2 REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2015 Board of Directors The Board of Directors of Altius Insurance Limited (Formerly Alpha Insurance Limited) (The Company ) presents its report and audited financial statements for the year ended 31 December 2015. Change of Company name On 24 July 2015 the Company changed its name from Alpha Insurance Limited to Altius Insurance Limited. Principal Activities The principal activities of the Company continue to comprise the provision of Life insurance, Accident and Health insurance and General Business insurance. Results The profit for the year after taxation was 3.282.313 (2014: 2.497.947). Significant events after the end of the financial year Any significant events that occurred after the end of the year are described in note 35 to the financial statements. Expected future developments of the Company The Board of Directors does not expect any major changes in the principal activities of the Company in the foreseeable future. Existence of branches The Company maintains branches in Nicosia, Limassol, Larnaca and Paphos. Review of the development and current position of the Company and description of the major risks and uncertainties The Company's development to date, financial results and position as presented in the financial statements are considered satisfactory. The correct management of the various risks and uncertainties is very important for the future development of the Company. A risk is any financial, insurance or other factor that creates possibilities for a future reduction in profitability. Details of the operating environment of the Company and the steps taken to manage the risks faced by the Company are described in notes 29 and 30 of the financial statements. Dividends On 2 January 2015, the Board of Directors approved a dividend payment of 4.000.000.
3 REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2015 (continued) Share capital There were no changes in the share capital of the Company. On 16 January 2015, Alpha Group Investments Ltd and Alpha Bank S.A. proceeded with the sale of their entire holding in the Company s share capital to third parties. As a result, from 16 January 2015 the Company is controlled directly or indirectly by the new Chairman of the Board of Directors of the Company, Mr Doukas Pavlos Paleologos. Capital Management The Solvency II capital regime for insurance companies ( Directive 2009/138/EC adopted in November 2009, and amended by Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 (the so-called Omnibus II Directive )) has come into effect on 1 st January 2016. After the assessment made during the preparatory phase prior to 1 st January 2016 the Company s Board of Directors is of the opinion that the Company meets the capital requirements under Solvency II and has a satisfactory solvency ratio (Solvency Capital Requirement SCR ratio). Additionally the Board of Directors is of the opinion that it will be in compliance with the capital requirements of the Day1 reporting under Solvency II i.e. as of 1 st January 2016. Board of Directors The members of the Board of Directors as at 31 December 2015 and at the date of this report are shown on page 1. Mr Georgios Georgiou, who was appointed as Chairman of the Board of Directors on 11 May 2011, resigned on 16 January 2015 and on the same date Mr Doukas Pavlos Paleologos was appointed in his position. Mr Constantinos Koutentakis and Mrs Popi Hadjioannou Demetriou who were appointed as directors on 8 July 2011, resigned on 16 January 2015 and on the same date Mr Gerasimos Gazis and Mr Nikolaos Pantelakis were appointed in their position. Mrs Chrysoula Kyriakopoulou who was appointed as director on 16 January 2015, resigned on 21 January 2016 and on the same date Mr Ioannis Economides was appointed in her position. Mr Dionisios Karatsis, who was appointed as a director on 8 December 2014, resigned on 16 January 2015. There were no significant changes in the assignment of the responsibilities and the remuneration of the members of the Board of Directors during 2015.
4 (FORMERLYALPHA INSURANCE LIMITED) REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2015 (continued) Independent Auditors The independent auditors, Deloitte Limited, have expressed their willingness to continue in office and a resolution authorising the Board of Directors to fix their remuneration will be submitted at the forthcoming Annual General Meeting. BY ORDER OF THE BOARD OF DIRECTORS Polykarpos Gregoriou Secretary Nicosia, 15 April 2016
5 Independent Auditor s Report To the Members of Altius Insurance Limited (Formerly Alpha Insurance Limited) Report on the financial statements We have audited the accompanying financial statements of Altius Insurance Limited (Formerly Alpha Insurance Limited) (the Company ) on pages 7 to 66, which comprise the statement of financial position as at 31 December 2015, the income statement, income statement and statement of other comprehensive income and statement of changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Board of Directors responsibility for the financial statements The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 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 whether the financial statements are free from material misstatement. 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true and fair view 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 Board of 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.
6 Independent Auditor s Report (continued) To the Members of Altius Insurance Limited (Formerly Alpha Insurance Limited) Opinion In our opinion, the financial statements give a true and fair view of the financial position of Altius Insurance Limited (Formerly Alpha Insurance Limited) as at 31 December 2015, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap 113. Report on other legal requirements Pursuant to the requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the following: We have obtained all the information and explanations we considered necessary for the purposes of our audit. In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books. The Company s financial statements are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required. In our opinion, the information given in the report of the Board of Directors is consistent with the financial statements. Other matter This report, including the opinion, has been prepared for and only for the Company s members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to. Panos Papadopoulos Certified Public Accountant and Registered Auditor for and on behalf of Deloitte Limited Certified Public Accountants and Registered Auditors Nicosia, 15 April 2016
7 INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015 Notes 2015 2014 Gross premium 3 29.565.288 30.189.658 Movement in gross unearned premium reserve 3 (492.849) 141.578 Movement in unexpired risks reserve 3 66.856 (35.831) Gross earned premiums 29.139.295 30.295.405 Reinsurance premiums ceded 3 (9.352.582) (10.132.997) Reinsurance share of movement in gross unearned premium reserve 3 164.866 (17.861) Net earned premiums 19.951.579 20.144.547 Gross claims incurred 4 (15.478.087) (17.821.605) Reinsurers share in gross claims incurred 4 5.010.028 5.873.723 Net claims incurred (10.468.059) (11.947.882) Gross commissions payable 4 (3.083.723) (2.992.726) Commissions receivable from reinsurers 4 1.788.821 1.977.170 Movement in deferred acquisition costs 4 (22.190) 35.644 Net commissions payable (1.317.092) (979.912) Administration expenses 5 (5.503.682) (5.105.841) Profit on investments 6 2.773.625 4.267.156 Increase in life assurance funds (1.536.515) (3.691.323) Dividends to policyholders with profit participation (264) (665) Profit before tax 3.899.592 2.686.080 Tax for the year 10 (617.279) (188.133) Profit after tax 3.282.313 2.497.947 Earnings per share (cent) 8 53,58 40,78 See accompanying notes to these financial statements
8 INCOME STATEMENT AND STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015 Notes 2015 2014 Profit after tax 3.282.313 2.497.947 Other comprehensive income Items that will not be reclassified subsequently to the Income Statement: Property revaluation Fair value adjustment on land and buildings 11 310 (5.190) Deferred Tax 22 2.132 (468) 2.442 (5.658) Items that may be reclassified subsequently to the Income Statement: Available-for-sale investments Fair value gain 25 93.621 1.568.017 93.621 1.568.017 Other comprehensive income for the year, net of tax 96.063 1.562.359 Total comprehensive income for the year 3.378.376 4.060.306 See accompanying notes to these financial statements
9 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015 2015 2014 Notes ASSETS Property, plant and equipment 11 504.848 481.265 Intangible assets 12 76.449 73.412 Investment property 13 1.248.500 1.311.500 Available-for-sale investments 16 26.558.060 8.615.218 Financial assets at fair value through profit or loss 15 16.580.907 18.418.926 Fixed deposits 27 1.962.102 24.131.842 Loans receivable 14 827.586 834.285 Gross deferred acquisition costs 26 929.359 905.187 Amounts due from agents and policyholders 17 7.271.234 6.010.272 Tax receivable 10 272.866 398.928 Amounts due from reinsurers - 320.668 Reinsurers share in the insurance liabilities 18 12.424.904 11.228.995 Prepayments and other receivables 19 1.523.642 919.159 Cash and cash equivalents 20 13.868.180 8.160.573 Total assets 84.048.637 81.810.230 EQUITY AND LIABILITIES Capital and reserves Share capital 23 10.474.966 10.474.966 Reserves 7.527.070 8.148.694 Total equity 18.002.036 18.623.660 Liabilities Life assurance funds 18 35.889.512 34.204.390 Provision for deferred tax 22 171.220 170.360 Insurance liabilities 18 26.893.413 26.502.602 Reinsurers share in deferred acquisition costs 26 632.008 579.658 Amount due to reinsurers 196.528 - Accrued expenses and other payables 21 2.259.961 1.727.041 Bank overdrafts 20 3.959 2.519 Total liabilities 66.046.601 63.186.570 Total equity and liabilities 84.048.637 81.810.230 The financial statements were authorised by the Board of Directors on 15 April 2016. Doukas Pavlos Paleologos Chairman Evangelos Anastasiades Chief Executive Officer See accompanying notes to these financial statements