NIGER INSURANCE PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 WITH MANAGEMENT SCHEDULES

Transcription

1 NIGER INSURANCE PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 WITH MANAGEMENT SCHEDULES

2 NIGER INSURANCE PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 CONTENTS PAGE Results at a Glance 1 Corporate Information 2 Report of the Directors 3 Auditors' Report 9 Report of the Audit Committee 11 Accounting Policies 12 Group Balance Sheet 19 Group Profit and Loss Account 20 Company Composite Balance Sheet 21 Life Profit and Loss Account 22 Life Revenue Account 23 Deposit Administration Revenue Account 23 Non-Life Profit and Loss Account 24 Non Life Revenue Account 25 Statement of Cash flows 26 Notes to the Financial Statements 27 Group Statement of Value Added 47 Company Statement of Value Added 48 Group financial summary 49 Company Financial Summary 50

3 NIGER INSURANCE PLC 1 RESULTS AT A GLANCE The Group The Company x'000 x'000 x 000 x 000 Gross premiums earned 7,196,709 5,177,257 7,196,709 5,177,257 Investment and other incomes 388,410 1,091, ,411 1,057,459 Provision for investment losses 1,566,943 1,124,161 1,566,943 1,124,161 Profit before taxation 50,281 98,045 82,492 63,757 Loss after tax (85,110) (124,754) (53,299) (152,335) Dividend paid 197, , , ,625 Dividend proposed - 197, ,541 Transfer to contingency reserve 130, , , ,739 Retained loss for the year (215,324) (236,493) (183,513) (264,074) Share capital 2,172,954 1,975,413 2,172,954 1,975,413 Shareholders fund 4,247,007 5,704,428 4,269,588 5,622,942 Insurance fund 5,978,709 1,759,552 5,978, ,552 Total assets 20,300,006 18,723,365 20,300,006 18,565,275 ======== ======= ======== ======= Per share data: Earnings per 50k share (1.96k) (2.78k) (1.23k) (3.86k) Net assets per share x0.98 x1.31 x0.98 x1.29 Proposed dividend per share k k Stock exchange quotation at 31 December k 325k * All previous year s per share data other than proposed dividend have been adjusted for purposes of comparability

4 2 NIGER INSURANCE PLC CORPORATE INFORMATION The Board: Bala Zakariya'u - Chairman Justus Clinton Uranta Dauda Kolapo Adedeji - Managing Director/Chief Executive - Executive Director Andrew Onyenweuwa Nwaujo- Executive Director Osa Osunde - Director Idris Onaolapo Sulaimon - Director Frederick Nnamdi Udechukwu- Director Yusuf Hamisu Abubakar Jibrin Isah - Director - Director Secretary: Taiwo A. Otuneye, Esq.- LL.M, B.L. Registered office: 48/50, Odunlami Street, Lagos. Registered numbers: RC RIC (R1-012) Bankers: Registrars: Auditors: Afribank Nigeria Plc Union Bank of Nigeria Plc First Bank of Nigeria Plc United Bank for Africa Plc Intercontinental Bank Plc Skye Bank Plc Bank PHB IBTC Chartered Bank NIC Securities and Trust Limited, 61 Marina, Lagos. Baker Tilly Nigeria, (Chartered Accountants), Kresta Laurel Complex (4th Floor), 376, Ikorodu Road, Maryland, Lagos.

5 1. Accounts NIGER INSURANCE PLC REPORT OF THE DIRECTORS The directors are pleased to submit their report together with the group audited financial statements for the year ended 31 December, Result for the year x 000 Company profit after taxation - life (289,361) 2. Legal form - non-life 236,062 (53,299) ======= The company was established in 1962 as an affiliate of Yorkshire Insurance Company (U.K.) and was then known as Yorkshire Insurance Company Nigeria Limited, with the registered office at 47, Marina, Lagos. Following the implementation of the indigenisation Act 1976,the Federal Ministry of Finance through NICON wholly acquired the company and it s name was changed to The Niger Insurance Company Limited. As a result of privatization policy of the Federal Government, the company s shares were sold to the public in 1989 and its name changed to Niger Insurance Plc. 3. Principal activities The principal activities of the company are the underwriting of life and general insurance business. 4. The Directors The current composition of the Board of Directors is as set out on page 2 of these financial statements. 5. Directors' interests The interests of the directors in the issued share capital of the company are as follows:- Number of shares held as at 31/12/ /12/2008 Bala Zakariya u 84,952,054 77,229,140 Justus Clinton Uranta 35,152,103 31,395,458 Dauda Kolapo Adedeji 14,501,660 14,901,660 Andrew Onyenweuwa Nwaujo 5,378,791 4,406,610 Osa Osunde 124,666, ,333,603 Idris Onaolapo Sulaimon , ,928,520 Frederick Nnamdi Udechukwu - Indirect (Chrome Oil Services Ltd) 546,981, ,255,915 Indirect (Goldust Investment Ltd.) 87,052,230 79,138,391 Jibrin Isah - Indirect (AIL Securities Ltd.,) 418,139, ,127,003 ========= ======== 3

6 4 6. Shareholdings (a) Summary of the shareholding position: As at 31/12/09 As at 31/12/08 Number of Number of Shareholders shares held % shares held % Management Alliance Company Limited 631,396, ,802, Fidelity Finance Company Limited 436,795, ,086, Chrome Oil Services 546,948, ,225, Other Nigerian Individuals and Associations 2,730,767, ,344,710, ,345,907, ,950,825, (b) Substantial interest in shares: ==== ====== === ========== === No individual shareholder other than Management Alliance Company Limited, Fidelity Finance Company Limited and Chrome Oil Services Limited held more than 10% of the issued share capital of the company as at 31 December, (c) Analysis of shareholding: Holding between Total Units % holders Nigerian Shareholders 1 and 1, , ,001 and 5,000 2,892 10,217, ,001 and 10,000 1,737 15,311, ,001 and 50,000 3,123 83,939, ,001 and 100, ,780, ,001 and 500, ,822, ,001 and 1,000, ,859, ,000,001 and 10,000, ,660, ,000,001 and 50,000, ,163, ,000,001 and100,000, ,827, Above 100,000, ,670,708, ,630 4,345,907, ===== ========== ==== 7. Bonus issue The directors recommend a bonus issue of one ordinary share for every five ordinary shares held by the members whose names appear in the register of members as at the close of business on 30 September, 2010.

7 5 8. Unclaimed Share Certificates and Dividend Warrants The Company is aware that some share certificates belonging to shareholders have been returned marked Unclaimed. Similarly, some dividend warrants sent to shareholders have been returned marked Unclaimed while some are yet to be presented for payment. Shareholders with unclaimed share certificates and/or dividend warrants are advised to write to the Registrars, NIC Securities and Trust Limited or the company Secretary or call at the office of the Registrars during normal working hours. Furthermore, members are urged to advise the Registrars or the Company Secretary of any change of address or situation particularly as it relates to share certificates and dividend warrants. 9. Fixed assets Movements in fixed assets during the year are shown in Notes 9 and 10 to the financial statements. In the opinion of the directors, the market value of the company's properties is not less than the value shown in the financial statements. 10. Donations The analysis of donations made during the year is as follows: x 000 Donations to Lion club international 200,000 Chartered Insurance Institute of Nigeria Enugu Chapter 105,000 Sponsorship of Port Harcourt international marathon 200,000 West Africa Insurance Institute s Building fund 1,450,000 1,955,000 ======== 11. Personnel (a) (b) (c) Employment of physically challenged persons: The company continues its general policy of extending employment opportunities to physically challenged persons as and when there are openings for such employees. Two such employees are at present engaged by the company. Health, safety and welfare: In addition to medical retainership in private clinics and hospitals, all essential safety regulations are being observed to guaranty maximum protection of personnel and also protect the company's assets. Employees' involvement and training: Employees are kept fully informed of the company's performance and the company continues with its open door policy whereby views of employees are sought and

8 given due consideration on matters which particularly affect them. 6 The company attaches importance to the training of its staff through regular in-house, on-the-job training sessions and outside courses which have broadened employees' opportunities for career development within the company. 12. Audit Committee In accordance with Section 359(3) of the Companies and Allied Matters Act Cap C20 LFN 2004, the Audit Committee members of the company elected at the last Annual General Meeting were as follows:- D. K. Adedeji - (Director) O. Osunde - (Director) Jibrin Isah - (Director) S. E. Bediare - (Shareholders' representative) M. O. Sodipe - (Shareholders' representative) Prince Adekunle Olodun (Shareholders' representative) The functions of the audit committee are as stated in Section 359(6) of the Companies and Allied Matters Act, Cap C20 LFN Compliance with the code of Corporate Governance The Directors confirm that they manage the affairs of the company in accordance with the provisions of the code of best practices on Corporate Governance in Nigeria with regards to matters stated concerning the Board of Directors, the Shareholders and the Audit Committee. Board meetings are scheduled well in advance. Also the agenda of Board meetings and reports on full business review, full report from the various Board Committees and reports from the Audit Committee are circularised to all Directors. The Board meets four times a year. Stated below is the record of attendance at Board meetings conveyed and held in year 2009: No. of meetings attended Bala Zakariya u 4 Justus Clinton Uranta 4 Dauda Kolapo Adedeji 4 Andrew Onyenweuwa Nwaujo 4 Osa Osunde 4 Idris Onaolapo Sulaimon 4 Frederick Nnamdi Udechukwu 4 Yusuf Hamisu Abubakar 4 Jibrin Isah 2 The following are the various committees of the board and their composition:

9 Finance and General Purpose Committee 7 1. Osa Osunde Chairman 2. Justus Clinton Uranta Member 3. Dauda Kolapo Adedeji Member 4. Frederick Nnamdi Udechukwu Member 5. Jibrin Isah Member Taiwo A. Otuneye, Esq., Secretary Establishment and staff matters committee 1. Alhaji Idris Onaolapo Sulaimon Chairman 2. Justus Clinton Uranta Member 3. Andrew Onyenweuwa Nwaujo Member 4. Amina Abubakar Member Taiwo A. Otuneye, Esq., Secretary Executive management committee 1. Justus Clinton Uranta Chairman 2. Dauda Kolapo Adedeji Member 3. Andrew Onyenweuwa Nwaujo Member Taiwo A. Otuneye, Esq., Secretary 15. Risk management Niger Insurance Plc recognizes the need for fast and efficient service delivery. At the same time, necessary attention is given to risk management. The company s approach is to minimize risk complexity whilst improving efficiency in the workplace. Insurance risk Niger Insurance underwrites both General and Life insurance business. The nature of risks involved are the likelihood that the insured event may occur and the uncertainty of the magnitude of the resulting claim. To mitigate against these risks, Niger Insurance has produced and issued a company-wide underwriting manual, covering acceptance criteria, pricing, accumulation control and levels of authority. The manual serves as a guide to the underwriters in accepting risks on the basis of prudence, professionalism, objectivity and risk discrimination. Besides, adequate Reinsurance Treaty have been put in place and reviewed annually to take account of changing retention profile. The company regularly trains and retains its underwriting staff to acquaint them with recent developments in the risk bearing industry. Besides, the company constantly reviews and controls risk quality and prudently applies policy limits when the need arises. In addition, our Internal Control Unit monitors

10 8 adherence to existing guidelines via regular examinations of the activities of varius strategic business units. Financial risks Niger Insurance is an active player in the economy. In the course of its operations, the company uses various financial instruments including cash and its equivalents, bonds, equities and trade debtors. Niger Insurance is exposed to likely losses arising from market risk. Such risks comprise fluctuations in interest rates, equity prices and rate of exchange for foreign currencies ad default in collection of receivables. Niger has developed a comprehensive financial management policy taking into account the relevant regulatory investment guidelines. Appropriate manuals are provided detailing administrative and accounting procedures. These manuals set out the framework for the investing function and specify the conditions and benchmarks for the acceptable levels of exposure to credit, currency and interest rate risks, etc. Liquidity and credit risks Liquidity or cashflow risk relate to the possibility that the company may encounter some difficulty to mobilize funds to discharge its obligation to clients as and when the need arises. Niger s investment guidelines are formulated such that minimum levels of financial assets are held in cash and cash equivalents with short maturity periods and easily convertible to cash at short notice. Credit risk refers to the likelihood that one party to a financial transaction may fail to fulfil its obligation as and when due thereby causing the other party to a transaction to suffer financial loss. Our company is exposed to credit risks through its investment in financial assets such as short-term deposits, fixed interest securities and receivables. Niger s approach is to ensure that short-term deposits are placed with financial institutions with high credit rating. Moreover, deposits are spread amongst high quality institutions to avoid undue concentration on any one organization. Credit risks associated with receivables are managed through a deliberate assessment of present and potential clients to ensure their rating meet with our set criteria for granting credit and making necessary provision for doubtful and irrecoverable debts. 14. Auditors Messrs Baker Tilly Nigeria (Chartered Accountants) have indicated their willingness to continue as auditors in accordance with Section 357(2) of the Companies and Allied Matters Act Cap C20 LFN A resolution will be proposed to authorise the directors to fix their remuneration. Lagos, Nigeria 1 September, 2010 By Order of the Board Taiwo A. Otuneye, Esq., Secretary

11 9 INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NIGER INSURANCE PLC We have audited the accompanying group financial statements of Niger Insurance Plc ( the Company ) and its subsidiary companies (together the Group ) which comprise the balance sheets as at 31 December, 2009, the profit and loss accounts, statements of cash flows, value added statements for the year then ended, the statement of accounting policies, notes to the financial statements and the five year financial summary. Directors responsibility for the financial statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with statements of accounting standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria, the Insurance Act of Nigeria, and relevant National Insurance Commission (NAICOM) guidelines and circulars. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

12 Opinion In our opinion, these financial statements give a true and fair view of the financial of affairs of Niger Insurance Plc ( the Company ) and its subsidiaries (together the Group ) as at 31 December, 2009, and of the Group and Company s financial performance and cash flows for the year then ended in accordance with statements of accounting standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria, Insurance Act of Nigeria and relevant NAICOM guidelines and circulars. Emphasis of matter Without qualifying our opinion, we draw your attention to the company s composite balance sheet on page 21 which shows the life s business shareholders fund to be x910,468,000. This amount is below the minimum required amount of x2 billion as provided in the 2007 Insurance Act of Nigeria. In our opinion, proper books of account have been kept by the Company and proper returns adequate for the purpose of our audit have been received from branches not visited by us. Additionally, the Company s balance sheet and profit and loss account are in agreement with the books of accounts. 10 ACCOUNTANTS Lagos, Nigeria 1 September, 2010 CHARTERED

13 11 NIGER INSURANCE PLC REPORT OF THE AUDIT COMMITTEE In compliance with Section 359(6) of the Companies and Allied Matters Act Cap C20 LFN 2004, we have: (a) (b) (c) reviewed the scope and planning of the audit requirements; reviewed the External Auditors Report to Management on the audit of the financial statements for the year ended 31 December, 2009 as well as the management responses thereto; and ascertained that the accounting and reporting policies of the company for the year ended 31 December, 2009 are in accordance with legal and agreed ethical practices. In our opinion, the scope and planning of the audit for the year ended 31 December, 2009 were adequate and we are satisfied with the management responses to the auditors' findings. Dated this September, 2010 S. E. Bediare Chairman, Audit Committee Other members of the Committee: S. E. Bediare - Chairman D. K. Adedeji M. O. Sodipe O. Osunde Jubrin Isah Prince Adekunle Olodun Taiwo A. Otuneye - Secretary

14 NIGER INSURANCE PLC 12 ACCOUNTING POLICIES The following are the main accounting policies adopted by the company in the preparation of its financial statements: 1. Basis of accounting These financial statements are the consolidated financial statements of Niger Insurance Plc, a company incorporated in Nigeria in 1962, and its subsidiaries (hereinafter collectively referred to as the Group ). The financial statements are prepared under the historical cost convention modified by the revaluation of certain buildings and comply with the Statement of Accounting Standards issued by the Nigerian Accounting Standards Board. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the directors best knowledge of current events and actions, actual results ultimately may differ from those estimates. Consolidation Subsidiary undertakings, which are those companies in which the company directly or indirectly, has an interest of more than half of the voting rights or otherwise has power to exercise control over their operations, have been consolidated. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the company. Separate disclosure is made for minority interest, if any. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Accounting policies are changed where necessary to ensure consistency with the policies adopted by the Group. 2. Accounting for revenue Business The Company conducts life assurance and non-life insurance businesses. In the non-life insurance business, the Company offers fire, general accident, motor, workmen compensation, marine and aviation, engineering all risk bonds, credit and goods in transit policies of insurance underwriting services. i) Underwriting results for non-life insurance business Underwriting results for non-life insurance business are determined on an annual basis whereby the incurred costs of claims, commission and related expenses are charged against the earned proportion of premium, net of reinsurance, as follows: a)gross premiums written relate to risks assumed during the year, that is, total amount invoiced to policy holders before reinsurances.

15 b) Unearned premiums represent the proportion of the premiums written in periods up to the accounting date which relate to the unexpired terms of policies in force at the balance sheet date, and are calculated on the basis of time apportionment. c)claims paid represent all payments made during the year, whether arising from events during that or earlier years. Outstanding claims represent the estimated ultimate cost of settling all claims arising from incidents occurring prior to the balance sheet date, but not settled at that date. Outstanding claims are computed on the basis of the best information available at the time the records for the year are closed, and include provisions for claims incurred but not reported ( IBNR ). 13 d) Provisions for unexpired risks are the estimated amounts required over and above provisions for unearned premiums to meet future claims and related expenses on businesses in force at the end of the accounting period, ii) Underwriting results for life assurance business The underwriting results for life assurance business are determined on a fund accounting basis in accordance with SAS 16 - Accounting for Insurance Business. The incurred costs of claims, commission and related expenses are charged against the earned proportion of premiums, net of reinsurance, as follows: - a) Gross premiums written relate to risks assumed and invoiced during the year before making allowance for reinsurance. b) Claims arising on maturity are recognised when the claims become due for payment. Death claims are accounted for on notification. Surrenders are accounted for on payment. The life assurance contracts (accounted for in the life fund) are assessed at the most every three years by qualified consulting actuaries in accordance with Section 29 of the Insurance Act. Any resulting actuarial loss is made up by additional provisions from the Group profit and loss account. Actuarial surplus are allocated between the shareholders and the policy holders. The Group allocates a maximum of 40% of surplus arising on actuarial valuation to the shareholders by transfer to the profit and loss account. Any balance remaining is retained in the life fund and attributable to with profit policyholders at the date of actuarial valuation. In accordance with Section 22(1) of the Insurance Act 2003, an additional reserve of not less than 25% of the net written premium is transferred to life fund between each valuation date. iii). Deposit administration Receipts of deposit administration and other business of savings nature are recognised as

16 14 liabilities. Interest accruing to the life assurer from investment of the savings is recognised in the profit and loss account in the period it is earned while interest paid and due to depositor is recognised as an expense. 3. Reinsurance costs Cost associated with reinsurance is recognised on the basis of time. At balance sheet date, unexpired portion of the premium is treated as asset in the balance sheet. 4. Management expenses Except for certain expenses which are directly related to each class of business, other management expenses are apportioned between the classes of insurance in the proportion of their retained premium. For life business, direct expenses relating to life business are charged to life revenue account while expenses of common nature is apportioned between life revenue and profit and loss account on the basis of total income. 5. Deferred acquisition cost and maintenance expenses Acquisition costs and maintenance expenses comprise all direct and indirect costs arising from the writing of and maintenance of insurance contracts. Deferred acquisition costs represent a proportion of commission and other acquisition costs, which are incurred during a financial year and are deferred to the extent that they are recoverable out of future revenue margins. It is calculated by applying to the acquisition expenses, the ratio of unearned premium to written premium. 6. Fixed assets Fixed assets are stated at cost or valuation less accumulated depreciation. 7. Depreciation of fixed assets Depreciation is provided on a straight line basis at annual rates estimated to write off the cost or valuation over their estimated useful lives as follows: - Leasehold buildings of the lease Freehold buildings Furniture, fittings and equipment Motor vehicles Computer hardware In equal instalments over the period 1% of cost/valuation 12½% on cost 20% on cost 33a% on cost

17 15 8. Long-term investments Quoted investments Quoted investments are stated at their market values. The appreciation or depreciation in the values of the investment as a result of price movements on the stock exchange is accounted for in the stock revaluation reserve account and transferred to profit and loss account when the relevant stocks are disposed off. However, where depreciation in the values of the investment fall below their cost at the balance sheet date, allowance is made in the profit and loss account for such deficit. Unquoted investments These are stated at cost. Where in the opinion of the Directors the value of any unquoted investment falls below its cost, an appropriate allowance for diminution in value thereof is charged against the profit and loss account. 9. Short-term investments Short-term investments are stated at the lower of cost and market values. The carrying cost is determined on an item by item basis. The amount by which cost exceeds market value (unrealised loss) is charged to profit and loss account. Realised gains or losses on disposal of short-term investments are taken to the profit and loss account. Interest receivable on investments is accrued and credited to the profit and loss account. 10. Investment incomes and expenses Investment income comprises income earned on short term deposits and trading of securities and they are accounted for on cash basis. Investment expenses are expenses incurred in buying and selling of all types of investments. They are accounted for on cash basis. 11. Debtors and prepayments Debtors are stated at their face value less any amounts considered bad or doubtful. Any recoveries are credited to the profit and loss account. Payments in advance are stated at cost after deducting amortised amounts. In line with National Insurance Commission (NAICOM) guidelines, provision is made for likely bad debts as follows: - Period outstanding % Provision made up to 3 months Nil 3-6 months months months 75 Above one year Foreign Currency Transactions i. Reporting currency The consolidated financial statements are presented in Nigerian Naira, which is the company s reporting currency.

18 16 Transactions and balances Foreign currency transactions are translated into the reporting currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. Balances in foreign currencies are converted to Naira at the rates of exchange ruling at the balance sheet date and the difference is taken to the profit and loss account. 13. Technical reserves These are computed in accordance with the provision of section 20, 21 and 22 of the Insurance Act 2003 as follows: - a) General insurance business (i) Reserve for unexpired risks This is calculated on the basis of time apportioned to risks accepted during the year. (ii) Contingency reserve b) Life business This represents the higher of 3% of total premiums and 20% of the net profit after taxation until the reserve reaches the greater of minimum paid up capital or 50% of net premium. (i) General reserve fund This is made up of net liabilities on policies in force as computed by the actuaries at the time of the actuarial valuation and an additional 25% of net premium for every year between valuation dates. (ii) Contingency reserves 14 Taxation This is credited with the higher of 1% of gross premiums and 10% of the net profit after taxation. Income tax expenses/credits are recognized in the profit and loss account. Current income tax is the expected tax payable on the taxable income for the year using the statutory tax rate at the balance sheet date. 15. Deferred taxation Provision for deferred taxation is made by the liability method and calculated at the current rate of taxation on the differences between the net book values of fixed assets qualifying for capital allowances and their corresponding tax written down values.

19 Employees' retirement benefits The Group operates a defined contribution plan. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Group makes contributions on behalf of qualifying employee to a mandatory scheme under the provisions of the Pension Reform Act of The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. 17. Dividend distribution In accordance with SAS 23, dividend distribution to the company s shareholders is recognised as a liability in the Group s financial statements in the period in which the dividend is approved by the company s shareholders. 18. Provisions Provisions are liabilities that are uncertain in timing or amount. Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated Provisions are normally made for restructuring costs and legal claims. A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Group; has a present obligation as a result of past events but is not recognised because it is not likely that an outflow of resources will be required to settle the obligation; or the amount cannot be reliably estimated. Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability is not likely to eventuate. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group. A contingent asset is never recognised rather they are disclosed in the financial statements when they arise. 19 Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business

20 18 segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns different from those of segments operating in other economic environments. Segment information is presented in respect of the Company s and the Group s business segment. The business segments are determined by management based on the company s internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 20. Investment properties Investment properties (including associated borrowing costs) are treated as long-term investments. They are carried at market values which are determined every three years by external independent valuers. Increases in their carrying amount are credited to revaluation reserve in shareholders equity. Decreases that offset previous increases of the same assets are charged against revaluation reserve while, all other decreases are charged to the income statement. Revaluation surplus on disposed assets are written back to income in line with the provisions of SAS Borrowing costs Borrowing costs associated with loans utilized on construction and/or acquisition of properties for resale are capitalised in accordance with the provisions of the International Accounting Standard No. 23. They include interest charges, establishment fees and other incidental fees directly related to the creation and arrangement of the facilities.

21 NIGER INSURANCE PLC GROUP BALANCE SHEET AS AT 31 DECEMBER, 2009 The Group The Company Assets Note x 000 x 000 x 000 x 000 Cash and bank balances 1 702, , , ,942 Short-term investments 2 1,957,284 1,756,293 1,956,784 1,755,793 Government securities 3-600, ,000 Debtors 4 3,070,913 5,266,767 2,877,746 5,111,806 Loans to policy holders 5 200, , , ,774 Deferred acquisition cost 6 134, , , ,137 Long-term investments 7 1,991,367 6,907,902 2,165,927 6,978,197 Statutory deposit 8 500, , , ,000 Investment properties 9 10,711,796-10,711,796 - Fixed assets 10 1,031,753 2,987, ,196 2,918,626 Liabilities 20,300,006 18,723,365 20,210,449 18,565,275 ======== ======== ======== ======== Creditors and accruals 11 3,669,432 3,892,175 3,582,424 3,843,160 Outstanding claims ,809 91, ,809 91,694 Current taxation , , , ,100 Deferred taxation , , , ,867 Deposit administration 15 3,379,822 6,761,960 3,379,822 6,761,960 Insurance fund 16 5,978,709 1,759,552 5,978,709 1,759,552 Capital and reserves 13,689,955 13,018,937 13,577,817 12,942, Share capital 17 2,172,954 1,975,413 2,172,954 1,975,413 Share premium 18 1,612,158 1,620,247 1,612,158 1,620,247 Bonus issue reserve , ,541 Capital reserve 20 3,745,144 1,258,188 3,745,144 1,258,188 Contingency reserve , , , ,103 General reserve 22 (3,956,566) 109,936 (3,933,985) 28,450 Shareholders fund 4,247,007 5,704,428 4,269,588 5,622,942 Life fund s asset revaluation reserve 23 2,363,044-2,363, ,610,051 5,704,428 6,632,632 5,622, ,300,006 18,723,365 20,210,449 18,565,275 ======== ======== ======== ======== Bala Zakariya u (Chairman)... Justus C. Uranta... (Managing Director/CEO) The accounting policies on pages 12 to 18 and the notes on pages 27 to 46 form part of these financial statements 19

22 NIGER INSURANCE PLC GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, The Group The Company Notes x 000 x 000 x 000 x 000 Gross premium earned 7,196,709 5,177,257 7,196,709 5,177,257 ======= ======== ======= ======= Underwriting profit 1,212,743 1,152,076 1,212,743 1,152,076 Investment incomes Income from fixed investments 185, , , ,673 Interest receivable and similar incomes 19,966 79,034 19,963 71,381 Profit/(loss) from deposit Administration (22,057) 29,028 (22,057) 29,028 Provision for investment losses (139,471) (683,837) (139,471) (683,837) Less: Expenses 1,256,696 1,155,609 1,231,697 1,121,321 Management expenses (604,092) (786,462) (551,269) (794,570) Depreciation (156,423) (135,835) (152,036) (127,727) Provision for doubtful debt (122,999) (196,749) (122,999) (196,749) Actuarial valuation deficit/surplus (322,901) 61,482 (322,901) 61,482 Profit on ordinary activities before taxation 24 50,281 98,045 82,492 63,757 Information technology levy 11ii (3,539) (4,179) (3,539) (4,179) Taxation 13 (128,507) (191,807) (127,907) (185,100) Deferred taxation (3,345) (26,813) (4,345) (26,813) Profit on ordinary activities after tax (85,110) (124,754) (53,299) (152,335) Transfer to contingency reserve 21 (130,214) (111,739) (130,214) (111,739) Retained loss transferred to general reserve 22 (215,324) (236,493) (183,513) (264,074) ======= ======= ====== ======= Earnings per share (1.96k) (3.16k) (1.23k) (3.86k) ====== ======= ======= ======= The accounting policies on pages 12 to 18 and the notes on pages 27 to 46 form part of these financial statements

23 NIGER INSURANCE PLC COMPANY COMPOSITE BALANCE SHEET AS AT 31 DECEMBER, Life Non-life x 000 x 000 x 000 x 000 Cash and bank balances 1 450, , , ,942 Short-term investments 2 617,056 1,339,728 1,956,784 1,755,793 Government securities ,000 Debtors 4 1,249,987 1,627,759 2,877,746 5,111,806 Loans to policy holders 5 200, , ,774 Deferred acquisition cost 6-134, , ,137 Long-term investments 7 1,437, ,175 2,165,927 6,978,197 Statutory deposit 8 200, , , ,000 Investment properties 9 10,711,796-10,711,796 - Fixed assets , , ,196 2,918,626 Liabilities 15,439,147 4,771,302 20,210,449 18,565,275 ======== ======= ======== ======== Creditors and accruals 11 3,126, ,628 3,582,424 3,843,160 Outstanding claims , ,809 91,694 Current taxation 13 14, , , ,100 Deferred taxation ,172 1, , ,867 Deposit administration 15 3,379,822-3,379,822 6,761,960 Insurance fund 16 5,412, ,527 5,978,709 1,759,552 Capital and reserves 12,165,635 1,412,182 13,577,817 12,942, Share capital ,034 1,291,920 2,172,954 1,975,413 Share premium , ,382 1,612,158 1,620,247 Bonus issue reserve ,541 Capital reserve 20 3,466, ,727 3,745,144 1,258,188 Contingency reserve , , , ,103 General reserve 22 (4,315,254) 381,269 (3,933,985) 28, Shareholders fund 910,468 3,359,120 4,269,588 5,622,942 Life fund assets revaluation reserve 23 2,363,044-2,363, ,273,512 3,359,120 6,632,632 5,622, ,439,147 4,771,302 20,210,449 18,565,275 ======== ======== ======== ======== The accounting policies on pages 12 to 18 and the notes on pages 27 to 46 form part of these financial statements

24 NIGER INSURANCE PLC 22 LIFE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, Note x 000 x 000 Gross premium 4,107,065 2,397,034 ======== ======== Investment income 102, ,915 Profit/(loss) from D/A (22,057) 29,028 Management expenses (25,773) (71,628) Provision for investment losses (3,311) (535,896) 51,508 (415,581) Actuarial valuation (deficit)/surplus (322,901) 61,482 Loss before taxation 23 (271,393) (354,099) Information Technology Current taxation 13 (14,663) - Deferred taxation (3,305) (26,813) Profit after tax (289,361) (380,912) Transfer to contingency reserve (39,598) (24,002) Transfer to general reserve 22 (328,959) (404,914) ======= ======= Earnings per share (6.66k) (8.76k) The accounting policies on pages 12 to 18 and the notes on pages 27 to 46 form part of these financial statements

25 NIGER INSURANCE PLC LIFE REVENUE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, x 000 x 000 Gross premium 4,107,065 2,397,034 Less: Reinsurance cost 154,215 63,148 Gross premiums earned 3,952,850 2,333,886 Commission received 6,964 3,186 Net premium 3,959,814 2,337,072 Investment and other income 47, ,945 Total income 4,007,774 2,459, Direct claims paid 360, ,782 Surrenders 29,632 27,380 Increase in outstanding claims - - Gross claims incurred 390, ,162 Reinsurance recovery - - Net claims incurred 390, ,162 Acquisition expenses 437, ,250 Maintenance expenses 268, ,206 Operating expenses 1,005, ,356 Provision for doubtful debt 1, Provision for depreciation 92,457 64,789 Provision for investment losses 1,427, ,324 Total expenses 3,623,807 2,459, Accretion/increase to life fund 383,967 - ======== ======== NIGER INSURANCE PLC DEPOSIT ADMINISTRATION REVENUE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, x 000 x 000 Interest income 106, ,274 Gains from sale of investment 28,536 2, , ,460 Guaranteed interest (157,026) 282,432 (Loss)/profit from deposit administration (22,057) 29,028 ======= =======

26 24 NIGER INSURANCE PLC NON-LIFE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 2009 Note x 000 x 000 x 000 x 000 Premium earned (net of reinsurances) 2,407,878 1,925,900 Add Commission received 34,983 46,196 Less: Underwriting expenses 2,442,861 1,972,096 Claims paid 559, ,979 Acquisition 425, ,061 Maintenance 244, ,980 1,230, ,020 Underwriting profit 1,212,743 1,152,076 Investment incomes Interest receivable and similar income 19,963 71,381 Other incomes 57, ,758 Provision for investment losses (136,160) (147,941) 1,154,416 1,465,274 Management expenses (617,953) (787,731) Depreciation (59,579) (62,938) Provision for doubtful debts (122,999) (196,749) Profit on ordinary activities before taxation 353, ,856 Information Technology Development Levy 11.ii (3,539) (4,179) Taxation 13 (113,244) (185,100) Deferred tax 14 (1,040) - Profit on ordinary activities after tax 236, ,577 Deduct: Contingency reserve 21 (90,616) (87,737) Retained profit for the year transferred to general reserve , ,840 ======= ====== Earnings per share - basic 5.43k 5.79k ====== ==== The accounting policies on pages 11 to 17 and the notes on pages 27 to 46 form part of these financial statements.

27 25

28 NIGER INSURANCE PLC NON-LIFE REVENUE ACCOUNT 26 Marine Workmen Burglary Motor aviation compen- fidelity vehicle Fire transit sation Accident misc. Total Total x 000 x 000 x 000 x 000 x 000 x 000 x 000 x 000 Income Direct premium 1,167, , ,770 60, , ,696 2,936,740 2,858,656 Inward reinsurance premium 29,933 9,952 10, ,878 83,812 65,913 Gross written premium 1,197, , ,819 60, ,646 1,012,574 3,020,552 2,924,569 (Increase)/Decrease in unexpired risks 61,487 16,484 25,883 6,788 16,864 98,288 69, ,346 Gross earned premiums 1,135, , ,702 67, ,782 1,110,862 3,089,644 2,780, Gross reinsurance premiums 222,200 95,747 83,866 12,412 23, , , ,435 Increase/(decrease) in prepaid reinsurance cost 19,297 5,422 5,536 1,070 2,227 17,806 51,358 74,112 Reinsurance cost 202,903 90,325 78,330 11,342 21, , , , Net earned premiums 932, , ,372 56,281 88, ,436 2,407,878 1,925,900 Commissions received 11,626 8,233 5,411 1,397 2,424 5,892 34,983 46, , , ,783 57,678 90, ,328 2,442,861 1,972,096 ====== ===== ====== ===== ===== ===== ======= ======= Expenses Direct claims paid 194,604 62,838 26,147 8,381 15, , , ,439 Inward reinsurance claims paid 5,382 1,973 1, ,436 16,137 18,500 Gross claims paid 199,986 64,811 27,493 8,381 15, , , ,939 Increase in outstanding claims provision 13,959 21, ,983 6,773 16,672 67, ,303 Gross claims incurred 213,945 86,534 26,497 17,364 22, , , ,636 Deduct: Reinsurance claims recoveries 74,436 56,059 6, , , ,657 Net claims paid 139,509 30,475 19,549 17,364 22, , , ,979 Add: expenses Maintenance cost 90,609 30,311 27,962 5,898 11,795 78, , ,980 Acquisition cost 135,671 74,830 63,775 4,458 15, , , ,061 Total expenses 365, , ,286 27,720 49, ,014 1,230, , Underwriting profit/(loss) transferred to P&L account 578, , ,497 29,958 41, ,314 1,212,743 1,152,076 ====== ====== ====== ====== ====== ====== ======= =======

29 27 NIGER INSURANCE PLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER, 2009 Cash flow from operating activities: The Group The Company Note x 000 x 000 x 000 x 000 Operating profit before working capital changes 25 2,444,706 1,019,685 2,543, ,945 Working capital changes 26 (699,458) 510,420 (699,245) 555,557 Income tax paid (143,549) (156,424) (140,166) (156,424) Net cash inflow from operating activities 1,601,699 1,373,6811,704,054 1,388, Cash flows from investing activities Government securities 600,000 (100,000) 600,000 (100,000) Purchase of fixed assets (4,082,048) (845,250) (4,079,956) (844,393) Short-term investments (307,838) (1,653,384) (307,838) (1,643,653) Long-term investments 3,456,439 (966,116) 3,352,174 (966,117) Proceeds from sale of fixed assets 32,710 31,460 32,710 31,460 Interest received 48,146 67,812 48,143 60,159 Net proceeds from disposal of investments 28, ,000 28, ,758 Net cash outflow from investing activities (224,055) (3,069,478) (326,231) (3,072,786) Cash flow from financing activities: Bank loan/overdraft (790,582) 1,836,546 (790,582) 1,836,546 Dividend paid (197,541) (592,625) (197,541) (592,625) Insurance funds (69,092) 144,345 (69,092) 144,345 Share capital increase expenses (8,089) (22,126) (8,089) (22,126) Net cash outflow from financing activities (1,065,304) 1,366,140 (1,065,304) 1,366, Net (decrease)/increase in cash and cash equivalents 312,340 (329,657) 312,519 (318,568) Cash and cash equivalents, beginning of year 390, , , ,510 Cash and cash equivalents, end of year , , , ,942 ====== ====== ====== ====== Previous years balances have been reclassified to enhance comparability.

30 28 NIGER INSURANCE PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, Cash and bank balances This comprises The Group The Company x 000 x 000 x 000 x 000 Cash in hand Balance held with banks in Nigeria 702, , , , , , , ,942 ====== ======= ======= ======= 1.1 Life business Cash in hand Balance held with banks in Nigeria , , , ,711 ===== ===== ======= ======= 1.2 Non life business Cash in hand Balance held with banks in Nigeria , , , ,231 ====== ===== ======= ======= 2. Short-term investments Short term deposits 652, , , ,379 Investment in trading securities 1,625, ,472 1,625, ,472 Deposit with stock broker - 628, ,554 2,277,743 1,969,905 2,277,243 1,969, Deduct: Provision for investment losses Brought forward 213,612 73, ,612 73,083 Additional provision during the year 283, , , ,941 Write back/(adjustment) (176,672) (7,412) (176,672) (7,412) 320, , , , ,957,284 1,756,293 1,956,784 1,755,793 ======= ======= ======= =======

31 29 The Company x 000 x Life business Short term investments is made up as follows:- Investment in trading securities 533,254 - Short-term deposits 404, ,975 Deposit with stock broker - 193, , , Less: Provisions Brought forward 36,940 44,352 Additional provision 283,519 - Write back/adjustments - (7,412) 320,459 36, , ,160 ====== ======= 2.2 Non-life business Short-term investments is made up as follows: - Short term deposits 247, ,404 Investments in trading securities 1,092, ,472 Deposit with stockbroker - 435,429 1,339,728 1,295, Less: Provisions Brought forward 176,672 28,731 Additional provisions/(write back) (176,672) 147, , ,339,728 1,118,633 ======= =======