SABB Takaful Company: Interim Condensed Financial Statements - 31 December 2016

Transcription

11. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 1. ORGANISATION AND PRINCIPAL ACTIVITIES SABB Takaful Company (the Company) is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under commercial registration No. 1010234032 dated 20 Jumad Awal 1428H (corresponding to 6 June 2007). The registered address of the Company is P. O. Box 9086, Riyadh 11413, Kingdom of Saudi Arabia. The purpose of the Company is to transact takaful operations and all related activities. Its principal lines of business include Individual Family (Protection and Savings – Individual), Group Family (Protection and Savings – Group) and General Takaful products. The Company operates only in the Kingdom of Saudi Arabia. 2. BASIS OF PREPARATION, BASIS OF PRESENTATION, SIGNIFICANT ACCOUNTING POLICIES, SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS AND RISK MANAGEMENT POLICIES a) Basis of preparation These interim condensed financial statements for the three and twelve months ended 31 December 2016 have been prepared in accordance with IAS 34 - Interim Financial Reporting. These interim condensed financial statements have been prepared on a historic cost basis except for the measurement at fair value of available-for-sale investments. These interim condensed financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company’s audited financial statements for the year ended 31 December 2015. In management’s opinion, these interim condensed financial statements reflect all adjustments (which include normal recurring adjustments) necessary to present fairly the results of operations for the interim periods presented. The Company’s interim results may not be indicative of its annual results. b) Basis of presentation As required by the Saudi Arabian Insurance Regulations, the Company maintains separate books of accounts for Takaful Operations and Shareholders’ Operations and presents the financial statements accordingly. Assets, liabilities, revenues and expenses clearly attributable to either activity are recorded in the respective accounts. The basis of allocation of expenses from joint operations is determined and approved by the management and the Board of Directors. c) Significant accounting policies, significant accounting estimates and assumptions and risk management policies The significant accounting policies, significant accounting estimates and assumptions and risk management policies adopted in the preparation of these interim condensed financial statements are consistent with the Company’s audited financial statements for the year ended 31 December 2015, except for the adoption of the following amendments to existing standards mentioned below which have had either insignificant effect or no financial impact on the condensed interim financial statements of the Company on the current period or prior periods and are expected to have a insignificant effect in future period: - Amendments to IAS 1 – “Presentation of Financial Statements”, applicable for the annual periods beginning on or after 1 January 2016, clarify, existing IAS 1 requirements in relation to:     The materiality requirements in IAS 1; That specific line items in the statement(s) of profit or loss and other comprehensive income (“OCI”) and the statement of financial position may be disaggregated; That entities have flexibility as to the order in which they present the notes to financial statements; and That the share of OCI of associates and joint ventures accounted for using the equity method must be presented in aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss. 9
12. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 2. BASIS OF PREPARATION, BASIS OF PRESENTATION, SIGNIFICANT ACCOUNTING POLICIES, SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS AND RISK MANAGEMENT POLICIES (continued) c) Significant accounting policies, significant accounting estimates and assumptions and risk management policies (continued) The amendments further clarify the requirements that apply when additional subtotals are presented in the statement of financial position and the statement(s) of profit or loss and OCI. - Amendments to IAS 16 – “Property, Plant and Equipment” and IAS 38 – “Intangible Assets”, applicable for the annual periods beginning on or after 1 January 2016, restricts the use of ratio of revenue generated to total revenue expected to be generated to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets. - Annual improvements to IFRS 2012-2014 cycle applicable for annual periods beginning on or after 1 January 2016. A summary of the amendments is as follows:  IFRS 5 – “Non-current Assets Held for Sale and Discontinued Operations”, amended to clarify that changing from one disposal method to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of the application of the requirements in IFRS 5.  IFRS 7 – “Financial Instruments: Disclosures” has been amended to clarify that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. The nature of the fee and the arrangement should be assessed in order to consider whether the disclosures are required under IFRS 7 and the assessment must be done retrospectively. IFRS 7 has been further amended to clarify that the offsetting disclosure requirements do not apply to condensed interim financial statements, unless such disclosures provide a significant update to the information reported in the most recent annual report.  IAS 19 – “Employee Benefits” – amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used.  IAS 34 – “Interim Financial Reporting” – amendment clarifies that the required interim disclosures must be either in the interim financial statements or incorporated by cross-referencing to the interim financial report (e.g., in the management commentary or risk report). However, the other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. d) Functional and presentation currency The functional and presentational currency of the Company is Saudi Riyals. The financial statements values are presented in Saudi Riyals rounded to the nearest thousand (SAR’000), unless otherwise indicated. [ 10
13. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 3. a) INVESTMENTS Investments comprise available-for-sale and held-to-maturity investments. An analysis of the investments is set out below: 31 December 2016 SAR’000 (Unaudited) Takaful Operations Shareholders Available-for-sale investments – Quoted Investment in Amanah Mutual Funds 353,740 ───── ───── Held-to-maturity investment – Quoted Saudi Electricity Company Sukuk (SEC-III) 25,119 Held-to-maturity investments – Unquoted Saudi Hollandi Bank Sukuk (SHB-III) Saudi Hollandi Bank Sukuk (SHB-IV) General Authority of Civil Aviation Sukuk (GACA - I) The National Industrialization Company Sukuk (TASNEE) Olayan Real Estate Company Sukuk (ORECO) The Power and Water Utility Company for Jubail and Yanbu Sukuk (MARAFIQ) Bank AlBilad Sukuk ───── ───── 353,740 ═════ Total investments 15,052 5,011 50,602 50,194 10,007 12,037 20,073 ───── 188,095 ───── 188,095 ═════ 31 December 2015 SAR’000 (Audited) Takaful Operations Shareholders Available-for-sale investments – Quoted Investment in Amanah Mutual Funds 374,739 ───── Held-to-maturity investment – Quoted Saudi Electricity Company Sukuk (SEC-III) - Held-to-maturity investments – Unquoted Saudi Hollandi Bank Sukuk (SHB-III) Saudi Hollandi Bank Sukuk (SHB-IV) Bank Al Jazira Sukuk General Authority of Civil Aviation Sukuk (GACA - I) The National Industrialization Company Sukuk (TASNEE) Olayan Real Estate Company Sukuk (ORECO) The Power and Water Utility Company for Jubail and Yanbu Sukuk (MARAFIQ) ───── ───── ───── 25,066 15,032 5,007 20,133 50,525 50,113 10,044 12,025 ───── 187,945 ───── Total investments 374,739 187,945 ═════ ═════ Available-for-sale investments in takaful operations represent investments in units of mutual funds managed by HSBC Saudi Arabia Limited, being a related party of the Company. Quoted held-to-maturity investments represent sukuks which are listed on Tadawul. 11
14. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 3. INVESTMENTS (continued) The maturity profile of held-to-maturity investments is as follows: Maturity profile - Saudi Electricity Company Sukuk (SEC-III) - Saudi Hollandi Bank Sukuk (SHB-III) - Saudi Hollandi Bank Sukuk (SHB-IV) - General Authority of Civil Aviation Sukuk (GACA - I) - The National Industrialization Company Sukuk (TASNEE) - Olayan Real Estate Company Sukuk (ORECO) - The Power and Water Utility Company for Jubail and Yanbu Sukuk (MARAFIQ) - Bank AlBilad Sukuk Maturity date 10 May 2017 26 November 2017 12 December 2018 18 January 2022 21 May 2019 25 June 2017 27 May 2018 30 August 2021 b) The fair value of held-to-maturity investments as at 31 December 2016 is SAR 187.85 million (31 December 2015: SAR 188.28 million). c) The movement in the available-for-sale investments held to cover unit-linked liabilities was as follows: Opening balance Purchased during the year Sold during the year Net change in fair values of investments Closing balance 31 December 2016 (Unaudited) SAR’000 31 December 2015 (Audited) SAR’000 374,739 98,551 (121,542) ────── 351,748 1,992 ────── 353,740 ══════ 398,747 96,344 (90,452) ────── 404,639 (29,900) ────── 374,739 ══════ The Company uses the following hierarchy methods for determining and disclosing the fair value of available-forsale investments at the reporting period end: Level 1: quoted prices in active markets for the same or identical instrument that an entity can access at the measurement date; Level 2: quoted prices in active markets for similar assets and liabilities or other valuation techniques for which all significant inputs are based on observable market data; and Level 3: valuation techniques for which any significant input is not based on observable market data. The Company’s available-for-sale investments and held-to-maturity investments are classified under Level 1 and Level 2 hierarchy respectively. 4. CONTRIBUTIONS RECEIVABLE, NET Due from policy holders Due from a shareholder (The Saudi British Bank) Provision for impairment 12 31 December 2016 (Unaudited) SAR’000 31 December 2015 (Audited) SAR’000 7,267 5,617 ────── 12,884 (336) ────── 12,548 ══════ 6,228 6,292 ────── 12,520 (146) ────── 12,374 ══════
15. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 5. CASH AND CASH EQUIVALENTS 31 December 2016 (Unaudited) SAR’000 Takaful Operations Shareholders Bank balances Murabaha deposits 17,175 20,000 ────── 37,175 ══════ 3,815 147,000 ────── 150,815 ══════ 31 December 2015 (Audited) SAR’000 Takaful Operations Shareholders Bank balances Murabaha deposits 18,122 25,000 ────── 43,122 ══════ 2,958 130,000 ────── 132,958 ══════ Bank balances are maintained with the Saudi British Bank, a shareholder of the Company. 6. OUTSTANDING CLAIMS 31 December 2016 (Unaudited) Retakaful Gross share Net SAR’000 SAR’000 SAR’000 Family Takaful outstanding claims - Outstanding claim reserves - Incurred but not reported reserve and other reserves General Takaful outstanding claims - Outstanding claim reserves - Incurred but not reported reserve and other reserves Total outstanding claims 25,527 21,687 (18,560) (16,089) 6,967 5,598 20,320 4,768 ───── 72,302 ═════ (18,760) (2,954) ───── (56,363) ═════ 1,560 1,814 ───── 15,939 ═════ 31 December 2015 (Audited) Retakaful Gross share Net SAR’000 SAR’000 SAR’000 Family Takaful outstanding claims - Outstanding claim reserves - Incurred but not reported reserve and other reserves General Takaful outstanding claims - Outstanding claim reserves - Incurred but not reported reserve and other reserves Total outstanding claims 13 8,503 17,356 (5,846) (12,805) 2,657 4,551 17,216 4,822 ───── 47,897 ═════ (16,249) (3,060) ───── (37,960) ═════ 967 1,762 ───── 9,937 ═════
16. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 7. a) MOVEMENT IN RESERVE FOR TAKAFUL CONTRIBUTION INCOME Movement in reserve for takaful activities ACTIVITIES Balance as at the beginning of the year Changes in reserve during the year Planholder charges Net change in fair value of investments Balance as at the end of the year AND NET UNEARNED Twelve months ended 31 December 2016 (Unaudited) SAR’000 Year ended 31 December 2015 (Audited) SAR’000 374,739 105 (23,096) 1,992 ────── 353,740 ══════ 389,166 41,885 (26,412) (29,900) ────── 374,739 ══════ The reserve for takaful activities represents the unit linked takaful plan reserve. b) Movement in net unearned contribution Twelve months ended 31 December 2016 (Unaudited) Retakaful Gross share Net SAR’000 SAR’000 SAR’000 Balance as at the beginning of the year Contribution written during the year Contribution earned during the year Balance as at the end of the year Balance as at the beginning of the year Contribution written during the year Contribution earned during the year Balance as at the end of the year 8. 21,441 (14,177) 7,264 93,234 (59,918) 33,316 (94,101) 60,119 (33,982) ────── ────── ────── 20,574 (13,976) 6,598 ══════ ══════ ══════ Year ended 31 December 2015 (Audited) Retakaful Gross share Net SAR’000 SAR’000 SAR’000 20,310 89,877 (88,746) ────── 21,441 ══════ (12,848) (57,605) 56,276 ────── (14,177) ══════ 7,462 32,272 (32,470) ────── 7,264 ══════ SEGMENTAL INFORMATION Consistent with the Company’s internal reporting process, business segments have been approved by management in respect of the Company’s activities. The Company’s gross written contribution, net written contribution and planholder charges, net contributions earned and planholder charges, fees and commission income, net claims incurred, surrenders and maturities, policy acquisition costs, underwriting surplus, investment income, general and administrative expenses, net surplus, surplus from takaful operations after shareholders’ appropriation, net profit, amortisation, depreciation, purchase of intangible assets and motor vehicle, intangible assets, motor vehicle, availablefor-sale investments, contribution receivables, net, retakaful share of outstanding claims and unearned contributions, deferred policy acquisition costs, total assets, reserve for takaful activities, gross unearned contributions, unearned commission income, gross outstanding claims and total liabilities, by business segment, are stated below. Segment assets do not include retakaful balances receivable, prepayments and other receivables and cash and cash equivalents. Accordingly they are included in unallocated assets. Segment liabilities do not include surplus distribution payable, retakaful balances payable, payables, accruals and others, provision for employees’ end of service benefits and due to shareholders. Accordingly they are included in unallocated liabilities. The unallocated assets and unallocated liabilities are not separately reported to chief operating decision maker under the related segments and are monitored on centralised basis. 14
17. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 8. SEGMENTAL INFORMATION (continued) Shareholders’ Fund SAR’000 For the three months ended 31 December 2016 (Unaudited) Gross written contribution Net written contribution and Planholder charges Net contributions earned and Planholder charges Fees and commission income Net claims incurred Surrenders and maturities Policy acquisition costs Underwriting surplus for the period Investment income General and administrative expenses Net surplus/ (deficit) for the period Individual Family (Protection & Savings) SAR’000 Group Family (Protection & Savings) SAR’000 General Takaful SAR’000 - 28,884 17,822 10,219 56,925 - 34,557 7,705 1,714 43,976 28,671 63 (22,999) (750) ───── 4,985 409 (3,349) ───── 2,045 ═════ 6,794 32 (4,248) (315) ───── 2,263 23 (2,889) ───── (603) ═════ 1,359 1,053 (302) (746) ───── 1,364 (2,651) ───── (1,287) ═════ 36,824 1,085 (4,487) (22,999) (1,811) ───── 8,612 3,165 (9,246) ───── 2,531 ───── 2,733 (357) ───── 2,376 ═════ Surplus from takaful operations after shareholders’ appropriation Net profit for the period Purchase of motor vehicle Amortisation Depreciation For the twelve months ended 31 December 2016 (Unaudited) Gross written contribution Net written contribution and Planholder charges Net contributions earned and Planholder charges Fees and commission income Net claims incurred Surrenders and maturities Policy acquisition costs Underwriting surplus for the year Investment income General and administrative expenses Net surplus/ (deficit) for the year 81 146 8 ═════ ═════ - 101,134 64,385 28,849 194,368 - 122,898 27,700 5,616 156,214 122,793 440 (207) (101,029) (2,909) ───── 19,088 1,641 (12,599) ───── 8,130 ═════ 28,044 785 (15,253) (1,654) ───── 11,922 85 (11,649) ───── 358 ═════ 5,938 6,160 (1,176) (2,653) ───── 8,269 (11,799) ───── (3,530) ═════ 156,775 7,385 (16,636) (101,029) (7,216) ───── 39,279 11,082 (38,010) ───── 12,351 ───── 9,356 (1,963) ───── 7,393 ═════ ════ (16) ───── 2,515 ═════ 81 146 8 ════ ═════ Surplus from takaful operations after shareholders’ appropriation Net profit for the year Purchase of intangibles Purchase of motor vehicle Amortisation Depreciation Total SAR’000 288 81 559 21 ═════ 15 ═════ ═════ ════ (496) ───── 11,855 ═════ 288 81 559 21 ═════
18. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 8. SEGMENTAL INFORMATION (continued) Shareholders’ Fund SAR’000 31 December 2016 (Unaudited) Intangible assets Motor vehicle Takaful operations’ assets Available-for-sale investments Contribution receivables, net Retakaful share of outstanding claims Retakaful share of unearned contributions Deferred policy acquisition costs Unallocated assets Total takaful operations’ assets Total shareholders’ assets 1,123 108 ═════ 376,592 Individual Family (Protection & Savings) SAR’000 Group Family (Protection & Savings) SAR’000 ═════ ═════ 353,740 453 - 4,650 34,195 2,974 336 - - General Takaful SAR’000 ═════ 1,123 108 ═════ 7,898 21,715 11,002 749 - 353,740 12,548 56,363 13,976 1,085 45,265 ───── 482,977 376,592 ───── 859,569 ═════ - - 6,833 45,711 - 13,741 2,794 25,088 - - - Total assets Takaful operations’ liabilities Reserve for takaful activities Gross unearned contributions Unearned commission income Gross outstanding claims Unallocated liabilities Total takaful operations’ liabilities Total shareholders’ liabilities 15,391 353,740 1,503 - - Total liabilities For the three months ended 31 December 2015 (Unaudited) Gross written contribution Net written contribution and Planholder charges Net contributions earned and Planholder charges Fees and commission income Net claims incurred Surrenders and maturities Policy acquisition costs Underwriting (loss)/ surplus for the period Investment income General and administrative expenses Net (deficit)/ surplus for the period 353,740 20,574 2,794 72,302 33,071 ───── 482,481 15,391 ───── 497,872 ═════ - 26,021 15,070 12,138 53,229 - 32,020 6,278 1,833 40,131 19,145 (237) (22,109) (884) ───── (4,085) 336 (4,952) ───── (8,701) ═════ 7,031 1,151 (2,996) (2,245) ───── 2,941 22 (2,197) ───── 766 ═════ 1,351 1,437 (288) (614) ───── 1,886 (2,543) ───── (657) ═════ 27,527 2,588 (3,521) (22,109) (3,743) ───── 742 1,784 (13,365) ───── (10,839) ───── 1,426 (3,673) ───── (2,247) ═════ Deficit from takaful operations after shareholders’ appropriation Net loss for the period Purchase of intangibles Amortisation Depreciation Total SAR’000 651 127 4 ═════ 16 ═════ ═════ ════ 858 ───── (9,981) ═════ 651 127 4 ════
19. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 8. SEGMENTAL INFORMATION (continued) Shareholders’ Fund SAR’000 For the year ended 31 December 2015 (Audited) Gross written contribution Net written contribution and Planholder charges Net contributions earned and Planholder charges Fees and commission income Net claims incurred Surrenders and maturities Policy acquisition costs Underwriting surplus for the year Investment income General and administrative expenses Net surplus/ (deficit) for the year Individual Family (Protection & Savings SAR’000 Group Family (Protection & Savings SAR’000 General Takaful SAR’000 - 112,306 60,834 29,043 202,183 - 137,365 26,712 5,560 169,637 95,480 224 (700) (80,004) (3,482) ───── 11,518 1,384 (13,222) ───── (320) ═════ 25,956 1,576 (10,953) (2,949) ───── 13,630 22 (11,091) ───── 2,561 ═════ 6,514 5,392 5,515 (2,307) ───── 15,114 13 (13,385) ───── 1,742 ═════ 127,950 7,192 (6,138) (80,004) (8,738) ───── 40,262 6,492 (42,715) ───── 4,039 ───── 5,073 (5,017) ───── 56 ═════ Surplus from takaful operations after shareholders’ appropriation 651 451 17 ═════ ═════ ═════ ════ (399) ───── 3,640 ═════ 651 451 17 ════ 1,394 48 ═════ ═════ ═════ ═════ 1,394 48 ═════ 374,739 349 - 3,927 18,303 2,346 388 - 8,447 19,308 11,831 792 - - - 374,739 12,374 37,960 14,177 1,180 47,691 ───── 488,121 366,187 ───── 854,308 ═════ 6,549 24,255 - 14,892 2,950 22,038 - Net profit for the year Purchase of intangible assets Amortisation Depreciation 31 December 2015 (Audited) Intangible assets Motor vehicle Takaful operations’ assets Available-for-sale investments Contribution receivables, net Retakaful share of outstanding claims Retakaful share of unearned contributions Deferred policy acquisition costs Unallocated assets Total takaful operations’ assets Total shareholders’ assets 366,187 - Total assets Takaful operations’ liabilities Reserve for takaful activities Gross unearned contributions Unearned commission income Gross outstanding claims Unallocated liabilities Total takaful operations’ liabilities Total shareholders’ liabilities Total SAR’000 11,117 374,739 1,604 - - - - Total liabilities All of the Company’s operating assets and principal activities are located in the Kingdom of Saudi Arabia. 17 374,739 21,441 2,950 47,897 40,695 ───── 487,722 11,117 ───── 498,839 ═════
20. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 9. BASIC AND DILUTED EARNINGS/ (LOSS) PER SHARE Earnings per share amounts are calculated by dividing the net profit/ (loss) for the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding at the reporting date as follows: Three months ended 31 December 2016 SR’000 (Unaudited) Three months ended 31 December 2015 SR’000 (Unaudited) 2,515 ═════ (9,981) ═════ 11,855 ═════ 3,640 ═════ 34,000 ═════ 0.07 ═════ 34,000 ═════ (0.29) ═════ 34,000 ═════ 0.35 ═════ 34,000 ═════ 0.11 ═════ Net profit/ (loss) for the period (SAR’000) Weighted average number of ordinary shares (Number in thousands) Earnings/ (loss) per share (SAR) 10. Twelve months ended 31 December 2016 SR’000 (Unaudited) Twelve months ended 31 December 2015 SR’000 (Audited) RELATED PARTY TRANSACTIONS Related parties represent major shareholders, directors and key management personnel of the Company, and companies of which they are principal owners and any other entities controlled, jointly controlled or significantly influenced by them. Pricing policies and terms of these transactions are approved by the Company’s Board of Directors. a) Transactions with related parties The summary of major related party transactions is as follows: Three months ended 31 December 2015 SR’000 (Unaudited) Twelve months ended 31 December 2016 SR’000 (Unaudited) Twelve months ended 31 December 2015 SR’000 (Audited) 17,592 9,098 15,544 11,609 54,088 28,337 51,545 30,741 963 12 1,337 29 4,172 89 5,309 197 1,233 1,342 5,471 6,927 270 289 1,163 1,286 Three months ended 31 December 2016 SR’000 (Unaudited) The Saudi British Bank (a shareholder of the Company) Contributions Claims paid Other expenses - IT maintenance cost and related expenses - Overheads Other entities controlled, jointly controlled or significantly influenced by related parties Policy acquisition costs paid HSBC Saudi Arabia Limited - IBSA Rebate on unit-linked investments ‘Other expenses’ include costs for various services under a management agreement between Saudi British Bank (SABB) and the Company. As per the agreement, SABB will provide operational services to the Company including use of fixed assets and IT infrastructure at a consideration mutually agreed between the parties. 18
21. SABB Takaful Company (A Saudi Joint Stock Company) NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS 31 December 2016 10. RELATED PARTY TRANSACTIONS (continued) b) Compensation of key management personnel Key management personnel of the Company include all directors, executive and non-executive, and senior management. The summary of compensation of key management personnel for the period is as follows. Three months period ended 31 December 2016 SAR’000 (Unaudited) Takaful Operations Shareholders Salaries and other benefits End-of-service benefits Directors’ remunerations and other benefits 945 43 ═════ 155 ═════ Twelve months period ended 31 December 2016 SAR’000 (Unaudited) Takaful Operations Shareholders Salaries and other benefits End-of-service benefits Directors’ remunerations and other benefits 11. 3,858 178 ═════ 685 ═════ Three months period ended 31 December 2015 SAR’000 (Unaudited) Takaful Operations Shareholders 942 29 ═════ 46 ═════ Twelve months period ended 31 December 2015 SAR’000 (Audited) Takaful Operations Shareholders 3,763 165 ═════ 182 ═════ ZAKAT AND TAX Status of Assessment During the quarter ended 31 March 2015, the General Authority of Zakat & Tax (GAZT) issued the final tax certificates for the years from 2008 to 2010. However, the GAZT had filed an appeal in the higher appellate forum against the ruling of Preliminary Zakat and Tax Appeal Committee in Company’s favour. The appeal was related to a matter assessed in tax years (2008-2010). During the quarter ended 31 March 2016, the said appeal was decided in Company’s favour. Further, during the quarter ended 31 December 2016, the GAZT has also started its review for the years from 2011 to 2015. 12. RECLASSIFICATION OF COMPARATIVE FIGURES Certain of the prior period amounts have been reclassified to conform with the presentation in the current period. These changes were made for better presentation of balances and transactions in the interim condensed financial statements of the Company. 13. APPROVAL OF THE INTERIM CONDENSED FINANCIAL STATEMENTS These interim condensed financial statements have been approved by the Board of Directors on 19 Rabi al-thani 1438H corresponding to 17 January 2017. 19