Technology and Innovation
looking) information available, in order to compare the 12 month PD is the probability of a loan defaulting within
risk of a default occurring at the reporting date with the the next 12 months. 12-month PD estimates are required
risk of a default occurring at initial recognition of the to calculate 12-month ECLs for accounts classified as Stage
financial instrument. 1. These PD estimates also form the basis of the lifetime
PD curves, which are required to calculate lifetime ECLs
Stage 3: This includes financial assets that have objective for accounts classified as Stage 2. 12 Months PD is used
evidence of impairment at the reporting date. For these computed using the Group’s data
assets, lifetime ECLs are recognised and interest revenue
is calculated on the net carrying amount (that is, net of Lifetime PDs
credit allowance). This is done by applying the EIR in
subsequent reporting periods to the amortised cost of the Lifetime PD curves are required to calculate expected
financial asset. credit losses for Stage 2 and Stage 3 accounts. Ideally,
lifetime PD curves should be developed based on internal
When the Group has no reasonable expectations of default data. However, the Group does not have sufficient
recovering the financial asset, then the gross carrying history of internal default data to build credible curves so
amount of the financial asset can be directly reduced it has derived lifetime PD curves using S & P’s 2017 Annual
in its entirety via a write off. A write-off constitutes a Sovereign Default Study and Rating Transition.
derecognition event.
Simplified approach Loss given default (LGD)
The simplified approach does not require the Group to LGD is the share of an asset that is lost when a borrower
track the changes in credit risk, but, instead, requires the defaults. The recovery rate is defined as 1 minus the LGD,
Group to recognise a loss allowance based on lifetime ECLs the share of an asset that is recovered when a borrower
at each reporting date, right from origination. defaults. Loss given default is facility-specific because
such losses are generally understood to be influenced by
The Group recognizes lifetime ECLs at each reporting key transaction characteristics such as the presence of
period for trade receivables or other receivables that result collateral and the degree of subordination.
from transactions within the scope of IFRS 15 and that do
not contain a significant financing component.
Exposure at default (EAD)
Measurement of expected credit losses
EAD is equal to the current amount outstanding at the
The standard defines credit loss as the difference between expected point of default in case of fixed exposures like
all contractual cash flows that are due to the Group in staff loans and investment securities. This is derived using
accordance with the contract and all the cash flows that the original carrying amount, interest rate and tenor of the
the Group expects to receive (i.e., all cash shortfalls), facility.
discounted at the original EIR
3.2 (b) Accounting policies applied until 31
ECLs are a probability-weighted estimate of credit losses December 2017
over the expected life of the financial instrument (i.e., the
weighted average of credit losses with the respective risks Financial assets and liabilities
of a default occurring as the weights).
i) Financial assets
When measuring ECLs, in order to derive an unbiased and
probability-weighted amount, the Group should evaluate (a) Classification
a range of possible outcomes. This involves identifying
possible scenarios that specify: The Group’s financial assets include cash and short term
deposits, quoted and unquoted equity instruments, fixed
a. The amount and timing of the cash flows for income securities, trade receivables, claims recoverable,
particular outcomes other assets and statutory deposits.
The classification of financial assets depends on the
b. The estimated probability of these outcomes purpose for which the assets were acquired or originated.
c. Exposure at default (EAD): The EAD estimates the The Group classifies its financial assets into the following
categories:
percentage of exposure the Group might lose if the
borrower defaults. • Financial assets at fair value through profit or loss;
• Held-to-maturity;
Probability of default (PD) • Loans and receivable, and
• Available-for-sale.
12 Month PDs
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(b) Initial recognition and treasury bills are carried at amortised cost using the
effective interest method, less impairment allowance, if
All financial instruments are initially recognized at fair any.
value, which includes directly attributable transaction
costs for financial instruments not classified as at fair Held to maturity investments are measured
value through profit and loss. Financial instruments are subsequent to initial recognition at amortised
derecognized when the rights to receive cash flows from cost using the effectiveinterest rate.
the financial instruments have expired or where the Group
has transferred substantially all risks and rewards of The Group considers tainted any financial assets classified
ownership. as held to maturity, if during the current financial year or
the two preceding financial years, it has sold or reclassified
more than an insignificant amount of the held-to-maturity
( c) Subsequent measurement investments before maturity (more than insignificant
in relation to the total amount of held-to-maturity
Subsequent to initial recognition, financial assets are investments) other than sales or reclassifications that
measured either at fair value or amortised cost, depending
n their categorization as follows: • Are so close to maturity or the financial asset’s call
date (for example, less than three months before
maturity) that changes in the market rate of interest
Financial assets at fair value through profit or would not have a significant effect on the financial
loss asset’s fair value;
Financial assets at fair value through profit or loss include • Occur after substantially all of the financial asset’s
financial assets held for trading and financial assets original principal has been collected
designiated at initial recognition at fair value through profit through scheduled payments or prepayments; or
or loss.
• Are attributable to an isolated event that is beyond
Financial assets classified as held for trading are acquired the Group’s control, is non-recurring and could
principally for the purpose of selling in the short term for not have been reasonably anticipated by the Group.
profit purposes.
Subsequent to initial recognition, financial assets as fair
value through profit or loss investments are re-measured Available-for-sale
at fair value, with gains and losses arising from changes in
this value recognized in the profit or loss in the period in Available for sale financial investments include equity and
which they arise. The fair values of quoted instruments in debt securities. The Group classifies as available-for-sale
active markets are based on current bid prices, while those those financial assets that are generally not designated as
of unquoted instruments are determined by reference to an another category of financial assets and strategic capital
active markets or valuation techniques. investments held for an indefinite period of time, which
may be sold in response to needs for liquidity or changes in
Interest earned and dividends received while holding interest rates, exchange rates or equity prices.
trading assets at fair value through profit or loss are
recognised in the profit or loss. The Group holds financial Available-for-sale financial assets are carried at fair value.
assets designiated at initial recognition at fair value Fair values for quoted instruments are determined in the
through profit or loss in addition to those financial assets same manner as those of instruments at fair value through
held for trading. profit or loss. The fair values of unquoted equities and
other instruments for which there is no active market,
Held-to-maturity are established using valuation techniques corroborated
by independent third parties. These inputs may include
Held-to-maturity investments are non-derivative financial reference to the current fair value of other instruments that
assets with fixed determinable payments and fixed are substantially similar in terms of underlying cash flows
maturities that management has both the positive intention and risk characteristics.
and ability to hold to maturity other than:
Available for sale equity instruments for which fair
• Those that the Group designates as available for sale; value cannot be reliably determined are carried at cost
• Those that upon initial recognition has been designated less impairment allowance, if any.
Unrealized gains and losses arising from changes in the fair
as at fair value through profit or loss; and value of available-for-sale financial assets are recognised
• Those that meet the definition of loans and receivables. in other comprehensive income while the investment is
held, and are subsequently transferred to the profit or loss
Such instruments as government bonds, corporate bonds statement upon sale or de-recognition of the instrument.
When available for sale instruments are impaired, the
result of loss is recognised immediately in the statement of
profit or loss.
152 Annual Report & Accounts 2018
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following:
Dividends received on available-for-sale instruments
are recognised in profit or loss when the Group’s right to - a material decline in quoted price is generally regarded
receive payment has been established. as significant and
- a decline in quoted price that persists over a reasonable
Interest income on available for sale instruments are period of time will be considered to be prolonged
recognised in the statement of profit or loss.
Loans and receivables and held-to-maturity financial
Loans and receivables instruments
Loans and receivables are non-derivative financial assets For financial assets subsequently measured at amortised
with fixed or determinable payments that are not quoted cost, the Group first assesses whether objective evidence
in an active market, other than those classified by the of impairment exists individually for financial assets
Group as at fair value through profit or loss or available- that are individually significant and individually or
for-sale. collectively for financial assets that are not individually
significant. Individually significant financial assets
Loans and receivables consist primarily of staff loans, are tested for impairment on an individual basis. The
premium debtors, due from reinsurers, other debtors. remaining financial assets are assessed collectively in
Loans and receivables are measured at amortised Group’s that share similar credit risk characteristics. An
cost using the effective interest rate method, less any impairment loss in respect of a financial asset measured
impairment losses. Loans granted to staff at below market at amortised cost is calculated as the difference between
rates are fair valued by reference to expected future cash its carrying value and the present value of the estimated
flows and current market interest rates for instruments future cash flows discounted at the original effective
in a comparable or similar risk class and the difference interest rate.
between the historical cost and fair value is accounted
for as employee benefits under staff costs where these are Available for sale instruments
considered material.
Available-for-sale financial assets are impaired if there is
(d) Impairment of financial assets objective evidence of impairment, resulting from one or
more loss events that occurred after initial recognition
The carrying amounts of these assets are reviewed at but before the reporting date, that have an impact on the
each reporting date to determine whether there is any future cash flows of the asset.
objective evidence of impairment. A financial asset is
considered to be impaired if objective evidence indicates All impairment losses are recognized through profit or
that one or more events that have occurred since the loss. If any loss on the financial asset was previously
initial recognition of the asset have had a negative effect recognized directly in equity as a reduction in fair value,
on the estimated future cash flows of that asset and can the cumulative net loss that had been recognized in
be reliably estimated. equity is transferred to the statement of profit or loss
and is recognized as part of the impairment loss. The
Observable data or evidence that the Group uses to amount of the loss recognized in the statement of profit
determine if an impairment allowance is required on a or loss is the difference between the acquisition cost in
financial asset include: the case of equity instruments or amortised cost in the
case of debt instruments and the current fair value, less
• Significant financial difficulty of a counter party; any previously recognized impairment loss in the profit
• A breach of contract such as default of contractual or loss.
terms or delinquency in interest or principal
payment; For debt instruments subsequent decreases in the
• It is probable that the counterparty will enter amount relating to an impairment loss, that can be linked
bankruptcy or other financial reorganization; objectively to an event occurring after the impairment
• Observable data which indicates that there is a loss was recognized in the profit or loss, is reversed
measurable decrease in the estimated future cash flow through the statement of profit or loss. An impairment
from a Group of assets since the initial recognition loss in respect of an equity instrument classified as
of those assets although the decrease cannot yet be available-for-sale is not reversed through the statement
identified with the individual financial assets. of profit or loss.
In addition, for an available-for-sale financial asset, a When an available-for-sale financial instrument is carried
significant or prolonged decline in the fair value below its at cost because fair value is not reliably measured, an
cost is also considered objective evidence of impairment. impairment loss is measured as the difference between
While the determination of what is significant or the carrying amount and the present value of estimated
prolonged is a matter of judgment. In respect of equity future cash flows discounted at current market rate of
securities that are quoted, the Group is guided by the return for similar instruments.
Annual Report & Accounts 2018 153
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ii) Financial liabilities
The Group’s financial liabilities are classified as other financial liabilities at amortised cost. They include: investment
contract liabilities, trade and other payables.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value while
other financial liabilities are measured at amortised cost. In accordance with IAS 39, all financial assets and liabilities
(including derivative financial instruments) have to be recognized in the financial statements and measured in accordance
with their assigned categories. The table below represents the Group’s classification of all its financial assets and liabilities:
Category Classes as determined by the Subclasses
Group
Financial assets Financial assets at fair Investment Equity securities Shares
value through profit or loss securities
Loans and receivables Cash and cash equivalents Cash in hand and at bank
Short-term bank
deposits
Trade receivables Due from brokers and
contract holders
Other receivables Receivables from related
parties
Sundry receivables
Reinsurance assets Claim recoverables
Available for sale Investment Debt securities Treasury Bills
securities
Corporate Bonds
Government Bonds
Held to maturity Investment Debt securities Treasury Bills
securities
Government Bonds
Financial Financial liabilities at fair Nil Nil Nil
liabilities value through profit or loss
Financial liabilities at Trade payables Due to reinsurance
amortized cost companies & brokers
Other payables Accounts payable
Accrued expenses
Investment contract liabilities Individual deposit
adminstration
Group deposit
adminsitration
iii) 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 compnay 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 valuation techniques that maximize the use of relevant
observable inputs and minimise 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. Valuation techniques include using
recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair
154 Annual Report & Accounts 2018
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value of another instrument that is substantially the same, (v) Offsetting financial instruments
discounted cash flow analysis and option pricing models.
Where an appropriate and reliable valuation technique can Financial assets and liabilities are set off and the net
not be achieved the instrument is carried at cost. amount presented in the statement of financial position
when, and only when, the Group has a legally enforceable
The best evidence of the fair value of a financial instrument right to set off the recognized amounts and intends either
at initial recognition is normally the transaction price, i.e. to settle on a net basis or to realize the asset and settle the
the fair value of the consideration paid or received. If the liability simultaneously.
Group determines that the fair value at initial recognition
differs from the transaction price and the fair value is (vi) De-recognition of financial instruments
evidenced neither by a quoted price in an active market
for an identical asset or liability nor based on a valuation A financial asset is derecognized when the contractual
technique that uses only data from observable markets, rights of the Group to the cash flows from the asset expire,
then the financial instrument is initially measured at or its rights to receive the contractual cash flows on the
fair value, adjusted to defer the difference between the financial asset in a transaction that transfers substantially
fair value at initial recognition and the transaction price. all the risks and rewards of ownership of the financial
Subsequently, that difference is recognised in profit or loss asset are transferred, or when it assumes an obligation to
on an appropriate basis over the life of the instrument but pay those cash flows to one or more recipients, subject to
no later than when the valuation is wholly suppported by certain criteria.
observable market data or the transaction is closed out. If
an asset or a liability measured at fair value has a bid price Any interest in transferred financial assets that is created
and an ask price, then the Group measures assets and long or retained by the Group is recognized as a separate asset
positions at a bid price and liabilities and short positions at or liability.
an ask price or at the price that best present the financial
instrument. The Group derecognizes a financial liability when its
contractual obligations are discharged, cancelled or
The fair value of a demand deposit is not less than the expire.
amount payable on demand, discounted from the first
date on which the amount could be required to be paid. (vii) Net realised gain/ (loss) from financial assets
The Group recognises transfers between levels of the fair
value hierarchy as of the end of the reporting period during Net realised gain/(loss) is the gain/(loss) arising from the
which the change has occurred. disposal of financial assets held at fair value through other
comprehensive income and are reclassified from other
(iv) Trade receivables comprehensive income and recognised in the profit or
loss.
Trade receivables arising from insurance contracts
represent premium debtors with determinable payments. (viii) Net fair value gain/ (loss) from assets at fair
Trade receivables on insurance contracts are initially value
recognised at fair value and subsequently measured at
amortised cost less impairment. Trade receivables are Net fair value changes arising from the changes in the fair
recognised for insurance cover for which payments have value of financial assets held at fair value through profit or
been received indirectly through duly licensed insurance loss are recognised in the profit or loss.
brokers or lead insurers in co-insurance arrangements.
Premium collected on behalf of the Group are expected to
be received within 30 days from insurance brokers and lead
insurers. Trade receivables that are individually identified
as impaired are assessed for specific impairment. All other
trade receivables are assessed for collective impairment.
Annual Report & Accounts 2018 155
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(A) Classification and measurement of financial instruments
The measurement category and the carrying amount of financial assets and liabilities in accordance with IAS 39 and
IFRS 9 at 1 January 2018 are compared as follows:
Group IAS 39 IFRS 9
Measurement Carrying Measurement Carrying
category amount category amount
Financial assets N’000 N’000
Cash and cash equivalents Loans and 1,745,342 Amortised cost 1,744,716
receivable
Debt instruments at amortised cost Amortised cost 5,461,742 Amortised cost 5,422,019
Debt instruments at fair value through OCI Available for sale 4,032,813 Fair value 4,032,813
through OCI
Trade receivables Loans and 707,489 Amortised cost 707,489
receivable
Other receivables Loans and 924,101 Amortised cost 919,630
receivable
Statutory deposits Loans and 632,964 Amortised cost 632,964
receivable
Equity Instrument - FVPL Fair value 1,380 Fair value 1,380
through P or L through OCI
Financial liabilities
Investment contract liabilities Amortised cost 1,063,860 Amortised cost 1,063,860
Trade payable Amortised cost 516,371 Amortised cost 516,371
Other payables Amortised cost 1,248,292 Amortised cost 1,248,292
Company IAS 39 IFRS 9 Carrying
Measurement Carrying Measurement amount
Financial assets category amount category N’000
Cash and cash equivalents 910,647
Debt instruments at amortised cost Loans and N’000
Debt instruments at fair value through OCI receivable 911,023 Amortised cost 993,965
Trade receivables Amortised cost 3,351,670
Other receivables Available for sale 1,004,463 Amortised cost
Statutory deposits 3,351,670 Fair value 486,997
Equity Instrument - FVPL Loans and
receivable through OCI 834,519
Loans and 486,997 Amortised cost
receivable 300,000
Loans and 834,519 Amortised cost
receivable 796
Fair value 300,000 Amortised cost
through P or L
796 Fair value
through OCI
Financial liabilities Amortised cost 162,970 Amortised cost 162,970
Trade payable Amortised cost 1,234,090 Amortised cost 1,234,090
Other payables
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(B) Reconciliation of statement of financial position balances from IAS 39 to IFRS 9
The Group and company performed a detailed analysis of its business models for managing financial assets and
analysis of their cashflow characteristics. The following table reconciles the carrying amount of the financial asset
from their previous measurement category in accordance with IAS 39 to their new measurement categories upon
transition to IFRS 9 on 1 January 2018
Group IAS 39 Remeasurements IFRS 9 carrying
carrying Reclassifications ECL amount
amount
31 Dec 2017 1 Jan 2018
Financial assets N’000 N’000 N’000 N’000
Amortised cost
Cash and cash equivalents 1,745,342 - (626) 1,744,716
Held to maturity 5,461,742 (5,461,742) -
Debt instruments at amortised 5,461,742 (39,723) 5,422,019
cost
Trade receivables 707,489 - 707,489
Other receivables 924,101
Statutory deposits 632,964 - (4,471) 919,630
- - 632,964
Fair value through profit
or loss
Held for trading equity 1,380 (1,380) - -
instruments (See (i) below)
Fair value through OCI 4,032,813 (4,032,813) -
- 4,032,813 4,032,813
Avaiable for sale
1,380 - 1,380
Debt instruments at fair value
through OCI
Equity Instrument - FVOCI
(See (i) below)
Financial liabilities 1,063,860 - -
Investment contract liabilities 516,371 - - 1,063,860
Trade payable - - 516,371
Other payables 1,248,292 - 1,248,292
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Company IAS 39 Remeasurements IFRS 9 carrying
carrying Reclassifications ECL amount
Financial assets amount
Amortised cost 31 Dec 2017 N’000 1 Jan 2018
Cash and cash equivalents
Held to maturity N’000 N’000 N’000
Debt instruments at amortised
cost 911,023 - (376) 910,647
Trade receivables 1,004,463 (1,004,463) -
Other receivables (10,498)
Statutory deposits 486,997 1,004,463 993,965
834,519 -
300,000 - - 486,997
- - 834,519
- 300,000
Fair value through profit or
loss
Held for trading equity 796 (796) - -
instruments (See (i) below)
Fair value through OCI 3,351,670 (3,351,670) --
- 3,351,670 - 3,351,670
Avaiable for sale
796 - 796
Debt instruments at fair value
through OCI
Equity Instrument - FVOCI
(See (i) below)
Financial liabilities -
Trade payable 162,970 - - 162,970
Other payables 1,234,090 - - 1,234,090
The following explains how applying the new classification requirements of IFRS 9 led to changes in classification of
certain financial assets held by the Group and Company as shown in the table above:
(i) Designation of equity instruments at FVOCI
The Group has elected to irrevocably designate its portfolio of equity securities at FVOCI as permitted
under IFRS 9. These securities were previously classified as held for trading. The changes in fair value of such
securities will no longer be reclassified to profit or loss when they are disposed of.
(ii) Reclassification from retired categories with no change in measurementIn addition to the above, the following debt
instruments have been reclassified to new categories under IFRS 9, as their previous categories under IAS 39 were
‘retired’, with no changes to their measurement basis:
(i) Those previously classified as available for sale and now classified as measured at FVOCI; and
(ii) Those previously classified as held to maturity and now classified as measured at amortised cost.
iii) Those previously classified as loans and receivables and now classified as measured at amortised
cost.
158 Annual Report & Accounts 2018
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(C) IFRS 9 impact on changes in equity & allowances for Financial Instruments on initial
application of IFRS 9 on January 1, 2018
The following table provides information on IFRS 9 impact on changes in Equity, i.e. retained earnings, and reconciles
the closing impairment allowance as at December 31 2017 for both the financial assets in ‘accordance with IAS 39 and
provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 to the opening ECL
allowance determined in accordance with IFRS 9 as at January 1, 2018.
Group Loan loss Reclassification Remeasurement Loan loss
allowance
under IAS 39 allowance
/IAS 37 under IFRS 9
Loans and receivables (IAS 39)/Financial Assets at Amortised Cost (IFRS 9)
Cash and cash equivalent - - 626 626
Trade receivables 658,900 - 658,900
Other receivables 1,646,108 4,471 1,650,579
Total 2,305,008 - 5,097 2,310,105
Held to maturity (IAS 39)/Financial assets measured at amortized cost (IFRS 9)
Investment securities - 39,723 39,723
39,723
Total - - 39,723
Available for sale (IAS 39)/Financial assets measured at FVOCI (IFRS 9)
Investment securities - 20,223 20,223
20,223 20,223
Total --
Total 2,305,008 - 65,042 2,370,050
Annual Report & Accounts 2018 159
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Company Loan loss Reclassification Remeasurement Loan loss
allowance allowance
under IAS 39 under IFRS 9
/IAS 37 376
170,658
Loans and receivables (IAS 39)/Financial Assets at Amortised Cost (IFRS 9) 1,166,703
1,337,737
Cash and cash equivalent - - 376
Trade receivables 170,658 -
Other receivables 1,166,703 -
Total 1,337,361 - 376
Held to maturity (IAS 39)/Financial assets measured at amortized cost (IFRS 9)
Investment securities - 10,498 10,498
10,498
Total - - 10,498
Available for sale (IAS 39)/Financial assets measured at FVOCI (IFRS 9)
Investment securities - 11,399 11,399
11,399 11,399
Total --
Total 1,337,361 - 22,272 1,359,633
The total remeasurement loss of N2.3 billion (Company: N1.3 billion) was recognised in opening reserves at 1 January
2018. This includes an amount of N20.2 million (Company: N11.4 million) which was reclassified from available for sale
reserve to retained earnings in respect of ECL impairment loss on debt instruments measured at fair value through other
comprehensive income.
3.3 Other receivables and prepayments
Other receivables are measured at amortised cost less accumulated impairment losses while prepayment are carried at
cost less accumulated impairment losses.
3.4 Reinsurance assets and reinsurance liabilities
Reinsurance assets represent balances due from reinsurance contracts. Reinsurance liabilities are primarily premiums
payable for reinsurance contracts and are recognised as an expense when due. The details of recognition and measurement
of reinsurance contracts assets and liabilities have been set out under note 3.18 (e).
3.5 Deferred acquisition cost
Acquisition costs comprise insurance commissions, brokerage and other related expenses arising from the generation
and conclusion of insurance contracts. The proportion of acquisition costs that correspond to the unearned premiums
are deferred as an asset and recognized in the subsequent period. They are recognised on a basis consistent with the
related provisions for unearned premiums.
3.6 Investment property
Investment property comprises investment in land or buildings held primarily to earn rental income or capital appreciation
or both. Investment property is initially recognized at cost including transaction costs. The carrying amount includes the
cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are
met; and excludes cost of day to day servicing of an investment property. Investment property is subsequently measured
at fair value with any change therein recognised in profit or loss. Fair values are determined individually, on a basis
appropriate to the purpose for which the property is intended and with regard to recent market transactions for similar
properties in the same location.
Fair values are reviewed annually by independent valuer, registered with the Financial Reporting Council (FRC) of
Nigeria as well as holding a recognized and relevant professional qualification and with relevant experience in the
location and category of investment property being valued.
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Subsequent expenditure on investment property is impairment losses. Cost includes expenditures that are
capitalized only if future economic benefit will flow to the directly attributable to the acquisition of the asset.
Group; otherwise they are expensed as incurred.
Investment properties are disclosed separately from the
property and equipment used for the purposes of the Land and buildings are initially recognised at cost and
business. subsequently carried at revalued amounts, being fair value
at the date of revaluation less subsequent accumulated
The Group separately accounts for a dual purpose property depreciation and impairment losses, if any.
as investment property if it occupies only an insignificant
portion. Otherwise, the portion occupied by the Group is
treated as property and equipment. When parts of an item of property or equipment have
different useful lives, they are accounted for as separate
3.7 Intangible assets items (major components) of property and equipment.
Software
The gain or loss on disposal of an item of property and
Recognition of software acquired is only allowed if it is equipment is determined by comparing the proceeds
probable that future economic benefits attributable to this from disposal with the carrying amount of property and
intangible asset will flow to the Group. equipment, and are recognised net within other income in
profit or loss.
Software acquired is initially measured at cost. The cost of
acquired software comprises its purchase price, including Subsequent costs
any import duties and non-refundable purchase taxes,
and any directly attributable expenditure on preparing Subsequent costs are included in the asset’s carrying
the asset for its intended use. After initial recognition, amount or recognized as a separate asset, as appropriate,
software acquired is carried at its cost less any accumulated only when it is probable that future economic benefits
amortization and any accumulated impairment losses. associated with the item will flow to the Group and the
Maintenance costs should not be included. cost of the item can be measured reliably. All other
repairs and maintenance costs are charged to the profit
Internally developed software is capitalized when the and loss account during the financial period in which they
Group has the intention and demonstrates the ability are incurred.
to complete the development and use of the software in
a manner that will generate future economic benefits, Subsequent costs on replacement parts on an item of
and can reliably measure the costs to complete the property are recognized in the carrying amount of the
development. The capitalized costs include all costs asset and the carrying amount of the replaced or renewed
directly attributable to the development of the software. component is derecognized.
Internally developed software is stated at capitalized cost
less accumulated amortization and impairment.
Depreciation
Subsequent expenditure on software assets is capitalized
only when it increases the future economic benefits Depreciation is calculated on property and equipment
embodied in the specific asset to which it relates. All other on the straight line basis to write down the cost of each
expenditure is expensed as incurred. Amortization is asset to its residual value over its estimated useful life.
recognised in profit or loss on a straight-line basis over Depreciation methods, useful lives and residual values
the estimated useful life of the software, from the date that are reassessed at each reporting date. No depreciation is
it is available for use. charged on fixed assets until they are brought into use.
The estimated useful life of software is five years subject to Depreciation reduces an asset’s carrying value to its
annual reassessment. residual value at the end of its useful life, and is allocated
on a straight line basis over the estimated useful lives, as
follows:
3.8 Property and equipment
Land - Over the lease period
Recognition and measurement Buildings - Over 50 years
Office equipment - Over 5 years
All items of property and equipment except land and Computer hardware - Over 3 years
buildings are initially recognised at cost and subsequently Furniture and fittings - Over 5 years
measured at cost less accumulated depreciation and Motor vehicles - Over 4 years
Annual Report & Accounts 2018 161
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Revaluation of land and building 3.9 Statutory deposit
Land and building is valued on an open market basis by These deposits represent bank balances required by the
qualified property valuers at each reporting date if there insurance regulator of the Group to be placed with the
are evidence of significant changes in the carrying value. Central Bank of Nigeria and are based on 10% of the
statutory minimum capitalisation. These deposits are not
When an individual property is revalued, any increase available for day to day use and are stated at amortised
in its carrying amount (as a result of revaluation) is cost.
transferred to a revaluation reserve, except to the extent
that it reverses a revaluation decrease of the same property
previously recognised as an expense in the statement of 3.10 Share capital, dividend on ordinary
profit or loss. shares, earnings per share, retained earnings &
revaluation reserve
When the value of an individual property is decreased as a
result of a revaluation, the decrease is charged against any (i) Share capital
related credit balance in the revaluation reserve in respect
of that property. However, to the extent that it exceeds any The Group classifies ordinary shares as equity when
surplus, it is recognised as an expense in the statement of there is no obligation to transfer cash or other assets.
profit and loss. Incremental costs directly attributable to issue of shares
are recognized as deductions from equity net of any tax
Derecognition effects.
An item of property and equipment is derecognised when (ii) Dividend on ordinary shares
it is disposed of or where no future economic benefits are
expected from its use or disposal. Gains and losses arising Dividends on the Group’s ordinary shares are recognised
on derecognition are calculated as the difference between in equity in the period in which they are paid or, if earlier,
the net disposal proceeds and the carrying amount of approved by the Group’s shareholders.
the asset and are recognised in profit or loss as other
income. Where a revalued asset is disposed or scrapped, (iii) Earnings per share
the revaluation reserve balance in respect of that asset is
transferred as a reserve reclassification from other reserves The Group presents basic earnings per share for its
to retained earnings. ordinary shares. Basic earnings per share are calculated by
dividing the profit attributable to ordinary shareholders of
Impairment of non-financial assets the Group by the number of shares outstanding during the
year.
The carrying amounts of the Group’s non-financial assets
are considered to be impaired when there exist any Adjusted earnings per share is determined by dividing the
indication that the asset’s recoverable amount is less than profit or loss attributable to ordinary shareholders by the
the carrying amount, it is then assessed for impairment weighted average number of ordinary shares adjusted for
to determine the recoverable amount. The recoverable the bonus shares issued. A diluted earnings per share is
amount is the higher of an asset’s fair value less costs to sell determined where appropriate.
and value in use. For the purposes of assessing impairment,
assets are carried at the lowest levels for which they are (iv) Retained earnings/(deficit)
separately identifiable cash flows (cash generating units).
Impairment losses are recognised in profit or loss. This account accumulates net profits or losses from
operations.
Impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss (v) Revaluation reserve
has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to Revaluation reserve represents the fair value differences
determine the recoverable amount since the impairment on the revaluation of items of property, plant and
loss was recognised. An impairment loss is reversed only to equipment as at the balance sheet date. If an asset’s
the extent that the asset’s carrying amount does not exceed carrying amount is increased as a result of a revaluation,
the carrying amount that would have been determined, the increase is recognised in other comprehensive income
net of depreciation or amortization, if no impairment loss and accumulated in revaluation reserve. The increase is
had been recognised. Reversals of impairment losses are recognised in profit or loss to the extent that it reverses
recognised in profit or loss. a revaluation decrease of the same asset previously
recognised in profit or loss. If an assets carrying amount
is decreased as a result of a revaluation, the decrease is
recognised in profit or loss, however, the decrease shall be
recognised in other comprehensive income to the extent of
162 Annual Report & Accounts 2018
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any credit balance existing in the revaluation surplus in - The period to maturity is taken as the full term of the
respect of that asset. policy less the expired term.
- Full credit is given to premiums due between valuation
The revaluation surplus in respect of an item of date and the end of the premium paying term.
property, plant and equipment is transferred to retained For all individual risk business, the gross premium
earnings when the asset is derecognised. This involves method of valuation was used.
transferring the whole of the surplus when the asset
is retired or disposed and some of the surplus are Reserves were calculated via a cashflow projection
transfered to retained earnings as the asset is used by approach, taking into account future office premiums,
the entity. The amount of the surplus transfered is the expenses and benefit payments. Future cashflows were
difference between depreciation based on the revalued discounted back to the valuation date at the valuation
carrying amount of the asset and the depreciation based rate of interest.
on the asset’s original cost. Transfers from revaluation
reserve to retained earnings are not made through profit An unexpired premium reserve (UPR) was included
or loss. for Group life business after allowing for acquisition
expenses at a ratio of 15% of premium. The UPR is tested
3.11 Contingency reserve against an Additional Unexpired Risk Reserve (AURR)
for adequacy and an AURR may also be held to allow
The Group maintains contingency reserves in accordance for any inadequacies in the UPR for meeting claims
with the provisions of the Nigerian Insurance Act in respect of the unexpired period. The claim rates
to cover fluctuations in securities and variations in underlying the AURR were based on pooled historical
statistical estimates. For life business, the reserve is scheme claims experience. Allowance was made for
calculated at the rate equal to the higher of 1% of gross IBNR (Incurred But Not Reported) claims in Group Life
premiums and 10% of net profit. to take care of the delay in reporting claims. This was
based on a loss ratio approach, which uses historical
3.12 Life insurance contract liabilities claims experience to estimate the expected claims, from
which the IBNR portion is determined.
The recognition and measurement of insurance contracts
have been set out under note 3.18. Insurance contracts. 3.13 Liability adequacy test
The reserves include Incurred But Not Reported (IBNR),
Unearned Premium Reserve (UPR) and Life fund and The liability for insurance contracts is tested for adequacy
these liabilities arising from life insurance contracts by discounting current estimates of all future contractual
are determined as follows: cash flows and comparing this amount to the carrying
value of the liability net of deferred acquisition costs.
(a). Life fund Where a shortfall is identified, an additional provision
is made and the Group recognizes the deficiency in the
This is made up of liabilities on life policies in force as statement of profit or loss. Insurance contract liabilities
determined by qualified actuaries at the reporting date. are subject to liability adequacy testing on an annual
Surplus or deficit arising from the periodic valuation of basis. The method of valuation and assumptions used,
the life insurance contracts are recognised in profit and the cash flows considered and the discounting and
loss. aggregation practices adopted have been set out as part
of note 3.12.
(b). Reserving methodology and assumptions The recognition of liability for investment contracts
have been set out under note 3.19. Reserve for
Data segmentation investment contract liabilities have been taken as the
amount standing to the credit of the policy holders at
The data used for reserving is segmented into the 2 the valuation date.
classes as follows:
3.14 Trade and other payables
• Individual business
• Group business Trade Payables:
Valuation and Assumptions Trade and other payables are recognised initially at
fair value and subsequently measured at amortised
The valuation for both the individual business and cost using the effective interest method. The fair value
Group business utilises various assumptions which of a non-interest bearing liability is its discounted
include: repayment amount. If the due date is less than one year,
- The valuation age is taken as Age Last Birthday at the discounting is omitted.
valuation date;
Annual Report & Accounts 2018 163
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Other payables: 3.17 Income tax
Other payables are initially recognised at fair value and Income tax comprises current and deferred tax. Income
subsequently measured at amortised cost. tax expense is recognised in the income statement except
to the extent that it relates to items recognised directly in
3.15 Provisions equity, in which case it is recognised in equity.
A provision is recognized if, as a result of a past event, the Current tax is the expected tax payable on taxable income
Company has a present legal or constructive obligation for the year, using tax rates enacted or substantively
that can be estimated reliably, and it is probable that an enacted at the balance sheet date and any adjustment to
outflow of economic benefits will be required to settle the tax payable in respect of previous years.
obligation. Provisions are determined by discounting the
expected future cash flows at a rate that reflects current 3.18 Insurance contracts
market assessments of the time value of money and the
risks specific to the obligation. The Group enters into insurance contracts as its primary
business activities. Insurance contracts are those that the
3.16 Deferred income tax Group accepts significant insurance risk from another
party (the policy holder) by agreeing to compensate the
Deferred income tax is recognised, using the liability policy holder or other beneficiary, if a specified uncertain
method, on temporary differences arising between the tax future event (the insured event) adversely affects the
bases of assets and liabilities and their carrying amounts in policy holder or the other beneficiary. The Group as a
the financial statements. However, if the deferred income guide defines significant insurance risk as the possibility
tax arises from initial recognition of the asset or liability of having to pay benefit on the occurrence of an insured
in a transaction other than a business combination that event that are at least 10% more than the benefit payable if
at the time of the transaction affects neither accounting the insured event did not occur.
nor taxable profit or loss, it is not accounted for. Deferred
income tax is determined using the tax rates (and laws) Life insurance contracts are issued to indemnify the
that have been enacted or substantively enacted by the end insured life, the dependent or other thirdparty in the event
of the reporting period and are expected to apply when the of death, permanent disability, loss of job or on survival
related deferred income tax is realizable or the deferred to maturity of the contract with the sums assured. These
income tax liability is payable. contracts insure events associated with human life (for
example, death or survival) over a long duration.
Deferred income tax assets are recognised to the extent
that it is possible that future profit will be available against In addition, the Group has short term life insurance
which the temporary differences can be utilized. contracts which protect the policyholders from the
consequences of events (such as death or disability) over
Deferred income tax is provided on temporary differences usually an annual period. Guaranteed benefits paid on
arising on investments subsidiaries and associates, except occurrence of the specified insurance event are either
where the Group controls the timing of the reversal of the fixed or linked to the extent of the economic loss suffered
temporary difference and it is probable that the temporary by the insured or the beneficiary.
difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when Recognition and measurement
there is legally enforceable right to offset current tax assets
against current tax liabilities and when deferred income (a) Gross premium written
tax assets and liabilities relate to income taxes levied by
the same taxation authority on either the taxable entity or Premiums and annuity considerations written and/
different entities where there is an intention to settle the or receivable under life insurance contracts are stated
balances on a net basis. gross of commission and recognised when due. Premium
written relates to risks assumed during the period.
The tax effects of carry-forwards of unused losses or
unused tax credits are recognised as an asset when it (b) Claims expenses
is probable that future taxable profits will be available
against which these losses can be utilized. Claims and benefits relating to life insurance contracts are
recognised as expense on notification. The measurement
Deferred tax related to fair value re-measurement of of life insurance contract liabilities has been set out under
available-for-sale investments, which are charged or note 3.12. Claims expenses are expenses related to the
credited directly in other comprehensive income, is also settlement of insurance risk obligations.
credited or charged to other comprehensive income and
subsequently recognised in the income statement together
with the deferred gain or loss.
164 Annual Report & Accounts 2018
Technology and Innovation
(c) Claims expenses recoverable (f) Unearned premiums
Claims expenses recoverable are amounts recoverable on Unearned premiums are those proportions of premiums
the gross claims expenses. This is estimated in manner written in the year that relate to periods of risks after
consistent with the outstanding claims provision and the reporting date. It is computed separately for each
claims incurred associated with the polices and are in insurance contract using a time proportionate basis, or
accordance with the related insurance contract. They another suitable basis for uneven risk contracts.
are measured at their carrying amount less impairment
charges. Amounts recoverable under reinsurance 3.19 Investment contracts
contracts are assessed for impairment at each reporting
date. If there is objective evidence of impairment, the Investment contracts are those contracts that transfer
Group reduces the carrying amount of its insurance assets financial risks with no significant insurance risk. Financial
to its recoverable amount and recognizes the impairment risk is the risk of a possible future change in one or more
loss in profit or loss as a result of an event that occurred of a specified interest rate, security price, commodity
after its initial recognition, that the Group may not price, foreign exchange rate, index of prices or rates,
recover all amounts due and that the event has a reliably credit rating or credit index or other variable, provided in
measurable impact on the amounts that the Group will the case of a non-financial variable that the variable is not
receive from the reinsurer. specific to a party to the contract.
(d) Deferred income The Group enters into investment contracts with
guarantee returns and other businesses of savings nature.
Deferred income represents a portion of commission Those contracts are recognised as liabilities and are
received on reinsurance contracts which are booked measured at amortised cost at amount payable at each
during the financial year and are deferred based on the reporting date. The Group does not have contracts with
tenor of the underlying contracs. It is calculated by discretionary participating features.
applying the reinsurance commission income ratio of
prepaid reinsurance to reinsurance cost. Individual deposit-based business comprises the various
Wapic Trust, Wapic Gold, Wapic Cash and Wapic Val
(e) Reinsurance contracts held policies and their reserve comprises of the amount standing
to the credit of the policyholders (account balance) at the
Contracts entered into by the Group with reinsurers under valuation date. The life cover element (and corresponding
which the Group is compensated for losses on one or more risk premiums where applicable) was unbundled from the
contracts issued by the Group and that meet the definition deposit components and reserves were calculated using
requirements for insurance contracts are reclassified as a gross premium cash flow approach as described above.
reinsurance contracts. Insurance contracts entered into The rate of return applied on the policyholders balance
by the Group under which the contract holder is another are also in accordance with the terms and conditions of
insurer are covered as insurance contracts. each product.
Reinsurance assets consist of short-term balances due 3.20 Fees and commission income
from reinsurers, as well as longer term receivables that
are dependent on the expected claims and benefits Fees and commissions are recognized on ceding business
arising under the related reinsured insurance contracts. to the re-insurer and undertaking policy adminsitration
Amounts recoverable from or due to reinsurers are for collectively administered policies. Commission are
measured consistently with the amounts associated with earned and credited to profit or loss over the period the
the reinsured insurance contracts and in compliance with service is provided.
the terms of each reinsurance contracts. Reinsurance
liabilities are primarily premiums payable for the 3.21 Underwriting expenses
reinsurance contracts and are recognised as an expense
when due. The Group had the right to set-off re-insurance Underwriting expenses are made up of acquisition and
payables against the amount due from re-insurance and maintenance expenses comprising commission and
brokers in line with the agreed arrangement between both policy expenses, proportion of staff cost and insurance
parties. supervision levy.
Reinsurance expense represents outward reinsurance Underwriting expenses for insurance contracts are
premiums and are accounted for in the same accounting recognized as expense when incurred, with the exception
period as the premiums for the related direct insurance or of acquisition costs which are recognized on a time
reinsurance business assumed. apportionment basis in respect of risk.
165
Annual Report & Accounts 2018
Technology and Innovation
3.22 Income recognition 3.23 Employee benefits
(i) Gross premium income Short-term benefits
Short-term employee benefit obligations include wages,
Gross written premiums recognised for assumed insurance salaries and other benefits which the Group has a present
obligation to pay, as a result of employees’ services
risks during the year are amortised over the period of provided up to the reporting date. The accrual is calculated
on an undiscounted basis, using current salary rates
the insurance contract. The gross premiums written are A provision is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans
recognised as gross premiums income by adjusting for if the Group has a present legal or constructive obligation
the movement in the unearned premiums reserves for to pay this amount as a result of past service provided by
insurance risks brought forward from the last year at the employee and the obligation can be estimated reliably.
the beginning of the year and the required unearned These expenses are recognised in the profit or loss for the
premiums reserves for the outstanding insurance risks related period.
at the end of the year. The recognised gross premiums
income represent the earned portion of all insurance
contracts in force during the year both from preceeding
years and the current year.
Post employment benefits
(ii) Fees and commission income The Group operates a defined contributory retirement
scheme as stipulated in the Pension Reform Act 2014.
Fees and commission income are recognised on the Under the defined contribution scheme, the Group pays
commission and policy admin fees received in respect of fixed contributions of 10% to a separate entity – Pension
businesses ceded out to reinsurance companies and other Fund Administrators; employees also pay a minimum fixed
insurance companies and fees earned from other related percentage contribution of 8% to the same entity. Once the
financial services during the period. contributions have been paid, the Group retains no legal
or constructive obligation to pay further contributions if
(iii) Investment income the Fund does not hold enough assets to finance benefits
Investment income comprise interest income earned on accruing under the retirement benefit plan. The Group’s
short-term deposits, rental income. and income earned on obligations are recognized in the profit and loss.
trading of securities including all realized and unrealized
fair value changes, dividends and foreign exchange Termination Benefits
differences. Investment income, other than interest Termination benefits are payable whenever an employee’s
employment is terminated before the normal retirement
income, is recognised at fair value and on an accrual date or whenever an employee accepts voluntary
redundancy in exchange for these benefits. The Group
basis. recognizes termination benefits when it is demonstrably
committed either to terminate the employment of current
employees according to a detailed formal plan without
possibility of withdrawal, or to provide termination
Interest income is recognised in the profit or loss as it benefits as a result of an offer made to encourage voluntarily
redundancy if it is probable that the offer will be accepted
accrues and is calculated using the effective interest rate and the number of acceptances can be estimated. Benefits
falling due more than 12 months after reporting sheet date
method. Fees and commissions that form part of an
integral part of the effective yield of a financial instrument
are recognised as an adjustment to the effective interest
rate of the instrument.
(iv) Other operating income
Other operating income comprises of profit from sale of are discounted to present value.
property and equipment, interest income earned on staff
loans and net foreign exchange gain. Interest income 3.24 Foreign currency transactions
is recognised in the profit or loss as it accrues and is
calculated using the effective interest rate method. The Nigerian Naira is the Group’s functional and reporting
currency. Foreign currency transactions are translated
(v) Dividend income at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated
Dividend is recognized when the Group’s right to receive in foreign currencies are translated using the exchange
the dividend has been established. The right to receive rate ruling at the reporting sheet date; the resulting foreign
dividend is established when the dividend has been duly exchange gain or loss is recognized in profit or loss.
declared. Unrealized exchange differences on non-monetary
financial assets (investments in equity instruments) are
a component of the change in their entire fair value and
are recognised in equity (translation reserve). For a non-
monetary financial asset held for trading or designated
at fair value through profit or loss, unrealized exchange
differences are recognized in profit or loss. For non-
166 Annual Report & Accounts 2018
Technology and Innovation
monetary financial investments available-for-sale, Leases of equipment where the Group has substantially all
unrealized exchange differences are recorded in other the risks and rewards of ownership are classified as finance
comprehensive income and transfer to equity when the leases. Finance leases are capitalized at the inception of the
asset is sold or becomes impaired. lease at the lower of the fair value of the leased asset or
the present value of the minimum lease payments. Each
3.25 Management and other operating expenses lease payment is allocated between the liability and finance
charges so as to achieve a constant interest rate on the
Management and other operating expenses are expenses outstanding balance of the liability.
other than claims and underwriting expenses. They include
depreciation expenses and other operating expenses. They The corresponding lease obligations, net of finance charges,
are recognised on an accrual basis. are included in liabilities. The finance cost is charged to the
income statement over the lease period according to the
effective interest method. The equipment acquired under
3.26 Segment reporting the finance lease is depreciated over the shorter of the
useful life of the asset and the lease term, if ownership does
A segment is a distinguishable component of the Group not pass at the end of the lease term. Leased assets under
that is engaged in providing products or services (business finance leases are treated in the same manner as property
segment), or in providing products or services within a and equipment.
particular economic environment (geographical segment),
which is subject to risks and rewards that are different 3.29 Contingent liabilities
from those of other segments. The Group’s primary format
for segment reporting is based on business segments. A contingent liability is a possible obligation that arises
Significant geographical regions have been identified as from past events and whose existence will be confirmed
the secondary basis of reporting. only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
3.27 Dividends of the Group or the Group has a present obligation as a
result of past events which is not recognised because it is
Dividend distribution to the Group’s shareholders is not probable that an outflow of resources will be required
recognized as a liability in the financial statements in to settle the obligation; or the amount cannot be reliably
the period in which the dividends are approved by the estimated. Contingent liabilities normally comprise of
Group’s shareholders. Dividends paid to shareholders legal claims under arbitration or court process in respect
are subject to witholding tax deduction at the appropriate of which a liability is not likely to crystallise.
rate. Dividends that are proposed but not yet declared are
disclosed in the notes to the financial statements. 3.30 Actuarial valuation
3.28 Leases Actuarial valuation of the life fund is conducted annually
to determine the liabilities on the existing policies and the
Operating leases adequacy of the assets representing the insurance fund as
at the date of valuation. All surpluses and deficits arising
Leases where the lessor retains the risks and rewards therefrom are charged to the profit or loss.
of ownership of the underlying asset are classified as
operating leases. Payments made under operating leases
are recognised on profit or loss on a straight-line basis over
the period of the lease.
Finance leases
Annual Report & Accounts 2018 167
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168 Annual Report & Accounts 2018
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Consolidated
Statements of
Financial Position
Group Group Company Company
Group 2018 2017 2018 2017
ASSETS 31-Dec 31-Dec 31-Dec 31-Dec
Cash and cash equivalents N’000 N’000 N’000 N’000
Financial assets at fair value through P or
L/ Held for trading Notes
Financial assets at fair value through OCI/
Available for sale 8 2,888,235 1,745,342 2,056,736 911,023
Financial assets at amortised cost/ Held to 9- 1,380 - 796
maturity
Trade receivables 9 5,272,266 4,032,813 1,413,091 3,351,670
Reinsurance assets
Deferred acquisition cost 9 2,571,929 5,461,742 809,832 1,004,463
Other Receivables & Prepayments
Investment property 10 34,962 707,489 34,962 486,997
Investment in associates
Investment in subsidiaries 11 3,692,142 1,586,301 2,187,984 838,139
Intangible assets
Property and equipment 12 749,174 530,793 598,828 317,832
Statutory deposit
Current income tax asset 13 1,435,324 1,061,531 1,017,312 871,238
Deferred tax asset
TOTAL ASSETS 14 253,480 312,750 253,480 312,750
15 8,763,246 8,264,440 5,059,810 5,059,810
16 - - 5,360,915 3,876,571
17 481,009 479,683 465,961 476,144
18 3,481,328 3,787,381 3,256,892 3,521,507
19 638,044 632,964 300,000 300,000
34,192 - - -
24 68,260 - 68,260 -
30,363,591 28,604,609 22,884,063 21,328,940
LIABILITIES 20 9,621,473 7,141,465 5,629,277 3,817,332
Insurance contract liabilities
Investment contract liabilities 21 1,170,785 1,063,860 - -
Annual Report & Accounts 2018 169
Technology and Innovation Technology and Innovation
Trade payables 22 255,384 516,371 162,970 415,414
Other Liabilities 2,697,095 1,417,790
Current income tax 23 1,946,741 1,458,748
Deferred tax liabilities 139,103 115,315
TOTAL LIABILITIES 25 258,901 263,793 - 202,548
5,968,399
24 - 202,547 8,628,445
13,253,284 10,646,784
EQUITY 26 6,691,369 6,691,369 6,691,369 6,691,369
Equity attributable to owners
Share capital 27 6,194,983 6,194,983 6,194,983 6,194,983
Share premium
Contingency reserves 28 2,436,203 2,061,153 2,053,249 1,742,067
Other reserves
Retained earnings 29 (191,965) 941,704 5,650 671,027
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY 30 1,979,717 2,068,616 (689,633) 61,095
17,110,307 17,957,825 14,255,618 15,360,541
30,363,591 28,604,609 22,884,063 21,328,940
These financial statements were approved by the board of directors (BOD) on 22 March 2019 and signed on behalf
of the board of directors by the directors listed below:
Aigboje Aig-Imoukhuede, CON
FRC/2013/CIBN/00000001999
Chairman
Adeyinka Adekoya
FRC/2016/CIIN/00000013893
Managing Director
Oluseyi Taiwo
FRC/2013/ICAN/00000004011
Chief Finance Officer
The statement of significant accounting policies and the accompanying notes form an integral part of these financial
statements.
170 Annual Report & Accounts 2018
Technology and Innovation Technology and Innovation
An1n7u1al Report & Accounts 2018 Annual Report & Account1s721018
Technology and Innovation Technology and Innovation
Consolidated Statements
of Profit or Loss and Other
Comprehensive Income
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
Gross premium written Notes 13,892,484 9,807,616 10,372,722 6,388,069
31
Gross premium income
Reinsurance expenses 31 12,217,602 9,589,128 8,681,483 6,494,411
31 (5,446,063) (3,937,089) (4,131,014) (2,742,273)
Net premium income
31 6,771,539 5,652,039 4,550,469 3,752,138
Fee and commission income
32 832,796 682,888 549,713 471,328
Net underwriting income
7,604,335 6,334,927 5,100,182 4,223,466
Claims expenses
Claims expenses recoverable 33 (4,958,065) (3,820,558) (2,723,471) (1,764,096)
Net insurance benefits and claims 33 1,877,556 758,848 850,268 81,745
Underwriting expenses (3,080,509) (3,061,710) (1,873,203) (1,682,351)
Increase in individual life fund
34 (2,364,112) (1,757,567) (1,784,686) (1,342,708)
Total underwriting expenses 20(d) (9,264) 20,487 - -
Underwriting profit (5,453,885) (4,798,790) (3,657,889) (3,025,059)
2,150,450 1,536,137 1,442,293 1,198,407
172 Annual Report & Accounts 2018
Technology and Innovation
Investment income 35(a) 1,162,250 1,255,961 919,211 621,263
Profit on investment contracts 35(b) 149,382 96,108 - -
Net realised gain on financial assets 5,161 614,534
Net fair value loss on assets at fair value 36 17,000 (663) 5,161 614,534
through profit or loss 37 17,000 (1,549)
Other operating income 498,114 1,164,532
38 397,006 980,556
Net income
Write-back on trade receivables 1,831,907 3,130,472 1,338,378 2,214,804
Write-back on other receivables and
prepayments 10(b) 3,982,357 4,666,609 2,780,671 3,413,211
Management expenses 13(b) 23 - 23 -
Net impairment gains on financial assets at
amortised cost 15,679 (38,333) (11,812) (54,028)
Net impairment (losses)/gains on financial
assets at fair value through OCI 39/40 (4,960,571) (4,393,783) (3,381,810) (3,128,558)
Expenses 8,591 - 572 -
Operating profit/(loss) (2,361) - 10,173 -
(4,938,638) (4,432,116) (3,382,854) (3,182,586)
(956,281) 234,493 (602,183) 230,625
Share of profit of associate 15(c) 1,143,515 1,388,198 - -
230,625
Profit / (loss) before tax 187,234 1,622,691 (602,183)
85,019
Income tax 25 163,959 (91,881) 184,910 315,644
Profit/(loss) after tax for the year 351,193 1,530,810 (417,273)
Other comprehensive income, net of tax
Items that are or may be reclassified to profit or loss:
Foreign currency translation difference of 29(b) (46,490) (27,610) - -
foreign operations
(274,289)
Net changes in fair value through OCI debt 2,361
financial instruments: -
- Unrealised net (losses)/gains arising 29(c) (258,342) (7,292) (168,301) 11,408
during the period -
- Net changes in allowance on FVOCI during 29(c) - (10,173) (128,719)
the period -
- Net reclassification adjustments for (128,719) -
realised net gains/(losses)
Share of other comprehensive income of 15(c) (104,418) -
associates
Annual Report & Accounts 2018 173
Technology and Innovation (577,132) (498,302) -
Items that will not be reclassified to profit or (1,153,892) (268,039) (676,776) (117,311)
loss:
Net changes in fair value through OCI (802,699) 1,262,771 (1,094,049) 198,333
equity financial instruments:
- Fair value loss on equity securities during 28 375,050 253,204 311,182 191,642
the period
(23,857) 1,277,606 (728,455) 124,002
Other comprehensive (loss)/income for the
year, net of tax 351,193 1,530,810 (417,273) 315,644
Total comprehensive income for the year (1,177,749) 1,009,567 (1,405,230) 6,691
(802,699) 1,262,771 (1,094,049) 198,333
Appriopration:
Transfer to statuatory regulatory reserve 351,193 1,530,810 (417,273) 315,644
Profit/(Loss) attributable to:
– Owners of the Company (802,699) 1,262,771 (1,094,049) 198,333
Total comprehensive income/(Loss) 41 3 11 (3) 2
attributable to:
– Owners of the Company
Earnings per share for profit/(loss) to the
equity holders of the Company (kobo):
Profit atributable to the owners of the
Company
Total comprehensive income attributtable to
the owners of the Company
Basic and diluted earnings / (loss) per share
(kobo)
174 Annual Report & Accounts 2018
Annual Report & Accounts 2018 Consolidated Statements of Changes in Equity - Group
For the period ended 31 December 2018
(All amounts in Naira thousands unless otherwise stated)
Notes Share Share Contingency Other Retained Total
reserves earnings equity
capital premium reserves
941,704 2,068,616 17,957,825
6,691,369 6,194,983 2,061,153
20,223 (65,042) (44,819)
IFRS 9 Opening Adjustment
Total comprehensive income for the year
Profit for the year -- - - 351,193 351,193
Other comprehensive income 29(c) - - - (274,289) - (274,289)
Net changes in fair value of FVOCI financial instruments 29(c) (577,132) (577,132)
Fair value loss on equity securities during the period 29(b) - -
Foreign currency translation difference 15(c) - - - (46,490) - (46,490)
Share of other comprehensive income of associates - - - (258,342) - (258,342)
ECL Impairment on financial assets at FVOCI 26 - 2,361 - 2,361
Total other comprehensive loss for the year -- - (1,153,892) - (1,153,892)
Total comprehensive loss for year -- - (1,153,892) 351,193 (802,699)
Transactions with equity holders, recorded directly in equity:
Transfer to contingency reserves 28 - - 375,050 - (375,050) -
Total transactions with owners -- 375,050 - (375,050) - Technology and Innovation
Balance at 31 December 2018 6,691,369 6,194,983 2,436,203
(191,965) 1,979,717 17,110,307
175
Technology and InnovationStatement of Changes in Equity - Company
176 Annual Report & Accounts 2018For the period ended 31 December 2018ShareShare Contingency Other Retained Total
(All amounts in Naira thousands unless otherwise stated) reserves earnings equity
Capital premium reserves
Balance at 1 January 2018
IFRS 9 Opening Adjustment Notes
6,691,369 6,194,983 1,742,067 671,027 61,096 15,360,542
11,399 (22,273) (10,874)
Total comprehensive income for the year
Loss for the year -- - - (417,273) (417,273)
Other comprehensive income 29(c) - - - (168,301) - (168,301)
Net changes in fair value of FVOCI financial instruments 29(c) - - - (498,302) - (498,302)
Fair value loss on equity securities during the year - - - (10,173)
ECL Impairment on financial assets at FVOCI (10,173)
Total other comprehensive loss for the year -- - (676,776) - (676,776)
Total comprehensive loss for year --
- (676,776) (417,273) (1,094,049)
Transactions with equity holders, recorded directly in equity:
Transfer to contingency reserves 28 - - 311,182 - (311,182) -
Total transactions with owners -- 311,182 - (311,182) -
Balance at 31 December 2018 6,691,369 6,194,983 2,053,249
5,650 (689,632) 14,255,619
Annual Report & Accounts 2018 Consolidated Statements of Changes in Equity - Group
For the period ended 31 December 2017 Share Share Contingency Other Retained Total
(All amounts in Naira thousands unless otherwise stated) reserves earnings equity
capital premium reserves
Balance at 1 January 2017
Notes
6,194,983 1,807,949 1,209,743 662,291 16,566,335
6,691,369
Total comprehensive income for the year
Profit for the year -- - - 1,530,810 1,530,810
Other comprehensive income 29(c) - - - (7,292) - (7,292)
Net changes in fair value of AFS financial instruments 29(c) - - - (128,719) 128,719 -
Net reclassification adjustments for realised net gains 29(b) - - - (27,610)
Foreign currency translation difference 15(c) - - - (104,418) - (27,610)
Share of other comprehensive income of associates - (104,418)
Total other comprehensive (loss)/income for the year -- - (268,039) 128,719 (139,320)
Total comprehensive (loss)/income for year -- - (268,039) 1,659,529 1,391,490
Transactions with equity holders, recorded directly in equity:
Transfer to contingency reserves 28 - - 253,204 - (253,204) -
Total transactions with owners - - 253,204 - (253,204) - Technology and Innovation
Balance at 31 December 2017 6,691,369 6,194,983 2,061,153
941,704 2,068,616 17,957,825
177
Technology and InnovationStatement of Changes in Equity -Company
178 Annual Report & Accounts 2018For the period ended 31 December 2017 Share Share Contingency Other Retained Total
(All amounts in Naira thousands unless otherwise stated) reserves earnings equity
Capital premium reserves
Balance at 1 January 2017
Notes
6,194,983 1,550,425 788,338 (191,626) 15,033,489
6,691,369
Total comprehensive income for the year
Profit for the year -- - - 315,644 315,644
Other comprehensive income 29(c) - - - 11,408 - 11,408
Net changes in fair value of AFS financial instruments 29(c) - - - (128,719) 128,719 -
Net reclassification adjustments for realised net gains/(loses)
Total other comprehensive income for the year -- - (117,311) 128,719 11,408
Total comprehensive income for year -- - (117,311) 444,363 327,052
Transactions with equity holders, recorded directly in equity:
Transfer to contingency reserves 28 - - 191,642 - (191,642) -
Total transactions with owners - - 191,642 - (191,642) -
Balance at 31 December 2017 6,691,369 6,194,983 1,742,067
671,027 61,095 15,360,541
Technology and Innovation Technology and Innovation
Statement of Cash Flows
For the year ended 31 December 2018
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
Operating activities 14,565,011 9,853,408 10,824,757 6,654,352
917,511 672,064 628,416 459,832
Premiums received
Fees and commission received (2,678,315) (2,144,355) (2,150,412) (1,476,844)
Fees and commission paid (7,996,103) (3,732,839) (5,561,984) (2,539,796)
Reinsurance premiums paid (4,612,047) (3,230,058) (2,423,774) (1,638,237)
Gross claims paid to policy holders
Reinsurance recoveries on claims 2,384,701 631,176 584,687 208,135
Payments to employees (1,537,080) (1,481,332) (1,198,642) (923,382)
Other operating cash payments (2,272,926) (2,656,724) (1,636,722)
Other operating cash receipts (661,959)
Receipts from Investment contract 487,359 653,001 402,170 745,159
Payments to Investment contract 698,557 326,029 - -
Tax paid (530,066) (167,672) - -
(150,817) (111,580) (62,110)
(78,407)
Net cash generated from operating activities (724,214) (1,388,882) 381,150 (225,910)
Cash flows from investing activities
Purchases of property and equipment (171,099) (328,657) (110,822) (146,160)
Purchases of intangible assets (115,141) (311,097) (102,581) (310,624)
Proceeds from sale of property and equipment
Purchases of investment in associates and subsidiaries 41,563 19,445 20,377 14,804
Purchases of investment securities - - (1,484,344) -
Proceeds from redemption of investment securities (3,422,777)
(10,566,777) (7,191,138) (3,623,992)
8,017,276 5,718,053 4,788,598 2,783,315
Annual Report & Accounts 2018 179
Technology and Innovation Technology and Innovation
Purchases of investment properties - 3,892 - (108)
Proceeds from sale of investment properties 66,650 214,670 66,650 214,670
Rental income received
Dividend income received 2,133 2,000 2,133 2,000
Interest income received 449,210 135,346 449,210 328,529
841,812 1,481,871 418,809 359,585
Net cash used in investing activities
(1,434,374) (255,615) 625,253 (377,981)
Cash flows from financing activities
- ---
Proceeds from issue of shares - ---
Dividend paid
- ---
Net cash used in financing activities
5,046,822 6,691,319 1,050,335 1,654,226
Cash and cash equivalents at beginning of year (2,158,588) (1,644,497) 1,006,402 (603,891)
Net increase in cash and cash equivalents
2,888,234 5,046,822 2,056,737 1,050,335
Cash and cash equivalent at end of year
Summary of Cash and cash equivalents Group Group Company Company
For the purposes of the statement of cash flow, cash 2018 2017 2018 2017
and cash equivalents is as follows:
31-Dec 31-Dec 31-Dec 31-Dec
Cash at bank and in hand N’000 N’000 N’000 N’000
Money market placements 2,223,320 933,582 1,816,483 508,263
Treasury bills less than 90 days maturity 664,914 811,760 240,255 402,760
3,301,480 139,312
- -
2,888,234 5,046,822 2,056,738 1,050,335
180 Annual Report & Accounts 2018
Technology and Innovation
Notes to the Financial
Statements
4. Critical accounting requires the use of techniques as described in accounting
policy 3.2(d). Further disclosures on the Group’s valuation
estimates and methodology have been made on note 5 (Fair value hierarchy)
. For financial instruments that trade infrequently and
judgments have little price transparency, fair value is less objective,
and requires varying degrees of judgement depending on
Management makes estimates and assumptions that liquidity, concentration, uncertainty of market factors,
affect the reported amounts of assets and liabilities. The pricing assumptions and other risks affecting the specific
underlying judgments of the selection and disclosure of the instrument.
Group’s critical accounting policies and estimates, and the
application of these policies and estimates are continually (ii) Actuarial valution of insurance contracts
evaluated based on historical experience and other factors, liabilities
including expectations of future events that are believed to
be reasonable under the circumstances. The liabilities for life insurance contracts are estimated
using appropriate and acceptable base tables of standard
mortality according to the type and nature of the insurance
Key sources of estimation uncertainty contracts. Assumptions such as expenses inflation,
valuation interest rate, mortality and claims experience are
(i) Determination of fair values considered in estimating the required reserves for individual
life contracts fund and the incurred but not reported claims
The determination of fair value for financial assets and under the Group life and non-life insurance contracts. The
liabilities for which there is no observable market price sensitivities to various valuation index for the life business
is included under note 5 (Sensitivity Analysis).
Annual Report & Accounts 2018 181
Technology and Innovation
5. Fair Value Hierarchy prices for similar instruments in markets that are considered
less than active; or other valuation techniques where all
significant inputs are directly or indirectly observable from
market data.
The Group’s accounting policy and basis of fair value
measurements are disclosed under notes 3.2 (d) and 4. Level 3: This includes financial instruments and other
assets and liabilities, the valuation of which incorporates
The determination of fair value for financial and other significant inputs that is not based on observable market
assets as well as financial and other liabilities for which data (unobservable inputs). Unobservable inputs are those
there is no observable market price requires the use of not readily available in an active market due to market
certain valuation techniques. illiquidity or complexity of the product. These inputs are
generally determined based on inputs of a similar nature,
For financial instruments and other assets and liabilities historic observations on the level of the input or analytical
that trades infrequently and have little price transparency, techniques.
fair value is less objective, and requires varying degrees
of judgment depending on liquidity, concentration, Determination of fair value of financial instruments:
uncertainty of market factors, pricing assumptions and
other risks affecting the specific instrument. (i) Valuation techniques used to derive Level 3 fair values
The Group measures fair value using the following fair Level 2 and level 3 fair values of investments have been
value hierarchy that reflects the significance of the inputs generally derived using the adjusted fair value comparison
used in making the measurement. approach. Quoted price per earning or price per book value,
enterprise value to EBITDA ratios of comparable entities
in a similar industry were obtained and adjusted for key
Level 1: The fair value of financial instruments traded in factors to reflect estimated ratios of the investment being
active markets is based on quoted market price in an active valued. Adjusting factors used are the Illiquidity Discount
market for an identical instrument at the balance sheet which assumes a reduced earning on a private entity in
date. comparison to a publicly quoted entity and the Haircut
adjustment which assumes a reduced earning for an entity
Level 2: The fair value of financial instruments that are located in Nigeria contributed by lower transaction levels in
not traded in an active market are determined by using comparison to an entity in a developed or emerging market.
valuation techniques based on observable inputs. This Below is a table showing sensitivity analysis of material
category includes instruments valued using quoted market unquoted investments categorised as Level 2 fair values.
prices in active markets for similar instruments; quoted
- African Reinsurance Corporation
Relationship of Fair value at 31 Valuation Unobservable FV if P/B FV if P/B
Technique Inputs multiples multiples
unobservable inputs to December 2018
is is
fair value increased decreased
to 1.01x to 0.91x
The higher the P/B ratio of 49,876,493 Adjusted Average P/B 52,583,963 47,377,629
similar trading entities, the fair value multiples of
higher the fair value comparison comparable entities
approach
- Nigerian Liability Insurance Pool
Relationship of Fair value at 31 Valuation Unobservable FV if P/B FV if P/B
Technique Inputs multiples multiples
unobservable inputs to December 2018
Average P/B is is
fair value multiples of increased decreased
comparable entities to 0.95x to 0.89x
The higher the P/B ratio of 7,415,800 Adjusted
similar trading entities, the fair value 7,936,483 7,435,231
higher the fair value comparison
approach
182 Annual Report & Accounts 2018
Technology and Innovation
- Energy and allied risk insurance pool of Nigeria
Relationship of Fair value at 31 Valuation Unobservable FV if P/B FV if P/B
Technique Inputs multiples multiples
unobservable inputs to December 2018
Average P/B is is
fair value multiples of increased decreased
comparable entities
The higher the P/B ratio of 47,685,649 Adjusted to 1.01x to 0.91x
similar trading entities, the fair value
higher the fair value comparison 50,274,192 45,296,548
approach
(ii) Determination of fair value of investment property
Management employed the services of estate surveyors and property valuation expert to value its investment
properties. The estimated open market value is deemed to be the fair value based on the assumptions that there will be
willing buyers and sellers. Recent market prices of neighborhood properties were also considered in deriving the open
market values. A variation of -/+5% will result in N13 million in the Group and Company results (2017: N16 million).
The table below analyses financial instruments and other assets and liabilities measured at fair value at the end of the year,
by the level in the fair value hierarchy into which the fair value measurement is categorised:
31 December 2018
Level 1 Level 2 Level 3 Total
balance
Group Notes
In thousands of Naira
Assets
Equity securities - at fair value through OCI 9 957,563 90,183 104,978 1,152,725
Fixed income securities - at fair value through OCI 9 4,119,541 - - 4,119,541
Equity securities - at amortised cost 9 -- - -
Investment properties 14 - 253,480 - 253,480
Total financial and other assets measured at 5,077,105 343,663 104,978 5,525,746
fair value
31 December 2017 Level 2 Level 3 Total
Level 1 balance
Group Notes
In thousands of Naira
Assets 9 1,548,487 120,812 59,178 1,728,477
Equity securities - Available for sale - 2,304,336
Fixed income securities - Available for sale 9 2,304,336 - -
Equity securities - Held for trading - 1,380
Investment properties 9 1,380 - 312,750
14 - 312,750
Total financial and other assets measured at 3,854,203 433,562 59,178 4,346,943
fair value
Annual Report & Accounts 2018 183
Technology and Innovation
31 December 2018 Level 2 Level 3 Total
Level 1 balance
57,292
Company Notes 956,985 137,869 - 1,152,147
In thousands of Naira 260,945 - - 260,945
Assets 9 - -
Equity securities - at fair value through OCI 9 - -
Fixed income securities - at fair value through OCI 9 - 253,480 253,480
Equity securities - at fair value through profit or loss 14
Investment properties
Total financial and other assets measured at 1,217,930 391,349 57,292 1,666,572
fair value
31 December 2017 Level 2 Level 3 Total
Level 1 balance
Company Notes
In thousands of Naira
Assets 9 1,470,080 120,812 59,178 1,650,070
Equity securities - Available for sale - 1,701,600
Fixed income securities - Available for sale 9 1,701,600 - -
Equity securities - Held for trading - 796
Investment properties 9 796 - 312,750
14 - 312,750
Total financial and other assets measured at 3,172,476 433,562 59,178 3,665,216
fair value
The following tables set out the fair values of financial instruments not measured at fair value and analyses them
by the level in the fair value hierarchy into which each fair value measurement is categorised:
31 December 2018
Carrying Level 1 Level 2 Level 3 Total
amount balance
Group
In thousands of Naira
Assets
Cash and cash equivalents 2,888,235 - 2,888,235 - 2,888,235
Financial assets 7,844,195 5,529,284 2,314,911 - 7,844,195
Trade receivables 34,962 - 34,962 - 34,962
Reinsurance assets 39,553 - - 39,553 39,553
Deferred acquisition cost 749,174 - - 749,174 749,174
Other receivables (excluding prepayment) 1,305,275 - - 1,305,276 1,305,276
Statutory Deposit 638,044 - 638,044 - 638,044
184 Annual Report & Accounts 2018
Technology and Innovation
Total financial assets not measured at 13,499,438 5,529,284 5,876,152 2,094,003 13,499,439
fair value
Liabilities
Investment contract liabilities 1,170,785 1,170,785 1,170,785
Trade payables 255,384 255,384 255,384
Other payables (excluding non-financial 1,758,007 1,758,007 1,758,007
liabilities)
Total financial liabilities not measured at fair 3,184,176 - - 3,184,176 3,184,176
value
31 December 2018
Carrying Level 1 Level 2 Level 3 Total
amount balance
Company 2,056,736 - 2,056,736 - 2,056,736
In thousands of Naira 2,222,923 1,065,148 1,157,775 - 2,222,923
Assets -
Cash and cash equivalents 34,962 - 34,962 47,036 34,962
Financial assets 47,036 - - 598,828 47,036
Trade receivables 598,828 - - 973,104 598,828
Reinsurance assets 973,104 - - - 973,104
Deferred acquisition cost 300,000 - 300,000
Other receivables (excluding prepayment) 300,000
Statutory Deposit
Total financial assets not measured at 6,233,589 1,065,148 3,549,473 1,618,968 6,233,589
fair value
Liabilities
Trade payables 162,970 - - 162,970 162,970
Other payables (excluding non-financial 2,524,952 - - 2,524,952 2,524,952
liabilities)
Total financial liabilities not measured at fair 2,687,922 - - 2,687,922 2,687,922
value
Annual Report & Accounts 2018 185
Technology and Innovation 31 December 2017
Group Carrying Level 1 Level 2 Level 3 Total
In thousands of Naira amount balance
Assets
Cash and cash equivalents 1,745,342 - 1,745,342 - 1,745,342
Financial assets 9,495,935 5,106,851 4,389,084 - 9,495,935
Trade receivables -
Reinsurance assets 707,489 - 707,489 47,036 707,489
Deferred acquisition cost 47,036 - - 530,793 47,036
Other receivables (excluding prepayment) - - 924,101
Statutory deposit 530,793 - - - 530,793
924,101 - 924,101
632,964 632,964 632,964
Total financial assets not measured at 14,083,660 5,106,851 7,474,879 1,501,930 14,083,660
fair value
Liabilities
Investment contract liabilities 1,063,860 1,063,860 1,063,860
Trade payables 516,371 516,371 516,371
Other payables (excluding non-financial 1,354,731 1,354,731 1,354,731
liabilities)
Total financial liabilities not measured at fair 2,934,962 - - 2,934,962 2,934,962
value
31 December 2017
Carrying Level 1 Level 2 Level 3 Total
amount balance
Company 911,023 - 911,023 - 911,023
In thousands of Naira 4,356,929 1,885,900 2,471,029 - 4,356,929
Assets -
Cash and cash equivalents 486,997 - 486,997 9,216 486,997
Financial assets 9,216 - - 317,832 9,216
Trade receivables - - 834,519
Reinsurance assets 317,832 - - - 317,832
Deferred acquisition cost 834,519 - 834,519
Other receivables (excluding prepayment) 300,000 300,000 300,000
Statutory Deposit
Total financial assets not measured at 7,216,516 1,885,900 4,169,049 1,161,567 7,216,516
fair value
Liabilities
Trade payables 415,414 - - 415,414 415,414
Other payables (excluding non-financial 1,324,350 - - 1,324,350 1,324,350
liabilities)
Total financial liabilities not measured at fair 1,739,764 - - 1,739,764 1,739,764
value
186 Annual Report & Accounts 2018
Technology and Innovation
6. Financial assets and liabilities
Accounting classification, measurement basis and fair values
Measurement basis
The fair value for financial assets and liabilities that are not carried at fair value were determined respectively as
follows:
(i) Financial assets:
The fair value for these financial assets is based on market prices from financial market dealer price
quotations. Where this information is not available, fair value is estimated using quoted market prices for
securities with similar credit, maturity and yield characteristics.
(ii) Cash and cash equivalents, trade receivables, other receivables, reinsurance assets and statutory deposits:
The carrying amount of cash and cash equivalents, trade receivables, other receivables, reinsurance assets and
statutory deposits are a reasonable approximation of their fair value as they are all short term in nature.
(iii) Investment contract liabilities, trade payables and other payables:
The carrying amount of investment contract liabilities, trade payables and other payables are a reasonable
approximation of their fair value as they are all short term in nature.
Accounting classification and fair values
The table below sets out the Group’s classification of each class of financial assets and liabilities, and their fair values.
FVTPL At Loans and FVTOCI Other Total Fair value
amortised receivables financial carrying
liabilities at amount
cost amotised cost
Group Notes
In thousands of
Naira
31 December
2018
Cash and cash 8 - - 2,888,235 - - 2,888,235 2,888,235
equivalents
Financial assets 9 - 2,571,929 - 5,272,266 - 7,844,195 13,116,461
Trade 10 - - 34,962 - - 34,962 34,962
receivables
Reinsurance 11 - - 813,825 - - 813,825 813,825
assets
Other 13 - - 1,305,276 - - 1,305,276 1,305,276
receivables
(excluding
prepayment)
Statutory 19 - - 638,044 - - 638,044 638,044
deposit
Total financial - 2,571,929 5,680,341 - 13,524,536 18,796,802
assets 5,272,266
Annual Report & Accounts 2018 187
Technology and Innovation
Investment 21 - - - - 1,170,785 1,170,785 1,170,785
contract - -
liabilities 22 - - - - 255,384 255,384 255,384
Trade payables 23
Other payables - - - - 1,516,851 1,516,851 1,516,851
(excluding
non-financial - - 2,943,020 2,943,020 2,943,020
liabilities)
Total financial
liabilities
FVTPL At Loans and FVTOCI Other Total Fair value
financial carrying
amortised receivables liabilities at amount
amortised
cost
cost
Group Notes -- 1,745,342 - 1,745,342 1,745,342
1,380 5,461,742 -
In thousands of 8 - - 9,495,935 7,332,772
Naira 9 -- 4,032,813 -
-- -
31 December -- -
2017
-- -
Cash and cash
equivalents
Financial assets
Trade 10 707,489 - 707,489 707,489
receivables 11
13 1,087,216 - 1,087,216 1,087,216
Reinsurance
assets 19 924,101 - 924,101 924,101
Other 632,964 - 632,964 632,964
receivables
(excluding
prepayment)
Statutory
deposit
Total financial 1,380 5,461,742 5,097,112 - 14,593,047 12,429,884
assets 4,032,813
Investment 21 - - - - 1,063,860 1,063,860 1,063,860
contract
liabilities 22 - - - - 516,371 516,371 516,371
23 - -
Trade payables - - 1,081,335 1,081,335 1,081,335
Other payables
(excluding
non-financial
liabilities)
Total financial -- - - 2,661,566 2,661,566 2,661,566
liabilities
188 Annual Report & Accounts 2018
Technology and Innovation
Financial assets and liabilities
Accounting classification, measurement basis and fair values
The table below sets out the Company’s classification of each class of financial assets and liabilities, and their fair values.
FVTPL At Loans FVTOCI Other Total Fair Value
financial carrying
amortised and liabilities amount
cost receivables at
amortised
cost
Company Notes
In thousands of
Naira
31 December 2018
Cash and cash 8- - 2,056,736 - - 2,056,736 2,056,736
equivalents
Financial assets 9 - 809,832 - 1,413,091 - 2,222,923 3,636,014
Trade receivables 10 - - 34,962 - - 34,962 34,962
Reinsurance assets 11 - - 490,209 - - 490,209 490,209
Other receivables 13 - - 973,104 - - 973,104 973,104
(excluding
prepayment)
Statutory deposit 19 - - 300,000 - - 300,000 300,000
Total financial - 809,832 3,855,011 1,413,091 - 6,077,935 7,491,025
assets
Trade payables 22 - - - - 162,970 162,970 162,970
23
Other payables 2,373,820 2,373,820 2,373,820
(excluding non-
financial liabilities)
Total financial -- - - 2,536,790 2,536,790 2,536,790
liabilities
FVTPL At Loans and FVTOCI Other Total Fair value
amortised receivables financial carrying
liabilities at amount
cost amortised
cost
Company Notes
In thousands of 8- - 911,023 - - 911,023 911,023
Naira
9 796 1,004,463 - 3,351,670 - 4,356,929 3,368,032
31 December 2017 486,997 - - 486,997 486,997
10 - - 403,620 - - 403,620 403,620
Cash and cash
equivalents 11 - -
Financial assets
Trade receivables
Reinsurance assets
Annual Report & Accounts 2018 189
Technology and Innovation
Other receivables 13 - - 834,519 - - 834,519 834,519
(excluding
prepayment) 19 - - 300,000 - - 300,000 300,000
Statutory deposit
796 1,004,463 2,936,159 3,351,670 - 7,293,088 6,304,191
Total financial
assets 22 - - - - 415,414 415,414 415,414
23 - -
Trade payables - - 1,139,318 1,139,318 1,139,318
Other payables
(excluding non- -- - - 1,554,732 1,554,732 1,554,732
financial liabilities)
Total financial
liabilities
190 Annual Report & Accounts 2018
Technology and Innovation
7. Operating segments disability, critical illness and other accidents. Revenue
from this segment is derived primarily from insurance
premium, investment income and net fair value gains on
financial assets at fair value through profit and loss.
The Group is organized into two operating segments as
described below, which are the Group’s strategic business Expenses for corporate units that render services for
units. These segments distribute their products through all business segments are initially paid by the general
various forms of brokers, agencies and direct marketing business segment and transferred to other business units
programs. Management identifies its reportable operating at cost price. The expenses are allocated based on service
segments by product line consistent with the reports used man hours rendered by the corporate units to the various
by the management. These segments and their respective business segments.
operations are as follows:
The corporate expenses for the following centrally shared
“General business: This segment covers the protection of services are being apportioned to all business segments in
customers’ assets (particularly their properties, both for the group:
personal and commercial business) and indemnification
of other parties that have suffered damage as a result of - Internal controls and audits
customers’ accidents. All contracts in this segment are
short-term in nature. Revenue in this segment is derived - Financial control
primarily from insurance premium, investment income,
net realized gains on financial assets, and net fair value - Human resources
gains on financial assets at fair value through profit or
loss. - Information technology
Life business: This segment covers the protection of the
Group’s customers against the risk of premature death,
Annual Report & Accounts 2018 191
192 Business segments Technology and Innovation
The Group operates the following main business segments:
General
Wapic Insurance Plc
- Includes general business insurance transactions with individual and corporate customers
Wapic Insurance Ghana Limited
- Includes general business insurance transactions with individual and corporate customers
Life
Wapic Life Assurance Limited
- Includes life insurance policies with individual and corporate customers.
Operating segment (continued)
The segment information is based on internal reporting to the Chief Operating Decision Maker in line with IFRS.
General Business Life Business General Business
Wapic Insurance Ghana Ltd Elimination Elimination
Adjustments Adjustments
Wapic Insurance Plc Wapic Life Assurance Ltd Group
31/12/18 31/12/17
31/12/18 31/12/17 31/12/18 31/12/17 31/12/18 31/12/17 31/12/18 31/12/17
Revenue: 8,681,483 6,494,411 2,055,365 1,712,521 1,480,754 1,382,196 - - 12,217,602 9,589,128
(647,049) (615,792) (668,000) (3,937,089)
Derived from external (4,131,014) (2,742,273) 1,408,316 1,096,729 (579,024) - - (5,446,063)
customers: 812,754 5,652,039
Annual Report & Accounts 2018 4,550,469 3,752,138 113,877 85,279 169,206 803,172 - - 6,771,539 682,888
- Gross premium 488,989 682,392 140,416 1,255,961
income 549,713 471,328 149,382 126,281 - - 832,796 96,108
96,108 - 614,534
- Reinsurance 919,211 621,263 - - - 188,368 (386,366) (236,062) 1,162,250
expenses - - - - - 149,382
Net insurance 5,161 614,534 -- - 5,161
premium income
- Commission
received
- Investment income
- Profit on investment
contracts
- Net realised gain/
(loss) on financial
assets
Annual Report & Accounts 2018 - Net fair value loss 17,000 (1,549) - - - 886 - - 17,000 (663)
on financial assets
at fair value through 90,403 498,114 1,164,532
profit or loss 2,050,911 9,436,241 9,465,399
- Other operating 397,006 980,556 14,365 193,761 86,743 93,573 - - 2,364,112 1,757,567
income (20,487) 9,264 (20,487)
202,378 1,481,332
6,438,559 6,438,270 2,174,929 376,887 1,209,119 1,212,280 (386,366) (236,062) 1,523,795 2,950,784
938,554 3,414,843 3,061,710
Expenses: 1,691,093 3,080,509 9,230,906
10,392,524
Underwriting 1,784,686 1,342,708 326,150 359,818 253,276 221,098 - - 1,388,198
expenses - 9,264 (176,902) - - - - 1,143,515 1,622,691
- 187,232
Decrease/ (Increase) - 923,382 282,006 182,916 262,484 355,572 - - 163,960 (91,881)
in individual life fund 2,259,204 676,058 335,237 314,694 - - 351,192 1,530,810
1,682,351 856,573 5,055,269 350,734 440,805 -
Employee benefit 979,306 6,207,645 2,150,052 2,781,745 1,201,730 1,332,169 30,363,591 28,604,609
expense 2,273,524 13,253,284 10,646,784
17,110,307 17,957,825
Other operating 2,403,548
expense
Claims incurred 1,873,202
Total underwriting 7,040,742
and operating
expenses
Share of profit of
associate
Profit/(loss) before tax (602,183) 230,625 24,877 7,389 (119,889) (386,366) (236,062)
85,019 (20,950) - 3 - -
Income tax 184,910 315,644
3,927 7,389 (119,886) (386,366) (236,062)
Profit/(loss) after tax (417,272)
Assets and
Liabilities:
Total assets 21,328,940 7,324,462 2,293,288 4,215,161 (2,138,223) (1,994,761)
22,884,063 5,968,399 3,818,892 1,462,878
15,360,541 3,505,570 830,410
Total liabilities 8,628,445 2,191,051 (656,931) (294,413)
Net assets/(liabilities) 14,255,618 2,024,110 (1,481,292) (1,700,348) Technology and Innovation
193
194 Revenue Account - Company Technology and Innovation
Revenue account for the period ended 31 December 2018
MOTOR FIRE GEN ACC MARINE AVIATION ENGINEERING OIL & ENERGY BOND TOTAL
N’000 N’000 N’000 N’000 N’000
N’000 N’000 N’000 N’000
- 7,449,658
DETAILS - 2,923,064
- 10,372,722
Income 430 (1,691,238)
Direct Premium 1,034,523 497,804 1,521,592 222,491 104,729 3,583,355 485,163 430 8,681,483
Reinsurance Inwards 33,390 313,657 230,538 97,061 107,497 131,708 2,009,213
Gross written premium 1,067,913 811,461 1,752,130 319,552 212,226 3,715,063 2,494,376
Movement in provision for unexpired 40,134 20,954 3,146 30,530 (738) (1,831,698) 46,003
risks
Gross premium income 1,108,047 832,415 1,755,277 350,083 211,488 1,883,365 2,540,379
Deduction from income 3,680 30,409 40,852 929 7,974 1,966,173 2,091,834 - 4,141,851
- Facultative outward 46,477 - 24,648 - - - - - 71,125
- Liability pool 88,698 286,243 - - - 1,092,274
- Surplus Treaty 326,019 182,061 - 209,253 - 532
- Energy pool - - - - - 532 - 88,490
- Minimum and deposit premium - - 53,367 - - - 5,394,271
Outward reinsurance Premium 138,854 26,618 351,743 8,505 61,341 619 (1,263,258)
Movement in prepaid reinsurance 710 383,046 9,787 191,495 17,755 2,175,426 2,092,366 619 4,131,013
Reinsurance Cost 139,564 (40,106) 361,530 (19,825) 79,096 (1,151,651) (80,546)
342,940 171,670 1,023,775
2,011,820
Net premium income 968,482 489,475 1,393,747 178,413 132,392 859,591 528,559 (188) 4,550,470
48,358 102,468 81,208 56,957 9,786 304,021 25,618 - 628,416
Commission received 1,659 (16,403) (5,383) (6,190) - (50,890) (1,605) (78,704)
109
Movement in deferred commission
income
Annual Report & Accounts 2018 Underwriting income 1,018,499 575,539 1,469,572 229,180 142,178 1,112,722 552,572 (80) 5,100,182
Expenses 606,585 628,284 232,489 65,696 392,049 98,998 399,674 - 2,423,774
Gross claims paid 22,995 (124,922) (4,535) (5,495) 792 (25,540) 581,679 3,300 448,274
Movement in provision for
outstanding claims 52,636 (120,444) 207,113 19,610 6,388 (19,248) (381,561) 340 (235,166)
Movement in provision for IBNR 682,216 382,918 435,066 79,811 399,229 54,210 599,792 3,640 2,636,882
(72,526) (49,472) (18,319) (159,247) (77,372) (850,268)
Claims recoveries (418,395) (54,938) -
Annual Report & Accounts 2018 Movement in claims recoverable (18,471) 62,748 6,613 3,383 6 38,997 36,756 (160,956) (30,925)
Movement in IBNR claims (10,923) 21,938 (31,188) (11,760) 352 6,805 117,514
recoverable 142,533 (244)
Net claims incurred 361,019 53,116 240,339 45,074 1,873,203
580,296 49,210 701,708 (157,560)
Underwriting expenses
Acquisition expenses 87,385 47,968 322,754 53,999 42,751 734,176 476,343 - 1,765,376
Movement in deferred acquisition 10,878 7,001 6,716 10,778 228 (364,589) 47,994 - (280,995)
cost
Maintenance expenses 87,905 11,998 55,636 18,350 2,454 6,935 117,027 - 300,305
Total underwriting expenses 186,167 66,967 385,107 83,127 45,432 376,521 641,364 - 1,784,687
Underwriting profit 252,036 459,362 723,446 92,937 (143,593) 691,126 (790,501) 157,480 1,442,293
Revenue Account - Company
Revenue account for the period ended 31 December 2017
MOTOR FIRE GEN ACC MARINE AVIATION ENGINEERING OIL AND BOND TOTAL
N’000 N’000 N’000 ENERGY N’000 N’000
DETAILS N’000 N’000 N’000
N’000
Income
Direct Premium 1,117,114 364,751 1,926,887 302,029 177,404 309,431 2,013,466 2,310 6,213,392
Reinsurance Inwards 33,910 16,318 38,519 67,381 5,092 12,656 799 - 174,675
Gross written premium
Movement in provision for unexpired 1,151,024 381,069 1,965,406 369,410 182,496 322,087 2,014,265 2,310 6,388,067
risks (7,960) 49,636 (50,827) (15,141) 18,741 14,651 97,496 (254) 106,342
Gross premium income
1,143,064 430,705 1,914,579 354,269 201,237 336,738 2,111,761 2,056 6,494,409
195 Deduction from income 78,868 7,730 376,838 4,093 26,086 127,569 850,756 1,824 1,473,764 Technology and Innovation
- Facultative outward 58,224 - 17,050 - - - - - 75,274
- Liability pool 76,516 412,674 - - -
- Surplus Treaty 170,208 - 137,473 105,392 - - 902,263
- Minimum and deposit premium - 16,425 - 100,367 - 116,792
Outward reinsurance Premium 213,608 806,562 126,453 850,756 1,824 2,568,093
Movement in prepaid reinsurance (32,897) 194,363 (15,384) 141,566 18,886 232,961 78,049 (619) 174,180
Reinsurance Cost 180,711 33,570 791,178 25,537 145,339 67,038 928,805 1,205 2,742,273
227,933 167,103 299,999
196 MOTOR FIRE GEN ACC MARINE AVIATION ENGINEERING OIL AND BOND TOTAL Technology and Innovation
N’000 N’000 N’000 ENERGY N’000 N’000
DETAILS N’000 N’000 N’000
N’000 575 454,814
Commission received 47,586 65,129 222,301 45,073 8,843 55,941 (109) 16,514
Movement in deferred commission 675 2,547 (318) 3,500 1,157 11,741 9,366
income
(2,679)
Underwriting income
1,010,614 270,448 1,345,384 235,739 65,898 104,421 1,189,643 1,317 4,223,464
Expenses
Gross claims paid 713,131 140,096 366,241 84,325 5,795 36,905 277,629 14,115 1,638,237
Movement in provision for 63,987 116,967 (190,881) (1,683) 14,512 56,254 34,371 (14,615) 78,912
outstanding claims
Movement in provision for IBNR 52,313 (34,991) 6,551 (16,306) 23,492 5,211 10,356 322 46,948
829,431 222,072 181,911 66,336 43,799 98,370 322,356 (178) 1,764,097
Claims recoveries (152,765) (98,475) (78,349) (2,246) (21,347) (417,904)
Movement in claims recoverable (53,494) 282,151 (64,722) 41,770 - -
Movement in IBNR claims 21,708 42,603 65,148 5,893 (41,344) (3,960) 317,872
recoverable (11,774) 2,243 9,923 (778) (947) (22,739) 18,287
Net claims incurred 428,316 (244)
686,600 72,346 76,685 82,545 81,969 258,273 1,682,352
Underwriting expenses (4,382)
Acquisition expenses
Movement in deferred acquisition 115,649 71,143 310,477 65,621 42,237 54,655 405,801 (2) 1,065,581
cost 3,317 13,759 (4,371) 4,372 3,003 3,696 (60,283) 18 (36,489)
Maintenance expenses
Total underwriting expenses 37,618 67,142 100,371 17,242 7,986 16,997 66,114 143 313,613
Underwriting profit 156,584 152,044 406,477 87,235 53,226 75,348 411,632 159 1,342,705
167,430 46,058 510,591 71,819 (69,873) (52,896) 519,738 5,540 1,198,407
Annual Report & Accounts 2018
Technology and Innovation
8. Cash and cash equivalents
Cash and cash equivalent includes cash in hand, balances at bank and short term instruments with less than 3
months original maturity from the date of acquisition.
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
Cash at bank and in hand 2,223,320 933,582 1,816,480 508,263
Money market placements 668,555 811,760 242,929 402,760
Impairment on money market placements (3,640) (2,673)
- -
Balance, end of year 2,888,235 1,745,342 2,056,736 911,023
Breakdown of Impairment
Impairment on transition to IFRS 9 at 1 January 2018 625 - 376 -
2,297 -
Movement during the year 3,015 - 2,673 -
Impairment at year end 3,640 -
9. Financial assets
These financial assets represent the Group’s and the Company’s holdings in investment securities and are
summarised by classification category below:
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
Financial assets at fair value through P or L/ Held for - 1,380 - 796
trading 5,272,266 4,032,813 1,413,091 3,351,670
2,571,929 5,461,742 809,832 1,004,463
Financial assets at fair value through OCI/Available for
sale
Financial assets at amortised cost/Held to maturity
Balance, end of year 7,844,195 9,495,935 2,222,923 4,356,929
Annual Report & Accounts 2018 197
Technology and Innovation
(a) Financial assets at fair value through OCI/Available for sale
These securities represent the Group and the Company’s interest in entities:
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
Equity securities:
– Listed (see note (i) below) 957,563 1,548,487 956,985 1,470,080
– Unlisted (see note (ii) below) 195,161 179,990 195,161 179,990
Fixed income securities (see note (iv) below) 4,119,541 2,304,336 260,945 1,701,600
Carrying amount 5,272,266 4,032,813 1,413,091 3,351,670
(i). Movement in Financial assets at fair value through OCI/Available for sale
Group Group Company Company
2018 2017
2018 2017
31-Dec 31-Dec
31-Dec 31-Dec N’000 N’000
N’000 N’000
Equity securities: 1,548,487 908,728 1,470,080 825,778
Liswted 1,495,018 1,495,018
Balance, beginning of year (592,304) (513,891) (24,938)
Acquisitions during the year - (29,481) - (825,778)
Fair value changes during the year (825,778)
Disposal during the year 1,380 796 1,470,080
Reclassification from fair value through P or L 957,563 1,548,487 956,985
Balance, end of year
(ii) Unlisted 179,990 97,535 179,990 97,535
Balance, beginning of year 150,000 53,275 150,000 52,590
Acquisitions during the year 29,180 29,865
Fair value changes during the year 15,171 15,171
Disposal during the year (150,000) - (150,000) -
Balance, end of year 195,161 179,990 195,161 179,990
198 Annual Report & Accounts 2018
Technology and Innovation
(iii). The breakdown of Financial assets at fair value through OCI/Available for sale unlisted equity securities are
shown below;
Group Group Company Company
2018 2017 2018 2017
31-Dec 31-Dec 31-Dec 31-Dec
N’000 N’000 N’000 N’000
African Reinsurance Corporation 49,876 46,827 49,876 46,827
Nigerian Liability Insurance Pool 7,416 12,351 7,416 12,351
Energy and Allied Insurance Pool 47,609 47,609
Coronation Merchant Bank Money Market Fund 47,686 73,203 47,686 73,203
90,183 90,183
Carrying amount 195,161 179,990 195,161 179,990
(iv) Fixed income securities: 2,304,336 1,219,553 1,701,600 558,812
Movement in Financial assets at fair value through 10,117,166 1,233,480 3,235,585 1,105,066
OCI/Available for sale fixed income securities (8,095,893) (490,083) (4,514,887) (245,608)
Balance, beginning of year
Acquisitions during the year 68,221 86,883 6,948 11,205
Disposals/maturities/redemption during the year (274,289) 254,503 (168,301) 272,125
Accrued interest receivables 4,119,541 2,304,336 260,945 1,701,600
Fair value adjustment
Balance, end of year - - -
The breakdown of Financial assets at fair value - 601,969 - 308,113
through OCI/Available for sale fixed income 2,669,816 1,584,339 260,945 1,275,459
financial assets are shown below; 1,449,726
118,028 - 118,028
Debt securities:
– Corporate bonds
– Government bonds
– Treasury bills
Carrying amount at fair value 4,119,541 2,304,336 260,945 1,701,600
At the reporting date, no available for sale fixed income financial asset was neither past due or impaired.
Annual Report & Accounts 2018 199
Technology and Innovation Group Company Company
2017 2018 2017
(b) Financial assets at fair value through P or L/ Held for trading
31-Dec 31-Dec 31-Dec
Group N’000 N’000 N’000
2018
31-Dec
N’000
Equity securities: 1,380 105 796 7
(i) Listed - 5 - 5
Balance, beginning of year - - 784
Acquisitions during the year 1,270 -
Fair value changes during the year (1,380) - (796)
Transferred to FVOCI 796
1,380 -
Carrying amount at fair value -
(c). Financial assets at amortised cost/Held to maturity 5,461,742 5,175,568 1,004,463 1,947,206
Movement in Financial assets at amortised cost/ 23,788 4,413,452 23,788 182,333
Held to maturity (3,980,841)
Balance, beginning of year (2,779,989) (260,349) (1,097,395)
Acquisitions during the year 501 - 501 -
Disposals/maturities/redemption during the year (146,437)
Foreign exchange gain (146,437) 9,242 (27,681)
Accrued interest receivables 39,815 - 39,815 -
Interest received during the year - (7,628) -
Impairment on financial assets (27,491) 5,461,742 809,832
Balance, end of year 2,571,929 1,004,463
The breakdown of Financial assets at amortised cost/Held to maturity are shown below;
Debt securities: 432,399 641,470 432,399 641,470
– Corporate bonds 2,143,735 1,636,820 361,775 341,709
– Government bonds 3,183,452 23,286
– Treasury bills 23,286 (7,628) 21,284
Impairment on financial assets (27,491) 5,461,742 809,832
Carrying amount at amortised cost 2,571,929 1,004,463
At the reporting date, no financial asset at
amortised cost was either past due or impaired.
Breakdown of Impairment 39,723 - 10,498 -
Impairment on transition to IFRS 9 at 1 January (12,232) - (2,870) -
2018 27,491 - 7,628 -
Movement during the year
Impairment at year end
200 Annual Report & Accounts 2018
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