ALLIED COOPERATIVE INSURANCE GROUP (ACIG) (A SAUDI JOINT STOCK COMPANY)

Transcription

1 UNAUDITED INTERIM CONDENSED FINANCIAL INFORMATION AND INDEPENDENT AUDITORS REVIEW REPORT FOR THE THREE-MONTHS AND SIX-MONTHS PERIODS ENDED 30 JUNE 2018

2 UNAUDITED INTERIM CONDENSED FINANCIAL INFORMATION AND INDEPENDENT AUDITORS REVIEW REPORT FOR THE THREE-MONTHS AND SIX-MONTHS PERIODS ENDED 30 JUNE 2018 INDEX PAGE Independent Auditors Review Report 1 Interim Condensed Statement of Financial Position 2 Interim Condensed Statement of Income 3 Interim Condensed Statement of Comprehensive Income 4 Interim Condensed Statement of Changes in Equity 5 Interim Condensed Statement of Cash flows 6 Notes to the Interim Condensed Financial Information 7 31

3 IBDO olsy!..., cj_;"w1 ~.JfoJ.lI Dr. Mohamed AI-Amri & Co. Crowe Horwath, AlAzem & AlSudalry Co. CPA's & Consultants Member Crowe Horwath International INDEPENDENTAUDITORS' REPORTON REVIEWOF INTERIMCONDENSEDFINANCIALINFORMATIONTO THE SHAREHOLDERSOF ALLIED COOPERATIVEINSURANCEGROUP(ACIG) (a Saudi Joint Stock Company) INTRODUCTION We have reviewed the accompanying interim statement of financial position of Allied Cooperative Insurance Group (A Saudi Joint Stock Company) (the 'Company') as of 30 June 2018 and the related interim condensed statements of income and comprehensive income for the fhree-months and six-months periods then ended and changes in shareholders' equity and cash flows for the six-months period then ended, and a summary of significant accounting policies and other selected explanatory notes from 1 to 19. Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Accounting Standard 34 - 'Interim Financial Reporting' (las 34) as modified by Saudi Arabian Monetary Authority ('SAMA') for the accounting for zakat and income tax. Our responsibility is to express a conclusion on this interim condensed financial information based on our review. SCOPE OF REVIEW We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. A review of interim condensed financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing as endorsed in the Kingdom of Saudi Arabia and consequently does not enable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express an audit opinion. CONCLUSION Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information is not prepared, in all material respects, in accordance with las 34 as modified by SAMA for the accounting for zakat and income tax. Dr. Mohamed AI Amri & Co. P.O Box 784 Jeddah Kingdom of Saudi Arabia /~~ Jamal M. AI Amrl Certified Public Accountant Registration No. 331 AIAzem & AISudairy Certified Public Accountants P. O. Box Riyadh Kingdom of Saudi Arabia Abdullah M. AIAzem Cert.ifled Public Accountant License No August Dhul Qa'dah 1439H Jeddah, Kingdom of Saudi Arabia

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9 FOR THE THREE-MONTHS AND SIX-MONTHS PERIODS ENDED 30 JUNE ORGANIZATION AND PRINCIPAL ACTIVITIES Allied Cooperative Insurance Group ( the Company ) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under Commercial Registration No dated 9 Shabaan 1428H, corresponding to 22 August Registered Office address of the Company was Al Ruwais District, P. O. Box 7076, Jeddah 21462, Kingdom of Saudi Arabia. As per the shareholders resolution dated 13 May 2014, the registered office address of the Company has changed from Jeddah to Al Malka District P.O. Box Riyadh 11511, Kingdom of Saudi Arabia. The legal formalities to change the registered office address of the Company have been completed during the year 2014 and accordingly new Commercial Registration No has been obtained and Articles of Association has been amended. The activities of the Company are to transact cooperative insurance and related activities in the Kingdom of Saudi Arabia. On 4 April 2009, the Company received a license from the Saudi Arabian Monetary Authority ( SAMA ) to engage in insurance in Saudi Arabia. The Company commenced its commercial on 1 July The Company was listed on the Saudi Stock Exchange (Tadawul) on 27 August There are 3 registered branches as set out below: Commercial Registration Branch Number Place of issuance Date Branch of ACIG Al Khobar 12 Ramadan 1439 H Branch of ACIG Khamis Mushayt 12 Ramadan 1439 H Branch of ACIG Jeddah 12 Ramadan 1439 H The Board of Directors on 7 March 2017 approved the study of a possibility of merger with Malath Cooperative Insurance Company (Malath). During the quarter ended 31 March 2018, the Board approved to extend the previously announced period by six months to sign a non-binding memorandum of understanding to conduct the technical, financial and legal studies necessary for the merger process and to present the results of the studies to the Board of Directors of the two companies. However, on 12 July 2018, the Board of Directors of ACIG decided not to continue the merger due to the failure to reach a preliminary agreement with Malath regarding the methodology used in evaluating the two companies. 2. BASIS OF PREPARATION Statement of Compliance The interim condensed financial information of the Company has been prepared in accordance with International Accounting Standard (IAS) 34 - Interim Financial Reporting as modified by the Saudi Arabian Monetary Authority ( SAMA ) for the accounting of zakat and income tax, which requires, adoption of all IFRS as issued by the International Accounting Standards Board ( IASB ) except for the application of International Accounting Standard (IAS) 12 Income Taxes and IFRIC 21 - Levies so far as these relate to zakat and income tax. As per the SAMA Circular no dated 11 April 2017 and subsequent amendments through certain clarifications relating to the accounting for zakat and income tax ( SAMA Circular ), the zakat and income tax are to be accrued on a quarterly basis through shareholders equity under retained earnings. These interim condensed financial information do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company s annual financial statements as at and for the year ended 31 December The Company follows a fiscal year ending 31 December. The interim condensed financial information are expressed in Saudi Riyals, being the functional currency of the Company and have been rounded off to the nearest thousand, unless otherwise specified. The preparation of interim condensed financial statements in conformity with International Financial Reporting Standards ( IFRS ) requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the interim condensed financial information and the reported amounts of revenues and expenses during the reporting period. Although these estimates and judgments are based on management s best knowledge of current events and actions, actual results ultimately may differ from those estimates. 7

10 FOR THE THREE-MONTHS AND SIX-MONTHS PERIODS ENDED 30 JUNE 2018 (continued) 2. BASIS OF PREPARATION (continued) Basis of presentation The interim condensed financial information is prepared under the going concern basis and the historical cost convention, except for the measurement at fair value of available-for-sale investments. The Company s interim statement of financial position is not presented using a current/non-current classification. However, the following balances would generally be classified as current: cash and cash equivalents, term deposits, premiums and reinsurers receivable - net, reinsurers share of unearned premium, reinsurers share of outstanding claims, reinsurers share of claims incurred but not reported, deferred policy acquisitions cost, due from related parties, prepaid expenses and other assets, policyholders claim payable, accrued and other liabilities, unearned premiums, unearned reinsurance commission, outstanding claims, claims incurred but not reported, other technical reserves, surplus distribution payable and Zakat and income tax. The following balances would generally be classified as non-current: end-of-service indemnities, investments, statutory deposit, accrued income on statutory deposit and property and equipment. As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for Insurance Operations and Operations and presents the financial information accordingly. Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint is determined and approved by the management and the Board of Directors. The interim statement of financial position, statements of income and statement of comprehensive income and cash flows of the insurance and shareholders which are presented on Note No. 16 of the financial information have been provided as supplementary financial information and to comply with the requirements of the guidelines issued by SAMA implementing regulations. SAMA implementing regulations requires the clear segregation of the assets, liabilities, income and expenses of the insurance and the shareholders. Accordingly, the interim condensed statements of financial position, statements of income, comprehensive income and cash flows prepared for the insurance and shareholders as referred to above, reflect only the assets, liabilities, income, expenses and comprehensive gains or losses of the respective. In preparing the Company-level financial information in compliance with IFRS, the balances and transactions of the insurance are amalgamated and combined with those of the shareholders. Interoperation balances, transactions and unrealised gains or losses, if any, are eliminated in full during amalgamation. The accounting policies adopted for the insurance and shareholders are uniform for like transactions and events in similar circumstances. The inclusion of separate information of the insurance with the financial information of the Company in the interim condensed statement of financial position, the statement of income, statement of comprehensive income, cash flows as well as certain relevant notes to the financial information represents additional supplementary information required as required by the implementing regulations. As per the by-laws of the Company, surplus arising from the Insurance Operations is distributed as follows: Transfer to 90% Transfer to Policyholders 10% 100% In case of deficit, the whole deficit will be transferred to. 8

11 FOR THE THREE-MONTHS AND SIX-MONTHS PERIODS ENDED 30 JUNE 2018 (continued) 2. BASIS OF PREPARATION (continued) New IFRS, International Financial Reporting and Interpretations Committee s interpretations (IFRIC) and amendments thereof, adopted by the Company The Company has adopted the following amendments and revisions to existing standards, which were issued by the International Accounting Standards Board (IASB): Standard/ Interpretation Description Effective date IFRS 15 Revenue from Contracts with Customers 1 January 2018 IFRS 2 Amendments to IFRS 2 Classification and Measurement of share-based 1 January 2018 Payment transactions. IAS 40 Amendments to IAS 40 Transfers of investment property. 1 January 2018 IFRIC 22 Foreign Currency Transactions and Advance consideration. 1 January 2018 IFRS 1 and IAS 28 Annual Improvements 2016 to IFRS cycle. 1 January 2018 The adoption of the relevant new and amended standards and interpretations applicable to the Company did not have any significant impact on these interim condensed financial information. Standards issued but not yet effective Standards issued but not yet effective up to the date of issuance of the Company s interim condensed financial information 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. IFRS 16 - Leases, applicable for the period beginning on or after 1 January The new standard eliminates the current dual accounting model for lessees under IAS 17, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, IFRS 16 proposes on-balance sheet accounting model. The Company has decided not to early adopt this new standard. IFRS 17- Insurance Contracts, applicable for the period beginning on or after 1 January 2021, and will supersede IFRS 4 Insurance Contracts. Earlier adoption is permitted if both IFRS 15 Revenue form Contracts with Customers and IFRS 9 Financial Instruments have also been applied. The Company has decided not to early adopt this new standard. IFRS 9 Financial Instruments, in July 2014, the IASB published IFRS 9 Financial Instruments which will replace IAS 39 Financial Instruments: Recognition and Measurement. The standard incorporates new classification and measurements requirements for financial assets, the introduction of an expected credit loss impairment model which will replace the incurred loss model of IAS 39, and new hedge accounting requirements. Under IFRS 9, all financial assets will be measured at either amortised cost or fair value. The basis of classification will depend on the business model and the contractual cash flow characteristics of the financial assets. The standard retains most of IAS 39 s requirements for financial liabilities except for those designated at fair value through profit or loss whereby that part of the fair value changes attributable to own credit is to be recognised in other comprehensive income instead of the income statement. The hedge accounting requirements are more closely aligned with risk management practices and follow a more principle based approach. In September 2016, the IASB published amendments to IFRS 4 Insurance Contracts that address the accounting consequences of the application of IFRS 9 to insurers prior to the publication of the forthcoming accounting standard for insurance contracts. The amendments introduce two options for insurers: the deferral approach and the overlay approach. The deferral approach provides an entity, if eligible, with a temporary exemption from applying IFRS 9 until the earlier of the effective date of a new insurance contract standard or 2021.The overlay approach allows an entity to remove from profit or loss the effects of some of the accounting mismatches that may occur before the new insurance contracts standard is applied. The Company has decided to defer the implementation of IFRS 9. The Company believes that IFRS 9 would have an impact on the classification of financial instruments required to be measured mandatorily at fair value. At present it is not possible to provide a reasonable estimate of the effects of application of this new standard as the Company is yet to perform a detailed review. 9

12 3. CASH AND CASH EQUIVALENTS 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Insurance Cash in hand and at banks 66,422 44,283 66,422 44,283 Cash in hand and at banks 19,032 33,315 19,032 33,315 Cash at banks are placed with counterparties who have good credit ratings. The carrying amounts disclosed above reasonably approximate fair value at the reporting date. 4. TERM DEPOSITS 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Insurance Operations Term deposits 134, ,249 Operations Term deposits 50,369 37,751 The term deposits are held with the commercial banks. These term deposits are denominated in Saudi Arabian Riyals and have been an original maturity of more than three months and less than twelve months. The carrying amounts of these term deposits reasonably approximate their fair values at the reporting date. 10

13 5. PREMIUMS AND REINSURERS RECEIVABLE, NET 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Due from policyholders 83,728 60,263 Due from policyholders related parties 2,116 2,234 Due from Brokers and agents 28,091 24,642 Receivables from reinsurers 4,579 5,592 Provision for doubtful debts (7,043) (5,806) 111,471 86,925 Movement in provision for doubtful debts is as follows: 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Balance at the beginning of the period / year 5,806 6,214 Release of provision during the period / year - (408) Additional provision during the period / year 1,237 - Balance at the end of the period / year 7,043 5, AVAILABLE-FOR-SALE INVESTMENTS 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Investment in sukuk 25,000 25,000 Quoted securities 23,848 16,800 Unquoted securities 1,923 1,923 50,771 43,723 Balance at the beginning of the period Net movement during the period Change in fair value for the period Balance at the end of the period As at 30 June 2018 (Unaudited) SR 000 SR 000 SR 000 SR 000 Investment in sukuk 25, ,000 Quoted securities 16,800 7, ,848 Investment in Najm for Insurance Services Company 1, ,923 43,723 7, ,771 Balance at the beginning of the year Net movement during the year Change in fair value for the year Balance at the end of the year As at 31 December 2017 (Audited) SR 000 SR 000 SR 000 SR 000 Investment in sukuk 25, ,000 Quoted securities 20,759 (773) (3,186) 16,800 Investment in Najm for Insurance Services Company 1, ,923 47,682 (773) (3,186) 43,723 11

14 6. AVAILABLE-FOR-SALE INVESTMENTS (continued) Investment in Najm for Insurance Services Company are held at cost and is classified under level 3. Investments in mutual funds and GACA Sukuk are classified under level 2. There is no movement in levels of investments. 7. STATUTORY DEPOSIT 30 June December 2017 (Unaudited) (Audited) Operations SR 000 SR 000 Statutory deposit 20,000 20,000 As required by Saudi Arabian Insurance Regulations, the Company deposited 10% of its paid up capital, amounting to SR 20 million in a bank designated by the Saudi Arabian Monetary Authority (SAMA). The Company cannot withdraw this deposit without SAMA s approval. 8. UNEARNED PREMIUMS, NET 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Unearned premiums 246, ,754 Reinsurance share of unearned premiums (24,707) (29,476) 221, , TECHNICAL RESERVES, NET 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Outstanding claims 38,118 37,425 Claims incurred but not reported 54,176 50,683 Other technical reserves ,354 88,168 Less: Reinsurers share of outstanding claims (9,512) (15,574) Less: Reinsurers share of claims incurred but not reported (6,525) (6,599) 76,317 65,995 12

15 10. ZAKAT AND INCOME TAX Zakat and Income Tax The Zakat and income tax payable by the Company has been calculated based on the best estimates of the management. The movement in the Zakat payable is as follows: 30 June 2018 (Unaudited) SR December 2017 (Audited) SR 000 Balance at the beginning of the period / year 2,128 1,510 Charge for the current period / year 3,546 2,148 Paid during the period / year (2,781) (1,530) Balance at the end of the period / year 2,893 2,128 The differences between the financial and the zakatable results are mainly due to certain adjustments in accordance with the relevant fiscal regulations. Zakat base has been computed based on the Company s understanding of the Zakat regulations enforced in the Kingdom of Saudi Arabia. The Zakat regulations in Saudi Arabia are subject to different interpretations, and the assessments to be raised by the GAZT could be different from the declarations filed by the Company. Income Tax Foreign shareholder, being Islamic Development Bank (IDB) is exempted from income tax. Status of assessment: Zakat and income tax returns have been filed with the General Authority of Zakat and Tax ( GAZT ) for the years ended up to 31 December Final certificate has been received from GAZT for the year ended 31 December However, GAZT has raised an additional assessment in respect of the returns filed for the years ended 31 December 2008, 2009 and 2010 amounting to SR 1.86 million which has been paid. 11. SHARE CAPITAL The authorized, issued and paid up share capital of the Company is SR 200 million at period end consisting of 20 million shares of SR 10 each. 30 June December 2017 (Unaudited) (Audited) % holding SR 000 % holding SR 000 Founding shareholders 40 80, ,000 General public , ,000 Balance at the end of the period / year , ,000 13

16 12. BASIC AND DILUTED EARNINGS PER SHARE Earnings per share for the period has been calculated by dividing the net income for the period by the weighted average number of issued and outstanding shares for the period. 13. STATUTORY RESERVE As required by Saudi Arabian Insurance Regulations, 20% of the net shareholders income shall be set aside as a statutory reserve until this reserve amounts to 100% of paid capital. No appropriation has been made as the Company has accumulated losses at the end of the period. 14. BALANCES AND TRANSACTIONS WITH RELATED PARTIES Major related party transactions during the period and the related balances at the end of the period / year are as follows: Related party Nature of transaction Amount of transactions six-months period ended Closing balance Receivable / (Payable) 30 June June June December 2017 (Unaudited) (Unaudited) (Unaudited) (Audited) SR 000 SR 000 SR 000 SR 000 Abiat (Affiliate) Premiums written Claims paid 38 - (19) - Fuji Saudi Arabia (Affiliate) Premiums written GEEC (Affiliate) Claims paid (102) - Premiums written Claims paid (26) - Mayar Holding (Affiliate) Premiums written Saudi Drip (Affiliate) Claims paid 42 - (11) - Premiums written (12) Claims paid Taya Feed Mill Factory (Affiliate) Premiums written Claims paid 21 - (11) - Taya Real Estate (Affiliate) Premiums written Claims paid (5) - Taya Holding (Affiliate) Premiums written GCP Co. (Affiliate) Claims paid (52) - Premiums written Claims paid 50 - (4) - Al Huda Charity Trust (Affiliate) Premiums written Claims paid 6 - (3) - 14

17 Saudi Wings Co. (Affiliate) Premiums written Claims paid Taya Agriculture Co. (Affiliate) Premiums written Bakri and sons Holding Co. (Affiliate) Saudi Drip Irrigation system Co. (Affiliate) Red sea Marine services Co. (Affiliate) Solaiman A.El Khereiji consultant (SAK) (Affiliate) M/s Arabian Gulf Co. For Maintenance & Contracting (Affiliate) Abdullah Al Rayes EST (Affiliate) M/s Al Bihar International Company Limited (Affiliate) Claims paid 71 - (23) - Premiums written Claims paid - 15 (200) (200) Premiums written Claims paid 69 7 (12) - Premiums written Claims paid Premiums written Claims paid Premiums written Claims paid Premiums Written Claims paid Premiums written Claims paid Board and audit committee Meetings fee 375 1, Key management personnel Short term benefits 3,092 2, Long term benefits (2,080) (1,809) 15

18 15. SEGMENTAL INFORMATION Consistent with the Company s internal reporting process, operating segments have been approved by the management in respect of the Company s activities, assets and liabilities as stated below. Segment results do not include general and administrative expenses, provision for doubtful debts and other income. Segment assets do not include cash and cash equivalents, investments, prepayments and other receivables, and property and equipment, net. Segment liabilities do not include reinsurance payables, accrued expenses and other liabilities, due to shareholders and employees terminal benefits. 16

19 15. SEGMENTAL INFORMATION - (continued) For three-months period ended 30 June 2018 (Unaudited) Medical Motor General Accident Others Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 38,395 71,164 1,548 3, ,118 Less: Premiums ceded - Local (764) - (21) (340) (1,125) - Foreign (5,571) (84) (448) (2,265) (8,368) Excess of loss premiums - (1,350) (240) (88) (1,678) Net written premiums 32,060 69, ,947 Changes in net unearned premiums (5,513) 3,716 1,329 4 (464) Net premiums earned 26,547 73,446 2, ,483 Other underwriting Income - 2, ,544 Reinsurance commission earned Net revenue 26,547 75,990 2, ,714 Underwriting Costs and expenses Gross claims paid and loss adjustment expenses 25,458 50, ,985 Less: Reinsurers share (8,536) (3,569) - (52) (12,157) Net claims paid 16,922 46, ,828 Changes in outstanding claims, net 2, ,125 Changes in incurred but not reported, net 1,292 1, ,042 Net claims incurred 20,251 49, ,995 Policy acquisition cost 2,472 4, ,920 Other underwriting expense Total underwriting costs and expenses 23,068 53, ,607 Net underwriting income 3,479 22,502 1, ,107 General and administrative expenses (22,815) Realized gain on available for sale investments 500 Allowance for doubtful debts (576) Investment income 1,132 Impairment on available for sale investments (2,797) Total other operating (expenses) (24,556) Total Net income for the period 3,551 17

20 15. SEGMENTAL INFORMATION - (continued) For three-months period ended 30 June 2017 (Unaudited) Medical Motor General Accident Others Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 31,561 62,154 3,763 4, ,296 Less: Premiums ceded - Local (757) - (15) (377) (1,149) - Foreign (7,131) - (1,041) (4,157) (12,329) Excess of loss premiums - (850) (156) (95) (1,101) Net written premiums 23,673 61,304 2, ,717 Changes in net unearned premiums 6,730 (7,752) 483 (103) (642) Net premiums earned 30,403 53,552 3, ,075 Other underwriting Income 977 2, ,315 Reinsurance commission earned Net revenue 31,380 55,892 3, ,125 Underwriting Costs and expenses Gross claims paid and loss adjustment expenses 25,766 45,837 1, ,924 Less: Reinsurers share (8,191) (222) (1,016) (16) (9,445) Net claims paid 17,575 45, ,479 Changes in outstanding claims, net (1,123) (165) (910) Changes in incurred but not reported, net (44) (3,301) - - (3,345) Net claims incurred 16,408 42, ,224 Policy acquisition cost 3,030 4, ,818 Other underwriting expense (150) Total underwriting costs and expenses 19,288 46, ,161 Net underwriting (loss)/income 12,092 9,086 2, ,964 General and administrative expenses (18,257) Realized gain on available for sale investments 1,557 Allowance for doubtful debts (794) Investment income 602 Other income 144 Total other operating (expenses) (16,748) Total Net income for the period 7,216 18

21 15. SEGMENTAL INFORMATION - (continued) For six-months period ended 30 June 2018 (Unaudited) Medical Motor General Accident Others Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 79, ,538 4,938 4, ,081 Less: Premiums ceded - Local (1,653) - (31) (498) (2,182) - Foreign (11,668) (84) (1,958) (3,305) (17,015) Excess of loss premiums - (2,700) (479) (176) (3,355) Net written premiums 66, ,754 2, ,529 Changes in net unearned premiums (17,495) 4,347 2,020 (179) (11,307) Net premiums earned 49, ,101 4, ,222 Other underwriting Income 2,416 5, ,499 Reinsurance commission earned ,257 Total revenues 51, ,188 4,785 1, ,978 Underwriting Costs and expenses Gross claims paid and loss adjustment expenses 48, , ,314 Less: Reinsurers share (15,697) (3,754) (12) (326) (19,789) Net claims paid 33,076 98, ,525 Changes in outstanding claims, net 4,991 (1,258) 635 (4) 4,364 Changes in incurred but not reported, net 1,330 2, ,567 Net claims incurred 39,397 99, ,456 Policy acquisition cost 4,762 8, ,118 Other underwriting expense Total underwriting costs and expenses 44, ,255 1, ,565 Net underwriting income 6,972 38,933 3,447 1,061 50,413 General and administrative expenses (43,433) Realized gain on available for sale investments 1,076 Allowance for doubtful debts (1,237) Investment income 2,165 Impairment on available for sale investments (2,797) Other income 6 Total other operating expenses (44,220) Total Net income for the period 6,193 19

22 15. SEGMENTAL INFORMATION - (continued) For six-months period ended 30 June 2017 (Unaudited) Medical Motor General Accident Others Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 55, ,585 10,801 8, ,069 Less: Premiums ceded - Local (1,672) - (22) (570) (2,264) - Foreign (12,813) (106) (4,126) (7,712) (24,757) Excess of loss premiums - (1,700) (312) (190) (2,202) Net written premiums 41, ,779 6, ,846 Changes in net unearned premiums 23,822 8,719 (836) (99) 31,606 Net premiums earned 65, ,498 5, ,452 Other underwriting Income 976 3, ,938 Reinsurance commission earned ,551 Total revenues 66, ,468 6,139 1, ,941 Underwriting Costs and expenses Gross claims paid and loss adjustment expenses 51, ,676 1, ,478 Less: Reinsurers share (16,196) (222) (1,024) (33) (17,475) Net claims paid 35, , (2) 143,003 Changes in outstanding claims, net (709) 4, Changes in incurred but not reported, net (44) (15,797) - - (15,841) Net claims incurred 34,462 95, ,099 Policy acquisition cost 6,556 9, ,990 Other underwriting expense ,053 Total underwriting costs and expenses 41, ,950 1, ,142 Net underwriting income 24,710 13,518 4, ,799 General and administrative expenses (35,958) Realized gain on available for sale investments 2,758 Release of doubtful debts 419 Investment income 1,359 Other income 185 Total other operating (expenses) (31,237) Total Net income for the period 12,562 20

23 15. SEGMENTAL INFORMATION - (continued) At 30 June 2018 (Unaudited) Medical Motor General accident Others Total Insurance operation Assets Cash and cash equivalents ,422 19,032 85,454 Term Deposits ,631 50, ,000 Premiums and reinsurers receivable - net , ,471 Reinsurers share of unearned premiums 11,926-2,850 9,931 24,707-24,707 Reinsurers share of outstanding claims 4,835 2,324 1, ,512-9,512 Reinsurers share of claims Incurred but not reported 2,738-1,574 2,213 6,525-6,525 Deferred policy acquisition costs 5,058 6,205 1, ,619-12,619 Unallocated assets ,475 78, ,486 Total Assets 24,557 8,529 7,239 13, , , ,774 Liabilities Policyholders claims payable ,969-6,969 Reinsurers' balances payable ,537-16,537 Unearned reinsurance commission Unearned premiums 68, ,252 17,550 10, , ,293 Other technical reserves Outstanding claims 17,430 15,582 4, ,118-38,118 Claims incurred but not reported 9,587 39,383 2,852 2,354 54,176-54,176 Unallocated liabilities and equity , , ,022 Total liabilities 95, ,217 25,088 13, , , ,774 Total 21

24 15. SEGMENTAL INFORMATION - (continued) As at 31 December 2017 (Audited) Medical Motor General accident Others Total Insurance operation Assets Cash and cash equivalents ,283 33,315 77,598 Term deposits ,249 37, ,000 Premiums and reinsurers receivable - net 31,670 30, ,700 86,925-86,925 Reinsurers share of unearned premiums 11, ,065 14,437 29,476-29,476 Reinsurers share of outstanding claims 3,816 4,228 1,632 5,898 15,574-15,574 Reinsurers share of claims Incurred but not reported 2,812-1,574 2,213 6,599-6,599 Deferred policy acquisition costs 3,964 9,884 1, ,336-15,336 Unallocated assets ,887 70, ,289 Total Assets 54,216 44,372 7,803 47, , , ,797 Liabilities Policyholders claims payable ,517-2,517 Reinsurers' balances payable ,731-23,731 Unearned reinsurance commission Unearned premiums 51, ,618 19,786 14, , ,754 Other technical reserves Outstanding claims 11,420 16,352 3,591 6,062 37,425-37,425 Claims incurred but not reported 8,331 37,146 2,852 2,354 50,683-50,683 Unallocated liabilities and equity , , ,807 Total liabilities 71, ,120 26,572 23, , , ,797 Total 22

25 16. SUPPLEMENTARY INFORMATION Interim condensed statement of financial position Insurance 30 June 2018 (Unaudited) 31 December 2017 (Audited) Total Insurance Total Assets Cash and cash equivalents 66,422 19,032 85,454 44,283 33,315 77,598 Term deposits 134,631 50, , ,249 37, ,000 Premiums and reinsurers receivable - net 111, ,471 86,925-86,925 Reinsurers share of unearned premium 24,707-24,707 29,476-29,476 Reinsurers share of outstanding claims 9,512-9,512 15,574-15,574 Reinsurers share of claims Incurred but not reported 6,525-6,525 6,599-6,599 Deferred policy acquisition cost 12,619-12,619 15,336-15,336 Due from related party 1,805-1,805 2,247-2,247 Prepaid expenses and other receivables 28,560 5,983 34,543 33,230 5,527 38,757 Property and equipment, net 7,110-7,110 7,410-7,410 Available for sale Investments - 50,771 50,771-43,723 43,723 Accrued income on statutory deposit - 1,257 1,257-1,152 1,152 Statutory deposit - 20,000 20,000-20,000 20,000 TOTAL ASSETS 403, , , , , ,797 Liabilities Policyholders claims payable 6,969-6,969 2,517-2,517 Accrued and other payables 26, ,706 20, ,698 Reinsurers' balances payable 16,537-16,537 23,731-23,731 Unearned reinsurance commission income Unearned premiums 246, , , ,754 Other technical reserves Outstanding claims 38,118-38,118 37,425-37,425 Claims incurred but not reported 54,176-54,176 50,683-50,683 Employees terminal benefits 9,147-9,147 8,287-8,287 Surplus distribution payable 5,460-5,460 4,608-4,608 Zakat and income tax - 2,893 2,893-2,128 2,128 Accrued commission on statutory deposit payable to SAMA - 1,257 1,257-1,152 1,152 TOTAL LIABILITIES 403,362 4, , ,329 3, ,863 23

26 16. SUPPLEMENTARY INFORMATION (continued) Insurance 30 June 2018 (Unaudited) 31 December 2017 (Audited) Total Insurance SHAREHOLDERS EQUITY Share capital - 200, , , ,000 Accumulated losses - (56,032) (56,032) - (57,827) (57,827) Fair value reserve on investments - (1,409) (1,409) - (4,239) (4,239) Total shareholders equity - 142, , , ,934 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 403, , , , , ,797 Total 24

27 16. SUPPLEMENTARY INFORMATION (continued) Interim condensed statement of income For three-months period ended Insurance Insurance 30 June (Unaudited) Total Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 114, , , ,296 Less: Premiums ceded - Local (1,126) - (1,126) (1,149) - (1,149) - Foreign (8,367) - (8,367) (12,329) - (12,329) Excess of loss premiums (1,678) - (1,678) (1,101) - (1,101) Net written premiums 102, ,947 87,717-87,717 Changes in net unearned premiums (464) - (464) (642) - (642) Net premiums earned 102, ,483 87,075-87,075 Other underwriting Income 2,544-2,544 3,315-3,315 Reinsurance commission earned Total revenues 105, ,714 91,125-91,125 Underwriting Costs and expenses Gross claims paid 75,985-75,985 72,924-72,924 Less: Reinsurers share of claims paid (12,157) - (12,157) (9,445) - (9,445) Net claims and other benefits paid 63,828-63,828 63,479-63,479 Changes in outstanding claims, net 3,125-3,125 (910) - (910) Changes in incurred but not reported, net 3,042-3,042 (3,345) - (3,345) Net claims and other benefits incurred 69,995-69,995 59,224-59,224 Policy acquisition cost 6,920-6,920 7,818-7,818 Other underwriting expense Total underwriting costs and expenses 77,607-77,607 67,161-67,161 Net underwriting income 28,107-28,107 23,964-23,964 General and administrative expenses (22,314) (501) (22,815) (17,746) (511) (18,257) Realized gain on available for sale investments ,557 1,557 Allowance for doubtful debts (576) - (576) (794) - (794) Investment income , Impairment on available for sale investments - (2,797) (2,797) Other income Total other operating (expenses) / income (21,954) (2,602) (24,556) (17,933) 1,185 (16,748) Net Surplus 6,153 (2,602) 3,551 6,031 1,185 7,216 Surplus transferred to Shareholders (5,538) 5,538 - (5,428) 5,428 - Net result after transfer of surplus to shareholders 615 2,936 3, ,613 7,216 25

28 16. SUPPLEMENTARY INFORMATION (continued) For three-months period ended 30 June (Unaudited) Insurance Total Insurance Total Earnings per share (Expressed in SAR per share) Basic EPS Interim statement of comprehensive income Insurance Total Insurance Total SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 absorption of deficit/ (Surplus transferred to Shareholders) 615 2,936 3, ,613 7,216 Other comprehensive income/(loss) Items that are or may be reclassified to consolidated statement of income in subsequent periods: Impairment on available for sale investments - 2,797 2, Net change in fair value of available for sale investments (582) (582) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 615 5,750 6, ,031 6,634 26

29 16. SUPPLEMENTARY INFORMATION (continued) Interim condensed statement of income For six-months period ended Insurance Insurance 30 June (Unaudited) Total Total Revenue SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 Gross premiums written 230, , , ,069 Less: Premiums ceded - Local (2,182) - (2,182) (2,264) - (2,264) - Foreign (17,015) - (17,015) (24,757) - (24,757) Excess of loss premiums (3,355) - (3,355) (2,202) - (2,202) Net written premiums 207, , , ,846 Changes in net unearned premiums (11,307) - (11,307) 31,606-31,606 Net premiums earned 196, , , ,452 Other underwriting Income 7,499-7,499 4,938-4,938 Reinsurance commission earned 1,257-1,257 1,551-1,551 Total revenues 204, , , ,941 Underwriting Costs and expenses Gross claims paid 151, , , ,478 Less: Reinsurers share of claims paid (19,789) - (19,789) (17,475) - (17,475) Net claims and other benefits paid 131, , , ,003 Changes in outstanding claims, net 4,364-4,364 3,937-3,937 Changes in incurred but not reported, net 3,567-3,567 (15,841) - (15,841) Net claims and other benefits incurred 139, , , ,099 Policy acquisition cost 14,118-14,118 16,990-16,990 Other underwriting expense ,053-1,053 Total underwriting costs and expenses 154, , , ,142 Net underwriting income 50,413-50,413 43,799-43,799 General and administrative expenses (42,452) (981) (43,433) (34,985) (973) (35,958) Realized gain on available for sale investments , Release of doubtful debts (1,237) - (1,237) Investment income 1, ,165 1, ,359 Impairment on available for sale investments - (2,797) (2,797) Other income Total other operating (expenses) / income (41,893) (2,327) (44,220) (33,352) 2,115 (31,237) Net Surplus 8,520 (2,327) 6,193 10,447 2,115 12,562 Surplus transferred to Shareholders (7,668) 7,668 - (9,402) 9,402 - Net result after transfer of surplus to shareholders 852 5,341 6,193 1,045 11,517 12,562 27

30 16. SUPPLEMENTARY INFORMATION (continued) For six-months period ended 30 June (Unaudited) Insurance Total Insurance Total Earnings per share (Expressed in SAR per share) Basic EPS Interim condensed statement of comprehensive income Insurance Total Insurance Total SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 absorption of deficit/ (Surplus transferred to Shareholders) 852 5,341 6,193 1,045 11,517 12,562 Other comprehensive income/(loss) Items that are or may be reclassified to consolidated statement of income in subsequent periods: Impairment on available for sale investment - 2,797 2,797 Net change in fair value of available for sale investments (1,935) (1,935) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 852 8,171 9,023 1,045 9,582 10,627 28

31 16. SUPPLEMENTARY INFORMATION (continued) Interim condensed statement of cash flow For six-months period ended 30 June (Unaudited) Insurance operati ons Total Insurance CASH FLOWS FROM OPERATING ACTIVITIES SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 Net profit for the period 852 5,341 6,193 1,045 11,517 12,562 Adjustments for non-cash items: Depreciation 1,185-1,185 1,316-1,316 Employees terminal benefits 1,118-1, Allowance for/(reversal of) doubtful debts 1,237-1,237 (419) - (419) Impairment on available for sale investments - 2,797 2,797 Realized gain on available for sale investments - (1,076) (1,076) - (2,758) (2,758) Changes in operating assets and liabilities: Premiums and reinsurers receivable (25,783) - (25,783) 1,641-1,641 Reinsurers share of unearned premiums 4,769-4,769 3,424-3,424 Reinsurers share of outstanding claims 6,063-6,063 (1,375) - (1,375) Reinsurers share of claims Incurred but not reported (1) - (1) Deferred policy acquisition cost 2,717-2,717 3,434-3,434 Due from related party (1,147) - (1,147) Prepayments and other receivables 4,670 (456) 4,214 (2,778) (343) (3,121) Policyholders claim payable 4,452-4, Due to related party Reinsurance payable (7,194) - (7,194) (4,636) - (4,636) Unearned commission income (221) - (221) Unearned premiums 6,539-6,539 (35,030) - (35,030) Outstanding claims ,306-5,306 Claims incurred but not reported 3,493-3,493 (15,840) - (15,840) Accrued and other payables 5, ,008 3,818 (122) 3,696 10,664 7,055 17,719 (39,935) 8,294 (31,641) End-of-service indemnities paid (258) - (258) (134) - (134) Surplus paid to policy holders (1,087) - (1,087) Zakat and income tax paid - (2,781) (2,781) - (1,530) (1,530) Net cash (used in) /generated from operating activities 10,406 4,274 14,680 (41,156) 6,764 (34,392) Total 29

32 16. SUPPLEMENTARY INFORMATION (continued) For six-months period ended 30 June (Unaudited) Insurance operati ons Total Insurance Total SR 000 SR 000 SR 000 SR 000 SR 000 SR 000 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (887) - (887) (842) - (842) Proceed from sale of property and equipment Purchases of available for sale investments - (7,128) (7,128) - (6,126) (6,126) Proceed from sale of available for sale investments - 1,189 1,189-4,877 4,877 Sale/(Purchase) of investment 12,617 (12,617) Net cash generated from/(used in) investing activities 11,732 (18,556) (6,824) (842) (1,249) (2,091) Net changes in cash and cash equivalents 22,138 (14,282) 7,856 (41,998) 5,515 (36,483) Cash and cash equivalents at the beginning of the period 44,283 33,315 77, ,500 55, ,535 Cash and cash equivalents at the end of the period 66,421 19,033 85, ,502 60, ,052 30

33 17. CONTINGENT LIABILITY As at 30 June2018, the Company has a letter of guarantee amounting to SR 1.83 million (31 December 2017: SR 1.83 million) in favor of GAZT (See Note 10). A margin of SR 1.83 million (31 December 2017: SR 1.83 million) being deposited with a bank for this purpose and is included in prepayments and other receivables in the interim statement of financial position. The Company has paid the assessment amount and requested for release of above mentioned guarantee amount. 18. COMPARATIVE FIGURES Certain of the prior year amounts have been reclassified to conform to the presentation in the current year. 19. APPROVAL OF INTERIM CONDENSED FINANCIAL INFORMATION These interim condensed financial information have been approved by the board of directors on 24 July 2018 corresponding to 11 Dhual Qa dah 1439H. 31