Dec 31, 2016 - No. of shares. Cost per unit. Total Cost ..... owns 100% interest in CHI Support Services Limited which i
CONSOLIDATED HALLMARK INSURANCE PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT PERIOD ENDED 30 SEPTEMBER 2016
Notes
Assets Cash and cash equivalents Financial assets: -At fair value through profit or loss -Loans and receivables -Available for sale assets -Held to maturity Deposit for shares Finance lease receivables Trade receivables Reinsurance assets Deferred acquisition cost Other receivables & prepayments Investment in subsidiaries Inventories Intangible Assets Investment properties Property and equipment Statutory deposits
Group September 31 December 2016 2015 N N
Company September 31 December 2016 2015 N N
2.
2,862,296,185
2,822,735,766
2,637,077,063
2,780,220,924
3.1 3.2 3.3 3.4 4. 5. 6. 7. 8. 9. 10. 11. 12.0 12.1 12.2 13.
141,630,618 236,631,809 60,950,000 1,014,735,272 215,627,088 280,579,297 485,851,346 192,565,490 198,388,279 3,418,701 13,981,971 893,589,275 965,540,115 300,000,000
183,200,238 61,029,203 60,950,000 497,905,166 172,095,986 81,030,026 691,913,416 190,525,298 135,246,867 5,146,854 16,467,871 888,020,000 917,049,344 300,000,000
136,682,023 215,422,459 60,950,000 1,014,735,272 280,579,297 485,851,346 192,565,490 210,330,951 480,000,000 13,189,771 808,928,275 958,669,088 300,000,000
177,671,643 70,851,262 60,950,000 497,905,166 81,030,026 691,913,416 190,525,298 135,266,048 250,000,000 15,592,433 803,359,000 908,924,352 300,000,000
7,865,785,446
7,023,316,035
7,794,981,035
6,964,209,568
14. 15. 16. 17. 18.2 18.3
2,307,732,618 582,960,851 201,113,714 5,759,030 178,049,506 186,329,728 3,461,945,447
2,218,670,079 112,060,913 163,568,360 184,444 120,730,104 140,289,268 2,755,503,168
2,307,732,618 582,960,851 218,755,287 5,525,733 148,789,293 185,733,625 3,449,497,407
2,218,670,079 112,060,913 171,540,123 4,430 93,162,912 139,693,165 2,735,131,622
19.1 20.1. 20.2 21.
3,000,000,000 1,206,906,555 9,035,935 187,897,509 4,403,839,999
3,000,000,000 1,058,782,003 5,826,986 203,203,878 4,267,812,867
3,000,000,000 1,206,906,555 138,577,073 4,345,483,628
3,000,000,000 1,058,782,003 170,295,943 4,229,077,946
Total liabilities and equity and reserves
7,865,785,446
7,023,316,035
7,794,981,035
6,964,209,568
Total assets Liabilities Insurance contract liabilities Trade payables Other payables and provision Retirement benefit obligations Income tax liabilities Deferred tax liabilities Total liabilities Equity and reserves Issued and paid up share capital Contingency reserve Statutory reserve Retained earnings Total equity and reserves
The consolidated financial statements were approved by the Board of Directors on 26 October, 2016
Chief Andrew D. S. Odigie Vice Chairman FRC/2013/ICAN/00000004421
Eddie A. Efekoha Managing Director FRC/2013/CIIN/00000002189
20
Babatunde Daramola Chief Financial Officer FRC/2013/ICAN/00000000564
CONSOLIDATED HALLMARK INSURANCE PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD JANUARY 1ST - 30 SEPTEMBER 2016
Notes Gross premium written
September 2016 N
Group July -Sept 2016 N
September 2015 N
4,924,157,282
1,487,498,677
4,939,411,645
Gross premium income Reinsurance premium expenses
23. 24.
4,884,029,421 (2,042,027,164)
1,589,085,767 (679,881,499)
4,657,411,645 (2,221,865,129)
Net premium income Fee and commission income
25.
2,842,002,257 185,067,338
909,204,268 39,696,418
2,435,546,516 122,940,410
3,027,069,595
948,900,686
2,558,486,926
Net underwriting income Claims expenses Claims recoveries from reinsurers Claims incurred
25a 25b.
(1,296,324,713) 268,883,655 (1,027,441,058)
(528,194,901) 107,600,392 (420,594,509)
Underwriting expenses
26.
(1,112,494,873)
(902,208,592) 189,163,537 (713,045,055)
(455,213,072)
(593,608,226)
887,133,664 315,158,640 129,097,500 -
73,093,105 123,002,347 25,718,569 -
1,251,833,645 301,783,011 116,127,358 (2,996,041)
(34,800,641) (938,510,225) 358,078,938 (162,051,800)
(18,640,570) (267,436,530) (64,263,079) 1,151,487
(90,060,445) (1,045,960,083) 530,727,445 (168,663,246)
Profit after taxation
196,027,138
(63,111,593)
362,064,199
Total comprehensive income for the year
196,027,138
(63,111,593)
362,064,199
Profit attributable to: Equity holders of the parents'
196,027,138
(63,111,593)
362,064,199
(148,124,553) 47,902,585
(48,901,810) (112,013,403)
(139,722,349) 222,341,850
Underwriting profit Investment income Other operating income Impairment (charge)/write back Net fair value gains on financial assets at fair value through profit or loss Management expenses Profit before taxation Income tax expense
27. 28. 29. 30. 31. 18.1
Continency reserve
Basic and diluted earnings per share (Kobo)
32.
3.27
6.03
21
July -Sept 2015 N 1,167,087,983 1,167,087,983 (578,588,181) 588,499,802 38,355,534 626,855,336 (292,477,895) 103,762,693 (188,715,202) (156,110,507) 282,029,629 119,651,016 53,196,093 -
September 2016 N
July -Sept 2016
Company September 2015
4,924,157,282
1,487,498,677
4,939,411,645
4,884,029,421 (2,042,027,164)
1,589,085,767 (679,881,499) 909,204,268 39,696,418 948,900,686 (528,194,901) 107,600,392 (420,594,509) (456,467,398) 71,838,779 123,002,347 10,067,156 -
4,657,411,645 (2,221,865,129) 2,435,546,516 122,940,410 2,558,486,926 (902,208,592) 189,163,537 (713,045,055) (593,608,226) 1,251,833,645 301,783,011 77,340,250 500,000 (93,556,486) (1,004,442,305) 533,458,116 (158,878,356) 374,579,760 374,579,760 374,579,760 (139,722,349)
2,842,002,257 185,067,338 3,027,069,595 (1,296,324,713) 268,883,655 (1,027,441,058) (1,120,947,763) 878,680,774 315,158,640 75,471,988 -
(29,445,940) (362,333,280) 63,097,518 (17,920,176) 45,177,342 45,177,342 45,177,342 (26,552,639)
(34,800,641) (906,312,105) 328,198,655 (151,792,973)
(148,124,553)
(18,640,570) (260,647,381) (74,379,670) 4,773,326 (69,606,344) (69,606,344) (69,606,344) (48,901,810)
18,624,703
28,281,129
(118,508,154)
176,405,682 176,405,682
176,405,682
2.94
234,857,411
6.24
July -Sept 2015
1,167,087,983 1,167,087,983 (578,588,181) 588,499,802 38,355,534 626,855,336 (292,477,895) 103,762,693 (188,715,201) (156,110,507) 282,029,629 119,651,016 53,196,093 500,000 (29,445,940) (362,333,280) 63,597,519 (17,920,176) 45,677,343 45,677,343 45,677,343 (26,552,639) 19,124,704
CONSOLIDATED HALLMARK INSURANCE PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AT PERIOD ENDED 30 SEPTEMBER 2016 The Group Issued share capital N At 1 January 2015 Changes in equity for 2015: Profit for the period Other comprehensive income for the year Total comprehensive income for the year Transactions with owners: Transfer to contigency reserves Transfer to statutory reserves Dividends declared during the year Non-controlling interest arising on business combination Contribution by and to owners of the business
Contingency reserves N
3,000,000,000
882,516,340
-
-
Statutory reserve N 8,477,548 -
Retained earnings N (48,682,240)
Total equity N 3,842,311,648
318,436,633 318,436,633
318,436,633 318,436,633
(10,283,440) (10,283,440)
-
113,169,710 -
(2,650,560) -
(110,519,150) -
-
113,169,710
(2,650,560)
(110,519,150)
At 30 September 2015
3,000,000,000
995,686,050
5,826,988
159,235,243
4,150,464,841
At 1 January 2016
3,000,000,000
1,058,782,003
5,826,986
203,203,878
4,267,812,867
196,027,138 196,027,138
196,027,138 196,027,138
(60,000,000) (60,000,000)
Changes in equity for 2016: Profit for the year Other comprehensive income for the year Total comprehensive loss for the year Transactions with owners: Transfer within reserves Dividends relating to prior periods paid during the year Non-controlling interest arising on business combination Contribution by and to owners of the business At 30 SEPTEMBER 2016
-
-
-
-
148,124,553 -
3,208,949 -
(151,333,502) (60,000,000)
-
148,124,553
3,208,949
(211,333,502)
1,206,906,556
9,035,935
187,897,513
3,000,000,000
22
4,403,840,005
CONSOLIDATED HALLMARK INSURANCE PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AT PERIOD ENDED 30 SEPTEMBER 2016 The Company Issued share capital N At 1 January 2015
Contigency reserves N
3,000,000,000
858,381,485
-
-
-
139,722,349
-
At 30 SEPTEMBER 2015 At 1 January 2016
Changes in equity for 2015: Profit for the year Other comprehensive income for the year Total comprehensive income for the year
(70,966,436)
Total equity N 3,787,415,049
374,579,760 374,579,760
374,579,760 374,579,760
139,722,349
(139,722,349) (120,000,000) (259,722,349)
(120,000,000) (120,000,000)
3,000,000,000
998,103,834
43,890,975
4,041,994,809
3,000,000,000
1,058,782,003
170,295,943
4,229,077,946
-
-
176,405,682 176,405,682
176,405,682 176,405,682
-
148,124,552
-
148,124,552
(148,124,552) (60,000,000) (208,124,552)
(60,000,000) (60,000,000)
3,000,000,000
1,206,906,555
Transactions with owners: Transfer within reserves Dividends relating to prior periods paid during the year Contribution by and to owners of the business
Changes in equity for 2016: Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners: Transfer within reserves Dividends relating to prior periods paid during the year Contribution by and to owners of the business At 30 SEPTEMBER 2016
Retained earnings N
23
138,577,073
4,345,483,628
CONSOLIDATED HALLMARK INSURANCE PLC CONSOLIDATED STATEMENT OF CASH FLOWS AT PERIOD ENDED 30 SEPTEMBER 2016
Notes Cash flows from operating activities Premium received from policy holders Reinsurance receipts in respect of claims Commission received Other operating receipts Cash paid to and on behalf of employees Reinsurance premium paid Claims paid Underwriting expenses Other operating cash payments Company income tax paid
25b. 25. 33. 25a
18.2
Net cash (used in)/ from operating activities Cash flows from investing activities Purchase of property and equipment Fair value change and additions to investment properties Increase in investment in subsidiaries Proceeds from sale of property and equipment Purchase of financial assets Proceeds from sale of financial assets Dividend received Interest received
Group September 2015
September 2016 N 4,633,761,194 268,883,655 185,067,338 198,745,246 (383,635,222) (1,835,965,094) (1,247,390,034) (1,118,333,029) (633,138,428) (50,126,134)
4,865,451,801 189,163,537 135,061,019 142,166,314 (572,136,361) (2,171,478,329) (887,738,035) (635,908,266) (406,254,262) (27,088,343)
31 DECEMBER 2015 N
September 2016 N
6,039,256,088 314,780,998 150,878,677 161,924,867 (553,499,753) (2,553,260,869) (1,260,879,778) (1,007,902,155) (508,768,666) (65,883,457)
4,633,761,194 268,883,655 185,067,338 75,471,988 (367,140,051) (1,835,965,094) (1,247,390,034) (1,122,987,956) (474,409,693) (50,126,134)
Company September 2015
1,998,502,834 57,474,130 26,462,670 1,245,353 (135,786,190) (966,128,885) (246,506,814) (216,896,959) (162,205,799)
31 DECEMBER 2015 N 6,039,256,088 314,780,998 150,878,661 155,399,462 (532,115,976) (2,553,260,869) (1,260,879,778) (1,016,074,857) (512,036,354) (63,018,348)
17,869,493
631,239,075
716,645,952
65,165,213
356,160,340
722,929,027
12.2
(116,891,592)
(77,687,165)
(107,445,819)
(116,891,593)
(22,230,125)
(99,646,496)
12. 10. 12.2 3.
(5,569,275) (832,434,376) 721,427,530 3,957,841 311,200,799
(3,772,000) 7,863,310 (299,575,123) 7,044,269 5,928,898 295,854,113
(9,665,093) 7,469,828 (581,298,577) 184,874,395 5,963,163 426,242,550
(5,569,275) (230,000,000) (832,434,376) 721,427,530 3,957,841 311,200,799
12,572,219 (152,819,845) 91,976,028
(9,504,593) 7,927,313 (460,044,542) 83,096,480 5,963,163 380,928,388
81,690,926
(64,343,698)
(73,859,553)
(148,309,075)
(70,501,723)
(91,280,287)
(60,000,000)
(120,000,000)
(120,000,000)
(60,000,000)
-
(120,000,000)
(60,000,000)
(120,000,000)
(120,000,000)
(60,000,000)
-
(120,000,000)
27. 27.
Net cash from investing activities Cash flows from financing activities Dividend paid
21.
Net cash used in financing activities Increase in cash and cash equivalents Cash and cash equivalents at Beginning Cash and cash equivalent at End
2
39,560,419 2,822,735,767
446,895,378 2,299,949,368
522,786,399 2,299,949,368
(143,143,862) 2,780,220,925
285,658,617 2,268,572,185
511,648,740 2,268,572,185
2,862,296,185
2,746,844,745
2,822,735,767
2,637,077,063
2,554,230,802
2,780,220,925
The accompanying notes form an integral part of this statement of cash flows.
24
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 1. Corporate information 1.1 The Group 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 Company Consolidated Hallmark Insurance Plc (formerly Consolidated Risk Insurers Plc) was incorporated on 2 August 1991. The Company 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 Company 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 Company 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. Group September 31 December 2015 2016 N N 2.
Cash and cash equivalents Cash in hand Balance with banks Call deposits Fixed deposits (Note 2.1) Impairment charge (Note 2.2)
3,947,549 700,989,786 16,275,973 2,141,082,877 2,862,296,185 2,862,296,185
2,126,570 123,888,545 7,725,567 2,688,995,084 2,822,735,766 2,822,735,766
Company September 31 December 2015 2016 N N 3,947,549 643,451,986 16,275,973 1,973,401,555 2,637,077,063 2,637,077,063
2,126,570 102,987,121 7,725,567 2,667,381,666 2,780,220,924 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 SEPTEMBER 2016 3.
Financial assets At fair value through profit or loss (Note 3.1) Loans and receivables measured at amortised cost (Note 3.2) Available for sale (Note 3.3) Held to maturity (Note 3.4)
3.1 At fair value through profit or loss At 1 January Additions Disposals Transfers to cash and WHT receivables
-
-
-
-
141,630,618
183,200,238
136,682,023
177,671,643
236,631,809 60,950,000 1,014,735,272 1,453,947,699
61,029,203 60,950,000 497,905,166 803,084,607
215,422,459 60,950,000 1,014,735,272 1,427,789,754
70,851,262 60,950,000 497,905,166 807,378,071
Fair value gains (Note 30) At 30 SEPTEMBER 2016
183,200,238 50,000 (6,818,979) 176,431,259 (34,800,641) 141,630,618
343,086,193 1,032,084 (20,638,023) 323,480,254 (140,280,016) 183,200,238
177,671,643 (6,188,979) 171,482,664 (34,800,641) 136,682,023
331,557,775 1,032,084 (14,333,200) 318,256,659 (140,585,016) 177,671,643
Current Non Current
141,630,618 -
183,200,238 -
136,682,023 -
177,671,643 -
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
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September DECEMBER 2015 2016 N N 3.2
Loans and receivables Staff loans Loan issued to corporate individuals (Note 3.2.1)
Current Non Current 3.2.1 Loan issued to corporate / individuals At 1 January Addition Repayment Impairment on loans issued to corporate and individuals (Note 3.2.4) At the end 3.2.2 Analysis by performance: Performing (Note 3.2) Non-performing (Note 3.2.1)
3.2.3 Analysis by maturity: Due within one year Due within one - five years Due after five years
Movement in impairment - loans and 3.2.4 receivables : At 1 January Addition (Note 29) Provision no longer required At the end 3.3
Company September DECEMBER 2015 2016 N N
204,908,367 31,723,443 236,631,810
30,321,897 30,707,306 61,029,203
204,908,367 10,514,092 215,422,459
30,321,897 40,529,365 70,851,262
139,207,200 97,424,610
29,870,483 31,158,720
148,006,533 67,415,926
27,978,291 42,872,971
126,402,527 171,616,520 (170,600,383) 127,418,664
114,520,593 52,633,603 (40,751,669) 126,402,527
134,408,271 131,332,945 (161,348,219) 104,392,997
98,291,698 109,437,335 (73,320,762) 134,408,271
(95,695,221) 31,723,443
(95,695,221) 30,707,306
(93,878,905) 10,514,092
(93,878,905) 40,529,366
236,631,810 95,695,221 332,327,031
61,029,203 95,695,221 156,724,424
215,422,459 93,878,905 309,301,364
70,851,264 93,878,905 164,730,169
321,232,200 8,596,483 2,498,348 332,327,031
126,853,941 29,870,483 156,724,424
298,206,533 8,596,483 2,498,348 309,301,364
136,751,877 27,978,291 164,730,168
95,695,221 95,695,221
95,765,592 429,629 (500,000) 95,695,221
93,878,905 93,878,905
94,378,905 (500,000) 93,878,905
Available for sale assets At 1 January Addition Exchange gains Impairment on available for sale At the end
60,950,000 60,950,000
2,000,000 50,250,000 8,700,000 60,950,000
60,950,000 60,950,000
2,000,000 50,250,000 8,700,000 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:
Planet Capital Limited (Formerly Strategy and Arbitrage Limited) Energy & Allied Insurance Pool Nigeria limited
26
No. of shares 2,000,000 -
Cost per unit N1
Total Cost 2,000,000 58,950,000
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 2016 N 3.4 Held to maturity assets At 1 January At initial recognition - additions Value at maturity Disposal Amortised interest (Note 27)
a)
b)
Company September 2016 N
December 2015 N
479,575,123 656,793,958 1,136,369,081 (169,515,487) 47,881,678
130,000,000 349,575,123 479,575,123 18,330,043
479,575,123 656,793,958 1,136,369,081 (169,515,487) 47,881,678
130,000,000 349,575,123 479,575,123 18,330,043
At the end
1,014,735,272
497,905,166
1,014,735,272 -
497,905,166 -
Held to maturity assets are analysed as follows: Debts securities Listed Unlisted
1,014,735,272 -
497,905,166 -
1,014,735,272 -
497,905,166 -
At the end
1,014,735,272
497,905,166
1,014,735,272
497,905,166
Current Non-current
47,881,678 966,853,594 1,014,735,272
18,330,043 479,575,123 497,905,166
47,881,678 966,853,594 1,014,735,272
18,330,043 479,575,123 497,905,166
15,952,515 52,995,058
20,217,260 51,130,137
15,952,515 52,995,058
20,217,260 51,130,137
43,768,079 -
45,565,891 67,378,055
43,768,079 -
45,565,891 67,378,055
103,054,027 142,171,636
99,303,385 214,310,438
103,054,027 142,171,636
99,303,385 214,310,438
150,183,532
-
150,183,532
-
336,574,607
336,574,607
-
170,035,818
170,035,818
-
At the reporting date, no held to maturity assets were past due or impaired 15.25% NAHCO Bond series 2 2013/2020 FCMB NGN SERIES 2 BOND 2015/2020 13.5% Lagos State Government Bond series 2 2013/2020 13.05% FGN bond 2014/2016 LAGOS STATE PROGRAMME 2 SERIES 2 FIXED RATE BOND ISSUANCE (2013/2020) Ecobank commercial paper Omo 18.45% 24/08/2017 FG TREASURE BILL FCMB Omo 18.45% 10/08/2017 FG TREASURE BILL FCMB Omo 18.25% 27/07/2017 FG TREASURE BILL FCMB Omo 18.25% 27/07/2017 FG TREASURE BILL FCMB At the end
4.
December 2015 N
Deposit for shares
1,014,735,272
497,905,166
-
-
1,014,735,272
497,905,166
-
-
-
-
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 Addition Repayment Gross investment Unearned income Net investment (Note 5.1) Impairment on finance lease receivables (Note 5.2) At the end
5.1 Current Non-current 5.2 Movement in impairment - finance lease receivables: At 1 January Charge for the year (Note 29) At the end
181,031,249 154,763,012 (113,026,706) 222,767,555 222,767,555 (7,140,467) 215,627,088
137,320,490 216,625,756 (134,347,008) 219,599,238 (38,567,989) 181,031,249 (8,935,263) 172,095,986
163,698,275 59,069,280
118,784,190 62,247,059
-
-
8,935,263 (1,794,796)
8,897,021 38,242
-
-
7,140,467
8,935,263
-
-
5.3 Finance Lease receivebale reported for the Group 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 Group. 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 Due from insurance brokers and agents Impairment allowance (Note 6.1)
Current Non-current
23,979,828 256,599,469 280,579,297 280,579,297
10,686,478 70,343,548 81,030,026 81,030,026
23,979,828 256,599,469 280,579,297 280,579,297
10,686,478 70,343,548 81,030,026 81,030,026
280,579,297 -
81,030,026 -
280,579,297 -
81,030,026 -
27
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 2016 N 6.1
Impairment allowance At 1 January Written off in the year Charge for the year (Note 29) At the end
-
31 December 2015 N
17,402,910 (17,402,910) -
Company September 31 December 2016 2015 N N
-
17,402,910 (17,402,910) -
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 Company 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.
Group September 2016 N 7.
31 December 2015 N
Company September 31 December 2016 2015 N N
Reinsurance assets Prepaid reinsurance (Note 7.1) Reinsurers share of outstanding claims (Note 7.2)
203,913,420 281,937,926
409,975,490 281,937,926
203,913,420 281,937,926
409,975,490 281,937,926
At the end
485,851,346
691,913,416
485,851,346
691,913,416
Current Non-current
485,851,346 -
691,913,416 -
485,851,346 -
691,913,416 -
The Company assesses its reinsurance assets for impairment. If there is objective evidence that the reinsurance assets are impaired, the Company reduces the carrying amount of the reinsurance assets to its recoverable amount and recognizes that impairment loss in the income statement. The Company 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. Group September 2016 N 7.1
7.2
7.3
Prepaid reinsurance Fire General accident Motor Marine Bond Engineering Aviation Oil & gas
Reinsurers share of outstanding claims Fire General accident Motor Marine Bond Engineering Aviation Oil & gas
Reinsurance assets: Movement in prepaid reinsurance: At 1 January Additions during the year (Note 24) Amortization during the year (Note 24) At the end
8.
Deferred acquisition cost At 1 January Acquistion cost during the year Less: Amortisation during the year (Note 26) At the end Current Non-current
31 December 2015 N
Company 31 December September 2016 2015 N N
129,618,382 19,069,104 (318,746) 19,336,002 2,420,956 103,425 (48,469,690) 82,153,987 203,913,420
137,100,731 23,912,990 4,565,263 30,900,057 3,177,107 4,652,158 67,103,737 138,563,447 409,975,490
129,618,382 19,069,104 (318,746) 19,336,002 2,420,956 103,425 (48,469,690) 82,153,987 203,913,420
137,100,731 23,912,990 4,565,263 30,900,057 3,177,107 4,652,158 67,103,737 138,563,447 409,975,490
143,252,064 55,888,491 5,929,828 17,345,649 750,020 9,438,056 31,175,169 18,158,649 281,937,926
143,252,064 55,888,491 5,929,828 17,345,649 750,020 9,438,056 31,175,169 18,158,649 281,937,926
143,252,064 55,888,491 5,929,828 17,345,649 750,020 9,438,056 31,175,169 18,158,649 281,937,926
143,252,064 55,888,491 5,929,828 17,345,649 750,020 9,438,056 31,175,169 18,158,649 281,937,926
409,975,490 1,835,965,094 2,245,940,584 (2,042,027,164) 203,913,420
438,216,646 2,657,491,886 3,095,708,532 (2,685,733,042) 409,975,490
409,975,490 1,835,965,094 2,245,940,584 (2,042,027,164) 203,913,420
438,216,646 2,657,491,886 3,095,708,532 (2,685,733,042) 409,975,490
190,525,298 691,609,181 (689,568,989) 192,565,490
194,835,265 661,713,497 (666,023,464) 190,525,298
190,525,298 691,609,181 (689,568,989) 192,565,490
194,835,265 661,713,497 (666,023,464) 190,525,298
192,565,490 -
190,525,298 -
192,565,490 -
190,525,298 -
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
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 31 December 2016 2015 N N 8.1
9.
Deferred acquisition cost analysis Fire General accident Motor Marine Bond Engineering Aviation Oil & gas
Other receivables and prepayments Staff advances & prepayment Account receivables Witholding tax credit Prepayments (Note 9.1) Impairment allowance (Note 29)
Current Non-current
9.1
Prepayments Prepaid rent Other prepayments
Current Non-current 10.
Company September 31 December 2016 2015 N N
37,501,217 34,704,050 56,165,400 20,752,002 1,827,434 8,193,068 10,374,511 23,047,808 192,565,490
36,914,648 34,494,094 55,535,274 19,947,150 1,146,299 9,797,034 9,695,867 22,994,932 190,525,298
37,501,217 34,704,050 56,165,400 20,752,002 1,827,434 8,193,068 10,374,511 23,047,808 192,565,490
36,914,648 34,494,094 55,535,274 19,947,150 1,146,299 9,797,034 9,695,867 22,994,932 190,525,298
44,015,884 4,027,610 56,464,643 93,880,142 198,388,279 198,388,279
18,050,009 34,793,406 58,554,822 24,195,755 135,593,992 (347,125) 135,246,867
44,015,884 4,027,610 56,464,643 105,822,814 210,330,951 210,330,951
18,050,009 34,620,844 58,399,440 24,195,755 135,266,048 135,266,048
198,388,279 -
135,246,867 -
210,330,951 -
135,266,048 -
31,694,869 62,185,273 93,880,142
24,195,755 24,195,755
31,694,869 74,127,945 105,822,814
24,195,755 24,195,755
93,880,142 -
24,195,755 -
105,822,814 -
24,195,755 -
480,000,000
250,000,000
Investment in subsidiaries CHI Capital (Note 10.1)
-
29
-
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 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.
CHI PLC N
CHI Capital Limited N
Elimination N
Total N
Condensed result of consolidated entities - 2016 10.2 Condensed financial position Assets Cash and cash equivalents Financial assets Deposit for shares Finance lease receivables Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayment Investment in subsidiaries Investment properties Inventories Intangible Assets Property and equipment Statutory deposits Total assets
2,637,077,063 1,427,789,754 280,579,297 485,851,346 192,565,490 210,330,951 480,000,000 808,928,275 13,189,771 958,669,088 300,000,000 7,794,981,035
175,219,122 26,157,945 215,627,088 34,238,647 84,661,000 3,418,701 792,200 6,871,027 546,985,730
Liabilities Insurance contract liabilities Trade payables Provision and other payables Staff retirement benefit Tax liabilities Deffered tax Share capital Statutory reserve Retained earnings Total liabilities and equity
2,307,732,618 582,960,851 218,755,287 5,525,733 148,789,293 185,733,625 3,000,000,000 1,206,906,555 138,577,073 7,794,981,035
28,539,746 233,297 29,260,213 596,103 430,000,000 9,035,935 49,320,436 546,985,730
29
50,000,000 (46,181,319) (480,000,000) (476,181,319)
(46,181,319) (430,000,000) (476,181,319)
2,862,296,185 1,453,947,699 215,627,088 280,579,297 485,851,346 192,565,490 198,388,279 893,589,275 3,418,701 13,981,971 965,540,115 300,000,000 7,865,785,446
2,307,732,618 582,960,851 201,113,714 5,759,030 178,049,506 186,329,728 3,000,000,000 1,215,942,490 187,897,509 7,865,785,446
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 CHI CHI PLC N 10.2
10.2
Elimination N
Total N
8,452,890 (8,452,890) -
887,133,664 315,158,640 129,097,500 1,331,389,804 -
Condensed result of consolidated entities - 2016 Condensed profit and loss Underwriting profit Investment income Other operating income Total operating income Impairment charge Net fair value gains/(losses) on financial assets at fair value through profit or loss Management expenses Profit before taxation Taxation Profit after taxation
10.2
Capital N
878,680,774 315,158,640 75,471,988 1,269,311,402 (34,800,641) (906,312,105) 328,198,656 (151,792,973) 176,405,683
62,078,402 62,078,402 (32,198,123) 29,880,279 (10,258,827) 19,621,452
-
(34,800,641) (938,510,228) 358,078,935 (162,051,800) 196,027,135
Condensed result of consolidated entities - 2015
Condensed financial position Cash and cash equivalents Financial assets Deposit for shares Finance lease receivables Trade receivables Reinsurance assets
2,780,220,924 807,378,071 81,030,026 691,913,416 190,525,298
42,514,842 34,799,377 172,095,986 5,420,000 -
(39,092,841) (5,420,000) -
2,822,735,766 803,084,607 172,095,986 81,030,026 691,913,416 190,525,298
Deferred acquisition costs Other receivables and prepayment Investment in subsidiaries Investment properties Property and equipment Inventories Statutory deposits Total assets
135,266,048 250,000,000 15,592,433 803,359,000 908,924,352 300,000,000 6,964,209,568
34,056,665 5,146,854 875,438 84,661,000 8,124,992 387,695,154
(34,075,846) (250,000,000) (328,588,687)
135,246,867 5,146,854 16,467,871 888,020,000 917,049,344 300,000,000 7,023,316,035
Liabilities Insurance contract liabilities Trade payables Other payables and provision Retirement benefit obligation Income tax liabilities Deferred tax liabilities Share capital Reserves Total liabilities and equity
2,218,670,079 112,060,913 171,540,123 4,430 232,856,077 3,000,000,000 1,058,782,003 170,295,943 6,964,209,568
70,616,924 180,014 28,163,295 250,000,000 5,826,986 32,907,935 387,695,154
(78,588,687) (250,000,000) (328,588,687)
2,218,670,079 112,060,913 163,568,360 184,444 261,019,372 3,000,000,000 1,064,608,989 203,203,878 7,023,316,035
1,361,579,901 402,048,193 170,537,974 1,934,166,068 17,402,910
(15,287,298) 45,314,162 29,975,867 60,002,731 (467,872)
23,460,000 (23,460,000) -
1,369,752,603 447,362,355 177,053,841 1,994,168,799 16,935,038
(138,191,291) (1,126,380,571) 686,997,116 (152,718,047) 534,279,069
500 (41,620,516) 17,914,843 (6,382,834) 11,532,009
Condensed result of consolidated entities - 2015 Condensed profit and loss Underwriting profit Investment income Other operating income Total operating income Impairment charge Net fair value gains on financial assets at fair value through profit or loss Management expenses Profit before taxation Taxation Profit after taxation
30
-
(138,190,791) (1,168,001,087) 704,911,959 (159,100,881) 545,811,078
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 2016 N 11.
Inventories At 1 January Auto track devices Used Impairment allowance (Note 29)
12.0 Intangible assets Cost At 1 January Addition September Accumulated amortization At 1 January Addition September Carrying amount At End 12.1 Investment properties At 1 January Addition Fair value change September
5,146,854 3,720,183
31 December 2015 N
Company September 31 December 2016 2015 N N
3,418,701
2,888,332 4,882,285 (1,250,483) (1,373,280) 5,146,854
22,265,000 809,700 23,074,700
16,500,000 5,765,000 22,265,000
21,337,500 21,337,500
16,500,000 4,837,500 21,337,500
5,797,129 3,295,600 9,092,729
2,814,041 2,983,088 5,797,129
5,745,067 2,402,662 8,147,729
2,814,041 2,931,026 5,745,067
13,981,971
16,467,871
13,189,771
15,592,433
888,020,000 5,569,275 893,589,275
877,960,682 9,665,093 394,225 888,020,000
803,359,000 5,569,275 808,928,275
793,460,682 9,504,593 393,725 803,359,000
(5,448,336)
-
-
-
-
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
1
TYPE OF ADDRESS ASSET Company Plot A/5 Pocket Layout (Clerk Building Quarters) Owerri, Imo State.
AMOUNT N
CURRENT TITLE HOLDER
STATUS ON CHANGE OF TITLE
207,680,000 Consolidated Hallmark Title over this property has been Insurance Plc. transferred to Consolidated Hallmark Insurance Plc.
2
Building
219, 220 and 221, Akukwe Street, Works Layout, Owerri, Imo State
240,270,000 Consolidated Hallmark Title now changed from Hallmark Insurance Plc. Assurance Plc to the name of Consolidated Hallmark Insurance Plc.
3
Building
No. 30, East Street, Rivers Layout Aba, Abia State.
109,580,000 Consolidated Hallmark Title over this property has been Insurance Plc. transferred to Consolidated Hallmark Insurance Plc.
4
Building
Plot 33, Chief Ogbonda Layout, Rumuogba, Port Harcourt.
5
Land
Plot 3, Sea Gate Estate, Phase 1, Lekki Peninsula, Eti-Osa.
130,314,000 Consolidated Hallmark Title over this property has been Insurance Plc. transferred to Consolidated Hallmark Insurance Plc. 47,020,000 Consolidated Hallmark The purchase documents now Insurance Plc. regularized in the name of Consolidated Hallmark Insurance Plc.
6
Building
Rivers State Housing Estate, Abuloma PH
47,719,275 Consolidated Hallmark Title over this property has been Insurance Plc. transferred to Consolidated Hallmark Insurance Plc.
7
Land
Plot 14, 1(W) Road, First Avenue, Lugbe Estate, Abuja.
23,275,000 Hallmark Assurance The Company made payments to the Plc (Legacy Company) Federal Housing Authority during the year and is awaiting final approval from them.
8
Shops
Trade Fair Shopping Complex
3,070,000 Consolidated Hallmark Already exist in the name of Insurance Plc. Consolidated Hallmark Insurance Plc. 808,928,275
CHI Capital Limited Thomas Estate,Orile Ibama, Ajah, Lagos Total
84,661,000
CHI Capital Limited
893,589,275
31
Already exist in the name of CHI Capital Limited
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 12.2 12.2a
Property and equipment 2016 The group Land N Costs At 1 January Additions in the year Disposals in the year September
Building N
Office Equipment N 83,679,352 16,934,100 100,613,452
Furniture & Fittings N
Motor Vehicles N
Computer Equipment N
Total N
107,872,857 9,724,047 (183,000) 117,413,904
338,825,681 84,945,000 (29,155,684) 394,614,997
208,436,224 4,798,122 (1,859,116) 211,375,231
1,561,253,784 116,401,269 (31,197,800) 1,646,457,254
93,249,714 4,043,650 (183,000) 97,110,364
199,919,550 43,116,070 (26,180,078) 216,855,542
188,279,419 5,174,257 (1,841,972) 191,611,704
644,204,440 64,974,836 (28,262,137) 680,917,139
286,099,948 286,099,948
536,339,722 536,339,722
Accumulated depreciation At 1 January 2016 Depreciation charge for the period Disposals in the period September
-
96,570,538 8,052,443 104,622,981
Accummulated impairment losses
-
-
-
-
-
-
-
Carrying value September
286,099,948
431,716,741
29,896,904
20,303,540
177,759,455
19,763,527
965,540,115
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
66,185,219 4,588,416 (57,087) 70,716,548
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
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016
12.2a
Property and equipment The group 2015 Land
Building N
Costs At 1 January Additions in the year Disposals in the year At 31 December 2015
Office Furniture & Motor Computer Equipment Fittings Vehicles Equipment Total N N N N N
N
286,099,948 286,099,948
536,339,722 536,339,722
78,041,943 6,328,448 (691,039) 83,679,352
105,157,160 3,540,697 (825,000) 107,872,857
274,518,389 89,448,174 (25,140,882) 338,825,681
208,533,277 2,363,500 (2,460,553) 208,436,224
1,488,690,439 101,680,819 (29,117,474) 1,561,253,784
Accumulated depreciation At 1 January Depreciation charge for the year Disposals in the year At 31 December 2015
-
80,162,865 16,407,673 96,570,538
62,144,799 4,727,459 (687,039) 66,185,219
89,066,570 5,008,144 (825,000) 93,249,714
179,808,113 41,152,831 (21,041,394) 199,919,550
182,045,504 8,264,557 (2,030,642) 188,279,419
593,227,851 75,560,664 (24,584,075) 644,204,440
Accummulated impairment losses
-
-
-
-
-
-
-
286,099,948 286,099,948
439,769,184 456,176,857
17,494,133 15,897,144
14,623,143 16,090,590
138,906,131 94,710,276
20,156,805 26,487,773
917,049,344 895,462,588
Carrying value At 31 December 2015 At 31 December 2014
33
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 12.2b
Property and equipment 2016 The company Land N Costs At 1 January Additions Disposals September
Building N
Office Equipment N
Motor Vehicles N
Computer Equipment N
Total N
107,872,857 9,724,047 (183,000) 117,413,904
327,710,680 84,945,000 (28,621,497) 384,034,183
207,661,473 5,288,446 (1,341,789) 211,608,130
1,549,249,208 116,891,593 (30,146,286) 1,635,994,515
286,099,948
536,339,722
286,099,948
536,339,722
-
96,570,538 8,052,443 104,622,981
66,155,857 4,588,416 (57,087) 70,687,186
93,249,715 4,043,650 (183,000) 97,110,365
196,402,613 42,903,596 (26,180,078) 213,126,131
187,946,133 5,174,257 (1,341,621) 191,778,769
640,324,856 64,762,362 (27,761,786) 677,325,432
Carrying value September
286,099,948
431,716,741
29,811,442
20,303,539
170,908,052
19,829,362
958,669,088
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
Accumulated depreciation At 1 January Depreciation charge for the period Disposals September
83,564,528 16,934,100 100,498,628
Furniture & Fittings N
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
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Property and equipment (Cont'd) 2015 The company Land N Costs At 1 January Additions Disposals At 31 December 2015 Accumulated depreciation At 1 January Depreciation charge for the year Disposals At 31 December 2015 Carrying value At 31 December 2015 At 31 December 2014
Building N
Office Equipment N
Furniture & Fittings N
Motor Vehicles N
Computer Equipment N
Total N
286,099,948 286,099,948
536,339,722 536,339,722
77,986,942 6,268,625 (691,039) 83,564,528
105,157,160 3,540,697 (825,000) 107,872,857
270,068,388 82,783,174 (25,140,882) 327,710,680
207,905,526 2,216,500 (2,460,553) 207,661,473
1,483,557,686 94,808,996 (29,117,474) 1,549,249,208
-
80,162,865 16,407,673 96,570,538
62,129,675 4,713,221 (687,039) 66,155,857
89,066,571 5,008,144 (825,000) 93,249,715
178,176,446 39,267,561 (21,041,394) 196,402,613
181,808,408 8,168,367 (2,030,642) 187,946,133
591,343,965 73,564,966 (24,584,075) 640,324,856
286,099,948 286,099,948
439,769,184 456,176,857
17,408,671 15,857,267
14,623,142 16,090,589
131,308,067 91,891,942
19,715,340 26,097,118
908,924,352 892,213,721
35
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group 2016 N 13.
Statutory deposits
2015 N
Company 2016 N
2015 N
300,000,000
300,000,000
300,000,000
300,000,000
944,485,481 1,363,247,137 2,307,732,618
895,550,802 1,323,119,277 2,218,670,079
944,485,481 1,363,247,137 2,307,732,618
895,550,802 1,323,119,277 2,218,670,079
This represents the amount deposited with the Central Bank 14.
Insurance contract liabilities Reserve for outstanding claims (Note 14.1) Unearned premium reserve (Note 14.2)
14.1 Reserve for outstanding claims - 2016 Group Outstanding Provision for Claim IBNR Gross Reserve N N N Fire 95,640,089 168,797,842 264,437,931 General accident 133,467,480 68,837,677 202,305,157 Motor 107,603,977 92,686,257 200,290,234 Marine 5,230,042 27,293,489 32,523,531 Bond 706,800 6,374,014 7,080,814 Engineering 7,951,836 26,963,770 34,915,606 Aviation 10,170,000 76,131,277 86,301,277 Oil & gas 16,700,000 99,930,931 116,630,931 377,470,224 567,015,257 944,485,481
Outstanding Claim N 95,640,089 133,467,480 107,603,977 5,230,042 706,800 7,951,836 10,170,000 16,700,000 377,470,224
Company Provision for IBNR N 168,797,842 68,837,677 92,686,257 27,293,489 6,374,014 26,963,770 76,131,277 99,930,931 567,015,257
Gross Reserve N 264,437,931 202,305,157 200,290,234 32,523,531 7,080,814 34,915,606 86,301,277 116,630,931 944,485,481
Reserve for outstanding claims - 2015 Outstanding Provision for Claim IBNR Gross Reserve N N N Fire 81,379,156 168,797,842 250,176,998 General accident 141,109,259 68,837,677 209,946,936 Motor 71,889,477 92,686,257 164,575,734 Marine 7,531,131 27,293,489 34,824,620 Bond 706,800 6,374,014 7,080,814 Engineering 6,804,722 26,963,770 33,768,492 Aviation 6,770,000 76,131,277 82,901,277 Oil & gas 12,345,000 99,930,931 112,275,931 328,535,545 567,015,257 895,550,802
Outstanding Claim N 81,379,156 141,109,259 71,889,477 7,531,131 706,800 6,804,722 6,770,000 12,345,000 328,535,545
Provision for IBNR N 168,797,842 68,837,677 92,686,257 27,293,489 6,374,014 26,963,770 76,131,277 99,930,931 567,015,257
Gross Reserve N 250,176,998 209,946,936 164,575,734 34,824,620 7,080,814 33,768,492 82,901,277 112,275,931 895,550,802
Group 2016 N 14.2 Unearned premium reserve Fire General accident Motor Marine Oil & Gas Engineering Aviation Bond
217,113,967 168,962,940 496,812,788 288,042,207 18,596,770 68,023,121 93,323,300 12,372,044 1,363,247,137
34
2015 N
181,680,772 173,968,966 462,932,271 98,518,877 250,900,679 46,918,726 101,429,847 6,769,139 1,323,119,277
Company 2016 N 217,113,967 168,962,940 496,812,788 288,042,207 18,596,770 68,023,121 93,323,300 12,372,044 1,363,247,137
2015 N
181,680,772 173,968,966 462,932,271 98,518,877 250,900,679 46,918,726 101,429,847 6,769,139 1,323,119,277
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group 2016 N 14.3
15.
Funds representing insurance contract liabilities Balance with banks Fixed deposits
Trade payables Due to insurance companies Due to reinsurance companies - local Other trade payables
Current Non-current 16.
Other payables and provision Lease payables Audit fees VAT payable Witholding tax payable Unclaimed dividend payable (Note 16.1) Accrued expenses Sundry creditors
Current Non-current 16.1
Company 2016 N
2015 N
663,675,508 1,973,401,555
102,987,121 2,667,381,666
663,675,508 1,973,401,555
102,987,121 2,667,381,666
2,637,077,063
2,770,368,787
2,637,077,063
2,770,368,787
17,103,333 565,857,518 582,960,851
112,060,913 112,060,913
17,103,333 565,857,518 582,960,851
112,060,913 112,060,913
582,960,851 -
112,060,913 -
582,960,851 -
112,060,913 -
4,000,000 453,754 72,747,541 7,562,911 116,349,508 201,113,714
12,132,500 7,543,934 740,082 72,747,541 47,201,405 23,202,898 163,568,360
4,000,000 453,754 72,747,541 7,562,911 133,991,081 218,755,287
6,970,000 7,543,934 740,082 72,747,541 29,512,688 54,025,878 171,540,123
201,113,714 -
163,568,360 -
218,755,287 -
171,540,123 -
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 Company 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).
Group 2016 N 17. 17.1
2015 N
Retirement benefit obligation Defined contribution pension plan At 1 January Provision during the period (Note 33) Payment during the period September
184,444 26,318,344 (20,743,755) 5,759,033
35
2015 N
137,815 54,019,284 (53,972,655) 184,444
Company 2016 N
4,430 25,861,144 (20,339,841) 5,525,733
2015 N
51,916,751 (51,912,321) 4,430
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group 2016 N 18.
Taxation
18.1
Income tax expense Income tax Education tax Information technology development Under/(over)provision in previous year Deferred tax (Note 18.3)
116,011,340 116,011,340 46,040,460 162,051,800
2015 N
100,477,804 6,698,520 7,095,813 114,272,137 44,828,744 159,100,881
Company 2016 N
105,752,513 105,752,513 46,040,460 151,792,973
2015 N
95,264,465 6,350,964 6,869,977 108,485,406 44,232,641 152,718,047
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 Company has provided for NITDA levy at the specified rate. Group 2016 N 18.2
18.3
Current income tax liabilities At 1 January Transfer from VAT and WHT payable Payments during the period
2015 N
Company 2016 N
2015 N
Charge for the period September
120,730,104 (58,691,936) 62,038,168 116,011,339 178,049,506
72,341,424 (65,883,457) 6,457,967 114,272,137 120,730,104
93,162,912 (50,126,132) 43,036,780 105,752,513 148,789,293
47,695,854 (63,018,348) (15,322,494) 108,485,406 93,162,912
Deferred tax liabilities At 1 January Charge for the period (Note 18.1) September
140,289,268 46,040,460 186,329,728
95,460,524 44,828,744 140,289,268
139,693,165 46,040,460 185,733,625
95,460,524 44,232,641 139,693,165
Reconciliation of effective tax rate Profit after tax
196,027,138
545,811,078
176,405,682
534,279,069
Total income tax expense Income Education Information technology tax (Over)/under-provision Deferred tax (Note 18.3)
116,011,339 46,040,460
100,477,804 6,698,520 7,095,813 44,828,744
105,752,513 46,040,460
95,264,465 6,350,964 6,869,977 44,232,641
162,051,799
159,100,881
151,792,973
152,718,047
358,078,936
704,911,959
328,198,655
686,997,116
The Company has adopted the International Accounting Standards (IAS 12) on accounting for taxation, which is now computed using liability method. 18.4
Profit for the period before excluding income tax Effective tax rate
45%
36
23%
46%
22%
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group 2016 N 19.
Share capital Authorised: 10 billion ordinary shares of 50k each
19.1 Issued and fully paid: 6 billion ordinary shares of 50k each September
2015 N
Company 2016 N
2015 N
5,000,000,000
5,000,000,000
5,000,000,000
5,000,000,000
3,000,000,000
3,000,000,000
3,000,000,000
3,000,000,000
1,058,782,003 148,124,552 1,206,906,555
882,516,340 176,265,663 1,058,782,003
1,058,782,003 148,124,552 1,206,906,555
882,516,340 176,265,663 1,058,782,003
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 Group.
20.
Other reserves
20.1. Contingency reserve At 1 January Transfer from income statement (Note 21) September 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 Transfer from income statement (Note 21)
5,826,986 3,208,949
8,477,548 (2,650,562)
-
-
September 9,035,935 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 Dividend declared and paid in the year based on the previous year published accounts Transfer to contigency reserve (Note 20.1) Transfer from income statement Transfer to statutory reserve (Note 20.2) September
203,203,878 (60,000,000) (148,124,552) 196,027,138 (3,208,949) 187,897,514
(48,682,240) (120,000,000) (309,859) (176,265,663) 545,811,078 2,650,562 203,203,878
170,295,943 (60,000,000) (148,124,552) 176,405,682 138,577,073
(67,717,463) (120,000,000) (176,265,663) 534,279,069 170,295,943
66,874,129 4,002,500
78,543,747 11,300,000
64,762,362 4,002,500
76,495,992 6,800,000
15,764,801 (64,640,519)
4,250,000 (2,936,429) (166,383,629)
15,764,801 (64,640,519)
4,250,000 (3,393,914) (166,383,629)
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 Auditors' remuneration Directors' remuneration: - Fees Profit on disposal of property and equipment Foreign exchange (gains)/loss
37
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 23. Gross premium earned analysed as follows:
Fire General accident Motor Aviation Oil & Gas Marine Engineering Bond
Direct premium N 628,698,908 725,013,087 1,047,830,529 1,299,110,838 712,096,197 321,408,438 113,168,484 23,687,767 4,871,014,248
Increase/ Inward decrease in reinsurance unearned Gross premium premium premium earned N N N 14,850,392 (35,433,196) 608,116,104 3,884,759 5,006,025 733,903,871 10,421,453 (33,880,517) 1,024,371,465 6,535,284 8,106,547 1,313,752,669 13,945,824 232,303,909 958,345,930 1,801,850 (189,523,330) 133,686,958 1,703,472 (21,104,395) 93,767,561 (5,602,904) 18,084,863 53,143,034 (40,127,861) 4,884,029,421
Gross premium earned analysed as follows:
Direct premium N Fire General accident Motor Aviation Oil & Gas Marine Engineering Bond
Increase/ Inward decrease in reinsurance unearned Gross premium premium premium earned N N N
549,889,211 545,080,818 973,822,683 1,143,214,579 1,242,810,966 230,466,978 112,242,193 12,854,087 4,810,381,515
16,231,398 3,877,518 10,433,461 68,101,847 16,634,594 8,988,372 4,762,940 129,030,130
Group 2016 N 24. Reinsurance expense The reinsurance expense is analysed as follows: Reinsurance premium cost (Increase)/decrease in prepaid reinsurance (Note 7.3) Reinsurance expense 25. Fee and commission Fire General accident Motor Aviation Oil & Gas Marine Engineering Bond
2015 N
(37,759,005) (35,285,822) (100,967,492) (8,222,341) (74,485,186) (13,688,393) (9,761,612) (1,830,150) (282,000,000)
528,361,605 513,672,514 883,288,651 1,203,094,085 1,184,960,375 225,766,957 107,243,521 11,023,937 4,657,411,645
Company 2016 N
2015 N
1,835,965,094
2,171,478,329
1,835,965,094
2,171,478,329
206,062,070 2,042,027,164
50,386,800 2,221,865,129
206,062,070 2,042,027,164
50,386,800 2,221,865,129
62,878,427 3,627,272 1,390,254 26,655,787 57,293,007 16,302,709 16,919,882 185,067,338
48,856,838 17,276,318 1,278,145 15,117,168 19,801,243 7,306,852 13,679,927 (376,082) 122,940,410
62,878,427 3,627,272 1,390,254 26,655,787 57,293,007 16,302,709 16,919,882 185,067,338
38
48,856,838 17,276,318 1,278,145 15,117,168 19,801,243 7,306,852 13,679,927 (376,082) 122,940,410
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group Claims expenses
25a Claims expenses Claims paid during the year Opening IBNR and outstanding claims Closing IBNR and outstanding claims (Note 14.1) Gross claims expenses 25b. Claims recoverable Opening claims recoverable Claims recovered Closing claims recoverable Net recoverable Net claims expenses
26.
Claims expenses
Company Claims Claims expenses expenses
30 SEPT 2016 N
30 SEPT 2015 N
30 SEPT 2016 N
30 SEPT 2015 N
1,247,390,034 (895,550,802) 944,485,481 1,296,324,713
887,738,035 (815,249,252) 829,719,809 902,208,592
1,247,390,034 (895,550,802) 944,485,481 1,296,324,713
887,738,035 (815,249,252) 829,719,809 902,208,592
281,937,926 268,883,655 (281,937,926)
213,551,222 189,163,537 (213,551,222)
281,937,926 268,883,655 (281,937,926)
213,551,222 189,163,537 (213,551,222)
268,883,655
189,163,537
268,883,655
189,163,537
1,027,441,058
713,045,056
1,027,441,058
713,045,056
Acquisition expenses N 127,071,574 144,413,787 121,607,545 82,200,814 121,605,064 64,268,814 24,710,931 3,690,458 689,568,987
Maintenance expenses N 47,041,648 116,659,880 89,674,907 87,498,703 48,363,754 23,624,736 8,471,592 1,590,667 422,925,887
Acquisition expenses N 127,071,574 144,413,787 121,607,545 82,200,814 121,605,064 64,268,814 24,710,931 3,690,458 689,568,987
Maintenance expenses N 47,041,648 116,659,880 98,127,796 87,498,703 48,363,754 23,624,736 8,471,592 1,590,667 431,378,776
Acquisition expenses N 109,761,595 105,879,980 112,851,138 36,723,250 56,922,918 50,025,613 23,595,145 2,215,151 497,974,790
Maintenance expenses N 1,509,549 6,378,460 28,058,667 2,112,529 52,916,255 3,356,714 1,018,302 282,960 95,633,436
Acquisition expenses N 109,761,595 105,879,980 112,851,138 36,723,250 56,922,918 50,025,613 23,595,145 2,215,151 497,974,790
Maintenance expenses N 1,509,549 6,378,460 28,058,667 2,112,529 52,916,255 3,356,714 1,018,302 282,960 95,633,436
Underwriting expenses Underwriting expenses- 2016
Fire General accident Motor Aviation Oil & Gas Marine Engineering Bond
Underwriting expenses- 2015
Fire General accident Motor Aviation Oil & Gas Marine Engineering Bond
39
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 2016 N 27.
Investment income Interest received Amortised gain(loss) on held to maturity (Note 3.4) Dividend received
27.1 Investment income Investment income attributable to policyholders' fund Investment income attributable to shareholders' fund
28.
29.
Other operating income Profit on disposal of property and equipment Interest on staff receivables Rent income on investment properties Recoveries in the year Exchange gain Other income
September 2015 N
Company September 2016 N
September 2015 N
263,319,121 47,881,678 3,957,841 315,158,640
283,084,790 12,769,323 5,928,898 301,783,011
263,319,121 47,881,678 3,957,841 315,158,640
283,084,790 12,769,323 5,928,898 301,783,011
224,674,679 90,483,960 315,158,640
235,622,721 66,160,291 301,783,011
224,674,679 90,483,961 315,158,640
235,622,721 66,160,291 301,783,011
3,796,981 5,624,050 1,389,401 48,000 64,640,519 53,598,549 129,097,500
3,529,761 173,086 450,000 492,109 72,807,842 47,068,746 124,521,544
Impairment on charge Cash and cash equivalent (Note 2.2) Loans and receivables (Note 3.2) Finance Lease receivable (Note 5.1) Trade receivables (Note 6.1) Other receivables (Note 9) Inventories (Note 11)
-
40
500,000 (3,496,041) (2,996,041)
3,796,981 5,624,050 1,389,401 48,000 64,640,519 (26,963) 75,471,988
-
3,529,761 173,086 450,000 492,109 72,807,842 (112,548) 77,340,250
500,000 500,000
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group September 2016 N 30. Net fair value gains on financial assets at fair value through profit or loss Fair value through profit or loss (Note 3.1) Investment property (Note 12) Others Fair value gains/loss
September 2015 N
Company September September 2016 2015 N N
34,800,641 34,800,641
2,996,041 90,320,446 93,316,487
34,800,641 34,800,641
(500,000) 93,556,486 93,056,486
Staff cost (Note 33) 383,635,222 Rent, insurance and maintenance 86,816,825 Depreciation of property and equipment 65,705,244 Auditors' remuneration 4,002,500 Directors' remuneration: - Fees (Note 45) Professional charges 57,443,674 Printing and telecommunication 26,670,343 Electricity Diesel,Travelling& Motor runing expenses 39,941,564 Advertising, & Entertainment 60,345,588 Travelling and motor vehicle expenses 66,732,488 Rates, Insurance levy and utilities 32,455,551 Office running,bank charges,AGM expenses 29,819,762 Subcription&Office security exp. 22,789,849 Others 62,151,615
572,000,481 65,034,633 58,634,208 26,175,640 27,564,357 12,502,712 17,301,853 70,973,604 48,825,293 40,628,685 64,638,869 3,958,512 37,721,238
367,140,051 79,620,910 64,762,362 4,002,500
560,372,529 61,616,842 57,163,507 -
57,443,674 26,538,903 37,467,564 60,316,924 63,565,407 32,455,551 29,284,956 22,789,849 60,923,455
26,175,640 27,564,357 11,886,778 13,571,651 69,471,584 41,243,273 39,126,685 56,786,849 3,958,512 35,504,099
938,510,225
1,045,960,083
906,312,105
1,004,442,305
196,027,138
362,064,199
176,405,682
374,579,760
6,000,000,000
6,000,000,000
6,000,000,000
6,000,000,000
Earnings/(loss) per share (kobo) Basic
3.27
6.03
2.94
6.24
Diluted
3.27
6.03
2.94
6.24
This represents increase in the value of financial assets at fair value through profit or loss during the year. 31. Management expenses
32. Basic/diluted earnings per share Profit/(loss) after taxation Number of shares
Earnings/(loss) per share have been computed on profit/(loss) after taxation attributable to ordinary shareholders and divided by the number of shares at 50k ordinary shares in issue at year end. Group September September 2016 2015 N N
Company September September 2016 2015 N N
300,772,654 19,075,952 37,468,272 26,318,344
478,545,012 12,563,159 37,631,820 43,260,490
284,734,821 19,075,952 37,468,134 25,861,144
469,120,980 12,563,159 37,631,820 41,056,570
383,635,222
572,000,481
367,140,051
560,372,529
750,000 4,500,000 8,160,000 12,000,000
750,000 4,500,000 8,160,000 12,000,000
750,000 4,500,000 8,160,000 12,000,000
750,000 4,500,000 8,160,000 12,000,000
33. Staff costs Wages and salaries Medical Staff training Defined contribution pension plan (Note 17.1)
34. Chairman's and Directors' emoluments, pensions and compensation for loss of office Emoluments: Chairman Other Directors Other emolument of executives Emolument of highest paid Director
41
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Group 2016 2015 Number Number 35.
36.
Staff Average number of persons employed in the financial year and staff costs were as follows: Managerial Senior staff Junior staff
30 111 97 238
28 107 104 239
29 106 94 229
27 102 101 230
Nil Nil Nil 9
Nil Nil Nil 8
Nil Nil Nil 9
Nil Nil Nil 8
Nil
Nil
Nil
Nil
7 30 26 14 1 10 14 3 133 238
7 30 26 14 1 11 15 135 239
6 30 26 14 1 10 13 3 126 229
6 30 26 14 1 10 14 129 230
The number of Directors excluding the Chairman whose emoluments were within the following ranges were: N Nil 100,001 200,001 Above
-
N 100,000 200,000 300,000 300,000
Emolument Number of Directors who have waived their rights to receive emoluments 37.
Company 2016 2015 Number Number
Employees remunerated at higher rates The number of employees in respect of emoluments within the following ranges were: N N 200,001 300,000 300,001 400,000 400,001 500,000 500,001 600,000 600,001 700,000 700,001 800,000 800,001 900,000 900,001 - 1,000,000 1,000,001 and above
38.
Capital commitments There were no capital commitments at 30 September 2016.
39.
Contingent liabilities There were no material contingent liabilities at 30 September 2016.
40.
Comparative figures Where necessary, comparative figures have been adjusted to conform with changes in presentation of the current year in accordance with the International Accounting Standards (IAS 1).
42
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 41.
Segment Information An operating segment is a component of the Group engaged in business activities from which it can earn revenues whose operating results are reviewed regularly by the Group’s Executive Management in order to make decisions about resources to be allocated to segments and assessing segments performance. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group’s Executive Management. The Group is organized into two operating segments, these segments and their respective operations are as follows:
General Insurance Business: This segment provides cover for indemnifying customers’ properties,and compensation for other parties that have suffered damage as a result of customers’ accidents. Major sources of revenue in this segment are mainly from insurance premium, investment income, commission received,net fair value gains on financial assets at fair value through profit or loss. CHI Capital Ltd: This is a subsidiary of Consolidated Hallmark Insurance Plc. The company is registered by CAC to offer consumer leasing and support services to Consolidated Hallmark Insurance Plc (the parent company). In addition, it owns Grand Treasurers Ltd who is registered by CBN to offer wide range financial services and products domestically to suit customer’s long- and short-term financial needs. These products include L.P.O financing, Consumer Lease, Working Capital financing, Auto lease, Project financing and intermediation and Financial Management Consultancy Services. Revenue from this segment is derived primarily from interest income, fee income, investment income and net fair value gains on financial assets at fair value through profit and loss. Segment information by company and subsidiaries: General Insurance N
Finance and support services N
Elimination N
Total N
At 30 SEPTEMBER 2016 Operating income Operating expenses Operating profit Taxation Profit for the period
1,234,510,760 (906,312,105) 328,198,655 (151,792,973) 176,405,682
62,078,402 (32,198,119) 29,880,283 (10,258,827) 19,621,456
Total assets
7,794,981,035
546,985,730
(476,181,319)
7,865,785,446
Total liabilities
3,449,497,407
58,033,256
(45,585,216)
3,461,945,447
Share capital and reserves
4,345,483,628
488,952,474
(430,596,103)
4,403,839,999
Depreciation ROCE
-
64,762,362 4%
212,474 4%
1,795,974,777 (1,108,977,661) 686,997,116 (152,718,047) 534,279,069
60,003,231 (42,088,388) 17,914,843 (6,382,834) 11,532,009
(23,460,000) (23,460,000) (23,460,000)
1,832,518,008 (1,151,066,049) 681,451,959 (159,100,881) 522,351,078
Total assets
6,964,209,568
387,695,154
328,588,687
7,680,493,409
Total liabilities
2,735,131,622
98,960,233
(78,588,687)
2,755,503,168
Share capital and reserves
4,229,077,946
288,734,921
(250,000,000)
4,267,812,867
As at 31 December 2015 Operating income Operating expenses Operating profit Taxation Profit for the year
Depreciation ROCE
76,495,992 13%
43
2,047,755 4%
-
1,296,589,162 (938,510,224) 358,078,938 (162,051,800) 196,027,138
-
64,974,836 4%
78,543,747 12%
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 42. Contraventions The company did not contravened any provisions or guidelines of any regulator during the period under review.
43. Reinsurance treaty The Company has a reinsurance agreement with African Reinsurance Corporation, and Continental Reinsurance Plc to reinsure the risks associated with fire and consequential loss, General accident, Marine cargo, motor, aviation and special risks etc. according to agreed quota share, surplus treaty or excess of loss treaty. This agreement was last modified 31 December 2015. 44. Related party transactions There are no significant business dealings with its related parties during the year under review.
Parent: The Group is controlled by Consolidated Hallmark Insurance Plc. which is the parent company, whose shares are widely held. Consolidated Hallmark Insurance Plc, is a General Business Insurance Company licensed by the National Insurance Commission. Subsidiaries: Consolidated Hallmark Insurance Plc holds 100% interest in CHI Capital Limited. Transactions between Consolidated Hallmark Plc and this subsidiary is eliminated on consolidation and already disclosed in Note 10.2 Key management personnel: Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group or Company, directly or indirectly, including any director (whether executive or otherwise). It includes close members of their families who may be expected to influence or be influenced by that individual in their dealings with the Group. The significant related party transaction in the course of the reporting period are as stated below with the subsidiary company, CHI Capital Limited. 2016 2015 September September Entity 6,274,336 9,864,071 Income from Auto-insurance support services CHI Capital Limited 6,274,336 9,864,071 Auto-insurance support services expenses CHI PLC Group September 31 December 2016 2015 N N 45. Compensation of key management personnel: Directors fees
-
4,250,000
Company September 31 December 2016 2015 N N -
4,250,000
46. Events after the reporting period: No event or transaction has occurred since the reporting date, which would have had a material effect on the financial statements as at that date or which needs to be mentioned in the financial statement in the interests of fair presentation of the Group's financial position as at the reporting date or its result for the year then ended. 47. Capital management The Group’s objectives with respect to capital management are to maintain a capital base that adequately meets regulatory requirements and to utilize capital allocations efficiently and effectively. Capital levels are determined either based on internal assessment or regulatory requirements. The Nigerian Insurance Act 2003 stipulates the minimum capital requirement for a non life insurance company as an amount not less than 15% of the gross premium income less reinsurance premiums paid out during the year under review or the minimum paid up capital whichever is greater. The act defines what constitutes admissible assets liabilities. The regulators generally expect companies to comply with capital adequacy requirements and the Company has consistently exceeded this minimum over the years. The regulator has the authority to request more extensive reporting and can place restrictions on the Company’s operations if the Company falls below this requirement as deemed neccesary. All of the Groups capital is Tier 1 (core capital) which consists of share capital and reserves created by appropriation of retained earnings. The following sources of funds are available to the group to meet its capital growth requirements: 1. Profits from operations: The group had regularly appropriated from its profit to grow its capital. 2. Issue of shares: The Group can successfully access the capital market to raise the desired funds for its operations and needs. 3. Loans (long term/short term): this remains a source of capital even though the group had never had cause to access this source for funding its operations. Compliance with statutory solvency margin requirement: The company at the end of the 2015 financial year maintained admisible assets of N6,192,326,113.06 which exceeded the total admissible liabilities of N2,511,036,434.09 The solvency margin was computed in line with the requirements of Section 24 of the insurance Act 2003, latest NAICOM guidelines. This showed a solvency margin in excess of the minimum requirement of N3billion for General Insurance Business by 23%. Thus, the solvency margin above satisfies the requirement of the regulatory requirement.
44
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016
48.
Asset & liability Management Asset & liability Management (ALM) is the practice of managing an insurer’s financial position so that actions taken with respect to assets and liabilities are designed to address the broad set of financial risks inherent in their joint behavior. Asset & Liability management (ALM) attempts to address financial risks the group is exposed to which includes interest rate risks, foreign currency risks, equity price risks and credit risks. The major financial risk is that in the long run its investment proceeds are not sufficient to fund the obligations arising from its insurance contracts. ALM ensures that specific assets of the group is allocated to cover reinsurance and other liabilities of the group. The following tables reconcile the consolidated balance sheet to the classes and portfolios used in the Group’s ALM framework. Group 2016 Insurance fund N ASSETS Cash and cash equivalents Financial assets - At fair value through profit or loss - Loans and receivables - Available for sale -Held -to-maturity Deposit for shares Finance lease receivables Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayments Investment in subsidiaries Intangible Asset Inventories Investment properties Property and equipment Statutory deposit TOTAL ASSETS LIABILITIES Insurance contract liabilities Trade payable Other payables and Provision Retirement benefit obligations Income tax liabilities Deferred income tax TOTAL LIABILITIES
Shareholders funds N
September 2016 N
2,307,732,618
554,563,567
2,862,296,185
2,307,732,618
141,630,618 236,631,809 60,950,000 1,014,735,272 215,627,088 280,579,297 485,851,346 192,565,490 198,388,279 13,981,971 3,418,701 893,589,275 965,540,115 300,000,000 5,558,052,829
141,630,618 236,631,809 60,950,000 1,014,735,272 215,627,088 280,579,297 485,851,346 192,565,490 198,388,279 13,981,971 3,418,701 893,589,275 965,540,115 300,000,000 7,865,785,446
582,960,851 201,113,714 5,759,030 178,049,506 186,329,728 1,154,212,828
2,307,732,618 582,960,851 201,113,714 5,759,030 178,049,506 186,329,728 3,461,945,447
4,403,840,001
4,403,839,999
2,307,732,618
2,307,732,618 -
SURPLUS
45
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016
Group 2015 Insurance fund N ASSETS Cash and cash equivalents Financial assets - At fair value through profit or loss - Loans and receivables - Available for sale -Held -to-maturity Deposit for shares Finance lease receivables Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayments Investment in subsidiaries Intangible Asset Inventories Investment properties Property and equipment Statutory deposit TOTAL ASSETS LIABILITIES Insurance contract liabilities Trade payable Other payables and Provision Retirement benefit obligations Income tax liabilities Deferred income tax TOTAL LIABILITIES
2,218,670,079
2,218,670,079 2,218,670,079
2,218,670,079 -
SURPLUS
45
Shareholders funds N
Dec 2015 N
604,065,687 183,200,238 61,029,203 60,950,000 497,905,166 172,095,986 81,030,026 691,913,416 190,525,298 135,246,867 16,467,871 5,146,854 888,020,000 917,049,344 300,000,000 4,804,645,956
2,822,735,766
112,060,913 163,568,360 184,444 120,730,104 140,289,268 536,833,089
2,218,670,079 112,060,913 163,568,360 184,444 120,730,104 140,289,268 2,755,503,168
4,267,812,867
4,267,812,867
183,200,238 61,029,203 60,950,000 497,905,166 172,095,986 81,030,026 691,913,416 190,525,298 135,246,867 16,467,871 5,146,854 888,020,000 917,049,344 300,000,000 7,023,316,035
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Company 2016 Insurance fund ASSETS Cash and cash equivalents Financial assets – At fair value through profit or loss - Loans and receivables – Available for sale -Held-to-maturity Deposit for shares Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayments Intangible Asset Investment in subsidiaries Investment properties Property, plant and equipment Statutory deposit TOTAL ASSETS LIABILITIES Insurance contract liabilities Trade payable Provision and Other payables Retirement benefit obligations Income tax liabilities Deferred income tax TOTAL LIABILITIES
Shareholders funds
September 2016
2,307,732,618
329,344,444
2,637,077,063
2,307,732,618
136,682,023 215,422,459 60,950,000 1,014,735,272 280,579,297 485,851,346 192,565,490 210,330,951 13,189,771 480,000,000 808,928,275 958,669,088 300,000,000 5,487,248,417
136,682,023 215,422,459 60,950,000 1,014,735,272 280,579,297 485,851,346 192,565,490 210,330,951 13,189,771 480,000,000 808,928,275 958,669,088 300,000,000 7,794,981,035
582,960,851 218,755,287 5,525,733 148,789,293 185,733,625 1,141,764,788
2,307,732,618 582,960,851 218,755,287 5,525,733 148,789,293 185,733,625 3,449,497,407
4,345,483,629
4,345,483,628
2,307,732,618
2,307,732,618 -
SURPLUS
46
CONSOLIDATED HALLMARK INSURANCE PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Company 2015 Insurance fund ASSETS Cash and cash equivalents Financial assets – At fair value through profit or loss - Loans and receivables – Available for sale -Held-to-maturity Deposit for shares Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayments Intangible Asset Investment in subsidiaries Investment properties Property, plant and equipment Statutory deposit TOTAL ASSETS LIABILITIES Insurance contract liabilities Trade payable Provision and Other payables Retirement benefit obligations Income tax liabilities Deferred income tax TOTAL LIABILITIES
49.
Shareholders funds
Dec 2015
1,974,439,083
294,133,108
1,974,439,083
331,557,775 19,379,021 2,000,000 133,173,401 50,250,000 69,245,808 651,767,868 194,835,265 141,704,560 15,592,433 250,000,000 793,460,682 905,899,680 300,000,000 4,137,407,168
2,780,220,924 177,671,643 70,851,262 60,950,000 497,905,166 81,030,026 691,913,416 190,525,298 135,266,048 15,592,433 250,000,000 803,359,000 908,924,352 300,000,000 6,964,209,568
112,060,913 171,540,123 4,430 93,162,912 139,693,165 516,461,543
2,218,670,079 112,060,913 171,540,123 4,430 93,162,912 139,693,165 2,735,131,622
3,620,945,625
4,229,077,946
2,218,670,079
2,218,670,079 -
SURPLUS Fair value hierarchy
The determination of fair value for each class of financial instruments was based on the particular characteristics of the instruments. Group’s accounting policy on fair value measurements is discussed under the statement of significant accounting policies. Level 1: Fair value measurements classified as Level 1 include exchange-traded prices of fixed maturities and equity securities unadjusted in active market for identical assets and liabilities. Level 2: valuation techniques based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields, reported secondary trades, brokerdealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.
Level 3: This includes financial instruments, the valuation of which incorporate significant inputs for the asset or liability that is not based on observable market data (unobservable inputs). Unobservable inputs are those not readily available in an active market due to market illiquidity or complexity of the product. These inputs are generally determined based on inputs of a similar nature, historic observations on the level of the input or analytical techniques.
47
CONSOLIDATED HALLMARK INSURANCE PLC APPENDIX 1 REVENUE ACCOUNT FOR THE PERIOD ENDED 30 SEPTEMBER 2016 Motor N Income Direct premium Inward reinsurance premium Gross written premium (Increase)/decrease in unexpired premium reserve Gross premium earned Deduct: Outward reinsurance premiums (Increase)/decrease in prepaid reinsurance Reinsurance cost Net premium earned Commission received (Increase)/decrease in unearned commission Total Income Gross Claims Paid (Increase)/decrease in outstanding claims provision Gross claims incurred Reinsurance claims recovery (Increase)/decrease in reinsurance recoveries
Fire N
Gen. Accident N
Marine N
Aviation N
Oil & Gas N
Engineering N
2016 Total N
2015 Total N
1,047,830,529 10,421,453
628,698,908 14,850,392
23,687,767 -
725,013,087 3,884,759
321,408,438 1,801,850
1,299,110,838 6,535,284
712,096,197 13,945,824
113,168,484 1,703,472
4,871,014,249 53,143,034
4,810,381,515 129,030,131
1,058,251,982
643,549,300
23,687,767
728,897,846
323,210,288
1,305,646,122
726,042,021
114,871,956
4,924,157,282
4,939,411,645
(33,880,517) 1,024,371,464
(35,433,196) 608,116,105
(5,602,904) 18,084,863
5,006,025 733,903,871
(189,523,330) 133,686,958
8,106,547 1,313,752,669
232,303,909 958,345,930
(21,104,395) 93,767,561
(40,127,861) 4,884,029,421
(282,000,000) 4,657,411,645
(38,977,220)
(195,869,448)
(6,034,524)
(52,215,806)
(114,211,279)
(960,644,810)
(426,371,581)
(41,640,426)
(1,835,965,094)
(2,171,478,329)
(4,884,009) (43,861,230)
(7,482,349) (203,351,797)
(756,151) (6,790,675)
(4,843,886) (57,059,692)
(11,564,055) (125,775,334)
(115,573,427) (1,076,218,237)
(56,409,460) (482,781,041)
(4,548,733) (46,189,159)
(206,062,070) (2,042,027,164)
(50,386,800) (2,221,865,129)
980,510,235 1,390,254
404,764,307 62,878,427
11,294,188 -
676,844,179 3,627,272
7,911,624 16,302,709
237,534,432 26,655,787
475,564,889 57,293,007
47,578,402 16,919,882
2,842,002,257 185,067,338
2,435,546,516 135,061,019
981,900,488
467,642,734
11,294,188
680,471,451
24,214,333
264,190,220
532,857,897
64,498,284
3,027,069,595
(12,120,609) 2,558,486,926
(393,387,200)
(415,722,283)
20,000
(195,181,414)
(101,826,671)
(81,441,218)
(30,301,662)
(29,549,587)
(1,247,390,034)
(887,738,035)
(35,714,500) (429,101,700) 29,405,850
(14,260,933) (429,983,216) 182,942,293
20,000 -
7,641,779 (187,539,635) 18,134,588
2,301,089 (99,525,582) 22,962,470
(3,400,000) (84,841,218) 110,881
(4,355,000) (34,656,662) 1,243,664
(1,147,114) (30,696,701) 14,083,909
(48,934,679) (1,296,324,713) 268,883,655
(14,470,557) (902,208,592) 189,163,537
-
-
Net claims paid incurred
(399,695,849)
(247,040,922)
Acquisition expenses (Increase)/decrease in commission expenses Maintenance/operating expenses
(122,237,670)
(127,658,143)
630,126 (98,127,796)
Total expenses Underwriting profit/(loss)
Bond N
20,000
-
-
-
-
-
-
-
(169,405,047)
(76,563,113)
(84,730,337)
(33,412,998)
(16,612,792)
(1,027,441,058)
(713,045,056)
(4,371,593)
(144,623,744)
(65,073,667)
(82,879,458)
(121,657,939)
(23,106,966)
(691,609,180)
(540,274,830)
586,569 (47,041,648)
681,134 (1,590,667)
209,956 (116,659,880)
804,853 (23,624,736)
678,644 (87,498,703)
52,875 (48,363,754)
(1,603,965) (8,471,592)
2,040,192 (431,378,777)
42,300,040 (95,633,436)
(619,431,190)
(421,154,145)
(5,261,126)
(430,478,714)
(164,456,663)
(254,429,854)
(203,381,816)
(49,795,315)
(2,148,388,822)
(1,306,653,282)
362,469,298
46,488,590
6,033,062
249,992,737
(140,242,330)
329,476,081
14,702,969
68
9,760,365
878,680,773
1,251,833,644
