Al Ain Ahlia Insurance Company Public
Shareholding Company
INTERIM CONDENSED FINANCIAL STATEMENTS
30 JUNE 2008 (UNAUDITED)
Board of Directors' Report
We are pleased to submit our report regarding the company's
business and activities during the 2nd quarter of 2008 along
with auditor's report in addition to summary of the financial
statement for the period ended 30th June 2008.
The company continues its balanced policy in both the fields
of insurance and investments.
Despite the extreme
competition in the market, the company maintains its advanced
position and continuous development especially in the
insurance business and achieved the following results.
Total premium value up to 30/06/2008 is an amount of AED.
358,196,650/= and the amount of net profit during the same
period in 2008 is AED. 73,306,477/=.
Board of Directors
REPORT ON REVIEW OF THE INTERIM CONDENSED FINANCIAL STATEMENTS TO
THE BOARD OF DIRECTORS OF AL AIN AHLIA INSURANCE COMPANY - PUBLIC
SHAREHOLDING COMPANY
Introduction
We have reviewed the accompanying interim condensed financial statements of Al Ain Ahlia Insurance
Company – Public Shareholding Company (“the Company”) as at 30 June 2008 comprising of the interim
balance sheet as at 30 June 2008, and the related interim income statement for the three month and six
month periods then ended and the related statements of changes in equity and cash flow for the six-month
period then ended and explanatory notes. Management is responsible for the preparation and presentation
of these interim condensed financial statements in accordance with International Financial Reporting
Standard IAS 34 Interim Financial Reporting (“IAS 34”). Our responsibility is to express a conclusion on
these interim condensed financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410,
“Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review
of interim financial information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
interim condensed financial statements are not prepared, in all material respects, in accordance with IAS
34.
Signed by:
Mohammad Mobin Khan
Partner
Ernst & Young
Registration No. 532
Date
Abu Dhabi
Al Ain Ahlia Insurance Company - Public Shareholding Company
INTERIM BALANCE SHEET
At 30 June 2008 (Unaudited)
30 June
2008
(Unaudited)
AED ‘000
31 December
2007
(Audited)
AED ‘000
537,590
479,577
138,386
152,153
289,236
5,463
318,908
611,997
420,820
113,791
146,914
235,318
6,134
281,970
1,921,313
1,816,944
150,000
60,000
600,000
8,083
120,000
60,000
600,000
8,083
134,426
161,338
-
166,082
118,032
60,000
1,113,847
1,132,197
Liabilities arising from insurance contracts:
Gross unearned premiums
Gross outstanding claims
260,879
366,074
249,758
293,356
Accounts payable and accruals
Employees’ end of service benefits
626,953
166,074
14,439
543,114
129,006
12,627
Total liabilities
807,466
684,747
1,921,313
1,816,944
Notes
ASSETS
Cash and bank balances
Investment securities – available for sale
Accounts receivable and prepayments
Reinsurer’s share in unearned premiums
Reinsurer’s share in outstanding claims
Property, furniture and equipment
Investment properties
3
TOTAL ASSETS
EQUITY AND LIABILITIES
EQUITY
Share capital
Legal reserve
General reserve
Technical reserve
Cumulative changes in fair value of
available for sale investments
Retained earnings
Proposed dividends
9
Total equity
LIABILITIES
TOTAL EQUITY AND LIABILITIES
_______________________
CHAIRMAN
_______________________
GENERAL MANAGER
The attached notes 1 to 9 form part of these interim condensed financial statements.
2
Al Ain Ahlia Insurance Company - Public Shareholding Company
INTERIM INCOME STATEMENT
Three months and six months ended 30 June 2008 (Unaudited)
Three months ended 30 June
2008
2007
Notes
AED ‘000
AED ‘000
Net underwriting profit
Net investment and other income
7
5
Six months ended 30 June
2008
2007
AED ‘000
AED ‘000
24,109
26,295
21,696
9,319
36,890
55,509
49,830
29,541
50,404
31,015
92,399
79,371
General and administration
(9,130)
(6,538)
(19,093)
(15,775)
PROFIT FOR THE PERIOD
41,274
24,477
73,306
63,596
2.75
1.63
4.89
4.24
OTHER EXPENSES
Basic and diluted earnings per share (AED)
8
The attached notes 1 to 9 form part of these interim condensed financial statements.
3
Al Ain Ahlia Insurance Company - Public Shareholding Company
INTERIM STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2008 (Unaudited)
Share
capital
AED ‘000
Legal
reserve
AED ‘000
General
reserve
AED ‘000
Technical
reserve
AED ‘000
Cumulative
changes in
fair values
of available
for sale
investments
AED ‘000
120,000
60,000
600,000
8,083
166,082
-
-
-
-
(35,090)
-
-
-
-
-
-
3,434
-
-
3,434
Total expense recognised directly in equity
Profit for the period
-
-
-
-
(31,656)
-
73,306
-
(31,656)
73,306
Total income and expense for the period
-
-
-
-
(31,656)
73,306
-
41,650
Balance at 1 January 2008
Recognised gains on sale of
available for sale investments
Net movement in fair value of
available for sale investments
Dividends paid during the period
Bonus shares issued
Balance at 30 June 2008
Balance at 1 January 2007
Recognised gains and losses on sale of
available for sale investments
Net movement in fair value of
available for sale investments
Total income and expense recognised directly in equity
Profit for the period
Total income and expense for the period
Bonus shares issued
Dividends paid during the period
Balance at 30 June 2007
-
-
-
-
-
30,000
-
-
-
-
150,000
60,000
600,000
8,083
134,426
90,000
45,000
500,000
8,083
104,102
-
-
-
-
-
-
-
-
-
-
-
-
63,576
-
Total
AED ‘000
118,032
60,000
1,132,197
-
(60,000)
(60,000)
161,338
-
1,113,847
117,431
45,000
909,616
(1,232)
-
-
(1,232)
64,808
-
-
64,808
63,596
-
63,576
63,596
63,596
-
127,172
-
-
-
63,576
-
-
-
-
120,000
45,000
500,000
8,083
167,678
(30,000)
(35,090)
-
-
4
Proposed
dividends
AED ‘000
-
30,000
-
The attached notes 1 to 9 form part of these interim condensed financial statements.
Retained
earnings
AED ‘000
(30,000)
151,027
(45,000)
-
(45,000)
991,788
Al Ain Ahlia Insurance Company - Public Shareholding Company
CASH FLOW STATEMENT
For the six months ended 30 June 2008 (Unaudited)
Note
Six months ended 30 June
2008
2007
AED ‘000
AED ‘000
OPERATING ACTIVITIES
Profit for the period
Adjustments for:
Depreciation
Unearned premiums
Gain on sale of investment securities – available for sale
Gain on sale of property, furniture and equipment
Provision for employees’ end of service benefits
Interest and dividend income
73,306
63,596
1,085
5,882
(35,090)
(6)
1,823
(17,538)
838
14,356
(1,232)
(34)
870
(22,525)
29,462
55,869
Working capital changes:
Accounts receivable and prepayments
Reinsurers share in outstanding claims
Accounts payable and accruals
Gross outstanding claims
(24,595)
(53,918)
37,068
72,718
(19,844)
(66,939)
(3,278)
84,234
Cash from operations
Employees’ end of service benefits paid
60,735
(11)
50,042
(569)
Net cash from operating activities
60,724
49,473
(338)
19
(37,027)
(150,121)
94,798
17,538
(949)
34
(23,609)
3,724
22,525
(75,131)
1,725
Dividends paid
(60,000)
(45,000)
Cash used in financing activities
(60,000)
(45,000)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(74,407)
6,198
Cash and cash equivalents at beginning of the period
604,497
309,216
530,090
315,414
INVESTING ACTIVITIES
Purchase of property, furniture and equipment
Proceeds from sale of property, furniture and equipment
Purchase of investment properties
Purchase of investment securities – available for sale
Proceeds from sale of investment securities – available for sale
Interest and dividend income received
Net cash (used in) from investing activities
FINANCING ACTIVITIES
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
3
The attached notes 1 to 9 form part of these interim condensed financial statements.
5
Al Ain Ahlia Insurance Company - Public Shareholding Company
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
30 June 2008 (Unaudited)
1
CORPORATE INFORMATION
Al Ain Insurance Company – Public Shareholding Company (the “Company”) is incorporated in Abu Dhabi by Law
No. (18) of 1975, with its principal activity being underwriting of all classes of insurance in accordance with the
provisions of the U.A.E. Federal Law No. (9) of 1984 relating to insurance companies and insurance agents.
The Company is registered as a public shareholding company in accordance with the Federal Law No. (8) of 1984
(as amended) under No. (19). Its head office is situated in Abu Dhabi, United Arab Emirates (P O Box 3077, Abu
Dhabi, United Arab Emirates).
The interim condensed financial statements of the Company were authorised for issuance by the Board of Directors
on _________________.
2
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim condensed financial statements for the six months ended 30 June 2008 have been prepared in accordance
with International Accounting Standard IAS 34, Interim Financial Reporting.
The interim condensed financial statements do not include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the Company’s annual financial statements as at
31 December 2007. In addition, results for the six months ended 30 June 2008 are not necessarily indicative of the
results that may be expected for the financial year ending 31 December 2008.
Accounting policies
The accounting policies used in the preparation of the interim condensed financial statements are consistent with
those used in the preparation of the annual financial statements for the year ended 31 December 2007.
3
CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:
30 June
2008
(Unaudited)
AED ‘000
30 June
2007
(Unaudited)
AED ‘000
Demand deposits and cash
Time deposits
67,353
470,237
25,798
297,116
Cash and bank balances
Statutory deposits
537,590
(7,500)
322,914
(7,500)
Cash and cash equivalents
530,090
315,414
Statutory deposits represent fixed deposits held as guarantee deposits in favour of the Ministry of Economy and
Commerce in accordance with law no. 9 of 1984.
6
Al Ain Ahlia Insurance Company - Public Shareholding Company
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
30 June 2008 (Unaudited)
4
DIVIDENDS
At the Annual General Meeting held on 5 March 2008, the shareholders approved a dividend of AED 5 per share
totalling AED 60 million which was paid during the period ended 30 June 2008.
5
NET INVESTMENT AND OTHER INCOME
Six months ended
30 June
2008
2007
AED ‘000
AED ‘000
Net investment income
Foreign exchange gain
Other income
52,628
21
2,860
23,757
113
5,671
55,509
29,541
Net investment income includes primarily interest and dividend income of AED 17,538,020 (30 June 2007:
AED 22,525,126) and gain on sale of investment securities – available for sale of AED 35,090,230 (30 June 2007:
AED 1,232,072).
6
CONTINGENT LIABILITIES
Contingent liabilities
The Company’s bankers have issued in the normal course of business letters of guarantee in favour of third parties
amounting to AED 3,072,692 (31 December 2007: AED 4,616,581).
Capital expenditure commitments
Estimated capital expenditure contracted for at the balance sheet date but not provided for amounted to
AED 600,000 (31 December 2007: 600,000)
7
SEGMENT REPORTING
For management purposes, the Company is organised into two business segments: Marine and Aviation and Fire and
General Accident. An analysis of the gross written premiums, net premiums earned and the net underwriting result is
shown below:
Marine and aviation
Six months ended
30 June
2008
2007
AED ‘000
AED ‘000
Gross premium written
Net premium earned
Net underwriting profit
Fire and accident
Six months ended
30 June
2008
2007
AED ‘000
AED ‘000
Total
Six months ended
30 June
2008
2007
AED ‘000
AED ‘000
20,216
22,412
337,980
308,171
358,196
330,583
998
1,361
146,005
131,029
147,003
132,390
5,046
4,336
31,844
45,494
36,890
49,830
As the Company’s activities are performed on an integrated basis a segmental analysis of assets and liabilities would
not be meaningful.
The Company is organised as one geographical segment, and consequently, no secondary information is required to
be provided.
7
Al Ain Ahlia Insurance Company - Public Shareholding Company
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
30 June 2008 (Unaudited)
8
BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share is computed by dividing the profit for the period by the weighted average number of
ordinary shares outstanding during the period.
Diluted earnings per share are calculated by dividing the profit for the period by the weighted average number of
ordinary shares outstanding during the period, adjusted for the effects of dilutive instruments.
Three months ended 30 June
2008
2007
Profit for the period (AED ‘000)
Weighted average number of ordinary shares
outstanding during the period
(as adjusted for the issue of bonus shares)
41,274
24,477
73,306
63,596
15,000,000
15,000,000
15,000,000
15,000,000
2.75
1.63
4.89
4.24
Basic and diluted earnings per share (AED)
9
Six months ended 30 June
2008
2007
SHARE CAPITAL
At the Board of Director’s meeting held on 17 March 2008, and based on the authority granted to it by the
shareholders in the extraordinary meeting held on 15 February 2005, it was decided to increase the share capital of
the Company to AED 150 million by issuing AED 30 million bonus shares to owners of shares as at close of trading
on 27 March 2008.
8