SBN HOLDINGS LIMITED Annual Report 2022
29
62
STATEMENTS OF CASH FLOWS
for the year ended 31 December 2022
Note
2022
N$'000
GROUP
2021
Restated¹
N$'000
COMPANY
2022
N$'000
2021
Restated¹
N$'000
Net cash flows (used in)/from operating activities
(87 195)
1 476 768
197 980
274 928
Cash flow from operations
33.1
1 356 237
1 049 013
67 221
38 647
Interest and commission receipts
3 561 767
3 122 635
68 891
43 679
Interest payments
Recoveries on loans previously written-off
(952 923)
(759 732)
Cash payments to suppliers and employees
33.4
Net movement in working capital
41 244
(1 293 851)
(1 271 187)
35 954
(1349 844)
(1 670)
(5 032)
593 723
64 508
3 473
(Increase)/decrease in income-earning assets
(Decrease)/increase in deposits and other liabilities
33.2
(601 702)
(1 391 904)
67 571
33.3
(669 485)
1 985 627
(3 063)
5 837
(2364)
Dividends received
Direct taxation paid
33.5
(172 245)
631
(166 599)
66 251
236 917
(4109)
Net cash flows used in investing activities
(69 814)
(157 194)
Capital expenditure on property and equipment
8
(50 196)
(62 318)
Proceeds from sale of property and equipment
33.6
5 045
1 661
Capital expenditure on intangible assets
9
(24 663)
(96 537)
349 286
163 902
(182 901)
Net cash flows from/(used in) financing activities
Principal element of lease payments
16.1
(17 813)
(15 956)
Subordinated debt issued
15
250 000
Subordinated debt redeemed
15
(100 000)
Senior debt issued
15
400 000
1 543 000
Senior debt redeemed
15
(1 206 500)
Dividends paid
33.7
(182 901)
(156 642)
(182 901)
Net increase in cash and balances with the central bank
Cash and balances with the central bank at the beginning
of the year
192 277
1 483 476
15 079
(156 642)
118 286
33.8
4 739 268
3 270 130
312 401
194 115
Effects of exchange rate changes on cash and balances
with the central bank
(148 012)
(14 338)
Cash and balances with the central bank at the end
of the year
312 401
1 Refer to restatement narrative included in the accounting policy elections and restatements section for details of restatements in the statements of cash flows.
33.8
4 783 533
4 739 268
327 480
ACCOUNTING POLICY ELECTIONS
AND RESTATEMENTS
SBN HOLDINGS LIMITED
Annual report 2022
(156 642)
The principal accounting policies applied in the presentation of
the group and company's annual financial statements are set out
below.
Basis of preparation
The group's consolidated and company's separate annual
financial statements (annual financial statements) are prepared
in accordance with IFRS as issued by the IASB, its interpretations
adopted by the IASB and the Namibian Companies Act.
The annual financial statements have been prepared on the
historical cost basis except for the following material items in the
statements of financial position:
■Financial assets classified at FVOCI, financial assets and
liabilities classified as fair value through profit or loss
(FVTPL) and liabilities for cash-settled share-based payment
arrangements.
■ Post-employment benefit obligations that are measured in
terms of the projected unit credit method.
The following principal accounting policy elections in terms of
IFRS have been made, with reference to the detailed accounting
policies shown in brackets:
■investments in associates and joint ventures are initially
measured at cost and subsequently accounted for using
the equity method in the separate financial statements
(accounting policy 2).
■purchases and sales of financial assets under a contract
whose terms require delivery of the asset within the time
frame established generally by regulation or convention in
the marketplace concerned are recognised and derecognised
using trade date accounting (accounting policy 3).
■commodities acquired principally for the purpose of selling in
the near future or generating a profit from fluctuation in price
or broker-traders' margin are measured at fair value less cost
to sell (accounting policy 3).
■the portfolio exception to measure the fair value of certain
groups of financial assets and financial liabilities on a net basis
(accounting policy 4).
■intangible assets and property, equipment and right-of-use
assets are accounted for at cost less accumulated amortisation
and impairment (accounting policy 6).
Functional and presentation currency
The annual financial statements are presented in Namibian
dollars, which is the functional and presentation currency of
the group and company. All amounts are stated in thousands of
Namibian dollars (N$'000), unless indicated otherwise.
Changes in accounting policies
The accounting policies are consistent with those reported in the
previous year. There are no new or amended standards that are
effective for the current reporting period. The group also did not
early adopt any amended standards during the current reporting
period.
Standards issued not yet adopted or effective
The following new standards, and amendments are not yet
effective for the year ended 31 December 2022 and have not been
applied in preparing these annual financial statements:
■IFRS 10 and IAS 28 Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (amendments)
Effective date: deferred the effective date for these
amendments indefinitely
Background: The amendments address an inconsistency
between the requirements in IFRS 10 and those in IAS 28,
in dealing with the sale or contribution of assets between
an investor and its associate or joint venture. The main
consequence of the amendments is that a full gain or loss is
recognised when a transaction involves a business (whether
it is housed in a subsidiary or not). A partial gain or loss is
recognised when a transaction involves assets that do not
constitute a business, even if these assets are housed in a
subsidiary. The amendments will be applied prospectively
and are not expected to have a material impact on the group's
financial statements.
■IFRS 17 Insurance Contracts
Effective date: 1 January 2023
Background: IFRS 4 Insurance Contracts (IFRS 4), the
existing standard dealing with the accounting treatment for
insurance contracts will be replaced by IFRS 17 for the group's
2023 financial year (with comparative information restated
as required by the standard). IFRS 17 provides the basis of
measurement for defined insurance contracts, including
investment contracts with discretionary participation features.
The difference between IFRS 4 (existing measurement
standard) and IFRS 17 carrying values (including any related
tax impacts) will be recognised in opening retained earnings
on 1 January 2022. The main principle that IFRS 17 adopts is
to recognise revenue (and profit or loss) over the duration of
the applicable policyholder contracts that best reflects the
delivery of contracted obligations in the specific reporting
period. IFRS 17 also distinguishes the sources of income
splitting between insurance services and financing activities.
As such, the standard does not allow for profit to emerge on
'day one, being the initial recognition of the contract but does
require contracted losses (onerous contracts) to be recognised
immediately to the extent onerous. These revenue recognition
principles are aligned to IFRS 15 Revenue from Contracts with
Customers. Under IFRS 17, a general measurement model
(GMM) is applicable to long-term insurance contracts and is
based on a fulfilment objective (risk-adjusted present value of
probability-weighted estimates of future cash flows). It requires
the use of current estimates, which are those informed by
actual trends and investment markets. IFRS 17 establishes a
contractual service margin (CSM) at the initial measurement
of the liability. The CSM represents the unearned profit on the
contract and results in no gain at initial recognition. The CSM
is released over the life of the contract in line with the level
of service provided in each period. The interest rate used to
discount cash flows and determine the initial CSM is locked in
at the rate at inception in regard to future CSM movements. All
other probability-weighted estimates of cash flows contained in
the measurement of insurance assets or liabilities are however
measured at current values. The GMM is modified for contracts
that are substantially investment-related contracts, in which
case the variable fee measurement approach (VFA) is used to
measure the contract. This approach effectively amortises the
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