RC 163170

PROFESSIONALISM 2016 21, Water Corporation Drive, Off Ligali Ayorinde Street, Victoria Island, Lagos. ANNUAL REPORT Tel: 012806500 Web: www.cornerstone.com.ng & ACCOUNTS Email: [email protected]

Results at a Glance 73 Takaful Life Business Revenue Account

Chairman’s Statement

Corporate Governance Report 75 Notes to the Consolidated and Separate Financial Statements

30 Complaints and Feedback

Risk Management Declaration

145 Dividend History

63 Financial Statements Consolidated and Separate Statement of Financial Position

Statement of Changes in Equity 68 Statement of Cash Flows NOTICE OF ANNUAL GENERAL MEETING 2016 Annual Report & Accounts

NOTICE IS HEREBY GIVEN that the Twenty Fifth Annual General Meeting of Cornerstone Insurance PLC will hold at the Agip Recital Hall, MUSON Centre, Onikan, Lagos on Thursday, June 15th , 2017 at 11.00am to transact the following businesses:

ORDINARY BUSINESS NOTES

1. To receive the Audited Financial Statements of the 1. CLOSURE OF REGISTER OF MEMBERS AND Company for the year ended December 31, 2016 together TRANSFER BOOKS with the Reports of the Directors, Auditors and Audit The Register of Members and Transfer Books of the Committee thereon; Company will be closed from June 5 to June 9, 2017 (both days inclusive) to enable the Registrar update the Register 2. To elect and re-elect Directors; of members.

3. To authorise the Directors to fix the remuneration of the 2. AUDIT COMMITTEE Auditors; • Pursuant to Section 359(5) of the Companies and Allied Matters Act 2004, any Shareholder may 4. To elect shareholders' representatives to the Audit nominate another shareholder for appointment to the Committee; and Audit Committee by giving notice in writing of such nomination to the Company Secretary at least Twenty 5. To consider and if thought fit, pass the following resolution One (21) days before the Annual General Meeting. as an ordinary resolution of which Special Notice has been • Please note that The Code of Corporate Governance given in accordance with Section 364 (1) (a) of the for Public Companies issued by the Securities and Companies and Allied Matters Act, CAP C20, LFN, 2004: Exchange Commission provides that members of the Audit Committee should be financially literate and “that Messrs. Akintola Williams Deloitte, shall able to read financial statements. We therefore retire as Auditors of the Company in line with request that all nominations to the Audit Committee Section 8 (iii) of the NAICOM Code of Corporate should be accompanied with the Curriculum Vitae of Governance and in their stead, Messrs, KPMG the Nominees. Professional Services be and are hereby appointed as Auditors of the Company. 3. ELECTION/RE-ELECTION OF DIRECTORS

SPECIAL BUSINESS 3.1. Election of Directors i. To elect Mr. Ekwunife Okoli as a non-executive 6. To consider and if thought fit, pass the following as an independent Director with effect from 22nd July, ordinary resolution: 2016; ii. To elect Ms. Elizabeth Amadiume as a non- Approval of Related Party Transactions executive independent Director with effect from 21st October, 2016; “That a General Mandate be and is hereby given to the iii. To elect Mr. Anthony Egbuna as a non-executive Company to enter into recurrent transactions with Director with effect from 21st October, 2016; related parties for the Company's day-to-day operations, iv. To elect Mr. Segun Adebanji as a non-executive including the procurement of goods and services, on Director with effect from 28th April, 2017 normal commercial terms in compliance with the Nigerian Stock Exchange Rules Governing Transactions with The profiles of the Directors are contained in the Related Parties or Interested Persons.” Annual Report and Accounts.

PROXY 3.2. Re-election of Directors A member entitled to attend and vote at the Annual General Pursuant to Section 259 (1) of the Companies and Meeting may appoint a proxy to attend and vote in his/her stead. Allied Matters Act, CAP C20, LFN, 2004, the Directors A proxy need not be a member of the Company. A form of proxy to retire by rotation are Mr. Ayo Osunbunmi, Mr. is attached to the Annual Report and if intended to be used, it Dominic Ichaba and Mr. Steve Iwenjora. must be executed and returned to the office of the Registrars, Lighthouse Registrars Limited, Kingsway Building (3rd Floor) 2/4, Their profiles are contained in the Annual Reports Davis Street, Lagos or the office of the Company Secretary, PAC and Accounts and are also available for viewing on Solicitors, 16, Kofo Abayomi Street, Victoria Island, Lagos, not www.cornerstone.com.ng later than 48 hours before the time fixed for the meeting.

2 NOTICE OF ANNUAL GENERAL MEETING CONTD. TABLE2016 Annual OF Report CONTENT & Accounts

4. RIGHTS OF SECURITIES’ HOLDERS TO ASK QUESTIONS Any member attending the meeting has the right to ask questions at the meeting and in writing prior to the meeting. Any questions to be asked prior to the meeting must reach the Company not later than 48 hours before the time fixed for the meeting.

5. WEBSITE A copy of this Notice and other information relating to the meeting can be accessed via the Company's website at www.cornerstone.com.ng

Dated this 8th day of May, 2017 By Order Of the Board

Elizabeth I. Uba-Onubogu PAC Solicitors (Company Secretary) FRC/2015/NBA/0000000/6266

16, Kofo Abayomi Street Victoria Island, Lagos Tel: 0909 929 8887, 0806 348 0070 Website: www.cornerstone.com.ng

3 CORPORATECONTENT INFORMATIONOF TABLE 2016 Annual Report & Accounts 2016 Annual Report & Accounts

BOARD OF DIRECTORS Mr. Segun Adebanji Group Chairman( From April 28, 2017) Mr. Paul Kokoricha Group Chairman( From October, 2016 to April 2017) Mr. Adedotun Sulaiman (MFR) Group Chairman( Retired September, 2016) Mr. Richard Ikiebe Vice Chairman( Retired March 2016) Mr. Ganiyu Musa Group Managing Director/CEO Mr. Oladapo Egbeyemi Non-executive Director( Retired March, 2016) Alhaji Hussaini Abdulrahman Non-executive Director( Retired March, 2016) Mr. Peter Ameadaji (Alternate) Non-executive Director( Retired March, 2016) Mr. Dominic Ichaba Non-Executive Director Mr Steve Iwenjora Non-Executive Director Mrs. Ndidi Okonkwo Nwuneli (MFR) Independent Director(Resigned December 2016) Mr. Ekwunife Okoli Independent Director( Appointed July 22, 2016) Ms. Elizabeth Amadiume Independent Director( Appointed October 21, 2016) Mr. Anthony Egbuna Non-Executive Director(appointed October 21, 2016) Mr. Tokunbo Bello Executive Director Mr. Ayo Osunbunmi Executive Director

LEGAL ADVISER Ifeoma Utah 21, Water Corporation Drive, Off Ligali Ayorinde Street, Victoria Island, Lagos

COMPANY SECRETARY PAC Solicitors 16 Kofo Abayomi Street, Victoria Island, Lagos. Tel: +234-805-056-9557, +234(01)7611191, +234(01) 2701121,+234(01)8980746

REGISTERED OFFICE: 136, Lewis Street, Lagos. Tel:01-0126332863, 2630722,2631832 (Lagos Island Office) Website: www.cornerstone.com.ng

CORPORATE HEAD OFFICE: 21, Water Corporation Drive, Off Ligali Ayorinde Street, Victoria Island, Lagos Tel: 01-2806500 Website: www.cornerstone.com.ng Email: [email protected]

LAGOS BRANCHES: 1) 136, Lewis Street, Lagos. Tel:01-2632863,2630722,2631832(Lagos Island Office) 2) 79, Allen Avenue(Samsung House) Ikeja, Lagos. Tel: 0802306981,01-8182984 3) Polysonic Mall(2nd Floor)42/44, Warehouse Road, Apapa, Lagos. Tel: 08033911435,07028856589 4) 191, Herbert Macaulay Street, Yaba. 5) Idowu Tailor, Victoria Island Lagos

OTHER BRANCHES 1) KM 20, Constitution Road, Kaduna Tel:07029234155 2) 67, Aboderin Layout, Oni& Sons Area, Ring Road, Ibadan Tel:02-8735649 3) 180, Aba Express Road, Port Harcourt Tel: 07029325494, 08056938454 4) Plot 487, Adetokunbo Ademola Str., Wuse II, Abuja Tel: 09-87766611,07028415541 5) Suite 7, No.5, Bank Road, Kano Tel:064-913241,064-925578 6) 57, Effurun / Sapele Road, Effurun-Warri, Delta State Tel:07029066313 7) 110, Muritala Muhammed Highway, Calabar Municipality, Calabar, Cross Rivers State. Tel: 087-845147,08056938454 8) Agbeloba Buildin. 56, Quarry Road, Abeokuta, Ogun State. Tel:01-7363042 9) 3, Sokoto Road, Sabo Oke, Ilorin, Kwara State. Tel: 080595581032

4 CORPORATE INFORMATION CONTD. 2016 Annual Report & Accounts

SALES OUTLET: Beside Coca Cola Depot, Gbongan Road, Oshogbo, Osun State. Tel: 02-7512395

REGISTRARS: Lighthouse Registrars Limited, 2/4 Davies Street Marina, Lagos

BANKERS: Access Bank Plc First Bank of Nigeria Limited Standard Chartered Bank Limited Guaranty Trust Bank Plc Wema Bank Plc United Bank For Africa Plc Stanbic IBTC Bank Plc First City Monument Bank Plc Heritage Bank Plc Skye Bank Plc Union Bank Plc Zenith Bank Plc

AUDITORS: Akintola Williams Deloitte Chartered Accountants Civic Center Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos, Nigeria

CAC REGISTRATION RC: 163170 NUMBER

5 RESULTS ATCONTENT A GLANCEOF TABLE 2016 Annual Report & Accounts

Group Group Company Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000

Gross Premium Written 9,190,634 7,331,633 8,389,950 7,331,633

Gross Premium Income 8,456,458 7,119,632 7,768,850 7,119,632

(Loss)/Profit Before Taxation (1,264,660) 1,843,054 (1,516,213) (332,139)

Taxation (470,563) (212,300) (373,574) (203,374)

(Loss)/Profit After Taxation (1,735,223) 1,630,754 (1,889,787) (535,513)

6 CHAIRMAN’S STATEMENT CHAIRMAN’S STATEMENT 2016 Annual Report & Accounts

MR. PAUL KOKORICHA Outgoing Group Chairman

MR. SEGUN ADEBANJI Group Chairman

28 CHAIRMAN’S STATEMENT CONTD. TABLE2016 Annual OF Report CONTENT & Accounts

Distinguished shareholders, members of the Board of Directors, 1.82 million barrels per day. By the end of the second quarter, invited guests, ladies and gentlemen. I welcome you all to the 25th Nigeria had recorded two consecutive quarters of contraction Annual General Meeting of our Company, Cornerstone Insurance (-2.06% in Q2) and for the first time in 29 years, the economy was PLC (“the Company”). I hereby present to you the Annual Report officially in a recession. and accounts for the financial year ended 31 December, 2016 as well as an overview of the major developments that shaped our Among other factors, the sharp drop in forex income, in an import financial results. dependent economy, played a major role in the decline of the value of the Naira. With increasing pressure on forex reserves, the The Global Economy Central Bank of Nigeria (CBN) resorted to controlling demand for Perhaps two of the most significant socio-political events of the forex through multiple exchange rates and a series of circulars to year occurred in the United Kingdom (UK) and the United States market operators while also attempting to checkmate nefarious (US). A referendum on European Union (EU) membership activities in the forex markets. resulted in a 52% vote in favour of the UK leaving the EU while Donald Trump emerged winner of the US Presidential election. With the gap between the official and parallel exchange rates widening to as much as N50 in Q2, a devaluation of the currency The “Brexit” vote created immediate economic shocks that was inevitable and in June 2016, the CBN announced a new forex reverberated globally, as the UK currency experienced an initial policy which was effectively a devaluation. The start of the managed 11% drop in value; the largest in the era of free-floating currencies float regime saw the official rate of the Naira plummet by 29% from and over USD$2 trillion in value was lost in stocks globally. Later in the peg of N197/US$1 to N254/US$1 within 24 hours. By the end the year, President Trump's nationalist posture signified possible of the second half of the year and after periodic interventions, the changes to the Trans-Pacific Partnership Agreement (TPPA) which official exchange rate stood at N304/US$1 while the parallel would have accounted for a third of global trade. This development market rate continued to rise and closed the year at N490/US$1, altered the dynamics of the economic and political landscape in creating a gap of N186 or 61%. Asia. The eventual withdrawal of the US from the TPPA is expected to provide China a great opportunity to consolidate its influence in Higher rates of forex and higher costs of importation dovetailed the region and bolster its economic recovery. into rising prices. The Consumer Price Index (CPI), which started the year in single digits, at 9.62%, inched upwards month on month A number of African countries saw their currencies weaken as the and ended the year at 18.55%, an 11-year high. The key drivers of US Federal Reserve raised interest rates by 0.25% to 1% late in the the almost 100% rise in the inflation rate (Year on Year) were year. With significant dollar-denominated bonds and high debt to electricity, fuel prices and road transportation. GDP ratios, countries like Ghana, South Africa, Kenya and Tunisia face tough economic challenges. Amidst the harsh economic climate, the President presented an expansionary 2016 budget of N6.07 trillion with a 30% allocation Despite the volatility however, the world economy still grew by an towards capital expenditure and N200 billion allocated to special estimated 3.1%, a slight reduction from the 3.2% achieved in 2015 intervention programmes at the grass root level. due mainly to weaker-than-expected growth in the United States and uncertainties regarding the institutional and trade In summary, the macroeconomic environment was characterised arrangements between the European Union and post-Brexit by thinner margins for most corporations in the manufacturing and United Kingdom. Growth in emerging markets and developing FMCG industries. It was a year characterised more by incremental economies remained subdued as commodity exporters struggled. growth and cost control measures than by capacity expansion Whilst emerging Asia continued to register strong growth and projects. For the average Nigerian, the year was one of shrinking slight improvements recorded in recession-hit Brazil and Russia, disposable incomes caused by sharp price increases of imported activity weakened in sub-Saharan Africa as South Africa continued and locally produced household items. Asset acquisition gave way to grapple with severe unemployment while resource-rich Nigeria to asset consolidation and reduced discretionary expenses. faced severe economic and security challenges. The magnitude of the economic downturn had a significant Macroeconomic Review adverse impact on insurance. The rapid rise in prices of goods and Before the start of the year, analysts and macroeconomic services was particularly detrimental to the insurance industry. commentators alike were largely unanimous in projecting a Not only did this affect the ability of customers to pay premiums, negative outlook for the Nigerian economy in 2016. Indeed, the the claims ratios increased astronomically as replacement costs first quarter of the year ended with a GDP contraction of -0.36%. for items lost or damaged were disproportionate to the premiums This was off the back of lower economic activity and depressed collected for contracts written in the prior 12 months. foreign exchange (forex) earnings caused in part by a 22% drop in the average price of Bonny Light compared to the previous quarter The Insurance Industry (US$34.39 per barrel from US$44.08 per barrel). Notwithstanding the overall macroeconomic outlook, there was justifiable reason for cautious optimism for the insurance industry Moreover, renewed militancy in large parts of some oil producing at the beginning of the year. An expansionary budget focused on states, characterized by the destruction of pipelines and other infrastructure spending could open additional insurance related infrastructures, further lowered the country's output and opportunities whilst a business friendly regulatory and earning capacity. Crude oil production dropped by 3.7% in Q1 consultative regulatory framework would create an enabling 2016 from 1.89 million barrels per day in the previous quarter to environment for innovation and growth.

9 CHAIRMAN’S STATEMENT CONTD. 2016 Annual Report & Accounts

During the year, the Insurance regulator, the National Insurance reported Loss before Tax of N1.26 billion (2015: N1.52billion). Commission (NAICOM) announced that guidelines were being Understandably, this is a matter of much disappointment for all our drafted for new alternative distribution channels. NAICOM, shareholders, the Board and management. through the Nigerian Bar Association and members of the Nigerian Stock Exchange commenced discussions with Board of Directors stakeholders to design structures for the distribution of Insurance On the 28th of April, 2017, I assumed the role of Chairman of the products. It is expected that the new channels will act as referral Board of Directors. This follows the retirement of the erstwhile channels only and will not be involved in the actual sale of Chairman, Mr. Paul Kokoricha who took over as Chairman from Mr. insurance products. Nonetheless, when launched, the new Adedotun Sulaiman. Mr. Adedotun Sulaiman and Mr. Paul channels are expected to have a significant impact by increasing Kokoricha retired in line with the Code of Corporate Governance insurance penetration in the country. A l s o i n t h e issued by NAICOM. As Mr. Sulaiman informed you at the last distribution space, there were a number of regulatory Annual General Meeting, four other members of the Board of interventions that addressed breaches in commission payments to Directors (Mr. Richard Ikiebe who served as Vice Chairman, Mr. unlicensed intermediaries. The Commission suspended all Peter Ameadaji, Alhaji Hussaini Abdulrahman and Mr. Oladapo distribution partnerships with banks, telco's, airlines and web- Egbeyemi) had also retired in line with the NAICOM Code of based aggregators that were in violation of Section 34 of the Corporate Governance. Insurance Act 2003. In December 2016, Mrs. Ndidi Okonkwo Nwuneli resigned as an Company Financial Performance Independent Non-Executive Director to pursue other interests The harsh economic climate notwithstanding, your Company has and attend to other commitments. sustained its growth trajectory by growing Gross Premium Written by 25% to N9.1 billion from N7.3 billion in 2015. Sales to I would like to express my thanks to each of them for the retail customers accounted for 25% of premiums while Special professionalism and dedication they have demonstrated Risks products to the Oil & Gas and Engineering sectors throughout the time they served on the Board and the contributed the second highest proportion at 23%. The increased contribution that they have made to the Company. I wish them the financial strength from the conclusion of the acquisition of Fin best in their future endeavours. Insurance and their growing reputation as a credible partner is now opening the opportunity for leadership position on major On July 22nd 2016, Mr. Ekwunife Okoli was appointed as an transactions as well as provide support for our retail expansion. Independent Non-Executive Director. He has proved a strong and positive fit to the Board, bringing new perspective to Board However, high claims inflation and the security challenges in the deliberations. North East and South-South zones of the country led to a significant deterioration in the claims experience during the year On October 21st 2016, Ms. Elizabeth Amadiume and Mr. Anthony under review. Gross claims for the year totalled N4.5 billion Egbuna joined the Board as Independent Non-Executive Director representing an increase of 61% from the previous year of N2.8 and Non-Executive Director respectively. They are all highly billion, driven largely by death claims from the group life, credit life qualified and seasoned professionals and their appointments will and third party motor classes of insurance. The company has since bring a renewed dynamism to the Board. They will be presented to carried out a comprehensive portfolio review and corrective you for election at this Annual General Meeting. actions have been taken to improve terms and conditions, reduce participation or exit the business as appropriate. Outlook Even though the country is not out of recession yet, the early signs Net investment income increased by 98%, from N.74 billion to give cause for cautious optimism that the worst may be over and N1.47 billion, mainly due to the consolidation of the investment economic activity may begin to improve. The rise in international income of the subsidiary. The unlisted equities portfolio suffered crude oil prices above the US$50 per barrel mark bolstered foreign significant impairment while the financial commitment on our new exchange reserves more than US$30 billion towards the tail end of head office building constrained the liquidity that would have Q1 2017. The CBN has directed an ample proportion of the benefited from attractive yields on short term instruments. reserves towards defending the Naira. Similarly, the rising cost of goods and services, coupled with the first-time consolidation of the operations of the subsidiary led to a The proposed 2017 Federal budget of N7.29 trillion is a strong 45% increase in management expenses. Significant investments indication that President Buhari is committed to turning the are being made in improving the technology and distribution economy around during the year. As in 2016, 30% (N2.24 trillion) infrastructure to support the company's retail strategy. Indeed, of the expenditure will go towards capital projects of which N791 the agency network almost doubled from 832 to 1,600 agents billion will be allocated to infrastructure projects in the Power, while a robust platform has been built for the rollout of the Works Housing and Transport sectors. bancassurance channel. While these costs are being accounted for in the current financial statements, we expect the benefits to In a bid to address the root causes of the economic downturn, the accrue over several accounting periods. Federal Government also unveiled a 4-year Economic Recovery and Growth Plan with one of its objectives being to achieve As a result, despite the modest growth in revenue, the combined macroeconomic stability and economic diversification. The plan effects of the harsh macroeconomic environment, high claims cost, projects a 2.19% growth in GDP in 2017, reaching 7% by 2020. The rising inflation and benign investment income have led to a full effects of the government's plans would have trickled down by

10 CHAIRMAN’S STATEMENT CONTD. 2016 Annual Report & Accounts

the second half of the year and economic activity is expected to There are also ongoing efforts to diversify sources of revenue into pick up by then. allied industries with higher profit margins.

We have also seen early signs of greater collaboration amongst the The Company made significant progress on our new Head Office financial services regulators which should lead to the satisfactory under construction. When completed, we will operate from a resolution of impediments in the areas of new products and complex befitting our status as a leading insurance player as well as distribution channels, especially bancassurance and annuity. obtain investment income from lettable floors. Overall, I would say that the prospects for the Insurance industry are slightly positive with potential for moderate growth. I would like to conclude by appreciating our valued customers and their intermediaries for their continued patronage, as we hope to The Board of Directors and the management of your Company continue to provide effective solutions to your financial needs. have also put in place additional cost management and revenue enhancement measures to ensure a quick return to profitability. May God bless Cornerstone Insurance plc. Strict cost control measures on management expenses have been put in place and will be closely monitored as the year progresses.

MR. SEGUN ADEBANJI Group Chairman

11

CORPORATE GOVERNANCE REPORT As at 31st December, 2016 BOARD OF DIRECTORS 2016 Annual Report & Accounts

SEGUN ADEBANJI GROUP CHAIRMAN

Mr. Segun Adebanji, has had over 35 years working experience in blue chip companies. Prior to joining Africa Capital Alliance in January 2011, Mr. Segun Adebanji was the Executive Vice Chairman of Alvac Company Limited. Mr. Segun Adebanji's working experience includes UAC and Unilever PLC London and South Africa. He has served as Financial Director of Nigerian Breweries PLC and later Managing Director, Heineken Ghana Breweries and Namibia Breweries. Mr. Adebanji is a non-Executive Director of Nigerian Breweries Plc and Chairman, Bevpak Nigeria Limited. He is a Fellow of both the Chartered Association of Certified Accountants and the Institute of Chartered Accountants of Nigeria.

*Mr. Segun Adebanji was appointed as Chairman of the Board effective 28th April, 2017.

PAUL KOKORICHA NON-EXECUTIVE DIRECTOR

Mr. Paul Kokoricha is an Executive Partner at African Capital Alliance and has over Thirty Years' experience in the financial services industry.

Mr. Paul Kokoricha holds a Bachelor of Science Degree, Second Class Upper Division in Economics and won the Departmental Prize for the Best Graduating Student in Economics in 1982 from the University of Nigeria, Nsukka. He is a Fellow of the Institute of Chartered Accountants of Nigeria.

*Mr. Paul Kokoricha resigned from the Board as Chairman effective 23rd April, 2017.

GANIYU MUSA MANAGING DIRECTOR

Mr. Ganiyu Musa worked at African Reinsurance Corporation for 19 years in various capacities including Director of Finance & Accounts/Chief Financial Officer for 10 years and Deputy Managing Director, Services for 5 years.

Mr. Ganiyu Musa is a highly experienced management professional with diversified experience in insurance, reinsurance, audit, consulting and financial management. He has over 27 years working experience and has served in different capacities at Pannell Kerr Forster, a firm of Chartered Accountants, Arthur Andersen and African Reinsurance Corporation.

He holds a Bachelor of Science degree in Business Administration and a Masters in Banking and Finance degree, both from the University of Lagos. He is a Fellow of the Institute of Chartered Accountants of Nigeria. He is also a Member of the Chartered Insurance Institute of London and a Senior Member of the Chartered Insurance Institute of Nigeria.

DOMINIC ICHABA NON – EXECUTIVE DIRECTOR

Mr. Dominic Ichaba a former Managing Director of Cornerstone Insurance PLC, is a Legal Practitioner and a Chartered Stockbroker. He has experience in Banking, Insurance, Strategy development and Human Resources Management.

He is a graduate of the Ahmadu Bello University, Zaria and the Nigerian Law School and holds a Masters Degree in Business Administration. He is also an alumnus of the London Business School, the I.E.S.E Business School, Barcelona and the Wharton School, USA.

14 BOARD OF DIRECTORS’ PROFILE 2016 Annual Report & Accounts

STEVE IWENJORA NON – EXECUTIVE DIRECTOR

Mr. Steve Iwenjora has over 17 years cognate experience in the financial services sector, spanning banking, private equity and investment management with local and international organisations. He is presently the Managing Director of CAN Fund Manager Limited, a Company under African Capital Alliance (ACA). He worked with Citi Bank and Continental Trust Bank before joining ACA in 2004. He is a Fellow of the Institute of Chartered Accountants of Nigeria and holds a Bachelors Degree in Accounting (2nd Class Upper Division) from the University of Lagos.

EKWUNIFE OKOLI NON-EXECUTIVE INDEPENDENT DIRECTOR Mr. Ekwunife Okoli has over 30 years consumer goods industry experience in a wide cross section of over 20 African countries including Nigeria, Ghana, Cameroun, Ethiopia, Angola and Mozambique among others. Mr. Ekwunife Okoli worked with Diageo for many years and served in different capacities including as Managing Director, Guinness Ghana, Managing Director, Guinness Cameroun, Marketing Director, Guinness Nigeria PLC and Guinness Brand Director, Africa with the last 10 years as CEO of large consumer goods markets and the last 4 years as a Regional Managing Director and acquired strong FMCG commercial and Brand Marketing experience at Diageo. He possesses significant corporate governance experience especially in difficult geographies and has held executive and non-executive board positions in various Diageo subsidiaries including Guinness Nigeria PLC, Guinness Ghana and Seychelles Breweries Limited. He is very passionate about Africa and its potential business and social opportunities and is currently the founder of Advantage Consult Limited. *He was appointed to the Board with effect from 22nd July, 2016.

ELIZABETH AMADIUME NON-EXECUTIVE INDEPENDENT DIRECTOR Ms. Elizabeth Amadiume has over 32 years working experience in all aspects of non-life insurance operations. She is a member of the Board of Directors of the African Reinsurance Corporation (South Africa) Limited. She has also served as the Director, Central Operations and Special Risks of African Reinsurance Corporation and its Regional Director of Mauritius. Ms. Amadiume Elizabeth was President of the Insurance Institute of Mauritius from April 2006 to March 2009, and was a Member of the Mauritius Financial Services Consultative Council Technical Committee for Insurance - 2007 to 2008; Member of the General Insurance Technical Committee, Kenya 2004, Member of the Joint Insurance Industry Risk Evaluation Committee, Kenya 2004; and Visiting lecturer, College of Insurance Kenya for several years up to 2004. Ms. Elizabeth Amadiume is a Fellow of the Chartered Insurance Institute, UK and has a Masters Degree in French Language and Literature from the Voronezh State University, then USSR. She is also an alumnus of the Harvard Management and Leadership Programme. *Mrs. Elizabeth Amadiume was appointed to the Board with effect from 21st October, 2016.

15 BOARD OF DIRECTORS 2016 Annual Report & Accounts

ANTHONY EGBUNA NON – EXECUTIVE DIRECTOR

Mr. Anthony Egbuna serves as a Vice President and Investment Officer at African Capital Alliance. Mr. Egbuna joined African Capital Alliance in 2009. He worked at Arthur Andersen, FSB International Bank, ProAce Consulting, and United Bank for Africa, as well as in Reynolds American, Winston Salem, and Jefferson Wells. Mr. Egbuna was one of a two-man team that led the turnaround consulting engagement at the then Federal Savings Bank. He has more than 28 years of varied experience in financial management, banking, auditing, process improvement, strategic planning and enterprise risk management, having been exposed to financial services, oil and gas, manufacturing, consumer products and several other industries as auditor, consultant, and banker. He serves as Non-Executive Director at e-Tranzact International PLC. Mr. Egbuna is a Chartered Accountant and holds an M.B.A. degree from Wake Forest University, Winston Salem and a first class Bachelor of Science degree in Social Sciences from the University of Ife.

*Mr. Anthony Egbuna was appointed to the Board with effect from 21st October, 2016.

TOKUNBO BELLO EXECUTIVE DIRECTOR

Mr. Tokunbo Bello is a consummate professional with over 20 years' experience in financial services consultancy and personal wealth management, he has extensive knowledge in various aspects of financial services having spent seven years at Citibank Life in the United Kingdom as a branch executive and manager responsible for new financial consultants and client portfolio management.

Mr. Tokunbo Bello holds a Bachelor's degree in Biology from the Ahmadu Bello University, Zaria and a Master's degree in Information Systems Management from the University of Stirling, Scotland. He is a member of the Chartered Institute of Insurance and also holds the Financial Planning Certificates 1, 2 and 3 and a Certificate in Mortgage Advice and Practice.

AYO OSUNBUNMI EXECUTIVE DIRECTOR

Ayo Osunbunmi joined Cornerstone Insurance PLC as Chief Operating Officer in 2015. Prior to this appointment, he was a member of general management at Union Bank of Nigeria PLC where he coordinated the pre-acquisition and post-acquisition due diligence activities on the bank that resulted in the acquisition of the bank by an investor group. He also worked with KPMG Professional Services and Arthur Andersen. In the course of his professional career, he has gained valuable experience in corporate governance, risk management, internal auditing, internal controls and investor relations among other skills.

Mr. Ayo Osunbunmi has a Bachelor of Science degree in Civil Engineering from the University of Ibadan and a Masters Degree in Business Administration (MBA) from the Stephen M. Ross School of Business at the University of Michigan. He also has a Master of Science (M.Sc.) degree in Computer Science from the West Chester University of Pennsylvania, West Chester, Pennsylvania, USA. He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN), a Certified Information Systems Security Professional (CISSP), a Certified Information Systems Auditor (CISA) and a Certified Fraud Examiner (CFE).

16 SENIOR MANAGEMENT TEAM 2016 Annual Report & Accounts

GANIYU MUSA TOKUNBO BELLO AYO OSUNBUNMI GMD/CEO E.D Technical/Operations E.D Services

OLASOJI TEHINGBOLA MARTINS UWUILEKHUE DAYO ALAO Chief Technology Officer GM, Head Technical / Risk management Division DGM. Head Retail Business Division

PETER EKWUEME PIUS OJO THAIBAT ADENIRAN DGM, Head Corporate Business Division DGM. Head, Branch Services Division Head, Halal Takaful Nigeria

EMMANUEL OTITOLAIYE TUNDE LAWUYI OMODAYO ODUNTAN Head, Finance and Performance Head, Product Development Head, Corporate Services Management group. & Channel Innovation 172 CORPORATE GOVERNANCE REPORT 2016 Annual Report & Accounts

CORPORATE GOVERNANCE COMPLIANCE and best practices to ensure that the Company is compliant STATEMENT at all times. The Board conducted a company-wide corporate Governance is central to the operations and structure of governance audit to gauge the Company's compliance with Cornerstone Insurance PLC and good corporate governance is an extant regulations and best practices and devised action plans essential part of the spirit of the Board. Our Company's to address gaps which were identified; governance structures and practices align with applicable local 6. The Company improved its interaction and engagement with legislation and international best practices including compliance various regulators as well as its stakeholders and has put in with the Code of Corporate Governance issued by the National place measures to continue to strengthen these relationships. Insurance Commission (NAICOM) for the Insurance Industry in 7. The Company has a policy of zero tolerance for non- Nigeria and the Code of Corporate Governance for Public compliance and has developed a robust Compliance Companies issued by the Securities and Exchange Commission. Framework to ensure compliance at all levels. Further, we ensure continuous review of our governance approach and practices to promote accountability and transparency. Governance Structure The governance of the Company resides with the Board of The Board also ensures that its governance approach is reflected Directors who are accountable to shareholders for creating and throughout the organisation and has developed a culture where delivering sustainable value through the management of the managers at every level are accountable and stakeholder views are Company's business. taken seriously. The Board determines the governance culture of the organisation and ensures that it leads by example by exhibiting The Board is responsible for the efficient operation of the responsible behaviour which is expected from every stakeholder Company and ensures the Company fully discharges its legal, in the organisation. financial and regulatory responsibilities. These oversight functions of the Board of Directors are exercised through its various At the beginning of 2017, NAICOM issued a statement to the Committees. industry highlighting its regulatory priorities for the year 2017 part of which was monitoring the behavioural aspects of corporate The matters which are more specifically reserved for the Board to governance. In furtherance of this objective, NAICOM ensure that it maintains full and effective control over appropriate subsequently issued a circular dated 25th August, 2016 clarifying strategic, financial, operational and compliance issues are: some provisions of its Code of Corporate Governance. The circular, among other things, compressed the existing committees • Maintenance of clear investment objectives and risk of insurance companies to three namely: management policies; • Formulation and Monitoring of the Group's Strategy and a. Finance, Investment and General Purposes Implementation of that Strategy; b. Audit and Compliance • Monitoring all business activities of the Company from c. Enterprise Risk Management and Governance analysis of investment performance to review of quarterly management accounts; In compliance with this circular, the Board reviewed its committee • Capital raising and Budget Allocation structure and approved changes to the committees' Terms of • Accounting policies, and financial reporting Reference. • Internal Control • Approval of material acquisitions and disposal of assets Some of the key initiatives which the Board embarked on in 2016 • Consideration and approval of Board and Senior to strengthen its corporate governance processes include but are Management appointments or removals not limited to the following: • Shareholder communication • Authorisation of Directors' conflicts or possible conflicts of 1. Appointment of the firm of J.K Randle as external interest; consultants to conduct the annual Board evaluation of the • Review of terms of reference and membership of Board Board in line with the provisions of the NAICOM Code of Committees; Corporate Governance; 2. Extensive review of the Company's Code of Business Ethics The Board delegates the operational management of the Group's to guide employees, Directors and other stakeholders who businesses to the Group Chief Executive who reports to the Board transact with the Company. The Code contains clear and who can sub-delegate any of his powers as appropriate. provisions and guidelines on anti-bribery, conflict of interest situations, whistle blowing and ethical conduct; Board Composition 3. Codification of the Company's Anti-money Laundering The Board of Directors of Cornerstone Insurance PLC is (AML) and Combating the Financing of Terrorism (CFT) comprised of experienced people with significant achievements in policies; their respective professions. 4. Peer Review of the Company's compensation and remuneration levels to ensure that the Company remains As at December 31, 2016, there were Nine (9) members on the competitive and can attract, motivate and retain skilled and Board of Directors comprising Four (4) Non-Executive Directors, qualified persons needed to manage the business of the one of whom is the Chairman, Two (2) Independent Directors and organisation; Three (3) Executive Directors, one of whom is the Managing 5. Constant monitoring of corporate governance regulations Director.

18 CORPORATE GOVERNANCE REPORT CONTD. 2016 Annual Report & Accounts

The composition of the Board as at 31st December, 2016 to date is presented as follows: Non – Executive Directors 1Mr. Segun Adebanji Chairman 2Mr. Paul Kokoricha Non-Executive Director 3Mr. Adedotun Sulaiman Non-Executive Director Mr. Dominic Ichaba Non-Executive Director Mr. Steve Iwenjora Non-Executive Director 4Ms. Elizabeth Amadiume Independent Director 5Mr. Anthony Egbuna Non-Executive Director 6Mr. Ekwunife Okoli Independent Director 7Mrs. Ndidi Okonkwo Nwuneli Independent Director

Executive Directors Mr. Ganiyu Musa Managing Director/CEO Mr. Ayo Osunbunmi Executive Director Mr. Tokunbo Bello Executive Director

1Appointed as Chairman of the Board effective 28th April, 2017. 2 Resigned as Chairman effective 23rd April, 2017 3 Resigned from the Board effective 13th September, 2016 4 Appointed effective from 21st October, 2016 5 Appointed effective from 21st October, 2016 6 Appointed effective 22nd July, 2016 7 Resigned effective 13th December, 2016

Changes to the Board Ms. Elizabeth Amadiume as a non-executive Independent Director. Details of her experience can be found on Page 4. Resignations The Board hereby presents the appointment of Ms. • In March, 2016, Messrs. Richard Ikiebe, Oladapo Elizabeth Amadiume as a non-executive independent Egbeyemi, Alhaji Hussaini Abdulrahman and Peter Director for approval at this Annual General Meeting. Ameadaji (alternate) retired as Directors from the Board in line with the NAICOM Code of Corporate Governance on • In October, 2016, the Board appointed Mr. Anthony tenure of Directors. The Chairman made this announcement Egbuna as a non-executive Director. Details of his to shareholders in his statement at the 2016 AGM of the experience can be found on Page 4. Company. The Board hereby presents the appointment of Mr. • In September, 2016, Mr. Adedotun Sulaiman retired from Anthony Egbuna as a non-executive Director for approval the Board in compliance with the provisions of the NAICOM at this Annual General Meeting. Code of Corporate Governance on tenure of Directors. The Board subsequently appointed Mr. Paul Kokoricha to replace Post Y ear End Events him as Chairman. • Mr. Segun Adebanji replaced Mr. Paul Kokoricha who resigned from the Board as Chairman effective from 23rd • In December, 2016, Mrs. Ndidi Okonkwo Nwuneli April, 2017. Details of his experience can be found on Page 2. resigned from the Board as a non-executive independent Director in order to pursue other interests and The Board hereby presents the appointment of Mr. Segun commitments. Adebanji as a non-executive Director for approval at this Annual General Meeting. Appointments/Election of Directors • In July 2016, the Board strengthened its composition with the Re-Election of Directors appointment of Mr. Ekwunife Okoli as a non-executive In accordance with Section 259(1) of the Companies and Allied independent Director. Details of his experience can be found Matters Act, CAP C20, LFN, 2004, the following Directors retiring on page 4. by rotation in accordance with Section 259 of the Companies and The Board hereby presents the appointment of Mr. Allied Matters Act being eligible are presenting themselves for re- Ekwunife Okoli as a non-executive independent Director election: for approval at this Annual General Meeting. a. Mr. Ayo Osunbunmi b. Mr. Dominic Ichaba • The Board through the ERM and Governance Committee c. Mr. Steve Iwenjora reviewed its composition and recognised the need for greater diversity on the Board. In October, 2016, the Board appointed Their profiles are contained in the section for Directors' Profiles.

19 CORPORATE GOVERNANCE REPORT CONTD. 2016 Annual Report & Accounts

Board Appointment, Induction and Training The Board through the Enterprise Risk Management (ERM) and Governance Committee is responsible for determining the required knowledge, skills and experience, required for the Board as a whole and for individual members. Members are expected to meet the standard requirements set by the Board and should also possess expertise and insights in the industry and other areas relevant to the Company. All new non-executive Directors appointed to the Board are issued a letter of appointment which contains their fiduciary duties as Directors, their roles and responsibilities, remuneration and information on Board meetings among other things. On appointment, Directors receive information about Cornerstone Insurance including financial data and key policies supporting the Company's business practices. They also receive copies of the Terms of Reference of the Board and committees to which they have been appointed and the Company's Memorandum and Articles of Association. All new Directors are required to disclose their memberships on other Boards and any real or potential conflict of interest situations which they are aware of. Directors are encouraged to update their skills and knowledge and the Board and individual Directors receive ongoing training as required. In 2016, Board members were trained and tested on AML and CFT regulations and processes. Directors also partook in the Fiduciary Awareness Certification Test (FACT) organised by the Nigerian Stock Exchange (NSE) in collaboration with the Centre for Business (CBI) Integrity as part of the Corporate Governance Rating System for companies listed on the Nigerian Stock Exchange.

Meetings of the Board The Board formally met Six (6) times in 2016. The Board meets at least once every quarter to perform its oversight function and to monitor the performance of management. Special Board meetings are scheduled whenever business exigencies arise which require the urgent attention of the Board. Between meetings, the Board maintains regular contact with Management.

Details of attendance by each of the Directors at Board meetings are shown in the table below.

Attendance Register of the Members of the Board for the year ended 31st December, 2016

MEETINGS 1 2 3 4 5 6 NAMES 26/01/16 16/03/16 26/04/16 22/07/16 21/10/16 15/12/16 Strategy Session

Mr. Adedotun Sulaiman ✓ ✓ ✓ ✓ NLD NLD Mr. Paul Kokoricha ✓ ✓ ✓ ✓ ✓ ✓ Mr. Segun Adebanji NYA NYA NYA NYA NYA ✓ Mr. Ganiyu Musa ✓ ✓ ✓ ✓ ✓ ✓ Mr. Dominic Ichaba ✓ ✓ ✓ ✓ ✓ ✓ Mr. Anthony Egbuna NYA NYA NYA NYA NYA ✓ Mr. Steve Iwenjora ✓ ✓ û ✓ ✓ ✗ Mr.Ekwunife Okoli NYA NYA NYA NYA ✓ ✓ Mr. Ndidi O. Nwuneli ✗ ✓ ✓ ✓ ✓ ✓ Ms. Elizabeth Amadiume NYA NYA NYA NYA NYA ✓ Mr. Tokunbo Bello ✗ ✓ û ✓ ✓ ✓ Mr. Ayo Osunbunmi ✓ ✓ ✓ ✓ ✓ ✓

Key: ✓-Present ✗-Absent NYA-Not Yet Appointed NLD- No Longer Director

Annual Board Evaluation In compliance with the NAICOM Code of Corporate Governance, the Company appointed the firm of J.K Randle to conduct the annual Board Evaluation exercise for the year ended 31st December, 2016. The report of the Board Evaluation is contained on page 24 of the Annual Report. At the Annual General Meeting of the Company held 21st July, 2015, the Company's shareholders approved the appointment of JK Randle Professional Services to facilitate the evaluation of the Board. The Board is confident that JK Randle Professional Services will continue to deliver value to the Board.

During the year, the ERM and Governance Committee considered the report of the Board Evaluation carried out for the year ended 31st December 2015, identified areas of specific focus and developed action plans to address those areas.

202 CORPORATE GOVERNANCE REPORT CONTD. 2016 Annual Report & Accounts

BOARD COMMITTEES The Board is supported by a number of committees which underpin the Board's assurance and oversight of the organisation. The Board committees are part of Cornerstone's formal governance structure and provide the Board with regular reporting and formal assurance. This helps the Board to spend a significant proportion of its time on strategic decision-making, whilst obtaining proper assurance that decisions across the organisation have been made effectively based on the correct information. Committee chairs report to the Board on their activities following each meeting of their respective committee. There were Four (4) standing Committees of the Board at the beginning of the year under review, namely; a. Governance and Establishment Committee b. Financial Performance and Enterprise Risk Management Committee c. Finance and Investment Committee and d. Audit Committee

As highlighted above, these Committees were reconstituted in line with the NAICOM Code of Corporate Governance by the fourth quarter of 2016. The Committees of the Board as at 31st December 2016 to date are: a. Enterprise Risk Management and Governance Committee b. Audit and Compliance Committee c. Finance, Investments and General Purposes Committee d. Statutory Audit Committee

All the Committees have Terms of Reference that guide Committee members in the execution of their duties. The Committees report to the Board and provide recommendations to the Board on matters reserved for Board approval. Enterprise Risk Management and Governance Committee The Enterprise Risk Management and Governance Committee which has taken on the risk management function of the former Financial Performance and ERM Committee, assists the Board to oversee the Group's overall risk management systems, risk appetite and risk tolerance. The Committee also assists the Board in discharging its governance responsibilities as well as its responsibilities for the management of human resources to ensure that recruitment and remuneration policies and practices are designed to attract, retain and reward fairly and responsibly with a clear link to corporate and individual performances. The Committee meets at least four (4) times in a year. The relevant members of the senior executive management team in attendance at the Committee's meetings include the Chief Operating Officer, the Head of Human Capital, the Head of Legal and Head of Enterprise Risk Management. The members of the Committee in 2016 and their meeting attendance were as follows:

1 2 3 4 5 NAMES 14-1-201621-4-2016 26-7-2016 5-10-2016 13-12-2016

Mr. Richard Ikiebe ü NLD NLD NLD NLD Mr. Adedotun Sulaiman NYM NYM û NLD NLD * Mr. Dominic Ichaba ü ü ü ü ü Mr. Ndidi O. Nwuneli ü ü ü ü ü Mr. Anthony Egbuna NYA NYA NYA NYA ü Ms. Elizabeth Amadiume NYA NYA NYA NYA ü

Key: ✓-Present ✗-Absent NYA-Not Yet Appointed NLD- No Longer Director NYM-Not Yet Member

*Chairman Audit and Compliance Committee The Audit and Compliance Committee is established as a Committee of the Board and is responsible for the integrity of the Group's financial reporting, including scrutinising accounting policies and monitoring the effectiveness of the Company's internal control and risk management systems. The Committee also reviews the effectiveness and objectivity of the Company's internal and external auditors among other things. The Audit Committee is to meet at least three (3) times a year and each of these meetings is to be attended by relevant members of the Company's Management team including the Managing Director, the Chief Operating Officer, the Internal Auditor, the General Manager-Risk Management, the Head of Finance and Performance Management, Head of Legal and where necessary the External Auditors. Since this Committee was established in the fourth quarter of 2016, the Committee did not hold any meetings in 2016. The members of the Committee are: a. Ms. Elizabeth Amadiume - Chairman b. Mr. Dominic Ichaba c. Mr. Steve Iwenjora

21 CORPORATE GOVERNANCE REPORT CONTD. 2016 Annual Report & Accounts

Finance, Investment and General Purposes Committee The Finance, Investment, and General Purposes Committee assists the Board in its oversight responsibilities over the Company's financial and investment strategy. The Committee also assists with establishing a framework or broad policy for investment and monitors the implementation of the Company's investment policies and procedures. The Committee oversees the Board's responsibilities in relation to the financial affairs of the Company and acts as a general purpose committee with power to act on all day-to-day matters not within the province of any other committee of the Company.

The Managing Director, the Chief Operating Officer, Head of Treasury and Investment, Head of Leasing, the Head of Marketing and Corporate Communications and Head of Legal are usually in attendance at the Committee's meetings to provide answers to the Committee on questions that may arise in the course of the meeting.

Since this Committee was a merger of two existing committees (Finance and Investment, Financial Performance and ERM), the members of the earlier committees and their attendance at meetings were as follows: Financial Performance and ERM Committee 20/1/16 16/3/16 22/4/16 14/7/16 20/10/16 1Mr. Paul Kokoricha ü ü ü ü ü Mr. Steve Iwenjora NYM NYM NYM ✗ ü Mr. Ganiyu Musa ü ü ü ü ü Mr. Tokunbo Bello ü ü ✗ ü ü Mr. Oladapo Egbeyemi ü ü NLD NLD NLD Mr. Segun Adebanji ü ü ü NYM NYM Mr. Ayo Osunbunmi NYM NYM NYM ü ü

Key: ✓-Present ✗-Absent NLD- No Longer Director NYM-Not Yet Member 1 Chairman

Finance and Investment Committee

26/4/16 8/8/16 5/10/16 1 13/12/16 Mr. Adedotun Sulaiman ü ü NLM NLM Mr. Ganiyu Musa ü ü ü ✗ Mr. Henry Olayemi ü NLM NLM NLM 2Mr. Anthony Egbuna NYA NYA NYA ü Mr. Paul Kokoricha NYM ü ü NLM Mr. Ayo Osunbunmi NYM ✗ ü ü Mr. Steve Iwenjora NYM ✗ ü ü

Key: ✓-Present ✗-Absent NYA-Not Yet Appointed NYM-Not Yet Member NLM-No Longer Member 1After reconstitution as the Finance, Investments and General Purposes Committee 2 Chairman

THE STATUTORY AUDIT COMMITTEE The Audit Committee of the Group is a requirement of Section 359 (4) of the Companies and Allied Matters Act CAP C20, Laws of the Federation of Nigeria 2004. The Committee consists of an equal number of Directors and representatives of the shareholders, but is subject to a maximum limit of six (6) members.

The Audit Committee's terms of reference are stated in Section 359(6) of the Companies and Allied Matters Act CAP C20, Laws of the Federation of Nigeria 2004. The Audit Committee is also guided by the provisions of Section 30 of the Code of Corporate Governance for Public Companies issued by the Securities and Exchange Commission.

22 CORPORATE GOVERNANCE REPORT CONTD. 2016 Annual Report & Accounts

The Audit Committee meets at least three (3) times a year and each of these meetings are attended by relevant members of the Company's Management team including the Managing Director, the Chief Operating Officer, the Internal Auditor, the General Manager-Risk Management, the Head of Finance and Performance Management, Head of Legal and where necessary the External Auditors.

The roles and responsibilities of the Audit Committee include to: • Ascertain whether the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices; • Review the scope and planning of audit requirements; • Review the findings on Management matters in conjunction with the external auditor and departmental responses thereon; • Keep under review the effectiveness of the Company's system of accounting and internal control; • Make recommendations to the Board with regard to the appointment, removal and remuneration of the external auditors of the company; • Authorise the internal auditor to carry out investigations into any activities of the Company which may be of interest or concern to the committee. • Review the Company's whistle-blowing policy • Monitor and review the effectiveness of the Company's internal audit function in the context of the Company's overall risk management system.

The members of the Statutory Audit Committee in 2016 and their attendance at meetings are as follows: 21-1-2016 16-3-2016 21-4-2016 14-7-2016 20-10-2016 1Mr. Henry Olayemi ü ü ü ✗ ü Mr. Chibuzor Eke ü ü ü ü ü Mr. Lazarus Onwuka ü ü ü NLD NLD Mr. Peter Ameadaji ü ü NLD NLD NLD Mr. Ariyo A. Olugbosun NYA NYA NYA NYA ü Mr. Paul Kokoricha ✗ ü ü ✗ NLM Mrs. Ndidi O. Nwuneli ü ü ü ü ü Mr. Dominic Ichaba NYA NYA NYA ü ü

Key:✓-Present ✗-Absent NYA-Not Yet Appointed NLD- No Longer Director NLM-No Longer Member 1 Chairman

Information Flow and Access to Management Comprehensive Board papers are circulated electronically and in print to the Directors before each meeting of the Board and Board Committees. The Board papers highlight and address the agenda items on which the Managing Director will report and areas requiring approvals and decisions of the Board.

The Board has a good line of communication with Management and can request the presence of any senior Management staff to provide information when required at its meetings.

The Company Secretary is available to advise individual Directors on corporate governance matters.

Directors' Remuneration The remuneration of Non-Executive Directors is competitive and comprises an annual fee and a meeting attendance allowance. The Board, through the ERM and Governance Committee, periodically reviews the remuneration package for Directors which is structured in a manner that does not compromise a Director's independence. The Company does not provide personal loans or credits to its Non-Executive Directors and publicly discloses the remuneration of each Director on an annual basis. In addition, the Company does not provide stock options to its Non-Executive Directors unless approved by shareholders at a general meeting.

The remuneration of Executive Directors including entitlements, benefits and share option schemes are adequately disclosed in the Financial Statements. However, no share option schemes were exercised in 2016.

Securities Trading Policy In compliance with the Investments & Securities Act, 2007, the Consolidated Rules and Regulations of the Securities and Exchange Commission and other relevant regulatory provisions, the Group has established a Securities Trading Policy which prohibits Directors, senior management, employees, professional advisers and every insider as described therein from abusing or placing themselves under the suspicion of abusing price sensitive information in relation to the Company's securities during closed periods. The policy is also available for viewing on https://cornerstone.com.ng/.

23 REPORT OF THE EXTERNAL CONSULTANTS 2016 Annual Report & Accounts

REPORT OF THE EXTERNAL CONSULTANTS ON THE APPRAISAL OF THE BOARD OF DIRECTORS OF CORNERSTONE INSURANCE PLC FOR THE YEAR ENDED 31ST DECEMBER, 2016

he Board of Directors of Cornerstone Insurance Plc. renewed its mandate to J. K. Randle International to conduct the evaluation of the Board of Directors of the company for the year ended 31st December, 2016 in accordance with the provisions of the NAICOM TCode of Good Corporate Governance for the Insurance Industry in Nigeria, February, 2009 (NAICOM Code). The Board of Cornerstone Insurance Plc. had ten Directors as at 31 December 2016. This consisted of Three Executive Directors, including the Managing Director/Chief Executive Officer and Seven Non-Executive Directors. Three Non-Executive Directors and one alternate Director resigned from the Board having completed their tenures.

Three Non-Executive Directors were appointed to fill the vacancies created by the resignations. Members of the Board remained conscious of their responsibilities in respect of the operations of the Board and the Company. They possess the requisite backgrounds to supervise the operations of the Company as well as the performance of Management. The composition of the Board conformed with the provisions of the NAICOM Code on the ratio of executive directors to non-executive directors. The number of committees conformed with the requirements of the NAICOM Code.

Despite the changes on the Board, the skills mix, experience base, and diversity remained adequate for the effective performance of the Board’s functions. We noted in particular, that the Board continued to review the performance of Management in line with the Company’s business plan during the year. The Board adequately challenged the assumptions of Management in the implementation of the Company’s business plans. It also ensured that the Company maintained very good relationship with the regulators and monitored compliance as appropriate.

We observed that the operations of the Board met the requirements of Best Practice and the NAICOM Code. Frequency of Board meetings exceeded the minimum requirement of the NAICOM Code. The Board held six meetings which included a strategy session, and the level of attendance was satisfactory.

The conduct of the meetings followed conventional procedures in a conducive atmosphere where all members expressed their views freely. The agenda of the Board consisted of relevant strategic issues in order to address the critical and emerging challenges within the Company and the industry. The activities of the Board were well documented in the minutes book.

The Board performed all the functions that fell within the purview of its oversight responsibilities which arose during the period under review. In particular the Board reviewed the Company’s Investment Policy. It also approved an Underwriting Policy to regulate the Company’s dealings in bonds. It strengthened the governance structures by reconstituting the Board Committees for more effectiveness.

The Board was actively involved in overseeing the internal audit functions as well as prudential matters such as Solvency Margin and Technical matters such as risk management. The Board also performed other statutory responsibilities including rendering the accounts of the operations and activities of the Company to the shareholders.

At the conclusion of the exercise, we recommended that the Board of Directors of Cornerstone Insurance Plc. should address highlighted issues in respect of a continued drive to strengthen the boards of the Company’s subsidiaries. The Board should also intensify efforts to complete the review of the Committees’ Terms of Reference following their reconstitution in line with NAICOM guidelines. The performance of the Board did not violate the NAICOM Code in any material manner and was adjudged to be satisfactory.

BASHORUN J. K. RANDLE, OFR Chairman/Chief Executive FRC/2013/ICAN/00000002703 Dated 22nd March, 2017

24 DIRECTORS’ REPORT 2016 Annual Report & Accounts For the year ended 31st December, 2016

The Directors of Cornerstone Insurance PLC (“Cornerstone'' or the “Company”) present their Report on the affairs of Cornerstone and its subsidiaries (together referred to as “the Group”), together with the Audited consolidated and separate financial statements and the Auditor's report for the year ended December 31st 2016.

LEGAL FORM AND PRINCIPAL ACTIVITY The Company was incorporated on 26 July, 1991 as a private limited liability company and converted to a public limited company on 17 June, 1997. The Company's principal activity continues to be the provision of risk underwriting and related financial services to its customers. Such services include provision of life and non-life insurance services for both corporate and individual customers. The Company has two wholly owned subsidiaries – Cornerstone Leasing and Investment Limited and Fin Insurance Company Limited. Cornerstone Leasing and Investment Limited commenced operations on 1 July 2004 and provides convenient asset acquisition options to both corporate organizations and individuals. FIN Insurance Company Limited is a private limited liability company incorporated in Nigeria and its primary activity is the provision of general insurance business. Fin Insurance Company Limited was acquired in the year 2015. Cornerstone Insurance Plc acquired 96.68% equity interest in Fin Insurance Company Limited thereby qualifying Fin Insurance Company Limited as a subsidiary. The Company prepares consolidated financial statements. The financial results of all its subsidiaries have been consolidated in this Annual Report and Accounts.

Operating Results:

The following is a summary of the operating results:

Group Group Company Company Group Company 2016 2015 2016 2015 YOY % YOY % N’000 N’000 N’000 N’000 Growth Growth

Gross Premium Written 9,190,634 7,331,633 8,389,950 7,331,633 25% 14%

Gross Premium Income 8,456,458 7,119,632 7,768,850 7,119,632 19% 9%

(Loss)/Profit before taxation (1,264,660) 1,843,054 (1,516,213) (332,139) -169% 356%

Taxation charge (470,563) (212,300) (373,574) (203,374) 122% 84%

(Loss)/Profit after taxation (1,735,223) 1,630,754 (1,889,787) (535,513) -206% 253%

Directors' shareholding: The Directors of the Company who held office during the year together with their direct and indirect interest in the issued share capital of the Company as recorded in the Register of Directors shareholding and as notified by the Directors in line with section 275 and 276 of the Company and Allied Matters Act and the Listing requirements of the Nigeria Stock Exchange are as follows:

NAMES OF DIRECTORS DIRECT INDIRECT TOTAL Mr. Paul Kokoricha * - - - Mr. Ganiyu Musa NA NA NA Mr. Dominic Ichaba 2,239,000 2,239,000 Mr. Anthony Egbuna * - - Mr. Steve Iwenjora * - - Mr. Ekwunife Okoli - - Ms. Elizabeth Amadiume Mr. Segun Adebanji * - - - Mr. Tokunbo Bello 503,360 503,360 Mr. Ayo Osunbunmi NA NA NA

* These Directors represent the interest of Banc-Assure Limited and Capasure Limited on the Board of the Company

25 DIRECTORS’ REPORT For the year ended 31st December, 2016 2016 Annual Report & Accounts

DIRECTORS' INTEREST IN CONTRACTS In accordance with section 277 of the companies and Allied Matters Act of Nigeria, The Board received a declaration from the following Director in respect of the services set against his name.

Name Of Director Interest In Company Name Of Company Services

Mr. Dominic Ichaba Director/Shareholder Pac Solicitors Legal Services

ANALYSIS OF SHAREHOLDING

Shareholding Structure as at 31 December 2016 The analysis of the distribution of the shares of the Company at the end of the financial year was as follows:

Range Number of Number of % of number of % of number of shareholders shares held shareholders shares held 1 -500 1,007 277,293 3.68 0.00 501 -1 ,000 1,185 1,088,001 4.33 0.01 1,001 -5 ,000 7,764 28,038,546 28.35 0.19 5 ,001 -10 ,000 5,382 46,479,215 19.65 0.32 10,001 -2 0,000 3,934 64,504,551 14.36 0.44 20,001 -5 0,000 4,075 145,733,030 14.88 0.99 50,001 -1,00 ,000 2,092 170,930,503 7.64 1.16 1,00,001 -5, 00,000 1,520 339,083,286 5.55 2.30 5,00,001 -1,000,000 219 176,515,413 0.80 1.20 1,000,001 -ABOVE 213 13,756,948,770 0.78 93.40 TOTAL 27,391 14,729,598,613 100 100

SUBSTANTIAL INTEREST IN SHAREHOLDING AS AT 31 DECEMBER, 2016

NAME SHAREHOLDING % OF SHAREHOLDING BANC-ASSURE LIMITED 7,143,885,379 49 CAPASURE LIMITED 4,498,205,285 31

The free float of shares as at the year ended 2016 stands at 46.4%.

Property and Equipment Information relating to changes in property and equipment is given in Note 15 to the financial statements.

HUMAN CAPITAL The Company's Human Capital unit is responsible for driving and enhancing the performance of the organisation as well as attracting high potential professionals. All Human Capital policies of the Company are subject to local laws and regulations in Nigeria. One of the objectives of the unit is to provide a work environment that is conducive for both personal and professional growth and ensure that Management aligns with global best practice.

Employment of Physically Challenged Persons The Group operates a non-discriminatory policy in the consideration of applications for employment, including those received from physically challenged persons. The Group's policy is that the most qualified and experienced persons are recruited for appropriate job levels irrespective of an applicant's state of origin, ethnicity, religion or physical condition. In the event that an employee becomes physically challenged in the course of employment, the Group is in a position to arrange appropriate training to ensure the continuous employment of such a person without subjecting him/her to any disadvantage in his/ her career development. As at 31 December 2016, the Group had no physically challenged persons in its employment.

26 DIRECTORS’ REPORT For the year ended 31 December, 2016 2016 Annual Report & Accounts

Gender Equality in Employment Cornerstone is an equal opportunity employer that adheres strictly to the principles of equality in all employment decisions and interventions. In order to provide equal employment opportunities to all individuals, employment decisions are based on merit, available vacancies and organizational priority.

Staff breakdown for 2016

Health, Safety and Welfare of Employees The Group continues to maintain strict health and safety rules and practices in the work environment which are reviewed periodically. Health, safety and fire drills are regularly organised to keep employees alert at all times. Employees are adequately insured against occupational hazards. In addition, the Group provides health insurance for its employees and their immediate families at its expense.

Employee Involvement and Training The Company places considerable value on the involvement of its employees and has continued the practice of keeping them informed on matters affecting them as employees and on various factors affecting the performance of the Company. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

Management decisions are communicated to employees on matters that are of concern to them by utilising various means of internal communication, including internal memoranda, email, Intranet Portal, companywide team building interactions, management meetings and business performance sessions among others.

The Company encourages the involvement of employees in the Company's performance through: • Reward & Recognition schemes such as staff promos; awards for the best performing staff in different areas of the organization (Marketing & Support teams); • Profit sharing; • No Accident Bonus for Company drivers; and • Performance Pay (variable pay) for Middle to Senior Management Staff

For the year 2016 Financial Year, trainings were conducted using the following methods: • E-learning • Knowledge Sharing Sessions • Class room based trainings • Product Knowledge Trainings • Open programmes • International & Local Seminars • Health, Safety and Environment Training

27 DIRECTORS’ REPORT For the year ended 31st December, 2016 2016 Annual Report & Accounts

ENTERPRISE RISK MANAGEMENT Enterprise Risk Management (ERM) Governance A system of risk governance is realised by establishing standards Overview related to organisational structure, risk strategy, written policies, Cornerstone's Enterprise Risk Management (ERM) model limit systems, documentation and reporting. These structures originates from a compendium of International risk standards. ensure the timely movement of risk-related information and a Foremost of the three (3) models is the ISO 31000 - Risk structured approach towards decision-making and Management - Principles and Guidelines. The definition of risk implementation. represents the foundation of Cornerstone's risk management philosophy as contained in the ERM framework document. Risk Management Philosophy Corresponding supporting frameworks include: The key elements of the Group's risk management philosophy are • The COSO integrated framework and as follows: • The three (3) lines of risk defense model - Risk owners, ERM • The Group considers sound risk management as the & Internal Control/Audit foundation of a long lasting financial institution. In addition to developing veritable structures in responding to the • The Group shall continue to adopt a holistic and integrated traditional Insurance Industry risks of claims management and approach to risk management. underwriting risks among others, the Board of Directors and • Risk officers shall be empowered to perform their duties Management appreciate the dynamism risk portends for the professionally and independently without undue business. For this reason, risk management structures have been interference. instituted to administer material changes in the corporate risk • Risk management shall be governed by policies which are well management framework. These risks include: compliance/ defined and clearly communicated Group-wide. regulatory, health and safety, strategic, reputational, operational • Risk management represents a shared responsibility. and financial risks. Therefore, the Group aims to build a shared -perspective on risks that is grounded on consensus. The Board is vested with the overall responsibility of overseeing the Group's risk management and internal control mechanism. The Risk Culture Group's internal Audit/Control function is instituted to The Board and Senior management set the tone-at-the-top, by strategically manage risks in the overall rather than exclude promoting accountable approaches to risks which are targeted at material risks in relation to the attainment of corporate objectives. ensuring that the long-term rewards and the reputation of the The Group promotes the culture of risk awareness through policy Group is not jeopardized in a bid to achieve set objectives. directives, communication and training. Management is responsible • The apex responsibility for risk management and control is for identifying, assessing and addressing material risks, and fully vested in the Board of Directors. designing internal controls accordingly. Standard operating • The Group's Management shall promote risk awareness and procedures and inherent controls are subject to periodic reviews risk management practice across the enterprise. by the Enterprise Risk Management unit, Management and Board • The Group advocates risk event reporting and whistle Committees. The key financial and non-financial risks and blowing, in order to properly monitor incidences of unethical uncertainties faced by the Group, have been considered during the practices. year, and our approaches to managing them, are described in this • The Group shall maintain a firm obligation to ethical report. principles, which shall be demonstrated in the ethical performance of staff and in the decision making process. The Cornerstone Enterprise Risk Management (ERM) Programme Risk Management and Internal Control Integrated The Group's Enterprise Risk Management (ERM) Programme Framework comprises instituted structures designed to manage a myriad of The ERM and Internal Audit/control practice of the Group derives uncertainties and threats and equally explore opportunities in its functionality from the Committee of Sponsoring Organizations enhancing the Group's performance standards. The Group's ERM of the Treadway Commission (COSO) Enterprise Risk practice involves a cross-functional and multi-dimensional Management – Integrated Framework. The framework highlights approach to corporate risk management. An ERM unit has been the nucleus of the Enterprise risk management process, the specifically charged with the function of identifying, evaluating, synergy of operations amongst the Board of Directors, monitoring and reporting uncertainties (risks and opportunities) Management and other personnel across the enterprise. that may impact on corporate objectives (ISO: 31000) using the The Group's ERM/internal control integrated framework primarily RAG (Red, Amber and Green) rating methodology. consists of the following five (5) constituents in accordance with best practices: The Group's risk context delineates the scope of the risk • Control environment management process and sets the standards against which risks • Risk assessment will be assessed in accordance with the Group's primary objective • Control activities to be the leading insurance based financial services Group that • Information & communication transforms. The Group appreciates the myriad of uncertainties • Monitoring inherent in underwriting insurance and managing ancillary risks and how such risks potentially impact achievement of business Control Environment objectives if left unaddressed via a structured /multi-dimensional The Group's control environment refers to established standards risk management approach. It is to this end that the Group's ethics, and structures that provide a foundation for the risk philosophy and risk culture are embodied in our integrated risk management/internal control and actions to thrive across the management and control function. Group. The Board of Directors and Senior Management institutes 28 DIRECTORS’ REPORT For the year ended 31 December, 2016 2016 Annual Report & Accounts the tone at the top regarding the importance of internal control. image of the Group is not jeopardized. The Enterprise Risk Furthermore, the control environment comprises our Five (5) management function is supported by Customer Experience, corporate values of integrity, empathy, professionalism, innovation Brand, Compliance and Legal functions. and team spirit that exhibit the Group's commitment to essential Operational Risk Management values. These values provide the necessary advantages that enables Operational risks represent the risk of losses that emanate from Management establish the mode of business operations and the inadequate or failed internal processes, people and systems or Board of Directors to effectively execute its independent from external events including legal and compliance risks. The oversight functions by setting the tone at the top. The operating Group's ERM framework recognizes external risks, legal and and corporate governance structure, establishment of standards compliance risks and financial crime risks e.g. Anti-Money of conduct, enforcement of accountability through structures and Laundering (AML) and Combating Financing of Terrorism (CFT). authorities represent critical success factors responsible for the The Group recognizes the pervasiveness of several types of thriving risk management culture within the Group thus far. operational risks in our business process; hence policies and tools Risk Assessment have been instituted to ensure that resulting impacts are kept as- Risk assessment involves an iterative method of identifying and low-as-reasonably-practicable (ALARP). Some of these processes evaluating risks that could constitute threats to the enterprise as a are: whole, usually emanating from business units and are capable of I. RCSA impacting the Group's objectives. Designated risk champions and The Risk and Control Self-Assessment tool is employed to risk officers are responsible for risk identification/reporting, while manage operational risks using a combination probability and the ERM unit conducts an evaluation and assessment of risk impact measurement to calculate risk scores. Risk officers identified, with the intention of developing action plans for working in designated departments are primarily responsible implementation and assessing the effectiveness thereof. Risk for risk identification in line with our 1st line of defence assessment reports are presented at the quarterly Board meetings model, assessment, proffering action plans for implementing of the Enterprise Risk Management and Governance Committee and determining the efficacy of these plans in order to (formerly the Financial Performance and Enterprise Risk mitigate risk exposures. Management Committee. ii. The Operational Risk Register The 2016 risk assessment was administered via the Risk Control The Operational Risk Register represents Cornerstone's Self-Assessment exercise. The objective is to identify risks across operational risk identification and evaluation tool. The tool the enterprise via process owners and risk officers and evaluate allows designated Risk Officers, process owners and staff to the adequacy of internal control vis-a-vis risks identified using identify and report operational risk concerns to the ERM probability and impact metrics (RAG methodology). The Group unit to administer. shall ensure that risks are kept as-low-as-reasonably practicable with similar emphasis on potential risk embedded therein. iii. Occupational Health and Safety Management System Control Activities The Group reviewed its Occupational Health and Safety Control activities are actions instituted through internal practices Management System (OHSAS) design, in order to meet the that help safeguard the implementation of the Group's directives requirements of the international standard for OHSAS to mitigate risk exposures and or promote business opportunities 1800:2007. The review was necessitated by the need to that may possibly influence the achievement of corporate strategic establish measures aimed at upholding the Group's policy on objectives. Control activities are entity-specific and are performed low risk tolerance against occupational health and safety at all levels across the Group at various stages within business risks. Risk awareness via communication to staff remains a processes and over the technology environment. veritable medium to promote company-wide health and safety. Information and Communication The Group firmly appreciates that management of information is iv. Environmental and Social Risk Management critical for the enterprise to proficiently implement internal An Environmental and Social (E&S) monitoring exercise of control functions and has developed and utilises information from Cornerstone for the year 2016 was conducted by internal and external sources to underpin the current internal Environmental Accord Nigeria Limited (EnvAccord) -an control system. This information also supports business decision- accredited environmental and sustainability consulting firm. making. With reference to IFC's Policy on E&S Sustainability Framework, Cornerstone Insurance can be classified as a Monitoring Category C project. This categorization is based on available The current corporate governance structure enables the Group information, that Cornerstone's operational activities have to evaluate the efficacy of its policies and procedures, adherence to minimal or no adverse impact on environmental and social its internal control and risk management measures and activities. communicates inherent and potential vulnerabilities in a timely manner to the authorities responsible for taking risk-based Management is committed to improving identified areas in corrective actions, including Senior Management and Board the Company's E&S performance via the Environmental and Committees. Social Action Plan (ESAP). Reputational Risk Management 2017 ERM Outlook The Group maintains a zero tolerance policy against all unethical With NAICOM's stated intention to adopt Risk Based Supervision behavior. Furthermore, the Group's corporate values continually in the Insurance Industry, the focal point of our risk management promote a responsible approach to avoiding and mitigating strategy significantly rests with instituting best practice that meets reputational risks and ensure that the long term survival and brand the regulators' requirements of the Risk based approach framework. 29 COMPLAINTS AND FEEDBACK 2016 Annual Report & Accounts

COMPLAINTS AND FEEDBACK

Introduction At Cornerstone Insurance PLC, one of our core values is Empathy and this is reflected in the quality of our service delivery to our customers at all times. Our customers are the reason we are in business, to this end, we focus on delivering quality service all times. We engage our customers and utilise feedback received to constantly improve on our service delivery, products offerings and distribution channels.

Complaints Channels We take feedback received from our customers as an opportunity to improve our service delivery. In furtherance of this, we have created various channels through which customers can give us feedback. These channels include: • Customer service representatives at our Corporate Head office and our various branches • Our complaint email channel [email protected] • Our website platform www.cornerstone.com.ng • Our customer service online [email protected]

Resolution Mechanism At Cornerstone Insurance PLC, we have put in place a standard system to ensure that customers' feedback are received and resolved promptly. We have a dedicated customer service unit, which is responsible for the prompt investigation and resolution of customers' complaints within the approved period. The unit interacts with other segments within the organisation to ensure that complaints are satisfactorily resolved.

Customers' complaints are stream-lined based on the type of complaints received in order to provide an enabling environment for proper monitoring, documentation and effective feedback process. The process flow of customer complaint and resolution is as follows:

• The customer care officer acknowledges and attends to the various customers' complaints; • The complaint is reviewed and addressed if it can be resolved at first level; in which case, a response is immediately provided to the customer; • If such complaint cannot be resolved at the first level, the customer care officer forwards the complaint to the appropriate unit to handle; • Upon resolution, the customer is contacted and the resolution is communicated to him. Thereafter, the case is closed and marked as resolved.

Customers' Opinion on Products To enrich our customers' experience, we also periodically evaluate public/customer opinion about our services, products and policies. The evaluation is conducted in various ways including:

• One-on-one focus meetings with key customers • Interviews with selected customers

Feedback on Customers' Complaints to Cornerstone Insurance PLC Feedback on customers' complaints is provided to Management and other relevant units in the organisation. The feedback gathered ensures that:

• Cornerstone retains her customers as they feel appreciated and respected • Quality service delivery is maintained and made uniform across the Cornerstone Group • Identified improvement opportunities are presented to Management for implementation

The feedback is circulated to management staff through the company's internal information channel.

30 COMPLAINTS AND FEEDBACK CONTD. 2016 Annual Report & Accounts

Below is a report of complaints received and resolved by the organisation between January-December 2016

Month Complaint received Number of Number of complaints Number of during the year complaints unresolved unresolved resolved complaints with SLA* January 1 1 Nil Nil February Nil Nil Nil Nil March Nil Nil Nil Nil

April 1 1 Nil Nil

May Nil Nil Nil Nil June 4 4 Nil N July 1 1 Nil Nil August Nil Nil Nil Nil September 2 2 Nil Nil October 1 1 Nil Nil November 1 1 Nil Nil December Nil Nil Nil Nil Total 11 11 Nil Nil

*Service Level Agreement

Complaints not resolved within the approved period, can be attributed mainly to unavailability of the customers via mail or phone call after resolution of their complaint but all complaints are usually treated within 48hours (depending on the nature of the complaint). The quantity of complaints received in 2016 was low as a result of our commitment to constantly engage our customers to understand and treat their concerns. Complaints Management Policy The Company has adopted a Complaint Management Policy in compliance with the requirements of the Securities and Exchange Commission Rules and Regulations. The Policy sets out a broad framework by which the Company and its Registrars will manage shareholder enquires and complaints in a fair, impartial, efficient and timely manner. The policy is available for viewing on the Company's website at www.cornerstone.com.ng

CODE OF BUSINESS CONDUCT AND BUSINESS ETHICS In order to further strengthen the Company's Corporate Governance policies, the Company approved and implemented the following internal policies and practices which are reviewed periodically: • Code of Ethics: The Board has approved a Code of Business Ethics which requires that the Company and its employees, Directors and all its stakeholders must operate in a manner that is consistent with the highest standards of conduct. The Code enunciates Cornerstone's core values of Integrity, Empathy, Professionalism, Innovation and Team Spirit. The Code contains extensive provisions on the use of confidential information, conflict of interest, fair dealing, insider trading, anti- discrimination and harassment and other matters as stipulated in the SEC Code of Corporate Governance. The Code of Ethics has been adequately communicated to all employees and each employee is required to read and execute same. Its implementation is adequately monitored. • Whistle Blowing Policy : The Whistle Blowing Policy of the Company specifically mandates members of staff to timely disclose any illegal, immoral or illegitimate practices including suspicious activities thereof that may adversely affect the Company and/or its stakeholders. The Company has a window for anonymous disclosures under this policy via a dedicated portal in addition to other channels through which employees may wish to make whistleblowing disclosures anonymously. • AML/CFT Policy : The Company's AML/CFT policy is aimed at facilitating the development of controls that will aid the detection and prevention of fraud against the Company. • Employment Hand Book : The Employee Hand Book of the Company regulates the conduct and affairs of members of staff. • Service Delivery : To facilitate quality service delivery to customers, the Company has in place Service Level Agreements (SLA), which regulate the contractual relationships among different units of the Company and their external vendors. • Board Charter The Board has formally adopted a Board Charter to assist Directors in the discharge of their roles and responsibilities. It details the functions and duties of the Board and its Committees and outlines the matters exclusively reserved for the Board.

31 DIRECTORS’ REPORT For the year ended 31st December, 2016 2016 Annual Report & Accounts

SUSTAINABILITY place across the Six (6) Local Educational Districts in the state. About 3,000 students and 150 teachers participated in The year 2016 underscores another milestone in our social value this program. The Foundation has also continued to oversee creation enterprise. During the year, Cornerstone Insurance the proper maintenance of all safety infrastructures earlier Plc Foundation was officially registered by the Corporate provided and located across the six (6) Local Education Affairs Commission (CAC) as the Company's Corporate Social Districts in Lagos State. These include but not limited to Responsibility (CSR) vehicle through which the Company will “Zebra Crossings” and “ Slow Down, Children identify and execute philanthropic projects and create sustainable Crossing” signs at critical flashpoints along the school social investments across Nigeria. The Foundation shall focus on corridors. These are all parts of a concerted effort by the specific projects targeted at achieving Sustainable Development Foundation to ensure that kids can learn in a freer and safer Goals in areas that are consistent with our business orientation society. and corporate mission. . • As part of its contribution to promoting an inclusive These areas include: education and academic excellence, the Foundation • Promotion of Health and Safety through community sponsored 'Annual Speech & Prize Giving Day' in some sensitization and provision of safety infrastructures. select schools. The idea was to support the reward system in • Inclusive and quality Education for all through the provision schools and promote healthy and scholarly competition of key enablers and support systems to assist pupils and among students. This Program is in an experimental phase teachers especially in public institutions. with an opportunity to be developed into a comprehensive • Inclusive Partnerships built upon shared value and vision and coherent part of our educational program in the future. for Sustainable Development. • In a bid to promote a greener and sustainable environment, Responsibility Highlights in 2016 the Company has also commissioned a Solar Power Plant at our Corporate Office. The plant will power some of our • Our flagship program “Safe Route 2 School'' witnessed operations and subsequently reduce our carbon footprint to significant improvement in the areas of strategic the environment. As a Company, we are at an advanced stage collaboration, wider coverage and community participation. of launching an Enterprise Document Management The theme for the year 2016 was ''Basic First Aid System (EDMS). This innovative approach will reduce the Technique and Emergency Medical Procedures''. This dependency on paper based operations which is essential to involved high impact participatory sessions featuring preserving bio-diversity and reducing deforestation. These simulations of emergencies and remedial actions. The are some of the ways we minimize the environmental impact objective of the training which was targeted at Secondary of our operations and reduce the depletion of natural Schools was to empower students with requisite life-saving resources. skills in emergency situations. The initiative was in conjunction with Lagos State Ministry of Education and took

DONATIONS AND CHARITABLE GIFTS The company identifies with the aspiration of the community as well as the environment within which it operates by supporting strategic projects and laudable events. 2016 DONATIONS S/N Description Organisation Amount 1 Donation of Award Plaques Fountain Heights Schools, Surulere 27,200 2 Donation of Award Plaques Oregun Senior Gramma School, Ikeja 21,000 3 Donation of Trophies Netcom Africa Ltd. 92,000 4 Corporate Donation Ajofa Special Education Foundation 50,000 for the Deaf 5 Corporate Donation to the 15th Women in Management, Business & WIMBIZ 250,000 Public Service Annual Conference 6 Corporate Donation to the 38th Annual General Meeting & West Africa Insurance Companies 100,000 Conference of WAICA Association (WAICA) 7 3rd Prize Sponsor of 2016 Miss Insurance Dance Chartered Insurance Institute of 200,000 Nigeria (CIIN) 8 Corporate Donation to Investiture Luncheon of the Nigeria Insurers Association 500,000 22nd Chairman of NIA 9 Corporate Donation to Special Talent At the African Basketball League 20,000 10 Professional Insurance Ladies Corporate Donation to the Investiture ceremony of the 500,000 11th President of PILA Association 11 Corporate Donation to The 4th Insurance Golf Tournament Ibadan Ibadan Golf Club 300,000

12 Adetunji Ogunkanmi Memorial Prize for Excellence Chartered Insurance Institute of 20,000 (Winner: Ajibulu, Adetokunbo Alaba) Nigeria (CIIN) 13 Corporate Donation to the 2016 CIIN Professional Forum Chartered Insurance Institute of 100,000 Nigeria (CIIN) 14 Donations to VGCPORA Fun Run-Walk Day VGCPORA 200,000 2,380,200

32 DIRECTORS’ REPORT For the year ended 31st December, 2016 2016 Annual Report & Accounts

Corruption Auditors The Board of Directors has a long-standing commitment to good Akintola Williams Deloitte will retire in line with the provisions of corporate governance, in addition to zero-tolerance to corrupt the NAICOM Code of Corporate Governance on the tenure of practices, including bribery and breach of applicable anti- External Auditors. The Board is presenting Messrs, KPMG corruption laws. Sections of the Employee hand book stipulate Professional Services at the Annual General Meeting for measures that guide staff professional conduct and ethical behavior appointment as External Auditors of the Company. in line with the Group's core values. BY ORDER OF THE BOARD Environmental Policies The Group has established eco-friendly occupational practices as part of its operational resource management system. These practices are targeted at controlling the adverse impact of our operations on the environment to its barest minimum. The Group identifies and complies with applicable environmental laws and regulations. Elizabeth I. Uba-Onubogu Company Secretary (PAC Solicitors) Cornerstone acknowledges the impact our operations have on the environment; hence we strive to maintain a veritable balance 21, Water Corporation Drive between profit making and environmental protection. In addition Off Ligali Ayorinde to conducting our operations in an environmentally friendly and Victoria - Island sustainable manner; the Group continually seeks opportunities for Lagos, Nigeria improving its environmental performance standards.

Use of energy efficient office equipment, a practice of e-document usage and storage, prudent use of office paper, deployment of solar energy are practical examples of the Group's sustainable business practices that reduce our carbon footprint.

Events after the reporting date There were no events after the reporting date which could have a material effect on the state of affairs of the Company as at 31 December 2016 and the profit for the year ended on that date that have not been adequately provided for or disclosed in this Annual Report and Accounts.

33 MANAGEMENT DISCUSSION & ANALYSIS 2016 Annual Report & Accounts

As at 31 December, 2016, Cornerstone Group comprised These statements reflect management’s current belief and are Cornerstone Insurance Plc (parent company) and three based on information available to Cornerstone Insurance Plc subsidiaries – Cornerstone Halal Takaful Limited, Fin Insurance and are subject to certain risk, uncertainties and assumptions. Nigeria Limited and Cornerstone Leasing and Investment Business Strategy of the Company and Overall Limited. The Group’s major activities are in insurance and asset Performance management. Cornerstone Insurance Plc is registered and incorporated in The ‘Management Discussion and Analysis’ (MD&A) has been Nigeria and is engaged in providing insurance and investment prepared as at 31 December, 2016 and should be read in solutions to both the corporate and retail sectors of Nigeria. conjunction with the consolidated financial statement account Some key strategic initiatives includes: of Cornerstone Insurance Plc and subsidiary companies. • Penetration of the retail segment through the various low Forward-Looking Statement cost channels. The MD&A contains forward-looking statements related to • Strategic partnerships with the key influencers and Cornerstone Insurance Plc financials and other projections, decision makers in the various sectors. expected future plans, event, financial and operating results, objectives and performance as well as underlying assumptions • Improved transaction processing across the business all of which involve risk and uncertainties. When used in this operations in order to drive operational efficiency. MD&A the words ‘believe’, ‘anticipate’, ‘intended’, ‘estimate’, and • Increased use of Technology and other digital solutions similar expression are used to identify forward looking • Leverage on Fin Insurance Nigeria Limited unique locations statements, although not all forward-looking statements contain in the Northern region to reach out to the uninsured such words. population.

Operating Result, Cash flow and Financial Condition.

2016 2015 Changes 2016 2015 Changes Group Group Company Company

N'000 N'000 % N'000 N'000 %

Gross Premium written 9,190,634 7,331,633 25 8,389,950 7,331,633 14

Net Premium income 5,174,520 5,009,455 3 4,823,470 5,009,455 -4

Net Underwriting income 5,652,345 5,316,582 6 5,272,226 5,316,583 -1 Net Claims expenses (3,370,702) (2,196,426) 53 (3,499,072) (2,196,426) 59

Underwriting results 696,385 1,646,161 (58) 323,672 1,646,162 (80)

Net investment income 1,413,781 1,028,423 37 1,044,771 1,018,709 3

Management expenses (3,408,002) (2,344,755) 45 (2,771,257) (2,314,789) 20

Result of operating activities (1,264,660) 10,144 (12,567) (1,516,213) (332,139) 356

Gain on bargain purchase - 1,832,910 (100) - -

Profit before tax (1,264,660) 1,843,054 (169) (1,516,213) (332,139) 356

Earnings per share (12) 11 (13) (4) Revenue and Underwriting Result (FVTPL), Operating Income, Profit from Investment contract

and allowance from impairment losses. The decrease Despite the harsh operating environment, the Group experienced on the line when compared to prior year was due experienced a growth of 25% in Gross Premium Written when to valuation/accounting adjustment on major financial assets. compared to prior year result. The growth was achieved on the back of improving relationship with key partners and increasing Operating Expenses

revenue from new channels. Operating expenses for the Group in the year totalled N3.4

billion – an increase of 45% compared to prior year. This was The Group paid out N3.4 billion in claims compared to N2.2 mainly due to slight growth in branch networking recurring and billion in 2015 – an increase of N1.2 billion. Claim recovery was rebranding expenditure incurred by the Group. N1.1 billion as against N648 million in 2015. The sharp increase in Claim expenses led to Underwriting result of N696 million Profit/ (loss) before tax compared to N1.6 billion of 2015. The Group recorded a loss before tax of N1.2 billion compared Net Investment and Other Income to prior year profit before tax of N1.8 billion whilst the

Company recorded loss of N1.5 billion as a result of claims and The line is made up of Investment Income attributable to diminution on investment. shareholders, fair value changes in investment property, fair value changes in financial asset – Fair Value Through Profit & Loss

34 RISK MANAGEMENT DECLARATION TABLE OF CONTENT For the year ended 31 December, 2016 2016 Annual Report & Accounts

We, the Directors on behalf of Cornerstone Insurance PLC, hereby endorse to the best of our knowledge and belief, having made appropriate enquires that: a. The Company has instituted an operational structure aimed at adhering to the guidelines established by the National Insurance Commission in relation to establishing a risk management framework for Insurers and Reinsurers in Nigeria; b. The Board is satisfied with the efficacy of the methods surrounding the production of financial information of the Company; c. The Enterprise Risk Management and Internal Control structure functions are embedded in the Company's operational framework and are functioning effectively.

Mr. Paul Kokoricha Mr. Ganiyu Musa Chairman Managing Director FRC/2015/ICAN/00000013047 FRC/2013/ICAN/00000003110

352 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 2016 Annual Report & Accounts

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2016

The Directors of Cornerstone Insurance PLC are The Directors are also responsible for: responsible for the preparation of the consolidated • Designing, implementing and maintaining an and separate financial statements that give a true effective and sound system of internal and fair view of the financial position of the Group controls throughout the Group and and Company as at 31 December 2016, and the Company; results of its operations, statements of cash flows • Maintaining adequate accounting records that and changes in equity for the year ended, in are sufficient to show and explain the Group's compliance with International Financial Reporting and Company's transactions and disclose with Standards ("IFRS") and in the manner required by reasonable accuracy at any time the financial the Companies and Allied Matters Act of Nigeria, position of the Group and Company, and CAP C20, the Insurance Act CAP 117 LFN 2004, which enable them to ensure that the financial relevant guidelines and circulars issued by the statements of the Group and Company National Insurance Commission (NAICOM) and comply with IFRS; the Financial Reporting Council of Nigeria Act 2011. • Maintaining statutory accounting records in compliance with the legislation of Nigeria and In preparing the consolidated and separate financial IFRS; statements, the Directors are responsible for: • Taking such steps as are reasonably available to them to safeguard the assets of the Group • Properly selecting and applying accounting and Company; and policies; • Preventing and detecting fraud and other • Presenting information, including accounting irregularities. policies, in a manner that provides relevant, reliable, comparable and understandable Going Concern: information; The Directors have made an assessment of the • Providing additional disclosures when Group's and Company's ability to continue as a going compliance with the specific requirements of concern and have no reason to believe the Group the IFRSs are insufficient to enable users to and Company will not remain a going concern in the understand the impact of particular year ahead. transactions, other events and conditions on the Group and Company's financial position The consolidated financial statements of the Group and financial performance; and and Company for the year ended 31st December • Making an assessment of the Group's ability 2016 were approved by the Board of Directors on to continue as a going concern. 9th March 2017.

SIGNED ON BEHALF OF THE DIRECTORS BY:

Paul Kokoricha Ganiyu Musa Chairman Managing Director FRC/2015/ICAN/00000013047 FRC/2013/ICAN/00000003110 9th March, 2017 9th March, 2017

362 REPORT OF THE AUDIT COMMITTEEE 2016 Annual Report & Accounts

REPORT OF THE AUDIT COMMITTEE FOR THE YEAR ENDED DECEMBER 31, 2016 TO THE MEMBERS OF CORNERSTONE INSURANCE PLC

In accordance with the provisions of Section 2. We are of the opinion that the accounting 359 (6) of the Companies and Allied Matters and reporting policies of the Company Act, Cap C20, Laws of the Federation of Nigeria and Group are in accordance with legal 2004, we the members of the Audit Committee and ethical practices and that the scope of of Cornerstone Insurance PLC report as the external and internal audits for the follows: year ended December 31, 2016 was satisfactory and reinforce the Group's 1. We have exercised our statutory internal control systems. functions under Section 359 (6) of the Companies and Allied Matters Act, Cap 3. We have deliberated with the External C20, Laws of the Federation of Nigeria Auditors, who confirmed that they 2004 and acknowledge the co-operation received Management's cooperation in of Management and staff in the conduct of the course of their audit and we are these functions. satisfied with Management's responses to the Management Letter on the audit of the financial statements of the Company and Group.

Mr. Steve Iwenjora Member, Audit Committee FRC/2015/ICAN/00000012066

3 March, 2017

Members of the Audit Committee are:

1 Mr. Henry Olayemi Chairman/shareholder 2 Mr. Eke Chibuzor Emmanuel Member - Shareholders representative 3 Mr. Ariyo OlugbosunMember Shareholders representative 4 Ms. Elizabeth Amadiume Member Non Executive Director 5 Mr. Dominic Ichaba Member Non Executive Director 6 Mr. Steve iwenjora Member Non Executive Director

372 Akintola Williams Deloitte Chartered Accountants Civic Center Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos, Nigeria

Tel: +234 (1) 271 78800 www.deloitte.com/ng INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF CORNERSTONE INSURANCE PLC REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS Opinion We have audited the accompanying consolidated and separate financial statements of Cornerstone Insurance Plc (“the Company”) and its subsidiaries (together referred to as “the Group”) which comprise the consolidated and separate statement of financial position as at 31 December 2016, the consolidated and separate statement of profit or loss and other comprehensive income, consolidated and separate statement of changes in equity, consolidated and separate statements of cash flows for the year then ended and the notes to the consolidated and separate financial statements including a summary of significant accounting policies In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of Cornerstone Insurance Plc as at 31 December 2016 and the consolidated and separate financial performance and statement of cash flows for the year then ended in accordance with the International Financial Reporting Standards, the Companies and Allied Matters Act Cap C20 LFN 2004, the Insurance Act CAP I17 LFN 2004, circulars and guidelines issued by the National Insurance Commission (NAICOM) and the Financial Reporting Council of Nigeria Act, 2011. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group in accordance with the requirements of the Institute of Chartered Accountants of Nigeria Professional Code of Conduct and Guide for Accountants (ICAN Code) and other independence requirements applicable to performing audits of financial statements in Nigeria. We have fulfilled our other ethical responsibilities in accordance with the ICAN Code and in accordance with other ethical requirements applicable to performing audits in Nigeria. The ICAN Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current year. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter How the matter was addressed in the audit

Insurance contract liabilities

Under IFRS 4, the Group is required to perform liability This insurance contract liabilities was significant to our audit adequacy test on its insurance liabilities to ensure the carrying because the balance is material to the financial statements. Also, value of the liabilities is adequate. the valuation of Insurance contract liabilities entails the use of assumptions and estimates which may be subject to Liability Adequacy test are carried out separately for the Life and management bias in the considerations of data used for the Non-Life business of the Group. actuarial valuation of the insurance contract liabilities.

As disclosed in note 19 to the consolidated and separate Our procedures included the following among others: financial statements, the insurance contract liabilities for the • We reviewed the methodology and processes adopted Group amounted to N6,941,872,000 (Company: 6,307,846,000) by management for making reserves in the books of the [2015: Group – N5,619,757,000, Company – N4,862,365,000] company. and this represents 63% of the total liabilities of the Group • Tested entity’s control around reserving process and (Company: 63%) as at 31 December 2016 and 63% in the prior maintenance of data for valuation of insurance contract year for both Group and Company. liabilities. • We reviewed and benchmarked the valuation method of The Company usually involves an actuary in the determination the insurance contract liabilities with the recommended of its insurance liability on a yearly basis after considering the approach by NAICOM and industry best practice. accuracy and integrity of data used in the valuation. Necessary • We validated the data used in the valuation of the adjustments are made in the financial statements to reflect the insurance contract liabilities. liabilities determined by the actuary. • We involved Deloitte Actuary in the review of the assumptions and estimates used by management and

38 assessment of the adequacy of the insurance liabilities in effort on the insurance contract liabilities valuation in line with Liability Adequacy Test (“LAT”) based on relation to the assumptions and estimates made by requirement of IFRS 4. management. • We ensured the appropriateness of the journals posted, footed and agreed the figures disclosed in the financial We concluded that the actuarial valuation of the insurance statements to the figures stated in the actuarial valuation contract liabilities appeared appropriate based on our review of after thorough review of the basis and assumptions. the data, assumptions and basis of estimates. • For the purposes of our audit, we focused our audit Other Information

The directors are responsible for the other information. The other information comprises the Directors’ Report and Audit Committee’s Report, which we obtained prior to the date of this auditor’s report, which is expected to be made available to us after that date. The other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, if we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Consolidated and Separate Financial Statements The directors are responsible for the preparation of the consolidated and separate financial statements that give a true and fair view in accordance with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act CAP C20 LFN 2004, Insurance Act CAP I17 LFN 2004, circulars and guidance issued by the National Insurance Commission (NAICOM), Financial Reporting Council Act, 2011 and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of Consolidated and Separate Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and the Company's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists relating to events or conditions that may cast significant doubt on the Group and

39 Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the Group and Company's financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the Group's audit. We remain solely responsible for our audit opinion.

We communicate with the audit committee and the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit

We also provide the audit committee and directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the audit committee and/or the directors, we determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the benefits derivable by the public from such communication.

Report on Other Legal and Regulatory Requirements In accordance with the Sixth Schedule of Companies and Allied Matters Act CAP C20 LFN 2004 we expressly state that: i) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit. ii) The Group has kept proper books of account, so far as appears from our examination of those books. iii) The Group and Company's financial position and its statement of profit or loss and other comprehensive income are in agreement with the books of account and returns.

The Company contravened certain sections of Insurance Act or NAICOM circulars and guidelines with respect to its activities in 2016. The particulars thereof and penalties paid are as disclosed in Note 41 to the financial statements.

For: Akintola Williams Deloitte Chartered Accountants Lagos, Nigeria 18 April, 2017

Engagement partner: Joshua Ojo FRC/2013/ICAN/00000000849

40 ACCOUNTING POLICIES ACCOUNTING POLICIES 2016 Annual Report & Accounts

1.1 Reporting entity insurance, life/health insurance, asset management and leasing. The Group’s products are classified at inception, for accounting Cornerstone Insurance Plc (the Company) was incorporated on purposes, as either Insurance contracts or Investment contracts. 26th July 1991 as a private limited liability company and converted to a public limited liability company on 17 June 1997. A contract that is classified as insurance contract remains an The Company's principal activity continues to be the provision of insurance contract for the remainder of its lifetime, even if the risk underwriting and related financial services to its customers. insurance risk reduces significantly during this period; unless all Such service includes the provision of Life and Non-life insurance rights and obligations are extinguished or expire. Investment services for both corporate and individual customers. contracts can, however, be reclassified as insurance contracts after inception if insurance risk becomes significant. The Company has two subsidiaries -Fin Insurance Company Limited and Cornerstone Leasing and Investment Limited. 1.3 Going concern Cornerstone Leasing and Investment Limited commenced These financial statements have been prepared on the going operations on 1 July 2004 and provides convenient asset concern basis. The group has no intention or need to reduce acquisition options to both corporate organisations and substantially its business operations. The management believes individuals. FIN Insurance Company Limited however was that the going concern assumption is appropriate for the group incorporated in 1981 as Yankari Insurance Company Limited. and company due to sufficient capital adequacy ratio and The name has since changed to FIN Insurance Company Limited projected liquidity, based on historical experience that short- in 2008. The main activity of the Company is the provision of term obligations will be refinanced in the normal course of General Insurance business. This includes Marine Insurance, business. Liquidity ratio and continuous evaluation of current Motor Insurance, Accident Insurance, Fire Insurance and other ratio of the group is carried out to ensure that there are no non-life insurance services. going concern threats to the operation of the group. During the year, Cornerstone Insurance Plc acquired a joint 2.2 Adoption of new and revised International venture interest in Caphoenix Cornerstone Limited but this was Financial Reporting Standards (IFRS) no consolidated as management considered that control does 2.2.1 New and revised IFRSs affecting amounts not exist over the entity. See details in note 12 to the financial reported and/or disclosures in the financial statements and section 3.51 of the statement of accounting statements policies. In the current year, the company has applied a number of new The financial statements of Cornerstone Insurance Plc have been and revised IFRSs issued by the International Accounting prepared on a going concern basis. The directors of the company Standards Board (IASB) that are mandatorily effective for an have a reasonable expectation that the Group and the Company accounting period that begins on or after 1 January 2013. have adequate resources to continue in operational existence for the foreseeable future. The consolidated annual financial New standards and amendments that will be effective for the statements of the group for the year ended 31 December 2016 reporting period that begins on or after 1 January 2016 comprises the parent company and its subsidiaries. A number of standards, interpretations and amendments 1.2 Principal activities thereto, has been issued by the IASB which are effective but do not impact on these consolidated financial statements as Cornerstone Insurance Plc and its subsidiaries (the Group) are summarised in the table below: engaged in various business lines ranging from property-casualty

IFRS Effective Date Subject of Standard/Amendment

IFRS 14 Regulatory 1 January 2016 IFRS 14 specifies the accounting for regulatory deferral account balances that Deferral Accounts arise from rate-regulated activities. The Standard is available only to first-time adopters of IFRSs who recognised regulatory deferral account balances under their previous GAAP. IFRS 14 permits eligible first-time adopters of IFRSs to continue their previous GAAP rate-regulated accounting policies, with limited changes, and requires separate presentation of regulatory deferral account balances in the statement of financial position and statementof profit or loss and other comprehensive income. Disclosures are also required to identify the nature of, and risks associated with, the form of rate regulation that has given rise to the recognition of regulatory deferral account balances. This standard does not impact on the consolidated financial statements as the Group does not provide services subject to rate regulation and in addition, the group has applied IFRS 1 in prior year when converting to IFRS.

42 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

43 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

IFRS Effective Date Subject of Standard/Amendment

Disclosure Initiative Effective for annual The amendments aim at clarifying IAS 1 to address perceived impediments (Amendments to IAS 1) periods beginning to preparers exercising their judgement in presenting their financial reports. on or after Disclosure Initiative (Amendments to IAS 1) makes the following changes: 1 January 2016 I. Materiality. The amendments clarify that (1) information should not be obscured by aggregating or by providing immaterial information, (2) materiality considerations apply to the all parts of the financial statements, and (3) even when a standard requires a specific disclosure, materiality considerations do apply. ii Statement of financial position and statement of profit or loss and other comprehensive income. The amendments (1) introduce a clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and additional guidance on subtotals in these statements and (2) clarify that an entity's share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss. iii. Notes. The amendments add additional examples of possible ways of ordering the notes to clarify that understandability and comparability should be considered when determining the order of the notes and to demonstrate that the notes need not be presented in the order so far listed in paragraph 114 of IAS 1. The IASB also removed guidance and examples with regard to the identification of significant accounting policies that were perceived as being potentially unhelpful

Investment Entities: Effective for annual The amendments address issues that have arisen in the context of applying Applying the periods beginning the consolidation exception for investment entities. Consolidation Exception on or after (Amendments to IFRS 10, 1 January 2016 Investment Entities: The amendments confirm that the exemption from IFRS 12 and IAS 28) preparing consolidated financial statements for an intermediate parent entity is available to a parent entity that is a subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries at fair value. It also states that a subsidiary that provides services related to the parent's investment activities should not be consolidated if the subsidiary itself is an investment entity. In addition, when applying the equity method to an associate or a joint venture, a non investment entity investor in an investment entity may retain the fair value measurement applied by the associate or joint venture to its interests in subsidiaries. In addition, an investment entity measuring all of its subsidiaries at fair value must provide the disclosures relating to investment entities as required by IFRS 12.

IFRS 5 Changes in The amendment introduces specific guidance in IFRS 5 for when an entity methods of reclassifies an asset (or disposal group) from Held for sale to Held for Non-current Assets Held disposal. distribution to owners (or vice versa). The amendment clarifies that such for Sale and Discontinued a change is considered as a continuation of the original plan of disposal Operations and accordingly an entity should not apply paragraphs 27-29 of IFRS 5 regarding changes to a plan of sale in those situations.

IFRS 7 (I) Servicing contracts The amendment provides additional guidance to clarify whether a servicing (ii) Applicability of the contract is continuing involvement in a transferred asset for the purpose of Financial Instruments: amendments to the disclosures required in relation to transferred assets. Also, the Disclosures IFRS 7 on offsetting amendment clarifies that the offsetting disclosures are not specifically disclosure to required for all interim periods. However, the disclosures may need to be (with consequential condensed interim included in the condensed interim financial statements to satisfy the amendments to IFRS 1) financial statements requirements in IAS 34 Interim Financial Reporting.

44 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

Annual Improvements to IFRSs 2010 - 2012 Cycle (Effective for annual periods beginning on or after 1 January 2016, except as detailed below) The Annual Improvements include amendments to a number of IFRSs, which have been summarised below. Subject of Standard Details amendment

IAS 19 Discount rate: The amendment clarifies that the rate used to discount post- regional market issue employment benefit obligations should be determined by reference to Employee Benefits market yields at the end of the reporting period on high quality corporate bonds. The basis for conclusions to the amendment also clarifies that the depth of the market for high quality corporate bonds should be assessed at a currency level which is consistent with the currency in which the benefits are to be paid. For currencies for which there is no deep market in such high quality bonds, the market yields (at the end of the reporting period) on government bonds denominated in that currency should be used.

IAS 34 Disclosure of The amendment clarifies the requirements relating to information information require by paragraph 16A of IAS 34 that is presented elsewhere within Interim Financial 'elsewhere in the the interim financial report but outside the interim financial Reporting interim financial statements. report'. The amendment requires that such information to be included either in the interim financial statements or incorporated by way of a cross- reference from the interim financial statements to the other part of the interim financial report that is available to users on the same terms and at the same time as the interim financial statements.

New and revised IFRSs that are not mandatorily Instruments: Recognition and Measurement upon its effective effective (but allow early application) for the year date. ending 31 December 2016 Phase 1: Below is a list of new and revised IFRSs that are not yet Classification and measurement of financial assets and mandatorily effective (but allow early application) for the year financial liabilities ending 31 December 2016: With respect to the classification and measurement, the number of categories of financial assets under IFRS 9 has been I IFRS 9 Financial Instruments; reduced; all recognised financial assets that are currently within ii. IFRS 15 Revenue from Contracts with Customers; the scope of IAS 39 will be subsequently measured at either iii. Amendments to IFRS 10 and IAS 28 Sale or amortised cost or fair value under IFRS 9. Specifically: Contribution of Assets between an Investor and its Associate or Joint Venture • a debt instrument that (i) is held within a business model iv. IFRS 16 Leases whose objective is to collect the contractual cash flows and v. Amendments to IAS 12 Recognition of Deferred Tax (ii) has contractual cash flows that are solely payments of Assets for Unrealised Losses principal and interest on the principal amount outstanding vi. Amendments to IAS 7 Additional disclosure on changes must be measured at amortised cost (net of any write down in financing activities for impairment), unless the asset is designated at fair value vii. Amendments to IFRS 2 Classification and Measurement through profit or loss (FVTPL) under the fair value option. of Share-based Payment Transactions viii. Amendments to IFRS 4 upon applying IFRS 9 • a debt instrument that (i) is held within a business model whose objective is achieved both by collecting contractual IFRS 9 Financial Instruments cash flows and selling financial assets and (ii) has contractual (Effective for annual periods beginning on or after 1 January terms that give rise on specified dates to cash flows that are 2018) solely payments of principal and interest on the principal In July 2014, the IASB finalised the reform of financial amount outstanding, must be measured at fair value through instruments accounting and issued IFRS 9 (as revised in 2014), other comprehensive income (FVTOCI), unless the asset is which contains the requirements for a) the classification and designated at FVTPL under the fair value option. measurement of financial assets and financial liabilities, (b) impairment methodology, and (c) general hedge accounting. • all other debt instruments must be measured at FVTPL. IFRS 9 (as revised in 2014) will supersede IAS 39 Financial • all equity investments are to be measured in the statement of

45 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

financial position at fair value, with gains and losses 1. The presentation of fair value gains and losses attributable to recognised in profit or loss except that if an equity changes in the credit risk of financial liabilities designated as investment is not held for trading, an irrevocable election can at FVTPL, the requirements for which an entity may early be made at initial recognition to measure the investment at apply without applying the other requirements in IFRS 9; and FVTOCI, with dividend income recognised in profit or loss. 2. hedge accounting, for which an entity may choose to continue to apply the hedge accounting requirements of IAS IFRS 9 also contains requirements for the classification and 39 instead of the requirements of IFRS 9. measurement of financial liabilities and derecognition requirements. One major change from IAS 39 relates to the An entity may early apply the earlier versions of IFRS 9 instead of presentation of changes in the fair value of a financial liability the 2014 version if the entity’s date of initial application of IFRS 9 designated as at FVTPL attributable to changes in the credit risk is before 1 February 2015. The date of initial application is the of that liability. Under IFRS 9, such changes are presented in other beginning of the reporting period when an entity first applies the comprehensive income, unless the presentation of the effect of requirements of IFRS 9. the change in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit IFRS 9 contains specific transitional provisions for or loss. Changes in fair value attributable to a financial liability’s I) classification and measurement of financial assets; credit risk are not subsequently reclassified to profit or loss. ii) impairment of financial assets; and Under IAS 39, the entire amount of the change in the fair value of iii) hedge accounting. Please see IFRS 9 for details. the financial liability designated as FVTPL is presented in profit or loss. IFRS 15 Revenue from Contracts with Customers

Phase 2: Impairment methodology (Effective for annual periods beginning on or after 1 January 2018) The impairment model under IFRS 9 reflects expected credit IFRS 15 establishes a single comprehensive model for entities to losses, as opposed to incurred credit losses under IAS 39. Under use in accounting for revenue arising from contracts with the impairment approach in IFRS 9, it is no longer necessary for a customers. It will supersede the following revenue Standards credit event to have occurred before credit losses are and Interpretations upon its effective date: recognised. Instead, an entity always accounts for expected credit losses and changes in those expected credit losses. The amount • IAS 18 Revenue; of expected credit losses should be updated at each reporting • IAS 11 Construction Contracts; date to reflect changes in credit risk since initial recognition. • IFRIC 13 Customer Loyalty Programmes; • IFRIC 15 Agreements for the Construction of Real Estate; Phase 3: Hedge accounting • IFRIC 18 Transfers of Assets from Customers; and • SIC 31 Revenue-Barter Transactions Involving Advertising The general hedge accounting requirements of IFRS 9 retain the Services. three types of hedge accounting mechanisms in IAS 39. However, greater flexibility has been introduced to the types of As suggested by the title of the new revenue Standard, IFRS 15 transactions eligible for hedge accounting, specifically broadening will only cover revenue arising from contracts with customers. the types of instruments that qualify as hedging instruments and Under IFRS 15, a customer of an entity is a party that has the types of risk components of non-financial items that are contracted with the entity to obtain goods or services that are eligible for hedge accounting. In addition, the effectiveness test an output of the entity's ordinary activities in exchange for has been overhauled and replaced with the principle of an consideration. ‘economic relationship’. Retrospective assessment of hedge effectiveness is no longer required. Far more disclosure Unlike the scope of IAS 18, the recognition and measurement of requirements about an entity’s risk management activities have interest income and dividend income from debt and equity been introduced. investments are no longer within the scope of IFRS 15. Instead, they are within the scope of IAS 39 Financial Instruments: The work on macro hedging by the IASB is still at a preliminary Recognition and Measurement (or IFRS 9 Financial Instruments, stage - a discussion paper was issued in April 2014 to gather if IFRS 9 is early adopted). preliminary views and direction from constituents with a comment period which ended on 17 October 2014. The project As mentioned above, the new revenue Standard has a single is under redeliberation at the time of writing. model to deal with revenue from contracts with customers. Its core principle is that an entity should recognise revenue to Transitional provisions depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity IFRS 9 (as revised in 2014) is effective for annual periods expects to be entitled in exchange for those goods or services. beginning on or after 1 January 2018 with earlier application permitted. If an entity elects to apply IFRS 9 early, it must apply all The new revenue Standard introduces a 5-step approach to of the requirements in IFRS 9 at the same time, except for those revenue recognition and measurement: relating to:

46 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

Step 1: Identify the contract with a customer The amendments further clarify that the requirement for an Step 2: Identify the performance obligations in the contract investment entity to consolidate a subsidiary providing services Step 3: Determine the transaction price related to the former’s investment activities applies only to Step 4: Allocate the transaction price to the performance subsidiaries that are not investment entities themselves. obligations in the contract Moreover, the amendments clarify that in applying the equity Step 5: Recognise revenue when (or as) the entity satisfies a method of accounting to an associate or a joint venture that is an performance obligation. investment entity, an investor may retain the fair value measurements that the associate or joint venture used for its Far more prescriptive guidance has been introduced by the new subsidiaries. revenue Standard: Lastly, clarification is also made that an investment entity that measures all its subsidiaries at fair value should provide the • Whether or not a contract (or a combination of contracts) disclosures required by IFRS 12 Disclosures of Interests in contains more than one promised good or service, and if so, Other Entities. when and how the promised goods or services should be unbundled. The amendments apply retrospectively for annual periods beginning on or after 1 January 2016 with earlier application • Whether the transaction price allocated to each performance permitted. obligation should be recognised as revenue over time or at a point in time. Under IFRS 15, an entity recognises revenue IFRS 16 Leases when a performance obligation is satisfied, which is when IFRS 16 Leases was issued, it specifies how an IFRS reporter will ‘control’ of the goods or services underlying the particular recognize, measure, present and disclose leases. The standard performance obligation is transferred to the customer. provides a single lessee accounting model, requiring lessees to Unlike IAS 18, the new Standard does not include separate recognize assets and liabilities for all leases unless the lease term guidance for 'sales of goods' and 'provision of services'; rather, is 12 months or less or the underlying asset has a low value. the new Standard requires entities to assess whether Lessors continue to classify leases as operating or finance, with revenue should be recognised over time or a particular point IFRS 16's approach to lessor accounting substantially unchanged in time regardless of whether revenue relates to 'sales of from its predecessor, IAS 17. goods' or 'provision of services'. Effective date of this standard is 1 January 2018 • When the transaction price includes a variable consideration Amendments to IAS 12 Recognition of Deferred Tax element, how it will affect the amount and timing of revenue Assets for Unrealised Losses to be recognised. The concept of variable consideration is IAS 12 Income Taxes was amended to clarify the following broad; a transaction price is considered variable due to aspects: Unrealized losses on debt instruments measured at fair discounts, rebates, refunds, credits, price concessions, value and measured at cost for tax purposes give rise to a incentives, performance bonuses, penalties and contingency deductible temporary difference regardless of whether the debt arrangements. The new Standard introduces a high hurdle for instrument's holder expects to recover the carrying amount of variable consideration to be recognised as revenue – that is, the debt instrument by sale or by use. The carrying amount of an only to the extent that it is highly probable that a significant asset does not limit the estimation of probable future taxable reversal in the amount of cumulative revenue recognised will profits. Estimates for future taxable profits exclude tax not occur when the uncertainty associated with the variable deductions resulting from the reversal of deductible temporary consideration is subsequently resolved. differences. An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law • When costs incurred to obtain a contract and costs to fulfil a restricts the utilization of tax losses, an entity would assess a contract can be recognised as an asset. deferred tax asset in combination with other deferred tax assets of the same type. Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Effective date of the amendment is 1 January, 2017 Associate or Joint Venture Amendments to IAS 7 Additional disclosure on changes in financing activities The amendments clarify that the exemption from preparing consolidated financial statements is available to a parent entity IAS 7 was amended to clarify that entities shall provide that is a subsidiary of an investment entity, even if the investment disclosures that enable users of financial statements to evaluate entity measures all its subsidiaries at fair value in accordance with changes in liabilities arising from financing activities. IFRS 10. Consequential amendments have also been made to IAS 28 to clarify that the exemption from applying the equity method Amendments to IFRS 2 Classification and Measurement of is also applicable to an investor in an associate or joint venture if Share-based Payment Transactions that investor is a subsidiary of an investment entity that measures IFRS 2 was amended to clarify the standard in relation to the all its subsidiaries at fair value. accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-

47 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

based payment transactions with net settlement features, and the • held for trading assets measured at fair value. accounting for modifications of share-based payment • investment property is measured at fair value. transactions from cash-settled to equity-settled. • insurance liabilities measured at present value of future cashflows. Effective date is 1 January 2018 • share based payment at fair value or an approximation of fair value allowed by the relevant standard Amendments to IFRS 4 upon applying IFRS 9 IFRS 4 Insurance Contracts was amended to provide two The consolidated and separate financial statements have been options for entities that issue insurance contracts within the prepared on the historical cost basis except for certain scope of IFRS 4: properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting i. an option that permits entities to reclassify, from profit or policies below. Historical cost is generally based on the fair value loss to other comprehensive income, some of the income or of the consideration given in exchange transactions except for expenses arising from designated financial assets; this is the certain investments whose valuation was based on observable so-called overlay approach; input from asset managers. ii. an optional temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts 3.3 Reporting currency within the scope of IFRS 4; this is the so-called deferral approach. The consolidated and separate financial statements are presented in Nigeria Naira (=N=) and are rounded to the The application of both approaches is optional and an entity is nearest thousand (‘000) unless otherwise stated. permitted to stop applying them before the new insurance contracts standard is applied. Overlay approach to be applied 3.4 Basis of consolidation when IFRS 9 is first applied. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. 3 SIGNIFICANT ACCOUNTING POLICIES IFRS 10 changes the definition of control such that an investor 3.1 Statement of compliance has control over an investee when (a) it has power over the investee, (b) it is exposed, or has rights, to variable returns from The consolidated financial statements have been prepared in its involvement with the investee and (c) has the ability to use its accordance with International Financial Reporting Standards power to affect its returns. All three of these criteria must be ("IFRS") issued by the International Accounting Standards Board met for an investor to have control over an investee. Previously, (IASB) and adopted by the Financial Reporting Council of Nigeria control was defined as the power to govern the financial and for the financial year starting from 1 January, 2016. operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements comply with the requirement of the Companies and Allied Matters Act CAP C20 Income and expenses of subsidiaries acquired or disposed of LFN 2004, Insurance Act, CAP 117 LFN 2004 and the Guidelines during the year are included in the consolidated statement of issued by the National Insurance Commission to the extent that comprehensive income from the effective date of acquisition and they are not in conflict with the International Financial Reporting up to the effective date of disposal, as appropriate. Total Standards (IFRS). comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests 3.2 Basis of preparation even if this results in the non-controlling interests having a deficit balance. The Consolidated and separate financial statements for the year ended 31 December 2016 have been prepared in accordance When necessary, adjustments are made to the financial with the International Financial Reporting Standards and IFRS statements of subsidiaries to bring their accounting policies in Interpretation committee (IFRIC) applicable to companies line with the Group accounting policies. reporting under IFRS. All intra-group transactions, balances, income and expenses are Basis of measurement eliminated in full on consolidation.

These consolidated and separate financial statements have been 3.5 Changes in the Group's ownership interest in prepared on the historical cost basis except for the following: existing subsidiaries

• non-derivative financial instruments designated at fair Changes in the Group's ownership interests in subsidiaries that value through profit or loss. do not result in the Group losing control over the subsidiaries • available-for-sale financial assets are measured at fair are accounted for as equity transactions. The carrying amounts value. of the Group's interests and the non-controlling interests are

48 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

adjusted to reflect the changes in their relative interests in the 3.6 Foreign currencies subsidiaries. In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's Any difference between the amount by which the non- functional currency (foreign currencies) are recognized at the controlling interests are adjusted and the fair value of the rates of exchange prevailing at the dates of the transactions. At consideration paid or received is recognized directly in equity the end of each reporting period, monetary items denominated and attributed to owners of the Company. in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are When the Group loses control of a subsidiary, a gain or loss is denominated in foreign currencies are retranslated at the rates recognized in profit or loss and is calculated as the difference prevailing at the date when the fair value was determined. between: (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and; (ii) the Non-monetary items that are measured in terms of historical previous carrying amount of the assets (including goodwill), and cost in a foreign currency are not translated. liabilities of the subsidiary and any non-controlling interests. Exchange differences on monetary items are recognized in When assets of the subsidiary are carried at revalued amounts or profit or loss in the period in which they arise except for: fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in * Exchange differences on foreign currency borrowings equity, the amounts previously recognized in other relating to assets under construction for future productive use, comprehensive income and accumulated in equity are accounted which are included in the cost of those assets when they are for as if the Group had directly disposed of the relevant assets regarded as an adjustment to interest costs on those foreign (i.e. reclassified to profit or loss or transferred directly to currency borrowings; retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date * Exchange differences on transactions entered into in when control is lost is regarded as the fair value on initial order to hedge certain foreign currency risks (below for hedging recognition for subsequent accounting under IAS 39 Financial accounting policies); and Instruments: Recognition and Measurement, or when applicable, the cost on initial recognition of an investment in an associate or * Exchange differences on monetary items receivable a jointly controlled entity. from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of 3.5.1 A joint venture is a joint arrangement whereby the the net investment in the foreign operation), which are parties that have joint control of the arrangement have rights to recognized initially in other comprehensive income and the net assets of the joint arrangement. Joint control is the reclassified from equity to profit or loss on repayment of the contractually agreed sharing of control of an arrangement, which monetary items. exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign An investment in a joint venture is accounted for using the equity operations are translated into currency units using exchange method from the date on which the investee becomes a joint rates prevailing at the end of each reporting period. Income and venture in accordance with the provision of IFRS 11:24. expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during The results of a joint venture is incorporated in these that period, in which case the exchange rates at the dates of the consolidated financial statements using the equity method of transactions are used. Exchange differences arising, if any, are accounting, except when the investment, or a portion thereof, is recognized in other comprehensive income and accumulated in classified as held for sale, in which case it is accounted for in equity (attributed to non-controlling interests as appropriate). accordance with IFRS 5. Under the equity method, an investment On the disposal of a foreign operation (i.e. a disposal of the in a joint venture is initially recognized in the consolidated Group's entire interest in a foreign operation, or a disposal statement of financial position at cost and adjusted thereafter to involving loss of control over a subsidiary that includes a foreign recognize the Group’s share of the profit or loss and other operation, a disposal involving loss of joint control over a jointly comprehensive income of the joint venture. When the Group’s controlled entity that includes a foreign operation, or a disposal share of losses of a joint venture exceeds the Group’s interest in involving loss of significant influence over an associate that that joint venture (which includes any long-term interests that, in includes a foreign operation), all of the exchange differences substance, form part of the Group’s net investment in the joint accumulated in equity in respect of that operation attributable venture), the Group discontinues recognizing its share of further to the owners of the Company are reclassified to profit or loss. losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made In addition, in relation to a partial disposal of a subsidiary that payments on behalf of the joint venture. does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences

49 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

are re-attributed to non-controlling interests and are not A financial asset is classified as held for trading if: recognized in profit or loss. For all other partial disposals (i.e. partial disposals of associates or jointly controlled entities that * It has been acquired principally for the purpose of selling do not result in the Group losing significant influence or joint it in the near term; or control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss. * On initial recognition it is part of a portfolio of identified financial instruments that the Group manages together Fair value adjustments on identifiable assets and liabilities and has a recent actual pattern of short-term profit- acquired arising on the acquisition of a foreign operation are taking; or treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each * A financial asset other than a financial asset held for reporting period. Exchange differences arising are recognized in trading may be designated as at FVTPL upon initial equity. recognition if:

3.7 Cash and cash equivalents * Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would Cash and cash equivalents include cash in hand, deposits held at otherwise arise; or call with banks and other short term highly liquid investments with original maturities of three months or less, these assets * The financial asset forms part of a group of financial readily convertible into known amounts of cash. assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in Cash and cash equivalents comprise cash at bank and in hand and accordance with the Group's documented risk short-term deposits with an original maturity of three months or management or investment strategy, and information less in the statement of financial position. n about the grouping is provided internally on that basis; or 3.8 Financial instruments * It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Financial assets are classified into the following specified Recognition and Measurement permits the entire categories: financial assets ‘at fair value through profit or loss' combined contract (asset or liability) to be designated (FVTPL), ‘held-to-maturity' investments, ‘available-for-sale' (AFS) as at FVTPL. financial assets and ‘loans and receivables'. The classification depends on the nature and purpose of the financial assets and is Financial assets at FVTPL are stated at fair value, with any gains determined at the time of initial recognition. All regular way or losses arising on remeasurement recognized in profit or loss. purchases or sales of financial assets are recognized and The net gain or loss recognized in profit or loss incorporates any derecognized on a trade date basis. Regular way purchases or dividend or interest earned on the financial asset and is included sales are purchases or sales of financial assets that require in the ‘other gains and losses' line item in the consolidated delivery of assets within the time frame established by regulation statement of comprehensive income/income statement. or convention in the marketplace. 3.11 Loans and receivables 3.9 Effective interest method Loans and receivables are non-derivative financial assets with The effective interest method is a method of calculating the fixed or determinable payments and fixed maturity dates that amortized cost of a debt instrument and of allocating interest are not quoted in an active market, which the Group has the income over the relevant period. The effective interest rate is the positive intent and ability to hold to maturity. Subsequent to rate that exactly discounts estimated future cash receipts initial recognition, held-to-maturity investments are measured at (including all fees and points paid or received that form an amortized cost using the effective interest method less any integral part of the effective interest rate, transaction costs and impairment. other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the 3.12 Available-for-sale financial assets net carrying amount on initial recognition. (AFS financial assets)

Income is recognized on an effective interest basis for debt AFS financial assets are non-derivatives that are either instruments other than those financial assets classified as at designated as available for sale or are not classified as (a) loans FVTPL. and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss. 3.10 Financial assets at fair value through profit or loss The Group also has investments in unlisted shares that are not Financial assets are classified as at fair value through profit or loss traded in an active market but that are also classified as AFS when the financial asset is either held for trading or it is financial assets and stated at fair value at the end of each designated as at FVTPL. reporting period (because the directors consider that fair value

50 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

can be reliably measured). . Changes in the carrying amount of For financial assets carried at cost, the amount of the impairment AFS monetary financial assets relating to changes in foreign loss is measured as the difference between the asset's carrying currency rates, interest income calculated using the effective amount and the present value of the estimated future cash flows interest method and dividends on available for sale equity discounted at the current market rate of return for a similar investments are recognized in profit or loss. Other changes in the financial asset. Such impairment loss will not be reversed in carrying amount of available-for-sale financial assets are subsequent periods. recognized in other comprehensive income and accumulated under the heading of investments revaluation reserve. When the The carrying amount of the financial asset is reduced by the investment is disposed of or is determined to be impaired, the impairment loss directly for all financial assets with the cumulative gain or loss previously accumulated in the exception of trade receivables, where the carrying amount is investments revaluation reserve is reclassified to profit or loss. reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the Dividends on available for sale equity instruments are recognized allowance account. in profit or loss when the Group's right to receive the dividends Subsequent recoveries of amounts previously written off are is established. credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or The fair value of AFS monetary financial assets denominated in a loss. foreign currency is determined in that foreign currency and When an AFS financial asset is considered to be impaired, translated at the spot rate prevailing at the end of the reporting cumulative gains or losses previously recognized in other period. The foreign exchange gains and losses that are recognized comprehensive income are reclassified to profit or loss in the in profit or loss are determined based on the amortized cost of period. the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income. For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss Available for sale equity investments that do not have a quoted decreases and the decrease can be related objectively to an market price in an active market and whose fair value cannot be event occurring after the impairment was recognized, the reliably measured and derivatives that are linked to and must be previously recognized impairment loss is reversed through settled by delivery of such unquoted equity investments are profit or loss to the extent that the carrying amount of the measured at cost less any identified impairment losses at the end investment at the date the impairment is reversed does not of each reporting period. exceed what the amortized cost would have been had the impairment not been recognized. 3.13 Impairment of financial assets In respect of AFS equity securities, impairment losses previously Financial assets, other than those at fair value through profit or recognized in profit or loss are not reversed through profit or loss, are assessed for indicators of impairment at the end of each loss. Any increase in fair value subsequent to an impairment loss reporting period. Financial assets are considered to be impaired is recognized in other comprehensive income and accumulated when there is objective evidence that, as a result of one or more under the heading of investments revaluation reserve. In respect events that occurred after the initial recognition of the financial of AFS debt securities, impairment losses are subsequently asset, the estimated future cash flows of the investment have reversed through profit or loss if an increase in the fair value of been affected. the investment can be objectively related to an event occurring For available for sale equity investments, a significant or after the recognition of the impairment loss. prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. 3.14 Determination of fair value For all other financial assets, objective evidence of impairment could include: For financial instruments traded in active markets, the determination of fair values of financial assets and financial * Significant financial difficulty of the issuer or liabilities is based on quoted market prices or dealer price counterparty; or quotations. This includes listed equity securities and quoted debt * Breach of contract, such as a default or delinquency in instruments on major exchanges. The quoted market price used interest or principal payments; or for financial assets held by the company is the current bid price. * It becoming probable that the borrower will enter bankruptcy or financial re-organisation; or A financial instrument is regarded as quoted in an active market * The disappearance of an active market for that financial if quoted prices are readily and regularly available from an asset because of financial difficulties. exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and For financial assets carried at amortized cost, the amount of the regularly occurring market transactions on an arm’s length basis. impairment loss recognized is the difference between the asset's If the above criteria are not met, the market is regarded as being carrying amount and the present value of estimated future cash inactive. flows, discounted at the financial asset's original effective interest rate. For all other financial instruments, fair value is determined using

51 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

valuation techniques. In these techniques, fair values are insurance contract holders. Receivables arising under insurance estimated from observable data in respect of similar financial contracts are measured on initial recognition at the fair value of instruments, using models to estimate the present value of the consideration received or receivable. Subsequent to initial expected future cash flows or other valuation techniques, using recognition, insurance receivables are measured at amortised inputs (for example, NIBOR, MPR etc.) existing at the dates of cost, using the effective interest rate method. The carrying value the statement of financial position. of insurance receivables is reviewed for impairment whenever events or circumstances indicate that the carrying amount may The company uses widely recognised money market rates in not be recoverable, with the impairment loss recorded in the determining fair values of non-standardised financial instruments income statement. of lower complexity like placements, and treasury bills. These financial instruments models are generally market observable. 3.17 Other receivables The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. Other receivables principally consist of prepayments, accrued income and sundry debtors and are carried at amortised cost. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the 3.18.1 Reinsurance contracts current market interest rate that is available to the company for similar financial instruments. The Group enters into reinsurance contracts in the normal course of business in order to limit the potential for losses 3.15 Derecognition of financial assets arising from certain exposures. Outwards reinsurance premiums are accounted for in the same period as the related The Group derecognizes a financial asset only when the premiums for the direct inwards reinsurance business being contractual rights to the cash flows from the asset expire, or reinsured. when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the 3.18.2 Reinsurance Assets Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred The Group cedes insurance risk in the normal course of asset, the Group recognizes its retained interest in the asset and business on the bases of our treaty and facultative agreements. an associated liability for amounts it may have to pay. Reinsurance assets represent balances due from reinsurance companies. Amounts recoverable from reinsurers are If the Group retains substantially all the risks and rewards of estimated in a manner consistent with settled claims associated ownership of a transferred financial asset, the Group continues with the reinsurer’s policies and are in accordance with the to recognize the financial asset and also recognizes a related reinsurance contract. collateralized borrowing for the proceeds received. The Group assesses its reinsurance assets for impairment at On derecognition of a financial asset in its entirety, the difference each reporting date or move frequently when an indication of between the asset's carrying amount and the sum of the impairment arises during the reporting year. If there is objective consideration received and receivable and the cumulative gain or evidence that the reinsurance asset is impaired, the Group loss that had been recognized in other comprehensive income reduces the carrying amount of the reinsurance asset to its and accumulated in equity is recognized in profit or loss. recoverable amount and recognises that impairment loss in the On derecognition of a financial asset other than in its entirety income statement. The Group gathers the objective evidence (e.g. when the Group retains an option to repurchase part of a that a reinsurance asset it impaired using the same process transferred asset), the Group allocates the previous carrying adopted for financial assets held at amortised cost. The amount of the financial asset between the part it continues to impairment loss is calculated using the incurred loss model for recognize under continuing involvement, and the part it no these financial assets. longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the Premiums, losses and other amounts relating to reinsurance carrying amount allocated to the part that is no longer treaties are recognized over the period from inception of a recognized and the sum of the consideration received for the treaty to expiration of the related business. part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive Ceded reinsurance arrangements do not relieve the Company income is recognized in profit or loss. A cumulative gain or loss from its obligations to policyholders. that had been recognized in other comprehensive income is Reinsurance assets or liabilities are derecognized when the allocated between the part that continues to be recognized and contractual rights are extinguished or expire or when the the part that is no longer recognized on the basis of the relative contract is transferred to another party. fair values of those parts. Reinsurance contracts that do not transfer significant insurance risk are accounted for directly through the statement of financial 3.16 Trade receivables position. These are deposit assets that are recognised based on the consideration paid less any explicit identified premiums or Receivables include amounts due from agents, brokers and fees to be retained by the reinsured.

52 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

Investment income on these contracts is accounted for using the the average term of the expected premiums payable. effective interest rate method when accrued. 3.19.3 Deferred expenses- Investment management 3.18.3 Impairment of reinsurance asset services

Reinsurance assets are subject to impairment testing and the The Group defers those incremental costs incurred during the carrying amount is reduced to its recoverable amount. The financial period directly attributable to securing investment impairment loss is recognised as an expense in the income contracts without discretionary participation features (DPF), statement. The asset is impaired if objective evidence is available under which the Group renders investment management to suggest that it is probable that the Group will not be able to services (to the extent that these costs can be identified collect the amounts due from reinsurers. separately, measured reliably and it is probable that these costs will be recovered out of future revenue margins); and amortised 3.18.4 Reinsurance recoveries over the average expected period.

Reinsurance recoveries in respect of incurred but not reported Incremental cost is a cost that would not have been incurred if (IBNR) claims are assumed to be consistent with the historical the Group had not secured the investment contracts without recoveries on paid and outstanding claims, adjusted to reflect DPF. The other transaction costs are included in the financial changes in the nature and extent of the Group’s reinsurance liability in accordance with IAS 39. programmes. An assessment is made of the recoverability of reinsurance having regard to available data on the financial For all deferred charges under an insurance contracts and strength of the reinsurance companies. investment contracts (with or without DPF), an impairment review is performed at the end of each reporting period, or 3.18.5 Reinsurance liabilities more frequently, when an indication of impairment arises. When the recoverable amount is less than the carrying amount, an Reinsurance liabilities comprise premiums payable for outwards impairment loss is recognised in profit or loss. The group equally reinsurance contracts and are recognised as an expense when assesses "future servicing rights" in order to establishing an due. onerous contract provision for each reporting period.

Gains or losses on buying reinsurance are recognised in income 3.20 Leasing at the date of purchase and are not amortised. Leases are classified as finance leases whenever the terms of the 3.19 Deferred charges lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as 3.19.1 Deferred acquisition costs and deferred operating leases. origination costs 3.20.1 The Group as a lessor The incremental costs directly attributable to the acquisition of new business for other participating investment contracts are Amounts due from lessees under finance leases are recognized deferred by recognising an asset. For other insurance contracts, as receivables at the amount of the Group's net investment in acquisition costs including both incremental acquisition costs the leases. Finance lease income is allocated to accounting and other indirect costs of acquiring and processing new periods so as to reflect a constant periodic rate of return on the businesses are deferred (deferred acquisition costs). Group's net investment outstanding in respect of the leases.

For investment contracts without discretionary features Rental income from operating leases is recognized on a straight- incremental costs directly attributable to acquiring the contracts line basis over the term of the relevant lease. Initial direct costs are deferred (deferred original costs) incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized Where such business is reinsured the reinsurers’ share is carried on a straight-line basis over the lease term. forward as deferred income. 3.20.2 The Group as a lessee Deferred acquisition costs and deferred origination costs are amortised systematically over the life of the contracts and tested Assets held under finance leases are initially recognized as assets for impairment at each reporting date. Any amount not of the Group at their fair value at the inception of the lease or, if recoverable is expensed. They are derecognised when the related lower, at the present value of the minimum lease payments. The contracts are settled or disposed of. corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease 3.19.2 Deferred income - Reinsurance commissions obligation.

The Group recognises commissions receivable on outwards Lease payments are apportioned between finance expenses and reinsurance contracts as a deferred income and amortised over reduction of the lease obligation so as to achieve a constant rate

53 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

of interest on the remaining balance of the liability. Finance depreciation and accumulated impairment losses. Depreciation expenses are recognized immediately in profit or loss, unless is recognized so as to write off the cost or valuation of assets they are directly attributable to qualifying assets, in which case (other than freehold land and properties under construction) they are capitalized in accordance with the Group's general less their residual values over their useful lives, using the straight- policy on borrowing costs. Contingent rentals are recognized as line method. The estimated useful lives, residual values and expenses in the periods in which they are incurred. depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for Operating lease payments are recognized as an expense on a on a prospective basis. straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in Depreciation is calculated on a straight line method to write which economic benefits from the leased asset are consumed. down the cost of assets in equal installments over their Contingent rentals arising under operating leases are recognized estimated useful lives, at the following annual rates: as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into Asset Description Years operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of Building 50 rental expense on a straight-line basis, except where another Motor Vehicles 4 systematic basis is more representative of the time pattern in Furniture and Fittings 5 which economic benefits from the leased asset are consumed. Equipment 4 Plant and Machinery 5 3.21 Investment properties Assets held under finance leases are depreciated over their Investment properties are properties held to earn rentals and/or expected useful lives on the same basis as owned assets. for capital appreciation (including property under construction However, when there is no reasonable certainty that ownership for such purposes). Investment properties are measured initially will be obtained by the end of the lease term, assets are at cost, including transaction costs. depreciated over the shorter of the lease term and their useful lives. Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in An item of property, plant and equipment is derecognized upon the fair value of investment properties are included in profit or disposal or when no future economic benefits are expected to loss in the period in which they arise. arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and An investment property is derecognized upon disposal or when equipment is determined as the difference between the sales the investment property is permanently withdrawn from use and proceeds and the carrying amount of the asset and is recognized no future economic benefits are expected from the disposal. Any in profit or loss. gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the 3.23 Intangible assets carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized. 3.23.1 Software expenditure An internally-generated intangible asset arising from the Group’s 3.22 Property, plant and equipment software development is recognized if and only if all of the following conditions are met: Group occupied properties are stated in the statement of financial position at cost, less any subsequent accumulated The technical feasibility of completing the intangible asset so that it depreciation and subsequent accumulated impairment losses. will be available for use or sale;

Properties in the course of construction for production, supply * The intention to complete the intangible asset and use or administrative purposes are carried at cost, less any or sell it; recognized impairment loss. Cost includes professional fees and, * The ability to use or sell the intangible asset; for qualifying assets, borrowing costs capitalized in accordance * How the intangible asset will generate probable future with the Group's accounting policy. Such properties are classified economic benefits; to the appropriate categories of property, plant and equipment * The availability of adequate technical, financial and other when completed and ready for intended use. resources to complete the development and to use or sell the intangible asset; and Depreciation of these assets, on the same basis as other property * The ability to measure reliably the expenditure assets, commences when the assets are ready for their intended attributable to the intangible asset during its use. development. Freehold land is not depreciated. The amount initially recognized for internally-generated Fixtures and equipment are stated at cost less accumulated intangible assets is the sum of the expenditure incurred from the

54 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

date when the intangible asset first meets the recognition criteria amount, in which case the reversal of the impairment loss is listed above. Where no internally-generated intangible asset can treated as a revaluation increase. be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred. 3.24 Statutory deposit

Subsequent to initial recognition, internally-generated intangible Statutory deposit represents a deposit of 10% of the regulatory assets are reported at cost less accumulated amortization and share capital kept with the Central Bank of Nigeria. The amount accumulated impairment losses, on the same basis as intangible held will increase or decrease in relation to the amount of paid assets that are acquired separately. Its estimated useful life is 3 up share capital in issue. The cash amount held is considered to years. be a restricted cash balance and stated at cost.

3.23.2 Impairment of tangible and intangible assets 3.25 Non-life insurance contract liabilities other than goodwill 3.25.1 Provision for outstanding claims and incurred At the end of each reporting period, the Group reviews the but not reported (IBNR) claims carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have Provisions for liabilities of non-life insurance contracts is made suffered an impairment loss. If any such indication exists, the for outstanding claims and settlement expenses incurred at the recoverable amount of the asset is estimated in order to reporting date including an estimate for the cost of claims determine the extent of the impairment loss (if any). When it is incurred but not reported (IBNR) at that date. Included in the not possible to estimate the recoverable amount of an individual provision is an estimate of the internal and external costs of asset, the Group estimates the recoverable amount of the cash- handling the outstanding claims. generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate Material salvage and other recoveries including reinsurance assets are also allocated to individual cash-generating units, or recoveries are presented as assets. otherwise they are allocated to the smallest group of cash- generating units for which a reasonable and consistent allocation Significant delays are experienced in the notification and basis can be identified. settlement of certain types of general insurance claims, particularly in respect of liability business, environmental and 3.23.3 Impairment of tangible and intangible assets pollution exposures, the ultimate cost of which may vary from other than goodwill the original assessment. Adjustments to the amounts of claims provisions established in prior years are reflected in the financial Intangible assets with indefinite useful lives and intangible assets statements for the period in which the adjustments are made not yet available for use are tested for impairment at least and disclosed separately, if material. annually, and whenever there is an indication that the asset may be impaired. The liability for Incurred But Not Reported (IBNR) claims is calculated at the end of the reporting period, using a range of Recoverable amount is the higher of fair value less costs to sell standard actuarial claim projection techniques, based on and value in use. In assessing value in use, the estimated future empirical data and current assumptions that may include a cash flows are discounted to their present value using a pre-tax margin for adverse deviation. The liability was not discounted for discount rate that reflects current market assessments of the time value of money; and no further provision was made for time value of money and the risks specific to the asset for which equalisation or catastrophe reserves (as prohibited by IFRS 4). the estimates of future cash flows have not been adjusted. These liabilities are derecognised when the obligation to pay a If the recoverable amount of an asset (or cash-generating unit) is claim is extinguished (i.e. expires, discharged or cancelled). estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its 3.25.2 Provision for unearned premiums and unexpired recoverable amount. An impairment loss is recognized risks immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated The provision for unearned premiums represents that part of as a revaluation decrease. written premiums, gross of commission payable to intermediaries that is estimated to be earned in subsequent When an impairment loss subsequently reverses, the carrying periods. The change in the provision is recorded in the income amount of the asset (or a cash-generating unit) is increased to the statement to recognise revenue over the period of the risk. revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount 3.25.3 Liability adequacy that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. At each reporting date the Group performs a liability adequacy A reversal of an impairment loss is recognized immediately in test on its insurance liabilities less related deferred acquisition profit or loss, unless the relevant asset is carried at a revalued costs and intangible assets to ensure that the carrying value is

55 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

adequate, using current estimates of future cash flows, taking 3.26.1 Classification as debt or equity into account the relevant investment return. If that assessment shows that the carrying amount of the liabilities is inadequate, any Debt and equity instruments issued by a group entity are deficiency is recognised as an expense to the income statement classified as either financial liabilities or as equity in accordance initially by writing off the intangible assets and subsequently by with the substance of the contractual arrangements and the recognising an additional liability for claims provisions or definitions of a financial liability and an equity instrument. recognising a provision for unexpired risks. 3.26.2 Equity instruments The unexpired risks provision is assessed in aggregate for business classes which are managed together. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its 3.25.4 Actuarial valuation of life fund liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs. Repurchase This is made up of the net liabilities on all policies in force as of the Company's own equity instruments is recognized and computed at the time of the actuarial valuation. Actuarial deducted directly in equity. No gain or loss is recognized in profit valuation of life fund is carried out annually for the purpose of or loss on the purchase, sale, issue or cancellation of the determining the surplus or deficit at the end of the year. All Company's own equity instruments. deficits/surpluses arising thereon are charged/credited to the profit or loss. 3.26.3 Compound instruments

3.25.5 Life insurance contract liabilities The component parts of compound instruments (convertible notes) issued by the Company are classified separately as Individual life financial liabilities and equity in accordance with the substance of These contracts insure mainly against death. For the annual the contractual arrangements and the definitions of a financial statement of accounts, the contracts are valued using a gross liability and an equity instrument. Conversion option that will be premium valuation, taking into account the present value of settled by the exchange of a fixed amount of cash or another expected future premium claim and associated expense cash financial asset for a fixed number of the Company's own equity flow. instruments is an equity instrument.

Group life At the date of issue, the fair value of the liability component is These contracts insure against death on a group basis. These estimated using the prevailing market interest rate for similar contracts are short term in nature and are typically renewed non-convertible instruments. This amount is recorded as a annually. liability on an amortized cost basis using the effective interest method until extinguished upon conversion or at the Insurance contracts with discretionary participation features instrument's maturity date. Cornerstone group issues endowment contracts that provide primarily savings benefits to policyholders but also transfer The conversion option classified as equity is determined by insurance risk. The benefit payable under each contract increases deducting the amount of the liability component from the fair each year by a reversionary bonus. Bonus distribution to policy value of the compound instrument as a whole. This is recognized holders is at the discretion of Cornerstone group’s management. and included in equity, net of income tax effects, and is not subsequently re-measured. In addition, the conversion option These contracts are valued on a gross premium valuation basis. classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in 3.25.6 Investment contract equity will be transferred to other equity. When the conversion option remains unexercised at the maturity date of the Receipts from investment contracts with guaranteed returns convertible note, the balance recognized in equity will be (welfare scheme/deposit administration) and other businesses transferred to retained profits. No gain or loss is recognized in that are savings related are recognised as liabilities. Interest profit or loss upon conversion or expiration of the conversion accruing from investment of the savings is recognised in the profit option. or loss account (deposit administration revenue account) in the year it is earned while guaranteed interest due to depositors is Transaction costs that relate to the issue of the convertible recognised as expense. The net result of deposit administration notes are allocated to the liability and equity components in revenue account is transferred to statement of profit and loss proportion to the allocation of the gross proceeds. Transaction account of the group. The policy liabilities are determined by the costs relating to the equity component are recognized directly in accrued benefits of relevant policy holders. equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and 3.26 Financial liabilities and equity instruments are amortized over the lives of the convertible notes using the effective interest method.

56 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

Once the convertible security is not convertible to fixed number A financial liability other than a financial liability held for trading of ordinary shares, it cannot be considered a compound may be designated as at FVTPL upon initial recognition if: instrument. * such designation eliminates or significantly reduces a 3.26.4 Trade Payables measurement or recognition inconsistency that would otherwise; or Trade Payables are measured on initial recognition at the fair value and subsequently measure at amortised cost, using the * the financial liability forms part of a group of financial effective interest rate method. The fair value of a non-interest assets or financial liabilities or both, which is managed bearing liability is its discounted repayment amount. If the due and its performance is evaluated on a fair value basis, in date of the liability is less than one year discounting is omitted. accordance with the Group's documented risk management or investment strategy, and information 3.26.4.1 Other payables and accruals about the grouping is provided internally on that basis; or

Other payables and accruals are recognised initially at fair value * it forms part of a contract containing one or more and subsequently measured at amortised cost using the effective embedded derivatives, and IAS 39 Financial Instruments: interest method. The fair value of a non-interest bearing liability Recognition and Measurement permits the entire is its discounted repayment amount. If the due of the liability is combined contract (asset or liability) to be designated as less one year discounting is omitted. at FVTPL.

A financial liability is derecognized when the obligation under the Financial liabilities at FVTPL are stated at fair value, with any gains liability is discharged or cancelled or expires. When an existing or losses arising on remeasurement recognized in profit or loss. financial liability is replaced by another from the same lender on The net gain or loss recognized in profit or loss incorporates any substantially different terms, or the terms of an existing liability, interest paid on the financial liability and is included in the ‘other are substantially modified, such as exchange or modification is gains and losses' line item in the consolidated statement of treated as a derecognition of the original liability and the comprehensive income/income statement. recognition of a new liability, and the difference in the respective carrying amounts is recognised in the income statement. Gains 3.27.2 Other financial liabilities and losses are recognised in the income statements when the liabilities are derecognized. Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortized cost 3.26.5 Trust and managed funds using the effective interest method.

Trust and managed funds consist of investments held by the The effective interest method is a method of calculating the Group as Trust Manager on behalf of third parties. amortized cost of a financial liability and of allocating interest 3.27 Financial liabilities expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments Financial liabilities are classified as either financial liabilities (including all fees and points paid or received that form an ‘at FVTPL' or ‘other financial liabilities'. integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the 3.27.1 Financial liabilities at fair value through profit or financial liability, or (where appropriate) a shorter period, to the loss net carrying amount on initial recognition.

Financial liabilities are classified as at fair value through profit or 3.27.3 Financial guarantee contracts loss when the financial liability is either held for trading or it is designated as at fair value through profit or loss. A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a A financial liability is classified as held for trading if: loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. * It has been acquired principally for the purpose of Financial guarantee contracts issued by the Group are initially repurchasing it in the near term; or measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of: * On initial recognition it is part of a portfolio of identified financial instruments that the Group manages together * The amount of the obligation under the contract, as and has a recent actual pattern of short-term profit- determined in accordance with IAS 37 Provisions, taking; or Contingent Liabilities and Contingent Assets; and * The amount initially recognized less, where appropriate, * It is a derivative that is not designated and effective as a cumulative amortization recognized in accordance with hedging instrument. the revenue recognition policies.

57 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

3.27.4 Derecognition of financial liabilities Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the The Group derecognizes financial liabilities when, and only when, reporting period. the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial The current taxes include: Company Income Tax at 30% of liability derecognized and the consideration paid and payable is taxable profit; Education Tax at 2% of assessable profit; Capital recognized in profit or loss. Gain Tax at 10% of chargeable gains; and Information Technology Development Levy at 1% of accounting profit before tax. 3.27.5 Fair value of financial instrument 3.29.2 Deferred tax The fair value of non-derivative financial assets and liabilities with standard terms and conditions and traded at an active liquid Deferred tax is recognized on temporary differences between market are determined by reference to quoted market prices. the carrying amounts of assets and liabilities in the consolidated Financial assets in this category include listed equities, listed debt financial statements and the corresponding tax bases used in the securities and mortgages. Financial liabilities include borrowing, computation of taxable profit. net asset value attributable to unit-holders and liabilities for investment contracts without DPF. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally The fair value of other non-derivative financial assets and recognized for all deductible temporary differences to the liabilities are determined in accordance with generally accepted extent that it is probable that taxable profits will be available pricing models based on discounted cash flow analysis using against which those deductible temporary differences can be prices from observable current market transactions and dealer utilized. Such deferred tax assets and liabilities are not quotes for similar instruments. recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business 3.28 Provisions combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is Deferred tax liabilities are recognized for taxable temporary probable that the Group will be required to settle the obligation, differences associated with investments in subsidiaries and and a reliable estimate can be made of the amount of the associates, and interests in joint ventures, except where the obligation. Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will The amount recognized as a provision is the best estimate of the not reverse in the foreseeable future. consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and Deferred tax assets arising from deductible temporary uncertainties surrounding the obligation. differences associated with such investments and interests are only recognized to the extent that it is probable that there will When a provision is measured using the cash flows estimated to be sufficient taxable profits against which to utilise the benefits settle the present obligation, its carrying amount is the present of the temporary differences and they are expected to reverse in value of those cash flows (when the effect of the time value of the foreseeable future. money is material). The carrying amount of deferred tax assets is reviewed at the When some or all of the economic benefits required to settle a end of each reporting period and reduced to the extent that it is provision are expected to be recovered from a third party, a no longer probable that sufficient taxable profits will be available receivable is recognized as an asset if it is virtually certain that to allow all or part of the asset to be recovered. reimbursement will be received and the amount of the receivable can be measured reliably. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is 3.29 Taxation settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of Income tax expense represents the sum of the tax currently the reporting period. The measurement of deferred tax liabilities payable and deferred tax. and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the 3.29.1 Current tax reporting period, to recover or settle the carrying amount of its assets and liabilities. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated 3.29.3 Current and deferred tax for the year statement of comprehensive income/income statement because of items of income or expense that are taxable or deductible in Current and deferred tax are recognized in profit or loss, except other years and items that are never taxable or deductible. The when they relate to items that are recognized in other

58 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

comprehensive income or directly in equity, in which case, the 3.32.2 Life business current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where Contingency reserves are done in accordance with the current tax or deferred tax arises from the initial accounting for a provisions of the Insurance Act, CAP II7 LFN 2004. business combination, the tax effect is included in the accounting for the business combination. The contingency reserve is credited with the higher of an amount equal to 1% of the gross premium or 10% of the profits. 3.30.1 Retirement benefit costs 3.33 Treasury shares Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered Own equity instruments which are acquired (treasury shares) service entitling them to the contributions. are deducted from equity and accounted for at weighted average cost. No gain or loss is recognised in the income statement on This is done in line with the Pension Reform Act 2014, whereby the purchase, sale, issue or cancellation of the Group’s own the minimum rate of Pension Contribution is 18% of monthly equity instruments. Any difference between the carrying amount emolument, where 8% will be contributed by employee and 10% and the consideration is recognised in other capital reserves. by employer. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them respectively 3.30.2 Borrowing and finance costs Contracts on own shares that require physical settlement of a Borrowing costs comprise interest payable on loans and bank fixed number of own shares for a fixed consideration are overdrafts as well as commission fees charged in respect of classified as equity and added to or deducted from equity. letters of credit. They are charged to profit or loss as incurred, Contracts on own shares that require net cash settlement or except those that relate to qualifying assets. Arrangement fees in provide a choice of settlement is classified as trading respect of financing arrangements including letters of credit are instruments. Changes in the fair value are reported in the charged to borrowing costs over the life of the related facility. income statement.

After initial recognition, interest bearing loans and borrowings 3.34 Contingent liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the A contingent liability is a possible obligation that arises from past income statement when the liabilities are derecognised as well as event and whose existence will be confirmed only by the through the effective interest rate (EIR) amortisation process. occurrence or non-occurrence of one or more uncertain future Amortised cost is calculated by taking into account any discount events, not wholly within the control of the Group or the Group or premium on acquisition and fee or costs that is an integral part has a present obligation as a result of past events which is not of the EIR. The EIR amortisation is included in finance cost in the recognized because it is not probable that an outflow of income statement resources will be required to settle the obligation, or the amount cannot be reliability estimated. Borrowing costs directly attributable to the acquisition, construction or production of an asset ("qualifying asset") that 3.35 Retained earnings necessarily takes a substantial period of time to get ready for use or sale are capitalized as part of the cost of the respective assets. Retained earnings are the carried forward recognized income net of expenses plus current period profit attributable to 3.31 Share capital shareholders.

Shares are classified as equity when there is no obligation to 3.36 Dividend transfer cash or other assets. Incremental external costs that are directly attributable to the issue of these shares are recognised in Dividend distribution to the shareholders of the group is equity, net of tax. recognised in the period in which the dividends are paid as a first interim dividend or is a second interim dividend approved by the 3.32 Contingency reserves group’s shareholders at the group’s annual general meeting.

3.32.1 Non-life business Dividend for the year that are approved after the reporting date are dealt with as an event after the reporting date. The company maintains contingency reserves in accordance with the provision of section 21(2) of the Insurance Act, CAP 117 LFN 3.37 Premiums 2004 to cover fluctuations in securities and variations in statistical estimates at a rate equal to greater of 3% of total 3.37.1 Non-life business premium or 20% of net profits until the accumulated amount reaches the greater of the minimum paid-up capital or 50% of the Written premiums for non-life (general) insurance business net premium. comprise the premiums on contracts incepted in the financial

59 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

year. Written premiums are stated gross of commissions that are receivables, movements in amortized cost on debt securities and payable to intermediaries and exclusive of taxes and duties on other loans and receivables, realized gains and losses, and premiums. unrealized gains and losses on fair value assets.

Unearned premiums are those proportions of the premium 3.39.1 Interest income which relate to periods of risk after the reporting date Interest income is recognized in the statement of profit or loss Unearned premiums are calculated on time apportionment basis. and other comprehensive income as it accrues and is calculated by using the effective interest rate method. Fees and 3.37.2 Life business commissions that are an integral part of the effective yield of the financial asset or liability are recognized as an adjustment to the Gross recurring premiums on life and investment contracts with effective interest rate of the instrument. Discretionary Participation Features (DPF) are recognised as revenue when payable by the policyholder. For single premium 3.39.2 Dividend income business, revenue is recognised on the date on which the policy is effective. Dividend income from investments is recognized when the company’s’ rights to receive payment have been established. 3.37.3 Fees and commission income 3.39.3 Rental income Fees and commission income consists primarily of Agency and brokerage commission, reinsurance and profit commissions, Rental income is recognized on an accrual basis. policyholder administration fees and other contract fees. Reinsurance commissions receivable are deferred in the same 3.39.4 Realized gains and losses way as acquisition costs. All other fee and commission income is recognized as the services are provided. Gains and losses on the sale of investments are calculated as the difference between net sales proceeds and the original or 3.38 Insurance benefits and claims amortized cost and are recorded on occurrence of the sale transaction. 3.38.1 Non-life business 3.39.5 Unrealised gains and losses Non-life insurance claims include all claims occurring during the year, whether reported or not, related internal and external Unrealized gains or losses represent the difference between the claims handling costs that are directly related to the processing carrying value at the year end and the carrying value at the and settlement of claims, a reduction for the value of salvage and previous year end or purchase value during the year, less the other recoveries, and any adjustments to claims outstanding reversal of previously recognized unrealized gains and losses in from previous years. respect of disposals during the year.

3.38.2 Reinsurance claims 3.40 Other expenses

The Group recognises reinsurance claims when the related gross All other operating expenses are recognized directly in profit or insurance claims are recognised according to the terms of the loss as when incurred. relevant contracts. 3.40.1 Underwriting expenses 3.38.3 Life business 3.38.4 Gross benefits and claims Underwriting expenses comprise acquisition costs and other underwriting expenses. Acquisition costs comprise all direct and ross benefits and claims for life insurance contracts and for indirect costs arising from the writing of insurance contracts. investment contracts with the Discretionary Participatory Examples of these costs include, but are not limited to, Feature (DPF) include the cost of all claims arising during the year, commission expense, supervisory levy, superintending fees and including internal and external claims handling costs that are other technical expenses. Other underwriting expenses are directly related to the processing and settlement of claims and those incurred in servicing existing policies/ contract. These policyholder bonuses declared on DPF contracts. Changes in the expenses are charges in the accounting year in which they are gross valuation of insurance and investment contract liabilities incurred. with DPF are also included. Death claims and surrenders are recorded on the basis of notifications received. Maturities and 3.40.2 Management expenses annuity payments are recorded when due. Management expenses are expenses other than claims and 3.39 Investment income underwriting expenses. They include salaries and wages, depreciation expenses and other non-operating expenses. They Investment income consists of dividends, interest and rent are accounted for on an accrual basis.

60 ACCOUNTING POLICIES CONT’D 2016 Annual Report & Accounts

4 Critical accounting judgments and key sources of Valuation of liabilities of non-life insurance contracts. estimation uncertainty Estimates are made for both the expected ultimate cost of claims reported and claims incurred but not reported (IBNR) at In the application of the Group’s accounting policies, the the balance sheet date. The estimate of IBNR is generally subject directors are required to make judgments, estimates and to a greater degree of uncertainty than that for reported claims. assumptions about the carrying amounts of assets and liabilities In calculating the estimated liability, the Group uses a variety of that are not readily apparent from other sources. The estimates estimation techniques based upon statistical analyses of and associated assumptions are based on historical experience historical experience which assumes past trends can be used to and other factors that are considered to be relevant. Actual project future developments. results may differ from these estimates. The carrying amount for non- life insurance contract liabilities at The estimates and underlying assumptions are reviewed on an the reporting date is N4,498 million (2015: N3,286 million and ongoing basis. Revisions to accounting estimates are recognised N1,810 million for life liabilities (2015:N1,576 million). in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Fair value of financial instruments using valuation techniques. Critical judgments in applying the Group’s accounting policies The directors use their judgment in selecting an appropriate The following are the critical judgments, apart from those valuation technique. Where possible, financial instruments are involving estimations (which are dealt with separately below), marked at prices quoted in active markets. In the current market that the directors have made in the process of applying the environment, such price information is typically not available for Group’s accounting policies and that have the most significant all instruments and the group uses valuation techniques to effect on the amounts recognized in financial statements. measure such instruments. These techniques use “market observable inputs” where available, derived from similar assets Product classification and contract liabilities. in similar and active markets, from recent transaction prices for comparable items or from other observable market data. For The Group’s Non-life insurance contracts are classified as positions where observable reference data are not available for insurance contracts. As permitted by IFRS 4, assets and liabilities some or all parameters the group estimates the non-market of these contracts are accounted for under previously applied observable inputs used in its valuation models. GAAP.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

61

FINANCIAL STATEMENTS CONSOLIDATED AND SEPARATE 2016 Annual Report & Accounts STATEMENT OF FINANCIAL POSITION As at 31 December, 2016

2016 2015 2016 2015 Group Group Company Company Note N'000 N'000 N'000 N'000 ASSETS Cash and cash equivalents 5 3,093,080 6,297,836 2,557,153 3,687,778 Financial assets 6 9,648,024 7,748,751 7,370,257 6,527,604 Trade receivable 7 73,731 - 73,224 - Other receivables and prepayments 8 228,293 213,394 391,309 452,635 Other Assets 8b - 290,138 - 290,138 Reinsurance assets 9 2,492,227 1,611,105 2,224,827 1,497,638 Deferred acquisition cost 10 258,101 219,308 206,629 197,082 Finance lease receivables 11 - 70 - - Investment in Joint venture 12 1,894,885 - 1,188,609 - Investment in subsidiaries 13 - - 2,954,748 2,954,748 Investment properties 14 494,000 1,302,994 - 816,994 Property, plant and equipment 15 2,235,928 2,070,530 806,082 770,413 Intangible assets 16 86,069 40,041 76,620 36,245 Deferred tax assets 22b - 242,583 18,790 187,843

Statutory deposits 17 800,000 800,000 500,000 500,000

Assets classified as held for sale 13.5 132,031 132,031 - -

Total Assets 21,436,369 20,968,781 18,368,248 17,919,118

Liabilities: Investment contract liabilities 18 2,353,766 1,712,048 2,353,766 1,712,048 Insurance contract liabilities 19 6,941,872 5,619,757 6,307,846 4,862,365 Trade payables 20 456,521 384,017 452,649 331,222 Other payables 21 807,455 826,647 634,631 616,758 Income tax liabilities 22 414,398 340,539 302,091 246,725 Deferred Tax Liabilities 22b 144,335 - - - Employees retirement benefit obligations 23 8,102 7,523 7,750 7,523 Liabilities directly associated with assets classified as held for sale 13.5 5,497 5,497 - - Total Liabilities 11,131,946 8,896,028 10,058,733 7,776,641

EQUITY & LIABILITIES Share capital & reserves: Ordinary share capital 24 7,364,754 7,364,754 7,364,754 7,364,754 Share premium 24a 1,947,166 1,947,166 1,947,166 1,947,166 Treasury shares 24b (48,175) (48,175) (48,175) (48,175) Contingency reserve 25a 1,759,421 1,519,802 1,735,400 1,519,802 AFS Fair value reserve 25b (437,367) (335,070) (277,545) (334,370) Revaluation reserve 25c 66,205 - - - Retained earnings 25d (519,062) 1,459,866 (2,412,085) (306,700) Equity attributable to owners of the company 10,132,942 11,908,343 8,309,515 10,142,477

Non -Controlling interest (NCI) 30g 171,481 164,410 - -

Total Equity 10,304,423 12,072,753 8,309,515 10,142,477

Total Equity & Liabilities 21,436,369 20,968,781 18,368,248 17,919,118

Mr. Paul Kokoricha Emmanuel Otitolaiye Ganiyu Musa Chairman Head, Finance Group Managing Director FRC/2015/ICAN/00000013047 FRC/2014/ICAN/00000008524 FRC/2013/ICAN/00000003110

64

CONSOLIDATED AND SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 2016 Annual Report & Accounts For the year ended 31 December, 2016

2016 2015 2016 2015 Group Group Company Company Note N'000 N'000 N'000 N'000

Gross Premium written 26a 9,190,634 7,331,633 8,389,950 7,331,633 Change in unearned premium 26a (734,176) (212,001) (621,100) (212,001) Gross Premium income 8,456,458 7,119,632 7,768,850 7,119,632 Reinsurance Expenses 26b (3,281,938) (2,110,177) (2,945,380) (2,110,177) Net premium income 5,174,520 5,009,455 4,823,470 5,009,455 Fees and commission income 27 477,825 307,128 448,756 307,128

Net underwriting income 5,652,345 5,316,583 5,272,226 5,316,583 Insurance claims and benefits expense- Gross (including loss adjustment expenses) 28 (4,573,714) (2,844,291) (4,527,743) (2,844,291)

Insurance claims recoverable from reinsurance Companies 28.1 1,203,012 647,865 1,028,671 647,865

Net Claims expenses 28 (3,370,702) (2,196,426) (3,499,072) (2,196,426)

Acquisition cost 29(a) (1,122,676) (1,108,961) (991,747) (1,108,961) Maintenance cost 29(b) (462,582) (365,034) (457,735) (365,034) Net Underwriting expenses 29 (1,585,258) (1,473,995) (1,449,482) (1,473,995)

Underwriting result 696,385 1,646,161 323,672 1,646,161 Profit/( Loss) from investment contract 18.1 (16,019) 23,761 (16,019) 23,761 Investment income attributable to Policyholders' funds 30(a) 203,118 407,488 203,118 407,488 Investment income attributable to Shareholders' fund 30(b) 540,354 780,062 207,938 780,062 Fair value changes in investment property 14 8,000 64,480 - 64,480 Fair value changes in financial assets-FVTPL 30(d) (2,390,911) (656,266) (2,390,911) (656,266) Operating income 30e 3,160,568 432,659 3,024,626 422,946 Share of loss from Joint venture 12 (2,340) - (1,285) - Allowance for impairment losses 31 (35,118) (311,180) (82,666) (695,860) Management expenses 32 (3,408,668) (2,344,755) (2,771,273) (2,314,789) Bank charges 33 (20,029) (32,266) (13,413) (10,123) Results of operating activities (1,264,660) 10,144 (1,516,213) (332,139) Gain on bargain purchase 30f - 1,832,910 - - Profit before tax (1,264,660) 1,843,054 (1,516,213) (332,139) Income tax expense 34 (470,563) (212,300) (373,574) (203,374) Profit for the year from continuing operations (1,735,223) 1,630,754 (1,889,787) (535,513) Other Comprehensive Income net of tax

Items that may not be reclassified subsequently to profit or loss: Revaluation gain on property and equipment 15 85,127 - - - Related tax 22b (18,922) - - - 66,205 - - - Items that may be reclassified subsequently to profit or loss: Fair value adjustment on available for sale securities 6.21 (416,155) (257,173) 56,825 (257,173) Foreign currency gain on available for sale securities 6.21 452,634 - - - Related tax 22b (135,790) - - - (99,311) (257,173) 56,825 (257,173)

Other Comprehensive Income, net of taxes (33,106) (257,173) 56,825 (257,173) Total Comprehensive Income for the year (1,768,329) 1,373,581 (1,832,962) (792,686)

Profit for the year, attributable to: * Owners' of the company (1,739,309) 1,630,754 (1,889,787) (535,513) * Non-controlling interests 4,086 - - -

Total Comprehensive Income, attributable to: * Owners' of the company (1,771,315) 1,373,581 (1,832,962 (792,686) * Non-controlling interests 2,986 - - - Earnings per share Basic and diluted 37 (12) 11 (13) (4)

65

to operate in the future. future. the in operate to

ares bought for the purpose of staff share scheme which the Company intends intends Company the which scheme share staff of purpose the for bought ares sh Company's the of cost the represent which 175,000 N48, of amount an is reserves other in Included

Treasury shares: Treasury

7,364,754 2015 Dec 31 At 12,072,753 164,410 (48,175) (335,070) - 1,459,866 1,519,802 1,947,166

Transfer to Contingency Reserve Contingency to Transfer (171,032) 171,032 ------

-

- - -

(176,400) (176,400) - - - Dividend paid: Dividend

-

Increase in share capital share in Increase 2,954,749 3,119,159 164,410

------

company recognised directly in equity in directly recognised company

Transactions with owners of the the of owners with Transactions

Total Comprehensive Income for the year the for Income Comprehensive Total 1,630,754 - - - 1,373,581 (257,173) -

Changes in fair value of AFS Investments AFS of value fair in Changes - - - (257,173) - - (257,173)

Profit for the year the for Profit 1,630,754 - - - 1,630,754

- - - -

At 1 January 2015 January 1 At 176,544 1,348,770 1,947,166 4,410,005 7,756,413 - (48,175) (77,897) -

At 31 December 2016 December 31 At (519,062) 1,759,421 1,947,166 7,364,754 10,304,423 171,481 (48,175) ) (437,367 66,205

Transfer to Contingency Reserve Contingency to Transfer (239,619) 239,619

------

recognised directly in equity in directly recognised

Transactions with owners of the company company the of owners with Transactions

Total Comprehensive Income for the year the for Income Comprehensive Total (1,739,309) - - - (1,768,329) 7,072 - (102,297) 66,205

Deferred tax Deferred (18,922) (135,790) (154,712)

Changes in fair value of AFS Investments AFS of value fair in Changes - - - - - 2,986 33,493 36,479

Revaluation reserves Revaluation - - - 85,127 - - - 85,127

Loss for the year the for Loss - - - (1,739,309) (1,735,223) 4,086

- - -

At 1 January 2016 January 1 At 1,519,802 1,947,166 7,364,754 - 1,459,866 12,072,753 164,410 (48,175) (335,070)

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

interest Reserve

reserves Reserve Premium Capital Earnings shares

Total controlling controlling Value

Contingency Contingency Share Share Revaluation Revaluation Retained Treasury Treasury

AFS Fair Fair AFS Non-

Group

66 STATEMENT OF CHANGES IN EQUITY IN CHANGES OF STATEMENT

iiedpi (176,400) (171,032) (535,513) 171,032 - (306,700) 1,519,802 - (535,513) 1,947,166 - - - 7,364,754 - 2,954,749 - - - (1,889,787 - - - 31At December 2015 to Contingency ReserveTransfer Dividend paid (1,889,787 - sharecapitalIncrease in - - Total Comprehensive Income the year for value of in Changes fair AFS Investments - yearProfit for the - - - - to Contingency ReserveTransfer Total Comprehensive Income the year for in ofChanges fair value AFS Investments yearProfit for the Company t3 eebr 06 ,6,5 19716 ,3,0 (2,412,085 1,735,400 1,947,166 7,364,754 31At December 2016

t1Jnay21 73474 ,4,6 15982 (306,700) 1,519,802 1,947,166 7,364,754 2016 1 January At

t1Jnay21 44005 ,4,6 13870 576,245 1,348,770 1,947,166 4,410,005 2015At 1 January STATEMENT OF CHANGES IN EQUITY STATEMENT

Share Capital Share Capital Capital Share '0 N'000 N'000 N'000 N'000 ------Premium Premium Share Share N'000 N'000 Contingency Contingency Contingency Contingency Reserve Reserve 1,9 (215,598) 215,598

N'000

Retained Retained Earnings

Earnings N'000 -

5,2 - (1,832,962) - 56,825 ) (7,4) 4,7) 8,309,515 (48,175) (277,545) ) ) - (1,889,787) (1,889,787) - ) ------56,825 - 56,825 56,825 - 56,825 10,142,477 (48,175) (334,370)

AFS FairAFS Value Value Reserve

2713 (792,686) (257,173) (334,370) (48,175) 10,142,477 10,142,477 (48,175) (334,370) AFS FairAFS (257,173) - (257,173) (257,173) - (257,173) 7,9) 4,7) 8,156,814 (48,175) (77,197) Reserve '0 N'000 N'000 N'000 N'000

'0 N'000 N'000 - - - (176,400) 2,954,749 - (535,513) -

Treasury Treasury hrs Total shares hrs Total shares - -

-

67

STATEMENT OF CASH FLOWS 2016 Annual Report & Accounts

2016 2015 2016 2015 Group Group Company Company Note N'000 N'000 N'000 N'000 Cash flows from operating activities

Insurance premium received 9,084,224 7,330,287 8,314,373 7,330,287 Deposit liabilities -contribution during the year 18 1,314,895 905,910 1,314,895 905,910

Deposit liabilities -Withdrawal during the year 18 (713,413) (531,435) (713,413) (531,435)

Reinsurance premium paid (3,998,353) (1,847,278) (3,657,716) (1,847,278)

Reinsurance commission received 27 477,825 307,128 448,756 307,128 Insurance benefits and claims paid 28 (4,180,951) (2,616,640) (3,898,540) (2,616,640)

Contribution to annuity fund 19b 215,917 22,911 215,917 22,911

Annuity benefits paid 19b (20,739) (1,348) (20,739) (1,348)

Reinsurance claims recovered 28 1,161,038 633,309 1,137,597 633,309

Commission paid 29a (1,161,469) (1,078,912) (1,001,294) (1,078,912)

Maintenance cost paid 29b (462,582) (365,033) (457,735) (365,033)

Cash paid to intermediaries and other suppliers (1,103,083) (1,330,269) (736,000) (1,138,619)

Cash paid to employees (1,410,150) (1,039,067) (1,173,425) (1,018,551)

(796,841) 389,563 (227,324) 601,729

Corporate tax paid 34 (164,499) (137,377) (149,155) (55,887)

Net cash used in operating activities (961,340) 252,186 (376,479) 545,842

Cash flows from investing activities:

Additions to intangible assets 16 (65,622) (17,933) (57,141) (17,933) Proceeds from sale of property and equipment 15 7,360 10,124 5,594 10,124

Purchase of property, plant and equipment 15 (319,657) (243,685) (225,906) (243,685) Investment in Joint Venture 12 (1,080,231) - (372,901) - Purchase of financial assets 6.2 (1,753,465) (662,481) (664,507) (662,481)

Cash acquired as part of business combination 30f - 2,609,613 - - Proceeds on redemption of financial assets 6.2.1 196,700 55,904 115,017 55,904 Dividends received 30b 111,321 342,468 107,664 342,468 Interest received 30 680,207 601,566 351,447 601,566 Net cash generated from/ used in) provided by investing activities (2,223,387) 2,695,576 (740,733) 85,963

Cash flows from financing activities: Dividend paid - (176,400) - (176,400) Finance cost 33 (20,029) (32,266) (13,413) (10,123) (20,029) (208,666) (13,413) (186,523) Net Increase/ (decrease) in cash and cash equivalents (3,204,756) 2,739,096 (1,130,625) 445,282 Cash and cash equivalents at beginning of year 6,297,836 3,558,740 3,687,778 3,242,496

Cash and cash equivalents at end of year 5 3,093,080 6,297,836 2,557,153 3,687,778

68

LIFE BUSINESS REVENUE ACCOUNT 2016 Annual Report & Accounts

2016 2015 Individual Life Group Life Total Total

Income N' 000 N' 000 N' 000 N' 000

Gross premium Income 132,629 1,649,2371,781,866 2,426,166 Changes in unearned premium 29,711 166,025195,736 (289,719) 162,340 1,815,2621,977,602 2,136,447 Reinsurance premium (18,323) (447,058)(359,956) (427,075)

Net premium 144,017 1,368,2041,512,221 1,709,372 Fee and Commission received 3,064 84,92887,992 85,528

147,081 1,453,1321,600,213 1,794,900

Gross claims incurred 8,800 1,987,4741,996,274 1,188,052 Insurance claims recoverable from reinsurance companies - (428,496)(428,496) (281,921)

Net claims incurred (8,800) (1,558,978) (1,567,78) 906,130

Underwriting expenses (72,921) (221,878)(294,800) (490,913) Underwriting results 62,873 (279,864)(262,364) 550,840

69 LIFE DEPOSIT ADMINISTRATION REVENUE ACCOUNT 2016 Annual Report & Accounts

2016 2015

Note N'000 N'000

Interest income 30 (c) 48,056 72,362

Expenses

Acquisition and maintenance cost 29 (c) 23,839 33,500

Guaranteed interest 29(d) 40,236 15,101

Profit on Deposit Administration 18.1 (16,019) 23,761

70 GENERAL BUSINESS COMPANY REVENUE ACCOUNT 2016 Annual Report & Accounts

Total Total General 31 Dec 31 Dec Motor FireAccident Oil & Gas Marine 2016 2015 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 Income Direct premium 1,636,415 975,300 1,851,909 1,368,592 506,171 6,338,387 4,742,159 Inward premium 10,131 27,949 16,227 31 7,064 61,402 43,610

Gross premium written 1,646,546 1,003,249 1,868,136 1,368,623 513,235 6,399,789 4,785,769 (Increase)/decrease in unearned premium (35,639) (85,215) (501,926) (166,814) (27,888) (817,482) 92,108

Gross premium earned 1,610,907 918,034 1,366,210 1,201,809 485,347 5,582,307 4,877,877

Outward reinsurance premium 46,921 651,007 1,009,294 1,165,047 298,702 3,170,971 1,461,374 (Increase)/decrease in unexpired reinsurance cost 9,883 (81,840) (440,536) (132,897) (48,669) (694,059) 218,213

Reinsurance cost 56,804 569,167 568,758 1,032,150 250,033 2,476,912 1,679,587

Net premium earned 1,554,103 348,867 797,452 169,659 235,314 3,105,395 3,198,291

Commission earned 12,868 151,060 76,786 71,306 48,333 360,353 220,721 Total income 1,566,971 499,927 874,238 240,965 283,647 3,465,748 3,419,012

Expenses Gross Claims paid 1,175,067 398,581 384,419 26,272 81,908 2,066,247 1,496,342 Increase in outstanding claims provision 28,470 130,150 5,837 269,849 (44,843) 389,463 120,839 Gross claims incurred 1,203,537 528,731 390,256 296,121 37,065 2,455,710 1,617,181 Reinsurance claims recoveries (44,655) (195,716) (73,751) (219,091) (63,555) (596,768) (365,943) Net claims incurred 1,158,882 333,015 316,505 77,030 (26,490) 1,858,942 1,251,238

Acquisition cost 219,334 158,758 175,002 40,493 79,566 673,153 669,014 Maintenance cost 123,251 66,622 124,057 90,886 34,082 438,898 286,139

Underwriting expenses 342,585 225,380 299,059 131,379 113,648 1,112,051 955,153

Total Expenses 1,501,467 558,395 615,564 208,409 87,158 2,970,993 2,206,391

Underwriting results 65,504 (58,468) 258,674 32,556 196,489 494,755 1,212,621

71 TAKAFUL BUSINESS REVENUE ACCOUNT 2016 Annual Report & Accounts

Total Total Total Takaful Takaful Takaful Takaful General life business business General Motor Fire Accident Marine 2016 2016 2016 2015 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 Income

Direct premium 144,581 20,019 14,148 6,217 184,965 23,330 208,295 100,035 ------

Gross premium written 144,581 20,019 14,148 6,217 184,965 23,330 208,295 100,035 (Increase)/decrease in unearned premium 505 70 49 22 646 646 (14,390) Reinsurance expenses (3,087) (3,087) (3,087) (3,514)

Gross premium earned 141,999 20,089 14,197 6,239 182,524 23,330 205,854 82,131 Commission earned 411 - - - 411 - 411 879 Total income 142,410 20,089 14,197 6,239 182,935 23,330 206,265 83,010

Expenses

Gross Claims paid 49,178 15,213 4,324 1,900 70,614 - 70,614 39,058 Increase in outstanding claims provision 2,036 1,541 1,089 479 5,145 - 5,145

Gross claims incurred 512,214 16,754 5,413 2,379 75,759 - 75,759 39,058 Reinsurance claims recoveries (3,407) - - - (3,407) - (3,407)

Net claims incurred 47,807 16,754 5,413 2,379 72,352 - 72,352 39,058 Acquisition cost 18,159 2,777 1,962 1,048 23,946 17,341 41,287 13,271 Maintenance cost 1,344 - - - 1,344 - 1,344 804

Underwriting expenses 19,503 2,777 1,962 1,048 25,290 17,341 42,631 14,075

Underwriting results 75,100 558 6,822 2,812 85,293 5,989 91,282 29,877

72 TAKAFUL LIFE BUSINESS 2016 Annual Report & Accounts

Revenue Account 2016 2015 Total Total N' 000 N' 000 Income Gross premium written 319,023 295,639 Investment linked products (295,693) (275,978)

Gross premium written 23,330 19,661 Unearned premium - -

Net Premium 23,330 19,661 Reinsurance cost

Underwriting expenses (17,341) (13,789)

Underwriting profit 5,989 5,872

73 74 CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION

CONSOLIDATION FIN Insurance NON-LIFE LIFE TAKAFUL Leasing ADJUSTMENTS Group 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 ASSETS Cash and cash equivalents 1,386,523 1,567,380 552,505 1,562,984 618,125 557,415 524,350 2,609 613, 11,577 444 3,093,080 6,297,836

Financial assets 3,808,421 3,747,589 3,429,036 2,675,934 132,800 104,079 2,277,412 1,212,459 355 8,688 9,648,024 7,748,751

Trade receivable 73,224 - - - - - 507 - - 73,731 - Other receivables and prepayment 311,696 440,223 79,613 12,411 37,948 9,722 502 436 (201,466) (249,400) 228,293 213,394 Other Assets - 290,138 - - 290,138 Reinsurance assets 1,813,591 1,046,745 411,236 450,893 267,400 113,466 - 2,492,227 1,611,105 Deferred acquisition cost 206,629 197,082 - - - - 51,472 22,226 - 258,101 219,308 Investment in Joint venture 851,108 - 337,501 - - - 707,331 - 70 (1,055) 1,894,885 70

Investment in subsidiaries 2,954,750 2,954,750 - - - - - (2,954,750) - - Investment properties - 324,226 - 492,768 494,000 486,000 494,000 1,302,994 Property, plant and equipment 796,371 749,449 9,079 18,509 632 2,451 1,429,808 1,299,264 38 856 2,235,928 2,070,530 Intangible assets 69,759 26,444 6,861 9,800 9,449 3,797 - 86,069 40,041 Deferred tax assets (237,742) 122,816 256,533 65,026 - 39,916 11,623 11,623 (30,414) 3,202 - 242,583 Statutory deposits 300,000 300,000 200,000 200,000 300,000 300,000 - 800,000 800,000 Assets classified as held for sale 132,031 132,031 132,031 132,031

Total Assets 12,334,330 11,766,794 5,282,3645,488,379751,557 663,945 6,099,677 6,096,463 24,095 22,117 (3,055,654) (114,167) 21,436,369 20,968,781 Liabilities: Investment contracts liabilities - - 2,048,343 1,416,331 305,423 295,717 - - 2,353,766 1,712,048 Insurance contract liabilities 4,638,965 3,231,681 1,609,860 1,576,162 59,023 54,523 634,024 757,391 - 6,941,872 5,619,756 Trade Payables 374,852 296,336 77,797 34,886 - - 52,795 3,872 456,521 384,017 Other payables 473,711 446,602 160,920 170,157 32,039 191,395 293,367 713,264 624,577 (731,835) (708,058) 807,455 826,647 Income tax payable 229,393 166,125 72,698 80,600 111,085 92,590 256 261 966 962 414,398 340,539 Deferred tax liabilities - - - - - 177,948 - (33,613) 144,335 Employees retirement benefit obligations 8,024 8,024 (273) (502) - - 351 8,102 7,523 Liabilities directly associated with assets ------5,497 5,497 5,497 5,497 classified as held for sale 5,724,945 4,148,768 3,969,344 3,277,634 364,446 382,279 1,114,452 1,196,144 717,743624,838 (759,985) (707,096) 11,131,946 8,896,027

Total Equity 10,304,423 12,072,752

Total Liabilities and equities 21,436,369 20,968,781

NOTES TO THE CONSOLIDATED AND

SEPARATE FINANCIAL STATEMENTS 75

4 Operating segments

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive Officer to allocate resources to the segments and to assess their performance.

The Group's reportable segments under IFRS 8 are therefore identified as follows:

• Non-life insurance; • Life insurance; • Halal Islamic Insurance; • Fin insurance Company Limited; and • Cornerstone Leasing and Investment

The other segment includes corporate expenses and other activities not related to the core business segments and which are not reportable segments due to their immateriality. Certain expenses, finance costs and taxes are not allocated across the segments.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment profit represents the profit earned by each segment without allocation of central corporate expenses, certain finance costs and tax expense. This is the measure reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segment performance.

NOTES TO THE CONSOLIDATED AND

76 SEPARATE FINANCIAL STATEMENTS

4.a The following is an analysis of the Group’s revenue and result byreportable segment in 2016 Non-life Life Takaful Cornerstone Insurance Insurance Insurance Company Fin Insurance Leasing Eliminations Group N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 Income: Gross written premiums 6,399,789 1,781,866 208,295 8,389,950 800,684 9,190,634 Changes in unearned premiums (817,482) 195,736 646 (621,100) (113,075) (734,176) Gross premium income 5,582,307 1,977,602 208,941 7,768,850 687,609 - 8,456,458 Reinsurance expenses (2,476,912) (465,381) (3,087) (2,945,380) (336,558) - (3,281,938) Net Insurance Premium ceded to reinsurers (2,476,912) (465,381) (3,087) (2,945,380) (336,558) - - (3,281,938) - - Net Premium income 3,105,395 1,512,221 205,854 4,823,470 351,050 5,174,520 Fees and commission income 360,353 87,992 411 448,756 29,069 477,825 Net underwriting income 3,465,748 1,600,213 206,265 5,272,226 380,119 - - 5,652,345

Insurance claims and benefits paid-Gross (including loss adjustment expenses) (2,455,710) (1,996,274) (75,760) (4,527,743) (45,971) - - (4,573,714) Insurance claims recoverable from reinsurance 3,407 Companies 596,768 428,496 1,028,671 174,341 - 1,203,012 Net Claims expenses (1,858,942) (1,567,778) (72,353) (3,499,072) 128,370 - - (3,370,702)

Acquisition cost (673,153) (277,306) (41,288) (991,747) (130,929) (1,122,676) Maintenance cost (438,898) (17,493) (1,344) (457,735) 4,847 (462,582) Net Underwriting cost (1,112,051) (294,799) (42,631) (1,449,482) (135,776) - (1,585,258) Underwriting results 494,755 (262,364) 91,281 323,672 372,713 - 696,385

Investment income attributable to - - Policyholders' funds 112,299 71,348 19,471 203,118 203,118 Investment income attributable to shareholders 114,964 73,041 19,933 207,938 332,416 - 540,354 fund

Fair value changes in investment property - - - - 8,000 - 8,000 Share of loss of Investment in Joint (1,285) - venture - (1,285) (1,055) (2,340)

Fair value changes in financial assets- FVTPL (1,230,985) (1,146,495) (13,431) (2,390,911) (2,390,911) Exchange gain (note 30e) 2,008,718 870,304 9,859 2,888,881 54,576 2,943,457 Other operating income (note 30e) 98,247 37,498 - 135,745 76,343 5,023 217,111 Profit/(loss) from investment contract - (16,019) - (16,019) - - (16,019)

Allowance for impairment on receivables - (82,666) - 47,548 - - (82,666) (35,118) Management expenses (2,607,258) (80,240) (83,775) (2,771,273) (613,358) (89,519) 65,482 (3,408,668) (1,010,545) (535,593) 43,338 (1,502,800) 230,691 (36,949) 64,427 (1,244,331) Finance charges (9,321) (4,092) - (13,413) (6,613) (3) - (20,029)

Segment profit or loss (1,019,866) (5) 43,338 (1,516,213) 224,074 (36,953) 66,132 (1,264,660)

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 77

4.b The following is an analysis of the Group's revenue and result by reportable segment in 2015

Non life Life Takaful Cornerstone Company Eliminations Group Insurance Insurance Insurance Takaful Leasing

General Life N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 - - Income: - Gross written premiums 4,785,770 2,426,166 100,035 19,662 7,331,633 7,331,633 Changes in unearned premiums 92,108 (289,719) (14,390) - (212,001) - (212,001) Premium income 4,877,878 2,136,447 85,645 19,662 7,119,632 - 7,119,632 Reinsurance expenses (1,679,587) (427,076) (3,514) - (2,110,177) - (2,110,177) Net Insurance Premium ceded to reinsurers (1,679,587) (427,076) (3,514) - (2,110,177) - - (2,110,177)

Net Premium income 3,198,291 1,709,371 82,131 19,662 5,009,455 --- - 5,009,455

- - Fees and commission income 220,721 85,528 879 307,128 307,128 Net Income 3,419,011 1,794,900 83,010 19,662 5,316,583 - - 5,316,583 - Insurance claims and benefits paid-Gross - (2,844,291) (including loss adjustment expenses) (1,617,181) (1,188,052) (39,058) (2,844,291) - - Insurance claims recoverable from reinsurance - - 647,865 647,865 Companies 365,943 281,922 - -

Net Claims expenses (1,251,238) (906,129) (39,058) - (2,196,426) - - (2,196,426)

Acquisition cost (669,014) (412,082) (14,075)--(13,789) (1,108,961) - - (1,473,995)(1,108,961)

Maintenance cost (286,138) (78,896) (365,033) - - (365,033)

Net underwriting expenses (955,152) (490,978) (14,075) (13,789) (1,473,995) Underwriting results 1,212,621 397,793 29,876 5,873 1,646,161 - - 1,646,161 Investment income attributable to 220,903 152,981 10,032 23,572 407,488 - 407,488 Policyholders' fund

Investment income attributable to shareholders - 414,365 355,660 2,997 7,041 780,062 -- - 780,062 fund - - -

Fair value changes in investment property 25,792 38,688 - - 64,480 - - 64,480

Fair value changes in financial assets-FVTPL (318,975) (335,278) (2,013) (656,266) - - (656,266)

Exchange gain 174,051 148,701 -- 322,752 - 322,752

Other operating income 98,367 1,827 -- 100,194 9,713- 109,907

Profit/(loss) from investment contract - 23,761 -- 23,761 23,761

Allowance for impairment on receivables (290,773) (405,084) -- (695,857) (24,356) 409,035 (311,178)

Management expenses (1,497,325) (749,826) (37,203) (30,439) (2,314,792) (75,699) 45,734 (2,344,757)

39,027 (370,776) 3,689 6,047 (322,014) (90,342) 454,769 42,410 - - Finance charges (9,018) (1,105) - (10,132) (22,143) - (32,266)

(9,018) (1,105) - - (10,132) (22,143) - (32,266)

30,009 (371,881) 3,689 6,047 (332,137) (112,485) 454,769 10,144 - - Gain on bargain purchase - - - - - 1,832,910 1,832,910

Segment profit or loss before taxation 30,009 (371,881) 3,689--6,047 (332,137)

Taxation (45,937) (157,437) (203,374) (8,926) - (212,300)

Segment profit or loss after tax (15,928) (529,318) 3,689 6,047 (535,511) (121,411) 454,769 1,630,754

NOTES TOCONTENT THEOF CONSOLIDATEDTABLE AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

4.c Revenue from major products and services

The Group’s revenue from major products and services is disclosed in the segment revenue tables.

4.d Geographical information

The Group’s revenue and information about its segment net assets by geographical location are as follows:

Revenue Net assets 2016 2015 2016 2015 N'000 N'000 N'000 N'000

Within Nigeria 8,389,950 7,331,633 8,349,754 10,142,477 Outside Nigeria - - - - 8,389,950 7,331,633 8,349,754 10,142,477

4.e Information about major customers

The Group does not derive revenue from an individual policyholder or intermediary that represents 10% or more of the groups total revenue.

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000

5 Cash and cash equivalents

Cash 1,473 2,313 779 706 Short-term deposits (including demand and time deposits) 3,091,607 6,295,523 2,556,374 3,687,072

Cash and cash equivalents (as per statement of financial statements and cash flows) 3,093,080 6,297,836 2,557,153 3,687,778

Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash, this includes current account with banks, short term placement with banks and cash in hand.

Short–term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group. All deposits are subject to an average variable interest rate of 14% (2015: 10.81%). The carrying amounts disclosed above reasonably approximate fair value at the reporting date.

78 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

6 Financial assets Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000

Available for Sale (AFS) ( note 6.a.1) 3,311,472 2,402,076 2,368,590 1,459,122 Fair value through profit or loss (FVTPL) ( note 3,510,998 2,836,108 3,510,998 6.a.2) 2,836,108 1,835,677 2,165,560 1,557,484 Loans & Receivables ( note 6.a.3) 3,500,444

9,648,024 7,748,751 7,370,258 6,527,603

6.a Classification – carrying amount

6.a.1 Available-for-sale investments (AFS)

Carried at fair value(listed security) 805,986 554,780 672,445 467,246 Fair value through other comprehensive income (unlisted security) (Note 6a(ii)) 931,246 903,291 121,904 73,602

Carried at cost (unlisted securities) (Note 6a (i)) 1,574,240 944,005 1,574,240 918,274 3,311,472 2,402,076 2,368,590 1,459,122

6.a.2 Fair value through profit or loss -Unlisted securities (note 6a(ii)) 2,836,108 3,510,998 2,836,108 3,510,998 6.a.3 Loans and receivables investments carried at amortised cost 6a(iii) 3,500,444 1,835,677 2,165,560 1,557,484

9,648,024 7,748,751 7,370,257 6,527,604

6a(i) Details of unlisted securities carried at cost include: CAPIC(see note i below) 1,413,836 779,020 1,413,836 779,020

Nigeria Oil & Gas Pool (NAL) 5,258 30,989 5,258 5,258

Nigeria Liability Insurance Pool 6,646 6,646 6,646 6,646 Energy & Allied Insurance Pool 61,000 39,850 61,000 39,850 OAK Pension Limited 50,000 50,000 50,000 50,000 Sterling Assurance 37,500 37,500 37,500 37,500

1,574,240 944,005 1,574,240 918,274

The above financial assets have been assessed for impairment and there was no objective evidence that the asset is impaired.

79 NOTES TOCONTENT THEOF CONSOLIDATEDTABLE AND SEPARATED FINANCIAL STATEMENTS 2016 Annual Report & Accounts

6a(ii) Details of unlisted securities includes: Fair value through profit or loss

MTN Nigeria Communication 2,836,108 3,510,998 2,836,108 3,510,998

Fair value through other comprehensive income: WAMCO Nigeria Limited 56,400 44,000 56,400 44,000 Food concepts Limited 1,260 1,540 1,260 1,540 ARM Ethical Fund-TAKAFUL 22,707 21,848 22,707 21,848 Lotus Halal Equities ETF 6,695 6,214 6,695 6,214 MTN Nigeria Communication 744,810 819,749 - - Jaiz Bank 10,851 9,941 - - Lotus Halal Fixed Income Fund 34,842 - 34,842 -

877,565 903,291 121,904 73,602

6a(iii) Details of loan and receivables includes: Bonds 3,271,018 1,665,415 1,936,489 1,395,910 Loans to policyholder 229,071 161,574 229,071 161,574 Advances and LPO financing 427,335 483,286 - -

3,927,424 2,310,275 2,165,560 1,557,484 Impairment (note 6.1) (426,980) (474,598) - -

3,500,444 1,835,677 2,165,560 1,557,484

6.1 Impairment provision

At 1 January 474,598 467,999 - -

Addition during the year(note 31) (47,618) 6,599 - -

At 31 December 426,980 474,598 - -

80 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 81

Notes to the Consolidated and Separate Financial Statements

6.2.1 Movement in financial assets (Group) – 2016

6.2.1 Movement in financial assets (Group) - 2016 Available For Sale (AFS)

Carried at Fair value Loans and Fair Fair value cost through profit Total receivables value(Listed (Unlisted (unlisted or loss securities securities) securities) (FVTPL) N'000 N'000 N'000 N'000 N'000 N'000

Balance as at 1 January 554,780 903,291 944,005 3,510,998 1,835,677 7,748,751

Addition during the year 208,182 34,500 144,440 - 1,366,343 1,753,465

Disposal/Repayment during the year - - (25,731) - (170,969) (196,700)

Accrued interest - - - - 55,211 55,211

Fair value Gain/(loss) - - - (2,390,911) (2,390,911) Exchange gains/(loss) recognised in income statement - - 511,526 1,716,021 366,564 2,594,111 Fair value changes in Other comprehensive income 43,024 (459,179) - - (416,155) Exchange gains/(loss) recognised in other comprehensive income - 452,634 - - 452,634

Impairment no longer required - - - - 47,618 47,618

Balance as at 31, December 805,986 931,246 1,574,240 2,836,108 3,500,444 9,648,024

82 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

6.2.1a Movement in financial assets (Group) -2015 Available For Sale (AFS)

Fair value Loans and Fair value Fair value Carried at through Total receivables (Listed (Unlisted cost (unlisted profit or loss securities securities) securities) (FVTPL) N'000 N'000 N'000 N'000 N'000 N'000

Balance as at 1 January 528,999 194,275 764,837 3,895,458 1,185,595 6,569,164

Addition during the year 115,389 6,214 125,324 - 354,873 601,800

Disposal/Repayment during the year (25,926) (21,294) - - (8,684) (55,904)

Accrued interest - - - 11,555 11,555

Fair value Gain/(loss) - 365 - - - 365 Fair value changes in comprehensive income - - - (656,266) - (656,266)

Fair value changes in OCI (151,216) (105,957) - - - (257,173)

Exchange gains/(loss) - - 28,113 271,806 22,833 322,752

Arising from Acquisition 87,534 829,688 25,731 - 269,505 1,212,458

Balance as at 31, December 554,780 903,291 944,005 3,510,998 1,835,677 7,748,751

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 83

Movement in financial assets 6.2.2 (Company) - 2016 Available For Sale (AFS)

Fair value Fair Fair Carried at through value(Listed value(Unlisted cost (unlisted profit or loss Loans and securities securities) securities) (FVTPL) receivables Total N'000 N'000 N'000 N'000 N'000 N'000 At 1 January 467,246 73,602 918,274 3,510,998 1,557,484 6,527,604 Addition during the year 162,175 34,501 144,441 - 323,390 664,507 Redemption - - - - (115,017) (115,017) Accrued interest - - - - 54,421 54,420 Fair value Gain/(loss) - - - (2,390,911) - (2,390,911) Fair value changes in other comprehensive income (OCI) 43,024 13,801 - - - 56,825

Exchange gains/(loss) - - 511,525 1,716,021 345,282 2,572,829

At 31 December 672,445 121,905 1,574,240 2,836,108 2,165,560 7,370,257

Movement in financial assets 6.2.2a (Company) -2015 Available For Sale (AFS)

Fair value Fair Fair Carried at through value(Listed value(Unliste cost (unlisted profit or loss Loans and securities d securities) securities) (FVTPL) receivables Total N'000 N'000 N'000 N'000 N'000 N'000 At 1 January 528,999 194,275 764,837 3,891,513 1,119,811 6,499,435 Addition during the year 115,389 6,214 125,324 3,945 411,969 662,841 Redemption (25,926) (21,294) - - (8,684) (55,904) Accrued interest - - - 11,555 11,555 Fair value Gain/(loss) - 364 - - - 364 Fair value changes in comprehensive income - - (656,266) - (656,266) Fair value changes in OCI (151,216) (105,957) - - (257,173) Exchange gains/(loss) 28,113 271,806 22,833 322,752 At 31 December 467,246 73,602 918,274 3,510,998 1,557,484 6,527,604

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 7 Trade Receivable Due from brokers 1,441,078 1,367,347 1,248,978 1,175,754 Allowance for impairment (1,367,347) (1,367,347) (1,175,754) (1,175,754) 73,731 - 73,224 -

All insurance receivables are designated as trade receivables and their carrying value approximate value at the statement of financial position date. Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 8 Receivables and prepayments

Due from Subsidiaries ( note 8.1a) 82,666 - 281,861 249,661 Other receivables** 88,067 115,563 35,656 49,307 Receivables from Meristem 4,589 4,589 4,589 4,589 Prepaid insurance 25,120 18,243 25,120 18,243 Stock of stationery 5,496 5,496 5,496 5,496 Investment in MV Exchange 10,000 10,000 10,000 10,000 Rent prepayment 107,046 105,892 83,551 105,892 Other prepaid balances 107,400 73,036 90,856 72,600

430,384 332,819 537,129 515,788 Allowance for impairment (note 8.1) (202,091) (119,425) (145,820) (63,154)

228,293 213,394 391,309 452,634

Within one year 304,394 200,686 473,975 452,634 More than one year 125,990 132,133 63,154 63,154

430,384 332,819 537,129 515,788

** Other receivable is made up of receivable from Arian capital of 42m, all of which have been fully provided for. The carrying amount is a reasonable approximation of fair value.

8.1 Impairment provision

At 1 January 119,425 93,629 63,154 37,358 Addition during the year (note 30, 8.1a) 82,666 25,796 82,666 25,796 At 31 December 202,091 119,425 145,820 63,154

8.1a Due from Subsidiaries represents the receivables from companies within the group as at 31 December 2016. The balance should be zero on consolidation. Additional impairment provision of N82million made in the year represents impairment on unreconciled intercompany balances (i.e. due from subsidiaries) as at 31 December 2016.

84 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Group Company 2016 2015 2016 2015 8b Other Assets N'000 N'000 N'000 N'000

Receivable from Cappa & D'Alberto (note13) 551,166 551,166 551,166 551,166

Impairment provision (note 8c) (261,028) (261,028) (261,028) (261,028)

Cash receipt in year 2016 (290,138) - (290,138) -

- 290,138 - 290,138

8c Impairment provision

At 1 January 261,028 - 261,028 -

Addition during the year (note 30) - 261,028 - 261,028

At 31 December 261,028 261,028 261,028 261,028

Reinsurance assets 9

Reinsurer share of outstanding claims-General 675,915 614,384 481,204 570,574 Reinsurer share of outstanding claims-Life 229,771 250,351 229,951 250,351 Reinsurer share of Incurred but not reported- General 141,412 25,070 141,412 25,070 Prepaid reinsurance-General 1,263,662 424,515 1,190,973 354,858 Reinsurer share of Incurred but not reported- Life 181,287 200,542 181,287 200,542 Reinsurance share of claims paid 335,835 431,898 335,655 431,898

3,075,363 1,946,760 2,560,482 1,833,293 Allowance for impairment (reinsurance receivable) note 9.1 (335,655) (335,655) (335,655) (335,655) 2,492,227 1,611,105 2,224,827 1,497,638

Within one year 2,492,227 1,611,105 2,224,827 1,497,638

More than one year - - - -

2,492,227 1,611,105 2,224,827 1,497,638

Impairment provision

At 1 January 335,655 335,655 335,655 335,655

Addition during the year (note 30, 8.1a) - - - -

At 31 December 335,655 335,655 335,655 335,655

*Reinsurance assets are valued after an allowance for their recoverability and the carrying amount is a reasonable approximation of fair value. *Prepaid reinsurance represents deferred portion of reinsurance cost (reinsurance portion of unearned premium).

85 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Deferred Acquisition Costs (DAC) 10 Deferred Acquisition Costs Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000

At 1 January 219,308 227,131 197,082 227,131 Acquisition cost paid during the year (note 29(a)) 1,161,469 1,079,093 1,001,294 1,078,912

Total acquisition cost 1,380,777 1,306,224 1,198,376 1,306,043

Acquisition cost amortized (charged to statement of profit or loss) note 29 (a) (1,122,676) (1,108,961) (991,747) (1,108,961) Arising from acquisition - 22,045 - - At 31 December 258,101 219,308 206,629 197,082

Deferred Acquisition Cost

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

Group Company 2016 2015 2016 2015 Deferred acquisition cost-Fire 57,443 47,526 51,875 39,824 Deferred acquisition cost-Motor vehicle 87,345 76,305 74,112 69,039 Deferred acquisition cost-General Accident, Bond & Engineering 71,086 38,818 55,518 34,902 Deferred acquisition cost-Aviation & Marine 27,595 22,680 22,325 20,818 Deferred acquisition cost-Oil & Gas 14,632 33,979 2,799 32,499 258,101 219,308 206,629 197,082

11 Finance lease receivables - Group

The Group entered into finance lease arrangements for certain of its equipment and motor vehicles. All leases are denominated in Naira. The average term of finance leases entered into is 3 years.

Amounts receivable under finance leases Present Value of Minimum Lease Payments 2016 2015 N'000 N'000 Not later than one year Later than one year and not later than 5 years 223,595 229,493 Later than 5 years - - 223,595 229,493 Less: unearned finance income - (5,898) 223,595 223,595 Allowance for uncollectible lease payments - Specific allowance (223,595) (223,525) - 70 11.1 Impairment Allowance At 1 January 223,525 205,768 Addition during the year (note 31) 70 17,757 At 31 December 223,595 223,525

86 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

12 Investment in Joint venture

12.1 CAP Phoenix Cornerstone Limited (CPCL) is a Special Purpose Entity (SPE) between CAP Phoenix and Cornerstone Insurance Plc. The entity was created as a joint venture to manage a real estate project which involves the construction of office spaces from which the Group plans to earn rental income. Cornerstone Plc also plans to relocate its Head Office to some floors in this building once it is completed.

As at 31 December 2016, Cornerstone Insurance Plc and CAP Phoenix Limited owned 51% and 49% respectively of the issued share capital of the Company. Cornerstone Insurance sold 23% of her holding to Fin Insurance Limited, which is approximately 98% owned by Cornerstone Insurance Plc. This arrangement effectively makes Cornerstone to have approximately 51% ownership of CPCL at the group level with a significant influence over the activities of the entity.

This transaction was accounted for using the equity method of accounting in accordance with the provision of IFRS 11 (Joint arrangements), paragraph 24 which states that “a joint venturer recognises its interest in a joint venture as an investment and shall account for that investment using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures unless the entity is exempted from applying the equity method as specified in that standard” .

The carrying amount of Investment in Joint venture are arrived at as follows:

Group Company 2016 2015 2016 2015

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

Cash paid for equity interest (note 12.2) 1,080,231 - 372,901 - Property transferred for equity interest (note 12.3) 816,994 - 816,994 -

1,897,225 - 1,189,894 - Share of loss of the joint venture (12.4) (2,340) - (1,285) - Net carrying cost of the Investment in Joint venture 1,894,885 - 1,188,609 -

12.2 The cash paid for equity interest represents the group investments in Caphoenix Cornerstone Limited in terms of cash contribution for the equity holdings in the entity. 12.3 The Investment property of Cornerstone Insurance Limited located at plot 2 block 2, Chief Yesufu Abiodun Way, Oniru Chieftaincy Estate, Victoria Island Annex, Lagos was transferred to Caphoenix Cornerstone Limited as an equity holdings contributions in the Investment. This was transferred at carrying amount of the investment property as at year ended 31 December 2015.

Investment in Caphoenix has been accounted for using the equity method of accounting as explained in note 12.1

12.4 The summarised income statements of the Joint venture as at 31 December 2016 are as follows: N'000 Revenue -

Loss from continuing operation 4,589

The loss from continuing operation of the joint venture was shared by the participating companies as follows: %Shareholding N'000 Fin Insurance Limited 23 1,055 Cornerstone Insurance Plc 28 1,285 Cornerstone group 51 2,340 CAP Phoenix Limited 49 2,249 Loss from continuing operation 100 4,589

87 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Company 2016 2015 N'000 N'000 13 Investment in subsidiaries

Cornerstone Leasing & Investment limited 59,879 59,879 Fin Insurance Company Limited 2,954,748 2,954,748 3,014,627 3,014,627 Impairment (59,879) (59,879) 2,954,748 2,954,748

13.1 Investment in Cornerstone Leasing & Investment Limited have been impaired in the prior years and no recovery was made on the impaired balance in the current year.

13.2 Principal subsidiary undertakings The Group is controlled by Cornerstone Insurance Plc "the Parent" incorporated in Nigeria. The controlling interests of Cornerstone Insurance Plc in the Group entities is disclosed in the table below:

% of equity Country of capital Company name Nature of business Origin controlled Cornerstone Leasing & Investment Limited Leasing Services Nigeria 100.00% Non-Life Insurance Fin Insurance Company Limited business Nigeria 96.68%

The remaining interests in the group are held by minority shareholders.

13.3 Other Information on subsidiaries

i. Cornerstone Leasing and Investment Limited commenced operation on 1 July, 2004 as part of the ultimate parent- company's strategic plan to provide world class leasing services. The company was formerly a subsidiary of Cornerstone Asset Management Limited who later in 2009 transferred its shareholding in the Company to the ultimate parent, Cornerstone Insurance Plc. Cornerstone Leasing and Investment provides convenient asset acquisition options to both corporate organisations and individuals

ii. FIN Insurance Company Limited is a private limited liability company incorporated in Nigeria and its primary activity is the provision of general insurance business. Cornerstone Insurance Plc acquired 96.68% equity interest in FIN Insurance Company Limited. The business acquisition is expected to increase the market share of the Non-Life Insurance business of the entity. At the date of acquisition, the fair value of the total consideration transferred was N2.94 billion which represents the fair value of the 5.9 billion shares of Cornerstone Insurance Plc that was issued to the seller, CAPE III.

88 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

The table below summarises the information of the Group's subsidiary that has material Non-Controlling Interest (NCI) before any intra-group eliminations.

FIN Insurance Company Limited 2015

N'000 NCI Percentage 3.32% Cash and cash equivalents 2,610,607 Financial assets 1,172,694 Held -To Maturity 43,229 Reinsurance assets 113,466 Deferred acquisition cost 22,226 Other receivables and prepayments 3,956 Investment properties 396,000 Intangible assets 3,797 Property and equipment 1,388,090 Deferred tax asset 40,853 Statutory deposits 300,000 Total assets 6,094,918 Total liabilities 1,159,572

Carrying amount of NCI ( see note 30c) 164,409

13.4 Significant restrictions The group does not have significant restrictions on its ability to access or use its assets and settle its liabilities other than those resulting from the regulatory frameworks which the insurance business operates. The regulatory frameworks require all insurance companies to maintain certain levels of regulatory capital and liquid assets and comply with other ratios such as the solvency margin.

13.5 Discontinued operation In the prior year, management announced the plan to discontinue the operations of Cornerstone Asset Management Limited. The decision is consistent with the Group's intention to focus its activities on rendering insurance business. The Group is actively perfecting the process of winding up of the entity and is committed to the disposal of the Company. This is expected to be completed in year 2017.

As described above, the Group is currently concluding the winding up of Cornerstone Asset Management Limited and the directors of the company expects that the fair value of assets less costs to wind up will be higher than the aggregate carrying amount of the related assets and liabilities. Therefore, no impairment loss was recognised on the assets and liabilities carried as held for sale as at 31 December 2016. The major classes of assets and liabilities of Cornerstone Asset Management Limited at end of the reporting period are as follows:

N'000

Assets classified as held for sales 11,706 Cash and cash equivalents Financial Assets 29,014 Loans and receivables 26,652 Property and equipment 1 Deferred tax assets 64,658 132,031

89 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Liabilities of Cornerstone Asset Management associated with assets classified as held for sales

Other liabilities 4,531 Income tax payable 966 5,497

There was no profit and cashflow for the year as the activities of Cornerstone Asset Management Limited was closed in January 2015.

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 14 Investment Properties

At 1 January 1,302,994 1,303,680 816,994 1,303,680 Transfer to Joint venture (note 12) (816,994) - (816,994) - Reclassification(see note 8b) - (551,166) - (551,166) Fair value Gains/(Losses) 8,000 64,480 - 64,480 Arising on acquisition - 486,000 - -

At 31 December 494,000 1,302,994 - 816,994

90 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 91

15 Property, Plant and Equipment

15a Property, Plant and Equipment- Group

Leasehold Motor Furniture & Property Equipment Total

Improvement Vehicles Fittings

Cost: N'000 N'000 N'000 N'000 N'000 N'000 At 1 January 2016 1,933,746 1,275 560,535 474,433 157,644 3,127,633

Additions during the year 4,663 - 244,282 55,055 15,657 319,657

Revaluation gain** 85,127 - - - - 85,127

Disposals during the year - (1,275) (65,381) (10,867) (412) (77,935)

At 31 December 2016 2,023,536 - 739,436 518,621 172,889 3,454,482

At 1 January 2016 257,202 1,275 334,871 352,726 111,029 1,057,103

Charge for the year 34,611 - 123,132 63,482 16,245 237,470

Disposals - (1,275) (61,936) (12,486) (322) (76,019)

At 31 December 2016 291,813 - 396,067 403,722 126,952 1,218,554

Carrying Amount:

At 31 December 2016 1,731,723 - 343,369 114,899 45,937 2,235,928

At 31 December 2015 1,676,544 - 225,664 121,707 46,615 2,070,530

**Land and building are carried at a revalued amount by FIN Insurance Company Limited, a subsidiary of Cornerstone Insurance Plc. Land and building for the subsidiary was independently valued by Orji and Partners in 2016 to ascertain the open market value of the Land and building. The open market value of land and building as at 31 December 2016 was N1,361,926,676 (2015:N1,276,800,000) and a revaluation gain of N85,126,676.33 was recognised as the excess of the revalued amount over the carrying value of Land and building.

92 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Notes to the Consolidated and Separate Financial Statements

15a(i) Property, Plant and Equipment- Group : 2015

Leasehold Motor Furniture & Property Equipment Total Improvement Vehicles Fittings

Cost: N'000 N'000 N'000 N'000 N'000 N'000

At 1 January 2015 488,258 1,275 396,458 296,841 98,713 1,281,545

Additions during the year 6,363 - 122,470 88,627 26,225 243,685

Disposals during the year - - (70,148) (577) (28) (70,753)

Arising from Acquisition 1,439,125 - 111,755 89,542 32,734 1,673,156

At 31 December 2015 1,933,746 1,275 560,535 474,433 157,644 3,127,633

At 1 January 2015 85,204 1,275 220,843 229,951 68,458 605,731

Charge for the year 10,607 86,767 37,358 11,436 146,168 Disposals (68,308) (353) (27) (68,688) Arising from Acquisition 161,391 95,569 85,770 31,162 373,892 At 31 December 2015 257,202 1,275 334,871 352,726 111,029 1,057,103

Carrying Amount: As At December 31 2015 1,676,544 - 225,664 121,707 46,615 2,070,530 As At December 31 2014 403,054 - 175,615 66,890 30,255 675,813

(i) The Group had no capital commitments as at the balance sheet date (2015: Nil). (ii) No impairment assessment was performed during the year as there was no indication of impairment on any of the assets in use by the group. NOTES TO THE CONSOLIDATED AND

SEPARATE FINANCIAL STATEMENTS 93

15 b Property, plant and equipment- Company

Leasehold Motor Furniture & 2016 Property Improvement Vehicles Equipment Fittings Total Cost: N'000 N'000 N'000 N'000 N'000 N'000 At 1 January 2016 494,621 1,275 443,854 383,972 124,883 1,448,607 Additions during the year 180,722 38,767 6,417 225,906 Disposals during the year (1,275) (65,381) (10,867) (412) (77,935) At 31 December 2016 494,621 - 559,195 411,872 130,888 1,596,578

Accumulated Depreciation: At 1 January 2016 95,811 1,275 235,177 266,109 79,821 678,194 Charge for the year 10,538 106,412 55,825 13,674 186,449 Disposals - (1,275) (61,932) (10,618) (322) (74,147) At 31 December 2016 106,349 - 279,657 311,316 93,173 790,496

Carrying Amount: At 31 December 2016 388,272 - 279,538 100,556 37,715 806,082 At31 December 2015 398,810 208,677 117,863 45,062 770,413

15b(i) Property, plant and equipment- Company

Leasehold Motor Furniture & 2015 Property Improvement Vehicles Equipment Fittings Total Cost: N'000 N'000 N'000 N'000 N'000 N'000 At 1 January 2015 488,258 1,275 391,529 295,922 98,686 1,275,671 Additions during the year 6,363 - 122,470 88,627 26,225 243,685 Disposals during the year - - (70,145) (578) (28) (70,751) At 31 December 2015 494,621 1,275 443,854 383,971 124,883 1,448,605

Accumulated Depreciation: At 1 January 2015 85,204 1,275 218,093 229,104 68,433 602,109 Charge for the year 10,607 - 85,392 37,358 11,416 144,773 Disposals - - (68,308) (353) (27) (68,688) At 31 December 2015 95,811 1,275 235,177 266,109 79,822 678,194

Carrying Amount: As At 31 December 2015 398,810 - 208,677 117,863 45,062 770,413 As At 31 December 2014 403,054 - 173,436 66,818 30,253 673,562

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

GROUP COMPANY 2016 2015 2016 2015

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

16 Intangible assets - Group/company

Cost: At 1 January 130,744 93,429 111,362 93,429 Additions 65,622 17,933 57,141 17,933 Arising from acquisition - 19,382 - - At 31 December 2016 196,366 130,744 168,503 111,362

Amortisation: At 1 January 90,703 62,402 75,117 62,402 Charge for the year 19,594 12,715 16,766 12,715 Arising from acquisition - 15,586 - - At 31 December 110,297 90,703 91,883 75,117

Carrying Amount: At 31 December 86,069 40,041 76,620 36,245

At 31 December 86,069 40,041 76,620 36,245

17 Statutory Deposits

Deposits with CBN 800,000 800,000 500,000 500,000

Analysis: Non-Life Business 600,000 300,000 300,000 300,000 Life Business 200,000 200,000 200,000 200,000 Arising from acquisition - 300,000 - - 800,000 800,000 500,000 500,000

Statutory deposits represent amounts deposited with the Central Bank of Nigeria (CBN) in accordance with section 9(1) and section 10(3) of Insurance Act 2003. The cash amount held is considered to be a restricted cash as the management does not have access to the balances in its day to day activities. Statutory deposits are measured at cost and interest is earned on t he deposits annually.

18 Investment Contract Liabilities Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Financial guarantee contracts 2,353,766 1,712,048 2,353,766 1,712,048

At 1 January 1,712,048 1,322,472 1,712,048 1,322,472 Contribution 1,314,895 905,910 1,314,895 905,910 Withdrawals (713,413) (531,435) (713,413) (531,435) Guaranteed interest 40,236 15,101 40,236 15,101 At 31 December 2,353,766 1,712,048 2,353,766 1,712,048

Current 2,353,766 1,712,048 2,353,766 1,712,048 Non-current - - - -

94 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

2016 2015 N'000 N'000 18.1 Income Statements for Deposit Administration Interest income (note 30c) 48,056 72,362

Expenses Investment contract cost (note 29c) (23,839) (33,500)

Guaranteed interest ( note 29d) (40,236) (15,101)

Profit on Deposit Administration (16,019) 23,761

19 Insurance contract liabilities

19.a (i) Carrying amount-Group

Gross Reinsurers’ asset Net

2016 2015 2016 2015 2016 2015 N'000 N'000 N'000 N'000 N'000 N'000 Life: Participating life - Life Fund 852,187 1,023,373 181,286 200,542 670,901 822,831 - Claims Outstanding 757,673 523,078 335,196 250,351 422,477 272,727 Annuity Fund

- Life Fund Annuity 200,339 29,711 - - 200,339 29,711 Total life 1,810,199 1,576,162 516,482 450,893 1,293,717 1,125,269

Non-life:

Outstanding claims 2,097,130 1,466,959 652,333 570,574 1,444,797 896,385

IBNR 402,930 315,594 164,995 25,070 237,935 290,524 IBNR-Takaful 17,582 12,437 - - 17,582 12,437 Arising from Acquisition- Outstanding claims - 469,767 - - - Arising from Acquisition-IBNR - 94,718 - 43,810 - 50,908 2,517,642 2,359,475 817,328 639,454 1,700,314 1,250,254

Unearned premiums 2,572,591 1,449,127 1,190,973 354,858 1,381,618 1,094,269 Unexpired risks-Takaful 41,440 42,086 - - 41,440 42,086 Arising from consolidation - 192,907 - 69,656 - 123,251 2,614,031 1,684,120 1,190,973 424,514 1,423,058 1,259,606

Total non -life 5,131,673 4,043,595 2,008,301 1,063,968 3,123,372 2,509,860

Total li abilities 6,941,872 5,619,757 2,524,783 1,514,861 4,417,089 3,635,129

Within one year 6,941,872 5,619,757 2,524,783 1,514,861 4,417,089 3,635,129

More than one year ------

6,941,872 5,619,757 2,524,783 1,514,861 4,417,089 3,635,129

95 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Gross Reinsurers’ asset Net 19.a (ii) Insurance contract liabilities Carrying amount-Company 2016 2015 2016 2015 2016 2015 Life: N'000 N'000 N'000 N'000 N'000 N'000 Participating life - Life Fund 852,187 1,023,373 181,286 200,542 670,901 822,831 - Claims Outstanding 757,673 523,078 335,196 250,351 422,478 272,727

- Life Fund Annuity 200,339 29,711 - - 200,339 29,711 Total life 1,810,199 1,576,162 516,482 450,893 1,293,718 1,125,269

Non-life:

Outstanding claims 1,824,644 1,466,959 481,205 570,574 1,343,439 896,385

IBNR 347,372 315,594 141,412 25,070 205,960 290,524

IBNR Takaful 17,582 12,437 - - - 12,437

2,189,598 1,794,990 622,617 595,644 1,549,399 1,186,909

Unearned premiums 2,266,609 1,449,127 1,190,973 354,858 1,075,636 1,094,269 Unexpired risks-Takaful 41,440 42,086 - - 41,440 42,086 2,308,049 1,491,213 1,190,973 354,858 1,117,076 1,136,355

Total non -life 4,497,647 3,286,203 1,813,590 950,502 2,666,475 2,323,264

Total liabilities 6,307,846 4,862,365 2,330,072 1,401,395 3,960,193 3,448,533

Within one year 6,039,725 4,594,244 2,124,672 1,195,995 3,897,472 3,385,812 More than one year 268,121 268,121 205,400 205,400 62,721 62,721

6,307,846 4,862,365 2,330,072 1,401,395 3,960,193 3,448,533

96

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

19.b (i) Group General Life Annuity Takaful Total Movement in Insurance contract liabilities N'000 N'000 N'000 N'000 N'000

Outstanding claims At 1 January 1,936,726 523,078 - - 2,459,804 Changes during the year (i) 160,405 234,595 - - 395,000 At 31 December 2,097,131 757,673 - - 2,854,804

Incurred But Not Reported ( IBNR) At 1 January 410,312 - - 12,437 422,749 Changes during the year (ii) (7,382) - 5,145 (2,237) - At 31 December 402,930 - 17,582 420,512

Total changes in outstanding claims & IBNR (i+ ii) ( see note 28) 153,023 234,595 - 5,145 392,763

Unearned Premium

At 1 January 1,642,034 - - 42,086 1,684,120

Changes during the year ( i) 930,557 - - (646) 929,911

At 31 December 2,572,591 41,440 2,614,031

Life fund & Annuity

At 1 January - 1,023,373 29,711 - 1,053,084

Addition during the year - - 215,917 - 215,917

Payment during the year - - (20,739) - (20,739)

Changes during the year (ii) - (171,186) (24,550) - (195,736)

At 31 December - 852,187 200,339 - 1,052,526 Change in unearned premiums (i) + (ii) (see note 26.1a). 930,557 (171,186) (24,550) (646) 734,176

Total insurance contract liabilities (note 19.a(i)) 5,072,652 1,609,860 200,339 59,022 6,941,872

97 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

19.b (ii) Company Movement in Insurance contract liabilities General Life Annuity Takaful Total N'000 N'000 N'000 N'000 N'000 Outstanding claims

At 1 January 1,466,959 523,078 - - 1,990,037 Changes during the year 357,685 234,595 - - 592,280

At 31 December 1,824,644 757,673 - - 2,582,317

Incurred But Not Reported ( IBNR)

At 1 January 315,594 - 12,437 328,031

Changes during the year 31,778 - 5,145 36,923

At 31 December 347,372 - 17,582 364,954 Total changes in out standing claims & IBNR ( note 28) 389,463 234,595 - 5,145 629,203

Unearned Premium At 1 January 1,449,127 - - 42,086 1,491,213 Changes during the year ( i) 817,482 - - (646) 816,836 At 31 December 2,266,609 - - 41,440 2,308,049

Life fund & Annuity

At 1 January 1,023,373 29,711 1,053,084 - - Addition during the year - - 215,917 - 215,917

Payment during the year - - (20,739) - (20,739)

Changes during the year (ii) - (171,186) (24,550) - (195,736)

At 31 December - 852,187 200,339 - 1,052,526 Change in unearned premiums (i) + (ii) (see note 26). 817,482 852,187 (24,550) (646) 621,100

Insurance contract liabilities (note 19.a(ii)) 4,438,625 1,609,860 200,338 59,022 6,307,846

98 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Aging analysis

Aging analysis of the outstanding claims, including incurred but not reported (IBNR) for the non- life business is as follows

0-90 91-180 181-360 361 Total Outstanding claims per claimant days days days days +

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

1-250,000 9,240 14,521 18,741 30,284 72,786

250,001-500,000 55,142 24,578 14,587 34,874 129,181

500,001-1,500,000 57,415 45,876 32,371 84,851 220,513

1,500,001-2,500,000 98,527 59,743 87,542 42,157 287,969

2,500,001-5000,000 102,741 95,791 105,871 204,541 508,944

5000,001-Above 115,879 105,327 201,874 547,125 970,205

438,944 345,836 460,986 943,832 2,189,598

Aging analysis of the outstanding claims for the life business is as follows:

0-90 91-80 181-360 361 Outstanding claims per claimant days days days days + Total

1-250,000 4,215 3,251 2,574 1,874 11,914 250,001-500,000 10,734 12,549 8,742 6,852 38,877 500,001-1,500,000 8,525 15,874 9,742 7,421 41,562 1,500,001-2,500,000 35,874 14,852 18,421 11,874 81,021 2,500,001-5,000,000 65,432 78,257 45,127 31,274 220,090

5,000,001-Above 74,854 108,745 105,748 74,862 364,209

199,634 233,528 190,354 134,157 757,673

99 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

19.c Asset Hypothecation NON-LIFE LIFE Takaful POLICY POLICY Policy Share HOLDERS ANNUITY HOLDER Holders holders TOTAL N'000 N'000 N'000 N'000 N'000

Cash and cash Equivalents 741,577 50,500 1,269,592 368,126 127,358 2,557,153

Fair value through profit and loss 950,670 - 1,846,059 39,380 - 2,836,109 Available for sales at (Fair value)- unlisted - - - - 121,904 121,904 Available for sales at cost -unlisted 445,621 20,034 365,820 - 742,765 1,574,240 Available for sales at fair value - listed - 139,803 - 14,170 518,471 672,444 Held -to-maturity investment carried at amortised cost(HTM) - - - - 2,165,560 2,165,560 Trade receivable 73,224 - - - - 73,224 Other receivable and prepayment - - - - 391,309 391,309 Reinsurance assets 2,043,541 - 181,286 - - 2,224,827 Deferred acquisition cost 206,629 206,629

Investment in Joint venture - - - - 1,188,609 1,188,609

Investment in subsidiary - - - - 2,954,748 2,954,748 Property, plant and equipment - - - - 806,082 806,082 Intangible assets - - - - 76,620 76,620 Deferred tax assets - - - - 18,790 18,790 Statutory deposits - - - - 500,000 500,000 4,461,262 210,337 3,662,757 421,676 9,612,216 18,368,248

Share INSURANCE FUNDS NON-LIFE Annuity LIFE Takaful holders TOTAL

N'000 N'000 N'000 N'000 N'000 N'000 Investment contact liabilities - - 2,048,343 305,423 - 2,353,766

Insurance contact liabilities 4,456,207 200,338 1,609,860 41,440 - 6,307,846

Shareholders and other funds - - - - 9,706,636 9,706,636

4,456,207 200,338 3,658,203 364,863 9,706,636 18,368,248

100 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Valuation Methods

The following approaches were adopted in the calculations of the premium and claim reserve.

The Basic Chain Ladder Method (BCL): The Basic Chain Ladder method forms the basis of the reserving methods explained below. Historical incremental claims paid were grouped into accident year cohorts by class of business – representing when they were paid after their accident year e.g. a year after accident year 2007 etc. These cohorts formed loss development triangles.

The incremental paid claims are accumulated to the valuation date and projected to their expected ultimate claim estimate amount using the trends observed in the historical data. The gross claim reserve was then derived from the difference between the cumulative paid claims and the estimated ultimate claim.

For the later years where the cohorts are underdeveloped or has less than expected claims, the Bornheutter Ferguson(BF) method was used to estimate the ultimate claims. The appropriate loss ratio used in estimating the BF ultimate claim was the average of fully developed historical years.

The Inflation Adjusted Chain Ladder Method (IACL): Under this method, the historical paid losses were adjusted to allow for inflation to the valuation date using the corresponding inflation index in each of the accident years.

The inflation adjusted paid claims were then treated similarly to the Basic Chain Ladder described above. The difference between the estimated ultimate values and the cumulative historical paid claims is then inflated based on future inflation assumption to the expected future payment date.

The following official inflation indices were adopted in the calculation:

Inflation Accumulated Year Index Inflation Index 2007 6.60% 193.16% 2008 15.10% 175.01% 2009 13.90% 138.93% 2010 11.80% 109.77% 2011 10.30% 87.63% 2012 12.00% 70.11% 2013 8.00% 51.88% 2014 8.30% 40.63% 2015 9.60% 29.85% 2016 18.48% 18.48% 2017+ 15.0% -

Calculations of reserves were based on these two bases; *By discounting the claims estimated to the valuation date at a discount rate of 16% p.a which at the valuation date was close to the weighted average of bonds with outstanding term of 4 years or less. *With no discounting.

Expected Loss Ratio: This method is simple and gives an approximate estimate. The Group adopted this method as a check on its ultimate projections and also where the volume of data available is too small to be credible when using a statistical approach. Under the method, we obtained the Ultimate claims by studying the historical loss ratios, investigating any differences and using judgm ents to derive a loss ratio. Paid claims already emerged is then deducted for from the estimated Ultimate claims to obtain our reserves.

101 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Frequency and Severity Method (Average Cost per claim). This method investigates the trend of the claim frequency and average cost per claim for each accident year. An Average of the fully run off acci dent years is used as a guide on the ultimate claim frequency and ultimate average cost which is then adopted for the accident years that are not fully run off.

Large losses Large losses distorting the claims payment trend were excluded from all our chain ladder projections and analyzed separately using the Average Cost per claim method.

Unearned Premium Reserve (UPR): The Group has calculated each policy’s unexpired insurance period (UP) as the exact number of days of insurance cover available after the review date and calculated the UPR as the annualized premium * (UP)/policy duration

Unexpired Risk Reserve (URR): The URR is estimated by multiplying the loss ratio by the unexpired premium (UP). This is the indication of the cost of the future claims cost and all expenses expected to be incurred in the future by the unexpired portion of existing policies.

Additional Unexpired Risk Reserve (AURR): This is defined as the max (0, URR-UPR). It is the additional reserve calculated when the Group expect a loss to occur.

Assumptions underlying the Valuation Methods

· Policies are written uniformly throughout the year for each class of business. · Claims occur uniformly throughout the year for each class of business. This implies that claims occur on average halfway through year. · Future claims follow a regression pattern from the historical data. Hence payment patterns will be broadly similar in each accident year. The proportionate increase in the known cummulative payments from one development yea r to the next is used to calculate the expected cummulative payments for the future developments periods. · An implicit assumption of the chain ladder is that weighted past average inflation will remain unchanged into the future. · The Group assumed gross claim amount includes all related claim expenses. If this is not the case, we will hold a separate reserve to cover claim expenses. · The UPR is calculated on the assumption that risk will occur evenly during the duration of the policy. · Under the Average Cost per claim method used in estimating large losses, we assumed the early years (e.g accident years 2007, 2008) are fully developed.

General accident Incremental Chain ladder-Yearly Projections ( N’000) Accident year 1 2 3 4 5 6 7 8 9 10 2007 - - 12,826 1,449 5,371 722 2,627 - 450 - 2008 - 59,297 42,071 14,514 4,767 2,366 1,474 225 - - 2009 39,261 91,806 20,061 411 11,964 4,368 307 54 - - 2010 37,896 79,908 6,814 8,405 6,238 2,709 177 - - - 2011 47,521 24,628 32,482 3,835 2,029 63 - - - - 2012 94,121 65,575 20,450 2,281 211 - - - - - 2013 47,792 77,553 11,094 4,429 ------2014 79,817 79,985 27,531 ------2015 98,907 113,326 ------2016 115,336 ------

102 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

FIRE Incremental Chain ladder-Yearl y Projections (N’000) Accident year 1 2 3 4 5 6 7 8 9 9 2007 - - 42,252 100 40 - 15 - - - 2008 - 52,975 12,453 4,090 389 30 - - - - 2009 28,361 65,149 7,614 793 233 - - - - - 2010 72,225 48,575 160 3,079 193 - - - - - 2011 29,065 11,508 9,535 2,264 8,517 - - - - - 2012 82,973 46,408 17,218 ------2013 53,756 52,428 16,327 21 ------

2014 52,281 35,936 983 ------

2015 116,209 83,035

2016 104,258 ------

Marine

Incremental Chain ladder-Yea rly Projections (N’000)

Accident year 1 2 3 4 5 6 7 8 9 10 2007 - - 5,373 1,762 2,335 - - - - 2008 - 23,113 2,331 442 - - - - -

2009 5,037 14,674 7,744 10,845 2,851 - - - -

2010 14,155 20,768 4,561 6,072 656 - - - -

2011 12,661 6,127 4,977 23,135 267 - - - -

2012 30,116 24,416 4,680 664 - - - - -

2013 29,124 27,388 2,331 ------

2014 23,424 16,260 204 ------2015 21,674 17,110 2016 33,990 ------

Motor Incremental Chain ladder-Yearly Proje ctions (N’000) Accident year 1 2 3 4 5 6 7 8 9 10 2007 - - - 3,308 730 1,230 135 - - 2008 - - 8,646 1,774 2,460 - - - - 2009 - 140,122 33,076 5,864 - - - - - 2010 260,284 149,182 11,352 1,781 - 427 - - - 2011 226,774 62,179 7,647 428 182 - - - - 2012 244,881 126,118 843 1,145 - - - - - 2013 270,060 102,542 5,360 ------

2014 315,495 81,431 643 ------

2015 360,538 237,905

2016 701,423 ------

103 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Oil & Gas The table shown below is the output of the Expected Loss Ratio Method used in estimating Gross Claim Reserve for Oil & Gas.

Expected Loss Ratio Method Table – Oil and Gas claims Gross Claims Total O/s Outstanding Earned Paid till as at 31 Current Current Ultimate Claim Accident Premium date (N' Dec 2016 Incurred Loss Ultimate Losses Reserves year (N' 000) 000) (N'000) (N'000) Ratio Loss Ratio (N'000) (N'000) 2008 - 3,488 - 3,488 0% 0% - - 2009 - 13,732 - 13,732 0% 0% - - 2010 683,158 5,643 - 5,643 1% 1% 5,643 - 2011 683,158 245,940 215,301 461,241 68% 68% 461,241 215,301 2012 683,158 260,696 263,046 523,742 77% 77% 523,742 263,046 2013 686,106 62,200 66,204 128,405 19% 19% 128,405 66,204 2014 749,765 10,704 240,663 251,367 34% 34% 251,367 240,663 2015 1,040,920 41 85,841 85,882 8% 13% 137,928 137,887 2016 1,192,374 1,923 33,500 35,423 3% 13% 157,997 156,074

Total 904,555 1,079,175

Discounted 920,973

20 Trade payables Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Reinsurance premium payable 344,221 221,488 344,221 220,442 Premium deposit received 112,300 162,529 108,427 110,780 456,521 384,017 452,649 331,222

Within one year 304,299 228,333 310,871 198,733 More than one year 152,222 155,684 141,778 132,489

456,521 384,017 452,649 331,222

21 Other payables

Accrued expenses (see note (i) below) 411,873 526,916 353,485 377,928 Payable to staff (see note (ii) below) 106,460 92,354 106,460 92,354 National Housing Funds 2,747 4,918 2,668 4,814 PAYE 21,058 15,028 20,837 14,713 Withholding Tax 28,537 19,200 28,537 19,200 ECOWAS BROWN CARD - 8,798 - 8,798 Honeywell Oil and Gas ltd. 37,855 37,855 37,855 37,855 SO&U SAACHI 4,967 4,967 4,967 4,967 Sundry creditors (see note (iii) below) 193,958 116,611 79,822 56,129 807,455 826,647 634,631 616,758

(i) Accrued expenses is made up of provision for NAICOM fee, professional fee, valuation fees and rent related expenses. (ii) Payable to staff is provision for 2016 performance pay to staff. (iii) Sundry creditors includes outstanding payments in respect of asset verification and tagging, head office renovation, land registration statutory fees and other creditors.

104 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

22 Income tax liabilities Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 a) Per Statement of Profit or Loss and Other Comprehensive Income:

- Recognised in profit or loss: Income tax based on the taxable profit/loss for the year 80,966 211,242 54,456 210,569 Education tax 3,167 3,805 - 3,805 Back duty assessment 152,047 - 150,065 - Information technology development levy (NITDA) 2,178 1,039 - 1,039

Current tax charge/(Income) for the year 238,358 216,086 204,521 215,413 Deferred tax charged recognised in profit or loss 232,205 (3,786) 169,053 (12,039)

Income tax expense 470,563 212,300 373,574 203,374

b) Current Tax Liabilities/(Assets) as per Statement of Financial Position: At 1 January 340,539 88,471 246,725 87,199 Charge for the year 238,358 216,086 204,521 215,413 Payment during the year (164,499) (56,608) (149,155) (55,887) Arising from acquisition - 92,590 - - At 31 December 414,398 340,539 302,091 246,725

The charge for income tax in these financial statements is based on the provisions of the Companies Income Tax Act, CAP C21 LFN 2004 as amended and Education Tax Act, CAP E4 LFN 2004.

22.1 Reconciliation of effective to statutory tax rate was presented in note 34a.

22 b Deferred Taxation

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. The offset amounts are as follows:

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Deferred tax assets: Deferred tax asset to be recovered after more than 12 months - - - - Deferred tax asset to be recovered within 12 months (144,335) 242,583 18,790 187,843 Deferred tax on asset held for sales - - - Arising from acquisition - - (144,335) 242,583 18,790 187,843

The net movement on the deferred income tax account is as follows: At 1 January 242,583 238,797 187,843 175,804

Deferred tax charged recognised in profit or loss (232,205) 3,786 (169,053) 12,039

Deferred tax charged recognised in other comprehensive income :

Property and equipmment (18,922) - - -

Unrealised exchange gain (135,791) - - - At 31 December (144,335) 242,583 18,790 187,843

The charge for income tax in these financial statements is based on the provision of the Companies Income Tax Act CAP C21 LFN 2004 as amended and Education Tax Act. CAP E4 LFN 2004.

105 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

23 Employees' Retirement Obligations Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Pensions (outstanding liability) 8,102 7,523 7,750 7,523 Pension: At 1 January 7,523 11,565 7,523 8,145

Pension Expense for the reporting period 104,722 89,149 101,913 89,149

Payment made during the year (104,143) (93,191) (101,686) (89,771)

- -

Net Employees' Retirement Obligations 8,102 7,523 7,750 7,523

The Company operates defined contribution pension plan based on the New Pension Act 2014. All pension contributions are remitted to the relevant registered PFAs.

24 Share Capital and Share Premium

Issued capital comprises: 2016 2015 2016 2015 N'000 N'000 N'000 N'000 14,729,507,615 fully paid ordinary shares of 50k each 7,364,754 7,364,754 7,364,754 7,364,754

Movement in share capital

At 1 January 7,364,754 4,410,005 7,364,754 4,410,005

Addition during the year(5,909,497,615 @50k/1) - 2,954,749 - 2,954,749

At 31 December 7,364,754 7,364,754 7,364,754 7,364,754

The total number of issued and fully paid ordinary shares as at year ended 31 December 2016 was 14,729,507,615 with a par value of 50k per share.

The additions to the fully paid ordinary shares in the year 2015 represents the nominal value of the 5,909,497,615 ordinary shares issued in respect of CAPE III; being the consideration paid for the acquisition of Fin Insurance Company Limited. See note 13 and note 30f for additional disclosures on the acquisition of Fin Insurance Company Limited.

24a Share premium

At 31 December 1,947,166 1,947,166 1,947,166 1,947,166 Share premium comprises additional paid up capital in excess of the par value. This reserve is ordinarily not available for distribution

24b Treasury shares

At 31 December 48,175 48,175 48,175 48,175

Treasury shares are own equity instruments which are deducted from equity and no dividends are allocated to them.

106 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

25a Contingency reserves Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 At 1 January 1,519,802 1,348,770 1,519,802 1,348,770 Transfer from retained earnings 239,619 171,032 215,598 171,032 At 31 December 1,759,421 1,519,802 1,735,400 1,519,802

In compliance with Section 21 (1) of Insurance Act 2003, the contingency reserve for non-life insurance business is credited with the greater of 3% of total premiums, or 20% of the profits. This shall accumulate until it reaches the greater of minimum paid-up capital and 50 percent of net premium. While for life business, the contingency reserves is credited with an amount equal to 1% of gross premium or 10% of net profit (whichever is greater) and accumulated until it reached the amount of minimum paid up capital.

Group Company

2016 2015 2016 2015

25b AFS fair value reserves N'000 N'000 N'000 N'000

At 1 January (335,070) (77,897) (334,370) (77,197)

Transfer from statement of other comprehensive income ( note 6.2.1 & note 6.2.2) (86,297) (257,173) 56,825 (257,173)

At 31 December (437,367) (335,070) (277,545) (334,370)

25c Revaluation reserve

Group Company

2016 2015 2016 2015

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

At 1 January - - - -

Revaluation gain ( note 15a) 85,127 - - -

Related deferred tax (note 22b) (18,922) - - -

At 31 December 66,205

2016 2015 2016 2015 25d Retained earnings N'000 N'000 N'000 N'000

At 1 January 1,459,866 176,544 (306,700) 576,245

Transfer to contingency reserves (239,619) (171,032) (215,598) (171,032) Transfer from Statement of

Comprehensive income (1,739,309) 1,630,754 (1,889,787) (535,513)

Dividend paid - (176,400) - (176,400) At 31 December (519,062) 1,459,866 (2,412,085) (306,700)

26a Gross Premium Income

Non-life insurance premiums 7,200,473 4,785,770 6,399,789 4,785,770

Life insurance premiums 1,781,866 2,426,166 1,781,866 2,426,166

Halal Takaful Insurance 208,295 119,697 208,295 119,697

Gross written premiums 9,190,634 7,331,633 8,389,950 7,331,633

107 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Change in unearned premiums (note 26.1a) (734,176) (212,001) (621,100) (212,001)

Gross Premium Income 8,456,458 7,119,632 7,768,850 7,119,632

2016 2015 2016 2015 N'000 N'000 N'000 N'000 26b Reinsurance expenses Non-life reinsurance expenses 3,652,618 1,461,374 3,313,027 1,461,374 Life reinsurance expenses 465,381 427,076 465,381 427,076 Takaful reinsurance expenses 3,087 3,514 3,087 3,514 Gross written reinsurance expenses 4,121,086 1,891,964 3,781,495 1,891,964 Change in reinsurance unearned premiums (839,148) 218,213 (836,115) 218,213 Reinsurers’ share of gross earned premiums

(note 26.2) 3,281,938 2,110,177 2,945,380 2,110,177

Net insurance premium income 5,174,520 5,009,455 4,823,470 5,009,455

26.1 Movement in unearned premium

At 1 January 1,684,120 1,568,931 1,491,213 1,568,931

Increase/(decrease) in unearned premium (note 19.b(i)) 929,911 (77,718) 816,836 (77,718)

At 31 December (note 19.b(i)) 2,614,031 1,491,213 2,308,049 1,491,213

26.1a Changes in Life fund (note 19.b(i)) 195,736 (289,719) 195,736 (289,719) Changes in the year-General

(note 19.b(i)) (929,910) 77,718 (816,836) 77,718

Charged to statement of profit or loss (734,176) (212,001) (621,100) (212,001)

26.2 Movement in reinsurance cost At 1 January 424,515 573,072 354,859 573,072 Reinsurance cost paid during the year 4,121,086 1,891,964 3,781,495 1,891,964 Total acquisition cost 4,545,601 2,465,036 4,136,354 2,465,036

Reinsurance cost amortised (charged to statement of profit and loss) (3,281,938) (2,110,177) (2,945,380) (2,110,177)

At 31 December 1,263,663 354,859 1,190,974 354,859

27 Fee and commission income Reinsurance commissions and profit commission 477,825 307,128 448,756 307,128

108 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

28 Insurance claims and benefits paid Group 2016

Movement in Gross claims outstanding Reinsurance's paid claims & IBNR Total share Net N'000 N'000 N'000 N'000 N'000 Life business 1,761,679 234,595 1,996,274 (428,496) 1,567,778 Non-life business 2,348,658 153,023 2,501,681 (771,109) 1,730,571 Takaful 70,614 5,145 75,769 (3,407) 72,353 4,180,951 392,763 4,573,714 (1,203,012) 3,370,702

Company

Life business 1,761,679 234,595 1,996,274 (428,496) 1,567,778

Non-life business 2,066,247 389,463 2,455,710 (596,768) 1,858,942

Takaful 70,614 5,145 75,769 (3,407) 72,352

3,898,540 629,203 4,527,743 (1,028,671) 3,499,072

Group/company

Insurance claims and benefits paid

2015

Movement in outstanding Reinsurance's Gross claims Total share Net N'000 N'000 N'000 N'000 N'000 Life business 1,093,677 94,375 1,188,052 (281,922) 906,130 Non-life business 1,496,342 120,839 1,617,181 (365,943) 1,251,238 Takaful 26,621 12,437 39,058 - 39,058

2,616,640 227,651 2,844,291 (647,865) 2,196,426

109

Total N'000 27,922 N'000 (1,256) (1,256)

14,556 125,314 633,309 136,428 (11,114)

647,865 Total (109,502) N'000

(137,424) (1,256) Changes

633,309 125,314

(148,557)

647,865

(109,502)

Life

Life

N'000 25,070 N'000 27,922 (1,256)

570,574 250,351 200,542 431,898 136,428 118,828

Closing N'000 27,922 424,515 balance (1,256) 281,922

118,828 136,428

1,478,435 281,922 2015

2015

2015 - - ness N'000

514,481 N'000 (11,114) 514,481 365,943 (11,114) N'000 365,943 581,688 162,494 113,923 172,620 433,154 (137,424) General (137,424) 573,072 balance General business

Opening

busi 1,463,879

Total N'000 97,086 Total N'000 40,951 97,086 (96,063) (96,063)

(109,949) 1,137,597 GROUP

1,161,038 COMPANY

1,028,671 61,531 1,203,012 N'000

41,974

116,342

(20,580) (19,256) (96,063) 839,147

Changes - - -

- - -

3,407 3,407 3,407 N'000 3,407

N'000 Takaful Takaful N'000

675,915 229,771 141,412 181,286 335,835

Closing balance

1,564,219 1,263,662 2016 2016 2016

Life Life

N'000 N'000 564,395 564,395 (20,580) (19,256) (19,256) (96,063) (96,063) (20,580)

428,496 428,496

N'000 25,070

614,384 250,351 200,542 431,898 - - 424,515 balance

Opening 1,522,245 N'000 61,531 N'000 593,236 116,342 116,342 569,795 (89,369) 771,109 596,768 General General business business

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS Prepaid Unexpired Risk (UPR) (note (UPR) 9) Prepaid Unexpired Risk Receipt from reinsurance paid Receipt from reinsurance on claims Claim recoverable from Reinsurance Changes in components of reinsurance assets are as are follows : assets componentsChanges reinsurance of in Changes in reinsurance share of outstanding claims reinsurance share of Changes (note 28.2) in Group Claim recoverable from Reinsurance Reinsurance share of outstanding claims Reinsurance of outstanding share -General (note 9) Changes in reinsurance share of IBNR IBNR (note 28.2)reinsurance share of Changes in Reinsurance share of outstanding claims Reinsurance of outstanding share (note 9)-Life Reinsurance share of IBNR -General (note Reinsurance of IBNR share 9) -General Reinsurance share of IBNR -Life (note Reinsurance of IBNR share 9) (note -Life Changes in reinsurance share of claims paid receivableclaims paid reinsurance share of Changes (note 28.2) in Changes in reinsurance share of claims paid receivable (note 28.2)claims paid reinsurance share of Changes in Changes in reinsurance share of IBNR IBNR 28.2)(note reinsuranceChanges share of in Changes in reinsurance shareoutstanding claims (note 28.2)Changes in of Claim recoverable from reinsurance Receipt from reinsurance paid Receipt from reinsurance on claims Reinsurance share of claims paid (note 9) paid Reinsurance of claims share Claim recoverable from reinsurance

28.1 28.2 28.1

110 NOTES TO THE CONSOLIDATED AND 111 SEPARATE FINANCIAL STATEMENTS

Company 2016 2015 Opening Closing Opening Closing 28.2 Changes in components of reinsurance assets are as follows : balance balance Changes balance balance Changes N'000 N'000 N'000 N'000 N'000 N'000 Reinsurance share of outstanding claims -General (note 9) 570,574 481,205 89,369 581,688 570,574 (11,114)

Reinsurance share of outstanding claims -Life (note 9) 250,351 229,771 20,580 113,923 250,351 136,428

Reinsurance share of IBNR -General (note 9) 25,070 141,412 (116,342) 162,494 25,070 (137,424)

Reinsurance share of IBNR -Life (note 9) 200,542 181,286 19,256 172,620 200,542 27,922

Reinsurance share of claims paid (note 9) 431,898 335,835 96,063 433,154 431,898 (1,256)

1,478,435 1,369,509 108,926 1,463,879 1,478,435 14,556

Prepaid Unexpired Risk (UPR) 354,858 1,190,973 836,115 573,072 354,858 (218,214)

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

29 Underwriting Expenses (Fees, commissions and other acquisition expenses) 29(a) Acquisition cost Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000

Acquisition cost- General 842,875 638,966 682,700 638,966 Acquisition cost- Life 277,306 412,082 277,306 412,082 Acquisition cost- Takaful 41,288 27,864 41,288 27,864 Total commission paid 1,161,469 1,078,912 1,001,294 1,078,912 Changes in deferred underwriting expenses (38,793) 30,049 (9,547) 30,049 1,122,676 1,108,961 991,747 1,108,961

29(b) Maintenance cost Maintenance cost- General 443,745 286,138 438,898 286,138 Maintenance cost- Life 17,493 78,896 17,493 78,896 Maintenance cost- Takaful 1,344 - 1,344 - 462,582 365,034 457,735 365,034

29 (c) Investment contract liability cost Acquisitions cost- deposit administration 23,839 15,133 23,839 15,133 Maintenance- deposit administration - 18,367 - 18,367 23,839 33,500 23,839 33,500

29(d) Guaranteed interest 40,236 15,101 40,236 15,101

30 Investment income

30(a) Investment income -Attributable to policyholders fund Interest income 203,118 407,488 203,118 407,488

30(b) Investment income -Attributable to

Shareholders fund Dividend income 111,321 658,345 107,664 658,345 Interest income 429,033 121,717 100,274 121,717 540,354 780,062 207,938 780,062

30(c) Interest income - Investment contract liabilities 48,056 72,362 48,056 72,362

30d Fair value changes in financial assets-FVTPL (note 6.2.1) (2,390,911) (656,266) (2,390,911) (656,266)

IAS 39 requires fair value changes for financial assets carried at fair value through profit or loss (FVTPL) to be recognised in the profit or loss account. Financial instrument designated as FVTPL by the Company relates to NGN2, 836 million (2015 NGN 3,511million) investment in MTN shares -see note 6a (ii) of the financial statements. Fair value changes for the year ended 31 December 2016 recognised in the profit or loss account amounted to N2, 390,911,000 while N656, 266,000 was recognised for year 2015. Fair values were determined by reference to market observable data under IFRS 13 Level 2 fair value hierarchy.

112 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 30e Operating income Exchange gain (30e.1) 2,943,457 322,752 2,888,881 322,752 Miscellaneous income (30e.2) 87,170 28,871 87,170 28,871 Realised gain on disposal of financial assets 11,094 - - - Gain on disposal of Property ,Plant & Equipment (PPE) 5,443 8,062 1,806 8,062 Reversal of prior year accrual (30e.3) 52,772 - - - Recovery on subrogation 60,632 72,974 46,769 63,261 3,160,568 432,659 3,024,626 422,946

30e.1 The exchange gains arose from translation of foreign currency denominated assets of the entity at closing rate as at reporting

date, 31 December 2016, in line with IAS 21. An exchange gain of N2,573 million represents ga ins on valuation of financial assets of the Company (See note 6.2.2) while the remaining balance amount of N316 million relates to exchange difference arising from the valuation of dollar denominated placements and other bank balances of the entity as at 31 December 2016. The exchange gains recorded are unrealised.

30e.2 Miscellaneous income include sales of scrap items on Oniru property, ITF refund and rent received .

30e.3 The sum of N52 .7 million related to prior years' actuarial estimation for employees defined benefit obligations that FIN Insurance Company Limited, a subsidiary of Cornerstone Insurance Plc, has now determined to be no longer required and thereby reversed in the current period.

2016 2015 2016 2015 N'000 N'000 N'000 N'000

30f Gain on bargain purchase - (1,832,910) -

Business Combinations

Acquisition of FIN Insurance Company Limited On 16 December, 2015 (the acquisition date), the Company acquired through a share for share exchange, 96.68% of the Voting rights in Fin Insurance Company Limited. FIN Insurance primary activity is to render Non- Life Insurance business.

As a result of the acquisition, FIN Insurance Company Limited became a subsidiary of Cornerstone Insurance Plc since the company obtained control of FIN Insurance Company Limited. The Company intends to expand the earning power in the insurance business by gaining more customers in the markets and also to increase its eminence.

The following table summarizes the estimated fair values of the consideration paid, the non- controlling interests and all the assets and liabilities assumed at the date of acquisition.

113 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

2015 N000 Fair value of consideration paid 2,954,749 Fair value on non-controlling interest (NCI) 164,410 Total 3,119,159

Fair value of assets acquired and liabilities assumed

Cash and cash equivalents 2,609,613 Financial assets 1,172,694 Held -To Maturity 39,765 Trade receivables - Reinsurance assets 113,466 Deferred acquisition cost 22,226 Other receivables and prepayments 9,721 Investment properties 486,000 Intangible assets 3,797 Property and equipment 1,299,263 Deferred tax asset 39,916 Statutory deposits 300,000 Total assets 6,096,461

Liabilities Insurance contract liabilities 757,392 Trade payables 1,046 Provision and other payables 236,594 Current income tax liabilities 92,590 Retirement benefits obligation 56,772 Total liabilities 1,144,394 Net Assets 4,952,067 Gain on bargain purchase (1,832,910)

The business acquisition resulted in a bargain purchase transaction because the fair values of the assets acquired and liabilities assumed exceeded the total fair value of the consideration paid and the fair value of other non-controlling interest held by N1.8 billion. The Company recognized the amount as a gain and recorded the amount separately as gain on bargain purchase in the consolidated Statement of profit or loss for the year ended 31 December 2015.

Although the entity effectively gained control of Fin Insurance Company Limited on 16 December, 2015, the amounts of revenue and profit or loss since the acquisition date and pro formal results of operations for the above business combinations are not presented in the year 2015 because the effects are not material to the consolidated financial statements. However, in the year 2016, the balances per the statement of the income and other comprehensive income and statement of the financial position of FIN Insurance Company Limited have been consolidated in this Group financial statements.

114 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

30g Non-Controlling Interest in Equity 2016 2015 N000 N000 At 1 January 164,410 - Non-controlling interest arising on acquisition of FIN Insurance Limited - 164,410 (see note 30f) Share of profit for the year 7,072 - At 31 December 171,481 164,410

Non-controlling interest represents 3.32% (109,560,000 ordinary shares) of the equity holdings of FIN Insurance Company Limited not attributable to Cornerstone Insurance Plc as at 31 December 2016. During the year, there was no change in the non-controlling interest holdings as there was no acquisition or disposal of any subsidiary for which Cornerstone Insurance Plc does not have 100% holdings.

31 Allowance for impairment losses Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Allowance on finance lease (note 11.1) 70 17,757 - - Impairment of financial assets (note 6.2.1) (47,618) 6,599 - 409,036 Allowance on receivable (note 8.1) 82,666 25,796 82,666 25,796 Allowance on other assets (note 8b) - 261,028 - 261,028 35,118 311,180 82,666 695,860

32 Management expenses Depreciation (note 15) 237,470 146,168 186,449 144,773 Amortisation of computer software (note 16) 19,594 12,715 16,766 12,715 Directors' costs 81,546 43,540 67,912 43,540 Advertising and corporate promotional expenses 168,485 127,545 156,058 127,545 Administrative expenses 303,601 215,337 215,114 213,110 Rents and rates 75,397 61,150 68,495 61,150 Consultancy fees 285,712 181,376 227,751 180,343 Maintenance expenses 267,904 166,840 224,973 166,245 Staff training and development 94,486 26,464 71,551 26,464 Auxiliary staff costs 253,578 126,425 198,048 126,425 Statutory due( NAICOM Levy) 82,407 59,028 71,329 59,028 Audit fees 33,200 24,200 20,000 20,000 AGM Expenses 15,676 6,458 15,676 6,458 Subscription 18,653 5,544 7,841 5,544 Others 60,230 10,677 49,656 10,677 Wages and Salaries* 1,306,007 984,894 1,071,739 965,662 Defined contribution pension costs 104,722 54,173 101,913 52,889 Transaction costs** - 92,221 - 92,221 3,408,668 2,344,755 2,771,272 2,314,789

*Wages and salaries is made up of: Salaries 1,123,529 814,182 900,514 797,202 Allowances 182,478 170,712 171,225 168,460 Total 1,306,007 984,894 1,071,739 965,662

**Transaction costs relates to expenses incurred in connection with the acquisition of Fin Insurance Company Limited. These costs include’ finders fees, legal fees and advisory fees.

115 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 33 Bank Charges Interest on Financial liabilities at amortised cost - 22,143 - - Cost of Turnover 20,029 10,123 13,413 10,123 20,029 32,266 13,413 10,123

34 Income tax expense/income

Current tax expense/(income) in respect of the current year 80,966 211,242 54,456 210,569 Education levy 3,167 3,805 - 3,805 Back duty assessment 152,047 - 150,065 - Information technology development levy (ITDL) 2,178 1,039 - 1,039 Total current tax 238,358 216,086 204,521 215,413

Deferred tax expense recognised in the current year (note 22b) 232,205 (3,786) 169,053 (12,039) Income tax expense 470,563 212,300 373,574 203,374

116

Reconciliation of effective tax as follows: is to statutory rate Effective tax rate reconciliation 34a

Profit before taxProfit before Adjustments: Adjustments: Effective tax rate Effective tax rate Company IncomeCompany Tax ITF Tax ITF Tax Education Education Tax Education Education Tax Information Information Technology Tax Deferred tax( PorDeferred L) Effect of Permanent Effect Differences SEPARATE FINANCIAL STATEMENTS TO THE CONSOLIDATED AND NOTES

31 December 2016 % 31 December 2015 % 31 December 2016 % 31 December 2015 % % 31 December 2015 % 31 December 2016 % 31 December 2015 % 31 2016 December

(1,264,660) 100 1,843,054 100 (1,516,213) 100 (332,139) 100 100 (332,139) 100 (1,516,213) 100 1,843,054 100 (1,264,660) (940,800) 30 2,392,187 30 (1,292,701) 30 30 (1,292,701) 30 2,392,187 30 (940,800) 9615 (4 (24) (946,145) 232,205 (18) (3,786) - 169,053 (11) 12,039 (4) (4) 12,039 (11) 169,053 - (3,786) (18) 232,205 N'000 096 6 2122 1 446 4 2059 (63) 210,569 (4) 54,456 11 211,242 (6) 80,966 ,7 - ,3 - - ,3 - 1,039 - - - 1,039 - 2,178 3,167 - (3,805) - - - (3,805) 1 1 (3,805) - - - (3,805) - 3,167 3,167 - 3,805 - - - 3,805 (1) (1) 3,805 - - - 3,805 - 3,167 ,7 - 109 - - ,3 - 1,039 - - - (1,039) - 2,178

6 4,7 1 - 5 3329 97 (323,289) 45 - 19 341,675 56

Group Group

,5,5 1 11 2,055,356 N'000

12271 (5 (15) (1,292,701) N'000 Company Company

N'000

(430,742) 30 30 (430,742) 1467 (68) (104,687)

117 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

35 Profit for the year

Profit for the year has been arrived at after charging/ (crediting) Group Company 2016 2015 2016 2015 N'000 N'000 N'000 N'000 Net foreign exchange gain 2,943,457 322,752 2,888,881 322,752 Depreciation of property and equipment 146,168 146,168 186,449 146,168 Amortisation of intangible assets 19,594 12,715 16,766 12,715 Staff costs and other expenses 1,410,729 1,039,067 1,173,653 1,018,551 Auditors’ remuneration 33,200 24,200 20,000 20,000 Impairment on receivables 35,118 311,180 82,666 695,860 NAICOM Levy 82,407 59,028 71,329 59,028

36 Share-based payments

Employee share option plan of the Company

Details of the employee share option plan of the Company are as stated below:

The Group has a share option scheme for executives and senior employees of the Company and its subsidiaries. In accordance with the terms of the plan, as approved by shareholders at a previous annual general meeting, executives and senior employees with more than five years’ service with the Group may be granted options to purchase ordinary shares. Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. As at 31 December 2016, no staff of the group had exercised the options.

37 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares outstanding at the end of the year. The cal culations are as detailed below:

Company Group 2016 2015 2016 2015 per kobo per kobo per kobo per kobo

Earnings per share- basic & diluted (note 36.1) (12) 11 (13) (4)

118 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

37.1 Basic/diluted earnings per share

Basic earnings per share is calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares outstanding at the end of the year. The calculations are as detailed below:

2016 2015 2016 2015 N'000 N'000 N'000 N'000 Profit for the year attributable to owners of the Company (1,735,223) 1,630,754 (1,889,787) (535,513)

(1,735,223) 1,630,754 (1,889,787) (535,513) Earnings used in the calculation of basic earnings per share from continuing operations

Weighted average number of ordinary shares at the end of the year 14,633,158 14,633,158 14,633,158 14,633,158

Basic earnings per share ( in Kobo) (12) 11 (13) (4)

Group Company

2016 2015 2016 2015

Weighted average number of ordinary shares for the purpose of basic earnings per share 14,729,508 14,729,508 14,729,508 14,729,508 Treasury shares (96,350) (96,350) (96,350) (96,350)

14,633,158 14,633,158 14,633,158 14,633,158

38 Litigation & Contingent liabilities

The group is a defendant in eighteen legal actions arising out of its normal business operations in 2016 with total contingent liability of N263.8 million (2015:N169.3m).The directors believe based on legal advice and current available information, that the outcome that would result from proceedings will not have material adverse effect on the financial position of the Group. Consequently, no provision has being made in these financial Statements.

39 Related parties

Balances and transactions between the company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are as disclosed below:

39.1 Transactions with related parties The group enters into transactions with its subsidiaries, associates, joint ventures and its key management personnel in the

normal course of business of providing insurance cover on Motor, Fire and General accidents. The transactions with related

parties are made at normal market prices and conducted at arm’s length.

2016 2015 Sales of: N'000 N'000

Insurance and investment contracts to key management personnel 1,680 5,600

119 NOTES TOCONTENT CONTENT THEOF OF CONSOLIDATED TABLE TABLE AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

The group considered the outstanding balances at the reporting date is unsecured and non-interest bearing. The settlements will involve physical delivery of cash.

40 Compensation of key management personnel

Key management personnel of the Group include all directors, executive a nd non-executive, senior management.

The summary of compensation of key management personnel for the year is as follows:

2016 2015 N'000 N'000 Salaries 312,102 303,604 Fees 32,150 31,500 Post-employment pension benefits 30,160 28,700 374,412 363,804 Total compensation to key management personnel

Directors Cost Salaries and wages 93,872 84,672 Pension cost 11,163 10,682 Total Directors cost 105,035 95,354

Remuneration of Highest paid Director/Chairman Remuneration of Highest paid Director 46,000 45,000

40.1 Employees remuneration

The number of employees whose emolument, excluding allowances within the following ranges were:

2016 2015 2016 2015 Number Number Number Number 500,000 - 1,500,000 15 7 7 7

1,500,001 - 2,500,000 36 41 30 31 2,500,001 - 3,500,000 68 67 57 52 3,500,001 - 4,500,000 38 35 35 25 4500001 - 5,500,000 31 41 24 36 24 5,500,001 - 6,500,000 18 22 16 6,500,001 - 7,500,000 26 2 17 2 7,500,001 - 8,500,000 4 11 4 11 8,500,001 - 9,500,000 2 9 0 8 9,500,001 - 10,500,000 19 5 16 5 10,500,001 and above 19 8 15 8 282 244 227 201

1202 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

41 Disclosure Contraventions

Fines and Nature of contraventions Penalties

N'000

Late payment of Insurance Levy for year 2016 500,000

Penalty for late submission of board resolution on approved maximum exposure on aviation risk 250,000 Violation of s. 81 (1) of the insurance act 2002 100,000 Penalty for late response to the commissions letter of 29th august 2016 on report of 2015 AMLICF compliance examination 100,000

Late submission of aviation treaty for 2016 250,000

1,200,000

The details of the contravention and penalty paid in year 2016 are as detailed above, however there were no penalty imposed on the company by NAICOM in the year 2015.

42 Events after reporting period

There are no event after the reporting period that could have had a material effect on the state of affair of the company as at

31 December 2016 which have not been adequately provided for or disclosed.

43 Approval of financial statements

The financial statement were approved by the board of directors and authourised for issue on 9th March, 2017.

44 Enterprise Risk Management

Overview The Group’s enterprise risk management (ERM) programme comprises of an instituted structure designed to manage a myriad of uncertainties (threats) and equally explore opportunities in enhancing the Group’s performance standards. The Group’s ERM practice involves a cross-functional and multi-dimensional approach to corporate risk management. This characteristically involves a strong corporate governance structure that facilitates the establishment of a risk management unit, which has been charged with the function of identifying uncertainties (risks and opportunities) that may impact on corporate objectives (ISO: 31000), and assessing its impact using the RAG (Red, Amber and Green) rating methodology. The overall oversight function of the risk management function remains critical to ensuring the Group attains its expected performance standards.

The Group’s risk context delineates the scope of the risk management process and sets the standards against which risks will be assessed in accordance with the group’s primary organizational objective of attaining to be the leading insurance based financial services group.

The Group clearly understand the uncertainties inherent in accepting insurance risks and how such risks potentially impact the achievement of business objectives if left undefined. It is to this end that the Group’s ethics, philosophy and risk culture are embodied in our integrated risk management and control function.

121 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Risk Management Philosophy

The key elements of Group’s risk management philosophy are as follows:

• The Group considers sound risk management as the foundation of a long lasting financial institution. • The Group shall continue to adopt a holistic and integrated approach to risk management. • Risk officers shall be empowered to perform their duties professionally and independently without undue interference. • Risk management shall be governed by policies which are well defined and clearly communicated Group-wide. • Risk management represents a shared responsibility. Therefore, the Group aims to build a shared-perspective on risks that is grounded on consensus; • Risk-related issues are taken into consideration in all business decisions. The Group shall strive to maintain a conservative balance between risk and revenue considerations.

Risk Culture

• The Board and senior management set the tone-at-the-top, by promoting a responsible approach to risk in order to ensure that the long term survival and reputation of the Group is not jeopardized in a bid to achieve set objectives. • The primary responsibility for risk management and control function is fully vested in the Board which in turn shall delegate such to Senior Management; • The Group’s management shall promote risk awareness and risk management practice across the enterprise. • The Group advocates risk event reporting and whistle blowing, in the quest to gain greater insights into mistakes and near- misses. • The Group maintains a firm obligation to ethical principles, which is replicated in the ethical profile of individuals and the application of ethics and the significance of wider stakeholder stances in decision making.

Risk Management Oversight - Three Lines of Defence Model

The three (3) lines of defence approach to effective risk management function and control to promote an integrated culture of risk sensitivity and accountability of key risk owners across the Group. The model enables the Group’s risk management and control function to delegate and coordinate essential risk management functions across the designated lines of defence, within a systematic and integrated process.

The three (3) lines of defence are depicted in the diagram below:

The Three Lines of Defence

Risk Management and Internal Control Integrated Framework The ERM and internal control framework of the Group derives its functionality from the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Enterprise Risk Management – Integrated Framework. The framework highlights the nucleus of the enterprise risk management process, the synergy of operations amongst the board of directors, management and other personnel across the enterprise. The Group’s ERM/internal control integrated framework primarily consists of the following five (5) constituents in accordance with best practices:

• Control environment • Risk assessment • Control activities • Information & communication • Monitoring

Control Environment

The Group’s control environment refers to established standards and structures that provide a foundation for the risk management /internal control functions to thrive across the Group. The board of directors and senior management institutes the tone at the top regarding the importance of internal control.

Furthermore, the control environment comprises our five (5) corporate values of integrity, empathy, professionalism, innovation and team spirit that exhibit the Group’s commitment to essential values. These values therefore, provide the necessary advantages that enable management establish the mode of business operation and

122 NOTES TO THE CONSOLIDATED AND TABLE OF CONTENT SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

the board of directors effectively executes its independent oversight functions by setting the tone at the top. Similarly the operating and corporate governance structure, establishment of standards of conduct, enforcement of accountability through structures and authorities etc. represents critical success factors responsible for the thriving risk management culture within the Group thus far.

Risk Assessment

Risk assessment involves an iterative method of identifying and evaluating risks that could enhance opportunities and/or mitigate threats that emanates across the enterprise. e.g. from department, division inclusive of subsidiaries capable of impacting the Group’s objectives.

Designated risk champions are charged with the responsibility of risk identification/reporting, while the ERM unit conducts an evaluation and assessment of risk identified, with the intention of developing action plans for implementation and assess the effectiveness thereof. Risk assessment reports are presented at the quarterly board meetings of the Financial Performance and Enterprise Risk Management Committee. Similarly, matters within the remit of the Audit committee are assessed. These committees have the responsibility to assesses changes that significantly impact the system of risk management and internal control and develop responsive control measures that impact on the avoidance / mitigation of risks within the Group’s acceptable levels.

Control Activities

Control activities are actions instituted through internal practices that help safeguard the implementation of Group’s directives to mitigate risks exposures and/or promote business opportunities that may possibly influence the achievement of corporate strategic objectives. Control activities are entity-specific and are performed at all levels across of the Group at various stages within business processes and over the technology environment.

Information and Communication

The Group firmly appreciates that management of information is critical for the enterprise to proficiently implement internal control functions and as such Management judicious develop and utilize information having its origins from internal and/or external sources to underpin the current internal control system.

Monitoring

The current corporate governance structure necessitates the Group to evaluate the efficacies of; its policies and procedures, adherence to its internal control/risk management measures and communicates inherent/potential deficiencies in a timely manner to the authorities responsible for taking risk-based corrective actions, including senior management and board committees, as apt.

Reputational Risk Management

The Group maintains a zero tolerance policy against all unethical behaviors. Furthermore, the Group’s corporate values continually promote a responsible approach to avoiding/mitigating reputational risks and ensure that the long term survival and brand image of the Group is not jeopardized.

Operational Risk Management

Operational risks represent risk of losses that emanate from inadequate or failed internal processes, people and systems or from external events. The Group’s ERM framework recognizes external risks, legal and compliance risks and financial crime risks e.g. Anti- Money Laundry (AML) and Combating Financing of Terrorism (CFT) are inclusive in the Operational risk (OR) profile description.

The Group recognizes the pervasiveness of several types of operational risks in our business process, hence policies and tools have been instituted to ensure that resultant impact are kept as-low-as-reasonably-practicable (ALARP). Some of these processes are:

RCSA

The risk control self-assessment tool constitutes a potent operational risk management tool employed by the Group to manage operational risks on a monthly basis, using a combination probability and impact measurements. Risk officers (Cornerstone Risk Officers) working in designated departments are primarily responsible for risk identification- in line with our 1st line of defence model, assessment, proffering action plans for implement and determining the efficacies of these plans as deemed fit, in order to mitigate risk exposures.

Occupational Health and Safety Management System The Group reviewed its Occupational Health and Safety Management System (OHSAS) design, in order to meet the requirements 123 NOTES TOCONTENT THEOF CONSOLIDATEDTABLE AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

of the international standard for OHSAS 1800:2007. This approach was in accordance with the Group’s policy on Zero tolerance against occupational health and safety risks. Examples of these Instituted policies include: emergency preparedness and response procedures, hazard identification, incident investigation and reporting of non-conformity standards, conduct of fire drills, record keeping on Loss Time Injury (LTI) and Loss Time Incident Frequency (LTIF). Furthermore, employees are adequately insured against occupational hazards. In addition, the Group provides medical facilities to its employees and their immediate families at its expense.

Outlook

The focal point of our future strategy of managing broad risk categories which include but may not be limited to: market, credit, liquidity, operational, insurance, reputational, legal and compliance risks; significantly rests with instituting a structured approach to embedding a robust risk management mechanism aimed at driving performance standards, day-to-day operations, corporate culture and decision making process in order to safeguard and engender values for all stakeholders in the ever dynamic insurance market space fraught with a principal concern- management of uncertainties.

45 Capital management

The Group objective with respect to capital management is to maintain a capital based that structured to exceed regulatory requirement and to best utilize capital allocations. Insurance industry regulation measure the financial strength of Non-Life using a solvency margin model. Generally NAICOM expect insurer to comply with capital adequacy requirement. The regulatory capital (as required under insurance Acts 2003 and NAICOM Guideline) within the Group have been maintained and preserved over the reporting periods.

The Solvency Margin Requirement The regulatory capital (as required under Insurance Act 2003 and NAICOM Guideline) within the Group have been maintained and preserved over the reporting periods. The section defines solvency Margin of Non-life insurer as the difference between the admissible assets and liabilities and this shall not be less than 15% of Net premium income(Gross premium Income less reinsurance premium paid) or the minimum capital base (N3 billion) whichever is higher.

124 NOTES TO THE CONSOLIDATED AND TABLE OF CONTENT SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Minimum Capital requirement During the year, the company has consistently exceeded the minimum capital requirement.

The table below show solvency margin computation for Composite business as at 31 December 2016.

SOLVENCY MARGIN COMPUTATION FOR COMPOSITE INSURANCE BUSINESS

Total Assets Admissible Assets Inadmissible Assets

N'000 N'000 N'000

Cash and cash Equivalent 2,557,153 2,557,153 Financial Assets 7,370,257 7,370,257 Trade receivables 73,224 73,224 Other receivables and prepayments 391,309 - (391,309) Other assets - - - Reinsurance Assets 2,224,827 2,224,827 Deferred acquisition cost 206,629 206,629 Investment in Joint venture 1,188,609 1,188,609 Investment in subsidiaries 2,954,748 2,954,748 Investment properties - - Property, Plant & 806,082 806,082 Intangible asset 76,620 76,620 Deferred tax asset 18,790 - (18,790) Statutory Deposit 500,000 500,000 Total Admissible Assets (a) 18,368,248 17,958,149 (410,099)

Investment contract liabilities 2,353,766 2,353,766 - Insurance Contract Liabilities 6,307,846 6,307,846 - Trade payables 452,649 452,649 - Other payables 634,631 634,631 - Retirement benefit obligation 7,750 7,750 - Tax payable 302,091 302,091 - Total Admissible Liabilities 10,058,733 10,058,733 -

Solvency Margin for the year 7,899,416

Minimum Required Capital 5,000,000

Excess/(Shortfall) in Solvency Margin 2,899,416

125 NOTES TOCONTENT THEOF CONSOLIDATEDTABLE AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Financial risk management

The Group monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (currency risk, interest rate risk and price risk), credit risk and liquidity risk.

The Group may seek to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

46.a Valuation bases Fair value is the amount for which an asset could be exchanged or liability being settled between knowledgeable, willing parties in an arms-length transaction.

Fair values are determined at prices quoted in active markets. In the current environment, such price information is typically not available for all instruments and the Group applies valuation techniques to measure such instruments. These valuation techniques make maximum use of market observable data but in some cases management estimate other than observable market inputs within the valuation model. There is no standard model and different assumptions would generate different results.

Fair values are subject to a control framework designed to ensure that input variables and output are assessed independent of the risk taker. These inputs and outputs are reviewed and approved by a valuation committee. The Group has minimal exposure to financial assets which are valued at other than quoted prices in an active market.

The table below shows financial assets carried at fair value through profit or loss by valuation method.

2016 2015

N N

Quoted prices in active markets (level 1) 2,836,108 4,330,746 Valuation technique:

Market observable data (level 2) - -

Other than observable market data (level 3) - - 2,836,108 4,330,746

Fair value measurements recognised in the consolidated statement of financial position.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

126 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

2016 FINANCIAL ASSETS Level 1 Level 2 Level 3 Total N N N N Financial Assets at FVTPL: Equity Shares 2,836,108 - - 2,836,108 Bonds/Debentures - - - - Redeemable Notes - - - -

2,836,108 - - 2,836,108 Financial Assets at AFS: Equity Shares 805,986 2,505,486 - 3,311,472 Bonds/Debentures -- - - Redeemable Notes -- - -

805,986 2,505,486 - 3,311,472

Financial Assets -Loan and receivables:

Bonds 3,271,018 - - 3,271,018 Loan to individuals 229,071 - - 229,071 Loans and advances - 355 - 355 3,500,089 355 3,500,444

Total Financial Assets 4,360,668 5,288,268 - 9,648,024

FINANCIAL LIABILITIES Level 1 Level 2 Level 3 Total N N N N Financial Liabilities at FVTPL: Derivative financial liabilities - - - - Bonds/Debentures - - - - Other derivative financial liabilities ------Financial Liabilities at Amortised Cost: Bank Loans - - - - Bank Overdrafts - - - - Bonds/Debentures ------

Total Financial Liabi lities - - - -

127 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

2015 FINANCIAL ASSETS Level 1 Level 2 Level 3 Total N N N N Financial Assets at FVTPL: Equity Shares - 4,330,746 - 4,330,746

Bonds/Debentures - - - -

Redeemable Notes - - - -

- 4,330,746 - 4,330,746

Financial Assets at AFS:

Equity Shares 554,780 1,027,548 - 1,582,328 - -- Bonds/Debentures - - -- Redeemable Notes -

554,780 1,027,548 - 1,582,328

Financial Assets -Loan and receivables:

Bonds 1,665,415 -- 1,665,415 Loan to individuals 161,574 - - 161,574 Loans and advances - 8,688 - 8,688 1,826,989 8,688 - 1,835,677

Total Financial Assets 2,381,769 5,366,982 - 7,748,751

Level 1 Level 2 Level 3 Total N N N N Financial Liabilities at Amortised Cost:

Bank Loans - - - -

Bank Overdrafts - - - - Bonds/Debentures - - - -

- - - -

Total Financial Liabilities - - - -

47 Market risk

Market risk is the risk of adverse financial impact as a consequence of market movements such as currency exchange rates, interest rates and other price changes. Market risk arises due to fluctuations in both the value of assets held and the value of liabilities.

The Group has established policies and procedures in order to manage market risk.

Foreign currency risk management The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate

fluctuations arise.

The Group has minimal exposure to currency risk as the Group’s financial assets are primarily matched to the same currencies as its insurance and investment contract liabilities. As a result, foreign e xchange risk arises from other recognised assets and liabilities denominated in other currencies.

128 NOTESTO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Carrying amounts of the Group’s foreign currency denominated assets and liabilities:

Sterling Euro US dollars Others Total N N N N N Assets - - 5,981,190 - 5,981,190

Liabilities 2,015 7,805 - - 9,820

2,015 7,805 5,981,190 - 5,991,010

2015

Sterling Euro US dollars Others Total

N N N N N Assets 1,055 10,398 5,152,657 - 5,164,110 Liabilities - - 1,055 10,398 5,152,657 - 5,164,110

Foreign currency sensitivity analysis The following table details the Group’s sensitivity to a 10% increase and decrease in the Sterling against the relevant foreign currencies. A 10% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and

represents management’s assessment of the reasonably possible change in foreign exchange rates. For each sensitivity the impact of change in a single factor is shown, with other assumptions unchanged.

Sterling Euro US dollars Total

N N N N

10% increase Pre-tax profit Shareholders’ equity 2,217 8,586 6,579,309 6,590,111

10% decrease Pre-tax profit Shareholders’ equity 1,814 7,025 5,383,071 5,391,909

2015

Sterling Euro US dollars Total

N N N N

10% increase Pre tax profit Shareholders’ equity 1,161 11,437 5,667,923 5,680,521 10% decrease Pre tax profit Shareholders’ equity 950 9,358 4,637,391 4,647,699

The Group’s method for sensitivity to currency rate fluctuations has not changed significantly over the year.

Interest rate risk management Interest rate risk is the risk that the value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Group is exposed to interest rate risk as entities in the Group invest in long term debt at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings and by limited use of interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite.

129 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Interest rate risk also exists in products sold by the Group. The Group manages this risk by adopting close asset/liability matching criteria, to minimise the impact of mismatches between asset and liability values arising from interest rate movements.

The Group has no significant concentration of interest rate risk.

Interest rate sensitivity analysis The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non- derivative instruments at the balance sheet date. A 10% increase or decrease is used when reporting interest rate risk

internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

2016 2015 N N 10% increase Pre-tax profit Shareholders’ equity (1,391,127) 1,744,471 10% decrease Pre-tax profit Shareholders’ equity (1,138,195) 1,427,294

The Group’s method for sensitivity to interest rate fluctuations has not changed significantly over the year.

Interest rate risk exposures from options and guarantees embedded in insurance liabilities

The Group’s insurance contracts and investment contracts with DPF have certain options and guarantees that transfer interest rate risk to the Group. These options and guarantees within contracts written in the Group’s overseas life operations are:

• options to surrender the insurance contract or the investment contract with DPF where the surrender value (i.e. the strike price of the option) is either a fixed amount or a fixed amount plus interest at a rate that ranges from 2.5% to 0.5% depending on the year in which the contract was issued; and

• guaranteed annuity options where the Group has guaranteed at the inception of certain contracts th at it will be paying a life annuity to the surviving policyholders at their retirement dates which will be calculated using the higher of the current annuity rate at that date or the guaranteed annuity rate set in the contract. The guaranteed rate has fixed at inception both the level of mortality risk and the interest rate that will be used to calculate the annuity payments. Interest rates guarantees are within a range from 0.5% to 2.5% depending on the year in which the contract was issued.

Under IFRS the Group is not required to, and does not, measure these options and guarantees as embedded derivatives at fair value. Their impact on the Group’s profit is considered at each reporting date in the context of the Group’s liability adequacy test. However these options and guarantees expose the Group to interest rate risk.

Other price risk management

The Group is exposed to equity price risks arising from equity investments primarily from investments not held for unit-linked business. The shares included in financial assets represent investments in listed and unlisted securities that present the Group with opportunity for return through dividend income and capital appreciation. Equity investments designated as available-for- sale are held for strategic rather than trading purposes.

The Group has no significant concentration of price risk.

130

NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 2016 Annual Report & Accounts

Equity price sensitivity analysis

The sensitivity analyses set out below show the impact of a 10% increase and decrease in the value of equities on profit before tax and shareholders’ equity based on the exposure to equity price risk at the reporting date.

2016 2015 N N 10% increase Pre-tax profit Shareholders’ equity (1,391,127) 1,044,740 10% decrease Pre-tax profit Shareholders’ equity (1,138,195) 854,787

The Group’s method for sensitivity to equity prices has not changed significantly from the prior year. The Group’s method for sensitivity to equity prices has not changed significantly from the prior year.

48 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The key areas of exposure to credit risk for the Group are in relation to its investment portfolio, reinsurance programme and to a lesser extent amounts due from policyholders and intermediaries.

The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent to investment grade and above. This information is supplied by independent rating agencies where available and if not available the Group uses other publicly available financial information and its own trading records to rate its major policyholders and reinsurers.

The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually.

Receivables consist of a large number of policyholders, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties. Concentration of credit did not exceed 5% of gross monetary assets at any time during the year. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The Group writes unit-linked business where the policyholder bears the investment risk on the assets held. The shareholders’ risk is limited to the extent that income arising from asset management charges is based on the value of those assets.

Except as detailed in the following table, the carrying amount of financial assets and reinsurance assets recorded in the financial statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained:

Maximum credit risk 2016 2015 N N Letters of credit provided by banks on behalf of reinsurers Nil Nil

The following table shows aggregated credit risk exposure for assets with external credit ratings. The majority of debt securities are investment grade and the Group has very limited exposure to sub-prime or alt-A.

Reinsurance assets are reinsurers’ share of outstanding claims and IBNR and reinsurance receivables. They are allocated below on the basis of ratings for claims paying ability. Loans and receivables from policyholders, agents and intermediaries generally do not have a credit rating.

131

132 NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts SEPARATE FINANCIAL STATEMENTS

Unit-linked assets are excluded from this analysis.

AAA AA A BBB Not rated Carrying Amount

N N N N N N Debt securities - Federal Government - 474,349 - - - 474,349 - State Government - 485,112 - - - 485,112 - Corporate - - 1,006,316 - - 1,006,316 Loans and receivables - Corporate Loans ------Individual Loans 229,071 - - - - 229,071 - LPO and Advances -- - - 355 355 - Mutual Funds/Unit Trusts ------Reinsurance Receivables -- - - 1,047,278 1,047,278 Reinsurance Assets 1,444,948 1,444,948 -- - - Insurance receivables 73,731 73,731 - - - Tenor Deposits (> 90 days) 800,000 800,000 - - - Cash and cash equivalents 329,478 - 2,227,675 - - 2,557,153

1,358,549 959,461 3,307,722 2,492,581 8,118,313

AAA AA A BBB Not rated Carrying Amount

N N N N N Debt securities - Federal Government 125,946 - - 125,946 - State Government 574,774 - - 574,774 - Corporate - 1,435,675 - - 1,435,675

Loans and receivables

- Corporate Loans - - - - -

- Individual Loans 161,574 - - - 161,574 - LPO and Advances - - - - 8,688 8,688 - Mutual Funds/Unit Trusts ------Reinsurance Receivables - - - - 986,048 986,048 Reinsurance Assets - - - - 625,057 625,057 Insurance receivables ------Tenor Deposits (> 90 days) 800,000 - - - - 800,000 Cash and cash equivalents 318,370 - 3,369,408 - - 3,687,778 1,279,944 700,720 4,805,083 - 1,619,793 8,405,540

NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts

SEPARATE FINANCIAL STATEMENTS 133

The following table shows the carrying value of assets that are neither past due nor impaired, the ageing of assets that are past due but not impaired and assets that have been impaired.

Unit linked assets are excluded from this analysis.

Neither past Past due less than Past due 31 to Past due more past due and Carrying due nor 30 days 90 days than 90 days impaired Amount impaired

N N N N N N

Loans and receivables - Federal Government 474,349 474,349 - State Government 485,112 485,112 - Corporate 1,006,316 1,006,316 Loans and receivables - Corporate Loans ------Individual Loans 229,071 - - 229,071 - 229,071 - LPO and Advances - - - - 355 355

- Mutual Funds/Unit Trusts ------

Reinsurance Receivables ------

Reinsurance Assets - 2,492,227 - - 2,492,227

- - - - Insurance receivables 73,731 73,731 Tenor Deposits (> 90 days) 800,000 - - - - 800,000 Cash and cash equivalents 2,557,153 - - - - 2,557,153

5,552,001 73,731 2,492,227 229,071 355 8,118,314 134 NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts SEPARATE FINANCIAL STATEMENTS

Neither past due Past due less Past due 31 to 90 Past due more than past due and nor impaired than 30 days days 90 days impaired Carrying Amount N N N N N N

Debt securities

- Federal Government 125,946 - - - - 125,946

- State Government - - - - 574,774 574,774 - Corporate 1,435,675 - - - - 1,435,675 Loans and receivables - Corporate Loans ------Individual Loans 161,574 161,574

- LPO and Advances - - - - 8,688 8,688

- Mutual Funds/Unit Trusts ------

Reinsurance Receivables ------Reinsurance Assets - - 1,611,105 - - 1,611,105 Insurance receivables - - - - - Tenor Deposits (> 90 days) 800,000 - - - - 800,000 Cash and cash equivalents 3,687,778 - - - - 3,687,778

6,785,747 - 1,611,105 - 8,688 8,405,540 NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts

SEPARATE FINANCIAL STATEMENTS 135

49 Liquidity risk

Liquidity risk is the risk that the Group cannot meet its obligations associated with financial liabilities as they fall due.

The Group has adopted an appropriate liquidity risk management framework for the management of the Group’s liquidity requirements. The Group manages liquidity risk by maintaining banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of assets and liabilities. The Group is exposed to liquidity risk arising from clients on its insurance and investment contracts. In respect of catastrophic events there is liquidity risk from a difference in timing between claim payments and recoveries thereon from reinsurers.

Liquidity management ensures that the Group has sufficient access to funds necessary to cover insurance claims, surrenders, withdrawals and maturing liabilities. In practice, most of the Group’s assets are marketable securities which could be converted in to cash when requir ed. The following table details the Group’s expected maturity for its non-derivative assets. The tables below have been drawn up based on the undiscounted contractual maturities

of the assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period.

Unit-linked assets and reinsurers’ share of unearned premiums are excluded from this analysis.

< 1 month 1 - 3 months 3 - 12 months 1 - 5 years > 5 years Total

N N N N N N Debt securities - Federal Government - - 474,349 - - 474,349 - State Government - - - 485,112 - 485,112 - Corporate - - - 1,006,316 - 1,006,316 Loans and receivables - Corporate Loans ------Individual Loans - - 229,071 - - 229,071 - LPO and Advances - - - 355 - 355 - Mutual Funds/Unit Trusts ------Reinsurance Receivables ------Reinsurance Assets - 1,444,948 --- 1,444,948 Insurance receivables - --- - Tenor Deposits (> 90 days) - --- 800,000 800,000 Cash and cash equivalents 329,478 2,227,675 --- 2,557,153

329,478 3,672,623 703,420 1,491,783 800,000 6,997,304

136 NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts SEPARATE FINANCIAL STATEMENTS

3 - 12 < 1 month 1 - 3 months months 1 - 5 years > 5 years Total Debt securities N N N N N N - Federal Government - - 125,946 - - 125,946 - State Government - - - 574,774 - 574,774 - Corporate - - - 734,955 - 734,955 Loans and receivables - Corporate Loans ------Individual Loans - - 161,574 - - 161,574 - LPO and Advances - - - 8,688 - 8,688 - Mutual Funds/Unit Trusts ------Reinsurance Receivables ------Reinsurance Assets 625,057 - - - 625,057 Insurance receivables ------Tenor Deposits (> 90 days) - - - - 500,000 500,000 Cash and cash equivalents 318,370 3,369,408 - - - 3,687,778

318,370 3,994,465 287,520 1,318,417 500,000 6,418,772

Although the Group has access to financing facilities, the Group expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.

NOTES TO THE CONSOLIDATED AND 2016 Annual Report & Accounts

SEPARATE FINANCIAL STATEMENTS 137

Liquidity Gap Analysis 2016 < 1 month 1 - 3 months 3 - 12 months 1 - 5 years > 5 years Total N N N N N N Financial & Insurance Assets 329,478 3,672,623 - 1,491,783 800,000 6,293,884 Financial & Insurance Liabilities - (638,578) (1,230,704) (1,077,989) - (2,947,271)

329,478 3,034,045 (1,230,704) 413,794 800,000 3,346,613

2015 < 1 month 1 - 3 months 3 - 12 months 1 - 5 years > 5 years Total N N N N N N Financial & Insurance Assets 318,370 3,994,464 - 2,019,137 500,000 6,831,971 Financial & Insurance Liabilities (177,249) (464,429) (794,278) (860,889) (8,786) (2,305,631)

141,121 3,530,035 (794,278) 1,158,248 491,214 4,526,340

GROUP STATEMENT OF VALUE ADDED 2016 Annual Report & Accounts

2016 % 2015 % GROSS PREMIUM WRITTEN N'000 N'000 Local 9,190,634 7,331,633

Other Income Local 1,949,828 2,935,048

11,140,462 10,266,681 Bought in Material and Services:

Local (10,770,435) (7,482,850)

Foreign - -

Value Added 370,027 100 2,783,831 100

Applied as follows:

Employees Salaries and other Employees benefits 1,410,729 344 1,039,067 37

Government Taxation 470,563 115 212,300 8

Retention and Expansion Depreciation and amortisation 257,064 63 158,884 6 Contingency Reserve 239,619 58 171,032 6 Retained (loss)/Profit for the year (2,007,948) (479) 1,202,548 43 Value Added 370,027 100 2,783,831 100

139 COMPANY STATEMENT OF VALUE ADDED 2016 Annual Report & Accounts

2016 % 2015 % GROSS PREMIUM WRITTEN N'000 N'000 Local 8,389,950 7,331,633

Other Income Local 1,534,333 1,092,426

9,924,283 8,424,059 Bought in Material and Services: Local (10,006,804) (7,837,332) Foreign - - Value Added (82,521) 100 586,727 100

Applied as follows:

Employees

Salaries and other Employees benefits 1,173,652 (1,422) 1,018,551 174

Government Taxation 373,574 (453) 203,374 35

Retention and Expansion Depreciation and amortization 203,215 (246) 157,488 27 Contingency Reserve 215,598 (261) 171,032 29 Retained Loss for the year (2,048,560) 2,482 (963,718) (165)

Value Added (82,521) 100 586,727 100

140

FIVE YEAR FINANCIAL SUMMARY - GROUP 2016 Annual Report & Accounts

2016 2015 2014 2013 2012 Group Group Group Group Group N'000 N'000 N'000 N'000 N'000 ASSETS Cash and cash equivalents 3,093,080 6,297,836 3,077,531 3,558,740 2,747,322 Financial assets 9,648,024 7,748,751 6,519,589 5,071,987 3,796,078

Trade receivables 73,731 - 31,600 56,613 551,199 Receivables and prepayments 228,293 213,394 176,673 229,457 865,667 Other receivables - 290,138 5,496 2,131 - Reinsurance assets 2,492,227 1,611,105 1,701,296 2,221,541 1,475,611 Deferred acquisition cost 258,101 219,308 227,131 245,488 132,208 Finance lease receivables - 70 21,726 110,595 32,299 Investment in Joint Venture 1,894,885 - - - - Investment properties 494,000 1,302,994 1,303,680 1,288,680 1,275,780

Property, plant and equipment 2,235,928 2,070,530 675,814 602,431 558,643

Intangible assets - software 86,069 40,041 31,027 26,333 40,186 Deferred tax assets - 242,583 260,336 236,562 201,769 Statutory deposits 800,000 800,000 500,000 500,000 500,000 Asset classified as held for sale 132,031 132,031 - - - Total Assets 21,436,369 20,968,781 14,153,923 14,150,558 12,176,762

LIABILITIES

Investment contract liabilities 2,353,766 1,712,048 1,322,472 1,303,049 1,229,957 Insurance contract liabilities 6,941,872 5,619,757 4,401,107 4,528,243 3,653,933 Trade payables 456,521 384,017 319,482 518,337 176,670 Other payables 807,455 826,647 632,389 577,614 590,815 Trust and managed funds - - - 199,749 348,135 Finance lease obligations - - - - 758 Income tax liabilities 414,398 340,539 88,471 110,887 110,508 Deferred tax liabilities 144,335 - - - -

Employees retirement benefit obligations 8,102 7,523 11,565 10,251 38,521

Liability directly associated with assets 5,497 5,497 - - classified as held-for sale. - Total Liabilities 11,131,946 8,896,028 6,775,486 7,248,130 6,149,297

EQUITY Share capital and reserves: Ordinary share capital 7,364,754 7,364,754 4,410,005 4,410,005 4,410,005

Share premium 1,947,166 1,947,166 1,947,166 1,947,166 1,947,166

Treasury shares (48,175) (48,175) (48,175) (48,175) (48,175)

Contingency reserve 1,759,421 1,519,802 1,348,770 1,148,801 975,978 Retained earnings (General reserve) (890,224) 1,124,796 98,647 (555,369) (1,257,509) Non-controlling interest 171,481 164,410 - - -

Total Equity 10,304,423 12,072,753 7,756,413 6,902,428 6,027,465

Total Equity & Liabilities 21,436,369 20,968,781 14,531,899 14,150,558 12,176,762

Statement of Profit or Loss & Other Comprehensive Income

Gross premium written 9,190,634 7,331,633 5,211,966 5,313,223 4,619,959

Gross premium income 8,456,458 7,119,632 5,187,098 4,622,737 4,525,046

(Loss)/profit before taxation (1,264,660) 1,843,054 1,037,690 870,207 543,925

Taxation credit/(charge) (470,563) (212,300) (91,208) (9,844) (33,523)

(Loss)/profit after taxation (1,735,223) 1,630,754 946,482 860,363 510,402

141

2016 Annual Report & Accounts FIVE YEAR FINANCIAL SUMMARY - COMPANY

2016 2015 2014 2013 2012 Company Company Company Company Company N'000 N'000 N'000 N'000 N'000 ASSETS Cash and cash equivalents 2,557,153 3,687,778 3,425,849 3,715,242 2,931,876 Financial assets 7,370,257 6,527,604 6,490,566 4,580,031 3,530,347 Trade receivables 73,224 - 31,600 56,613 551,199 Receivables and prepayments 391,309 452,635 334,157 496,909 618,764 Other assets - 290,138 -- 2,131 Reinsurance assets 2,224,827 1,497,638 1,701,296 2,221,541 1,475,611 Deferred acquisition cost 206,629 197,082 227,131 245,488 132,208 Investment in Joint venture 1,188,609 - - - - Investment in subsidiaries 2,954,748 2,954,748 - 59,879 59,879 Investment properties - 816,994 1,303,680 1,288,680 1,275,780 Property, plant and equipment 806,082 770,413 673,562 598,856 555,907 Intangible assets - software 76,620 36,245 31,027 26,333 40,186 Deferred tax assets 18,790 187,843 175,804 170,722 135,929 Statutory deposits 500,000 500,000 500,000 500,000 500,000 Total Assets 18,368,248 17,919,118 14,894,672 13,962,425 11,807,686

LIABILITIES Investment contract liabilities 2,353,766 1,712,048 1,322,472 1,303,049 1,229,957 Insurance contract liabilities 6,307,846 4,862,365 4,401,107 4,528,243 3,653,933 Trade payables 452,649 331,222 319,482 518,337 176,670 Other payables 634,631 616,758 599,453 548,296 615,028 Finance lease obligations - - - - 758 Income tax liabilities 302,091 246,725 87,199 90,268 73,932 Employees retirement benefit obligations 7,750 7,523 8,145 7,967 37,602 Total Liabilities 10,058,733 7,776,641 6,737,858 6,996,160 5,787,880

EQUITY Share capital and reserves: Ordinary share capital 7,364,754 7,364,754 4,410,005 4,410,005 4,410,005 Share premium 1,947,166 1,947,166 1,947,166 1,947,166 1,947,166 Treasury shares (48,175) (48,175) (48,175) (48,175) (48,175) Contingency reserve 1,735,400 1,519,802 1,348,770 1,148,801 975,978 Retained earnings (2,689,630) (641,070) 499,048 (491,532) (1,265,168)

Total Equity 8,309,515 10,142,477 8,156,814 6,966,265 6,019,806

Total Equity & Liabilities 18,368,248 17,919,118 14,894,672 13,962,425 11,807,686

Statement of Profit or Loss & Other Comprehensive Income

Gross premium written 8,389,950 7,331,633 5,211,966 5,313,223 4,619,959

Gross premium income 7,768,850 7,119,632 5,187,098 4,622,737 4,525,046

(Loss)/profit before taxation (1,516,213) (332,139) 1,390,165 940,615 399,654

Taxation credit/(charge) (373,574) (203,374) (107,819) (8,756) 34,327

(Loss)/profit after taxation (1,889,787) (535,513) 1,282,346 931,859 433,981

142 MANAGEMENT STAFF LIST 2016 Annual Report & Accounts

S/N CADRE EMPLOYEE NAME

1 GROUP MANAGING DIRECTOR GANIYU, MUSA 2 EXECUTIVE DIRECTOR OSUNBUNMI, AYO SUNDAY 3 BELLO, TOKUNBO ADEREMI 4 GENERAL MANAGER UWUILEKHUE, MARTINS 5 DEPUTY GENERAL MANAGER ALAO, DAYO 6 OJO, PIUS, OLADAPO 7 EKWUEME, PETER EMEKA 8 ASSISTANT GENERAL MANAGER ABIDOGUN, ADEMOLA 9 PRINCIPAL MANAGER ODUNTAN, OMODAYO THERESA 10 LAWUYI, JONATHAN BABATUNDE 11 OTITOLAIYE, EMMANUEL DARE 12 ADENIRAN, THAIBAT ADENIKE 13 SENIOR MANAGER OLUDE, OLUDARE 14 ALIYU ABDULLAHI SUMAILA 15 FOSTER-AILERU ADEWALE EMMANUEL 16 OLUKOJU, YEMI 17 OKOPIE , ANTHONY 18 ADEGBEMILE, SOLAPE 19 ABIMBOLA, AKINROLABU 20 GBADEGESIN, ADESINA SIKIRU 21 EKEOCHA CORDELIA CHINWE 22 ADEKOYA, KOLAWOLE 23 AJIBADE, MOJOLAOLUWA 24 TIAMIYU, ABIMBOLA 25 SHEFIU, GANIU DARE 26 MANAGER MAFIKUYOMI, ADEMOLA ADEOYE 27 ONAJIDE, LANRE OLUTAYO 28 MOSHOOD, OLALEKAN SAHEED 29 OGUMKA, EMEKA 30 EGBE MARGARET TARE 31 OLUSHOLA STEPHEN ADERINOLA 32 ACHEMA, ADEJO 33 POPOOLA, WASIU 34 BALOGUN, AKINWUNMI EMMANUEL 35 AKINJOBI, ADERONKE 36 UTAH, IFEOMA VERA

1432 SHARE CAPITALCONTENT OF HISTORYTABLE 2016 Annual Report & Accounts

Authorized Share Issued & Fully Date Capital Value(N) Shares Paid Value (N) Shares Consideration

1991 5,000,000 5,000,000 5,000,000 5,000,000 Private Placement 1992 10,000,000 10,000,000 10,000,000 10,000,000 Rights Issue 1993 10,000,000 10,000,000 10,000,000 10,000,000 - 1994 20,000,000 20,000,000 10,000,000 10,000,000 Rights Issue 1995 30,000,000 60,000,000 25,000,000 50,000,000 Bonus 1996 50,000,000 100,000,000 37,500,000 75,000,000 Bonus 1997 100,000,000 200,000,000 70,000,000 140,000,000 Private Placement 1998 100,000,000 200,000,000 70,000,000 140,000,000 Private Placement 1999 100,000,000 350,000,000 100,000,000 200,000,000 Bonus 2000 175,000,000 350,000,000 175,000,000 350,000,000 Rights Public Offer 2001 175,000,000 350,000,000 175,000,000 350,000,000 - 2002 400,000,000 800,000,000 210,000,000 420,000,000 Bonus 2003 750,000,000 1,500,000,000 378,000,000 756,000,000 Bonus 2004 750,000,000 1,500,000,000 557,768,000 1,115,536,000 Rights Offer 2005 3,000,000,000 6,000,000,000 982,274,000 1,964,548,000 Bonus 2006 3,000,000,000 6,000,000,000 2,160,903,000 4,321,806,000 Public Offer 2007 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 Placing 2008 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2009 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2010 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2011 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2012 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2013 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2014 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2015 5,000,000,000 10,000,000,000 4,410,005,181.50 8,820,010,363 - 2016 7,500,000,000 15,000,000,000 7,364,799,306.50 14,729,598,613 -

144 DIVIDEND HISTORY 2016 Annual Report & Accounts

YEAR NET PROFIT (N) DIVIDEND (N) DIVIDEND PER SHARE (K)

1991 242,728 1992 6,543,999 400,000 4 1993 4,544,267 2,500,000 25 1994 8,050,610 2,500,000 25 1995 15,056,000 7,500,000 15 1996 27,754,000 - 1997 29,742,000 21,000,000 15 1998 36,815,000 14,000,000 10 1999 38,705,000 30,000,000 15 2000 53,726,000 52,500,000 15 2001 120,387,000 59,500,000 17 2002 82,865,000 42,000,000 10 2003 126,227,000 52,500,000 12.5 2004 170,430,000 145,020,000 13 2005 205,790,000 98,227,000 5 2006 197,481,000 172,872,000 4 2007 389,037,000 264,221,000 3 2008 339,288,000 - - 2009 377,727,000 - - 2010 218,195,000 - - 2011 156,344,000 - - 2012 510,402,000 - - 2013 860,363,000 - - 2014 946,482,000 - - 2015 535,513,000 176,400,000 2 2016 (1,516,213) - -

145

TABLE OF CONTENT OF TABLE 2016 Annual Report & Accounts RC 163170

MISSION Delivering value beyond expectations

VISION To be the leading insurance-based Financial Services group that transforms the industry

CORE VALUES

INTEGRITY Accountable. Responsible. Ethical EMPATHY Thoughtful. Understanding. Involved PROFESSIONALISM Competent. Consistent. Focused INNOVATION Proactive. Creative. Contemporary TEAM SPIRIT United. Connected. Commited

147 RETURNED CERTIFICATES 2016 Annual Report & Accounts

NO. NAMES NO. NAMES NO. NAMES 1 ABANA JUDE 77 ADEPITAN OLULANU OMOTUNDE 153 AKINBO STEPHEN ADEBAYO 2 ABDUL KAREEM ABDUL WASIU 78 ADERIBIGBE ABDULKAREEM A. 154 AKINBOADE COMFORT SHADE 3 ABDUL ZAINAB OMOTAYO 79 ADESANYA ADEKUNLE AZEEZ 155 AKINBODE FRANCIS AKINDEJI 4 ABDULLAHI WAHEED WILLIAMS 80 ADESANYA MISAN O. 156 AKINBODE JACOB AKINSOLA 5 ABDULRAHAMAN ABDULHAMID 81 ADESI SILAS 157 AKINBOLA MICHAEL O. 6 ABDULRAHAMAN ONYENEOIZA U. 82 ADESOLA ORIMALADE 158 AKINBOLUSERE MICHAEL AFOLABI 7 ABDULSALAM OGUEYI TIJANI 83 ADETOBA ADEYEMI TEMITOPE 159 AKINBULE OLUDAMILOLA OLUSEYI 8 ABDURRAHMAN SURAJ ALAO 84 ADETOYE FOLUKE AINA 160 AKINDE OLUSEYE SIGISMOND 9 ABEGUNDE ANTHONY OSO 85 ADETUYI OLAWUMI 161 AKINDEKINDE OLAJOMOKE OLUWAKEMI. 10 ABEGUNDE OLUWASEPE 86 ADEWALE ABIOLA OLAIDE 162 AKINDOYIN VICTORIA OLANREWAJU 11 ABIODUN BANKOLE AYODEJI 87 ADEWALE ADETUNJI 163 AKINDURO BOLA BOROJI 12 ABIOYE JOHN OLUREMI 88 ADEWALE EMMANUEL ADEBOLA 164 AKINJAYEJU IGBEKELE FESTUS O. 13 ABIOYE OLAWALE FATAI 89 ADEWUSI JOSEPH OLUTAYO 165 AKINKUGBE OLAOLU 14 ABOABA EYITAYO 90 ADEWUYI GEORGE ADEOLA 166 AKINKUNMI OLUFEMI ADEMOLA 15 ABOLAJI OLAYINKA OLUBIYI 91 ADEWUYI NAJEEM KAYODE 167 AKINKUNMI OLUWASAYO ADEOLA 16 ABOLO TONY 92 ADEYANJU LATEEF OYEKANMI 168 AKINLABI RASIDAT ADEBOLA 17 ABU OMACHONU (MR) 93 ADEYANJU MUKAILA OLAOGUN 169 AKINLATUN OLABODE ADEOYE 18 ABUBAKAR AL-MUJTABA 94 ADEYANJU OYEKEMI OYEDAYO 170 AKINNUSI ABIMBOLA OLABOWALE 19 ABUBAKAR AMADU MUHAMMED 95 ADEYEMI ADESOLA ADENIIYI 171 AKINOLA PATRICK AYODELE 20 ABUBAKAR KABIR (MALLAM) 96 ADEYEMI ADETAYO 172 AKINRINBIDO OLAFEMIWA 21 ABUBAKAR NANA HAUWA 97 ADEYEMI RUFUS ARIYO 173 AKINRO CHRIS A. 22 ABUMERE VICTOR 98 ADEYEMI SULEMAN KOLAWOLE 174 AKINSELOYIN KEHINDE ADEOLA 23 ACHIMUGU ENEOJO M. 99 ADEYEYE OLUKOYA M. 175 AKINTADE SOLOMON ATIJOSAN 24 ADAJI ADUKU JOHN 100 ADEYI AKANJI ADEMOLA 176 AKINTOKUN AMOS BAMIDELE 25 ADAJI OGBADU THOMAS 101 ADEYINKA ADEOLU AKANNI 177 AKINTUNDE ABOLADE 26 ADAMS LATEEF AKANNI 102 ADEYINKA AKANNI ADEOLU 178 AKINTUNDE ADETAYO ADEWUNMI 27 ADANGSON BARRY 103 ADEYINKA SAMUEL ADISA OLUKAUODE 179 AKINTUNDE OLUKUNLE TAIWO 28 ADARANIJO OYEYEMO OLUFISAYO 104 ADIBE IRONUMA JOHN 180 AKINWUNMI OLATUNJI 29 ADEBANJO DOTUN 105 ADIGWU VIDA CHUKWUDUMEBI 181 AKINYEDE LAMBERT OLUWAFEMI 30 ADEBANWO FATAI ADEBOLA 106 ADISA ABEL OLUWABEMIGA 182 AKINYEMI FUNMILAYO CAROLINE 31 ADEBAYO ADEBOLA OLABODE 107 ADU FOLAKEMI 183 AKINYODE MAUSI OLABISI 32 ADEBAYO EMMAN BABAFEMI 108 AEDWOJO AJIBADE 184 AKOLE OLUSOLA OJO 33 ADEBAYO JOHN ADEBAYO 109 AFOLABI KAMORU ABIORO 185 AKORGA BENEDICT SAAVE 34 ADEBAYO SAMUEL SUNADY 110 AFOLAYAN GBENGA 186 AKPAH BARTHOLOMEW CHIZOBA 35 ADEBIYI ADEMOLA 111 AGBABIAKA LUKMAN OLUGBEGA 187 AKPAN PETER BENEDICT 36 ADEBIYI KINHINDE ADEGBOYE 112 AGBAJE ADEYIGA 188 AKPAN ROSE 37 ADEBOYE ADEBAYO AKINWALE 113 AGBER MSUGH DANIEL (REV) 189 AKPAN S.E. 38 ADEDAYO ADEDAYO ADEBAYO 114 AGBONAVBARE KENNEDY OSAS 190 AKPATA UYIOSA N. 39 ADEDAYO SODEINDE 115 AGBOOLA ADEPESOLA SIDIKAT 191 AKUMA OBIAGERI EUNICE 40 ADEDEJI SHERIF ALAMU OLADIPO 116 AGOHA-EHINM UZOMA 192 AKURA JULIET MWUESE 41 ADEDEJI-MABIAKU AMAJUORITSE UTSEORI 117 AGORO RASAKI 193 AKWAZIE V. M.A 42 ADEDIRAN GBENGA BENJAMIN 118 AGU NAOMI 194 ALABI ADETOYE LAYIDE 43 ADEEKO ADESANMI 119 AGUARIAVWODO SUSAN AHWEFERHE 195 ALABI EBENEZER LAGOKE 44 ADEFEKO ADEYINKA SHERIFAT 120 AGUDA AKINTAYO CLEMENT 196 ALADE MORENIKE 45 ADEFIRANYE ABIOLA OLUMIDE 121 AGUNBIADE JUMOKE 197 ALAKA-ALLI ADEKEMI OLATEJU 46 ADEGUMSOYE ADEMOLA GODWIN 122 AGWOEMEH CHUKWU DOMINIC 198 ALAO OLATUNJI AYOOLA 47 ADEKEYE JULIE MOJISOLA 123 AIGBOVO OSARETIN 199 ALATECH COMPANY 48 ADEKOYA ABIODUN SUNDAY 124 AIYELABOLA SAMUEL OLUWATOSIN 200 ALAWAYE ADEBANKE 49 ADEKOYA ADEWALE 125 AJADI BOLAJI DORCAS 201 ALEGBEMI MODUPE OLUFUNKE 50 ADEKUNLE ADEYINKA EMMANUEL 126 AJALA ADEREMI OMOTESO 202 ALEONEWESE JOHN OKHUMODE 51 ADEKUNLE MOJIRAYO ABEGBO 127 AJAO MATHEW OLUGBEMIGA 203 ALEXANDER-ZAMBA IDOWU MARY 52 ADEKUNLE OLUWATOYIN R. 128 AJAWUIHE NELSON UZOMA 204 ALFRED EDOGAME 53 ADEKUOYE OLUBUNMI 129 AJAYI BABAFEMI OLUYEMI 205 ALI SURAJUDEEN AYANJIDE 54 ADELEKE ADEBAYO ADETUNJI 130 AJAYI E. B. 206 ALI-BALOGUN NKECHI BRIDGET 55 ADELEYE CORNELIUS OLUFEMI 131 AJAYI EMMANUEL IBUKUN 207 ALIMI SAHEED 56 ADELEYE EMMANUEL BOBADE 132 AJAYI MICHAEL OLATUNBOSUN 208 ALIU ABDULAZEEZ 57 ADELKAN TAOFEEK 133 AJAYI OLATUNBOSUN 209 ALLU CHRISTOPHER OLORUNDARE 58 ADEMU OMOH P 134 AJAYI TEMITAYO 210 ALOKUN NURUDEEN A TOPE 59 ADENEKAN SULAIMON ADENIYI 135 AJE IFEDOLAPO ABIODUN 211 AMADI FRANCIS ANAYOCHUKWU 60 ADENEYE OLALEKAN AHMED 136 AJIBADE DANIEL OLUWASEGUNFUNMI 212 AMINU USMAN 61 ADENIJI ADEYEMI ISRAEL 137 AJIBOYE JOSHUA EBUN 213 AMINULAHI JIBRIL G. 62 ADENIJI EMMANUEL 138 AJOSE BUSAYO DANIELLA 214 AMOBI JOSEPH CHINEDU 63 ADENIRAN ADEMOLA FRANCIS 139 AJOSE DANIEL KEHINDE 215 AMOLE BISI LAWRENCE 64 ADENIRAN AISHAT 140 AJUDUA STEVE ELVE 216 AMOLEGBE MUSBAN ADENLE O. (COL) 65 ADENIYI EBENEZER SUNDAY 141 AKALI HENRY CHINEDU 217 AMUWO ADEYEMI MICHAEL 66 ADENIYI FUNKE ABIGELE 142 AKANDE ADEYEMI ADEBAYO 218 ANIEBONAM UCHENNA CLEMENT 67 ADENRELE S.BABATUNDE 143 AKANDE OLAREWAJU AUGUSTINE 68 ADENUGA ADEMOLA BABATUNDE 144 AKANDE SILI AKANBI 219 ANOKWURU CHRISTIAN 69 ADENUGA MOSUDI ADEMOLA 145 AKANNI JULIANAH ABIKE 220 ANUGENGEN SAMUEL 70 ADEOJO KAMAL 146 AKHAURE PEACE OZIENKHAYE 221 ANUKAM KINGSLEY CHIDOZIE 71 ADEOLA JOHN 147 AKHILOMEN EHIS GODWIN 222 ANUM JOSEPH AKOOM 72 ADEOTI SUNDAY OLASUNKANMI 148 AKIBOYE MICHAEL AKINUNMI OLUFEMI 223 ANUMBA BENENETT IZUKA 73 ADEOYE ADESAYO OYETUNDE 149 AKINADE EMMANUEL O. 224 ANYACHOR UCHE SYLVIA 74 ADEOYE EMILY OYEBIMPE 150 AKINBAMI ABIOLA TAWAKALIT 225 ANYANWU VICTOR CHIAGOZIE 75 ADEOYE JOHN OLUREMI 151 AKINBAMI HAMEERAH ATINUKE OMOLARA 226 ANYIM AGBAI JAMES 76 ADEOYE OYEKANMI 152 AKINBO HAJARAT OMOTAYO 227 ANYIWO RAYMONY ARINZE

1482 RETURNED CERTIFICATES CONTD 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 228 ARE ADERONKE MODINAT 303 BEBETEIDOH WISDOM 378 EKE IFEOMA JECENTA 229 ARE OLANIYI IFEOLUWA 304 BELADE JANET 379 EKE MICHAEL NNAMDI 230 AREGBESOLA MOTUNRAYO A. 305 BELADE JANET OLUFUNKE 380 EKEBOR SILAS C. 231 AREMU JULIANA IKEOLU 306 BELLO ABDULAZEEZ OLUWAFEMI 381 EKEJIUBA UCHENNA EKEJIUBA S. 232 ARIBISALA SOLOMON OJO 307 BELLO GBOLAHAN 382 EKEMODE JILIUS OLUTOPE 233 ARUNA SURAJ TEMITOPE 308 BELLO RASHIDAT MORENIKE 383 EKEOBA ANTHONY OSAMHON 234 ASABIA CONSTANT AKINFOLAYAN 309 BELLO SIKIRU ADETINKA 384 EKERIN GANIYU ADEBISI 235 ASARE-BEDIAKON MIKE 310 BELLO TAWAKALIT OLAYINKA 385 EKHATOR AYGYSTINE OSAMUDIMEN 236 ASHOGBON JAMIU SHINA MR. & MRS 311 BENSON OLAYEMI 386 EKONG ANDIKAN CHARLES 237 ASUNI BAYO 312 BIRIYOK CASIMIR 387 EKONG IBIYE ASME 238 ATANE NICHOLAS 313 BISIRIYU MUTIU OLUWASEYI 388 EKONG UDEME MICHAEL 239 ATEKOJA ADEFISAYO 314 BLANKSON AMPIM GOGO 389 EKPO USORO EKANEM 240 ATIEGOBA ANNE IFEANYI 315 BOLARINWA JACOB AYODEJI 390 EKUN PHILOMINA ILEYEMI TINUOLA 241 ATTAH EDEGBO DANIEL 316 BOLARINWANRA SHEED RAJI 391 EKWEALOR NORAH I. 242 ATTAH IKO VICTOR 317 BONIFACE A. DURU 392 EKWEMALOR N. STELLA 243 ATU SUNDAY ATSON 318 BROLBAK INTERNATIONAL LTD 393 ELERI NICHOLAS 244 ATUKUN SAMUEL BITRUS 319 BUKOL NIGERIA LTD 394 ELETU OLASEIDE BABATUNDE (DR) 245 AUDU AISHA GOD'S GIFT 320 BUSARI TEMITOPE FAUSAT 395 ELIAS ADEPEJU RAMILAT 246 AUDU SALIU TIJANY 321 CANOGA ESTATE & PROPETY SERV. LTD. 396 ELUHAIWE PAUL NDUKA 247 AVANTE CAPITAL PARTNER 322 CAPIMS NIG. LTD 397 ELUJOBA AYOOLA OLABISI 248 AWA-OSAJE PHINA 323 CAPITAL PROVIDERS SEC. LTD. 398 ELUYEFA PETER 249 AWESU OLUKAYODE 324 CAPITAL TRUST BRKS LTD TRADED A/C 399 EMENIKE CHLOO G. 250 AWOBAJO MICHAEL OLAYIMIKA 325 CASHCRAFT ASSET-DESPOSIT A/C 400 EMENIKE CHUKWUEMEKA CHRISTIAN 251 AWOKOYA OLUSEGUN OLAWALE 326 CAVESCO INVESTMENT COY LTD 401 EMENIKE DONATUS 252 AWOLU FRANZ SEGUN 327 CENTURY SECURITIES LTD 402 EMERUWA PRISCILIA O. 253 AWONIYI OLUFEMI ADEWALE 328 CHALLSON NYIAM 403 EMMANUEL MONDAY SAMSON 254 AWONUGA AYODEJI OLU (MR&MRS) 329 CHART INVESTMENTS LTD 404 EMOEFE DAFE ESERO 255 AWOSANYA OLUSEGUN OLASUPO 330 CHINRA PAUL CHUKWURAH 405 EMORDI NKIRUKA VERONICA 256 AWOYOMI JOHNSON OLU 331 CHINWOKWU VICTOR 406 ENEH RICHARD O. 257 AYENI JOSEPH ABIODUN 332 CHUKWU ANYAOGU AWARA 407 ENEMANNA CHUKWUEMEKA .C. 258 AYIDU DONATUS 333 CHUKWUKA NDULUE DOMINIC 408 ENIKUOMEHIN CHRISTIAN OMOTEREM 259 AYOADE C. IDOWU ADEBUSOYI 334 CHUKWUMA MEGAFU 409 ENOEFE DAFE ESERO 260 AYODELE EMMANUEL O. 335 CLARION & MARK LTD 410 ERONMOMMOSELE VINCENT 261 AYODELE OMOLARA 336 COATLAND SECURITY CONSULT & SERVICE 411 ESAN ADEWONULA OLUKEMI 262 AYODELE TALABI 337 COKER TOPE MICHAEL 412 ESEGBA DEBORAH EGUONO 263 AYODELE WASIU OLALEKAN 338 CORE TRUST & INVEST 413 ESEHA AUGUSTINE ENEJETA 264 AYORINDE CAROLINE ABOSEDE 339 COUNTERS TRUST SECURITIES LTD 414 ESEHA OMAMIRO OLUWASEYI 265 AYORINDE DELE 340 DADA ISHOLA ADELOYE 415 ESENE JOSEPH KELLY 266 AYOTUNDE SALU 341 DADA MOTUNDE 416 ESO ADEBAYO JOSEPH 267 AZEEZ FIMISOLA A. 342 DAHUNSI ARINOLA OLUWAYOMI 417 ESSIEN FRIDAY ENANG 268 AZUBUIKE FELIX ONYEDIKACHI 343 DAMOLA ADENIRAN 418 ETTA CLAUDIA IGUO 269 BABALOLA OLANREWAJU 344 DARAMOLA ELIJAH OLUWASEUN 419 EVBUOMWAN OMOREGIE JIMMY 270 BABALOLA RAFIU SIYANBOLA 345 DARE ADESOLA ADEBAYO 420 EWEJE JOHN AJIBOLA 271 BABARINDE OYEBAMIJI KEHINDE 346 DE BUSINESS NETWORK LTD 421 EWETO J. ONOBEREVU 272 BABATUNDE ADEKUNLE M. 347 DE-CANON INVESTMENT LTD 422 EWULO ORIYIMI FELIX 273 BABATUNDE IBIRONKE 348 DELE ADENIYI 423 EYA OLIVER AMA 274 BADARU EZE KEHINDE 349 DIKE FRANKLIN IFEDINACHUKWU 424 EYONG FRANCIS 275 BADIRU BOLANLE 350 DIMKA ISAAC YILJI ZAKARI 425 EZEALA GEORGE 276 BADMUS TEMITOPE MUINAT 351 DIMOWO OLUWATOYIN 426 EZEGO N. I .H CLEMENT 277 BADRU IBRAHIM ADEBAYO 352 DIVINE NOBLE FAITH VENTURES 427 EZEH ANI JOHN 278 BAIYE EUNICE AYOKA MRS 353 DOKPESI OLUWATOSIN ABIMBOLA 428 EZEH CHIKA VICTOR 279 BAKARE ADEBISI OLUWAYEMISI 354 DOKUN AFOLABI 429 F.N.C. IGWE ENTR NIG. LTD 280 BAKARE AISHA BUKOLA 355 DOSUNMU ADENIKE S. 430 FADARE CHIOMA PRECIOUS 281 BAKARE LATEEF ABDUL 356 DOSUNMU OLUWOLE ROGER 431 FADE ANTHONY ADEMOLU 282 BAKARE WASIU ADIO 357 DOSUNMU SIDIQUAT FOLASHADE 432 FADINA OLUGBEGA 283 BAKO PATIENCE 358 DUOPAMA OBOMANU BOMA 433 FALADE MUDIRAT MORENIKE 284 BALOGUN AKINOLA 359 DUROSINMI-ETTI OLUFUNMILAYO TITI 434 FALAEYE LATEEF FOLORUNSHO 285 BALOGUN SARATA IYABO 360 DURU CHIKA ANN 435 FALANO OLUEYMI 286 BALOGUN TAOFIQ OLAWALE 361 DUYILEMI FEMI EDWARD 436 FALUSI CALEB OJO 287 BALOGUUN MOSHOOD ISHOLA 362 DYITKUKA EIRENEH PWANMWAKAT 437 FAM CAB NIG. LTD 288 BALUCHI BEHRAM SHERO 363 EBENUWAH ANTHONY N. 438 FAMAKINWA ADEDOYIN 289 BAMIDELE ALFRED AYOOLA 364 EDEKOBI NNAMDI PIUS 439 FAMILUGBA ADEBISI 290 BAMIDELE HAMBOLU 365 EDOZIE JOHN U. 440 FAMORIYO SILIFAT MOSUNMOLA ADENEYE 291 BAMIDELE MORUF 366 EDUZOR OGUGUA 441 FARRI ENIOLA 292 BAMIGBOJE ABRAHAM O 367 EGIE EDAFE EMMANUEL 442 FASHETIRE FUNSHO 293 BAMIGBOJE PHEBEAN ADEBUKUNOLA 368 EGOPIJA JULIANA AYUWU 443 FASOGBON ADEBISI 294 BAMIGBOJE V. ZACHEUS OYEWOLE 369 EGUBE EJIROGHENE THEODORE 444 FATAI B. OWODUNMI 295 BAMMEKE AYO 370 EGUBE GAB. EJIRO 445 FATANMI COLSON OLADAPO 296 BANJOKO OLADELE 371 EGUNYOMI AKINLOLU S. 446 FATGBE KOLAWOLE OLUFEMI 297 BAPETEL IBRAHAM 372 EGWOBA CHRISTOPHER UZODINMA 447 FATINIKUN TUNDE 298 BATIDO SYSTMS LIMITED 373 EHIGIEGBA ENORENSE PHILIP 448 FATOGUN B. O. 299 BAYODE DAMOLA BOSEDE 374 EHIY CHRISTOPHER OSEGHALE 449 FATUBARIN SAMUEL FOLORUNSO 300 BEBETEIDOH ALEXANDRA T. 375 EJEMUTA ISAAC 450 FOWLER ADEYINKA I. 301 BEBETEIDOH LAURYN OYIN 376 EKE ALOYSIUS ONYEMAUCHE 451 FRANCES O. AYEWOH 302 BEBETEIDOH PAULA-YOUNG 377 EKE CHRISTIAN OBIAGERI 452 FRANK AKPAN

1492 RETURNED CERTIFICATES CONTD. 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 453 FUEL NOMINEE A/C 529 ISAAC VICTOR IME 605 LAIZER JOSEPH DAVID O. 454 FUTURE VIEW SECURITIES LTD 530 ISHIORHOVOJA O. ANDREA 606 LANIYAN SOLOMON OLA 455 GANIIYU AFOLABI MORUFU 531 ISIGUZO UGOCHUKWU 607 LASHORE BABATUNDE OLUWASEYI 456 GANIYU IYABO 532 ISTIFANUS MURINA 608 LASHORE CHRISTIE MOPELOLA 457 GBARAB EMMANUEL LEGIA 533 ITANOLA NURAIN OMOTAYO 609 LASHORE OLADIPUPO EBUN 458 GBEYIDE OLUWOLE EMMANUEL 534 ITF A. DAVID BOLUWA 610 LASHORE OLAYEMI OLANIYI 459 GBOLAGUNTE ADEGBOYE AYINLA 535 ITF A. DAVID BOLUWATIFE 611 LASHORE OLOLADE OLABISI 460 GBUN JOY NWUESE 536 ITONYO VICTOR WILFRED 612 LASHORE OLUWABUKOLA 461 GEORGE SELEIPIRI IWURU 537 IWAN VICTOR TERKIMBI 613 LASHORE STEPHEN IBITAYO 462 GOERGE-HART CLADYS N. 538 IWERE TED 614 LAWAL ADETUNJI LUQMAN 463 GOJE BLESSED SANI 539 IWUJI FRANCISCA AGATHA O. 615 LAWAL DARASIWA ESTHER 464 GOLD AMBROSE PHILIP 540 IYAMU OMORUYI C. 616 LAWAL IFEOLUWANI AYOMIDE 465 GREEN LOUIS OLAKUNLE 541 IYIOLA A. & SONS 617 LAWAL MODINAT ADEOLA 466 HABEEBAT AINOGBO 542 IYORE EMMANUEL O. 618 LAWAL MUSTAW AKANO 467 HALIDU-GIWA ABDULMAIK 543 IZU LIVINGSTONE CLITON 619 LAWAL O. AYOBAMIDELE 468 HALLIBURTON P/HARCOURT CO-OP. 544 IZUKA IHEANYI AUGUSTINE O. 620 LAWAL OLUTOBI ADEDIWURA 469 HARIGOLD VENURES LTD 545 J&P LAUNDRY AND DRYCL 621 LAWANSON T. A. 470 HARRY AYIBO 546 JABAR MOSHOOD OLAYIDE 622 LAWRENCE SAMUEL TEMIDAYO 471 HARUNA ABUBAKAR 547 JACKSON-COLE FREDRICK E. O. 623 LEWIS ANDREW OLUFUNMILAYO 472 HASSAN OLAREWAJU AFIS 548 JACOB BABATUNDE BOLAJI 624 LONGE PETER OHIAKHUEMI 473 HOLLOWAY JOLASUN 549 JADOT ASSOCIATIES LTD. 625 LOWO EMMANUEL A. ABAYOMI 474 HUSSAINI HAMIDU 550 JAGA MICHAEL 626 LUCKY MADEK LTD. 475 HWAKAR HENRY GBAASOM 551 JAGA OLUBUKOLA BOSEDE 627 M/S FOLLY & SONES AUTO ENG. 476 IBE CHIBUZOR EMMANUEL 552 JAGUN OMOFEHINTOLA 628 MACAULAY AKIN 477 IBE LOUIS EMEFU 553 JAIYEOLA CHARLES EKUNDAYO 629 MADUFOR JOSEPH SUNDAY 478 IBEGBULEM CHUKA ONOCHIE 554 JAIYEOLA MOSES 630 MADUMERE ONYINYE IJEOMA N. 479 IBEKWE GODFREY NWABUEZE 555 JAIYESIMI OLUFEMI 631 MAJEKODUNMI FEYISOPE ADETUTU 480 IBIDOJA KAROL IFEYINWA 556 JAJA-WACKUKU EMENUWA ANUGHA 632 MALIZU CHINEMEREM BENDI 481 IBINE OLAYIWOLA JETHRO 557 JALO Y OLGA 633 MALOMO ABOSEDE GRACE 482 IBITOYE TOLU 558 JAMES KITWA 634 MANUWA KUEWUMI 483 IBRAHEEM ABDUL-GAFAR O. 2 IBIK 559 JAMES OLUSEGUN MICHAEL 635 MARRIOT SEC. & TRUST COY LTD. 484 IBRAHEEM WAKEELAT O. 2 IBIK 560 JATAU EMMANUEL MONDAY 636 MARTINS THADDEUS OLUWASEYI 485 IBRAHIM ABDULKAREEM MAJID 561 JAWANDO OLUWAKEMI O. 637 MARVEL TRADES & SERVICES 486 IBRAHIM MUHAMMED AUDU 562 JAWO JOHNSON 638 MBACHU SOLOMON ONWUAMAEZE 487 IBRAHIM SHAMSUDEEN SAEED 563 JAWO JOHNSON OLAKUNLE 639 MBAMBA IJOMA SUNDAY & ANR 488 IBTA TRUST & INVESTMENT LTD 564 JEGEDE COMFORT SALAMAT 640 MBERU CEPHAS 489 IDAKWO JOHN U. 565 JEGEDE RUFUS BABALOLA 641 MBONU THERESA NKECHI 490 IDELE ROSEMARY OMOZEFE 566 JEREMIAH AGBO 642 MEADOWS ADEGBOYEGA 491 IDORNIGIE SUNDAY PIUS 567 JEROME JIMOH 643 MEGACREDITS LTD. 492 IDOWU FAOSAT OLAYINKA 568 JIBARTO NIG. LTD 644 MEMUD MUIBAT MEMUD 493 IDOWU JOHNSON ADEYI 569 JIMOH TAJUDEEN AKANNI 645 METROPOLITAN MOTORS LIMITED. 494 IDOWU PASCHAL ADELEKE 570 JINADU FATAI ABOLORE 646 MGBAHURIKE SYLVESTER AHAMEFULE 495 IDOWU SAMUEL FOLORUNSHO 571 JIYA ATTAI JIBRIN 647 MILTON OGBONNAYA NWOSU 496 IFATUJOSIN S. BABATOPE 572 JOHN ADEWUMI O. OPADOKUN 648 MINTY BELTHA OMARI 497 IFEBUEME JULIET OGECHUKWU 573 JOHN OMOSA ODUNTAN 649 MINTY GABRIEL AKABOM TITO 498 IFEKWE IFEOMA MERCY 574 JOHNSON ABIMBOLA 650 MINTY IVAN OSATOHAMWEN 499 IFEMADE OLUBUKOLA OMOLOLA 575 JOHNSON ABAYOMI (OEMA) 651 MINTY ZARA ISIUWA 500 IGBEN LESLIE DONOR 576 JOHNSON ADEOLA 652 MOHAMMED IBRAHIM KABIR 501 IGBINOVIA NEWTON NOSA 577 JOHNSON BABATUNDE 653 MOHAMMED IDRIS 502 IGBOKWE IWUEJINA AUGUSTINE 578 JOHNSON EDWARD 654 MOHAMMED JAMILU KIRU 503 IGIEBOR AMADIN WILFRED 579 JOHNSON MOBOLAGI O 655 MOMAH IFEYINWA 504 IHEAKA NKEIRUKA CHARITY 580 JOHNSON OLAWALE 656 MOSES GIDEON AKINTOMIWA 505 IHEUKO STANLEY 581 JOLADEM COMPANY 657 MOZIE ROPHINA CHINENYE 506 IKEAKANAM RAPHAEL 582 KADRI KAMAL ADISA 658 MRS FOLLY & SONES AUTO ENGINEERING. 507 IKEANEKE OBIAGELI 583 KASALI TAIWO 659 MUHAMMAD ANWALU ABDU 508 IKEGWUANI ONOCHIE OBIESIE 584 KASSIM HADIZA 660 MUO IKE FERDINAND 509 IKEM AUGUSTINE OGOEGBUNAM 585 KAYODE TIMOTHY OLUFEMI 661 MUOGHALU CHRIS ALOYSIUS 510 IKHELOA JOSEPHINE O. 586 KENEDY AGBAEZE 662 MURIANA KHALIL OPEYEMI 511 IKOGWE ADEBOLA OLUBUNMI 587 KENKU KEHINDE OMOLABI 663 MUSA SARAH 512 IKOLO EZEKIEL OMAYAYERHWE 588 KENKU TAIWO AFOLABI 664 MUSTAPHA IDOWU YAHAYA 513 IKPIRHIRHIN ONAEFE BLESSING 589 KENNETH NWADIKE 665 MUSTAPHER GANIYU ADEBAYO 514 IKPON SUNDAY E. 590 KERERE-EKUN SAIHEED RAHUF 666 NAMEDU BENJAMIN AIGBOGHIE 515 IKUYIMINU OLANIY 591 KESINRO JOS OLU 667 NAZEGBULAM CHRISTOPHER OLUMIDE 516 IKWEONYE A. IFEANYICHUKWU 592 KESSELLY YOUNGAH CECELIA 668 NDUBUISI KISSINGER UGOCHUKWU 517 ILAVBARHE MUSAH ORIVBABEHI 593 KIPUPU NGAMUNONO AMIYOO 669 NDULUE BENEDICT CHIKE 518 ILELEJI ERNEST 594 KOLAJO JIMOH A 670 NGADI CHIDERA 519 ILOH EMMANUEL NNAEMEKA 595 KOLAPO ARINLADE ARIKE 671 NGELALE GODSPOWER OSILAOLLOR 520 IMAM TAIYE ABDUL 596 KOLARINWA REMI 672 NKIRI FLORENCE NKONYE 521 IMONA PETER OSEDEBIAMWEN 597 KOLE FUNSHO 673 NLEMDIM UCHENNA OGADINMA 522 INDEPENDENT SEC. LTD 598 KOSOKO ZUBAIR ABIODUN 674 NOAH MOHAMMED 523 INIYEZO EMMANUEL OGHENEOVO 599 KOVAME FRANCISCA ADEKUNBI 675 NSA CHRIS EKPEYONG 524 INVESTS. STRATEGIE LTD. 600 KREUGER BRENT LTD. 676 NURUDEEN AKINOLA DAUDA 525 INYANG MORGAN JOHNSON 601 KUE YEGHENEE NNA 677 NWABEZE ADAKU AKUDO 526 INYANG REBECCA EFFIONG 602 KUFORIJI NATHANIEL OLANREWAJU 678 NWABUSI ANTHONIA N 527 IRABOR HUMPHREY 603 KUTENHA DARLINGTON 679 NWABUSI ISRAEL 528 IREYOMI IYANIWURA ADERINOLA 604 LADABOT NOMINEES LTD. 680 NWANI OSITA EZEKIEL

1502 RETURNED CERTIFICATES CONTD 2016 Annual Report & Accounts

NO. NAMES NO. NAMES NO.NAMES 681 NWANKOR NNAMDI MIKE 756 OGUNFOWORA ROTIMI A. 832 OLAITAN NOAH TOYIN 682 NWANKWO OGBONNA CHRISTIAN 757 OGUNJIMI OLUFEMI BABALOLA 833 OLAITAN TAIWO FOLASHADE 683 NWANZE JEFF CHIKEZIE JUDE 758 OGUNLEYE BOLAJI 834 OLAIYA ISAAC ADEBISI 684 NWATU MICHAEL NWAFOR 759 OGUNNAIKE OLAJIDE ADEKUNLE 835 OLAJIDE ADEBAYO BAMIDELE 685 NWEKE NKIRUKA JUDITH 760 OGUNSUNLADE SUNDAY EMMANUEL 836 OLAJIDE DAVID BANKOLE 686 NWOKOCHA BENEDICT ONYEMAEC 761 OGUNTOMI AYODELE 837 OLAJIDE OLANREWAJU TAJUDEEN 687 NWOSU IFEANYI EUGENE 762 OGUNWALE KUNLE LAWRENCE 838 OLAJIDE TAJU OLANREWAJU 688 NZEKWE BLESSING CHISA 763 OGUNYEMI OLUFEMI SEBASTINE 839 OLAKANYE BENSON ABIODUN 689 OAMEN ANTHONY O. 764 OGUNYEMI WINIFRED KUNBI 840 OLAKEMI VICTORIA 690 OBAFEMI OLUWASEYI ADETUNJI 765 OHIOMAH EMMANUEL AHONKHAI 841 OLANIYAN BANJI 691 OBAJIMI J. OLUWAROTIMI 766 OJELEKE OLABAYO A.R. 842 OLANIYAN BOLA MISS 692 OBAMI SOT OWUNDA 767 OJEMEN COSMAS A. 843 OLANIYAN GBOLADE CHARLES 693 OBAMONIRE OLADAPO SAMUEL 768 OJIDIRAN JAMES IYIOLA 844 OLANIYAN OLUGBENGA 694 OBASEKI EDWARD OSAZEE 769 OJIGBO TOBECHUKWU I. 845 OLANREWAJU AMBALI ALLI 695 OBI AYOBAMCHUKWU A. 770 OJO ALBERT OLUWOLE 846 OLAOSEBIKAN TUNDE 696 OBI NWACHUKWU 771 OJO EZEKIEL OLUWASEYI 847 OLATUNDE OMON ANTHONY 697 OBIANODO C. CHUKWUAGOZIE 772 OJO ISAAC OLADEJO 848 OLATUNDE SALISU GANIYU 698 OBIENE THEOPHILUS DIENEYE 773 OJO JAMES AKINLOLU 849 OLATUNJI ENOMA MERCY 699 OBIKE JOHNNY O. 774 OJO SOLOMON OLUSEGUN 850 OLATUNJI ISHAQ OLALEKAN 700 OBILANA OLUSOJI 775 OJOH DAVID 851 OLATUNJI MATHIAS ROTIMI 701 OBILEYE VICTOR OLAJIRE 776 OJUMOOLA OLUSEGUN AKANBI 852 OLATUNJI O. OLALEKE 702 OBIOHA OLANMA 777 OKAFOR FRANCIS C. E. 853 OLATUNJI SAMUEL 703 OBIOHA RALPH A. 778 OKAFOR KENECHUKWU HILARY 854 OLAWOYE J. D. 704 OBISESAN AKINWALE TAIWO 779 OKAFOR UZOCHUKWU SUNDAY 855 OLAYANJU OLOLADE 705 OBOMANU ISRAEL ABEREYANA 780 OKANLAWON SAMUEL ADEGOKE 856 OLAYEMI EMMANUEL AYINLA 706 OCHIAGHA CLEMENT 781 OKANRENDE OLADOTUN OLAWALE 857 OLAYINKA KEHINDE OLOLADE 707 ODEBIYI NURUDEEN BOLAJI 782 OKARA LYNA IJEOMA 858 OLIMAH ELIZABETH I. 708 ODEDEJI DAVID ADEOYE 783 OKE AYODEJI LAYIWOLA 859 OLIOBI CHRISTIAN DR.&MRS 709 ODEDOKUN DEBORAH OLUWATOYIN 784 OKEKE ANTHONY 860 OLIVER AMAEYA 710 ODEKUNLE TAIWO OLUDELE 785 OKEKE CLEMENT IKENNA 861 OLOGBOSERE AUSTYNE IYERE OSA 711 ODELE OLAKUNLE 786 OKEKE HEZEKIAH EMEKA 862 OLOKO BUSHURA OWOLABI 712 ODENIYI REBECCA OLAPEJU 787 OKERONBI ADEWALE A 863 OLONISAKIN AYOOLA 713 ODERINDE OLUFEMI SUNDAY 788 OKESOLA MASILIAT AYOKA 864 OLORUNFUNMI OLUSEGUN ADELEYE 714 ODETOYINBO SUSAN TOMI 789 OKETUNDE LANRE PETERS 865 OLORUNSOLA PETER IBUKUN 715 ODETUNDE OLAGOKE M. OBERTH 790 OKEWOLE RANTI FLORENCE 866 OLOTU MICHAEL OLUWATOBI 716 ODII FREDS CHUKWUEMEKA 791 OKHIRA LUCKY 867 OLOWE OLATUNDE JOHNSON 717 ODIKAGBUE THOMAS 792 OKOJIE OSA JOSEPH 868 OLUBANIYI GRACE MORONMUBO 718 ODOMA IBRAHIM ISA 793 OKOLO NGOZI CHRISTIANA 869 OLUBOYEDE DEBROAH O. 719 ODUFESI KEHINDE 794 OKON ANDREW ANIEFIOK 870 OLUBUNMI GA-OPADOKUN 720 ODUGBESI ADEBAYO OLUSEGUN 795 OKONJE UMO GABRIEL 871 OLUDARE GBENGA ISAAC 721 ODUNLAMI JOSEPH OLUYEMI 796 OKONKWO KENECHUKWU JUDAH 872 OLUFIDIPE ANTHONY OYE 722 ODUNTAN OLAJIDE 797 OKONKWO UCHE MERCY 873 OLUFIDIPE TOLUWALASE 723 ODUOLA MICHAEL OMOLADUN 798 OKONKWO VICTOR CHUKWUNONSO O. 874 OLUGBEMI OLUBUNMI ADREMI 724 ODUWOLE OLASENI 799 OKORO EMMANUEL OBINNA 875 OLUKOYA TITILOPE 725 OFOGBA PATRICIA LAIRE 800 OKOSUN EDWARD EROMOSELE 876 OLUMEGBON RISIKAT ABIMBOLA 726 OFOMATA CHINENYE JOY 801 OKOYE AFAMEFUNA NNAMDI O. 877 OLUMESE DONALD EHINOR 727 OFOYEJU MITCHELL JARIKRE 802 OKOYE MARTIN OLISA 878 OLUMUYIWA IBIRONKE 728 OGBARA AKEEM MUSTAPHA 803 OKPALA CHUDE ONYEMAUCHE 879 OLUOKUN AYOBAMI 729 OGBE OJONIMI JOHN 804 OKPALA JUDE UDECHUKWU 880 OLUSANYA OLUSEGUN 730 OGBISE MIEBIDOU DAVID 805 OKPUNO LUKE UCHE 881 OLUSEGUN O. ADEYEYE 731 OGBODO SAMUEL 806 OKUFOLAMI T. BRIGHT 882 OLUTOBI ADEOGUN CHRISTOPHER 732 OGBONMIDE CAROLINE OLAYINKA (MRS) 807 OKUGBENI ALFRED-BRORHIEN 883 OLUWADARE SUNDAY VICTOR 733 OGBONNA GODWIN CHINWENDU 808 OKUMA AGHOGHO OGHOGO 884 OLUWAKOREDE NURUDEEN 734 OGBOYE SOLA COMFORT 809 OKUNLADE OLUWAMUYIWA OLUKAYODE 885 OLUYEDE TAJUDEEN BALOGUN 735 OGBU NNEDI (MRS) 810 OKWARA KENNEDY STAN 886 OLUYEMI ADETUTU OLUKOREDE 736 OGELE TONY ICHEBADU 811 OLABANJI MICHAEL 887 OMAGBEMI MILDRED SELAYI 737 OGENYI AUDU EMMANUEL 812 OLABISI JOHN KOLA 888 OMIDIRE FUNKE 738 OGEYE BABATUNDE O. 813 OLABODE OLAREWAJU 889 OMISANYA ABDUL WASPL ADENIYI 739 OGHOR GODWIN JAMES 814 OLABODE OLAYINKA 890 OMO FARMS NIGERIA LIMITED 740 OGINNI BAKARE ADIO 815 OLABODE SOLA 891 OMODENI ADEGBOYEGA PHILIP OLADAPO 741 OGUDU FUNKE 816 OLABOPO HOLDINGS LTD 892 OMOFAYE BOASON OLA 742 OGUFERE OWEN 817 OLABOSIPO OLUSEGUN MOSES 893 OMOGOR LAZARUS E. 743 OGUINE SOLOMON UCHENNA 818 OLADAPO AJIBOLA YEMISI 894 OMOIFO BATHOLOMEW OKHAREDIA 744 OGUN THOMAS MAUTON 819 OLADEJO 895 OMOKHAYE BAYO OJEMERI 745 OGUNAIKE OLAJIDE 820 OLADEJO ADEBAYO OLATUNDE 896 OMOLE JOSEPH ADEDEJO 746 OGUNBAMIYO SOLAPE BOLAJI 821 OLADEJO MAJEMITE ADEREMI 897 OMOLODUN OLUSEGUN 747 OGUNBIYI BABATUNDE JUBRIL A. 822 OLADELE DAVID OLANIYI 898 OMOLOKUN OMOTOUN OMOTOPE 748 OGUNDANA EMMANUEL OLANIYI 823 OLADIPO MUFUTAU ADEKUNLE 899 OMONDIAGBE ALEX OMON 749 OGUNDE VERONICA MODUPE 824 OLADIPO OLANREWAJU 900 OMONI OLUSOLA 750 OGUNDELE JAMES ONASANYA 825 OLADIRAN ONAOLAPO 901 OMONIYI FOLASAYO BUKOLA 751 OGUNDIPE AKINFOLARIN 826 OLADOKE AYINDE O. OLUSHOLA 902 OMONIYI OLUWATOSIN GIDEON 752 OGUNDIPE DAVID 827 OLADOYIN KEMI ADUNNI 903 OMOPARIOLA HENRY IBUKUN 753 OGUNDIRAN EZEKIEL 828 OLADUNNI EMMANUEL TAIWO 904 OMOREGBE CAROLINE (MRS) 754 OGUNFERE OWEN 829 OLAGUNDOYE OLUREMI ADE 905 OMOREGHA ADEBOWALE CLAUDIUS 755 OGUNFOWODU OLAJUWON OMOPARIOLA 830 OLAGUNJU E. O 906 OMORIBA BABATUNDE 831 OLAITAN MICHAEL OLUFEMI 907 OMORUYI SANDRA 151 RETURNED CERTIFICATES CONTD 2016 Annual Report & Accounts

NO. NAMES NO. NAMES NO.NAMES 908 OMOTAYO OLANREWAJU KABIRU 973 OWODUNNI OLUWASEYI 1037 SAMUEL OLU SEHINOLA 909 ONABANJO OYEJIDE OLUKAYODE 974 OWOLABI BABATUNDE RAFIU 1038 SANNI KAYODE 910 ONABANJO VICTOR OLUFEMI 975 OWOSHAGBA STEPHEN ONI 1039 SANNI TUNDE 911 ONADELE BOLA 976 OWOSO ARAMIDE 1040 SANUSI IDOWU DAUDA 912 ONAFOWOKAN A. ADERONKE 977 OWOYEYE JAMES OLABODE 1041 SANYA GANIU ADEWALE 913 ONAJIDE BUKOLA OLUSEYI 978 OWUNNAH PROMISE WENENDAH 1042 SAPORU MICHAEL OBALOLA 914 ONALAJA OLUWAFEMI OMOTOLA OROWHUR 1043 SAVAGE AKEEM BOLAJI 915 ONANUGA LATEEF 979 OWUYE ANTHONY ADEKUNLE 1044 SENBANJO OLASUNMBO DAMILOLA 916 ONANUGA SABAINAH OLUDAYO 980 OYARINU ADEBAYO OLUGBENGA 1045 SENJOBI AYOOLA OLAWUNMI 917 ONAOLAPO OLAWALE 981 OYATERU SOLOMON A. K 1046 SEVENTH JANUARY INVESTMENTS LTD 918 ONASANYA ALABA 982 OYAWOYE ANUOLUWA ESTHER 1047 SHAJI BOSEDE OLAJUMOKE 919 ONI ADEROMONKE AKANKE 983 OYEBAMIJI BOLA 1048 SHANU TOLUWALASE ADESINA 920 ONI OLUYEMI 984 OYEDEJI DIDEOLUWA AYO 1049 SHEBA ISREAL OLA 921 ONIBUDO AHMED (CHIEF) 985 OYEDELE TIMOOTHY ABIDOYE 1050 SHOBANDE BABATUNDE AKANNI 922 ONILUDE J. TUNDE 986 OYEGBOLA ABENI FUNMILAYO 1051 SHODEINDE MICHEAL OLADAPO 923 ONIPEDE JOLADE 987 OYEKAN EBUNLOMO GRACE 1052 SHOTAYO SHODIPO 924 ONIWINDE FEMI 988 OYEKAOKWO EMMAN IKECHUKWU 1053 SHOTOMIWA MULIKATU BOLANLE 925 ONUOEAH VERU UZOAMAKA 989 OYENUBI MUYIWA 1054 SHUAIBU ABDULMUMINI 926 ONWUEGBUNA CHIMAOBI TOBENNA 990 OYENUGA LUKEMAN GBOLAHAN 1055 SIJUWADE TITLOLA 927 ONWUKA MARY 991 OYENUGA VICTOR OLUSEGUN 1056 SIJUWADE TITLOLA OLABIMPE 928 ONYEKWELU TAGBOO 992 OYERINU ADEBAYO OLUGBENGA 1057 SILVERAGE LIMITED 929 ONYEKWELU TAGBOO CHARLES 993 OYESHOMO PHILLIP OLATUNDE MR. 1058 SIMISAIYE BINTU OLUDAYO 930 ONYEMA PATRICK ONYEBUCHI 994 OYETIBO GANIYU OLADUNJOYE 1059 SIMISAIYE M. MARY IYABO 931 ONYENKPA VICTOR UZODINMA 995 OYEWO ABOSEDE ABIDEMI 1060 SMITH MOSUNMOLA FAUSAT 932 ONYIA CHINEDU 996 OYEWO YOYIN 1061 SODANGI ABUBAKAR DANSO 933 OPARA CHRIS EKEOCHA 997 OYEWOLE BABAFUNMI OLUFOLA 1062 SODEINDE OLUTAYO OLUTOLA 934 OPARA ETHELBERT O. 998 OYEWOLE FEMI OLAUDIE 1063 SODIYA KOLAWOLE 935 OPARISON MORAKINYO 999 OYEWOLE MARIAM ASHABI 1064 OETAN BAYO OLUSEGUN 936 OPELAMI OLUYEMISI 1000 OYEWUMI OLAWAKEMI 1065 SOLOMON JUSTINA 937 OPEODU ADEBOLA AFEEZ 1001 OYIBODE AUGUSTIAN 1066 SONGONGA ADEYEMI ADESOLA AYINDE 938 ORECHUKWU VIRGINIA AMOGE 1002 OZULUMBA IJEOMA DORIS 1067 SONGONUGA BABATUNDE 939 ORIAIFOH BEATRICE ITOSE 1003 PASEDA ADEDAYO OLUSESAN 1068 SONGONUGA BABATUNDE SOROMOLA 940 ORIHIE GRACE C. 1004 PCL CAPITAL 1069 OREMEKUN ABISOLA AMUDAT 941 ORIJ FRANCIS UDU 1005 PETER EKWUEME 1070 SOUTHERNGATE GROUP 942 ORISHANI AUGUSTINE IKECHUKWU 1006 PETER RICHARD OKPU 1071 SOWUNMI MARGARET ABOSEDE 943 ORUGBANI FIENYOBO SINCLAIR 1007 PHILOMENAA OBASOGIE 1072 SPINKS INTERNATIONAL LTD. 944 ORUNDAMI KOLAWOLE AYODELE 1008 PINNICK WILMA & EBI 1073 SUBAIR LATEEF AYODELE 945 ORUNGBEMI TEMITOPE TIMOTHY 1009 PITAN OLADELE OLORUNFUNMI 1074 SUKUYE DONALD T. M 946 OSADEBE SAMUEL IFEANYI 1010 POPOOLA WAHAB FUNSO 1075 SULAIMAN AKEEM ADEYINKA 947 OSANDATUWA ANDY O. JOLOMI 1011 PRINCE ITOBORE 1076 SULAIMAN LATIF LAMBO 948 OSENI OLAYEMI 1012 RAHEEM RASAK BABATUNDE 1077 SULE MUTAIRU AUGUSTINE 949 OSHILE JOHN BABATUNDE 1013 RAINOIL LTD 1078 UMMA GUARANITY & TRUST COY LTD 950 OSIBANJO OLAJUMOKE OLSOLA 1014 RAJI GANIAT ABIDEMI (MRS) 1079 TAHIR AHMED 951 OSIEGBU UCHE FRANCISCA 1015 RANDLE KINGSLEY 1080 TAIGA EMUMEJAYE O. PETERSON 952 OSIGWE ROSEMARY LEBORN 1016 RDS INS. BROKERS LTD 1081 TAIWO DAVID BABATUNDE 953 OSIPITAN JONATHAN ADEGBUYI 1017 RED OAK TRUST & INVEST. 1082 TAIWO OKUNGOWA 954 OSITELU SAMSON B 1018 REGENCY INSURANCE CO. 1083 TALABI JEJELOLA ENITAN 955 OSIYEMI OLUKEMI 1019 RESORT SEC. & TRUST LTD 1084 TALABI OLUFEMI 956 OSOBU MICHAEL ADEDAYO 1020 ROBERTS NGOZI EUCHARIA 1085 TENI TAIWO ZACCHEAUS 957 OSOBU SUNDAY OLAKANMI 1021 ROBERTS ROSEVITA NENE 1086 THOMAS ADESEYE 958 OSOTA OBAFUNMILAYO OLABOYE 1022 ROY A. ASSOCIATES 1087 THOMPSON O. FAPOHUNDA 959 OSOTA OLUWAFEMI 1023 RUFUS BABATUNDE OLUSHOLA 1088 TIDDO UNIVERSAL SEC. FIN. TRS-STO 960 OSUAGWU PETER NNEJI 1024 SAIBU RASAQ SEDIE 1089 TIKATOBI FELICIA 961 OSULA OGHAGHO (MRS) 1025 SALAKO ADEYEMI AFOLABI 1090 TITILOLA BAYO SIKIRU 962 OSUNDEKO OLUSEYE 1026 SALAKO S. OLADIPO 1091 TITILOYE FOLSADE ESTHER 963 OSUNKWO COLLINS CHINEDU 1027 SALAMI BABAJIDE 1092 TOKOYA BABATUNDE OLUWATELE 964 OSUNSANYA BOLAJI 1028 SALAMI VICTORIA FUNMILAYO 1093 TOMORI ADIJAT OLAIDE 965 OSUNTOKI TITI 1029 SALAU SIKIRU OLADIPUPO 1094 TOMORI OLABODE FELIX 966 OSUNTOKUN OLANIKE KEHINDE 1030 SALAUDEEN DIMEJI ISMAIL 1095 TUKURU ABIODUN 967 OTEGBADE OLUFEMI 1031 SALAWU AKEEM (MR) 1096 UBAH KENNETH NWAINOBI C. 968 OTOIDE VICTOR A. 1032 SALAWU MOJISOLA KUDIRAT 1097 UBBOE SYLVANUS NWABUEZE 969 OTUN ADENIYI MORUFF 1033 SALIHU ABRAHAM 1098 UBINI OKIEMUTE MCHMILLLAN 970 OTUN KAYODE 1034 SALISU TAOFIK TOYIN 1099 UBOHOH NNSEWO MISS 971 OVAH EJIRO 1035 SALTAWAY LIMITED 1100 UCHENDI COLLINS OJOCHEMI 972 OWODUNNI BUKUNMI 1036 SAMPSON ABAYOMI ODUYOYE

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RETURNED AND UNCLAIMED DIVIDEND WARRANTS 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 1 ABAH O. PAUL 76 ADELAKU GABRIEL 151 AGHOLOR NGOZI EDITH 2 ABANA OSITA CHUKWUMA 77 ADELEYE A/CMFP" ADENIYI KEHINDE 152 AGOHA MOTUNRAYO OLUFOLAKE 3 ABANIWONDA MUYIDEEN ADESEGUN 78 ADELEYE ADENIYI KEHINDE 153 AGUSIOBO BEBEDICTA CHIWOKWU 4 ABASA MARTINS UDO OGEDI 79 ADELEYE EMMANUEL BOBADE 154 AHAMBA EMMANUEL NKEIRUKA 5 ABDULGANIYU MUIDEEN ATILOLA 80 ADELEYE HALIRAT OLADOYIN T. 155 AHAMISI TITILAYO 6 ABDULKARIM SIKIRATU 81 ADELEYE NIYI & SHADE (MR & MRS) 156 AHMED ADEKUNLE GARBA 7 ABDULLAHI OYENIKE OYEPEJU 82 ADELEYE PAULINE SUBUOLA 157 AHMED NASIRU 8 ABDULLAHI WAHEED WILLIAMS 83 ADEMESO JAMES OLUFEMI 158 AHUBARAEZEAMA THEOPHILUS C. 9 ABDULRAHAMAN ABDULHAMID 84 ADEMOLA ADEPOJU 159 AIDOMOJIE AGATHA UNOMA 10 ABDULSALAM OWODUNNI SAHEED 85 ADENEKAN MOTUNRAYO FUNMILOLA 160 AIMIOSIOR FRANCISCA EITEBIREMHEN 11 ABIODUN BANKOLE AYODEJI 86 ADENIJI OMOTAYO 161 AINA MOTOLANI OLAKITAN 12 ABIODUN-AYENI BAMIKE 87 ADENIRAN ABDULLAHI 162 AINA MOTUNRAYO OLAYINKA 13 ABIOYE OLAWALE FATAI 88 ADENIRAN ADEMOLA FRANCIS 163 AJA SOLOMON NWACHUKWU 14 ABOABA EYITAYO 89 ADENIRAN AISHAT 164 AJAGBAWA JOHNBULL 15 ABOLAJI OLAYINKA OLUBIYI 90 ADENIRAN EMMANUEL 165 AJALA ELIJAH AYOOLA 16 ABOLARIN OLUWASEUN FEYI 91 ADENIRAN HABIB 166 AJANAKU FRANKLIN OLANIYI 17 ABU OLANREWAJU 92 ADENIYI ADEKUNLE FESTUS 167 AJANI BILIAMIN O. MOHAMMED 18 ABUBAKAR ALIYU MADAWAKI 93 ADENIYI ADEWALE OREOLUWA 168 AJANI ELIZABETH FOLUKE 19 ABUBAKAR IBRAHIM AMINU 94 ADENIYI FUNKE ABIGAIL 169 AJAO MOSUDI AYINDE 20 ABUBAKAR KABIR (Mallam) 95 ADENRELE EBENEZER KAYODE 170 AJAYEOBA KAYODE ODUNAYO 21 ABUE PAULINE NKOGO 96 ADENUGA ISLAMIYAT TEMITOPE 171 AJAYI ADEYINKA I. 22 ABUKAR SHEHU 97 ADEOJO KAMAL 172 AJAYI E. B. 23 ACHEBE EMMANUEL UDOJI 98 ADEOLA ADEDEJI MOYINOLUWA 173 AJAYI EMMANUEL IBUKUN 24 ACHEMU GABRIEL C 99 ADEOLA DORCAS OLUBUNMI 174 AJAYI LANRE 25 ACHEOA JOSEPH OSOMETSO 100 ADEOLA JOHN 175 AJAYI OLUFEMI 26 ACHIMUGU ENEOJO M. 101 ADEOLA OLADELE ADEBUNMI 176 AJAYI OLUWAFUNMILOLA OLUSOLA 27 ADAGAM GIDEON 102 ADEPITAN OLULANU OMOTUNDE 177 AJAYI OLUWAYOMI JOSHUA 28 ADAH PETER AGABA 103 ADERETI OSUADE ABRAHAM 178 AJAYI OLUWOLE BAMIDELE 29 ADAJI ABRAHAM OLEMA 104 ADERIBIGBE ABDULKAREEM A. 179 AJAYI SUNDAY OLAJIDE 30 ADAJI OMOJO FAVOUR 105 ADESANYA ABAYOMI ADEOLA 180 AJAYI TAIWO 31 ADAJI VICTOR CHUBI 106 ADESANYA YAHAHA BABATUNDE 181 AJENEYE GBOLAHAN 32 ADANGSON BARRY 107 ADESEWO ADESEGUN PIUS 182 AJIBADE AANUOLUWATOMIWA 33 ADARANIJO OYEYEMI OLUFISAYO 108 ADESI SILAS 183 AJIBADE ABAYOMI JULIUS 34 ADEAGBO ADESOPE ADEYEMI 109 ADESOGAN BABATUNDE 184 AJIBADE OLUWATAYO AKEEM 35 ADEAGBO BABATUNDE ADETOMIWA 110 ADESOLA ORIMALADE 185 AJIBOLA AKINMADE 36 ADEAGBO OLUWADEMILADE 111 ADETAYO JOHNSON OLU 186 AJODO-OHIEMI SAMUEL 37 ADEBANWO FATAI ADEBOLA 112 ADETUNJI OLUSEGUN OLUYOMI 187 AJUMOBI AFEEZ 38 ADEBAYO ADEBOWALE MOHAMMED 113 ADETUNJI WALE M. 188 AJUONU CHIAGOZIEM 39 ADEBAYO ADELEKE ROCKSON 114 ADETUYI OLAWUMI 189 AJUZIE ULOM ALLOY 40 ADEBAYO FELICIA OLUWASAYO 115 ADEWALE ABIOLA OLAIDE 190 AKANDE ADEYEMI ADEBAYO 41 ADEBAYO SAMUEL SUNDAY 116 ADEWALE ADETUNJI 191 AKANDE AKINOLA OJO 42 ADEBAYO SUNDAY 117 ADEWARA OLUMIDE EMMANUEL 192 AKANDE MUMINAT MODUPE 43 ADEBAYO WAIDI ADEBAYO 118 ADEWOLE TIMOTHY OGHIE 193 AKANNI JULIANAH ABIKE 44 ADEBISI JAMES OLUWAFEMI 119 ADEWOYE NIYI EZEKIEL 194 AKAPO BOLANLE OLUFUNKE 45 ADEBISI SAMUEL ADEOLA 120 ADEWUMI SAMUEL KAYODE 195 AKAPO ESTHER MODUPE 46 ADEBIYI ADEMAOLA 121 ADEWUNMI OLAWOLE ADEDOYIN 196 AKARUESE PATRICIA 47 ADEBIYI ADESOLA TOBI 122 ADEWUSI COSMAS A. 197 AKEMU FEJIRO 48 ADEBIYI COMFORT ODUNOLA 123 ADEWUYI EMMANUEL 198 AKEREDOLU ELIJAH OLUTAYO 49 ADEBIYI TITILAYO 124 ADEYANJU ADETUNJI 199 AKHAINEME GREGGY EHIDIAMHEN 50 ADEBOLA AYODEJI ADESHOLA 125 ADEYEMI RUFUS ARIYO 200 AKHIGBE AUSTINE 51 ADEBOYE ADEBAYO AKINWALE 126 ADEYONU ADETOMIWA EMMANUEL 201 AKHIGBE SUNDAY OHRIHEMEN 52 ADEDAYO ADEDAYO ADEBAYO 127 ADHEKE JONAH OMANUDHOHWO 202 AKHIMIEN DANIEL 53 ADEDAYO OLUKAYODE FRANK 128 ADIGUN ABIDEMI ABOSEDE 203 AKIGA AGEE SAMUEL 54 ADEDEJI ADEGOKE LAWRENCE 129 ADIGWE WILLIAMS BISHOP 204 AKIGA SAMUEL AGEE 55 ADEDEJI ISAAC KOLADE 130 ADIMACHUKWU FIDELIS ONYEBUCHI 205 AKINBIYI KEHINDE OLUFUNMILAYO 56 ADEDEJI SHERIF ALAMU OLADIPO 131 ADIO OLAOLUWA SIMEON 206 AKINBO HAJARAT OMOTAYO 57 ADEDEJI-MABIAKU AMAJUORITSE TSEORI 132 ADIOTOMRE ANTHONY 207 AKINBOBOLA ARIYIKE 58 ADEDIRAN ALANI GANIYU 133 ADISA FOLA ADEKUNLE 208 AKINBOBOYE OLAWALE 59 ADEEKO SEGUN OLORUNSOGO 134 ADODO ANDREW 209 AKINBOYE OLUSEGUN OLUFEMI 60 ADEFIDIPE JULIUS ADELOYE 135 ADU DAVID IDOWU 210 AKINDEINDE OLAJUMOKE O. 61 ADEFIRANYE ABIOLA OLUMIDE 136 ADU FOLAKEMI 211 AKINDOYIN VICTORIA OLANREWAJU 62 ADEFUYE MICHAEL OLORUNTELE 137 ADUMADEYIN KAYODE 212 AKINDURENI AKINOLA 63 ADEGOKE PIUS TOPE 138 AFOLABI FUNMILAYO ATINUKE 213 AKINGBADE PETER BANJO 64 ADEGORITE ADETAYO 139 AFOLABI KAMORU ABIORO 214 AKINMOYEDE ABIMBOLA IYABODE 65 ADEGUNSOYE ADEMOLA GODWIN 140 AFOLABI OLUWATOBILOBA 215 AKINMULERO TAIWO JACOB 66 ADEJOH HABIBETU 141 AFOLABI YAKIBI AYODELE 216 AKINNIYI OJO 67 ADEJUMO ADEKUNLE OMOTOSHO 142 AFOLABI YEMISI VICTORIA 217 AKINOLA OLUWASEUN 68 ADEJUMO TOLULOPE ADEBIMPE 143 AFOLAYAN GBENGA 218 AKINOLA SAMUEL TAIWO 69 ADEKOYA ADE ADERIBIGBE 144 AGBODO IROROGHENE ERICK 219 AKINRULI OLUGBENGA KOLAWOLE 70 ADEKOYA ADEWALE 145 AGBOGU FREDERICK EMEKA 220 AKINSANYA KEHINDE 71 ADEKOYA OLABIYI 146 AGBOKHAUHO BLESSING OSHONAGBO 221 AKINSIKU LANRE BENJAMIN 72 ADEKOYA TITILADE 147 AGBONLAHOR ANDREW OMORUYI 222 AKINTOKUN AMOS BAMIDELE 73 ADEKUNLE ADERONKE IYABODE 148 AGBOR MARY JOE 223 AKINTOLA AKEEM ABIODUN 74 ADEKUNLE ADEYINKA EMMANUEL 149 AGEMA SUUR EDWARD 224 AKINTOLA ORIADE MUZY 75 ADEKUNLE MONSURU ADEWALE 150 AGHA EMMANUEL 225 AKINTOYE BIYI

1532 RETURNED AND UNCLAIMED DIVIDEND WARRANTS 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 226 AKINTOYE MODUPE 301 ATERE OLUWAFUNMILAYO 374 CALMDAY OMBO LUCKY 227 AKINTUNDE OJO SUNDAY 302 ATIEGOBA ANNE IFEANYI 375 CAPITAL PROVIDERS SEC. LTD. 228 AKINWANDE YISA OLABODE 303 ATOBATELE ADETOYESE FELA 376 CHARAMS GLOBAL CONCEPT LTD. 229 AKINWUNTAN PATRICK AKIN 304 ATSENOGWA FRIDAY OGHENEWERUYI 377 CHECERBU VENTURES LTD 230 AKINYEMI ANTHONY BABATUNDE 305 ATTAH AYOMIDE ELIZABETH ADUKE 378 CHIDERA R. EZEJA 231 AKINYEMI SOLOMON ADEDOLA 306 ATTAH SIMON ANENEUNA 379 CHIJIAKU CHIBUIKE 232 AKINYOSOYE FRANKLYN 307 ATULOBI COMFORT NGOZI 380 CHIKWENDU CORNELIUS E. (EST. OF) 233 AKIOLU FADEKE KUBURAT 308 AUDU-DAMODU EBIKAY 381 CHINWEUBA AUGUSTINE 234 AKIOYA ESEOSA (DR) 309 AUDU-DAMODU IMOTSEMHE 382 CHIRA PAUL CHUKWURAH 235 AKORGA BENEDICT SAAVE 310 AWE DANIEL B. 383 CHUKWUANI JUNIOR CLIFFORD 236 AKPABIO IGNATIUS ASUQUO 311 AWE FEMI 384 CHUKWUNETA ELIAS CHISAROKWU 237 AKPABIODE SHOLE DAVID 312 AWE OLADIMEJI MICHAEL 385 COAST ONORIODE 238 AKPAH BARTHOLOMEW CHIZOBA 313 AWHINANA LIMITED 386 COLE HELEN KEHINDE 239 AKPALA IFEANYI MAYOR 314 AWONUSI TEMIDAYO OMOYEMI 387 COLLIER OLANREWAJU ASHEID 240 AKPAN ROSE 315 AWOYELE IBUKUN OLUBUNMI 388 CORNERSTONE C/O OLUKAYODE ARIYO 241 AKPAN S. E. 316 AWUA SAMUEL 389 CRAIG KEHINDE ABIMBOLA 242 AKPOWOWO BETTY ERHUVWU 317 AWUSE KESENYA B. 390 DADA ISHOLA ADELOYE 243 ALABI MICHAEL 318 AXER BUSINESS SOLUTIONS LIMITED 391 DAHUNSI OYEWOLE LAWRENCE 244 ALAMU TIMOTHY O. 319 AYANGOKE ELIZABETH OLURONKE 392 DAIYABU DAHIRU (ALH.) 245 ALAO MARY BOLATITO 320 AYENI JOSEPH ABIODUN 393 DAKPOKPO EMMANUEL ALASA 246 ALAWAIYE W. KUNLE 321 AYENI MONISOLA VERONICA 394 DANIEL DARLINGTON 247 ALAWAYE ADEBANKE 322 AYOADE CHRISTOPHER IDOWU 395 DARIYA JEREMIAH VICTOR 248 ALAYAKI ADESHINA RAFIU ADEBUSOYE 396 DAUDA AKEEM ABIODUN 249 ALEBIOSU COMFORT OLUBUNMI 323 AYODELE MARTINS AYODEJI 397 DAWODU KAYINSOLAMI VICTORIA 250 ALEONEWESE JOHN OKHUMODE 324 AYOOLA IFEYINWA CHIOMA 398 DAWODU OLUWADAMILARE VICTOR 251 ALEXANDRA ULOGHOMAN SATURDAY 325 AYOOLA ODUNAYO ABIOLA PETER 399 DEDEGU BENEDICTA EMMALUNAGBE 252 ALIGBE PATRICIA AIROHU 326 AYO-OLUWA HENRY A. 400 DIALI VICTOR 253 ALIGWEKWE CHUKWUDI CAIUS 327 AYORINDE CAROLINE ABOSEDE 401 DIBIA CHUKWUDI EMMANUEL 254 ALIU BASILIA OLURANTI 328 AYORINDE DELE 402 DICK-IRUENABERE BASOENE 255 ALLISON IBITOLA FOLASHADE 329 AYRVBUDMWAN O. FRANCIS 403 DIMGBA EMMANUEL & CATHERINE 256 ALLOH DORCAS OLUFUNMILAYO 330 AYUBA RONKE 404 DIMOWO PEMTOB 257 ALLOH OLAITAN JOSEPH 331 AZEEZ FIMISOLA A. 405 DIPITA-WILLIAMS BABATUNDE O. 258 ALOKUN NURUDEEN A. TOPE 332 AZEEZ MODUPEOLA VICTORIA 406 DISEYE SILIKOWE I 259 ALUKO OLAOLUWA ADEDAYO 333 AZEEZ SIKIRU ADETONA 407 DOGO DAUDA 260 AMADI VIVIAN C. 334 AZEGBA COSMOS OKECHUKWU 408 DOGONYARO DANLAMI 261 AMAKU TIMOTHY 335 AZUBUIKE CHIBUZOR C. 409 DOMINION-DAVID AHIACHI JOY 262 AMAO JACOB OLADELE 336 BABALOLA OLATUNJI OLADAPO 410 DONNETTE LTD 263 AMEDU ABDULATEET AMANOSI 337 BABALOLA VICTORIA OLUYEMISI 411 DOSUNMU OLUWOLE ROGER 264 AMEEN GBOLAHAN AZEEZ 338 BABATUNDE ADEKUNLE 412 DOSUNMU SIDIQUAT FOLASHADE 265 AMINOMA EBENEZER ORITSETEMIYIN 339 BABATUNDE IBIRONKE 413 DUGBELE DESINY OGOCHUKWU 266 AMINU ADELEKE AYOFE 340 BADEJO ADENIYI OLUKAYODE 414 DUROJAIYE OLADELE OLUWASEYI 267 AMINU OLATUNJI AKEEM 341 BADIRU BOLANLE 415 DUROWOJU ADEWUNMI MAHDINAT 268 AMOBI JOSEPH CHINEDU 342 BAFUNSO SUNDAY ADEMOLA 416 DURU GODSFREY ONYEKACHI 269 AMODU TAIWO 343 BALOGUN ADENIYI SHAKIRU 417 DUSUNMU MUDASHIR ADEKUNLE 270 AMU ANDREW OHIEREIMEN 344 BALOGUN AKINOLA 418 DYITKUKA EIRENE PWANMWAKAT 271 AMU ANDREW OHIREIMEN 345 BALUCHI BEHRAM SHERO 419 EBI UMA NNOCHIN 272 AMUSAH LATEEF ISHOLA KOLA OWOLABI 346 BAMGBOSE ADESOJI OMOTAYO 420 EBIWANNO MOBOLAJI JOHNSON 273 AMUSAN YETUNDE OLUBUNMI 347 BAMGBOSE OYINDAMOLA ITUNUOLUWA OMOTAYO 274 AMUWA ADEYEMI MICHAEL 348 BAMIDELE COMFORT IFEJEOLA 421 EBIWANNO OLUWAYEMISI OLUKEMI 275 ANDU RASULULAI ABIODUN 349 BAMISILE BOYEDE RUFUS 422 EBODAGHE BARNABAS O. 276 ANI BENEDICY OKWUDIKI 350 BAMISILE SESAN (MR.) 423 EBOETSE KETIMU 2 277 ANIETOR JUDE 351 BANJOKO OLADELE 424 EBOMWONYI PATRICK OSAZEE 278 ANIGBO EMMANUEL OKECHUKWU 352 BANKOLE OLUWATIMILEHIN DANIEL 425 ECHALESHIKE DAVID 279 ANOZIE ANMBROSE NWORA DR. 353 BASOENE IBIBA HARRY 426 ECHEBIRI C. CHRISTIAN 280 ANOZIE FLORENCE OGONNA 354 BASSEY OFEM EFFIONG 427 ECHEGWO STANLEY UCHE 281 ANTHONY MUHYIDIN OLAWALE 355 BAYAGBON ODAFE BRIGHT 428 ECHEGWO TOCHUKWU 282 ANUGENGEN SAMUEL 356 BEGHO THELMA ANIRE 429 EDEIGBA OKOEGUALE ANTHONY 283 ANUSHIEM MADONNA CHINASA 357 BELLO LAWAN MOHAMMED 430 EDET ELIJAH ESSIET 284 ANYANWU THEODORE NNAJI 358 BELLO OYESOLA JOSEPHINE 431 EDO EDWIN JUDE 285 AREMO FELIX 359 BELLO YUSUFF AYINLA 432 EDOGAME ALFRED OSHOAKPEME 286 AREWA ADEMOLA 360 BISIRYU MUTIU OLUWASEYI 433 EDOGAME ESTHER IKPEMOSI 287 ARIBISALA MARGARET OLUSOLA 361 BOJEN INVEST LTD 434 EDOGAME RITA SENUMA 288 ARIJE ABDULRASAQ 362 BOJERENU M MAUTON 435 EDOZIE JOHN U. 289 ARIKANKI OLUTUNDE 363 BOLARINWA FEYISOLA OMOLARA 436 EFFIONG VIVIAN 290 AROKO EGBE SAMUEL 364 BOLARINWA MORONKE YEMISI 437 EFUGHI VICTOR CHUKWULENYE 291 ARULEBA OLUWASEYI ADEREMI 365 BOMAIPIRIMA NIGERIBARA 438 EGEKENZE PATRICK IKECHI 292 ARUNA SURAJ TEMITOPE 366 BONIFACE A. DURU 439 EGEREGA EFE STEPHEN 293 ASAGWARA E. CHRISTOPHER 367 BOSAH CHIKE ANDREW 440 EGIE EDAFE EMMANUEL 294 ASAKOME ANI OMOSHALOWA 368 BOSHORO OLUWAPELUMI ADENIYI 441 EGONE DANIEL EJODEPHIA 295 ASANGA ENEFIOK AKPAN 369 BOSHORO OLUWASJIBOMI SHETEMI 442 EGOPIJA JULIANA ANYUWU 296 ASARE-BEDIAKON MIKE 370 BRAIMAH VICTOR ADEJOH & HAUWA 443 EGUH CHRISTOPHER 297 ASHAMU PATE VICTOR 444 EGUME ONEME 298 ASHAOLU SUNDAY AYINDE 371 BRIGGS NINAH NIMI 445 EGUZO STEVE IHEANACHO 299 ASHOGBON FESTUS OLABODE 372 BULUKU JULIETTE 446 EHIGHALUA KINGSLEY 300 ATANE NICHOLAS 373 BUSAI YUSSUF OLAWUNMI 447 EHIY CHRISTOPHER OSEGHALE

1542 RETURNED AND UNCLAIMED DIVIDEND WARRANTS 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 448 EHIZE BLESSING EHIKIOYA 523 FAMILUGBA ADEBISI 597 IGIEHON IYENOMA IMUE TINYAN 449 EJEZIE OGONNA NAOMI 524 FAMORIYO SILIFAT MOSUNMOLA ADENEYE 598 IGUNDUWASSE CATHERINE TERDOO 450 EJIEJI VINCENT OGBONNA 525 FANIYI OLUFUNMILAYO ADUKE 599 IGWUBOR FRIDAY R. CHUKWUMA 451 EJIWUNMI OLUFEMI OLUKAYODE 526 FARINU MORENIKE VICTORIA 600 IHEAKA NKEIRUKA CHARITY 452 EKANEM GREG EKANEM 527 FARRI ENIOLA 601 IHEANACHO DONATUS AMARACHUKWU 453 EKANEM MFON INI 528 FASESIN ABIOLA 602 IHEUKWUMERE JOSHUA CHARLES 454 EKE EMANA KOKOEKA 529 FASHANU ISAIAH ADEPOJU 603 IHIMOYAN ROTIMI 455 EKEADA MICHAEL MBAGWU & PRECILLIAN 530 FASHINA OLUKEMI 604 IHUEKWUMERE JOSHUA CHARLES 456 EKEJIUBA UCHENNA EKEJIUBA S. 531 FASINTEL CHRISTIAN K.O. 605 IJADUNOLA TITUS OLAOLUWA 457 EKHATOR AYGYSTINE OSAMUDIMEN 532 FATILEWA PAULINA OLASUNBO 606 IJAOPO ISSAAC OJO 458 EKHATOR OSARUMEH DAISY 533 FATOKI OLAJIDE OLASUPO 607 IJARAH ERNEST 459 EKONG LEO EDEM UDO 534 FATUKASI OLAJIDE OYINDAMOLA 608 IJEH IWEANYA HENRY 460 EKPE JOHN AMAECHI 535 FICM LTD 609 IJEI NNAMDI 461 EKPO USORO EKANEM 536 FIRST BAPTIST CHURCH BARIGA 610 IKE CHINENYE 462 EKUNDAYO TAYO 537 FLOMAT COMPANY NIGERIA LTD. 611 IKEM AUGUSTINE OGOEGBUNAM 463 EKWEALOR NORAH I. 538 FOLARIN MORAYO KOFOWOROLA 612 IKENNA JUDE MICHAEL 464 EKWEMALOR CHIDINMA JESSICA 539 FOLORUNSO JANET TAIWO 613 IKHELOA JOSEPHINE O. 465 EKWEMALOR N. STELLA 540 FOLORUNSO KAYODE 614 IKPONMWOSA ENOMA 466 ELEAZU REGINA REX 541 FRANCIS PATIENCE 615 ILELEJI ERNEST 467 ELENWO FELIX 542 FRANK AKPAN 616 ILOABACHEIE CHINEDU BENJAMIN 468 ELETU OLASEIDE BABATUNDE (DR.) 543 FUNMILAYO REUBEN OLUWASINA 617 ILOKAH TOCHUKWU CHIKA 469 ELIJAH EZEWEL 544 GABRIEL JONATHAN DODO 618 ILOZOR PETER CHUKWUKA 470 ELKAKANAH COSMOS 545 GANIYU ISMAIL AKANJI 619 IMAM TAIYE ABDUL 471 ELUMELU C. AKIELE 546 GANIYU MORUFU AFOLABI 620 IMOUDUME SUNDAY 472 EMEFIEH ERNEST EGBUNWINE 547 GARNETT STARLING 621 INUIKIM ASUQUO EDET 473 EMENIKE CHLOO G. 548 GARRICK YESIDE IBUKUN NETLAND 622 INVESTMENT MASTER & TRUST LTD 474 EMENIKE CINAZA CHIDERA 549 GBADAMASI OSENI ADESINA 623 IREYOMI IYANIWURA ADERINOLA 475 EMERONYE BENJAMIN 550 GBADAMOSI OLUWAKEMI 624 IROFUALA MICHAEL IRECHUKWU 476 EMERUWA PRISCILIA O. 551 GBEMUDU ROSEMARY OGBEYANU 625 IRONDI IHEANYI OGBONNA 477 EMEYE NICHOLAS NKEMCHOR 552 GBRIKA DIVINE EFETOBORE 626 IRUKE JAMES UWEME 478 EMMANUEL MONDAY SAMSON 553 GEORGE-HART GLADYS N. 627 ISA RABU 479 EMOJORHO EMUDIAGA FRANCIS 554 GEORGEWILL OPRITE MONDAY ORISU 628 ISAAC ENEMONA SAMSON 480 EMOKAH NKIRU GLORIE 555 GIDI-FANIMOKUN IKEOLUWA CHIDARA 629 ISIBOR-PHILIP ESTHER 481 ENEGBUYA ANDERSON IGORU 556 GLOBAL HARVEST CHURCH INTER 630 ISIMA JEFFREY 482 ENEH IFEANYI HEADQT 631 ISIORHOVOJA OKEROGHENE A. 483 ENEJE NWANNEKA EMMANUELLA 557 GREEN LOUIS OLAKUNLE 632 ISKHEI EMEKA 484 ENEMANNA CHUKWUEMEKA C. 558 GYANG CHRISTOPHER JOHN 633 ITANOLA NURAIN OMOTAYO 485 ENWONWU CHELSEA IFY 559 HAASTRUP OLUTADE ADEDAPO 634 ITIVAKPINU IPHEGHE GABRIEL 486 ENWONWU CHUKA FITZGERALD 560 HABEEB AMUDA YUSUF 635 ITONYO VICTOR WILFRED 487 ENWUWKWE WILSON 561 HALLIDAY CHIMEZIE EBENEZER 636 IVIENAGBOR RACHEAL 488 EPHRAIM-OLUWANUGA OLUSOLA S. 562 HARRY IBIM GEORGE 637 IWEKE EYITUOYE 489 EREKOSIMA ALAYE 563 HASSAN OLANREWAJU AFIS 638 IYORAH ELIZABETH MORENIKEJI 490 ERIJOTOR RUKEME DAVID 564 HASSAN SANI 639 IYORE EMMANUEL O. 491 ERINOSHO OLUYEMI BABATUNDE 565 HENRY AGBOTAEN ELIMARY 640 IYORTYER IWASEN MIMI 492 ERONMOMOSELE VINCENT 566 HOLLOWAY JOLASUN 641 IZU LIVINGSTONE CLITON 493 ERUOTOR RUKEME DAVID 567 HOROREZ NIGERIA LIMITED 642 JACK M. JERRY MONDAY 494 ESEDEBE AUGUSTINE BUNOR 568 HUNGBO TIMOTHY ADEWALE 643 JAJ-WACHUKU EMENUWA ANUCHA 495 ESENE OMONUA OKOEDO 569 HUSSAINI HAMIDU 644 JAKPA TEJUMADE 496 ESSIEN CHRISTINE 570 HUTHMAN ABIODUN TAJUDEEN 645 JEBOSE DANIEL EBITE 497 ESU PATRICK 571 HWAKAR HENRY GBAASOM 646 JIMOH JEMITOPE OLUMUYIWA 498 ETTA CLAUDIA IGUO 572 IBANIBO TEKENA & ROSEMARY 647 JIMOH OLUSHOLA LOOKMAN 499 EVBUOMWAN OMOREGIE 573 IBE PHINA NGOZI 648 JINADU BASIRU ADEWALE 500 EWEJE JOHN AJIBOLA 574 IBITOYE TOLU 649 JOHN MARIA KENNETH 501 EWELEYE JACOB ADETUNJI 575 IBRAHIM ABDUL BASIT 650 JOHN NSE GLORY 502 EWONEME MATTHEW OLAREWAJU 576 IBRAHIM MAI U SULE HADIZA 651 JOHNSON ABAYOMI (GEMA) 503 EYA OLIVER AMA 577 IBRAHIM MUHAMMED AUDU 652 JOHNSON CHARLES AGBEJU NIMIBOFA 504 EYITENE OGAGA MARK 578 IBRAHIM MUJIDAT MOSUNMOLA 653 JOHNSON CHIBUEZE GODWIN 505 EZE GABRIEL CHUKWUEBUKA 579 IBRAHIM OLUWATOYIN 654 JOHNSON EDWARD 506 EZEALA GEORGE 580 IBRAHIM QOZEEM BABATUNDE 655 JOLUGBO OLUWAKEMI FELICIA 507 EZEANYA CHINWE NENKA 581 IBRAHIM SHEHU YAHAYA 656 JONATHAN UWAMARI MATHEW 508 EZECHI MARY UNOMA 582 IDEMUDIA UYI -OGHOSA 657 JONES-ERE OYEINMIEBI 509 EZEDIGWE LUCY NGOZI 583 IDEMUDIA UYIEKPEN OSARODION 658 JOSEPHSON ADEBAYO MICHAEL 510 EZEIFE CHUKS UCHE 584 IDOWU FAOSAT OLAYINKA 659 KAREEM SAKA ADENIJI 511 EZEJIOFOR NATHAN C. 585 IDOWU JOHNSON ADEYI 660 KASALI RASHEED OLUSEGUN 512 EZENWA MOUREEN IFEOMA 586 IDOWU OLAWALE OLASUPO 661 KATIBI TAIWO ADETUTU 513 FABIYI EBENEZER OLADIMEJI 587 IDOWU OLUWADAMILOLA MORAYO 662 KEHINDE ADEREMI OLUDIRAN 514 FADE ANTHONY ADEMOLU 588 IDRIS OLUBUNMI 663 KEHINDE BABATUNDE 515 FADINA OLUGBENGA 589 IDRIS SULAIMAN SHANONO 664 KEHINDE OLATUNDE 516 FADIRAN OLUMIDE 590 IFATUJOSIN S. BABATOPE 665 KOKOGHO IGHO DANIEL 517 FAJANA OMOLOLA D 591 IFEZULIKE ADAEZE 666 KOLAWOLE DONCOLLINS JOHNSON 518 FAJEMBOLA AJANI 592 IGBE EGHOSA BECKY 667 KOLAWOLE SAIDI OLA 519 FALODUN OLUSOLA OMONIYI 593 IGBEDI CLARIS TAREDE 668 KOMOLAFE OLUFEMI & JOY 520 FALOMO ABIOLA ISAIAH 594 IGBEN LESLIE DONOR 669 KOSOKO ADEBANKE JOSEPHEN 521 FALUSI IBUKUN 595 IGBINOSUN ANTHONY 670 KOYEJO EBENEZER OLATUNJI 522 FAMAKIN TOLUWANIMI EMIOLA 596 IGHOFEMONI ROLAND LUCKY 671 KUBOYE OLUFELA

1552 RETURNED AND UNCLAIMED DIVIDEND WARRANTS TABLE2016 OF Annual CONTENT Report & Accounts

NO. NAMES NO. NAMES NO.NAMES 672 KUDLA FRANK SATUMARI 747 OBASEKI OLUBANKE 822 OJINNI NDUBUISI 673 KUJE HOSEA AMOS 748 OBASI CORNELIUS 823 OJO ALBERT OLUWOLE 674 KUTENHA DARLINGTON 749 OBEBE ADEKUNLE TOLULOPE 824 OJO EZEKIEL OLUWASEYI 675 KUYINU OLUYINKA AKINKUNMI 750 OBETTA CALLISTUS 825 OJO OLUFEMI EBENEZER 676 LADIPO KOLAWOLE 751 OBI JULIET NKIRUKA 826 OJOBO FAVOUR 677 LAGOKE OLUWAGBOLAHAN 752 OBI OBAMCHUKWU A. 827 OKAFOR FRANCIS C. E. 678 LAIZER JOSEPH DAVID O. 753 OBI OGOCHUKWU 828 OKAFOR KENECHUKWU HILARY 679 LAJORIN OLUSINA EBENEZER 754 OBICHUKWU MADUKA JOSHUA 829 OKAFOR OKECHUKWU FRANCIS 680 LALA ADEFOLAHAN OLANREWAJU 755 OBISESAN BABATUNDE MUSTAPHA 830 OKANRENDE OLADOTUN OLAWALE 681 LANIYAN SOLOMON OLA 756 OBRIMAH OGHENEVIE O. 831 OKAREME RICHARD OMAMUZO 682 LANOSBERE KATHLEEN CLAIRE 757 OBUBA CHINEME 832 OKE BABATUNDE ADEYEMI 683 LAOSHE AFOLAKE 758 OCHOLI BLESSING 833 OKEKE AUSTIN OKWUDILI 684 LAW BOMA 759 ODAMAH IKHIA OGBOR JOYCE 834 OKEUGO EMEKA ONYEAGOZIRI 685 LAWAL ABDUL-WAHAB 760 ODAUDU ABIMAJE DAVID 835 OKEWOLE RANTI FLORENCE 686 LAWAL KEHINDE 761 ODEBIYI NURUDEEN BOLAJI 836 OKHIGBOCHIE E. DONATUS 687 LAWAL KOLAWOLE 762 ODEDIRAN TAIWO 837 OKOH ISRAEL CHUKWUYEMI 688 LAWAL KOLAWOLE ADEWALE 763 ODEH OSAROBO HENDRIX 838 OKOJIE EDWARD 689 LAWAL SAIDAT MOSADOLUWA 764 ODEKUNLE MICHAEL AJIBOLA 839 OKOJIE JOSEPH OSA 690 LEVI DENEN ADAGA 765 ODEKUNLE TAIWO OLUDELE 840 OKOLI CHUKWUDI CHARLES 691 LOOLO ISAELE TAMBARI 766 ODELEYE OLUWAKEMI 841 OKOLO A. DAVID 692 M/S FOLLY & SONS AUTO ENGINEERING 767 ODERINDE ABAYOMI ALANI 842 OKOLO STELLA MARIS 693 MACAULAY AKIN 768 ODERINDE IDOWU 843 OKONKWO OBINNA UZOMA 694 MADUKA GEORGE EMEKA 769 ODETOYINBO SUSAN TOMI 844 OKONKWO TOCHUKWU JOSHUA 695 MALIZU CHINERMEREM BENDI 770 ODHURA EMMANUEL EKEMENA 845 OKORIE AGATHA IHUNNA 696 MALIZU KOSIRISO CHUKWU 771 ODIH DAVID OGAGAOGHENE 846 OKOROH ROSE ORITSEWEYINMI 697 MALOMO ABOSEDE GRACE 772 ODII FREDS CHUKWUEMEKA 847 OKOSUN PHILOMINA E. 698 MARVEL TRADES & SERVICES 773 ODUBELA KATHERINE 848 OKOTIE VINCENT 699 MBERU CEPHAS 774 ODULATE JOSEPH OLUSOLA 849 OKOYE AFAMEFUNA NNAMDI O. 700 MEWOMO BABATUNDE AYORINDE 775 ODUNTAN OLAJIDE 850 OKOYE CHIKE 701 MGBOJIKWE DARLINGTON NDUKWE 776 ODUSANYA BOLANLE 851 OKOYE IFEANYI COLIN 702 MILTON OGBONNAYA NWOSU 777 ODUSOTE OLALERE 852 OKOYE IJEOMA OLEMENTINA 703 MINAINYO TAMUNO-OPUBO TAMSY 778 ODUYOYE MORENIKE & AYOTOMIWA 853 OKOYE MARTIN OLISA 704 MOHAMMED ABBAS FATIMA 779 OFFIA GABRIEL CHIKA 854 OKPALA EBELE PATRICK 705 MOHAMMED IBRAHIM KABIR 780 OFODEME CHINEDU 855 OKPARA CHUKWUDALU SANTUS 706 MOKWENYE EUSTACE AKA 781 OFOGBA PATRICIA LAIRE 856 OKUBENA IBRAHIM OLAWALE 707 MORDI CHIADIKA ESTHER EBELE 782 OGBE JOHN OGBE 857 OKUMA AGHOGHO OGHOGHO 708 MSHELLIA ASURA MUAZU 783 OGBEDE GEORGE EZENWA 858 OKWARA KENNEDY STAN 709 MUHAMMAD HALILU BICHI 784 OGBIMI ACHERE IBIFURO 859 OLAAJE AJEBIYI A. 710 MURPHY UZOHUE OBIANUJU BERTHA 785 OGBISE MIEBIDOU DAVID 860 OLABISI ADEDAYO 711 MUSA MUDASIRU 786 OGBOMA OBI SUNDAY 861 OLABODE SOLA 712 MUSTAPHER GANIYU ADEBAYO 787 OGBONNA FAVOUR EBERE 862 OLADAPO AJIBOLA YEMISI 713 NAZEGBULAM CHRISTOPHER OLUMIDE 788 OGBUOKIRI AMARACHUKWU 863 OLADEJI OLANREWAJU TOBA 714 NDEM ERIC UWEMEDIMOH 789 OGBUOKIRI JOCELYN ANARIOCHI 864 OLADEJO 715 NDUBUISI ANTHONIA NGOZI 790 OGENYI AUDU EMMANUEL 865 OLADEJO MAJEMITE ADEREMI 716 NDUBUISI KISSINGER UGOCHUKWU 791 OGHAEGO IFECHUKWU 866 OLADEJO TUNDE BAMIDELE 717 NDUKWE UCHECHUKWU 792 OGHOBASE DEBORAH 867 OLADUJA ADEMOLA OJO 718 NDULUE BENEDICT CHIKE 793 OGIUGO OSAMEDE TEMITOPE 868 OLADUNJOYE GEORGE ABAYOMI 719 NDULUE CYRIL CHUKWUMA 794 OGUDU FUNKE 869 OLAFUSI ADEOLA OLAMIPOSI 720 NEWDEVCO FINANCE SERVICES COMPANY 795 OGUNBAMIYO SOLAPE BOLAJI 870 OLAGBAJU PATRICIA ADEJOKE K. 721 NGBANWA OBI SUNDAY PAUL 796 OGUNDELE ADEBAYO SUNDAY 871 OLAITAN MICHAEL OLUFEMI 722 NIMKWAM MANKAR NICHOLAS 797 OGUNDELE OLABANJI JOEL 872 OLAIYA ABIMBOLA BUKOLA 723 NINGI ABDUL ADAMU 798 OGUNDIPE OLUBUNMI 873 OLALERE JIMOH ALABA 724 NJOKU EBERE CATHY 799 OGUNFERE OWEN 874 OLALEYE OMOBOLANLE 725 NKEZE ANTHONY SUNDAY 800 OGUNFOWODU OLAJUWON OMOPARIOLA 875 OLAMIDE JOSEPH BAMIGBOLA 726 NKPOSONG ASUQUO EDET 801 OGUNGBEMI KAYODE IBUKUNOLUWA 876 OLANIYAN ABDULRASAQ ALIYU 727 NWABUEZE JUDE NZE 802 OGUNGBESAN OYINDAMOLA KAYODE 877 OLANIYAN BOLA MISS 728 NWAIMO AUGUSTINE 803 OGUNJOBI OLAWALE OLUSEGUN 878 OLANIYAN OLUGBENGA 729 NWAJEI FRIDAY 804 OGUNLEYE BOLAJI 879 OLANIYI RAPHAEL SOJI TAYE 730 NWAJUO HYGINUS IHEANA EJERE 805 OGUNLEYE CHRISTIANAH OLAYINKA 880 OLANREWAJU OLAWOLE ISHOLA 731 NWANI OSITA EZEKIEL 806 OGUNLEYE ROTIMI WILLIAMS 881 OLANREWAJU OLUGBENGA SAMUEL 732 NWANKWO OGBONNA CHRISTIAN 807 OGUNMADEJI JULIUS 882 OLAOSEBIKAN TUNDE 733 NWANKWUDO PERPETUA UJU 808 OGUNNIRAN MICHAEL 883 OLATUNJI IDOWU 734 NWANZE JEFF CHIKEZIE JUDE 809 OGUNNIRAN RUTH OLUSOLA 884 OLAWOYE JOHNSON DAPO 735 NWAODU CHIGOZIRIM CHINAZO 810 OGUNS AYORINDE OMOTAYO 885 OLAYEMI EMMANUEL AYINLA 736 NWAZUO FRANCIS CHINEDU 811 OGUNSANYA RAPHAEL 886 OLAYERA BUKOLA SAMSON 737 NWOGU JOSEPH (MR & MRS) 812 OGUNSOLA GBENGA THOMAS 887 OLISA OBINNA MOSES 738 NWOKO EJIKE LEXIUS 813 OGUNTADE MATHEW & OLUBUKOLA ODUNAYO 888 OLORUNFEMI MODUPE 739 NWOKORO NGOZI AMAKA 814 OGUNTUNDE OLALEKAN 889 OLORUNSOLA PETER IBUKUN 740 NWOSU MONDAY SAMPSON 815 OGUNYALE IBUKUN MICHAEL 890 OLOWOKERE OLANIYI JULIUS 741 NYONG ANTHONY EFFIONG 816 OHA CHIBUEZE 891 OLOWO-OKERE MOPELOLA OMOYENI 742 NZEREOGU VICTOR U. 817 OHINDASE SANUSI MOHAMMED A. 892 OLUBANIYI GRACE MORONUMUBO 743 OAKS INVESTMENT LIMITED 818 OJADI FELIX NDUBUISI 893 OLUBOYO VINCENT & ABIMBOLA (MR & MRS) 744 OAMEN ANTHONY O. 819 OJI CHINEDUM OKECHUKWU 894 OLUFIDIPE TOLUWALASE 745 OARHE ADEKOLA 820 OJIEGO BEATRICE 895 OLUJEDE ALADE ANTHONY 746 OARHE IZEBE CHRISTOPHER 821 OJIKUTU OLUSEYI MORENIKE 896 OLUMEGBON RISIKAT ABIMBOLA

1562 RETURNEDCONTENT OF AND UNCLAIMEDTABLE DIVIDEND WARRANTS 2016 Annual Report & Accounts

NO.NAMES NO. NAMES NO.NAMES 897 OLUMIDE OTOME 963 OYEBANJO PROPERTY & INV. LTD. 1028 TOMORI ADIJAT OLAIDE 898 OLUREMI BOLANLE OLUDOTUN 964 OYENIRAN MICHAEL OLUNISOLA 1029 TOMORI OLABODE FELIX 899 OLUWADARE SUNDAY VICTOR 965 OYERINU ADEBAYO OLUGBENGA 1030 TOWADECON LIMITED 900 OLUWADUNMININU OGUNSOLA 966 OYEROGBA OYERINDE OWOLABI 1031 TUKURU ABIODUN 901 OLUWAKOREDE NURUDEEN 967 OYETOLA TITUS 1032 UCHENDU CHIBUZO BASIL 902 OLUWO FASHOLA OLADIPUPO 968 OYETOYAN SUKANMI 1033 UDEMEZUE UCHE NJIDEKA 903 OLUWOLE RICHARD OJO 969 OYEWOLE FEMI CLAUDIE 1034 UDEZE JOSEPH SUNDAY 904 OMAGHOMI JULIET MARTHA 970 OYEWOLE GEORGE 1035 UDO IQUO OKON 905 OMALE JEREMIAH PAUL 971 OYEWOLE MARIAM ASHABI 1036 UDO KENNETH T. 906 OMIDIORA VICTOR AKINWUNMI 972 OYEWUMI OLWAKEMI 1037 UDOH OLUTAYO 907 OMISANYA ABDUL WASI'L ADENIYI 973 OYIBO ONALO 1038 UDOH STEVE 908 OMODIALE HELEN 974 OZOR CHINEDU REMIGIUS 1039 UDUEHI ODION 909 OMOFAYE BOASON OLA 975 PARA KINGDOM JUSTINA 1040 UGBE JOHN UGBE 910 OMOLOKUN OMOTUN OMOTOPE 976 PASEDA ADEDAYO OLUSESAN 1041 UGBOMA OBI SUNDAY 911 OMOMOWO OMOLAFE OLANREWAJU 977 PENSURE PFA LIMITED 1042 UKATU GEORGE UGONNA 912 OMON ANTHONY OHIOLE 978 PETER RICHARD OKPU 1043 UKO LORETTA AKUDO 913 OMONIJE OPEYEMI OLUWASEUN O. 979 PROMINENT SECURITIES LTD 1044 UKO ONWUKA UCHE 914 OMONIYI FOLASAYO BUKOLA 980 PROSPERITY INVESTMENT CLUB 1045 UKO RUTH IKEME UKO 915 OMOPARIOLA AYODELE SOLOMON 981 RAJI GANIYU AJIBOYEDE 1046 UKPEBOR THOMPSON OSALEN 916 OMOTAYO OLANREWAJU KABIRU 982 RAZAK-ADAMS BOLADALE O. (MRS) 1047 UKPONG SAMUEL 917 ONABANJO ALEXANDER 983 RAZAK-ADAMS OLUWADAMILOLA O. O. 1048 UKUTE JOSHUA LUCKY 918 ONABANJO KAYODE 984 REUBEN ADEBAYO OLUSEGUN 1049 UKWATAR KARI IYETOR 919 ONABANJO VICTOR OLUFEMI 985 ROSANWO GLORIA OMOBAMIDELE O. 1050 UMAR MOHAMMED SANNI 920 ONABIYI TAJUDEEN 986 RUFAI BOSUN HAKEEM 1051 UMARU ABIMBOLA OLUWANDE 921 ONAFOWOKAN A. ADERONKE 987 RUFUS BABATUNDE OLUSHOLA 1052 UMARU ALLI BABTUNDE 922 ONAFOWOKAN OLUWASEGUN 988 SADIQ ENEYAMIRE PRECIOUS 1053 UMARU MICHAEL 923 ONALAJA OLUWAFEMI OMOTOLA 989 SADU RUKAYAT OPEYEMI 1054 UMEH OLIVER OKECHUKWU 924 ONANUGA LATEEF 990 SAIBU RASAQ SEDIE 1055 UMEOZULU OGOCHUKWU FRANCIS 925 ONASANYA ALABA 991 SALIHU ABRAHAM 1056 UMEUGOJI NNEKA CHINENYE 926 ONIFADE D.MOBOLADE 992 SANUSI IDOWU DAUDA 1057 UMOH ENOBONG EMMANUEL 927 ONIKOYI TUNDE OLANREWAJU AVIODUN 993 SELERE OLUWATOYIN OPEOLUWA 1058 UMOH NSIKAN KINGSLEY 928 ONOGHA GIFT ESE 994 SHOFOLA YISA BABATUNDE 1059 UMOH UBONG OKON 929 ONUEGBO NAPOLEON CHIJOKE 995 SHOTOMIWA MULIKATU BOLANLE 1060 UMOH UNYIME LEONARD 930 ONUOHA SUSAN OBIAGERI 996 SIMON LOHNAN DAVID 1061 UWAKWE JULIAN KINGSLEY 931 ONUOHA UCHE SEBASTINE 997 SMITH BENJAMIN DENNIS EVANG. 1062 UWAYA JOSEPH 932 ONUORAH VERU UZOAMAKA 998 SMITH MOSUNMOLA FAUSAT 1063 UWUILEKHUE MARTINS 933 ONWUACHU CHIMEZIE DARLINGTON 999 SODANGI ABUBAKAR DANSO 1064 UZOH OKWUDIRI JULIUS 934 ONWUEGBUNA CHIMAOBI TOBENNA 1000 SODOLA OLUFEMI JAMES 1065 WAFTA MOHAMMED HUSSEIN 935 ONWUEGBUNA OBIANUJU GERALDINE 1001 SOFOLA-ORUKOTAN ONAOPEMIPO 1066 WATTI EMMANUEL TEMITOPE 936 ONWUENWEOLOR FELICIA ADUJIE PRECIOUS 1067 WILLIAMS JOSHUA OLAKUNLE 937 ONYEKA CHUKWUEMEKA 1002 SOKAN BABATUNDE ADETOKUNBO 1068 WILLIAMS MOBOLAJI OLUWASEUN 938 ONYEKWELAONWU CHIGOZIRI 1003 SOLOMON IDONGESIT AND INEMESIT 1069 WILMA NWANZE TEEN 939 OPARA WONUKWURU GODFREY 1004 SOLOMON NSIKAN PATRICK 1070 WILSON IROHAM ENYINNAYA 940 OPARISON MORAKINYO 1005 SONGONUGA BABATUNDE 1071 WODI ADAOBI CHIOMA 941 ORIAFOH BEATRICE ITOSE 1006 SORIBE IBEAWUCHI FESTUS 1072 WUESE JOSEPHINE 942 ORIHIE GRACE C. 1007 SOWANDE LEKAN 1073 YAHAYA AYOTUNDE 943 ORIOYE MOSUNMOLA BUKOLA 1008 SPINKS INTERNATIONAL LIMITED 1074 YAHAYA JOLAOLUWA 944 ORJI FRANCIS ODU 1009 STARDILL LIMITED 1075 YAHAYA MUKHTAR UMAR 945 ORUNGBEMI TEMITOPE TIMOTHY 1010 SUBAIR LATEEF AYODELE 1076 YAKUBU IBRAHIM 946 ORUPABO DANIEL I. 1011 SUMMA GUARANTY & TRUST COY LTD. 1077 YAMIESEIFA OFEM UBI 947 OSAROBO OSAZEE PETERS 1012 SUNMOLA ADEYEMI M. 1078 YINUSA ADIGUN RASAK 948 OSHILE JOHN BABATUNDE CHIEF 1013 TANKO CLETUS 1079 YINUSA KAZEEM ADEKUNLE 949 OSHODI ADIJAT OLUWAKEMI 1014 TARFA REBECCA 1080 YUNANA YAHAYA YILA 950 OSIGWE ROSEMARY LEBORN 1015 TAUPYEN SHALDAM 1081 YUSSUF SODIQ OLANREWAJU 951 OSIPITAN JONATHAN ADEGBUYI 1016 TEMILOLUWA ADEOLA OKUNSOLUBO 1082 YUSUF ABDULKADIR ALHAJI 952 OSULA OGHOGHO (MRS) 1017 TEWE AYODEJI 1083 YUSUF OPEMI RAKIYA 953 OSUNDEKO OLUSEYE 1018 THEODORE ALLEN NIGERIA LIMITED 1084 ZIMEST INVEST & MGT. COMPANY 954 OSUNKWO COLLINS CHINEDU 1019 THEOTON MEGA CONCEPT 955 OTAIGBE MICHAEL IJEZELE 1020 THOMAS ADEBISI SARIYU 956 OTUN KAYODE 1021 THOMSON O. FAPOHUNDA 957 OVWIGHOWHARA OKIEMUTE VERA 1022 TIAMIYU ISMAIL ADESHINA 958 OWOEYE FISAYO ROSEMARY 1023 TIDDO UNIVERSAL SEC FIN TRADED STO 959 OWOLABI BABATUNDE RAFIU 1024 TIJANI KAZEEM OYEWALE 960 OYAWUSI FOLUSHO I. 1025 TITUS OYETOLA 961 OYEBAMIJI BOLA 1026 TOBRISE SAMUEL 962 OYEBAMIJI WALIU 1027 TOKODE OLUSEGUN O

1572

REGISTRATION/ADMISSION FORMS

Notes Notes AFFIX PIX HERE PLS

REGISTRARS: Lighthouse Registrars Limited, 2/4 Davis Street, Kingsway Building, Marina, Lagos. PROXY FORM 2016 Annual Report & Accounts

RC 163170

25th ANNUAL GENERAL MEETING to be held at Agip Recital Hall, MUSON Centre, Onikan, Lagos at 11.00 am on Thursday, 15th June, 2017.

I/We______S/N ORDINARY BUSINESS/ ORDINARY RESOLUTIONS FOR AGAINST being member(s) of Cornerstone Insurance PLC hereby appoint ______1. To receive the 2016 Annual Reports and Accounts as my/our proxy to vote on my/our behalf for/against the resolution(s) at the Annual General Meeting of the Company 2. To elect Mr. Ekwunife Okoli as a Director to be held on Thursday, 15th June, 2017 and any adjournment thereof. 3. To elect Mr. Anthony Egbuna as a Director

Dated this ______day of ______, 2017 4. To elect Ms. Elizabeth Amadiume as a Director

Shareholder's Signature______5. To elect Mr. Segun Adebanji as a Director

Notes 6. To re-elect Mr. Ayo Osunbunmi 1. A member of the Company is entitled to attend and vote 7. To re-elect Mr. Dominic Ichaba at the Annual General Meeting of the Company. He is also entitled to appoint a proxy to attend and vote in his stead, 8. To re-elect Mr. Steve Iwenjora and in this case, this card may be used to appoint a proxy. 9. To appoint Messrs KPMG Professional Services 2. All executed Proxy Forms must be deposited at the As External Auditors office of the Registrars, Lighthouse Registrars Limited, rd 10. To authorize Directors to fix the Kingsway Building (3 Floor) 2/4, Davis Street, Lagos, remuneration of the Auditors P.O Box 60270 or the office of the Company Secretary, PAC Solicitors, 16, Kofo Abayomi Street, Victoria Island, 11. To elect shareholders’ representatives to the Lagos, not later than 48 hours before the time fixed for Statutory Audit Committee. the meeting. SPECIAL BUSINESS/ ORDINARY RESOLUTION FOR AGAINST 3. If the shareholder is a Company, this form should be sealed under the Company's common seal or under the 12. To approve recurrent related party hand of an officer duly authorized. transactions

4. Under the Stamp Duties Act, CAP S8. Laws of the Please indicate with X in the appropriate box how you wish your votes Federation of Nigeria, 2004 any instrument of proxy to to be cast on the resolutions set out above. Unless otherwise instructed, be used for the purpose of voting by any person entitled the proxy will vote or abstain from voting at his discretion. to vote at any meeting of shareholders must bear a stamp duty.

Before posting the above form please tear off this part and retain it for admission to the meeting ADMISSION CARD TO THE 25TH ANNUAL GENERAL MEETING OF CORNERSTONE INSURANCE PLC (RC 163170) To be held at Agip Recital Hall, MUSON Centre, Onikan, Lagos on Thursday, 15th June, 2017 at 11.00 am Name of Shareholder______Name of Proxy______(FOR E-BONUS AND E-DIVIDEND) 2016 Annual Report & Accounts

Dear Shareholder(s)

In our request to update shareholders date with the current technology in the capital market (i.e e-bonus and e-dividend). We request you to complete this form with the following information:

Tel no: CSCS A/C No: STOCK BROKING FIRM:

E-mail Address: Name of Bank:

Branch of Bank Bank Acc No: Branch Code

No of units held:

NAME OF SHAREHOLDER/CORPORATE SHAREHOLDERS AND CURRENT ADDRESS:

CSCS No:

Bank Account Details:

Signature & Date:

NAME OF COMPANY IN WHICH YOU HAVE SHARES Cornerstone Insurance Plc.

Please notify our Registrar, Lighthouse Registrars Ltd of any change in telephone, Address and bank whenever it occurs.

Yours faithfully Cornerstone Insurance Plc.

SIGNATURE/RIGHT THUMBPRINT OF SHAREHOLDER

Note: **Please be informed that by filling and sending this to out Registrars, Lighthouse Registrars Limited, for processing, you have applied for the e-dividend and e-bonus; thereby, authorizing Cornerstone Insurance Plc. to credit your account (in respect of dividend and bonuses electronically.)

PLEASE COMPLETE AND RETURN TO: Lighthouse Registrars Limited, 2/4 Davis Street, Kingsway Building, Marina, Lagos. In case of Corporate Shareholder, use company seal TABLE OF CONTENT OF TABLE

AFFIX PIX HERE PLS

REGISTRARS: Lighthouse Registrars Limited, 2/4 Davis Street, Kingsway Building, Marina, Lagos. Affix Current Passport LIGHTHOUSE REGISTRARS RC 163170 Write your name at the back of your passport photograph E-DIVIDEND MANDATE ACTIVATION FORM

TICK NAME OF COMPANY SHAREHOLDER ACCOUNT NO Only Clearing Banks are acceptable CORNERSTONE INSURANCE

Instruction Please complete all section of the forms to make eligible for processing and return to the address below

The Registrar, Lighthouse Registrars Limited Kingsway Building, 3rd Floor, 2/4 Davies Street P.O Box 60276 Lagos Nigeria.

We hereby request that henceforth, all my/our dividend payment due to me/us from our holdings in cornerstone Insurance Plc be credited to my/our bank detailed below:

Clearing House No

Bank Verification No

Bank Name

Bank Branch

Bank Address

Bank Account Number

Account Opening Date

Account Type (Tick) Current Savings Shareholders Account Information Surname First Name Other Names

Address:

City State Country

Previous Address (if any)

Mobile Telephone 1 Mobile Telephone 2

Email Address

Signature (s) (If applicable)

Help Desk Telephone No/Contact Centre Information for Issue Resolution or clarification: +2348087901770

Light Registrar Ltd Website: www. Lighthousereg.com Email: [email protected] 2016 Annual Report & Accounts nnual Report & Accounts

AFFIX PIX HERE PLS

REGISTRARS: Lighthouse Registrars Limited, 2/4 Davis Street, Kingsway Building, Marina, Lagos.

RC 163170

PROFESSIONALISM 2016 21, Water Corporation Drive, Off Ligali Ayorinde Street, Victoria Island, Lagos. ANNUAL REPORT Tel: 012806500 Web: www.cornerstone.com.ng & ACCOUNTS Email: [email protected]