cornerstone insurance plc · 2017-07-31 · cornerstone insurance plc consolidated and separate...

CORNERSTONE INSURANCE PLC UNAUDITED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2017

RC: 163170 CORN INSURANCE PLC

ce

Emmanuel Otitolaiye Hoad, Finance & Peformance Mgt. Group FRC/2014/ICAN/00000008524

RC. 1631

S RANCE PL (Director

COR

D,t„Ganlyu_Musa Group Managing nictor FRC/2013/ICAN/00000003110

Cornerstone RC 163170

Consolidated and Separate Statement of Financial Position As at June 30, 2017

Note

2017 Group N'000

2016 Group N'000

2017 Company

N'000

2016 Company

N'000

ASSETS

Cash and cash equivalents 5 2,182,766 3,093,080 1,252,969 2.557,153

Financial assets 6 10,647,655 9,648,025 7,973,311 7,370,259

Trade receivable 7 183.730 73,731 182,783 73,224

Other receivables and prepayments 8 118,914 228,293 196,528 391.309

Reinsurance assets 9 2,502,576 2,492,226 2,031,380 2,224,826

Deferred acquisition cost 10 416,451 258.101 291.666 206,630

Investment in subsidiaries 11 2.954.748 2,954,748

Investment in Joint venture 12 1,894,885 1,894,885 1,188,609 1,188,609

Investment properties 13 1,020.856 494,000 526.856

Property, plant and equipment 14 2,204,393 2,235,927 777,897 806,081

Intangible assets 15 86,415 86.070 77,650 76,620

Deferred tax assets 20b 18.790 18,790

Statutory deposits 16 800,000 800,000 500,000 500,000

Assets classified as held for sales 11.5 132.031 132,031

Total Assets 22,190,673 21,436,369 17,973,185 18,368,248

Liabilities:

Investment contract liabilities 17 3,302,963 2,353,766 3,302,963 2,353,766 Insurance contract liabilities 18 7.713,677 6,941,872 6,555,890 6.307,846

Trade payables 19 414,108 456.520 302,215 452,648

Other payables 20 1,026.649 807,455 266.040 634,631

Income tax liabilities 21 150,991 414,398 103,098 302,091

Deferred tax liabilities 21b 144,335 144,335 Employees retirement benefit obligations 22 108 8,102 1,549 7,750 Liabilities directly associated with assets classified as held for sale 11.5 5,497

Total Liabilities 12,752,831 11,131,945 10,531,754 10,058,732

EQUITY & LIABILITIES Share capital & reserves:

Ordinary share capital 23 7,364,754 7,364.754 7,364,754 7,364,754

Share premium 23a 1,947.167 1.947,166 1,947.167 1.947.166 Treasury shares 23b (48,175) (48,175) (48,175) (48,175) Contingency reserve 23c 1,759,421 1,759.421 1,854.196 1,735,400 AFS Fair value reserve 23d (437,367) (437,367) (277.545) (277,545) Retained earnings 23e (1,385,646) (519,062) (3,398,967) (2,412,085) Revaluation reserves 66,205 66,205 Non Controlling interest(NCI) 28c 171,481 171.481

Total Equity 9,437,842 10,304,424 7,441,431 8,309,515

Total Equity & Liabilities 22,190,673 21,436,369 17,973,185 18,368,248

Cornerstone Insurance Plc. Authorised & Regulated by the National Insurance Commission RIC 008

BOARD OF DIRECTORS

Paul Kokoricha - Chairman

REGISTERED ADDRESS

136, Lewis Street, Lagos-Island, Lagos, Nigeria

CORPORATE HEAD OFFICE

21, Water Corporation Drive, Off I io ii Avevirtelo

CORNERSTONE INSURANCE PLC

Consolidated and Separate Statement of Profit or Loss and Other Comprehensive Income for the Half-Year ended 30 June , 2017

Note

2017 Group NV00

2016 Group NV00

2017 Company

NV00

2016 Company

NV00

Gross Premium written 24 5,576,748 5,918,483 4,617,874 5,430,858 Change in unearned premium 24 (1,039,722) (1,914,871) (735,509) (1,802,561) Premium Income 4,537,026 4,003,612 3,882,366 3,628,297 Reinsurance Expenses 24 (1,707,044) (1,437,978) (1,442,208) (1,294,578)

Net premium Income 24 2,829,982 2,565,634 2,440,158 2,333,718 Fees and commission income 25 371,413 212,509 275,205 196.593

Net underwriting income 3,201,396 2,778,143 2,715,363 2,530.310 Insurance claims and benefits paid- Gross (including loss adjustment expenses) 26 (2.806,187) (2.246,135) (2,581,491) (2,188,091)

Insurance claims recoverable from reinsurance Companies 26 543,374 530,294 521,185 509,942 Net Claims expenses 26 (2.262,814) (1,715.840) (2.060,306) (1,678,149)

Acquisition cost 27(a) (573,067) (554,422) (465,188) (499,389)

Maintenance cost 27(b) (284,859) (232,989) (256,867) (224,326) Net Underwriting expenses 27 (857,926) (787.412) (722,054) (723,715)

Investment income attributable to Policyholders' funds 28(a) - - - Underwriting result 80,656 274,891 (66,998) 128,446

Investment income attributable to Shareholders' fund 28(b) 289,925 409.981 158,141 252,867 Fair value changes in investment property 13 - - Fair value changes in financial assets-FVTPL 28('c) 280,733 201,809 - Operating income 28(d) 224,295 2,208,447 211,725 1,842,793 Profit/( Loss) from investment contract (27,194) (23,826) (27,194) (23.826)

Allowance for impairment losses 29 - - Management expenses 30 (1,664,803) (1,687,387) (1,341,418) (1,398,846) Results of operating activities (816,388) 1,180,105 (863,935) 801,434 Finance costs 31 (50,194) (41,128) (4,150) (4,579)

(866,583) 1,138.978 (868,086) 796,856 Gain on bargain purchase 28(f) - - Profit before tax (866,583) 1,138,978 (868,086) 796,856 Income tax expense 32 - Profit for the year from continuing operations (866,583) 1,138,978 (868,086) 796,856

Retained profit for the year (866,583) 1,138,978 (868,086) 796,856

Other Comprehensive Income net of tax (86,658) 113,898 Items that may not be reclassified subsequently to profit or loss:

(779.924) 1,025,080

Items that may be reclassified subsequently to profit or loss: Changes in fair value of AFS Investments Other Comprehensive Income, net of taxes

Total Comprehensive Income for the year (866,583) 1,138,978 (868,086) 796,856

Profit for the year, attributable to: • Owners' of the company (866,583) 1,138,978 (868,086) 796,856 * Non-controlling interests

Total Comprehensive Income, attributable to: * Owners' of the company (866,583) 1,138,978 (868.086) 796,856 • Non-controlling interests

-866716.1432 134 Earnings per share Basic and diluted 35 10 14

1

Statement of Cash Flows for the period ended

30 June 2017

2017 Company

N'000

2016 Company

N'000 Cash flows from operating activities Insurance premium received 4,644,772 4,050,593

Deposit liabilities -contribution during the year 922,595 1,335,013

Deposit liabilities -Withdrawal during the year (355,838) (713,413) Reinsurance premium paid (1,442,208) (1,294,578) Reinsurance commission received 275,205 196,593 Insurance benefits and claims paid (2,581,491) (2,188,091) Contribution to annuity fund 43,568 215,917 Annuity benefits paid (26,216) (20,739) Reinsurance claims recovered 521,185 509,942 Commission paid (465,188) (499,389) Maintenance cost paid (256,867) (224,326) Cash paid to intermediaries and other suppliers (184,000) (736,000) Cash paid to employees (688,704) (567,686)

406,813 63,835

Corporate tax paid (198,993) (149,155)

Net cash used in operating activities 207,820 (85,320)

Cash flows from investing activities: Additions to intangible assets (72,458) (57,141) Proceeds from sale of property and equipment 5,593 Purchase of property, plant and equipment (83,620) (243,685) Additions to investment In subsidiaries (200,000) (372,901) Disposal/(Purchase) of financial assets (664,507) Financial assets redeemed during the year Proceeds on redemption of financial assets 115,017 Dividends received (27,808) 10,566 Interest received 185,949 242,301

Net cash generated from/ used provided by investing acti (197,937) (964,757)

Cash flows from financing activities:

Dividend paid Finance cost (4,150) (4,579)

(4,150) (4,579) Net Increase/ (decrease) in cash and cash equivalents 5,733 (1,054.655)

Cash and cash equivalents at beginning of year 2,557,153 3,611,808

Cash and cash equivalents at end of period 2,562,886 2,557,153

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Life Business Revenue Account For the period ended June 30, 2017


2017 2016 Individual Life Group Life Total Total

Income N' 000 N' 000 N' 000 N' 000

Gross premium Income 75,515 888,322 963.837 966,257 Unearned premium (107,646) Net Premium 75,515 888,322 963,837 858,611 Reinsurance cost (1,094) (233,632) (234,727) (252,011)

Premium retained 74,421 654,689 729,110 606,600 Investment Income - Fee and Commission received 219 58,408 58,627 61,090

74,640 713,097 787,737 667,690 Gross claims incurred 17,386 611,309 628,695 1,175,593 Less: reinsurance recoveries (88,772) (88,772) (212,972)

Net claims incurred (17,386) (522,537) (539,923) (962,621)

Underwriting expenses (63,093) (91,965) (155,058) (198,921)

Underwriting profit (5,839) 98,595 92,757 (493,852)

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4b The following is an analysis of the Group's revenue and result by reportable segment In 2016

Cornerstone

Consolidated

Leassing Eliminations

N'000

N'000

Income:

Gross written premiums

Less: Investment contracts

Gross premium income

Net changes in unearned premiums

Gross premium income

Insurance premium ceded to reinsurers

Net Insurance Premium ceded to reinsurers

Net insurance premium revenue

Fees and commission Income

Net Income

Insurance claims and benefits paid- Gross (including loss:

Insurance claims recoverable from reinsurance Companie

Net Claims expenses

Underwriting expenses-Gross

Deferred underwriting expenses

Net Underwriting cost

Underwriting results

Investment income 30,387 (45.630)

Fair value changes in Investment property

Fair value changes in financial assets-F VTPL

Exchange gain

Other operating income 17,952 (47.997)

Surplus transfer from invetment contract

48.339 (93,627)

Allowance for impairment on receivables (416,077) 59.897

Management expenses (34,037)

Finance cost (61,333) 47,997

Employee benefit expenses

Total Expenses (511,447) 107,894

Segment profit or loss before taxation (463,108) 14,267

Taxation 19,001

Segment profit or loss after tax 444.107 14,267

Segment result represents the result of each segment without allocation of certain expenses, finance costs and Income tax. This is the meast

(946,842)

CORNERSTONE INSURANCE PLC 4.0 Revenue from major products and services

The Group's revenue from major products and services is disclosed in the segment revenue tables.

4.d Geographical information

The Group's revenue and information about its segment net assets by geographical location are as follows:

Revenue Net assets 2017 2016 2017 2016 N'000 N'000 N'000 N'000

W.tnin Nigeria 5,576,748 5,918.483 9,437,842 7,756,413 Outside Nigeria

5,576.748 5.918,483 9,437,842 -7756,413

4.e Information about major customers

The Group does not derive revenue from an individual policyholder or intermediary that represents 10% or more of the groups total

revenue.

6 Cash and cash equivalents Group 2017

N'000 Cash 5,862

Short-term deposits (including demand and time deposits 2,176,903

Company

2016 2017 2016

N'000 N'000 N'000

1,473 891 7791

3,091,607 1,252,079 2 556.374

Cash and cash equivalents (as per statement of financials 2,182,766 3,093,080 1,252,969 2,657,153

Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash, this includes

current account with banks,short term placement with banks and cash at hand

Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements

of the Group. All deposits are subject to an average variable interest rate of 10.81% (2014: 13%).

The carrying amounts disclosed above reasonably approximate fair value at the reporting date.

6

6.a

Financial assets

Classification - carrying amount

Available-for-sale investments (AFS)

Group 2017 N'000

2016 N'000

Company 2017

N'000

2016

N'000

Carried at fair value(listed security) 1,154,481 877 484

Fair value through other comprehensive income (unlisted s 142,079 142,079

Carried at cost (unlisted securities) (See note 6a (i)) 2,658,945 2.658,945

Available-for-sale investments (AFS) 3,955,504 3,311.472 3,678.508 2,368,590

Fair value through profit or loss (FVPT)

Fair value through profit or loss (FVPT) 3,816,494 2,836.108 3,071,684 2,836.108

Loans and receivables investments carried at amortised c 1,952,454 3.500,444 2,023.670 2.165,560 9,724,452 9.648.025 8 7/3,862

6a(i) Details of unlisted securities carried at cost include:

CAPIC(see note i below) 1,580,798 779.020 1,580,798 779.020

Nigeria Oil & Gas Pool (NAL) 5,258 30,989 5,258 5 258

Nigeria Liability Insurance Pool 6,646 6,646 6,646 6,646

Energy & Allied Insurance Pool 63,248 39,850 63,248 39,850

OAK Pension Limited 50,000 50.000 50,000 50,000

Sterling Assurance 37,500 37,500 37,500 37,500

CAP PHOENIX CORNERSTONE LTD 915,495 915,495 2,658,945 944.004 2.658,945

The above financial assets have been assessed for impairment and there was no objective evidence that the asset is impaired.

6a(II) Details of unlisted securities Includes

Fair value through prof( or loss

MTN Nigeria Communication 3,816,494 4.330,746 3,071,684 3,510,998

Fair value through other comprehensive Income:

Consolidate Breweries

WAMCO Nigeria Limited 64,000 44,000 64000 44,000

Food concepts Limited 1,540 1,540 1540 1.540

ARMEthical Fund-TAKAFUL 22,706 21,848 22,706 21,849

Lotus Halal Equities ETF 6,695 6.214 6,695 6,214

Lotus Halal Fixed Incom Fund 47,138 47,138

Jaiz Bank 9,940 142,079 83,642 142,079 73,803

6a(iii) Details of loan and receivables includes:

Bonds 1,726,382 1,435,675 1,726,382 1,395,910

Loans to policyholder 297,288 161,574 297,288 161,574

Advances and LPO financing 355,595 483,286 - 2,379,265 2,080.535 2.023,670 1,557.484

Impairment (426,810) (474,598) 1.952.454 1605.937 2.023,670 1.557 484

Impairment provision At 1 January 474.598 467,999 Addition dunng the year(note 30) (47.787) 6.599 At 30 November 426810.4442 474,698

i This represent the company's investment in CAM, a real estate investment fund.

CORNERSTONE INSURANCE PLC 6a(iii) Movement in financial assets

Carried at cost

(unlisted

securities)

N'000

Fair value through

profit or loss

(unlisted securities )

N'000

Loans and

receivables

N'000

Total

19000

Balance as at 1 January 2.836.108 3.500,444 6,336,553

Addition during the year 125,324 354,873 601,800

Disposal/Repayment during the year (8,684) (55,904)

Accrued interest 11,555 11,555

Fair value Gain/(loss) 364

Impairment losses (656,266) (656,266)

Impairment losses-OCI (257,173)

Exchange gains/(loss) 28,113 271,806 22,833 322,752

Arising from Acquisition 25,731 819,749 39,765 982,719

Balance as at 31, December 179,168 3,320,971 3920786 7,335.974 ...._...■.s... MP L--"-----. 3•=•1•1■1 6 4

Interest Exchange difference

Fair value

gains/((loss)

Closing

balance Available-for-sale investments (AFS) N'000 N'000 N'000 N'000 At fair value- General 208,151 Al fair value- Life 248,338 At fair value- Takaful 11,294 Subsidiary 8.869

476.651 LOANS AND RECEIVABLES vuneidi 0,00 01,000 IAA.) 1,, I Life businesss 339,808 Takaful 54,832 Subsidiary Loans to policy holders 4659 171,952 Advances and LPO financing 85,112

11.555 32.836 1.652.975 Fair value through profit or loss(FVTPL) General business 131,325 69,897 1,772,594 Life businesss 183,667 73.470 1,863,193 Takaful 581 763 19.339

315,573 144,130 3.655.126

Gamed at cost General business 34.070 750,616 Life businesss 7,390 127.807 Takaful

41,460 878.423 Carried at cost(see note 6a(ii) General business 340 45.540 Life business Takaful 24 22.106

364 67.646


6.b Carrying amount at 2016 - Group

FINANCIAL INSTRUMENTS CLASSIFICATION BUCKETS

Debt securities

Fair Value

Available for

sale

N'000

Fair value through

profit or loss

N'000

Amortised Cost

Loans and

Receivables

N'000

Total

N'000

- Federal Government 480,195 480,195

- State Government 436,272 436,272

- Corporate 627,715 627,715

'-Individual loans 297,288 297,288

'-Loans and advances (71,216) (71,216)

1.770,254 1,770,254

Equities

- Listed 1,154,481 1,154,481 - Unlisted 2,801.024 3.816.494 6,617.518

3.955.505 3,816.494 7,771,999

Total financial assets 3,955.505 3,816,494 1,770,254 9.542,253

Within one year 3,955,505 3,955,505 More than one year 3,816,494 1,770,254 5,586,748

3,955,505 3,816,494 1.770,254 9,542,253

6.b Carrying amount at 31 December 2016- Group

Debt securities - Federal Government 125,946 125,946 - State Government 574,774 574,774

- Corporate 734,955 734,955

- Loans to policyholders 161.574 161,574 -Advances and LPO financing 8,688 8,688

1.605,937 1,605,937

Equities - Listed - Unlisted 2,836.108 2,836,108

2,836,108 2,836.108

Total financial assets 2,836,108 1,605,937 4,442.045

Within one year

More than one year 2,836.108 1,605.937 4,442,045

2.836,108 1,605,937 4,442.045

Carrying amount at 2017 - Company

FINANCIAL INSTRUMENTS CLASSIFICATION BUCKETS

Debt securities

Fair Value

Avallablo for sale

N'000

Fair value through profit orloss

N'000

Amortised Cost

Loans and Receivables

N'000

Total

N'000

- Federal Government 480,195 480,195

- State Government 436,272 436,272

- Corporate 627,715 627,715

- Loans to policyholders 297,288 297,288

-Advances and LPO financing 1.841.470 1,841,470

Equities - Listed 142,079 142,079

- Unlisted 3.536,429 3,071,684 6,608,113

3,678.508 3,071,684 6,750,192

Total financial assets 3,678.508 3,071.684 1,841.470 8,591,662

Within one year More than one year 3,678.508 3,071.684 1,841,470 8,591,662

3,678,508 3,071.684 1,841.470 8,591,662

Carrying amount at 31 December 2016 - Company

Debt securities

- Federal Government


- State Government 119.050 119,050 - Corporate 572,968 572,968 - Loans to policyholders 161,574 161,574

853.592 853.592

Equities - Listed - Unlisted 2.836,108 2,836,108

2,836,108 2.836,108

Total financial assets 2,836,108 853,592 3,689,700

Within one year

More than one year 2,836.108 853.592 3,689,700

2,836,108 853,592 3,689,700


7 Trade Recievable

Group 2017 2016

14'0043 N'000

Company

2017 2016

N1600 N'000

Due from policyholders 1,600,857 1,441,078 1,408,317 1,248,978 Allowance for impairment (1,417,127) (1,367,347) (1,225,534) (1,175,754)

183,730 73,731 182,783 73,224

7.1 Impairment provision

At 1 January 1417127.316 1175754 1175754 1,175,754 Addition during the year(note 31)

At 31 December 2016 1.417.127 1,175,754 1,175,754 1,175,754

All insurance receivables are designated as trade receivables and their carrying value approximate value at the statement of financial position date .

8 Receivables and prepayments

Group Company 2017 2016 2017 N'000 N'000 N'000

2016 N'000

Due from Subsidiaries 82,666 180,864 281,861

Other receivables•• 207,950 88,067 77,046 35,656 Receivables from Meristem 4,589 4,589 4,589 4,589 Prepaid insurance 18,215 25,120 18,215 25,120

Stock of stationery 5,496 5,496 5,496 5,496 Investment in MV Exchange 10,000 10,000 10,000 10,000 Rent prepayment 102,652 107,046 96,908 83,551 Prepayments 120,182 107,401 96,453 90,856

469.084 430,384 489,570 537.129

Allowance for impairment (note 8.1) (350,168) (202,091) (293,043) (145,820) 118,914 228,293 196,528 391.309

Within one year 343,094 200.686 426.416 452,634 More than one year 125,990 12,207 63,154 63,154

469,084 213,393 489,570 515,788

•• Other recievable is made up of receivable from Cornerstone asset management of N56M,receivable from Arian capital of 42m, all of which have been fully provided for.

The carrying amount is a reasonable approximation of fair value

8.1 Impairment provision

At 1 January 430,384 304,394 537,129 473,975

Addition during the year(note 31) 125,990 63,154

As At December 31 2016 430,384 430,384 537,129 537.129

8b Other Assets

Receivable from Cappa & D'Alberto (notel3) 290,138 290,138

Impairment provision (note 30) (290,138) (290,138)

9 Reinsurance assets Group Company 2017 2016 2017 2016 N'000 N'000 N'000 N'000

Reinsurer share of outstanding claims-General 893,147 675,915 674,812 481,205

Reinsurer share of outstanding claims-Life (4,436) 335,196 (4,436) 335,196

Reinsurer share of Incurred but not reported-General 622,874 141,412 622,874 141,412

Prepaid reinsurance-General 789,158 1,263,662 536,297 1,190,973

Prepaid reinsurance-Life 181,286 181,286 181,286 181,286

Reinsurance share of claims paid 603,684 477,891 603,684 477,891

3,085,713 3,075,363 2.614517 2,807,963

Allowance for impairment (reinsurance receivable) (583,136) (583,136) (583,136) (583,136) 2,502,576 2,492,226 2,031,380 2,224,826

Within one year 2.502,576 2,492,226 2,031,380 2,224,826

More than one year 2,502,576 2,492,226 2,031,380 2,224,826

Reinsurance assets are valued after an allowance for their recoverability and the carrying amount is a reasonable approximation of fair value.

•Prepaid reinsurance represents deferred portion of reinsurance cost(reinsurance portion of unearned premium).


10 Deferred acquisition Charges

At 1 January 2017

Acquisition cost paid during the year

Total acquisition cost

Acquisition cost amortised(charged to statement of pr Arising from acquisition

Deferred acquisition costs (DAC)

Group Company

2017 2016 2017

N'000 N'000 N'000

258,101 219,308 206,630

731,418 1,185,308 550,224

2016

N'000

197,082 1,025,133

989,518

(573.067)

1,404,616

(1,146,515)

756,854

(465,188)

1.222,216

(1,015,586)

As At June 30 2017 416,451 258,101 291,666 206,630

Deferred Acquisistion Cost

The breakdown of deferred acquisition cost by class of business are as follows : Group Company

2017 2016 2017 2016

Deferred acquisition cost-Fire 45.694 57,443 26,758 51,875

Deferred acquisition cost-Motor vehicle 104,135 87,345 90,132 74,112

Deferred acquisition cost-General Accident, Bond & Engineering 120,761 71,086 101,318 55,518

Deferred acquisition cost-Aviation & Marine 77,646 27,595 28,961 22,325

Deferred acquisition cost-Oil & Gas 58,669 14,632 34,949 2,799

406,904 258.101 282,119 206,630

11 Investment in sublsIdiaries Company

2017 N'000

2016 N'000

Cornerstone Assets Management Limited 202,232 202,232

Cornerstone Leasing & Investment limited 59,879 59,879

HALAL TAKAFUL LTD 200,000

Fin Insurance company limited 2,954,748 2,954,748

3,416,860 3,216.859

11.1 Movement in Impairment

At 1 January (262,111) (262,111)

Impairment losses

As At June 30 2017 (262,111) (262,111)

3,154,749 2954748.191

11.2 Principal subsidiary undertakings

The Group is controlled by Cornerstone Insurance Plc "the Parent" incorporated in Nigeria. The controlling interests of Cornerstone Insurance Plc in the Group enti

Nature of L;ountry of of equity

Company name

business Origin capital

Leasing Services Cornerstone Leasing & Investment Limited

Nigeria 100.00

Non-Lite

Fin Insurance Company Limited

Insurance Nigeria 96 68%

The remaining interests in the group are held by minority shareholders.


11.3 Other Information on subsidiaries

i. Cornerstone Leasing and Investment Limited commenced operation on 1 iuly,2004 as part of the ultimate parent-company's strategic plan to provide world

class leasing services. The company was formerly a subsidiary of Cornerstone Asset Management Limited who later in 2009 transferred its shareholding in the

Company to the ultimate parent,Cornerstone Insurance Plc. Cornerstone Leasing and Investment provides convenent asset acquisition options to both corporate

organisations and individuals

ii. FIN Insurance Company Limited is a private limited liability company incorporated in Nigeria and its primary activity is the provision of general insurance

business. Cornerstone Insurance Plc acquired 96.68% equity interest in FIN Insurance Company Limited. The business acquisition is expected to increase the

market share of the Non-Life Insurance business of the entity. As at the date of acquisition, the fair value of the total consideration transfered was N2.94 billion

which represents the fair value of the 5.9 billion shares of Cornerstone Insurance Plc that was issued to the seller, CAPE III.

The table below summarises the information for relating to the Group's subsidiary that has material Non-Controlling Interest ( NCI) before any intra-group

eliminations.

FIN Insurance Company Limited 2016

N'000

NCI Percentage 3.32%

Cash and cash equivalents 2,610,607

Financial assets 1,172,694

Held -To Maturity 43,229

Reinsurance assets 113,466

Deferred acquisition cost 22,226

Other receivables and prepayments 3,956

Investment properties 396,000

Intangible assets 3,797

Property and equipment 1,388,090

Deferred tax asset 40,853

Statutory deposits 300,000

Total assets 6,094,918

Total liabilities 1,159,572

Carrying amount of NCI ( see note 30c) 156,682

11.4 Significant restrictions

The group does not have significant restrictions on its ability to access or use its assets and settle its liabilities other than those resulting from the regulatory

frameworks which the insurance business operates. The regulatory frameworks require all insurance companies to maintain certain levels of regulatory capital

and liquid assets and comply with other ratios such as the solvency margin.

11.5 Discountinued operation

The management has announced a plan to discountinue the operations of Cornerstone Asset Management Limited.The decision is consistent with the Group's

intention to focus its activities on redering insurance business.The Group is actively perfecting the process of winding up of the company and this is expected to

be completed in year 2016. As discribed above, the Group is currently concluding the winding up of Cornerstone Asset Management Limited and the directors of the company expects that

the fear value of assets less costs to wind up will be higher than the aggregagate carrying amount of the related assets and liabilities. Therefore, no impa irment

loss was recognised on the reclassification of assets and liabilities as held for sales as at 310ecember 2015.The major classes of assets and liabilities of

Cornerstone Asset Management Limited at end of the reporting period are as follows:

N'000

Assets classified as held for sales 11,706 Cash and cash equivalents Financial Assets 29,014 Loans and receivables 26,652 Property and equipment 1 Deferred tax assets 64,658

132031

Liabilities of Cornerstone Asset Management associated with assets classified as held for sales Other liabilities 4531 Income tax payable 966

5497

There was no profit and cashflow for the year as the activities of Cornerstone Asset Management Limited have been Closed since january 2016


12 Investment in Joint Venture

Group Company

2017 2016 2017 2016

N'000 N'000 N'000 N'000

1,894,885 1,894,885 1,188,609 1,188,609

1,894,885 1,894,885 1,188,609 1,188,609

CAP Phoenix Cornerstone Limited (CPCL) is a Special Purpose Entity (SPE) between CAP Phoenix and Cornerstone Insurance Plc. The entity was created as a joint

venture to manage a real estate project which involves the construction of office spaces from which the Group plans to earn rental income. Cornerstone Plc also

plans to relocate its Head Office to some floors in this building once it is completed.

As at 31 March 2017, Cornerstone Insurance Plc and CAP Phoenix Limited owned 51% and 49% respectively of the issued share capital of the Company.

Cornerstone Insurance sold 23% of her holding to Fin Insurance Limited, which is approximately 98% owned by Cornerstone Insurance Plc. This arrangement

effectively makes Cornerstone to have approximately 51% ownership of CPCL at the group level with a significant influence over the activities of the entity.

This transaction was accounted for using the equity method of accounting in accordance with the provision of IFRS 11 (Joint arrangements), paragraph 24 which

states that "a joint venturer recognises its interest in a joint venture as an investment and shall account for that investment using the equity method in

accordance with IAS 28 Investments in Associates and Joint Ventures unless the entity is exempted from applying the equity method as specified in that

standard".


Finance lease receivables

The Group entered into finance lease arrangements for certain of its equipments and motor vehicles. All leases are denominated in Haire. The average term of finance leases

entered Into is 3 years.

Amounts receivable under finance leases

Not later than one year

Minimum Lease Payments 2017 N'000

2016 N'000

Present Value of Minimum lease Payments 2017 N'000

2016 N'000

Later than one year and not later than 51 223.595 223.595 229.309 227.494

Later than 5 years 223,595 223.595 229,309 227,494

Less: unearned finance income (0) 223.595 223.595 229.309 227.494

Allowance for uncollectible lease paymen - Specific allowance (223,595) (223695)

229,309 227.494

Impairment Allowance At 1 January 223.525 130,872 Addition dudng the yeartnutu 31) (2.134) 74 896

Al 31 December 2016 221,391 205.768

13 Investment Properties

Group Company 2017 2016 2017 2016 N'000 N'000 N*000 9000

At 1 January 494.030 1.302.994 - 816,994 Additions during the year 526,856 526.856 Transfer to unlisted Investment (816,994) (816,994) Fair value Gainsi(Losses) 8000 Arising on acqueotion

At 30 June 2017 1,020,856 494,000 526,856

Investment properties are stated at fair value, which has been determined based on valuations performed by lide Taiwo & Co (Estate Surveyors and Valuars-f RC/2012/0000000i

In the course of the financial year, the construction contract with Cappa & D'Alberto Plc for the development of the company's investment property located In Oniru, Victoria 1st;

14

14a

Property and equipment

Property and equipment. Group

d Furniture & Property Improve Motor Vehicles Equipment Fittings Total

Cost: 9'000 W000 9'000 9800 6r000 1'4'000

At 1 January 2017 2,023.536 - 739.436 518,621 172,889 3,454,482

Additions during the year 11,926 1.275 58,374 10.341 1,704 83.620

Disposals during the year

At 30 June 2017 2,035,462 1275 797 810 528.962 174,593 3.538,101

At 1 January 2017 291.813 396,067 403.722 128,952 1.218.554

Charge for the year 17.375 (1.2751 60.327 30.571 8.456 115.154

Disposals

Arising from Acquisition

At 30 June 2017 309,188 (1,275) ash,094 434,293 135,408 1,333,708

Carrying Amount:

At 30 June 2017 1,726,274 341,715 94.669 39.185 2,204,393

As At December 31 2016 1,731.723 343.369 114 899 45637 2.235.927

(i) The Group had no capital commitments as at the balance sheet date (2016: Nil).

(iii) No Impairment assessment was performed during the year as there was no indication of impairment on any of the assets in use by the group.

144) Property and equipment- Group 2016

Cost:

Property

N'000

Leasehold Motor Vehicles

N'000 9000

Equipment

N'000

Furniture & Fittings

N'000

Total

N'000

At 1 January 2016 488258 7.275 396.458 296.841 98.713 1 281,545

Additions during the year 6.363 122.470 88,627 26225 243.885

Disposals during the year - (70,148) (577) (28) (70,753)

Arising from Acquisltion 1439,125 111,755 89.542 32,734 1,673,156

At 31 December 2016 1,933,746 1275 560,535 474 433 157 644 3.127.633

At 1 January 2016 85,204 1,275 220.843 229,951 68.458 605,731

Charge for the year 10,607 86,767 37.358 11,436 146.188

Disposals (68.308) (353) (27) (68.888)

Arising from Acquisition 161,391 95.589 85,770 31.162 373,882

At 31 December 2016 257202 1275 334871 352726 111029 1057103

Carrying Amount

As At December 31 7016 1.878.544 225.664 121.707 46.815 2.070.530

As At December 31 2015 403,054 175.815 86,890 30.255 075 811


14 b Property and equipment- Company

Cost:

At 1 January 2017

Additions during the year

Disposals during the year

At 31 December 2017

Accummulated Depreciation:

At 1 January 2017

Charge for the year

Disposals

At 30 June 2017

Carrying Amount:

At 30 June 2017

As At December 31 2016

Leasehold Motor Furniture &

Property Improvement Vehicles Equipment Fittings Total N'000 N'000 N'000 N'000 N'000 N'000

494,621 559,195 411,872 130,888 1,596,576

58,373 10,110 68,483

494,621 617,568 421,982 130,888 1,665.059

106,349 279,657 311,316 93.173 790,495

5,601 56,813 27,314 6,939 96,667

111,950 336,470 338,630 100,112 887,162

382,671 281,098 100,556 30,776 777,897

388,272 279,538 117,863 37,715 806,081

14 b(i) Property and equipment- Company Leasehold Motor Furniture &

Property Improvement Vehicles Equipment Fittings Total

Cost: N'000 N'000 N'000 N'000 N'000 N'000

At 1 January 2016 488,258 1,275 391,529 295,922 98,686 1,275,671

Additions during the year 6,363 122,470 88,627 26,225 243,685

Disposals during the year (70,145) (578) (28) (70,751)

At 31 December 2016 494,621 1,275 443,854 383,971 124,883 1,448,605

Accummulated Depreciation:

At 1 January 2016 85,204 1,275 218,093 229,104 68,433 602,109

Charge for the year 10,607 85,392 37,358 11,416 144,773

Disposals - (68,308) (353) (27) (68,688)

At 31 December 2016 95,811 1,275 235.177 266,109 79,822 678.194

Carrying Amount:

As At December 31 2016 398,810 208,677 117,863 45,062 770,411

As At December 31 2015 403,054 173,436 66,818 30,253 673,561

15 Intangible assets - Group/company

201; 2017 2016

GROUP COMPANY GROUP COMPANY

N'000 N'000 N'000 N'000

Cost:

At 1 January

Additions

Arising from acquisition

At 30 June 2017

196,366 168,503

10,277 10,276

130,744 111,362

65,623 57,141

196,366 168,503 206,644 178,779

Amortisation:

178,779

At 1 January

90,703

91,883 90,703

75,117 101,129

Charge for the year

29,526 9,245

19,594 16,766

Impairment


206,644

At 31 December

120,229 101,129

110,297 91,883

120,229

326,873

Carrying Amount: 240,458

At 31 December 2017

750,4 I

I /At V a ,

16 Statutory Deposits Group Company


2017 2016 2017 2016

N•000 N'000 N'000 N'000

Deposits with CBN 800 000 800.000 500.000 500 000

Analysis Non.Life Business 600,000 300,000 300,000 300,000 Life Business 200,000 200,000 200,000 200,000 Arising from acquisition 300,000

800.000 800,000 500,000 500,000

In line with section 10 (3) of the Insurance Act of Nigeria, a deposit of 10% of the regulatory share capital is kept with the Central Bank of Nigeria. The

amount held will increase or decrease in relation to the amount of paid up share capital in issue. The cash amount held is considered to be a restricted

cash balance.

17 Investment Contract Liabilities Group 2017

N•000

2016 N'000

Company

2017

14'000 2016

N'000

Financial guarantee contracts 3,302,963 2,353.766 3,302,963 2,353,766

At 1 January 2,669,332 1.712,048 2,669.332 1,712,048

Contribution 922,595 1,335.013 922,595 1,335,013

Withdrawals (288,964) (713,413) (288,964) (713,413)

Guaranteed interest 20,118 20,118 At 31 December 3.302.963 2.353,766 3,302.963 2.353,766

Current 3.302.963 2,353,766 3.302.963 2,353,766 Non-current


18.b(i) Carrying amount-Group

Life: Participating life

Gross

2017 N'000

2016 N'000

Reinsurers' asset 2017

N'000 2016 N'000

Net

2017 N'000

2016

N'000

- Life Fund 1.023,373 852,187 200.542 181.286 822,831 670,901

- Claims Outstanding 97,746 757,673 250,351 335.196 (152,605) 422,478

Annuity Fund - - Life Fund Annuity (27,338) 200.338 (27.338) 200.338

Total life 1,093.781 1.810,198 450.893 516.482 642,888 1.293.717

Non-life: Outstanding claims 3,783,625 2,500,060 570.574 3.213,051 2.500.060 IBNR 25.070 (25,070)

Outstanding claims- Takaful 17,582 17,582 Arising from Aquisition 43,810 (43,810)

3,783,625 2,517,642 639,454 3,144,171 2,517,642

Unearned premiums 2,758,820 2,572,591 354,858 1,190,973 2,403,962 1,381,618

Unexpired risks 77,451 41,440 42.201 41,440

Arising from consolidation 69,656 (69,656) - 2,836,271 2,614,031 424,514 1,190.973 2,376,507 1,423,058

Total non-life 6.619,896 5.131,674 1.063,968 1.190,973 5,520,678 3.940.701

Total liabilities 7.713.677 6,941.872 1,514,861 1,707,455 6,163,566 5,234.417

Within one year 7.713,677 6,941,872 1,514,861 1,707,455 6,163,566 5,234,417

More than one year 7.713,677 6,941.872 1.514.861 1.707,455 6.163,566 5,234,417

18.b(ii) Carrying amount-Company

Life: Participating life

Gross

2017 N'000

2016 N'000

Reinsurers'

2017 N'000

asset Net


2016 N'000

2017 N'000

2016 N'000

- Life Fund 1.023.373 852,187 181,286 181.286 842.087 670.901

- Claims Outstanding 97,746 757,673 (4,436) 335,196 102.183 422,478

Annuity Fund -

- Life Fund Annuity (27,338) 200,338 (27,338) 200,338

- Claims Outstanding Total life 1,093,781 1,810,198 176,850 516,482 916,932 1,293,717

Non-life: Outstanding claims 3,236.032 1.824.644 674,812 481,205 2.561,220 1,343.439

IBNR 347372 198 622,874 141,412 (622.874) 205,960

Outstanding claims- Takaful 17,582 - - 3,236,032 2,189,598 1,297,686 622,617 1,938,346 1,549,399

Unearned premiums 2,148,625 2,266.609 536,297 1,190,973 1,612.328 1,075,636

Unexpired risks 77,451 41,440 77,451 41,440

2,226,076 2,308,049 536,297 1,190,973 1,689,779 1,117,076

Total nonlife 5,462,108 4,497,648 1,833,983 1,813,590 3,628,126 2,666,475

Total liabilities 6,555,890 6,307,846 2,010,832 2,330,072 4,545,058 3,960,192

Within one year 6,287,769 6,140,041 1.805,432 2.228,871 4,482.337 3.893,588

More than one year 268.121 167,805 205,400 101.201 62,721 66,604

6,555,890 6,307,846 2,010,832 2,330,072 4,545,058 3,960,192


19 Trade payables

Group Company 2017 2016 2017 2016 N'000 N'000 N'000 N'000

Reinsurance premium payable 305,681 344,221 275,317 344,221 Premium deposit received 108,426 112,299 26,897 108,426

414,108 456,520 302,215 452,648

Within one year 181,473 304,298 168,742 310,870 More than one year 152,222 152,222 105,494 141,778

333,695 456,520 274,236 452,648

20 Other payables

Accrued expenses 363,426 289,330 239,857 167,563 Stale cheques 237,123 187,020 237,123 185,925 Payable to staff 123,739 106,460 123,739 106,460 National Housing Funds 3,433 2,747 3,576 2,668 PAYE 16,111 21,058 14,428 20,837 Witholding Tax 12,164 28,537 15,373 28,537 ECOWAS BROWN CARD - - - Honeywell Oil and Gas ltd. 37,855 37,855 37,855 37,855 SO&U SAACHI 4,967 4,967 4,967 4,967 FORTE ASSET MGT - - .

Other liabilities 227,832 129,481 (410,877) 79,818 1.026,649 807,455 266,040 634,631


21 a Income taxes Group Company

2017 2016 2017 2016

a) Per Statement of Profit or Loss and Other Col

- Recognised in profit or loss:

N'000 N'000 N'000 N'000

Income tax based on the taxable profit/loss for 1 152,047 150,065

Education tax

Information technology development levy(NITD

Current tax charge/(Income) for the year 152,047 150,065

Deferred taxation

Income tax expense

b) Current Tax Liabilities/(Assets) as per Statem

152,047 150,065

At 1 January 414.398 340,539 302.091 246,725

Charge for the year 238,358 204,521

Payment during the year (263,407) (164,499) (198,993) (149,155)


At 31 May 2017 150,991 414,398 103,098 302,091

The charge for income tax in these financial statements is based on the provisions of the Companies Income Tax Act,

CAP C21 LFN 2004 as amended and Education Tax Act, CAP E4 LFN 2004.


21 b Deferred Taxation

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax

liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the

taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. The offset amounts are as

follows:

Group

2017

N'000

2016

N'000

Company 2017

N'000

2016

N'000

Deferred tax assets:

Deferred tax asset to be recovered after more than 12 months

Deferred tax asset to be recovered within 12 months (144,335) 242,583 18,790 187,843

Deferred tax on asset held for sales (386,918) (169,053)

Arising from acquisition - -

(144,335) (144,335 18,790 18,790

The net movement on the deferred income tax account is as follows:

Group Company

2017 2016 2017 2016

N'000 N'000 N'000 N'000

At 1 January 264,122 260,336 187,843 175,804

Charge to profit or loss 3,786

Tax charged to equity net of transfers to retained earnings 12,039

At 31 December 264,122 264,122 187,843 187,843

The charge for income tax in these financial statements is based on the provision of the Companies income Tax Act CAP C21 LFN 2004 as

amended and EducationTax Act. CAP E4 LFN 2004.


22 Employees' Retirement Obligations

Group 2017

N'000

2016

N'000

Company

2017

N'000

2016

N'000

Pensions (outstanding liability) 108 7,523 1,549 7,750

Pension:

At 1 January 8,102 64,295 7,750 7,523

Pension Expense for the reporting period 121141 89149 101913

Payment made during the year (7,994) (177,334) (89,771) (101.686)

Arising from acquisition - -

Net Employees' Retirement Obligations 108 8,102 7,128 7,750

The Company operates defined contribution pension plan based on the New Pension Act 2014.All pension contributions are remitted to the

relevant registered PFAs

Share Capital andShare Premium

Issued capital comprises: 2017 2016 2017 2016 N'000 N'000 N'000 N'000

14,729,507,615 fully paid ordinary shares (31 December 2015: 14,729,507, 7,364,754 7,364,754 7,364,754 7,364,754

Movement in share capital At 1 January 7,364,754 7,364,754 7,364,754 7,364,754

Addition during the year(5,909,497,615 @5010) At 31 December 7,364,754 7,364,754 7,364,754 7,364,754

The total number of issued and fully paid ordinary shares as at year ended 31 December 2015 was 14,729,507,615 (2014: 8,820,010,000)

with a par value of 50k per share.

The additions to the fully paid ordinary shares during the year represent the nominal value of the 5,909,497,615 ordinary shares issued in

respect of CAPE III; being the consideration paid for the acquisition of Fin Insurance Company Limited. See note 11 and note 30a for

additional disclosures on the acquisition of Fin Insurance Company Limited.

Share premium

At 31 December 1,947,167 1,947,166 1,947,167 1.947,166

Treasury shares

At 31 December 48,175 48,175 48,175 48,175

23

23a

23b


23c Contigency reserves

At 1 January

Transfer from retained earnings At 31 December

Group 2017 N'000

1.519.802

118,796

2016 N '000

1,348.770

171 171,032

2017 Company

N1',°5°1°9,802

118,796

N2'001060 1,348,770

171.032

1,638,698 1,519,802 1,638,598 1 519,802

In compliance with Section 21 (1) of Insurance Act 2003, the contingency reserve for non-life insurance business is credited with the greater of 3% of total

premiums, or 20% of the profits. This shall accumulate until it reaches the amount of greater of minimum paid-up capital or 50 percent of net premium.

While for life business, the contingency reserves is credited with an amount equal to 1% of gross premium or 10% of net profit (whichever is greater) and

accumulated until it reached the amount of minimum paid up capital.

23d Retained earnings

At 1 January 98,647 (555,369) (646,290) 499,048

Transfer to contigency reserves (118,796) (199.969) (118,796) (171,032)

Statement of Comprehensive income (866,584) 853.985 (868,087) (797,906)

Dividend paid - (176,400) At 31 December (886,733) 98,647 (1,633,173) (848,290)

24 Net insurance premium income

2017 2016 2017 2016 Non-life insurance premiums 4,509,523 4,827,296 3.550,649 4,339,671

Life insurance premiums 963,837 966,257 963.837 966,257

Halal Takaful Insurance 103,388 124,930 103,388 124.930

Gross written premiums 5.576.748 5,918,483 4,617,874 5,430.858

Investment contract Liabilities

5,576,748 5,918,483 5,430,858

Change in unearned premiums (1,039,722) (1,914,871) (735,509) (1.802,561)

Gross earned premiums 4,537,026 4,003.612 3.882,366 3,628,297

Non-life reinsurance premiums 1.833,365 2,505,132 1,388,359 2.328.437

Life reinsurance premiums 234,727 252,011 234,727 252,011

Takaful reinsurance premiums 546 1.615 546 1,615

Gross written reinsurance premiums 2.068,638 2,758,758 1.623,632 2,582,063

Change in reinsurance unearned premiums (361,593) (1,320,780) (181,423) (1,287,485)

Reinsurers' share of gross earned premiums 1,707,044 1.437,978 1,442,208 1,294,578

Net insurance premium income 2,829,982 2,565 632 2.440.158 2,333,718


26 Fee and commission income

Group

Company

2017

2016

2017

2016 N'000

N'000

N'000

N'000

Reinsurance commissions and profit commissi. 371,413 212.509

275.205 196.593

Group

26 Net Claims expenses

2017

Reinsurance's

Total share Net Gross paid Movement In ou

N'000 N'000 N'000 N'000 N'000 Life business 628,695.4 628,695 (88,772.41) 177,194

Non-life business 1,217,306 915,703 2,133,009 (451,501) 2.129.908 Takaful 44,483 44,483 (3,101) 47.584

1,890.484 915,703 2,806,187 (549,3/4) 2,354.686

Company

26 Net Claims expenses

Life business

Non-life business

Takaful

Gross paid

N'000

628.695

1,169,008

44,483

Movement In ou

N'000

739,305

2017

Total

N'000 628,695

1,908,313

44,483

Reinsurance's share

N'000 (88,772)

(429,312)

(3.101)

Net

N'000 539,923

1.479,002

47,584 1,842,186 7.39.305 2.581.491 (521.185) 2.066,508

2016 Reinsurance's

Total share Net Gross IBNR

N'000 N'000 N'000 N'000 N'000

Life business 1,175 593 1,175 593 - 1,175,593 (212.972) 962,621

Non-life business 1,015,101 813,638 143,419 957,057 (296,970) 660,087

Takaful 55,441 55.441 55,441 55.441

2,246,136 2,044,672 143,419 2,188,091 (609,942) 1,678,149


27 Underwriting Expenses (Fees, commissions and other acquisition expenses)

27(a) Acquisition cost

Group Company

2017 2016 2017 2016

N'000 N'000 N'000 N'000

Aquisition cost- General 598,260 475,110 417,067 391,114

Aquisition cost- Life 133,157 153,527 133,157 153,527

Aquisition cost- Takaful 23,535 23,535

731,418 652,172 550,224 568,177

Changes in deferred underwriting expenses (158,351) (97,750) (85,037) (68,788)

573,067 554,422 465,188 499,389

27(b) Maintenance cost

Maintenance cost- General 266,806 210,763 238,814 202,100

Maintenance cost- Life (5,294) 21,569 (5,294) 21,569

Maintenance cost- Takaful 23,346 657 23,346 657

284,859 232,989 256.867 224,326

27 (c) Investment contract liability cost

Aquisition cost- deposit administration

Maintenance- deposit administration

27,194 23,826 27,194 23,826

27,194 23,826 27.194 23,826

27(d) Guaranteed interest

Total 885,120 811,237 749,249 747,541

28 Investment income Group Company

2017 2016 2017 2016 N'000 N'000 N'000 N'000

28(a) Investment income -Attributable to policyholders fund

Interest income

28(b) Investment income -Attributable toShare holders fund

Dividend income

Interest income

Others

27,467

11,190

(27,808) 10,566

185.949 242,301 317,392

398,791

289,925 409,981

158,141 252,867

28(c) Intesest income-Investment contract liabilities

28d Fair value changes in financial assets-FVTPL 280,733 201,809

28e Operating income

Exchange gain/(Loss) 172,875 2,154,213 163,182 1,798,041

Miscellaneous income 45,595 47,833 43,461 42,727

Income from disposal of PPE 5,082 4,401 5,082 2.025

Other operating income 743

224,295 2,206,447 211,725 1,842,793

2017 2016 2017 2016 N'000 N'000 N'000 N'000


28f Gain on bargain purchase

Business Combinations

Acquisition of FIN Insurance Company Limited

On 16 December, 2015 (the acquisition date), the Company acquired through a share for share exchange, 96.68% of the Voting rights in the Fin

Insurance Company Limited, a company involve in Non- Life Insurance business.

As a result, FIN Insurance Company Limited became a subsidiary of Cornerstone Insurance Plc as the company obtained control of FIN

Insurance Company Limited. The Company intends to expand the earning power in the insurance business by gaining more customers in the

markets and also to increase its eminence.

The following table summarizes the estimated fair values of the consideration paid, the non- controlling interests and all the assets and

liabilities assumed at the date of acquisition.

Fair value of consideration paid 2,954,749

Fair value on non-controlling interest (NCI) 156,682

Total 3111430.681

Fair value of assets acquired and liabilities assumed

Cash and cash equivalents Financial assets Held -To Maturity Trade receivables Reinsurance assets Deferred acquisition cost Other receivables and prepayments Investment properties Intangible assets Property and equipment Deferred tax asset Statutory deposits

Total assets

Liabilities Insurance contract liabilities Trade payables Provision and other payables Current income tax liabilities Deferred tax liability Retirement benefits obligation Total liabilities

Net Assets

Gain on bargain purchase

The business acquisition resulted in a bargain purchase transactions because the fair values of the assets acquired and liabilities assumed

exceeded the total fair values of the consideration paid and the fair of other non-controlling interest held by N1.8 billion. The Company

recognized the amount as a gain and recorded the amount separately as gain on bargain purchase in the consolidated Statement ofprofit or

loss for the year ended 31 December 2015.

Although the entity effectively gained control of Fin Insurance Company Limited on 16 December, 2015,the amounts of revenue and profit or

loss since the acquisition date and pro formal results of operations for the above business combinations are not presented because the effects

are not material to the consolidated financial statements.

The balances per the statement of the financial position have been consolidated in this financial statements.

28d Non-Contolling Interest in Equity

Group

2015

Arsing from acquisition during the year

156,682

Non controlling interest represents 3.32% (108,560,000 ordinary shares) of the equity holding of the Company's Subsidiary, FIN Insurance

Company Limited.

29


Allowance for impairment losses

Group Company 2017 2016 2017 2016

N'000 N'000 N'000 N'000

Allowance on investment in subsidiary (note 11.1)

Allowance on finance lease (note 12)

Impairmet of financial assets

Allowance on receivable (note 8.1)

Allowance on other assets (note 8b)

30 Management expenses

Depreciation (note 14) 125,982 109,821 105,417 88,288

Amortisation of computer software (note 15) 8,947 9,595 8,260 9,019

Directors' costs 22,974 42,551 13,720 39,789

Advertising and corporate promotional expenses 28,383 103,836 23,278 98,881

Administrative expenses 172,591 192,116 133,463 137,568 Rents and rates 45,648 36,095 35,674 29,943 Consultancy fees 96,356 155,716 63,645 144,052

Maintenance expenses 155,817 93,181 112,793 74,974

Staff training and development 9,532 36,436 8,704 34,219

Auxiliary staff costs 135,394 117,488 110,746 90,964

Statutory due 45,110 43,604 40,373 40,826

Audit fees 17,500 7,335 12,000

AGM Expenses 23,235 4,789 23,235 4,789

Subscription 8,818 9,618 6,124 5,270 Others 25,967 47,007 15,526 32,579

Wages and Salaries*** 706,323 645,878 596,524 539,966

Defined contribution pension costs 36,226 32,321 31,934 27,719

Transaction cost

1,664 803 1,687,387 1,341 418 1,398,846

*•*Wages and salaries is made up of:

Salaries 706,323 645,878 596,524 539,966

Allowances 36,226 32,321 31,934 27,719

Total 742,549 678,199 628,459 567,686

*Transaction costs relates to expenses incurred in connection with the acquisition of Fin Insurance Company Limited. These costs include

finders fees, legal fees and advisory fees.

31 Finance Costs

Interest on Financial liabilities at amortised cost 41,582 35,775 - 0

Bank charges 8,612 5,353 4,150 4,579

50,194 41,128 4,150 4,579


32 Income tax expense/income

Current tax expense/(income) in respect of the current year Under provision of tax in prior years Education levy

Information technology development levy (ITDL)

Total current tax

Group Company 2017 2016 2017 2016 N'000 W000 N'000 N'000

1,807 3.450

1,607 3,450

Deferred tax expense recognised in the current year

Income tax expense 1,807 3,460

33 Profit for the year

Profit for the year has been arrived at after charging/(crediting)

2017 2016 N'000 N'000

Net foreign exchange gain

Depreciation of property and equipment

Amortisation of intangible assets

Staff costs and other expenses

Auditors' remuneration

Impairment on receivables

NAICOM Levy

34 Share-based payments

Employee share option plan of the Company

Details of the employee share option plan of the Company:

of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees with more than five years'

service with the Group may be granted options to purchase ordinary shares.

Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient

on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of As at 31st December 2015, no staff of the group had exercised the options.

35 Earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows.

Group Company 2017 2016 2017 2016

per kobo per hobo per kobo per kobo

Earnings per share- basic & diluted

10

14

36.1 Basic/diluted earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows.

2017 N'000

2016 N'000

2017 N*000

2016 N'000

Profit for the year attributable to owners of the Company (866.583) 1,138,978 (868,086) 796.856

Earnings used in the calculation of basic earnings per share (866,583) 1,138,978 (868,086) 796,856

Profit for the year from discontinued operations used in the calculation of

basic earnings per share from discontinued operations

Others

Earnings used in the calculation of basic earnings per share from continuing

operations (866,583) 1,138,978 (868,086) 796,856

Diluted earnings provides a measure of the interest of each ordinary share in the performance of an entity while giving effect to all dilutive

potential ordinary shares outstanding during a period. There exist no potential ordinary share of the company outstanding during the year

ended 31 December, 2015 and the comparative year, consequently diluted and basic earnings per share are the same.

Weighted average number of ordinary shares for the purpose of basic earnings per share

Treasury shares

2017 2016

14,729,508 8,820,010

(96,350) (96.3501

14 633,158 8,723,660

cornerstone insurance plc · 2017-07-31 · cornerstone insurance plc consolidated and separate...

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