NicozDiamond 2017 Annual Report PDF

NICOZDIAMOND INSURANCE LIMITED 2017 ANNUAL REPORT
Contents
01 Corporate Information
18 Chairman’s Statement
02 Corporate Values
20 Managing Director’s Report
04 Product Overview
24 Report of the Directors
06 Distribution
27 Independent Auditor’s Report
07 Corporate Social Responsibility

33 Group Financial Statements
09 Statement of
Corporate Governance 87 Shareholder Analysis
13 Directorate
88 Dividend Notice
16 Directorate & Management

90 Proxy Form
CORPORATE INFORMATION
NATURE OF ACTIVITIES Short-term insurance
DIRECTORS James Karidza (Chairperson)

Mrs Thembiwe C Mazingi
Mrs Rachel P Kupara
Mr Bruce Campbell
Mrs Daphine Tomana
Mr Douglas Hoto
Mr Kirtkumar Naik
Mrs Nester Mukwehwa
Mrs Grace Muradzikwa (Managing Director)
COMPANY SECRETARY Mrs Gloria Zvaravanhu
AUDITORS Ernst & Young

Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Corner Julius Nyerere/Kwame Nkrumah
P O Box 62, Harare
SHARE TRANSFER SECRETARIES ZB Transfer Secretaries

21 Natal Road
Avondale, Harare
P O Box 2540, Harare

REGISTERED OFFICE Ground Floor
Insurance Centre
30 Samora Machel Avenue
Harare
POSTAL ADDRESS NicozDiamond Insurance

P O Box 1256
Harare

PRINCIPAL BANKERS Stanbic Bank Zimbabwe Limited
Stanbic Centre
50 Samora Machel Avenue, Harare
CURRENCY OF FINANCIAL STATEMENTS United States Dollars
PERIOD OF FINANCIAL YEAR 1 January to 31 December 2017
1
CORPORATE VALUES
Our Vision
To be highly visible and preferred provider of innovative risk
solutions in our chosen markets.
Our Mission
To provide superior risk solutions underpinned by a high competent, innovative
and dedicated team for the benefit of all stakeholders.
Our Values
Professionalism – To be trustworthy, competent, respectful,
considerate and acting with integrity
Accountability – Have authority, responsibility, ownership, and meet

stakeholders expectations and transparency
Teamwork – Have shared purpose to achieve common goals
Innovation – Doing something differently, adding value and being cost

effective, continuous improvement and new ideas
Excellence – Being the best, have the art of mastering and should
have superior quality
2
What we offer:
Motor Vehicle Insurance Home Plan Insurance
Travel Insurance Commercial Insurance
Golfers Plan And much more
3
PRODUCT OVERVIEW
NICOZDIAMOND offers a wide range of short term insurance

covers under the following classes of business:
Personal Insurance
• Homeowners – covering the private dwelling and all out
buildings, pool pumps, gates and walls.
• Householder insurance – movables covering contents of
the private dwelling house.
• Motor vehicle insurance for motor vehicles with a carrying
capacity of up to 2 tons, used for private purposes.
• All Risks Insurance offering worldwide cover for specified
valuable items such as jewellery, cameras, mobile phones
sporting equipment, cycles, spectacles and laptops which
are normally carried on the person.
Business Combined Insurance

This policy caters for the specific needs of the small to medium
sized commercial and industrial business types.
The policies are tailor-made to suit the specific requirements
of the business. There is a wide range of products that are
available to cover these sizes of business as well as the larger
corporates.
Commercial Insurance- Assets Policy

This policy caters for the varying needs of corporate businesses.
Underwritten on an Asset based policy wording incorporating

buildings, office contents, stock in trade etc. against fire,
consequential loss and most types of crime related risks such
as burglary and theft of money, and accidental damage type of
risks.
The broader classes listed below are further split into numerous
insurance products providing cover against most insurable risks.
As the scope of insurance is so broad, those covers which have
broad similarities are grouped together. The different types of
insurance covers would include;
4
PRODUCT OVERVIEW continued
Policy Type Cover Provided
Fire and allied perils Loss or damage to buildings, contents and stock-in-trade caused by fire
and allied perils explosions, earthquakes, aircraft, non- political riots and
malicious damage
Consequential loss Loss of gross profit as a result of reduction in turnover following loss
covered under the fire policy
Accounts receivable On outstanding debit balances which cannot be traced following a loss
by fire
Theft Loss of contents, stock and machinery as a result of theft
Money Money stolen from the business premises or in-transit to or from the bank
Glass Breakage of external and internal fixed glass
Goods in-transit Damage to property whilst in transit by road, rail or air
Business all risks Worldwide cover for specified small valuable items
Accidental damage Accidental damage to property at premises
Motor Insurance - Private and light delivery vehicles, commercial trucks and special type
cars, cycles buses and trailers against passenger liability own including
third party and damage and liability to third parties
Engineering Insurance Machinery breakdown and resultant deterioration of stock, plant and
erection all risks, contactors all risks and resultant liabilities
Marine and Aviation Damage to hull and liability to passengers carried therein loss or damage
Insurance to cargo
Fidelity Guarantee Loss due to dishonesty or fraud by employees
Credit Insurance Loan protection against involuntary retrenchment, death sickness and/
disability
Golfers Insurance Policy covers risks associated with golfing to both amateurs and
professionals alike
Travel Insurance Traveling emergencies such as: Emergency medical expenses, journey
cancellations, loss of luggage.
Liabilities – General, Legal liability to third parties and to employees for death or injury resulting
Employers, Property in incapacitation or professional negligence resulting in financial loss
Owners, Tenants,
Professional and directors
and officers
Group Personal Accident Death or disability to insured persons due to an accident
5
DISTRIBUTION
BRANCH NETWORK IN ZIMBABWE
BULAWAYO
Fidelity Life Centre
Corner 11th Ave. /Fife Ave.
P.O. Box 158
NicozDiamond has presence in the following markets: Tel: (09) 71532/4, 62001/3, 78408
Zimbabwe, Mozambique and Malawi. Fax: (09) 71535
United General Insurance Company Limited

GWERU
(UGI) - Malawi
MIPF Building
NicozDiamond has a 46% stake in the company as well 7th Street
as a management and technical services contract with the Box 688
company. The company is the second largest short-term Tel: (054) 222661, 228984
insurance company in Malawi. The results of the Company Fax: (054) 222663
are consolidated into the group results.
MUTARE
Diamond Seguros - Mozambique 4 Manica Centre
NicozDiamond has a shareholding of 24,33% and a 118 Hebert Chitepo St.
management contract. The results are included under P.O. Box 331
associates. Tel (020) 63200, 67500
Fax: (020) 63255
MASVINGO
Ground Floor
ZIMRE Building
Hughes St.
P.O. Box 306
Tel: (039) 263929, 263937
Fax: (039) 263937
6
CORPORATE SOCIAL RESPONSIBILITY
NicozDiamond
NicozDiamond Insurance Limited (NDI) is passionate and
committed to the development of the communities that it operates in
and recognizes the role and impact that it can play to empower the
“Inspired to
less privileged in society.
The company hosted a successful charity winter ball whose theme

was “Inspire to Make a Change”, on 28th July at Mutapa Gardens,
Make a Change”
Monomotapa. The event was well attended by more than 300 guests
who showed their deep commitment to the important fundraiser.
Over the years the company’s customers, business partners and
other stakeholders have supported its fundraising initiatives, and
this has repeatedly allowed NDI to make a difference in the lives
of many!
The winter ball is an annual event held to raise funds for the
company’s Corporate Social Responsibility (CSR) programmes.
The company is pleased that it managed to achieve the target
funds and with the CSR budget now fully funded, NicozDiamond
continues to strive to support and strengthen the beneficiaries of the
proceeds through education and charitable contributions. NDI has
over the years warmed hearts and changed lives through fulfilling
needs such as capacity building within areas of education and
support of rehabilitation services. The company has also reached
out to schools in rural areas, children’s and old peoples’ homes and
universities.
For 2017, the company has committed most of its CSR budget
to sinking boreholes for Universities to relieve them of water
shortages and improve the living conditions of students on campus.
In addition, some of the funds will be directed to providing medical
care for cancer patients who are unable to access funds to undergo
chemotherapy and Radiotherapy. Tagwira Primary School will also
benefit through the provision of desktops to enable its students to
adjust to the new learning curriculum.
NDI continues to look into ways of improving its fundraiser to enable

it to grow and raise more funds for its CSR programme in efforts to
make a greater change!
Faith Mariwi handing over donation to Midlands Children’s Home
7
When it all falls, will you

be covered or left exposed?
8
STATEMENT OF CORPORATE GOVERNANCE
OVERVIEW OF SYSTEM OF GOVERNANCE INSIDER TRADING

NicozDiamond and its associated companies is committed to good corporate governance No Director, officer or employee may deal either directly or indirectly in the company’s
and is guided by the National Code on Corporate Governance Zimbabwe and the King shares on the basis of unpublished price-sensitive information regarding its business or
Reports on Corporate Governance. It is committed to the principles of transparency, affairs. In addition, no director, officer or employee may trade in the company’s shares
accountability, fairness and integrity in all its dealings. Directors and management are during closed periods. Closed periods are from the end of the interim and annual reporting
required to observe the highest ethical standards, ensuring the business practices are periods to the announcement of financial and operating results for the respective periods,
conducted in a manner which, in all reasonable circumstances, is beyond reproach. The and while the company is under a cautionary announcement.
company values ethical behavior and reaffirms its commitment to corporate governance
principles by complying with all applicable legislation and regulations. MECHANISMS FOR COMMUNICATION WITH STAKEHOLDERS
The company has a formal platform for engaging and communicating with stakeholders.
The system of corporate governance in place ensures that Directors and management The systems include formal meetings with investors, annual general meeting, press
to whom the running of the company has been entrusted by shareholders, carry out their announcements on interim and year-end results, analyst and media presentations,
responsibilities faithfully and effectively, placing the interests of the company ahead of company website and annual reporting to shareholders.
their own. This process is facilitated through the establishment of appropriate reporting
and control structures as detailed below; ENTERPRISE RISK MANAGEMENT
The company has fully embraced Enterprise Risk Management and has put in place an
BUSINESS ETHICS enterprise risk management policy that is supported by the Board through the Audit and
The Board, management and staff are guided by the company’s Code of Ethics. The Risk Management Committee. There is an executive risk management committee that is
Code of Ethics supports its commitment to a policy of fair dealing, honesty and integrity tasked with implementation of the policy and reports to the Audit and Risk Management
in the conduct of its business. The Code of Ethics has been reviewed and approved Committee on a quarterly basis.
by the board, communicated and distributed to all employees across all levels in the
company. The company has instituted a whistleblowing policy and fraud and corruption The company management has designed and implemented a risk management
reporting platform through Deloitte’s Tip-offs Anonymous. Incidences of unethical practice framework whose key objectives are to protect the company’s capital, enhance value
are reported to various levels within the company depending on who is involved, and creation, support decision making and protect the company’s reputation and brand.
all reports are investigated to their reasonable conclusion using internal or external The framework, which incorporates the risk management policy, strategy and plan, aims
resources. to ensure that risk management processes are embedded in critical business activities
and functions, and that risks are undertaken in an informed manner and pro-actively
BOARD & MANAGEMENT ETHICS managed in accordance with the business risk appetite.
The company believes that it is the responsibility of the Board and Management to
lead by example in observing personal ethical practices detrimental to the business. As This includes identifying and taking advantage of opportunities as well mitigating adverse
such, all Directors and key management are required to declare interests which might impacts of risk. The approach to risk management includes being able to identify,
be deemed in conflict with their appointment or contract with the company. No part of describe and analyse risks at all levels throughout the organisation, with mitigating
the company’s business was managed during the year by any third party in which any actions being implemented at the appropriate point of activity. The very significant, high
director or key management had an interest. impact risk areas and the related mitigating action plans are monitored at executive level.
Risks and mitigating actions are given relevant visibility at various appropriate forums
RELATED PARTY TRANSACTIONS throughout the organisation.
The company has a process in place whereby the directors and key management have
confirmed that, to the best of their knowledge, the information disclosed in the company’s The company has documented its approach towards Information and Communication
annual financial statements fairly represents their shareholding in the company, both Technology (ICT) in the ICT Information Security Policy. The document covers all policies
beneficial and indirect, interest in share options of the company and the compensation relating to ICT and guides staff on usage of the company ICT facilities. The document
earned from the company for the financial year. In addition, the directors and key also covers physical and environmental security, communications and operations as
management have confirmed that all interests have been declared. well as access control. The Company also has a Disaster Recovery Plan which contains
appropriate business continuity plans and identified resources that will ensure the
implementation of recovery procedures, if a disaster occurs.
9
CORPORATE GOVERNANCE continued
ACCOUNTABILITY AND INTERNAL CONTROL The company’s internal audit function operates independently in all operations to appraise
The directors are required by the Companies Act to maintain records and prepare financial and evaluate the effectiveness of the operational activities and the attendant business
statements, which fairly present the state of affairs of the company as at the end of the risks. Where necessary, recommendations are made for improvements in the systems of
financial year and the results of its operations for that year. The financial statements, internal control and accounting practice based on internal audit plans and reports which
which are also prepared in accordance with International Financial Reporting Standards, take cognisance of relative degrees of risk of each function or aspect of business.
are the responsibility of the directors and it is the responsibility of the independent
external auditors to report thereon. Systems of internal control are implemented to reduce BOARD OF DIRECTORS
the risk of error, loss or failure to achieve corporate objectives in a cost effective manner. The Board rules and procedures are governed by a Board Charter. The roles of the
These controls include the proper delegation of responsibilities within a clearly defined Chairman and the Managing Director are separately held and are defined so as to ensure
framework of prudent and effective accounting procedures and adequate segregation of a clear division of responsibility. Board meeting are held on a quarterly basis and at such
duties. They are monitored throughout the company and all employees are required to other times as are necessary under the chairmanship of a non-executive Director
maintain the highest ethical standards in ensuring that the company’s business practices
are conducted in an appropriate manner, which is above reproach. All the Directors have unrestricted access to the advice and services of the Company
Secretary. The Board of Directors has overall responsibility for the company’s systems
of internal control. These systems are designed to provide reasonable assurance of the
safeguarding of assets and the reliability of financial information.
BOARD COMPOSITION
The Board has a unitary board structure, which at 31 December 2017 comprised the following:
Audit & Risk Executive

Director Status Board Management Investments Manpower Remuneration Nominations ICT

James Karidza Independent
Non-Executive Director (Chairperson) (Chairperson) (Chairperson)

Thembiwe Mazingi Independent
Non-Executive Director (Vice-chair) (Chairperson) (Chairperson)

Robert C von Seidel ^ Non-Executive Director

Grace Muradzikwa Managing Director
Bruce Campbell Independent

Non-Executive Director

Rachel Pfungwa Kupara Independent
Non-Executive Director (Chairperson)

Douglas Hoto ** Non-Executive Director

Nester Mukwehwa Non-Executive Director

Daphine Tomana Non-Executive Director

Kiritkumar Naik Independent
Non-Executive Director (Chairperson)

^ resigned 24 January 2018
** appointed 7 November 2017
10
In accordance with the company’s articles of association, directors are required to retire BOARD INDUCTION
by rotation at intervals of three years. Directors retiring by rotation who avail themselves On appointment, new Directors have the benefit of induction activities aimed at
may be reelected at the Annual General Meeting (AGM) at which they retire. New broadening their understanding of the company and markets within which it operates. The
Directors may only hold office until the next AGM, at which they will be required to retire Company Secretary ensures that directors receive accurate, timely and clear information.
and offer themselves for election.
BOARD EVALUATION
BOARD EXPERTISE The Board has a formal self-evaluation process of the Board and the assessment of
Collectively, the Directors possess a wide array of skills, knowledge and experience, and the Chairperson’s performance by the Board. This process is conducted annually, and
bring independent judgment to board deliberations and decisions, with no one individual is an integral element of the board’s activities to review and improve its performance
or group having unfettered powers of decision-making. Board members possess skills continually.
that include Insurance Legal, Regulatory and Compliance, Accounting and Financial
The committees of the Board review matters on behalf of the Board and make
Management, Investments, Audit & Risk Management, Human Resources Management
recommendations for consideration by the Main Board. The power, duties and
and Actuarial skills..
responsibilities of the committee are governed by their respective Charters as approved
by the Board and they work closely with key management in discharging their duties.
The main responsibility of the Board is to support good corporate governance, strategy
formulation and guide policy implementation. Board members are allocated to serve The committees are illustrated in the diagram below:
on committees of the Board in their areas of strategic strength and expertise. During
the year, no major changes in the Board structure took place which could be deemed
significant to the company’s operations and strategies.
Board Committee Structures and Responsibility
COMMITTEES
EXECUTIVE
REMUNERATION
COMMITTEE
11

The committee composition and key roles are tabulated below;
Committee Composition Roles and Responsibilities
Audit & Risk Management Mrs. R.P. Kupara (Chair) The Audit and Risk Management Committee monitors internal control policies and procedures designed
(Meets once a quarter) (3 Non- Executive Directors) to safeguard company assets and to maintain the integrity of financial reporting. Among the specific
responsibilities set out in its Charter, the Audit and Risk management Committee reviews all published accounts
of the company; reviews the scope and the independence of the internal and external audits; monitors and
assesses the systems for internal compliance and control and advises on the appointment, performance and
remuneration of external auditors.
Investments
(Meets once a quarter) Mr. K. Naik (Chair) The committee is responsible for the formulation of the Investment Policy of the company and reviewing
(2 Non- Executive investment strategy for compliance with such policy.
Directors and Managing Director)

Manpower The committee is responsible for the company’s Human Resources Policy issues and terms and conditions
(Meets once a quarter) Mrs. T.C. Mazingi (Chair) of service. The company continues to subscribe to a compensation philosophy, which ensures that it attracts
(1 Non- Executive and retains skilled personnel. Staff compensation levels and manpower development proposals made by the
Director and Managing Director) committee are presented to the Board for approval.

Executive Remuneration
(Meets as and when required Mr. J. Karidza Chair) The committee is responsible for ensuring that senior executives are competitively remunerated in line with
but at least once a year) (2 Non- Executive Directors) their contribution to the company’s operating and financial performance, at levels which take into account
industry and market bench marks as well as affordability and sustainability.
Nominations
(Meets as and when required Mr. J.Karidza (Chair) The committee has a role of identifying and making recommendations to the Board on the appointment of
but at least once a year) (2 Non- Executive Directors) any executive and non-executive Directors. The committee also reviews and evaluates the performance and
effectiveness of the Board.
ICT Mrs. T C Mazingi (Chair)
(Adhoc) (1 Non- Executive Director The committee was established to assist the Board with oversight on the System upgrade project.
and Managing Director)

BOARD AND EXECUTIVE MANAGEMENT REMUNERATION Incentive Bonus Schemes
The incentive bonus schemes in place applies to all staff in the organisation where
Executive Remuneration bonus parameters are set in relation to the achievement of company objectives per the
The remuneration of senior management is determined by taking into consideration Balanced Scorecard for the year.
market comparisons and an assessment of performance related to the achievement
of documented measurable performance targets. Strategic and business objectives, Share Option Schemes
which are reviewed periodically, as well as a general assessment of performance, are The objective of the share incentive schemes is to strengthen the alignment of
taken into account. The remuneration structure at senior management level consists of shareholder and employees’ interests’. Under the share option schemes, senior
guaranteed pay, variable pay in the form of performance and bonus schemes and long management and employees of the company are awarded share options based on their
term incentives in the form of employee share option schemes. grade in the organisation, their individual performance in the year and the years served in
the organisation. The allocation criterion is applied equally across both management and
Basic Salary staff and all permanent staff of the company are eligible per the scheme rules.
The basic salaries of executive management are subject to annual review by the Executive
Remuneration Committee and the Board and are set with reference to relevant external Non-Executive Directors’ Remuneration
market data as well as the assessment of individual performance. All salary reviews of Non-Executive Directors receive fees for their services as directors through sitting on the
executive management are approved by the Executive Remuneration Committee. company’s board and board committees, on the basis of a fixed quarterly retainer fee and
a sitting fee. Directors’ fees are recommended by the Remuneration Committee taking
into considering market data, considered by the Board, and proposed to the shareholders
for approval at each AGM.
12
DIRECTORATE
James Karidza – Independent Non-Executive Director (Chairman)
BAcc (UZ), CA (Z)
James is a Chartered Accountant (Zimbabwe) and a holder of a Bachelor of Accountancy degree from the University of
Zimbabwe. He did his articles of clerkship with KPMG. He has served as the Chief Finance Officer for Cimas Medical
Aid Society, Group Finance Director for Migdale Holdings (Private) Limited and Group Finance Director for SMM
Holdings (Private) Limited. James has been on a number of Boards of Zimbabwean and foreign companies including
manufacturing, banking, mining and services operations where he chaired various board committees. He is a keen golfer
and enjoys farming.
Thembiwe Chikosi Mazingi – Independent Non-Executive Director (Vice Chairperson)

BL (UZ), LLB (UZ), MBA (UZ)
Thembiwe holds a Masters in Business Administration (MBA), Bachelor of Laws degrees from the University of
Zimbabwe. She is also a holder of Advanced Corporate Law and Securities Law, Advanced Programme in Value-Added
Tax and Post-graduate Certificate in Advanced Taxation, all from UNISA. Thembiwe is registered as a legal Practitioner
of the High Court of Zimbabwe. She has more than 28 years experience as a Legal Practitioner in private practice and
currently is a partner in law firm, Coghlan, Welsh & Guest. Her assignments include providing legal services and advice
in the law of property, conveyance and notarial practice, trusts, estate planning, taxation, commercial law, corporate
compliance and regulatory issues. Thembiwe is a member of the Law Society of Zimbabwe and is also non-executive
director for National Tyre Services, African Century Leasing Company and Ariston Holdings. She is also a past board
member of Zimbabwe Allied Banking Group, Zimbabwe Electricity Supply Authority and Fidelity Asset Management.
Grace Muradzikwa – Executive Director (Managing Director)

Bachelor of Administration, MBA, AIISA, FIISA, IPM Diploma
Grace holds a Masters in Business Administration and Bachelor of Administration degree from the University of
Zimbabwe. In addition, she is an Associate of the Insurance Institute of South Africa (AIISA) and fellow of the Insurance
Institute of South Africa (FIISA). She also holds an IPM Diploma in Personnel Management. She has been at the helm
of NicozDiamond for many years and has over 2 decades of insurance experience spanning all facets of Short-term
Insurance and Reinsurance. Grace holds directorships in various local and regional companies and is a member of
different professional affiliations. She has received awards such as Zimbabwe National Chamber of Commerce Business
Woman of the Year, 2009 IOD Director of the Year, 2013 Megafest Leadership Award and 2014 Megafast Award. She is
a non-executive Director for Buy Zimbabwe, Africa University and Bindura University.
13
DIRECTORATE continued
Rachel Pfungwa Kupara – Independent Non-Executive Director
B.Acc (Hons,) CA (Z), MBA
Rachel is a Chartered Accountant (Zimbabwe) who holds a Masters in Business Administration (MBA) from the University
of Bradford, England. She obtained an Accountancy degree at the University of Zimbabwe and did her articles of clerkship
with Ernst & Young Zimbabwe. Her work experience spans over 31 years in Audit, Insurance, Banking and Agriculture.
She has held various Finance and Managing Directors positions during her working career. She has also served as a
Non-Executive Director on the Boards of Reserve Bank of Zimbabwe, Afre Corporation, Air Zimbabwe, Zimbabwe Open
University and Ariston Holdings. Currently, other than serving on the NicozDiamond Board, she is also a Non-Executive
Director for Dairibord Holdings Limited, ZIB Insurance Brokers, Briolette Investments (Pvt) Ltd, Tongaat Hulett Limited(SA)
and Zimbabwe International Film Festival Trust.
Bruce Campbell – Independent Non-Executive Director

MBL (UNISA), Bachelor of Arts (NU) FllSA, AllSA
Bruce is a qualified and seasoned insurer who is a Fellow of the Chartered Insurance Institute of London and also holds an
Associateship from the same institute. He holds a Master of Business Leadership from UNISA and has a Bachelor of Arts
Degree from Natal University. He has been Chief Executive Officer of Mutual and Federal Insurance Company in South
Africa for ten years between 1998 and 2007 and oversaw the successful acquisition and integration of the Protea Insurance
Company and Commercial Union. He has also been chairman and Chief Executive Officer of the Alexander Forbes Group
between 2007 and 2010.He has served on the Board of Credit Guarantee as chairman, on the RMI insurance company
Zimbabwe as Board chair and also as a Director of Mutual Federal in Namibia and the South African Insurance Association
Board. He is currently an independent Director of Santam South Africa and sits on several other non- insurance Boards.
Kiritkumar Naik – Independent Non-Executive Director

Advanced diploma - Mechanical Engineering Technician City and Guild Institute, London
Kiritkumar is the Managing Director of Rank Zimbabwe. He currently serves on the Boards of TSL Limited, Dulux Zimbabwe
and is the current President of the Hindoo Society. He has previously served on the Boards of Turnall Holdings, William Bain
and Co, ZNCC, Steelnet, Art Corporation, Capitol Insurance and Trinidad Industries.
Nester Mukwehwa – Non-Executive Director

Masters in Policy Studies, BSc Honours Social Science and Administration
Nester is currently the Human Resources Director of Hunyani Paper and Packaging since 2008. She is also a Board
member of NSSA, Chairman of the National Employment Council for the Printing and Packaging Industry, Independent
Arbitrator of the Ministry of Public Service and Social Service, Chairperson of EMCOZ Labour committee and UZ Council
member. She is a highly experienced human capital specialist and holds a Masters in Policy Studies and a BSc Honours
Social Science and Administration as well as various HR diplomas.
14
DIRECTORATE continued
Robert C von Seidel – Non-Executive Director
BAcc. (University of Exeter – UK).
Robert is a Chartered Accountant (ICAEW) with a Bachelors in Business Science from Capetown University. He has vast
experience in fund management acquired over 24 years. He currently sits on the ZIMRE Holdings and Dairibord Boards
amongst others. He currently manages and provides investment advice in South Africa.
Daphine Tomana - Non-Executive Director

BL(UZ)
Daphine holds a Bachelor of Laws (Honours) from the University of Zimbabwe. Daphine is a registered Legal Advisor, Legal
Practitioner, Corporate Legal Services Manager and a Bank Examiner. She has more than 18 years’ experience as a Legal
Practitioner, Bank Examiner and Corporate Legal Services and currently with Zimbabwe Newspapers (1980). Her assignments
include providing legal services and advice, drafting agreements and opinions, attending Court sessions, managing legal
matters, responding to claims made for and against the company, administration of the Head Office, reviewing legislation
applicable to the company, research, handling insurance and processing all insurance claims by the company, conducting
workshops on defamation and labour matters. Daphine is a Non-Executive Board Member for Agribank. She is also a past
Commissioner with the Media Information Commission.
Douglas Hoto – Non Executive Director

BSc Honours in Mathematics, FIFA, FASSA
Douglas holds a Bachelor of Science (Honours) in Mathematics from the University of Zimbabwe. In addition he is a Fellow of
the Institute and Faculty of Actuaries of the United Kingdom as well as a Fellow of the Actuarial Society of South Africa. His
work experience spans over 27 years in various positions. Douglas has also served as Chairman and non-executive Director
on the Boards of Zimbabwe National Statistics Agency, Actuarial Society of Zimbabwe and the Insurance and Pensions
Commission (IPEC). He is the Chief Executive Officer of First Mutual Holdings Limited.
Currently, other than serving on the NicozDiamond Board, he is also a non-Executive Director for FMRE P & C Botswana,
Rainbow Tourism Group, Arundel School, Peterhouse Group of Schools and the SV Muzenda Scholarship Trust.
15
DIRECTORATE and MANAGEMENT
NON- EXECUTIVE EXECUTIVE MANAGEMENT

Mr. James Karidza (Chairman) Mrs. Grace Muradzikwa Managing Director
Mrs. Thembiwe C Mazingi (Vice Chairperson)
Mr. Noel Manika General Manager (Operations)
Mr Bruce Campbell
Ms. Gugulethu Ngwenya General Manager (Business Development)
Mrs. Rachel P. Kupara
Mr. Kiritkumar Naik Mrs. Gloria Zvaravanhu General Manager (Corporate Services)
Mrs Nester Mukwehwa
Mr. Douglas Hoto MANAGEMENT
Mrs Daphine Tomana Ms. Cathrine Musakwa Head Strategic Business Unit
Mr. Tinashe Masvaya Head Strategic Business Unit
EXECUTIVES
Mrs. Rebecca Moyo Head Finance
Mrs. Grace Muradzikwa (Managing Director)
Mr. Elisha Makwarimba Treasury Manager
COMPANY SECRETARY Mrs. Agnes Mtotela Head Human Resources
Mrs. Gloria Zvaravanhu Mr. Vusani Mapuke Head IT
Ms. Odiline Kava Head Marketing
BOARD COMMITTEES
Mr. Christopher Tapererwa Head Business Analysis
AUDIT AND RISK MANAGEMENT COMMITTEE
Mr. Jabulani Mbengo Head Internal Audit
Mrs. Rachel P Kupara (Chairperson)
Mr Bruce Campbell Mr. Lloyd Gurira Acting Claims Manager
Mr. Douglas Hoto Mr. Champion Gwaza Business Development Manager
Mr. Witness Chimboza Branch Controller Mutare
MANPOWER COMMITTEE Mr. Ranga Verenga Branch Controller Bulawayo
Mrs. Thembiwe C Mazingi (Chairperson)
Mrs. Benedict Betera Branch Controller Masvingo
Mrs Nester Mukwehwa
Ms Faith Mariwi Branch Controller Gweru
Mrs. Grace Muradzikwa - Executive
EXECUTIVE REMUNERATION COMMITTEE

Mr. James Karidza (Chairperson)
Mrs. Thembiwe Chikosi Mazingi
Mrs Daphine Tomana
INVESTMENTS COMMITTEE
Mr. Kiritkumar Naik (Chairperson)
Mrs Daphine Tomana
Mrs. Rachel P. Kupara
Mrs. Grace Muradzikwa (Executive)
NOMINATIONS COMMITTEE
Mr. James Karidza (Chairperson)
Mrs. Thembiwe Chikosi Mazingi
Mrs Daphine Tomana
ICT COMMITTEE
Mrs. Thembiwe Chikosi Mazingi (Chairperson)
Mrs Rachel P. Kupara
Mrs. Grace Muradzikwa (Executive)
16
JERICHO 024271
Another diamond
achievement
As we embark on our journey for 2018, we look forward to enhancing
our commitment to excellence for our customers.
At NicozDiamond, we are dedicated to raising the standard in customer service and are
highly motivated to support your pursuit of happiness.
17
CHAIRMAN’S STATEMENT
INTRODUCTION
It gives me great pleasure to present to you my statement to shareholders
of the NicozDiamond Group of companies for the year ended 31 December
2017.
Despite being affected by numerous challenges ranging from cash and

foreign currency shortages to the resurgence of inflation, the local economy
has remained resilient with official growth estimates being revised from 1.7%
to 3.7% on the back of good agricultural yields. In line with this economic
performance, the short term insurance industry is estimated to have grown
by 9%. The same resilience demonstrated at a macroeconomic level is,
I am pleased to note, also evident in the performance of your company.
Revenue, operating profit, operating cash flow and headline earnings all
showed marked improvement as detailed in the financial statements.
OPERATIONS OVERVIEW
The operating environment in short term insurance continued to be
characterised by incessant liquidity constraints and softening of rates which
have impacted meaningful revenue growth. Claims costs were also on the
increase due to inflation on cost of repairs which was exacerbated by an
acute foreign currency shortage.
Business acquisition costs were similarly on the increase as there were

attendant incremental costs in strengthening regulation and offering
electronic distribution of cover notes for the motor policies. These however
have the overall long-term benefit of curbing fake cover notes and protecting
the insuring public. Motor remains the dominant class of business for the
short term insurance sector as well as for the company.
Given the constrained liquidity situation, the pressure to extend payment

plans to clients persisted thereby distorting the insurance pool model
as intended. In turn this has adversely affected the Company’s ability
to generate new cash for investments and resultantly dampening the
investment returns.
The property market continued to be characterised by increased voids

and downward revisions of rentals, which ultimately affected the property
values. Occupancy of the Group’s properties however remained above
market average. In the market in general, rental collection challenges did
not go away but collection efficiencies for the Group’s properties improved
owing to more stringent tenant vetting.
The regional investments in Malawi and Mozambique showed positive

signs of recovery during 2017 reflecting mending operating environments
in these markets. Their meaningful performance however continued to be
dragged by the nominal capital levels at their disposal. During the year the
Board made a decision to exit from the investment in Zambia based on the
operation’s performance and the limited foreign currency available to allow
The Company’s capital increased to $14.7 million from the Group to follow its rights for recapitalisation.
$12.4 million in 2016 and remained well above the
minimum statutory capital requirement for short term
insurance companies in Zimbabwe of $2.5 million.
18
CHAIRMAN’S STATEMENT continued
REGULATORY ENVIRONMENT INDEPENDENT RATING AND CERTIFICATION

The regulatory environments in the various markets continued to undergo changes which The company currently enjoys an A- rating for claims paying ability by Global Credit
typically converged around governance, risk management principles and measures to Rating (“GCR”) of South Africa. The Company also maintained its certification on ISO
protect the insuring public in line with best practice. The Group continuously strives to Standard, ISO 9001:2008.
embed best practice corporate governance principles. Corporate governance is not
merely viewed as a compliance exercise but as an integral part of how business is SOCIAL RESPONSIBILITY
conducted to ensure the long-term sustainability of value creation for stakeholders. Support for the chosen charitable causes was maintained as the Company strives to
continuosly be relevant to its communities.
Locally, minimum capital requirements for short term insurance companies are pegged at
$2.5 million and I am delighted to advise that the company was way above the minimum DIRECTORATE
required. The Board welcomed Mr Douglas Hoto onto the Board with effect from 7 November 2017.
FINANCIAL PERFORMANCE OVERVIEW DIVIDEND

The Group registered an encouraging financial performance during the year on the In line with the improved Group profitability, the Directors are proposing a final dividend
back of firm company performance and recovery in the performance of United General of 0.096 cents per share for 2017 which compares positively with 0.074 cents per share
Insurance (UGI) Malawi. The performance of UGI Malawi which recorded its worst for 2016. A dividend announcement with the salient details will be made in due course.
performance to date in 2016 rebounded significantly in 2017 on the back of an improving
economic environment referred to earlier and turnaround strategies implemented. OUTLOOK
The Group and Company remain positive about future profitability despite the increasing
The Group made an overall total comprehensive income of $2,973,086 which was a challenges in the operating environment. Business retention and growth through
significant surge from the $52,507 achieved in 2016. This was largely buoyed by the provision of excellent service, cost containment and aggressive risk management are
good performance from the Company which posted a profit after tax of US$2,448,928, a the bedrock of this outlook.
significant improvement in performance from the US$1,725,016 of 2016.
Following the acquisition of an 80.92% stake in the company by First Mutual Holdings
Gross premium written increased by 9% as both company and UGI Malawi recorded Limited (FMHL),the processes to see the merger of NicozDiamond and Tristar Insurance
modest revenue growth during the year. The group enjoyed a favourable claims have been started and more information will be provided to shareholders in due course.
experience for the year as there was a 6% reduction in claims incurred. Operating
expenses increased by 13.6% fuelled by the rising inflation especially in Zimbabwe. On APPRECIATION
the other hand Malawi incurred restructuring costs which are expected to result in cost I conclude by extending on behalf of the Board and shareholders our continued
efficiencies in the future. appreciation to our valued clients, the Regulators (Insurance and Pension Commission,
Securities and Exchange Commission of Zimbabwe, Zimbabwe Stock Exchange and the
There was a 75% growth in net investment income. This emanated from the Company Reserve Bank of Zimbabwe) who continue to provide support as needed to the Group.
as the investment returns from quoted equities and fixed income securities improved
significantly. In line with the market, the Company did not register much movement on As Chairman, I would also like to express my sincere gratitude and appreciation to the
its properties portfolio. All investments in associates contributed positively to Group Board for their continued wisdom, stewardship and strategic guidance to the Group in the
profitability in 2017 but the overall contribution by associates was affected by the loss on years gone by and continuing into the future.
disposal of some associates.
The Group generated positive cash from operations of $2,375,852 in the year which
was an improvement of 163% when compared to prior year. This derived from improved
premium collections by the company.
James Karidza
Backed by this performance, the Group’s consolidated balance sheet (Net asset value) CHAIRMAN
grew by 15% to $21.6 million. The Company’s capital increased to $14.7 million from 15 March 2018
$12.4 million in 2016 and remained well above the minimum statutory capital requirement
for short term insurance companies in Zimbabwe of $2.5 million. The Malawi operation
was however still below the minimum required solvency in the market, pointing to the
need for recapitalisation.
19
MANAGING
DIRECTOR’S
REPORT
20
MANAGING DIRECTOR’S REPORT continued

PERFORMANCE OVERVIEW Retention ratio
The macro-economic environment in Zimbabwe continued to pose operating challenges The amount of business retained by the Group increased to 68% during the period under
that ranged from increasing cost of doing business, foreign currency shortages to liquidity review compared to 65% recorded for the prior period. The increased use of internal risk
challenges. engineers and improvements in risk management practices by clients helped to reduce
reinsurance placements on a number of mega risks underwritten by the company. The
Despite the tough economic landscape, the NicozDiamond Group recorded impressive Group is working towards achieving a retention ratio of 75%.
performance in all major line items.
Claims ratio
The Group posted gross revenue of US$40.2 million for the period, representing solid The claims ratio reduced to 50% for 2017 compared to 58% recorded in 2016 as a
growth of 9% on the comparative period. The company recorded a growth of 6.5% in result of improved claims experience for UGI which saw motor accident claims declining
gross premiums whilst the Malawian entity (UGI) registered a 17% growth. by 21%. The Group continues to employ various initiatives to manage claims more
effectively. These include negotiation of discounts with repairers, use of fraud detection
Underwriting profitability improved significantly to US$1.5 million, up by 711%. UGI turned checklists, conducting pre and post loss surveys, reviewing underwriting terms for active
around from a loss position in 2016 to record a positive underwriting profit of US$0.486 portfolios, as well as working closely with private claims investigators to combat fraud.
million in 2017. The Group’s Profit after Tax increased by 238% to US$2.9 million driven
by good performance of the investment income. Expenses ratio
The expense to net earned premium marginally improved from 30% achieved in 2016 to
All the unlisted investments for the Group performed very well contributing positively to 29% in 2017. Overall expenses grew by 11% due to inflationary pressures in Zimbabwe
the overall profitability of the Group. Though negatively affected by depressed rentals, as well the restructuring expenses incurred at UGI.
subdued occupancy levels and impairments, the Property Company managed to
contribute a profit of US$0.119 million. BUSINESS CLASS PERFORMANCE
Motor continues to be the dominant class despite recording subdued premium growth
The performance highlights per unit are shown in the table below rates over the years. The motor class premium contribution remained unchanged at 45%
in 2017. The fire class in turn contributed 26% to gross premiums in 2017.
$’000 NDI UGI TSM GROUP The contribution from the other classes has been bolstered by the increased contributions
from the credit class. Banks have exhibited an increased demand for credit insurance
Gross Premium Written 31,488 8,711 - 40,199
Net Premium Written 20,146 7,243 - 27,389
Earned Premium 19,650 6,683 - 26,333
Net Claims Incurred 10,089 3,180 - 13,269
Net Commission Paid 3,192 575 - 3,767
Management Expenses 5,504 2,443 - 7,797
Underwriting Profit 865 486 - 1,500
Investment Income 2,308 468 119 2,722
Retrenchment - 195 - 195
Profit Before Tax 3,173 759 119 4,027
Profit After Tax 2,449 493 76 2,931
TECHNICAL PERFORMANCE REVIEW

The graph below shows the key technical ratios of the Group for 2017 compared to 2016
80%
70% 68% 65%

58% 2017 2016
60%
50%
50%
40%
30%
30%29%
20% 14%12%
10%
0%
Retention NCI/EP NCP/EP Exp/EP UW Margin
Ratio
21
MANAGING DIRECTOR’S REPORT continued

INVESTMENT CLASS PERFORMANCE All the major key investor ratios improved in the year 2017 compared to prior period as a
result of substantial improvements in underwriting and investment profitability for all the
2,500
2,216 Group’s entities. The NicozDiamond share price closed the year at 2.19 cents which was
a 44% growth from 2.75 cents achieved in 2016.
2,000 Dec-2017 Dec-2016
1,500 OUTLOOK
The new political dispensation has introduced confidence in the economy. The “open for
1,000
591 626 546 454 465
business” thrust by the Government and the involvement of key stakeholders to improve
500 economic policies is quite encouraging. The Group has positioned itself to capitalize
191 48 on the growth opportunities prevailing in the economy. Meanwhile, the Group shall be
focusing on profitable business growth driven by excellent service delivery to customers.
(500) ICT remains a key business enabler to bring efficiencies and convenience to customers.
(546)
(1,000) APPRECIATION
Money Other Properties Quoted Unquoted
Market Income On behalf of management and staff, I wish to thank the shareholders, Directors, Staff and
all other stakeholders for their effort during the period under review.
The Group investment income was US$2.722 million in 2017, up by 52% from US$1.785
million recorded prior period. Notable improvements were registered in quoted equities
and unquoted investment categories which grew by 376% and 254% respectively.
Interest income however reduced by 6% due to softening rates coupled with a reduced
size of the fixed income securities book. G. Muradzikwa
Managing Director
KEY INVESTOR RATIOS 15 March 2018
2017 2016
Basic EPS (Cents) 0.46 0.25
Share Price (Cents) 2.19 2.75
NAVps (Cents) 3.64 3.31
Exp/EP 29% 30%
Claims/EP 50% 58%
ROCE 19% 7%
Solvency Margin - Co 74% 77%
22
What we offer:
Motor Vehicle Insurance Home Plan Insurance
Travel Insurance Commercial Insurance
Golfers Plan And much more
23
REPORT OF THE DIRECTORS
The Directors present their report together with the audited financial statements for the year ended 31 December 2017.
1. SHARE CAPITAL
Ordinary shares Number 2017 Number 2016
Total shares in Issue 590 014 738 566 764 773
Un-issued 9 985 262 33 235 227
Authorized 600 000 000 600 000 000
Opening Issued shares 566 764 773 555 764 773

Closing Issued Shares 590 014 738 566 764 773
As at 31 December 2017, 9 985 262 (2016-33 235 227) shares were under the control of the directors.
2. RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017

The results for the year are as set out in the accompanying financial statements, a summary of which is stated below;
Summary of Group Results (Continuing Operations)

2017 (US$) 2016 (US$)
Gross Premium Written 40,198,577 36,999,970
Operating Profit 2,112,525 1,072,998
Profit before Taxation 4,026,906 1,351,818
Profit After Tax 2,930,714 959,798
Summary of Group Results (Discontinued Operations)

2017 (US$) 2016(US$)
Loss After Tax - (533,673)
3. RESERVES
The movements in the reserves of the Group and Company are shown in the Consolidated Statement of Comprehensive Income, Group and Company Statements of
Changes in Equity and in the Notes to the Financial Statements.
4. PROPERTY AND EQUIPMENT

Capital Expenditure for the year ended 31 December 2017 amounted to $282,317 (2016: $597,691).
5. INTANGIBLE ASSET
The intangible asset with a net carrying amount of $688,018 (2016:$738,357) relates to the Company’s enterprise resource planning (ERP), underwriting and finance
software.
6. DIVIDEND
The Directors have recommended a final dividend of 0.096 cents per share for the year ended 31 December 2017. The dividend will be paid to shareholders registered in
the books of the company at close of business on 12 April 2018. The dividend will be payable on or about 27 April 2018. Taxes will be deductible as applicable.
7. DIRECTORATE
Mr D Hoto joined the Board with effect from 7 November 2017.
24
REPORT OF THE DIRECTORS continued
8. DIRECTORS’ INTERESTS
No Director had, during the year, any material interest in any contract of significance in relation to the Group’s businesses. The Beneficial interests of the Directors in the
shares of the Company (both direct and indirect holdings) as at 31 December 2017 are shown in table below.
Name 2017 2016

Bruce Campbell 119 119
Grace Muradzikwa 22,263,176 37,755,019
Total 22,263,295 37,755,138
As at 15 March 2018, the position remained the same.
Total outstanding share options to Grace Muradzikwa amounted to 178 338 as at 31 December 2017 (3 150 092 - 2016).
9. DIRECTORS FEES
Directors’ fees have been reviewed in line with market trends during the year and are pegged at an average of those paid to Directors of similar sized companies. A
resolution will be passed at the annual general meeting to approve Directors fees totaling $116,200 (2016: $82,220).
10. BOARD ATTENDANCE

The table below shows Board member attendance to Board and Committees meetings in 2017:
Name of Director MAIN BOARD ARMCO INVECO MANCO NOM & EXEC REM
Number of meetings 4 4 4 4 2
J Karidza 4/4 - - - 2/2
TC Mazingi 4/4 - - 4/4 2/2
B Campbell 4/4 - 4/4 - -
N Mukwehwa 4/4 - - 4/4 -
RP Kupara 3/4 3/4 2/4 - -
K Naik 3/4 3/4 3/4 - -
C von Seidel ^ 3/4 3/4 - - -
D Hoto ** 1/1 1/1 - - -
D Tomana 3/4 - 4/4 - 1/2
G Muradzikwa 4/4 - 4/4 4/4 -
^ Resigned 24 January 2018
** Appointed 7 November 2017
Key: ARMCO-Audit and Risk Committee, INVECO-Investments Committee, MANCO-Manpower Committee, NOM-Nominations Committee and Exec Rem-Executive
Remuneration Committee
11. AUDITORS
Shareholders will be requested to approve the remuneration of the Auditors for the financial year ended 31 December 2017 amounting to $88,301 (inclusive of VAT) at the
Annual General Meeting and to appoint Auditors for the year 2018.
25
REPORT OF THE DIRECTORS continued
12. DIRECTORS RESPONSIBILITY FOR FINANCIAL REPORTING
The Directors of the Company are responsible for the maintenance of adequate accounting records, and the preparation of financial statements for each financial period
that gives a true and fair view of the state of affairs of the Company and the Group at the end of the financial period and of the results and cash flows for the period.
They are also required to select appropriate accounting policies, to safeguard the assets of the Company and the Group and to make reasonable and prudent judgments
and estimates. Accounting policies, which follow International Financial Reporting Standards, have been consistently applied.
The Directors are also responsible for the systems of internal control. These are designed to provide reasonable, but not absolute assurance as to the reliability of the
financial statements, and to safeguard, verify and maintain accountability of assets, and to prevent and detect material misstatements and losses. They systems are
implemented and monitored by suitably trained personnel with an appropriate segregation of authority and duties. Nothing has come to the attention of the directors to
indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the period under review.
The financial statements have been prepared on a going concern basis since the Directors have every reason to believe that the Group has adequate resources to
continue in operation for the foreseeable future. The financial statements have been prepared in full compliance with all International Financial Reporting Standards and
the Companies Act (Chapter 24:03).
The financial statements have been audited by the group’s external auditors, Ernst &Young, who have been given unrestricted access to all financial records and related
data, including minutes of all meetings of the Board of Directors and Committees of the Board. The Directors confirm that all representations made to the independent
auditors during the audit were valid and appropriate.
The financial statements were prepared by the NicozDiamond Insurance Limited Finance Department under the direction and supervision of the General Manager
Corporate Services, Mrs. Gloria Zvaravanhu (PAAB Registration Number 03311).
The financial statements for the year ended 31 December 2017, were approved by the Board of Directors on 15 March 2018 and are signed on their behalf by:
………………………………. ………………………………
MR. J KARIDZA MRS. G MURADZIKWA
BOARD CHAIRMAN MANAGING DIRECTOR
26
27
1
2
28
3
29
4
30
5
31
NICOZDIAMOND
INSURANCE
FINANCIAL STATEMENTS
32
STATEMENTS OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 DECEMBER 2017

Group Group Company Company
Note 2017 2016 2017 2016
Continuing Operations US$ US$ US$ US$
Income

Gross premium 40,198,577 36,999,970 31,487,676 29,565,055
Premium ceded (12,809,715) (12,767,084) (11,341,582) (10,565,969)
Net premium written 27,388,862 24,232,886 20,146,094 18,999,086
Movement in the unearned premium provision (1,055,585) 11,809 (495,884) 347,531
Earned premium 26,333,277 24,244,695 19,650,210 19,346,617
Brokerage commission and fees 2,440,550 2,145,711 2,089,784 1,682,481
Investment income 8.1 1,047,379 1,082,155 889,100 568,953
Other income 8.2 15,145 32,020 101,979 109,478

Total income 29,836,351 27,504,581 22,731,073 21,707,529

Total expenses (27,723,826) (26,431,583) (20,874,696) (19,497,708)
Net benefits and claims 8.3 (13,268,663) (14,069,084) (10,089,300) (10,025,248)
Commission and acquisition expenses (6,207,401) (5,099,835) (5,281,929) (4,313,039)
Operating and administrative expenses 8.4 (8,247,762) (7,262,664) (5,503,467) (5,159,421)

Operating profit 2,112,525 1,072,998 1,856,377 2,209,821

Net other gains 8.5 1,914,814 677,489 1,316,433 338,236

Finance costs - (6,806) - -
Profit before share of losses of associates 4,027,339 1,743,681 3,172,810 2,548,057

Share of associates losses 8.6 (433) (391,863) - -

Profit before tax 4,026,906 1,351,818 3,172,810 2,548,057

Taxation expense 8.7 (1,096,192) (392,020) (723,882) (823,041)

Profit for the year from continuing operations 2,930,714 959,798 2,448,928 1,725,016

Discontinued Operations
Profit after tax for the year from discontinued operations 8.8 - 393,356 - -
Recycling of the cumulative losses arising from translation
from Other Comprehensive Income to Profit or loss 8.8 - (352,499) - -
Loss on disposal of subsidiary 8.8 - (574,530) - -
Loss for the year from discontinued operation - (533,673) - -
Profit for the year from continuing and discontinued operations 2,930,714 426,125 2,448,928 1,725,016

Profit for the year for continuing and discontinued operations attributable to:
Equity holders of the parent 2,703,795 698,947 2,448,928 1,725,016
Non-controlling interests 226,919 (272,822) - -
2,930,714 426,125 2,448,928 1,725,016
Earnings per share (in cents) for continuing operations

Basic earnings per share (cents) 6 0.46 0.25 0.42 0.30
Diluted earnings per share (cents) 6 0.46 0.24 0.41 0.29
Earnings per share (in cents) for discontinuing operations
Basic earnings per share (cents) 8.8 - 0.09
Diluted earnings per share (cents) 8.8 - 0.09

33
STATEMENTS OF COMPREHENSIVE INCOME


Note 2017 2016 2017 2016
US$ US$ US$ US$
Profit for the year from continuing and discontinued operations 2,930,714 426,125 2,448,928 1,725,016

Other comprehensive income:
Other comprehensive income to be reclassified to profit
or loss in subsequent periods:

Share of OCI attributable to associates 8.6 28,459 (88,932) - -
Recycling of the cumulative losses arising from translation 11,618 - - -
Exchange difference on translation of foreign operations 8.9 2,295 (284,686) - -

Other comprehensive income for the year net of tax 42,372 (373,618) - -

Total comprehensive income for the year 2,973,086 52,507 2,448,928 1,725,016

Total comprehensive income attributable to:
Equity holders of the parent 2,744,928 479,565 2,448,928 1,725,016
Non-controlling interests 228,158 (427,058) - -
2,973,086 52,507 2,448,928 1,725,016

34
STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2017

Note Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$
ASSETS
Non-current assets 20,164,035 21,207,684 12,728,684 13,565,208
Property and equipment 9 1,463,421 1,575,589 733,818 906,319
Intangible assets 9.1 688,018 738,357 688,018 738,357
Investment properties 10 14,693,016 14,325,706 7,234,000 6,973,000
Investment in associates 8.6 528,670 622,030 221,550 544,242
Investment in unquoted equities 11.1 17,493 17,493 17,493 17,493
Investments held to maturity 11.3 1,711,014 2,708,182 1,711,014 2,708,182
Investment in subsidiaries 12 - - 1,839,581 1,524,962
Other non-current assets 11.5 370,691 262,333 283,210 152,653
Deferred tax assets 13.1 691,712 957,994 - -

Current assets 25,665,735 19,996,931 18,664,300 14,031,578
Insurance receivables 15 10,704,350 11,211,289 6,620,759 7,176,002
Inventories 16 29,567 30,513 29,567 30,513
Deferred acquisition costs 17 1,400,648 1,194,529 989,894 890,784
Related party receivables 19.2 248,086 544,156 176,772 228,600
Other receivables and prepayments 15.1 1,781,574 567,851 616,753 487,736
Short-term investments 11.2 5,203,866 1,594,793 4,604,651 1,250,613
Cash and cash equivalents 20 6,297,644 4,853,800 5,625,904 3,967,330

Total assets 45,829,770 41,204,615 31,392,984 27,596,786

EQUITY AND LIABILITIES

Equity attributable to owners of the parent 20,610,697 18,001,273 14,746,174 12,432,750
Share capital 21 2,950,074 2,833,525 2,950,074 2,833,525
Share premium 21 3,463,250 3,291,039 3,463,250 3,291,039
Retained earnings 14,916,101 12,514,434 8,321,920 6,186,738
Foreign currency translation reserve (729,658) (759,173) - -
Other reserves 10,930 121,448 10,930 121,448
Non-controlling interest 12.4 986,640 758,482 - -

Total equity 21,597,337 18,759,755 14,746,174 12,432,750

Non-current liabilities 399,376 431,964 115,161 143,509
Deferred tax liability 13.2 399,376 431,964 115,161 143,509

Current liabilities 23,833,057 22,012,896 16,531,649 15,020,527
Insurance payables 22 3,289,166 3,715,811 3,054,727 3,403,246
Related party payables 19.2 368,796 248,436 153,446 62,652
Other payables and accruals 22 3,657,822 2,903,112 2,837,521 2,507,949
Current tax payable 18 327,055 106,889 487,478 254,953
Insurance provisions 23 16,190,218 15,038,648 9,998,477 8,791,727

Total liabilities 24,232,433 22,444,860 16,646,810 15,164,036

TOTAL EQUITY AND LIABILITIES 45,829,770 41,204,615 31,392,984 27,596,786
The financial statements were approved and authorised for publication by the Board of Directors on 15 March 2018 and signed on its behalf by:

Chairman .......................................

Director: . ...................................

Date: 15, March 2018

35
STATEMENTS OF CASH FLOWS


Note 2017 2016 2017 2016
Cash flows from operating activities US$ US$ US$ US$
Cash receipts from customers 24 40,885,706 38,859,426 34,181,432 30,040,475

Cash paid to suppliers and employees 25 (37,930,216) (37,433,314) (30,595,135) (28,969,012)
Cash generated from operations 2,955,490 1,426,112 3,586,297 1,071,463

Finance costs - (6,806) - -
Income tax paid 18 (579,638) (516,100) (519,705) (370,743)
Net cash generated from operating activities 2,375,852 903,206 3,066,592 700,720

Cash flows from investing activities
Purchase of property and equipment (264,135) (597,691) (77,874) (392,959)
Purchase of intangible asset (50,388) (667,952) (50,388) (667,952)
Purchase of investments (5,953,859) (9,802,592) (6,051,387) (9,057,837)
Acquisition and development of investment properties 10 (55,713) (1,670,681) (49,953) (1,670,681)
Investment income 382,858 484,547 221,839 271,414
Disposal of investments 5,120,256 8,543,050 4,710,345 7,878,887
Proceeds from disposal of property and equipment 10,082 5,363 10,082 5,363
Disposal of subsidiary - 49,988 - 49,988
Acquisition of subsidiary, net of cash acquired - (447,488) - (447,488)
Net cash utilised in investing activities (810,899) (4,103,456) (1,287,336) (4,031,265)

Cash flows from financing activities

Dividend paid (409,442) (57,434) (409,442) -
Issue of shares 288,760 - 288,760 -
Repayment of loan - (94,908) - (94,908)
Net cash utilised in financing activities (120,682) (152,342) (120,682) (94,908)

Net increase/(decrease) in cash and cash equivalents 1,444,271 (3,352,592) 1,658,574 (3,425,453)
Cash and cash equivalents at beginning of year 4,853,800 8,487,808 3,967,330 7,392,783
Discontinued operations - (182,280) - -
Effects of exchange rate changes on cash and cash equivalents (427) (99,136) - -
Cash and cash equivalents as at 31 December 2017 20 6,297,644 4,853,800 5,625,904 3,967,330

36
STATEMENT OF CHANGES IN EQUITY


Note Share Share Retained Capital Other Total
GROUP capital premium earnings Reserve FCTR Reserves Total NCI equity
US$ US$ US$ US$ US$ US$ US$ US$ US$

Balance at 1 January 2016 2,833,525 3,291,039 11,456,638 30,394 (892,290) 450,981 17,170,287 1,797,482 18,967,769
Total comprehensive income for the year - - 698,947 - (219,382) - 479,565 (427,058) 52,507
Profit after tax for the year - - 698,947 - - - 698,947 (272,822) 426,125
Other comprehensive income net of taxes - - - - (219,382) - (219,382) (154,236) (373,618)

Dividend declared - - - - - - - (88,215) (88,215)
Disposal of subsidiary - - 358,849 (30,394) 352,499 (328,455) 352,499 (523,727) (171,228)
Share options reserve movement - - - - - (1,078) (1,078) - (1,078)
Balance at 31 December 2016 2,833,525 3,291,039 12,514,434 - (759,173) 121,448 18,001,273 758,482 18,759,755
Total comprehensive income - - 2,715,413 - 29,515 - 2,744,928 228,158 2,973,086
Profit after tax for the year - - 2,703,795 - - - 2,703,795 226,919 2,930,714
Other comprehensive income net of taxes - - 11,618 - 29,515 - 41,133 1,239 42,372
Issue of shares from exercised share options 116,250 172,510 - - - - 288,760 369,335 658,095
Share options reserve movement 21.2.1 - - 110,518 - - (110,518) - - -
Dividend declared - - (424,264) - - - (424,264) (369,335) (793,599)
Balance at 31 December 2017 2,949,775 3,463,549 14,916,101 - (729,658) 10,930 20,610,697 986,640 21,597,337
Note Share Share Retained Capital Other Total

COMPANY capital premium earnings Reserve FCTR Reserves Total NCI equity
Balance at 1 January 2016 2,833,525 3,291,039 4,461,722 - - 122,526 10,708,812 - 10,708,812

Total comprehensive income for the year - - 1,725,016 - - - 1,725,016 - 1,725,016
Profit after tax for the year - - 1,725,016 - - - 1,725,016 - 1,725,016

Share options reserve movement - - - - - (1,078) (1,078) - (1,078)
Balance at 31 December 2016 2,833,525 3,291,039 6,186,738 - - 121,448 12,432,750 - 12,432,750

Total comprehensive income for the year - - 2,448,928 - - - 2,448,928 - 2,448,928
Profit after tax for the year - - 2,448,928 - - - 2,448,928 - 2,448,928

Issue of shares from exercised share options 116,250 172,510 - - - - 288,760 - 288,760
Dividend declared - - (424,264) - - - (424,264) - (424,264)
Share options reserve movement 21.2.1 - - 110,518 - - (110,518) - - -
Balance at 31 December 2017 2,949,775 3,463,549 8,321,920 - - 10,930 14,746,174 - 14,746,174

Notes
Other Reserves
Other reserves pertain to the share option reserves of $10,930 (2016 - $121,448). This relates to the NicozDiamond Insurance staff share option scheme and is a provision for the
share option costs to the company as they become available for exercising. Details of the share option scheme are shown under note 21.2.
Portion of other reserves pertaining to FICO was transferred to retained earnings on disposal in 2016.
Capital reserves
Capital reserve was transferred to retained earnings on the disposal of FICO in 2016.

Foreign currency translation reserve
This arose from translation of assets and liabilities of foreign operations (UGI, DGI and DS) into US dollars at the rate of exchange prevailing at the reporting date and their profit or
loss at exchange rates prevailing at the date of the transactions. Refer to note 8.9 for details of exchange rates applied.

37
NOTES TO THE FINANCIAL STATEMENTS

1 CORPORATE INFORMATION • The ability to use its power over the investee to affect its returns Generally,
NicozDiamond Insurance Limited (the company) is a limited company incorporated there is a presumption that a majority of voting rights result in control. To
in Zimbabwe whose shares are publicly traded on the Zimbabwe Stock Exchange. support this presumption and when the Group has less than a majority of
The principal activities of the company and that of its subsidiaries is the provision the voting or similar rights of an investee, the Group considers all relevant
of short term insurance solutions and property investments. facts and circumstances in assessing whether it has power over an
investee, including:
The registered office of the Company is: Insurance Centre, 2nd Floor 30 Samora
Machel Avenue, Harare. The consolidated financial statements of NicozDiamond • The contractual arrangement with the other vote holders of the investee
Insurance Limited for the period ended 31 December 2017 were authorised for
issue in accordance with a resolution passed by the Directors on 15 March 2018. • Rights arising from other contractual arrangements
2 REPORTING CURRENCY • The Group’s voting rights and potential voting rights
The consolidated financial statements are presented in United States Dollars
(USD or US$) which is the company’s functional and presentation currency and The Group reassesses whether or not it controls an investee if facts and
values are rounded to the nearest dollar. circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group obtains
3 BASIS OF PREPARATION control over the subsidiary and ceases when the Group loses control of the
3.1
Statement of Compliance subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
The consolidated financial statements have been prepared in accordance with disposed of during the year are included in the consolidated financial statements
International Financial Reporting Standards (IFRS), as issued by the International from the date the Group gains control until the date when the Group ceases to
Accounting Standards Board (IASB). The consolidated financial statements control the subsidiary.
have been prepared on a historical cost basis, except for investment properties,
unquoted equities at discounted cash flows and quoted equities which have been Profit or loss and each component of OCI are attributed to the owners of the
measured at fair value. Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. When necessary, adjustments are made to
The consolidated financial statements provide comparative information in respect the financial statements of subsidiaries to bring their accounting policies into line
of the previous period. with the Group’s accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of
3.2 Going Concern the Group are eliminated in full on consolidation.
The financial position of the company, its cash flow, liquidity position and
borrowing facilities are described on pages 33 to 86. In addition notes 27 and A change in the ownership interest of a subsidiary, without a loss of control, is
28 to the financial statements include the company’s objectives, policies and accounted for as an equity transaction.
processes for managing its capital: its financial risk management objectives and
its exposures to credit risk and liquidity risk. If the Group loses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and other components
The company has considerable financial resources together with a diverse of equity, while any resultant gain or loss is recognised in profit or loss. Any
insurance book across different sectors and geographic areas. As a consequence, investment retained is recognised at fair value.
the directors believe that the company is well placed to manage its business risks
successfully despite the challenging economic outlook. 3.4 Statement of Changes in Accounting Policies and Disclosures
The Group applied for the first time certain standards and amendments, which are
The directors have a reasonable expectation that the company has adequate effective for annual periods beginning on or after 1 January 2017.
resources to continue in operational existence for the foreseeable future. Thus The Group has not early adopted any other standard, interpretation or amendment
they continue to adopt the going concern basis of accounting in preparing the that has been issued but is not yet effective.
annual financial statements. The nature and the impact of each new standard and amendment is described
below.
3.3
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Amendments to IAS 7: Disclosure Initiative
Group and its subsidiaries as at 31 December 2017. The amendments require entities to provide disclosure of changes in their
Control is achieved when the Group is exposed or has rights, to variable returns liabilities arising from financing activities, including both changes arising from
from its involvement with the investee and has the ability to affect those returns cash flows and non-cash changes (such as foreign exchange gains or losses).
through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has: Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets
for Unrealised Losses
• Power over the investee (i.e., existing rights that give it the current ability to The amendments clarify that an entity needs to consider whether the tax law
direct the relevant activities of the investee) restricts the sources of taxable profits against which it may make deductions
on the reversal of deductible temporary difference related to unrealised losses.
• Exposure, or rights, to variable returns from its involvement with the Furthermore, the amendments provide guidance on how an entity should
investee determine future taxable profits and explain the circumstances in which taxable
profits may include the recovery of some assets for more than their carrying
amount.
38
NOTES TO THE FINANCIAL STATEMENTS continued
3.4 Statement of Changes in Accounting Policies and Disclosures (continued) correctly identified all of the assets acquired and all of the liabilities assumed and
The Group applied amendments retrospectively. However, their application reviews the procedures used to measure the amounts to be recognised at the
has no effect on the Group’s financial position and performance as the Group’s acquisition date. If the reassessment still results in an excess of the fair value of
accounting policy has been consistent with the amendments. net assets acquired over the aggregate consideration transferred, then the gain is
recognised in profit or loss.
Annual Improvements Cycle - 2014-2016: Amendments to IFRS 12
Disclosure of Interests in Other Entities: Clarification of the scope of
After initial recognition, goodwill is measured at cost less any accumulated
disclosure requirements in IFRS 12 impairment losses. For the purposes of impairment testing, goodwill acquired in a
The amendments clarify that the disclosure requirements in IFRS 12, other than business combination is allocated to an appropriate cash-generating unit (CGU)
those in paragraphs B10–B16, apply to an entity’s interest in a subsidiary, a joint that is expected to benefit from the combination, irrespective of whether other
venture or an associate (or a portion of its interest in a joint venture or associate)assets or liabilities of the acquiree are assigned to those units.
that is classified (or included in a disposal group that is classified) as held for
sale. During 2017 and 2016, the Group had no interests classified as such, and Where goodwill has been allocated to a cash-generating unit (CGU) and part of the
therefore these amendments did not affect the Group’s financial statements. operation within that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when determining
4 Summary of Significant Accounting Policies the gain or loss on disposal. Goodwill disposed of in these circumstances is
The following is a summary of the Group’ accounting policies which are consistent measured based on the relative values of the disposed operation and the portion
with those of the previous financial year except where stated otherwise. of the cash-generating unit retained.

4.1
Business Combinations 4.2 Impairment of Non-Financial Assets
Business Combinations are accounted for using the acquisition method. The cost The Group assesses at each reporting date whether there is an indication that
of an acquisition is measured as the aggregate of the consideration transferred, an asset may be impaired. If any such indication exists, the Group estimates the
measured at acquisition date fair value and the amount of any non-controlling asset’s recoverable amount. An asset’s recoverable amount is the higher of it’s
interest in the acquiree. For each business combination, the Group has an option fair value less cost of disposal and its value in use. When the carrying amount of
to measure any non-controlling interests in the acquiree either at fair value or an asset exceeds its recoverable amount, the asset is considered impaired and is
at the non-controlling interest’s proportionate share of the acquiree’s identifiable written down to its recoverable amount.
net assets. Acquisition related costs are expensed as incurred and included in
administrative expenses. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
When the Group acquires a business, it assesses the financial assets and assessments of the time value of money and the risks specific to the asset. In
liabilities assumed for appropriate classification and designation in accordance determining fair value less costs to sell, recent market transactions are taken into
with the contractual terms, economic circumstances and pertinent conditions at account, if available. If no such transactions can be identified, an appropriate
acquisition date. This includes the separation of embedded derivatives in host valuation model is used.
contracts by the acquiree. No reclassification of insurance contracts is required
for business combination. These calculations are corroborated by valuation multiples, quoted share prices
for publicly traded companies or other available fair value indicators.
Thus, insurance contracts are classified on the basis of the contractual terms and
other factors at the inception of the contract or modification date. An impairment loss is recognised as an expense immediately.
If the business combination is achieved in stages, any previously held equity Where an impairment loss subsequently reverses, the carrying amount of the
interest is remeasured at its acquisition date fair value and any resulting gain or asset (cash generating unit) is increased to the revised estimate of its recoverable
loss is recognised in profit or loss amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
Any contingent consideration is recognised at fair value at the acquisition date. recognised for the asset (cash- generating unit) in prior years. A reversal of an
Subsequent measurement takes place at fair value with changes in fair value impairment loss is recognised as income immediately.
recognised in profit or loss.
4.3 Investment in Associates
Goodwill is initially measured at cost (being the excess of the aggregate of the An associate is an entity over which the Group has significant influence.
consideration transferred and the amount recognised for non-controlling interests Significant influence is the power to participate in the financial and operating
and any previous interest held over the net identifiable assets acquired and policy decisions of the investee, but is not control or joint control over “those
liabilities assumed). If the fair value of the net assets acquired is in excess of policies. The considerations made in determining significant influence are similar
the aggregate consideration transferred, the Group re-assesses whether it has to those necessary to determine control over subsidiaries.
39
4 Summary of Significant Accounting Policies (continued) Fair value is the price that would be received to sell an asset or paid to
4.3 Investment in Associates (continued) transfer a liability in an orderly transaction between market participants at the
The Group’s investments in its associates are accounted for using the equity measurement date. The fair value measurement is based on the presumption
method. that the transaction to sell the asset or transfer the liability takes place either:

Under the equity method the investment in the associate is carried in the statement In the principal market for the asset or liability, or
of financial position at cost plus post-acquisition changes in the Group’s share of In the absence of a principal market, in the most advantageous market for the
net assets of the associate. Any changes in the Group’s share of profits are asset or liability
recorded in profit and loss.
Goodwill relating to an associate is included in the carrying amount of the The principal or the most advantageous market must be accessible to by the
investment and is neither amortised nor individually tested for impairment. Group.
Profit or loss reflects the share of the results of operations of the associates. This The fair value of an asset or a liability is measured using the assumptions that
is profit attributable to equity holders of the associates and therefore is profit after market participants would use when pricing the asset or liability assuming that
tax. Any change in OCI of the associate is presented as part of the Group’s OCI. market participants act in their economic best interest.
Where there has been a change recognised directly in the equity of the associate,
the Group recognises its share of any changes, when applicable, in the statement A fair value measurement of non-financial asset takes into account a market
of changes in equity. Unrealised gains and losses resulting from transactions participant’s ability to generate economic benefits by using the asset in its highest
between the Group and the associates are eliminated to the extent of the interest and best use or by selling it to another market participant that would use the asset
in the associates. in its highest and best use.
The aggregate of the Group’s share of profit or loss of an associate is shown on The Group uses valuation techniques that are appropriate in the circumstances
the face of the statement of profit or loss outside operating profit and represents and for which sufficient data are available to measure fair value, maximising the
profit or loss after tax and non-controlling interests in the subsidiaries of the use of relevant observable inputs and minimising the use of unobservable units.
associate. All assets and liabilities for which fair value is measured or disclosed in the
financial statements are categorised within the fair value hierarchy, described
“The financial statements of the associates are prepared for the same reporting as follows, based on the lowest level input that is significant to the fair value
period as the Group. Where necessary” adjustments are made to bring its measurement as a whole:
accounting policies in line with the Group’s.
Level 1 - quoted (unadjusted) market prices in active markets for identical assets
Investments in associates at Company level are carried at cost. or liabilities

After application of the equity method, the Group determines whether it is Level 2 - Valuation techniques for which the lowest level input that is significant to
necessary to recognise an additional impairment loss on the Group’s investment their fair value measurement is directly or indirectly observable
in associates. The Group determines at each reporting date, whether there is any
objective evidence that the investment in the associate is impaired. If this is the Level 3 - Valuation techniques for which the lowest level input that is significant to
case, the Group calculates the amount of impairment as the difference between the fair value measurement is unobservable
the recoverable amount of the associate and its carrying value and recognises the
amount in the ‘share of profit of an associate’ in profit or loss. For assets and liabilities that are recognised in the financial statements at
fair value on a recurring basis, the Group determines whether transfers have
Upon loss of significant influence over the associate, the Group measures and occurred between levels in the hierarchy by re-assessing categorisation (based
recognises any remaining investment at its fair value. Any difference between the on the lowest level input that is significant to the fair value measurement as a
carrying amount of the associate upon loss of significant influence and the fair whole) at the end of each reporting period.
value of the remaining investment and proceeds from disposal is recognised in
profit or loss. The Investments Committees determines the policies and procedures for both
recurring fair value measurement, such as investment properties and unquoted
Financial information is disclosed for all associates whose shareholding is more AFS financial assets, and for non-recurring measurement, such as assets held for
than 20%. disposal in discontinued operations.
4.4 Fair Value Measurement External valuers are involved for valuation of significant assets, such as
The Group measures financial instruments, such as investment in equities and properties and AFS financial assets, and significant liabilities, such as contingent
non-financial assets such as investment properties at fair value at each reporting consideration. Involvement of external valuers is decided upon annually by the
date. Investments and Audit Committees. Selection criteria include market knowledge,
The carrying amounts of other financial assets and liabilities approximate the fair reputation, independence and whether professional standards are maintained.
values. The Investments Committee decides, after discussions with the external valuers,
which valuation techniques and inputs to use for each case.
40
4 Summary of Significant Accounting Policies (continued) Subsequent Measurement

4.4 Fair Value Measurement (continued) For purposes of subsequent measurement, financial assets are classified in three
At each reporting date, the Investments Committee analyse the movements categories:
in the values of assets and liabilities which are required to be remeasured or • Financial assets at fair value through profit or loss
re-assessed as per the Group’s accounting policies. For this analysis, the • Loans and receivables
Investments Committee verifies the major inputs applied in the latest valuation • Held-to-maturity investments
by agreeing the information in the valuation computation to contracts and other
relevant documents. Financial Assets at Fair Value through Profit and Loss
Financial assets at fair value through profit and loss are those financial assets
The Investments Committee, in conjunction with the external valuers, also held for trading or financial assets designated as such upon initial recognition.
compares the change in the fair value of each asset and liability with relevant
external sources to determine whether the change is reasonable. Financial assets are classified as held for trading if they are acquired for the
purpose of selling in the near term.
On an interim basis, the Investments Committee and the external valuers present
the valuation results to the Audit Committee and the Group’s independent auditors. These financial assets are initially recorded at fair value. Subsequent to initial
This includes a discussion of the major assumptions used in the valuations. recognition , these financial assets are measured at fair value.
Fair value adjustments and realised gains and losses are recognised in profit or
For the purpose of fair value disclosures, the Group has determined classes of loss.
assets and liabilities on the basis of the nature, characteristics and risks of the (Derivatives embedded in host contracts are accounted for as separate
asset or liability and the level of the fair value hierarchy, as explained above. derivatives and recorded at fair value if their economic characteristics and risks
are not closely related to those of the host contracts and the host contracts are
4.5 Current versus Non-current Classification not held for trading or designated at fair value through profit or loss). These
The Group presents assets and liabilities in the statement of financial position embedded derivatives are measured at fair value with changes in fair value
based on current/non-current classification. An asset is current when it is: recognised in profit or loss.
• Expected to be realised or intended to be sold or consumed in a normal
operating cycle Loans and other Receivables
• Held primarily for the purpose of trading These are non-derivative financial assets with fixed or determinable payments that
• Expected to be realised within twelve months after the reporting period, or are not quoted in an active market. These assets/balances are initially recognised
• Cash or cash equivalent unless restricted from being exchanged or used to at fair value of the consideration paid for the acquisition of the investment. All
settle a liability for at least twelve months after the reporting period. transaction costs directly attributable to the acquisition are also included in the
cost of the investment. After initial measurement, loans and receivables are
All other assets are classified as non-current. A liability is current when: measured at amortised cost using the effective interest rate method (EIR) less
• It is expected to be settled in normal operating cycle impairment.
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or Gains and losses are recognised in profit or loss when investments are
• There is no unconditional right to defer the settlement of the liability for at derecognised or impaired as well as through the amortisation process.
least twelve months after the reporting period.
The Group evaluates whether the ability and intention to sell its AFS financial
The Group classifies all other liabilities as non-current. assets in the near term is still appropriate. When, in rare circumstances, the
Deferred tax assets and liabilities are classified as non-current assets and Group is unable to trade these financial assets due to inactive markets, the Group
liabilities. may elect to reclassify these financial assets if management has the ability and
intention to hold the assets for the foreseeable future or until maturity
4.6 Financial Assets
Initial recognition and measurement Dividend income is recognised when the Group’s right to receive the payment is
Financial assets within the scope of IAS 39 are classified as financial assets at fair established, which is generally when shareholders approve the dividend.
value through profit or loss and loans and receivables.
All financial assets are recognised initially at fair value plus transaction costs,
except in the case of financial assets recorded at fair value through profit or
loss.

The Group’s financial assets include investments in unquoted equities,
investments held to maturity, short term investments and cash and cash
equivalents.
41
4 Summary of Significant Accounting Policies (continued) Interest income (recorded as finance income in the statement of profit or loss)
4.6 Financial Assets (continued) continues to be accrued on the reduced carrying amount and is accrued using the
Held-to-maturity Investments rate of interest used to discount the future cash flows for the purpose of measuring
Non-derivative financial assets with fixed or determinable payments and fixed the impairment loss. Loans together with the associated allowance are written
maturities are classified as held to maturity when the Group has the positive off when there is no realistic prospect of future recovery and all collateral has
intention and ability to hold them to maturity. After initial measurement, held been realised or has been transferred to the Group. If, in a subsequent year, the
to maturity investments are measured at amortised cost using the EIR, less amount of the estimated impairment loss increases or decreases because of an
impairment. event occurring after the impairment was recognised, the previously recognised
impairment loss is increased or reduced by adjusting the allowance account.
Amortised cost is calculated by taking into account any discount or premium If a write-off is later recovered, the recovery is credited to finance costs in the
on acquisition and fees or costs that are an integral part of the EIR. The EIR statement of profit or loss.
amortisation is included as finance income in the statement of profit or loss. The
losses arising from impairment are recognised in profit or loss as finance costs. 4.7 Financial Liabilities
The held to maturity investments are reflected under note 11.3 Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans
Derecognition of Financial Assets and borrowings, minus directly attributable transaction costs.
A financial asset is derecognised when: Financial liabilities include other payables and accruals, short and long term
- The right to receive cash flows from the asset has expired or loans and related party payables, which are classified as loans and borrowings.
- The Group has transferred substantially all the risks and rewards of the Subsequent Measurement
asset or the Group has transferred control of the asset.
The measurement of financial liabilities depends on their classification as follows:
When the Group has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if and to what extent it Financial Liabilities at Fair Value through Profit or Loss
has retained the risks and rewards of ownership. When it has neither transferred Financial liabilities at fair value through profit or loss include financial liabilities
nor retained substantially all of the risks and rewards of the asset , nor transferred held for trading and financial liabilities designated upon initial recognition as at
control of the asset, the Group continues to recognise the transferred asset to fair value through profit or loss.
the extent of the Group’s continuing involvement. In that case the Group also
recognises an associated liability. Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative
The transferred asset and the associated liability are measured on a basis that financial instruments entered into by the Group.
reflects the rights and obligation that the Group has retained.
Separated embedded derivatives are also classified as held for trading.
Impairment of Financial Assets
The Group assesses at each reporting date whether there is any objective Gains or losses on liabilities held for trading are recognised in the statement of
evidence that a financial asset or group of financial assets is impaired. A financial profit or loss.
asset or group of financial assets is deemed to be impaired if, and only if, there
is objective evidence of impairment as a result of one or more events that has Financial liabilities designated upon initial recognition at fair value through profit
occurred after the initial recognition of the asset and that loss event has an impact or loss are designated at the initial date of recognition, and only if the criteria in
on the estimated future cash flows of the financial asset or the group of financial IAS 39 are satisfied. The Group has not designated any financial liability as at fair
assets that can be reliably estimated. value through profit or loss.
Evidence of impairment may include indications that the debtors or a group of Loans and Borrowings
debtors is experiencing significant financial difficulty, default or delinquency in After initial recognition, interest bearing loans and borrowings are subsequently
interest or principal payments, the probability that they will enter bankruptcy or measured at amortised cost using the effective interest rate method. Gains and
other financial reorganisation. losses are recognised in profit or loss when the liabilities are derecognised, as
well as through the effective interest rate amortisation process. Amortised cost is
For financial assets carried at amortised cost, if there is objective evidence that calculated by taking into account any discount or premium on acquisition and fees
an impairment loss has been incurred, the amount of or costs that are an integral part of the effective interest rate.

the loss is measured as the difference between the asset’s carrying amount and Derecognition of financial liabilities
the present value of estimated future cash flows (excluding future expected credit A financial liability is derecognised when the obligations under the liability is
losses that have not yet been incurred). The present value of the estimated future discharged or cancelled or expires. When an existing financial liability is replaced
cash flows is discounted at the financial asset’s original effective interest rate. If a by another from the same lender or substantially modified, such an exchange or
loan has a variable interest rate, the discount rate for measuring any impairment modification is treated as derecognition of the original liability and the recognition
loss is the current EIR. of a new liability. The differences in terms of carrying amounts is recognised in
The carrying amount of the asset is reduced and the loss is recognised in the profit or loss.
statement of profit and loss.
42
4 Summary of Significant Accounting Policies (continued) Cash and Cash Equivalents

4.7 Financial Liabilities (continued) Cash and short-term deposits in the statement of financial position comprise cash
Offsetting of Financial Instruments at banks and on hand and short-term deposits with a maturity of three months or
Financial assets and financial liabilities are off set and the net amount is reported less.
in the consolidated statement of financial position if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on The short-term investments, with a maturity of three months or less are readily
a net basis or to realise the assets and settle the liabilities simultaneously. convertible to a known amount of cash with insignificant risk of change in value.
4.8 Reinsurance ceded to Reinsurance Counterparties For the purposes of the consolidated statement of cash flows, cash and cash
The Group cedes insurance risk in the normal course of business for all of its equivalents consists of cash and short-term deposits as defined above, net of
businesses. Reinsurance assets represent balances due from reinsurance outstanding bank overdrafts.
companies. Amounts recoverable from reinsurers are estimated in a manner
consistent with the outstanding claims provisions, settled claims associated with 4.10
Taxes
the reinsurer policies and in accordance with the related reinsurance contract. Current Income Tax
The reinsurance receivables/payables are measured at fair value received/paid Current income tax assets and liabilities for the current period are measured at
or receivable/payable. the amount expected to be recovered from or paid to the taxation authorities. The
tax rates and tax laws used to compute the amount are those that are enacted
Reinsurance assets are reviewed for impairment at each reporting date or more or substantively enacted by the reporting date in the countries where the Group
frequently when an indication of impairment arises during the reporting year. operates and generates taxable income. Current income tax assets and liabilities
Impairment occurs when there is objective evidence as a result of an event that also include adjustments for tax expected to be payable or recoverable in respect
occurred after initial recognition of the reinsurance asset that the Group may not of previous periods.
receive all outstanding amounts due under the terms of the contract and the event
has a reliably measurable impact on the amounts that the Group will receive from Current income tax relating to items recognised directly in equity or other
the reinsurer. The impairment loss is recorded in profit or loss. comprehensive income is recognised in equity or other comprehensive income
and not in profit or loss.
The Group also assumes reinsurance risk in the normal course of business for non
life insurance contracts where applicable. Premiums and claims are recognised Withholding tax on dividend is taxed at source.
as revenue or expenses in the same manner as they would be if the reinsurance Management periodically evaluates positions taken in the tax returns with respect
were considered direct business, taking into account the product classification to situations in which applicable tax regulations are subject to interpretation and
of the reinsured business. Reinsurance liabilities represent balances due to establishes provisions where appropriate.
reinsurance companies. Amounts payable are estimated in a manner consistent
with the related reinsurance contract. Deferred Tax
Deferred tax is provided using the liability method on temporary differences at the
Premiums and claims are presented on a gross basis for both ceded and reporting date between the tax bases of assets and liabilities and their carrying
assumed reinsurance. amounts for financial reporting purposes at the reporting date.
Reinsurance assets or liabilities are derecognised when the contractual rights are Deferred tax liabilities are recognised for all taxable temporary differences,
extinguished or expire or when the contract is transferred to another party. except:
• When the deferred tax liability arises from the initial recognition of goodwill or
Ceded reinsurance arrangements do not relieve the Group from its obligation to an asset or liability in a transaction that is not a business combination and, at
policyholders. the time of the transaction, affects neither the accounting profit nor taxable
profit or loss
Gains and losses on buying reinsurance are recognised in profit or loss • In respect of taxable temporary differences associated with investments in
immediately on the date of purchase and are not amortised. subsidiaries, associates and interests in joint arrangements, when the timing
of the reversal of the temporary differences can be controlled and it is probable
4.9 Insurance Receivables that the temporary differences will not reverse in the foreseeable future
Insurance receivables are recognised when due and measured on initial
recognition at the fair value of the consideration received or receivable. Deferred tax assets are recognised for all deductible temporary differences,
the carry forward of unused tax credits and any unused tax losses. Deferred
The carrying value of insurance receivables is reviewed for impairment whenever tax assets are recognised to the extent that it is probable that taxable profit will
events or circumstances indicate that the carrying amount may not be recoverable, be available against which the deductible temporary differences, and the carry
with the impairment loss recorded in profit or loss. forward of unused tax credits and unused tax losses can be utilised, except:
Insurance receivables are derecognised when the derecognition criteria for • When the deferred tax asset relating to the deductible temporary difference
financial assets as described in note 4.6 has been met. arises from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss
43
4 Summary of Significant Accounting Policies (continued) Initial direct costs incurred in negotiating an operating lease are added to the
4.10 Taxes (continued) carrying amount of the leased asset and recognised over the lease term on the
• In respect of deductible temporary differences associated with investments same basis as rental income. Contingent rents are recognised as revenue in the
in subsidiaries, associates and interests in joint arrangements, deferred tax period in which they are earned.
assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be 4.12 Foreign Currency Translation
available against which the temporary differences can be utilised The Group’s consolidated financial statements are presented in USD which
is also the parent company’s functional currency. Each company in the Group
The carrying amount of deferred tax assets is reviewed at each reporting date determines its own functional currency and items included in the financial
and reduced to the extent that it is no longer probable that sufficient taxable statements of each entity are measured using that functional currency.
profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are (i) Transactions and Balances
recognised to the extent that it has become probable that future taxable profits will Transactions in foreign currencies are initially recorded by the Group entities at
allow the deferred tax asset to be recovered. their respective functional currency spot rates at the date the transaction first
qualifies for recognition.
Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the asset is realised or the liability is settled, based on Monetary assets and liabilities denominated in foreign currencies are translated
tax rates (and tax laws) that have been enacted or substantively enacted at the at the functional currency spot rate of exchange ruling at the reporting date.
reporting date.
Non-monetary items that are measured in terms of historical cost in foreign
Deferred tax relating to items recognised outside profit or loss is recognised currency are translated using the exchange rate as at the date of initial transaction
outside profit or loss. Deferred tax items are recognised in correlation to the and are not subsequently restated. Non-monetary items measured at their fair
underlying transaction either in OCI or directly in equity. value in a foreign currency are translated using the exchange rates at the date
when their fair value was determined.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current tax liabilities and the (ii) Group Companies
deferred taxes relate to the same taxable entity and the same taxation authority. On consolidation, the assets and liabilities of foreign operations are translated into
USD at the rate of exchange prevailing at the reporting date and their statements
Tax benefits acquired as part of a business combination, but not satisfying the of profit or loss are translated at exchange rates prevailing at the date of the
criteria for separate recognition at that date, are recognised subsequently if new transaction. The exchange differences arising on translation for consolidation are
information about facts and circumstances change. The adjustment is either recognised in other comprehensive income. On disposal of a foreign operation,
treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was the component of other comprehensive income relating to that particular foreign
incurred during the measurement period or recognised in profit or loss. operation is recognised in profit or loss.
4.11
Leases Any goodwill arising on the acquisition of a foreign operation and any fair
The determination of whether an arrangement is a lease or contains a lease is value adjustments to the carrying amounts of assets and liabilities arising on
based on the substance of the arrangement at the inception date, and requires an the acquisition are treated as assets and liabilities of the foreign operation and
assessment of whether the fulfillment of arrangement is dependent on the use of translated at the spot rate of exchange at the reporting date.
a specific asset or assets, and the arrangement conveys a right to use the asset
even if that right is not explicitly specified in an arrangement. 4.13 Insurance contract liabilities
Insurance contract liabilities are recognised when contracts are entered into
Operating Lease and premiums are charged. These liabilities are known as outstanding claim
This is a contract wherein the owner, called the Lessor, permits the user, called provision, which are based on the estimated ultimate cost of claims incurred but
the Lesse, to use of an asset for a particular period which is shorter than the not settled at the reporting date, whether reported or not together with related
economic life of the asset without any transfer of ownership rights. claims handling costs and reduction for the expected value of salvage and other
recoveries. Delays can be experienced in the notification and settlement of
Group as a Lessee certain types of claims, therefore the ultimate cost of which cannot be known
Capitalised leased assets are depreciated over the shorter of the estimated with certainty at the financial reporting date. Claims incurred but not reported are
useful life of the asset and the lease term, if there is no reasonable certainty that claims arising out of events which have occurred by the reporting date but have
the Group will obtain ownership by the end of the lease term. Operating lease not been reported. These are estimated at 5% of net written premium.
payments are recognised as an expense in profit or loss on a straight line basis
over the lease term.
Group as a Lessor
Leases where the group does not transfer substantially all the risks and benefits
of ownership of the asset are classified as operating leases.
44
4 Summary of Significant Accounting Policies (continued) Onerous Contracts

4.13 Insurance contract liabilities (continued) A provision is recognised for onerous contracts in which the unavoidable costs
The liability is not discounted for the time value of money and include provision of meeting the obligations under the contract exceed the expected economic
of earned premiums, unexpired risk and inadequate premium levels. The liability benefits expected to be received under it. The unavoidable costs reflects the least
is derecognised when the contract expires, is discharged or cancelled. No net cost of exiting the contract, which is the lower of the cost of fulfilling it and any
provision for equalisation or catastrophe reserves is recognised. The provision for compensation or penalties arising from failure to fulfill it.
unearned premiums represents that portion of premiums received or receivable
that relates to risks that have not yet expired at the reporting date. The provision 4.16 Share-Based Transactions
is recognised when contracts are entered into and premiums are charged, Share Options
and is brought to account as premium income over the term of the contract in Employees (including senior executives) of the company receive remuneration
accordance with the pattern of insurance service provided under the contract. in the form of share options, whereby employees are granted share options on
an annual basis depending on their years of service and prior year individual
Liability Adequacy Test performance. The share options are exercisable over a period of time as specified
At each reporting date, the Group reviews its unexpired risk and a liability in the share option rules and are exercised at the grant price.
adequacy test is performed. In performing these tests, current best estimates Options are cancelled on expiration and the company will be absolved of all
of future contractual cash flows and claims handling administration costs are obligations relating to the expired share options. Shares from the share options
used. Any deficiency is immediately charged to profit or loss initially by writing are issued as and when they are exercised.
off deferred acquisition cost (DAC) and by subsequently establishing a provision
for losses arising from liability adequacy tests (the unexpired risk provision). Any Equity-Settled Transactions
DAC written off as a result of this test is not reinstated. The cost of equity-settled transaction with employees is measured by reference
to the fair value at the date on which they are granted.
Insurance Payables The fair value is determined as the market value of the equities.
Insurance payables are recognised when due and measured on initial recognition The cost of equity-settled transactions is recognised, together with a
at the fair value of the consideration received less directly attributable transaction corresponding increase in equity, over the period in which the performance
costs. Subsequent to initial recognition, they are measured at amortised costs and/or service conditions are fulfilled, ending on the date on which the relevant
using the effective interest rate method. employees become fully entitled to the award (“the vesting date”).
Derecognition Insurance Payables Service and non-market performance conditions are not taken into account when
Insurance payables are derecognised when the obligation under the liability is determining the grant date fair value of awards, but the likelihood of the conditions
settled, cancelled or expired. being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest. Market performance conditions are
4.14 Pensions and other post Employment Benefits reflected within the grant date fair value. Any other conditions attached to an
The Group operates a defined contribution pension plan administered by Fidelity award, but without an associated service requirement, are considered to be non-
Life Assurance. The Group and employees contribute 7.5% and 16.5% of the vesting conditions. Non-vesting conditions are reflected in the fair value of an
pensionable salaries respectively. The assets of the fund are held in a separate award and lead to an immediate expensing of an award unless there are also
trustee administered fund. service and/or performance conditions.
The Group contributes to the National Social Security Scheme and the The cumulative expense recognised for equity-settled transactions at each
contributions are disclosed under note 8.4. reporting date until the vesting period reflects the extent to which the vesting
period has expired and the Group’s best estimate of the number of equity
4.15
Provisions instruments that will ultimately vest. The profit or loss charge or credit for a period
Provisions are recognised when the Group has a present obligation (legal or represents the movement in cumulative expense recognised as at the beginning
constructive) as a result of a past event, and it is probable that an outflow of and end of the period.
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Where the No expense is recognised for awards that do not ultimately vest, except for
Group expects some or all of a provision to be reimbursed, the reimbursement awards where vesting is conditional upon a market condition, which are treated
is recognised as a separate asset, but only when the reimbursement is virtually as vesting irrespective of whether or not market condition is satisfied, provided
certain. The expense relating to any provision is presented in profit or loss net of that all other performance and/or service conditions are satisfied.
any reimbursement.
When the terms of an equity-settled award are modified, the minimum expense
If the effect of the time value of money is material, provisions are discounted recognised is the expense as if the terms had not yet been modified. An additional
using a current pre-tax rate that reflects, when appropriate, the risks specific to expense is recognised immediately. However, if a new award is substituted for the
the liability. When discounting is used, the increase in the provision due to the cancelled award, and designated as a replacement award on the date that it is
passage of time is recognised as a finance cost. granted, the cancelled and new awards are treated as if they were a modification
of the original award, as described in the previous paragraph. The dilutive effect
of outstanding options is reflected as additional share dilution in the computation
of diluted earnings per share, see note number 6.
45
4 Summary of Significant Accounting Policies (continued)

4.17
Equity Movements
Ordinary Share Capital (f) Interest on Staff Loans
The Group has issued ordinary shares that are classified as equity instruments. Interest earned from staff loans is recognised on an accrual basis effective on the
Incremental external costs that are directly attributable to the issue of these date the loan is issued to the employee.
shares are recognised in equity net of tax.
Dividend on Ordinary Share Capital (g) Fees on collection agency services
Dividend on ordinary shares are recognised as a liability and deducted from The fees are recognised at the point the premium is received by the Group.
equity when they are approved by the Group’s shareholders.
4.18.3 Fees and Commission
Dividend for the year that are approved after the reporting date are dealt with as Commission income is only from ceded Reinsurance. The fees are recognised as
an non-adjusting event after the reporting date. revenue per policy over the period of the policy.
4.18 Revenue Recognition Management fees is recognised on a monthly basis at the issuing of an invoice.
Revenue is recognised to the extent that it is probable that the economic benefits
will flow to the Group and the revenue can be reliably measured, regardless of 4.19 Benefits, Claims and Expenses Recognition
when the payment is being made. 4.19.1 Gross Benefits and Claims
General insurance include all claims occurring during the year, whether reported
4.18.1
Gross Premiums or not, related internal and external claims handling costs that are directly related
Gross premium written for general insurance comprise the total premiums to the processing and settlement of claims, a reduction for the value of salvage
receivable for the whole period of cover provided by contracts entered into and other recoveries and any adjustments to claims outstanding from previous
during the accounting year. They are recognised on the date on which the policy years.
commences. Premiums include any adjustments arising in the accounting period
for premiums receivable in respect of business written in prior accounting periods. 4.19.2 Finance Cost
Premiums collected by intermediaries, but not yet received, are assessed based Interest paid is recognised in profit or loss as it accrues and is calculated by using
on estimates from underwriting or past experience and are included in premiums the effective interest rate method. Accrued interest is included within the carrying
written. value of the interest bearing financial liability.
Unearned premiums are those proportions of premiums written in a year 4.19.3

Deferred acquisition costs
that relate to periods of risk after the reporting date. Unearned premiums are Acquisition costs, which represent commissions and other related expenses,
calculated on a daily pro-rata basis. The proportion attributable to subsequent are deferred over the period in which the related premiums are earned and are
periods is deferred as a provision for unearned premiums. recognised in full through profit or loss for the period they relate to. An impairment
review is performed at each reporting date or more frequently when an indication
4.18.2 Investment Income of impairment arises. When the recoverable amount is less than the carrying
(a) Interest Income value an impairments loss is recognised in profit or loss. The recoverable amount
Revenue is recognised as interest accrued (using effective interest rate), that would be assessed on applicable premium deferred. Deferred acquisition costs
is the rate that exactly discounts estimated future cash receipts through the are also considered in the liability adequacy test for each reporting period.
expected life of the financial instrument to the net carrying amount of the financial
asset. 4.19.4 Reinsurance Claims
“Reinsurance claims are recognised when the related gross insurance claim is
(b) Dividend recognised according to the terms of the relevant contract as a deduction to gross
Investment income also includes dividends when the right to receive payment benefits.”
is established. For listed securities, this is the date the security is listed as ex-
dividend upon dividend declaration. 4.20 Property and Equipment
Property including owner occupied properties is stated at cost, excluding the cost
(c) Realised gains and losses of day to day servicing, less accumulated depreciation and and accumulated
Realised gains and losses recorded in profit or loss on investments include gains impairment losses. Replacement or major inspection costs are capitalised when
and losses on financial assets and investment properties. Gains and losses incurred and if it is probable that future economic benefits associated with the
on the sale of investments are calculated as the difference between net sales item will flow to the entity and the cost of the item can be reliably measured.
proceeds and the original or amortised cost and are recorded on occurrence of
the sale transaction.
(d) Rental Income

Rental income arising from operating leases on investment properties is
accounted for on a straight line basis over the lease terms.
(e) Income from the Lodge

Revenue is recognised at the point when booking has been confirmed.
46
4 Summary of Significant Accounting Policies (continued) 4.22 Investment Properties

4.20 Property and Equipment (continued) Property held for long term rental yields that is not occupied by the Group
Equipment is stated at cost less accumulated depreciation and impairment. companies is classified as investment property. Investment property comprises
Depreciation is calculated on a straight line method to write off the depreciable freehold land and buildings.
amounts (costs less residual value) of each asset over its estimated useful life as
follows: Property located on land that is held under operating lease is classified as
investment property as long as its held for long term rental yields and is not
Land and Buildings N/A occupied by the Group companies. The land is initially recognised at cost. The
Computers and equipment 5 years property is carried at fair value after initial recognition.
Office equipment 10 years
Motor Vehicles 5 years Investment properties are initially measured at cost, including transaction costs.
Furniture and fittings 10 years The carrying amount includes the cost of replacing part of an existing investment
property at the time that cost is incurred if the recognition criteria are met; and
Buildings are not depreciated as the carrying amounts approximates their residual excludes the costs of day-to-day servicing of an investment property. Subsequent
values. to initial recognition, investment properties are measured at fair value, which
reflects market conditions at the reporting date. Gains or losses arising from
The assets’ residual values, useful lives and method of depreciation are reviewed changes in the fair values of investment properties are included in profit or loss in
and prospectively adjusted if appropriate at each reporting date. the year in which they arise.
An item of property and equipment is derecognised upon disposal or when no Fair value is determined annually by an accredited external independent valuer.
further future economic benefits are expected from its use or disposal. Any gain Investment property that is being redeveloped for continuing use as investment
or loss arising on derecognition of the asset is included in profit or loss in the year property, or for which the market has become less active, continues to be
the asset is derecognised. measured at fair value. Changes in fair values are recorded in profit or loss. Fair
value is based on an active market, adjusted, if necessary, for any difference in
4.21
Intangible Assets the nature, location or condition of the specific asset.
Intangible assets acquired separately are measured on initial recognition at cost.
The cost of intangible assets acquired in a business combination is their fair Transfers are made to or from investment property only when there is a change
value at the date of acquisition. Following initial recognition, intangible assets are in use. For a transfer from investment property to owner occupied property, the
carried at cost less any accumulated amortisation and accumulated impairment deemed cost for subsequent accounting is the fair value at the date of change
losses. Internally generated intangibles, excluding capitalised development costs, in use. If owner occupied property becomes an investment property, the Group
are not capitalised and the related expenditure is reflected in profit or loss in the accounts for such property in accordance with the policy stated under property
period in which the expenditure is incurred. The useful lives of intangible assets and equipment up to the date of change in use.
are assessed as either finite or indefinite.
For a transfer from inventory to investment property, the deemed cost for
Intangible assets with finite lives are amortised over the useful life and assessed subsequent accounting is the fair value at the date of change in use.
for impairment whenever there is an indication that the intangible asset may be
impaired. The amortisation period and the amortisation method for an intangible If owner occupied property becomes an investment property, the Group accounts
asset with a finite useful life are reviewed at least at the end of each reporting for such property in accordance with the policy stated under property and
period. Changes in the expected useful life or the expected pattern of consumption equipment up to the date of change in use.
of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in Investment properties are derecognised when either they have been disposed
accounting estimates. The amortisation expense on intangible assets with finite of or when the properties are permanently withdrawn from use and no future
lives is recognised in profit or loss in the expense category that is consistent with economic benefit is expected from its disposal. Any gains or losses on the
the function of the intangible assets. retirement or disposal of an investment property are recognised in profit or loss in
the year of retirement or disposal.
Intangible assets with indefinite useful lives are not amortised, but are tested
for impairment annually, either individually or at the cash-generating unit level. 4.23
Inventories
The assessment of indefinite life is reviewed annually to determine whether the The inventories are made up of:
indefinite life continues to be supportable. If not, the change in useful life from a) stationery, other office consumables and are valued at the lower of cost and net
indefinite to finite is made on a prospective basis. realisable value.
b) costs in relation to an investment property development.
Gains or losses arising from derecognition of an intangible asset are measured as Inventories are valued at the lower of cost (using the First-In-First-Out method)
the difference between the net disposal proceeds and the carrying amount of the and net realisable value.
asset and are recognised in profit or loss when the asset is derecognised. Net realisable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and the estimated costs necessary
Intangible assets with a finite useful live are amortised on a straight line basis over to make the sale.
the estimated useful life of seven years.
47
5 KEY JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINITY d) Consolidation of United General Insurance Company (UGI)
The Group consolidates an investee company where there is control and the
The preparation of the consolidated financial statements requires management Group is exposed or has rights to variable returns from its involvement with
to make judgments, estimates and assumptions that affect the reported amounts the investee and has ability to affect those returns through its power over the
of revenues, expenses, assets and liabilities, and the disclosure of contingent investee. The company has power over UGI as it has the management and
liabilities, at the reporting date. However, uncertainty about these assumptions technical services agreement to oversee the management and technical aspects
and estimates could result in outcomes that could require a material adjustment of the business. It is exposed and has rights to variable returns from UGI as the
to the carrying amount of the asset or liability affected in the future periods. company owns a 46% stake in the investee and the management fees are a
function of the profitability of the investee. The company has ability to use its
Judgments power over UGI to affect its returns via the management contract and also being
In the process of applying the Group’s accounting policies, management has the single largest shareholder in the investee. In addition the company has control
made the following judgements, which have the most significant effect on the on the Board and in shareholders meetings as the single largest investor with a
amounts recognised in the consolidated financial statements: management contract , coupled with a vote pooling arrangement with another
investor. The Group considers that it controls UGI even if it owns less than 50%
(a) Operating lease commitments – Group as lessor of shareholding. This is because the Group considers the terms and conditions of
The Group has entered into commercial property leases on its investment the ownership structure of the investment to determine control.
property portfolio. The Group has determined, based on an evaluation of the
terms and conditions of the arrangements, such as the lease term not constituting Estimates and assumptions
a substantial portion of the economic life of the commercial property, that it retains The group based its assumptions and estimates on parameters available when
all the significant risks and rewards of ownership of these properties and accounts the consolidated financial statements were prepared. Existing circumstances and
for the contracts as operating leases. assumptions about future developments, however may change due to market
changes or circumstances that are beyond the control of the Group. Such
(b) Disposal of subsidiary - 2016 changes are reflected in the assumptions when they occur.
On 30 September 2016 First Insurance Company Of Uganda (FICO) was
disposed of for a consideration of $100,000. Judgement was required in (a) Valuation of financial assets using valuation techniques
determining the significance of the subsidiary to the Group. FICO represented a The determination of fair values is based on the discounted cash flows. Significant
major geographical area of operation based on its contribution to the Group Gross estimates were used in coming up with discounted cashflows include long term
Premium Written (GPW), net assets and profit before tax. growth rate , weighted average cost of capital and estimation of future cash flows.
(Refer to Note 11.4 for more detail)
(c) Disposal of Associates
The Group made two disposals during the year of the following investments: (b) Technical Reserves
The Company engaged African Actuarial Consultants to determine the values of
Diamond General Insurance (DGI) technical reserves as per the new requirement by the Insurance and Pensions
DGI effective shareholding was 24.88%, its contribution of share of Associate Commission in Zimbabwe. All technical reserves which are UPR, Outstanding
profit/(loss) was considered immaterial, whilst its value in the Statement of claims, IBNR were actuarially determined in 2017.
Financial Position was considered significant to the Group. Technical reserves are disclosed under note 23.
This was disposed effective 6 October 2017, at a consideration of $115,180 at (c) Unearned premium reserves (UPR)
company level and at $132,855 at Group level. Unearned premiums represent the proportion of premiums, written in the year
that relate to unexpired terms of policies in force at the reporting date generally
Fidelity Funeral Services calculated on the 365th basis after providing 20% for deferred acquisition
This investment was disposed at $110,039 effective 1 July 2017. costs (DAC). (The DAC percentage is split between commissions (15%) and
Judgement was required in determining the significance of the two associates to administrative expenses (5%)). As 31 December 2017 UPR was $7,516,682
the Group. Fidelity Funeral Services was being held at nil value hence it had no (2016 - $6,352,329). The movement on the unearned premium reserve are
significance to the Group. shown through profit or loss. As at 31 December 2017 DAC was $1,400,648
(2016 - $1,194,429).
The UPR for the Company was actuarially reviewed by African Actuarial
Consultants.
48
5 KEY JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINITY (continued)

(d) Insurance Contract Liabilities
Outstanding Claims
Outstanding claims represent the ultimate cost (net of salvage recoveries) of setting all claims
arising from events that have occurred up to the reporting date. Accrual is made for the
estimated costs of claims net of anticipated recoveries under reinsurance arrangements notified
but not settled at year end. Refer to note 23 for the carrying amount of the outstanding claims.
Outstanding claims for the Company were primarily based on case estimate schedules by the
Actuary.
Incurred but not reported claims provision (IBNR)

Claims incurred but not reported (IBNR) claims provision, is a provision for claims arising out
of events which have occurred by the reporting date but have not yet been reported at that
date. This was actuarially determined based on the basic chain ladder approach. The method
assumes that payments for an accident year will develop in the same way as claims have for
prior accident years. Refer to note 23 for the carrying amount of the IBNR (2017:$2,242,713,
2016:$2,332,350).
(e) Deferred tax assets and liabilities

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax asset that can be recognised,
based upon the likely timing and the level of future taxable profits together with future tax
planning strategies.
Further details on taxes are disclosed on note number 13.
(f) Fair value on investment properties

The Group carries its investment properties at fair value, with changes on fair value being
recognised in profit or loss. The Group engaged an independent valuer to assess fair value as
at 31 December 2017. A valuation methodology based on a discounted cashflow model was
used together with reference to market based evidence using comparable prices adjusted for
specific market factors such as nature, location and condition of the property.
The determined fair value of the investment properties is most sensitive to the estimated yield
as well as the long term vacancy rate. The key assumption used to determine the fair value of
the investment properties are further explained in note 10.

6 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net profit for the year attributable
to ordinary shareholders of the parent by the weighted average number of ordinary shares
outstanding at the reporting date.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during
the year plus the weighted average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into ordinary shares.

49
The following reflects the income and share data used in the basic and diluted earnings per share computations:

2017 2016 2017 2016
US$ US$ US$ US$
Profit for the year attributed to equity holders of the parent (US$) 2,703,795 1,407,703 2,448,927 1,725,016
Weighted number of shares for basic EPS 590,014,738 566,764,773 590,014,738 566,764,773
Effect of share options 3,075,546 26,325,511 3,075,546 26,325,511
Weighted number of shares for diluted EPS 593,090,284 593,090,284 593,090,284 593,090,284
Basic earnings per share (US cents) 0.46 0.25 0.42 0.30
Diluted earnings per share (US cents) 0.46 0.24 0.41 0.29

7 SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their geographical location and has two reportable segments as
follows:
Management monitors operating results of its business units separately for the purpose of making decisions about resource
1) Zimbabwe allocation and performance assessment.

Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss
2) Malawi in the consolidated financial statements.
The Group’s customers are diverse and there is no one major customer who contributes 10% to the Group’s Gross Premium Written.

Zimbabwe Malawi Total
US$ US$ US$

SEGMENT REPORT - 2017
Group
Analysis by geographical areas
Revenue from external customers 30,902,250 8,710,901 39,613,151
Revenue from related parties 585,426 - 585,426
Total gross premium written 31,487,676 8,710,901 40,198,577

Investment income, other income and other gains 2,509,007 468,331 2,977,338
Brokerage commission and fees 2,089,784 350,766 2,440,550

Net benefits and claims (10,089,301) (3,179,362) (13,268,663)
Commission and acquisition expenses (5,281,929) (925,472) (6,207,401)
Reinsurance (11,341,582) (1,468,133) (12,809,715)
Unearned Premium Reserve (495,883) (559,702) (1,055,585)
Other operating and administrative expenses (5,609,795) (2,637,967) (8,247,762)
Total benefits, claims and other expenses (32,818,490) (8,770,636) (41,589,126)

Operating Profit before Share of Associate 3,267,977 759,362 4,027,339

Share of profit/(loss) of associates (62,598) 62,165 (433)

Tax expense (767,278) (328,914) (1,096,192)

Segment Result 2,438,101 492,613 2,930,714

Statement of financial position items
Total Assets 36,392,116 9,437,654 45,829,770
Total Liabilities (16,883,532) (7,348,901) (24,232,433)
Investment in associates included in non-current assets 221,550 307,120 528,670

50
7 SEGMENT INFORMATION (continued)

SEGMENT REPORT - 2017 (continued)
Group Total
Analysis by products and services Short term Insurance Property US$

Revenue from external customers 39,613,151 - 39,613,151
Revenue from related parties 585,426 - 585,426
Total gross premium written 40,198,577 - 40,198,577
Brokerage commission and fees 2,440,550 - 2,440,550

Net benefits and claims (13,268,663) - (13,268,663)
Commission and acquisition expenses (6,207,401) - (6,207,401)
Reinsurance (12,809,715) - (12,809,715)
Unearned Premium Reserve (1,055,585) - (1,055,585)
Other operating and administrative expenses (7,992,754) (255,008) (8,247,762)
Total benefits, claims and other expenses (41,334,118) (255,008) (41,589,126)

Operating Profit before Share of Associate 3,961,100 66,239 4,027,339

Share of loss of associates (433) - (433)

Tax expense (1,052,796) (43,396) (1,096,192)

Segment Result 2,907,871 22,843 2,930,714

Total Assets 38,979,041 6,850,729 45,829,770
Total Liabilities (23,995,707) (236,726) (24,232,433)
Investment in associates included in non-current assets 528,670 - 528,670

SEGMENT REPORT - 2016
Group 2016
Analysis by geographical areas Zimbabwe Malawi Total
US$ US$ US$
Revenue from external customers 28,244,005 7,434,915 35,678,920
Revenue from related parties 1,321,050 - 1,321,050
Total gross premium written 29,565,055 7,434,915 36,999,970

Brokerage commission and fees 1,682,481 463,230 2,145,711

Net benefits and claims (10,025,248) (4,043,836) (14,069,084)
Commission and acquisition expenses (4,313,039) (786,796) (5,099,836)
Reinsurance (10,565,969) (2,201,115) (12,767,084)
Unearned Premium Reserve 347,531 (335,722) 11,809
Finance costs (6,806) - (6,806)
Other operating and administrative expenses (5,239,969) (2,022,695) (7,262,664)
Total benefits, claims and other expenses (29,803,500) (9,390,164) (39,193,664)

Operating Profit before Share of Associate 2,897,672 (1,153,991) 1,743,681

Share of profit/(loss) of associates (409,563) 17,700 (391,863)

Tax (expense)/credit (806,949) 414,929 (392,020)

Segment Result 1,681,160 (721,362) 959,798


Total Assets 32,614,756 8,589,859 41,204,615
Total Liabilities (15,391,940) (7,052,920) (22,444,860)
Investment in associates included in non-current assets 544,242 77,788 622,030
51
7 SEGMENT INFORMATION (continued)

SEGMENT REPORT - 2016 (continued)
Group
Analysis by products and services
Short term Insurance Property Total
US$ US$ US$

Revenue from external customers 35,678,920 - 35,678,920
Revenue from related parties 1,321,050 - 1,321,050
Total gross premium written 36,999,970 - 36,999,970

Brokerage commission and fees 2,145,711 - 2,145,711

Net benefits and claims (14,069,084) - (14,069,084)
Commission and acquisition expenses (5,099,835) - (5,099,835)
Reinsurance (12,767,084) - (12,767,084)
Unearned Premium Reserve 11,809 - 11,809
Finance costs - (6,806) (6,806)
Other operating and administrative expenses (7,035,990) (226,674) (7,262,664)
Total benefits, claims and other expenses (38,960,184) (233,480) (39,193,664)

Operating Profit before Share of Associate 1,782,241 (38,560) 1,743,681

Share of loss of associates (391,863) - (391,863)

Tax (expense)/credit (408,112) 16,092 (392,020)

Segment Result 982,266 (22,468) 959,798


Total Assets 34,438,226 6,766,389 41,204,615
Total Liabilities (22,216,951) (227,909) (22,444,860)
Investment in associates included in non-current assets 622,030 - 622,030

52

2017 2016 2017 2016
US$ US$ US$ US$

8.1 Investment income
Rental income from investment properties 377,996 292,173 72,549 66,287
Dividend income from financial assets at fair value through profit and loss 42,119 47,990 369,421 94,293
Interest income from financial assets at fair value through profit and loss 401,973 484,547 221,839 271,414
Other investment income 225,291 257,445 225,291 136,959
1,047,379 1,082,155 889,100 568,953

Other investment income consists of interest earned on staff loans and.
fees on collection agency services
8.2 Other income

Management fees charged 5,979 26,000 101,979 109,478
Income from the lodge 9,166 6,020 - -
15,145 32,020 101,979 109,478

8.3 Net benefits and claims
Gross benefits and claims paid 16,843,190 18,827,744 12,026,555 13,536,262

Claims recovered from reinsurers (3,824,531) (6,535,292) (2,755,049) (3,974,738)

Gross change in contract liabilities
Change in outstanding losses provision 269,857 1,115,482 628,834 223,946
Change in IBNR claims provision (19,853) 661,150 188,960 239,778
Total gross change in contract liabilities 250,004 1,776,632 817,794 463,724
13,268,663 14,069,084 10,089,300 10,025,248
8.4 Operating and administrative expenses
Auditors’ remuneration 146,991 147,096 82,280 97,472

Directors’ fees and emoluments 144,022 150,741 116,200 82,220
Wages and salaries (excluding executive management) 3,054,412 2,745,288 2,171,548 1,882,474
Wages and Salaries (Executive management) (Note 19.3) 802,411 777,746 729,700 773,130
Pension costs 182,932 232,635 100,217 157,002
National social security costs 19,930 20,852 19,930 20,852
Depreciation (Note 9) 409,627 386,334 249,583 255,885
Amortisation of intangible assets 102,167 - 102,167 -
Share option costs (Note 21.2.1) - (1,078) - (1,078)
Legal fees 7,010 13,337 7,010 13,337
Rent, premises costs and utilities 227,404 294,845 298,897 360,813
Travel and representation 447,718 429,228 294,742 276,047
Marketing, advertising & promotion 522,100 451,891 418,400 374,420
Investment property expenses (less depreciation on related equipment) 230,332 202,639 - -
Retrenchment 195,228 - - -
Allowances for credit losses (Note 15.2) 312,414 284,448 - -
Other operating and administration costs 1,443,064 1,126,662 912,793 866,847
8,247,762 7,262,664 5,503,467 5,159,421

Other operating and administration costs include Insurance and Pensions levies, consultation costs, communication costs and insurance costs.

53

2017 2016 2017 2016
US$ US$ US$ US$
8.5 Other gains/(losses)
(Loss)/gain on disposal of property and equipment (49,077) (1,248) 10,082 3,876

Fair value adjustments of financial assets through profit and loss 122,649 38,791 122,649 38,791
Gain on disposal of associates - DGI 140,312 - (41,279) -
Gain on disposal of associates - Fidelity funeral Services 110,039 - 110,039 -
Receipts from debtor recoveries - 10,124 - -
323,923 47,667 201,491 42,667

Unrealized gain/(loss)
Fair value adjustment on investment properties (Note 10) 168,248 161,953 68,237 205,599
Fair value adjustment on quoted equities (Note 11.2.1) 2,092,928 426,467 1,838,516 434,356
Other investment provisions and write offs (562,135) - (562,135) (382,026)
Impairment of investments (44,273) - (166,233) -
Unrealized exchange gains/(losses) on monetary assets and liabilities (63,877) 41,402 (63,443) 37,640
1,590,891 629,822 1,114,942 295,569
Net other gains 1,914,814 677,489 1,316,433 338,236

Disposal of investments
The Company and the Group disposed two associates during the year.
Fidelity funeral Services was disposed effective 1 July 2017. The profit on disposal of $110,039 (Group level $110,039) is included in net other gains
Diamond General Insurance (DGI) of Zambia was disposed effective 5 October 2017 and the loss on disposal for $41,279 (Group level gain $140,312)
is included in the other net gains.
Other investments and write offs

This is made up of a VAT liability arising from property and a write off of management fees.

Impairement of Investments
Diamond Seguros of Mozambique was impaired when its carrying amount was more than its recoverability value. At company level the impairement
was $166,233 whilst at Group level the impairement was $44,273.

8.6 Investment in associates
Reconciliation of the carrying amount Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$
Balance at beginning of the year 622,030 1,015,138 544,242 469,468

Disposal of Associates (DGI and FF) (77,113) - (156,459) -
Additions - 87,687 - 87,687
Impairments (44,273) - (166,233) (12,913)
Share of Other Comprehensive Income attributable to Associate 28,459 (88,932) - -
Share of loss for the year (433) (391,863) - -
Share of associates loss (20,714) (379,483) - -
Deemed profit on disposal of DS 20,281 - - -
Impairment of investment in associate - (12,380) - -
Balance at year end 528,670 622,030 221,550 544,242
The Company and the Group disposed Diamond General Insurance (DGI) of Zambia and Fidelity Funeral (FF) during the course of the year.
The carrying amount of the investment in Diamond Seguros (DS) in the company books was $387,687, which was higher than the company’s
estimated fair value. The company impaired the investment by $166,233. At Group level the impairement was $44,273 which was in line with the net
asset value.
54
8.6 Investment in associates (continued)
The Group has the following Investments in Associates:
Clover Leaf Panel Beaters 2017 2016

Country of incorporation Zimbabwe Zimbabwe
Principal activities Motor Industry Motor Industry
Percentage holding 45% 45%
Year end December December
Accounting method Equity Accounting Equity Accounting
US$ US$
Non-current assets 124,883 97,735
Current assets 929,317 870,657
Current liabilities (173,225) (140,074)
Non current liabilities (15,786) (11,654)
Equity 865,189 816,664
Proportion of the Group’s ownership 45% 45%
Share of Net Asset Value 389,335 367,499
Revenue 2,299,220 2,109,275

Cost of sales (1,391,114) (1,265,611)
Admin expenses (829,879) (757,659)
Profit before tax 78,227 86,005
Income tax expense (29,704) (27,536)
Profit for the year 48,523 58,469
Group’s share of profit for the year 21,835 26,311
Fidelity Funeral Services 2017 2016

Country of incorporation Zimbabwe Zimbabwe
Principal activities Funeral Services Funeral Services
Percentage holding 0% 23.9%
Non-current assets - 319,889
Current assets - 82,952
Current liabilities - (517,603)
Non-current liabilities - (35,516)
Equity - (150,278)
Proportion of the Group’s ownership - 23.9%
Share of Net Asset Value - (35,916)

Revenue - 322,813
Admin expenses - (374,612)
Loss before tax - (51,799)
Income tax expense - -
Loss for the year - (51,799)
Group’s share of loss for the year - (12,380)

55
Diamond Seguros 2017 2016

Country of incorporation Mozambique Mozambique
Principal activities Non life Insurance Non life Insurance
Percentage holding 24.33% 28.00%
US$ US$
Non-current assets 31,759 28,816
Current assets 2,898,464 2,254,123
Current liabilities (2,651,663) (2,201,847)
Non-current liabilities (96,590) (7,395)
Equity 181,970 73,697
Proportion of the Group’s ownership 24.33% 28%
Impairement (44,273) -
Revenue 2,914,800 2,383,351

Cost of sales (2,007,820) (1,982,215)
Admin expenses (937,157) (552,082)
Exchange loss 98,175 -
Profit/ (loss) before tax 67,998 (150,946)
Income tax expense (49,539) -
Loss for the year 18,459 (150,946)
Group’s share of profit/(loss) for the year 4,491 (42,265)

Diamond General Insurance 2017 2016
Country of incorporation Zambia Zambia
Principal activities Non life Insurance Non life Insurance
Year end September December
Non-current assets 1,327,817 1,342,954

Current assets 5,072,364 3,917,395
Current liabilities (2,294,231) (2,300,686)
Non-current liabilities (3,796,008) (2,425,680)
Equity 309,942 533,983
Proportion of the Group’s ownership 24.88% 24.88%
Revenue 4,919,217 5,606,626

Cost of sales (3,742,401) (4,681,389)
Admin expenses (1,135,432) (1,517,234)
Profit/(loss) before tax 41,384 (591,997)
Income tax expense (264,593) -
Loss for the year (223,209) (591,997)
Group’s share of loss for the year (55,534) (147,289)
56
VanGuard Life Assurance 2017 2016

Country of incorporation Malawi Malawi
Principal activities Life Assurance Life Assurance
US$ US$
Non-current assets 2,634,597 2,044,095
Current assets 5,176,392 3,209,843
Current liabilities (471,325) (426,385)
Non-current liabilities (5,897,270) (3,781,582)
Equity 1,442,394 1,045,971
Proportion of the Group’s ownership 9.66% 9.66%
Revenue 4,575,334 3,001,144

Cost of sales (1,431,866) (4,350,579)
Admin expenses (2,685,173) (978,417)
Profit/(loss) before tax 458,295 (2,327,852)
Income tax (expense)/credit (160,421) 89,338
Profit/(loss) for the year 297,874 (2,238,514)
Group’s share of profit for the year 28,775 (216,241)

Analysis of Investments in associates 2017 2017 2017 2017 2017 Total

Fidelity Diamond Diamond Vanguard
a) Carrying Amount Clover leaf Funeral Seguros General Life
Panel Beaters Services
US$ US$ US$ US$ US$ US$

Share of net assets 389,335 - - - 139,335 528,670
Carrying amount of investment 389,335 - - - 139,335 528,670

b) Share of profits/(losses) 21,835 - 4,491 (55,534) 28,775 (433)

c) Share of OCI attributable to Associates - - 19,147 (208) 9,520 28,459

Analysis of Investments in associates 2016 2016 2016 2016 2016 Total
Fidelity Diamond Diamond Vanguard
a) Carrying Amount Clover leaf Funeral Seguros General Life
Panel Beaters Services
US$ US$ US$ US$ US$ US$

Share of net assets 367,499 - 20,635 132,855 101,041 622,030
Subsequent capitalization of associate - - - - - -
Impairment - - - - - -
Goodwill on acquisition of associate - - - - -

Carrying amount of investment 367,499 - 20,635 132,855 101,041 622,030

b) Share of profits/(losses & impairement) 26,311 (12,380) (42,265) (147,289) (216,240) (391,863)

c) Share of OCI attributable to Associates - - (41,643) 11,826 (59,115) (88,932)

57
8.6.1 Impairment Losses

The 2016 impairment losses for $12,380 for the group represents the write down of investment in Fidelity Funeral Services to the recoverable amount.
The recoverable amount was based on the value in use.
Fidelity Funeral Services’ financial performance has continued to deteriorate. The company has since exhausted its capital to negative levels. This
prompted NDI to impair the full carrying cost of the investment which was valued at $12,913.
The value in use for Fidelity Funeral Services was calculated as $12,380 and a discount rate of 16.12% was used.
8.7 Income Tax

The major components of income tax expense for the Group Group Company Company
year ended 31 December 2017 and 2016 are: 2017 2016 2017 2016
Current income tax: US$ US$ US$ US$
Current income tax charge (Note 18) (871,744) (425,168) (752,230) (415,863)
Deferred tax:
Relating to origination and reversal of temporary differences continuing operations (224,448) 33,148 28,348 (407,178)
Income tax charge reported in profit or loss (1,096,192) (392,020) (723,882) (823,041)
Tax rate reconciliation

Tax at normal rate (25.75%) (25.75%) (25.75%) (25.75%)
Adjust for:
Effect of non-deductible expenses: impairments, non deductible reserves 10.6% 15.8% (7.9%) 15.6%
Effect of non-taxable income: fair value gain, dividend income, premium received in advance (22.2%) (20.9%) 10.85% -22.1%
Tax on associates income& withholding tax 10.2% 2.0% - -
Effective tax rate (27.2%) (28.9%) (22.8%) (32.3%)
58
8.8 Discontinued Operations

The disposal balance on FICO, which was disposed in 2016 was received in January 2017 for $50,012.
The results of FICO for the period to disposal are presented below:
2017 2016
US$ US$
Total income - 619,414
Expenses - (216,547)
Profit before tax - 402,867
Tax expense - (9,511)
Profit after tax - 393,356
Loss on disposal - (574,530)
Recycling of the cumulative losses arising from translation - (352,499)
Loss after tax - (533,673)
The major classes of assets and liabilities of FICO classified as held for sale as at 30 September 2017 were as follows:
Assets
Property and equipment - 36,324
Investment properties - 433,810
Held to maturity - 526,201
Investment in unquoted equities - 292,903
Deferred tax asset - 96,380
Statutory deposit - 163,556
Trade receivables - 2,204,102
Deferred acquisition costs - 61,495
Other receivables and prepayments - 129,039
Due from related parties - 28,131
Bank balances and cash - 80,226
- 4,052,167
Liabilities
Trade payables - 268,409
Related party payables - 92,903
Other payables - 909,436
Taxation payable - 208,037
Short term provisions - 1,375,142
Net assets directly associated with disposed Company - 2,853,927

Net Cashflows incurred by FICO are, as follows: FICO FICO
2017 2016
Operating - (365,372)
Investing - (228,620)
Financing - 590,000
Net cash (outflow)/inflow - (3,992)

Earnings per share
Basic earnings per share from discontinued operations - 0.09
Diluted earnings per share from discontinued operations - 0.09

59

2017 2016 2017 2016
US$ US$ US$ US$
8.9 Components of other comprehensive income
Exchange difference on translation of foreign operations 2,295 (284,686) - -
This arose from translation of principal information of foreign operations (subsidiary and Associates from their local reporting currencies to the Groups
functional and reporting currency (US$).
The table below shows the conversation rates:

Entity Year P/L $ SFP $
UGI 2017 726 725
UGI 2016 711 726
DS 2017 64 59
DS 2016 63 72
DGI 2017 10 10
DGI 2016 10 10

9. PROPERTY AND EQUIPMENT

Group
Freehold Land Motor Computers & Furniture &
& Buildings vehicles Equipment fittings Total
US$ US$ US$ US$ US$
Cost
Balance as at 1 January 2016 173,307 1,461,653 771,649 534,705 2,941,314
Disposal of subsidiary - (27,046) (65,110) (58,892) (151,048)
Exchange rate movement on foreign operations 5,313 52,775 42,476 2,734 103,298
Additions - 426,322 142,313 29,056 597,691
Disposals - (77,317) (5,135) (1,977) (84,429)
Balance at 31 December 2016 178,620 1,836,387 886,193 505,626 3,406,826
Exchange rate movement on foreign operations - 19,067 27,900 51 47,018
Additions - 104,895 167,868 9,554 282,317
Disposals - (255,588) (4,678) - (260,266)
Balance at 31 December 2017 178,620 1,704,761 1,077,283 515,231 3,475,895
Accumulated depreciation
Balance as at 1 January 2016 - (705,498) (490,980) (286,634) (1,483,112)
Charge for the year - (234,484) (101,777) (50,072) (386,333)
Eliminated on disposals - 67,669 3,776 1,565 73,010
Impairment reversals recognised in P&L - 258 - - 258
Disposal of subsidiary - 20,923 42,839 50,327 114,089
Exchange rate movement on foreign operations - (88,383) (52,433) (8,333) (149,149)
Balance on 31 December 2016 - (939,515) (598,575) (293,147) (1,831,237)
Eliminated on disposals - 234,220 3,315 - 237,535
Exchange rate movement on foreign operations - (116) (9,011) (18) (9,145)
Balance at 31 December 2017 - (924,148) (743,631) (344,695) (2,012,474)

Carrying amount at 31 December 2017 178,620 780,613 333,653 170,535 1,463,421

Carrying amount at 31 December 2016 178,620 896,872 287,618 212,479 1,575,589

60
Company

Freehold Land Motor Computers & Furniture &
& Buildings vehicles Equipment fittings Total
US$ US$ US$ US$ US$
Cost
Balance at 01 January 2016 80,000 1,082,215 476,891 342,285 1,981,391
Additions - 286,386 81,723 24,849 392,958
Disposals - (57,746) (3,459) (1,977) (63,182)
Additions - - 68,320 9,554 77,874
Disposals - (201,267) (850) - (202,117)

Accumulated depreciation
Balance on 01 January 2016 - (680,776) (344,959) (184,924) (1,210,659)
Eliminated on disposals - 57,746 2,385 1,565 61,696
Balance on 31 December 2016 - (791,486) (394,402) (218,960) (1,404,848)
Eliminated on disposals - 201,267 58 - 201,325
Balance at 31 December 2017 - (748,885) (448,126) (256,095) (1,453,106)

Carrying amount at 31 December 2017 80,000 360,703 174,499 118,616 733,818

Carrying amount at 31 December 2016 80,000 519,369 160,753 146,197 906,319
61
9.1 Intangible Asset

2017 2016 2017 2,016
Cost US$ US$ US$ US$
Balance as at 1 January 738,357 - 738,357 -
Additions 51,828 738,357 51,828 738,357
Amortisation (102,167) - (102,167) -
Balance as at 31 December 688,018 738,357 688,018 738,357

The intangible asset relates to the Company’s enterprise resource planning (ERP), underwriting and finance software.

2017 2016 2017 2,016
10 INVESTMENT PROPERTIES US$ US$ US$ US$

1. Reconciliation of the carrying amount
Balance at 1 January 14,325,706 9,762,841 6,973,000 1,870,000
Additions 198,523 1,672,681 192,763 1,672,681
Reclassified from inventory (Note 16.1.1) - 3,224,720 - 3,224,720
Exchange rate movement on foreign operations 539 (62,679) - -
Disposal of subsidiary - (433,810) - -
Fair value adjustments (Note 8.5) 168,248 161,953 68,237 205,599
Balance at 31 December 14,693,016 14,325,706 7,234,000 6,973,000

The Group’s investment properties consist of commercial and residential properties located in Zimbabwe and Malawi.
Investment properties are stated at fair value as at 31 December 2017 and 31 December 2016. Fair values were determined, with reference to
valuations performed by Integrated Properties, an accredited independent valuer. The value of the commercial properties were determined by their
capacity to generate income in the form of rentals. This was measured by a rental yield. The average commercial properties rental yield was 7%
in 2017 (2016: 7%). To obtain a risk weighted capitalisation rate, the rental yield of 7% was further adjusted for liquidity risk(1.5%), Legal/tenant risk
(1%) and Location risk (1%). These factors give an effective capitalisation rate of 10.5%.
The value of the commercial properties was therefore calculated using the effective yield computation formulae as follows:

V = R/Y
where V = Value
R = Annual rental
Y = Annual yield
With regard to residential properties, the valuer was able to identify various residential properties sold or which were on sale and situated in
comparable areas. After adjustments for quality, location and size on the rates for our properties, these rates were then applied to the specific
residential properties.
Description of valuation techniques used and key inputs to valuation on commercial properties are as follows:

2017 Valuation technique Significant Range
unobservable inputs

Commercial properties Rental yield Annual Yield $4.50 - $6.50 per square metre
Residential Properties Market Comparable Method Prices of comparable properties $300,000 - $410,000

2016 Valuation technique Significant Range
unobservable inputs

Commercial properties Rental yield Annual Yield $4.50 - $6.50 per square metre

Residential Properties Market Comparable Method Prices of comparable properties $300,000 - $400,000
62
Significant increases (decreases) in annual yield in isolation would result in a significantly higher or (lower) fair value of the properties. Significant increases (decreases) in
prices of comparable properties in isolation would result in a significantly higher or (lower) fair value of the properties. The rental income that arose during the year is included
in investment income. Investment properties are mainly kept for capital appreciation and to earn rentals. The Group entered into operating lease contracts
2. Income and expenses related to investment property 2017 2016 2017 2016
US$ US$ US$ US$
Rental income from investment property recognized in profit or loss 377,996 292,173 72,549 52,662
Direct operating expenses (repairs, maintenance, etc.) for:
- Property that generated rentals during the year (excluding depreciation) (Note 8.4) (230,332) (202,639) - -
Profit arising from investment properties carried at fair value 147,664 89,534 72,549 52,662

The following table provides the fair value measurement hierarchy of the Group’s investment property:
Quoted prices in active Significant Significant

Group Market observable inputs Unobservable inputs
Date of Valuation Total Level 1 Level 2 Level 3
US$ US$ US$ US$
Commercial properties 31 December 2017 6,964,162 6,964,162
Residential properties 31 December 2017 7,728,853 7,728,853
14,693,015 - - 14,693,015

Commercial properties 31 December 2016 6,914,301 6,914,301
14,325,706 - - 14,325,706

Quoted prices in active Significant Significant
Company Market observable inputs Unobservable inputs
Date of Valuation Total Level 1 Level 2 Level 3
US$ US$ US$ US$
Commercial properties 31 December 2017 - -
7,234,000 - - 7,234,000

Commercial properties 31 December 2016 - -
6,973,000 - - 6,973,000
63
11 INVESTMENTS
11.1 Investment in unquoted equities at fair value through profit or loss

2017 2016 2017 2016
%age Holding US$ US$ US$ US$

Special Automobile Underwriters of Zimbabwe 10.00% 17,493 17,493 17,493 17,493
17,493 17,493 17,493 17,493
11.1.1 Movements in unquoted equities

Opening balance 17,493 228,881 17,493 17,493
Disposal of subsidiary - (292,903) - -
Exchange rate movement on foreign operations - 81,515 - -
Closing balance 17,493 17,493 17,493 17,493

The disposal of subsidiary refers to the discontinued operation of First Insurance Company of Uganda (FICO) effective 30 September 2016.
11.2 Short term investments

2017 2016 2017 2016
Government, Municipal stocks and bonds 390,000 - 390,000 -
Money market deposits 50,000 - 50,000 -
Quoted equities 4,763,866 1,594,793 4,164,651 1,250,613
Grand Total 5,203,866 1,594,793 4,604,651 1,250,613

The Group holds investments in quoted equities.
11.2.1 Movement in quoted equities
Opening balance 1,594,793 807,284 1,250,613 364,582

Additions 1,175,522 717,552 1,175,522 717,552
Disposals (100,000) (265,877) (100,000) (265,877)
Exchange Differences 623 (90,633) - -
Fair value adjustment (Note 8.5) 2,092,928 426,467 1,838,516 434,356
Closing balance 4,763,866 1,594,793 4,164,651 1,250,613
11.2.2 Movement in short term investments (excluding quoted equities)
Opening balance - 892,007 - 380,000

Additions 830,000 - 830,000 -
Realized on maturity (423,385) (1,097,512) (423,385) (545,505)
Closing balance 440,000 - 440,000 -
The management assessed that the fair values of short-term investments approximate their carrying amounts largely due to the short-term maturities
of these instruments.
11.3 Long term investments held to maturity

Government, Municipal stocks and bonds 1,711,014 2,558,182 1,711,014 2,558,182
Money market deposits - 150,000 - 150,000
1,711,014 2,708,182 1,711,014 2,708,182

In 2017 the company held investments in money market, Government, Municipal Stocks and Bonds with financial institutions with interest rates
ranging between 1% to 9% and maturing in 30 to 717 days (4 to 24 months).
In 2016 the company held investments in money market, Government, Municipal Stocks and Bonds with financial institutions with interest rates
ranging between 1.5% to 10% and maturing in 36 to 182 months.
64
11 INVESTMENTS (continued)

2017 2016 2017 2016
11.3.1 Movement in long term investments held to maturity US$ US$ US$ US$

Opening balance 2,708,182 430,000 2,708,182 430,000
Additions - 2,558,182 - 2,558,182
Realized on maturity (1,188,819) (329,632) (1,188,819) (329,632)
Closing balance 1,711,014 2,708,182 1,711,014 2,708,182
The carrying amounts of the held to maturity investments approximates their fair values.

11.4 Fair value measurements
The table below provides the fair value measurement hierarchy of the Group’s assets.
Quantitative disclosure fair value measurement hierarchy for assets as at 31 December 2017:

Quoted prices Significant Significant 31
in active observable unobservable
markets inputs inputs 31 Dec 2017
2017 Level 1 Level 2 Level 3
US$ US$ US$ US$
Group
Asset measured at fair value:
Quoted equity shares
Consumer 2,075,684 - - 2,075,684
Financial services 1,074,373 - - 1,074,373
Agro 1,613,809 - - 1,613,809
Unquoted equity shares
Financial services - - 17,493 17,493
Total 4,763,866 - 17,493 4,781,359
Company 31 Dec 2017

Consumer 2,075,684 - - 2,075,684
Financial services 475,158 - - 475,158
Agro 1,613,809 - - 1,613,809
Total 4,164,651 - 17,493 4,182,144

65
11
INVESTMENTS (continued) Quoted prices Significant Significant
in active observable unobservable
markets inputs inputs 31 Dec 2016
Level 1 Level 2 Level 3
2016 US$ US$ US$
Group
Consumer 555,417 - - 555,417
Agro 394,631 - - 394,631
Total 1,594,793 - 17,493 1,612,286

2016 31 Dec 2016
Company
Asset measured at fair value: Level 1 Level 2 Level 3
Consumer 555,417 - - 555,417
Agro 394,631 - - 394,631
Total 1,250,613 - 17,493 1,268,106

Description of significant unobservable inputs to valuation:
The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a
quantitative sensitivity analysis as at 31 December 2017 and 2016 are as shown below:

31 December 2017

Valuation technique Significant Range Sensitivity of the
unobservable inputs input to fair value
DCF method Long-term growth 4.7% - 5% A 3% increase/(decrease) in the growth rate
rate for cash flows would result in an increase/(decrease) in fair
AFS financial for subsequent value by $84,456 ($57,428)
assets in unquoted years
equity shares

WACC 18.60% - 34.85% A 5% increase/(decrease) in WACC
would result in an (decrease)/increase in fair
value ($182,503) $346,192
31 December 2016

Valuation technique Significant Range Sensitivity of the
unobservable inputs input to fair value
DCF method Long-term growth 0.17% - 5% Increase/(decrease) in the growth rate would
AFS financial rate for cash flows result in an increase (decrease) in fair value
assets in for subsequent
unquoted years
equity shares

WACC 7.55% - 27.10% Increase/(decrease) in WACC
would result in an (decrease)/increase in
fair value

For investment property fair value hierarchy refer to note 10.
66
11 INVESTMENTS (continued)
11.5 OTHER NON-CURRENT ASSETS

Included in other non- current assets are long term staff loans amounting to $203,997 (2016 - $154,691).
Loans are issued to staff on at average interest rate of 12%. The repayment period is three years.
12 INVESTMENT IN SUBSIDIARIES
12.1 Information about subsidiaries % equity interest US$ % equity interest US$
Name Principal Activity County of Corporation 2017 2017 2016 2016
Thirty Samora Machel (Private) Limited Property Investment Zimbabwe 100% - 100% -
Marabou Investments (Private) Limited Property Investment Zimbabwe 100% 250,000 100% 250,000
United General Insurance Company Limited Insurance Solutions Malawi 46% 1,589,581 46% 1,274,962
1,839,581 1,524,962
Investment in Thirty Samora (Private) Limited is nil as this company was purchased during the Zimbabwe dollar era and at conversion the value was not redenominated to
United States Dollars (USD). There has not been subsequent investment in this subsidiary.

12.2 Information about subsidiaries % equity interest NCI Carrying % equity NCI Carrying
- NCI amount interest - NCI amount
Name Principal Activity County of Corporation 2017 2017 2016 2016
Thirty Samora Machel Private Limited Property Investment Zimbabwe 0% - - -
United General Insurance Company Limited Insurance Solutions Malawi 54% 986,640 54% 758,482
Marabou Investments Property Investment Zimbabwe 0% - - -
986,640 758,482
12.3 Reconciliation of investments in subsidiaries

2017 2016 2017 2016
US$ US$ US$ US$
Opening balance - - 1,524,962 1,994,075
Impairment - FICO - - - (369,113)
Disposal of subsidiary - FICO - - - (100,000)
Bonus issue - UGI - - 314,619 -
Closing balance - - 1,839,581 1,524,962

A bonus issue (with no financial impact) was declared to all shareholders of UGI as at December 2017, resulting in all shareholders receiving shares in the same proportion
and thus no shareholders were diluted.
67
12 INVESTMENT IN SUBSIDIARIES (continued)
12.4 Financial Information of the subsidiary that had a material non-controlling interest in 2017:

United General Insurance Company Limited of Malawi.
Summarised Statement of profit and loss
Summarised Statement of profit or loss

For the Year ended 31 December 2017 2017 2016
US$ US$
Gross premium written & other revenue/income 9,179,232 7,772,943
Reinsurance premium (1,468,132) (2,201,115)
Unearned premium provision (559,702) (335,722)
Net claims incurred (3,179,363) (4,043,836)
Net commission paid (574,707) (428,679)
Operating costs (2,637,967) (2,022,694)
Profit/(Loss) before tax 759,361 (1,259,103)
Share of Associate profit 62,165 17,700
Tax (expense) /credit (328,914) 414,930
Total comprehensive income/(loss) 492,611 (826,474)

Attributable to non controlling interest 226,919 (447,905)

Summarised Statement of Financial Position
As at 31 December 2017 2017 2016
Inventories, cash and bank balances & other current assets 7,074,901 6,103,088
Property and equipment & other non-current assets 2,254,475 2,093,990
Financial assets (non-current) 87,481 429,281
Trade and other payables (7,405,009) (7,196,256)
Total equity 2,011,848 1,430,103
Non controlling interest (NCI) 986,640 758,482

Summary of cash flow information
For the Year ended 31 December 2017 2017 2016

Operating (721,408) 189,797
Investing 493,220 (67,589)
Financing - (57,434)
Net increase/(decrease) in cash and cash equivalent (228,188) 64,774

Dividend paid to Non-controlling Interest by UGI was $369,335 in 2017.
Dividend paid to Non-controlling Interest by UGI was $87,675 in 2016.
68
2017 2016 2017 2016

13 DEFERRED TAX US$ US$ US$ US$
13.1 Deferred tax asset 691,712 957,994 - -

Movement in deferred tax asset
Opening balance 957,994 1,032,225 - 263,669
Transfer (to)/from deferred tax liability 814 (263,669) - (263,669)
Deferred tax credit/(charge) for the year in profit or loss (264,680) 414,930 - -
Discontinued operations (Note 8.8) - (96,380) - -
Exchange rate movement on foreign operations (2,416) (129,112) - -
Closing balance 691,712 957,994 - -

Deferred Tax Asset Analysis
Property and equipment (59,917) (67,126) - -
Investment properties 28,600 78,657 - -
Investment in associates 37,495 47,377 - -
Held for trading investments 8,601 - - -
Deferred acquisition costs - (1,106) - -
Unrealised exchange losses 130 - - -
Tax losses 129,392 4,538 - -
Short-term provisions 547,411 895,654 - -
691,712 957,994 - -
The Group has recognised a deferred income tax asset (relating to UGI Malawi) as it is probable that in the foreseeable future, taxable profits will be
available against which the deferred tax asset can be realised.
At 31 December 2017, the group subsidiarity had experienced tax losses amounting to $672,590, (2016: $17,624).
The analysis of the effect of tax losses on deferred tax is stated below:

Disposal of
Opening balance Loss/(utilisation) subsidiary Closing balance
US$ US$ US$ US$
2017 balance 17,624 654,966 - 672,590
2016 balance 695,981 17,624 (695,981) 17,624
2015 balance 761,100 (65,119) - 695,981

13.2 Deferred tax liability Group Group Company Company
2017 2016 2017 2,016
At beginning of year 431,964 307,807 143,509 -
Exchange difference 6,830 6,045 - -
Transfer to/(from) deferred tax asset 814 (263,669) - (263,669)
Deferred tax charge/(credit) for the year in profit or loss (40,232) 381,781 (28,348) 407,178
Balance at 31 December 399,376 431,964 115,161 143,509

Deferred Tax Analysis
Property, plant and equipment 83,653 36,484 89,187 22,221

Investment properties 299,858 232,102 10,109 (42,091)
Other intangible assets 26,492 190,127 26,492 190,127
Investment in associates (88,054) (23,516) (88,054) (23,516)
Investment in subsidiaries 27,971 27,971 27,971 27,971
Available for sale financial assets 384,302 16,426 384,302 16,427
Trade receivables 1,534,897 1,644,361 1,534,897 1,644,361
Deferred acquisition costs 254,898 229,376 254,898 229,377
Unrealised exchange losses (37,930) (21,593) (37,930) (21,593)
Trade payables (786,592) (876,335) (786,592) (876,336)
Short-term provisions (1,300,119) (1,023,438) (1,300,119) (1,023,439)
399,376 431,965 115,161 143,509

69
14 STATUTORY DEPOSIT Group Group Company Company

2017 2016 2017 2016
US$ US$ US$ US$
Opening balance - 125,224 - -

Additional investment - 38,332 - -
Discontinued operations/movement - (163,556) - -
Closing balance - - - -

This pertained entirely to FICO and is a requirement per the Insurance Act of Uganda that every insurer should establish and maintain at the central
bank a security deposit of at least 10% of the prescribed paid up capital of the company. This deposit is only available for distribution at liquidation of
the Company.
The balance is now nil after the investment in FICO was disposed.in 2016.
15 INSURANCE RECEIVABLES 2017 2016 2017 2016
Trade receivables and recoveries US$ US$ US$ US$
Due from policy holders (Direct clients) 1,263,886 734,659 158,872 162,678
Due from reinsurers 2,402,080 2,774,453 496,492 527,812
Due from brokers, agents & intermediaries 7,293,104 7,536,726 5,612,094 6,099,117
Due from insurers 257,720 160,727 189,799 124,073
Provision for credit losses (700,603) (393,432) - -
10,516,187 10,813,133 6,457,257 6,913,680
Other trade receivables

Direct and treaty losses receivable 188,163 398,156 163,502 262,322
188,163 398,156 163,502 262,322
Grand Total 10,704,350 11,211,289 6,620,759 7,176,002

Premiums are generally payable at inception of policy, however, in certain instances payment terms over the policy period are agreed with the policy
holders. As at 31 December 2017, trade receivables at initial value of $700,603 (2016 -$393,432) were impaired.
The Group cancels all policies which are considered long over due and where premiums are deemed not collectable. The Group does not intend to
keep debtors above 365 days save for exceptional cases where clear payment plans are in place and are being adhered to.

15.1 Other receivables and pre-payments 2017 2016 2017 2,016
US$ US$ US$ US$
Staff loans 245,179 307,622 227,960 291,489
Rentals receivable 5,321 6,731 - 6,731
Other receivables 1,509,600 221,349 372,192 159,681
Prepayments 21,474 32,149 16,601 29,835
1,781,574 567,851 616,753 487,736

Loans are issued to staff on an average interest rate of 12%. The repayment period is three years.
Other receivables is made up of various provisions on claim receivables.
15.2 Trade receivables and recoveries

Neither past due nor impaired Not due 1,107,893 2,853,144 1,107,893 2,853,146
Past due but not impaired 0-30 days 1,229,834 3,532,707 549,627 1,490,076
Past due but not impaired 31-60 days 1,812,038 1,624,385 547,091 643,506
Past due but not impaired 61-90 days 1,399,117 1,067,075 799,869 606,009
Past due but not impaired over 90 days 4,967,305 1,735,822 3,452,777 1,320,943
10,516,187 10,813,133 6,457,257 6,913,680

70
15 INSURANCE RECEIVABLE (continued) Group Group Company Company

2017 2016 2017 2016
US$ US$ US$ US$
Movements in provision for credit losses
Opening balance (393,432) (372,383) - -
Exchange difference on translation of foreign operation 5,243 102,682 - -
Discontinued operations - 160,717 - -
Charge for the year (Note 8.4) (312,414) (284,448) - -
Balance at end of year (700,603) (393,432) - -
The carrying amounts of trade and other receivables approximate fair value. An impairment analysis is performed at each reporting date on an
individual basis for all clients.
16 INVENTORIES Group Group Company Company

2017 2016 2017 2016
US$ US$ US$ US$
Consumables and stationery 29,567 30,513 29,567 30,513

16.1 Movement in inventories
Opening balance 30,513 3,278,730 30,513 3,278,730
Movement in consumables (946) (23,497) (946) (23,497)
Reclassification to investment property (Note 10) - (3,224,720) - (3,224,720)
Closing balance 29,567 30,513 29,567 30,513

17 DEFERRED ACQUISITION COSTS
Group
Insurance Insurance Insurance
contracts contracts contracts
NDI UGI
US$ US$ US$
At 1 January 2016 958,590 272,003 1,230,593
Expenses deferred 805,372 31,742 837,114
Amortisation (873,178) - (873,178)
At 31 December 2016 890,784 303,745 1,194,529
Expenses deferred 584,073 107,009 691,082
Amortisation (484,963) - (484,963)
At 31 December 2017 989,894 410,754 1,400,648

18 CURRENT TAX PAYABLE Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$

Balance at the beginning of the year 106,889 197,942 254,953 209,833
Exchange rate movement on foreign operations (71,940) (121) - -
Amounts charged to statement of profit or loss (Note 8.7) 871,744 425,168 752,230 415,863
Amounts paid (579,638) (516,100) (519,705) (370,743)
Balance at the end of the year 327,055 106,889 487,478 254,953

19 RELATED PARTY DISCLOSURES

19.1 The financial statements include the financial statements of NicozDiamond Insurance Limited and the subsidiaries listed below:

Country of Incorporation Primary Business Operation % Held
United General Insurance Limited Malawi Short term Insurance 46%
Thirty Samora Machel (Private) Limited Zimbabwe Property Investments 100%
Marabou Investments (Private) Limited Zimbabwe Property Investments 100%

71
19 RELATED PARTY DISCLOSURES (continued)
19.2 a) Transactions with related parties

Terms and conditions of transactions with related parties
For the year ended 31 December 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties
(2016- nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which
the related party operates. The repayment terms for related party balances differ per specific contracts.

2017 2016 2017 2016
US$ US$ US$ US$
Transactions with Related Parties -
ZimRe Holdings Limited (ZHL) - (Shareholder up to 30 November 2017) -
Insurance premiums received 10,720 12,009 10,720 12,009
Claims & benefits paid (833) - (833) -

Baobab Reinsurance (subsidiary of ZHL) -
Net reinsurance paid - (219,386) - (219,386)
Claims & benefits paid - (24,780) - (24,780)

CFI (Associate of ZHL up to 30 November 2017) -
Claims & benefits paid (10,121) (84,388) (10,121) (84,388)

ZimRe Property Investments (Subsidiary of ZHL)
Rentals paid - (18,749) - 18,749

NATIONAL SOCIAL SECURITY AUTHORITY (Shareholder)
Nissan Clover Leaf (Associate)

Insurance premiums received 40,965 - 40,965 -

Special Automobile Underwriters of Zimbabwe (Underwriting agency)

Malawi Re (Subsidiary of ZHL)
Reinsurance - (185,784) - -

72
19 RELATED PARTY DISCLOSURES (continued)
19.2 b) Amounts owed to/(owed by) Related Parties

Receivables and Payables to Related Parties are as follows; Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$
Receivables from Related Parties
Thirty Samora Machel (Private) Limited (subsidiary) - - 62,010 150,187
Marabou Investments (Private) limited (Subsidiary) - - 48,155 20,778
Malawi RE (Subsidiary of ZHL) 237,587 543,021 - -
Special Automobile Underwriters of Zimbabwe (unquoted equity) 10,388 - 10,388 -
United General Insurance Ltd Malawi (Subsidiary) - - 56,108 56,500
Starwin (Subsidiary) 111 1,135 111 1,135
248,086 544,156 176,772 228,600
The balances are classified as current assets in the Statement of Financial Position

Payables to Related Parties
Malawi Re 122,657 185,784 - -
Special Automobile Underwriters of Zimbabwe (unquoted equity) - 43,076 - 43,076
Diamond Seguros (Associate) 153,446 19,576 153,446 19,576
ZimRe Holdings Limited 92,693 - - -
368,796 248,436 153,446 62,652

The balances are classified as current liabilities in the Statement of Financial Position
Transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the
year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party
receivables or payables. For the year ended 31 December 2017, the Group has not recorded any impairment of receivables relating to amounts owed
by related parties (2016: $Nil). This assessment is undertaken each financial year through examining the financial position of the related party and
the market in which the related party operates.
19.3 Compensation of key management personnel of the Group Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$
Short term employee benefits 802,411 777,746 729,700 739,775
Post employment pension - 33,355 - 33,355
Total compensation paid to key management personnel 802,411 811,101 729,700 773,130
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel
(executive management) .
19.4 Executive Directors loan balance

The Group offers senior management a facility to borrow loans , repayable within five years from date of disbursement . Such loans are unsecured
and the interest rate is 7% per annum. The fair value of the loan is equivalent to the carrying amount. The loan balance as at 31 December 2017 was
$70,581 (2016 : $65,081). Appropriate shareholder approvals are sought annually.

20 CASH AND CASH EQUIVALENTS Group Group Company Company
2017 2016 2017 2016
US$ US$ US$ US$
Cash on hand and balances with banks 2,886,482 1,825,471 2,694,664 1,764,595
Deposits with original maturity less than 3 months 3,411,162 3,028,329 2,931,240 2,202,735
Total cash and bank balances 6,297,644 4,853,800 5,625,904 3,967,330

21 ORDINARY SHARE CAPITAL AND SHARE PREMIUM
Authorised Share Capital
600 000 000 ordinary shares of $0.005 each 3,000,000 3,000,000 3,000,000 3,000,000
Issued Share Capital
590 014 738 (2016 - 566 764 773) ordinary shares of $0.005 each 2,950,074 2,833,525 2,950,074 2,833,525

Share Premium 3,463,250 3,291,039 3,463,250 3,291,039
73
21 ORDINARY SHARE CAPITAL AND SHARE PREMIUM (continued)
21.1 Dividend Paid

The company declared a final dividend of $0.096 cents per share in respect of the year 2017. (2016 : 0.074 cents per share).

21.2 Share options
Shareholders approved a share option scheme for 55,945,016 shares on 18 May 2010. Under the share option scheme, all permanent employees
of the company are awarded share options based on their grade in the organization, their individual performance in the year and the years served in
the organization. The allocation criterion is applied equally across both management and all permanent staff who have been with the company for
at least one year at the time of granting are eligible per the scheme rules. Granted share options are exercised 40% after first year, up to 80% after
second year and in full after third year. There were no share options granted in 2017.
Movements during the year pertains to only exercised share options.

The following table illustrates the number and weighted average exercise price (WAEP) of and movements in share options during the year

Movements during the year 2017 2017 2016 2016
Number WAEP Number WAEP

Outstanding at 1 January 26,325,511 1.30 33,512,655 1.30
Exercised during the year (23,249,965) 1.30 - 1.30
Forfeited shares - - (7,187,144) -
Expiry during the year - - - -
Outstanding as at 31 December 3,075,546 - 26,325,511 -
Exercisable as at 31 December
The weighted average remaining contractual life for the share options outstanding as at 31 December 2017 was 1.75 years (2016- 2.75 years)

The share options were valued by an independent value using the Black-Scholes-Merton valuation model. Inputs into the Black-Scholes-Merton
valuation model are given below:

2017
Description Symbol Value Comment

Current price S0 1.30 cents Market price at grant date ( 10 March 2015)
Exercise Price K 1.30 cents As agreed by Board on resolution
Time period T 2.75 Expected expiry of options in terms of scheme
Excepted volatility δ 0 Annualised standard deviation of share price daily returns for 3 years to
31 December 2015
Risk free rate r 8% Estimated average risk-free yield on 3-year government securities
Dividend yield Y 4.23% Average dividend yield for the three years

2016
Description Symbol Value Comment
Current price S0 1.30 cents Market price at grant date ( 10 March 2015)
Exercise Price K 1.30 cents As agreed by Board on resolution
Time period T 3 years Expected expiry of options in terms of scheme
Excepted volatility δ 0 Annualised standard deviation of share price daily returns for 3 years to
31 December 2015
Risk free rate r 8% Estimated average risk-free yield on 3-year government securities
Dividend yield Y 4.23% Average dividend yield for the three years
74
21 ORDINARY SHARE CAPITAL AND SHARE PREMIUM (continued)
21.2.1 Share option costs

The movement of the share option reserve are shown through the retained earnings in 2017 and profit or loss in 2016 (see note 8.4). The movement
in 2017 was ( $110,518), ( 2016:-$1,078).
22 INSURANCE AND OTHER PAYABLES Group Group Company Company

2017 2016 2017 2,016
US$ US$ US$ US$
Due to policy holders, reinsurers 3,289,166 3,715,811 3,054,727 3,403,246
Other payables and accruals 3,657,822 2,903,112 2,837,521 2,507,949
Insurance payables are non interest bearing and are normally settled on 30 day terms.
Other payables are non interest bearing and have an average term of 60 days.
22.1 A further breakdown of other payable and accruals is as listed below:
Salary related accruals 310,562 84,611 72,363 61,693

Other Accruals 225,851 243,088 221,038 241,862
Motor Levy payable 491,570 594,550 477,148 571,095
Stamp duty 352,291 777,277 352,291 775,799
Deferred revenue (premiums paid in advance) 200,329 344,661 51,528 344,661
Dividend Payable 77,935 67,258 74,316 67,258
Leave Pay provision 439,321 151,305 191,668 151,305
VAT accrual 647,124 - 484,324 -
Commission payable 540,108 - 540,108 -
Other payables 372,731 640,362 372,737 294,276
3,657,822 2,903,112 2,837,521 2,507,949
22.2 Leave Pay Provision Reconciliation

Carrying Amount as at 1 January 151,305 142,729 151,305 142,729
Additional provision 296,881 19,650 49,228 19,650
Amounts paid (8,865) (11,074) (8,865) (11,074)
Carrying amount as at 31 Decemebr 439,321 151,305 191,668 151,305

23 INSURANCE PROVISIONS
Outstanding claims provision 6,430,823 6,354,164 3,531,198 3,009,292
Incurred but not reported claims reserve 2,242,713 2,332,350 1,517,807 1,328,847
Total outstanding claims and IBNR 8,673,536 8,686,514 5,049,005 4,338,139
Unearned premium provision 7,516,682 6,352,134 4,949,472 4,453,588
Balance at 31 December 16,190,218 15,038,648 9,998,477 8,791,727

The insurance provisions as at 31 December 2017 and 31 December 2016 for the Company are actuarially determined in accordance with IPEC
guidelines. The inputs which have a significant effect on the recorded fair value are based on observable historical company and market data.
23.1 Movement in outstanding claims and IBNR

Opening balance 8,686,514 7,842,935 4,338,139 3,958,833
Exchange rate movement on foreign operations (156,054) (848,635) - -
Utilised in the year (5,300,783) (3,175,705) (948,534) (2,649,544)
Raised in the year 5,550,787 4,952,337 1,766,328 3,113,268
Claims payable (106,928) (84,418) (106,928) (84,418)
Closing balance 8,673,536 8,686,514 5,049,005 4,338,139
23.2 Movement in unearned premium reserve Group Group Company Company

2017 2016 2017 2,016
US$ US$ US$ US$
Opening balance 6,352,134 6,826,960 4,453,588 4,801,119
Exchange rate movement on foreign operations 108,963 (486,637) - -
Utilised in the year (2,243,209) (4,426,466) (2,243,209) (4,374,329)
Raised in the year 3,298,794 4,414,657 2,739,093 4,026,798
Closing balance 7,516,682 6,352,134 4,949,472 4,453,588

75
24 CASH RECEIPTS FROM CUSTOMERS

2017 2016 2017 2,016
US$ US$ US$ US$
Opening balance for insurance and other receivables (excluding prepayments) 12,291,150 12,338,143 7,862,504 6,572,135
Discontinued operation - (625,576) - -
Gross premiums receivable for the year 38,364,050 36,999,972 31,048,637 29,581,924
Other gross receivables for the year 2,440,550 2,145,711 2,089,784 1,682,480
Unrealised exchange gains (63,877) (37,640) 63,444 (37,640)
Dividend received 42,119 37,793 369,422 37,793
Rentals revenue 377,996 292,173 72,549 66,287
Closing balance for trade and other debtors (excluding prepayments) (12,566,282) (12,291,150) (7,324,908) (7,862,504)
Cash received 40,885,706 38,859,426 34,181,432 30,040,475
25 CASH PAID TO SUPPLIERS AND EMPLOYEES

Opening balance for current liabilities (excluding tax) (21,906,005) (21,760,130) (14,765,574) (13,920,457)
Discontinued operation - 1,018,304 - -
Gross premiums payable/cedable for the year (12,809,715) (12,767,084) (11,341,582) (10,565,969)
Gross payables for benefits and claims, commission (18,970,462) (19,168,918) (15,371,229) (14,338,287)
Operating expenses (less depreciation) (7,727,617) (6,652,840) (5,143,367) (4,903,536)
Prepayments (21,474) (32,149) (16,601) (29,835)
Movement in inventories (946) 23,498 (946) 23,498
Closing balance for current liabilities (excluding tax) 23,506,003 21,906,005 16,044,164 14,765,574
Cash paid (37,930,216) (37,433,314) (30,595,135) (28,969,012)

26 RISK MANAGEMENT FRAMEWORK
26.1 Governance frame work
The primary objective of the Group’s risk and financial management framework is to protect the Group’s shareholders from events that hinder
the sustainable achievement of financial performance objectives, including failing to exploit opportunities. Key management recognises the critical
importance of having efficient and effective risk management systems in place. The Group established a risk management function with clear terms
of reference from the Board of Directors, Audit and Risk Management committee and the Management Committees. A Group policy framework which
sets out the risk profiles for the Group, risk and management control has been put in place. Each risk identified has controls put in place to counter
it and a member of senior management charged with overseeing compliance.
The Audit and Risk Management committee of the Board approves the Group risk management policies. These policies define the Group’s identification
of risk and its interpretation, limit structure to ensure the appropriate quality and diversification of assets, align underwriting and reinsurance strategy
to the corporate goals, and specify reporting requirements.
26.2 Approach to capital management

The Group seeks to optimise the structure and sources of capital to ensure that it is consistently maximising returns to the shareholders.
The Group’s approach to managing capital involves managing assets, liabilities, and risks in a coordinated way, assessing shortfalls between reported
and required capital levels on a regular basis and taking appropriate actions to influence the capital position of the Group in the light of changes
in economic conditions and risk characteristics. An important aspect of the Group’s overall capital management process is the setting of target risk
adjusted rates of return, which are aligned to performance objectives, to ensure that the Group is focused on the creation of value for shareholders.
26.3 Capital Management objectives, policies and approach

The primary source of capital used by the Group is equity shareholders’ funds and reinsurance support. The primary objective of the Group’s capital
management is to ensure that it maintains a strong claims paying ability rating, healthy solvency and liquidity ratios in order to support its business
(underwriting capacity) and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. The Group monitors capital using a solvency ratio calculated as equity divided by Net Premiums Written . As at 31 December
the solvency ratio was 73%(2016: 65%). The solvency ratio comes down to 25.3% when upon factoring the capital guidelines issued by the regulator
mainly relating to the disallowance of Debtors above 90 days. This will however still within the regulatory minimum solvency margin of 25%.

76
26 RISK MANAGEMENT FRAMEWORK (continued)

26.3 Capital Management objectives, policies and approach (continued)
The components of the Capital were as follows: Group Group Company Company
2017 2016 2017 2,016
US$ US$ US$ US$
Share capital 2,949,775 2,833,525 2,949,775 2,833,525
Share premium 3,463,549 3,291,039 3,463,549 3,291,039
Retained earnings 14,916,101 12,514,434 8,321,920 6,186,738
Foreign translation reserve (729,658) (759,173) - -
Other reserves 10,930 121,448 10,930 121,448
Total Equity 20,610,697 18,001,273 14,746,174 12,432,750

26.4 Regulatory framework
Regulators are primarily interested in protecting the rights of policy holders. The Group is monitored closely by the Regulator to ensure that it
satisfactorily manages affairs for the benefit of policyholders. At the same time regulators are also interested in ensuring that the Group maintains an
appropriate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.
The operations of the Group are also subject to regulatory requirements within the jurisdictions in which it operates. Such regulations, also impose
certain restrictive provisions (e.g. Solvency ratios) to minimise the risk of default and insolvency on the part of the insurance companies to meet
unforeseen liabilities as these arise. Minimum capital requirements as set by the Insurance and Pensions Commission in Zimbabwe is $1,500,000,
and the company is meeting the capital requirements.
The Group’s Malawi subsidiary (UGI) is required by the Regulator (Reserve Bank of Malawi) to have a minimum solvency ratio of 20% and a minimum
core capital of MWK750 million, and the company had MWK1.1 billion. As at 31 December 2017 the Company’s solvency ratio as 2.9% which is below
the minimum required ratio. The UGI Board is currently seized with addressing the matter through capital restructuring.
26.5 Insurance and financial risk

The principal risk the Group faces under insurance contracts is that the actual claims and benefit payments or the timing thereof, differ from
expectations. This is influenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long term claims.
Therefore the objective of the Group is to ensure that sufficient reserves are available to cover these liabilities. The above risk exposure is mitigated
by diversification across a large portfolio claims. Therefore, the objective of the Group is to have sufficient reserves available to cover these liabilities.
The risk exposure is mitigated by diversification across a large portfolio of insurance contracts and geographical areas. The variability of risks is also
improved by careful selection and implementation of underwriting strategy guidelines, as well as the use of reinsurance arrangements.
The Group purchases reinsurance as part of its mitigation programme. Reinsurance ceded is placed on both a proportional and non-proportional
basis. The majority of proportional reinsurance is quota-share reinsurance which is taken out to reduce the overall exposure of the Group to
certain classes of business. Non-proportional reinsurance is primarily excess-of-loss reinsurance designed to mitigate the group’s net exposure to
catastrophe losses. Retention limits for the excess of loss reinsurance vary by product line.
Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision and are in accordance with the
reinsurance contracts. Although the Group has reinsurance arrangements, it is not relieved of its direct obligations to its policyholders and thus
a credit exposure exists with respect to ceded insurance, to the extent that any reinsurer is unable to meet its obligations assumed under such
reinsurance arrangements. The Group’s placement of reinsurance is diversified such that it is neither dependant on a single reinsurer nor are the
operations of the Group substantially dependant upon any single reinsurance contract.
The Group principally issues the following type of general insurance contracts: motor, fire, marine, accident, engineering, credit (loan protection)
etc. The variability of risks is improved by careful selection and implementation of underwriting strategies, which are designed to ensure that risks
are diversified in terms of risk and level of insured benefits. This is largely achieved through diversification across industry sectors and geography.
Further, strict claim review policies to assess all lodged claims, regular detailed review of claims handling procedures and frequent investigation of
possible fraudulent claims are all policies and procedures put in place to reduce the risk exposure of the Group. The Group further enforces a policy
of actively managing and promptly pursuing claims, in order to reduce its exposure to unpredictable future developments that can negatively impact
the business.
77

26.5 Insurance and financial risk (continued)
The major source of risk is motor class followed by fire class in both 2017 and 2016.
The table below sets out the concentration of insurance contract liabilities (outstanding claims and IBNR) by type of contract:

2017
Gross Liability Reinsurance recovery Net Liabilities
US$ US$ US$
Motor 8,734,122 2,475,242 6,258,880
Fire 1,998,282 1,093,851 904,431
Marine 87,741 29,220 58,521
Engineering 358,915 169,863 189,052
Accident 1,851,700 945,220 906,480
Credit 545,353 189,181 356,172
13,576,113 4,902,577 8,673,536
2016
Gross Liability Reinsurance recovery Net Liabilities

Motor 6,214,778 612,096 5,602,682
Fire 11,105,543 9,608,744 1,496,799
Marine 132,449 67,173 65,276
Engineering 254,268 73,140 181,128
Accident 1,604,316 413,608 1,190,708
Credit 176,660 28,588 148,072
Farming 2,183 - 2,183
Aviation (334) - (334)
19,489,863 10,803,349 8,686,514

The geographical concentration of the Group’s insurance contract liabilities is noted below. The disclosure is based on the countries where the
business is written.
2017 Gross Liabilities Reinsurance of Liabilities Net Liabilities

Zimbabwe 8,601,627 3,809,313 4,792,314
Malawi 4,974,486 1,093,264 3,881,222
Total 13,576,113 4,902,577 8,673,536
2016 Gross Liabilities Reinsurance of Liabilities Net Liabilities

Zimbabwe 13,501,146 9,526,626 3,974,520
Malawi 5,988,717 1,276,723 4,711,994
Uganda - - -
Total 19,489,863 10,803,349 8,686,514
Key assumptions
Material judgement is required in determining the liabilities and in the choice of assumptions. Assumptions in use are based on past experience,
current internal data, external market indices and benchmarks which reflect current observable market prices and other published information.
Assumptions and prudent estimates are determined at the date of valuation and no credit is taken for possible beneficial effects of voluntary
withdrawals. Assumptions are further evaluated on a continuous basis in order to ensure realistic and reasonable valuations.
78

Claims Development table

The following table is an assessment for Incured but Not Reported Reserve (IBNR) and outstanding claims since 2010 on a net of reinsurance basis.

Loss year 2010 2011 2012 2013 2014 2015 2016 2017 Total
Year Paid US$ US$ US$ US$ US$ US$ US$ US$ US$

0 4,639,755 6,559,505 5,144,035 5,819,842 6,029,252 6,888,998 8,235,332 8,579,915
1 4,639,755 6,559,505 5,144,035 5,819,842 6,029,252 6,888,998 8,235,332
2 4,639,755 6,559,505 5,144,035 5,819,842 6,029,252 6,888,998
3 4,639,755 6,559,505 5,144,035 5,819,842 6,029,252
4 4,639,755 6,559,505 5,144,035 5,819,842
5 4,639,755 6,559,505 5,144,035
6 4,639,755 6,559,505
7 4,639,755 - - - - - - - -
Cumulative estimate of cumulate
claims incurred 4,639,755 6,559,505 5,144,035 5,819,842 6,029,252 6,888,998 8,235,332 8,579,915 51,896,634

Cumulative Paid Claims

Loss Year 2010 2011 2012 2013 2014 2015 2016 2017 Total
0 4,113,524 5,889,160 4,512,121 4,982,553 5,198,046 5,970,120 6,906,485 7,062,109

1 555,011 7,918,356 6,093,969 7,277,645 7,666,312 8,428,731 9,492,690
2 5,644,391 8,190,586 6,262,696 7,437,342 7,996,126 8,782,967
3 6,016,865 8,259,906 6,275,710 7,440,918 8,118,423
4 6,075,880 8,307,596 6,294,887 7,452,210
5 6,079,615 8,327,995 6,313,877
6 6,079,615 8,328,237
7 6,081,630

Cumulative payments to date 6,081,630 8,328,237 6,313,877 7,452,210 8,118,423 8,782,967 9,492,690 7,062,109 61,632,143

Current estimate of surplus/(deficiency) (1,441,875) (1,768,732) (1,169,842) (1,632,368) (2,089,171) (1,893,969) (1,257,358) 1,517,806 (9,735,509)

% Surplus/(deficiency) of initial gross reserve -31% -27% -23% -28% -35% -27% -15% 18% -19%

In constructing the table we made some changes outlined below:
• The Company does not revise its IBNR estimates so we have allowed for this in our tables
• The tables supplied as at 31 December 2017 allowed for changes in estimates but we have changed this to be in line with Company policy.

79

Sensitivities
The following analysis is performed for reasonably possible movements in key assumptions with all other assumptions held constant, showing the
impact on gross, and net liabilities, profit before tax and equity.
31 December 2017
Changes in Impact on gross Impact on Impact on profit Impact
assumptions liabilities net liabilities before tax on equity

Average claim cost +10% 409,385 409,385 (409,385) (409,385)

31 December 2016
Changes in Impact on gross Impact on Impact on profit Impact
assumptions liabilities net liabilities before tax on equity

Average claim cost +10% 78,833 78,833 (78,833) (78,833)
27 CREDIT RISK
Credit risk is risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation.
The following policies and procedures are in place to mitigate the Group’s exposure to credit risk:
- Net exposure limits are set for each counterparty or group of counterparties each year by the Board of Directors, (i.e. limits are set for investments
counterparties and cash deposits).
- Reinsurance is placed with counter parties that have a good credit rating and concentration of risks is avoided by following policy guidelines in
respect of counterparties’ limits that are set each year by the Board of Directors and are subject to regular reviews.
At each reporting date, management performs an assessment of creditworthiness of reinsurers and review the reinsurance placement strategy.
- Risks arising on uncertainty in underwriting are managed through termination of policies.

Collateral
The amount and type of collateral required depends on an assessment of the credit risk of the counterparty.
Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or
have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other
conditions. Concentrations indicate the relative sensitivity of the Group’s performance to developments affecting a particular industry.

Credit risk from balances with banks and financial institutions is managed by the Group’s Investment committee in accordance with the Group’s policy.
Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.
The limits are set to minimise the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make
payments.
27.1 Credit Exposure

The Group’s maximum exposure to credit risk is equal to the carrying amounts of financial assets as disclosed on the statement of financial position.
The Group’s maximum exposure for financial guarantees is equal to the maximum amount the entity could have to pay if the guarantee is called on.
The maximum risk exposure presented below does not include the exposure that arise in the future as a result of the changes in values.

31 December 2017 $
Financial guarantees 826,935

31 December 2016
Financial guarantees 526,935
80
27 CREDIT RISK (continued)

27.2 Liquidity Risk
Liquidity risk is that risk that the Group will encounter difficulty in meeting obligations associated with financial instruments. The following policies and
procedures are in place to mitigate the Group’s exposure to liquidity risk.
- Guidelines are set for asset allocation, portfolio limit structures and maturity profiles of assets in order to ensure sufficient funding is available
to meet insurance and investment contracts obligations.
- Contingency funding plans are in place, which specify minimum proportion of funds to meet emergency calls as well as specifying events that
trigger such plans.
Maturity Profiles
The Group maintains a portfolio of highly marketable and diverse assets that can be easily liquidated in the event of an unforeseen interruption of cash
flow. The table that follows summarises the maturity profile of the non-derivative financial assets and financial liabilities of the Group.
Unearned premiums have been excluded from the analysis as they are not contractual obligations.
Maturity Analysis (contractual undiscounted cash flow basis)

Group
2017 Carrying Amount Up to one year 1-3 years Total
US$ US$ US$ US$
Financial Assets
Investment in unquoted equities 17,493 17,493 - 17,493
Investment held to maturity 1,711,014 - 1,957,463 1,957,463
Insurance receivables 10,704,350 10,704,350 - 10,704,350
Related party receivables 248,086 248,086 - 248,086
Other receivables 2,152,264 1,781,573 370,691 2,152,264
Short-term investments 5,203,866 5,203,866 - 5,203,866
Cash and cash equivalents 6,297,644 6,297,644 - 6,297,644
Total undiscounted assets 26,334,717 24,253,012 2,328,154 26,581,166

Financial Liabilities
Insurance payables 3,289,166 3,289,166 - 3,289,166
Related party payables 368,796 368,796 - 368,796
Other payables and accruals 3,657,822 3,657,822 - 3,657,822
Claims payable 16,190,218 16,190,218 - 16,190,218
Total undiscounted liabilities 23,506,002 23,506,002 - 23,506,002

Net liquidity surplus 2,828,715 747,010 2,328,154 3,075,164
Company
US$ US$ US$ US$
Financial Assets
Other receivables and prepayments 899,963 616,753 283,210 899,963
Claims payable 9,998,477 9,998,477 - 9,998,477
Total undiscounted Liabilities 16,044,171 16,044,171 - 16,044,171

Net liquidity surplus 3,612,385 1,618,161 2,240,673 3,858,834
81

27.2 Liquidity Risk (continued)
Group
US$ US$ US$ US$
Financial Assets
Other receivables 830,184 567,851 262,333 830,184

Claims payable 15,038,648 15,038,648 - 15,038,648
Net liquidity surplus (146,110) (3,116,625) 3,423,816 307,191

Company
Financial Assets
Other receivables 640,389 487,736 152,653 640,389


Claims payable 8,791,727 8,791,727.00 - 8,791,727
Net liquidity surplus 1,223,035 (1,637,800) 3,314,136 1,676,336

82

27.3 Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk
comprises three types of risk: foreign exchange rates (currency risk), market interest rates (interest rate risk) and market prices, (price risk).

(a) Foreign Currency Risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The Group’s principal transactions are carried in United Sates Dollars and its exposure to foreign exchange risk arise primarily with respect to South
African Rand and Malawian Kwacha. The Group’s financial assets are primarily denominated in the same currencies as its insurance and investment
contract liabilities, which mitigates the foreign currency exchange rate risk for the foreign operations. Thus the main foreign exchange risk arises
from recognised assets and liabilities denominated in currencies other than those in which insurance and investment contract liabilities are expected
to be settled.

Foreign Currency Sensitivity
The Group’s principal foreign currency exposures are to the USD against the Malawian Kwacha . The table below illustrate the hypothetical
sensitivity to the Group’s reported profit (I/S) and net assets (Equity) to a 10% increase and decrease in the US$/Mal Kwacha (MWK) exchange
rates at the year end date, assuming all other variables remain unchanged. The sensitivity of 10% represents the Directors’ assessment of a possible
change.

2017 P/L (US$) Equity (US$)
US$ weakens by 10% to MWK (44,783) (182,895)
US$ strengthens by 10% to MWK 54,735 223,539
Exchange rate applied USD: MWK 726 725
2016 P/L (US$) Equity (US$)

US$ weakens by 10% to MWK (93,515) (137,904)
US$ strengthens by 10% to MWK 76,512 168,549
Exchange rate applied USD: MWK 711 726
Positive figures represent an increase in profit or increase in value on net assets.
(b) Interest rate risk

Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The
Group’s exposure to the risk of changes in market interest rates relates primarily to the held to maturity, cash and cash equivalents and short term
investments which carry fixed interest rates. The Group is not exposed to the risk of changes in market interest rates as a result of the fixed nature
of interest rates. As a result of the fixed nature of interest rates, no sensitivity analysis has been presented.
(c) Equity Price Risk

Equity price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other
than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument
or its issuer, or factors affecting all similar financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
A substantial part of the Group’s equity portfolio comprises listed counters. Unlisted counters are subjected to periodic financial analysis and
review. The Group’s equity price risk policy is to manage such risks by setting and monitoring objectives on investments, setting limits and ensuring
diversification of the portfolio. The Board reviews and approves all the equity investment decisions.
Below is a table showing the impact on the group profit before tax and fair values due to changes in market prices. There is no impact on equity

31 December 2017 analysis: Impact on profit before tax
US$
10% 209,326
-10% (209,326)

31 December 2016 analysis: Impact on profit before tax
US$
10% 42,647
-10% (42,647)

At the reporting date, the exposure to listed equity securities at fair value through profit and loss was $209,326 [2016:($42,647)].
83

27.4 Operational risk
Operational risk is the risk of loss arising from system failure, human error, fraud or external events. When controls fail to perform, operational
risks can cause damage to reputation, have legal or regulatory implications or can lead to financial loss. The Group cannot expect to eliminate all
operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risks, the Group is able to manage the
risks. Controls include effective segregation of duties, access controls authorisation and reconciliation procedures, staff education and assessment
processes, including the use of internal audit. Business risks such as changes in environment technology and the industry are monitored through the
Group’s strategic planning and budgeting process.
28 CONTINGENCIES AND COMMITMENTS

(a) The Group operates in the insurance industry and is subject to legal proceedings in the normal course of business. The Group is also subject to
insurance solvency regulations in all the territories where it operates and has complied with all these solvency regulations. There are no contingencies
associated with the Group’s compliance or lack of compliance with such regulations. No changes were made in the objectives, policies or processes
during the years.
b) Stamp Duty
In 2015 the tax authorities observed that the non-life insurance industry in Zimbabwe was not complying with the requirements of the Finance Act
when computing and collecting Stamp Duty from clients. This would have resulted in significant Stamp Duty obligations to the tax authorities by the
company. However, the matter was resolved amicably and the industry was pardoned by the Ministry of Finance and Economic Development. As a
result, the potential tax obligations were not accrued by the company.
(c) Commitments:
2017 2016 2017 2016
US$ US$ US$ US$
Authorised capital expenditure for the period 1,040,204 1,841,808 641,550 1,439,056
Actual expenditure for the period 252,317 597,691 77,874 392,958
29 OPERATING LEASE COMMITMENTS - GROUP AS LESSOR

The Group has entered into commercial property leases on its investment property portfolio, consisting of the Group’s surplus office and residential
buildings. These property leases typically have lease terms of between 1-3 years and include clauses which enable periodic upward revision of the
rental charge according to prevailing market conditions. Some leases contain options to cancel before the end of the lease term.
Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

2017 2016 2017 2016
US$ US$ US$ US$
Within 1 year 801,918 320,744 447,791 86,729
*Due to uncertainties that exists in the operating environment, rentals due from operating leases for periods beyond one year could not be determined
since lease agreements contain escalation clauses. The rates of which are determined from time to time by prevailing market conditions.
30 STANDARDS ISSUED BUT NOT YET EFFECTIVE

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed
below. The Group intends to adopt these standards, if applicable, when they become effective.
IFRS 9 Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and
Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project:
classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018,
with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not
compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
During 2017, the Group performed a high-level impact assessment of all three aspects of IFRS 9. This preliminary assessment is based on currently
available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being
made available to the Group in the future. The Group will perform a detailed assessment in the future to determine the extent. The group meets the
eligibility criteria of the temporary exemption from IFRS 9 and intends to defer the application of IFRS 9 until the effective date of the new insurance
contracts standard (IFRS 17) of annual reporting periods beginning on or after 1 January 2021, applying the temporary exemption from applying IFRS
9 as introduced by the amendments (see below).
84
30 STANDARDS ISSUED BUT NOT YET EFFECTIVE (continued) SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the
Substance of Transactions Involving the Legal Form of a Lease.
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments IFRS 16 sets out the principles for the recognition, measurement,
with IFRS 4 Insurance Contracts presentation and disclosure of leases and requires lessees to account
In September 2016, the IASB issued amendments to IFRS 4 to for all leases under a single on-balance sheet model similar to the
address issues arising from the different effective dates of IFRS accounting for finance leases under IAS 17. The standard includes
9 and the new insurance contracts standard (IFRS 17). The two recognition exemptions for lessees – leases of ’low-value’ assets
amendments introduce two alternative options of applying IFRS 9 (e.g., personal computers) and short-term leases (i.e., leases with
for entities issuing contracts within the scope of IFRS 4: a temporary a lease term of 12 months or less). At the commencement date of
exemption; and an overlay approach. The temporary exemption a lease, a lessee will recognise a liability to make lease payments
enables eligible entities to defer the implementation date of IFRS 9 (i.e., the lease liability) and an asset representing the right to use
for annual periods beginning before 1 January 2021 and continue to the underlying asset during the lease term (i.e., the right-of-use
apply IAS 39 to financial assets and liabilities. An entity may apply asset). Lessees will be required to separately recognise the interest
the temporary exemption from IFRS 9 if: (i) it has not previously expense on the lease liability and the depreciation expense on the
applied any version of IFRS 9, other than only the requirements for right-of-use asset.
the presentation of gains and losses on financial liabilities designated
as FVPL; and (ii) its activities are predominantly connected with Lessor accounting under IFRS 16 is substantially unchanged from
insurance on its annual reporting date that immediately precedes 1 today’s accounting under IAS 17. Lessors will continue to classify
April 2016. The overlay approach allows an entity applying IFRS 9 all leases using the same classification principle as in IAS 17 and
to reclassify between profit or loss and other comprehensive income distinguish between two types of leases: operating and finance
an amount that results in the profit or loss at the end of the reporting leases.
period for certain designated financial assets being the same as if an
entity had applied IAS 39 to these designated financial assets. IFRS 16 also requires lessees and lessors to make more extensive
disclosures than under IAS 17.
An entity can apply the temporary exemption from IFRS 9 for annual
periods beginning on or after 1 January 2018. An entity may start IFRS 16 is effective for annual periods beginning on or after 1
applying the overlay approach when it applies IFRS 9 for the first January 2019. Early application is permitted, but not before an entity
time. applies IFRS 15. A lessee can choose to apply the standard using
either a full retrospective or a modified retrospective approach. The
During 2016, the Group performed an assessment of the standard’s transition provisions permit certain reliefs. The Group
amendments and reached the conclusion that its activities are does not expect the impact to be significant.
predominantly connected with insurance as at 31 December 2016.
During 2017, there had been no significant change in the activities of IFRS 2 Classification and Measurement of Share-based Payment
the Group that requires reassessment. The Group intends to apply Transactions — Amendments to IFRS 2
the temporary exemption from IFRS 9 and, therefore, continue to The IASB issued amendments to IFRS 2 Share-based Payment that
apply IAS 39 to its financial assets and liabilities in its reporting address three main areas: the effects of vesting conditions on the
period starting on 1 January 2018. measurement of a cash-settled share-based payment transaction;
the classification of a share-based payment transaction with net
IFRS 15 Revenue from Contracts with Customers settlement features for withholding tax obligations; and accounting
IFRS 15 was issued in May 2014 and establishes a five-step model for a modification where the terms and conditions of a share-based
to account for revenue arising from contracts with customers. Under payment transaction changes its classification from cash settled to
IFRS 15, revenue is recognised at an amount that reflects the equity settled.
consideration to which an entity expects to be entitled in exchange
for transferring goods or services to a customer. On adoption, entities are required to apply the amendments without
restating prior periods, but retrospective application is permitted if
The new revenue standard will supersede all current revenue elected for all three amendments and other criteria are met. The
recognition requirements under IFRS. Either a full retrospective amendments are effective for annual periods beginning on or after
application or a modified retrospective application is required for 1 January 2018, with early application permitted. The Group is
annual periods beginning on or after 1 January 2018. Early adoption assessing the potential effect of the amendments on its consolidated
is permitted. The Group expects to apply IFRS 15 using the modified financial statements.
retrospective application. Given insurance contracts are scoped
out of IFRS 15, the Group expects the main impact of the new IFRS 17 Insurance Contracts
standard to be on the accounting for income from administrative and In May 2017, the IASB issued IFRS 17 Insurance Contracts, a
investment management services. The Group does not expect the comprehensive new accounting standard for insurance contracts
impact to be significant. covering recognition and measurement, presentation and disclosure,
which replaces IFRS 4 Insurance Contracts.
IFRS 16 Leases
IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases,
IFRIC 4 Determining whether an Arrangement contains a Lease,
85
30 STANDARDS ISSUED BUT NOT YET EFFECTIVE (continued) IAS 40 - Transfer of Investment Property (Amendments to IAS
40)
IFRS 17 Insurance Contracts (continued) (effective for annual financial statements for periods beginning on
In contrast to the requirements in IFRS 4, which are largely based on or after 1 January 2018)The amendments to IAS 40 Investment
grandfathering previous local accounting policies for measurement Property;
purposes, IFRS 17 provides a comprehensive model (the general -Amends paragraph 57 to state that an entity shall transfer a
model) for insurance contracts, supplemented by the variable fee property to or from investment property when, and only when, there
approach for contracts with direct participation features that are is evidence of a change in use. A change of use occurs if the property
substantially investment-related service contracts, and the premium meets or ceases to meet the definition of investment property. A
allocation approach mainly for short-duration which typically applies change in management’s intentions for the use of the property by
to certain non-life insurance contracts. itself does not constitute evidence of a change in use.
-The list of examples of evidence in paragraph 57(a) – (d) is now
The main features of the new accounting model for insurance presented as a non-exhaustive list of examples instead of the
contracts are, as follows: previous exhaustive list. The group expects to adopt the requirements
•The measurement of the present value of future cash flows, and will implement in all future transfers as they arise.
incorporating an explicit risk adjustment, remeasured every reporting
period (the fulfilment cash flows) IFRIC Interpretation 22
• A Contractual Service Margin (CSM) that is equal and opposite to Foreign Currency Transactions and Advance Consideration Effective
any day one gain in the fulfilment cash flows of a group of contracts. for annual periods beginning on or after 1 January 2018
The CSM represents the unearned profitability of the insurance
contracts and is recognised in profit or loss over the service period Key requirements
(i.e., coverage period) The interpretation clarifies that in determining the spot exchange rate
• Certain changes in the expected present value of future cash flows to use on initial recognition of the related asset, expense or income
are adjusted against the CSM and thereby recognised in profit or loss (or part of it) on the derecognition of a nonmonetary asset or non-
over the remaining contractual service period monetary liability relating to advance consideration, the date of the
• The effect of changes in discount rates will be reported in either transaction is the date on which an entity initially recognises the non-
profit or loss or other comprehensive income, determined by an monetary asset or nonmonetary liability arising from the advance
accounting policy choice consideration. If there are multiple payments or receipts in advance,
• The recognition of insurance revenue and insurance service then the entity must determine a date of the transactions for each
expenses in the statement of comprehensive income based on the payment or receipt of advance consideration. The interpretation is
concept of services provided during the period effective for the annual periods beginning on or after 1 January 2018
• Amounts that the policyholder will always receive, regardless The Group will apply the interpretation from its effective date.
of whether an insured event happens (non-distinct investment
components) are not presented in the income statement, but are IFRIC Interpretation 23 Uncertainty over Income Tax Treatment
recognised directly on the balance sheet The Interpretation addresses the accounting for income taxes when
• Insurance services results (earned revenue less incurred claims) tax treatments involve uncertainty that affects the application of IAS
are presented separately from the insurance finance income or 12 and does not apply to taxes or levies outside the scope of IAS 12,
expense nor does it specifically include requirements relating to interest and
• Extensive disclosures to provide information on the recognised penalties associated with uncertain tax treatments.
amounts from insurance contracts and the nature and extent of risks The Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments
arising from these contracts.
separately
• The assumptions an entity makes about the examination of
IFRS 17 is effective for annual reporting periods beginning on or after
tax treatments by taxation authorities
1 January 2021, with comparative figures required. Early application
• How an entity determines taxable profit (tax loss), tax bases,
is permitted, provided the entity also applies IFRS 9 and IFRS 15 on
unused tax losses, unused tax credits and tax rates
or before the date it first applies IFRS 17. Retrospective application
• How an entity considers changes in facts and circumstances
is required. However, if full retrospective application for a group
An entity must determine whether to consider each uncertain tax
of insurance contracts is impracticable, then the entity is required
treatment separately or together with one or more other uncertain
to choose either a modified retrospective approach or a fair value
tax treatments.
approach.
The approach that better predicts the resolution of the uncertainty
should be followed. The interpretation is effective for annual
The Group plans to adopt the new standard on the required effective
reporting periods beginning on or after 1 January 2019, but certain
date together with IFRS 9 (see above). The Group started a project
transition relief are available. The Group will apply interpretation from
to implement IFRS 17 and has been performing a high-level impact
its effective date.
assessment of IFRS 17. The Group expects that the new standard
will result in an important change to the accounting policies for
31 EVENTS AFTER THE REPORTING PERIOD
insurance contract liabilities of the Group and is likely to have a
There were no events after the reporting date that require
significant impact on profit and total equity together with presentation
disclosure.
and disclosure.
86
SHAREHOLDER ANALYSIS As at 31 December 2017

TOP 10 SHAREHOLDERS
Shareholders No of Shares % Holding
FIRST MUTUAL HOLDINGS LIMITED 477,423,529 80.92

ZIMBABWE ALLIED BANKING GROUP 37,233,118 6.31
LOXMILL INVESTMENTS (PVT) LTD 21,140,413 3.58
LOCAL AUTHORITIES PENSION FUND 9,991,914 1.69
GURAMATUNHU FAMILY TRUST 4,898,784 0.83
NAGAR DHANUSK 1,901,330 0.32
REMO INVESTMENT BROKERS 1,850,062 0.31
NCUBE NTOKOZO 1,611,852 0.27
THE TAKUPANA TRUST 1,404,000 0.24
MURADZIKWA GRACE 1,122,763 0.19
Shares reported 558,577,765 94.66
Shares not reported 31,436,973 5.34
Shares Issued 590,014,738 100
Holders 5,163

SHARE HOLDING DISTRIBUTION
Range Shares % Shares Holders % Holders
1-500 533,873 0.09 2,535 49.10

501-1000 480,794 0.08 711 13.77
1001-5000 2,523,905 0.43 1,197 23.18
5001-10000 1,715,793 0.29 249 4.82
10001-20000 2,938,305 0.50 213 4.13
20001-50000 4,301,713 0.73 139 2.69
50001-100000 3,552,872 0.60 53 1.03
100001-500000 10,224,668 1.73 48 0.93
500001-1000000 5,165,050 0.88 7 0.14
1000001-99999999999 558,577,765 94.67 11 0.21
Totals 590,014,738 100.00 5,163 100%

SHAREHOLDING PER CATEGORY
Group Code Total Holding Percentage Holding Number of Shareholders Percentage Count
COMPANY LOCAL 488,219,028 84.98 229 4.44

PENSION FUNDS 10,171,912 1.50 14 0.27
NOMINEES LOCAL 2,999,824 0.44 32 0.62
BANK 37,233,118 0.00 1 0.02
LOCAL RESIDENT 42,752,723 11.80 4,815 93.26
INVESTMENT, TRUST AND PROPERTY COMPANIES 7,222,535 1.07 43 0.83
INSURANCE COMPANIES 229,844 0.03 3 0.06
EMPLOYEE 315,676 0.05 13 0.25
NEW NON RESIDENT 864,386 0.13 8 0.15
ESTATES 5,692 0.00 5 0.10
Totals 590,014,738 100.00 5,163 100%
87
DIVIDEND NOTICE
As announced by the Board Chairman, in his statement accompanying the 2017 financial results published on 20 March 2018, the Board has recommended
a dividend of 0.096 cents per share for the year ended 31 December 2017. The dividend shall be payable to members registered in the books of the
company on Friday the 20th of April 2018.
The following timetable will be followed;
• Last Day to Trade Cum Div 16 April 2018
• Shares Trade Ex Div 17 April 2018
• Last Day to Register 20 April 2018
• Dividend Payment Date 27 April 2018
Shareholders are requested to submit/update their bank details to the Transfer Secretaries;
ZB Transfer Secretaries (Pvt) Ltd

1st Floor, 21 Natal Road Tel: +2638677002001, 04-2934585
Avondale rmutakwa@zb.co.zw; pmberikwazvo@zb.co.zw; smahaja@zb.co.zw.
Harare
Zimbabwe
Submissions can also be made at any ZB Bank branch
By Order of the Board NicozDiamond Insurance Limited
G Zvaravanhu
Company Secretary
5 April 2018
88

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NICOZDIAMOND INSURANCE LIMITED 2017 ANNUAL REPORT

07 Corporate Social Responsibility

16 Directorate & Management

DIRECTORS James Karidza (Chairperson)

COMPANY SECRETARY Mrs Gloria Zvaravanhu

AUDITORS Ernst & Young

SHARE TRANSFER SECRETARIES ZB Transfer Secretaries

POSTAL ADDRESS NicozDiamond Insurance

CURRENCY OF FINANCIAL STATEMENTS United States Dollars

PERIOD OF FINANCIAL YEAR 1 January to 31 December 2017

Accountability – Have authority, responsibility, ownership, and meet

Teamwork – Have shared purpose to achieve common goals

Innovation – Doing something differently, adding value and being cost

NICOZDIAMOND offers a wide range of short term insurance

Business Combined Insurance

Commercial Insurance- Assets Policy

Underwritten on an Asset based policy wording incorporating

PRODUCT OVERVIEW continued

Policy Type Cover Provided

Theft Loss of contents, stock and machinery as a result of theft

Glass Breakage of external and internal fixed glass

Goods in-transit Damage to property whilst in transit by road, rail or air

Accidental damage Accidental damage to property at premises

Fidelity Guarantee Loss due to dishonesty or fraud by employees

Group Personal Accident Death or disability to insured persons due to an accident

United General Insurance Company Limited

are consolidated into the group results.

CORPORATE SOCIAL RESPONSIBILITY

The company hosted a successful charity winter ball whose theme

NDI continues to look into ways of improving its fundraiser to enable

Faith Mariwi handing over donation to Midlands Children’s Home

When it all falls, will you

STATEMENT OF CORPORATE GOVERNANCE

OVERVIEW OF SYSTEM OF GOVERNANCE INSIDER TRADING

CORPORATE GOVERNANCE continued

Audit & Risk Executive

Bruce Campbell Independent

CORPORATE GOVERNANCE continued

Board Committee Structures and Responsibility

CORPORATE GOVERNANCE continued

Committee Composition Roles and Responsibilities

Thembiwe Chikosi Mazingi – Independent Non-Executive Director (Vice Chairperson)

Grace Muradzikwa – Executive Director (Managing Director)

Bruce Campbell – Independent Non-Executive Director

Kiritkumar Naik – Independent Non-Executive Director

Nester Mukwehwa – Non-Executive Director

Daphine Tomana - Non-Executive Director

Douglas Hoto – Non Executive Director

DIRECTORATE and MANAGEMENT

NON- EXECUTIVE EXECUTIVE MANAGEMENT

EXECUTIVE REMUNERATION COMMITTEE

Despite being affected by numerous challenges ranging from cash and

Business acquisition costs were similarly on the increase as there were

Given the constrained liquidity situation, the pressure to extend payment

The property market continued to be characterised by increased voids

The regional investments in Malawi and Mozambique showed positive

CHAIRMAN’S STATEMENT continued

REGULATORY ENVIRONMENT INDEPENDENT RATING AND CERTIFICATION

FINANCIAL PERFORMANCE OVERVIEW DIVIDEND

MANAGING DIRECTOR’S REPORT continued

TECHNICAL PERFORMANCE REVIEW

70% 68% 65%