Staco Insurance PlcNSENG: STACO

Quarter 2 - financial statement for 2020

· Issued by Staco Insurance Plc
STACO INSURANCE PLC MANAGEMENT ACCOUNTS FOR THE PERIOD ENDED 30 JUNE 2020

STACO INSURANCE PLC

FINANCIAL HIGHLIGHTS

2020

2019

Growth

N'000

N'000

%

Major statement of financial position

Total assets

5,384,289

5,479,055

(1.73)

Shareholders' funds

(3,964,676)

(3,683,664)

7.63

Major statement of comprehensive income

Gross premium

381,909

1,749,428

(78.17)

Net premium earned

473,921

1,250,329

(62.10)

Investment income

100,155

42,588

135.17

Other income

13,233

9,026

46.62

Net underwriting and claims expenses

(277,125)

(695,899)

60.18

(Loss)/profit before taxation

(271,011)

(93,740)

(189.11)

(Loss)/profit after taxation

(281,011)

(108,738)

(158.43)

Information per 50k ordinary share

Earnings per share (kobo)

(3)

(1)

(158.43)

Net assets (kobo)

1

1

(0.02)

Stock exchange quotation (kobo) at 30 September

50

50

-

Price earning ratio

(0.06)

(0.02)

-

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

30

31

June

December

2020

2019

ASSETS

Note

N'000

N'000

Cash and cash equivalents

8

232,404

205,245

Financial assets

9

144,610

207,201

Trade receivables

10

20,759

17,411

Reinsurance assets

11

788,308

806,747

Other receivables and prepayments

12

105,466

99,438

Deferred acquisition cost

13

38,444

63,075

Investment in subsidiary

14

327,937

327,937

Investment properties

15

1,520,000

1,520,000

Deffered tax assets

16.1

-

-

Leased assets

17

6,470

6,470

Property ,plant and equipment

18

1,894,300

1,919,332

Statutory deposit

19

300,000

300,000

Intangible asset

20

5,591

6,200

Total assets

5,384,289

5,479,055

LIABILITIES

Insurance contract liabilities

21

3,265,424

3,312,244

Financial Liabilities

22

4,827,303

4,867,854

Trade payables

23

304,644

273,069

Other payables

24a

813,107

581,066

Deferred tax liabilities

16.1

98,050

98,050

Employee benefit liability

26

-

-

Taxation

27

40,437

30,437

Total liabilities

9,348,965

9,162,719

EQUITY

28

Issued share capital

28a

4,670,544

4,670,544

Share premium

28c

434,164

434,164

Revaluation reserve

28d

1,595,299

1,595,299

Fair value reserve

28e

333,904

333,904

Contingency reserve

28f

2,281,485

2,270,028

Retained earnings

28g

(13,280,073)

(12,987,604)

Shareholders' funds (3,964,676) (3,683,664)







Total Liabilities and Equity 5,384,289 5,479,055



………………………………….. …………………………………… ………………………………….

Jide Omotere Bayo Fakorede Alhaji Muhammad Aliyu Sidi

Chief Financial Officer Ag. Managing Director Chairman FRC/2013/ICAN/00000002180 FRC/2013/CIIN/00000004099 FRC/2020/003/00000021442

STACO INSURANCE PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE, 2020

01.04 -

30.06

2020

30

June 2020

01.04 - 30.06

2019

30

June 2019

Note

N'000

N'000

N'000

N'000

Gross Premiums written

29

128,350

381,909

705,321

1,749,428

Gross Premium Income

29a

227,573

570,634

881,436

1,663,981

Reinsurance expenses

29b

(39,083)

(96,713)

(302,233)

(413,652)

Net Premium Income

29

188,489

473,921

579,203

1,250,329

Fees and Commission Income

30

8,314

21,046

72,351

99,690

Net underwriting Income

196,803

494,966

651,555

1,350,019

Claims expense

31

(64,916)

(182,592)

(557,291)

(371,445)

Underwriting expenses

32

(35,322)

(94,533)

(160,376)

(324,454)

Net underwriting and claims expenses

(100,238)

(277,125)

(717,667)

(695,899)

Underwriting results

7

96,565

217,842

(66,112)

654,120

Investment income

33

77,254

100,155

10,125

42,588

Net realised gain/(loss) on financial assets

34

-

-

-

-

Other income

35

12,285

13,233

3,326

9,026

Operating and administrative expenses

36

(187,280)

(520,181)

(352,820)

(752,411)

Interest on convertible bond

37

(41,030)

(82,060)

(23,531)

(47,062)

Impairment loss on trade receivables

38

-

-

-

-

Profit / (Loss) before taxation

(42,207)

(271,011)

(429,013)

(93,740)

Taxation

27.1

-

(10,000)

-

(14,998)

Profit / (Loss) for the year

(42,207)

(281,011)

(429,013)

(108,738)

Other comprehensive income

Net fair value gain (loss) on available for sale

financial assets

28e

-

-

-

-

Foreign exchange translation gain/(loss)

28f

-

-

-

-

Appreciation on investment in subsidiary

-

-

-

Total comprehensive income/(loss) for the year

(42,207)

(281,011)

(429,013)

(108,738)

Profit/(Loss) attributable to:

Owner of equity

(42,207)

(281,011)

(429,013)

(108,738)

Non controlling interest

-

-

(42,207)

(281,011)

(429,013)

(108,738)

Total comprehensive income/(loss) attributable to :

Owner of equity

(42,207)

(281,011)

(429,013)

(108,738)

Non controlling interest

-

-

(42,207)

(281,011)

(429,013)

(108,738)

Earning per share(kobo)

- Actual

(0)

(3)

(5)

(1)

- Adjusted

(0)

(3)

(5)

(1)

year

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE, 2020

Share

Share

Revaluation

Fair value (Available for

Contigency

Retained

Total

Capital

Premium

Reserve

sale) Reserve

Reserve

Earnings

Equity

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Balance as at 1 January 2019 4,670,544

434,164

1,595,299

364,813.21

2,207,830

(7,072,451)

2,200,200

-

-

-

-

- (30,909)

- -

-

-

-

-

(30,909)

-

-

-

- -

52,483

(52,483)

-

-

-

- -

-

(142,634)

(142,634)

-

-

- -

-

-

-

-

-

- -

-

-

-

Total comprehensive income for the Issue of share capital

Transfer to contigency reserve Transfer from (to) retained earning Dividend

Revaluation surplus

Balance as at 30 June 2019

4,670,544

434,164

1,595,299

333,904

2,260,313

(7,267,568)

2,026,657

Balance as at 1 January 2020

4,670,544

434,164

1,595,299

333,904

2,270,028

(12,987,604)

(3,683,665)

Total comprehensive income for the year

-

-

-

-

-

-

-

Issue of share capital

-

-

-

-

-

-

-

Transfer to contigency reserve

-

-

-

-

11,457

(11,457)

-

Transfer from (to) retained earning

-

-

-

-

-

(281,011)

(281,011)

Dividend

-

-

-

-

-

-

-

Revaluation surplus

-

-

-

-

-

-

-

Balance as at 30 June 2020

4,670,544 434,164 1,595,299 333,904 2,281,485 (13,280,073)

(3,964,676)

STACO INSURANCE PLC

STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 JUNE, 2020

30

30

June

June

2020

2019

Cash flow from operating activities

Note

N'000

N'000

Premium received from policy holders

378,561

1,551,696

Reinsurance receipts in respect of claims

189,257

308,792

Reinsurance cost

(86,370)

(406,402)

Cash paid to and on behalf of employees

(384,559)

(367,958)

Other operating cash payments/receipts

(184,923)

(550,873)

Commission paid

(19,532)

(11,773)

Claims paid

(221,848)

(664,178)

Tax paid

-

(34,998)

Net cash provided by operating activities

44

(329,414)

(175,694)

Cash flow from investing activities

Purchase of property,plant and equipment

18

(1,140)

(2,346)

Purchase of intangible asset

Fund placement proceed

-

22,863

-

43,453

Dividend received

76,312

15,162

Interest received

23,843

27,426

Proceeds from sales of assets

11,630

-

Net cash provided by investing activities

133,508

83,695

Cash flow from financing activities

Change in borrowings

223,065 0

(51,116)

Proceeds from issue of share capital Repayment of finance lease liabilities

-

-

-

-

Net cash used in financing activities

223,065

(51,116)

Net increase/(decrease) in cash and cash

equivalents

27,160

(143,115)

Cash and cash equivalents at the beginning of the

year

205,245

412,084

Cash and cash equivalents at the end of the year

232,404

268,969

Represented by:

Cash at bank and in hand Cashbook overdrawn

8

232,404

-

232,404

268,969

-

268,969

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

RISK MANAGEMENT FRAMEWORK (CON'TD) CAPITAL MANAGEMENT

The Group's objectives with respect to capital management are to maintain a capital base that is structured to exceed regulatory and to best utilize capital allocations

Insurance industry regulator measures the financial strength of Non-life insurers using a solvency margin model, NAICOM generally expects non-life insurer to comply with this capital adequacy requirement.

Section 24 of the Insurance Act 2003 defines Solvency Margin of a Non-life insurer as the difference between the admissible assets and liabilities and this shall not be less than 15% of net premium income (gross premium income less re-insurance premium paid) or the minimum capital base (3 billion) whichever is higher.

The test compares insurers' capital against the risk profile. The regulator indicated that the insurer should produce a minimum solvency margin of 100%. During the period, the Group consistently operated above the minimum. The regulator has the authority to request more extensive reporting and can place restrictions on the Group's operations as deemed necessary if the Group falls below this requirement.

The solvency margin for the Company as at 30 June 2020 is as follows:

ASSETS:

ADMISSIBLE

IN ADMISSIBLE

TOTAL

N'000

N'000

N'000

Cash and cash equivalents

232,404

-

232,404

Financial assets

144,610

-

144,610

Insurance receivables

20,759

20,759

Reinsurance assets

788,308

-

788,308

Other receivables

-

105,466

105,466

Deferred acquisition cost

38,444

-

38,444

Investment in subsidiary

-

327,937

327,937

Investment properties and land

1,520,000

-

1,520,000

Leased assets

6,470

6,470

Property and equipment

1,894,300

-

1,894,300

Statutory deposit

300,000

-

300,000

Intangible assets

-

5,591

5,591

Total assets

4,945,295

438,994

5,384,289

LIABILITIES

Investment contract liabilities

-

-

Insurance ccontract liabilities

3,265,424

-

3,265,424

Borrowings

4,827,303

-

4,827,303

Trade payables

304,644

-

304,644

Other payables

813,107

-

813,107

Deferred tax liabilities

-

98,050

98,050

Current income tax liabilities

40,437

-

40,437

Total liabilities

9,250,915

98,050

9,348,965

SOLVENCY MARGIN

(4,305,620)

MINIMUM REQUIRED

3,000,000

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020 RISK MANAGEMENT FRAMEWORK (CON'TD) CAPITAL MANAGEMENT

The Company further developed an internal capital adequacy model that assesses the risk of assets, policy liabilities and other exposures by applying various factors. The model calculates the capital required for each class of the broad risks identified by the Company and aggregates through co-variance methodology that considers the relationship between these risk categories.

As at period end, the Company showed a negative solvency margin of N4,305,619.65 and a solvency ratio of 143.52%

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

7 SEGMENT INFORMATION- COMPANY

Segment Information

Following the management approach of IFRS 8, the company is organised into eight operating segments. These segments distribute their products through various forms of brokers, agencies, and direct marketing programs. Management identifies its reportable segments by product line. These segments and their respective operations for the period ended 30 June, 2020 are as follows:

Fire

General accident Motor vehicle

Oil and gas Marine Aviation Bond Engineering

Fire

General

Accident

Motor

Vehicle

Oil and

Gas

Marine

Aviation

Bond

Engineering

Total

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Gross premium written

98,823

65,703

134,750

6,561

49,945

2,619

10,222

13,286

381,909

Gross premium income

139,434

84,427

261,298

29,614

25,732

2,910

4,336

22,883

570,634

Re-insurance expenses

(49,298)

-

(7,577)

(22,511)

(11,170)

(70)

(1,222)

(4,865)

(96,713)

Net premium income

90,137

84,427

253,720

7,103

14,561

2,840

3,114

18,018

473,921

Fee Income and commission

10,438

-

1,184

5,026

2,645

12

328

1,412

21,046

Investment returns

-

Net underwritting income

100,575

84,427

254,905

12,128

17,207

2,853

3,442

19,430

494,966

Claim expenses(Gross)

(6,537)

(14,077)

(34,354)

(163,519)

(2,197)

(1,127)

-

(37)

(221,848)

Insurance claims recovered /

recoverable from reinsurers

(3,308)

(13,273)

12,061

117,358

(67,648)

305

1,523

(7,761)

39,256

Net insurance benefits and claims

(9,845)

(27,350)

(22,294)

(46,162)

(69,845)

(822)

1,523

(7,798)

(182,592)

Underwriting expenses

(24,363)

(17,179)

(31,150)

(6,265)

(9,609)

(737)

(891)

(4,339)

(94,533)

Total expenses

(34,207)

(44,529)

(53,444)

(52,427)

(79,453)

(1,559)

632

(12,137)

(277,125)

Reportable segment profit

66,367 39,898 201,461

(40,298)

(62,247)

1,293

4,073

7,293

217,842

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

SEGMENT INFORMATION CONT'D- COMPANY

The segment information provided by Management for the reporting segments for the year ended 30 June 2019

General

Motor

Oil and

Fire Accident

Vehicle

Gas

Marine

Aviation

Bond

Engineering

Total

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

N'000

Gross premium written

468,781 257,023

519,961 140,685 202,570 90,552

15,988

53,868 1,749,428

Gross premium income

447,022

239,031

546,918

186,004

90,528

90,414

5,062

59,002

1,663,981

Re-insurance expenses

(245,807)

(4,708)

(15,226)

(42,297)

(79,822)

(1,797)

(3,232)

(20,762)

(413,652)

Net premium income

201,216

234,323

531,692

143,707

10,706

88,616

1,830

38,239

1,250,329

Fee Income and commission

56,857

1,354

2,618

10,389

20,466

436

953

6,618

99,690

Investment returns

-

-

- -

- -

-

-

-

Net underwritting income

258,073 235,676

534,310 154,096 31,172 89,052

2,783

44,857 1,350,019

Claim expenses(Gross)

(178,582)

(76,311)

(140,715)

(136,199)

(62,315)

(44,658)

-

(25,398)

(664,178)

Insurance claims recovered from reinsurers

174,727 231,048

193,286 (361,447)

93,459 1,124

330

(39,794)

292,732

Net insurance benefits and claims

(3,855)

154,737

52,571

(497,646)

31,144

(43,534)

330

(65,192)

(371,445)

Underwriting expenses

(98,526)

(48,228)

(74,870)

(38,760)

(33,159)

(18,629)

(953)

(11,328)

(324,454)

Total expenses

(102,381)

106,509

(22,299)

(536,406)

(2,015)

(62,163)

(623)

(76,520)

(695,899)

Reportable segment profit

155,692

342,185

512,011 (382,310)

29,157 26,889

2,159

(31,663)

654,120

30

June 2020 N'000

31

December

2019

N'000

8 CASH AND CASH EQUIVALENTS

Cash in hand

2,575

2,844

Due from banks and other financial institutions (note

8.1)

229,829

202,401

232,404

205,245

8.1 Due from banks and other financial institutions

Balances held with banks

88,261

37,969

Placement with banks

141,569

164,432

229,829

202,401

Short-term deposits are made for varying period of

one day and three months depending on the

immediate cash requirement of the group.

For the purpose of cash flows, cash and cash

equivalents comprises include cash and bank

balances (as above)

232,404

205,245

30

31

June

December

2020

2019

N'000

N'000

9

FINANCIAL ASSETS

The group financial assets are summarised below by measurement category :

Held to maturity (Note 9.1)

31,827

92,625

Loans and receivables (Note 9.2)

16,192

17,985

Available for sale financial asset (Note 9.3)

96,591

96,591

144,610

207,201

9.1

Held to maturity

Government securities

26,149

86,946

Treasury bills

5,679

5,679

31,827

92,625

Due within 12 months

-

1,350

Due after 12 months

31,827

91,275

31,827

92,625

There are no impaired held to maturity

investments at 31 December 2019 (2018 nil)

9.2

Loan and receivables

Staff loan

16,192

17,985

16,192

17,985

16,192

17,985

Due within 12 months

2,255

4,048

Due after 12 months

13,937

13,937

16,192

17,985

9.2a

Staff loan

113,378

115,171

Allowance for impairment (Note 9.2c)

(97,186)

(97,186)

16,192

17,985

For loans and receivables exceeding 12 months, the estimated fair values of the loans and receivables are the discounted amount of the estimated future cash flows expected to be received. Expected cash flows are discounted factor at current market rates to determine fair value. For loans and receivables with maturity period of below 12 months, no discounting was applied.

9.2b Movement on the provision for impaired loans and receivables are as follows :

Company Staff loan Total

N'000

N'000

At beginning of year

97,186

97,186

Provision for impairment

-

-

Provision no longer required

-

Amount written off during the year as uncollectible -Unused amount reversed 97,186 - 97,186

30

31

June

December

2020

2019

N'000

N'000

9.3 Available for sale investment

Listed

-

-

Unlisted

96,591

96,591

96,591

96,591

Due within 12 months

-

-

Due after 12 months

96,591

96,591

96,591

96,591

The Group investment in unquoted equity financial instrument could not be fair valued as there were no observable data for which the entity could be fair valued,the carrying amount was based on cost less impairment.

The quoted equity financial instrument are measured at market value,the cummulative gain or loss are recognised in other comprehensive income.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

N'000

N'000

10 TRADE RECEIVABLES

Due from agents

-

-

Due from brokers

1,620,950

1,617,602

Due from Reinsurance companies

-

-

1,620,950

1,617,602

Allowance for impairment (Note 10.1)

(1,600,191)

(1,600,191)

20,759

17,411

Due within 12months

20,759

17,411

Due after 12 months

-

-

20,759

17,411

10.1 Movement on the allowance for impairment of receivables arising out of direct insurance arrangements are as follows:

N'000

At beginning of year 1,600,191

Provision for impairment -

Provision no longer required -

Amount written off during the year as uncollectible -

At end of period 1,600,191

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

11 REINSURANCE ASSETS

N'000

N'000

Prepaid reinsurance (note 11.1)

74,948

80,328

Reinsurance recoverable

708,398

716,495

Prepaid M&D Deposit - Re-Insurance

4,963

9,925

788,308

806,747

Due within 12months

500,907

765,607

Due after 12 months

287,401

287,401

788,308

1,053,008

11.1 Movement in prepaid reinsurance At beginning of year

80,328

258,355

Additions during the year

1,008,732

644,232

Amortisation during the year

(96,713)

(822,258)

At end of period

992,346

80,328

There were no indicators of impairment

for re-insurance assets.Therefore

,no impairment

allowance is required in respect of these assets.The carrying amounts disclosed above is in respect of the reinsurance contracts which approximate the fair value at the reporting date.

30

31

June

December

2020

2019

12 OTHER RECEIVABLES AND

PREPAYMENTS

Accrued income (Note 12.2)

-

-

Prepayment (Note 12.2)

23,195

17,166

Other receivables (Note 12.1)

82,271

82,271

105,466

99,438

Due within 12months

105,466

99,438

Due after 12 months

-

-

105,466

99,438

12.1 Other receivables

Stock- consumables

-

-

Deposit for assets

-

-

Other sundry debtors

2,302,437

2,302,437

2,302,437

2,302,437

Allowance for impairment (Note 9.2c)

(2,220,166)

(2,220,166)

82,271

82,271

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

13 DEFERRED ACQUISITION COST

At begining of year

63,075

158,181

Additions during the year

56,719

383,385

Amortisation during the year

(81,350)

(478,490)

At end of period

38,444

63,075

Due within 12months

38,444

63,075

Due after 12 months - -

38,444 63,075

14 INVESTMENT IN SUBSIDIARY

14.1 The following table illustrates the summarized financial information of

the company's investment in Staco Sierra Leone Limited

Share of the Subsidiary's statement of financial position:

Assets

-

920,133

Liabilities

-

-

733,504

Equity

-

186,629

Share of Subsidiary's reserves and

156,741

profit or loss:

Contingency reserve

-

41,747

Retained earnings

-

99,561

-

141,308

Carrying amount of the investment

327,937

327,937

14.2 Appreciation/(Diminition) in investment

Carrying amount of the investment

327,937

327,937

Cost of investment

74,733

74,733

Appreciation in investment

253,204

253,204

This represents 60% holding in the ordinary share capital of Staco Sierra Leone Limited, a subsidiary incorporated and operating in Sierra Leone

15 INVESTMENT PROPERTIES

At 1 January

Addition during the year Revaluation surplus

1,520,000

-

-

1,520,000

-

-

At end of period

1,520,000

1,520,000

Cost/Valuation at 30 September, 2019 is represented by:

Valuation

495,000

495,000

Cost

1,025,000

1,025,000

1,520,000

1,520,000

Investment properties are carried at fair value which are determined by independent professional valuers .The determination of fair value of the investment properties was supported by market evidence. The modalities and process utilized extensive analysis of market data and other sector specific peculiarities corroborated with available database derived from previous experience.

The investment property is a landed property held for the purpose of capital appreciation.It is a bare land located at No 13 Glover Road ,Ikoyi in Eti Osa Local Government Area of Lagos State.

The property was independently valued by Dennis Osamudiame (FRC/2013/NIESV/00000003727)

for Dennis Osamudiame & Co on 13th December 2017 at N1,520,000,000(2015 : N1,520,000,000) on the basis of open market value .

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

16 DEFERRED TAX ASSETS

30

June 2020 N'000

31

December

2019

N'000

At 1 January

-

-

Charge for the period At 30 June 2020

-

-

-

-

The movement in defered income tax liabilities

during the year is as follows:

16.1 DEFERRED TAX LIABILITY

N'000

N'000

At 1 January

98,050

98,050

Charge for the period

-

-

At 30 June 2020

98,050

98,050

The movement in defered income tax liabilities

during the year is as follows:

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

17

LEASED ASSETS

Furniture

Fittings and equipment

Motor Vehicle

TOTAL

Cost

N'000

N'000

N'000

At 1 January 2020 Additions

-

-

117,750

-

117,750

-

At 30 June 2020

-

117,750

117,750

Accumulated depreciation

At 1 January 2020

-

111,280

111,280

Charge for the period

-

-

-

At 30 June 2020

-

111,280

111,280

Carrying value

At 30 June 2020

-

6,470

6,470

At 31 December 2019

-

6,470

6,470

STACO INSURANCE PLC

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

  1. PROPERTY, PLANT AND EQUIPMENT

    Land and Building

    Plant and Machinery

    Furniture

    Fittings and equipment

    Motor Vehicle

    Work in Progress

    TOTAL

    N'000

    N'000

    N'000

    N'000

    N'000

    N'000

    Cost

    At 1 January 2020

    1,950,101

    40,758

    363,335

    1,252,144

    4,226

    3,610,564

    Additions

    -

    -

    1,140

    -

    -

    1,140

    Disposal

    -

    -

    Revaluation surplus (Note 27d) -At 30 June 2020 1,950,101 40,758 364,475 1,252,144 4,226 3,611,704

    Accumulated depreciation

    At 1 January 2020

    94,064

    28,310

    337,721

    1,231,136

    -

    1,691,232

    Charge for the period

    17,206

    869

    4,631

    3,465

    -

    26,171

    Disposal - -At 30 June 2020 111,271 29,179 342,353 1,234,601 - 1,717,404

    Carrying value

    At 30 June 2020

    1,838,830

    11,579

    22,122

    17,543

    4,226

    1,894,300

    At 31 December 2019

    1,856,037

    12,448

    25,614

    21,007

    4,226

    1,919,332

    18

    NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

    30

    June 2020

    31

    December

    2019

    N'000 N'000

  2. STATUTORY DEPOSIT

This represents amount deposited with Central Bank of Nigeria (CBN) in accordance with section 10(3) of the Insurance Act, 2003

300,000 300,000

Due within 12 months - -

Due after 12 months 300,000 300,000

300,000 300,000

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

N'000

N'000

20 INTANGIBLE ASSET

Goodwill (Note 20.1)

-

-

Software (Note 20.2)

5,591

6,200

5,591

6,200

20.1 Intangible Asset - Goodwill

Cost

At 1 January

Addition

-

-

At 30 June 2020

-

-

Amortisation

At 1 January

-

-

Amortisation

-

-

At 30 June 2020

-

-

Carrying value

At 30 June 2020

-

-

20.2 Intangible Asset - Software

Cost

At 1 January

9,876

9,876

Cost capitalised

-

-

At 30 June 2020

9,876

9,876

Amortisation

At 1 January

3,676

2,689

Amortisation

610

988

At 30 June 2020

4,286

3,676

Carrying value

At 30 June 2020

5,591

6,200

The intangible assets of the company comprised of goodwill and computer software.The computer softwares are accounted for using the cost model of IAS 38 i.e cost less accumulated amortization and less accumulated impairment.The amortization is charged to income statement in line with the Company's policy.

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

30

June 2020 N'000

31

December

2019

N'000

21 INSURANCE CONTRACT LIABILITIES

General business (note 21.1)

3,265,424

3,312,244

Life business (note 21.2) Total insurance liabilities

-

3,265,424

-

3,312,244

Due within 12 months

3,265,424

3,312,244

Due after 12 months

-

3,265,424

-

3,312,244

21.1 General business liabilities

Outstanding claims provision (note 21.1a)

2,734,440

2,605,435

Claims incurred but not reported (note 20.1b)

273,444

260,544

Provision for unearned premium (note 21.1c)

257,541

446,266

Total general business insurance contract liability

3,265,424

3,312,244

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

N'000

N'000

Outstanding claims provision - General

21.1a business

Movement in outstanding claims provision

At 1 January

2,605,435

2,253,059

Claims incurred in the current year

350,852

1,293,892

Claims paid during the year

(221,848)

(941,516)

At 30 June 2020

2,734,440

2,605,435

Claims incurred but not reported (IBNR)

21.1b provision

Movement in IBNR provision

At 1 January

260,544

225,306

Movement during the year

12,900

35,238

At 30 June 2020

273,444

260,544

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

21.1c

Unearned Premium

Unearned

Unearned

premium

Movement

premium

2020

2019

Fire

53,933

(40,611)

94,544

Engineering

7,946

(9,597)

17,542

Motor

112,296

(126,548)

238,844

General Accident

48,233

(18,724)

66,957

Marine

29,146

24,213

4,933

Bond

5,928

5,886

43

Oil and gas

-

(23,053)

23,053

Aviation

58

(291)

349

257,541 (188,725)

446,266

These provision represent the liability for short term insurance contracts for which the Group's obligations are not expired at period end,The unearned premuim provision relates to the casuality insurance contracts for which the group expect tp pay claims in excess of the related unearned premium provision.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE, 2020

30

31

June

December

2020

2019

N'000

N'000

21.2 Life insurance liabilities

Provision for outstanding claims

-

-

Life liability (note 20.2a)

-

-

-

-

21.2a The movement on the life funds account during the year was as follows :

At 1 January

-

-

Increase/(decrease) during the year

-

-

At 30 June 2020

-

-

22 FINANCIAL LIABILITIES

Convertible bond (Note 21.1)

3,943,729

3,861,668

Short term loan

883,574

1,006,186

4,827,303

4,867,854

22.1 Convertible Bond

This represents zero coupon JPY 1,200,000,000 direct, unconditional, unsubordinated and unsecured European bond with option issued on 9 November, 2007 to Daewoo Securities Europe Limited. The Bonds were issued with the option to subscribe for the ordinary Shares of the company with a yield of 4.25% per annum while the tenor of the convertible option is valid up to year 2029.

As 1 January

3,861,668

3,762,063

Movement during the year(Note 22.2)

82,060

99,605

At 30 June 2020

3,943,729

3,861,668

22.2 Movement during the year

Interest and default charges on the bond Exchage gain / loss

Payments during the year

Provision no longer required

82,060

-

-

-

99,605

-

-

-

82,060

99,605

22.3 Short term loan

883,574

1,006,186

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2020

30

June 2020

31

December

2019

N'000

N'000

23

TRADE PAYABLES

Insurance companies

48,266

46,850

Reinsurance payables (Note 23.1)

256,378

226,219

304,644

273,069

23.1

Reinsurance payables

Reinsurance premium payable

256,378

226,219

Minimum deposit payable

-

-

256,378

226,219

24a

OTHER PAYABLES

Lease obligation

22,098

22,098

Accruals

338,379

205,460

Other creditors (note 24.1)

452,630

353,507

813,107

581,066

24.1

The breakdown of other creditors is as below:

Tax payables

-

-

Unclaimed Dividend

43,078

43,078

Other payables

409,552

310,429

452,630

353,507

The carrying amounts disclosed above approximate the fair value at the reporting date.All amount are payable within one year.

Due within 12 months

452,630

353,507

Due after 12 months

-

-

452,630

353,507

26 EMPLOYEE BENEFIT LIABILITY Gratuity scheme

The Group has a post emploment benefit scheme which is not funded

The movement in the defined benefit obligation over the year is as follows:

At beginning of year - -

Current service cost

Benefits paid - -

At 30 June 2020 - -

Due within 12 months - -

Due after 12 months - -

- -

27 TAXATION

27.1 Charge

Income

10,000

10,000

Education tax

Prior year under provision

-

54,998

Technology tax

10,000

64,998

Deferred tax (note 15) - -

Charge for the period 10,000 64,998

27.2 Tax liability

The movement on tax payable account during the year is as follows:

At 1 January 30,437 25,506

Payments during the year - (60,068) Charge for the period 10,000 64,998

At 30 June 2020 40,43730,437

30

June 2020

31

December

2019

28 EQUITY

28a Share capital

Authorised

9 billion(2012 -7 billion) ordinary shares of 5ok each

N'000 N'000

6,500,000 6,500,000

Issued and fully paid

4,670,544

4,670,544

At 1 January 4,670,544

4,670,544

Issued during the year -

-

At 30 June 2020 4,670,544

4,670,544

28c

Share premium 434,164

434,164

Premium arising from the issue of shares are reported in the share premium account.

28d

Revaluation reserve

At 1 January 1,595,299

1,595,299

Addition during the year (Note 18) -

-

At 30 June 2020 1,595,299

1,595,299

Under current regulations, assets revaluation reserve is not available for shareholders either as dividends or bonus shares.

distribution to

No provision was made for deferred capital gains tax as the property is not meant foreseeable future.

for sale in the

28e

Fair value reserves

At the beginning of the year 333,904

368,475

Additions during the year -

(34,571)

Appreciation on investment in Subsidiary(Note 14.2) -

-

At end of the period 333,904

333,904

9,341,087,609 units of ordinary shares of 50k each

30

June 2020

31

December

2019

N'000 N'000

28f Contingency reserve

In accordance with the Insurance act, a contigency reserve is credited with the greater of 3% of total premiums or 20% of profits for general business and 1% of total premiums or 10% of profits for life business. This shall accumulate until it reaches the amount of greater of minimum paid- up capital or 50 percent of net premium.

At the beginning of the year

2,270,028

2,204,156

Transfer from profit and loss

11,457

65,872

At end of the Period

2,281,485

2,270,028

28g

Retained Earnings

General reserve consist of undistributed profits from previous years.

At the beginning of the year

(12,987,604)

(11,364,964)

Transfer from profit and loss

(281,011)

(1,556,769)

Transfer to contingency reserve

Revaluation of investment assets

(11,457)

-

(65,872)

-

At end of the year

(13,280,073)

(12,987,604)

Translation reserve (Note 28f(i))

-

-

(13,280,073)

(12,987,604)

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