CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT PERIOD ENDED 30 JUNE 2016 Notes JUNE JUNE 31 December JUNE JUNE 31 December 2016 2015 2015 2016 2015 2015 N N Assets Cash and cash equivalents 2. 3,321,073,120 2,931,517,809 2,822,735,766 3,081,719,904 2,887,900,486 2,780,220,924 Financial assets: - - -At fair value through profit or loss 3.1 160,721,188 271,261,974 183,200,238 155,822,593 259,388,557 177,671,643 -Loans and receivables 3.2 254,538,139 67,113,770 61,029,203 235,362,411 56,666,226 70,851,262 -Available for sale assets 3.3 60,950,000 2,000,000 60,950,000 60,950,000 2,000,000 60,950,000 -Held to maturity 3.4 275,124,839 232,369,586 497,905,166 275,124,839 232,369,586 497,905,166 Deposit for shares 4. - 50,250,000 - - 50,250,000 - Finance lease receivables 5. 188,873,023 151,771,072 172,095,986 - - - Trade receivables 6. 206,397,204 98,228,955 81,030,026 206,397,204 98,228,955 81,030,026 Reinsurance assets 7. 691,913,416 651,767,868 691,913,416 691,913,416 651,767,868 691,913,416 Deferred acquisition cost 8. 190,525,298 237,135,305 190,525,298 190,525,298 237,135,305 190,525,298 Other receivables & prepayments 9. 196,247,561 200,497,805 135,246,867 200,727,182 157,988,859 135,266,048 Investment in subsidiaries 10. - - - 480,000,000 250,000,000 250,000,000 Inventories 11. 3,360,467 2,017,552 5,146,854 - - - Intangible Assets 12.0 14,311,505 16,467,871 13,996,505 15,592,433 Investment properties 12.1 892,123,677 878,121,182 888,020,000 807,462,677 793,460,682 803,359,000 Property and equipment 12.2 983,805,142 926,955,739 917,049,344 975,926,463 920,697,065 908,924,352 Statutory deposits 13. 300,000,000 300,000,000 300,000,000 300,000,000 300,000,000 300,000,000 Total assets 7,739,964,579 7,001,008,617 7,023,316,035 7,675,928,492 6,897,853,589 6,964,209,568 Liabilities Insurance contract liabilities 14. 2,409,319,707 2,271,797,500 2,218,670,079 2,409,319,707 2,271,797,500 2,218,670,079 Trade payables 15. 339,568,098 76,363,582 112,060,913 339,568,098 76,363,582 112,060,913 Other payables and provision 16. 142,315,616 196,745,954 163,568,360 158,297,207 148,965,000 171,540,123 Retirement benefit obligations 17. 5,473,737 137,815 184,444 5,335,922-4,430 Income tax liabilities 18.2 218,546,055 194,747,819 120,730,104 191,123,922 161,565,688 93,162,912 Deferred tax liabilities 18.3 157,789,768 95,460,524 140,289,268 157,193,665 95,460,524 139,693,165 Total liabilities 3,273,012,981 2,835,253,194 2,755,503,168 3,260,838,520 2,754,152,294 2,735,131,622 Equity and reserves Issued and paid up share capital 19.1 3,000,000,000 3,000,000,000 3,000,000,000 3,000,000,000 3,000,000,000 3,000,000,000 Contingency reserve 20.1. 1,158,004,746 995,686,050 1,058,782,003 1,158,004,746 995,686,050 1,058,782,003 Statutory reserve 20.2 7,950,303 5,826,986 5,826,986 - - - Retained earnings 21. 300,996,549 164,242,387 203,203,878 257,085,226 148,015,245 170,295,943 Total equity and reserves 4,466,951,598 4,165,755,423 4,267,812,867 4,415,089,972 4,143,701,295 4,229,077,946 Total liabilities and equity and reserves 7,739,964,579 7,001,008,617 7,023,316,035 7,675,928,492 6,897,853,589 6,964,209,568 - The consolidated financial statements were approved by the Board of Directors on 22nd July, 2016 20
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME JUNE June 30, 2015 31 December JUNE June 30, 2015 31 December Notes Gross premium written 3,436,658,604 3,772,323,662 6,039,451,539 3,436,658,604 3,772,323,662 6,039,451,539 Gross premium income 23. 3,294,943,654 3,490,323,661 5,875,522,094 3,294,943,654 3,490,323,661 5,875,522,094 Reinsurance premium expenses 24. (1,362,145,665) (1,643,276,947) (2,685,733,043) (1,362,145,665) (1,643,276,947) (2,685,733,043) - - Net premium income 1,932,797,989 1,847,046,714 3,189,789,051 1,932,797,989 1,847,046,714 3,189,789,051 Fee and commission income 25. 145,370,920 84,584,876 145,879,333 145,370,920 84,584,876 145,879,333 - - Net underwriting income 2,078,168,909 1,931,631,590 3,335,668,384 2,078,168,909 1,931,631,590 3,335,668,384 - - Claims expenses 25a (768,129,812) (609,730,698) (1,341,181,328) (768,129,812) (609,730,698) (1,341,181,328) Claims recoveries from reinsurers 25b. 161,283,263 85,400,844 383,167,702 161,283,263 85,400,844 383,167,702 Claims incurred (606,846,549) (524,329,854) (958,013,626) (606,846,549) (524,329,854) (958,013,626) - - Underwriting expenses 26. (657,281,801) (437,497,720) (1,007,902,155) (664,480,365) (437,497,720) (1,016,074,857) - - Underwriting profit 814,040,559 969,804,016 1,369,752,603 806,841,995 969,804,016 1,361,579,901 Investment income 27. 192,156,293 182,131,995 447,362,355 192,156,293 182,131,995 402,048,193 Other operating income 28. 103,378,931 64,810,303 177,053,841 65,404,832 24,144,157 170,537,974 Impairment (charge)/write back 29. - - 16,935,040 - - 17,402,910 Net fair value gains on financial assets at fair value through profit or loss 30. (16,160,071) (64,110,545) (138,190,791) (16,160,071) (64,110,545) (138,191,291) Management expenses 31. (671,073,695) (669,417,393) (1,168,001,089) (645,664,724) (642,109,026) (1,126,380,571) Profit before taxation 422,342,017 483,218,376 704,911,959 402,578,325 469,860,597 686,997,116 Income tax expense 18.1 (163,203,286) (149,491,161) (159,100,881) (156,566,299) (140,958,180) (152,718,047) - - Profit after taxation 259,138,731 333,727,215 545,811,078 246,012,026 328,902,417 534,279,069 - - - Total comprehensive income for the year 259,138,731 333,727,215 246,012,026 328,902,417 - - - Profit attributable to: - - - Equity holders of the parents' 259,138,731 333,727,215 545,811,078 246,012,026 328,902,417 - - Continency reserve (99,222,743) (113,169,710) 545,811,078 (99,222,743) (113,169,710) 534,279,069 159,915,988 220,557,505 545,811,078 146,789,283 215,732,707 534,279,069 Basic and diluted earnings per share (Kobo) 32. 4.32 5.56 9.10 4.10 5.48 8.90 21
CONSOLIDATED STATEMENT OF CASH FLOWS AT PERIOD ENDED 30 JUNE 2016 JUNE JUNE 31 DECEMBER JUNE JUNE 31 DECEMBER Notes 2016 2015 2015 2016 2015 2015 Cash flows from operating activities Premium received from policy holders 3,288,377,879 3,733,172,590 6,039,256,088 3,288,377,879 1,998,502,834 6,039,256,088 Reinsurance receipts in respect of claims 25b. 161,283,263 85,400,844 314,780,998 161,283,263 57,474,130 314,780,998 Commission received 25. 145,370,920 84,584,876 150,878,677 145,370,920 26,462,670 150,878,661 Other operating receipts 188,678,090 81,692,773 161,924,867 65,404,832 1,245,353 155,399,462 Cash paid to and on behalf of employees 33. (246,820,584) (364,974,156) (553,499,753) (236,026,958) (135,786,190) (532,115,976) Reinsurance premium paid (1,362,145,665) (1,643,276,947) (2,553,260,869) (1,362,145,665) (966,128,885) (2,553,260,869) Claims paid 25a (719,195,133) (594,372,281) (1,260,879,778) (719,195,133) (246,506,814) (1,260,879,778) Underwriting expenses 26. (659,825,440) (482,077,760) (1,007,902,155) (664,480,366) (216,896,959) (1,016,074,857) Other operating cash payments (517,697,319) (279,067,255) (508,768,666) (367,401,135) (162,205,799) (512,036,354) income tax paid 18.2 (41,104,790) (27,088,348) (65,883,457) (41,104,790) (63,018,348) Net cash (used in)/ from operating activities 236,921,222 593,994,337 716,645,952 270,082,847 356,160,340 722,929,027 Cash flows from investing activities Purchase of property and equipment 12.2 (110,610,324) (55,707,028) (107,445,819) (110,610,324) (22,230,125) (99,646,496) Fair value change and additions to investment properties 12. (4,103,677) - (9,665,093) (4,103,677) - (9,504,593) Increase in investment in subsidiaries 10. - - - (230,000,000) - - Proceeds from sale of property and equipment 12.2-5,158,662 7,469,828-12,572,219 7,927,313 Purchase of financial assets 3. (176,363,629) (100,000,000) (581,298,577) (176,363,629) (152,819,845) (460,044,542) Proceeds from sale of financial assets 420,337,469 5,990,475 184,874,395 420,337,469-83,096,480 Dividend received 27. 2,194,203 333,958 5,963,163 2,194,203-5,963,163 Interest received 27. 189,962,090 181,798,038 426,242,550 189,962,090 91,976,028 380,928,388 Net cash from investing activities 321,416,131 37,574,104 (73,859,553) 91,416,132 (70,501,723) (91,280,287) Cash flows from financing activities Dividend paid 21. (60,000,000) - (120,000,000) (60,000,000) - (120,000,000) Net cash used in financing activities (60,000,000) - (120,000,000) (60,000,000) - (120,000,000) Increase in cash and cash equivalents 498,337,353 631,568,441 522,786,399 301,498,979 285,658,617 511,648,740 Cash and cash equivalents at Beginning 2,822,735,767 2,299,949,368 2,299,949,368 2,780,220,925 2,268,572,185 2,268,572,185 Cash and cash equivalent at End 2 3,321,073,120 2,931,517,808 2,822,735,767 3,081,719,904 2,554,230,802 2,780,220,925 The accompanying notes form an integral part of this statement of cash flows. 24
1. Corporate information 1.1 The The group comprises of Consolidated Hallmark Insurance Plc and its subsidiary - CHI Capital Limited. CHI Capital Limited also has two wholly owned subsidiaries, Grand Treasurers Limited and CHI Support Services. 1.2 The Consolidated Hallmark Insurance Plc (formerly Consolidated Risk Insurers Plc) was incorporated on 2 August 1991. The changed its name from Consolidated Risk Insurers Plc to Consolidated Hallmark Insurance Plc following its merger with Hallmark Assurance Plc and The Nigerian General Insurance Limited in line with the consolidation reform of NAICOM announced in 2006. Consolidated Hallmark Insurance Plc came into effect from 1 March 2007. 1.3 Principal activities During the year under review, the engaged in general insurance business and maintained offices in major cities with Corporate headquarters at 266 Moshood Abiola way, Lagos. The principal activities of the subsidiaries are portfolio management, short term lending, equipment leasing and auto tracking services. JUNE 31 December JUNE 31 December 2. Cash and cash equivalents Cash in hand 3,001,462 2,126,570 3,001,462 2,126,570 Balance with banks 209,251,264 123,888,545 137,228,675 102,987,121 Call deposits 15,337,025 7,725,567 15,337,025 7,725,567 Fixed deposits (Note 2.1) 3,093,483,369 2,688,995,084 2,926,152,742 2,667,381,666 3,321,073,120 2,822,735,766 3,081,719,904 2,780,220,924 Impairment charge (Note 2.2) - - - - 3,321,073,120 2,822,735,766 3,081,719,904 2,780,220,924 2.1 The Fixed deposits have a short term maturity of 30-90 days and the effect of discounting immaterial. 2.2 Impairment charge At 1 January - - - - Written off in the year - - - - Provision no longer required (Note 29) - - - - At 30 June 2016 - - - - 3. Financial assets At fair value through profit or loss (Note 3.1) 160,721,188 183,200,238 155,822,593 177,671,643 Loans and receivables measured at amortised cost (Note 3.2) 254,538,139 61,029,203 235,362,411 70,851,262 Available for sale (Note 3.3) 60,950,000 60,950,000 60,950,000 60,950,000 Held to maturity (Note 3.4) 275,124,839 497,905,166 275,124,839 497,905,166 751,334,166 803,084,607 727,259,843 807,378,071 3.1 At fair value through profit or loss At 1 January 183,200,238 343,086,193 177,671,643 331,557,775 Additions - 1,032,084-1,032,084 Disposals (6,318,979) (20,638,023) (5,688,979) (14,333,200) Transfers to cash and WHT receivables - - - - 176,881,259 323,480,254 171,982,664 318,256,659 Fair value gains (Note 30) (16,160,071) (140,280,016) (16,160,071) (140,585,016) At 30 JUNE 2016 160,721,188 183,200,238 155,822,593 177,671,643 Current 160,721,188 183,200,238 155,822,593 177,671,643 Non Current - - - - Financial assets at fair value through profit or loss of the group represents investment where there is a ready and liquid quoted market, which are acquired for the purpose of short-term trade, and where mark-to-market valuations are possible on every trading day. Assets under this category have been acquired by management with the intent of short term trading. 25
JUNE DECEMBER JUNE DECEMBER 3.2 Loans and receivables Staff loans 208,343,821 30,321,897 208,343,821 30,321,897 Loan issued to corporate individuals (Note 3.2.1) 46,194,320 30,707,306 27,018,590 40,529,365 254,538,141 61,029,203 235,362,411 70,851,262 Current 157,113,531 29,870,483 167,946,485 27,978,291 Non Current 97,424,610 31,158,720 67,415,926 42,872,971 3.2.1 Loan issued to corporate / individuals At 1 January 126,402,527 114,520,593 134,408,271 98,291,698 Addition 166,616,521 52,633,603 131,332,945 109,437,335 Repayment (151,129,507) (40,751,669) (144,843,721) (73,320,762) 141,889,541 126,402,527 120,897,495 134,408,271 Impairment on loans issued to corporate and individuals (Note 3.2.4) (95,695,221) (95,695,221) (93,878,905) (93,878,905) At the end 46,194,320 30,707,306 27,018,590 40,529,366 3.2.2 Analysis by performance: Performing (Note 3.2) 254,538,141 61,029,203 235,362,411 70,851,264 Non-performing (Note 3.2.1) 95,695,221 95,695,221 93,878,905 93,878,905 350,233,362 156,724,424 329,241,316 164,730,168 3.2.3 Analysis by maturity: Due within one year 339,138,531 126,853,941 318,146,485 136,751,877 Due within one - five years 8,596,483 29,870,483 8,596,483 27,978,291 Due after five years 2,498,348-2,498,348-350,233,362 156,724,424 329,241,316 164,730,168 3.2.4 Movement in impairment - loans and receivables : At 1 January 95,695,221 95,765,592 93,878,905 94,378,905 Addition (Note 29) - 429,629 - - Provision no longer required - (500,000) - (500,000) At the end 95,695,221 95,695,221 93,878,905 93,878,905 3.3 Available for sale assets At 1 January 60,950,000 2,000,000 60,950,000 2,000,000 Addition - 50,250,000-50,250,000 Exchange gains - 8,700,000-8,700,000 Impairment on available for sale - - - - At the end 60,950,000 60,950,000 60,950,000 60,950,000 Current - - - - Non Current 60,950,000 60,950,000 60,950,000 60,950,000 Available for sale assets are the unquoted equity securities of the group and are measured at cost because their fair value could not be reliably measured. At period end there is no indication of impairment. Available for sale equities is analysed as follows: No. of shares Cost per unit Total Cost Planet Capital Limited (Formerly Strategy and Arbitrage Limited) 2,000,000 N1 2,000,000 Energy & Allied Insurance Pool Nigeria limited - 58,950,000 26
JUNE December JUNE December 3.4 Held to maturity assets At 1 January 429,575,123 130,000,000 429,575,123 130,000,000 At initial recognition - additions - 299,575,123 299,575,123 Value at maturity 429,575,123 429,575,123 429,575,123 429,575,123 Disposal (174,979,805) - (174,979,805) - Amortised interest (Note 27) 20,529,521 68,330,043 20,529,521 68,330,043 At the end 275,124,839 497,905,166 275,124,839 497,905,166 - - a) Held to maturity assets are analysed as follows: Debts securities Listed 275,124,839 497,905,166 275,124,839 497,905,166 Unlisted - - - - At the end 275,124,839 497,905,166 275,124,839 497,905,166 Current 87,857,936 68,330,043 87,857,936 68,330,043 Non-current 187,266,903 429,575,123 187,266,903 429,575,123 275,124,839 497,905,166 275,124,839 497,905,166 b) At the reporting date, no held to maturity assets were past due or impaired 15.25% NAHCO Bond series 2 2013/2020 15,200,542 20,217,260 15,200,542 20,217,260 FCMB NGN SERIES 2 BOND 2015/2020 51,068,493 51,130,137 51,068,493 51,130,137 13.5% Lagos State Government Bond series 2 2013/2020 42,270,243 45,565,891 42,270,243 45,565,891 13.05% FGN bond 2014/2016 67,328,415 67,378,055 67,328,415 67,378,055 LAGOS STATE PROGRAMME 2 SERIES 2 FIXED RATE BOND ISSUANCE (2013/2020) 99,257,146 99,303,385 99,257,146 99,303,385 Wema bank commercial paper - 214,310,438-214,310,438 At the end 275,124,839 497,905,166 275,124,839 497,905,166 4. Deposit for shares - - - - This represents fund deposited by the company for the shares of the Energy & Allied Insurance Pool Nigeria limited through the Nigerian Insurers Association. 5. Finance lease receivables At 1 January 181,031,249 137,320,490 - - Addition 124,563,012 216,625,756 - - Repayment (109,580,772) (134,347,008) - - Gross investment 196,013,489 219,599,238 - - Unearned income - (38,567,989) - - Net investment (Note 5.1) 196,013,490 181,031,249 - - Impairment on finance lease receivables (Note 5.2) (7,140,467) (8,935,263) - - At the end 188,873,023 172,095,986 - - 5.1 Current 133,498,276 118,784,190 - - Non-current 62,515,214 62,247,059 - - 5.2 Movement in impairment - finance lease receivables: At 1 January 8,935,263 8,897,021 - - Charge for the year (Note 29) (1,794,796) 38,242 - - At the end 7,140,467 8,935,263 - - 5.3 Finance Lease receivebale reported for the in the published 2013 Financial Statement was N85,000,120. However a restrospective adjustment of =N=2,906,507 was made due to a CBN prescribed imparment in the Finance Lease Receivable in the audited financial statements of Grand Treasurers Limited, a subsidiary within the. Thus, the 2013 compaarative figure is N82,093,614.and this has been retrospectively restated in these financial statements. 6. Trade receivables Due from insurance companies 1,789,427 10,686,478 1,789,427 10,686,478 Due from insurance brokers and agents 204,607,777 70,343,548 204,607,777 70,343,548 206,397,204 81,030,026 206,397,204 81,030,026 Impairment allowance (Note 6.1) - - - - 206,397,204 81,030,026 206,397,204 81,030,026 Current 206,397,204 81,030,026 206,397,204 81,030,026 Non-current - - - - 27
JUNE 31 December JUNE 31 December 6.1 Impairment allowance At 1 January - 17,402,910-17,402,910 Written off in the year - - - - Charge for the year (Note 29) - (17,402,910) - (17,402,910) At the end - - - - Basis of impairment An impairment rate is derived based on the likelihood that a premium debt will not be paid and will fall into default. The first assesses whether objective evidence of impairment exists individually for receivables that are individually significant and are impaired accordingly. If the company determines that no objective evidence of impairment exists for an individually assessed receivable, whether significant or not, it includes the receivable in a group of receivables with similar credit risk characteristics and collectively assesses them for impairment. The impairment rate is derived based on the historical collection rate of outstanding premium over three different periods and the average rate derived is applied to the carrying amounts at the reporting dates to determine impaired receivables. JUNE 31 December JUNE 31 December 7. Reinsurance assets Prepaid reinsurance (Note 7.1) 409,975,490 409,975,490 409,975,490 409,975,490 Reinsurers share of outstanding claims (Note 7.2) 281,937,926 281,937,926 281,937,926 281,937,926 At the end 691,913,416 691,913,416 691,913,416 691,913,416 Current 691,913,416 691,913,416 691,913,416 691,913,416 Non-current - - - - The assesses its reinsurance assets for impairment. If there is objective evidence that the reinsurance assets are impaired, the reduces the carrying amount of the reinsurance assets to its recoverable amount and recognizes that impairment loss in the income statement. The has a reinsurance agreement with African Reinsurance Corporation, and Continental Reinsurance Plc. Based on the financial position and performance during the period under review, they are solvent and had never defaulted on their obligations. Consequently, there are no indications of impairment as at the reporting date. JUNE 31 December JUNE 31 December 7.1 Prepaid reinsurance Fire 137,100,731 137,100,731 137,100,731 137,100,731 General accident 23,912,990 23,912,990 23,912,990 23,912,990 Motor 4,565,263 4,565,263 4,565,263 4,565,263 Marine 30,900,057 30,900,057 30,900,057 30,900,057 Bond 3,177,107 3,177,107 3,177,107 3,177,107 Engineering 4,652,158 4,652,158 4,652,158 4,652,158 Aviation 67,103,737 67,103,737 67,103,737 67,103,737 Oil & gas 138,563,447 138,563,447 138,563,447 138,563,447 409,975,490 409,975,490 409,975,490 409,975,490 7.2 Reinsurers share of outstanding claims Fire 143,252,064 143,252,064 143,252,064 143,252,064 General accident 55,888,491 55,888,491 55,888,491 55,888,491 Motor 5,929,828 5,929,828 5,929,828 5,929,828 Marine 17,345,649 17,345,649 17,345,649 17,345,649 Bond 750,020 750,020 750,020 750,020 Engineering 9,438,056 9,438,056 9,438,056 9,438,056 Aviation 31,175,169 31,175,169 31,175,169 31,175,169 Oil & gas 18,158,649 18,158,649 18,158,649 18,158,649 281,937,926 281,937,926 281,937,926 281,937,926 7.3 Reinsurance assets: Movement in prepaid reinsurance: At 1 January 409,975,490 438,216,646 409,975,490 438,216,646 Additions during the year (Note 24) 1,362,145,665 2,657,491,886 1,362,145,665 2,657,491,886 1,772,121,155 3,095,708,532 1,772,121,155 3,095,708,532 Amortization during the year (Note 24) (1,362,145,665) (2,685,733,042) (1,362,145,665) (2,685,733,042) At the end 409,975,490 409,975,490 409,975,490 409,975,490 8. Deferred acquisition cost At 1 January 190,525,298 190,525,298 190,525,298 190,525,298 Acquistion cost during the year 461,855,756 230,143,379 461,855,756 230,143,379 Less: Amortisation during the year (Note 26) (461,855,756) (230,143,379) (461,855,756) (230,143,379) At the end 190,525,298 190,525,298 190,525,298 190,525,298 Current 190,525,298 190,525,298 190,525,298 190,525,298 Non-current - - - - Deferred acquisition cost represent commissions on unearned premium relating to the unexpired risk. The movement in the deferred acquisition cost during the year is as shown above. 28
JUNE 31 December JUNE 31 December 8.1 Deferred acquisition cost analysis Fire 36,914,648 36,914,648 36,914,648 36,914,648 General accident 34,494,094 34,494,094 34,494,094 34,494,094 Motor 55,535,274 55,535,274 55,535,274 55,535,274 Marine 19,947,150 19,947,150 19,947,150 19,947,150 Bond 1,146,299 1,146,299 1,146,299 1,146,299 Engineering 9,797,034 9,797,034 9,797,034 9,797,034 Aviation 9,695,867 9,695,867 9,695,867 9,695,867 Oil & gas 22,994,932 22,994,932 22,994,932 22,994,932 190,525,298 190,525,298 190,525,298 190,525,298 9. Other receivables and prepayments Staff advances & prepayment 78,883,075 18,050,009 78,883,075 18,050,009 Account receivables 1,203,758 34,793,406 1,203,758 34,620,844 Witholding tax credit 52,233,142 58,554,822 52,233,142 58,399,440 Prepayments (Note 9.1) 63,927,586 24,195,755 68,407,207 24,195,755 196,247,561 135,593,992 200,727,182 135,266,048 Impairment allowance (Note 29) - (347,125) - - 196,247,561 135,246,867 200,727,182 135,266,048 Current 196,247,561 135,246,867 200,727,182 135,266,048 Non-current - - - - 9.1 Prepayments Prepaid rent 34,434,587 24,195,755 34,434,587 24,195,755 Other prepayments 29,492,999-33,972,620-63,927,586 24,195,755 68,407,207 24,195,755 Current 63,927,586 24,195,755 68,407,207 24,195,755 Non-current - - - - 10. Investment in subsidiaries CHI Capital (Note 10.1) - - 480,000,000 250,000,000 29
10.1 CHI Capital Limited is a fully owned subsidiary of Consolidated Hallmark Insurance Plc. It carries on the business of consumer leasing. CHI Capital Limited acquired 100% interest in Grand Treasurers Limited, a CBN licensed finance company, in December 2010 with the purpose of carrying on financing activities. CHI Capital Limited also owns 100% interest in CHI Support Services Limited which is into the business of vehicle tracking. Condensed result of consolidated entities - 2016 CHI PLC CHI Elimination Capital Limited Total 10.2 Condensed financial position Assets Cash and cash equivalents 3,081,719,904 189,353,216 50,000,000 3,321,073,120 Financial assets 727,259,844 24,074,324-751,334,167 Deposit for shares - - - - Finance lease receivables - 188,873,023 188,873,023 Trade receivables 206,397,204 - - 206,397,204 Reinsurance assets 691,913,416 - - 691,913,416 Deferred acquisition cost 190,525,298 - - 190,525,298 Other receivables and prepayment 200,727,182 46,456,560 (50,936,181) 196,247,561 Investment in subsidiaries 480,000,000 - (480,000,000) - Investment properties 807,462,677 84,661,000-892,123,677 Inventories - 3,360,467-3,360,467 Intangible Assets 13,996,505 315,000 14,311,505 Property and equipment 975,926,462 7,878,680-983,805,142 Statutory deposits 300,000,000 - - 300,000,000 Total assets 7,675,928,492 544,972,269 (480,936,181) 7,739,964,579 Liabilities Insurance contract liabilities 2,409,319,707 - - 2,409,319,707 Trade payables 339,568,098 - - 339,568,098 Provision and other payables 158,297,207 34,954,590 (50,936,181) 142,315,615 Staff retirement benefit 5,335,922 137,815-5,473,737 Tax liabilities 191,123,922 27,422,134-218,546,056 Deffered tax 157,193,665 596,103 157,789,768 Share capital 3,000,000,000 430,000,000 (430,000,000) 3,000,000,000 Statutory reserve 1,158,004,746 7,950,303-1,165,955,049 Retained earnings 257,085,226 43,911,323-300,996,549 Total liabilities and equity 7,675,928,492 544,972,269 (480,936,181) 7,739,964,579 29
10.2 Condensed result of consolidated entities - 2016 CHI CHI PLC Capital Elimination Total Condensed profit and loss Underwriting profit 806,841,995-7,198,565 814,040,560 Investment income 192,156,293 - - 192,156,293 Other operating income 65,404,832 45,172,664 (7,198,565) 103,378,931 Total operating income 1,064,403,120 45,172,664-1,109,575,784 Impairment charge - - - - Net fair value gains/(losses) on financial assets at fair value through profit or loss (16,160,071) - - (16,160,071) Management expenses (645,664,724) (25,408,969) (671,073,693) Profit before taxation 402,578,325 19,763,696-422,342,020 Taxation (156,566,299) (6,636,987) - (163,203,286) Profit after taxation 246,012,026 13,126,709-259,138,734 10.2 Condensed result of consolidated entities - 2015 Condensed financial position Cash and cash equivalents 2,780,220,924 42,514,842-2,822,735,766 Financial assets 807,378,071 34,799,377 (39,092,841) 803,084,607 Deposit for shares - 172,095,986-172,095,986 Finance lease receivables 81,030,026 5,420,000 (5,420,000) 81,030,026 Trade receivables 691,913,416 - - 691,913,416 Reinsurance assets 190,525,298 - - 190,525,298 Deferred acquisition costs 135,266,048 34,056,665 (34,075,846) 135,246,867 Other receivables and prepayment 250,000,000 - (250,000,000) - Investment in subsidiaries - 5,146,854-5,146,854 Investment properties 15,592,433 875,438-16,467,871 Property and equipment 803,359,000 84,661,000-888,020,000 Inventories 908,924,352 8,124,992-917,049,344 Statutory deposits 300,000,000 - - 300,000,000 Total assets 6,964,209,568 387,695,154 (328,588,687) 7,023,316,035 Liabilities Insurance contract liabilities 2,218,670,079 - - 2,218,670,079 Trade payables 112,060,913 - - 112,060,913 Other payables and provision 171,540,123 70,616,924 (78,588,687) 163,568,360 Retirement benefit obligation 4,430 180,014-184,444 Income tax liabilities 232,856,077 28,163,295-261,019,372 Deferred tax liabilities 3,000,000,000 250,000,000 (250,000,000) 3,000,000,000 Share capital 1,058,782,003 5,826,986-1,064,608,989 Reserves 170,295,943 32,907,935-203,203,878 Total liabilities and equity 6,964,209,568 387,695,154 (328,588,687) 7,023,316,035 10.2 Condensed result of consolidated entities - 2015 Condensed profit and loss Underwriting profit 1,361,579,901 (15,287,298) 23,460,000 1,369,752,603 Investment income 402,048,193 45,314,162-447,362,355 Other operating income 170,537,974 29,975,867 (23,460,000) 177,053,841 Total operating income 1,934,166,068 60,002,731-1,994,168,799 Impairment charge 17,402,910 (467,872) - 16,935,038 Net fair value gains on financial assets at fair value through profit or loss (138,191,291) 500 - (138,190,791) Management expenses (1,126,380,571) (41,620,516) - (1,168,001,087) Profit before taxation 686,997,116 17,914,843-704,911,959 Taxation (152,718,047) (6,382,834) - (159,100,881) Profit after taxation 30 534,279,069 11,532,009-545,811,078
JUNE 31 December JUNE 31 December 11. Inventories At 1 January 5,146,854 2,888,332 Auto track devices 3,720,183 4,882,285 - - Used (5,506,570) (2,623,763) Impairment allowance (Note 29) - - - 3,360,467 5,146,854 - - 12.0 Intangible assets Cost At 1 January 22,265,000 16,500,000 21,337,500 16,500,000 Addition 319,375 5,765,000-4,837,500 JUNE 22,584,375 22,265,000 21,337,500 21,337,500 Accumulated amortization At 1 January 5,797,129 2,814,041 5,745,067 2,814,041 Addition 2,475,741 2,983,088 1,595,928 2,931,026 JUNE 8,272,870 5,797,129 7,340,995 5,745,067 Carrying amount At End 14,311,505 16,467,871 13,996,505 15,592,433 12.1 Investment properties At 1 January 888,020,000 877,960,682 803,359,000 793,460,682 Addition 4,103,677 9,665,093 4,103,677 9,504,593 Fair value change - 394,225-393,725 JUNE 892,123,677 888,020,000 807,462,677 803,359,000 Investment properties Investment properties are made up of buildings and properties held by the company to earn rentals or for capital appreciation or both and are accounted for in line with International Accounting Standard (IAS) 40. Some of these properties retained the title of one of the legacy companies making up Consolidated Hallmark Insurance Plc. There is no dispute as to the title of Consolidated Hallmark Insurance Plc to these properties. However, in line with NAICOM requirement, provided below is the list of these properties and status of efforts to change their name to Consolidated Hallmark Insurance Plc. S/N TYPE OF ADDRESS ASSET 1 Building Plot A/5 Pocket Layout (Clerk Quarters) Owerri, Imo State. 2 Building 219, 220 and 221, Akukwe Street, Works Layout, Owerri, Imo State 3 Building No. 30, East Street, Rivers Layout Aba, Abia State. 4 Building Plot 33, Chief Ogbonda Layout, Rumuogba, Port Harcourt. 5 Land Plot 3, Sea Gate Estate, Phase 1, Lekki Peninsula, Eti-Osa. 6 Building Rivers State Housing Estate, Abuloma PH 7 Land Plot 14, 1(W) Road, First Avenue, Lugbe Estate, Abuja. 8 Shops Trade Fair Shopping Complex CHI Capital Limited Thomas Estate,Orile Ibama, Ajah, Lagos AMOUNT N 109,580,000 Consolidated Hallmark Insurance Plc. 130,314,000 Consolidated Hallmark Insurance Plc. 47,020,000 Consolidated Hallmark Insurance Plc. 46,253,677 Consolidated Hallmark Insurance Plc. 23,275,000 Hallmark Assurance Plc (Legacy ) 3,070,000 Consolidated Hallmark Insurance Plc. 807,462,677 CURRENT TITLE HOLDER 207,680,000 Consolidated Hallmark Insurance Plc. 240,270,000 Consolidated Hallmark Insurance Plc. 84,661,000 CHI Capital Limited STATUS ON CHANGE OF TITLE Title over this property has been transferred to Consolidated Hallmark Insurance Plc. Title now changed from Hallmark Assurance Plc to the name of Consolidated Hallmark Insurance Plc. Title over this property has been transferred to Consolidated Hallmark Insurance Plc. Title over this property has been transferred to Consolidated Hallmark Insurance Plc. The purchase documents now regularized in the name of Consolidated Hallmark Insurance Plc. Title over this property has been transferred to Consolidated Hallmark Insurance Plc. The made payments to the Federal Housing Authority during the year and is awaiting final approval from them. Already exist in the name of Consolidated Hallmark Insurance Plc. Already exist in the name of CHI Capital Limited Total 892,123,677 31
12.2 Property and equipment 2016 12.2a The group Office Furniture & Motor Computer Land Building Equipment Fittings Vehicles Equipment Total N N N Costs At 1 January 286,099,948 536,339,722 83,679,352 107,872,857 338,825,681 208,436,224 1,561,253,784 Additions in the year - - 13,228,200 8,329,624 84,595,000 4,457,500 110,610,324 Disposals in the year - - - - (23,805,684) (556,000) (24,361,684) JUNE 286,099,948 536,339,722 96,907,552 116,202,481 399,614,997 212,337,724 1,647,502,424 Accumulated depreciation At 1 January 2016-96,570,538 66,185,219 93,249,714 199,919,550 188,279,419 644,204,440 Depreciation charge for the period - 5,348,703 2,812,800 2,532,648 28,261,040 3,493,915 42,449,106 Disposals in the period - - - - (21,900,078) (1,056,184) (22,956,262) JUNE - 101,919,240 68,998,019 95,782,362 206,280,512 190,717,150 663,697,284 Accummulated impairment losses - - - - - - - Carrying value JUNE 286,099,948 434,420,482 27,909,533 20,420,119 193,334,485 21,620,574 983,805,142 At 1 January 2016 286,099,948 439,769,184 17,494,133 14,623,143 138,906,131 20,156,805 917,049,344 Some fixed assets were professionally re-valued as at 31 December 2006, by Messrs Adegboyega Sanusi & Co. on the basis of open market values. These values were incorporated in the books at that date. The surplus arising on the revaluation over the written down values was treated in the NGAAP financial statements as fixed assets revaluation reserve. However, in compliance with IFRS (i.e. IAS 16) the revalued amount was taken as deemed cost at transition date and the revaluation reserve was transferred to revenue reserve. During the year ended 31 December 2011, the landed property of CHI Capital Limited were professionally re-valued at N84 million by Messrs Adegboyega Sanusi & Co. Estate Surveyors & Valuers on the basis of open market value between a willing seller and buyer. The sum of N65,495,775 was then recognised as revaluation reserve in the financial statements. 32
Property and equipment 12.2a The group 2015 Office Furniture & Motor Computer Land Building Equipment Fittings Vehicles Equipment Total N N N Costs At 1 January 286,099,948 536,339,722 78,041,943 105,157,160 274,518,389 208,533,277 1,488,690,439 Additions in the year - - 6,328,448 3,540,697 89,448,174 2,363,500 101,680,819 Disposals in the year - - (691,039) (825,000) (25,140,882) (2,460,553) (29,117,474) At 31 December 2015 286,099,948 536,339,722 83,679,352 107,872,857 338,825,681 208,436,224 1,561,253,784 Accumulated depreciation At 1 January - 80,162,865 62,144,799 89,066,570 179,808,113 182,045,504 593,227,851 Depreciation charge for the year - 16,407,673 4,727,459 5,008,144 41,152,831 8,264,557 75,560,664 Disposals in the year - - (687,039) (825,000) (21,041,394) (2,030,642) (24,584,075) At 31 December 2015-96,570,538 66,185,219 93,249,714 199,919,550 188,279,419 644,204,440 Accummulated impairment losses - - - - - - - Carrying value At 31 December 2015 286,099,948 439,769,184 17,494,133 14,623,143 138,906,131 20,156,805 917,049,344 At 31 December 2014 286,099,948 456,176,857 15,897,144 16,090,590 94,710,276 26,487,773 895,462,588 33
12.2b Property and equipment 2016 The company Office Furniture & Motor Computer Land Building Equipment Fittings Vehicles Equipment Total N N N Costs At 1 January 286,099,948 536,339,722 83,564,528 107,872,857 327,710,679 207,661,473 1,549,249,207 Additions 13,228,200 8,329,624 84,595,000 4,457,500 110,610,324 Disposals - - - - (23,271,497) (556,000) (23,827,497) JUNE 286,099,948 536,339,722 96,792,728 116,202,481 389,034,182 211,562,973 1,636,032,034 Accumulated depreciation At 1 January - 96,570,538 66,155,857 93,249,715 196,402,613 187,946,133 640,324,856 Depreciation charge for the period - 5,348,703 2,812,800 2,532,648 28,048,566 3,493,915 42,236,632 Disposals - - - - (21,900,078) (555,833) (22,455,911) JUNE - 101,919,241 68,968,657 95,782,363 202,551,101 190,884,215 660,105,577 Carrying value JUNE 286,099,948 434,420,481 27,824,072 20,420,118 186,483,081 20,678,758 975,926,463 At 31 December 2015 286,099,948 439,769,184 17,408,672 14,623,142 131,308,067 19,715,340 908,924,352 Some items of property and equipment were professionally re-valued as at 31 December 2006, by Messrs Adegboyega Sanusi & Co. on the basis of open market values. These values were incorporated in the books at that date. The surplus arising on the revaluation over the written down values was treated in the NGAAP financial statements as revaluation surplus. However, in compliance with IFRS (i.e IAS 16) the revalued amount was taken as deemed cost at transition date and the surplus on revaluation was transferred to retained earnings. 34
Property and equipment (Cont'd) 2015 The company Office Furniture & Motor Computer Land Building Equipment Fittings Vehicles Equipment Total N N N Costs At 1 January 286,099,948 536,339,722 77,986,942 105,157,160 270,068,388 207,905,526 1,483,557,686 Additions - - 6,268,625 3,540,697 82,783,174 2,216,500 94,808,996 Disposals - - (691,039) (825,000) (25,140,882) (2,460,553) (29,117,474) At 31 December 2015 286,099,948 536,339,722 83,564,528 107,872,857 327,710,680 207,661,473 1,549,249,208 Accumulated depreciation At 1 January - 80,162,865 62,129,675 89,066,571 178,176,446 181,808,408 591,343,965 Depreciation charge for the year - 16,407,673 4,713,221 5,008,144 39,267,561 8,168,367 73,564,966 Disposals - - (687,039) (825,000) (21,041,394) (2,030,642) (24,584,075) At 31 December 2015-96,570,538 66,155,857 93,249,715 196,402,613 187,946,133 640,324,856 Carrying value At 31 December 2015 286,099,948 439,769,184 17,408,671 14,623,142 131,308,067 19,715,340 908,924,352 At 31 December 2014 286,099,948 456,176,857 15,857,267 16,090,589 91,891,942 26,097,118 892,213,721 35
13. Statutory deposits 300,000,000 300,000,000 300,000,000 300,000,000 This represents the amount deposited with the Central Bank 14. Insurance contract liabilities Reserve for outstanding claims (Note 14.1) 944,485,481 895,550,802 944,485,481 895,550,802 Unearned premium reserve (Note 14.2) 1,464,834,226 1,323,119,277 1,464,834,226 1,323,119,277 2,409,319,707 2,218,670,079 2,409,319,707 2,218,670,079 14.1 Reserve for outstanding claims - 2016 Outstanding Provision for Outstanding Provision for Claim IBNR Gross Reserve Claim IBNR Gross Reserve N N Fire 95,640,089 168,797,842 264,437,931 95,640,089 168,797,842 264,437,931 General accident 133,467,480 68,837,677 202,305,157 133,467,480 68,837,677 202,305,157 Motor 107,603,977 92,686,257 200,290,234 107,603,977 92,686,257 200,290,234 Marine 5,230,042 27,293,489 32,523,531 5,230,042 27,293,489 32,523,531 Bond 706,800 6,374,014 7,080,814 706,800 6,374,014 7,080,814 Engineering 7,951,836 26,963,770 34,915,606 7,951,836 26,963,770 34,915,606 Aviation 10,170,000 76,131,277 86,301,277 10,170,000 76,131,277 86,301,277 Oil & gas 16,700,000 99,930,931 116,630,931 16,700,000 99,930,931 116,630,931 377,470,224 567,015,257 944,485,481 377,470,224 567,015,257 944,485,481 Reserve for outstanding claims - 2015 Outstanding Provision for Outstanding Provision for Claim IBNR Gross Reserve Claim IBNR Gross Reserve N N Fire 81,379,156 168,797,842 250,176,998 81,379,156 168,797,842 250,176,998 General accident 141,109,259 68,837,677 209,946,936 141,109,259 68,837,677 209,946,936 Motor 71,889,477 92,686,257 164,575,734 71,889,477 92,686,257 164,575,734 Marine 7,531,131 27,293,489 34,824,620 7,531,131 27,293,489 34,824,620 Bond 706,800 6,374,014 7,080,814 706,800 6,374,014 7,080,814 Engineering 6,804,722 26,963,770 33,768,492 6,804,722 26,963,770 33,768,492 Aviation 6,770,000 76,131,277 82,901,277 6,770,000 76,131,277 82,901,277 Oil & gas 12,345,000 99,930,931 112,275,931 12,345,000 99,930,931 112,275,931 328,535,545 567,015,257 895,550,802 328,535,545 567,015,257 895,550,802 14.2 Unearned premium reserve Fire 225,107,502 181,680,772 225,107,502 181,680,772 General accident 219,111,017 173,968,966 219,111,017 173,968,966 Motor 498,637,126 462,932,271 498,637,126 462,932,271 Marine 98,810,692 98,518,877 98,810,692 98,518,877 Oil & Gas 242,554,297 250,900,679 242,554,297 250,900,679 Engineering 46,985,276 46,918,726 46,985,276 46,918,726 Aviation 126,446,554 101,429,847 126,446,554 101,429,847 Bond 7,181,762 6,769,139 7,181,762 6,769,139 1,464,834,226 1,323,119,277 1,464,834,226 1,323,119,277 34
14.3 Funds representing insurance contract liabilities Balance with banks 155,567,162 102,987,121 155,567,162 102,987,121 Fixed deposits 2,926,152,742 2,667,381,666 2,926,152,742 2,667,381,666 3,081,719,904 2,770,368,787 3,081,719,904 2,770,368,787 15. Trade payables Due to insurance companies (6,225,857) 112,060,913 (6,225,857) 112,060,913 Due to reinsurance companies - local 345,793,955-345,793,955 - Other trade payables - - - - 339,568,098 112,060,913 339,568,098 112,060,913 Current 339,568,098 112,060,913 339,568,098 112,060,913 Non-current - - - - 16. Other payables and provision Lease payables - - - - Audit fees 4,000,000 12,132,500 4,000,000 6,970,000 VAT payable - 7,543,934-7,543,934 Witholding tax payable 284,825 740,082 284,825 740,082 Unclaimed dividend payable (Note 16.1) 72,747,541 72,747,541 72,747,541 72,747,541 Accrued expenses 7,387,911 47,201,405 7,387,911 29,512,688 Sundry creditors 57,895,339 23,202,898 73,876,930 54,025,878 142,315,616 163,568,360 158,297,207 171,540,123 Current 142,315,616 163,568,360 158,297,207 171,540,123 Non-current - - - - 16.1 Unclaimed dividend payable represents amount of dividend which shareholders are yet to collect from the company's registrars and which, in line with the relevant rules of the Securities and Exchange Commission, have been returned to the to be held in a separate investment trust account. The balance in the fund is N72,747,540.97 (made up of principal of N72,354,130.97 and accrued interest of N393,410). 17. Retirement benefit obligation 17.1 Defined contribution pension plan At 1 January 184,444 137,815 4,430 - Provision during the period (Note 33) 16,852,489 54,019,284 16,750,889 51,916,751 Payment during the period (11,563,196) (53,972,655) (11,419,397) (51,912,321) JUNE 5,473,737 184,444 5,335,922 4,430 35
18. Taxation 18.1 Income tax expense Income tax 145,702,786 100,477,804 139,065,799 95,264,465 Education tax - 6,698,520-6,350,964 Information technology development - 7,095,813-6,869,977 Under/(over)provision in previous year - - - - 145,702,786 114,272,137 139,065,799 108,485,406 Deferred tax (Note 18.3) 17,500,500 44,828,744 17,500,500 44,232,641 163,203,286 159,100,881 156,566,299 152,718,047 18.1.1 The Nigerian Information Technology Development Agency (NITDA) Act was signed into law on 24 April 2007. Section 12(2a) of the Act demands that, 1% of profit before tax should be paid to the Nigerian Information Technology Development Agency. In line with the Act, the has provided for NITDA levy at the specified rate. 18.2 Current income tax liabilities At 1 January 120,730,104 72,341,424 93,162,912 47,695,854 Transfer from VAT and WHT payable - - - - Payments during the period (47,886,834) (65,883,457) (41,104,789) (63,018,348) 72,843,270 6,457,967 52,058,123 (15,322,494) Charge for the period 145,702,785 114,272,137 139,065,799 108,485,406 JUNE 218,546,055 120,730,104 191,123,922 93,162,912 18.3 Deferred tax liabilities At 1 January 140,289,268 95,460,524 139,693,165 95,460,524 Charge for the period (Note 18.1) 17,500,500 44,828,744 17,500,500 44,232,641 JUNE 157,789,768 140,289,268 157,193,665 139,693,165 The has adopted the International Accounting Standards (IAS 12) on accounting for taxation, which is now computed using liability method. 18.4 Reconciliation of effective tax rate Profit after tax 259,138,731 545,811,078 246,012,026 534,279,069 Total income tax expense Income 145,702,786 100,477,804 139,065,799 95,264,465 Education - 6,698,520-6,350,964 Information technology tax - 7,095,813-6,869,977 (Over)/under-provision - - - - Deferred tax (Note 18.3) 17,500,500 44,828,744 17,500,500 44,232,641 163,203,286 159,100,881 156,566,299 152,718,047 Profit for the period before excluding income tax 422,342,016 704,911,959 402,578,325 686,997,116 Effective tax rate 39% 23% 39% 22% 36
19. Share capital Authorised: 10 billion ordinary shares of 50k each 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 19.1 Issued and fully paid: 6 billion ordinary shares of 50k each JUNE 3,000,000,000 3,000,000,000 3,000,000,000 3,000,000,000 The holder of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at meetings of the. 20. Other reserves 20.1. Contingency reserve At 1 January 1,058,782,003 882,516,340 1,058,782,003 882,516,340 Transfer from income statement (Note 21) 99,222,743 176,265,663 99,222,743 176,265,663 JUNE 1,158,004,746 1,058,782,003 1,158,004,746 1,058,782,003 In line with sections 21(1) and (2) and 22(16) of the Insurance Act 2003, Insurance companies in Nigeria are required to transfer to the statutory contingency reserve, the higher of 20% of net profits and 3% of total premium. 20.2 Statutory reserve At 1 January 5,826,986 8,477,548 - - Transfer from income statement (Note 21) 2,123,317 (2,650,562) - - JUNE 7,950,303 5,826,986 - - In line with Central Bank of Nigeria guideline, Finance companies in Nigeria are required to transfer a minimum of 15% of its profit before tax to statutory reserve until the reserve fund equals the Paid-up Capital and a minimum of 10% thereafter. This applies to Grand Treasurers Limited a sub-subsidiary within the group. 21. Retained earnings At 1 January 203,203,878 (48,682,240) 170,295,943 (67,717,463) Dividend declared and paid in the year based on - (120,000,000) - (120,000,000) the previous year published accounts (60,000,000) (309,859) (60,000,000) - Transfer to contigency reserve (Note 20.1) (99,222,743) (176,265,663) (99,222,743) (176,265,663) Transfer from income statement 259,138,731 545,811,078 246,012,026 534,279,069 Transfer to statutory reserve (Note 20.2) (2,123,317) 2,650,562 - - JUNE 300,996,549 203,203,878 257,085,226 170,295,943 Retained earnings are the carried forward recogni sed income net of expenses plus current period pr ofit attributable to shareholders. 22. Profit before taxation Profit before taxation is stated after Depreciation of property and equipment 44,348,399 78,543,747 42,236,632 76,495,992 Auditors' remuneration 4,002,500 11,300,000 4,002,500 6,800,000 Directors' remuneration: - Fees 15,989,801 4,250,000 15,989,801 4,250,000 Profit on disposal of property and equipment - (2,936,429) - (3,393,914) Foreign exchange (gains)/loss (56,762,267) (166,383,629) (56,762,267) (166,383,629) 37
23. Gross premium earned analysed as follows: <------------------- 2016 ---------------> Increase/ Direct premium Inward reinsurance premium decrease in unearned premium Gross premium earned Fire 467,281,496 9,995,358 (43,426,730) 433,850,124 General accident 408,261,913 3,477,544 (45,142,052) 366,597,406 Motor 814,803,790 4,900,440 (35,704,856) 783,999,375 Aviation 823,173,190 6,535,284 (25,016,708) 804,691,766 Oil & Gas 592,500,035 13,147,832 8,346,382 613,994,249 Marine 193,360,467 1,394,260 (291,814) 194,462,912 Engineering 78,858,620 1,327,762 (66,550) 80,119,831 Bond 17,640,613 - (412,622) 17,227,991 3,395,880,124 40,778,480 (141,714,950) 3,294,943,654 Gross premium earned analysed as follows: <--------------------- 2015 --------------------> Increase/ Direct premium Inward reinsurance premium decrease in unearned premium Gross premium earned Fire 419,429,127 15,649,915 (37,759,005) 397,320,037 General accident 416,046,044 3,761,600 (35,285,822) 384,521,822 Motor 713,609,396 6,051,737 (100,967,492) 618,693,641 Aviation 760,463,662 67,966,468 (8,222,341) 820,207,789 Oil & Gas 1,102,782,945 15,160,525 (74,485,186) 1,043,458,284 Marine 159,391,206 3,774,412 (13,688,393) 149,477,226 Engineering 76,664,089 3,466,965 (9,761,612) 70,369,442 Bond 8,105,570 - (1,830,150) 6,275,420 3,656,492,039 115,831,622 (282,000,000) 3,490,323,661 24. Reinsurance expense The reinsurance expense is analysed as follows: Reinsurance premium cost 1,362,145,665 1,643,276,947 1,362,145,665 1,643,276,947 (Increase)/decrease in prepaid reinsurance (Note 7.3) - - - - Reinsurance expense 1,362,145,665 1,643,276,947 1,362,145,665 1,643,276,947 25. Fee and commission Fire 44,694,202 30,913,825 44,694,202 30,913,825 General accident 3,270,681 7,530,983 3,270,681 7,530,983 Motor 538,225 1,624,446 538,225 1,624,446 Aviation 24,349,681 9,195,571 24,349,681 9,195,571 Oil & Gas 52,404,348 20,440,221 52,404,348 20,440,221 Marine 9,521,086 5,298,146 9,521,086 5,298,146 Engineering 10,592,697 9,581,685 10,592,697 9,581,685 Bond - - - - 145,370,920 84,584,876 145,370,920 84,584,876 38
Claims Claims Claims Claims expenses expenses expenses expenses 30 JUNE 2016 30 June 2015 30 JUNE 2016 30 June 2015 25a Claims expenses Claims paid during the year 719,195,133 594,372,281 719,195,133 594,372,281 Opening IBNR and outstanding claims (895,550,802) (815,249,252) (895,550,802) (815,249,252) Closing IBNR and outstanding claims (Note 14.1) 944,485,481 830,607,669 944,485,481 830,607,669 Gross claims expenses 768,129,812 609,730,698 768,129,812 609,730,698 25b. Claims recoverable Opening claims recoverable 281,937,926 213,551,222 281,937,926 213,551,222 Claims recovered 161,283,263 85,400,844 161,283,263 85,400,844 Closing claims recoverable (281,937,926) (213,551,222) (281,937,926) (213,551,222) Net recoverable 161,283,263 85,400,844 161,283,263 85,400,844 Net claims expenses 606,846,549 524,329,854 606,846,549 524,329,854 26. Underwriting expenses Underwriting expenses- 2016 Acquisition Maintenance Acquisition Maintenance expenses expenses expenses expenses Fire 94,917,032 27,440,474 94,917,032 27,440,474 General accident 80,456,581 24,171,289 80,456,581 24,171,289 Motor 94,853,318 55,700,805 94,853,318 61,920,165 Aviation 39,219,792 42,742,875 39,219,792 42,742,875 Oil & Gas 94,135,880 29,888,661 94,135,880 29,888,661 Marine 39,011,394 10,823,293 39,011,394 10,823,293 Engineering 15,988,140 4,748,335 15,988,140 4,748,335 Bond 3,273,617 889,519 3,273,617 889,519 461,855,754 196,405,251 461,855,754 202,624,611 Underwriting expenses- 2015 Acquisition Maintenance Acquisition Maintenance expenses expenses expenses expenses Fire 83,382,928 976,460 83,382,928 976,460 General accident 78,933,708 4,407,613 78,933,708 4,407,613 Motor 80,669,221 18,360,344 80,669,221 18,360,344 Aviation 30,234,131 1,824,599 30,234,131 1,824,599 Oil & Gas 33,716,928 51,829,287 33,716,928 51,829,287 Marine 34,086,639 2,814,179 34,086,639 2,814,179 Engineering 16,003,387 888,427 16,003,387 888,427 Bond 1,376,935 272,934 1,376,935 272,934 358,403,877 81,373,843 358,403,877 81,373,843 39
JUNE JUNE JUNE JUNE 27. Investment income Interest received 169,432,569 179,113,735 169,432,569 179,113,735 Amortised gain(loss) on held to maturity (Note 3.4) 20,529,521 2,684,303 20,529,521 2,684,303 Dividend received 2,194,203 333,958 2,194,203 333,958 192,156,293 182,131,996 192,156,293 182,131,996 27.1 Investment income Investment income attributable to policyholders' fund 148,763,123 155,832,550 148,763,123 155,832,550 Investment income attributable to shareholders' fund 43,393,170 26,299,446 43,393,170 26,299,446 192,156,293 182,131,996 192,156,293 182,131,996 28. Other operating income Profit on disposal of property and equipment 2,613,915 3,091,104 2,613,915 3,091,104 Interest on staff receivables 5,614,050 70,859 5,614,050 70,859 Rent income on investment properties 390,600 450,000 390,600 450,000 Recoveries in the year 24,000 243,109 24,000 243,109 Exchange gain 56,762,267 20,337,380 56,762,267 20,337,380 Other income 37,974,099 27,456,650 - (48,296) 103,378,931 51,649,103 65,404,832 24,144,157 29. Impairment on charge Cash and cash equivalent (Note 2.2) - - - - Loans and receivables (Note 3.2) - 500,000-500,000 Finance Lease receivable (Note 5.1) - (3,496,041) - - Trade receivables (Note 6.1) - - - - Other receivables (Note 9) - - - - Inventories (Note 11) - - - - - (2,996,041) - 500,000 40