Cornerstone RC 163170

CORNERSTONE INSURANCE PLC

UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2020

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

-16 Lew s w‘roes iser Corpoation Ilnye

Oft Asosirde

Company information and statement of accounting policies

1.1 Reporting entity

Cornerstone Insurance Plc (the Company) was incorporated on 26 July 1991 as a private limited liability company and converted to a public limited liability company an

17 June 1997. The Company's principal activity continues to be the provision of risk underwriting and related financial services to its customers. Such service includes the

provision of Life and Non-life insurance services for both corporate and individual customers.

The Company has two subsidiaries - Fin Insurance Company Limited & Cornerstone Leasing and Investment Limited. Cornerstone Leasing and Investment Limited

commenced operations on 1 July 2004 and provides convenient asset acquisition options to both corporate organisations and individuals. Fin Insurance Company tirnited

was incorporated in 19E1 as Yankari Insurance Company Limited. The name was changed to Fin Insurance Company Limited in 2008. The main activity of the subsidiary is

the provision of General Insurance business. This includes Marine Insurance, Motor Insurance, Accident Insurance, Fire Insurance and other Non-life in:Luanne services.

The Company currently has authorized share capital of M7.5 billion divided into 15 billion units of ordinary shares of 50k each with a fully paid up capital of N7.36 billion.

The Company currently has jts corporate head office at Victoria Island, Lagos with branches spread across major cities and commercial centres in Nigeria.

These consolidated financial statements comprise the financial records of Company and its subsidiaries (together referred to as "the Group").

1.2 Principal activities

The Group is engaged in various business lines ranging from property-casualty insurance, life/ health insurance and leasing. The Group's products are classified at

inception, for accounting purposes, as either Insurance contracts or Investment contracts

A contract that is classified as insurance contract remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during

this period; unless all rights and obligations are extinguished or expire. Investment contracts can, however, be reclassified as insurance contracts after inception if

insurance risk becomes significant.

1.3 Going concern

These consolidated and separate financial statements have been prepared using appropriate accounting policies, supported by reasonable Judgments and estimates. The

Directors have a reasonable expectation, based on an appropriate assessment of a comprehensive range of factors, that the Group has adequate resources to continue

as going concern for the foreseeable future and has no intention or need to reduce substantially its business operations. Liquidity ratio and continuous evaluation of

current ratio of the Group is carried out to ensure that there are no going concern threats to the operation of the Group.

2.1 Basis of accounting

Statement of compliance

The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting Standards (1FRSs) as issued by the

International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act, Cap C.20, Laws of the Federation of Ni ge ra, 2004,

the Financial Reporting Act, 2011, the Insurance Act 2003 and relevant National Insurance Commission (N AI COM) circulars.

2.2 Functional and presentation currency These consolidated and separate financial statements are presented in Nigerian Na ira, which 15 the Group's and Company's functional and presentatic n currency Except

as indicated, financial information presented in Nava has been rounded to the nearest thousand.

2.3 Basis of measurement

These consolidated and separate financial statements have been prepared under the historical cost basis except for the following items which are measured on an

alternative basis on each reporting date.

• financia l instruments a t fair va l ue through prof i t or loss measured affair value.

• available-for-sale financial instruments measured at fair value

• insurance contract liabilities measured at present value of projected cash, flows

• investment properties measured at fair value

2.4 Use of estimates and Judgements

The preparation of financial statements in conformity with 1FRSs requires management to make judgements, estimates and assumptions that affect the application of

policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

Information about significant areas of estimation uncertainties and critical Judgements in applying accounting policies that have the most significant effect on the

amounts recognised in the consolidated and separate financial statements are described in note 4.

2.5 Reporting period

The financial statements have been prepared for a 3-month period from 1 January 2020 to 31 March 2020.

26 Changes in accounting policies

Except for the changes below, the Group has consistently applied the accounting policies as set out in note 3 to all periods presented in these financial statements. The

effective interpretations and standards that have been adopted for first quarter ended 31 March 2020 are as follows:

Ill IFR3 16 /daavis

The Company has adopted 1FRS 16, "Leases" as issued by the 145B in July 2014 with a date of transition of 1 January 2019, which resulted in changes in accounting

policies The adoption of [FRS 16 did not have a material impact on the company's financial statements as the company's leases are mostly short term and low value

in nature and the Company has elected to apply the exemption for such leases.

(n) treatments (IFRIC 23)

The amendment clarifies how to determine the accounting tax positron when there is uncertainty over income tax treatments.

The interpretation requires an entity to:

determine whether each tax treatment should be considered independently or whether some tax treatments should be considered together, and assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings

• If yes, the entity should determine its accounting tax position consistently with the tan treatment used or planned to be used in its Income tax filings

* If no, the entity should reflect the effect of uncertainty in determining its accounting tax position. The Group has adopted IFRIC 23 effective I .anua ry 2019 The

adoption did not result in a material Impact on the Group's financial statements.

2 7 Effective standards not yet adopted by the Group

IFRS 9 Financial Instruments

IFRS 9 became effective for financial year commencing on or after I January 2018 but the standard has not been adopted in preparing these financial statements as the

Group elected to adopt the deferral approach available to insurance companies.

IFRS 9 is part of the IASB's project to replace IAS 39 Ions:non, In allIPIO PIS Retogninon and Measurement IFRS 9 includes revised guidance on the r lassilicatron and measurement of financial instruments, a new expected crest loss model for calculating impairinent on financial assets, and new general hedge accour ling requirements. It also carries forward the guidance on recognition and de- recognition of fmancial Instruments from IAS 39.

IFRS 9 replaces the multiple classification and measurement models in IAS 39 with a single model that has only three classification categories ammo( sad cost, fart Yalue through Oct and fair value through profit or loss

furthermore for non-derivative ftnanclal Irabtlities designated at falrvalue through profit or loss, It requires that the credo risk component of fair value gains and losses be separated and included in OCI rather than in the income statement.

Cla 'cation and Measurement

The standard uses one primary approach to determine whether to measure a financial asset at amortised cost, fair value through other cornprehensio income (FVTOCIL

or fair value through profit or loss IFVTPL) as against the IAS 39 classifications of FVTPL, Available-for-Sale (AFS) financial assets, Loans and Receivables and Held-to-

Maturity INTO) investments. The Group's business model is the determining factor for classifying its financial assets. Financial assets are meaasured at amortised cost if

the business objective is to hold the asset in order to collect contractual cash flows that are solely payments of principal and interest (SRN. Financial assets are

measured at fair value through OCI if the business's objective is to collect contractual cash flows as well as cash flows from selling the asset.

The

a

final category of financial assets are those assets where the business model is neither to hold for solely to collect the contractual cashflows nor selling to collect the

cashflows and therfore classified as at fair value through profit or loss. These are financial assets that are held with the objective of trade and to realize fair value

changes. The Group can also designate some of its financial assets at fair value through profit or loss if this helps to eliminate an accounting mismatch.

Impairment

IFRS 9 also requires that creek losses expected at the balance sheet date (rather than those incurred as at year-end) are reflected at the date of reporting on all financial

assets This approach is an expected credit loss (ECL( model as opposed to the incurred credit loss model under IAS 39. This approach does not require a credit loss event

to have occurred before the recognition of the loss at the reporting date. The amount of the expected credit losses is expected to be updated at each reporting date to

reflect changes in credit risks since initial recognition.

CO. a determined by multiplying the Exposure At Default (EAD) by the Probability of Default (PD) and the Loss Given Default (LGD).

The Group and Company do not currently have an Expected Credit Loss (ECL) model for financial assets; hence the potential impact of the ECL impairment on profit or

loss and equity has not been estimated. However, it is not expected that the impact would be significant due to the nature of the financial assets in the Group and

Company.

Amendments to IFRS 4 Appion,, /1-Al 9J s 1.1 4 onuran

In September 2016, the IASE. published an amendment to IFRS 4 which addresses the concerns of insurance companies about the different effective dates of IFRS 9

;Manson muniments and the forth-coming new insurance contracts standard, (FRS 17. The amendment provides two different solutions for insurano companies a

temporary exemption from IFRS 9 (I e the deferral Lipp ouch') for entrees that meet specific requirements (applied at the reporting entity leseD, and the 'overlay

approach' Both approaches are optional The effective date 15 I January 201g or when the entity first applies IFRS 9 IFRS 4 (including the amendments) writ be

superseded by the forth-coining new Insurance contracts standard, IFRS 17 Accordingly, both the temporary exemption and the Wort lay approat arc expected to cease

Si, he applicable when the new insurance standard becomes effective

2

In response to concerns regarding ternporary accounting mismatches and volatility, and Increased costs and cow plenty, the IASES issued amendments to IFRS 4

insurance Contracts

line amendments reduce the impacts, but companies need to carefully confider their IFRS 9 implementation approach to decide if and bow to use them The wo optional

solutions raise sonic constderations Glitch require detailed analysis and management Ludisement

The optional solutions are

I emporary exemption from IFRS 9 - Some Companies will be permitted to continue to apply IAS 39 rotanctal Inamorata Recoatutcon and tdecostranert

qualify for this exemption the company's activities need to he predominantly connected with insurance. A company's activities are predominantly connected with

nsuiance IC and only if

(a) the amount of as insurance liabilities is fignificant compared with its total amount of liabilities, and

(5) the percentage of its [Lath fates connected with insurance relative to its total amount of liabtlates

III greater than 90 percent or

(n) less than or equal to 90 percent but greater than 80 percent, and the Company does not engage in a scgnifi cant activity unconnected with Insurance

Li abi hues connected with insurance Include investment connects measured at FVTIM„ and liabilities that arise because the insurer issues, or fulfils obligator

from, these contracts (such as deferred tax liabilities arising on its insurance contracts)

2. Overlay approach -This solution provides an overlay approach to alleviate temporary accounting mismatches and volatility. For designated financial assets, a

company is permitted to reclassify between profit or loss and other comprehensive income (OCI I, the difference between the amounts recognised in profit or loss under

IFRS 9 and those that would have been reported under IAS 39 .

With respect to !FRS 9 above, the Group is eligible to apply 1E55 9 deferral approach since IFRS 9 has not been previously applied by the Group and the activities of the

Group are predominantly connected with insurance. To determine if the Group's activities are predominantly connected with insurance, The Group has assessed the

ratio of the Group's liabilities connected with insurance - including investment contracts liabilities - conn pared with it's total liabilities. See the assessment below:

LIABILITIES

AS REPORTED

(A)

Admissible for

Predominance Test

(B)

AS REPORTED

(A)

Adm issible for

Predominance Test

(B)

Group Group Company Company

31 December 2015 31 December 2015 31 December 2015 31 December 2015

Investment contract liabilities 1,712,048 1,712,048 1,712,048 1,712,048

Insurance contract liabilities 5619,756 5,619,756 4,862,365 4,862,365

Trade payables 384,017 384,017 331,222 331,222

Other payables and accruals 826,647 616,758

Current tax liabilities 340,539 246,725

Deferred tax liabilities

Employees benefit obligations 7,523 7,523

Liabilities directly associated with assets classified as

held-for-sale 5,497 - — —. 4 tea, es. , °pc cac

Score = (B/A)% 86 7% 888%

Given a score of 86.7% for the Group (Company 88 8%1, we assessed whether the Group engages in a significant activity unconnected with insurance. Based on our

assessment, we concluded that the Group does not engage in a significant activity unconnected with Insurance since majority of the activities from which the Group

earns income and Incur expenses are Insurance-related

The Group has elected to apply the temporary exemption from IFRS 9 (deferral approach) and qualifies for the temporary exemption based on the foilowing:

a) Its activities are predominantly connected with insurance contracts;

b) As at 31 December 2015, which is the reporting date that Immediately precedes 1 April 2016, the carrying amount of its flab-dl ies arising from insrea ace contracts was

N7.715b (Company: PI6.91b) which was 86.8% (Company: 88.8%) of the total carrying amount of all its liabilities as at that date.

c( The Group's activities have remained the same and are predominantly connected with insurance contracts. The majority of the activities from which the Group earns

income and incur expenses are insurance-related.

Based on the above, the Group will apply IFRS 9 together with !FRS 17 in 2022

Fair value disclosures

i) Financial assets with contractual terms that give rise to cash flows that are solely payments of principal and interest (SIMI)

The Group's financial assets with contractual terms that give rise to cash flows that are solely payments of principal and interest on the principal amopt outstanding are

as follows:

a) Cash and cash equivalents

bi Available-for-sale financial assets (Bonds)

c) Loans and receivables

dl Held-to-Maturity financial assets

e) Trade receivables

f) Reinsurance assets (less prepaid reinsurance and reinsurers' share of outstanding claims and IBNR)

g) Other receivables (only financial receivables)

ill financial assets with contractual terms that do not give rise to cash flows that are solely payments of principal and interest

These are financial assets that meet the definition of financial assets designated at fair value through profit or loss in line with IFRS 9, or that are managed and whose

performance is evaluated on a fair value basis. These are

a) Fina noel assets measured though profit and loss (Investment in MTN shares)

b) Equity securities and Investment funds

2.9 New standards, interpretations and amendments to existing standards not yet adopted by the Group

The following new or revised standards or amendments which have a potential impact on the Group are not yet effective for the year ended 31 March 2020 and have

not been applied in preparing these financial statements. The Group is currently assessing the impact of the new or revised standards or amendments.

Pronouncement Summary of the requirements and impact assessment Effective date

IFRS 17 supersedes IFRS 4 Insurance Contracts and aims to increase

comparability and transparency about profitability. The new standard

introduces a new comprehensive model ("general modelfor the recognition

and measurement of liabilities arising from insurance contracts. In addition, it

includes a simplified approach and modifications to the general measurement

model that can be applied in certain circumstances and to specific contracts,

such as:

- Reinsurance contracts held;

- Direct participating contracts; and

- Investment contracts with discretionary participation features.

Under the new standard, investment components are excluded from

Insurance revenue and service expenses. Entities can also choose to present

the effect of changes in discount rates and other financial risks in profit or loss

or OCI

The new standard includes various new disclosures and requires additional

granularity in disclosures to assist users to assess the effects of insurance

contracts on the entity's financial statements.

The standard is effective for annual periods beginning on or after 1 January

2022. Early adoption is permitted.

The Group is in the process of determining the impact of the standard. The Annual periods beginning on or after 1 January

IFRS 17 lawiran, Contrans Group will adopt the standard for the year ending 31 December 2022. 2022

These amendments require the full gain to be recognised when assets

transferred between an investor and its associate or pint venture meet the

definition of a 'business' under IFRS 3 Business Combinations, Where the

assets transferred do not meet the definition of a business, a partial gain to

the extent of unrelated investors interests in the associate or one venture is

recognised. The definition of a business is key to determining the extent of the

Sale or Contribution of Assets

between an investor and its Associate

or Joint Venture:

gain to be recogn ised.

This amendment is not expected to have a significant impact on the Group's The effective date of this amendment has been

(Amendments to IFRS 10 and IAS 28) financial statements. deferred indefinitely by the IASEl.

3 Significant Account Policies

Accounting policies are the specific principles, bases, conventions, rules and practices applied by en entity in preparing and presenting financial statements.

Except for the changes explained in note 2.6 above, the accounting policies set out below have been consistently applied to all periods presented in these financial

statements

3.1 Basis of Consolidation

Business combination and goodwill

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is

generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related

to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised 'n profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial

instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration rs remeasured at

fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement

ent with the

entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether it has control if there are changes w or more of

the elements of control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead to the

Group having power over an investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control

ceases.

Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related Non-controllling interest (NCI) and other

components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is

lost.

Non. controlling interests Non-controlling Interest (NCI) are measured at their proportionate share of the acquiree's identifiable net assets at the acquisition date.

Transaction eliminated on consolidation penses (except for for& rr gn cuency transaction gains or losses) arising from intraigroup

Intra-group balances and transactions, and any unrealised income and ex

transactions, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2 Insurance contracts

(i) Classification IFIVS 4 requires contracts weitten by insurers to be classified as either 'insurance contracts' or 'investment contracts' depending on the level of insurance risk transferred

Insurance contracts are those contracts when the insurer has accepted significant insurance risk from another party (the policyholders) by agreeing to compensate the

policyholders if a specified uncertain future event (the insured event) adversely affects the policyholders. The Group's insurance contract liabilities represent its liability to the policy holders. Liabilities for unpaid claims are estimated on case by case bas s The liabilities

recognised for claims fluctuate based on the nature and severity of the claim reported. Claims incurred but not reported are determined using statistical analyses and

F in

Group deems liabilities reported as adequate. The liability comprises reserves for unexpired risk, outstanding claims and incurred but not reported claims.

Financial guarantee contracts are recognised as insurance contracts. Liability adequacy testing is performed to ensure that the carrying amount of the liability for

financial guarantee contracts is sufficient. At the end of each accounting period, the insurance contract liability is reflected as determined by the actuarial valuation report.

The Group also insure events associated with human life (for example, death or survival) over a long duration and has short term life insurance contracts which protect

the Company's policyholders from the Cortequences of events (such as death or disability) that would affect the ability of the insured or his/her dependants to maintain

their current level of income Guaranteed benefits paid on occurrence of the specified insurance event are either fixed or linked to the extent of the economic loss

suffered by the insured or the beneficiary.

A number of insurance and investment contracts contain a Discretionary Participation Feature (DPF) This feature entitles the holder to receive,

33 a supplement to

guaranteed benefits, additional benefits or bonuses.

• portion of the total contractual

• contractually at the discretion of

• That are contractually based on.

pool of contracts or a specified

investment returns on a specified

Company, fund or other entity

Long-term insurance business (i.e. long-term insurance contracts with fined and guaranteed terms, and long-term insurance contracts without hoed terms and with

discretionary participation features -OFF) includes insurance business of all or any of the following classes, namely; life insurance business, superannuation business and

business incidental to any such class of business. For contracts with OFF features, the actuary calculates the bonus due to the policy holders and is accounted for as part

of the insurance or investment contract liabilities.

Life assurance business means the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or in

specified sickness only) or on the happening of any contingency dependent on the termination On

continuance of human life (either with or wo hoot provision for a

benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for a term de pertlent on the termination

or continuation of human life and any contract securing the grant of an annuity for a term dependent upon human life,

(el Recognition and Measurement of Insurance contracts

Premium

Premium income is recognised on assumption of risks. Gross written premiums for insurance contracts comprise premiums received in cash as well as premiums that have been received and confirmed as being he on

behalf of the Company by insurance brokers and have been duly certified Gross written premiums are stated gross of taxes payable and stamp duties that are payable

to relevant regulatory bodies respectively. Unearned premiums represent the proportions of premiums written in the year that relate to the unexpired risk of policies in force at the reporting date.

Gross premium income is gross written premiums less changes in unearned premium.

Claims d during the financial year and changes in the provision for outstanding claims Claims and claims Claims incurred comprise claims and claims handling expenses incurre

handling expenses are charged to profit or loss as incurred.

For long term insurance business, benefits are recorded as an expense when they are incurred, Claims arising on maturing policies are recognized when the claims

become due for payment Death claims are accounted for on notification. Surrenders are accounted for on payment.

Outstanding claims represent the estimated ultimate cost of settling all claims arising from incidents occurring prior to the end of reporting date, bu' not settled at that

date. Adjustments to the amount of claims provisions established in prior years are accounted for prospectively in the financial statements for the period in which the

adjustments are made, and disclosed se perately If material

Claims and loss adjustment expenses are recognised in statement of profit or loss when incurred based on the estimated liability for compensation owed to contract

holders or third parties damaged by the contract holders.

Salvage and subrogation reimbursement

Some insurance contracts permit the Group to sell (usually damaged) property acquired in settling a claim (for example salvage). The Company may also have the right

to pursue third parties for payment of some or all costs (for example subrogation).

Salvaged property is recognized in other assets when the amount that can reasonably be recovered from the disposal of the property has been established and salvage

recoveries are included as part of claims recoveries. Subrogation reimbursements are recognized in claim recoveries when the amount to be recovered from the liable

third party has been established.

(iii) Insurance contract liabilities

These represent the Company's liabilities to the policyholders. They comprise the unearned premium, outstanding claims and the incurred but no' reported claims. At

the end of each reporting period, these liabilities are reflected as determined by an actuarial valuation.

Unearned premium provision

The provision for unearned premiums represents the proportion of premiums written in the periods up to the accounting date that relate to the unexpired terms of

policlies in force at the end of the reporting date. This is estimated to be earned in subsequent financial periods, computed separately for each

It urance contract using

a time apportionment basic The change in the provision is recorded in the income statement to recognise revenue over the period of the risk.

Reserve for unexpired risk A provision for additional unexpired risk reserve is recognised for an underwriting year where it Is envisaged that the estimated cost of claims and expenses exceed the

unearned premium provision.

Reserve for outstanding claims Outstanding claims represent the estimated ultimate cost of settling all claims arising from incidents occurring prior to the end of reporting date but not settled at that

date.

Reserve for incurred but not reported claims (If IHR) A provision is made for claims incurred but not yet reported as at the end of the financial year. This provision is based on the liability adequacy test report from the

registered actuary engaged by the Group.

Liability adequacy test

At the end of each reporting period, liability adequacy tests are performed to ensure that material and reasonably foreseeable losses arising frc m existing contractual

obligations are recognised. In performing these tests, current best estimates of future contractual cash flows, claims handling and administration expenses. investment

income backing such liabilities are considered. Long-term insurance contracts are measured based on assumptions set out at the inception of the contract Any

deficiency is recognised in profit or loss by increasing the carrying amount of the related insurance liabilities.

The Liability Adequacy Test (LAT) was carried out by a recognized firm of actuaries, O&A Hedge Actuarial Consulting (FRC/2019/00000012909)

Actuarial valuation An actuarial valuation of the insurance contract liabilities is conducted annually to determine the liabilities on the existing policies as at the date of the valuation.

Actuarial valuation of the life fund is conducted annually to determine the liabilities on the existing policies and the adequacy of the assets representing the insurance

fund as at the date of valuation. All surpluses and deficits arising therefrom are charged to profit or lost. See note 43 for further details on actuarial valuation techniques,

methodologies, assumptions etc.

3.3 Revenue recognition

(I) Gross premium written

Gross premium written comprises the premiums on insurance contracts entered into during the year, irrespective of whether they relate In whole or .n part to a later

accounting period. It is recognized at the point of attachment of risk to a policy, gross of commission expense, and before deducting cost of reinsurance cover and

unearned portion of the premium. Gross premium written and unearned premiums are measured in accordance with the policies set out in 3.254 and 3.2(ii) of the

statement of accounting policies respectively.

(ill Gross premium income This represents the earned portion of premium received and is recognized as revenue including changes in unearned premium. Premiums are earned from the date of

attachment of risk, over the insurance period, based on the pattern of risk underwritten. Outward reinsurance premiums are recognized as an expense in accordance

with the pattern of risk reinsured.

(ii) Fees and commission income Fees and commission income consists primarily of insurance agency and brokerage commission, reinsurance and profit commissions, policyholder administration fees

and other contract fees. Reinsurance commissions receivable are deferred In the same way as acquisition costs. All other fee and commission income are recognized as

the services are provided.

(iv) Investment income on financial assets Investment income on financial assets is composed of interest income and dividend income.

Interest income is recognized in profit or loss as it accrues and is calculated by using the effective interest rate method. Fees and commissions that are an integral part of

the effective yield of the financial asset or liability are recognized as an adjustment to the effective interest rate of the instrument. The effective interest rate is the rate

that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net

carrying amount of the financial asset or financial liability.

Dividend income from investments is recognized when the shareholders' rights to receive payment have been established.

(v) Realized gains and losses and unrealized gains and losses

Realized gains and losses on investments include gains and losses on financial assets and investment properties. Gains and losses on the sale of investments are

calculated as the difference between net sales proceeds and the original or amortized cost and are recorded on occurrence of the sale transaction.

Unrealized gains or losses represent the difference between the carrying value at the year end and the carrying value at the previous year end or purchase value during

the year, less the reversal of previously recognized unrealized gains and losses in respect of disposals during the year

Other operating income represents income generated from sources other than premium revenue and investment income. It includes rental income and profit on lad

Other operating income

disposal of property and equipment. Rental income is recognized on an accrual basis.

3 4 Expense recognition

(i) Claims expenses

Claims expenses consist claims and claims handling expenses incurred within the reporting period, less the amount recoverable from the reinsurance companies

Insurance claims and claims incurred

Gross claims consist benefits and claims paid/payable to policyholders, which include changes in the gross valuation of insurance contract liabilities, except for gross

change in the unearned premium provision which are recorded in premium income it further includes internal and external claims handling cost', that are directly

related to the processing and settlement of claims. Amounts receivable in respect of salvage and subrogation are also considered.

GM Underwriting "Pen",

Underwriting expense include acquisition costs and maintenance expense. Acquisition costs comprise direct and indirect costs associated with the writing of insurance

contracts These include commission expenses and other technical expenses. Maintenance expenses are expenses incurred in servicing existing policies and clients. All

underwriting expenses are charged to profit or loss as they accrue or become payable.

(iv) Management expenses Management expenses are recognised in profit or loss when goods are

received or services rendered. They are expenses other than claims, maintenance and

underwriting expenses and include employee benefits, depreciation charges and other operating expenses

3.5 Reinsurance contracts Contracts entered into by the Company with reinsurers under which the Company is compensated for losses on one or more contracts issued by the Company and that

meet the definition requirements for insurance contracts are reclassified as reinsurance contracts. Insurance contracts entered into by the Company under which the

contract holder is another insurer are covered as insurance contracts.

Reinsurance assets and liabilities

Reinsurance assets consist of short-term balances due from reinsurers, as well as longer term receivables that are dependent on the expected c aims and benefits arising

under the related reinsured insurance contracts. Arnounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the

reinsured msurance contracts and in compliance with the terms of each reinsurance contracts. Reinsurance liabilities are primarily premiums payable for the reinsurance

contracts and are recognized as an expense when due.

Reinsurance expense Reinsurance expense represents outward reinsurance premiums and are accounted for in the same accounting period as the premiums for the related direct insurance

or reinsurance business assumed.

Prepaid reinsurance premiums Prepaid reinsurance premiums are those proportions of premiums written in a year that relate to periods of risk after the statement of financial position date. Uncanny)

,

reinsurance premiums are deferred over the term of the underlying direct insurance policies for risks-attaching contracts and over the term of the reinsurance contract

3.26 Segment reporting

allocates resources to the segment and assesses their performance thereof. Operating segments are identified and reported in consonance with the internal reporting policy of the Group that are regularly reviewed by the Chief Executive who

The Group's reportable segments, for management purpose, are

organized into business units based on the products and services offered as follows: • Life insurance

• Takaful insurance • Fin Insurance

• Leasing

3.27 Contingent liabilities and assets

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or

non-occurrence of one or more uncertain future events not wholly within the control of the Group or the Group has a present obligation as a result of past events which is not recognized because

it is not probable that an outflow of resources will be required to settle the obligation; or the amount cannot be reliably estimated. Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability may crystallize.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more

uncertain future events not wholly within the control of the Group. Contingent assets are never recognised but are

disclosed in the financial statements when they arise.

3.28 Share capital and other reserves

Share capital

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

Where any of the Group entities purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the Company's equity holders.

Where such shares are subsequently sold, reissued or otherwise and the related income tax effects, disposed of, any consideration received is included in equity attributable to the Company's equity holders, net of any directly attributable incremental transaction costs

Share premium

This represents the excess amount paid by shareholders on the nominal value of the shares. This amount is db unbuta bre to the shareholders at their discretion. The share premium is classified as an equity instrument in the statement of financial position. Treasury shares

Own equity instruments which are acquired (treasury shares)are deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the Group's own equity instruments. Any difference between the carrying amount and the consideration is recognised in other capital reserves.

Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them respectively.

Retained earnings/Accumulated losses

as part of equity in the statement of financial position.

Retained earnings/Accumulated losses comprises undistributed profit/

)loss) from previous years and the current year Retained earnings/Accumulated losses is classified

Contingency reserve

The Nigerian Insurance regulations require the Group to make an annual appropriation to a statutory reserve. As stipulated by section 21(1) of Insurance Act 2003, the contingency reserve for Non-life insurance business is credited with

the greater of 3% of total premium, or 20% of the net profits. This shall accumulate until it reaches the greater of minimum paid-up capita I

and 50% percent of the net premium. For life business, the contigency reserve is credited with an amount equal to 1% of gross premium or 10% of net profit (whichever N greater) and accumulated until it reaches the amount of re imimum paid-up capital.

ARS fart- value reserve

The fair value reserve comprises the cumu l e net change in the fair value of available-for-sale financial assets until the assets are derecognised or impaired.

17

for losses-occurring contracts.

Insurance claims recoverable from reinsurance cornpanies

Insurance claims recoverables from reinsurance companies are estimated in manner consistent with the outstanding claims provision and claims incurred associated

with the reinsurer's polices and are in accordance with the related insurance contract. They are measured at their carrying amount less impairment charges. Amounts

recoverable under reinsurance contracts are assessed for impairment at each reporting date. If there Is objective evidence of impairment, the Company reduces the

carrying amount of its insurance assets to its recoverable amount and recognizes the impairment loss in profit or loss as a result of an event that occur red after its initial

recognition, that the Company may not recover all amounts due and that the event has a reliably measurable impact on the amounts that the Company will receive from

the reinsurer.

3.6 Investment contracts

Investment contracts are those contracts that transfer financial risks with no significant insurance risk.

Financial risk is the risk of a possible future change in one or more of a specified interest rate, security price, commodity price, foreign exchange rate. index of prices or

rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.

The Group enters into investment contracts with guarantee returns and other businesses of savings nature. Those contracts are termed investment contract liabilities

and are initially measured at fair value and subsequently at amortised cost.

Finance cost on investment contract liabilities is recognised as an expense in profit or loss using the effective interest rate.

3] Deferred acquisition costs ,

The incremental costs directly attributable to the acquisition of new business which has not expired at the reporting date, are deferred by recognizing an asset.

Acquisition costs include both incremental acquisition costs and other indirect costs of acquiring and processing new businesses.

Deferred acquisition costs are amortised systematically over the life of the contracts at each reporting date.

3.8 Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank and call deposits and other short-term highly liquid investments with original maturities of three months or less,

which are subject to insignificant risk of changes in their fair value and used by the Group to manage its short term commitments. Cash and cash equivalents are

measured at amortised cost in the statement of financial position.

3.9 Financial Instruments

Classification

The classification of the Group's financial assets depends on the nature and purpose of the financial assets and are determined at the time of initial recognition. The

financial assets have been recognised in the statement of financial position and measured in accordance with their assigned classifications.

The Group classifies its financial assets into the following categories;

• financial assets at fair value through Profit or loss (fiirfiLli

• held-to-maturity financial assets; and

• loans and receivables.

• available-for-sale financial assets

The Group's financial liabilities are classified as other financial lia bilities. They include trade and other payables.

Initial recognition All financial instruments are initially recognized at fair value, which includes directly attributable transaction costs for financial instruments not classified as fair value

through profit and loss.

Subsequent Measurement

Subsequent to Initial recognition, financial assets are measured either at fair value or amortised cost, depending on their categorization as follows.

Financial Assets at Fair Value through Profit or Loss (FVTPL)

A financial asset is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable

transaction costs are recognised in profit or loss as incurred. Financial asset at fair value through profit or loss are measured at fair value and changes therein, including

any interest expense or dividend income, are recognised in profit or loss.

Held-to-maturity investments

Held-to-maturity financial assets are non-derivative assets with fixed or determinable payments and fixed maturity that the Group has the positiveintent and ability to

hold to maturity, and which are not designated at fair value through profit or loss or available-for-sale,

Held-to-maturity financial assets are carried at amortised cost using the effective interest method. Any sale or reclassification of a significant amount of held-to-maturity

investments not close to their maturity would result in the reclassification of all held-to-maturity investments as available-for- sale and this prevents the Group from

assifying investment securities as held-to-maturity for the current and the following two financial years.

H owever, sales and reclassifications in any of the following circumstances would not trigger a reclassification:

Sales or reclassification that are so close to maturity that changes on the market rate of interest would not have a significant effect on the financial asset's fair value.

• Group has collected substantially

Sales or reclassification attributable to non-recurring isolated events beyond the Group's control that could not have been reasonably anticipated.

Loans and receivables

Loans and receivables on the statement of financial position comprise trade receivables and other receivables.

Loans and receivables, after initial measurement, are measured at amortized cost, using the effective interest rate method less any impairment Amortized cost is

calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the effective interest rate.

When the asset is impaired, the impairment losses are carried on the statement of financial position as a deduction from the carrying amount of the loans and

receivables and recognized in profit or loss as impairment losses.

9

Available-for-sale financial itssets

Available-for-sale investments are non-derivative investments that are not designated as another category of financial assets. Unquoted equity securities whose fair

value cannot be relDbly measured are carried at cost. All other available-for-sale investments are carried at fair value.

Interest income is recognised in profit or loss using the effective interest method. Dividend income is recognised in profit or loss when the Group becomes entitled to the

dividend. Foreign exchange gains or losses on available-for-sale debt security investments are recognised in profit or loss.

Other fair value changes are recognised directly in other comprehensive income until the investment Is sold or impaired where upon the cumulative gains and losses

previously recognised in other comprehensive income are recognised to profit or loss as a reclassification adjustment. As at the reporting date, the Group's investment

in quoted equities are classified as available for sale financial assets.

Amortised cost measurement

The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments, plus

or minus the cumulative amortisation using the effective interest method of any difference between the initial amount recognised and the maturity a mount, minus any

reduction for impairment.

Fair value measurement

Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance

risk.

When available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if

transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses a valuation technique that maximises the use of relevant observable inputs and minirnize the use of

unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price i.e. the fair value of the consideration given or received.

If the Group determines that the fair value at initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active

market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrumert is initially

measured at fair value, adjusted to defer the difference between the fair value at initial recognition and the transaction price. Subsequently, that difference is

recognized in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or

the transaction is closed out.

If an asset or a ha bi lity measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short

positions at an ask price.

Portfolios of financial assets and financial liabilities that are exposed to market risk and credit risk and managed by the Group on the basis of the net exposure to either

market or credit risk are measured on the basis of a price that would be received to sell a net long position for paid to transfer a net short position) for a particular risk

exposure. Those portfolio-level adjustments are allocated to the individual assets and liabilities on the basis of the relative risk adjustment of each of the individual

instruments in the portfolio.

The fair value of a demand deposit is not less than the amount payable on demand, discounted from the first date on which the amount could be required to be paid .

Identification and measurement of impairment

At each reporting date, the Group assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. Financial

assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset and that the loss event has an impact

on the future cash flows on the asset that can be estimated reliably. The Group considers evidence of impairment for loans and receivables and held-to-maturity

investments individually and collectively. Assets showing signs of deterioration are assessed for individual impairment. All individually significant loans and receivables

and held-to maturity investments found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified by

grouping together financial assets (carried at amortised cost) with similar risk characteristics.

Objectreft evidence that financial assets are impaired include significant financial difficulty of the obligor, default or delinquency by a borrower resulting in a breach of

contract, restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider, indications that a borrower or issuer will enter

bankruptcy, the disappearance of an active market for a security, or other observable data relating co a group of assets such as adverse changes in the payment status of

borrowers or issuers in the group, or economic conditions that correlate with defaults in the group. In addition, for an investment in an equity security, a significant or

prolonged decline in its fair value below cost is objective evidence of impairment.

Impairment losses on available-for-sale investment securities are recognised by transferring the difference between the carrying amount and current fair value out of

equity to profit or loss. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be objectively related to an

event occurring after the impairment loss was recognised in profit and loss, the impairment loss is reversed, with the amount of the reversal recognised in profit and

lost However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income. The Group writes

off certain loans and receivables when they are determined to be uncollectible.

Offsetting

Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, and only when, the Group has a .egal right to set off

the amounts and intends either to settle on a net basis or to realise the asset and settle the lie beity simultaneously.

10

Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and losses arising from a group of similar transac

De-recognition

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial assets in a transaction in

which substantially all the risks and rewards of ownership of the financial assets are transferred or in which the Group neither transfers nor retains substantially all the

risks and rewards of ownership and it does not retain control of the financial asset. Any interest in transferred financial assets that qualify for de-recognition that is

created or retained by the Group is recognised as a separate asset or liability in the statement of financial position. On de-recognition of the financial assets, the

difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset transferred), and the sum of (i) thsi consideration

received (including any new asset obtained less any new liability assumed) and (li)any cumulative gain or loss that had been recognised in other comprehensive income

is recognised in profit and loss. The Group enters into transactions whereby it transfers assets recognised on its financial position, but retains either all or substantially

all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not

derecognised from the financial position.

In transactions in which the Group neither retains nor transfers substantially all the risks and rewards of ownership of a financial asset and it retains :antral over the

asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to charges in the value of

the transferred asset. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

3.10 Trade receivables Trade receivables comprise premium receivables. Premium receivables are those for which credit notes issued by brokers are within 30 days after the reporting date, in

conformity with the "NO PREMIUM, NO COVER" NAICOM poky.

3.11 Foreign currency transactions

Foreign currency transactions are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign

currencies are translated using the exchange rate ruling at the reporting date. Foreign currency differences are generally recognised in profit or loss.

Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transact on.

3.12 Trade and other payables

Trade payables Trade payables are recognized when due. These include amounts due to agents, reinsurers and co-assurers. Trade payables are recognized initially sit fa it value and

subsequently measured at amortized cost using the effective interest method. The fair value of a non-interest bearing liability is its discounted repayment amount. If the

due data is less than one year, discounting is not applied.

Accruals and other payables

Other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method. The fair value of a non-

interest bearing liability is its discounted repayment amount. If the due date is less than one year, discounting is not applied.

3.13 Other receivables and prepayments Other receivables principally consist of accrued income, intercompany receivable and sundry debtors. Prepayments are essentially prepaid rents, prepaid insurance and

other prepaid balances. Other receivables and prepayments are measured at amortised cost.

3.14 Investment properties investment properties are properties held to earn rentals or for capital appreciation (including property under construction for such purposes) or fcr both purposes, but

not for sale in the ordinary course of business.

Recognition and measurement

Investment properties are measured initially at cost plus any directly attributable expenses. Subsequent to initial recognition, investment properties are measured at fair value, which reflects market conditions at the reporting date. Gains or losses arising from

changes in the fair value of investment properties are included in profit or loss in the period in which they arise. Fair values of the investment properties are evaluated

and assessed annually by an accredited external valuer.

De-recognition

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are

expected from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference between the net disposal proceeds and the carrying

amount of the asset) is recognized in profit or loss in the period of de-recognition. The carrying amount of the asset represents the fair value of the asset as at the date

of the latest valuation before disposal.

Transfers

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupies property, the

deemed cost for subsequent accounting is the fair value at the date of change. If owner-occupied property becomes an investment property, the Croup accounts for

such property in accordance with the policy stated under property and equipment up to the date of change. Subsequently, the property is re-measured to fair value and

reclassified as investment property.

3.15 Investment in Joint venture

A joint venture is an arrangement in which the Group has (NM control as well as rightsto the net assets of the rrangement, rather than rights to its assets and

obligations for its liabilities.

Interests in associates and the Joint venture are accounted for using the equity method. They are Initially recognised at cost, which includes transaction costs.

Subsequent to initial recognition, the consolidated financial statements include the Group's share of the profit or loss and OCI of equity-accounted trivestees, until the

date on which the Joint control ceases. The Group evaluates its investment in joint venture in line with the provisions of IFR511- Joint Venture.

11

3.16 Property and equipment

Recognition and measurement

Items of property and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour.

any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring

the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part

of equipment.When parts of an item of property or equipment have different useful lives, they are accounted for as separate items (major components) of property and

equipment.

Subsequent costs The cost of replacing part of an item of property or equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits

embodied within the part will flow to the Group and its cost can be measured reliably, The carrying amount of the replaced part is derecognised. The costs of the day-to-

day servicing of property and equipment are recognised in profit or loss as incurred.

Depreciation

Depreciation is recognised in the statement of profit or loss and other comprehensive income on a straight-line basis to write down the cost of each asset, to their

residual values over the estimated useful lives of each part of an item of property and equipment. Leased assets under finance lease are depreciates: over the shorter of

the lease term and their useful lives. Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset is derecognised or

classified as held for sale in accordance with WAS 5. A non-current asset or disposal group is not depreciated while it is classified as held for sale.

Depreciation is calculated over their estimated useful lives at the following rates:

Land

Leasehold improvements

Office equipments

Furniture and fittings

Computer equipment

Motor vehicles

at

Not depreciated

shorter of the

4 years

5 years

0 years

4 years

5 years

De-recognition An item of property and equipment is de recognised on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-

recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the

asset is derecog nisei

Impairment

Assets that are subject to depreciation are reviewed for Impairment whenever events or changes in circumstances indicate that the carrying amount may not be

recoverable. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable

amount. The recoverable amount is the higher of the asset's fair value less costs to sell or the value in use.

3.17 Intangible assets

Computer software

Software acquired by the Group is stated at cost less accumulated amortisation and accumulated impairment losses. Expenditure on internally developed software is

recognised as an asset when the Group is able to demonstrate its intention and ability to complete the development and use the software in a manner that will generate

future economic benefits and can reliably measure the costs to complete the development. The capitalised costs of internally developed software nclude all costs

directly attributable to developing the software and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated

amortisation and impairment. Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific

asset to which it relates. All other expenditure is expensed as incurred.

Amortisation is recognised In profit or loss on a straight-line basis over the estimated useful life of the software, from the date that it is available for use since this most

closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life of software is five years.

Amortisation method, useful lives, and residual values are reviewed at each financial year-end and adjusted if appropriate.

Intangible assets are derecognised on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition is

included in profit of loss in the year the asset is de recognised.

3.16 Impairment of non-financial assets

The carrying amounts of the Group's non-financial assets other than deferred tax assets are reviewed at each reporting date to determine whether there is any

indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an

asset or Its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable group of assets that generates cash flows that are

largely independent from other assets. Impairment losses are recognised in profit or loss. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In

respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer

exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the

extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment

loss had been recognised.

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3 19 Income and deferred tax

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect

of previous yearn The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflews uncertainty

related to income taxes, if any. It is measured using tax rates enacted at the reporting date. Current tax also includes any tax arising from dividends.

Minimum tax

The Company is subject to the Finance Act (amendments made to Companies Income Tax Act (CITA)). Total amount of tax payable under the new Fir a nce Act shall not

be less than 0.5% of the Company's gross premium. Taxes based on taxable profit for the period are treated as income tax in line with IAN 12; whereas Minimum tax

which is based on a gross amount is outside the scope of IAS 12 and therefore, are not presented as part of income tax expense in the profit or loss.

Where the minimum tax charge is higher than the Company Income Tax (CIT), a hybrid tax situation exists. In this situation, the LIT is recognized in the income tax

expense line in the profit or loss and the excess a mount is presented above the income tax line as Minimum tax.

Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose: and the amounts

used for taxation purposes.

Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor

taxable profit or loss;

temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill,

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable

profits will be availa ble against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer

probable that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted

at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Gf0Up expects, at the reporting date, to recover or settle the

carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax

authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities

will be realised simultaneously. In determining the amount of current and deferred tax, the Group considers the impact of tax exposures, including whether additional taxes and interest may be due.

This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New Information may become available that causes the

Group to change its judgment regarding the adequacy of existing tax liabilities: such changes to tax liabilities would Impact tax expense in the period in which such a

determination is made.

3.2 Statutory deposits Statutory deposits are cash balances held with the Central Bank of Nigeria (CB N) in compliance with the Insurance Act 2003. The deposits are only available as a last

resort to the Group if it goes into liquidation. Statutory deposits are measured at amortised cost,

3.21 Hypothecation of assets The Company structured its assets to meet the requirements of the Insurance Act 2003 such that policyholders' assets and funds

are not co-mingled with shareholders.

In particular, investment securities and insurance funds hypothecated to policyholders are distinguished from those owned by the shareholders. The assets

hypothecated are shown in note 44 of the financial statements.

3.22 Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an

outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that

reflects current market assessments of the time value of money and where appropriate, the risks specific to the liability.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has

been announced publicly. Future operating costs are not provided for. A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting

its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost

of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract

3.23 Employee benefits

Short-term employee benefits/Personnel expenses

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the

amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result

of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense In profit or loss when they are due in respect of service rendered before

the end of the reporting period. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. The

Group contributes to a defined contribution pension scheme for its employees. Obligations in respect of the Group's contributions to the scheme are recognised as an

expense in the profit and loss account on an annual basis. The employee and the Group contribute 8% and 10% respectively of basic salary, housisg, and transport

allowance to each employee's retirement savings account maintained with their nominated Pension Fund Administrators.

3,24 Earnings/loss per share The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary

13

shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss

14

attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Earnings

per share is determined by dividing the profit or loss attributable to ordinary shareholders by the weighted number of ordinary shares adjusted for any bonus shares

issued.

325 Leases

The Group has adopted IFRS 16 Leases effective 1 January 2019.

IFRS 16 Introduced a single, on-balance sheet accounting model for leases. As a result, the Group, as a lessee has recognized the sight-of-use assets representing its right

to use the underlying assets and lease liabilities representing its obligation to make lease payments. Lessors accounting remains similar to previous accounting policies.

Policy applicable from 1 January 2019

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the

use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an Identified asset, the

Group uses the definition of a lease in IFRS 16,

This policy is applied to contracts entered into (or changed) on or after 1 January 2019.

The Group as a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates consideration in the contract to each lease component on the

basis of its relative standalone price. However, for leases of branches and office premises the Group has elected not to separate non-lease components and accounts for

the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the

initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of

costs to dismantle and remove any improvements

made to branches or office premises.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. In addition, the right-of-

use asset is periodically reduced by impairment losses, if any, and adjusted for certain re mea sure ments of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate

implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its Incremental borrowing rate as

the discount rate .

The Group determines its incremental borrowing sate by analysing its borrowings from various external sources and makes certain adjustments to reflect the terms of

the lease and type of asset leased .

Lease payments included in the measurement of the lease liability comprise the following

fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date,

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably

certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early .

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a

change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its

assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability Is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if

the carrying amount of the right-of-use asset has been reduced to zero.

Short term leases and leases of low-valueassets

payments associated with these leases as an expense on a straight-line basis over the lease term.

A significant proportion of the Group's leases are short term in nature and this election has resulted in an immaterial impact on the Group's financial statements upon

adoption of the standard.

The Group acting as a lessor At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the

basis of their relative stand-alone selling prices

When the Group acts as a lessor, it determines at lease inception whether the lease is a finance lease or an operating lease.

underlying asset If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indtca tors

such as whether the lease is for the major part of the economic life of the asset.

Policy applicable before 1 January 2019

f or contracts entered Into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether.

- fulfilment of the arrangement was dependent on the use of a specific asset or assets; and

- the arrangement had conveyed a right to use the asset .

As a lessee

The Group did not have any finance leases under 145 17.

Assets held under other leases were classified as operating leases and were not recognised in the Group's statement of financial position. Payments made under

operating leases were recognised in profit or loss on a stra ight-line basis over the term of the lease. Lease Incentives received were recognised as an integral part of the

total lease expense, over the term of the lease.

As a lessor When the Group acted as a lessor, it determined at lease inception whether each lease was a finance lease or an operating lease .

To classify each lease, the Group made an overall assessment of whether the lease transferred substantially all of the risks and rewards incidental to ownership of the

15

underlying asset. If this was the case, then the lease was a finance lease; if not, then it was an operating lease. As part of this assessment, the Group considered certain

indicators such as whether the lease was for the major part of the economic life of the asset.

16

RC: 163170 CORNS ' EINMANCE PLC

Winance

re

111

CORN MSTIllariNSURANCE PLC Group/ManighltDRixtor

Date: Sign..

Consolidated and Separate Statement of Financial Position

As at 31 March 2020

Note ASSETS

31-Mar-20

Group

WOOD

31•Dec-19

Group

N'000

Cornerstone RC 163170

31-Man20 31-Dec-19

Company Company

W000 W000

Cash and cash Equivalents 6 11,31Q407 12,649,384 6,374,983 8,193.360 Financial Assets 7 13,068,062 12,661,308 11,959,518 11,169,338 Trade receivable 8 451875 60,183 417.689 58,100 Other receivables and prepayments 9 779,638 405,459 818,783 434,059 Reinsurance assets 10 5,544,368 4,736,426 5,108,966 4.356,742 Deferred acquisition cost 11 316,400 257,866 264,942 219,592 Investment in Joint venture 12 554,305 554,305 293.116 293,116 Investment in subsidiaries 13 - - 2.954,747 2,954.747 Investment property 14 560,000 560,000 Property, plant and equipment 15 2,182,593 1,904,212 626,830 639,309 Intangible assets 16 24,790 29,364 24.790 29,364 Deferred tax assets 23(d) 338,923 338,923 338,923 338,923 Statutory deposits 17 1,000,000 1,000,000 700,000 700,000

Total Assets 36,131,360 35,157,430 29,883,187 29,386,650

Liabilities:

Investment contract liabilities 18 3,404,942 3,406,701 3,404,942 3,406,701 Insurance contract liabilities 19 13,335,352 11,730,130 12,110,636 10,703,380 Trade payables 20 2,661,544 3,600,975 2,428,652 3,490,315 Other payables and accruals 21 662,840 801,179 312,701 642,411 Deferred commission income 22 433,391 265,073 402,590.13 231,961 Current lax liabilities 23(a) 510,462 464,185 346,834 306,421 Employees retirement benefit obligations 24 3,994 3,577 1,970 1,553

Total Liabilities 21,012,525 20,271,820 19,008,426 18,782,741

EQUITY 8 LIABILITIES

Share capital & reserves'

Ordinary share capital 26(a) 7,364,754 7,364,754 7,364,754 7,364,754 Share premium 26(b) 1,947,166 1,947,166 1,947,166 1,947,166 Treasury shares 26(c) (48,175) (48,175) (48,175) (48,175) Accumulated losses 26(d) 1,967,291 1,565,115 (1,399,901) (1,671,138) Contingency reserve 26(e) 3,452670 3,379,729 2,869,161 2,776,680 AFS Fair value reserve 26(f) 184,414 426,306 141,756 234,622 Equity attributable to owners of the company 14,868,120 14,634,895 10,874,761 10,603,909

Non Controlling interest(NCI) 26g 250,715 250,715 Total Equity 15,118,836 14,885,610 10,874,761 10,603,909

Total Equity 8, Liabilities 36,131,360 35,157,430 29,883,187 29,386,650 The Unaudited Account was approved by board

on 21-April-2020

Chief Financial Officer

FRCI2013/ICAN/00000000731

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

136, Lewis Street, 21, Water Corporation Drive,

CORNERSTONE INSURANCE PLC

Consolidated and Separate Statement of Profit or Loss and Other

Comprehensive income for the period ended 31 March, 2020

Gross Premium Income

Change in unearned premium

Gross premium income

Reinsurance Expenses

Net premium income

Fees and commission income

Net underwriting income

Insurance claims and benefits paid- Gross (including loss adjustment expenses)

Insurance claims recoverable from reinsurance Companies

Net Claims expenses

Acquisition cost

Maintenance cost

Net Underwriting expenses

Underwriting result

Loss on deposit administration / investment contracts

Investment income on financial asses

Fair value changes in investment propeny

Fair value changes in financial assets - FNITPL,

Nei exchange gain

Net trading income

Operating income

Share of Profit from joint ventures

Allowance for impairment losses

Personnel expenses

Depreciation

Amortisation

Other operating expenses

Finance cost

Profit/Ross) before income and minimum tax

Income tax expense

Profit/(Loss) for the year

Attributable to shareholders

Attributable to non-controlling interest holders

Other Comprehensive income, net of tax

Items within OCI that may be reclassified to profit or loss

Fair value changes on available-for-sale securities

Foreign currency gain on available for sale securities

Related tax

Other Comprehensive Income, net of taxes

Total Comprehensive Income for the year

Attributable to shareholders

Attributable to non-controlling interest

Other comprehensive income, net of tax

Basic and diluted earning per share (hobo)

Note

27(a)

27(b)

31-Mar-20

Group

N'000

4,575,086

(1271,992)

31-Mar.19

Group

N'000

4,793,662

(1,786,575)

3,007,087

(1,554,328)

31-Mar-20

Company

N'000

4,231,698

(1254,546)

2,977,152

(1,716,934)

31-Mar-19

Company

N'000

4,343,997

(1,601623)

2742,373

(1,422894) 27(e)

3.303,094

(1,878,414)

28

1424,680

338,771

1,452,758

263,313

1,260,218

303 196

1,319,479

233,694

1,763,452 1,716,071 1,563,414

(1,756,513)

928,553

1,553,173

29

29

( 2.036,586)

1,020,960

(1,547,772)

722,485 (1 .456,833)

637,697

30(a)

30(b)

(1,015,626)

(408,499)

(116,028)

(825,286)

(379,515)

(140,505)

(520,020)

(827,960)

(365,053)

(99,265)

(464,319)

(821,136)

(337,293)

(116,761)

(454,054) (524,626)

18(a)

31

14

32

33(a)

33(b)

34

12(c)

35

36

I5

16

37

38

223,299

.

305,620

166,828

522,669

57,094

.

(448,678)

(47,189)

(4,573)

(234,379)

(19,099)

370,764

357,319

2,624

(411,242)

(41,313)

(6,087)

(306,376)

(5,365)

271,135

239,362

166,628

256,198

55,797

(348,063)

(33037)

(4,573)

(181,604)

(17,712)

277,982

266,396

1,374

(337.978)

(31,001)

(5,411)

(261,923)

(123)

23(b)

521,393

(46,276)

(39,675)

(58,698)

(98,373)

404,131

(40,413)

363,718

(90,684)

(9,068)

(99,753) 475,117

471,963

3,154

(147,669)

49,296

363,718 (99,753)

475,117 (98,373) 363,718 (99,753)

32(b)

7(a)(ii)

23(d)

(241,892) (20,007) (92,886) (15,462)

(241,892) (20,007)

(20,007)

(92,866)

(92,866)

(15,462)

(15.462) (241,892)

233,225 (118,381) 270,852 (115,214)

233,538

(313)

(118,539)

159

270,852 (115,214)

233,225 (118,381) 270,852 (115,214)

39 3 (1) 2 (1)

16

CORNERSTONE INSURANCE PLC

Consolidated and Separate Statement of Profit or Loss and Other Comprehensive income for the period ended 1 January 2020 to 31 March 2020

Gross Premium Income

Change in unearned premium

Gross premium income

Reinsurance Expenses

Net premium income

Fees and commission income

Net underwriting income

Insurance claims and benefits paid- Gross (including loss adjustment expenses)

Insurance claims recoverable from reinsurance Companies Net Claims expenses

Acquisition cost

Maintenance cost

Net Underwriting expenses

Underwriting result

Loss on deposit administration !investment contracts

Investment income on financial assets

Fair value changes in Investment property

Fair value changes in financial assets - FVTPI.

Net exchange gain

Net trading income

Operating income

Share of Profit from joint ventures

Allowance for impairment losses

Personnel expenses

Depreciation

Amortisation

Other operating expenses

Finance cost

Profit/(loss) before income and minimum tax Income tax expense

Profit/(Loss) for the year

Attributable to shareholders

Attributable to non-controlling interest holders

Other Comprehensive income, net of tax

Items within OCI that may be reclassified to profit or loss

Fair value changes on available-for-sale securities

Foreign currency gain on available for sale securities Related tax

Other Comprehensive Income, net of taxes

Total Comprehensive Income for the year

Attributable to shareholders

Attributable to non-controlling interest

Other comprehensive income, net of tax

Basic and diluted earning per share (Kobo)

Note

27(a)

27(b)

27(e)

28

January - March 2020

Group

N'000

4575,086

(1,271,992)

January - March 2019

Group

N'000

4793,662

(1,786.575)

January - March 2020

Company

N'000

4231,696

(1,254546)

January- March 2019

Company

N'000

4,343,997

(1,601,623)

2,742,373

(1.422,894)

1,319,479

233,694

1,553,173

3,303,094

(1,878,414)

3,007,087

(1,554,328) 2,977,152

(1/16,934)

1,424,680

338.771

1,452,758

263,313

1,260,218

303,196

1,563,414 1,763,452 1,716,071

29

29 (2,036,586)

1,020,960 (1,547,772)

722485 (1,756,513)

928,553

(827,960)

(365,053)

(99,265)

(1,458533)

637,697

30(a)

30(b)

(1,015,626)

(408,499)

(116,028)

(825,286)

(379,515)

(140,505)

(821,136)

(337,293)

(116761) (524,626) (520,020) (464,319) (454,054)

277,982

266,396

1,374

.

(337,978)

(31,001)

(5,411)

(261,923)

(123)

18(a)

31

14

32

33(a)

330)

34

12(c)

35

36

15

16

37

38

223,299

305,620

166,628

522,669

57,094

(448578)

(47,189)

(4,573)

(234,379)

(19,099)

370,764

357,319

2,624

(411,242)

(41,313)

(6,087)

(306,376)

(5365)

271,135

239.362

166,628

256,198

55,797

.

(348,063)

(33537)

(4,573)

(181,604)

(17,712)

23(b)

521,393

(46,276)

(39,675)

(58598)

(98,373)

404,131

(40,413)

363,718

(90,684)

(9,068)

(99,753) 475,117

471,963

3,154 (147,669)

49296 363,718 (99,753)

475,117 (98,373) 363,718 (99,753)

32(b)

7(a)(ii)

23(d)

(241,892) (20,007) (92566) (15462)

(241,892) (20507)

(20,007)

(92,866)

(92,866)

(15,462)

(15462) (241,892)

233,226 (118,381) 270,852 (115,214)

233,538

(313)

(118,539)

159

270852 (115,214)

233,225 (118,381) 270,852 (115,214)

39 3 (1) 2 (1)

17

CO

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ST

ON

E IN

SU

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E P

LC

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CO

RN

ER

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ON

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SU

RA

NC

E P

LC

Statement of Cash Flows for the periodr ended 31 March, 2020

Operating activities

Insurance premium received

Deposit liabilities -contribution during the year

Deposit liabilities -Withdrawal during the year

Reinsurance premium paid

Reinsurance commission received

Insurance benefits and claims paid

Reinsurance claims received

Commission paid

Maintenance cost paid

Recovery on subrogation

Other operating cashflow

Corporate tax paid

Net cash used in operating activities

Cash flows from Investing activities:

Additions to intangible assets

Proceeds from sale of property and equipment

Investment in joint venture

Purchase of property and equipment

Investment in Joint Ventures

Financial assets Purchase during the year

Dividends received

Proceeds from sale of financial asset

Interest received

Net cash generated from/ used provided by investing activities

Cash flows from financing activities: Finance cost

Net Increase/ (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Note

39

18

18

28

29

29

30(a)

30(b)

34

16

31

31

38

31-Mar-20

Group

N'000

4,183,394

1,581,568

(1,680,780)

(1,747,001)

338,771

(1,683,688)

1,020960

(466,953)

(116,028)

2,929

(1,365,455)

67,718

67,718

3,790

(43,552)

(1,937,175)

3,517

283,721

302,103

(1,387,596)

(19,099)

(1,338,977)

12,649,384

11,310,407

31-Mar-19 Group

N'000

3,244,448

1,568,094

(1,076,686)

(2,106,821)

12,456

(1,356,245)

(402,545)

(456,831)

(140,505)

(19,398)

(2,642,274)

(3,376,308)

(3,376,309)

(2,916)

2,148,723

(223,213)

(482,365)

153,402

195,492

1,789,124

(5,365)

(1,592,550)

4,227,075

2,634,525

31-Mar-20

Company

N'000

3,872,109

1,581,568

(1,680,780)

(1,716,518)

303,196

;1,584,136)

928,553

(410,323)

(99,265)

2,929

(1,544,118)

(346,787)

(346,787)

3,766

(43,552)

(1,937,175)

3,083

283,721

236,279

(1,453,878)

(17,712)

(1,818,377)

8,193,360

6,374,983

31-Mar-19

Company

N'000

2,832,517

1,568,094

(1,076,686)

(1,851,622)

42,226

(1,268,079)

(511,911)

(383,852)

(116,761)

(19,398)

(1,314,283)

(2,099,755)

(2,099,755)

(1,950)

798,917

(85,249)

(312,915)

106,496

145,897

651,195

(123)

(1,448,683)

3,424,044

1,975,361

20

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Group Group Company Company

2,020 2,019 2,020 2,019

1 967 722 1,989247 196772 2 155 1 989 247 UnnUDIed equity securities (MTN Linked notes)

Group Company Company

@ Loan and receivables

Group

Cash and cash equivalents

In thousonds ofvelra

Group 2,020

Group 2,019

Company 2,020

CORNERSTONE INSURANCE PLC

Company 2,019

Cash 34,944 2 604 34945 2354

Balances with banks 1 020,305 9269 553 888.755 5,662,553

Short-term depouts 10,255,157 3,377 327 5651683 2628,553

12,649,384 J93,360

Current 11,31Q407 12,649,384 6,374983 8,193,360

Non current 11,310,407 12.649,364 6,374,983 8,193,360

Short-term deposits are made for varying periods of between one day and three months, depending on the Immediate cash requirements of the Group. The

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

Financial sets

In thousands of nom('

Group

2,020

Group 2,019

Company 2,020

Company 2,019

Available-for-sale (AFS) financial assets (see note (a) below) 8.618,590 7660055 8,192.323 6,173992

Financial assets at fair value through profit or loss (FUTPL) Gee note (b) helow) 3967322 1 089 247 1967722 1,989.247

Loans and receivables (see note (c) below) 311,475 927 781 311.473 327781

Held-to-maturity investments Gee note (d) below) 23 75 277 2684 225 1,488,000 1,978718

13,068,082 12,661,306 11 959,518 11,169,338

(a) Available-for-sale (AFS) financial assets

Group Group Company Company

in thousands of no(ra 2,020 2,019 2,020 2,019

Quoted equity securities measured at fair value 551,895 1,595.843 481.563 782,779

Unquoted equity securities measured at fair value 2,764 2764

Unquoted equity securities measured at cost 1,823,000 87.500 1823499 999 57,500

Investment in funds measured at fair value 156,576 163,128 156575.9018 163,128

Investmerit in MTN preference shares 21,575 349.885 21525 276,886

Investment in CAPIC funds measured at cost 67,593 1823.500 87593.080 1 823.500

Investment in Insurance pool 87,500 87.594 87500.00002 87.594

Bonds measured at fair value (see note (h) below) 5,887,237 3652.605 5531302 031 3.652 605

8,618,590 7,850,055 8,192,323 6,873,592

0) This represents the Company's subscription and total commitment of USD 5million into the partnership arrangement of Capital Alliance Property Investment

Company (LAPIS) The Padnembip was set up to directly and indirectly acquire. develop, hold, manage and dispose of investments in real estate.

Available for sale financial instruments designated at cost are measured as such because the lair value could not be reliably delem,ined

00 This represents the total fair value of the Company's investment In bonds which includes FGN Bonds. Eurobonds, State Government bonds and Corporate

bonds classified as available-foFsale

pull The above manual assets nave been assessed for irTmairinent and there was no objective evidence that the assets were Impaled as at year end

(lo) Financial assets at fair value through profit or loss IFSTSI-)

In thousands of nawa 2,020 2,019 2,020 2,019

LIDOSLS to policyholders (see note (4) below) 316473 336614 311673 336.614

Advances and LPO financing 0 0

311,473 336.614 - 311.473 375,614

Allowance for impairment (see note (i) below) (8,833) (8933)

311,473 327.701 311,473 327,781

The Group grants cash loans to policyholders in line with the poticy provisions (terms and conditions) The maximum ban amount that could be granted to

(ii) policyholders. 70% of the porcycash valueexcept for endowment policievwhere the policyholder can obtain a maximum of 90% of the palmy cash surrender value The cash value (worth of the policy as determined by the actuary) is the cash amount ante to policyholder upon surrender of the insurance contract as at

the date of determination and 8is used as collateral on policy cash loan granted.

The tenor of the loan is not beyond the policy duration and such policy MUST be In (WOO and has acquired cash value before loan application can be considered.

A pre-determined interest rate (compounded daily) is applied on the ban The rate Is currently within the range orb-13% per annum depending on the type of

policy and it is reviewed periodically

The rate is determined alter due consideration on the interest rale used by the actuary far premium benefit calculation allowancefor documentation, and other

expenses on the policy, margin for contingencies and profit loadings. Policy loans are not impaired as balances am set-of against benefits accruable to the

pOliCyhOlder

(8) Held 4 ormaturly -Financial assets

In thousands of naora

Group 2,020

Group 2,019

Company 2,020

company 2,019

Bonds 682,277 140,301

Treasury bills 1.488000 3343924 140&000 1978718

2,170,277 2,404.225 1,400,000 1,978.710

7

CORNERSTONE INSURANCE PLC

8 Trade Recievable

(a) Trade receivables comprise

Is thousands of nada

Group

2020

Group

2019

Company

2020

Company

2019

Due from brokers, agents and other insurance companies

Due from direct customeri

1,771,340 1,426,508 1,5456 61 1,230,067

(c ) below)

1,771,340

(1,319,4651

1,426,508

(1,366,325)

1,548,561

(1,127,8721

1,230067

(1,171,967) Allowance for impairment Nee note

451,875 60,183 417,1589 58,100

Current

Non-current

451,875 60,183 417,689 56100

451,875 60,183 417,589 58,100

(b) The age analysis of gross insurance trade receivables as at year end is as follows Group Group Company Company

In thousands of nada 2020 2019 2020

451,875 136,021 417,689 Within 30 days

More than 30 days 1,319,465 1,319,465 1,127.872

1,771,340 1,455,486 1,545 561.

6 The movement in allowance for impairment of trade receivables is as follows: Group Group Company

In thousands of nada 2020 2019 2020

1,351,367 1,319,465 1,159 774 Opening balance (31,902) 31,902 (31902)

Charge/(reversal) during the year

1,319,465 1,351,367 1,127,872

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

9 Other receivables and prepayments

In thousands of nada

Group

2020

Group

2019

Company

2020

Company

2019

Non-financial Prepaid rent

Prepaid insurance

Stoc VAT c

k of stontrol

ationery

balances (see note (a) below)

18,336 15,645

9,752

145,512 136,092

18,589

8,346 136,849 129,337

9,752 147,903 108,167

299,802

16336

18,589 8,346

136,849 89,265

253,050 Other prepaid

Financial

Due from subsidiaries

Witholding tax receivable

Dividend receivable

Receivable from Meristem

Receivables from policyholders (see note (a) below)

Other receivables (see note © below)

Receivable from CPC)

Due from staff

Insurance recoverable

325,336

184,078

4833

38,226

4589

57,274

418,308

17,087

293,121

4,283

48,105

4,589

37.883

449,664

3,221

26.8,957

35,226

3,589

33,991

367,688

17,087

50,178

38,272

4,589

33,390

422,080

3,221

724,395 547,695 724,438 551,730

Total other receivables and prepayment

Allowance for impairment (see note 0 below)

1,049,731

(270,094)

840,817

(435,357)

1,024,240

1205,458)

804,780

(370,721)

434,059 779,638 405,459 818,783

Within one year

More than one year

779,638

270,094

405,460

435,357

818,783

205,458

434,059

370,721

1,049,731 840,817 1,024,240 804,780

`Other receivables comprise receivables from its investment brokers which include WSTC Financial Services, RENCAP Securities, Reward Investment etc and from

other third parties.

2019

134,452

1,127,872

1,262,324

Company

2019

1,127,872 31,902

1,159,774

24

The carrying amount is a reasonable approximation of fair value

Reinsurance assets

In thousands of naaa

Group

2020

Group

2019

Company

2020

CORNERSTONE INSURANCE PLC

Company

201.9

Prepaid reinsurance - Minimum & Deposit

Prepaid reinsurance 2,004,445 1,543,007 1,884,408 1,398,974

Prepaid reinsurance - Non-life (see note (i) below) 1,356,136 1,285,022 1,236,100 1,153,040

224,772 Prepaid reinsurance -Life (see note (i) below)

648,309 224,772

.

648,309 .

Additional Unexpired Risk Reserve lAURR)-Life 21,162 Additional Unexpired Risk Reserve (AURR). Non-Life

33,213 1,249,671

Reinsurers' share of outstanding claims - Norhlife (see note (5) below) 2,060,844 1,444,387 1,8217,602

Reinsurers' share of outstanding claims - Life (see note (iii) below) 157,269 537,020 157,269 537,020

426,592 Reinsurers' share of Incurred but not reported . Non-life (see note (iv) below)

501,815 467,528 425,592

70512 Reinsurers' share of Incurred but not reported -Life (see note (v) below)

70,512 70,512 77,512

1,152,421 Reinsurers' share of claims paid - receivable - Non-life (see note (vi) below)

1,133,079 1,152,421 1,133,079

94,296 18,784 Reinsurers' share of claims paid - receivable . Life (see note (vii) below)

94,296 18,784

6,022,259 5,233,659 5,586,756 4,853,975

for note (ii) below) Allowance impairmenthsee (477,891) (497,233) (477,991) (497,233)

5,544,368 4,736,426 5,108,866 4,356,742

10

25

Deferred Acquisition Cost

In thousands of mica

Group

2020

Group

2019

Company

2020

CORNERSTONE INSURANCE PLC

Company

2019

Balance, beginning of the year

Acquisition during the year cost paid

248,269

466,953

278,428

1,635,504

209,995

410,323

237,635

1,464,297

Total acquisition cost

Amortisation during the year

715,222

(408,499)

1,913,932

(1,665,663)

620,318

(365,053)

1,701,932

(1,491,937)

316,400 248,269 264,942 209,995

0

Current

Non-current

316,400 248,269 264,942 209,995

316,400 248,269 264,942 209,995

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

In thousands of mum

Group

2020

Group

2019

Company

2020

Company

2019

Deferred acquisition cost-Fire 71,678 51,736 61,546 44,297

57,177 Deferred acquisition cost-Motor vehicle

101,806 71,015 82,739

93,128 Deferred acquisition cost-General Accident, Bond & Engineering

97,589 101,375 89,394

18,968 Deferred acquisition cost-Aviation & Marine

32,425 23,697 21,998

6,022 Deferred acquisition cost-Oil & Gas

12,902 10,043 10,264

- Deferred acquisition cost-Life

316,400 257,866 264,942 219,592

0

12 Investment in Joint Venture

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

venture to manage a real estate project which involves the construction of office spaces from which the Group plans to earn rerv:al income. Cornerstone

Insurance Plc also plans to relocate its Head Office to some floors in this building upon completion.

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 lnsuranceholds 28% of the Group's 51% in CPCL with the remaining 23% being held by Fin Insurance Limited.

The Group has evaluated its investment inline with the provisions of IFRS 11 with the conclusion that the investments met the criteria for recognition as

investment in joint venture. In line with IERS 11:24, the Company has consequently accounted for its investment in CPCL using the equity method of accounting

in its separate financial statements and at the group level.

The analysis of the carrying amount of the investment in joint venture is as follows:

In thousands of nouo

Balance, beginning of the year

Cash paid for equity interest (see note (a) below)

Property transferred for the equity interest (see note (b) below)

Prior years'share of loss of the joint venture

current year share of profit/(loss) of the joint venture (see note below)

Dividends paid during the year

Group Group Company

2020 2019 2020

554,305 6,056,550

(0) 597,165

293416

0

1,055

554305 6,654,770 293,116 3,642,392

1,586,483 871,010

(,686,948) (4,220,286)

554,305 554,305 293,116 293,116

Company

2019

3,310,166

332,226

(a) The cash paid for equity interest represents the group investments in Caphoenix Cornerstone Limited in terms of cash contribution for the equity holdings in the

entity

(b) The Investment propery of Cornerstone Insurance Plc located at Plot 2, Block 2, Yesufu Abiodun Way, Oniru Chieftancy Estate, victoria island Annex, Lagos was

transferred to to Caphoenix Cornerstone Limited as part of its equity holdings contributions in the Investment. The transfer of the property was done during the

year ended 31 December, 2016 .

The loss from continuing operation of the joint venture was shared by the participating companies as follows.

5ti holding 2020 2019

1,

n nsurance ompany m

Cornerstone I nsurance Plkc

28 1,927

51 3,510

49 3,372

101)

ornerstone Group

CAP Phoenix Limited

t numg operation

26

77

27

In thousands of naira

Balance, beginning of the year

Addition during the year

Group Group Company Company

2020 2019 2020 2019

100,000 100.000

100,000 100,000

560,000 560,000

Carrying amount

520000

28000

Balance, end of the year

(a) The details of the investment properties of the Group are presented in the table below(

Details of the property

Land and Twin Duplex, Plot 667 (A&B) Umon Street, off Ladol

Land and Two Blocks Flats, House no 16&18, 2nd Avenue,21(

(b) Measurement of fair values

(i) Fair value hierarchy

Investment in subisidiaries

In thousands of noir°

Group Group Company

2020 2019 2020

CORNERSTONE INSURANCE PLC

Company

2019

Cornerstone Leasing & Investment limited

Fin Insurance company limited

100,000

2,954,748

100,000

2,954,748

Impairment alldwance (see note (a) below)

3,054,748

(100,000)

3,054,748

(100,000)

2,954,747 2,954,747

Current

Non-current 2,954,747 2,954,747

2,954,747 2,954.747

(a) The Company assessed its investment in its subsidiaries for impairment during the year.the investment in Cornerstone Leasing & Investment Limited has been

fully impaired from prior years and there was no change to impairment allowance during the year. The movement in the allowance for impairment during the

year is as follows;

(b) Principal subsidiary undertakings

The Group is controlled by Cornerstone Insurance Plc ("the Parent Company") which is incorporated in Nigeria. The controlling interest of Cornerstone Insurance F

Country of Nature of % equity

incorporation business holdings

Company name

Cornerstone Leasing 8 Investment Limited Nigeria Leasing business 100%

Nigeria Non-life insurance business Fin Insurance Company Limited

96,68%

(c) Other information on subsidiaries

(i) 0) Cornerstone Leasing and Investment Limited commenced operation on 1 July 2004 as part of the parent company's ultimate strategic plan to provide world

class leasing se(vices 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 convenient 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 in 2015. The acquisition was made in a bid to increase the

market share of the Non-Life Insurance business of the entity.

(d) 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

14 Investment properties

Group Group Company Company

2020 2019 2020 2019

In thousands of mord 560,000 532,000

Balance, beginning of the year 28,000 Fair value gains/(losses)

13

CORNERSTONE INSURANCE PLC

The fair value of investment properties was determined by an external, independent property valuer, having appropriate recognised professional qualifications

and recent experience in the location and category of the property being valued. The Independent valuer. Orji & Partners Estate Surveyors and Valuers

(F110/2013/NIESV/70000000/3947) valued the properties on the basis of open market value as at 31 December 2019

(ii) Valuation technique and significant unobservable inputs

The following table shows the valuation technique used in measuring the fair value of investment property, as well as the significant unobservable inputs used.

Valuation technique

The fair values are determined by applying the direct market evidence comparative

method of valuation to derive the open market value. This valuation model reflects

the current price on actual transaction for similar properties in the neighbourhood

in recent time.

References were made to prices of land and comparable properties in the

neighbourhood. The data obtained were analysed and adjustment was made to

reflect differences in site area and the actual location, quality of construction and

off-site facilities.

The estimated fair value would

increase (decrease) if the rate of

development in the area increases

Prices per square meter (decivases), quality of the building

Rate of development in the area - increases (decreases), influx of

Quality of the building - Influx of the people and/or business to the area

people and/or businesses in the area _ increases (decreases)

28

CORNERSTONE INSURANCE PLC

15 Property and equipment

(a) Group

31 January, 2020

In thousands of nail Land Building Improvement

Leasehold Motor Vehicles Equipment

Furniture &

Fittings Total

Cost:

At I January 2020

Additions

Right of use of Asset

Disposals

Revaluation gam (see note (0 below)

At 31 March, 2020

Accumulated depreciation

At 1 January 2020

Charge for the year

Disposals

At 31 March, 2020

Carrying Amount:

At 31 March, 2020

At December 31 2019

(a) Group

31 December, 2019

1429,581

16,540

483756

10,667

9,445

64,877 696.566

23,959

(25,095)

588.486

20,179

18/805

552

3 448 071

71.897

9 445

;25,095)

1,446,121 500,868 64,877 695,430 608,665 108,357 3,504,318

(0)

(0)

120,746

829

17,038

1,712

456,610

26,239

(25,095)

535,991

9 477

1]6.678

1,499

1.30] 064

39 756

125,095)

(01 121,575 18,750 457/54 545,468 1'8.178 1 321 725

1,446,121 379,293

360,010

46,127

4]839

237,676

239,956

63,197

52,495

10,179

11.126

2,182,593

2,141,007

1.429,501

Land Building

Leasehold

Improvement Motor Vehicles Equipment

Furniture &

Fittings Total

In thousands of nalra

Cost:

At 1 January 2019

Additions

Disposals

Revaluation gain (see note (0 below)

Recognition of right-of-use asset

At 31 December, 2019

Accumulated depreciation

An 1 January 2019

Charge for the year

linpanment loss on right-of-use asset

Disposals

At 31 December, 2019

Carrying Amount.

At 31 December, 2019

At 31 December 2010

1,288,808 601.230

1,109

26 710

64,877 575,262

166.322

(19,855)

564.427

23,419

(971)

187.002

11,309

(001

3 281 606

202 159

120,9141

26 710

629,049 64,877 721,729 586,875 198,223 3 489 561

1,260800

72,017 263.459

18,218

12,158

5,324

417,137

92,262

(17,923)

513,400

31,593

(847)

164.586

14 053

(88)

7442757

161,450

(183581

201 677 17 482 491 476 544,146 176,551 1.585 349

72,017

347372 47 395 230,253 42,729 19.672 1,904,212

838 848 1 1,216 791 337,771 52/19 158.125 51 G27 22A16

1,216,791

29

30

117,431

17,038 360,686

856 1,712 22,000

CORNERSTONE INSURANCE PLC

15(b) Company

31 January, 2020

In thousands of nano

Cost

At 1 January 2020

Additions

Disposals

At 31 March, 2020

ACEUMMUlate9 Depreciation

At 1 January 2020

Charge for the year

Intercompany charge (see note (D( below)

Disposals

At 31 March, 2020

Net book value

At 31 March, 2020

At 31 December 2019

Leasehold Furniture 13

Land Building Improvement Motor Vehicles Equipment Fittings Total

135,321 294,423 64877 566208 470.855 139.585 1671269

23.959 18,811 080 43 250

- (25,095) (25,095)

135,321 294 423 64.877 565,073 489,666 140,065 1689,424

(25695)

118,287 18750 357,591 416.755 131,212 1062594

135,321 176,137 46,127 207,482 52,912 6,853 626,830

135321 176,993 4]839 205,522 41,397 9 254 616325

429,450 130 331 1054 944

7 297 861 32,746

(25.095)

(i) The Group had no capital commitments as at the balance sheet date (2017:5 6

(i) There are no restrictions on the Company's title to its property and equipment

(119 There were no borrowing costs related to the acquisition of property and equipment during the year.

(v) This represents the depreciation charge on items of property and equipment that are being used by members of staff that have been seconded to other entities within the gr

Company

31 December, 2019

Land Building

Leasehold Improvement Motor Vehicles Equipment

Furniture Fittings Total

In thousands of natra

Coat

At 1 January 2019

Additions

Disposals

Recognition of right-of-use asset

135321

(01

294.423

0

22.984

64,877

0

447,835

135,872

(17,495)

443696

18,536

138,485

9 697

1.524.637

164.105

(17,495)

22 984

1,694 231

135,321 317,407 64,877 566,212 462,232 148,182

At 31 December, 2019

Accummulated Depreciation:

At 1 January 2019

Charge for the year

Intercompany charge Gee note (m) be8w)

111,860

5,107

12.158

5.324

296664

78860

(15,563)

406492

24,171

119783

10,546

945,97

124,508

(155631

1854,922 OLSOCO315 '

116,967 17 482 360.461 429663 130.329

At 31 December 2019

Net book value 135,321 200,420 47,395 205,751 32,569 17,853

18,702

639,309

578,662 At 31 December, 2019

135,321 182,543 52,719 151,1]1 38,204

At 31 December 2018 (5,324)

(i) The Group had no capital commitments as at the balance sheet date (2018 Nil)

tel There are no restrictions on the Company's title to its property and equipment.

M) There were no borrowing costs related to the acquisition of property and equipment during the year.

This represents the depreciation charge on stems of property and equipment that are being used by members of staff that have been seconded to other entitse sithin the gr

16 Intangible Assets

In thousands of naira

Group 2020

Group 2019

Company 2020

Company 2019

Cost:

Balance, beginning of the year

Additions

212,210 209,294

2,916

184,895

184,895

181,979

2 916

184,895 Disposals 212,210 212,210

Balance, end of the period

Amortssation.

Balance, beginning of the year

Charge for the year

182,846

4,573

160,478

22,369

155,531

4,573

160,104

135.595

19,936

155,531 Disposals

the Balance, end of period 187,420 182,846

29,364 24,790 29,363 24,790

As At 30 January 2019

2019 As At 31 Decerpher

29,364 46,817 29,364 46,384

(iv)

1,770,573 1,491,900

4,416,95

In thousands of nano

Cite fund

Claim outstanding

Claims outstanding Takaful dte

Life annuity fund

Total life insurance contract liabilities

1,615,685 1,179,719 1,615,685 1,179719

1,030,697 1,162,903 1,030,697 1,167,903

1,770,573 1 491 983

4416950 3834,

(b) Non-life insurance contract liabilities Group Group Company Company

2020 2019 2020 2019

In thousands of owe

Outstanding claims (see note (i) below)

IBNR (see note (a) below)

Claims payable

Outstanding claims-Takaful

IBNIR-Takaful

4,656,733 4,140 366 6225,013 3694,197

1,054.414 1.059,441 872,094 872 095

0 0 0 0

46,223 59,663 46,223 50,663

21901 21902 21 601 21901

59]6.972 5 281074 5. 164932 4,647556

2,533,204 2,1 39 973

81 244 2 221 217

2157,248

71,502

2928950 01.244

2 614 4413

2967,024

71.502

2,939,426

0,9113 397 7,895922 7 693,681 6 868 73

Unearned premiums (see note (iii) below)

Unearned premium Takeful

Total non-life unearned premium

CORNERSTONE INSURANCE PLC

17 Statutory Deposits

This represents the amount deposited with the Central Bank of Nigeria as at 31 December 2015 in accordance with section 9)1) and section 10(3) of Insurance Oct 2003. The

cash amount held is considered to be a restricted cash as the Management does not have access to the balances in its day to day activities. Interest income earned on No

deposit is included in the investment income.

in thousands of nada

Non life business 600,000 600.000 300000 300 000

Takaful

209000 200000 200,000 200 000

Life business

200900 200,000 200000 200.000

Li

1,000,000 1,000,000 700,000 700,000

Current

Non-current

1000 000 1 000 000 700 000 700 000

1,000,000 1,000,000 700,000 700,000

Group Group Company Company

2020 2019 2020 2019

18 Investment Contract Liabilities

in thousands of norra

Investment contract liabilities

The movement in investment contract liabilities is

Balance, beginning of the year

Contribution

Withdrawals

Guaranteed interest

Balance, end of the period

Current Non-current

19 Insurance contract liabilities

In thousands of nada

Life insurance contract Nee (a) below)

Non life insurance contract Nee (b) below)

Total insurance contract liabilities Nee note C below)

(a) Life insurance contract liabilities

Group Group Company Company

2020 2019 2020 2019

3404942 3406.701 9404 942

3406,701

9354959 3416964 3054.859 3.416,364

1581,568 1403978 1,581,568 1,403 778

(1980,7801 (19997771 11,680.780) 11 599 7771

149,295 106,336 149,295 186,336

3,404,942 3,406,701 3,404,942 3,406,701

3,404,942 3,406,701 3,404,942 3406,70'

Group Group Company Company

2020 2019 2020 2019

4,416,955 3,834,607 4416,955 3,034,607

8,935,397 7,895,522 7 693 981 6,860,/73

13,335,352 11,230 130 12,110,636 10,703 3310

Group Group Company Company

2020 2019 2020 2019

Total non-life claims

Total non-life insurance con ract

13 335 352 11 ]30,129 12 110,636 19703960

Total insurance contract liabilities

31

50,668

1,104

104,881

147,143 369,108

21 Other payables and accruals

In thousands of naffs

Financial Performance bonus Other staff payables National Housing Funds Accounts payable Stale cheques Rent payable Consultancy tee payable NITDA levy payable NAICOM levy payable Sundry creditors

Group Group Company Company

2020 2019 2020 2019

32,974 230,919 25,042 215,860

6,703 19,705 3,722 17,681

4,769 3,959 4,769 3,959

62.273 115,276 62,273 88,431

8,378 0 8,378 0

33.648

1,104

104,881

145,936 49,322

CORNERSTONE INSURANCE PLC

20 Trade payables Trade payables represent amounts payable for reinsurers, co-insurers, agents and brokers at year end. The carrying amounts disclosed below approximate

the fair values at the reporting date

In thousands of natra

Group Group Company Company

2020 2019 2020 2019

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

1,905,394 1,773,981 1,764,682 1,764,266

20,103 20,103

756,150 1,806,891 663,970 1,705.946

2,661,544 3,600,975 2,428,652 3.490,315

Payables to reinsurers and coinsurers

Commission payable

Premium Deposit

Current 2,661,544

3,600,975 2,428,652 3490,315

Non-current

2,66 ,544 3,600,975

2428,652 3,490,315

250,123 514886 484,205 673,655

Non-financial

Accrued expenses 143,860 93,497 32,353, 93,497

13,153 27,644 8,993 27,644

PAYE Impairment allowance

Witholdinq tax payable 21,621 6,383 21,232 6,383

178,634 127,524 62,579 127,524

662,840 801,179 312,701 642,410

662,840

801,179 312,701 642,410

Current Non-current

801,179 312,701 642,410 862,840

22 Deferred commission income The analysis of deferred commission income by class is as follows:

In thousands of naira

Motor Fire General accident,BOnd & Engineering

Marine

Aviation

Oil and Gas Mapfre Life

Group Group Company Company

2020 2019 2020 2019

8,633 9,322 4,594 5,978

75,065 46,718 60,050 37,109

71,778 75,501 66,485 67,400

16,408 13,633 11,421 10,368

- 35 -

39,913 39,766 38,546 31,008

579 2,003 579 2,003

221,014 78,094 221,014 78,094

433,391 265,073 402,690 231,961

433,391 265,073 402,690 231,961

Current Non-current

433,391 265,073 402,690 231,961

32

23 Income tax liabilities (a) The movement in income tax liabilities during the year is as follows:

In thousands of naira

Group 2020

Group 2019

Company 2020

CORNERSTONE INSURANCE PLC

Company 2019

Balance, beginning of the year

Income tax for the year (see note (b) below)

Minimum tax year

464,185

46,276

-

541,971

42,417

58,252

(178,455)

306,421

40,413

323.998

32.675

52,299

(102,551) Payment during the Balance, end of the year 510,461 464,185 346,834 306,421

Current

Non-current

510,461 464,185 346,834 306,421

510,461 464,185 346,834 306,421

24 Employees' Retirement Obligations

This represents the Company's liability from the defined benefit contribution pension plan which Is in compliance with the New Pension Act 2014 All pensio

In thousands of naira

Group 2020

Group 2019

Company 2020

Company 2019

Balance, beginning of the year

Pension expense for the year

during the

3,577 . 00

416.71

3,306

47,962

(47,691)

1,553

417

1,282

45,938

(45.667)

Payments made year 3,994 3,577 1,970 1,553

Current 3,994 3,577 1,970 1 553

Non-current 3,994 3,577 1,970 1,553

25 Discontinued operation Management announced the plan to discontinue the operations of Cornerstone Asset Management Limited (CAML) in 2015. The decision is consistent with

the Group's intention to focus its activities on rendering insurance business. Consequently, the assets of CAML were classified and separa rely presented as

assets held for sale and its ha hilt es as liabilities directly associated with assets held for sale In the financial statements for the year ended 31 December

2016.

33

(2,428,926)

In thousands of naira

Transfer from retained earnings 72,941 589,849 92,481 347,754

Balance, beginning of the year 3,379,729 2,789,880 2,776,680 2,428,926

Balance, end of the year 3,452,670 3.379,729 2,869,161 2,776,680

Group Group Company

2020 2019 2020

Company 2019

In compliance with section 21)11 of Insurance Act 2003, the contingency reserve for non-life insurance business is credited with the greater of 3% of total premium, or .20%

of the profits. This shall accumulate until it reaches the greater of minimum paid-up capital and 50% percent of the net premium. While for life business, the conugency

reserve is credited with an amount equal to 1% gross premium or 10% of net profit (whichever is greater) and accumulated until it reached the amount of MMIMUM paid-

up capital.

(e) Contingency reserves

26 Equity

(a) Share capital Group Group Company Company

In thousands of naira 2020 2019 2020 2019

Authonsed of 50k each

7,500,000 7,500,000 7,500,000 7,500,000

15900900900 ordinary shares

Issued and fully paid: 7,364.754 7,364,754 7,364,754 7,364,754

14,729,507,615 ordinary shares of 50k each

(b) Share premium This represents the amounts paid by shareholders above the nominal price of the shares.

Group Group Company Company

of naira In thousands 2020 2019 2020 2019

1947,166 1,947,166 1.947,166 1.947,166

Share premium

(c) Treasury shares allocated to them, Treasury shares are own equity instruments which are deducted from equity and no dividends are

Group 2020

Group 2019

Company 2020

Company 2019

In thousands of naira

(48,175) (48,175) (48,175) (48,175)

Treasury shares

(d) Accumulated losses Group 2020

Group 2019

1,260,546

Company 2020

Company 2019

(4.267,842) In thousands of naira

Balance, beginning of the year Transfer from reserves from merger (see note 25)

Transfer to contingency reserves (see note (e) below)

Transfer from statement of comprehensive income

1,565,115

(72941)

475,117

(1921005)

(589,849)

4,075,969

(1911138)

(92,481)

363,718

(1,399,901)

(347,754)

2944,458

(1,671,1381 Pnor year adjustment 1,967,291 1,565,115

Balance, end of the year

(f) AFS fair value reserves Group 2020

Group 2019

Company 2020

234,622

Company 2019

67.262 In thousands of naira

Balance, beginning of the year Transfer from statement of other comprehensive income

Balance, end of the year

426,306

(241,892)

184,414

Group 2020

75,220

351,086 426,306

Group 2019

(92,866)

141,756

Company 2020

167,360

234,622

Company 2019 (g) Non-controlling interest in Equity

In thousands of naira

Balance, beginning of the year

Share of profit for the year

Share of other comprehensive income

250,715

250,715

204,218

40,188

6,309 250,715

Balance, end of the year

34

2019

N'000

3033 56 233 694 338 771 263 )13

Group Company

2020 2019 2020

WOOD N'000 10000

2070

20 Fee and commission rncome

Reinsurance commissions and profit commison

Group

29 Net Claims expenses

CORNERSTONE INSURANCE PIC

27 Premium Income

(a) Gross psyllium written Group Group Company Company

In Thousands of nada 2020 2019 2020 2019

2 829 269 2 708293 2 085881 2 338 628

Non-life Insurance premiums 1,656,643 1,928 413 1,656 643 413 1,926413

Life insurance premiums

Investment contracts with OPE 41 910 41910

Annuity 47 264 76 956 47 260 76.956

Halal Takaful Insurance 4,575,086 4,793,662 4.231 698 4,343.997

Gross written premiums

Investment contract Liabilities 4,575,086 4,793062 4.231696 4943957

lb) Movement in unearned premium Group Group Company Company

of nada in thousands 2020 2019 2020 2019

5,359,919 3,573 343 4.824.417 3.232.794

Balance, beginning of the year 1,271992 1 766,575 1,254,546 ) 601,623

Changes in unearned premium (see note 19(0( iii)) 6,631,910 5,359,919 6,088,963 4834.417

Balance, end of the year

(1271,992) (1 .786 570 (1,2549461 11 601 620

Change in unearned premiums

5.303,064 3007087 2977152 2,742373

Gross earned premiums

(c) Gross premium inborn. Group Group Company Company

2020 2019 2020 2019

In thousands of nada

4 575088 4 793 662 4 231,698 4.343,897

Gross premium written (1 271 092) (1 786,578) 0 254 5481 (1.601,623)

Changes in unearned premium (see note (5) above) 3,303,094 3,007,087 2,977,152 2,742 374

Cross premium income

Group Group Company Company (d) Changes in Life Business

2020 2019 2020 2019

In thousands of nava

Changes in life fund (see note 19(c)(or)1

Changes in life annuity fund (see note 15(c)(v))

(278,588)

t276.5881

(278,588)

(7.r8 500)

(c) Reinsurance expenses

Non-life reinsurance premiums

Life reinsurance premiums

Takaful reinsurance premiums

Gross written reinsurance premiums

Change in reinsurance unearned premiums

1.555.521 1.853301 1.405.906 1.597 98l

789954 232936 709.554 232.936

8.828 20 705 6,820 20.705

2,351,903 2,106,821 2,202,368 1,851,622

(470469) (552,403) (485,034) (426727)

78 410 1,554,32r 171693 22,894

Reinsurers share of gross earned premiums

1,424,680 1,452,759 1,260,218 1,319,479

Net premium income

Total Reinsurances

share Net

Life business

Non-life business

Takaful

Gross paid Movement in ou

N'000 0'000 9'000 N'000 N'000

7657306 (354,324) 411.407 (146,298 72) 1463.2551

900,962 711.338 1.612,319 (874.662) 1.612 319

16,976 (4,1181 12,860 . 12 860

1.683,688 352,898 2,038,586 (1.020 960) 1 .161924

Company

29 Net Claims expenses

1070

35

CORNERSTONE INSURANCE PLC

Life business

Non-life business

Takalul

Group

Gross paid

N'000

765,731

801,430

16.976

Mov entln ou

N • 000

(354324)

530.816

(4.116)

Total

N'000

411 407

1332247

12 860

Reinsurance's

share

N'000

(146.299)

(782.2551

Net

N'000

265 108

549.991

12 860

1.584,136 172.377 1,756,513 (928.553) 827 959

172,7 7 1,756 513 (920,553) 823,959

Total Reinsurance's

share

101S

Net

Gross

14'000

Movement in ou

N'000 N'000 N'300 N'000

294,914

Site business

Non life business

Takaful

316361

989197

50,687

95.713

106765

(10553)

412,074

1,095,562

40135

(117.160)

(605325) 490 237

40 135

825 286 1 356.245 191726 1.547.771 722465)

,286, 191,526 1,547.772 (722.485)

Total Reinsurance's

Share

)018

Net

Company Gross

14'000

Movement in ou

N'000 N'000 M000 N'000

294 914 316,361 95 713 412,074 (117160)

Life business 901,030 105,594 1006.624 (520,5361 486.088

Non-life business 50.687 (10553) 40 135 40 135

Takaful 821.136

1,268,079 190754 1,458.833 (637697)

697) (677 821.176 1,268 079 190,754

36

37

30 Underwriting Expenses

(a) Acquisition cost

In thousands of naira

Aquisition cost- General

Aquisition cost- Life Aquisition cost- Takaful

Changes in deferred underwriting expenses

Group Group Company Company 2020 2019 2020 2019

319,142 334,575 262,513 261,595

137,080 109,946 137.080 109,946

10,730 12,311 10,730 12.311

466,953 456,831 410,323 383,852

(58,454) (77,316) (45.270) (46,559)

408,499 379,515 365,053 337.293

94,390

3,550

1,325

99,2E5

111,152

3,550

1,325

116,028

132,871 5,949

1,685

140,505

109,127

5.949

1,685

116,761

(b) Maintenance cost

Maintenance cost- General

Maintenance cost- Life

Maintenance cost- Takaful

O Investment contract liability cost Aquisition cost- deposit administration Maintenance- deposit administration

(d) Guaranteed interest

In thousands of nada

0 0

Group Group Company Company

2020 2,019 2,020 2,019

0

(176,270)

(176,270) 0 (176,270)

(176,270) Guaranteed interest (see note 18(a))

Total 288,049 454,054 348,257 520,020

Group 2020 N'000

Company

2019 2020 2019

N'000 N'000 N'000

31 Investment income

31(a) Investment income -Attributable to policyholders fund

Interest income

166,528 (29,714)

250,715 00 250,715.00

166,628 (29,714)

26(c) Non Controlling interest(NCI)

32(a) Fair value changes in financial assets-FVTPL

32(b) Fair value changes in financial assets-FVTOCI

Group Company

2020 2019 2020 2019

241,892 (20,007) (92,866) (15,46

CORNERSTONE INSURANCE PLC

31(b) Investment income -Attributable toSh are holders fund

Dividend income

Interest income

Others

3,517 144,287 3,083 123,684

301,750 574,691 236,279 410,482

305,267 718,978 239,362 534,166

IAS 39 requires fair value changes for financial assets carried at fair value through profit or loss to be recocgnised in the profit or loss account. Fin

CORNERSTONE INSURANCE PLC

31 Investment income

This comprises

In thousands of naira

110,754

Group

2020

Group 2019

Company

2020

Company

2019

Interest income on financial assets (see note (a) below) 110,754 76,225 109,41)1 75,601

Interest income - Investment contract liabilities (see note 18(a)) 191,350 119,267 126,878 70,296

Total interest income 302,103 195,492 236,279 145,897

Dividend income 3,517 161,827 3,0i33 120,499

Total investment income 305,620 357,319 239,362 266,396

Less' Interest income - Investment contract liabilities

Investment income on financial assets 305,620 357,319 239,362 266,396

(a) Interest income on financial assets' Group Group Company Company

In thousands of naira 2020 2019 2020 2019

Interest income received

Accrued interest: - Available-for-sale financial assets (see note 7(a)(ii))

- Held-to-maturity investments (see note 7(d)(i)) 110,754 110,754

76,225

76,225

109,431 109,491

75,601 75,601

income Investment contract liabilities (see note 18(a)) Interest - 191,350 119,267 126,878 70,296

302,103 195,492 236.279 145,897

32 Net fair value (losses)Igains-FVTPL Group Group Company Company

In thousands of naira 2020 2019 2020 2019

166,628 166,628 Fair value gainsnoss) in financial assets (see note 7(b)(1))

Share of Profit from Joint Venture 0

166,628 166,628

(I)

IAS 39 requires fair value changes in financial assets carried at fair value through profit or loss (FVTPL) to be recognised in profit or loss. Financial instruments designated as FVTPL by the Company relates to fs(3.330 billion (2017: f43.072 billion) investment in MTN equity-linked

notes (see note 7(b)). Fair value gain for the year ended 31 December 2017 recognised in profit or loss amounted to 8236.3 million (2016:

P42.39 billion loss). Fair values were determined by reference to market observable data under I FRS 13 Level 2 fair value hierarchy.

33(a) Net exchange gain Group Group Company Company

2020 2019 2020 2019 In thousands of naira

522,669 256.198 Unrealised exchange gain Realised exchange gain

522,669 256,198

The net exchange gain resulted from translation of foreign currency denominated assets of the entity at closing rate as at reporting date in line

with IA5 21 and also from sales of foreign currency denominated assets during the year.

33(b) Net trading income

In thousands of naira

Group 2020

Group 2019

Company

2020

Company 2019

Realised gain on disposal of financial assets

34 Other operating income

In thousands of naira

Miscellaneous income

Group

2020

Group 2019

Company 2020

Company

2019

38 50

'678 23,611 49,405 22,361

CORNERSTONE INSURANCE PLC

Gain on disposal of property 8 equipment 3,488 (1,590) 3,464 (1,590)

Provision no longer required

Recovery on subrogation 2,929 (19,398) 2,929 (19,398)

57,094 2,624 55,797 1,374

35 Allowance for impairment losses

Group Group Company Company

In thousands of naira 2020 2019 2020 2019

Loss on premium receivables

Reserval of impairment of financial assets (see note 96(i))

Allowance on reinsurance receivable (see note 1090)

Allowance on receivables (see note 9(c)) 0

0

36 Personnel expenses Group Group Company Company

In thousands of naira 2020 2019 2020 2019

Salaries 337,710 261,780 247,622 203.418

Other staff allowanCes 21,481 46,707 21,397 43.893

Defined contribution pension costs 17,749 15,508 14,255 12.227

Auxiliary staff costs 47,912 58,764 42,606 52,236

Directors' costs 5,134 6,120 3,814 4,670

Staff training and development 18,692 22,362 18,369 21,535

448,678 411,242 348,063 337,978

37 Other operating expenses Group Group Company Company

In thousands of naira 2020 2019 2020 2019

Advertising and promotions 6,190 5,433 5,268 4,637

Administrative expenses (see note (i) below) -

Rents and rates 12,647 16,674 10.376 13,706

Consultancy fees 21,496 69,898 21.496 69,898

Legal fees 27,147 27,140 14,410 22.938

Repairs, fuel and maintenance 56,650 67,124 52,086 63,464

Statutory due (NAICOM levy) 6,489 21,122 3,382 17,609

Director's Costs Auditor's remuneration 14,850 9,728 10.350 6,728

Subscription 4,474 9,091 962 3,177

Stamp duty expense Business travels 14,297 14,707 10,517 9.897

Fines and Penalties - 25 -

Insurance 12,865 13,268 10,548 11.573

Medicals 17,791 16,225 15,717 15,298

AGM expenses - -

Telephone and postages 4,387 7,045 2,343 4,271

Electricity 4,058 5,665 3.445 4,453

Stationery and printing 3,620 4,008 2.634 3,028

Office expenses 7,583 4,748 6,393 4.685

IT Consumables 6,064 6,578 5,351 5,877

Other expenses 13,770 7,963 6,326 750

Impairement of Other Asset -

Business re-organisation and relocation (65) (65)

234,379 306,376 181,604 261,923

*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.

38 Finance Costs

In thousands of naira

Group 2020

Group 2019

Company 2020

Company 2019

Cost of turnover Interest expense Bank charges 19,099 5,365 17,712 123

19,099 5,365 17,712 123

39

39 Statement of cash flow notes

Details of the statement of cash flows workings are presented below. Certain comparative figures have been

reclassified in the statement of cash flows in order to align to the presentation adopted in the current year. The

impact of these reclassification has been considered to be immaterial.

Group Company

In thousands of naira Note 2020 2020

(i) Premium received

Gross written premium per income statement 4,575,086 4,231,698

Add: Opening receivables (Gross) 60,183 58,100

Less: Closing receivables (Gross) (451,875) (417,689)

4,183,394 3,872,109

(ii) Proceeds from disposal of property and equipment

Cost of assets disposed 25,397 25,397

Accumulated depreciation of assets disposed (25,095) (25,095)

Net book value of disposed assets 302 302

Profit/ (Loss) on disposal 3,488 3,464

Disposal proceeds 3,790 3,766

(v) Reinsurance premium paid

Reinsurance cost (1,878,414) (1,716,934)

Add: Closing reinsurance payable 1,905,394 1,764,682

Less: Opening reinsurance payable (1,773,981) (1,764,266)

(1,747,001) (1,716,518)

40 Securities Trading Policy

In compliance with Rule 17. 15 Disclosure of Dealings in Issurers' shares, Rulebook of the Exchange 2015 (Issurers

Rule) Cornerstone Insurance PLC maintains an effective Securities Trading Policy which guides Directors, Audit Committee Members, employees and all individuals categorized as insiders as to their dealing in the Company's

shares. The Policy is regularly reviewed and updated by the Board. The Company has made specific inquiries of all

the Directors and other insiders and is not aware of any infringement of the Policy during the period.

40