1 A N N U A L R E P O R T & A C C O U N T S 2 0 1 1 V I S I O N To be a leading brand providing insurance and financial services of global standards. M I S S I O N To enhance the every day life of our customers t h ro u g h i n n o v a t i v e insurance and financial services while creating exceptional value for our shareholders. CORE VALUES Superior Customer Service Innovation Professionalism Integrity Empathy Team Spirit. A N N U A L R E A C C O P O R T U N T S & 2 2 0 1 1 Notice of AGM 03 Corporate Information 05 Management Team 07 Financial Highlights 08 Chairman’s Statement 09 Board of Directors 14 Management Team 18 Directors’ Report 24 Statement of Directors' Responsibilities 31 Independent Auditor’s Report 32 C O N T E N T S Report of the Audit Committee 33 Statement of Significant Accounting Policies 34 Balance Sheet 40 Profit and Loss Account 41 Revenue Account 42 Statement of Cash Flow 43 Notes to the Financial Statements 45 Statement of Value Added 63 Five-Year Financial Summary 64 Share Capital History 65 Mandate Form 66 Proxy Form 67 Admission Form 68 Unclaimed Dividend Warrant List 69 3 A N N U A L R E P O R T & A C C O U N T S 2 0 1 1 1 7 T H A G M N O T I C E 4 A N N U A L R E P O R T & A C C O U N T S 2 0 1 1 N O T I C E O F T H E 1 7 T H A N N U A L G E N E R A L M E E T I N G TO ALL THE SHAREHOLDERS NOTICE OF ANNUAL GENERAL NOTES CLOSURE OF REGISTER MEETING PROXIES The Register of members and Only a member of the Company Transfer Books of the Company shall NOTICE IS HEREBY GIVEN to you entitled to attend and vote at the be closed from 24th day of May that the 17th Annual General General Meeting is entitled to 2012 to 31st day of May 2012 (both Meeting of Sovereign Trust appoint a proxy in his/her stead. All days inclusive) for the purpose of Insurance PLC will take place at The valid instruments of proxy should be payment of dividend. Grand Banquet Hall, The Civic completed, stamped and deposited Centre, Ozumba Mbadiwe Road, at the office of the Company's AUDIT COMMITTEE Victoria Island, Lagos on Thursday Registrars, Meristem Registrars In accordance with Section 359(5) of the 21st day of June 2012 at 12.00 Limited, 213, Herbert Macaulay the Companies & Allied Matters Act noon to transact the following Way, Adekunle, Yaba, Lagos, not Cap C20 Laws of the Federation of business: less than 48 hours before the time Nigeria 2004, any member may fixed for the meeting. nominate a shareholder for ORDINARY BUSINESS: appointment to the Audit 1. To receive the Audited Financial DIVIDEND Committee by giving notice in Statements for the year ended If approved, dividend is payable on writing of such nomination to the December 31, 2011 together or before the 12th day of July 2012 Company Secretary not less than 21 with the Reports of the Directors, to the shareholders whose names days before the Annual General Auditors and the Audit are registered in the Register of Meeting. Committee thereon; Members on Wednesday 23rd day 2. To declare a dividend; of May 2012. Payment shall be CIRCULATION OF 2011 ANNUAL 3. To re-elect Directors; either by way of direct credit to bank REPORT AND ACCOUNTS 4. To approve the remuneration of accounts of shareholders (for The company will be circulating its the Directors; shareholders who have advised their 2011 Annual Report and Accounts 5. To authorise the Directors to fix bank account details before the in compact disks (CD) format to the remuneration of the payment date) or by postal despatch shareholders at their registered Auditors; of the payment warrants (for addresses and if you prefer to 6. To elect members of the Audit shareholders who have not advised receive the traditional printed Committee. their bank account details). booklet, kindly request for “STI Plc Shareholders may advise their bank 2011 annual report and accounts in DATED THIS 18TH DAY OF MAY 2012 account details to the Registrars, printed booklet” from the Meristem Registrars Limited, whose Registrars, Meristem Registrars BY ORDER OF THE BOARD office is at 213, Herbert Macaulay Limited not less than 21 days before Way, Adekunle, Yaba, Lagos and the Annual General Meeting. who may also be reached on EQUITY UNION LIMITED telephone Nos. 01-8920491-2. Company Secretaries 5 A N N U A L R E P O R T & C o r p o r a t e I n f o r m a t i o n A C C O U N T S 2 0 1 1 Directors Chief (Dr.) Ephraim F. Faloughi OON (Chairman) Mr. Oluseun O. Ajayi (Vice Chairman) Mr. Bolaji Agbabiaka Mr. Kolapo Lawson Mrs. Adefemi Abeke Taire OFR Sir (Dr.) Ogala Osoka MFR Prof. Steve Azaiki OON Reinsurers Colonel Musa Shehu (Rtd) OFR Africa Reinsurance Corporation Mr. Wale Onaolapo (Managing) Continental Reinsurance Plc WAICA Reinsurance Pool Aveni Reinsurance Company Limited Company Secretaries Equity Union Limited (Company Secretaries & Nominees) Bankers Equity Union House, Guaranty Trust Bank Plc Central Business District, Alausa First Bank Plc Ikeja, Lagos Access Bank Plc Ecobank Plc Stanbic IBTC Bank Plc Corporate Head Office Skye Bank Plc 17, Adetokunbo Ademola Street, Zenith Bank Plc Victoria Island, Lagos. FCMB Plc +234 1 461 5006 - 9 Website: www.stiplc.com E-mail: [email protected] Registrars Meristem Registrars Limited 213, Herbert Macaulay Way, Adekunle, Yaba, Lagos +234 01 8920491-2, 07098118587 Website: www.meristemregistrars.com E-mail: [email protected] Solicitors Citipoint Chambers (Legal Practitioners) Equity Union House, Central Business District, Alausa Ikeja, Lagos. Auditors SIAO 18b Olu Holloway Road Off Alfred Rewane Road, Ikoyi P.O.Box 55461, Falomo Ikoyi, Lagos. Tel: +234 01 463 0871-2 Website: www.siao-ng.com E-mail: [email protected] 6 A N N U A L R E P O R T & A C C O U N T S 2 0 1 1 Corporate Information (Contd.) Vision Other Offices Lagos Agency Office To be a leading brand providing insurance and financial services of Aba Branch Office Elephant House global standards. 97, Azikwe Road 239/241, Ikorodu Road Aba, Abia State Anthony, Lagos State. Mission Tel: +234 0 803 764 1355 Tel: +234 0 809 992 9146 To enhance the every day life of our c u s t o m e r s t h ro u g h i n n o v a t i v e Abeokuta Agency Office Umuahia Agency Office insurance and financial services while 23, Quarry Road, Laderin House 3, Okpara Square creating exceptional value for our Umuahia, Abia State shareholders. Abeokuta, Ogun State Tel: +234 0 808 177 4909 Tel: +234 0 803 774 0835 +234 0 809 992 5292 Core Values Warri Branch Office Superior Customer Service Ado-Ekiti Branch Office Suite 13/14, Nosky Plaza Innovation 16, Ajilosun Street Opp. Shell Contractors' Gate Professionalism Ado-Ekiti, Ekiti State Ogunu, Warri, Delta State Integrity Tel: +234 0 803 720 5798 Tel: +234 0 803 584 9953 Empathy +234 0 818 814 2391 Team Spirit. Yenagoa Branch Office Akure Branch Office 53, Mbiama-Yenagoa Road Bond Bank Building Area Offices 3, Alagbaka Junction Akure, Ondo State Yenagoa, Bayelsa State Abuja Area Office Tel: +234 0 802 324 3337 Tel: +234 0 803 382 1451 40, Agadez Crescent Off Aminu Kano Street Asaba Agency Office Wuse II, Abuja 5, Ilah/Govt. House Road Tel: +234 0 809 992 8125 Asaba, Delta State Tel: +234 0 803 584 9953 Apapa Area Office +234 0 702 818 0879 20, Commercial Road Apapa, Lagos State. Benin Agency Office Tel: +234 1 460 0419 37, forestry Road +234 1 817 5634 Benin City, Edo State Tel: +234 0 818 239 7174 Ibadan Area Office Calabar Agency Office 87, Obafemi Awolowo Road 45, Murtala Highway Oke Bola, Ibadan, Oyo State Calabar, Cross-River State Tel: +234 2 873 8948 Tel: +234 0 803 382 1451 +234 2 873 8949 Enugu Branch Office Ikeja Area Office 72/76 Ogbui Road 11, IPM Avenue Off Obafemi Enugu State Awolowo Road, Ikeja, Lagos State Tel: +234 0 803 544 4837 Tel: +234 1 764 6291 Jos Agency Office Lagos Central Area Office 20, Ahmadu Bello way 9/11, McCarthy Street Jos, Plateau State Onikan, Lagos State. Tel: +234 0 805 413 5238 Tel: +234 1 462 7510 +234 0 706 772 0731 +234 1 462 7511 Kaduna Branch Office Port Harcourt Area Office 16 Ahmadu Bello Way 2nd Floor Genesis Building CB Finance House, Kaduna State 47, Trans Amadi Industrial Layout Tel: +234 0 809 992 5307 Port Harcourt, Rivers State +234 0 802 343 3812 Tel: +234 84 762 363 Kano Branch Office Surulere Area Office 4C, Murtala Mohammed Way 13, Razaq Balogun Street Kano State Surulere, Lagos State. Tel: +234 0 808 177 4909 Tel: +234 1 773 4635 +234 0 809 992 5292 7 A N N U A L R E P O R T & M a n a g e m e n t T e a m A C C O U N T S 2 0 1 1 Wale Onaolapo Managing Director/CEO Samuel Ogbodu General Manager/COO Olaotan Soyinka DGM/Divisional Head, Energy Kayode Adigun DGM/Divisional Head, Finance & Investments Segun Bankole AGM/Head, Corporate Ugochi Odemelam Communications & Brand DGM/Divisional Head, Marketing & Management Relationship Management Lekan Oguntunde Tolu Fasoranti AGM/Head, IT & Strategy AGM/Head, Lagos Central Area Office Tajudeen Rufai Sanni Oladimeji AGM/Divisional Head, Technical AGM/Head, Risk Management & Control Lanre Ojuola AGM/Divisional Head, Business Development Emmanuel Anikibe AGM/Divisional Head, Branch Operations Chris Agbara AGM/Head, Surulere Area Office 8 A N N U A L R E P O R T & A C C O U N T S 2 0 1 1 F i n a n c i a l H i g h l i g h t s 2011 2010 Change N'000N'000 N'000 N'000N'000 % Balance Sheet Cash and Bank Balances 259,284 200,457 58,827 29 Debtors and Prepayments 2,530,776 1,947,117 583,659 30 Investments 3,005,931 2,091,989 913,942 44 Statutory Deposits 315,000 315,000 - - Fixed Assets 583,310 517,123 66,187 13 Total Assets 7,310,390 5,654,938 1,655,452 29 Creditors and Accruals 260,944 208,014 52,930 25 Insurance Funds 938,875