Islamic Arab Insurance Co. (Salama) Interim Financial Statements 3Q 2016

Transcription

1. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim financial statements for the nine-month period ended 30 September 2016
2. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim financial statements for the nine-month period ended 30 September 2016 Contents Page Independent auditors’ report on review of condensed consolidated interim financial information 1-2 Condensed consolidated interim statement of profit or loss 3-4 Condensed consolidated interim statement of profit or loss and other comprehensive income 5 Condensed consolidated interim statement of financial position 6 Condensed consolidated interim statement of cash flows 7 Condensed consolidated interim statement of changes in equity Notes 8-9 10 - 25
5. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of profit or loss for the nine-month period ended 30 September 2016 Note Nine-month Nine-month period ended period ended Three-month period ended 30 September 30 September 2016 2015 AED’000 AED’000 (Un-audited) (Un-audited) 30 September 2016 AED’000 (Un-audited) Three-month period ended 30 September 2015 AED’000 (Un-audited) CONTINUING OPERATIONS UNDERWRITING RESULTS Underwriting income Gross written contributions Less: retakaful contributions ceded Net contributions Net movement in unearned contributions Contributions earned Commission income on ceded retakaful 18 18 18 18 595,369 (165,672) 429,697 38,661 468,358 22,495 490,853 683,093 (166,287) 516,806 (6,799) 510,007 32,336 542,343 178,131 (47,972) 130,159 14,645 144,804 4,734 149,538 241,694 (49,074) 192,620 3,365 195,985 11,826 207,811 376,684 (82,577) 294,107 338,229 (89,131) 249,098 87,563 (20,843) 66,720 117,159 (26,602) 90,557 45,981 295,079 171,009 466,088 33,914 100,634 56,135 156,769 35,851 126,408 63,555 189,963 Underwriting expenses Gross claims paid Less: retakaful share of claims paid Net claims paid Net movement in outstanding claims and technical reserve for family takaful Claims incurred Commission expense and other costs 18 18 141,427 435,534 180,720 616,254 Net underwriting (loss) / income 18 (125,401) 76,255 (7,231) 17,848 21,886 15,709 (87,806) 10,200 16,781 103,236 12,152 2,966 7,887 71 5,781 23,700 (84,944) (633) (95,871) (805) (31,242) (123) (33,523) (246) (173,383) (27,043) (20,483) (23,478) (27,043) (37,112) (6,823) (8,783) (2,029) (3,074) (180,206) (1,737) (29,266) (1,086) (25,507) (1,737) (40,186) (1,086) (181,943) (30,352) (27,244) (41,272) (45,209) (48,806) (44,017) (6,569) (227,152) (79,158) (71,261) (47,841) Income from other sources Income from investments Other income Expenses General, administrative and other expenses Financial expenses Impairment on goodwill Net loss before tax for the period Taxation - current Net loss after tax for the period before policyholders’ distribution Distribution to policyholders of Company Net loss after tax and distribution to policyholders for the period from continuing operations DISCONTINUED OPERATIONS Loss from discontinued operations Net loss after tax and distribution to policyholders for the period 13 3
6. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of profit or loss (continued) for the nine-month period ended 30 September 2016 Nine-month period ended 30 September Nine-month period ended 30 September Three-month period ended 30 September Three-month period ended 30 September 2016 AED’000 (Un-audited) 2015 AED’000 (Un-audited) 2016 AED’000 (Un-audited) 2015 AED’000 (Un-audited) (227,152) (79,158) (71,261) (47,841) (235,040) 7,888 (227,152) (84,628) 5,470 (79,158) (73,586) 2,325 (71,261) (49,322) 1,481 (47,841) Loss per share (AED) (Note 16) (0.198) (0.071) (0.062) (0.042) Loss per share (AED) - continuing operations (0.160) (0.030) (0.025) (0.036) Note Net loss after tax and distribution to policyholders for the period Attributable to: Shareholders Non-controlling interest The notes on pages 10 to 25 form an integral part of these condensed consolidated interim financial statements. The independent auditors’ report on review of condensed consolidated interim financial information is set out on pages 1 - 2. 4
7. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of profit or loss and other comprehensive income for the nine-month period ended 30 September 2016 AED’000 (Un-audited) Three-month period ended 30 September 2016 AED’000 (Un-audited) Three-month period ended 30 September 2015 AED’000 (Un-audited) (227,152) (79,158) (71,261) (47,841) 395 (8,617) (15,055) (7,281) (34,853) 395 (3,554) 1,040 (1,426) (10,832) - (23,277) (250,429) (42,134) (121,292) (2,119) (73,380) (12,258) (60,099) (252,355) 1,926 (250,429) (121,631) 339 (121,292) (75,901) 2,521 (73,380) (60,428) 329 (60,099) Nine-month period ended Nine-month period ended 30 September 2016 30 September 2015 AED’000 (Un-audited) Net loss after tax and distribution to policyholders for the period Other comprehensive loss net of income tax Items that are or may be reclassified to profit or loss: Net change in revaluation of property and equipment Net change in fair value of available-for-sale investments Foreign exchange translation reserve Other comprehensive loss for the period Total comprehensive loss for the period Attributable to: Shareholders Non-controlling interest The notes on pages 10 to 25 form an integral part of these condensed consolidated interim financial statements. The independent auditors’ report on review of condensed consolidated interim financial information is set out on pages 1 - 2. 5
9. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of cash flows for the nine-month period ended 30 September 2016 Nine-month period ended 30 September Note Cash flows from operating activities Net loss before non-controlling interest Adjustments for: Depreciation Net movement in unearned contributions reserve Investment properties Amortisation of intangible assets Share of profit from associates Dividend income Operating (loss) / profit before changes in working capital Change in deposits with takaful and retakaful companies Change in contributions and takaful balance receivable Change in due from / to related parties Change in other assets and receivables Change in assets held-for-sale Change in outstanding claims (net of retakaful) Change in takaful payables and other payables Change in liabilities held-for-sale Net cash used in operating activities 14 14 Cash flows from investing activities Property and equipment - net Net movement in intangible assets Net movement in associates Statutory deposits Dividend received Investments-net Dividend income from associate Net movement in Participants' investments in unit-linked contracts Net cash generated from investing activities Cash flows from financing activities Bank finance Net movement in non-controlling interest Net cash generated from / (used in) financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 30 September Nine-month period ended 30 September 2016 2015 AED’000 (Un-audited) AED’000 (Un-audited) (227,152) (79,158) 2,823 (47,597) 2,265 374 (4,709) (2,132) (276,128) 3,493 (83,049) 201,875 480 (3,063) (1,292) 39,286 342 (41,032) 252 (26,161) 109,666 148,548 91,694 (59,228) (52,047) 139,647 272,218 4,502 (158,948) (804,386) (239,719) (256,005) 661,607 (341,798) (852) (356) 9,075 2,132 85,973 993 714 97,679 31,003 27,897 (43,524) (6,069) 1,292 212,219 931 (4,043) 219,706 1,025 1,133 2,158 47,790 52,603 100,393 (143,475) 4,209 (139,266) (261,358) 388,753 127,395 The notes on pages 10 to 25 form an integral part of these condensed consolidated interim financial statements. The independent auditors’ report on review of condensed consolidated interim financial information is set out on pages 1 2. 7
10. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of changes in equity (Un-audited) for the nine-month period ended 30 September 2016 Share capital AED’000 Balance at 1 January 2015 Total comprehensive income for the period (Loss) / profit for the period Other comprehensive loss Movement in net change in fair value of available-for-sale investments Movement in foreign exchange translation reserve Total other comprehensive loss Total comprehensive (loss) / income for the period 1,210,000 Transaction with owners, recorded directly in equity Surplus revaluation reserve transferred on disposals of property Change in non-controlling interest due to capital increase Dividend paid Balance at 30 September 2015 Attributable to the equity holders of the Company Foreign exchange Investment Statutory Revaluation translation fair value Treasury Accumulated reserve reserve reserve reserve stock losses AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 73,861 42,173 (30,697) 12,719 Noncontrolling Total interest AED’000 AED’000 Total equity AED’000 1,238,604 (35,972) (99,151) 1,172,933 65,671 - - - - - - (84,628) (84,628) 5,470 (79,158) - - - (29,751) (29,751) (7,252) (7,252) - - (7,252) (29,751) (37,003) (5,102) (29) (5,131) (12,354) (29,780) (42,134) - - - (29,751) (7,252) - (84,628) (121,631) 339 (121,292) - - (4,258) - - - 4,278 20 (20) - - - - - - - - - 6,719 (2,510) 6,719 (2,510) 1,210,000 73,861 37,915 (60,448) 5,467 (35,972) (179,501) 1,051,322 70,199 1,121,521 The notes on pages 10 to 25 form an integral part of these condensed consolidated interim financial statements. 8
11. Islamic Arab Insurance Co . (Salama) and its subsidiaries Condensed consolidated interim statement of changes in equity (Un-audited) (continued) for the nine-month period ended 30 September 2016 Attributable to the equity holders of the Company Foreign exchange Investment Share Statutory Revaluation translation fair value Treasury Accumulated capital reserve reserve reserve reserve stock losses AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 Balance at 1 January 2016 Total comprehensive income for the period (Loss) / profit for the period Other comprehensive (loss) / income Property revaluation reserve Movement in net change in fair value of available-for-sale investments Movement in foreign exchange translation reserve Total other comprehensive loss Total comprehensive (loss) / income for the period Transaction with owners, recorded directly in equity Surplus revaluation reserve transferred on disposal of property Dividend paid Change in non-controlling interest due to capital increase Balance at 30 September 2016 1,210,000 73,861 35,469 (61,610) 3,980 Noncontrolling Total interest AED’000 AED’000 (35,972) (266,421) 959,307 74,146 Total equity AED’000 1,033,453 - - - - - - (235,040) (235,040) 7,888 (227,152) - - 395 - - - - 395 - 395 - - 395 395 (9,119) (9,119) (9,119) (8,591) (8,591) (8,591) - (235,040) (8,591) (9,119) (17,315) (252,355) (26) (5,936) (5,962) 1,926 (8,617) (15,055) (23,277) (250,429) - - 3,325 - - - - - 3,325 - (3,325) (109) (109) - - - - - - - - 1,242 1,242 1,210,000 73,861 39,189 (70,729) (4,611) (35,972) (501,461) 710,277 73,880 784,157 The notes on pages 10 to 25 form an integral part of these condensed consolidated interim financial statements. 9
12. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (forming part of the condensed consolidated interim financial statements) 1 Legal status and activities Islamic Arab Insurance Co. (Salama) (“the Company”) is a public shareholding company, registered in the Emirate of Dubai, United Arab Emirates (UAE) and operates through various branches in the UAE. The registered office of the Company is P.O. Box 10214, Dubai, United Arab Emirates. The principal activity of the Company is the writing of all classes of general takaful and family takaful business, in accordance with Islamic Shari’ah principles and in accordance with the relevant Articles of the Company, UAE Federal Law No. 2 of 2015 for commercial companies and U.A.E. Federal Law No. 6 of 2007, concerning regulations of insurance operations. The Company and its subsidiaries are referred to as “the Group”. Tariic Holding B.S.C (Tariic), a subsidiary of the Company, is an intermediate holding company in Bahrain and no commercial activities are carried out in the Kingdom of Bahrain. The Group has the following principal subsidiaries which are engaged in insurance and reinsurance under Islamic Shari’ah principles: Subsidiaries Directly owned Tariic Holding Company B.S.C Misr Emirates Takaful Life Insurance Co. Salama Immobilier * Group’s Ownership 31 December 30 September 2015 2016 Through Tariic Salama Assurances Senegal Salama Assurances Algerie Egyptian Saudi Insurance Home Best Re Holding Company (discontinued operations) Country of incorporation 99.40% 85.00% 84.25% 99.40% 85.00% 81.50% Kingdom of Bahrain Egypt Senegal 58.45% 96.98% 51.15% 57.41% 96.98% 51.15% Senegal Algeria Egypt 100% 100% Malaysia * - During the period, the Company acquired all the shares of Salama Immobilier that were held by Salama Assurances Senegal, thereby increasing the holding percentage. 2 Basis of preparation a) Statement of compliance These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all of the information required for the full annual audited consolidated financial statements, and should be read in conjunction with the annual audited consolidated financial statements of the Group for the year ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). On 1 April 2015, a new UAE Federal Law No. 2 of 2015 for the Commercial Companies (“UAE Companies Law of 2015”) was issued with effective date on 1 July 2015. In June 2016, the UAE Cabinet passed a resolution to extend the deadline for existing companies in the UAE to ensure compliance with the new UAE Companies Law from 30 June 2016 to 30 June 2017. The Group is in the process of adopting the new federal law and will be fully compliant before the transitional provisions deadline. Further, under Federal Law No 6 of 2007, relating to Establishment of Insurance Authority and Regulation of Insurance Operations, a new financial regulation for insurance companies was issued on 28 January 2015. The financial regulation provided an alignment period to the insurance companies between one to three years from the publication of financial regulation in Public Gazzette on 29 January 2015 to align the operations to the covenants of the regulations therein. The Group is in the process of aligning the operations with the requirement of the regulations and will be fully aligned before the deadline for alignment period. 10
13. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 2 Basis of preparation (continued) b) Basis of measurement The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following: i) financial instruments at fair value through profit and loss ("FVTPL") and unit-linked contracts are measured at fair value; ii) available-for-sale ("AFS") financial assets are measured at fair value; and iii) investment properties are measured at fair value. c) Functional and reporting currency These condensed consolidated interim financial statements are presented in UAE Dirham (AED), which is the functional currency of the Company. Except as otherwise indicated, financial information presented in UAE Dirham has been rounded to the nearest thousand. d) Significant accounting policies The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s annual audited consolidated financial statements for the year ended 31 December 2015. 3 Financial risk management The Group's financial risk management objectives, policies and accounting policies are consistent with those disclosed in the audited consolidated financial statements as at and for the year ended 31 December 2015. 4 Estimates The preparation of the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised in the period in which the estimates are revised and in the future periods effected. In preparing these condensed consolidated interim financial statements, the significant judgments made by the management in applying the Group’s accounting policies and the key sources of estimation uncertainty were significantly same as those that applied to the annual audited consolidated financial statements as at and for the year ended 31 December 2015. 5 Interim measurement The nature of the Group’s business is such that income and expense are incurred in a manner, which is not materially impacted by any form of seasonality. These condensed consolidated interim financial statements were prepared on the accrual basis, which requires income and expense to be recorded as earned or incurred and not as received or paid throughout the period. However, the interim results may not represent a proportionate share of the annual profits due to variability in contributions and investment income and uncertainty of claims occurrences. 11
14. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued) 6 Allocation of the net profit (Un-audited) For the nine-month period ended 30 September 2016 Noncontrolling interest Shareholders Policyholders Total AED’000 AED’000 AED’000 AED’000 Net underwriting (loss) / income Income Wakalah share (Note 7) Mudarib share (Note 7) Net technical charges from policyholders to shareholders Net underwriting income from subsidiaries Income from investments Other income Expenses General, administrative and other expenses Financial expenses Impairment on goodwill Charitable donations Net profit / (loss) before tax for the period Tax – current Net profit / (loss) after tax for the period Loss from discontinued operations Share of non-controlling interest Distribution to policyholders of the Company Policyholders' loss financed by shareholders / recovery of loss from policyholders' fund (Note 15) Net (loss) / profit for the period For the nine-month period ended 30 September 2015 Non controlling interest Shareholders Policyholders Total AED’000 AED’000 AED’000 AED’000 - (125,401) - (125,401) - 76,255 - 76,255 61,598 12 (61,598) (12) - - 74,142 20 (74,142) (20) - - 4,062 30,675 22,042 15,709 134,098 (4,062) (30,675) (156) (221,904) - 21,886 15,709 (87,806) 10,111 45,969 9,998 16,781 157,021 (10,111) (45,969) 202 (53,785) - 10,200 16,781 103,236 (83,299) (633) (1,645) - - (83,299) (633) (1,645) (95,393) (805) (27,043) (478) - - (95,393) (805) (27,043) (478) 48,521 (6,823) (221,904) - - (173,383) (6,823) 33,302 (8,783) (53,785) - - (20,483) (8,783) 41,698 (45,209) (7,888) - (221,904) (1,737) 7,888 - (180,206) (45,209) (1,737) 24,519 (48,806) (5,470) - (53,785) (1,086) 5,470 - (29,266) (48,806) (1,086) (223,641) (235,040) 223,641 - 7,888 (227,152) (54,871) (84,628) 54,871 - 5,470 (79,158) 12
15. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 6 Allocation of the net profit (Un-audited) (continued) Consolidated statement of financial position 30 September 2016 AED'000 (Un-audited) ASSETS Participants' assets Participants' investments in unit-linked contracts Contributions and takaful balance receivables Retakafuls’ share of outstanding claims Retakafuls’ share of unearned contributions Other assets and receivables Cash and bank balances Total participants' assets Total shareholders' assets * Total assets LIABILITIES Participants' liabilities Outstanding claims and family takaful reserve Payable to Participants for unit-linked contracts Unearned contributions reserve Takaful balances payable Other payables and accruals Total participants' liabilities Total shareholders' liabilities * Total liabilities NET ASSETS EMPLOYED FINANCED BY: Shareholders’ equity Non-controlling interest 31 December 2015 AED'000 (Audited) 931,441 163,561 134,964 69,553 7,427 23,484 1,330,430 2,156,613 3,487,043 766,687 136,742 81,429 51,802 3,257 1,039,917 2,319,272 3,359,189 381,926 925,065 105,911 87,411 75,121 1,575,434 1,127,452 2,702,886 262,386 759,597 128,007 70,012 51,164 1,271,166 1,054,570 2,325,736 784,157 1,033,453 710,277 73,880 784,157 959,307 74,146 1,033,453 * Shareholders' assets and liabilities represents affairs of the subsidiaries as shareholder funds are used for the investments thereon. 13
16. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 7 Wakalah and Mudarib Share The shareholders manage the takaful operations of the Group for the policyholders and charge 15% (2015: 15%) of gross written contributions of non family takaful business (excluding subsidiaries) as wakalah share. For family takaful business, sharing ratio is 15% (2015: 15%) of mortality costs. The shareholders of the Group also manage the policyholders’ investment funds other than family takaful and charge 15% (2015: 15%) of investment income earned by the policyholders as Mudarib share. 8 Investment properties The geographic dispersion of investment properties is as follows : 30 September 2016 AED'000 (Un-audited) 15,500 36,108 51,608 Within UAE Outside UAE 31 December 2015 AED'000 (Audited) 15,500 38,373 53,873 The variations in the value of investment properties are due to foreign exchange translation of investment properties held in foreign operations. The Group investment properties portfolio is being managed and maintained by a third party; administrative costs and the rental income received from these properties are being set off with the administrative fees. 9 Investments in associates The principal significant associates of the Group, all of which have 31 December as their year end are as follows: 30 September 31 December Ownership Country of 2016 2015 2016 2015 incorporation AED’000 AED’000 Associates (Un-audited) (Audited) Salama Cooperative Insurance 61,293 58,204 30.00% 30.00% KSA Company (formerly Saudi IAIC) 29,971 29,344 Islamic Insurance Jordan 20.00% 20.00% Jordan 87,548 91,264 Movements during the period/year Balance at the beginning of period/year Rights share issue in Salama Cooperative Insurance Company Share of profit from associates Dividend received Transfer to assets held-for-sale Balance at the end of period/year 14 30 September 2016 AED’000 (Un-audited) 87,548 4,709 (993) 91,264 31 December 2015 AED’000 (Audited) 42,559 44,040 2,396 (931) (516) 87,548
17. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 10 Classes and categories of financials assets and financial liabilities The table below sets out the classification of each class of financial assets and liabilities and their fair values. For instruments carried at amortised cost, the management believes that their carrying values approximates to their fair values. At 30 September 2016 (Un-audited) Financial assets Investments Statutory deposits Participants' investments in unit-linked contracts Deposits with takaful and retakaful companies Contributions and takaful balance receivables Amounts due from related parties Other assets and receivables Cash and bank balances Assets held-for-sale Amortised cost Others AED’000 AED’000 FVTPL AED’000 AFS AED’000 Total AED’000 43,952 931,441 975,393 82,604 82,604 465,351 12,401 4,256 244,861 11,948 90,135 100,393 929,345 620,643 620,643 591,907 12,401 931,441 4,256 244,861 11,948 90,135 100,393 620,643 2,607,985 925,065 925,065 - 5,701 141,377 274,370 422,174 554,036 554,036 5,701 925,065 141,377 274,370 554,036 1,901,275 FVTPL AED’000 AFS AED’000 Amortised cost Others AED’000 AED’000 Total AED’000 33,009 766,687 799,696 110,260 110,260 558,283 21,476 4,598 203,829 11,474 18,575 52,603 870,838 730,309 730,309 701,552 21,476 766,687 4,598 203,829 11,474 18,575 52,603 730,309 2,511,103 759,597 759,597 - 4,676 120,742 173,602 299,020 613,264 613,264 4,676 759,597 120,742 173,602 613,264 1,671,881 Financial liabilities Bank finance Payable to Participants for unit-linked contracts Takaful balances payable Other payables and accruals Liabilities held-for-sale At 31 December 2015 (Audited) Financial assets Investments Statutory deposits Participants' investments in unit-linked contracts Deposits with takaful and retakaful companies Contributions and takaful balance receivables Amounts due from related parties Other assets and receivables Cash and bank balances Assets held-for-sale Financial liabilities Bank finance Payable to Participants for unit-linked contracts Takaful balances payable Other payables Liabilities held-for-sale 15
18. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 11 Investments 30 September 2016 31 December 2015 (Un-audited) (Audited) Domestic International Total Domestic International Total investments investments investments investments AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 Financial assets at fair value through profit or loss Mutual fund and externally managed portfolios Shares and securities 4,670 4,670 24,611 14,671 39,282 24,611 19,341 43,952 4,492 4,492 18,999 9,518 28,517 18,999 14,010 33,009 - 81,814 790 82,604 81,814 790 82,604 4,358 4,358 105,473 429 105,902 105,473 4,787 110,260 - 177,629 177,629 - 116,605 116,605 4,670 163,320 124,402 587,237 163,320 124,402 591,907 8,850 230,976 210,702 692,702 230,976 210,702 701,552 Available-for-sale investments Mutual fund and externally managed portfolios Shares and securities Islamic placements (refer 11.1) Held to maturity SUKUK and Government bonds Other investments Total investments 11.1 Represent Shari’ah compliant placements with different financial institutions having profit rates of 0.22% to 4.75% (2015: 0.22% to 4.75%) and maturing in more than three months when acquired. 11.2 Participants' investments in unit-linked contracts 30 September 31 December 2016 2015 AED’000 AED’000 (Un-audited) (Audited) Financial assets at fair value through profit or loss 931,441 16 766,687
19. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 11 Investments (continued) Determining fair values The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised: Investments securities Level 1 AED’000 Level 2 AED’000 Level 3 AED’000 Total AED’000 24,611 - - 24,611 19,341 43,952 931,441 931,441 - 931,441 19,341 975,393 337 337 81,814 453 82,267 - 81,814 790 82,604 15,765 3,234 - 18,999 14,010 29,775 766,687 769,921 - 766,687 14,010 799,696 4,358 4,358 105,473 429 105,902 - 105,473 4,787 110,260 30 September 2016 (Un-audited) Fair value through profit or loss Mutual fund Participants' investments in unitlinked contracts Shares and securities Available-for-sale Mutual fund Shares and securities 31 December 2015 (Audited) Fair value through profit or loss Mutual fund Participants' investments in unitlinked contracts Shares and securities Available-for-sale Mutual fund Shares and securities 17
20. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 12 Related party transactions The Group, in the normal course of business, collects contributions, settles claims and enters into other transactions with other businesses that fall within the definition of related parties contained in the IAS 24 Related Party Disclosures (Revised). The management believes that the terms of such transactions are not significantly different from those that could have been obtained from third parties. Following are the details of significant transactions with related parties. General and administrative expenses Retakaful on contributions Retakaful on claims Nine-month period ended 30 September 2016 AED’000 (Un-audited) Nine-month period ended 30 September 2015 AED’000 (Un-audited) 2,093 - 2,113 1,145 26 5,298 402 5,700 6,666 384 7,050 30 September 2016 AED’000 (Un-audited) 31 December 2015 AED’000 (Audited) 11,128 820 11,948 11,128 346 11,474 Compensation of key management personnel Short term benefits Employees end of service benefits Amounts due from related parties Bin Zayed Group (funds advanced for investment) Other entities under common management with the Group Amounts due to related parties Other entities under common management with the Group 13 726 726 - Discontinued operation During prior year, the Board of Directors of the Group had approved to sell its investment in one of its subsidiaries Best Re Holding. The subsidiary was not previously classified as held-for-sale. The comparative information has been represented to reflect discontinued operations seperately from continuing operating activities. 18
21. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 13 Discontinued operations (continued) Results from discontinued operations Revenue Expenses Results from operating activities Delinquencies relating to subsidiary Loss from discontinued operations Loss per share Nine-month period ended 30 September 2016 AED’000 (Un-audited) Nine-month period ended 30 September 2015 AED’000 (Un-audited) 9,869 (55,078) (45,209) (45,209) 40,308 (83,609) (43,301) (5,505) (48,806) (0.038) (0.041) Cash flows from / (used in) discontinued operations 30 September 2016 AED’000 (Un-audited) (48,942) 68,916 2,973 22,947 Net cash used in operating actvities Net cash flows from investing actvities Net cash flows from financing actvities Net cash flows for the period 19
22. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 14 Disposal group held-for-sale Assets and liabilities of disposal group held-for-sale At 30 September 2016, the disposal group was stated at fair value less costs to sell and comprised the following assets and liabilities. 30 September 2016 AED’000 (Un-audited) 31 December 2015 AED’000 (Audited) Property and equipment Intangible assets Investment property Investments in associates Statutory and investment deposits Investments Deposits with insurance and reinsurance companies Premiums and insurance balance receivables Reinsurers' share of outstanding claims Reinsurers' share of unearned premium Other assets Islamic placements Cash in hand and at bank Delinquencies relating to disposal group Assets held-for-sale 11,676 508 83,870 516 754 31,369 168,584 137,605 49,261 488 15,767 75,718 50,032 (5,505) 620,643 11,594 547 115,774 517 756 51,861 116,449 250,320 45,559 1,020 16,404 97,928 27,085 (5,505) 730,309 Gross outstanding claims Unearned premiums Insurance balance payable Other payables and accruals Bank loan ‐ long term portion Liabilities held-for-sale 146,517 56,656 214,311 5,909 130,643 554,036 176,674 55,039 250,166 3,717 127,668 613,264 66,607 117,045 Net assets Measurement of fair values i. Fair value hierarchy The non-recurring fair value measurement for the disposal group of AED 68,442 thousand (before costs to sell of AED 1,835 thousand) has been categorised as a Level 3 fair value based on the inputs to the valuation technique used. ii. Valuation technique The Group has done the individual assessment of each asset and liability based on the current situation. The expected recoverable amount of the assets and settlement amount of liabilities has been computed based on the most recent information available. 20
23. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 15 Policyholders’ fund Balance at 1 January Net deficit attributable to policyholders for the period/year Surplus distribution to policyholders of family takaful Financed by shareholders’ 30 September 2016 AED’000 (Un-audited) (231,827) 31 December 2015 AED’000 (Audited) (98,407) 30 September 2015 AED’000 (Un-audited) (98,407) (221,904) (117,823) (53,785) (453,731) (15,597) (231,827) (1,086) (153,278) 453,731 - 231,827 - 153,278 - The shareholders of the Company financed the policyholders’ deficit in accordance with the takaful contracts between the Company and its policyholders. 16 Loss per share The calculation of loss per share for the period ended 30 September 2016 is based on the loss attributable to shareholders of AED 235 million (30 September 2015: loss attributable to shareholders of AED 84.6 million) divided by the weighted average number of shares of 1,188 million (30 September 2015: 1,188 million) outstanding during the period. There is no dilutive effect on basic earnings per share. 17 Contingent liabilities and capital commitments 30 September 2016 AED’000 (Un-audited) 11,119 Letters of guarantee 31 December 2015 AED’000 (Audited) 11,873 Statutory deposits of AED 11.38 million (31 December 2015: AED 12.14 million) are held as lien by the bank against the above guarantees. 21
24. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 17 Contingent liabilities and capital commitments (continued) The Group is exposed to certain claims and litigations, these are subject to legal cases filed by the policyholders, cedants and retakaful operators in connection with the policies issued. The management believes, based on independent legal counsel opinions, that the ascertainment of liabilities and its timing is highly subjective and dependent on outcomes of court's decisions. Furthermore, as per the independent legal counsel, the Group has strong grounds to defend the suits successfully. Accordingly, no additional provision for these claims has been made in the condensed consolidated interim financial statements. However a provision is made in respect of each individual case where it is probable that the outcome would result in a loss to the Group in terms of an outflow of economic resources and a reliable estimate of the amount of outflow can be made. There are no significant capital commitments at 30 September 2016 (31 December 2015: nil). 18 Operating segment By business (for the nine-month period ended 30 September 2016) General takaful Family takaful AED’000 AED’000 361,711 233,658 Gross written contributions Net contributions earned Commissions income on ceded retakaful Net claims incurred Commissions expense and other costs Net underwriting (loss) / income Investment and other income Unallocated expenses and tax Distribution to policyholders of Company Loss from discontinued operations Net loss after tax Total AED’000 595,369 268,579 18,519 287,098 (407,513) (52,425) (172,840) 199,779 3,976 203,755 (28,021) (128,295) 47,439 468,358 22,495 490,853 (435,534) (180,720) (125,401) 37,595 (92,400) (1,737) (45,209) (227,152) General takaful AED’000 495,703 350,230 29,289 379,519 (274,505) (80,503) 24,511 Family takaful AED’000 187,390 159,777 3,047 162,824 (20,574) (90,506) 51,744 Total AED’000 683,093 510,007 32,336 542,343 (295,079) (171,009) 76,255 26,981 (132,502) (1,086) (48,806) (79,158) (for the nine-month period ended 30 September 2015) (Restated) Gross written contributions Net contributions earned Commissions income on ceded retakaful Net claims incurred Commissions expense and other costs Net underwriting income Investment and other income Unallocated expenses and tax Distribution to policyholders of Company Profit from discontinued operations Net loss after tax 22
25. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 18 Operating segment (continued) By geography (for the nine-month period ended 30 September 2016) Gross written contributions Net contributions earned Commissions income on ceded retakaful Net claims incurred Commissions expense and other cost Net underwriting income / (loss) Investment and other income Unallocated expenses and tax Distribution to policyholders of Company Loss from discontinued operations Net loss after tax Africa AED’000 Asia AED’000 Total AED’000 202,233 166,411 7,872 174,283 (104,644) (38,964) 30,675 393,136 301,947 14,623 316,570 (330,890) (141,756) (156,076) 595,369 468,358 22,495 490,853 (435,534) (180,720) (125,401) 37,595 (92,400) (1,737) (45,209) (227,152) Africa AED’000 Asia AED’000 Total AED’000 222,439 183,052 9,717 192,769 (104,084) (41,597) 47,088 460,654 326,955 22,619 349,574 (190,995) (129,412) 29,167 683,093 510,007 32,336 542,343 (295,079) (171,009) 76,255 26,981 (132,502) (1,086) (48,806) (79,158) (for the nine-month period ended 30 September 2015) (Restated) Gross written contributions Net contributions earned Commissions income on ceded retakaful Net claims incurred Commissions expense and other cost Net underwriting income Investment and other income Unallocated expenses and tax Distribution to policyholders of Company Profit from discontinued operations Net loss after tax 23
26. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 18 Operating segment (continued) By business (As at 30 September 2016) ASSETS Property and equipments General takaful AED’000 64,866 Family takaful AED’000 4,696 Total AED’000 69,562 Goodwill and intangibles 127,000 176 127,176 51,608 91,264 8,401 584,672 4,256 225,812 148,079 92,801 11,948 28,326 51,858 520,627 2,011,518 4,000 7,235 931,441 19,049 22,380 842 337,155 48,535 100,016 1,475,525 51,608 91,264 12,401 591,907 931,441 4,256 244,861 170,459 93,643 11,948 365,481 100,393 620,643 3,487,043 General takaful AED’000 5,551 Family takaful AED’000 150 Total AED’000 5,701 494,110 96,992 591,102 205,785 127,438 160,381 109 467,642 1,461,016 550,502 925,065 4,724 13,939 113,989 617 86,394 1,241,870 233,655 925,065 210,509 141,377 274,370 726 554,036 2,702,886 784,157 Investment properties Investments in associates Statutory deposits Investments Participants' investments in unit-linked contracts Deposits with takaful and retakaful companies Contributions and takaful balance receivables Retakafuls’ share of outstanding claims Retakafuls’ share of unearned contributions Amounts due from related parties Other assets and receivables Cash and bank balances Assets held-for-sale TOTAL ASSETS LIABILITIES EXCLUDING POLICYHOLDERS’ FUND Bank finance Outstanding claims and family takaful reserve Payable to Participants for unit-linked contracts Unearned contributions reserve Takaful balances payable Other payables and accruals Amounts due to related parties Liabilities held-for-sale TOTAL LIABILITIES Policyholders’ fund NET ASSETS EMPLOYED FINANCED BY: Shareholders’ equity Non-controlling interest 710,277 73,880 784,157 24
27. Islamic Arab Insurance Co . (Salama) and its subsidiaries Notes (continued ) 18 Operating segment (continued) By business (As at 31 December 2015) ASSETS Property and equipments General takaful AED’000 70,561 Family takaful AED’000 577 Total AED’000 71,138 Goodwill and intangibles 127,147 47 127,194 53,873 87,548 17,476 701,552 4,598 192,718 100,485 70,483 11,474 22,446 38,660 703,688 2,202,709 4,000 766,687 11,111 15,758 862 316,874 13,943 26,621 1,156,480 53,873 87,548 21,476 701,552 766,687 4,598 203,829 116,243 71,345 11,474 339,320 52,603 730,309 3,359,189 General takaful AED’000 4,676 Family takaful AED’000 - Total AED’000 4,676 325,165 63,173 388,338 232,646 114,204 126,850 590,977 1,394,518 808,191 759,597 3,162 6,538 76,461 22,287 931,218 225,262 759,597 235,808 120,742 203,311 613,264 2,325,736 1,033,453 Investment properties Investments in associates Statutory deposits Investments Participants' investments in unit-linked contracts Deposits with takaful and retakaful companies Contributions and takaful balance receivables Retakafuls’ share of outstanding claims Retakafuls’ share of unearned contributions Amounts due from related parties Other assets and receivables Cash and bank balances Assets held-for-sale TOTAL ASSETS LIABILITIES EXCLUDING POLICYHOLDERS’ FUND Bank finance Outstanding claims and family takaful reserve Payable to Participants for unit-linked contracts Unearned contributions reserve Takaful balances payable Other payables and accruals Amounts due to related parties Liabilities held-for-sale TOTAL LIABILITIES Policyholders’ fund NET ASSETS EMPLOYED FINANCED BY: Shareholders’ equity Non-controlling interest 19 959,307 74,146 1,033,453 Comparative figures Certain comparatives have been reclassified / regrouped to conform to the presentation adopted in the condensed interim financial statements. 25