Quarter 1 - financial statement for 2026

Directors Mr. Shuaibu Idris, mni Chairman (Effective 1st January 2024)

Mr. Eddie Efekoha Group CEO (Effective 1st January 2024)

Mr. Babatunde Daramola Group Chief Financial Officer (Effective 1st January 2024)

HRH Eze Ben Onuora Non-Executive Director (Effective 1st January 2024) Dr. Layi Fatona Non-Executive Director (Effective 1st January 2024) Dr. Anthony Anonyai Non-Executive Director (Effective 1st January 2024) Mr. Adegbola Adesina Non-Executive Director (Effective 1st January 2024)

Mrs. Chijioke Ugochukwu Independent Non-Executive Director (Effective 1st January 2024)

Chief Sunny Obidegwu Non-Executive Director (Effective 29th April 2024)

Company Secretary Mrs. Rukevwe Falana

Consolidated Hallmark Holdings Plc 266, Ikorodu Road

Obanikoro, Lagos

Registered Office Consolidated Hallmark Holdings Plc

266, Ikorodu Road Obanikoro, Lagos

Registration Number 1901273

Corporate Head Office Consolidated Hallmark Holdings Plc

266, Ikorodu Road Obanikoro, Lagos Email: info@chiplc.com

Registrars Meristem Registrars & Probate Services Ltd 213, Herbert Macaulay Road

Adekunle, Yaba Lagos Tel: +234 (1) 8920491-2

Lagos

Bankers Fidelity Bank Plc

First Bank of Nigeria Limited GTBank Limited

United Bank for Africa Plc Zenith Bank Plc

FCMB

Reinsurers African Reinsurers Corporation Continental Reinsurance Plc WAICA Reinsurance Corporation

Auditors PKF Professional Services

PKF House

205A, Ikorodu Road, Obanikoro Lagos, Nigeria.

Tel:+2349030001351

Website: https://www.pkf-ng.com

Actuary Becoda Consulting

7 Ibiyinka Olorunbe Close Victoria Island

Lagos

Subsidiaries

Consolidated Hallmark Insurance Ltd 266, Ikorodu Road

Obanikoro, Lagos

Hallmark Health Services Limited 264, Ikorodu Road

Obanikoro, Lagos

Hallmark Finance Company Limited Plot 33D Bishop Aboyade Cole Street Victoria Island

Lagos

CHI Life Assurance Limited

Plot 33D Bishop Aboyade Cole Street Victoria Island

Lagos

Branch Networks Abuja

Corporate Head Office 3rd Floor,Wing B, Ulo Plaza

266, Ikorodu Road 34 Sokode Crescent

Obanikoro, Lagos Wuse Zone 5 FCT Abuja

Tel: +234-1-2912543 Tel: 09-2347965 Fax: 097804398

0700CHINSURANCE abuja@chiplc.com

O7OO24467872

e-mail:info@chiplc.com website: https://www.chhplc.com

Regional Offices Victoria Island Office

Port Harcourt Plot 33D Bishop Aboyade Cole Street

No 1, Worlu Street Victoria Island Lagos

Off Ulo Obasanjo Road Port Harcourt Tel:01-4618222

Tel: 09092861724, 09033543581 Fax 01-4618380

porthacourt@chiplc.com e-mail: info@chiplc.com website:www.chiplc.com

Aba Office Kaduna Office

4, Eziukwu Road NK 9, Constitution Road

Tel: 08180001164 Kaduna

aba@chiplc.com Tel: 08180001148

kaduna@chiplc.com

Owerri Office Akure Office

5B Okigwe Road 3rd Floor, Bank of Industry (BOI) House

Opp. Govt College Owerri Alagbaka Akure

08180001162 Tel: 08180001154

owerri@chiplc.com akure@chiplc.com

Kano Office Warri Office

17, Zaria Road 179, Jakpa Road, Effurun

Gyadi Gyadi Tel: 08180001157

Tel: 08180001146 warri@chiplc.com

kano@chiplc.com

Onitsha Office Enugu Office

41, New Market Road Onitsha 77, Ogui Road

Tel: 08180001139 Tel: 08180001142

onitsha@chiplc.com enugu@chiplc.com

Ibadan Office

1st Floor, Navada Plaza 140/142 Liberty Stadium Road Tel: 08180001152

ibadan@chiplc.com

The Directors have the pleasure in submitting their report on the affairs of Consolidated Hallmark Holdings Plc for the year ended 31st December 2025.

LEGAL FORM

Consolidated Hallmark Holdings Plc evolved from Consolidated Hallmark Insurance Plc (now Ltd) whose history dates back to 2nd August, 1991 when it was incorporated. The company started as an insurance company and is the product of a merger between Hallmark Assurance Plc Consolidated Risks Insurers Ltd and the Nigeria General Insurance Company Limited that took effect on 1st March, 2007 in line with the consolidation reform of the National Insurance Commission announced in 2005. In 2022, the Company resolved to undergo another corporate restructuring (Scheme of Arrangement). The scheme of arrangement was approved by a court ordered meeting on 1st November, 2022 and sanctioned by the Federal High Court on 12th July, 2023 effectively birthing a non-operating Holding company called Consolidated Hallmark Holdings (CHH Plc).

CHANGE IN OWNERSHIP

There was a change in the shareholding structure of Group as Godsmart Limited divested itself of its 1,199,500,429 shares while Cordcap acquired a total of 1,000,000,000 shares thus holding a total of 9.23% of the Company's shares during the period under review.

DIRECTORS AS AT THE DATE OF THIS REPORT

DIRECTORS AND THEIR INTEREST

The Directors of the Company who held office during the year together with their direct and indirect interest in the share capital of the Company were as follows:

SUBSTANTIAL INTEREST IN SHARES

Below are the Shareholders who held more than 5% of the issued share capital of the Company:

DIRECTORS RESPONSIBILITIES

The Company's Directors are responsible, in accordance with the provisions of section 377 of the Companies and Allied Matters Act 2020, for the preparation of Financial Statements which give a true and fair view of the state of affairs of the Company as at the end of each financial year and of its profit or loss and cash flows for the year and that the statements comply with the International Financial Reporting Standards, Insurance Act 2003, Bank & Other Financial Institutions Act 2020 and Companies and Allied Matters Act 2020. In doing so, they ensure that:

1. Proper accounting records are maintained.

2. Adequate internal control procedures are established which as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other accounting irregularity.

3. Applicable accounting standards are followed.

4. Suitable accounting policies are consistently applied.

5. Judgments and estimates made are reasonable and prudent and consistently applied.

6. The going concern basis is used unless it is inappropriate to presume that the Company shall continue in business.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The Company act as the Holding Company for various subsidiaries providing administrative and other shared services support to the Group members.

DIVIDEND

The Board of Directors, pursuant to the powers vested in it by the provisions of Section 426 of the Companies and Allied Matters Act (CAMA) 2020, has recommended a final dividend of 15kobo per share for the financial year ended 31st December 2025.

INTRODUCTION

The Company is unswerving in its adherence to the principles of corporate governance as enshrined in the regulators' codes. The Company recognises the benefits that strict adherence to these codes afford its investors, the Company, and the financial market in Nigeria and beyond. The Company has thus, not reneged in its commitment and efforts toward ensuring full compliance with the various and similar standards required of it by its regulators.

THE BOARD

The Company's Board of Directors is made up of seasoned and accomplished professionals in law, petroleum, insurance, accounting and the banking industry. This assemblage of well-bred and accomplished professionals with vast experience who are very conscious of their various professional ethics and the regulated nature of the insurance business have over the years brought these experiences to bear by their robust, dispassionate and consistent review of the Company's policies.

COMPOSITION OF THE BOARD

The Board of CHH is made up of nine directors. The Board was made up of majorly Non-Executive Directors which makes it independent of Management and has thus, enabled the Board to carry out its oversight function in an objective and effective manner. In tandem with the Nigerian Code of Corporate Governance 2018, SEC Corporate Governance Guidelines, and International Best Practice, the positions of the Chairman and the Chief Executive Officer/Managing Director are occupied by two separate persons.

The details of the composition of the Board are stated below:

DUTIES OF THE BOARD

1. Provision of strategic direction for the Company.

2. Approval of the budget of the Company.

3. Oversight of the effective performance of Management in running the affairs of the Company.

4. Ensuring human and financial resources are effectively deployed.

5. Establishment of an adequate system of internal control procedures that ensure the safeguard of assets and assist in the prevention and detection of fraud and other irregularities.

6. Following applicable accounting standards.

7. Consistently applying suitable accounting policies.

8. Ensures compliance with the code of corporate governance and with other regulatory laws and guidelines.

9. Performance appraisal of Board Members and Senior Executives.

10. Approval of the policies surrounding the Company's communication and information dissemination system.

MEETINGS OF THE BOARD

The Board meets regularly and ensures that the minimum standards in terms of attendance and frequency of meetings are complied with. The Board met seven times in 2025, thus it ensured that the requirement of meeting at least once in every quarter was achieved. Required notices and meeting papers were sent in advance before the meeting to all the Directors.

BOARD COMMITTEES

To assist in the execution of its responsibilities, the Board discharges its oversight functions through various Committees put in place. The Committees are set up in line with statutory and regulatory requirements and are consistent with Global Best Practices. Membership of the Committees of the Board is intended to make the best use of the skills and experience of Non-Executive Directors in particular.

The Committees have well-defined terms of reference which set out their roles, responsibilities, functions, scope of authority and procedure for reporting to the Board. The Committees consider matters that fall within their purview to ensure that decisions reached are as objective as possible.

Set out below are the various Committees and the terms of reference of each Board Committee:

1. Board Finance, Investment & Technology Committee (BFITC)

2. Board Audit & Risk Management Committee (BARMC)

3. Board Governance, Nomination & Remuneration Committee (BGNRC)

1. BOARD FINANCE, INVESTMENT & TECHNOLOGY COMMITTEE (BFITC) PURPOSE

   The Board Finance, Investment & Technology Committee (BFITC) is set up by and responsible to the Board of Directors. It shall oversee the Company's financial affairs on behalf of the Board and to give initial consideration to and advice on any other Board business of particular importance or complexity.

   RESPONSIBILITIES

   • To review and make recommendations to the Board on the annual budget of the Company as well as periodically review the capital structure of the Company.

   • To evaluate quarterly financial performance and position of the Company against board approved budget and make appropriate recommendations to the Board on same.

   • To recommend strategic initiatives to the board and review major new businesses, especially those with significant capital allocation, acquisitions, disposal of business segments or subsidiaries and joint ventures and advise the Board thereon.

   • To consider and approve extra budgetary expenditure in excess of the 10% of the original expenditure when and where necessary.

   • To consider the dividend policy of the Company, review it from time to time and make recommendation to the Board for its approval

   • To present the investment policies and plans to the Board annually for approval and ensure that investments are made in accordance with the policies.

   • To consider and advise the Board on strategic policies for the Company's investment programmes, investment performance benchmarks and target risk management exposures.

   • To decide on the appropriateness of all investments within the Company that affects the Company's clients, lines of business, management and staff and also IT systems.

   • To ensure that guidelines for investment comply with legal and regulatory requirements and that investment activities reflect the goals and strategy of the Company.

   • To approve all investment in excess of the limits delegated to Management Investment Committee.

   • To approve provisions for non-performing investments based on presentation by the CEO and in line with existing regulations.

   • To review Management Investment Committee's authority level as and when deemed necessary and recommend new levels to the Board for consideration.

   • To conduct quarterly review of investments granted by the Company to ensure compliance with the Company's internal control systems and investment approval procedures.

   • To notify all Directors related investment to the Board.

   • To monitor and notify the top debtors to the attention of the Board.

   • To ensure that the investment assets of the Company are protected and effective control measures are put in place for sufficient internal checks and balances.

   • To review and recommend the technology strategy to align with the Group's overall business objectives and long-term goals.

   • To assess and oversee technology-related risks, including cybersecurity, data privacy, and IT compliance, and ensure the implementation of appropriate risk mitigation measures.

   • To evaluate and approve proposed technology investments and ensure alignment with the Group's strategic priorities and financial objectives.

   • To review and advise on the effectiveness of the Group's information systems, including the security, reliability, and performance of technology infrastructure.

   • To monitor the trends in technology and advancements and advise on opportunities for innovation to enhance the competitive position of the Group.

   • To recommend and review policies relating to technology and procedures, data control and processing to ensure compliance with relevant laws and regulations.

   • To oversee the Group's cybersecurity posture, including reviewing incident response plans, monitoring threat landscapes, and ensure the adequacy of cybersecurity

   • To give anticipatory approvals on behalf of the board on matters falling within its purview that require urgent decisions and ensure that such approvals are ratified by the Board at its next sitting.

   • To consider any other matter that may be delegated to the Committee by the Board from time to time.

   • To review the Company's strategy to ensure it aligns with the Nigerian Data Protection Act 2023 and other data related law provision on cyber security.

   • The Committee should also access and advise the Board on destructive risk on the Company's IT infrastructure.

   • Develop and or review from time to time the guidelines for all Director and related party transactions and investments.

   • Review and recommend to the Board of Directors approval or otherwise for all Director and related party transactions.

   • Oversee Management processes in relation to finance, investment, and technology and ascertain the integrity of the Company's compliance with applaudable laws and regulations

     MEETINGS AND PROCEDURE

     The Committee meets quarterly and where necessary in-between to consider and review issues within its purview. The Committee ensured that attendance and resolutions reached at its meetings were adequately recorded and brought to the attention of the Board for the Board's information or approval as the case may be. The Company Secretary provides secretarial support to the Committee.

     MEMBERSHIP/COMPOSITION

     The Committee met four times during the reporting period.

     Dr. Anthony Anonyai	Non-Executive Director	Chairman
     Mr. Eddie Efekoha	Group CEO	Member
     Mr. Babatunde Daramola	Group CFO	Member
     Mrs. Chijioke Ugochukwu	Independent Non-Executive Director	Member
     Mr. Adegbola Adesina	Non-Executive Director	Member
     Chief Sunny Obidegwu	Non-Executive Director	Member

2. BOARD AUDIT & RISK MANAGEMENT COMMITTEE PURPOSE

   The Board Audit and Risk Management Committee is set up by and responsible to the Board of Directors. It shall monitor and provide effective supervision of Management's financial reporting process with a view to ensure accurate, timely and proper disclosures, transparency, integrity and quality of financial reporting.

   The Committee also oversees the work carried out in the financial reporting process by Management, including the Internal Auditor and the External Auditor. It shall have the power to investigate any activity within its terms of reference, seek information from any employee and obtain external legal or professional advice from experts when necessary.

   RESPONSIBILITIES

   • To receive and review the activities, findings, conclusions and recommendations of the internal and external auditors relating to the Company's quarterly reports and annual unaudited financial statements.

   • To appoint an External Party to review the effectiveness of the Internal Audit Process once in every three years.

   • To review for the approval of the Board the Company's risk management policy inc1uding risk appetite and risk strategy.

   • Determine the adequacy and effectiveness of the Company's risk detection and measurement systems and controls.

   • Evaluate the Group's internal control and assurance framework annually, in order to satisfy itself on the design and completeness of the framework relative to the activities and risk profile of the Company and its subsidiaries.

   • Keep the effectiveness of the Company's system of accounting, reporting and internal control under review and to ensure compliance with applicable laws, regulatory requirements and agreed ethical standards.

   • To periodically review changes in the economic and business environment including emerging trends and other factors relevant to the company's risk profile.

   • To review the procedure put in place to encourage whistle blowing; receive a summary of whistle blowing cases reported and the result of the investigation from the Internal Auditor.

   • To review the oversight of management process for the identification of significant risk across the group and the adequacy of prevention, detection and reporting mechanisms.

   • Review and recommend to the Board for approval, the contingency plan for specific risks.

   • To conduct annual appraisal of the Head of Internal Auditor.

   • Approval of the annual budget and resource requirements of the Internal Audit along with the Annual Audit scope and plan.

   • The disciplinary issues relating to the Internal Auditor would be under the purview of the Audit Committee.

   • To make recommendations to the Board regarding appointment, removal and remuneration of the external auditors of the company.

   • To review the findings in Management letter in conjunction with the external auditors and Management's responses thereto.

   • To review the independence of the external auditors before and after their appointment and ensure that where they are permitted to perform with audit services there is no real or perceived conflict of interest or other legal or ethical impediments.

   • To discuss the interim and annual unaudited financial statements as well as significant financial reporting, findings, and recommendations with Management and external auditors prior to recommending them to the Board for appropriate action.

   • At least once a year, review and recommend for approval of the Board, the Company's Information Technology (IT) data governance framework to ensure that its data and privacy risks are adequately mitigated, and relevant assets protected effectively.

     MEETINGS AND PROCEDURE

     The Committee meets quarterly and where necessary in-between to consider and review issues within its purview. The Committee ensured that attendance and resolutions reached at its meetings were adequately recorded and brought to the attention of the Board for the Board's information or approval as the case may be.

     The Company Secretary provides secretarial support to the Committee.

     MEMBERSHIP/COMPOSITION

     The Committee met five times during the reporting period.

     1	Mr. Adegbola Adesina	Non-Executive Director	Chairman
     2	HRH Eze Ben Onuora	Non-Executive Director	Member
     3	Dr. Anthony Anonyai	Non-Executive Director	Member

3. BOARD GOVERNANCE, NOMINATION & REMUNERATION COMMITTEE (BGNRC) PURPOSE

The purpose of the Board Governance, Nomination & Remuneration Committee is to deal with matters affecting Executive Management staff as it relates to recruitment,

assessment, promotion, disciplinary measures, career development amongst others. The Committee is also responsible for monitoring corporate governance developments, best practices for corporate governance and furthering the effectiveness of the Company's corporate governance practices.

RESPONSIBILITIES

• To review from time to time the human resources policies and conditions of service for executive management staff including but not limited to compensation structure, welfare package, succession plan, training, equality and diversity, organizational structure and make recommendations to the Board as appropriate.

• To consider and recommend to the Boards of the Company and its Subsidiaries, appointment of Executive Directors and Non-Executive Directors, Directors' fees, sitting allowances and other benefits, and bonuses of Executive Management staff.

• To consider periodically productivity/performance appraisal reports of Executive Management staff and where necessary recommend to the Board any promotion, salary increment, training, transfers and any disciplinary actions including but not limited to termination of appointment.

• To ensure that the Company complies with all requirements contained in the Codes of Corporate Governance issued by the various regulators, including but not limited to the Securities & Exchange Commission, the Nigerian Exchange Limited, and the Financial Reporting Council of Nigeria to which the Company reports.

• To evaluate the current composition, structure, organization and governance of the Board and its Committees, as well as determine future requirements and make recommendations in this regard to the Board for its approval.

• To ensure that an external consultant is appointed for the annual evaluation of the Board performance of the Group and their report presented t o and considered by the Board.

• To recommend to the Board, Director nominees for each Committee of the Board.

• To advise the Company on the best business practices being followed on corporate governance issues nationally and worldwide.

• To review and re-examine the Board Charter and the Committees' Terms of Reference every three years or shorter period if deemed fit and make recommendations to the Board for any proposed changes.

• To establish the criteria for Board and Board Committee memberships, review candidates' qualifications and any potential conflict of interest, assess the contribution of current directors in connection with their re-nomination and make recommendations to the Board.

• To prepare a job specification for the chairman's position, including an assessment of the time commitment required of the candidate.

• To periodically evaluate the skills, knowledge and experience required on the Board; make recommendations on experience required by Board Committee members, committee appointments and removal, operating structure, reporting and other committee operational matters.

• To provide input to the annual report of the Company in respect of Directors' compensation.

• To ensure that a succession policy and plan exists for the positions of Chairman, CEO/ GMD, the Executive Directors and the Managing/Executive Directors of the subsidiaries.

• To ensure that Management put in place a staff succession policy and plan across the Company and its subsidiaries.

• To review the performance and effectiveness of the subsidiary Company's Board on an annual basis where applicable.

• To develop a formal, clear and transparent framework for the remuneration policies and procedures for the Group To approve the annual Board training and capacity-building plans/program for the Board of Directors of the Group

  MEETINGS AND PROCEDURE

  The Committee meets quarterly and where necessary in-between to consider and review issues within its purview. The Committee ensured that attendance and resolutions reached at its meetings were adequately recorded and brought to the attention of the Board for the Board's information or approval as the case may be.

  The Company Secretary provides secretarial support to the Committee.

  MEMBERSHIP/COMPOSITION

  The Committee met five times during the reporting period.

  HRH Eze Ben Onuora	Non-Executive Director	Chairman
  Dr. Layi Fatona	Non-Executive Director	Member
  Mrs. Chijioke Ugochukwu	Independent Non-Executive Director	Member
  Chief Sunny Obidegwu	Non-Executive Director	Member

  ATTENDANCE AT THE BOARD & ITS COMMITTEES' MEETINGS

  	BOARD	BARMC	BGNRC	BFITC
  Mr. Shuaibu Idris, mni	1 / 1.	N/A	N/A	N/A
  HRH Eze Ben Onuora	1 / 1.	1 / 1.	1 / 1.	N/A
  Dr. Layi Fatona	1 / 1.	N/A	1 / 1.	N/A
  Dr. Anthony Anonyai	1 / 1.	1 / 1.	N/A	1 / 1.
  Mr. Adegbola Adesina	1 / 1.	1 / 1.	N/A	1 / 1.
  Mrs. Chijioke Ugochukwu	1 / 1.	N/A	1 / 1.	1 / 1.
  Chief Sunny Obidegwu	1 / 1.	N/A	1 / 1.	1 / 1.
  Mr. Eddie Efekoha	1 / 1.	N/A	N/A	1 / 1.
  Mr. Babatunde Daramola	1 / 1.	N/A	N/A	1 / 1.

  TENURE OF DIRECTORS

  The tenure of the Non-Executive Directors is limited to three terms of three years each. This is in compliance with Best Practices and is also fuelled by the necessity to reinforce the Board by continually injecting new energy, fresh ideas, and perspectives.

  STATUTORY AUDIT COMMITTEE

  The constitution and composition of the Statutory Audit Committee is in compliance with Section 404 of the Companies and Allied Matters Act, 2020. The Committee is made of two Directors and three representatives of Shareholders. The Statutory Audit Committee, amongst other things examines the Auditor's report and make recommendations thereon at the Annual General Meeting as it deems fit.

  The Committee's composition is set out below:

  Chief James Emadoye	Shareholders' Representative	Chairman
  Chief Simon Okiotorhoro	Shareholders' Representative	Member
  HRH Eze Ben Onuora	Non-Executive Director	Member
  Mr. Adegbola Adesina	Non-Executive Director	Member
  Mr. Bola Temowo	Shareholders' Representative	Member
  Mr. Azubuike Ogbeka	Shareholders' Representative	Member

  RESPONSIBILITIES

• Ascertain whether the Accounting and Reporting Policies of the Company are in accordance with legal requirements and agreed ethical practice.

• Review the scope and planning of the Company/ Group annual audit exercise.

• Review the audit findings as contained in Management Letters and the Management responses thereon with External Auditors.

• Review the effectiveness of the Company's system of Accounting and Internal Control.

• Authorize the Internal Auditor to carry out investigations into any activities of the Company which may be of interest or concern to the Committee.

• Examine the Auditor's Report and make recommendations thereon to Shareholders at Annual General Meetings and to the Board as it deems fit.

• Assess qualifications and independence of External Auditor and performance of the Company's Internal Audit function as well as that of External Auditors.

• Ensure the development of a comprehensive Internal Control framework for the Company; obtain assurance and report annually in the financial report, on the operating effectiveness of the Company's Internal Control framework.

• At least on an annual basis, obtain and review a report by the internal auditor describing the strength and quality of internal controls including any issues or recommendations for improvement, raised by the most recent internal control review of the company.

• Meet separately and periodically with management, internal auditors and external auditors to review audit exercise, internal control issues and any other issues.

• Review and ensure that adequate whistle-blowing procedures are in place. A summary of issues reported are highlighted to the Chairman.

• Review the independence of the External Auditors and ensure that where non audit services are provided by the External Auditors, there is no conflict of interest.

• Preserve auditor's independence, by setting clear hiring policies for employees or former employees of Independent Auditors.

• Consider any related party transactions that may arise within the Company or Group.

• Invoke its authority to investigate any matter within its Terms of Reference and the Company must make available the resources to the Internal Auditors with which to carry out this function including access to external advice where necessary

MEETINGS OF THE COMMITTEE

The Committee meets at regular intervals and when necessary to consider and review issues within its purview. The Statutory Audit Committee met four times during the period under review.

SHAREHOLDERS RIGHTS

The Board is continuously committed to the fair treatment of shareholders and ensures that the shareholders are given equal access to information about the Company irrespective of their shareholdings. The general meeting of the Company has been conducted in an open manner which allows for free discussions on all issues on the agenda. The statutory and general rights of the shareholders are protected at all times. The representatives of the shareholders also attend and are allowed to make full and fair participation during the Annual General Meeting.

CONFLICT OF INTEREST

Consolidated Hallmark Holdings Plc has a policy in place that requires prompt disclosure from Directors of any real or potential conflict of interest that they may have regarding any matter that may come before the Board or its committees. CHH's policy requires any Director who has or may have a conflict of interest to abstain from discussions and voting on such matters.

DIRECTORS' NOMINATION AND APPOINTMENT PROCESSES

Appointment to the Board is regulated by an approved Board Appointment Policy which accords with best practice, the requirements of the applicable codes of Corporate Governance and the provisions of the Companies and Allied Matters Act 2020.

TRAINING AND INDUCTION OF NEW DIRECTORS

Annual training are organized for directors to enable them perform their responsibilities optimally. The Board Retreat is also an avenue where the Board Members are trained and refreshed on their fiduciary duties to the Company and on emerging trends in the insurance industry and the general business environment.

Newly appointed Directors are made to undergo induction with the Board and top executives of the Company to aid seamless integration into the responsibilities of the Board. The Board Retreat also serves as an opportunity for integrating new Directors into the Board.

THE COMPANY SECRETARY

The Company Secretary primarily assists the Board and Management in the implementation and development of good corporate governance. The Company Secretary provides guidance and advice to the Board and the Management of the Company on issues of ethics, conflict of interest and good corporate governance.

The Company Secretary also does the following: advise the Directors on their duties and ensure that they comply with corporate legislation and the Articles of Association of the Company; Arranging meetings of the Directors and the shareholders. This responsibility involves the issue of proper notices of meetings, preparation of agenda, circulation of relevant papers and taking and producing minutes to record the business transacted at the meetings and the decisions taken.

CORPORATE SOCIAL RESPONSIBILITY

In our bid to be good corporate citizens and promote the standards espoused by best corporate governance practices, the Company runs its operation taking into account the impacts it has on the environment particularly the effect on internal stakeholders for instance, focusing and investing in resources that promote the health and safety of workers.

SUSTAINABILITY AND ENVIRONMENTAL ISSUES

The following principles and practices are part of the Company's approach towards ensuring a sustainable socio-economic environment:

1. Corruption

   Ours is a Company that abhors corruption in business practice. To ensure activities in this regard are discouraged, we have put in place an Anti- bribery policy which is included in all Service Level Agreements with vendors.

2. Environmental Protection

   The nature of our services is not such that emit hazardous substances to the environment. We nonetheless have in place a robust Enterprise Risk Management framework. This consists of a policy and a set of procedures to identify, assess and manage environmental and other risks.

3. HIV/AIDS

The Company does not discriminate in the employment of persons living with HIV/AIDS and any form of disability. This is explicit in the employment policy.

HUMAN RIGHTS

The Company recognizes and respects the fundamental rights of its employees and stakeholders as enshrined under the constitution. It is also an equal-opportunity employer, and this is evidenced by its gender and culturally diverse personnel.

WHISTLEBLOWING POLICY

The Whistleblowing Policy of the Company provides employees with a platform to report misconduct like bribery and corruption. It provides a framework for safeguarding the reputation of the Company. The Policy is underpinned by the Nigerian Code of Corporate Governance 2018 and the Federal Government's stance on whistleblowing. This gives legal protection to employees against being discriminated or penalised by the employer as a result of publicly disclosing illegal or substantial unethical behaviour. The company is committed to ensuring that no member of staff should feel at a disadvantage for raising legitimate concerns, and the Board recognises its responsibility to implement the policy. This whistle-blowing policy is made known to employees, stakeholders such as contractors, shareholders, job applicants and the public at large.

ANTI-BRIBERY AND CORRUPTION POLICY

It is our policy to conduct our businesses in an honest and ethical manner. We maintain a zero-tolerance approach to Bribery and Corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships. We also operate, implement, and enforce effective systems to counter bribery and corruption risk in our environment. We will uphold all laws relevant to countering bribery and corruption in all the locations where the Company operates. We remain bound by national, international, and relevant applicable laws concerning bribery and corruption.

COMPLAINTS MANAGEMENT POLICY

In compliance with regulatory requirements and to stay abreast with current best practices, the Company has in place a Complaints Management Policy that provides a framework for the swift resolution of disputes with stakeholders on issues relating to the Company's activities.

BOARD EVALUATION

A Board evaluation is annually conducted to assess how each Director, the committees of the Board and the Board are committed to their roles, work together, and continue to contribute effectively to the achievement of the Company's objectives and values. The independent status of the Independent Non-Executive Directors is also assessed annually and CHH declares that the Independent Non-Executive Directors are not close or extended family members of any of the company's advisers, directors, senior employees, consultants, auditors, creditors, suppliers, customers or substantial shareholder neither do they receive, and have not received additional remuneration from the Company apart from a Director's fee and allowances.

REMUNERATION

The Company has a comprehensive remuneration policy for Directors and all levels of Management staff. Our remuneration policy is adequate to attract, motivate and retain skilled, qualified and experienced individuals required to manage the Company successfully. The statement of the Directors' remuneration is stated in the Unaudited Financial Statement.

EMPLOYMENT AND EMPLOYEES

1. Employment of Physically Challenged Persons

   The Company does not discriminate in considering applications for employment from physically challenged persons. If a physically challenged person meets all recruitment requirements, the Company shall not by reason of disability deny such a person from employment opportunity but would make adequate provision for the accommodation of such person. However, as at 31st December 2025 there was no physically challenged person in the Company's employment.

2. Employees' Training and Involvement

   The Company ensures that the employees are kept fully informed of the values, goals and performance plans and progress during the year. They are involved in the goal setting at the beginning of the year and meet regularly to review performances. They make recommendations on innovative ideas towards meeting customers' expectations and improving on general operations and relationships within the Company.

   The Company pays strong importance to the use of our core values in the discharge of duties across the Company and acquisition of technical expertise through extensive internal and external training, on the job skills enhancement and professional development.

3. Health, Safety and Welfare of Employees

The Company strictly observes all safety and health regulations. Successfully managing Health, Safety and Environment (HSE) issues is an essential component of our business strategies. Through observance and encouragement of this policy, we assist in protecting the environment and the overall well-being of all our stakeholders, specifically, our employees, clients, shareholders, contractors, and host communities.

Regular fire trainings and drill exercises are conducted to sensitize all staff and stakeholders of the need to be safety conscious. The Company ensures that all safety measures are observed in all locations.

During the period under consideration, the Company did not experience any workplace accident or health hazards.

Employees are registered with Health Management Organizations of their choice for provision of medical services at the designated hospitals. The Company equally has arrangements with off-site hospitals to cater for emergency cases that may occur during working hours.

INSIDER TRADING POLICY

In compliance with the requirement of Rule 17.15 (c) the Nigerian Exchange Limited Amended Rules, the Company has in place an Insider Trading Policy which is designed to prevent insider trading in the Company's securities by Board Members, Executive Management and persons that are closely related to them who are privy to price sensitive information. The policy also prevents them from releasing such price sensitive information to their privies or agent for the purpose of trading in the Company's shares.

Auditors

The Auditors PKF Professional Services have indicated their willingness to serve as the Company's External Auditors in accordance with section 401(2) of the Companies and Allied Matters Act 2020. A resolution will be proposed at the Annual General Meeting to authorize the Directors to fix their remuneration.

COMPLIANCE STATEMENT

The Board of Directors affirm that it is in substantial compliance with the Nigerian Code of Corporate Governance and requirements of the Securities and Exchange Commission, National Insurance Commission, the Financial Reporting Council, the Nigerian Exchange Limited, the Corporate Affairs Commission and other applicable regulatory requirements of Government Agencies.

By Order of the Board

RUKEVWE FALANA

Company Secretary FRC/2016/NBA/00000014035

In accordance with the provisions of Section 377 of the Companies and Allied Matters Act 2020, the Directors are responsible for the preparation of annual financial statements which give a true and fair view of the financial position at the end of the financial year of the Company and its Subsidiaries and of the operating result for the year then ended.

The responsibilities include ensuring that:

• Appropriate and adequate internal controls are established to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

• The Group keeps proper accounting records which disclose with reasonable accuracy the financial position of the Group and which ensure that the financial statements comply with the requirements of the Companies and Allied Matters Act, 2020, Banks and Other Financial Institutions Act, 2020, Insurance Act 2003, Financial Reporting Council Act No 42 2023 (as amended) and Prudential Guidelines issued by NAICOM and CBN

• The Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates, and that all applicable accounting standards have been followed; and

• The financial statements are prepared on a going concern basis unless it is presumed that the Group will not continue in business.

  The Directors accept responsibility for the year's financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with;

• Insurance Act 2003

• International Financial Reporting Standards;

• Companies and Allied Matters Act 2020;

• Banks and Other Financial Institutions Act, 2020;

• NAICOM Prudential Guidelines; and

• Financial Reporting Council Act No 42 2023 (as amended).

The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Group and of its operating result for the year ended.

The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of the financial statements, as well as adequate systems of financial control. Nothing has come to the attention of the Directors to indicate that the Group will not remain a going concern for at least twelve months from the date of this statement.

Signed on behalf of the Directors on March 30, 2026 by:

The Group comprises Consolidated Hallmark Holdings Plc (the Company) and its subsidiaries:

Consolidated Hallmark Insurance Ltd, Hallmark Finance Company Ltd and Hallmark Health Services Ltd.

Consolidated Hallmark Holdings Plc (CHH Plc) is a non-operating Holdco having interests in General Insurance, Life Assurance, Health Management Organisation (HMO) and Finance Company Business.

Consolidated Hallmark Holdings Plc evolved from Consolidated Hallmark Insurance Plc (now Ltd) whose history dates back to 2nd August, 1991 when it was incorporated. The Company started as an insurance Company and is the product of a merger between Hallmark Assurance Plc, Consolidated Risks Insurers Ltd, and the Nigeria General Insurance Company Limited that took effect on 1st March, 2007, in line with the consolidation reform of the National Insurance Commission announced in 2005.

In 2022, the Company resolved to undergo another corporate restructuring (Scheme of Arrangement). The Scheme of Arrangement was approved by a court-ordered meeting on 1st November, 2022 and sanctioned by the Federal High Court on 12th July, 2023, effectively birthing a Non-Operating Holding Company called Consolidated Hallmark Holdings (CHH Plc.)

The Group remains steadfast and committed to its core values of Professionalism, Relationship, Integrity, Customer-Focus, and Excellence and will continue to uphold its time-tested high standard of Corporate Governance.

These consolidated and separate financial statements have been authorized for issue by the Board of Directors on 30 March, 2026.

Consolidated Hallmark Holdings Plc (CHH Plc) is a non-operating Holdco having interests in General Insurance, Life Assurance, Health Management Organisation (HMO) and Finance Company Business.

The Company is a public limited entity incorporated and domiciled in Nigeria. Its shares are listed on the floor of the Nigerian Exchange and it has its registered office at 266, Ikorodu Road, Obanikoro, Lagos.

These consolidated financial statements have been prepared on a going concern basis. The Group has neither the intention nor the need to reduce substantially its business operations. The Management believes that the going concern assumption is appropriate for the Group and there are no going concern threats to the operations of the Group.

CHI Limited is a fully owned subsidiary of Consolidated Hallmark Holdings Plc, incorporated on the 2nd of August. 1991 and licensed by NAICOM to provide General insurance business covering Motor Insurance, Aviation, Oil and Energy, Bond, Fire and Burglary, General Accident, Marine and Engineering classes of insurance in Nigeria.

Hallmark Finance Company Limited is a fully owned subsidiary of Consolidated Hallmark Holdings Plc.

It is licensed by the Central Bank of Nigeria to render finance business, which comprises consumer lending, lease financing, working capital finance, LPO finance and other finance company business.

Hallmark Health Services Limited is a fully owned subsidiary of Consolidated Hallmark Holdings Plc. Incorporated in 2017, the Company is envisioned to be a leading health insurance company to meet the need for quality health maintenance services providing affordable and lasting health care plan for all Nigerians. Hallmark Health Services Ltd. Is fully accredited by the National Health Insurance Authority as a National Health Management Organization.

The following are the material accounting policies adopted by the Group in the preparation of its consolidated financial statements. These policies have been consistently applied to all year's presentations, unless otherwise stated

1. Basis of presentation:
   1. Statement of compliance with IFRS

      These financial statements are the separate and consolidated financial statement of the company and its subsidiaries (together, "the group"). The group's financial statements for the quarter 2026 have been prepared in accordance with the International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standard Board ("IASB"), and interpretations issued by IFRS's interpretation committee (IFRIC) and in compliance with the Financial Reporting Council of Nigeria Act, No 42 2023 (as amended).

      These are the Group's financial statements for the period ended 31 March 2026, prepared in accordance with IFRS 10 - Consolidated Financial Statements.

      1. Application of new and amended standards Standards and interpretation effective and adopted in current year
         1. New and amended standards and interpretations

            Several standards amendments and interpretations apply for the first time in 2025 but did not have an impact on the financial statements of the Group.

            In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2026. Their adoption has not had any material impact on the disclosures or on the amounts reported in these consolidated financial statements.

         2. Amendments to IAS 1 Presentation of Financial Statements-Classification of Liabilities as Current or Non-current

            The amendments to IAS 1 published in January 2020 affect only the presentation of liabilities as current or noncurrent in the consolidated statement of financial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items.

            The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of 'settlement' to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

            The directors of the Group have accessed the application of this amendment above and concluded that it did not have any material impact on the amounts recognised in the Group's consolidated financial statements for prior periods and in future periods.

         3. Amendments to IAS 1 Presentation of Financial Statements-Non-current Liabilities with Covenants

            The amendments specify that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity's right to defer settlement of a liability for at least twelve months after the reporting date (and therefore must be considered in assessing the classification of the liability as current or noncurrent). Such covenants affect whether the right exists at the end of the reporting period, even if compliance with the covenant is assessed only after the reporting date (e.g. a covenant based on the entity's financial position at the reporting date that is assessed for compliance only after the reporting date).

            The IASB also specifies that the right to defer settlement of a liability for at least twelve months after the reporting date is not affected if an entity only has to comply with a covenant after the reporting period. However, if the entity's right to defer settlement of a liability is subject to the entity complying with covenants within twelve months after the reporting period, an entity discloses information that enables users of financial statements to understand the risk of the liabilities becoming repayable within twelve months after the reporting period. This would include information about the covenants (including the nature of the covenants and when the entity is required to comply with them), the carrying amount of related liabilities and facts and circumstances, if any, that indicate that the entity may have difficulties complying with the covenants.

            The directors of the Group have accessed the application of this amendment above and concluded that it did not have any material impact on the amounts recognised in the Group's consolidated financial statements for prior periods and in future periods

         4. Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures-Supplier Finance Arrangements

            The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the entity's liabilities and cash flows. In addition, IFRS 7 was amended to add supplier finance arrangements as an example within the requirements to disclose information about an entity's exposure to concentration of liquidity risk.

            The term 'supplier finance arrangements' is not defined. Instead, the amendments describe the characteristics of an arrangement for which an entity would be required to provide the information.

            To meet the disclosure objective, an entity will be required to disclose in aggregate for its supplier finance arrangements:

            • The terms and conditions of the arrangements;

            • The carrying amount, and associated line items presented in the entity's statement of financial position, of the liabilities that are part of the arrangements;

            • The carrying amount, and associated line items for which the suppliers have already received payment from the finance providers;

            • Ranges of payment due dates for both those financial liabilities that are part of a supplier finance arrangement and comparable trade payables that are not part of a supplier finance arrangement;

            • Liquidity risk information.

            The directors of the Group have accessed the application of this amendment above and concluded that it did not have any material impact on the amounts recognised in the Group's consolidated financial statements for prior periods and in future periods

         5. Amendment to IFRS 16 Leases-Lease Liability in a Sale and Leaseback

            The amendments to IFRS 16 add subsequent measurement requirements for sale and leaseback transactions that satisfy the requirements in IFRS 15 to be accounted for as a sale. The amendments require the seller-lessee to determine 'lease payments' or 'revised lease payments' such that the seller-lessee does not recognise a gain or loss that relates to the right of use retained by the seller-lessee, after the commencement date.

            The amendments do not affect the gain or loss recognised by the seller-lessee relating to the partial or full termination of a lease. Without these new requirements, a seller-lessee may have recognised a gain on the right of use it retains solely because of a remeasurement of the lease liability (for example, following a lease modification or change in the lease term) applying the general requirements in IFRS 16. This could have been particularly the case in a leaseback that includes variable lease payments that do not depend on an index or rate.

            As part of the amendments, the IASB amended an Illustrative Example in IFRS 16 and added a new example to illustrate the subsequent measurement of a right-of-use asset and lease liability in a sale and leaseback transaction with variable lease payments that do not depend on an index or rate. The illustrative examples also clarify that the liability, that arises from a sale and leaseback transaction that qualifies as a sale applying IFRS 15, is a lease liability.

            The directors of the Group have accessed the application of this amendment above and concluded that it did not have any material impact on the amounts recognised in the Group's consolidated financial statements for prior periods and in future periods

      2. Interpretations Issued and Effective on or after 1 January 2025

         The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's consolidated financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

         1. Standards issued and effective on or after 1 January 2025

            • Amendments to IAS 21 -- Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025);

            • Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2026);

            • IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective for annual periods beginning on or after 1 January 2027);

            • IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027);

            The directors do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the group in future periods, except if indicated below.

            1. Amendments to IAS 21 -- Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025)

               In August 2023, the IASB amended IAS 21 to help entities to determine whether a currency is exchangeable into another currency, and which spot exchange rate to use when it is not.

               The directors do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the group in future periods, except if indicated below.

            2. Amendments to the Classification and Measurement of Financial Instruments -Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2026)

               On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent

               questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities.These amendments:

               • clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

               • clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

               • add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and

               • update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).

                 The directors do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the group in future periods, except if indicated below.

            3. IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective for annual periods beginning on or after 1 January 2027)

               Issued in May 2024, IFRS 19 allows for certain eligible subsidiaries of parent entities that report under

               IFRS Accounting Standards to apply reduced disclosure requirements.

               The directors do not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the group in future periods, except if indicated below.

            4. IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)

               IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will

               help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users.Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures.

               The new standard introduces the following key new requirements:

               • Entities are required to classify all income and expenses into five categories in the statement of profit or loss. Namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly-defined operating profit subtotal. Entities net profit will not change.

               • Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements.

               • Enhances guidance is provided on how to group information in the financial statements.

                 In addition, all entities are required to use the operating profit sub-total as the starting points for the statement of cash flows when presenting operating cash flows under the indirect method.

                 Management is currently assessing the detailed implications of applying the new standard on the group's consolidated financial statements. From the high-level preliminary assessment performed, the following potential impacts have been identified:

               • Although the adoption of IFRS 18 will have no impact on the group's net profit, the group mexpects that grouping items of income and expenses in the statement of profit or loss into the new categories will impact how operating profit is calculated and reported. From the high-level impact assessment that the group has performed, the following items might potentially impact operating profit:

                 • Foreign exchange differences currently aggregated in the line item 'other income and other gains/(losses) - net' in operating profit might need to be disaggregated, with some foreign exchange gains or losses presented below operating profit.

                 • IFRS 18 has specific requirements on the category in which derivative gains or losses are recognised - which is the same category as the income and expenses affected by the risk that the derivative is used to manage. Although the group currently recognises some gains or losses in operating profit and others in finance costs, there might be a change to where these gains or losses are recognised, and the group is currently evaluating the need for change.

               • The line items presented on the primary financial statements might change as a result of the application of the concept of 'useful structured summary' and the enhanced principles on aggregation and disaggregation. In addition, since goodwill will be required to be separately presented in the statement of financial position, the group will disaggregate goodwill and other intangible assets and present them separately in the statement of financial position.

               • The directors of the group does not expect there to be a significant change in the information that is currently disclosed in the notes because the requirement to disclose material information remains unchanged; however, the way in which the information is grouped might change as a result of the aggregation/disaggregation principles. In addition, there will be significant new disclosures required for:

                 • management-defined performance measures;

                 • a break-down of the nature of expenses for line items presented by function in the operating category of the statement of profit or loss - this break-down is only required for certain nature expenses; and

                 • for the first annual period of application of IFRS 18, a reconciliation for each line item in the statement of profit or loss between the restated amounts presented by applying IFRS 18 and the amounts previously presented applying IAS 1.

               • From a cash flow statement perspective, there will be changes to how interest received and interest paid are presented. Interest paid will be presented as financing cash flows and interest received as investing cash flows, which is a change from current presentation as part of operating cash flows

               The Group will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and so the comparative information for the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.

   2. Basis of measurement

      These financial statements are prepared on the historical cost basis except for the following:

      • Investment property is measured at fair value.

      • Assets held for trading are measured at fair value

   3. Functional and presentation currency

      The financial statements are presented in the functional currency, Nigeria naira which is the Group's functional currency.

   4. Consolidation

      The Group financial statements comprise the financial statements of the Group and its subsidiaries, Consolidated Hallmark Insurance Ltd, Hallmark Health Services Limited and Hallmark Finance Group Limited all made up to 31 December, each year.

      The financial statements of subsidiaries are consolidated from the date the group acquires control, up to the date that such effective control seizes.

      Subsidiaries are all entities (including structured entities) over which the Group exercise control. Control is achieved when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

      1. Power over the investee

      2. Exposure, or rights, to variable returns from its involvement with the investee, and

      3. The ability to use its power over the investee to affect the amount of the investor's returns.

      The subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases.

      Subsidiaries are measured at cost less impairment in the separate financial statement.

   5. Use of estimates and judgments

      The Group makes estimate and assumption about the future that affects the reported amounts of assets and liabilities. Estimates and judgement are continually evaluated and based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumption. The annual accounting basis is used to determine the underwriting result of each class of insurance business written.

      The effect of a change in an accounting estimate is recognized prospectively by including it in the comprehensive income in the period of the change, if the change affects that period only, or in the period of change and future period, if the change affects both.

      The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amount of asset and liabilities within the next financial year are discussed below:

      1. The ultimate liability arising from claims made under insurance contracts

         The estimation of the ultimate liability arising from claims made under insurance contracts is the group's most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Group will ultimately pay for such claims. The uncertainty arises because all events affecting the ultimate settlement of the claims have not taken place and may not take place for some time. Changes in the estimate of the provision may be caused by receipt of additional claim information, changes in judicial interpretation of contract, or significant changes in severity or frequency of claims from historical records. The estimates are based on the Group's historical data and industry experience. The ultimate claims liability computation is subjected to a liability adequacy test by an actuarial consultant using actuarial models.

      2. Impairment of trade receivables

         The Group adopted the policy of no premium no cover and the trade receivables outstanding as at the reporting period are premium receivable within 30days that are due from brokers. The trade receivable was further subjected to impairment based on management judgement. Internal models were developed based on Group's specific collectability factors and trends to determine amounts to be provided for impairment of trade receivables. Efforts are made to assess significant debtors individually based on information available to management and where there is objective evidence of impairment they are appropriately impaired. Other trade receivables either significant or otherwise that are not specifically impaired are grouped on a sectorial basis and assessed based on a collective impairment model that reflects the Group's debt collection ratio per sector.

      3. Income taxes

      The Group periodically assesses its liabilities and contingencies related to income taxes for all years open to audit based on the latest information available. For matters where it is probable that an adjustment will be made, the Group records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

2. Segment reporting

An operating segment is a component of the Group engaged in business activities from which it may earn revenues and incur expenses 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 and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision -maker. The chief operating decision maker is the Group Executive Management.

3.0 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits with a maturity of three months or less and other short-term highly liquid investments that are readily convertible into known amounts of cash. For the purpose of reporting cash flows, cash and cash equivalents include cash on hand; bank balances, fixed deposits and treasury bills within 90days.

3.1 Financial Instruments Financial Assets Recognition

The Group on the date of origination or purchase recognizes placements, equity securities and deposits at the fair value of consideration paid. Regular -way purchases and sales of financial assets shall be recognized on the settlement date. All other financial assets and liabilities, including derivatives, shall be initially recognized on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

Classification and Measurement

Initial measurement of a financial asset or liability shall be at fair value plus transaction costs that are directly attributable to its purchase or issuance. For instruments measured at fair value through profit or loss, transaction costs shall be recognized immediately in profit or loss. Financial assets include placement with banks, treasury bills and equity instruments.

Financial assets shall be classified into one of the following measurement categories in line with the provisions of IFRS 9:

1. Amortised cost

2. Fair Value through Other Comprehensive Income (FVOCI)

3. Fair Value through Profit or Loss (FVTPL) for trading related assets.

   The Group shall classify its financial assets based on the business model for managing the assets and the asset's contractual cash flow characteristics.

   Business Model Assessment

   Business model assessment shall involve determining whether financial assets are managed in order to generate cash flows from collection of contractual cash flows, selling financial assets or both. The Group shall assess business model at a portfolio level reflective of how groups of assets are managed together to achieve a particular business objective. For the assessment of business model the Group will take into consideration the following factors:

   The stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, whether management's strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities that shall be funding those assets or realizing cash flows through the sale of the assets;

   • How the performance of assets in a portfolio will be evaluated and reported to the relevant heads of department and other key decision makers within the Group's business lines;

   • The risks that affect the performance of assets held within a business model and how those risks shall be managed;

   • How compensation shall be determined for the Group's business lines, management that manages the assets; and

   • The frequency and volume of sales in prior periods and expectations about future sales activity.

     Management shall determine the classification of the financial instruments at initial recognition. The business model assessment falls under three categories:

     1. Business Model 1(BM1): Financial assets held with the sole objective to collect contractual cash flows

     2. Business Model 2 (BM2): Financial assets held with the objective of both collecting contractual cash flows and selling; and

     3. Business Model 3 (BM3): Financial assets held with neither of the objectives mentioned in BM1 or BM2 above. These shall be basically financial assets held with the sole objective to trade and to realize fair value changes.

        The Group may decide to sell financial instruments held under the BM1 category with the objective to collect contractual cash flows without necessarily changing its business model if one or more of the following conditions shall be met:

        1. Where these sales shall be infrequent even if significant in value. A Sale of financial assets shall be considered infrequent if the sale shall be one -off during the financial year and/or occurs at most once during the quarter or at most three (3) times within the financial year.

        2. Where these sales shall be insignificant in value both individually and in aggregate,even if frequent. A sale shall be considered insignificant if the portion of the financial assets sold shall be equal to or less than five (5) per cent of the carrying amount (book value) of the total assets within the business model.

        3. When these sales shall be made close to the maturity of the financial assets and the proceeds from the sales approximates the collection of the remaining contractual cash flows. A sale is considered to be close to maturity if the financial assets has a tenor to maturity of not more than one (1) year and/or the difference between the remaining contractual cash flows expected from the financial asset does not exceed the cash flows from the sales by ten (10) per cent.

           Other reasons: The following reasons outlined below may constitute 'Other Reasons' that may necessitate selling financial assets from the BM1 category that will not constitute a change in business model:

           1. Selling the financial asset to realize cash to deal with unforeseen need for liquidity (infrequent).

           2. Selling the financial asset to manage credit concentration risk (infrequent)

           3. Selling the financial assets as a result of changes in tax laws (infrequent).

           4. Other situations also depend upon the facts and circumstances which need to be judged by the Management

     Cash flow characteristics assessment

     The Group shall assess the contractual features of an instrument to determine if they give rise to cash that shall be consistent with a basic investment arrangement. Contractual cash flows shall be consistent with a basic deposit arrangement if they represent cash flow that are solely payments of principal and interest on the principal amount outstanding (SPPI). Principal shall be defined as the fair value of the instrument at initial recognition. Principal may change over the life of the instruments due to repayments. Interest shall be defined as consideration for the time value of money and the credit risk associated with the principal amount outstanding and for other basic lending risks and costs (liquidity risk and administrative costs), as well as a profit margin.

     Classification of Financial Assets

     1. Financial assets measured at amortised cost

        Financial assets shall be measured at amortised cost if they are held within a business model whose objective shall be to hold for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category shall be carried at amortized cost using the effective interest rate method. The effective interest rate shall be the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. Amortized cost shall be calculated taking into account any discount or premium on acquisition, transaction costs and fees that shall be an integral part of the effective interest rate.

        Amortization shall be included in Interest income in the Consolidated Statement of Income. Impairment on financial assets measured at amortized cost shall be calculated using the expected credit loss approach. Financial assets measured at amortized cost shall be presented net of the allowance for credit losses (ECL) in the statement of financial position.

     2. Financial assets measured at FVOCI

        Financial assets shall be measured at FVOCI if they are to be held within a business model whose objective shall be to hold for collection of contractual cash flows and for selling financial assets, where the assets' cash flows represent payments that shall be solely payments of principal and interest. Subsequent to initial recognition, unrealized gains and losses on debt instruments measured at FVOCI shall be recorded in Other Comprehensive Income (OCI).

     3. Financial assets measured at FVTPL

        Financial assets measured at FVTPL include assets held for trading purposes, assets held as part of a portfolio managed on a fair value basis and assets whose cash flows do not represent payments that shall be solely payments of principal and interest. Financial assets may also be designated at FVTPL if by so doing eliminates or significantly reduces an accounting mismatch which would otherwise arise. These instruments shall be measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income.

     4. Equity Investments

     Equity instruments shall be measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value shall be recognized in the Consolidated Statement of Income. The Group can elect to classify non-trading equity instruments at FVOCI. This election will be used for certain equity investments for strategic or longer term investment purposes. The FVOCI election shall be made upon initial recognition, on an instrument-by-instrument basis and once made shall be irrevocable. Gains and losses on these instruments including when derecognized/sold be irrevocable. Gains and losses on these instruments including when derecognized/sold shall be recorded in OCI and shall not be subsequently reclassified to the Consolidated Statement of Income.

     Dividends received shall be recorded in Interest income in the Consolidated Statement of Income. Any transaction costs incurred upon purchase of the security shall be added to the cost basis of the security and shall not be reclassified to the Consolidated Statement of Income on sale of the security.

     Financial Liabilities

     Financial liabilities shall be classified into one of the following measurement categories:

     1. Fair Value through Profit or Loss (FVTPL)

     2. Amortised cost

     1. Financial Liabilities at fair value through profit or loss

        Financial liabilities accounted for at fair value through profit or loss fall into two categories: financial liabilities held for trading and financial liabilities designated at fair value through profit or loss on inception

        Financial liabilities at fair value through profit or loss shall be financial liabilities held for trading. A financial liability shall be classified as held for trading if it shall be incurred principally for the purpose of repurchasing it in the near term or if it shall be part of a portfolio of identified financial instruments that shall be managed together and for which there shall be evidence of a recent actual pattern of profit-taking. Derivatives shall also be categorized as held for trading unless they shall be designated and effective as hedging instruments. Financial liabilities held for trading also include obligations to deliver financial assets borrowed by a short seller.

        Gains and losses arising from changes in fair value of financial liabilities classified as held for trading shall be included in the income statement and shall be reported as 'Net gains/(losses) on financial instruments classified as held for trading'. Interest expenses on financial liabilities held for trading shall be included in 'Net interest income'.

        Financial Liabilities shall be designated at FVTPL when either the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise or the financial liability contains one or more embedded derivatives which significantly modify the cash flows otherwise required. For liabilities designated at fair value through profit or loss, all changes in fair value shall be recognized in the Consolidated Statement of Income, except for changes in fair value arising from changes in the Group's own credit risk which shall be recognized in OCI. Changes in fair value of liabilities due to changes in the Group's own credit risk, which are recognized in OCI, shall not be subsequently reclassified to the Consolidated Statement of Income upon derecognition/extinguishment of the liabilities.

     2. Financial Liabilities at amortised cost

     Financial liabilities that are not classified at fair value through profit or loss fall into this category and shall be measured at amortised cost using the effective interest rate method. Financial liabilities measured at amortised cost shall be debt securities in issue for which the fair value option is not applied, convertible bonds and subordinated debts.

     Reclassifications

     Financial assets shall not be reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets. A change in the Group's business model will occur only when the Group either begins or ceases to perform an activity that is significant to its operations such as:

     - Significant internal restructuring or business combinations; for example: an acquisition of a private asset management Group that might necessitate transfer and sale of assets to willing buyers, this action will constitute changes in business model and subsequent reclassification of the assets held from BM1 to BM2 Category.

     Any other reason that might warrant a change in the Group's business model are determined by management based on facts and circumstances.

     The following shall not be considered to be changes in the business model:

     1. A change in intention related to particular financial assets (even in circumstances of significant changes in market conditions)

     2. A temporary disappearance of a particular market for financial assets.

     3. A transfer of financial assets between parts of the Group with different business models.

     When reclassification occurs, the Group shall reclassify all affected financial assets in accordance with the new business model. Reclassification shall be applied prospectively from the 'reclassification date'. Reclassification date shall be 'the first day of the first reporting period following the change in business model. Gains, losses or interest previously recognised shall not be restated when reclassification occurs.

     Impairment of Financial Assets

     In line with IFRS 9, the Group assesses the under listed financial instruments for impairment using Expected Credit Loss (ECL) approach:

     1. Amortized cost financial assets; and

     2. Debt securities classified as FVOCI;

     Equity instruments and financial assets measured at FVTPL shall not be subjected to impairment under the standard.

     Expected Credit Loss Impairment Model

     The Group's allowance for credit losses calculations shall be outputs of models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. The expected credit loss impairment model reflects the present value of all cash shortfalls related to default events either over the following twelve months or over the expected life of a financial instrument depending on credit deterioration from inception. The allowance for credit losses reflects an unbiased, probability-weighted outcome which considers multiple scenarios based on reasonable and supportable forecasts.

     The Group shall adopt a three-stage approach for impairment assessment based on changes in credit quality since initial recognition.

     Stage 1 - Where there has not been a Significant Increase in Credit Risk (SICR) since initial recognition of a financial instrument, an amount equal to 12 months expected credit loss shall be recorded. The expected credit loss shall be computed using a probability of default occurring over the next 12 months. For those instruments with a remaining maturity of less than 12 months, a probability of default corresponding to remaining term to maturity shall be used.

     Stage 2 - When a financial instrument experiences a SICR subsequent to origination but is not considered to be in default, it shall be included in Stage 2. This requires the computation of expected credit loss based on the probability of default over the remaining estimated life of the financial instrument.

     Stage 3 - Financial instruments that are considered to be in default shall be included in this stage. Similar to Stage 2, the allowance for credit losses captures the lifetime expected credit losses.

     The guiding principle for ECL model shall be to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments since initial recognition. The ECL allowance shall be based on credit losses expected to arise over the life of the asset (life time expected credit loss), unless there has been no significant increase in credit risk since origination. Examples of financial assets with low credit risk (no significant increase in credit risk) include: Risk free and gilt edged debt investment securities that shall be determined to have low credit risk at the reporting date; and Other financial instruments (other than lease receivables) on which credit risk has not increased significantly since their initial recognition.

     Measurement of Expected Credit Losses

     The probability of default (PD), exposure at default (EAD), and loss given default (LGD) inputs used to estimate expected credit losses shall be modelled based on macroeconomic variables that are most closely related with credit losses in the relevant portfolio.

     Details of these statistical parameters/inputs are as follows:

     PD - The probability of default shall be an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the remaining estimated life, if the asset has not been previously derecognized and are still in the portfolio.

     12-month PDs - This is the estimated probability of default occurring with the next 12 months (or over the remaining life of the financial instrument if that is less than 12 months). This shall be used to calculate 12-month ECLs.

     Lifetime PDs - This is the estimated probability of default occurring over the remaining life of the financial instrument. This shall be used to calculate lifetime ECLs for "stage 2" and stage 3 exposures. PDs shall be limited to the maximum exposure required by IFRS 9

     EAD - The exposure at default shall be an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.

     LGD - The loss given default shall be an estimate of the loss arising in the case where a default occurs at a given time. It shall be based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realization of any collateral. It shall be usually expressed as a percentage of the EAD.

     Forward-looking information

     The measurement of expected credit losses for each stage and the assessment of significant increases in credit risk considers information about past events and current conditions as well as reasonable and supportable forecasts of future events and economic conditions. The estimation and application of forward-looking information requires significant judgement.

     Macroeconomic factors

     The Group shall rely on a broad range of forward-looking information as economic inputs, such as GDP growth, unemployment rates, central bank base rates, crude oil prices, inflation rates and foreign exchange rates. The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or overlays shall be made as temporary adjustments using expert credit judgement.

     Multiple forward-looking scenarios

     The Group shall determine allowance for credit losses using three probability -weighted forward looking scenarios. The Group shall consider both internal and external sources of information in order to achieve an unbiased measure of the scenarios used. The Group prepares the scenarios using forecasts generated by credible sources such as Business Monitor International (BMI), International Monetary Fund (IMF), Nigeria Bureau of Statistics (NBS), World Bank, Central Bank of Nigeria (CBN), Nigeria Insurers Association, Financial Markets Dealers Quotation (FMDQ), and Trading Economics.

     The Group estimates three scenarios for each risk parameter (LGD, EAD, CCF and PD) - Normal, Upturn and Downturn, which in turn shall be used in the estimation of the multiple scenario ECLs. The 'normal case' represents the most likely outcome and shall be aligned with information used by the Group for other purposes such as strategic planning and budgeting. The other scenarios represent more optimistic and more pessimistic outcomes. The Group has identified and documented key drivers of credit risk and credit losses for each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macro -economic variables, credit risk and credit losses.

     Assessment of significant increase in credit risk (SICR)

     At each reporting date, the Group shall assess whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting date and the date of initial recognition. The assessment considers borrower-specific quantitative and qualitative information without consideration of collateral, and the impact of forward-looking macroeconomic factors. The common assessments for SICR on retail and non-retail portfolios include macroeconomic outlook, management judgement, and delinquency and monitoring. Forward looking Macroeconomic factors shall be a key component of the macroeconomic outlook. The importance and relevance of each specific macroeconomic factor depends on the type of product, characteristics of the financial instruments and the borrower and the geographical region.

     The Group shall adopt a multi factor approach in assessing changes in credit risk. This approach considers: Quantitative (primary), Qualitative (secondary) and Back stop indicators which are critical in allocating financial assets into stages.

     The quantitative models considers deterioration in the credit rating of obligor/counterparty based on the Group's internal rating system or External Credit Assessment Institutions (ECAI) while qualitative factors considers information such as expected forbearance, restructuring, exposure classification by licensed credit bureau etc.

     A backstop shall be used to ensure that in the (unlikely) event that the primary (quantitative) indicators do not change and there is no trigger from the secondary (qualitative) indicators, an account that has breached the 30 days past due criteria for SICR and 90 days past due criteria for Default shall be transferred to stage 2 and stage 3 respectively except there is a reasonable and supportable evidence available without undue cost to rebut the presumption.

     Definition of Default and Credit Impaired Financial Assets

     At each reporting date, the Group shall assess whether financial assets are credit impaired. A financial asset shall be credit impaired when one or more of the following events have a detrimental impact on the estimated future cash flows of the financial asset:

     • Significant financial difficulty of the Issuer;

     • A breach of contract such as a default or past due event;

     • It is becoming probable that the borrower will enter bankruptcy or other financial reorganization.

     • The disappearance of an active market for a security because of financial difficulties

       A debt that has been renegotiated due to a deterioration in the issuer's condition shall be considered to be credit-impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced significantly and there shall be no other indicators of impairment. In making an assessment of whether an investment in sovereign debts is credit-impaired, the Group shall consider the following

       1. The market's assessment of credit worthiness as reflected in the bond yields

       2. The rating agencies' assessments of credit worthiness

       3. The country's ability to access the capital markets for new debt issuance

       4. The probability of debt being restructured, resulting in holders suffering losses through voluntary or mandatory debt forgiveness

       5. The international support mechanisms in place to provide the necessary support as lender of last resort to that country as well as the intention, reflected in public statements of governments and agencies to use those mechanisms. This includes an assessment of the depth of those mechanisms and irrespective of the political intent, whether there is the capacity to fulfil the required Criteria.

          Presentation of allowance for ECL in the statement of financial position

          Allowances for ECL shall be presented in the statement of financial position as follows:

     • Financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets

     • Financial assets measured at FVOCI: no loss allowance shall be recognized in the statement of financial position because the carrying amount of these assets shall be their fair value.

       However, the loss allowance shall be disclosed and recognized in the fair value reserve.

       Write-off

       The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there shall be no realistic prospect of recovery. After a full evaluation of a non-performing exposure, in the event that either one or all of the following conditions apply, such exposure shall be recommended for write-off (either partially or in full):

     • Continued contact with the customer is impossible;

     • Recovery cost is expected to be higher than the outstanding debt;

     • Amount obtained from realization of credit collateral security leaves a balance of the debt; or

     • It is reasonably determined that no further recovery on the facility is possible.

4. Leases

   This is a new standard which replaces IAS 17 Leases, and introduces a single lessee accounting model. The main changes arising from the issue of IFRS 16 which are likely to impact the Group are as follows:

   • Group as lessee: Lessees are required to recognize a right-of-use asset and a lease liability for all leases, except short term leases or leases where the underlying asset has a low value, which are expensed on a straight line or other systematic basis.

   • The cost of the right-of-use asset includes, where appropriate, the initial amount of the lease liability; lease payments made prior to commencement of the lease less incentives received; initial direct costs of the lessee; and an estimate for any provision for dismantling, restoration and removal related to the underlying asset.

   • The lease liability takes into consideration, where appropriate, fixed and variable lease payments; residual value guarantees to be made by the lessee; exercise price of purchase options; and payments of penalties for terminating the lease.

   • The right-of-use asset is subsequently measured on the cost model at cost less accumulated depreciation and impairment and adjusted for any re-measurement of the lease liability. However, right of-use assets are measured at fair value when they meet the definition of investment property and all other investment property is accounted for on the fair value model. If a right-of-use asset relates to a class of property, plant and equipment which is measured on the revaluation model, then that right-of-use asset may be measured on the revaluation model.

   • The lease liability is subsequently increased by interest, reduced by lease payments and re -measured for reassessments or modifications. ◻ Re-measurements of lease liabilities are affected against right-of-use assets, unless the assets have been reduced to nil, in which case further adjustments are recognised in profit or loss.

   • The lease liability is re-measured by discounting revised payments at a revised rate when there is a

     change in the lease term or a change in the assessment of an option to purchase the underlying asset.

   • The lease liability is re-measured by discounting revised lease payments at the original discount rate when there is a change in the amounts expected to be paid in a residual value guarantee or when there is a change in future payments because of a change in index or rate used to determine those

   • Certain lease modifications are accounted for as separate leases. When lease modifications which decrease the scope of the lease are not required to be accounted for as separate leases, then the lessee re-measures the lease liability by decreasing the carrying amount of the right of lease asset to reflect the full or partial termination of the lease. Any gain or loss relating to the full or partial termination of the lease is recognised in profit or loss. For all other lease modifications which are not required to be accounted for as separate leases, the lessee re-measures the lease liability by making a corresponding adjustment to the right -of- use asset.

   • Right-of-use assets and lease liabilities should be presented separately from other assets and liabilities. If not, then the line item in which they are included must be disclosed. This does not apply to right-of-use assets meeting the definition of investment property which must be presented within investment property. IFRS 16 contains different disclosure requirements compared to IAS 17 leases. Group as lessor:

   • Accounting for leases by lessors remains similar to the provisions of IAS 17 in that leases are classified as either finance leases or operating leases. Lease classification is reassessed only if there has been a modification.

   • A modification is required to be accounted for as a separate lease if it both increases the scope of the lease by adding the right to use one or more underlying assets; and the increase in consideration is commensurate to the stand alone price of the increase in scope.

   • If a finance lease is modified, and the modification would not qualify as a separate lease, but the lease would have been an operating lease if the modification was in effect from inception, then the modification is accounted for as a separate lease. In addition, the carrying amount of the underlying asset shall be measured as the net investment in the lease immediately before the effective date of the modification. IFRS 9 is applied to all other modifications not required to be treated as a separate

   • Modifications to operating leases are required to be accounted for as new leases from the effective date of the modification. Changes have also been made to the disclosure requirements of leases in the lessor's financial statements.

   Sale and leaseback transactions:

   In the event of a sale and leaseback transaction, the requirements of IFRS 15 are applied to consider whether a performance obligation is satisfied to determine whether the transfer of the asset is accounted for as the sale of an asset. If the transfer meets the requirements to be recognised as a sale, the seller-lessee must measure the new right-of use asset at the proportion of the previous carrying amount of the asset that relates to the right -of-use retained. The buyer-lessor accounts for the purchase by applying applicable standards and for the lease by applying IFRS 16.

   If the fair value of consideration for the sale is not equal to the fair value of the asset, then IFRS 16 requires adjustments to be made to the sale proceeds. When the transfer of the asset is not a sale, then the seller-lessee continues to recognize the transferred asset and recognizes a financial liability equal to the transfer proceeds. The buyer -lessor recognizes a financial asset equal to the transfer proceeds. The effective date of the standard is for years beginning on or after January 1, 2019. The Group adopted the standard for the first time in the 2019 annual report and financial statements. The impact of this standard is not material on the financial statements.

5. Trade receivables

   A receivable represents the Groups right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due). Trade receivables are recognized when due. These include amounts due from agents, brokers and insurance contract holders. If there is objective evidence that the receivable is impaired, the Group reduces the carrying amount of the receivable accordingly and recognizes that impairment loss in the income statement. The Group first assesses whether objective evidence of impairment exists individually for receivables that are individually significant. If the Group 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 using the model that reflects the Group's historical outstanding payments collection ratio per sector.

6. Reinsurance contract assets and liabilities

   These are contracts entered into by the Group with reinsurers under which the Group is compensated for losses on one or more contracts issued by the Group, and which also meets the classification requirements for insurance contracts held as reinsurance contracts. Insurance contracts entered into by the Group under which the contract holder is another insurer (inwards reinsurance) are included in insurance contracts.

   The benefits to which the Group is entitled under its reinsurance contracts are recognized as reinsurance assets. These assets consist of short-term balances due from reinsurers, as well as long term receivables that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance contract.

   In certain cases, a reinsurance contract is entered into retrospectively to reinsure a notified claim under the Group's property or casualty insurance contracts.

   Where the premium due to the reinsurer differs from the liability established by the Group for the related claim, the difference is amortized over the estimated remaining settlement period.

   The Group assesses its reinsurance assets for impairment. If there is objective evidence that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss in the income statement. The Group gathers the objective evidence that a reinsurance asset is impaired using the same process adopted for financial assets held at amortized cost. The impairment loss is calculated following the same method used for these financial assets.

7. Other receivables and prepayments

   Receivables are stated at their original invoiced value, as the interest that would be recognized from discounting future cash receipts over the short credit period is not considered to be material. These receivables are reduced by appropriate allowances for estimated irrecoverable amounts. Interest on overdue receivables is recognized as it accrues.

8. Investment in subsidiaries

   Subsidiaries are entities controlled by the parent. In accordance with IAS 10, control exists when the parent has:

   1. Power over the investee

   2. Exposure, or rights, to variable returns from its involvement with the investee; and

   3. The ability to use its power over the investee to affect the amount of investor's returns.

   Investments in subsidiaries are reported at cost less impairment (if any).

9. Offsetting financial instruments

   Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

10. Intangible assets

Intangible assets acquired separately are shown at historical cost less accumulated amortization and impairment losses. Amortization is charged to profit or loss on a straight- line basis over the estimated useful lives of the intangible asset unless such lives are indefinite. These charges are included in other expenses in profit or loss. Intangible assets with an indefinite useful life are tested for impairment annually.

Amortization periods and methods are reviewed annually and adjusted if appropriate.

The class of the intangible assets recognised by the Group and its amortisation rates are as follows:

Rate

Computer software 15%

1. Property and equipment

   1. Recognition and Measurement

      All property and equipment are stated at historical cost less accumulated depreciation less accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

      Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

      Land is not depreciated. Land and Building shall be measured using the revaluation model. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

      Buildings	-	2%
      Furniture & fittings	-	15%
      Computers	-	15%
      Motor vehicles	-	20%
      Office equipment	-	15%

      When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. The assets' residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable value.

      Gains and losses on disposals are determined by comparing the proceeds with the carrying amount, these are included in the income statement in operating income. The Group reviews the estimated useful lives of property and equipment at the end of each reporting period.

   2. Investment property

      Property held for long-term rental yields and (or) capital appreciation that is not occupied by the companies in the Group is classified as investment property.

      Investment property comprises freehold land and buildings. It is carried at fair values, adjusted if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses alternative valuation methods such as discounted cash flow projections or recent prices in less active markets. Gains/losses in the fair value of investment properties are recognised in the income statement.

      These valuations are reviewed annually by an independent valuation expert. Investment Property under construction that is being developed for continuing use as investment property are measured at cost.

      Property located on land that is held under an operating lease is classified as investment property as long as it is held for long-term rental yields and is not occupied by the companies in the consolidated Group. The initial cost of the property shall be the fair value (where available), when not available the initial cost shall be used. The property is carried at fair value after initial recognition.

      When the use of a property changes from owner-occupied to investment property, the property is re-measured to fair value and reclassified as investment property. Any gain arising on re-measurement is recognized in income statement to the extent the gain reverses a previous impairment loss on the specific property, with any remaining gain recognized in other comprehensive income and presented in the revaluation reserve in equity.

      Any loss is recognized in other comprehensive income and presented in the revaluation reserve in equity to the extent that an amount had previously been included in the revaluation reserve relating to the specific property, with any remaining loss recognized immediately in income statement.

2. Statutory Deposit

Statutory deposit represents10% of the minimum paid-up capital of the Group deposited with the Central Bank of Nigeria CBN) in pursuant to Section 10(3) of the Insurance Act, 2003. Statutory deposit is measured at cost.

1. Investment Contract Liability

   Investment contracts are those contracts that transfer financial risk with no significant insurance risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.

   The Group enters into investment contracts with guarantee returns and other businesses of savings nature. Those contracts are termed investment contract liabilities and are initially measured at fair value and subsequently at amortised cost. Finance cost on investment contract liabilities is recognised as an expense in profit or loss using the effective interest rate.

2. Retirement benefits obligations

   1. Defined contribution plan

      The Group runs a defined contribution plan in line with the Pension Reform Act Amended 2014. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The rate of contribution by the Group and its employee is 10% and 8% respectively of basic salary, housing and transport allowance. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

      Under the defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expenses when they are due.

      Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.

3. Share capital

   Shares are classified as equity when there is no obligation to transfer cash or other assets. Equity instruments issued are recorded at the value of proceeds received, net of costs directly attributable to the issue of the instruments. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax.

4. Share premium

   Share premium is the excess amount over the par value of the shares. This is classified as equity when there is no obligation to transfer cash or other assets. The proceeds received are recorded as net of costs. This reserve is not ordinarily available for distribution.

5. Contingency reserve

   In compliance with Section 21 (2) of Insurance Act 2003, the contingency reserve is credited with the greater of 3% of total premiums, or 20% of the net profits. This shall accumulate until it reaches the amount of greater of minimum paid-up capital or 50 percent of net premium.

6. Statutory reserve

   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 Hallmark Finance Company Limted, a subsidiary within the group.

7. Regulatory risk reserve

   The Subsidiary (Hallmark Finance Company Ltd) determines its loan loss provisions based on the requirements of IFRS. The difference between the loan loss provision as determined under Nigerian Prudential Guideline (as prescribed by the Central Bank of Nigeria) is recorded in this reserve. This reserve is non-distributable.

8. Dividend distribution

   Dividend distribution to the Group's shareholders is recognized as a deduction in the retained earnings in the year in which the dividend is approved by the Group's shareholders.

9. Revenue recognition

1. Key types of insurance contracts issued, and reinsurance contracts held.

   Non-Life Business - The Group issues non-life insurance to individuals and businesses. Non-life insurance products offered include motor, property, marine, fire and personal accident. These products offer protection of policyholders' assets and indemnification of other parties that have suffered damage as a result of a policyholder's accident. The Group also issued Life insurance contracts through its Microinsurance sub-subsidiary.

   The Group accounts for these contracts applying the Premium Allocation Approach (PAA). The Group uses facultative and treaty reinsurance to mitigate some of its risk exposures

   For the life business, the Group holds quota share reinsurance treaties and accounts for these treaties applying the PAA.

2. Definition and Classification

   Products sold by the Group are classified as insurance contracts when the Group accepts significant insurance risk from a policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder.

   This assessment is made on a contract-by-contract basis at the contract issue date. In making this assessment, the Group considers all its substantive rights and obligations, whether they arise from contract, law or regulation.

   The Group determines whether a contract contains significant insurance risk by assessing if an insured event could cause the Group to pay to the policyholder additional amounts that are significant in any single scenario with commercial substance even if the insured event is extremely unlikely or the expected present value of the contingent cash flows is a small proportion of the expected present value of the remaining cash flows from the insurance contract.

   The Group does not issue any contracts with direct participating features.

3. Separating components from insurance and reinsurance contracts

   The Group assesses its insurance and reinsurance products to determine whether they contain components which must be accounted for under another IFRS 15 rather than IFRS 17 (distinct non -insurance components). After separating any distinct components, an entity must apply IFRS 17 to all remaining components of the (host) insurance contract.

   Currently, the Group's products do not include distinct components that require separation.

   Some term life contracts issued by the Group include a surrender option under which the surrender value is paid to the policyholder on maturity or earlier lapse of the contract. These surrender options have been assessed to meet the definition of a non -distinct investment component in IFRS 17. IFRS 17 defines investment components as the amounts that an insurance contract requires an insurer to repay to a policyholder in all circumstances, regardless of whether an insured event has occurred. Investment components which are highly interrelated with the insurance contract of which they form a part are considered non-distinct and are not separately accounted for. However, receipts and payments of the investment components are excluded from insurance revenue and insurance expenses. The surrender options are considered non distinct investment components as the Group is unable to measure the value of the surrender option component separately from the life insurance portion of the contract.

4. Level of aggregation

   IFRS 17 requires an entity to determine the level of aggregation for applying its requirements. The Group identifies portfolios by aggregating insurance contracts that are subject to similar risks and managed together. In grouping insurance contracts into portfolios, the Group considers the similarity of risks rather than the specific labelling of product lines. The Group has determined that all contracts within each product line, as defined for management purposes, have similar risks. Therefore, when contracts are managed together, they represent a portfolio of contracts. Each portfolio is subdivided into groups of contracts to which the recognition and measurement requirements of IFRS 17 are applied.

   At initial recognition, the Group segregates contracts based on when they were issued. A cohort contains all contracts that were issued within a 12-month period. Each cohort is then further disaggregated into three groups of contracts:

   • Contracts that are onerous on initial recognition

   • Contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently

   • Any remaining contracts

     For short term contracts accounted for applying the PAA, the Group determines that contracts are not onerous on initial recognition, unless there are facts and circumstances indicating otherwise. As IFRS 17 does not define what "facts/circumstances" entail; the following are considered on their impact on expected cashflows and resulting profitability:

     Significant changes in external conditions including economic or regulatory changes. Changes to the organization or processes

     Changes in underwriting and pricing strategies

     Trends in experience and expected variability in cashflows

     This consideration is only required for Liabilities for Remaining Claims (LRC) and not Liabilities for Incurred Claims (LIC)which is already measured at the current fulfillment value. Fulfillment cashflows can be estimated at whichever aggregate level is deemed appropriate and then subsequently allocated into IFRS 17 portfolios and groups. The fact that incurred claims of a particular cohort are loss-making does not mean the LRC will also be onerous. Judgment is applied to determine whether each cohort's LRC will be similar to this incurred experience and hence onerous. For example, actions taken to improve profitability a historically loss -making cohort may indicate that the cohort will be non-onerous going forward.

     All short-term contracts have currently been assessed as having no possibility of becoming onerous. Though the Fire portfolio (non-Life) has historically been loss-making, the portfolio has been showing some improvement post-implementation of PRAN rates and other underwriting strategies such as removal of some toxic accounts etc. The Group expects that improvements will be sustained in future and therefore the cohort will be non-onerous. In subsequent periods, non-onerous contracts are re-assessed based on the likelihood of prevailing facts and circumstances leading to significant possibility of becoming onerous.

     Reinsurance contracts held are assessed for aggregation on an individual contract basis and are assessed separately from insurance contracts. The smallest unit of account is a reinsurance contract, even where this contract covers more than one type of insurance product. However, there are cases where a reinsurance contract covers separate and identifiable product lines which are only included in the same legal document for administrative convenience. These contracts have been separated into its different component.

     If two or more reinsurance contracts are written on a particular product line, these may be grouped together in the same portfolio as they will be covering risks of the same nature and will be managed together. For example, the Surplus contracts (1&2) on Fire have been grouped together as they cover risks of the same nature and can be measured under the same measurement approach (PAA because they have a contract boundary of 1 year). While, facultative and excess of loss contracts are in separate groups; though they cover the same risks and are even managed together, differing measurement approaches as well as recognition requirements may apply.

5. Recognition

   The Group recognizes groups of insurance contracts issued from the date when the first payment from a policyholder in the group becomes due. As Group adheres to the statutory "no premium no cover", the date premium is received from the policyholder will always be earlier or on the same date as the coverage period. This premium receipt date would then be used to separate the groups of insurance contracts into yearly cohorts. The contract groupings shall not be reassessed until they are derecognized.

6. Contract Boundaries

   The Group includes in the measurement of a group of insurance contracts all the future cash flows within the boundary of each contract in the group. Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has a substantive obligation to provide the policyholder with insurance contract services. A substantive obligation to provide insurance contract services ends when:

   • The Group has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks Or

   • Both of the following criteria are satisfied:

   • The Group has the practical ability to reassess the risks of the portfolio of insurance contracts that contain the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio.

   • The pricing of the premiums up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.

   A liability or asset relating to expected premiums or claims outside the boundary of the insurance contract are not recognized. Such amounts relate to future insurance contracts.

7. Measurement of insurance contracts issued.

   1. General Model - Initial Measurement

   The Group measures a group of contracts on initial recognition as the sum of the expected fulfilment cash flows within the contract boundary and the contractual service margin representing the unearned profit in the contracts relating to services that will be provided under the contracts.

   Fulfilment cash flows within contract boundary

   The fulfilment cash flows are the current unbiased and probability-weighted estimates of the present value of the future cash flows, including a risk adjustment for non -financial risk. In arriving at a probability-weighted mean, the Group considers a range of scenarios to establish a full range of possible outcomes incorporating all reasonable and supportable information available without undue cost or effort about the amount, timing and uncertainty of expected future cash flows. The estimates of future cash flows reflect conditions existing at the measurement date including assumptions at that date about the future. The Group estimates expected future cash flows for a group of contracts at a portfolio level and allocates them to the groups in that portfolio in a systematic and rational way.

   When estimating future cash flows, the Group includes all cash flows within the contract boundary

   • Premiums and any additional cash flows resulting from those premiums.

   • Reported claims that have not yet been paid, claims incurred but not yet reported, future claims expected to arise from the policy and potential cash inflows from recoveries on future claims covered by existing insurance contracts.

   • An allocation of insurance acquisition cash flows attributable to the portfolio to which the issued contract belongs.

   • Claim handling costs.

   • Costs of providing contractual benefits in kind, such as home and vehicle repair

   • Policy administration and maintenance costs including recurring commissions expected to be paid to intermediaries for policy administration services only (recurring commissions that are insurance acquisition cash flows are treated as such in the estimate of future cash flows)

   • Transaction-based taxes

   • An allocation of fixed and variable overheads directly attributable to the fulfilment of insurance contracts including overhead costs such as accounting, human resources, information technology and support, building depreciation, rent, and maintenance and utilities.