Company Reg. No. PB 307 / PQ. Consolidated Interim Financial Statements 31st December 2016 Unaudited (Condensed)

Transcription

1 Company Reg. No. PB 307 / PQ Consolidated Interim Financial Statements 31st December 2016 Unaudited (Condensed)

2 Review of Operations Twelve months ended 31st December 2016 Janashakthi Insurance PLC reported a consolidated Profit After Tax of LKR 1,935 Mn for the twelve months ended 31st December 2016, compared to LKR 950 Mn in the corresponding period of the previous year. This is a 103% growth over the previous year same period. Gross written premium increased to LKR 13.6 Bn compared to LKR 10.6 Bn. The Non-Life segment of the business grew by 32% while the Life segment recorded a growth of 15%. At company level a profit of LK 1,092 Mn was recorded (2015- profit of LKR 316 Mn) during the period under review. This includes LKR 708Mn of Surplus Transfer determined by external consultant acturies based on their year end valuation process. The Group has maintained healthy Capital Adequacy Ratios (CAR) for both Life and Non-Life businesses, following the introduction of the Risk Based Capital (RBC) model. The total assets of the Group as at 31 December, 2016 stand at LKR 34.2 Bn compared to LKR 31.6 Bn as at 31 December, Net Assets Value per share of Janashakthi Insurance PLC as at 31st December 2016 was LKR and the Earning per Share as at 31st December 2016 was LKR Following the successful amalgamation of AIA General with Janashakthi General, reporting structures and branches have been rationalised to reflect the merged entity. The acquisition has strengthened the company and combined synergies better positions us as a principal player in the increasingly competitive General Insurance industry.

3 STATEMENT OF FINANCIAL POSITION AS AT Consolidated Company Unaudited Audited Unaudited Audited 31 December December December December 2015 Assets LKR '000 LKR '000 LKR '000 LKR '000 Financial Investments 21,585,697 21,846,024 11,115,416 10,827,289 Investment Property 22,600 22,600 22,600 22,600 Intangible Assets 35,556 37, Purchased Goodwill 1,014,448 1,402, Property, Plant and Equipment 1,797,487 2,003, ,715 Policyholder & Other Loans 257, , , ,074 Reinsurance Receivable 1,790, ,619 15,302 12,527 Premium Receivables 2,603,728 2,380,957 29,859 40,968 Investment in Subsidiaries - - 6,840,000 6,840,000 Other Assets 2,045, , , ,345 Other Fund Assets 52,387 47, Deferred Tax Asset 130, , Deferred Expenses 1,375,464 1,328, Cash in Hand and Balance at Bank 1,490, , , ,803 Total Assets 34,201,912 31,667,747 18,897,928 19,323,321 ` Liabilities and Shareholders' Equity Equity Stated Capital 4,853,752 4,853,752 4,853,752 4,853,752 Revaluation Reserve 162, , Revenue Reserves 4,313,907 3,218,986 3,439,144 2,903,236 Available for Sale Reserve Fund of Life Policyholders (5,590) (5,590) - Total Equity 9,324,230 8,234,898 8,287,307 7,756,988 Liabilities Insurance Liability - Life 9,699,136 8,865,740 9,699,136 8,865,740 Insurance Liability - Non Life 9,294,731 9,036, Retirement Benefit Obligation 287, , , ,130 Other Fund Liabilities 223,105 47, Deferred Revenue 27, , Interest Bearing Borrowings 1,462,482 1,525,767 14, ,237 Reinsurance Creditors 481, ,321 45,765 42,484 Other Liabilities 3,401,477 3,010, ,496 1,604,742 Total Liabilities 24,877,682 23,432,849 10,610,601 11,566,333 Total Equity and Liabilities 34,201,912 31,667,747 18,897,928 19,323,321 I certify that these Interim Financial Statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007 Sgd Mangala Gamage General Manager - Finance & Planning The Board of Directors is responsible for the preparation and presentation of these Interim Financial Statements. Signed on behalf of the Board Sgd Anushya Coomaraswamy Director Sgd Jude Fernando Director Colombo 27 February,

4 INCOME STATEMENT Consolidated Company Unaudited Audited Unaudited Audited For the Year ended 31 December LKR'000 LKR'000 LKR'000 LKR'000 Notes Gross Written Premium 8 13,651,444 10,664,000 2,943,963 2,550,782 Premium Ceded to Reinsurers (2,105,113) (1,325,761) (90,592) (81,991) Net Written Premium 11,546,331 9,338,238 2,853,372 2,468,791 Net Change in Reserve for Unearned Premium (7,244) (359,912) - - Net Earned Premium 11,539,087 8,978,326 2,853,372 2,468,791 Other Revenue Fee and Commission Income 344, ,494 41,520 46,438 Investment Income 1,958,113 1,524,522 1,046, ,601 Realised Gains/ (Losses) 390,189 19, ,643 (11,124) Fair Value Gains/ (Losses) (51,300) 135,591 (5,004) 58,927 Other Operating Revenue 415, ,534 49, ,153 Total Other Revenue 3,057,191 2,134,102 1,495,413 1,055,995 Total Net Income 14,596,278 11,112,429 4,348,785 3,524,786 Benefits and Claims Net Benefits & Claims (6,688,081) (5,135,273) (1,103,408) (839,310) Increase in Life Insurance Fund (832,885) (893,924) (832,885) (893,925) Underwriting & Net Acquisition Cost (1,931,794) (1,701,025) (691,739) (714,990) Total Benefits, Claims & Net Acquisition Cost (9,452,760) (7,730,222) (2,628,032) (2,448,224) Finance Cost (68,398) (77,380) (25,381) (56,405) Other Operating and Administrative Expenses (2,631,479) (2,279,869) (603,683) (704,101) Impairment Loss 12 (388,000) Other Expenses (3,087,877) (2,357,249) (629,065) (760,506) Profit / (Loss) before Taxation 2,055,641 1,024,958 1,091, ,056 Income Tax Expense (120,207) (74,448) - - Profit/(Loss) for the Period 1,935, ,510 1,091, ,056 Profit / (Loss) attributable to: Equity holders of the Company 1,935, ,510 1,091, ,056 1,935, ,510 1,091, ,056 Basic earnings per share (LKR)

5 STATEMENT OF COMPREHENSIVE INCOME For the Year ended 31 December Consolidated Company Unaudited Audited Unaudited Audited LKR'000 LKR'000 LKR'000 LKR'000 Profit/(Loss) for the Period 1,935, ,510 1,091, ,056 Other Comprehensive Income Revaluation of Land & Building - 162, Actuarial Losses on Defined Benefit Plans (2,194) 41,023 27,061 5,831 Investments classified as Available for Sale Changes in fair value (436,047) (447,859) (180,570) (110,969) Aggregate tax effect of items recognized in Other Comprehensive (Income) / Loss - (14,710) - - Other Comprehensive Income (438,241) (259,387) (153,509) (105,138) Total Comprehensive Income for the Period 1,497, , , ,918 Total Comprehensive Income attributable to: Equity holders of the Company 1,497, , , ,918 1,497, , , ,918 3

6 INCOME STATEMENT Consolidated Company Unaudited Unaudited Unaudited Unaudited For the Three months ended 31 December LKR'000 LKR'000 LKR'000 LKR'000 Notes Gross Written Premium 8 3,819,402 3,312, , ,149 Premium Ceded to Reinsurers (529,776) (481,072) (27,422) (18,826) Net Written Premium 3,289,625 2,831, , ,323 Net Change in Reserve for Unearned Premium (379,382) (103,980) - - Net Earned Premium 2,910,243 2,727, , ,323 Other Revenue Fee and Commission Income 90,320 76,948 9,058 12,110 Investment Income 560, , , ,552 Realised Gains/ (Losses) 378,343 11, ,169 - Fair Value Gains/ (Losses) (17,284) 44,604 (2,462) (16,740) Other Operating Revenue 319,013 94,095 10, ,685 Total Other Revenue 1,330, , , ,607 Total Net Income 4,240,661 3,423,076 1,498,883 1,092,931 Benefits and Claims Net Benefits & Claims (1,733,384) (1,510,387) (310,311) (216,074) Increase in Life Insurance Fund 292,731 (90,729) 292,731 (90,729) Underwriting & Net Acquisition Cost (467,184) (462,001) (176,680) (177,820) Total Benefits, Claims & Net Acquisition Cost (1,907,836) (2,063,117) (194,259) (484,623) Finance Cost (41,721) (57,404) (23,505) (53,901) Other Operating and Administrative Expenses (742,226) (664,724) (178,524) (228,555) Impairment Loss (388,000) Other Expenses (1,171,947) (722,128) (202,028) (282,456) Transfer from Life Insurance Fund Reserve Surplus transfer to Shareholder (708,118) (203,785) (708,118) (203,785) Surplus transfer from Policyholder 708, , , ,785 Profit / (Loss) before Taxation 1,160, ,831 1,102, ,851 Income Tax Expense (14,699) (25,403) - - Profit/(Loss) for the Period 1,146, ,428 1,102, ,851 Profit / (Loss) attributable to: Equity holders of the Company 1,146, ,428 1,102, ,851 1,146, ,428 1,102, ,851 Basic earnings per share (LKR)

7 STATEMENT OF COMPREHENSIVE INCOME For the Three months ended 31 December Consolidated Company Unaudited Unaudited Unaudited Unaudited LKR'000 LKR'000 LKR'000 LKR'000 Profit/(Loss) for the Period 1,146, ,428 1,102, ,851 Other Comprehensive Income Revaluation of Land & Building - 162, Actuarial Losses on Defined Benefit Plans (2,194) 46,430 27,061 5,831 Investments classified as Available for Sale Changes in fair value (140,998) (255,286) (62,810) (111,483) Other Comprehensive Income (143,191) (46,698) (35,749) (105,653) Total Comprehensive Income for the Period 1,002, ,730 1,066, ,199 Total Comprehensive Income attributable to: Equity holders of the Company 1,002, ,730 1,066, ,199 1,002, ,730 1,066, ,199 5

8 STATEMENT OF CHANGES IN EQUITY Group Revenue Reserves Stated Capital Revaluation Reserve Retained Earnings Available-forsale Financial Assets Total Available for Sale Reserve Fund of Life Policyholders Total LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 Balance as at 1 January 2015 (Restated) 1,496,000-3,075,642-3,075,643 4,571,643 Issue of shares - Rights Issue 3,357, ,357,752 Stamp Duty on Rights Issue - - (16,789) (16,789) (16,789) Profit/(Loss) for the period , , ,509 Net Change in fair value of AFS assets (447,859) (447,859) - Actuarial Losses on Defined Benefit Plans ,023-41,023 - Aggregate tax effect of items recognized in Other Comprehensive (Income) / Loss - - (14,710) - (14,710) - Revaluation changes - 162, Other Comprehensive Income for the Period - 162, (421,545) (259,387) Total Comprehensive Income for the period ,122 Transfer to Life Insurance Fund - - (5,831) (5,831) (5,831) Dividends paid - - (363,000) - (363,000) (363,000) Audited Balance as at 31 December ,853, ,158 3,666,845 (447,859) 3,218,986 8,234,898 Profit for the period - - 1,935,434-1,935,434 1,935,434 Changes in Fair Value of AFS assets (436,047) (436,047) - Actuarial Losses on Defined Benefit Plans - - (2,194) - (2,194) - Other Comprehensive Income for the Period (438,241) (438,241) Total Comprehensive Income for the Period ,497,193 Net Change in fair value of AFS assets - transfers to Available for Sale Reserve Fund of Life Policyholders ,104 6,104 (6,104) - Transfer (to)/ from Life Insurance Fund Dividends paid - - (408,375) - (408,375) - (408,375) Unaudited Balance as at 31 December ,853, ,158 5,191,710 (877,802) 4,313,908 (5,590) 9,324,231 6

9 STATEMENT OF CHANGES IN EQUITY Company Revenue Reserves Available for Stated Capital Available-forsale Financial Fund of Life Sale Reserve Retained Earnings Assets Total Policyholders Total LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 Balance as at 1 January 2015 (Restated) 1,496,000 3,077,942-3,077,942 4,573,942 Issue of shares - Rights Issue 3,357,751-3,357,751 Stamp Duty on Rights Issue (16,789) (16,789) (16,789) Profit for the Period 316, , ,056 Changes in Fair Value of AFS assets (110,969) (110,969) Actuarial Losses on Defined Benefit Plans 5,831 5,831 Other Comprehensive Income for the Period (105,138) (105,138) Total Comprehensive Income for the Period 210, ,918 Transfers to Life Insurance Fund (5,831) (5,831) (5,831) Dividends paid (363,000) (363,000) (363,000) Audited Balance as at 31 December ,853,752 3,014,209 (110,969) 2,903,240-7,756,989 Profit/(Loss) for the period 1,091,689 1,091,689 1,091,689 Changes in Fair Value of AFS assets (180,570) (180,570) Actuarial Losses on Defined Benefit Plans 27,061 27,061 Other Comprehensive Income for the Period (153,509) (153,509) Total Comprehensive Income for the Period 938, ,180 Net Change in fair value of AFS assets - transfers to Available for Sale Reserve Fund of Life Policyholders - 6,104 6,104 (6,104) - Transfer from Life Insurance Fund (514) (514) Dividends paid (408,375) (408,375) (408,375) Unaudited Balance as at 31 December ,853,752 3,724,070 (291,539) 3,432,529 (5,590) 8,287,307 7

10 CASH FLOW STATEMENT For the Year ended 31 December Consolidated Company Cash Flows From Operating Activities Notes Unaudited Audited Unaudited Audited LKR '000 LKR '000 LKR '000 LKR '000 Premium Received from Customers 13,419,167 10,402,241 2,959,328 2,546,428 Reinsurance Premium Paid (2,045,770) (1,373,198) (87,311) (71,421) Claims Paid (22,193,677) (5,277,766) (1,152,863) (506,585) Reinsurance Receipt in Respect of Claims 13,955, ,538 50,943 31,334 Interest Received 1,067,846 1,010, , ,721 Dividends Received 65,029 52,567 18,969 19,805 Other Operating Cash Payments (2,742,228) (2,029,886) (1,604,343) 11,079 Cash Flows From Operating Activities A 1,525,429 3,505, ,533 2,584,361 Gratuity Paid (80,122) (37,531) (10,565) (23,156) Net Cash Generated From Operating Activities 1,445,307 3,467, ,968 2,561,205 Cash Flows Used in Investing Activities Net drawdown/(purchase) of Investments (216,790) (4,044,573) (473,197) (3,084,967) Acquisition of Subsidiary - (3,056,820) - (2,840,000) Proceeds on sale of Investment Property - 124, Purchase of Property, Plant and Equipment (887,934) (413,594) - (164,715) Disposal of Property, Plant and Equipment 1,021,126 34,824 1,018,870 - Purchase of Intangible Assets (16,693) (15,315) - - Net Cash Used in Investing Activities (100,291) (7,370,595) 545,673 (6,089,683) Net Cash Flows Before Financing Activities 1,345,016 (3,902,782) 1,264,641 (3,528,477) Interest Paid on Borrowings (68,398) (77,380) (25,381) (56,405) Net drawdown of Borrowings (1,139,391) 1,139,391 (799,391) 799,391 Procceds from Issue of Shares - 3,340,962-3,340,963 Ordinary Dividends Paid (408,375) (363,000) (408,375) (363,000) Net Cash Used in Financing Activities (1,616,165) 4,039,973 (1,233,148) 3,720,949 Net Increase / (Decrease) in Cash and Cash Equivalents B (271,149) 137,191 31, ,472 8

11 NOTES TO THE CASH FLOW STATEMENT For the Year ended 31 December Consolidated Company A Cash Flows from Operating Activities LKR '000 LKR '000 LKR '000 LKR '000 Unaudited Audited Unaudited Audited Profit/(Loss) before Tax 2,055,641 1,024,958 1,091, ,056 Finance Cost 68,398 77,380 25,381 56,405 (Profit)/Loss on Sale of: Property, Plant & Equipment (361,203) (14,675) (361,169) - Investment Property - (16,410) - - (Gain)/Loss on Financial Investments 41,576 (124,467) 5,004 (47,813) Provision for Retirement Benefit 53,064 25,541 27,838 27,542 Depreciation and Amortisation Expenses 119, ,226-2,414 Provision for Bad Debts 16,628 30,146 - Net Foreign Exchange (Gain) / Loss (10,515) Impairment Loss 388, Changes in Working Capital (Increase)/Decrease in Premium and Other Receivables (2,710,442) 75,594 (14,672) 197,255 Increase in Life Insurance Fund 832, , , ,244 Increase/(Decrease) in Non Life Insurance Provision 258, , Increase/(Decrease) in Creditors 773, ,506 (877,424) 1,133,260 Net Cash Flows from Operating Activities 1,525,429 3,505, ,533 2,584,361 For the Year ended 31 December LKR '000 LKR '000 LKR '000 LKR '000 Unaudited Audited Unaudited Audited B Increase / (Decrease) in Cash and Cash Equivalents Cash in Hand and Balance at Bank 1,490, , , ,803 Bank Overdrafts (1,462,482) (386,375) (14,861) (116,846) Net Cash and Cash Equivalents for the Current Year 27, , , ,957 Net Cash and Cash Equivalents for the Previous Year 299, , ,957 (58,515) Increase /( Decrease) in Cash and Cash Equivalents During the Year (271,149) 137,191 31, ,472 9

12 INCOME STATEMENT - SEGMENT INFORMATION Unaudited For the Year ended Audited For the Year ended 31 December December 2015 Life Non Life Life Non Life Insurance Insurance Insurance Insurance LKR'000 LKR'000 LKR'000 LKR'000 Gross Written Premium 2,943,963 10,707,481 2,550,782 8,113,218 Net Earned Premium 2,853,371 8,685,716 2,468,790 6,509,536 Other Revenue Total Other Revenue 1,495,413 1,593,891 1,055,995 1,218,108 Total Net Income 4,348,785 10,279,607 3,524,785 7,727,644 Benefits and Claims Net Benefits & Claims (1,103,408) (5,584,673) (839,310) (4,295,963) Increase in Life Insurance Fund (832,885) - (893,925) - Underwriting & Net Acquisition Cost (691,739) (1,240,055) (714,990) (986,035) Total Benefits, Claims & Net Acquisition Cost (2,628,033) (6,824,727) (2,448,225) (5,281,998) Other Operating and Administrative Expenses (629,065) (2,458,813) (760,506) (1,596,743) Impairment Loss - (388,000) - - Profit / (Loss) before Taxation 1,091, , , ,903 Income Tax Expense - (120,207) - (74,448) Profit/(Loss) for the period 1,091, , , ,455 10

13 INCOME STATEMENT - SEGMENT INFORMATION Unaudited For the Three months ended For the Three months ended 31 December December 2015 Life Non Life Life Non Life Insurance Insurance Insurance Insurance LKR'000 LKR'000 LKR'000 LKR'000 Gross Written Premium 816,265 3,003, ,149 2,596,836 Net Earned Premium 788,843 2,121, ,323 2,030,610 Other Revenue Total Other Revenue 710, , , ,651 Total Net Income 1,498,883 2,773,891 1,092,931 2,384,261 Benefits and Claims Net Benefits & Claims (310,311) (1,423,073) (216,074) (1,294,313) Increase in Life Insurance Fund 292,731 - (90,729) - Underwriting & Net Acquisition Cost (176,680) (290,505) (177,820) (284,180) Total Benefits, Claims & Net Acquisition Cost (194,259) (1,713,577) (484,623) (1,578,493) Other Operating and Administrative Expenses (202,028) (969,918) (282,456) (439,672) Impairment Loss - (388,000) - - Profit / (Loss) before Taxation 1,102,595 90, , ,096 Income Tax Expense - (14,699) - (25,403) Profit/(Loss) for the period 1,102,595 75, , ,693 11

14 OPERATING SEGMENT INFORMATION BUSINESS SEGMENTS Unaudited As at 31 December 2016 Audited As at 31 December 2015 Life Non Life Life Non Life Insurance Insurance Insurance Insurance LKR'000 LKR'000 LKR'000 LKR'000 Segment Assets Financial Investments 11,115,416 10,470,280 10,827,289 11,518,735 Investment Property 22,600-22,600 - Intangible Assets - 35,555-37,568 Purchased Goodwill - 1,014, Property, Plant and Equipment - 1,797, ,715 1,012,462 Policyholder & Other Loans 179,328 78, ,074 83,593 Reinsurance Receivable 15,302 1,775,556 12, ,092 Premium Receivables 29,859 2,573,869 40,968 2,339,989 Investment in Subsidiaries 6,840,000-6,840,000 - Other Assets 515,111 1,966, , ,593 Other fund assets - 52,387-47,815 Deferred Tax Asset - 130, ,404 Deferred Expenses - 1,375,464-1,328,397 Cash in Hand and Balance at Bank 180,311 1,310, , ,630 Total Segment Assets 18,897,929 22,579,968 19,323,324 18,318,278 Segment Liabilities Insurance Provision - Life 9,699,135-8,865,740 - Insurance Provision - Non Life - 9,294,731-9,036,635 Retirement Benefit Obligation 127, , , ,096 Other fund liabilities - 27,727-47,815 Deferred Revenue - 223, ,728 Interest Bearing Borrowings 14,861 1,447, , ,529 Reinsurance Creditors 45, ,899 42,484 Other Liabilities 723,496 3,166,324 1,604,742 1,822,014 Total Segment Liabilities 10,610,599 14,755,427 11,566,332 11,902,817 12

15 NOTES TO THE FINANCIAL STATEMENTS 1 General Information Janashakthi Insurance PLC ( JIPLC ) is a limited liability company incorporated and domiciled in Sri Lanka and is listed on the Colombo Stock Exchange. Janashakthi PLC is the ultimate parent undertaking and controlling entity of Janashakthi Insurance PLC. The registered office of the Company is at No. 55/72, Vauxhall Lane, Colombo 02, while principal places of business are located at No. 55/60, Vauxhall Lane, Colombo 02, No. 24 Staples Street, Colombo 02 and No. 46, Muttiah Road, Colombo Basis of Preparation The Condensed Consolidated Interim Financial Statements have been prepared in accordance with the Sri Lanka Accounting Standards LKAS 34 Interim Financial Reporting. These Condensed Consolidated Interim Financial Statements should be read in conjunction with the Annual Financial Statements for the year ended 31 December, The unaudited Condensed Consolidated Interim Financial Statements for the twelve months ended 31 December, 2016 were approved by the Board of Directors on 27 February, Basis of Measurement The Condensed Consolidated Interim Financial Statements have been prepared on the historical cost basis, except for land and building recognized under property, plant & equipment and financial instruments which are measured at fair value. The Condensed Consolidated Interim Financial Statements are presented in Sri Lankan Rupees and all values are rounded to the nearest thousand except when otherwise indicated. 4 Significant Accounting Policies The accounting policies adopted for the current interim period are consistent with those of the Audited Annual Financial Statements for the year ended 31 December, 2015 (The same accounting policies and methods of computation as stated in the Audited Annual Financial Statements for the year ended 31 December, 2015 have been followed in preparation of these Condensed Consolidated Financial Statements) except for the change in accounting policy as explained in Note 6. 5 Liability Adequacy Test 5.1 Insurance Contract Liabilities - Life The Liability Adequacy Test in respect of recognized insurance liabilities of the Life business as required by SLFRS 4 - Insurance Contracts was performed as at 31st December 2016,with the assistance of the External Actuaries of the Company and concluded that, the liability value is sufficient to meet future benefits and expenses. The Liability Adequacy Test is performed annually. 5.2 Insurance Contract Liabilities - Non Life The Liability Adequacy Test in respect of Insurance Provisions of Non Life as required by SLFRS 4 - Insurance Contracts was performed as at 31st December 2016,with the assistance of the appointed external Actuaries of the Company. Accordingly it was confirmed by the Actuaries that the Insurance Provisions recorded by the Company are adequate to meet the Insurance Liabilities as of 31st December The Liability Adequacy Test is performed annually. 6 Merger of AIA General Insurance Lanka Limited with Janashakthi General Insurance Limited AIA General Insurance Lanka Limited (AIA-GI) has been amalgamated with Janashakthi General Insurance Limited (JGIL) w.e.f. 29 January, 2016 in accordance with the provisions of The Companies Act No. 07 of The regulatory approval and the approval of the shareholders have been duly obtained. Accordingly, on 29 January, 2016, the net assets of AIA-GI were absorbed into JGIL and JGIL continues its activities as a licensed General Insurance Company wholly owned by Janashakthi Insurance PLC. 13

16 NOTES TO THE FINANCIAL STATEMENTS 7 The Accounting Policy for Consolidation of Subsidiaries Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. Inter-company transactions, balances and unrealized gains / (losses) on transactions between group companies are eliminated. Amounts reported by subsidiaries have been adjusted to conform with the group's accounting policies when necessary. 8 Segmental Review Gross Written Premium For the Year ended 31 December For the Three months ended 31 December LKR '000 LKR '000 LKR '000 LKR '000 Life Insurance First Year Premium 1,287, , , ,349 Renewal Premium 1,656,323 1,554, , ,800 Total Life Premium 2,943,963 2,550, , ,149 Non Life Insurance Fire 1,324, , , ,794 Motor 7,090,438 5,619,886 1,872,801 1,688,557 Marine 362, ,568 92,253 97,699 Miscellaneous 1,929,722 1,383, , ,787 Total Non - Life Premium 10,707,481 8,113,218 3,003,137 2,596,837 Total Gross Written Premium 13,651,444 10,664,000 3,819,402 3,312,986 9 Income Tax Expense The Company and the Group are liable to Income Tax at 28% ( %) of Taxable Profits in accordance with the provisions of the Inland Revenue Act, No. 10 of 2006 and subsequent amendments thereto. 10 In the opinion of the Directors and in consultation with the Company Lawyers and Advisors, litigation and claims currently pending against the Company and Group will not have a material impact on the reported financial results or future operations of the Company or the Group. All pending litigation for claims have been evaluated and adequate provision has been made in the Interim Financial Statements. 14

17 NOTES TO THE FINANCIAL STATEMENTS 11 Related Party Transactions The nature of related parties in the current period is similar to those reported in the audited financial statements for the year ended 31 December Goodwill on Acquisition The Company acquired 100% of the shares of AIA General Insurance Lanka Limited on 23 October, 2015 for LKR 3.2 Billion. The resulting preliminary goodwill on the acquisition is computed as follows: LKR '000 Costs of the acquisition including related expenses 3,200,000 Less: net assets (1,797,552) Goodwill on Acquisition 1,402,448 AIA General Insurance Lanka Limited (AIA-GI) has been amalgamated with Janashakthi General Insurance Limited (JGIL) w.e.f. 29 January, 2016 in accordance with the provisions of The Companies Act No. 07 of The regulatory approval and the approval of the shareholders have been duly obtained. Accordingly, on 29 January, 2016, the net assets of AIA-GI were absorbed into JGIL and JGIL continues its activities as a licensed General Insurance Company wholly owned by Janashakthi Insurance PLC. The Goodwill is tested for impairment annually based on the given accounting guidance of LKAS 36 Impairment of assets.as a result of the impairment test done for the year ended 31st December 2016, it was estimated that the impairment of Goodwill amounts to LKR 388 Million.This has been adjusted in these unaudited Condensed Consolidated Interim Financial Statements. 13 Stated Capital is represented by shares in issue as given below: For the Period ended 31 December No. of Ordinary Shares 544,500, ,500, Information On Ordinary Shares 31 December 31 December Market Price per Ordinary Share (LKR) Highest Price Lowest Price Closing Price Net Asset Value per Share (LKR) - Company Group Twenty Largest Shareholders as at 31 December 2016 Name of Shareholder No.of Shares % (1) Janashakthi PLC 413,375, % (2) Commercial Bank of Ceylon Limited / Dunamis Capital PLC 17,250, % (3) Bank of Ceylon-No2 A/C 10,594, % (4) Suktam Holdings (Pvt) Ltd 5,570, % (5) Mr. Amarakoon Mudiyanselage Weerasinghe 3,515, % (6) Mr. Dinesh Jamnadas Ambani 2,828, % (7) Seylan Bank PLC / Dr.Thirugnanasambandar Senthilverl 2,321, % (8) Mr. Husein Nuruddin Esufally 2,253, % (9) Mr. Chitral Hiran Mendis 1,980, % (10) Lanka Orix Finance PLC / L.H.M.S.Lansakara 1,801, % (11) First Capital Limited 1,703, % (12) Hatton National Bank PLC / Arunasalam Sithampalam 1,582, % (13) Life Insurance Corporation (Lanka) Ltd 1,530, % (14) Mr. Hans Anton Van Starrex 1,369, % (15) Ceylon Investment PLC A/C No. 01 1,350, % (16) Mrs.Manjula Mathews 1,275, % (17) Mr. Rohitha Ruwan Premathilaka 1,150, % (18) Perera & Sons (Bakers) Limited 1,125, % (19) Perera & Sons Caterers (Pvt) Ltd 1,125, % (20) Mr.Vijendran Pathmanathan 1,004, % 474,704, % Others 69,795, % Total 544,500, % 15

18 NOTES TO THE FINANCIAL STATEMENTS 16 Public Shareholding 31 December December 2015 No. of Shares % of Shares No.of Shares % of Shares Public Shareholding 127,381, % 129,635, % Number of shareholders representing the public holding 5,925 6, Directors' Shareholding 31 December December 2015 Mr. Husein Esufally (Chairman) 2,253,594 - Mr. Prakash Schaffter (Managing Director) - - Mr. L. C. R. de C Wijetunga - - Ms. Manjula Mathews 1,275,000 1,275,000 Mr.Ramesh Schaffter - - Mr.Eardley Perera - - Ms. Anushya Coomaraswamy 112, ,500 Mr. Jude Fernando (Chief Executive Officer) Events after the Reporting Period There have been no events subsequent to the reporting date, which require disclosure in the financial statements. 16

19 BOARD OF DIRECTORS CHAIRMAN Mr. Husein Esufally CORPORATE MANAGEMENT TEAM Ms. Dayalanie Abeygunawardena Mr. Mangala Gamage Ms. Shani Ranasinghe Mr. Hashra Weerawardane MANAGING DIRECTOR Mr. Prakash Schaffter REGISTERED OFFICE No. 55/72, Vauxhall Lane, Colombo 02. DIRECTOR/CHIEF EXECUTIVE OFFICER Mr. Jude Fernando DIRECTORS Mr. L. C. R. de C Wijetunga Ms. Manjula Mathews Mr. Ramesh Schaffter Mr. Eardley Perera Ms. Anushya Coomaraswamy SECRETARY TO THE COMPANY KHL Corporate Services Ltd.