Dubai Islamic Insurance & Reinsurance Company (AMAN) (P.J.S.C)
Condensed interim consolidated financial information (Unaudited)
For the six-month period ended 30 June 2024
Dubai Islamic Insurance & Reinsurance Company (AMAN) (P.J.S.C)
Condensed interim consolidated financial information (unaudited) For the six-month period ended 30 June 2024
Table of contents | Pages |
Board of Directors' report | 1 |
Review report on condensed interim consolidated financial information | 2 |
Condensed interim consolidated statement of financial position | 5 |
Condensed interim consolidated statement of profit or loss | 6 |
Condensed interim consolidated statement of other comprehensive income | 7 |
Condensed interim consolidated statement of changes in equity | 8 |
Condensed interim consolidated statement of cash flows | 9 |
Notes to the condensed interim consolidated financial information | 10 |
Grant Thornton Audit
and Accounting Limited
- Abu Dhabi
Office 1101, 11th Floor
Al Kamala Tower
Zayed the 1st Street
Khalidiya
Abu Dhabi, UAE
T +971 2 666 9750
www.grantthornton.ae
Report on review of condensed interim consolidated financial information
To The Shareholders of Dubai Islamic Insurance & Reinsurance Co. (Aman) (P.J.S.C)
Introduction
We have reviewed the accompanying condensed interim consolidated statement of financial position of Dubai Islamic Insurance & Reinsurance Co. (AMAN) (P.J.S.C) (the "Company") and its subsidiaries (collectively referred to as "the Group") as at 30 June 2024, and the related condensed interim consolidated statements of profit or loss, other comprehensive income for the three-month and six-month periods then ended, changes in equity, and cash flows for the six-month period then ended and other related explanatory notes. Management is responsible for the preparation and presentation of this condensed interim consolidated financial information in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting. Our responsibility is to express a conclusion on this condensed interim consolidated financial information based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of condensed interim consolidated financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Basis for Adverse Conclusion
- As stated in note 1.1 to this condensed interim consolidated financial information, the accumulated losses of the Group have reached AED 152,485 thousand as of 30 June 2024, which represents 68% of the share capital of the Group. Further, as disclosed in note 21 to the condensed interim consolidated financial information, the Group has MCR Solvency Margin Deficit, SCR Solvency Margin Deficit and MGF Solvency Margin Deficit in solvency capital requirements as stipulated by the Central Bank of the U.A.E. by an amount of AED 114,447 thousand, AED 36,204 thousand and AED 32,869 thousand, respectively. The Group's ability to continue as a going concern was based on the successful execution of the proposed business plan, which states that the Shareholders of the Group have approved the exit of all takaful operations and the change of the status of the Group from a takaful operator to an investment Group, however, there is currently insufficient evidence available to confirm that this plan will be successfully executed.
2
Report on review of condensed interim consolidated financial information
To The Shareholders of Dubai Islamic Insurance & Reinsurance Co. (Aman) (P.J.S.C) (continued)
Basis for Adverse Conclusion (continued)
Further, the Group's Third-Party Administrator (TPA) and system provider for the individual life portfolio has filed for insolvency and the local court appointed a restructuring expert. The TPA previously made certain investments on behalf of the Group amounting to AED 555,276 thousand which are recorded at fair value through profit or loss. These investments were made in sukuk unit-linked investments, a portion of which were issued by entities related to the TPA Group and which are currently under liquidation. As a result, the valuation of these investments could be adversely affected by the liquidation process and this could potentially result in the Group's liabilities being over and above the value of the underlying assets.
These factors, along with other matters set forth in Note 1.1, indicate that a material uncertainty exists that may cast doubt on the Group's ability to continue as a going concern and, consequently, the going concern basis of preparation of the condensed interim consolidated financial information is not appropriate. Any adjustments that might be required to be recorded in the condensed interim consolidated financial information relating to this matter have not been determined.
-
Further, as detailed in note 19.2 to this condensed interim consolidated financial information, the Group has not adopted the International Financial Reporting Standard (IFRS) 17,
"Insurance Contracts", which became effective for annual periods beginning on or after 1
January 2023 for the preparation of this condensed interim consolidated financial information. As stated in Note 19.2 to the condensed interim consolidated financial information, the Group has not implemented the provisions of IFRS 17 on the takaful portfolio classified as held for sale - discontinued operations in this condensed interim consolidated financial information due to the shareholders' decision to exit and sell the entire insurance portfolios.
However, the Group has performed a financial impact assessment on IFRS 17 and elected not to adopt the impact on the condensed interim consolidated financial information and continue to apply the provisions of IFRS 4, "Insurance Contracts". Had the Group adopted IFRS 17, total assets and total liabilities would have decreased by AED 20,239 thousand and AED 41,924 thousand, respectively, and the net loss for the period would have increased by AED 7,456 thousand. Further, due to the retrospective adoption requirement of IFRS 17, the comparative figures of total assets and total liabilities as of 31 December 2023 would have decreased by AED 27,251 thousand and AED 31,513 thousand, respectively and the net loss for the six- month period ended 30 June 2023 would have increased by AED 5,849 thousand.
Adverse Conclusion
Our review indicates that, because of the significant matters explained in the Basis of Adverse Conclusion section of our review report, the accompanying condensed interim consolidated financial information does not present fairly, in all material respects, the financial position of the Group as at 30 June 2024 and their financial performance and their cash flows for the six-month period then ended in accordance with International Accounting Standard 34 "Interim Financial Reporting" as issued by the IASB.
3
Report on review of condensed interim consolidated financial information
To The Shareholders of Dubai Islamic Insurance & Reinsurance Co. (Aman) (P.J.S.C) (continued)
Emphasis of Matters
We draw attention to note 19.1 to the condensed interim consolidated financial information, which discloses information on assets that are held by a related party for the beneficial interest of the Group. Our conclusion is not modified in respect of this matter.
Further, we draw attention to Note 19.2 to the condensed interim consolidated financial information, which states that the entire Takaful operations have been classified as held for sale according to the requirements of IFRS 5 "Discontinued Operations and Assets Held for Sale", based on the Shareholders' special resolution issued on 6 February 2023 to approve the board of directors' decision for the Group to exit and sell its entire insurance portfolio, and authorizing the Group's Board of Directors to complete all procedures with authorities and policyholders to exit the insurance business and transform the Group's activities into an investment Group. Our conclusion is not modified in respect of this matter.
Farouk Mohamed
Grant Thornton
Registration No 86
Abu Dhabi, United Arab Emirates
15 August 2024
4
Dubai Islamic Insurance & Reinsurance Company (AMAN) (P.J.S.C) Condensed interim consolidated financial information (unaudited)
Condensed interim consolidated statement of profit or loss
For the six-month period ended 30 June 2024
Three-month period | Six-month period | ||||
ended 30 June | ended 30 June | ||||
2024 | 2023 | 2024 | 2023 | ||
AED | AED | AED | AED | ||
Notes | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
Attributable to Policyholders | |||||
Discontinued operations | |||||
Profit/(loss) from discontinued | |||||
operations - takaful operation | 19.2 | 1,493,118 | (8,481,949) | 4,128,589 | 171,403 |
Attributable to Shareholders | |||||
Income | |||||
Investment income/(expenses), net | 15 | 423,812 | (164,260) | (6,856,121) | 323,325 |
Wakala fees from policyholders | 14 | 248,254 | 1,825,334 | 716,369 | 4,977,498 |
Mudarib's share from policyholders | 14 | 5,799 | 5,845 | 11,270 | 11,340 |
Other income | 1,162,276 | (2,285) | 5,325,035 | 1,599 | |
Recovery from Qard Hassan to | |||||
policyholders | 20 | 69,837 | 16,405,990 | 487,186 | 16,405,990 |
1,909,978 | 18,070,624 | (316,261) | 21,719,752 | ||
Expenses | |||||
Policy acquisition cost | (609,692) | (3,499,698) | (1,262,497) | (9,120,105) | |
General and administrative expenses | (3,336,779) | (4,186,162) | (6,694,449) | (8,594,313) | |
Total expenses | (3,946,471) | (7,685,860) | (7,956,946) | (17,714,418) | |
(Loss)/profit for the period from | |||||
continuing operations | (2,036,493) | 10,384,764 | (8,273,207) | 4,005,334 | |
Profit for the period from discontinued | |||||
operations | 1,493,118 | (8,481,949) | 4,128,589 | 171,403 | |
(Loss)/profit for the period before | |||||
tax | (543,375) | 1,902,815 | (4,144,618) | 4,176,737 | |
Income tax expense | - | - | - | - | |
(Loss)/profit for the period after tax | (543,375) | 1,902,815 | (4,144,618) | 4,176,737 | |
Attributable to: | |||||
Shareholders of the Company | (2,036,493) | 10,384,764 | (8,273,207) | 4,005,334 | |
Policyholders - Discontinued | |||||
operations | 1,493,118 | (8,481,949) | 4,128,589 | 171,403 | |
(543,375) | 1,902,815 | (4,144,618) | 4,176,737 | ||
(Loss)/earnings per share - | |||||
continuing operations | 16 | (0.009) | 0.046 | (0.037) | 0.018 |
The accompanying notes from 1 to 26 form an integral part of this condensed interim consolidated financial information.
6
Dubai Islamic Insurance & Reinsurance Company (AMAN) (P.J.S.C) Condensed interim consolidated financial information (unaudited)
Condensed interim consolidated statement of other comprehensive income For the six-month period ended 30 June 2024
(Loss)/profit for the period attributable to shareholders of the Company
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Transfer of realised gain on sale of financial assets carried at fair value through other comprehensive income
Changes in fair value of equity investments carried at fair value through other comprehensive income
Other comprehensive (loss)/income for the period
Total comprehensive (loss)/income for the period
Attributable to:
Shareholders of the Company Policyholders - Discontinued operations
Total comprehensive (loss)/income for the period
Three-month period | Six-month period | ||
ended 30 June | ended 30 June | ||
2024 | 2023 | 2024 | 2023 |
AED | AED | AED | AED |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) |
(2,036,493) | 10,384,764 | (8,273,207) | 4,005,334 |
- | (1,737,189) | - | (1,737,189) |
(275,193) | 15,144,657 | (8,668,575) | 3,335,696 |
(275,193) | 13,407,468 | (8,668,575) | 1,598,507 |
(2,311,686) | 23,792,232 | (16,941,782) | 5,603,841 |
(2,311,686) | 23,792,232 | (16,941,782) | 5,603,841 |
1,493,118 | (8,481,949) | 4,128,589 | 171,403 |
(818,568) | 15,310,283 | (12,813,193) | 5,775,244 |
The accompanying notes from 1 to 26 form an integral part of this condensed interim consolidated financial information.
7
Dubai Islamic Insurance & Reinsurance Company (AMAN) (P.J.S.C)
Condensed interim consolidated financial information (unaudited)
Condensed interim consolidated statement of changes in equity
For the six-month period ended 30 June 2024
Equity | ||||||||
attributable | ||||||||
Investments | to | |||||||
revaluation | shareholders | Non- | ||||||
Share | Legal | General | Accumulated | reserve - | of the | controlling | Total | |
capital | reserve | reserve | losses | FVOCI | Company | interests | equity | |
AED | AED | AED | AED | AED | AED | AED | AED | |
Balance at 1 January 2023 | 225,750,000 | 6,309,669 | 6,309,669 | (146,704,914) | (13,151,220) | 78,513,204 | (1,325,973) | 77,187,231 |
Net profit for the period attributable to the | ||||||||
shareholders of the Company | - | - | - | 4,005,334 | - | 4,005,334 | - | 4,005,334 |
Transfer of realised gain on sale of financial | ||||||||
assets carried at fair value | - | - | - | 1,737,189 | (1,737,189) | - | - | - |
Changes in fair value of financial assets | ||||||||
carried at fair value through other | ||||||||
comprehensive income | - | - | - | - | 3,335,696 | 3,335,696 | - | 3,335,696 |
Total comprehensive loss for the period | - | - | - | 5,742,523 | 1,598,507 | 7,341,030 | - | 7,341,030 |
Balance at 30 June 2023 | 225,750,000 | 6,309,669 | 6,309,669 | (140,962,391) | (11,552,713) | 85,854,234 | (1,325,973) | 84,528,261 |
Balance at 1 January 2024 | 225,750,000 | 6,420,521 | 6,420,521 | (143,212,289) | (18,853,358) | 76,525,395 | (1,325,973) | 75,199,422 |
Net profit for the period attributable to the | ||||||||
shareholders of the Company | - | - | - | (8,273,207) | - | (8,273,207) | - | (8,273,207) |
Changes in fair value of financial assets | ||||||||
carried at fair value through other | ||||||||
comprehensive income | - | - | - | - | (8,668,575) | (8,668,575) | - | (8,668,575) |
Directors' fees | - | - | - | (1,000,000) | - | (1,000,000) | - | (1,000,000) |
Total comprehensive loss for the period | - | - | - | (9,273,207) | (8,668,575) | (17,941,782) | - | (17,941,782) |
Balance at 30 June 2024 | 225,750,000 | 6,420,521 | 6,420,521 | (152,485,496) | (27,521,933) | 58,583,613 | (1,325,973) | 57,257,640 |
The accompanying notes from 1 to 26 form an integral part of this condensed interim consolidated financial information.
8