cornerstone insurance plc · 2017-07-31 · cornerstone insurance plc consolidated and separate...
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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
CORNERSTONE INSURANCE PLC
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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CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
- 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
CORNERSTONE INSURANCE PLC
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).
CORNERSTONE INSURANCE PLC
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.
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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".
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
Arising from acquisition
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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)
Arising from acquisition
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.
CORNERSTONE INSURANCE PLC
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.
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
CORNERSTONE INSURANCE PLC
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
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