several factors, the most significant resulting from severe weather events

like natural calamities, fire and allied perils and their consequences and liability claims awarded by the Court. Inflation is another

factor that may affect claims payments.

Underwriting measures are in place to enforce appropriate risk selection criteria. For example, the Group has the right to review

terms and conditions on renewal or not to renew an insurance contract.

For contracts where death is the insured risk, the most significant factors that could increase the overall frequency of claims are

epidemics or wide spread changes in lifestyle, such as eating, smoking and exercise habits, resulting in earlier or more claims than

expected. For contracts where survival is the insured risk, the most significant factor is continued improvement in medical science

and social conditions that would increase longevity. Insurance risk is therefore subject to contract holders' behaviours and the impact

of contract holders' behaviours have been factored into the assumptions used to measure insurance liabilities.

For contracts with fixed and guaranteed benefits and fixed future premiums, there are no mitigating items and conditions that reduce

the insurance risk accepted.

For contracts with Discretionary Participation Feature (DPF), the participating nature of these contracts results in a significant portion

of the insurance risk being shared with the insured party.

Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk, accumulation of risk and

type of industry covered.

The Group issues contracts that transfer insurance or financial risk or both. This section summarises the main risks linked to long-

term and short-term insurance business and the way they are managed.

A description of the significant risk factors are given below together with the risk management policies applicable.

Insurance risk is transferred when the Group agrees to compensate a policyholder if a specified uncertain future event (other than a

change in a financial variable) adversely affects the policyholder. By the very nature of an insurance contract, this risk is random and

therefore unpredictable. The Group is exposed to short-term and long-term insurance risks.

The main risk that the Group faces under its insurance contracts is that actual claims and benefit payments exceed the carrying

amount of the insurance liabilities. This may occur if the frequency or severity of claims and benefits are greater than estimated.

Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected

outcome. In addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the

portfolio. The Group has developed its insurance underwriting strategy so as to diversify the type of insurance risks accepted and

within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.


3. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONTINUED)

3.1.1 Insurance contracts (continued)

3.1.2 Concentration of insurance risk


Number

Class of business of Claims

SCR SCR

Non-life

Fire & Allied Perils 39 32,066,451 3,233,984

Motor 3,197 10,999,611 10,999,611

Accident & Liability 209 7,431,298 1,387,644

Marine 18 90,000 75,000

Others 73 23,626,246 12,013,410

3,536 74,213,606 27,709,649

IBNR - 8,674,267 5,220,962

3,536 82,887,872 32,930,611

Number

Class of business of Claims

SCR SCR

Non-life

Fire & Allied Perils 104 3,446,773 2,541,382

Motor 3,307 7,510,096 7,510,096

Accident & Liability 259 7,249,360 1,839,262

Marine 22 80,000 65,000

Others 164 16,146,481 8,121,986

3,856 34,432,711 20,077,726

IBNR - 3,135,707 2,489,941

3,856 37,568,418 22,567,667


With Profit Without Profit Total

SCR SCR SCR

Office Premium 59,324,695 62,580 59,387,275

Single Premium - 14,673,869 14,673,869

Accrued Bonus 152,617,469 - 152,617,469

Sum Assured 869,341,297 539,514,814 1,408,856,111

Reserve before Bonuses 388,293,584 14,177,575 402,471,159

Reserve after Bonuses 393,851,043 14,177,575 408,028,618

Number of Policies 8,301 1,850 10,151

Net

Total outstanding claims at December 31, 2018 (notes 20 & 25(a))

The Group manages these risks through its underwriting strategy and reinsurance arrangements. The underwriting strategy is

intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. For

example, death risk and survival risk are balanced across its portfolio. Medical selection is also included in the underwriting

procedures with premiums varied to reflect the health condition and family medical history of the applicants. There are defined

retention limit on any single life or group life insured and reinsures the excess of the insured benefit over its retention limit. The Group

does not have any reinsurance covers for contracts that insure survival risk.

2018

The following tables disclose the concentration of claims by class of business gross and net of reinsurance for short-term insurance:

The Group

Gross Net

Total outstanding claims at December 31, 2017 (notes 20 & 25(a))

The Group

Gross

2017

2018



3.1.2 Concentration of insurance risk (continued)

(b) Long-term insurance (continued)

With Profit Without Profit Total

SCR SCR SCR

Office Premium 53,821,386 1,098,495 54,919,881

Single Premium - 21,118,027 21,118,027

Accrued Bonus 156,422,171 - 156,422,171

Sum Assured 826,307,749 602,196,399 1,428,504,148

Reserve before Bonuses 402,353,573 15,957,834 418,311,407

Reserve after Bonuses 403,910,370 15,957,834 419,868,204

Number of Policies 8,085 2,561 10,646

3.1.3 Sources of uncertainty in the estimation of future claim payment


2018

Change

in

assumpti

ons

Impact on

gross

liabilities

Impact on

reinsurance

share of

liabilities

Impact on

profit before

tax

Impact on

equity

SCR SCR SCR SCR

Average claim cost 5% 3,710,680 1,385,482 (5,096,163) (3,208,238)

2017

Change in

assumptio

ns

Impact on

gross

liabilities

Impact on

reinsurance

share of

liabilities

Impact on profit

before tax

Impact on

equity

SCR SCR SCR SCR

Average claim cost 5% 1,721,636 1,003,886 (717,749.24) (853,973.80)


Claims are payable on a mix of claims-occurrence and claims-made basis. On a claims-occurrence basis, mostly for the liabilities

classes of business, the Group is liable for all insured events that occurred during the term of the contract, even if the loss is

discovered after the end of the contract term. On a claims-made basis, which is mostly with respect to the property classes of

business, the claim is only entertained if the policy was in force at the time the claim is asserted for coverage to apply. As a result,

liability claims are settled over a long period of time. There are several variables that affect the amount and timing of cash flows from

these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the

risk management procedures adopted. The compensation paid on these contracts is the monetary awards granted for bodily injury by

employees (for employer's liability covers) or members of the public (for public liability covers). Such awards are lump-sum payments

that are calculated as the present value of the lost earnings and rehabilitation expenses that the injured party will incur as a result of

the accident.

All reasonable steps are taken to ensure that appropriate information is available regarding claims exposures. However, given the

uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability

established. The liability for these contracts comprise a provision for IBNR and a provision for reported claims not yet paid at the

reporting date. The Group has ensured that liabilities on the statement of financial position at reporting date for existing claims

whether reported or not, are adequate.

2017

Uncertainty in the estimation of future benefit payments and premium receipts for long-term insurance contracts arises from the

unpredictability of long-term changes in overall levels of mortality and the variability in contract holders' behaviour.

The Group uses appropriate base tables of standard mortality according to the type of contract being written and statistical data are

used to adjust the crude mortality rates to produce a best estimate of expected mortality for the future. When data is not sufficient to

be statistically credible, the best estimate of future mortality is based on standard industry tables adjusted for experience.

THE GROUP

THE GROUP

Claims can be either long tail or short tail. Short tail claims are settled within a short time and the estimation processes reflect with a

higher degree of certainty of all the factors that influence the amount and timing of cash flows about the estimated costs of claims.

However, for long tail claims (e.g. bodily injury), the estimation process is more uncertain and depends largely on external factors

such as Court awards for example.



3.1.3 Sources of uncertainty in the estimation of future claim payment (continued)

(b) Long-term insurance (continued)

2018 2017

Actuarial

Liability Actuarial Liability

Percentage

change relative

to main basis

SCR SCR %

Main Basis 408,028,618 419,868,204

Renewal expenses plus 10% 418,007,493 431,860,752 2.4%

Withdrawals plus 10% 407,821,051 419,923,804 -0.1%

Inflation plus 1% 413,347,920 426,405,848 1.3%

Investment return less 1% 440,050,957 452,802,277 7.8%

Mortality (and other claims) plus 10% 409,122,288 421,511,255 0.3%

Investment return plus 1% 380,086,499 391,887,498 -6.8%

The Group manages long-term insurance risks through its underwriting strategy and reinsurance arrangements. Management

ensures that risks underwritten are well diversified in terms of type of risk and the level of insured benefits. Medical selection is

included in the Group’s underwriting procedures, with premiums varied to reflect the health condition and family medical history of the

applicant. Insurance risk may also be affected by the contract holder's behaviour who may decide to amend terms or terminate the

contract or exercise a guaranteed annuity option.

The table below indicated the level of the respective variables that will trigger an adjustment and then indicates the liability

adjustment required as a result of a further deterioration of the variable.

The following table presents the sensitivity of the value of insurance liabilities disclosed to movements in assumptions used in the

estimation of insurance liabilities.

The Group has a predetermined retention limit on any single life insured and the Group reinsures the excess of the insured benefit

above the retention limit.



3.1 Insurance risk (Continued)

3.1.4Claims development

Net insurance contract liabilities - 2018

Accident year 2011 2012 2013 2014 2015 2016 2017 2018 Total

SCR'000 SCR'000 SCR'000 SCR'000 SCR'000 SCR'000 SCR'000 SCR'000 SCR

At end of accident year 48,912 35,267 37,912 34,775 44,258 40,999 46,438 43,335

One year later 63,847 47,892 50,384 47,183 48,938 47,596 53,929

Two years later 62,558 51,995 51,677 52,690 49,002

Three years later 62,074 52,563 53,252 52,707 -

Four years later 62,322 52,566 53,252 - -

Current estimate of cumulative claims incurred 62,322 52,566 53,252 52,707 49,002 47,596 53,929 43,335 414,708

At end of accident year (48,912) (33,331) (37,043) (27,912) (30,248) (27,695) (36,886) (26,415)

One year later (63,847) (46,971) (47,335) (45,381) (39,857) (42,462) (51,269)

Two years later (62,558) (50,706) (58,709) (46,644) (40,872) (43,296)

Three years later (61,355) (51,614) (59,073) (47,118) (41,019)

Four years later (61,606) (51,964) (62,897) (48,532) -

Cumulative claims paid to date (61,606) (51,964) (62,897) (48,532) (41,019) (43,296) (51,269) (26,415) (386,999)

Net contract liabilities at reporting date 716 602 (9,645) 4,175 7,983 4,300 2,660 16,919 27,710

Incurred but not reported (IBNR) 5,221

Net outstanding claims at December 31, 2018 (notes 20 & 25(a)) 32,931

The development of insurance liabilities for the short-term insurance business provides a measure of the Group's ability to estimate the ultimate value of claims. The table below illustrates how the

estimates of net claims outstanding for each year have changed at successive year ends and the table reconciles the cumulative claims to the net amount appearing in the statements of financial

THE GROUP



3.1 Insurance risk (Continued)

3.1.4Claims development (continued)

Net insurance contract liabilities - 2017

Accident year 2010 2011 2012 2013 2014 2015 2016 2017 Total

SCR '000 SCR '000 SCR '000 SCR '000 SCR '000 SCR '000 SCR '000 SCR '000 SCR '000

At end of accident year 29,741 48,912 35,267 37,912 34,775 44,258 40,999 46,438

One year later 36,927 63,847 47,892 50,384 47,183 48,938 47,596 -

Two years later 37,426 62,558 51,995 51,677 52,690 49,002 - -

Three years later 36,729 62,074 52,563 53,252 52,707 - - -

Four years later 35,470 62,298 52,566 53,252 - - - -



At end of accident year (23,684) (48,912) (33,331) (37,043) (27,912) (30,248) (27,695) (36,886)

One year later (32,374) (63,847) (46,971) (47,335) (45,381) (39,857) (42,462) -

Two years later (35,085) (62,558) (50,706) (58,709) (46,644) (40,872) - -

Three years later (35,400) (61,355) (51,614) (59,073) (47,118) - - -

Four years later (35,446) (61,606) (51,964) (62,897) - - - -

Cumulative claims paid to date (35,446) (61,606) (51,964) (62,897) (47,118) (40,872) (42,462) (36,886) (379,251)

Net contract liabilities at reporting date 24 692 602 (9,645) 5,589 8,130 5,134 9,552 20,078

Incurred but not reported (IBNR) 2,490

Net outstanding claims at December 31, 2017 (notes 20 & 25(a)) 22,568

The Group has in place a series of proportional and non-proportional or surplus and excess of loss covers in each of the last four years to cover for losses on these contracts.

THE GROUP



3.2 Financial risk

The most important components of this financial risk are:

▪ Market risk (which includes currency risk, interest rate risk and equity price risk);

▪ Credit risk;

▪ Liquidity risk;

▪ Capital management; and

▪ Fair value estimation.

3.2.1 Market risk

Currency risk

THE GROUP

The Group's financial assets and financial liabilities in foreign currencies are detailed below:

At December 31, 2018 Rupee USD Euro GBP Total

SCR SCR SCR SCR SCR

Assets

Investment in financial assets 140,698,573 31,530,641 - - 172,229,214

Trade and other receivables 28,025,390 63,658,629 15,862,377 - 107,546,396

Cash & cash equivalents 40,542,553 16,321,540 1,631 2,814 56,868,538

Total assets 209,266,515 111,510,810 15,864,008 2,814 336,644,148

The financial impact from market risk is monitored at board level through investment reports which examine impact of changes in

market risk on investment returns and asset values. The Group’s market risk policy sets out the principles for matching liabilities with

appropriate assets and the approach to be taken when liabilities cannot be matched and the monitoring processes required.

The Group purchases reinsurance contracts internationally, thereby exposing it to foreign currency fluctuations. The Group's primary

exposures are with respect to the Euro, US Dollar and British pound.

Management closely monitors currency risk exposures against pre-determined limits. Exposure to foreign currency exchange risk is

not hedged.

The Group also has a investments in foreign currencies, namely US Dollar, which are exposed to currency risk.

The Group's activities are exposed to financial risks through its financial assets, financial liabilities, insurance and reinsurance assets

and liabilities. In particular, the key financial risk is that investment proceeds are not sufficient to fund the obligations arising from

insurance contracts.

The Group's risk management policies are designed to identify and analyse these risks, to set appropriate risk limits and control, and

to monitor the risks and adherence to limits by means of reliable and up-to-date administrative and information systems.

The Group regularly reviews its risk management policies and systems to reflect changes in markets, products and emerging best

practice. The Board recognises the critical importance of having efficient and effective risk management policies and systems in

place. To this end, there is a clear organisational structure with delegated authorities and responsibilities from the Board to Board

Committees, executives and senior management. Individual responsibility and accountability are designed to deliver a disciplined,

conservative and constructive culture of risk management and control.

Market risk is the risk of adverse financial impact due to changes in fair values or future cash flows of financial instruments from

fluctuation in interest rates, equity prices, property prices and foreign currency exchange rates.

The Group has established policies which set out the principles that they expect to adopt in respect of management of the key

market risks to which they are exposed. The Group monitors adherence to the market risk policy through the Group’s Investment

Committee which is also responsible for managing market risk at Group level.



3.2 Financial risk (Continued)

3.2.1 Market risk (Continued)

Currency risk (Continued)


SCR SCR SCR SCR SCR

Liabilities

Trade and other payables 34,638,033 9,161,991 3,527,828 - 47,327,851

Total liabilities 34,638,033 9,161,991 3,527,828 - 47,327,851


SCR SCR SCR SCR SCR

Assets

Investment in financial assets 123,451,637 40,446,502 - - 163,898,140

Trade and other receivables 27,200,357 52,996,137 616,054 - 80,812,548

Cash & cash equivalents 25,994,477 8,642,029 1,630 2,814 34,640,951

Total assets 176,646,472 102,084,669 617,684 2,814 279,351,639

Liabilities

Trade and other payables 53,399,678 11,024,358 1,238,691 123,869 65,786,596

Total liabilities 53,399,678 11,024,358 1,238,691 123,869 65,786,596

THE COMPANY

The Company's financial assets and financial liabilities are denominated in Seychelles Rupees.

Sensitivity analysis

Impact of a 5% change in exchange rate on consolidated

statement of profit or loss and OCI GBP Euro USD

SCR SCR SCRAt December 31, 2018

Increase of 5% in the exchange rate 141 616,809 5,117,441

Decrease of 5% in the exchange rate (141) (616,809) (5,117,441)

At December 31, 2017

Increase of 5% in the exchange rate 6,053 31,050 (4,553,016)

Decrease of 5% in the exchange rate 6,053 31,050 (4,553,016)

Interest rate risk

The interest rate profiles of the financial assets of the Group as at December 31, were as follows:

2018 2017 2018 2017

% % % %

Held-to-maturity investments 2.00%-6.34% 2.99% - 3.32% - -

Short term deposits 3.10% - 4.50% 1.20% - 6.34% 2.36% - 3.75% 2.36% - 3.75%

Loans and receivables 12% 4.50% - 12.00% - -

Bank balances 1.00% - 1.50% 1.00% - 1.50% 1.00% 1.00%

As at 31 December 2018, the Group only has fixed interest rate financial instruments and thus is not exposed to risk of movement in

interest rates.


If the Seychelles Rupee had weakened / strengthened against the following currencies with all variables remaining constant, the

impact on the results for the year would have been as shown below as a result of foreign exchange gains / losses.

Interest rate risk arises from the Group’s investments in fixed income securities: loans & receivables, held-to-maturity Investments,

bank balances and deposits which are exposed to fluctuations in interest rates. Exposure to interest rate risk is monitored by the

Investment Committee through a close matching of assets and liabilities. The impact of exposure to sustained low interest rates is

also regularly monitored.

THE GROUP

Short term insurance liabilities are not directly sensitive to the level of market interest rates as they are undiscounted and

contractually non-interest bearing. However, due to the time value of money and the impact of interest rates on the level of bodily

injury related claims incurred by certain insurance contract holders, a reduction for interest rates would normally produce a higher

insurance liability.

SACOS GROUP LIMITED

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTSFOR YEAR ENDED 31 DECEMBER 2018 40



3.2.1 Market risk (Continued)

Interest rate risk (continued)

Management regularly monitors the sensitivity of reported interest rate movements.

2018 2017

Impact on Life Assurance Fund SCR million SCR million

+1% 14.2 14.2

-1% (14.2) (14.2)

Equity price risk

The Group

Market indices

Change in

variables

Impact on profit

before tax

Impact on

equity

Impact on

profit before tax

Impact on

equity

% SCR SCR SCR SCR

Foreign markets + 15% 1,521,028 1,521,028

Foreign markets - 15% (1,521,028) (1,521,028)

- reinsurer's share of insurance liabilities;

- amounts due from reinsurers in respect of claims already paid;

- amounts due from insurance contract holders, and

- amounts due from insurance intermediaries.

Reinsurance credit exposures

Group

excluding

life Life

35% -

- 95%

27% 5%

For liabilities under long term insurance contracts with fixed and guaranteed terms, changes in interest rate will not cause a change

to the amount of liability because their carrying amounts are not affected by the level of market interest rates.

2018

The amounts presented in the consolidated statements of financial position are net of allowances for estimated irrecoverable amount

receivables, based on management's prior experience and the current economic environment.

Credit risks is a risk that a counterparty will be unable to pay an amount in full when due. Credit risk is the risk of financial loss to the

Group if a customer or counterparty to a financial instruments fails to meet all or part of their obligations. The Group's credit risk is

primarily attributable to:

However for insurance contracts with Discretionary Participation Feature (DPF), the DPF element liabilities are directly affected by

changes in the level of interest rates to the extent that they affect the carrying amount of underlying assets. An increase in the value

of the assets would require all other assumptions being equal, an increase in the DPF liability and vice versa.

The Group’s equity price risk exposure relates to quoted equity instrument financial assets whose values will fluctuate as a result of

changes in market prices. The sensitivity analysis of the risk is disclosed below:

2017

Equity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in equity

prices (other than those arising from interest rate or foreign exchange rate risk), whether those changes are caused by factors

specific to the individual financial instrument or its issuer, or by factors affecting all similar financial instruments traded in the market.

The impact of changes of 100 basis points in the interest rates used for discounting the liabilities within the Life Assurance Fund are

as follows:

The Group has no significant concentration of credit risk in respect of its insurance business with exposure spread over a large

number of clients, agents and brokers. The Group has policies in place to ensure that sales of services are made to clients and

brokers with sound credit history.

2018

Africa Re

Swiss Re

The Group is however is exposed to concentrations of risks with respect to its reinsurers due to the nature of the reinsurance market

and the restricted range of reinsurers that have acceptable credit ratings. The Group is exposed to the possibility of default by its

reinsurers in respect of share of insurance liabilities and refunds in respect of claims already paid.

The Group manages its reinsurance counterparty exposures and the reinsurance department has a monitoring role over this risk.

The Group's largest reinsurance counterparties are:

Swan Life Ltd




3.2.2 Credit risk

2018 2017 2018 2017

SCR SCR SCR SCR

Neither past due nor impaired 104,680,122 79,983,186 - 2,451,349

Impaired 2,866,274 829,362 - -

Carrying amount at year-end 107,546,396 80,812,548 - 2,451,349

2018 2017 2018 2017

SCR SCR SCR SCR

Neither past due nor impaired 61,424,503 63,615,048 - -

Impaired - 439,555 - -

Carrying amount at year-end 61,424,503 64,054,603 - -

Financial instruments

2018 2017 2018 2017

SCR SCR SCR SCR

61,424,503 64,054,603 - -

172,229,214 163,898,140 615,308 548,781

107,546,396 80,812,547 - 2,451,349

Bank balances and cash 56,868,538 34,640,952 1,305,597 5,966,482

2018 2017

SCR SCR

Collateral is from the counterparty and is repayable if the contract terminates. 40,125,711 40,125,711

Loan amount against the above collateral 36,113,140 35,114,332

THE GROUP

The following table provides information regarding the carrying value of trade and other receivables that have been impaired.

Trade & other receivables

Management also monitors the financial strength of reinsurers and there are policies in place to ensure that risks are ceded to top-

rated and credit worthy reinsurers only.

Loans and receivables

The following table provides information regarding the carrying value of trade and other receivables that expose the Group and the

Company to credit risk.


This exposure is monitored on a regular basis for any shortfall in the claims history to verify that the contract is progressing as

expected and that no further exposure for the Group will arise.


Loans and receivables at amortised cost

Trade and other receivables

Investments in financial assets*

The loan to the associate and the Group staff loans are also collateralised as appropriate to minimise the risk of credit losses.

Collateral on policy loans

The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are

implemented regarding the acceptability of types of collateral and the valuation parameters. Collateral is mainly obtained for loans

and receivables which are secured by corresponding life assurance policies and amount granted is limited to 90% of the surrender

value. Management monitors the value of the collateral, requests additional collateral when needed.

The amounts for collateral as at the year-end are:

THE COMPANY

The following table provides information regarding the carrying value of loans and receivables that have been impaired.

THE GROUP




3.2.3 Liquidity risk

Maturities of financial liabilities

THE GROUP

2018 Less than

1 year 1 to 5 years

More than

5 years Total

SCR SCR SCR SCR

Trade and other payables 47,327,851 - - 47,327,851

Gross outstanding claims and IBNR 86,421,995 - - 86,421,995

Gross unearned premiums 64,123,960 - - 64,123,960

Bank overdraft - - - -

Total liabilities 197,873,806 - - 197,873,806

2017 Less than

1 year 1 to 5 years

More than

5 years Total

SCR SCR SCR SCR

Trade and other payables 65,786,596 - - 65,786,596

Gross outstanding claims and IBNR 37,568,418 1,868,263 - 39,436,681

Gross unearned premiums 67,731,265 - - 67,731,265

Bank overdraft 727,365 - - 727,365

Total liabilities 171,813,643 1,868,263 - 173,681,907

3.2.4 Capital management

THE GROUP

•

•

•

•

•

• To maintain strong credit ratings and healthy capital ratios in order to support its business objectives and maximise

shareholders value

The Group has strong liquidity positions and liquidity risk is considered to be low. Through the application of the liquidity

management policy, the Group seeks to maintain sufficient financial resources to meet its obligations as they fall due.

The operations of the Group are subject to regulatory requirements within the jurisdiction where it operates, such regulations not only

prescribe approval and monitoring of activities but also impose certain restrictive provisions to minimise the risk of default and

insolvency on the part of the Group to meet unforeseen liabilities as these arise.

To maintain the required level of stability of the Group thereby providing a degree of security to policyholders

As per Section 15 of the Insurance Regulations 2009 and Insurance Act, 2008, the stated capital of a licensed insurer carrying short

(general) insurance and long term (life) insurance businesses shall be SCR 3 million which the Group is currently compliant with.

The Group has established the following capital management objectives, policies and approach to managing the risks that affect its

capital position:

To allocate capital efficiently and support the development of business by ensuring that returns on capital employed meet

the requirements of its capital providers and of its shareholders

The tables below analyses the Group and the Company’s financial assets and liabilities to the relevant maturity groupings based on

the remaining years of repayment.

To maintain financial strength to support new business growth and to satisfy the requirements of the policyholders,

regulators and stakeholders

To retain financial flexibility by maintaining strong liquidity and access to a range of capital markets

To align the profile of assets and liabilities taking account of risks inherent in the business

The Group manages its capital structure and makes adjustment to it, in light of changes in economic conditions. In order to maintain

or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or sell assets to

reduce debts. The Actuarial valuation report as at 31 December 2018 shows a valuation surplus of SCR10.2 million and the Assets

in the Life Fund meets the Insurance Act Minimum Solvency Requirement in the Life Fund . The Life Fund is therefore solvent as at

31 December 2018 with a Solvency ratio of 1.08.




3.2.4 Capital management (Continued)

Short-term insurance

- Not less than SCR 2 million;

- 20% of net premium income of the Fund in the preceding accounting period; or

- 20% of loss reserves of the fund at the end of the preceding accounting period, whichever is the highest.

Solvency margin

based on preceding accounting period

Highest of: SCR

(a) SR 2 million fund 2,000,000

(b) 20% of net premium income of the Fund in the preceding accounting period; or 19,759,603

(c) 20% of loss reserves of the fund at the end of the preceding accounting period. 7,513,684

Long-term insurance

-

-

Solvency margin

based on preceding accounting period

SCR

3% of without profit liabilities 425,327

plus 2% of with profit liabilities 7,877,021

plus 1% of the sum assured for initial terms of 2 years or less 27,240

plus 0.2% of the sum assured for initial terms of more than 2 years 1,857,533

10,187,121

Approach to capital management

THE COMPANY

The Company has no long term debt.

3.3 Fair Value estimation

The Group seeks to optimise the structure and sources of capital to ensure that it consistently maximises returns to the shareholders

and policyholders.

The solvency margin of an insurance fund established in respect of short (general) and long term insurance business to be

maintained by a licensed insurer at all times during any accounting period shall be:

3% of the insurer's liabilities as determined under regulation 19 in respect of non-participating policies, and 2% of such

liabilities in respect of participating policies, as at the end of the preceding accounting period; and

1% of the sum insured at risk for policies the original term of which is 2 years or less, and 0.2% of the sum insured at risk for

policies the original term of which is more than 2 years, as at the end of the preceding accounting period.

The Group’s approach in managing capital involves managing assets, liabilities and risks in a coordinated way, assessing shortfalls

between reported and required capital levels on a regular basis and taking appropriate actions to influence the capital position of the

Group in the light of changes in economic conditions and risk characteristics. An important aspect of the Group's overall capital

management process is the setting of target risk adjusted rates of return, which are aligned to performance objectives and ensure

that the Group is focused on the creation of value for shareholders.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These

valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific

estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A

market is regarded as active if quoted prices are readily and regularly available from for example, a stock exchange and those prices

represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial

assets held by the Group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1

comprise primarily quoted equity investments classified as trading securities or available-for-sale.



3.3 Fair Value estimation - (continued)

(a)

Fair Value

Hierarchy

Fair value at

31 December

2018

Carrying value

at 31 December

2018

Fair Value

Hierarchy

Fair value at

31 December

2017

Carrying value

at 31

December

2017

SCR SCR SCR SCR SCR SCR

Assets

Land (note 3.3 (i) (i.ii)) Level 3 46,338,550 46,338,550 Level 3 46,563,550 46,563,550

Buildings (note 3.3 (i) (ii)) Level 2 257,216,537 257,216,537 Level 2 289,016,538 289,016,538

303,555,087 303,555,087 335,580,088 335,580,088

Level 1 43,483,284 43,483,284 Level 1 26,236,202 26,236,202

The carrying values of loans and receivables approximate its fair value.

(b)

4. RISK MANAGEMENT FRAMEWORK

Governance Framework

Regulatory Framework

Given the prevailing stable political and economic environment in the Seychelles, the Directors assess that it is currently appropriate

to have each of the investment properties valued by an independent valuer in 3 - 5 year cycles as a rule and more frequently if the

Board assesses that it is appropriate for any particular property.The valuation for the year ended December 31, 2018 was based on

a mix of Directors' best estimates and independent professional valuation reports which were requested as appropriate to the

individual circumstances. Management and the Board considered that the carrying amounts of the investment properties

approximate their fair values.

Available-for-sale investments comprise of equity instruments that are listed on stock exchange. Active market prices on stock

exchange are used to revalue these investments.

Investment properties (note

3.3 (i):

Some of the Group and Company's assets and liabilities are measured at fair value at the end of each reporting period. The following

table gives the information about how the fair value of these assets and liabilities are determined:

The Group

This note provides information on how the Group and Company determine fair value of various assets and liabilities.

Regulators are primarily interested in protecting the rights of policyholders and monitor them closely to ensure that the Group is

satisfactorily managing affairs for their benefit. At the same time, regulators are also interested in ensuring that the Group maintains

an appropriate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.

The operations of the Group are subject to regulatory requirements within the jurisdictions in which it operates. Such regulations not

only prescribe approval and monitoring of activities, but also impose certain restrictive provisions (e.g. capital adequacy) to minimise

the risk of default and insolvency on the part of insurance companies to meet unforeseen liabilities as these arise.

Available-for-sale investments comprise of equity instruments that are listed on stock exchange. Active market prices on stock

exchange are used to revalue these investments.

The board of directors approves the Group risk management policies and meets regularly to approve any commercial, regulatory

and organisational requirements of such policies. These policies define the Group’s identification of risk and its interpretation and

limit structure to ensure the appropriate quality and diversification of assets aligning underwriting and reinsurance strategy to the

corporate goals, and specify reporting requirements.

The primary objective of the Group’s risk and financial management framework is to protect the Group’s shareholders from events

that hinder the sustainable achievement of financial performance objectives, including failing to exploit opportunities. Key

management recognised the critical importance of having efficient and effective risk management systems in place.

Available-for-sale investment

(note 3.3 (ii):


4. RISK MANAGEMENT FRAMEWORK (CONTINUED)

4.1 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

Critical accounting estimates and assumptions

(a) Insurance Contracts

Estimates of future claims payments

Short-term insurance

▪ terms and conditions of the insurance contracts;

▪ knowledge of events;

▪ court judgement;

▪ economic conditions;

▪ previously settled claims;

▪ estimates based upon a projection of claims numbers and average cost; and

▪ expected loss ratios.

Long-term insurance

Long-term business technical provisions are computed using statistical or mathematical methods.

The estimation of ultimate liability arising from the claims made under insurance contracts is one of the Group's most critical

accounting estimates. There are sources of uncertainty that need to be considered in the estimate of the liability that the Group will

eventually pay for such claims. Estimates have to be made both for the expected ultimate cost of claims reported at the reporting

date and for the expected ultimate cost of claims incurred but not reported (“IBNR”) at the reporting date. The Group uses a range of

actuarial methodologies to estimate these provisions. Liabilities for unpaid reported claims are estimated using the input of

assessments for individual cases reported to the Group and management estimates based on past claims settlement trends for the

claims IBNR. Technical provisions for general insurance contracts require significant judgment relating to factors and assumptions

such as inflation, claims development patterns and regulatory changes.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom

equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next financial year are discussed below.

The preparation of these consolidated financial statements requires management to make judgements, estimates and assumptions

that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the

reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material

adjustment to the carrying amount of the asset or liability affected in the future.

The uncertainty inherent in the consolidated financial statements of the Group arises principally in respect of the technical provisions.

The technical provisions of the Group include provision for unearned premiums, Life Assurance Fund, Fisheries and Agricultural

Fund, Mortgage Protection Fund and outstanding claims (including IBNR).

The liability for life insurance contracts with DPF is either based on current assumptions or on assumptions established at the

inception of the contract, reflecting the best estimate at the time increased with a margin for risk and adverse deviation. All contracts

are subject to a liability adequacy test, which reflect actuarial’ s best current estimate of future cash flows.

The determination of the liabilities under long-term insurance contracts is dependent on estimates made by the Group. Estimates

are made as to the expected number of deaths for each of the years in which the Group is exposed to risk. The Group bases these

estimates on standard industry mortality tables that reflect recent historical mortality experience, adjusted where appropriate to

reflect the Group's own experience. For contracts that insure the risk of longevity, appropriate but not excessively prudent allowance

is made for expected mortality improvements. However, continuing improvements in medical care and social conditions could result

in improvements in longevity in excess of those allowed for in the estimates used to determine the liability for contracts where the

Specifically, long-tail lines of business, which often have low frequency, high severity claims settlements, are generally more difficult

to project and subject to greater uncertainties than short-tail, high frequency claims. Further, not all catastrophic events can be

modelled using actuarial methodologies, which increases the degree of judgment needed in estimating general insurance loss

reserves. At each reporting date, prior year claims estimates are reassessed for adequacy and changes are made to the provision.

The Group adopts multiple techniques to estimate the required level of provisions, thereby setting a range of possible outcomes. The

most appropriate estimation technique is selected taking into account the characteristics of the business class and risks involved.

The techniques Group use involves review of following:

Provisions are calculated gross of any reinsurance recoveries. A separate estimate is made of the amounts that will be recoverable

from reinsurers based upon the gross provision and having due regard to collectability.

For short-term business, the Group is regulated by local authority to maintain a solvency margin under Insurance Act 2008 (note

3.2.4). Management assessed the appropriateness of the liability for short-term insurance contracts at the year-end.

The liability for life insurance contracts with DPF is either based on current assumptions or on assumptions established at the

inception of the contract, reflecting the best estimate at the time increased with a margin for risk and adverse deviation.


4.1 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS (CONTINUED)

Critical accounting estimates and assumptions (Continued)

(a) Insurance Contracts (Continued)

Estimates of future claims payments (Continued)

Short-term insurance (Continued)

Long-term insurance (Continued)

Sensitivity

Uncertainties and judgements

▪

▪

▪ uncertainty over the timing of a settlement to a policyholder for a loss suffered.

(b) Reinsurance

(c) Pension benefits

uncertainty as to the amount of insured loss suffered by a policyholder as a result of the event occurring; and

The Group has not carried out any actuarial valuation since the Directors have based themselves on the method as prescribed by the

Seychelles Employment Act and they have estimated that the amount of liability provided will not be materially different had it been

computed by an external Actuary.

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a

number of assumptions. The assumptions used in determining the net cost for pensions include the discount rate. Any changes in

these assumptions will impact the carrying amount of pension obligations.

The Group 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 pension obligations. In

determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate 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

pension liability.

There may be some reporting lags between the occurrence of the insured event and the time it is actually reported. Following the

identification and notification of an insured loss, there may still be uncertainty as to the magnitude and timing of the settlement of the

claim. There are many factors that will determine the level of uncertainty such as judicial trends, unreported information etc.

The degree of uncertainty will vary by policy class according to the characteristics of the insured risks. For certain classes of policy,

the maximum value of the settlement of a claim may be specified under the policy terms while for other classes, the cost of a claim

will be determined by an actual loss suffered by the policyholder.

The Group is exposed to disputes on, and defects in, contract wordings and the possibility of default by their Reinsurers. The Group

monitors the financial strength of their Reinsurers.

The uncertainty arising under insurance contracts may be characterised under a number of specific headings, such as:

uncertainty as to whether an event has occurred which would give rise to a policy holder suffering an insured loss;

A margin for risk and uncertainty is added to these assumptions. These assumptions are ‘locked in‘ for the duration of the contract.

New estimates are made each subsequent year in order to determine whether the previous liabilities are adequate in the light of

these latest estimates. If the liabilities are considered adequate, the assumptions are not altered. If they are not adequate, the

assumptions are altered (‘unlocked’) to reflect the best estimate assumptions.

For contracts without fixed terms, it is assumed that the Group will be able to increase mortality risk charges in future years in line

with emerging mortality experience.

Estimates are also made as to the future investment income arising from the assets backing long-term insurance contracts. These

estimates are based on current market returns as well as expectations about future economic and financial developments.

For long-term insurance contracts with fixed and guaranteed terms and with DPF, estimates are made in two stages. Estimates of

future deaths, voluntary terminations, investment returns and administration expenses are made at the inception of the contract and

form the assumptions used for calculating the liabilities during the life of the contract.

The reasonableness of the estimation process is tested by an analysis of sensitivity around several different scenarios and the best

estimate is used.


4.1 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS (CONTINUED)

Critical accounting estimates and assumptions (Continued)

(d) Revaluation of investment property

For commercial and residential rent earning investment properties where the determined fair value is arrived at using the income

approach, the calculated fair value amount is most sensitive to the assumptions of estimated yield and the long-term occupancy rate.

The Directors and Valuer used the valuation techniques as deemed appropriate to each of the individual investment properties. They

considered that the carrying amounts of the assets to approximate their fair values.

As allowed by IFRS 13, more than one valuation technique is used to arrive at the Fair Value based primarily on availability of market

information for transactions on similar properties/ indicative purchase offers on the property and or the income approach.

Given the prevailing stable political and economic environment in the Seychelles, the Directors assess that it is currently appropriate

to have each of the investment properties valued by an independent valuer in 3 - 5 year cycles as a rule and more frequently if the

Board assesses that it is appropriate for any particular property.

Investment properties are re-measured at fair value, which is the amount for which the property could be exchanged between

knowledgeable, willing parties in an arm's length transaction. Fair value reflects the actual market state and circumstances as at the

balance sheet date for a given investment property. Changes in fair value are recognised in the statement of profit or loss and other

comprehensive income.

Management and the Board (particularly the Investment Committee) frequently evaluate property values. Where deemed

appropriate, the Company also engages an Independent Professional Valuer to determine the market fair value revalued amounts.

SACOS GROUP LIMITEDCONSOLIDATED NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2018 48

5. EQUIPMENT

(a) THE GROUP Furniture Motor Computer Total Work in

and fittings vehicles equipment PPE Progress Total


COST

At January 1, 2017 9,422,362 5,290,009 9,499,247 24,211,618 - 24,211,618

Additions 56,540 1,205,652 148,410 1,410,602 - 1,410,602

Disposals (3,961) (1,513,751) (17,661) (1,535,373) - (1,535,373)

At December 31, 2017 9,474,941 4,981,910 9,629,996 24,086,847 - 24,086,847

Additions 22,244,559 278,500 611,634 23,134,694 6,507,640 29,642,334

Disposals (158,244) (859,936) (153,491) (1,171,671) - (1,171,671)

At December 31, 2018 31,561,257 4,400,474 10,088,139 46,049,870 6,507,640 52,557,510

ACCUMULATED DEPRECIATION

At January 1, 2017 5,794,591 3,660,161 8,419,773 17,874,525 - 17,874,525

Charge for the year (note 30) 971,996 826,062 570,637 2,368,695 - 2,368,695

Disposals (3,961) (1,513,751) (17,661) (1,535,373) - (1,535,373)

At December 31, 2017 6,762,626 2,972,472 8,972,749 18,707,848 - 18,707,848

Charge for the year (note 30) 1,238,873 939,155 378,347 2,556,375 - 2,556,375

Disposals (115,915) (948,847) - (1,064,762) - (1,064,762)

At December 31, 2018 7,885,584 2,962,779 9,351,096 20,199,461 - 20,199,461

NET BOOK VALUE

At December 31, 2018 23,675,673 1,437,694 737,043 25,850,409 6,507,640 32,358,049

At December 31, 2017 2,712,315 2,009,438 657,247 5,378,998 - 5,378,998

(b) THE COMPANY Furniture Furniture Computer

and fittings and fittings equipment Total

SCR SCR SCR SCR

NET BOOK VALUE

At December 31, 2017 - - - -

At December 31, 2016 - - - -

(c) Depreciation has been charged to other operating expenses (note 30).

(d)

6. INVESTMENT PROPERTIES

2018 2017

SCR SCR

At January 1, 335,580,088 324,832,877

Additions - -

Disposals (32,025,001) -

Reclassification of Deferred Lease rental (b) - 10,747,211

Increase / (decrease) in fair value - -

At December 31, 303,555,087 335,580,088

(a) The fair market value of each of the investment properties was determined on an open-market basis by reference to market evidence of

expected fair value and the income approach as deemed appropriate to each investment property. The valuation for the year ended

December 31, 2018 was based on a mix of Directors' best estimates and independent professional valuation reports which were

requested as appropriate to the individual circumstances. Management and the Board considered that the carrying amounts of the

investment properties approximate their fair values.

There is no restriction (pledge/security) on realisability of equipment or the remittance of income and proceeds of

THE GROUP


6. INVESTMENT PROPERTIES (CONTINUED)

(b)

(c) The following amounts have been recognised:

2018 2017

SCR SCR

Rental income 24,254,639 23,489,735

Related expenses:

Direct operating expenses arising from investment property that generated income 3,338,719 6,591,943

Direct operating expenses arising from investment property that did not generate income 1,019,720 1,196,588

Other expenses - -

4,358,439 7,788,532

7. INTANGIBLE ASSETS

THE COMPANY

(a) THE GROUP Computer Website Total Computer

software software

SCR SCR SCR SCR

COST

At January 1, 2017 9,313,326 95,840 9,409,166 -

Additions 28,750 28,628 57,378 -

Write-off (note 30) -

At December 31, 2017 9,342,076 124,468 9,466,544 -

Additions 488,477 488,477 -

Write-off (note 30) - - - -

At December 31, 2018 9,830,553 124,468 9,955,021 -

AMORTISATION

At January 1, 2017 2,082,959 95,840 2,178,799 -

Charge for the year (note 30) 1,603,031 2,863 1,605,894 -

At December 31, 2017 3,685,990 98,703 3,784,693 -

Charge for the year (note 30) 1,539,391 24,894 1,564,285 -

At December 31, 2018 5,225,381 123,596 5,348,978 -

NET BOOK VALUE

At December 31, 2018 4,605,172 872 4,606,043 -

At December 31, 2017 5,656,086 25,765 5,681,851 -

8. INVESTMENT IN SUBSIDIARIES

2018 2017

SCR SCR

Investment at cost (note 8(a)) 13,100,000 13,100,000

Investment at cost - preference shares (note 8(d)) 45,000,000 45,000,000

Investment recognised upon split (note 8(b)) 28,651,590 28,651,590

Long-term receivables (note 8(c)) 22,519,772 22,519,772

109,271,362 109,271,362

(a) Details of the subsidiary companies are as follows:

Name of subsidiaries Shareholding Amount

% SCR'000

SACOS Insurance Company Limited 100 10,000

SACOS Life Assurance Company Limited 100 48,000

Sun Investment (Seychelles) Limited 100 100

58,100

THE GROUP

THE GROUP

Short-term insurance business

Investment property management

Activities

THE COMPANY

Long-term insurance business

2018

The fair value arrived at falls primarily within category level 2 of the hierarchy. Where deemed necessary and appropriate, Level 3

inputs also were used to assess and or corroborate the fair value amount. Investment properties have not been increased in value

based on inflation.

There is no restriction on realisability of investment property or the remittance of income and proceeds of disposal. The Group has no

contractual obligation to purchase, construct or develop investment property or for repairs, maintenance or enhancement.


8. INVESTMENT IN SUBSIDIARIES (CONTINUED)

(b)

(c)

(d)

9. INVESTMENT IN FINANCIAL ASSETS

2018 2017 2018 2017

SCR SCR SCR SCR

Available-for-sale financial assets (note a & d) 43,484,076 26,236,202 - -

Held-to-maturity financial assets (note b) 128,745,139 137,661,938 615,308 548,781

172,229,215 163,898,140 615,308 548,781

The Group

2017 2018 2017 2018 2017

SCR SCR SCR SCR SCR

Current asset - 73,932,428 82,444,873 73,932,428 82,444,873

Non-current asset 26,236,202 54,812,711 55,217,065 98,296,786 81,453,267

26,236,202 128,745,139 137,661,938 172,229,214 163,898,140

The Company - 615,308 548,781 615,308 548,781

(a) The movement in investments in available-for-sale financial assets is summarised as follows:

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 26,236,202 21,468,028 - -

Investments purchased during the year 17,703,753 - - -

Interest Accrued 29,730 - - -

Investments sold during the year - - - -

Fair value changes (note 9(a)(i)) (732,851) 4,768,174 - -

Foreign exchange gain / (loss) 247,240 -

At December 31, 43,484,076 26,236,202 - -

(b) The movement in investments in held-to-maturity financial assets is summarised as follows:

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 137,661,938 164,137,795 548,780 24,010,386

Investments purchased during the year 127,245,464 173,942,478 21,344,732

Transfer of investments - - -

Investments matured during the year (141,507,120) (205,614,244) (45,663,039)

Accrued interest 5,344,859 5,195,909 66,528 856,701

At December 31, 128,745,141 137,661,938 615,308 548,780

Sacos Group Limited fully subscribed to 45,000 shares of SCR1,000 each which were issued by Sacos Life Assurance Company

Limited (SLACL) and this has been treated as an investment in subsidiary in the Company financial statements and equity in the

financial statements of SLACL. The main terms of the preference shares are that the shares be redeemable at the option of Sacos Life

Assurance Company Limited and attract a target 5% annual dividend rate, payable at the discretion of the management of the Sacos

Life Assurance Company Limited. At the end of the transaction both Sacos Life Assurance Company Limited and Sacos Group Limited

are solvent.

2018

THE COMPANY

-

THE GROUP

SCR


-

43,484,076

43,484,076

Total


HELD-TO-MATURITYAVAILABLE-FOR-SALE

This is unsecured and interest free long-term shareholders' loan given to SISL by the Company with no fixed

An amount of SR 35.7 million resulted upon the split of the SACOS Group Limited on January 1, 2009 when the retained earnings

generated by the general insurance business up to the split date were transferred to a capital contribution account. Subsequently in

2011, SR 7 million was used to issue bonus shares to the Company's shareholders, thus resulting in remaining balance of SR 28.7

million. No movement has been noted since then as well as during the year ended December 31, 2018.


9. INVESTMENT IN FINANCIAL ASSETS - (CONTINUED)

(c) Investments in financial assets include the following:

(i) THE GROUP

Interest rate 2018 2017

% SCR SCR

Available-for-sale:

Equity investment 43,484,076 26,236,202

Held-to-maturity:

Term deposit 3.25%-6.34% 82,556,309 96,432,328

Treasury bills 4.87%-5.24% 46,188,830 41,229,610

128,745,139 137,661,938

(ii) THE COMPANY

Held-to-maturity:

Term deposit 2.36% - 3.75% 615,308 548,780

Treasury bills - -

615,308 548,780

(d) Available-for-sale investments are quoted in active market.

10. LOANS AND RECEIVABLES

(a)

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 37,364,685 36,484,000 - -

Impairment on loans (note 10 (c)) - - - -

Loans repaid (20,267,090) (20,543,598) - -

Loans granted 22,470,023 21,424,283 - -

At December 31, 39,567,618 37,364,685 - -

(b)

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 13,669,999 12,761,058 - -

Movement during the year (2,533,908) 908,941 - -

At December 31, 11,136,091 13,669,999 - -

(c)

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 13,019,919 - - -

Accrued Interest 1,123,684 19,919 - -

Loans repaid (3,422,811) - - -

Loans granted - 13,000,000 - -

At December 31, 10,720,792 13,019,919 - -

(d)

2018 2017 2018 2017

SCR SCR SCR SCR

Current asset 21,981,809 24,232,641 - -

Non-current asset 39,442,694 39,821,962 - -

61,424,502 64,054,603 - -

Matured

THE GROUP

Loans and receivables of the Group consist of staff loan movement is shown below:

THE COMPANY

Loans and receivables of the Group consist of loans on life assurance policies and the movement is shown below:

Maturity date

THE GROUP

Loans and receivables of the Group consist of loan to associate company and movement is shown below:


March 2019 to January 2021

January to March 2018

THE COMPANY

Classification between current and non-current assets:

No fixed date of maturity

January 2019 to March 2019

The Group The Company

SACOS GROUP LIMITED

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2018 52

10. LOANS AND RECEIVABLES (CONTINUED)

(e) The movement in the provision for credit impairment is as follows:

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 4,310,076 3,870,521 - -

- 439,555 - -

- - - -

At December 31, 4,310,076 4,310,076 - -

(f)

(g)

11.

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, - 10,747,211 - -

Released to profit or loss - - - -

Reclassification of deferred lease rental - (10,747,211)

At December 31, - - - -

12. DEFERRED TAX ASSETS / (LIABILITIES)

(a) Deferred income tax is calculated on all temporary differences under the liability method:

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 602,488 240,514 - (24,654)

(Charge) / credit for the year

(note 12(i & ii)) (1,804,956) 361,974 - 24,654

At December 31, (1,202,468) 602,488 - -

(b)

2018 2017 2018 2017

SCR SCR SCR SCR

Deferred tax assets 154,213 1,446,727 - -

Deferred tax liability (1,356,681) (844,239) - -

(1,202,468) 602,488 - -

(c) Deferred tax assets and liabilities during the year are attributable to the following items:

(i) Deferred tax assets:

THE GROUP Retirement

benefitobligations

SCR

At January 1, 2018 1,446,727

Charge to consolidated statement of profit or loss and other comprehensive income (1,292,514)

At December 31, 2018 154,213

At January 1, 2017 1,335,034

Charge to consolidated statement of profit or loss and other comprehensive income 111,693

At December 31, 2017 1,446,727

Charged / (reverse) to the profit or loss

THE COMPANY

THE COMPANY

THE COMPANY

Deferred tax assets and liabilities are offset for the income taxes related to the same fiscal authority of the same

entity. The following amounts are shown in the consolidated statements of financial position:

Write-offs

Loans and receivables are secured as appropriate to minimise credit risk.


THE GROUP

THE GROUP

DEFERRED LEASE RENTAL

THE GROUP

The rate of interest on loans vary from 4.5% to 12% (2016: 4.5% to 12%).

SACOS GROUP LIMITED


12. DEFERRED TAX ASSETS / (LIABILITIES) (CONTINUED)

(ii) Deferred tax liability:

THE GROUP Accelerated Unrealised

tax exchange

depreciation differences Total

SCR SCR SCR

At January 1, 2018 (844,239) - (844,239)

(512,442) - (512,442)

At December 31, 2018 (1,356,681) - (1,356,681)

At January 1, 2017 (559,339) (535,181) (1,094,520)

(284,900) 535,181 250,281

At December 31, 2017 (844,239) - (844,239)

THE COMPANY

Accelerated

tax

depreciation

SCR

At January 1, 2018 -

-

At December 31, 2018 -

At January 1, 2017 -

Charge to statement of profit or loss -

At December 31, 2017 -

13. INVESTMENT IN ASSOCIATES2018 2017

SCR SCR

(a) Company's share of net assets in associated Company

As previously reported 19,628,783 -

Additions - 19,345,360

Share of results of associated Company 880,184 283,423

Dividends - -

Other movements - -

At 31 December, 20,508,967 19,628,783

(b) Details of the associate at the end of the reporting period as follows:

Name Year end

Principal Place

of Business

Proportion of

ownership

interest

Nature of

Business

St Claire Devlopment Co Ltd Dec-31 Seychelles 49%

Management

of owned

Shopping

Center or retail

Rental and

Centre

Management

(i) The above associate is accounted for using the equity method.

(ii)

Credit to consolidated statement of profit or loss and other

comprehensive income

Charge to consolidated statement of profit or loss and other


2018

Charge to consolidated statement of profit or loss and other


The St Claire Development Company Ltd owns the Maison Ste Claire building in Victoria, Mahe. The Company holds

49% of the shares of the Ste Claire Development Company which means that there is no effective control in that the

remaining 51% is held by one non-related party giving them the effective control.


14. TRADE AND OTHER RECEIVABLES

2018 2017 2018 2017

SCR SCR SCR SCR

Premium receivables 31,608,390 37,407,240 - -

Provision for credit impairment

(note 14(a)) (3,695,636) (829,362) - -

27,912,754 36,577,878 - -

Recoverable from reinsurers

- share of notified claims

(notes 20 & 25(a)) 49,957,262 15,000,750 - -

- share of unearned premiums

(notes 20 & 25(b)) 19,053,146 22,412,886 - -

Amount receivable from related company - - - 2,451,349

Other receivables and prepayments (note 14(d)) 10,623,234 6,821,033

107,546,396 80,812,547 - 2,451,349

(a) The movement in the provision for impairment is as follows:

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 829,362 829,362 - -

2,866,274 - - -

At December 31, 3,695,636 829,362 - -

(b) The carrying amount of trade and other receivables are denominated in the following currencies:

2018 2017 2018 2017

SCR SCR SCR SCR

Seychelles rupee 94,716,350 64,613,994 - 2,451,349

US dollar 8,450,304 15,582,500 - -

Euro 4,379,741 616,054 - -

UK pound sterling - - - -

107,546,395 80,812,548 - 2,451,349

(c) Other receivables and prepayments comprise of advances to staff, commission receivable, rent receivables and other prepaid.

(d) The carrying amounts of 'trade and other receivables' approximate their fair values.

(e) The Group and the Company do not hold any collateral as security against any of trade and other receivables.

(f) The other classes within trade and other receivables do not contain any impaired assets.

THE GROUP


THE COMPANY

Charged / (reverse) to the consolidated statement



15. INTERCOMPANY RECEIVABLES AND PAYABLES

Life

The Company SISL SICL SLACL

SCR SCR SCR SCR SCR

Amount (payable) by:

The Company - - 11,647,612 5,363,436 17,011,048

(5,363,436) 988,214 (12,970,886) - (17,346,108)

- - (11,013,092) (988,214) (12,001,306)

(11,647,612) 11,013,092 - 12,970,886 12,336,366

(17,011,048) 12,001,306 (12,336,366) 17,346,108 -

Life

The Company SISL SICL SLACL

SCR SCR SCR SCR SCR

Amount (payable) by:

The Company - (2,000,000) 5,408,202 (451,349) 2,956,853

451,349 (254,005) (5,461,409) - (5,264,065)

2,000,000 - (1,200,226) 254,006 1,053,779

(5,408,202) 1,200,226 - 5,461,409 1,253,434

(2,956,853) (1,053,779) (1,253,434) 5,264,066 -

(a)

(b)

16. CASH AND CASH EQUIVALENTS

2018 2017 2018 2017

SCR SCR SCR SCR

Cash in hand 194,344 109,005 63,410 63,410

Call account balances 898,083 351,977 - 62,196

Bank balances 55,776,111 34,179,970 1,242,187 5,840,876

Cash and bank balances 56,868,538 34,640,952 1,305,597 5,966,482

Bank Overdraft - (727,365) - -

56,868,538 33,913,587 1,305,597 5,966,482

17. CURRENT TAX ASSETS / (LIABILITIES)

(a) Current Tax Assets

(i) Statement of financial position

2018 2017 2018 2017

SCR SCR SCR SCR

At January 1, 15,421,974 7,277,649 3,019,318 1,672,682

Paid/(Refund) during the year (4,031,688) 9,330,330 1,641,642 1,528,460

Charge for the year (7,006,603) (1,186,006) (2,083,315) (181,824)

At December 31, 4,383,682 15,421,974 2,577,645 3,019,318

Current tax assets 4,383,682 7,277,649 2,577,645 3,019,318

Current tax liability - - - -

4,383,682 7,277,649 2,577,645 3,019,318

(ii) Statement of profit or loss

2018 2017 2018 2017

SCR SCR SCR SCR

Tax charge on the adjusted profit for

the year (note 17(b)) (7,006,603) 1,186,010 2,083,315 181,824

Tax charge for prior years (724,476) - -

Deferred tax (charge) / credit (note 12) (1,804,956) (361,974) - -

(9,536,035) 824,036 2,083,315 181,824

THE GROUP

Intercompany receivables and payables represent the net balance receivable or payable by group excluding life

companies to life company as disclosed above.

2018

2017

THE COMPANY

Group excluding life

SISL

Amount Receivable by

Amount Receivable by

Group excluding lifeConsolidated

SISL

SICL

SLACL

THE GROUP


THE COMPANY

Consolidated

SLACL

Intercompany receivables and payables are interest free unsecured balances with not fixed repayment terms or

SICL

SACOS GROUP LIMITED


17. CURRENT TAX ASSETS / (LIABILITIES) (CONTINUED)

(b) Applicable tax rates for 2018 and 2017 tax years are as follows:

THE THE

Taxable income threshold GROUP COMPANY

% %

Less than or equal to SCR. 1,000,000 25% 25%

More than SCR. 1,000,000 33% 33%

18. SHARE CAPITAL

2018 2017

SCR SCR

Authorised and fully paid up

Ordinary shares of SR 35 each 70,000,000 70,000,000

The authorised share capital of the group and the company is 2 million shares (2017: 2 million shares).

19. LIFE ASSURANCE FUND

(a)

(b)

20. INSURANCE LIABILITIES AND REINSURANCE ASSETS

2018 2017

SCR SCR

Claims reported and loss adjustment expenses (note 25(a)) 74,213,606 34,432,711

8,674,267 3,135,707

Unearned premiums (note 25(b)) 64,123,960 67,731,265

Total gross insurance liabilities (note 25) 147,011,833 105,299,683

Recoverable from reinsurers

Claims reported and loss adjustment expenses (note 25(a)) 46,503,956 14,354,985

Claims Incurred But Not Reported (IBNR) (note 25(a)) 3,453,305 645,766

Unearned premiums (note 25(b)) 19,053,145 22,412,886

Total reinsurer's share of insurance liabilities (note 25) 69,010,406 37,413,637

Net

Claims reported and loss adjustment expenses 27,709,649 20,077,726

Claims Incurred But Not Reported (IBNR) 5,220,962 2,489,941 Unearned premiums (note 25) 45,070,815 45,318,379

Total net insurance liabilities (note 25) 78,001,426 67,886,046

Gross outstanding claims and IBNR (group excluding life) 82,887,872 37,568,418

Gross outstanding claims (life business) 3,534,123 1,868,263

86,421,995 39,436,681

THE GROUP

Claims Incurred But Not Reported (IBNR) (note 25(a))

THE GROUP

The liability component of the Discretionary Participating Feature (DCF) is included in the Life Assurance Fund.

The actuary of Sacos Life Assurance Company Limited is QED Actuaries & Consultants (Pty) Ltd. The latest actuarial

valuation of the Life assurance fund was done at 31 December 2018. At the end of every year, the amount of the

liabilities of the Life assurance fund is established. As the Company made a surplus during the year, the total surplus

of SCR 10.2 million was transferred to statement of Life Fund (2017: Share of Deficit SCR 16.5 million). This share

of deficit and / or surplus is calculated and approved by the actuaries on the basis that sufficient reserves are held to

maintain the solvency of the life assurance fund over the long term.

AND THE COMPANY

SACOS GROUP LIMITED


21. MORTGAGE PROTECTION FUND

2018 2017

SCR SCR

At January 1, 228,911 259,080

(64,499) (30,169)

At December 31, 164,412 228,911

(a)

22. FISHERIES AND AGRICULTURAL FUND

2018 2017

SCR SCR

At January 1, 480,226 873,207

(1,463) (392,981)

At December 31, 478,763 480,226

23. RETIREMENT BENEFIT OBLIGATIONS

2018 2017

SCR SCR

At January 1, 5,187,954 7,388,016

Charge for the year (note 28) 538,717 1,685,323

Benefits paid during the year (603,444) (3,885,385)

Actuarial losses recognised in other comprehensive income - -

At December 31, 5,123,227 5,187,954

24. TRADE AND OTHER PAYABLES

2018 2017 2018 2017

SCR SCR SCR SCR

Amount payable to reinsurers 9,966,082 18,953,413 - -

Commission payable 4,615,367 5,773,325 - -

Staff cost 3,568,698 5,396,061 - -

Rent retention 1,285,717 819,905 - -

Trade payables - - -

Insurance premium - - - -

With-holding tax - - - -

Investment in Equities Payable 6,805,315 - - -

Other accruals and payables 17,212,563 26,110,731 20,285,756 24,184,824

Other tax payables 3,874,108 8,733,161 - 11,818

47,327,851 65,786,596 20,285,756 24,196,642

The fund is designated for contributions to premiums payable under a Government sponsored/subsidised voluntary

scheme. Under this Agricultural Disaster and Fisheries Voluntary Insurance Scheme, farmers registered with the

Seychelles Agriculture Agency (SAA) and boat owners registered with the Seychelles Fisheries Authorities (SFA) are

charged 4% of the insured values, to which the fund contributes 50%. The contributions would cover the insured items

(crop, livestock, boats and employees / crew) in case of loss or damage, death following natural disasters and

accidents, depending on the scheme applicable.

Retirement benefit obligations is in respect of length-of-service compensation as per the Seychelles Employment Act,

1995. Movement during the year is shown below:


The amounts payable to related companies are unsecured, interest free and with no fixed repayment terms. These

have been classified as current liabilities based on Directors' opinion.

THE GROUP

The carrying amount of trade and other payables approximate its amortised costs.

The fund is designated for mortgage protection insurance under a Home Ownership Scheme. Under this scheme,

upon approval of their mortgage loans, borrowers are automatically charged 6% of the nominal value of the loan

towards mortgage protection which is expected to cover the loan repayments in case of death or permanent disability.

The 6% consist of 4% risk premium and 2% management fee for the Company which arises at the inception of the

Released during the year to statement of profit or loss and other comprehensive

THE GROUP

THE GROUP

Released during the year to statement of profit or loss and other comprehensive


25.MOVEMENTS IN INSURANCE LIABILITIES AND REINSURANCE ASSETS

(a) Outstanding claims

Gross Reinsurance Net Gross Reinsurance Net


At January 1, 34,432,711 (14,354,985) 20,077,726 33,441,856 (9,513,569) 23,928,287

Claims incurred 87,636,451 (36,861,268) 50,775,183 72,312,855 (19,197,393) 53,115,462

(47,855,556) 4,712,297 (43,143,260) (71,322,000) 14,355,977 (56,966,023)

Recognised notified claims 74,213,606 (46,503,956) 27,709,649 34,432,711 (14,354,985) 20,077,726

8,674,267 (3,453,305) 5,220,962 3,135,707 (645,766) 2,489,941

At December 31, (note 14) 82,887,872 (49,957,261) 32,930,611 37,568,418 (15,000,751) 22,567,667

45,319,455 (34,956,510) 10,362,944 (4,738,878) (1,634,749) (6,373,627)

45,319,456 (34,956,510) 10,362,944 (4,738,878) (1,634,749) (6,373,627)

- - - -

45,319,456 (34,956,510) 10,362,944 (4,738,878) (1,634,749) (6,373,627)

Total claims and benefits paid

Claims (group excluding life) (47,855,556) 4,712,297 (43,143,259) (71,322,000) 14,355,977 (56,966,023)

Claims and benefits (life) (48,668,083) - (48,668,083) (41,542,826) - (41,542,826)

(96,523,639) 4,712,297 (91,811,342) (112,864,826) 14,355,977 (98,508,849)

(b) Provision for unearned premiums

Gross Reinsurance Net Gross Reinsurance Net


At January 1, 67,731,265 (22,412,886) 45,318,379 61,769,714 (19,383,118) 42,386,596

162,552,080 (56,040,429) 106,511,651 161,653,742 (59,923,946) 101,729,796

(166,159,384) 59,400,170 (106,759,214) (155,692,191) 56,894,178 (98,798,014)

At December 31,(note 14) 64,123,960 (19,053,145) 45,070,816 67,731,265 (22,412,886) 45,318,379

(c) Net earned premium 2018 2017

SCR SCR

(i) Gross premium earned:

Group excluding life 162,552,080 161,109,429

Life business 64,503,589 60,930,796

227,055,669 221,094,411

Change in unearned premiums 3,607,304 (5,961,551)

230,662,973 215,132,860

(ii) Premium ceded to reinsurers:

Group excluding life (56,040,429) (59,923,946)

Life business (5,540,143) (4,012,835)

(61,580,572) (63,936,781)

Change in unearned premiums (3,359,741) 3,029,768

(64,940,313) (60,907,013)

Net earned premiums 165,722,660 154,225,848

The Group

Premium written during the year

Premium earned during the year

2018 2017

THE GROUP

2018 2017

Cash paid for claims settled in the year

THE GROUP

Movement in outstanding claims (group

excluding life)

Movement in outstanding claims (life

Movement during the year recognised

in profit or loss

Incurred But Not Reported (IBNR)

Movement during the year recognised

in profit or loss


26. INVESTMENT INCOME

2018 2017 2018 2017

SCR SCR SCR SCR

Interest income was in respect of:

- Financial assets 5,994,342 5,692,002 1,255 906,282

- Bank Deposits - 9,781 - -

- Loans and receivables 5,269,669 4,690,121 - -

- Others - - - -

Dividend income and share of profit - - - 12,000,000

11,264,011 10,391,904 1,255 12,906,282

0 27. SUNDRY INCOME

2018 2017 2018 2017

SCR SCR SCR SCR

Gain on foreign exchange 362,624 288,820 - -

Management fee - - - -

(Loss) / profit on sale of equipment 340,318 530,350 -

Other income 3,357,922 3,012,620 2,682 194,195

Adjustment of fisheries and agricultural fund - - - -

Adjustment mortgage protection fund release - - - -

Housing loan scheme income - - - -

Insurance levy - - - -

4,060,863 3,831,790 2,682 194,195

28. STAFF COSTS

2018 2017 2018 2017

SCR SCR SCR SCR

Salaries and wages 24,481,871 26,668,706 - -

Retirement benefit obligations (note 23(a)) 873,171 1,572,004 - -

Other staff costs 7,519,548 6,528,097 - -

32,874,590 34,768,807 - -

(a)

THE COMPANY



THE GROUP

Other staff costs includes welfare, compensation, termination, leave pay accruals, overtime, pension, uniforms, training and

health insurance.


29. Operating and administrative expenses

2018 2017 2018 2017

SCR SCR SCR SCR

(a) Office & Lease rentals 6,666,347 6,657,891 - -

Software Maintenance 1,684,851 - -

Electricity and water charges 3,031,888 3,010,950 - -

Marketing fees 2,038,201 3,457,831 - -

Repairs and maintenance 2,307,887 3,288,373 - -

Legal and professional fees 7,190,856 4,973,472 - -

Tourism and Other taxes 2,280,697 3,813,248 36,781

Investment property expenses 273,482 - -

Auditors' remuneration 564,313 1,444,599 32,813 258,625

Insurance cost 829,938 1,344,443 -

Telecommunication 1,294,057 1,315,331 -

Printing, postage and stationery 3,397,955 2,709,099 -

Travelling expenses 1,035,471 414,659 -

Other administrative expenses (3,532,935) 2,025,544 (10,708) 148,975

Bad debts (note 14(a)) - -

Commission expenses - -

Policy protection fee 595,804 426,168 -

Directors' emoluments (note 29(a)) 1,200,000 959,984 -

Finance Charges 928,666 735,833 100,531 2,361

Office security 524,416 - -

Sponsorships - - -

Annual General Meeting expenses 99,850 - -

Rebates 2,363,084 - -

Foreign exchange loss 619,312 (3,609) - -

Donations 727,436 - -

Entertainment 35,708 - -

Security for investment properties 609,004 844,925 - -

31,330,941 42,854,084 122,635 446,743

(b) Directors' emoluments

2017

Fees Emoluments Total Total

SCR SCR SCR SCR

P Bastide 150,000 - 150,000 70,588

J C D'Offay 100,000 - 100,000 70,588

M Inch - - - 70,588

L Nair 300,000 - 300,000 517,647

R Thorrington 150,000 - 150,000 70,588

I Barbe 150,000 - 150,000 70,588

L Rivalland 150,000 - 150,000 70,588

B Adonis 150,000 - 150,000 18,807

D Bradburn 50,000 - 50,000 -

J Esther - - - 2,380,000

J Morel - 1,566,534 1,566,534 -

M Sinovich - 2,377,056 2,377,056 1,844,405

G Capricieuse - 267,770 267,770 - 1,200,000 4,211,361 5,411,361 5,184,388

30. Depreciation and amortisation charges

2018 2017 2018 2017

SCR SCR SCR SCR

Depreciation on equipment (note 5(a)) 2,556,375 2,368,695 - -

Amortisation on intangible asset (note 7) 1,564,283 1,605,894 - -

Write-off of intangible assets (note 7) - - - -

Other expenses - - - -

4,120,658 3,974,589 - -

2018


THE GROUP



31. RELATED PARTY TRANSACTIONS

(a) Following are transactions and balances with the related parties:

2018 2017 2018 2017

SCR SCR SCR SCR

Transactions with: Transactions with: fellow

third parties (Note 31(a)(d) subsidiaries (Note 31(a)(e)

Sales of services 5,374,309 7,021,769 -

Loans and receivables 10,720,792 - 22,519,772 22,519,772

Management Fees 540,874 -

Dividends - - - 12,000,000

Investment - - 86,751,590 86,751,590

Amount receivable 337,544 176,846 - 2,451,349

Amount payable 2,272,993 739,799 (17,011,049) 7,020,304

Key management personnel

Sales of services 673,190 159,195 -

Loans and receivables 1,407,978 1,706,603 -

Shareholders

Dividends - 3,000,000 - 3,000,000

Directors

Remuneration 4,211,361 5,184,388 - -

(b) Key management personnel compensation:

2018 2017

SCR SCR

Salaries and short-term employee benefits 7,909,562 5,305,264

Post-employment benefits - 840,000

Key management personnel consist of the chief executive officer, directors and other key personnel.

(c)

(d)

(e)

(f)

(g) There has been no guarantees provided or received for any related party receivable or payable.

32. SEGMENT INFORMATION

(a) Basis of segmentation

Management has determined the operating segments based on the reports reviewed by the Chief Executive Officer, who is

responsible for allocating resources to the reportable segments and assesses their performance. The chief operating decision-

maker assesses the performance of the operating segments based on profit or loss.

The Group's reportable segments under IFRS 8 Operating Segment are based on insurance classes. The Group generates

revenue from provision of life and general insurance services, sales motor vehicle spare parts and letting out residential

apartments. The basis of segmentation is disclosed below:


THE GROUP

The sales, purchases, receivables and payables related to related parties are made on arms length basis and outstanding balances

for related party receivables and payables are unsecured and interest free.

For the year ended December 31, 2018, the Group and the Company has not recorded any impairment on receivables owed by

related parties (2017: nil) and this assessment is undertaken at the end of each financial year by examining the financial position of

the related party and the market in which the latter operates.

The Group include the parent entity i.e. SACOS Group Limited ("the Company") and the subsidiaries for which it has 100%

ownership / control in:

a) SACOS Life Assurance Company Limited;

b) SACOS Insurance Company Limited; and

c) Sun Investment Seychelles Limited.

Related party transactions of the Company relate to fellow subsidiaries as explained above.

Related party transactions of the Group pertain to Swan Life Ltd and Swan General Ltd, who has indirect shareholding in Sacos

Group. Swan Life Ltd and Swan General Ltd also act as reinsurers for Sacos Life Assurance Company Ltd and Sacos Insurance

Company Ltd respectively.


32. SEGMENT INFORMATION (CONTINUED)

(a) Basis of segmentation (Continued)

Insurance services:

General

Life

Investment property business

Revenue from this segment comprise income and gains from rental of investment properties business of the Group.

The Company customer portfolio base is widely spread and no customer accounts for more than 10% of the total revenue.

Inter-segment sales and expenses are eliminated in the below disclosure for operating segment.

(b) Operating segment for the Group

December 31, 2018

Other Total

SCR SCR SCR SCR SCR

Income

Gross written premiums 162,552,080 64,503,589 - 226,109,855

Net earned premiums 106,759,214 58,963,446 - 164,776,846

Underwriting surplus 49,848,881 8,624,942 - 58,473,823 Rental income 5,985,884 15,750,316 2,518,439 - 24,254,639 Investment income 620,890 10,641,866 - 1,255 11,264,011 Other income 3,475,856 582,325 - 2,682 4,060,863 Intercompany income - - 2,520,089 1,625,521 4,145,610 Increase in fair value of investment properties - (2,000,000) - - (2,000,000)

Expenses -

Staff costs (27,001,801) (3,063,506) (2,809,283) - (32,874,590) Marketing and administrative expenses (19,727,627) (9,834,322) (2,000,878) (122,635) (31,685,462) Other operating expenses (3,355,025) (483,304) (282,329) - (4,120,658) (Impairment) / reversal of impairment on financial assets (2,866,274) - - - (2,866,274) Intercompany expenses 5,595,753 (9,386,842) - - (3,791,089) Share of profit in associate - 880,184 - - 880,184 Profit before taxation 12,576,537 11,711,659 (53,962) 1,506,823 25,741,057 Taxation charge (6,638,623) (724,476) (89,621) (2,083,315) (9,536,035)

Profit for the year 5,937,914 10,987,183 (143,583) (576,492) 16,205,021

This segment provides protection against liability claims of individuals / organisations for negligent acts / omissions property, risks such as fire, theft and some weather damage.

Revenue in the above segment is derived primarily from insurance premiums, investment income and realised gain on financial assets.

General Life

Property

Management



(b) Operating segment for the Group (Continued)

December 31, 2018 (Continued)Other Total

SCR SCR SCR SCR SCR

Segment assets 254,350,332 501,339,667 43,452,955 49,498,551 763,634,693

Segment liabilities 53,683,931 18,636,319 1,208,566 20,285,757 53,807,761

Technical liabilities: 149,333,116 448,301,438 - - 597,634,554 Life Assurance Fund - 444,767,315 - - 444,767,315 Gross outstanding claims and IBNR 82,887,872 3,534,123 - - 86,421,995 Gross unearned premiums 64,123,960 - - - 64,123,960 Mortgage protection fund 164,412 - - - 164,412 Fisheries and agricultural fund 478,763 - - - 478,763 Policy Protection Fund 1,678,109 - - - 1,678,109

Equity holders' interest 10,286,385 (13,598,090) 19,624,617 23,484,157 39,797,069

Capital expenditure: 28,639,228 888,686 114,420 - 29,642,334

Depreciation 1,062,886 146,399 282,330 1,491,615

Amortisation 1,494,600 69,685 - 1,564,285

December 31, 2017

SCR SCR SCR SCR SCRIncomeGross written premiums 161,109,429 60,930,796 - 222,040,225

Net earned premiums 98,253,701 56,917,961 - 155,171,662

Underwriting surplus 41,298,156 13,853,650 - 55,151,805 Rental income 4,422,048 16,317,713 2,749,975 - 23,489,735 Investment income 842,191 8,643,431 - 906,282 10,391,903 Other income 1,751,121 1,707,372 179,102 194,195 3,831,790 Intercompany income 9,744,958 - 3,045,813 - -

ExpensesStaff costs (27,005,641) (3,447,413) (4,315,753) - (34,768,807) Marketing and administrative expenses (30,073,423) (12,353,720) (4,436,547) (446,743) (47,310,434) Other operating expenses (2,720,845) (587,328) (245,266) - (3,553,439) (Impairment) / reversal of impairment on financial assets - (439,555) - - (439,555) Intercompany expenses (421,151) (9,470,028) (354,521) - - Share of profit in associate - 283,423 - - 283,423 Transfer to Life Assurance Fund - - - - 7,076,422 Profit before taxation (2,162,587) 14,507,544 (3,377,198) 653,734 9,621,495 Taxation charge (674,486) - 32,275 (181,824)

Profit for the year (2,837,073) 14,507,544 (3,344,923) 471,910 16,697,917

General

Other TotalGeneral Life

Property

Management

Property

Management

Life

SACOS GROUP LIMITED



(b) Operating segment for the Group (Continued)

December 31, 2017 (Continued)

Other Total

SCR SCR SCR SCR SCR

Segment assets 194,063,986 476,262,818 45,839,037 9,534,581 725,700,423

Segment liabilities 39,772,461 10,743,727 2,397,287 18,788,440 71,701,914

Technical liabilities: 107,642,721 436,696,728 - - 544,339,449 Life Assurance Fund - 434,828,465 - - 434,828,465 Gross outstanding claims and IBNR 37,568,418 1,868,263 - - 39,436,681 Gross unearned premiums 67,731,265 - - - 67,731,265 Mortgage protection fund 228,911 - - - 228,911 Fisheries and agricultural fund 480,226 - - - 480,226 Policy Protection Fund 1,633,901 - - -

- Equity holders' interest 4,348,472 (13,913,571) 19,768,199 27,060,649

- Capital expenditure: 1,369,002 31,350 10,250

- Depreciation 1,669,426 454,003 245,266

- Amortisation 1,472,569 133,325 -

GEOGRAPHIC INFORMATION

Income from

external

customers

Non current

assets

2018 2017 2018 2017

SCR SCR SCR SCR

Seychelles - - - 488,147,437

33. SHAREHOLDERS SHARE OF LIFE SURPLUS

Property

ManagementGeneral Life

In accordance with the accounting policy in Note 2, the independent actuaries have assessed the amount of the Discretionary Participating Feature (DPF) eligible surplus/deficit to be transferred to Life

Assurance Fund from statement of profit or loss and other comprehensive income. As the life business made a surplus during the year, the surplus amount has been recognised in statement of Life

Assurance Fund. Assets in the Life Fund meets the Insurance Acts Minimum Solvency Requirement and this covers 108% of the Solvency Margin as well as 1/9th of the Cost of Bonus that can be

transferred to shareholders. In addition to he Solvency margin a bonus stabilisation reserve in 2018 of SCR 7.6m providing additional retained surplus in the Life Fund.

SACOS GROUP LIMITEDCONSOLIDATED NOTES TO THE FINANCIAL STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2018 65

34. EARNINGS / (LOSS) PER SHARE

The following reflects the income and share data used in the computations:

2018 2017 2018 2017

SCR SCR SCR SCR

5,217,839 (5,165,773) (576,492) 12,471,910

2,000,000 2,000,000 2,000,000 2,000,000

2.61 (2.58) (0.29) 6.24

35. DIVIDEND PAID

2018 2017

SCR SCR

3,000,000 14,000,000

Dividend Guideline

36. CAPITAL COMMITMENTS

There are no capital commitments as at 31 December 2018 (31 December 2017: nil).

37. CONTINGENT LIABILITIES AND ASSETS

There are no contingent liabilities and assets as at 31 December 2018 (31 December 2017: nil).

38. EVENT AFTER THE REPORTING PERIOD

(a) Amalgamation

The objectives of amalgamation are to accomplish the following:

▪

▪

▪

Authorized dividend in 2018 and paid in 2018 @ SCR 1.50 per share;

(2017: SCR 7.00 per share for 2016).

In accordance with PART VI - Transfer and Amalgamation, Sections 52, 53 and 54 of the Insurance Act, 2008 and Section 22 of the

Companies Act 1972, the SACOS Insurance Group applied to the Financial Services Authority (FSA) for the amalgamation of SACOS

Insurance Company Limited and Sun Investment (Seychelles) Limited into SACOS Group Limited.

Amalgamation of SACOS Group Limited, SACOS Insurance Company Limited and the Sun Investments (Seychelles) Limited into

SACOS Group Limited.

Post amalgamation, the surviving entities will be SACOS Group Limited and SACOS Life Assurance Company Limited.

SACOS Group Limited will continue to be the listed entity on the Stock Exchange of Trop-X in the Seychelles and SACOS Life

Assurance company Limited will remain a subsidiary company of SACOS Group Limited.

The Company intends to maintain attractive dividend payments to shareholders through dividend cover times ratio targeting by

considering the performance (profit after taxation) for the year.

Group performance is significantly enhanced by good insurance premium income and low claims.

Our numerous and diverse shareholders have an important role to play in this space.

At the same time there is a need to balance the desire for distributions with prudential capital management, business development

including strategic investment and operational liquidity requirements.

To ensure compliance with the law of the Seychelles, when first assessing the potential dividend declaration, the requirements of the

Companies Act and Insurance Act need to take precedence.

The Company thus follows an adaptable, shareholder and business holistic dividend strategy as is appropriate to a given year, the

position of the Company now and in the foreseeable future.

After considering the position and performance of the Company, the Board of Directors is responsible for making a dividend

recommendation for approval of the dividend at the annual shareholders’ meeting.

THE GROUP AND THE COMPANY


(Loss) / profit attributable to equity holders of the parent

Weighted average number of ordinary shares ranking

for dividend

(Loss) / earnings per share - Basic and diluted

SACOS GROUP LIMITEDCONSOLIDATED NOTES TO THE FINANCIAL STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2018 66

38. EVENT AFTER THE REPORTING PERIOD (CONTINUED)

Progress of amalgamation process:

1.

2.

3.

4.

39. COMPARATIVE FIGURES

An amended Memorandum of Association (MoA) has been drawn to reflect the amalgamation. This is has been approved by the

shareholders on 28th April 2017 in an Extraordinary General Meeting (EGM).

The transfer of asset resolution will be executed as the audited consolidated financial statements are available and court

approval will be sought to complete the process.

Certain reclassifications are made between accounting elements of the prior period consolidated financial statements for the purpose

of better presentation to confirm with current years' presentation.

SACOS Group Limited was subsequently granted a license by FSA to carry on the insurance business that is currently being

conducted by SACOS Insurance Company Limited.

The scheme for the amalgamation was approved by FSA on 11 April 2017.

SACOS GROUP LIMITED

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS


40. FIVE YEAR FINANCIAL SUMMARY

(a) THE GROUP 2018 2017 2016 2015

(Restated*)

2014

(Restated*)

SCR SCR SCR SCR SCR

Profit before tax 25,741,057 10,165,808 (6,224,229) 22,298,060 31,131,000

Tax charge (9,536,035) (824,036) (2,231,555) (7,326,599) (5,099,305)

Profit for the year 16,205,022 9,341,772 (8,455,784) 14,971,461 26,031,695

Other comprehensive income / (loss) - - (555,005) - -

Total comprehensive income / (loss) for the year 16,205,022 9,341,772 (9,010,789) 14,971,461 26,031,695

Retained earnings brought forward 37,263,750 56,256,546 82,267,335 84,295,874 74,693,306

Prior period adjustment - (2,429,127)

Life Surplus Consolidated to Life Surplus (10,987,182) (14,507,544) - - -

Share of Shareholder's Surplus/(Deficit) (i) 315,480 172,977 - - -

Dividends (3,000,000) (14,000,000) (17,000,000) (17,000,000) (14,000,000)

Retained earnings carried forward 39,797,069 37,263,750 56,256,546 82,267,335 84,295,874

EQUITY

Share capital 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000

Capital contribution 2,395,310 2,395,310 - - -

Retained earnings 39,797,069 37,263,750 56,256,546 82,267,335 84,295,874

Total equity 112,192,379 109,659,060 126,256,546 152,267,335 154,295,874

SACOS GROUP LIMITED

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENT


40. FIVE YEAR FINANCIAL SUMMARY (CONTINUED)

(b) THE COMPANY

2018 2017 2016 2015

(Restated*)

2014

(Restated*)

SCR SCR SCR SCR SCR

Profit before tax 1,506,823 12,653,734 18,663,166 11,950,852 18,794,000

Tax charge (2,083,315) (181,824) (773,138) (27,244) 783,369

Profit for the year (576,492) 12,471,910 17,890,028 11,923,608 19,577,369

Retained earnings brought forward 27,060,649 28,588,739 27,698,711 32,775,103 31,185,000

Prior period adjustment - - - - (3,987,266)

Effect of adopting IFRS - - - - -

Dividends (3,000,000) (14,000,000) (17,000,000) (17,000,000) (14,000,000)

Retained earnings carried forward 23,484,157 27,060,649 28,588,739 27,698,711 32,775,103

EQUITY

Share capital 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000

Capital contribution - - - - -

Retained earnings 23,484,156 27,060,649 28,588,739 27,698,711 32,775,103

Total equity 93,484,156 97,060,649 98,588,739 97,698,711 102,775,103

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