jordan international insurance company 2015 annual report - english.pdfannual report 2015 the 20th...

Annual Report2015

JordanInternational

InsuranceCompany

Annual Report 2015

The 20th Annual Report and Consolidated Financial Statement and the Auditor Report for the Year Ended December 31, 2015

شركـــــة األردن الدوليـــة للتأمـــنيJordan International Insurance

TABLE OF CONTENTS

5Chairman’s Letter

13Independent Auditor Report

15Consolidated Statement of Financial Position

16Consolidated Statement of Income

17Consolidated Statement of Comprehensive Income

18Consolidated Statement of Changes in Owners’ Equity

19Consolidated Statement of Cash Flows

20Statement of Underwriting Revenue for the Insurance Licenses

21Statement of Paid Claims Cost for the Insurance Licenses

22Statement of Profits Underwriting for the Insurance Licenses

23Statement of Underwriting Revenue for the Life Insurance Licenses

24Statement of Financial Position for the Life Insurance

25Notes to Consolidated Financial Statements

Annual Report 2015 5

Chairman’s Letter

On behalf of the Board of Directors, it gives me great pleasure to welcome you to the 20th general assembly meeting, and to present to you our audited financial statements and annual report.

The company has achieved its objectives of growing its profitability by generating a net profit of JD 1.6m and growing the company’s net book value from JD 24.4M to JD 25.9M as a result of the positive developments in both insurance and investment operations in 2015.

The company’s solvency margin has also increased from 380% to 413%, making it one of the most liquid insurance companies in Jordan with a very strong balance sheet to cover liabilities and subsequent claims. As a result the company is now the insurer of choice for large corporates and individuals. Additionally, we were recently selected by the leading industry publication “MENA Insurance Review” as the Best Insurer in Jordan for the second year, as a result of the management’s innovative and professional approach to managing the insurance portfolio.

As part of our growth and expansion strategy, we have established a liaison office in Dubai in order to capitalize on the large volume of premiums and business available in the UAE. We are also in the final stages of completing our new offices and retail space in our Amman headquarters, launching a strong HR initiative for the training and talent management of our dynamic and diverse team, and the launch of our commercial brand: Newton Insurance – which will help differentiate JIIG in the local and foreign markets, and provide a platform for us to connect with new opportunities and compete with regards to disruptions occurring in the insurance and financial services industry.

The management continue to adhere to the company’s underwriting principles:

1. Understanding all risk exposures to the company’s insurance portfolio.

2. Assessing conservatively the likelihood of any exposure causing a loss and the probable costs.

3. Setting a premium that will deliver a profit after both prospective loss costs and operating expenses are covered.

4. Developing insurance products that offer better coverage and protection; and that deliver better value to our shareholders.

Jordan International Insurance Company6

On the investment front, the company’s investment portfolio continued to achieve a stellar performance led by our investment in the Royal Jordanian Air Academy. In addition, our brokerage business, Ibda’a Brokerage, has improved profitability as Amman Stock Exchange volumes increased overall. As for our real-estate operating company, Jordan International Investment, the team has commissioned a feasibility and master plan study for the free zone in Hallabat, and has expanded its land bank with an acquisition in Al-Qastal.

The company’s growth strategy for 2016 will focus on:

1. Expanding the corporate insurance product in the cargo and property segments.

2. Growing the retail and SME segment through launching life insurance products and developing the bancassurance distribution channel.

3. Maintaining the current customer base through customer relationship management.

4. Attracting strategic investors to the Free Zone project

5. Building the company’s team and talent base through continued focus on training and performance development.

As indicated in our 2014 annual report, we are pleased to announce that dividends will be distributed for the year 2015. We recommend the distribution of 6% of net profits to shareholders and maintaining a healthy balance of 1.5% of profits to strengthen and enhance our solvency margin.

In conclusion we are confident that Jordan International Insurance’s team will build on the recent successes to achieve the Shareholder’s long-term objectives.

Mazen DarwazehChairman of the Board

Board of Directors


A NEW EQUATION IN INSURANCE

2016 marks a turning point for JIIG. Having restructured and streamlined our processes, and having diversified and trained our teams of experts and front house personnel; we have been focusing our efforts on building relations and understanding the needs of the market and developing services that can offer better solutions to a wider and more diversified pool of corporate and individual clients across all insurance lines. We want to be the constant smart choice for companies seeking excellent insurance packages and value adding solutions.

Additionally we have been able to establish a good reputation in the health business line and this we have achieved through an aggressive plan to provide quality experts, offer fast processing of client transactions, a quality call center and support staff, better data usage, and better co-design and management of corporate package with clients.

Finally our network of partners continues to grow, and we are excited to work closely together to build a brand and product that can continue to compete in an ever changing landscape. Thus our journey of evolution, innovation and learning continues.

The Newton brand represents a move towards the future of insurance. With many companies in the financial services sector experiencing eroding customer trust - brought on by lack of quality service and unclear undifferentiated complex products; customers are left to compare providers based on price or proximity. Additionally, the industry has been experiencing many disruptions that have changed the way customers interact with providers on a fundamental level; and thus opening the door for smaller more innovative firms to compete for a share of wallet and to establish a strong position in this new market as serious contenders.

The mission of the Newton brand is simple: To develop relevant, timely, easy to use solutions through a transparent, responsive and easy to engage with platform. Our dynamic team of employees the “Newtonians” are the force behind our excellent service: Knowledgeable, customer focused and dependable. Our service slogan is: Momentum on your side. We understand that our clients need to focus their energy and time on keeping their lives and business in motion, therefore it is our job to come up with smart ways to manage and organize their insurance needs whether in the long term or on


the go. We are already reinventing the way health, marine, P&C and asset insurance is offered in Jordan and we plan to take this model to other countries in the region in the coming year.

Newton’s vision is to re-invent the way people buy and use insurance through using technology for fast, simple delivery and transparent relationship management, utilizing data to provide preventative advice and information to our clients and partners in real time, and to offer smart mix-and-match coverage that provide individuals, families and businesses the exact right solution at the right time and with flexible customization and renewal options.

Finally, Newton is committed to working closely with key financial service providers, government bodies, local communities, online media, social groups and information partners to create a value network that provides all stakeholders with quality strategic and real-time information, timely targeted reports, smarter solutions and better prediction models to strengthen preventative measures. All this to serve the needs of our members. To keep life in motion. To keep businesses running. To progress. To be prepared for whatever is next. This is the core mission of the newton brand.


Board of Directors

H.E. Mr. Mazen DarwazehChairman (Executive Vice-Chairman, CEO of the MENA region for HikmaPharmaceuticals)

Mr. Kim Abu JaberChairman (Chairman of Abu Jaber Group)

H.E. Mr. Sami GammohRepresenting United Group Management

H.E. Dr. Michel MartoDirector (Chairman of Housing Bank for Trade & Finance)

Mr. Haytham KamhiyahRepresenting Capital Bank (General Manager of Capital Bank)

Mr. Ramzi KhouriDirector (Chairman of Medica)

Mr. Naim KhouriDirector (Former Chairman of the Jordanian Association of Certified Public AccountantsAssociation)

Mrs. Lina KreishanDirector Representing Social Security Corporation

Mr. Osama Al-WazaniDirector (Partner in Al-Wazani Law Firm)

Mr. Hazim SarrafDirector (CEO of SNAX)

Mr. Faris GammohDirector (CEO of JIIG)


Major Shareholders

1. United Group Management Consulting

2. H. E. Mr. Sami Gammoh

3. Mr Kim Abu Jaber

4. Social Security Corporation

5. Mr. Qais Abu Jaber

6. Mr. Mazen Darwazeh

JIIC Global Reinsurers

• Swiss Re, Switzerland (AM Best Rating: A+)

• SCOR Global Life, France (AM Best Rating: A)

• Gen Re, A Berkshire Hathaway Company, USA (AM Best Rating: A++)

• Odyssey Re, France (AM Best Rating: A)

• Korean Re, Korea (AM Best Rating: A)

• General Insurance Corporation, India (AM Best Rating: A-)

• Liberty Specialty Markets, United Kingdom (AM Best Rating: A)

Insurance Products

Corporate Lines• Property• Energy and Power• Marine Cargo and Hull• Group Medical and Life Insurance• Financial Lines• Casualty

Personal Lines• Home and Property Insurance• Personal Accident and Travel Insurance• Individual Medical and Life


For more information about our products and services, please feel free to contact one of our staff members.

JIIG Officers Mr Faris GammohGeneral ManagerEmail: [email protected]

Mr Mahmoud MatarnehDeputy General ManagerEmail: [email protected]


Consolidated Statement of Financial Position as at December 31,2015December 31

ASSETS Note 2015 2014

JD JD

Deposits at banks 3 8,399,558 7,292,141

Financial assets at fair value through income statement 4 341,103 2,902,643

Financial assets at fair value through other comprehensive income 5 6,948,579 5,549,644

Financial assets at amortized cost 6 365,000 400,000

Real state investments 7 8,395,520 8,628,640

Total Investments 24,449,760 24,773,068

Cash on hand and at banks 8 632,416 224,349

Checks under collection 9 425,638 326,959

Accounts receivable - net 10 4,709,345 3,169,132

Reinsurance companies accounts - debit 11 769,090 830,722

Settlement guarantee fund contribution 12 25,000 25,000

Due from related parties 36 312,650 279,706

Deferred tax assets 13/B 588,365 677,438

Property and equipment - net 14 2,381,589 2,324,025

Intangible assets 15 200,000 200,000

Other assets 16 675,310 599,640

TOTAL ASSETS 35,169,163 33,430,039

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES

Unearned premiums provision - net 1,765,988 1,499,534

Claims provision - net 2,056,259 2,771,139

Mathematical provision - net 17 42,116 27,080

Total Insurance Contracts Liabilities 3,864,363 4,297,753

Accounts payable 18 1,067,841 1,379,069

Reinsurance companies accounts - credit 19 1,195,060 780,807

Accrued expenses 56,254 99,024

Due to related parties 36 325,322 11,887

Other provisions 20 182,155 102,309

Provision for income tax 13/A 2,887 -

Deferred tax Liabilities 13/B 562,946 619,085

Other liabilities 21 1,915,315 1,736,719

TOTAL LIABILITIES 9,172,143 9,026,653

SHAREHOLDERS' EQUITY

Authorized and paid - up capital 1 & 22 18,150,000 18,150,000

Statutory reserve 23 2,584,294 2,419,770

Special reserve 24 2,225 2,225

Difference in purchasing non controlling shares 25 325,804 320,354

Cumulative change in fair value - net 26 1,781,698 1,781,929

Accumulated Gains (losses) 27 2,241,752 805,137

Total Shareholders' Equity 25,997,020 24,403,386

Non controlling intresets 28 911,247 923,971

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 35,169,163 33,430,039

THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ TOGETHER WITH THEM

Statement (A)


Consolidated Statement of Income as at December 31,2015 For the Year Ended December 31

Note 2015 2014

JD JD

Revenue:

Gross written premiums 12,833,528 11,026,532

(Less): Re - insurers' share (8,125,564) (6,831,286)

Net Written Premiums 4,707,964 4,195,246

Net change in unearned premiums reserve (266,454) (104,989)

Net change in mathematical provision (15,036) (9,613)

Net Written Premiums 4,426,474 4,080,644

Commissions revenue 874,570 723,606

Rent revenue 30 17,182 15,259

Policy issuance fees 377,884 345,762

Credit interest 29 285,438 438,009

Gains from financial assets and investments-net 30 1,494,848 1,535,116

Other revenue 31 551,480 312,938

Total Revenue 8,027,876 7,451,334

Claims, Losses and Expenses

Paid claims 10,111,108 9,578,956

(Less): Recoveries (591,588) (629,102)

Re - insurers' share (5,296,205) (4,019,285)

Net Claims Paid 4,223,315 4,930,569

Net change in claims reserve (714,880) (1,337,105)

Allocated employees' expenses 32 1,247,571 1,039,852

Allocated general and administrative expenses 33 283,129 186,129

Excess of loss premium 31,500 13,500

Cost of policies acquisition 53,484 53,698

Other expenses related to underwritings 208,403 261,127

Other expenses 47,222 8,610

Net Claims Paid Cost 5,379,744 5,156,380

Unallocated employees expenses 32 249,303 231,030

Unallocated general and administrative expenses 33 620,316 625,372

Depreciation and amortization 102,295 113,794

Impairment in accounts receivable provision 11&10 26,128 40,000

Other provisions 5,449 68,500

Total Expenses 6,383,235 6,235,076

Profit before Tax - Statement (E) 1,644,641 1,216,258

Income tax 13/A (41,621) (12,679)

Net Profit for the Year - Statements (C), (D) 1,603,020 1,203,579

Refer to:

Company Shareholders' 1,601,139 1,202,628

Non controlling interests 28 1,881 951

1,603,020 1,203,579

Earnings Per Share for the Year 34 0/088 0/066

THESE STATEMENTS ARE SELECTIVE EXTRACTS FROM THE ENGLISH FINANCIAL STATEMENTS AND SHOULD BE READ

TOGETHER WITH THEM

Statement (B)


Consolidated Statement of Comprehensive Income asat December 31,2015

For the Year Ended December 31

Note 2015 2014

JD JD

Profit for the Year - Statement (B) 1,603,020 1,203,579

Comprehensive Income Items:

Cumulative change in fair value -financial assets at fair value through other comprehensive income 26 (231)

Gross Comprehensive Income - Statement (D) 1,602,789 1,203,579

Refer to:

Company Shareholders' 1,600,908 1,202,628

Non controlling interests 1,881 951

1,602,789 1,203,579


Statement (C)


Cons

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5JD

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JDJD

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begi

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320,

354

1,78

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4,96

3 23

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92

3,97

1 24

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Profi

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- St

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Net c

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Stat

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t (D)


Consolidated Statement of Cash Flows as at December 31,2015 For the Year Ended December 31

Note 2015 2014Cash flows from operating activities: JD JD

Profit before income tax 1,644,641 1,216,258

Adjustments for:

Depreciation and amortization 102,295 113,794

Net change in unearned premiums reserve 266,454 104,989

Net change in claims reserve (714,880) (1,337,105)

Net change in mathematical provision 15,036 9,613

Net change of Financial assets at fair value through income statement 30 23,600 (239,796)

Net losses / (profits) on sale Financial assets through income statement (767) (198,069)

Impairment in accounts receivable and reinsurance companies accounts - debit 10,11 26,128 40,000

Various provisions-net 20 79,846 72,170

Gain on sale of real state investments 31 (155,302) (71,034)

Operating Cash Flows before changes in Assets and Liabilities 1,287,051 (289,180)

(Increase) decrease in cheques under collection (98,679) (97,023)

(Increase) in accounts receivable (1,566,341) 819,240

(Increase) decrease in Reinsurance companies accounts - debit 61,632 (609,435)

Proceeds from Financial assets through income statement 1,951,458 596,274

(Purchasing) of financial assets through income statement (816,686) -

(Increase) decrease in due from related parties (32,944) (83,719)

(Increase) in other assets (171,385) (281,378)

(Increase) in accounts payable (311,228) 353,905

Increase (decrease) in due to related parties 313,435 1,680

Increase in accured expenses (42,770) (120,043)

Increase in Reinsurance companies accounts - credit 414,253 (987,003)

Increase in other liability 178,596 90,065

Net Cash Flows from Operating Activities before Income Tax Paid 1,166,392 (606,617)

Income tax paid on credit interests (6,031) -

Income tax paid refund of interest payable 13 - 23,182

Paid and refund from various provisions - (22,500)

Net Cash Flows from Operating Activities 1,160,361 (605,935)

Cash flows from investing activities:

Cash proceed from Acquisition of subsidiary company - -

Purchasing real state investments (77,054) (636,422)

Proceeds from sale of real state investments 452,000 337,000

Proceeds from sale of Financial assets through other comprehensive income 14 5,000 -

Proceeds from Financial assets at amortized cost 35,000 25,000

(Increase) decrease in Deposits at banks (10,000) 1,786,627

(Acquisition) of property, equipment and intangible assets (52,170) (14,700)

Proceeds from sale of Property and equipment 14 1,502 -

Change in non controlling intresets (9,155) (34,178)

Net increase (decrease) in cash and cash equivalents 1,505,484 857,392

Cash and cash equivalents - beginning of the year 35 7,177,910 6,320,518

Cash and cash equivalents - End of theYear 35 8,683,394 7,177,910


Statement (E)


Stat

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2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

Writ

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prem

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Dire

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1,9

84

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36,4

29

93,

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8,09

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72,1

67

318

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1

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2 10

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(Les

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are

-

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184

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1

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6

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738

249

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3

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2 6

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6

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1,9

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168

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1

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1

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73,

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13,

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310

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4,

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3,80

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Add:

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3

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45

22,

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113

23

2

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,706

2

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,873

3

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4

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Less

: Re

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of th

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1

63

284

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1

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30

438

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4

33,9

99

288

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1,

131,

355

20,

354

13,

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-

18

930

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1,

129,

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1,9

61,6

68

2,8

47,4

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Net u

near

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prem

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s re

serv

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ning

of t

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ear

-

13,

865

51,

804

21,

401

-

102

2

3,74

8 1

5,39

0 2

,382

1

,402

-

5

1

,421

,600

1,

342,

380

1,4

99,5

34

1,3

94,5

45

Prem

ium

s de

ficien

cy re

serv

e -

-

-

Less

: Une

arne

d pr

emiu

ms

rese

rve

- End

of t

he Y

ear

-

-

392

,733

3

36,0

32

27,

867

438

,493

1

,667

,812

3

12,2

35

62,

764

22,

736

910

-

2,

696,

807

2,35

1,70

6 4,

848,

893

3,4

61,2

02

Re -

insu

rers

' sha

re -

End

of

the

Year

-

-

338

,771

2

84,2

28

27,

546

438

,493

1

,583

,056

2

88,4

87

56,

652

20,

354

683

-

1,

076,

197

930

,106

3

,082

,905

1

,961

,668

Net u

near

ned

prem

ium

s re

serv

e - E

nd o

f the

Yea

r -

-

5

3,96

2 5

1,80

4 3

21

-

84,

756

23,

748

6,1

12

2,3

82

227

-

1,

620,

610

1,42

1,60

0 1

,765

,988

1

,499

,534

Chan

ge in

une

arne

d pr

emiu

ms

rese

rve

prov

ision

-

(13,

865)

2,1

58

30,

403

321

(1

02)

61,

008

8,3

58

3,7

30

980

2

27

(5)

199

,010

7

9,22

0 2

66,4

54

104

,989

Net R

even

ue fr

om th

e Un

derw

ritte

n Pr

emiu

ms

- st

atem

ent (

H) -

1

5,84

9 1

66,5

58

92,

586

256

1

02

82,

805

65,

475

18,

474

12,

595

83

5

3,89

3,84

7 3,

729,

203

4,16

2,02

3 3

,915

,815

THES

E ST

ATEM

ENTS

AR

E SE

LEC

TIVE

EXT

RAC

TS F

RO

M T

HE

ENG

LISH

FIN

ANC

IAL

STAT

EMEN

TS A

ND

SH

OU

LD B

E R

EAD

TO

GET

HER

WIT

H T

HEM

Stat

emen

t (F)


Stat

emen

t of P

aid C

laim

s Co

st fo

r the

Insu

ranc

e Li

cens

es fo

r the

Per

iod

Ende

d De

cem

ber 3

1,20

15M

otor

Mar

ine

and

Tran

spor

tatio

nAv

iatio

nFi

re a

nd O

ther

Publ

ic

Liab

ility

Pers

onal

Ac

cide

nts

Med

ical

Tota

l

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

Paid

clai

ms

685

,269

1

,566

,339

1,

458,

292

519

,919

-

1

,431

1

,416

,806

3

91,5

69

16,

119

5,2

18

-

2,5

53

6,17

1,07

3 6,

573,

666

9,7

47,5

59

9,0

60,6

95

(Les

s): R

ecov

eries

107

,937

2

34,2

27

25,

443

96,

647

-

-

84,

421

23,

948

-

-

-

-

372

,593

2

73,3

96

590

,394

6

28,2

18

Loca

l re

-insu

rers

' sha

re

-

-

-

-

-

-

158

,288

1

2,53

2 -

-

-

-

-

-

1

58,2

88

12,

532

Fore

ign

re -

insu

rers

' sha

re 4

,483

8

4,26

9 1,

347,

675

358

,848

-

1

,431

1

,034

,682

3

46,5

65

8,6

00

496

-

-

2,

461,

594

2,79

0,56

5 4

,857

,034

3

,582

,174

Net C

laim

s Pa

id -

stat

emen

t (B

) 5

72,8

49

1,2

47,8

43

85,

174

64,

424

-

-

139

,415

8

,524

7

,519

4

,722

-

2

,553

3,

336,

886

3,50

9,70

5 4

,141

,843

4

,837

,771

Add

: Rep

orte

d cla

ims

rese

rve

- En

d of

the

Year

1,4

45,4

12

2,1

49,4

51

1,

298,

523

921

,571

-

-

10

,070

,996

1

6,55

1,88

1 6

17,2

06

506,

964

1,9

04

1,9

70

216

,800

1

69,6

53

13,6

50,8

41

20,3

01,4

90

IBNR

End

of t

he Y

ear

50,

000

70,

000

30,

000

25,

000

-

-

30,

000

30,

000

25,

000

25,

000

-

-

386

,417

3

11,4

41

521

,417

4

61,4

41

Re -

insu

rers

' sha

re -

End

of th

e Ye

ar

305

,330

3

81,4

33

1,

127,

891

747

,239

-

-

9

,957

,719

1

6,27

9,49

4 4

32,4

36

31

0,68

5 2

0 1

7 2

45,6

07

215

,932

12

,069

,003

17

,934

,800

Reco

verie

s 7

2,71

9 7

7,47

9 -

-

-

-

-

-

-

-

-

-

-

-

7

2,71

9 7

7,47

9

Net c

laim

s re

serv

e - E

nd o

f the

Yea

r 1

,117

,363

1

,760

,539

2

00,6

32

199

,332

-

-

1

43,2

77

302

,387

2

09,7

70

221,

279

1,8

84

1,9

53

357

,610

2

65,1

62

2,0

30,5

36

2,7

50,6

52

(Les

s): R

epor

ted

claim

s re

serv

e -

begi

nnin

g of

the

year

2,1

49,4

51

3,6

57,5

81

921

,571

1,09

2,46

8 -

-

16,5

51,8

81

16,

717,

946

506

,964

483,

814

1,9

70

2,1

00

169

,653

9

6,48

0 20

,301

,490

22

,050

,389

IBNR

beg

inni

ng o

f the

yea

r 7

0,00

0 1

64,0

88

25,

000

15,

000

-

-

30,

000

20,

000

25,

000

10,

000

-

-

311

,441

2

85,8

11

461

,441

4

94,8

99

Re -

insu

rers

' sha

re -

beg

inni

ng o

f th

e ye

ar 3

81,4

33

524

,582

7

47,2

39

902

,683

-

-

16,2

79,4

94

16,

451,

140

310

,685

269,

526

17

17

215

,932

1

52,4

05

17,9

34,8

00

18,3

00,3

53

Reco

verie

s 7

7,47

9 1

72,7

45

-

-

-

-

-

-

-

-

-

-

-

-

77,

479

172

,745

Net c

laim

s re

serv

e - b

egin

ning

of

they

ear

1,7

60,5

39

3,1

24,3

42

199

,332

2

04,7

85

-

-

302

,387

2

86,8

06

221

,279

22

4,28

8 1

,953

2

,083

2

65,1

62

229

,886

2

,750

,652

4

,072

,190

Net P

aid C

laim

s Co

st -

stat

emen

t (H)

(70,

327)

(115

,960

) 8

6,47

4 5

8,97

1 -

-

(1

9,69

5) 2

4,10

5 (3

,990

) 1

,713

(6

9) 2

,423

3,

429,

334

3,54

4,98

1 3

,421

,727

3

,516

,233

THES

E ST

ATEM

ENTS

AR

E SE

LEC

TIVE

EXT

RAC

TS F

RO

M T

HE

ENG

LISH

FIN

ANC

IAL

STAT

EMEN

TS A

ND

SH

OU

LD B

E R

EAD

TO

GET

HER

WIT

H T

HEM

Stat

emen

t (G

)


Stat

emen

t Of U

nder

writ

ing

Profi

ts fo

r the

Insu

ranc

e Li

cens

es fo

r the

Per

iod

Ende

d De

cem

ber 3

1,20

15M

otor

Mar

ine

and

Tran

spor

tatio

nAv

iatio

nFi

re a

nd O

ther

Publ

ic L

iabi

lity

Pers

onal

Ac

cide

nts

Med

ical

Tota

l

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

JDJD

Net r

even

ue fr

om

the

unde

rwrit

ten

prem

ium

s -

- 1

5,84

9 1

66,5

58

92,

586

256

1

02

82,

805

65,

475

18,

474

12,

595

83

5

3,8

93,8

47

3,72

9,20

3 4

,162

,023

3,

915,

815

Stat

emen

t (F)

(70,

327)

(115

,960

)86

,474

58,9

71 -

-

(1

9,69

5) 2

4,10

5 (3

,990

) 1

,713

(6

9) 2

,423

3

,429

,334

3,

544,

981

3,4

21,7

27

3,51

6,23

3

Add:

rece

ived

com

miss

ions

-

-

180,

427

178,

275

8,2

31

8,9

16

432

,862

24

3,05

8 1

9,43

9 5

8,24

2 -

-

2

33,6

11

235

,115

8

74,5

70

723

,606

Polic

y iss

uanc

e fe

es0

150

19,4

7718

,434

1,8

78

16,

261

48,

519

33,

353

11,

940

5,9

31

52

-

275

,677

2

56,3

79

357

,543

3

30,5

08

Oth

er re

venu

es57

4,67

227

9,14

877

,939

-

-

39,

979

251

-

-

-

-

2

1,00

3 4

3,95

4 3

40,1

87

126

,816

Tota

l rev

enue

57

4,8

22

479

,052

2

74,6

48

10,

109

25,

177

521

,360

27

6,66

2 3

1,37

9 6

4,17

3 5

2 -

5

30,2

91

535

,448

1

,572

,300

1,

180,

930

Less

: paid

co

mm

issio

ns -

-

17,

694

10,

592

-

-

22,7

9225

,904

1,30

629

80

09,

133

16,8

87 5

0,92

5 5

3,68

1

Exce

ss o

f los

s pr

emiu

m -

-

-

-

-

-

31,

500

13,

500

-

-

-

-

-

-

31,

500

13,

500

Unde

rwrit

ing

adm

inist

rativ

e ex

pens

es -

1

71,3

91

277

,133

1

53,4

54

9,9

60

22,

802

324,

879

204,

111

28,

190

53,

226

-

-

690

,898

4

83,1

60

1,3

31,0

60

1,08

8,14

4

Oth

er e

xpen

ses

028

,908

6,30

055

,266

-

-

53,

652

69,

626

-

-

00

106,

658

90,4

93 1

66,6

10

244

,293

Tota

l exp

ense

s -

2

00,2

99

301

,127

2

19,3

12

9,9

60

22,

802

432

,823

31

3,14

1 2

9,49

6 5

3,52

4 -

-

8

06,6

89

590

,540

1

,580

,095

1,

399,

618

Net U

nder

writ

ing

Inco

me

(Los

s) 7

0,38

4 (6

3,66

8) 2

58,0

09

88,

951

405

2

,477

1

91,0

37

4,8

91

24,

347

21,

531

204

(2

,418

) 1

88,1

15

129

,130

7

32,5

01

180

,894

THES

E ST

ATEM

ENTS

AR

E SE

LEC

TIVE

EXT

RAC

TS F

RO

M T

HE

ENG

LISH

FIN

ANC

IAL

STAT

EMEN

TS A

ND

SH

OU

LD B

E R

EAD

TO

GET

HER

WIT

H T

HEM

Stat

emen

t (H)


Statement of Underwriting Revenue, Claims Cost & Underwriting Profits (Losses) for the Life Insurance Licenses for the Period Ended 31 December, 2015

Life Investment Related Total

Dec. 31 Dec. 31 Dec. 31

2015 2014 2015 2014 2015 2014

Written Premiums JD JD JD JD JD JD

Direct Insurance 844,449 508,866 - - 844,449 508,866

Gross Earned Premiums 844,449 508,866 - - 844,449 508,866

Less:

Foreign Reinsurance Share 564,962 334,424 - - 564,962 334,424

Net Earned Premiums 279,487 174,442 - - 279,487 174,442

Add : Mathmatical provision-Beginning of the year 50,488 24,168 - - 50,488 24,168

Less : Reinsurance Share 23,408 6,701 - - 23,408 6,701

Net Mathmatical provision at Beginning of the year 27,080 17,467 - - 27,080 17,467

Closing Balance

Add : Mathmatical provision-at end of the year 85,521 50,488 - - 85,521 57,316

Deduct : Reinsurance Share 43,405 23,408 - - 43,405 23,408

Net Mathmatical provision at end of the year 42,116 27,080 - - 42,116 27,080

Change in Mathmatical provision (15,036) 9,613 - - (15,036) 9,613

Net Earned Premiums Income from written premiums - Statement (k) 264,451 164,829 - - 264,451 164,829

Claims Paid 363,549 518,261 - - 363,549 518,261

Less : Recoveries 1,194 884 - -

Local Reinsurance Share - -

Foreign Reinsurance Share 280,883 424,579 - - 280,883 424,579

Net Claims Paid 81,472 92,798 - - 81,472 92,798

Add: Outstanding Claims Porvision at end of the year:

Reported 57,233 49,805 - - 57,233 49,805

Not Reported 25,000 15,000 - - 25,000 15,000


Net out standing provision at end of the year 25,723 20,487 25,723 20,487

Reported 18,223 8,937 - - 18,223 8,937

Not Reported 7,500 11,550 - - 7,500 11,550

Less: Outstanding Claims Porvision at Beging of the year:

Reported 49,805 77,552 - - 49,805 77,552

Not Reported 15,000 15,000 - - 15,000


Net out standing provision at beginig of the year 20,487 36,054 - - 5,487 36,054

Reported 17,037 21,054 - - 17,037 21,054

Not Reported 3,450 15,000 - - 3,450 15,000

Cost of Claims Incurred 86,708 77,231 101,708 77,231

Net Earned Premiums Income 264,451 164,829 264,451 164,829

Deduct :

Cost of Claims Incurred 86,708 77,231 - - 86,708 77,231

Add :

Commissions Received 0 0 - - 0 0

Issueing Fees 20,341 15,254 - - 20,341 15,254

Other Revenues 6,641 19,309 - - 6,641 19,309

Total Revenues 204,725 122,161 - 204,725 122,161

Deduct :

Commissions Paid 2,559 17 - - 2,559 17

Allocated administrative expenses 199,640 137,837 - - 199,640 137,837

Other Expenses 41,793 16,834 - - 41,793 16,834

Total Expenses 243,992 154,688 - - 243,992 154,688

Underwriting Profit (Loss) (39,267) (32,527) - - (39,267) (32,527)


Statement (I)


Statement Of Financial Position For Life Insurance for theYear Ended December 31, 2015

2015 2014

Assets JD JD

Deposits at banks 100,000 100,000

Total Investment 100,000 100,000

Accounts Recievable 194,408 112,367

Reinsurance companies accounts - debit 12,554 32,880

other assets 34 136

Property plant and equipment 4 4

307,000 245,387

Liabilities & equity

Liabilities :

Accounts Payable 71,966 71,306

Reinsurance companies accounts - credit 100,312 54,714

Other liabilities 27,350 7,507

Outstanding claims provision - net 25,723 20,487

Mathematical provision - net 42,116 27,080

Total Technical provisions - net 67,839 47,567

Total liabilities 267,467 181,094

Equity

Head office current account 78,800 96,820

Net income for the year (39,267) (32,527)

Total equity 39,533 64,293

Total Liabilities and equity 307,000 245,387


Statement (L)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 General

A. The Company was established in 1996 and registered as a public limited shareholding company under Number (301). Its main branch address is Amman – Jordan, P.O.BOX 3253 Amman 11181 Jordan, with JD 18/150 million authorized capital divided into 18/150 million shares of JD 1 each. Moreover, the paid-up capital is JD 18/150 million as at Dec 31, 2014.

• The ownership of transferred and non- transferred funds required to operate.

• The company operates in all insurance business types.

• Investing the surplus fund in the best available manner the company sees.

• Borrowing the needed funds from the banks.

B. The accompanying consolidated financial statements were approved by the Board of Directors in its meeting dated Feb 2, 2015, and it is subject to the approval of the General Assembly of Shareholders.

2 Significant Accounting Policies

Basis of Preparation

• The consolidated financial statements have been prepared according to the Standards issued by the International Accounting Standards Board and in accordance with the forms prescribed by the Jordanian Insurance Commission.

• The consolidated financial statements have been prepared according to the historical cost convention except the financial assets and liabilities which are shown at fair value as of consolidated financial statements date.

• The reporting currency of the consolidated financial statements is the Jordanian Dinar, which is the functional currency of the company.

• The accounting policies adopted for the current year are consistent with those applied in the year ended December 31,2013 , Except for the effects shown in Note (44–A).


The consolidated financial statements basis:

The consolidated financial statements includes JIIC it’s supsidaries financial statements after elemenating intergroup transactions between the group entities:

Date of Ownership

Company Location

Type of BusinessOwnership %Paid In CapitalCompany Name

2005AmmanBrokerage100%2,500,000Ibda' For Financial Investments

2006AmmanReal Estate Investments90/22%10,000,000Jordan International

Investments

2012AmmanReal Estate Investments100%150,000Telal Salem Real

Estate

Control is achieved when the company has the ability to control the financial and operating policies of the subsidiaries to obtain benefits from their activities.Additionally, transactions, balances, revenues, and expenses between the company and its subsidiaries are eliminated.

The results of the Subsidiaries are incorporated into the consolidated statement of income from the effective date of acquisition which is the date on which is actual control over the subsidiaries is assumed by the company. Moreover, the operating results of the disposed subsidiaries are incorporated into the consolidated statement of income up to the effective date of disposal which is the date on which is the date on which the company losses control over the subsidiaries.

The financial statements of the subsidiaries are prepared for the same financial year using the same accounting policies adopted by the insurance company.If the accounting policies adopted by the subsidiaries companies are different from those used by the insurance company, the necessary adjustments to the financial statements of the subsidiaries companies are made to comply with the accounting policies followed by the insurance company.

Non – controlling interest represent the portion of owners equity not owned by the company in the subsidiaries , non-controlling interest is shown in subsidiaries net assets in separate item thought he group owners equity.

The followings are the most significant accounting policies adopted during the year ended December 31, 2014:

A. Financial assets at amortized cost

• Financial assets at amortized cost are the financial assets which the company management intends according to its business model to hold to collect the contractual cash flows which comprise the contractual cash flows that are solely payments of principal and interest on the principal outstanding.


• Financial assets at amortized cost are recorded at cost upon purchase plus acquisition expenses. Moreover, the issue premium \ discount is amortized using the effective interest rate method, and recorded to interest or in its account. Any allocations resulting from the decline in value of these investments leading to the inability to recover the investment or part thereof are recorded, and any impairment is registered in the statement of income.

• Impairment in financial assets recorded at amortized cost is determined on the basis of the difference between the book value and the present value of the expected cash flows discounted at the effective interest rate.

Reclassification of financial assets

It’s allowed to reclassify the financial assets at amortized cost to financial assets at fair value through profit and loss and vice versa, when the entity changes its business model that has been applied to classify these assets as mentioned above, taking into consideration the following:

• It’s not allowed to return any profit (loss) or any income interest recognized and taken before.

• When the reclassification of the financial assets that are measured at fair value, its fair value should be determined as at the reclassification date, and any profit (loss) that may occur as a result of the difference between the booked value and the fair value stated in the profit and loss statement should be recorded.

B. Financial assets at fair value through profit or loss

• Other Financial assets that didn’t meet these conditions of the financial assets at amortized cost are measures at fair value.

• Financial assets at fair value through profit or loss represent share, bonds and debentures held by the company for the purpose of trading and achieving gains from the fluctuations in market prices in the short term.

• Financial assets at fair value through profit and loss are initially stated at fair value at acquisition date (purchase costs are recorded at consolidated statement of income upon purchase); they are subsequently re-measured to fair value as of the date of the financial statements .Moreover, change in the fair value are recorded in the statement of income including the change in fair value resulting from foreign currency exchange transaction of non-monetary assets.

• Dividends or incurred interests are stated in the consolidated statement of income.


C. Financial assets at fair value through statement of comprehensive income

Financial assets at fair value through comprehensive income represent the strategic investment in companies’ shares as a long term investments, not for trading purposes.

Financial assets at fair value through other comprehensive income are initially recorded at fair value including acquisition costs. They are subsequently re-measured to fair value; the change in fair value appears in the consolidated statement of comprehensive income and in the owner’s equity including change in fair value resulting from foreign currency exchange translation of non-monetary assets. Gains or losses resulting from the sale of these financial assets are taking to the consolidated statement of comprehensive income and owner’s equity. The fair value reserve balance that belongs to the equity instruments sold is transferred directly to the retained earnings and not through the consolidated statement of income.

Dividends are stated in the consolidated income statement of income.

D. Sectors Information

• The business sector represents a group of assets and operations that share in providing products or services subject to risks and rewards different from those of other business sectors.

• The geographic sector relates to the provision of products and services in a specific economic environment subject to risks and rewards different from those of sectors operating in other economic environments.

E. Date of Recognition of Financial Assets

Financial assets are recognized on the trading date (which is the date the Company and its subsidiaries commits itself to purchase or sell the financial assets).

F. Fair Value

Closing market prices (acquiring assets / selling liabilities) in active market at the date of the consolidated financial statement represent the fair value of financial derivatives traded. In case declared market prices do not exist, active trading of some financial assets and derivatives is not available, or the market is inactive, fair value is estimated by one of several methods including the following:

• Comparison with the market value of another financial asset with similar terms and conditions.

• Present value Analysis of expected future cash flows for similar instruments.

• Adoption of the option pricing models.


The valuation methods aim at providing a fair value reflecting the expectations of the market, expected risks and expected benefits. Moreover, financial assets, the fair value of which cannot be reliably measured, are stated at cost less any impairment.

G. Impairment in the Value of Financial Assets

The Company and its subsidiaries reviews the values of financial assets on the date of consolidated statement of financial position in order to determine if there are any indications of impairment in their value individually or in the form of a portfolio. In case such indications exist, the recoverable value is estimated to determine the impairment loss.

Impairment is determined as follows:

• Impairment in financial assets recorded at amortized cost represent the different between the amount recorded and the present value of the expected cash flows discounted at the original interest rate

• Impairment in financial assets fair value recorded through profit and loss and comprehensive income at fair value represents the difference between book value and fair value.

• Impairment in financial assets recorded at cost is determined on the basis of present value of the expected cash flows discounted at the market interest rate of similar instrument.

The impairment in value is recorded in the consolidated statement of income. Any surplus in subsequent period resulting from previous declines in the fair value of financial assets is taken to the consolidated statement of income except for the impairment in financial assets thought other comprehensive in which is recovered through investment reevaluation reserve through the consolidated comprehensive income and owners equity statements.

I. Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances with banks and financial institutions maturing within three months, less Bank accounts payable and restricted funds.

J. Reinsurance Accounts

Reinsurers’ shares of insurance premiums, paid claims, technical provisions, and all other rights and obligations resulting from reinsurance based on contracts concluded between the Company and reinsurers are accounted for on the accrual basis.


K. Impairment in Reinsurance Assets

In case there was any indication as to the impairment of the reinsurance assets of the Company, which possesses the reinsured contracts, the Company has to reduce the present value of the contracts, and record the impairment in the consolidated statement of income. The impairment is recognized in the following cases only:

1. There is objective evidence resulting from an event that took place after the recording of the reinsurance assets confirming the Company’s inability to recover all the amounts under the contracts terms.

2. The event has a reliably and clearly measurable effect on the amounts that the Company will recover from reinsurers.

l. Acquisition Costs of Insurance Policies

Acquisition costs represent the costs incurred by the Company against selling, underwriting, or starting new insurance contracts. The acquisition costs are recorded in the consolidated statement of income.

M. Real Estate Investments

The real estate investments appear in cost after deduction the accumulated depreciation (except the lands), the real estate investments can be depreciated by 2% of its production life. The impairment is record in the consolidated income statement.

In case the fair value of the real estate increases investments which impairment has already been taken in the previous years, the losses can be refunded in which should not exceed the cost or the recorded fair value whichever is less.

The real estate investments are evaluated in accordance to the decisions issued by insurance commission and the fair value is disclosed in the real estate investments note.

N. Property and Equipment

Property and equipment are stated at cost net of accumulated depreciation and accumulated impairment. Moreover, fixed assets are depreciated according to the straight-line method over their estimated useful lives using the following yearly rates; Depreciation is recorded in the consolidated statement of income:

%Equipment , Furniture, and fixtures 10-25Vehicles 15Buildings 2


When the recoverable values of property and equipment is less than their carrying amounts, assets are written down, and impairment losses are recorded in the consolidated statement of income.

The useful lives of property and equipment are reviewed at the end of each year. In case the expected useful life is different from what was determined before, the change in estimate is recorded in the following years, as change in estimate.

The gains or losses resulting from the disposal of property and equipment, representing the difference between the property and equipment sale proceeds and their book value, are recorded in the statement of income.

Property and equipment are derecognized when disposed of or when there is no expected future benefit from their use or disposal.

O. Intangible Assets

• Intangible assets acquired through merger are recorded at fair value upon their acquisition. Additionally, intangible assets acquired other than through a merger are recorded at cost.

• Furthermore, intangible assets are classified according to their estimated lives: definite or indefinite. Intangible assets with definite useful lives are amortized over the life of the asset while those with indefinite lives are reviewed for impairment at the date of the financial statements, and the impairment is recorded in the consolidated statement of income.

• Internally generated intangible assets are not capitalized in the company and its subsidiaries and are taken to the consolidated statement of income in the current year.

• Indications of impairment in the value of intangible assets are reviewed at the date of the financial statements. Moreover, their lives are reassessed and adjustments are recorded in the subsequent periods.

P. Computer Systems and Programs

Computer systems and programs are stated at cost upon acquisition and amortized at an annual rate of 25%.

Q. Provisions

Provisions are recognized when the Company and its subsidiaries has an obligation on the date of the consolidated statement of financial position as a result of past events, it


is probable to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

Amounts recognized as provisions represent the best evaluation of the amounts required to settle the obligation as of the consolidated financial statements date, taking into consideration risks and the uncertainty relating to the obligation. When the provision amount is determined on the basis of the expected cash flows for the settlement of the current obligation, its book value represents the present value of these cash flows.

When it is expected that some or all of the economic benefits required from other parties to settle the provision will be recovered, the receivable is recognized within assets if receipt of the compensations is actually certain and their value can be reliably measured.

First: Technical ProvisionsTechnical provisions are taken and maintained according to the regulations of the Insurance Commission as follows:

1. The provision for unearned premiums for general insurance activities is calculated according to the remaining days up to the expiry date of the insurance policy after the consolidated financial statements date on the basis of a (365) day year except for marine and land transport insurance in which the provision is calculated on the basis of written premiums of the issued policies on the date of the financial statements according to laws, regulations and instructions issued for this purpose.

2. The provision for reported claims is computed by determining the maximum total expected costs for each claim on an individual basis.

3. The incurred but not reported claims are calculated based on the Company’s experience and estimation.

4. The unearned premiums provision for life insurance business is calculated based on the company’s experience.

5. The life insurance policies mathematical provision is calculated based on actuarial equation, revised periodically by the Actuary Consultant.

6. The premium deficiency provision is calculated based on the company’s experience and estimation.

Second: Provision for Doubtful DebtsA provision for doubtful debts is taken when there is objective evidence that whole or part of these debts has become irrecoverable. The provision is calculated as the difference between the book value and recoverable value. In which the provision calculated on based of approved ratios by the board of directors upon the receivables aging on the date of consolidated financial statements.


Third: End-of-Service Indemnity ProvisionEnd-of-service indemnity provision is calculated based on the internal regulations prepared by the Company and its subsidiaries in accordance with the Jordanian Companies Law.

Annual compensations paid to the terminated employees are charged to the end-of-service indemnity provision when paid. Moreover, an allowance for the company’s liabilities in connection with end-of-service compensations is taken for the company and its subsidiaries to the consolidated statement of income.

R. Liability Adequacy Test

At the consolidated statement of financial position date, the adequacy and suitability of the insurance liabilities are evaluated through the calculation of the present value of the future cash flows relating to the outstanding insurance policies.

If the evaluation shows that the present value of the insurance liabilities (various purchase expenses less suitable and related intangible assets) is inadequate compared to the expected future cash flows, the full impairment is recorded in the statement of consolidated income.

S. Income Tax

Income tax expenses represent accrued taxes and deferred taxes.

1. Accrued Taxes

• Income tax expenses are accounted for on the basis of taxable income. Moreover, taxable income differs from income declared in the financial statements because the latter includes non-taxable revenue or tax expenses not deductible in the current year but deductible in subsequent years, accumulated losses acceptable by the tax authorities, as well as unallowable and non-taxable items.

• Taxes are calculated on the basis of the tax rates prescribed tax tares according to the prevailing laws, regulations, and instructions in the Hashemite kingdom of Jordan.

2. Deferred Taxes

• Deferred taxes are taxes expected to be paid or recovered as a result of temporary timing differences between the value of the assets and liabilities in the consolidated financial statements and the value of the taxable amount. Moreover, deferred taxes are calculated according to the consolidated statement of financial position liability method based on the tax rates expected to be applied at the tax settlement date or the realization of the deferred tax assets or liabilities.


• The balances of deferred tax assets and liabilities are reviewed at the consolidated statement of financial position date and reduced in case they are expected not to be utilized or are no longer needed, wholly or partially.

T. Offsetting

Financial assets and financial liabilities are offset, and the net amount is reflected in the statement of consolidated financial position only when there are legal rights to offset the recognized amounts, the Company intends to settle them on a net basis, or assets are realized and liabilities settled simultaneously.

U. Revenue Recognition

1.Insurance ContractsInsurance premiums arising from insurance contracts are recorded as revenue for the year (earned insurance premiums) on the basis of the maturities of time periods and in accordance with the insurance coverage periods. Insurance premiums from insurance contracts unearned at the date of the statement of consolidated financial position are recorded as unearned insurance premiums within liabilities. Claims and incurred losses settlement expenses are recorded in the consolidated statement of income based on the expected liability amount of the compensation relating to the insurance policyholders or other affected parties.

2.Dividends and InterestDividends from investments are recorded when the right of the shareholder to receive dividends arises upon the related resolution of the General Assembly of Shareholders.Interest income is calculated according to the accrual basis based on the maturities of the time periods, original principals, and earned interest rate.

3.Rent RevenuesThe real estate revenues are recognized issued by operation contracts based on the Straight-line method; the other expenses are recognized based on the accrual basis.

4.Commissions revenueThe commissions resulted by purchasing and selling of shares are recorded when earned

V. Expense Recognition

All commissions and other costs relating to the acquisition of new or renewed insurance policies are amortized in the consolidated statement of income upon their occurrence. Other expenses are recognized on the accrual basis.


W. Insurance Compensations

Insurance compensations represent the claims paid during the period and the change in the claims provision. The insurance compensations represent all the amounts paid during the year whether they relate to the current year or previous years. Moreover, outstanding claims represent the highest estimated amount for the settlement of all claims resulting from events that took place prior to the statement of consolidated financial position date but were still unsettled at that date. Moreover, outstanding claims are calculated on the basis of the best information available at the date of the consolidated financial statements and include the incurred but not reported claims provision.

X. Salvage and Subrogation Reimbursements

Estimates of salvage and subrogation reimbursements are considered as an allowance in the measurement of the insurance liability for claims.

Y. General and Administrative Expenses

All distributable general and administrative expenses are loaded on insurance departments separately.

Around 80% of the general and administrative expenses to Jordan International Insurance Company have been allocated to the various insurance departments on the basis of the earned premiums of each department in proportion to total premiums.

Z. Employees Expenses

All distributable employees’ expenses are allocated on each insurance departments separately. Around, 80% of the employees’ undistributable expenses to Jordan International Insurance Company have been allocated to the various insurance departments on the basis of the earned premiums of each department in proportion to total premiums.

Aa. Foreign Currency

Transactions in foreign currencies are recorded at the exchange rates of the Jordanian Dinar prevailing at the transaction date.

Financial assets and financial liabilities denominated in foreign currencies are translated to Jordanian Dinar according to the average exchange rates issued by the Central Bank of Jordan at the date of the consolidated statement of financial position.

Non-monetary assets and non-monetary liabilities denominated in foreign currencies are translated at fair value at the date of the determination of their fair value.

Exchange gains or losses resulting there from are taken to the statement of income.


Translating differences are posted to the assets and liabilities items in non-monetary foreign currencies as part of the change in fair value.

When consolidating financial statements, all assets and liabilities for the company and its subsidiaries are translated from the foreign currency (functional) to the report currency according to the average exchange rate on the date of the financial statements taken from Central Bank of Jordan. The revenues and expenses items are translated using the average exchange rate during the year and any differences are shown in a separate line item in the consolidated comprehensive income and owners’ equity statements, and when one of these subsidiaries is sold, the related currency differences are taken as revenues or expenses in the consolidated statement of income.

Use of Estimates

Preparation of the financial statements and application of the accounting policies require the Company’s management to perform estimates and judgments that affect the amounts of the financial assets and liabilities, and disclosures relating to contingent liabilities. These estimates and judgments also affect revenues, expenses, provisions and changes in the fair value shown within shareholders’ equity. In particular, management is required to issue significant judgments to assess future cash flows and their timing. The above –mentioned estimates are based on several assumptions and factors with varying degrees of estimation and uncertainty. Moreover, the actual results may differ from the estimates due to changes resulting from the circumstances and situations of those estimates in the future.

Management believes that the estimates within the financial statements are reasonable. The details are as follows:

• A provision for accounts receivable is made according to the various assumptions and basis adopted by management to evaluate the required provision as per International Financial Reporting Standards.

• The financial year is charged with its part from income tax according to the prevailing regulations and the international financial reporting standards.

• Management periodically reevaluates the productive lives of tangible assets for the purpose of calculating annual depreciation based on the general condition of those assets and the estimates of their expected productive lives in the future. Any impairment loss is taken to the statement of income.

• The claims provision and technical provisions are taken based on technical studies and according to the instructions of the Insurance Commission. Moreover, the mathematical reserve is taken based on actuarial studies.

• A provision for lawsuits against the Company is based on a legal study conducted by the Company’s lawyer according to which probable future risks are determined. A


review of such studies is performed periodically.

• Management reviews the financial assets, shown at amortized cost, to evaluate any impairment in their value. Such impairment is taken to the statement of income.

• Fair value hierarchy: The Company is required to determine and disclose the level in the fair value hierarchy into which the fair value measurements are categorized in their entirety, segregating fair value measurements in accordance with the levels defined in IFRS. Differentiating between Level 2 and Level 3 fair value measurements, i.e., assessing whether inputs are observable and whether the unobservable inputs are significant, may require judgment and a careful analysis of the inputs used to measure fair value, including consideration of factors specific to the asset or liability.

3 Deposits at Banks

This item consists of the following: December 31, 2015 December 31, 2014

Deposits Maturing Within three Month

Deposits Maturing more than 3 Months Total Total

JD JD JD JD

Inside Jordan 8,050,586 348,972 8,399,558 7,292,141

Total 8,050,586 348,972 8,399,558 7,292,141 • The interest rates on deposits in Jordanian Dinar during the year 2015 ranging from

3.25% to 6,5% and 0.5% to 2% on deposits in USD.

• Moreover, deposits collateralized against a bank guarantee issued to the order of the Director of the Insurance Commission in addition to his position amounted to JD 348,972 as of December 31, 2015 and JD 338,580 December 31, 2014.

4 Financial Assets at Fair Value Through Profit or Loss

December 31, December 31,

2015 2014JD JD

Listed shares in Amman Stock Exchange 220,810 1,805,203

Listed shares in foreign markets 120,293 819,855

Foreign investment funds* - 277,585

Total 341,103 2,902,643

* This item represents the investment in Global Equity Blend in Luxemburg and it’s not capital guaranteed.According to the board decision the investment plan has been changed and all of shares in one investment has been reclassified from financial assets through income statement amounting 1,403,936 During fourth quarter 2015 to be at the financial assets at fair value through other comprehensive income.


5 Financial Assets at Fair Value Through Comprehensive Income

These items consist of the following:Number Of Shares Decmber 31,

2015 2014Listed SharesAmman Stock Exchange JD JD

International Silica Industrial 425,435 1,157,935 -

Un listed Shares *Royal Jordanian Air Academy 622,913 5,790,644 5,544,644

Specialized for Oil distribution and trading - 5,000

Total financial Assets at fair value through profit or loss –inside Jordan 6,948,579 5,549,644

* These shares have been evaluated as per last available evaluation for the year 2015

6 Financial Assets at Amortized Cost

This item consists of the following:

December 31, 2015 December 31, 2014

JD JD

Specialized Investments Company Bonds* 365,000 400,000

365,000 400,000

This bonds have been extended to mature in December 6, 2020, moreover an amount of JD135,000 has been paid from the value of the bonds as for December 2015 and the interest rate has been modified from 9.5% to become 10%.

7 Real Estate Investments

A. This item consists of the following:

December 31,

2015 2014JD JD

Lands 7,848,005 8,067,551

Buildings 467,119 467,119

Apartments 120,697 120,697

Wadi Saqra Office 88,433 88,433

8,524,254 8,743,800

Deduct:

Accumulated depreciation (103,900) (90,326)

Impairment in Real Estate Investments* (24,834) (24,834)

8,395,520 8,628,640


Movement on the provision for Impairment in Real Estate Investments during the year was as follows:

2015 2014

JD JD

Balance - beginning of the year 24,834 24,834

Refund during the year - -

Balance - End of Year 24,834 24,834

• The fair value of real estate investments has been reevaluated by Certified adjusters and the average of market value amounted to JD 11,026,158 as per last evaluation on June 30, 2015 and 31-Dec, 2014 for the lands in Al-Qastal.

• During the year 2015 some of lands for costing JD 269,698 have been sold in Telal Salem Zone amounting to JD 452,000 which resulted in JD 155,302 as a profit which was recorded in the consolidated income statement.( JOD 71,039 in 2014 )

• During the year 2014 some of lands have been purchased in Al-Qastal costing of JD 624,635.

8 Cash on Hand and at Banks


December 312015 2014

JD JDCash on hand 465,862 935Cash at banks (current accounts) 164,629 223,343Cash at banks (facilities account) 1,925 71

632,416 224,349

9 Checks under CollectionThis item consists of the following:

December 312014 2014

JD JD

Checks under collection* 425,638 326,959

425,638 326,959

*The maturities of checks under collection extend up to April. 30, 2017.


10 Accounts Receivable - NetThis item consists of the following:

December 31

2015 2014

JD JD

Policyholders 4,534,588 3,177,893

Brokerage Customers * 707,875 654,364

Agents 65,140 25,942

Brokerage 66,150 114,956

Employees 39,133 36,688

Commercials 73,712 73,094

Others 403,352 240,672

5,889,950 4,323,609

Less: Provision for doubtful debts ** (1,180,605) (1,154,477)

Accounts receivable - Net 4,709,345 3,169,132

Ageing of receivables is as follows:

December 31

2015 2014

JD JD

Accounts receivable not due 1,774,945 820,445

Less than 60 days 1,348,773 599,019

61 – 90 days 450,007 643,023

91 – 180 days 280,207 284,764

181 – 360 days 560,859 746,023

More than 360 days 1,475,159 1,230,335

Total 5,889,950 4,323,609

*This item Includes the accounts receivable which related to the subsidiary company amounting to JD 654,364 after deducting the interests in suspense amounting to JD 15,310 as of Dec 31, 2015 which is resulted from financing shares purchased from brokerage customers which have been blocked in Amman Stock Exchange for the merging purposes (JD 15,130 as of Dec 31, 2014), these receivables are guaranteed against collateral of shares owned by the subsidiary company ,the subsidiary company has blocked full provision against these receivables.

**Movement on the provision for doubtful debts during the year was as follows:2015 2014JD JD

Balance - beginning of the year 1,154,477 1,114,477Additions 26.128 40.000Balance - End of Year 1,180,605 1,154,477


11 Reinsurance Companies Accounts - Debit


December 312015 2014JD JD

Local insurance companies 188,609 218,778Foreign reinsurance companies 641,943 673,406

830,552 892,184Less: Provision for doubtful debts* (61,462) (61,462)Re - insurance companies accounts - net 769,090 830,722 The ageing of local reinsurance companies’ accounts is as follows:


Less than 60 days 7,766 -61 – 90 days 58,567 6,11491 – 180 days - 16,208181 – 360 days 2,615 99,328More than 360 days 119,661 97,128Total 188,609 218,778

The ageing of foreign reinsurance companies’ accounts is as follows:


Less than 60 days 306,043 483,67361 – 90 days 111,699 159,29691 – 180 days 110,348 1,073181 – 360 days 81,400 25,889More than 360 days 32,453 3,475Total 641,943 673,406

*The movement in Provision for doubtful debts was as follows: December 31

2015 2014

JD JD


Additions - -

Total 61,462 61,462


12 Brokrage Guarantee Fund Diposits

The item represents Ibda’ for Investments company (subsidiary company) balance in the Brokerage Guarantee Fund Deposit in accordance article No.(90) of the Commercial Paper Law No.(76) for the year 2002 and the internal regulations of the guarantee fund fro the year 2004.

13 Income Tax

a. Income Tax Provision

Movement on the income tax provision was as follows:

2015 2014

JD JD

Balance - beginning of the year - 46,552

Income tax paid on credit interest (6,031) -

Income tax expense - 23,182

Income tax expense refunds - (69,734)

Income tax for the year (8,918) -

Balance – End of the Year 2,887 -

Income tax in the consolidated income statement represent the following:

2015 2014

JD JD

Deferred tax assets 26,720 28,272

Amortized tax assets (115,793) (54,315)

Deferred tax liability - (56,370)

Amortized tax liability 56,370 -

Released tax provision - 69.734

Income tax provision for the year (8,918) -

(41,621) (12,679)


- Summary of the accounting profit with taxable income:

2015 2014

JD JD

Accounting loss 1,644,641 1,216,258

Non-deductible tax expense 886,934 862,518

Profits not subject to tax (2,076,655) (1,916,216)

Taxable loss 454,920 162,560

• A final tax settlement has been reached for income tax and sales tax department up to the year 2012 for the parent company (Jordan International Insurance Company). the company filed its income tax return for the years, 2013 and 2014 however, no final settlement has been reached with the income and sales tax department yet.

• Final tax settlement has been reached for income tax and sales department up to 2014 for the subsidiaries of Jordan International Insurance Company (JIIG).

• A final settlement with the Income and Sales tax department has been reached up to year 2014 excluding the year 2013 for Ibda’a for financial investment (subsidiary) the company filed its income tax return for the year 2012, 2013 and 2014. , however, no final settlement has been reached with Income & Sales Tax department yet.

• The income tax return was filed from the years 2008 and 2009 .However, no final settlement has been reached with the Income and Sales Tax department yet for those years regarding to Tilal Salem (Subsidiary). However, the final settlement has been reached with the income tax and sales tax department 2010 up to 2014 excluding the years 2008 and 2009.

• In the opinion of management and its tax consultant, all the provisions take in the consolidated financial statements are adequate for all the tax liabilities.


b. Deferred tax assets/liabilities:

Deferred Tax AssetsThe details are as follows:

For the Year Ended December 31, 2015 December 31

2015 2014

Accounts included:Balance at Year -

Beginning

Released Amounts Additions Balance at

Year - EndDeferred

TaxDeferred

Tax

JD JD JD JD JD JD

Provision for doubtful debts 1,215,939 - 26,128 1,242,067 296,146 290,115

Provision for end – of service indemnity 16,714 - 23,670 40,384 8,877 3,343

Impairment in financial assets through P&L - - 29,500 29,500 6,843 -

Employees Issues Provision 17,095 - - 17,095 4,104 4,104

Impairment in real estate investments 24,834 - - 24,834 4,967 4,967

Good will impairment losses 333,196 - - 333,196 79,967 79,967

Management bounus provision - - 40,448 40,448 9,490 -

Contingent Liability 68,500 - - 68,500 13,700 13,700

Not reported claims 476,442 120,731 - 355,711 84,972 113,947

Provision accumulated losses 697,061 366,660 - 330,401 79,299 167,295

2,849,781 487,391 119,746 2,482,136 677,438 588,365

Deferred Tax Liabilities 2,578,539 479,895 246,000 2,578,539 562,715 619,085

- The movement on deferred tax assets-liabilities was as follows:

2015 2014Assets Liabilities Assets Liabilities

Balance at the beginning of the year 677,438 619,085 703,481 562,715

Additions 26,720 59,040 28,272 56,370

Dsiposal (115,793) (115,179) (54,315) -

Balance at year end 588,365 562,946 677,438 619,085

* This figure represents the beginning balance of deferred tax assets regarding to incurred but not reported reserve for the reason of the profit in the current year 2015, however, we can benefit from this deferred tax assets in the near future. Differed tax assets have been calculated based on tax rates for JIIC & Ibda’ for investment by 24% and Jordan international insurance by 20% as at Dec. 31, 2014 against 14% as at Dec. 31, 2013 according to the income tax law affecting starting the year 2015, according to management opinion the benefits of this deferred tax assets will be effective in the near future.


14 Property And Equipment


Land Building Furniture & Equipments Vehicles

Projects Under

processTotal

JD JD JD JD JD

31 December 2015

Cost

Balance - beginning of the year 688,561 235,222 - 3,450,920

Additions 46,170 6,000 95,715 147,885

Delations - 2,475 - 16,500 - 16,500

Balance at the end of the year 363,068 2,164,069 734,731 224,722 95,715 3,582,305

Accumulated depreciation

Balance at the beginning of the year - 295,852 608,751 222,292 - 1,126,895

Depreciation during the year - 42,757 39,147 6,819 - 88,723

Delations (14,902) - (14,902)

Balance at the end of the year - 338,609 647,898 214,209 - 1,200,716

Property and Equipment Net Book Value - End of the Year 363,068 1,825,460 68,833 10,513 95,715 2,381,589

Depreciation rate

Land Building Furniture & Equipments Vehicles

Projects Under

processTotal

JD JD JD JD JD JD

31 December 2014

Cost

Balance - beginning of the year 363,068 2,164,069 673,861 235,222 - 3,436,220

Additions - - 14,700 - - 14,700

Balance -End of the year 363,068 2,164,069 688,561 235,222 - 3,450,920

Accumulated Depreciation:

Accumulated depreciation - beginning of the year - 252,521 568,037 206,064 - 1,026,622

Depreciation for the year - 43,331 40,714 16,228 - 100,273

Accumulated Depreciation - End of the Year - 295,852 608,751 222,292 - 1,126,895

Property and Equipment Net Book Value - End of the Year 363,068 1,868,217 79,810 12,930 - 2,324,025

* The amount of proparaties and equipments which fully consumed as at 31 Dec, 2012 is JD 658,919 and JD 666,841 as at 31 Dec, 2011


15 Intangible Assets - Net


Brokerage License

2014 2013Description JD JD


Additions - -

Amortization - -

Balance - End of the Year 200,000 200,000

16 Other Assets

This item consists of the following: December 31

2015 2014JD JD

Refundable deposits 254,606 208,552

Prepaid expenses 28,173 62,103

Medications and medical supplies for claims 254 254

Accrued revenues not received 35,298 15,942

Prepaid income tax deposits 41,441 38,013

New system* 227,301 190,781

Trading settlement 78,006 81,631

Others 10,231 2,364

675,310 599,640

* This figure represents the payments for the new system which expected will be done during the year 2016 then will be capitalized as an intangible assets.


17 Mathematical Provision – Net


December 31

2015 2014JD JD

Net of Mathematical Provision 27,080 17,467

Life Additional Reserve (Refund) 15,036 9,613

42,116 27,080

18 Accounts Payable


December 31

2015 2014JD JD

Medical accounts – credit 481,619 878,102

Policies holders' 243,659 217,014

Brokerage customers 162,724 127,377

Services companies 48,130 66,221

Garage and cars spare parts payables 7,652 18,415

Agents payables 2,765 5,145

Brokerage payables 14,016 3,443

Employees payables 2,544 818

Other payables 104,732 62,534

1,067,841 1,379,069

19 Reinsurance Companies Accounts - Credit


December 31

2015 2014JD JD

Local insurance companies 145,049 291,624

Foreign reinsurance companies 1,050,011 489,183

1,195,060 780,807


20 Other Provisions

Movement on other provisions is as follows:

For the Year Ended December 31, 2015

Balance at the Beginning

of the Year

Charged During

the Year

Paid During

the Year

Refunded During

the Year

Balance at Year-

EndJD JD JD JD JD

Provision for end-of-service Indemnity 16,714 23,670 - - 40,384

Provision for employees issues 17,095 - - - 17,095

Management bonuses provision - 40,448 - - 40,448

Other provisions 68,500 - - - 68,500

Profit sharing of life contracts - 15,728 - - 15,728

102,309 79,846 - 182,155

For the Year Ended December 31, 2013

Balance at the Beginning

of the Year

Charged During

the Year

Paid During

the Year

Refunded During

the Year

Balance at Year-

EndJD JD JD JD JD

Provision for end-of-service Indemnity 13,044 3,670 - - 16,714

Provision for employees issues 39,595 - 22,500 - 17,095

Other Provisions - 68,500 - - 68,500

52,639 72,170 22,500 - 102,309

21 Other Liabilities


December 31

2015 2014JD JD

Reinsurers deposits 1,444,201 1,368,393

Claims under suspense accounts 189,822 284,925

Other deposits 266,609 79,276

Un earned revenues 4,584 4,125

Others 10,099 -

1,915,315 1,736,719


22 Authorized and Paid up Capital

Subscribed and paid up capital amounted to JD 18/15million distributed over 18/15 million shares, the par value of each is JD 1, as of December 31, 2015.

23 Statutory Reserve

The amounts in this account represent what has been appropriated from the yearly income before tax at 10% according to the Companies Law. This reserve cannot be distributed to shareholders.

24 Special Reserve

Represents the increase in the assets value of merged companies which has been generated the subsidiary company capital (Jordan International Investment), after the merged in accordance with the consolidation community report represented by general companies controller.

25 Difference in Purchasing of Non-Controlling Interests

The company has purchased part of non-controlling interest in JIIC to be owned by 90/22 % of the subsidiary company capital as of date of the consolidation financial statements. And the difference of JD 325,804 has been booked in the owners’ equity on Dec 31, 2014 which represents the paid amounts and the stocks shares of the net assets which have been purchased in the years 2011, 2012, 2013,2014 & 2015 as per the international standard No. (3) (Amended in the year 2008) related for business combination.

26 Investments Evaluation Reserve

Represents the net of change in the financial assets at fair value through comprehensive income as follows:

2015 2014

JD JDBalance – beginning of the year 1,781,929 1,781,929

Change during the year - -

Changes in deferred tax liability (231) -

Net Change – statement (D) (231) -

Balance - End of the Year 1,781,698 1,781,929


27 Accumulated ProfitsThis item consists of the following:

2015 2014

JD JD

Balance – beginning of the year 805,137 (267,869)

Add:

Gain for the year 1,601,139 1,202,628

Deduct: -

Transferred to Statutory Reserve (164,524) (129,622)

Balance - End of the Year 2,241,752 805,137

Board of directors recommended 1,089,000 JD distributing to the shareholders 6% of capital from the distributable profit of the returned earnings and this is subjected to general assembly approval

28 Non-Controlling InterestsRepresents the Non-controlling interests for Jordan International Investment Company in the net of owner’s’ equity:

Ownership Contripution

Paid In Capital

Statuary Reserve

Special Reserve

Cumulative profit

Profit of the Year

Total Controlling Interests

NonControlling Interests

Non ControllingInterests

fromprofit of the Year

Year - JD JD JD JD JD JD JD JD

2014 90/08% 10,000,000 27,337 2,225 (690,074) 9,586 9,339,488 923,971 951

2015 90/22% 10,000,000 29,018 2,225 (672,523) 19,232 9,358,720 911,247 1,881

29 Credit Interests


2015 2014

JD JD

Bank interest earned on deposits at banks 245.425 396,355

Financial assets interests at amortized cost 40.013 41,654

Total 285.438 438,009


30 Net Gains from Financial Assets This item consists of the following:

2015 2014

JD JD

Cash dividends returns for financial assets through The profit & loss 20.226 33,316

Cash dividends returns for financial assets through comprehensive income 1.497.455 1,063,935

Profit from financial assets at fair value through the Profit & loss - net 767 198,069

Cumulative change in fair value through profit & loss - net (23.600) 239,796

1.494.848 1,535,116

31 Other Revenues


2015 2014

JD JD

Other underwriting revenues 346,828 146,125

Selling profits of real estate investments 155,302 71,034

Financial brokerage commissions 39,949 56,721

Other 9,401 39,058

551,480 312,938

* This item contains marine treaties profits amounting JD 196,677 from AWRIS

32 Employees Expenses


2015 2014

JD JD

Salaries and bonuses 1,168,119 998,820

Company's share of social security contributions 129,350 105,035

Employees training & development 19,493 8,799

Travel and transportation 67,244 74,582

Medical expenses 70,194 57,444

Security and protection 18,625 21,499

End-of-service indemnity 23,669 3,670

Employees clothes 180 1,033

Total 1,496,874 1,270,882

Employees Expenses Allocated to Underwriting Accounts 1,247,571 1,039,852

Employees Expenses Unallocated to Underwriting Accounts 249,303 231,030


33 General and Administrative Expenses


2014 2013

JD JD

Technical consultation and fees 198,736 179,932

Stationery and printing 61,420 56,461

Government and other fees 50,004 58,186

Rent 12,937 34,427

Advertisements 44,811 15,386

Computer expenses 65,564 59,858

Communication and stamps 52,276 43,214

Hospitality 22,644 16,991

Electricity, water and heating 50,213 41,862

Non discountable Sales tax 24,346 31,822

Board of Directors' travel expenses 39,600 51,539

Bank commissions 54,334 58,966

Donations 670 2,450

Subscriptions 77,254 38,249

Maintenance 35,017 17,000

Cleaning expenses 25,474 29,550

Vehicles expenses 16,607 20,813

Offices insurance 5,612 -

Tenders expenses 8,299 5,153

End of service indemnity and management bounus 35,000 14,085

Brokerage commissions 1,069 185

Other expenses 21,558 35,372

Total 903,445 811,501

Allocated general & administrative expenses to the underwriting accounts* 283,129 186,129

Unallocated general and administrative expense to the underwriting account 620,316 625,372


34 Profits per Share for the Year

Profits per share have been computed by dividing net profit for the year by the average number of shares during the year. The details are as follows:

For the year ended December 31,

2015 2014

JD JD

Gains for the year 1,601,139 1,202,628

Weighted average number of shares 18,150,000 18,150,000

Earnings per Share (Basic and Diluted) 0/088 0/066

35 Cash and Cash Equivalents


December 31

2015 2014

JD JD

Cash on hand and at banks 632,416 224,349

Add: Deposits at banks 8,399,558 7,292,141

(Less): Restricted deposits (348,580) (338,580)

8,683,394 7,177,910

36 Transactions with Related Parties

The consolidated financial statements include the financial statements for company and the subsidiary companies as following:

Paid - Up Capital

Ownership 2015 2014

% JD JD

Jordan International Investments 90.22% 10,000,000 10,000,000

Ibda' for Financial Investments 100% 2,500,000 2,500,000

Telal Salem Real Estate 100% 150,000 150,000


As part of the company operations, the company and the subsidiary companies do the transactions with its board of directors members and the related parties (as companies or singles) based on conditions issued by the Board of Directors and the following is the summary of the transactions with related parties during the year:


Board member Total Total

On-Statement of Financial Position Items: JD JD JD

Accounts receivable 312,650 279,706 312,650

Accounts payables 325,322 11,887 325,322

Insurance premiums 598,097 549,069 598,097

Top Executive Management Salaries and BonusesTop Executive management (salaries, bonuses, and other benefits) are as follows:

December 31

2015 2014

JD JD

Salaries and bonuses 553,523 466,131

Total 553,523 466,131

37 The Fair Value of Financial Assets and Liabilities Not Shown at Fair Value in the Consolidated Financial Statements

38 Risk Management

First: Explanatory Disclosures:

The company manages its risks through comprehensive strategy to mitigate risks and establish the right control in order to ensure the continuity of its effectiveness along with risk control system to achieve the ideal balance between risk and return factors. The process of risk management includes continuous identification ,measurement and control on financial and non-financial risk , that might negatively affect the company’s performance and reputation, in addition to ensure an effective distribution for the company’s capital to balance the risk against return factors. The company is exposed to the following risks : market risk , liquidity risk , insurance & exchange rate risk.


Second: Quantitative Disclosures:

a. Insurance Risk

1. Insurance Risk

Risks of any insurance policy represent the probability of occurrence of the insured accident and the uncertainty of the related claim amount due to the nature of the insurance policy whereby the risks are volatile and unexpected in connection with insurance policies of a certain insurance class. As regards the application of the probability theory on pricing and the reserve, the primary risks facing the Company are that incurred claims and the related payments may exceed the book value of the insurance obligations. This may happen if the probability and risk of claims are greater than expected. As insurance accidents are unstable and vary from one year to another, estimates may differ from the related statistics.

Studies have shown that the more similar the insurance policies are, the nearer the expectations are to the actual loss. Moreover, diversifying the types of insurance risks covered decreases the probability of the overall insurance loss.

Through its personnel consisting of professionals and administrative staff, the Company provides the best service to its clients. Moreover, a plan has been set to protect it against probable risks whether natural or unnatural. This requires that the necessary provisions as well as the necessary technical equipment be made available to maintain the Company’s continuity and viability. Hence, the necessity to set the risk management strategy.

Risk management Is the process of measurement and risk evaluation along with strategy development to manage it , where these strategies includes transferring the risks to another party , avoiding and mitigate its negative effects on the company and its subsidiaries , in addition to accept some or all of its consequences . Risk management is divided to four sections:

First: Material risks such as natural catastrophe, fires, accidents, and other external risks not relating to the company’s and its subsidiaries operations.

Second: Legal risks resulting from legal claims or any risks arising from the laws and regulations issued by the insurance commission and the related non-compliance.

Third: Risks arising from financial matters such as interest rate, insurance risk, foreign currencies risks and market risk.

Fourth: Intangible risks that are difficult to identify such as knowledge risk that occurs upon the application of inadequate knowledge by employee. Moreover, relationships risks occur when there is inefficient cooperating with clients. All of these risks reduce the employee’s productivity in knowledge and lessen the effectiveness of expenditure, profit, service, quality, reputation, and the quality of gains.

Risk management adopted by Company and its subsidiaries relies on prioritizing so that risks with huge losses and high probability are treated first while risks with lower losses and lesser probability are treated later on.


2. Claims Development

The schedules below show the actual claims (based on management’s estimates at year-end) compared to the expectations for the past four years based on the year in which the vehicles insurance claims were reported and on the year in which underwriting of the other general insurance types was executed as follows:

Total - Motors:

The accident year 2011 2012 2013 2014 2015 Total

JD JD JD JD JD JD

At the end of the year 8,032,196 1,560,419 1,114,837 478,692 246,321 11,432,465

After one year 6,649,099 1,544,653 1,259,368 521,000 - 9,974,120

After two years 6,702,032 1,544,653 1,259,368 - - 9,506,053

After three years 6,702,032 1,544,653 - - - 8,246,685

After four years 6,702,032 - - - - 6,702,032

Current expectations of cumulative 6,702,032 1,544,653 1,259,368 521,000 246,321 10,273,374

Cumulative payments 5,731,284 1,375,698 1,001,258 489,568 230,154 8,827,962

Liabilities as stated in the statement of financial position 970,748 168,955 258,110 31,432 16,167 1,445,412

Surplus (deficit) in the preliminary estimate for reserve 1,383,097 15,766 (144,531) (42,308) - 1,458,345

Total – Marine:


JD JD JD JD JD JD

At the end of the year 178,574 136,483 734,138 689,250 458,900 2,197,345

After one year 178,146 129,451 658,962 722,125 - 1,688,684

After two years 179,015 129,451 658,962 - - 967,428

After three years 179,015 129,451 - - - 308,466

After four years 179,015 - - - - 179,015

Current expectations of cumulative claims 179,015 129,451 658,962 722,125 458,900 2,148,453

Cumulative payments 84,054 125,819 86,976 402,953 150,128 849,930

Liabilities as stated in the statement of financial position 94,961 3,632 571,986 319,172 308,772 1,298,523

Surplus (deficit) in the preliminary estimate for 428 7,032 75,176 (32,875) - 508,661


Total - Fire and Property:


JD JD JD JD JD JD

At the end of the year 8,621,806 160,429 9,418,468 4,258,325 216,591 22,675,619

After one year 756,616 146,023 12,869,221 4,258,325 - 18,030,185

After two years 298,827 146,023 12,869,221 - - 13,314,071


After four years 298,827 - - - - 298,827

Current expectations of cumulative claims 298,827 146,023 12,869,221 4,258,325 216,591 17,788,987

Cumulative payments 75,276 138,693 3,890,125 3,403,528 210,369 7,717,991

Liabilities as stated in the statement of financial position 223,551 7,330 8,979,096 854,797 6,222 10,070,996

Surplus (deficit) in the preliminary estimate for 7,865,190 14,406 (3,450,753) - - 4,645.434

Total – Liability:


JD JD JD JD JD JD

At the end of the year 390,650 40 93,204 23,150 353,847 860,891

After one year 125,000 40 94,589 24,056 - 243,685

After two years 125,000 40 94,589 - - 219,629

After three years 125,000 40 - - - 125,040

After four years 125,000 - - - - 125,000

Current expectations of cumulative claims 125,000 40 94,589 24,056 353,847 597,532

Cumulative payments 121,005 40 - - 89,258 210,303

Liabilities as stated in the statement of financial position 265,650 - (1,358) (906) 353,847 617,206

Surplus (deficit) in the preliminary estimate for reserve 3,995 - 94,589 24,056 - 387,229


Total – Personal Accidents:


JD JD JD JD JD JD

At the end of the year 107 - 2,100 125 - 2,332

After one year - 258 - 170 - 428

After two years - - - - - -

After three years - - - - - -

After four years - - - - - -

Current expectations of cumulative claims 107 258 2,100 170 - 2,635

Cumulative payments 107 148 20 100 - 375

Liabilities as stated in the statement of financial position 107 (258) 2,100 (45) - 1,904

Surplus (deficit) in the preliminary estimate for reserve - 110 2,080 70 - 2,260

Total – Medical:


JD JD JD JD JD JD

At the end of the year 225,214 353,494 96,480 169,653 216,800 1,061,641

After one year 225,214 353,494 96,480 169,653 - 844,841

After two years 225,214 353,494 96,480 - - 675,188


After four years 225,214 - - - - 225,214

Current expectations of cumulative claims 225,214 353,494 96,480 169,653 216,800 1,061,641

Cumulative payments 225,214 353,494 96,480 169,653 - 844,841

Liabilities as stated in the statement of financial position - - - - 216,800 216,800

Surplus (deficit) in the preliminary estimate for reserve - - - - - 216,800


3. Concentration of Insurance Risk

Concentration of assets and liabilities according to the insurance type as follows:

Insurance Type 2015 2014

Net Gross Net Gross

Motor 1,117,363 1,495,412 1,760,539 2,219,451

Marine 254,594 1,721,256 251,136 1,282,603

Fire & other 228,033 11,768,808 326,135 16,894,116

Third party liability 215,882 704,970 223,661 554,700

aviation 321 27,867 - 438,493

Personal accident 2,111 2,814 1,953 1,970

Medical 1,978,220 3,300,024 1,686,762 2,832,800

Life 67,839 167,754 47,567 115,293

Total 3,864,363 19,188,905 4,297,753 24,339,426

Concentrating of assets and liabilities according to the geographical and sectional distribution is as follows:


Assets Liabilities Assets Liabilities

JD JD JD JD

According to geographical area :

Inside Jordan 5.441.745 3.864.363 7,115,156 4,291,283

Other Middle East Countries 2.603.640 - 3,404,294 -

Europe 6.204.907 - 8,113,000 -

Asia * 1.074.250 - 1,404,597 -

Total 15.324.542 3.864.363 20,037,047 4,291,283

* Including Asian countries except Jordan & Middle East countries.


The concentration for assets and liabilities related to accounts receivable & payable according to sectors as follows:


Assets Liabilities Assets Liabilities

JD JD JD JD

According to Sector:

Companies and corporations 5.355.182 2.246.019 3,876,614 2,140,672

Individuals 123.253 16.882 123,240 19,204

Total 5.478.435 2.262.901 3,999,854 2,159,876

4. Reinsurance Risk

As with other Insurance Companies and for the purpose of reducing the exposure to financial risks that may arise from major insurance claims, the Company, within the normal course of its operations, enters into reinsurance contracts with other parties. In order to reduce its exposure to major losses arising from the insolvency of reinsurance companies, the Company evaluates the financial position of the reinsurance companies it deals with while monitoring credit concentrations coming from geographic areas and activities or economic components similar to those companies. Moreover, the reinsurance policies issued do not exempt the Company from its obligations towards policyholders. As a result, the Company remains committed to the reinsured claims balance in case the reinsurers are unable to meet their obligations according to the reinsurance contracts.

In order to reduce exposure to the financial risks that may arise from the major insurance claims, the Company enters into reinsurance agreements with other parties.

5. Sensitivity of Insurance Risks


Consolidated Income Owners' Equities Consolidated Income Owners' Equities

JD JD JD JD

Consolidated profits/ owner equity 1,603,020 25,997,020 1,203,579 24,403,386

Decrease 5% of premiums (641,676) (641,676) (551,327) (551,327)

Total 961,344 25,355,344 652,252 23,852,059

Consolidated profits/ owner equity 1,603,020 25,997,020 1,203,579 24,403,386

Increase 5% of claims (505,555) (505,555) (478,948) (478,948)

Total 1,097,465 25,491,465 724,631 23,924,438


b. Financial Risk

The Company & its subsidiaries follow financial policies or managing the various risks within a predefined strategy. Moreover, the company’s management monitors and controls the risks and performs the optimal strategic allocation of both financial assets and financial liabilities .Risks include interest rate risk, credit risk , foreign currencies risk, and market risk.

Moreover, the Company follows the financial hedge policy for both financial assets and financial liabilities whenever the need arises. This hedge relates to the expected future risks.

1. Market Risks:

Market risk is the potential losses that may arise from the changes in fair value or cash flow from financial instruments according to changes in market prices such as the change in interest rates, foreign currency exchange rates, and equity instrument prices, and these risks and mentioned according to specific policies and procedures through specialized committees and responsible workshop. It also includes the risk of interest rates, exchange rate equity instrument risks. The following table illustrates the effect of a 5% increase (decrease) in Amman Stock Exchange index on the fair value through income statement which is reflected on the statement of consolidated equity as of the consolidated statement of financial statement data, the sensitivity analysis was prepared on the assumption that the shares prices are moving along with the index percent change:

+ 5 % ( 5 )%

For the Year Ended December 31,

2015 2014 2015 2014

JD JD JD JD

Consolidated Income Statement 17,055 145,132 (17,055) (145,132)

+ 5 % ( 5 )%


2015 2014 2015 2014

JD JD JD JD

Owners Equities 17,055 145,132 17,055 (145,132)

The company and its subsidiaries aren’t exposed to exchange rate risks, since the financial reconciliations with the clients or the reinsurers occur in the local currencyAnd for the transaction in USD the company’s management considers that risk immaterial since Jordanian Dinar (the functional currency) is direct tied with USD.


2. Interest Rate Risks:

Interest rate risk represents the risks resulting from changes in interest rates prevailing in the market. Moreover the company and its subsidiaries continually manage their exposure to risk and all variety considerations such as finance and renewing the current positions are revalued. The company manages bank accounts interest rate risk through the application of sensitivity analysis of the instruments subject to interest rates so as not to reflect negatively on the net income from interest. An increase or decrease of 5%, which represents management’s assessment of the likely change and acceptable rates of interest, is used.

2015 2014


+ 5 % - ( 5 )% + 5 % - ( 5 )%

JD JD JD JD

Loss of the year 45,160 (45,160) 37,582 (37,582)

Owner's equity 45,160 (45,160) 37,582 (37,582)


3. Liquidity Risk

Liquidity risk is the inability of the company and its subsidiaries to provide the finding necessary to perform its obligations on the due dates. The risk management process includes the following:

• Maintaining highly marketable assets that can be easily liquidated in protection against any unforeseen event of a shortage in liquidity.

• Monitoring the indicators of liquidity in accordance with domestic requirements and the requirements of regulatory authorities.

• Managing the concentrations and maturity dates of debts.

Less than One

Month

More Than 1

Month to 3 Months

More than 3

Months to 6

Months

More than 6

Months to 1 Year

More than 1

Year to 3 Years

More than

3Years

Without Maturity Total

December 31, 2015 JD JD JD JD JD JD JD JD

Liabilities:

Accounts payable - 1,067,841 - - - - - 1,067,841

Reinsures companies accounts- credit - 1,195,060 - - - - - 1,195,060

Accrued expenses - 56,254 - - - - - 56,254

Other provisions - 182,155 - - - - 182,155

Due from related party - 325,322 - - - - - 325,322

Income tax provision - 2,887 - - - - - 2,887

Deferred tax liabilities - - - - 562,946 - - 562,946

Other liabilities - 10,099 4,584 226,609 1,634,022 - - 1,915,315

Total liabilities - 2,839,618 4,584 266,609 2,196,969 - - 5,307,780

Total Assets 9,024,105 769,090 1,012,960 3,954,378 9,082,549 11,126,081 200,000 35,169,163

December 31, 2014 JD JD JD JD JD JD JD JD

Liabilities:

Accounts payable - 1,379,069 - - - - - 1,379,069

Reinsures companies - 780,807 - - - - - 780,807

Accrued expenses - 99,024 - - - - - 99,024

Other provisions - 102,309 - - - - 102,309

Due from related party - 11,887 - - - - - 11,887

Deferred tax liabilities - - - 619,085 - - - 619,085

Other liabilities - 4,125 79,276 - 1,653,318 - - 1,736,719

Total liabilities - 2,377,221 79,276 619,085 1,653,318 - - 4,728,900

Total Assets 10,080,553 2,845,377 1,227,078 631,665 9,428,146 8,967,220 200,000 33,430,039


4. Credit Risks

Credit risk is the risk of failure of the other party to fulfill its contractual obligations, causing losses to the company and its subsidiaries. Moreover, The Company and its subsidiaries follow the policy of dealing with only creditworthy parties, so as to reduce the risk of losses resulting from failure to meet commitments.

Furthermore, the company and its subsidiaries do not take any guarantees for collecting trade receivables .Therefore, trade receivables are not guaranteed.

The company’s and its subsidiaries financial assets consist mainly of policy holders, financial assets in fair value through statement of income. Financial assets in fair value through statement of comprehensive income, cash and cash equivalent and other debit balances , policy holders’ receivables consist of debit on local insures , some governmental parties , major ventures and foreign clients.

In the opinion of the company’s management the percentage of uncollected receivables or part of its very low, knowing that its represents important concentration for the credit risks in the clients geographical areas, Moreover a strict credit policy is maintained, where every client account is being monitored separately. The clients’ concentration per their geographical area as follows:

Geographical Area Indebtedness

Inside Jordan 4,709,345

Outside Jordan -

Total 4,709,345

39 Main Segments Analysis

a. Information on the Company’s Operating Segments

The general insurance sector at the Company includes motor insurance, marine insurance, flight insurance, fire and damages insurance, malpractice insurance, and other types of insurance. This includes investments and the management of cash for the Company. Moreover, transactions among the sectors are based on the estimated market prices at the same terms given to others.

b. Information on Geographical Distribution

This note represents the geographical distribution of the Company’s operations. Moreover, the Company conducts its operations mainly in the kingdom, representing local operations. It also conducts international activities through its branches in the Middle East, Europe, Asia, America, and the Far East, representing the international operations.


The following is the distribution of the Company’s revenues, assets, and capital expenditures according to geographical sector:

Inside Jordan Outside Jordan Total

December 31 December 31 December 31

2015 2014 2015 2014 2015 2014

JD JD JD JD JD JD

Total Revenues 7,064,127 6,727,728 963,749 723,606 8,027,876 7,451,334

Total Assets 34,282,251 31,936,778 886,912 1,493,261 35,169,163 33,430,039

39 Management of Capital

The Company’s objectives as to the management of capital are as follows:

The company’s management and its subsidiaries aim to achieve capital management goals through the development the company and its subsidiaries business and achieve surplus in operating revenues, revenues and the optimum utilization for the available fund resources, where it achieves the desired growth in the owners’ equity.

The company and its subsidiaries takes into account the appropriateness between capital size and the nature of risks that the company and its subsidiaries are exposed to , where it doesn’t interfere with the ongoing regulations and laws, which is reflected through the company and its subsidiaries strategic plans and budgets.

The effect of participating in investments are taken into considerations capital adequacy ratio, the capital and its adequacy are being continuously monitored, in the opinion of the board of directors, the organizational capital is adequate to achieve the company and its subsidiaries goals.

e. The following table shows the summary of the Company’s capital and the minimum required capital:

December 31

2015 2014

JD JD

First: Capital available 28,627,658 26,290,586

Second: Capital required

Capital required against assets risk 5,984,840 5,987,881

Capital required against policy liability 560,286 671,757

Capital required against reinsurance credit risks

Capital required against life insurance risk 381,296 267,631

Total capital required 6,926,422 6,927,269

Third: Solvency ratio 413/31% 379/52%


* The following table shows the available capital:

December 31

2015 2014

JD JD

Core Capital

Paid – up Capital 18,150,000 18,150,000

Statutory reserve 2,584,294 2,419,770

Statutory private 2,225 2,225

Deference in purchasing of non controlling entrusts 325,804 320,354

Non controlling entrusts 911,247 923,971

Cumulative profit 2,241,752 805,137

Increase in real estate investments 2,630,638 1,887,200

Reserve valuation of investments 1,781,698 1,781,929

Total available capital 28,627,658 26,290,586

In the opinion of the Company’s management, the regulatory capital is compatible with and adequate to the size of capital and nature of risks to which the Company is exposed.


40 The Maturities of Assets and Liabilities

The following table shows the analysis of assets and liabilities according to their expected period to recovery or settlement:

Within One Year

More than One Year Total

December 31, 2015 JD JD JD

Assets:

Deposits at banks 8,050,586 348,972 8,399,558

Financial assets at fair value through Profit & Loss 341,103 - 341,103

Financial assets at fair value through the other comprehensive income - 6,948,579 6,948,579

Financial assets at amortized cost - 365,000 365,000

Cash on hand and at banks 632,416 - 632,416

Real Estate Investments - 8,395,520 8,395,520

Checks under collection 425,638 - 425,638

Accounts receivable – net 3,528,740 1,180,605 4,709,345

Reinsurers companies accounts - debit 769,090 - 769,090

Due from related parties 312,650 - 312,650

Deposit Settlement Guarantee Fund 25,000 - 25,000

Deferred tax assets - 588,365 588,365

Property and equipment – net - 2,381,589 2,381,589

Intangible assets - 200,000 200,000

Other assets 675,310 - 675,310

Total Assets 14,760,533 20,408,630 35,169,163

Liabilities

Unearned premiums provision – net 1,765,988 - 1,765,988

Claims provision – net 2,056,259 - 2,056,259

Account provision 42,116 - 42,116

Accounts payable 1,067,841 - 1,067,841

Accrued expenses 56,254 - 56,254

Reinsures Companies accounts - credit 1,195,060 - 1,195,060


Income tax provision 2,887 - 2,887

Due to related parties 325,322 325,322

Deferred tax liabilities - 562,946 562,946

Other liabilities 281,292 1,634,023 1,915,315

Total Liabilities 6,975,174 2,196,969 9,172,143

Net 7,785,359 18,211,661 25,997,020


Within One Year More than One Year Total

December 31, 2014 JD JD JD

Assets:

Deposits at banks 6,953,561 338,580 7,292,141

Financial assets at fair value through Profit & Loss 2.902.643 - 2,902,643

Financial assets at fair value through the other comprehensive income - 5,549,644 5,549,644

Financial assets at amortized cost - 400,000 400,000

Cash on hand and at banks 224,349 - 224,349

Real Estate Investments - 8,628,640 8,628,640

Checks under collection 326,959 - 326,959

Accounts receivable – net 2,014,655 1,154,477 3,169,132

Reinsurers companies accounts - debit 830,722 - 830,722

Due from related parties 279,706 - 279,706

Deposit Settlement Guarantee Fund 25,000 - 25,000

Deferred tax assets 677,438 - 677,438

Property and equipment – net - 2,324,025 2,324,025

Intangible assets - 200,000 200,000

Other assets 599,640 - 599,640

Total Assets 14,157,235 19,272,804 33,430,039

Liabilities

Unearned premiums provision – net 1,499,534 1,499,534

Claims provision – net 2,771,139 2,771,139

Account provision 27,080 27,080

Accounts payable 1,379,069 1,379,069

Accrued expenses 99,024 99,024

Reinsures Companies accounts - credit 780,807 780,807


Due from related parties 11,887 11,887

Deferred tax liabilities 619,085 619,085

Other liabilities 83,401 1,653,318 1,736,719

Total Liabilities 7,373,335 1,653,318 9,026,653

Net 7,461,338 16,942,048 24,403,386


41 Lawsuits against the Company

There are lawsuits against the Company at courts claiming compensation for a total amount of JD 4.017.692 as of December 31, 2015. In the opinion of the Company’s management and its lawyer, no obligations shall arise there from exceeding the allocated amounts within the net claims reserve. (JD 4.440.641 as of Dec. 31, 2014). However there is no any of court case against the subsidiaries as of Dec 31,2015

42 Contingent Liabilities

a The Company was contingently liable for bank guarantees of JD 1,851,159 as of December 31, 2014.

b Cash claims amounted to JOD 68,500 from Free Zone consist of services and fines related to buildings owned by Jordan International Investment.

43 Fair Value Hierarchy

a. Financial assets/liabilities fair value for the company which is evaluated at fair value in a continuous way.

Some of financial Assets/liabilities are evaluated at fair value for each period, the below schedule illustrate information regarding the way to limit its fair value.

Financial assets / liabilities Fair value at Dec 31, 2015

Fair value at Dec 31, 2014

Fair value layer

Evaluation method

Financial assets at fair value through profit& loss statement

Shares in Corporations 341,103 2,902,643 First layer Prices listed in ASE

Total 341,103 2,902,643

Shares with fair value 1,157,935 - Second layer Discounted cash flow

Shares without fair value 5,790,644 5,549,644 Second layer Discounted cash flow

Total 6,948,579 5,549,644

Total financial assets at fair value 7,289,682 8,452,287


b. Financial assets/liabilities fair value for the companies which are not evaluated at fair value in a continuous way.

31Dec, 2015 31Dec, 2014 FMV layer

Book value FMV Book value FMV

Financial assets not evaluated at FMV JD JD JD JD

Deposit in banks 8,399,558 8,416,253 7,292,141 7,315,353 Second layerProperty Investment 8,395,520 11,026,158 8,628,640 10,515,840 Second layerTotal 16,795,078 19,442,411 15,920,781 17,831,193

44 Adoption of new and revised International Financial Reporting Standards (IFRSs)

a. Amendments to IFRSs applied with no material effect on the financial statements:

The following new and revised IFRSs have been adopted in the preparation of the financial statements for which they did not have any material impact on the amounts and disclosures of the financial statements, however, they may affect the accounting for future transactions and arrangements.

Amendments to IFRS 1 Severe Hyperinflation (Effective for annual periods beginning on or after 1 July 2011)

The amendments regarding severe hyperinflation provide guidance for entities emerging from severe hyperinflation either to resume presenting IFRS financial statements or to present IFRS financial statements for the first time.

Amendments IFRS 1 removal of Fixed Dates for First-time Adopters (Effective for annual periods beginning on or after 1 July 2011)

The amendments regarding the removal of fixed dates provide relief to first-time adopters of IFRSs from reconstructing transactions that occurred before their date of transition to IFRSs.

Amendments to IFRS 7 Disclosures – Transfers of Financial assets (effective for annual periods beginning on or after 1 July 2011)

The amendments to IFRS 7 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures of transactions where a financial asset is transferred but the transferor retains some level of continuing exposure in the asset.

Amendments to IAS 12: Deferred Tax – Recovery of Underlying assets (Effective for annual periods beginning on or after 1 January 2012)

Amends IAS 12 Income Taxes to provide a presumption that recovery of the carrying amount of an asset measured using the fair value model in IAS 40 Investment Property will, normally, be through sale.

As a result of the amendments, SIC-21 Income Taxes — Recovery of Revalue Non-Depreciable Assets would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC-21, which is accordingly withdrawn.


Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)

Amends IAS 1 Presentation of Financial Statements to revise the way other comprehensive income is presented.The amendments:

• Preserve the amendments made to IAS 1 in 2007 to require profit or loss and OCI to be presented together, i.e. either as a single ‘statement of profit or loss and comprehensive income’, or a separate ‘statement of profit or loss’ and a ‘statement of comprehensive income’ – rather than requiring a single continuous statement as was proposed in the exposure draft.

• Require entities to group items presented in OCI based on whether they are potentially reclassifiable to profit or loss subsequently. i.e. those that might be reclassified and those that will not be reclassified.

• Require tax associated with items presented before tax to be shown separately for each of the two groups of OCI items (without changing the option to present items of OCI either before tax or net of tax).

b. New and revised IFRSs issued but not yet effective

The Company has not applied the following new and revised IFRSs that have been issued and are available for early application but are not effective yet:

Effective for annual periods beginning on or after

IFRS 9 Financial Instruments (as revised in 2010) 1 January 2015Amendments to IFRS 9 and IFRS 7 Mandatory Effective date of IFRS 9 and transition Disclosures

1 January 2015

IFRS 10 Consolidated Financial Statements 1 January 2013IFRS 11 Joint Arrangements 1 January 2013IFRS 12 Disclosure of Interests in Other entities 1 January 2013Amendments to IFRS 10, IFRS 11 and IFRS 12 Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other entities: Transition Guidance

1 January 2013

IAS 27 Separate Financial Statements (as revised in 2011) 1 January 2013

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011) 1 January 2013


IFRS 13 Fair Value Measurement 1 January 2013IAS 19 Employee Benefits (as revised in 2011) 1 January 2013Amendments to IAS 32 Financial Statements Offsetting Financial Assets and Liabilities 1 January 2014

Amendments to IFRS 1 Government Loans 1 January 2013Amendments to IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013

Annual Improvements to IFRSs 2009 – 2011 Cycle 1 January 2013

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013

Management anticipates that each of the above standards and interpretations will be adopted in the financial statements by its date mentioned above without having any material impact on the Company’s financial statements.

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