1. GENERAL

Salama Cooperative Insurance Company (“the Company”) is a Saudi Joint Stock Company incorporated in the Kingdom of Saudi Arabia as per the Ministry of Commerce and Industry’s Resolution number 1121K dated 29 Rabi Al-Thani 1428H (corresponding to 16 May 2007). The Company is registered in Jeddah under Commercial Registration No. 4030169661 dated 6 Jamad Al-Awwal I428H (corresponding to 23 May 2007).

The registered office address of the Company is:

Salama Tower;

Al Madinah Road

P.O. Box 4020;

Jeddah 21491;

Kingdom of Saudi Arabia.

The objective of the Company is to transact cooperative insurance operations and related activities in the Kingdom of Saudi Arabia. The Company was listed on the Saudi Stock Exchange on 23 May 2007. The Company started its operations on 1 January 2008. The Company is fully owned by the general public and Saudi shareholders.

2. BASIS OF PREPARATION

1. 1. Basis of presentation

The interim condensed financial statements of the Company as at and for the period ended 31 March 2022 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants (“SOCPA”).

The interim condensed financial statements are prepared under the going concern basis of accounting and the historical cost convention, except for the measurement of investments (excluding held-to-maturity) at their fair values, and employee benefit obligations which are assessed using projected unit credit method.

The Company’s interim condensed statement of financial position is presented in order of liquidity. Except for property and equipment, right of use asset, intangible asset, statutory deposit, employee benefit obligations, lease liabilities, outstanding claims, claims incurred but not reported, other technical reserves, all other assets and liabilities are of short-term nature, unless, stated otherwise.

As required by the Saudi Arabian Insurance Regulations (“the Implementation Regulations”), the Company maintains separate books of accounts for “Insurance Operations” and “Shareholders’ Operations”. Accordingly, assets, liabilities, revenues and expenses clearly attributable to either operation, are recorded in the respective accounts (Refer note 18).

The interim condensed financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the annual financial statements as of and for the year ended
31 December 2021.

The interim condensed financial statements may not be considered indicative of the expected results for the full year.

These interim condensed financial statements are expressed in Saudi Arabian Riyals (SR) and are rounded off to the nearest thousands.

1. 2. Critical accounting judgments, estimates and assumptions

The preparation of interim condensed financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these interim condensed financial statements, the significant judgments made by management in applying the Company’s accounting policies, and the key sources of estimation uncertainty including the risk management policies, were the same as those that applied to the annual financial statements as at and for the year ended 31 December 2021. However, the Company has reviewed the key sources of estimation uncertainties disclosed in the last annual financial statements against the backdrop of the COVID-19 pandemic. Management is unable at this time to reasonably quantify the estimation uncertainties as disclosed in note 21 to these interim condensed financial statements. Management will continue to assess the situation, and reflect any required changes in future reporting periods.

1. 3. Seasonality of operations

There are no seasonal changes that may affect insurance operations of the Company.

19. IMPACT OF COVID-19

In response to the spread of the Covid-19 in the Kingdom of Saudi Arabia where the Company operates and its resulting disruptions to the social and economic activities in those markets over the last two years, management continues to proactively assess its impacts on its operations. In particular, the Company is closely monitoring the current surge in cases due to the outbreak of a new variant - Omicron. The preventive measures taken by the Company in April 2020 are still in effect including the creation of ongoing crisis management teams and processes, to ensure the health and safety of its employees, customers and the wider community as well as to ensure the continuity of its operations. Employee health continues to be a key area of focus with programs being implemented to assist with increasing awareness, identification, support and monitoring of employee health. A majority of the employees of the Company have been fully vaccinated for at least two doses of vaccine and the management is working on a plan to encourage booster shots in line with the government initiatives related to Covid-19.

The management of the Company believes that any potential lockdown measures being reintroduced will not materially affect the underlying demand for the Company’s insurance products and forecast.

Based on these factors, management believes that the Covid-19 pandemic has had no material effect on the Company’s reported financial results for the period ended 31 March 2022 including the significant accounting judgements and estimates.

The Company continues to monitor the surge of the new variant closely although at this time management is not aware of any factors that are expected to change the impact of the pandemic on the Company’s operations during 2022 or beyond.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies, estimates and assumptions used in the preparation of these interim condensed financial statements are consistent with those used in the preparation of the annual financial statements for the year ended
31 December 2021 except as mentioned below:

1. New IFRS Standards, IFRIC interpretations and amendments thereof, adopted by the Company

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:

• Require contractual changes or changes to cash flows that are required by the IBOR reform, to be treated as changes to a floating interest rate equivalent to the changes in the market interest rate.

• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued.

• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component.

These amendments had no impact on the interim condensed financial statements of the Company.

The Company intends to use the practical expedients in future periods if they become applicable.

2. Standards issued but not yet effective

Standards issued but not yet effective up to the date of issuance of the Company’s financial statements are listed below. The listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt these standards when they are effective.

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 17 – Insurance Contracts

Overview

This standard has been published in 18 May, 2017. It establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 – Insurance contracts.

The new standard applies to insurance contracts issued, to all reinsurance contracts and to investment contracts with discretionary participating features, provided the entity also issues insurance contracts. It requires to separate the following components from insurance contracts

1. embedded derivatives, if they meet certain specified criteria;

2. distinct investment components; and

3. any promise to transfer distinct goods or non-insurance services.

These components should be accounted for separately in accordance with the related standards (IFRS 9 and IFRS 15).

Measurement

In contrast to the requirements in IFRS 4, which permitted insurers to continue to use the accounting policies for measurement purposes that existed prior to January 2015, IFRS 17 provides the following different measurement models:

The General model is based on the following “building blocks”:

1. the fulfilment cash flows (FCF), which comprise:

• probability-weighted estimates of future cash flows,

• an adjustment to reflect the time value of money (i.e. discounting) and the financial risks associated with those future cash flows, and

• a risk adjustment for non-financial risk.

2. the Contractual Service Margin (CSM) - The CSM represents the unearned profit for a group of insurance contracts and will be recognized as the entity provides services in the future. The CSM cannot be negative at inception; any net negative amount of the fulfilment cash flows at inception will be recorded in profit or loss immediately. At the end of each subsequent reporting period, the carrying amount of a group of insurance contracts is remeasured to be the sum of:

• the liability for remaining coverage, which comprises the FCF related to future services and the CSM of the group at that date; and

• the liability for incurred claims, which is measured as the FCF related to past services allocated to the group at that date.

The CSM is adjusted subsequently for changes in cash flows related to future services but the CSM cannot be negative, so changes in future cash flows that are greater than the remaining CSM are recognized in profit or loss. Interest is also accreted on the CSM at rates locked in at initial recognition of a contract (i.e. discount rate used at inception to determine the present value of the estimated cash flows). Moreover, the CSM will be released into profit or loss based on coverage units, reflecting the quantity of the benefits provided and the expected coverage duration of the remaining contracts in the group.

The Variable Fee Approach (VFA) is a mandatory model for measuring contracts with direct participation features (also referred to as ‘direct participating contracts’). This assessment of whether the contract meets these criteria is made at inception of the contract and not reassessed subsequently. For these contracts, in addition to the adjustment under GMM, the CSM is also adjusted for:

1. the entity’s share of the changes in the fair value of underlying items,

2. the effect of changes in the time value of money and in financial risks not relating to the underlying items.

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 17 – Insurance Contracts – (continued)

Measurement – (continued)

In addition, a simplified Premium Allocation Approach (PAA) is permitted for the measurement of the liability for remaining coverage if it provides a measurement that is not materially different from the General Measurement Model for the group of contracts or if the coverage period for each contract in the group is one year or less. With the PAA, the liability for remaining coverage corresponds to premiums received at initial recognition less insurance acquisition cash flows. The General Measurement Model remains applicable for the measurement of the liability for incurred claims. However, the entity is not required to adjust future cash flows for the time value of money and the effect of financial risk if those cash flows are expected to be paid/received in one year or less from the date the claims are incurred.

Effective date

The IASB issued an Exposure Draft Amendments to IFRS 17 proposing certain amendments to IFRS 17 during June 2019 and received comments from various stakeholders. On 17 March 2020, the IASB completed its discussions on the amendments to IFRS 17 - Insurance Contracts that were proposed for public consultation in June 2019. It decided that the effective date of the Standard will be deferred to annual reporting periods beginning on or after 1 January 2023. The IASB expects to issue the amendments to IFRS 17 during 2020. Earlier application is permitted if both IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments have also been applied. The Company intends to apply the standard on its effective date.

Transition

Retrospective application is required. However, if full retrospective application for a group of insurance contracts is impracticable, then the entity is required to choose either a:

• Modified Retrospective Approach or

• A Fair Value Approach

Presentation and Disclosures

The Company expects that the new standard will result in a change to the accounting policies for insurance contracts together with amendments to presentation and disclosures.

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 17 – Insurance Contracts – (continued)

Impact

The Company has completed the design phase of IFRS 17 implementation in which company has designed and developed new processes and procedures for the business including any system developments required under IFRS 17 and detailed assessment of business requirements. Following are the main areas under design phase and status of the progress made so far by the Company:

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 17 – Insurance Contracts – (continued)

Impact

Following are the main areas under design phase and status of the progress made so far by the Company:

After the design phase, where all the methodologies and policy decisions has been documented and concluded by the Company in last year, the company has started its journey towards executing the fourth phase, i.e., Implementation and Dry Runs and has started the implementation of the IFRS 17 solution, to come up with IFRS 17 numbers by performing the dry runs, on a timely basis. The company was required to prepare the complete set of financial statement under IFRS 17 based on FY 2020 data and provide comparison between IFRS 17 and IFRS 4 under the first dry run, which was due on 30 November 2021. The Company has successfully submitted the results as per the 1st dry run.

Company is also required to produce two more Dry Runs based on 31 December 31 2021 and 30 June 2022 data in 2022 which are due by 31 May 2022 and 29 September 2022.

IFRS 9 – Financial Instruments

This standard was published on 24 July 2014 and has replaced IAS 39. The new standard addresses the following items related to financial instruments:

Classification and measurement

IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost, at fair value through other comprehensive income or at fair value through profit or loss. A financial asset is measured at amortized cost if both:

1. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

2. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding (“SPPI”).

The financial asset is measured at fair value through other comprehensive income, and realized gains or losses are recycled through profit or loss upon sale, if both conditions are met:

1. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and for sale; and

2. the contractual terms of cash flows are SPPI.

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 9 – Financial Instruments – (continued)

Assets not meeting either of these categories are measured at fair value through profit or loss. Additionally, at initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.

For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss.

Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss.

Impairment

The impairment model under IFRS 9 reflects expected credit losses, as opposed to incurred credit losses under IAS 39. Under the IFRS 9 approach, it is no longer necessary for a credit event to have occurred before credit losses are recognized. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition.

Hedge accounting

IFRS 9 introduces new requirements for hedge accounting that align hedge accounting more closely with Risk Management. The requirements establish a more principles-based approach to the general hedge accounting model.

The amendments apply to all hedge accounting with the exception of portfolio fair value hedges of interest rate risk (commonly referred to as “fair value macro hedges”). For these, an entity may continue to apply the hedge accounting requirements currently in IAS 39. This exception was granted largely because the IASB is addressing macro hedge accounting as a separate project.

Effective date

The published effective date of IFRS 9 was 1 January 2018. However, amendments to IFRS 4 – Insurance Contracts: Applying IFRS 9 – Financial Instruments with IFRS 4 – Insurance Contracts, published on 12 September 2016, changes the existing IFRS 4 to allow entities issuing insurance contracts within the scope of IFRS 4 to mitigate certain effects of applying IFRS 9 before the IASB’s new insurance contract standard (IFRS 17 – Insurance Contracts) becomes effective. The amendments introduce two alternative options:

1. apply a temporary exemption from implementing IFRS 9 until the earlier of

1. the effective date of a new insurance contract standard; or

2. annual reporting periods beginning on or after 01 January 2023. On 17 March 2020, the International Accounting Standards Board (IASB) decided to extend the effective date of IFRS 17 and the IFRS 9 temporary exemption in IFRS 4 from January 1, 2021 to January 1, 2023. Additional disclosures related to financial assets are required during the deferral period. This option is only available to entities whose activities are predominantly connected with insurance and have not applied IFRS 9 previously; or,

3. adopt IFRS 9 but, for designated financial assets, remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contract standard is implemented. During the interim period, additional disclosures are required.

The Company has performed a detailed assessment beginning of 1 January 2020 which included below:

1. The carrying amount of the Company’s liabilities arising from contracts within the scope of IFRS 4 (including deposit components or embedded derivatives unbundled from insurance contracts) were compared to the total carrying amount of all its liabilities; and

2. the total carrying amount of the company’s liabilities connected with insurance were compared to the total carrying amount of all its liabilities. Based on these assessments the Company determined that it is eligible for the temporary exemption. Consequently, the Company has decided to defer the implementation of IFRS 9 until the effective date of the new insurance contracts standard. Disclosures related to financial assets required during the deferral period are included in the Company’s financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES – (continued)

2. Standards issued but not yet effective – (continued)

IFRS 9 – Financial Instruments – (continued)

Impact assessment

As at 31 March 2022, the Company has total financial assets (including premiums and reinsurers’ receivable – net) and insurance related assets amounting to SR 522,684 thousand (2021: SR 504,682 thousand) and SR 127,579 thousand (2021: 141,775 thousand), respectively. Currently, financial assets held at amortized cost consist of cash and cash equivalents and certain other receivables. Other financial assets consist of available for sale investments amounting to SR 1,923 thousand (2021: 1,923 thousand). The Company expect to use the FVOCI classification of these financial assets based on the business model of the Company for debt securities and strategic nature of equity investments.

The Company has completed the gap analysis in relation to this standard and has started its journey towards executing the second phase, i.e., Implementation and Dry Runs. The Company, however, does not expect IFRS 9 to have a material impact on the classification and measurement of financial assets.

The Company is required to prepare financial position and income statement under IFRS 9 based on 31 December 2021 and 30 June 2022 data and provide comparison between IFRS 9 and IAS 39 under the first and second dry runs, which are due on 31 May 2022 and 29 September 2022 respectively.

Going Concern

During the period ended, the Company has incurred losses amounting to SR 8.32 million (2021: SR 112 million) that resulted in an increase of accumulated losses and reaching to 66.84% (2021: 63.51%) of its Capital. On 17 March 2022, the Board of Directors recommended restructuring the Company’s capital in line with Article 150 of the new Companies Law to cover the accumulated losses. The Board of Directors recommended to decrease the accumulated losses by netting-off with the share capital of SR 150 million and utilize the entire balance of SR 5 million from the statutory reserve. The Solvency margin of the Company as at 31 March 2022 is 70.74% (2021:73.52%) which is less than 100% as required by SAMA implementing regulations.

The recommendation to reduce the Company's share capital and statutory reserve is subject to the approval of the related official authorities including SAMA and the Capital Market Authority, and the approval of the extraordinary general assembly.

The Company’s management has made an assessment of the Company’s ability to continue as a going concern and is satisfied that it has the resources to continue its business for the foreseeable future. Therefore, the interim condensed financial statements continue to be prepared on the going concern basis.

6. INVESTMENTS

Investments are classified as follows:

a) FVSI

Movement in FVSI investment balance is as follows:

6. INVESTMENTS – (continued)

a) FVSI – (continued)

* Managed at the discretion of a local regulated financial institution (“DPM”).

** NAV: Net Asset Value as announced by asset manager.

b) Available for sale investments

Movement in available-for-sale investment balance is as follows:

1. Unquoted available for sale investment, having a carrying value of SR 1,923 thousand (31 December 2021: SR 1,923 thousand) are measured at cost as its fair value cannot be reliably measured due to the absence of active market and unavailability of observable market prices for similar instruments.

6. INVESTMENTS – (continued)

c) Held to maturity

Movement in held to maturity investment balance is as follows:

5. PREMIUMS AND REINSURERS’ RECEIVABLE – NET

Receivables comprise amounts due from the following:

Movement in allowances for doubtful receivables during the period / year was as follows:

8. PREPAID EXPENSES AND OTHER ASSETS

4. CASH AND CASH EQUIVALENTS AND TERM DEPOSITS

1. Cash and cash equivalents included in the statement of cash flows comprise the following:

2. Term deposits

The term deposits are held with the commercial banks and earn commission at market rates. These term deposits are denominated in Saudi Arabian Riyals and have an original maturity of more than three-months and less than twelve-months. As at 31 March 2022, the deposit carrying commission rates ranging from 0.95% to 4.2% (2021: from 0.95% to 4.2%).

9. STATUTORY DEPOSIT

As required by Saudi Arabian Insurance Regulations, the Company has deposited an amount equivalent to 15% of its paid up capital amount of SR 37.5 million (2021: SR 37.5 million) in a bank designated by the Saudi Central Bank (“SAMA”). Accrued income on this deposit is payable to SAMA amounting to SR 4 million (2021: SR 3.88 million) and this deposit cannot be withdrawn without approval from SAMA.

14. ZAKAT

1. 1. Charge for the period / year

The differences between the financial and the Zakatable results are mainly due to certain adjustments in accordance with the relevant fiscal regulations.

* included a withholding tax payment of SR 4.963 million.

1. 2. Status of zakat assessments

The Company submitted the Zakat declarations for the year ended 31 December 2020 and obtained the necessary Zakat and tax certificate.

The ZATCA has issued assessments for the years from 2006 to 2012 amounting to SR 17.1 million which represents SR 9.3 million as zakat differences and SR 4.4 million as withholding tax differences and SR 3.4 million as withholding tax delay fines. The Company has settled the amount of withholding tax differences amounting to SR 4.4 million and partially settled the delay fines amounting to SR 3.1 million and accordingly issued a letter of guarantee amounting to SR 9.5 million on the favour of ZATCA for the zakat differences for the said years. The case is currently pending with the General Secretariat of the tax committees and their conclusion is awaited.

A settlement request was submitted to ZATCA to pay an amount of SR 3 million to close the case, but the Zakat disputes committee reached to a decision to settle an amount of SR 7.7 million to finalize the assessments for the said years. The ZATCA has rejected the Zakat disputes committee’s decision with the completion of the hearing of the case raised to the Appeal Committee. The management expects that the volume of zakat liability will reach to SR 4.2 million and based on the objection and the information submitted to ZATCA and the committees.

14. ZAKAT – (continued)

b. Status of zakat assessments – (continued)

The ZATCA has issued an assessment for the year 2014, which has requested an additional Zakat liability amounting to SR 1.2 million. The assessment was objected, and the objection was rejected by ZATCA. The case has been escalated to the Preliminary Committee of the Tax Committees and their decision is awaited. The management believes that the volume of zakat liability will reach to SR 1.2 million.

The ZATCA raised an assessment for the years from 2015 to 2018, which has requested an additional Zakat liability amounting to SR 14.1 million, and withholding tax liability for the years from 2014 to 2018, amounting to SR 7 million. During 2021, the Company has settled the withholding tax differences to get the benefits of governmental revised 1st phase amnesty period (full exemption of penalty). The management believes that the volume of zakat liability will reach to SR 14.7 million.

During 2021, the Company received zakat assessments for the year 2019 and 2020 where ZATCA asking additional liability of SR 11.4 million. The Company objected and later reduced to SR 9.1 million. The Company made a payment of SR 2.3 million in order to object according to the zakat regulation. The objection has been referred to the General Secretariat of the Tax Committees and the case is still under discussion.

15. SHARE CAPITAL

The authorized and issued and fully paid share capital of the Company is SR 250 million divided into 25 million ordinary shares of SR 10 each.

7. TECHNICAL RESERVES

1. 1. Net outstanding claims and reserves

Net outstanding claims and reserves comprise of the following:

7. TECHNICAL RESERVES – (continued)

1. 2. Movement in unearned premiums

Movement in unearned premiums comprise of the following:

17. LOSS PER SHARE

Loss per share for the period has been calculated by dividing the net losse after zakat for the period by the weighted average number of issued and outstanding shares for the period.

13. RELATED PARTY TRANSACTIONS AND BALANCES

Related parties represent major shareholders, directors and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Pricing policies and terms of these transactions are approved by the Company’s management and Board of Directors.

The Company has no transactions during the period ended 31 March 2022 and 31 March 2021.

The compensation of key management personnel during the period is as follows:

12. OPERATING SEGMENTS

Operating segments are identified on the basis of internal reports about components of the Company that are regularly reviewed by the Company’s Board of Directors in their function as chief operating decision maker in order to allocate resources to the segments and to assess its performance.

Transactions between the operating segments are on normal commercial terms and conditions. The revenue from external parties reported to the Board is measured in a manner consistent with that in the income statement. Segment assets and liabilities comprise operating assets and liabilities.

There have been no changes to the basis of segmentation or the measurement basis for the segment profit or loss since 31 December 2021.

Segment assets do not include cash and cash equivalents, short term deposits, premiums and reinsurers’ receivable, net, prepayments and other receivables, amount due from a related party, investments, furniture, fittings and office equipment. Accordingly, they are included in unallocated assets. Segment liabilities do not include policyholders’ claims, reinsurance payables, accruals and other payables and employees’ end of service indemnities. Accordingly, they are included in unallocated liabilities.

These unallocated assets and liabilities are not reported to chief operating decision maker under related segments and are monitored on a centralized basis.

The segment information provided to the Company’s Board of Directors for the reportable segments for the Company’s total assets and liabilities at 31 March 2022 and 31 December 2021, its total revenues, expenses, and net income for the three-month and nine-months period then ended, are as follows:

12. OPERATING SEGMENTS – (continued)

12. OPERATING SEGMENTS – (continued)

12. OPERATING SEGMENTS – (continued)