7/29/2019 FIDL Unaudited results for HY ended 30 Jun 13.pdf

1/1

CHAIRMANS STATEMENT

Operating environmentThe economy was subdued in the rst half of the year with liquidity challenges being the majormpediment to economic performance. Consequently the economic growth forecast for 2013 waseduced from 5% to 3.4%.

To the insurance sector liquidity challenges have negatively affected the uptake of insurance productsas well as collection of premiums.

Financial performanceGross premium income increased marginally by 3% to US$6.9 million in the rst half of the yearcompared to US$6.7 million in the corresponding period last year. An underwriting surplus of US$2.2million was achieved in the period under review compared to US$3.3 million achieved in June 2012.Prot from operations at US$2.6 million is down 21% from US$3.3 million recorded in June 2012because land that has been earmarked for development has not been revalued in 2013 whereas in2012, such land was revalued as it was classied as investment property.

ndividual company performance

Fidelity Life AssuranceThe anchor company recorded net premium income of US$4.2 million compared to US$3.6 million inhe corresponding period.

Vanguard Life AssuranceThe Malawi- based subsidiary recorded premium income of US$1.3 million compared to US$1.7 millionn June 2012.

Fidelity Funeral AssuranceThe funeral assurance company recorded an unchanged premium income of US$1.2 million in theperiod under review. The assurance business of the company has been merged with the individualfe business of Fidelity Life Assurance so as to rationalize costs and remove licence duplication goingorward.

Non insurance subsidiariesThe micro-nance company posted a prot of US$326,000, with the asset management companyenjoying a turnaround from a loss of US$27,000 in 2012 to a prot of US$212,695. Fidelity MedicalServices Company and Zimbabwe Actuarial Consultants are also operating protably contributingUS$156,000 and US$28,000 respectively to overall Group prots.

DividendThe board has resolved to pass the interim dividend in order to conserve cash for projects funding andmaintaining liquidity given the deteriorating general liquidity in the economy.

RecognitionThe Group continues to be acknowledged for the work it has been doing since the advent ofdollarization and was recently recognized for best performance by a listed counter in the Central AfricanStock Exchanges for the period between 2009 and 2012 during which there has been rapid growthn the companys net assets and prots. This has resulted in the share price of Fidelity Life Assuranceappreciating by over 1,100%.

OutlookOperations in core products are being streamlined and consolidated to manage costs whilst the upsidebrought about by the Pension Act in Malawi continues to be experienced by the Malawian subsidiaryVanguard Life Assurance, following the stabilisation of the economic situation in that country.

The Group is well positioned to ensure a sustainable value creation and delivery trajectory goingorward. Regulatory approvals (including a sub-division permit) to commence development of FidelitySouthview Park residential project have been secured and works are expected to commence in theourth quarter of 2013.

The sub-division permit covers the servicing of 5,773 residential stands, 14 garden ats, 8 primarychools, 3 secondary schools, 4 commercial centers, 7 churches, 7 crches and other social amenities.

The Group has also been issued with a compliance certicate for the Fidelity Life Park Project. As aesult, the remaining 117 residential stands from the original 317 are now available for sale and the

market response is positive.

All this augurs well for the diversication of income and funding of long term insurance liabilities that the

Group is underwriting.

Appreciationwould like to thank our customers, boards of the company and subsidiaries, management, staff

and other stakeholders for all the support. We look forward to continuously delivering value for ourpolicyholders and shareholders.

...............................S.TemboChairman29 August 2013

Interim abridged consolidated statement of prot or loss and other comprehensive income

for the half year ended 30 June 2013Unaudited Unaudited

30-Jun-2013 30-Jun-2012US$ US$

RevenueGross written premiums 6,897,041 6,683,981Outward reinsurance premiums (171,900) (168,671)Net premiums earned 6,725,141 6,515,310

Fees from fund management and investment contracts 443,130 1,324,301Investment return 2,613,441 4,515,944Other income 1,453,532 648,686Total revenue 11,235,244 13,004,241

ExpensesClaims and benets (1,006,241) (650,159)Reinsurance recoveries 43,418 -Net claims and benets incurred (962,823) (650,159)

Change in insurance contract liabilities (3,528,802) (5,132,764)Cost of sales on residential stands and other cost of sales (84,661) -Fee and commission expenses, and other acquisition costs (380,134) (499,724)Other operating and administrative expenses (3,650,907) (3,428,191)Total expenses (8,607,327) (9,710,838)

Prot from operations 2,627,917 3,293,403

Finance costs (453,658) (617,030)Prot before tax 2,174,259 2,676,373

Income tax expense (65,673) (50,341)Prot from continuing operations after tax 2,108,586 2,626,032

Discontinued operations - -Prot/(loss) from discontinued operations after tax - -Prot for the period 2,108,586 2,626,032

Other comprehensive incomeExchange differences on translation of foreign operations 106,776 123,843Total other comprehensive income for the period 106,776 123,843

Total comprehensive income for the period 2,215,362 2,749,875

Prot for the period attributable to:Equity holders of the parent 1,891,187 2,461,668Non-controlling interests 217,399 164,364Total prot for the period 2,108,586 2,626,032

Total comprehensive income attributable to:

Equity holders of the parent 1,997,963 2,585,511Non-controlling interests 217,399 164,364Total comprehensive income for the period 2,215,362 2,749,875

Continuing operationsBasic earnings per share (cents) 1.74 2.26Diluted earnings per share (cents) 1.74 2.26Headline earnings per share (cents) 1.74 2.25

1. ACCOUNTING POLICIESThe same accounting policies and methods of computation that were followed in preparing theGroups audited nancial statements for the year ended 31 December 2012 were followed inpreparing these interim abridged consolidated nancial statements.

Basis of preparationThe interim abridged consolidated nancial statements are based on statutory records maintainedunder the historical cost convention as modied by the revaluation of held for trading investmentsand investment property.

2. STATEMENT OF COMPLIANCEThe interim abridged consolidated nancial statements for the six months ended 30 June 2013

have been prepared in accordance with IAS 34- Interim Financial Reporting.

The interim abridged consolidated nancial statements do not include all the information anddisclosures required in the annual nancial statements and should be read in conjunction with theGroups annual nancial statements as at 31 December 2012.

Unaudited Audited30-Jun-2013 31-Dec-2012

3. SIGNIFICANT TRANSACTIONS US$ US$3.1 Investment property additions 1,856,747 5,625,596

Unaudited Unaudited30-Jun-2013 30-Jun-2012

US$ US$3.2 Gross premiums written during the period 6,897,041 6,683,981

3.3 Gains /(losses) on nancial investments at fair valuethrough prot or loss 1,521,443 (818,264)

3.4 Fair value gains on investment property - 5,000,000

4 EARNINGS PER SHAREProt for the period attributed to ordinary equityholders of the parent 1,891,187 2,461,668

Number of shares used in calculating earnings per shareShares in issue 108,923,291 108,923,291Weighted average shares in issue 108,923,291 108,923,291

Basic earnings per shareBasic earnings per share are calculated by dividing the prot attributable to ordinary equity holdersof the parent company by the weighted average number of ordinary shares in issue during theperiod

Headline earnings per shareHeadline earnings per share are calculated by dividing the headline earnings for the periodattributable to ordinary equity holders of the parent company by the weighted average number ofordinary shares in issue during the period

Headline earnings are calculated as follows:

Prot for the period attributed to ordinary equity holders ofthe parent 1,891,187 2,461,668Prot on disposal of vehicles and equipment - (12,060)Headline earnings 1,891,187 2,449,608

5 GEOGRAPHICAL SEGMENTS

Period ended 30 June 2013 Zimbabwe Malawi Zambia TotalUS$ US$ US$ US$

RevenueTotal revenue 9,495,092 1,814,702 - 11,309,794

Inter-segment revenue (74,550) - - (74,550) Total revenue from externalcustomers 9,420,542 1,814,703 - 11,235,244

Segment prot before tax 1,788,931 385,328 - 2,174,259

Tax expense (33,434) (32,239) - (65,673)Prot for the period 1,755,497 353,089 - 2,108,586

As at 30 June 2013Reportable segment assets 43,820,510 8,139,870 241,228 52,201,608Reportable segment liabilities 32,801,637 7,336,542 519,196 40,657,375

Period ended 30 June 2012 Zimbabwe Malawi Zambia TotalUS$ US$ US$ US$

RevenueTotal revenue 11,242,531 1,803,300 - 13,045,831

Inter-segment revenue (41,590) - - (41,590) Total revenue from externalcustomers 11,200,941 1,803,300 - 13,004,241

Segment prot before tax 2,481,568 194,805 - 2,676,373

Tax expense (50,341) - - (50,341)Prot for the period 2,431,227 194,805 - 2,626,032

As at 31 December 2012Reportable segment assets 36,133,090 11,606,682 241,228 47,981,000Reportable segment liabilities 31,396,534 6,361,399 519,196 38,277,129

nterim abridged consolidated statement of nancial position

as at 30 June 2013

Unaudited Audited30-Jun-2013 31-Dec-2012

US$ US$ASSETSNon-current assetsProperty, vehicles and equipment 6,890,132 7,006,281nvestment property 17,468,330 15,700,386ntangible assets 360,465 382,908Deferred acquisition costs 1,414,293 1,414,293Other receivables 533,740 459,035

26,666,960 24,962,903

Current assetsnventories 2,311,342 2,310,554Trade and other receivables 8,131,202 7,879,287Related party receivables 136,939 334,082Held for trading investments 7,269,385 7,311,603Money market investments 6,875,989 2,980,882Bank and cash balances 568,563 1,960,461

25,293,420 22,776,869

Assets in disposal group classied as held for sale 241,228 241,228

Total assets 52,201,608 47,981,000

EQUITY AND LIABILITIESEquity attributable to owners of the parentShare capital 1,089,233 1,089,233Share premium 1,185,317 1,185,317Non distributable reserve 174,461 174,461Foreign currency translation reserve (344,054) (450,830)Revaluation reserve 165,171 165,171Retained earnings 8,114,976 6,598,789

10,385,104 8,762,141

Non-controlling interest 1,159,129 941,730

Total equity 11,544,233 9,703,871

Non-current liabilitiesLife assurance policyholder liabilities 32,410,545 28,864,142

Deferred tax 163,048 135,31732,573,593 28,999,459

Current liabilitiesTrade and other payables 3,638,606 4,034,907Related party payables 52,411 92,208Borrowings 3,730,858 4,452,897Corporate tax liability 40,911 177,062Bank overdraft 101,800 1,400

7,564,586 8,758,474

Liabilities in disposal group classied as held for sale 519,196 519,196

Total liabilities 40,657,375 38,277,129

Total equity and liabilities 52,201,608 47,981,000

Interim abridged consolidated statement of cash ows

for the half year ended 30 June 2013Unaudited Unaudited

30-Jun-2013 30-Jun-2012US$ US$

CASH FLOWS FROM OPERATING ACTIVITIESProt before tax 2,174,259 2,676,373

Adjustments: (907,292) (7,092,624)Fair value adjustment on held for trading investments (1,588,450) (2,483,770)Fair value adjustment on investment property (5,000) (5,000,000)Fair value adjustment on available for sale investment - (361,951)Amortisation of intangible assets 46,162 -Finance costs 453,658 617,030Exchange differences (106,776) (123,843)Depreciation of property, vehicles and equipment 293,114 271,970Prot on sale of vehicles and equipment - (12,060)Changes in working capital (491,658) (2,598,953)

Increase in inventories (788) (996,151)Increase in trade and other receivables (251,915) (578,573)Decrease in related party receivables 197,143 347,938Decrease in trade and other payables (396,301) (1,372,167)Decrease in related party payables (39,797) -Cash generated from operations 775,309 (7,015,204)

Income taxes paid (201,824) (87,678)NET CASH GENERATED FROM OPERATING ACTIVITIES 573,485 (7,102,882)CASH FLOWS FROM INVESTING ACTIVITIES (394,961) (1,330,364)

Replacement of property, vehicles and equipment (103,589) (368,317)Additions and improvements to investment property (1,852,945) (2,945,793)Additions to intangible assets - (257,240)Increase in loans and receivables (74,705) -Decrease in held for trading investments 1,630,668 2,226,676Proceeds from sale of vehicles and equipment 5,610 14,310

CASH FLOWS FROM FINANCING ACTIVITIES 2,224,285 8,714,855

Finance costs (453,658) (617,030)

Dividends paid (375,000) (350,000)Increase in insurance liabilities 3,528,802 5,132,764Transfer to life fund 246,180 1,388,064(Decrease)/Increase in borrowings (722,039) 3,161,057

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,402,809 281,609

CASH AND CASH EQUIVALENTS AT BEGINNINGOF THE PERIOD 4,939,943 4,875,038

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 7,342,752 5,156,647

Interim abridged consolidated statement of changes in equityfor the half year ended 30 June 2013

Non Currency Attributable to NonShare Share Retained Revaluation distributable translation shareholders of controlling

capital premium earnings reserve reserves reserve parent interest Total equityUS$ US$ US$ US$ US$ US$ US$ US$ US$

Restated balance at 31 December 2011 1,089,233 1,185,317 3,110,606 1,018,728 730,102 (388,690) 6,745,296 689,616 7,434,912

Total comprehensive income for the period - - 2,461,668 - - 123,843 2,585,511 164,364 2,749,875

Dividend paid - - (350,000) - - - (350,000) - (350,000)Restated balance at 30 June 2012 1,089,233 1,185,317 5,222,274 1,018,728 730,102 (264,847) 8,980,807 853,980 9,834,787

Balance at 31 December 2012 1,089,233 1,185,317 6,598,789 165,171 174,461 (450,830) 8,762,141 941,730 9,703,871

Total comprehensive income for the period - - 1,891,187 - - 106,776 1,997,963 217,399 2,215,362

Dividend paid - - (375,000) - - - (375,000) - (375,000)Balance at 30 June 2013 1,089,233 1,185,317 8,114,976 165,171 174,461 (344,054) 10,385,104 1,159,129 11,544,233

FIDELITY LIFE ASSURANCE OF ZIMBABWE LIMITED

INTERIM ABRIDGED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 30 JUNE 2013

Notes to the interim abridged consolidated nancial statements

for the half year ended 30 June 2013

Directors: S Tembo (Chairman), SB Chapereka (Managing)*, Dr H Chikova, PS Madzonga, Dr. G Mandishona, Dr. GC Mataka, L Tamayi, G Mushoma*, P Razunguzwa*

*Executive