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Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended31 December 2020

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020ContentsCorporate information 1Directors' report 2Statement of Corporate Responsibilitty for the Financial Statements .6Management's discussion and analysis 7Statement of directors' responsibilities .10Corporate governance report 11Independent auditor's report 16Reporting entity.21Statement of compliance with International Financial Reporting Standard.21Basis of preparation.21Changes in accounting policies.22Other Significant accounting policies.28Consolidated and separate statement of comprehensive income.42Consolidated and separate statement of financial position.43Consolidated and separate statement of changes in equity.44Consolidated and separate statement of cash flows .46Notes to the financial statement1Risk management .472Operating segment.1013General business revenue account .10236Related party transaction.13937Transactions with directors .14038Contingent liabilities.14039Capital commitments.14040Litigations 14041Events after the reporting date.14042Contravention, fines and penalties.140AppendixOther national information

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020Corporate InformationName of DirectorsJim Ovia, CONKehinde BorisadeElaine DelaneyJoseph OnwubuyaProfessor Oyewusi Ibidapo-ObeVictor AbuleleMrs Patience UgboajahClifford MensahChairmanManaging DirectorNon-Executive DirectorNon-Executive DirectorNon-Executive (Independent) DirectorNon-Executive (Independent) DirectorExecutive DirectorExecutive DirectorRegistered Office13th and 14th Floor,Civic Towers, Ozumba Mbadiwe Avenue,Victoria Island,Lagos.RC Number6761Company SecretaryEmeka Anyaeji15th Floor,Civic Towers, Ozumba Mbadiwe,Victoria Island,Lagos.AuditorPricewaterhouseCoopersLandmark Towers5B Water Corporation Road, Oniru, LagosTel 234 1 271700www.pwc.com/ngMajor Banker(s)Zenith Bank PlcFirst bank of Nigeria LimitedEcobank Nigeria LimitedGuaranty Trust Bank PlcActuaryErnst & YoungFRC/2012/NAS/00000000738ReinsurersAfrica Reinsurance CorporationMunich Reinsurance Company LimitedGhana Reinsurance Company LimitedSwiss Reinsurance Company LimitedContinental Reinsurance Plc1

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020Director's ReportFor the year ended 31 December 2020The Directors have pleasure in submitting their annual report together with the audited consolidated and separate financial statements forthe year ended 31 December 2020 which discloses the state of affairs of Zenith General Insurance Company Limited ("the Company") andits subsidiary ("together referred to as "the Group").Legal form and principal activityThe Company was incorporated in 1970 as Piccadilly Insurance Company Limited and it traded in this name until 2003 when it wasacquired by Zenith Bank Plc. The name was changed to Zenith General Insurance Company Limited in 2004. Zenith General InsuranceCompany Limited is incorporated in Nigeria under the Companies and Allied Matters Act as a private limited company and it is domiciledin Nigeria. By 2015 Zenith Bank divested its holdings in the company to Veritas Registrars in line with regulatory requirements to divestfrom non-core banking operations.The registered office of the Company is: 13th & 14th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos.The Company has one wholly owned subsidiary: Venus Medicare Limited. Venus Medicare Limited engages in the provision of healthcare services through health care providers and for that purpose is accredited with the National Health Insurance Scheme.The principal activities of the Group are the provision of Marine insurance, Motor insurance, Accident insurance, Fire insurance, other nonlife insurance services, Health insurance, Claims settlement and other investment activities.There have been no material changes to the group's business from the previous year.Operating resultsHighlights of the Group financial performance is as s premium fit before taxationTaxationProfit after 32,781)2,954,529Profit attributable to the groupProfit from discontinued operationProfit for the yearTransfer to contingency reserveRetained earnings for the yearRetained earnings beginning of yearDividend paidBonus shares paidRetained earnings, end of (4,561,577)9,503,31629k30k26k29kEarning per share -basic (in kobo)2

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020DividendSubsequent to the year-end and subject to approval at the next annual general meeting, the directors proposed a final dividend of N 14.78kper share (2019: Nil) on the issued and paid-up capital of N 10.15bn ordinary shares of N 1.00 each for the year ended 31 December2020. This amounts to N 1.5bn (2019: Nil) and this final dividend have not been reflected in the financial statements. Payment ofdividend is subject to witholding tax at the rate of 10% in the hands of the recipient.DirectorsThe Directors of the Company who held office during the year were as follows:Jim Ovia, CONKehinde BorisadeElaine DelaneyJoseph OnwubuyaPatience UgboajahClifford MensahProfessor Oyewusi Ibidapo-ObeVictor AbuleleChukwuemeke IgumborOmotola SotadeOlamide OlajoloChairmanManaging DirectorNon-Executive DirectorNon-Executive DirectorExecutive DirectorExecutive Director (appointed December 8, 2020)Non-Executive (Independent) Director (died January 3, 2021)Non-Executive (Independent) Director (resigned w.e.f December 8, 2020)Non-Executive Director (resigned w.e.f February 24, 2020)Executive Director (resigned w.e.f August, 2020)Executive Director (resigned w.e.f February 24, 2020)*w.e.f: With Effect FromMajor shareholdingVeritas Registrars LimitedJim Ovia, CON31-Dec-20No. of shares10,149,999,993710,150,000,000% holding99.990.01100.0031-Dec-19No. of shares10,149,999,993710,150,000,000% holding99.990.01100.00According to the register of members as at 31 December 2020, no individual shareholder held more than 5% of the issued capital of theCompany except the following;31-Dec-2031-Dec-19No. of shares% holdingNo. of shares% holdingVeritas Registrars ding to the Register of Members, analysis of shareholders based on geographical location is provided below:31 December 2020Number of holdingLocal shareholders1 - 1,000,000,000Number ofshareholdersNumber ofshares 0,000,00010031 December 2019Number of holdingLocal shareholders1 - 1,000,000,000Number ofshareholdersNumber ofshares 0,000,0001003

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020For the purpose of section 277 of the Companies and Allied Matters Act (CAMA), all contracts with related parties during the year wereconducted at arm's length. Information on related party transactions is contained in note 36 of the financial statements.Property and equipmentInformation relating to changes in property and equipment during the year is given in Note 22 to the financial statements.Employment of disabled personsThe Group operates a non-discriminatory policy on recruitment. Applications by disabled persons are always fully considered, bearing inmind the respective aptitudes and abilities of the applicants concerned. In the event of members of staff becoming disabled, every effort ismade to ensure that their employment with the Group continues and that appropriate training and support are arranged. It is the policy ofthe Group that the training, career development and promotion of disabled persons should, as far as possible, be identical with those ofother employees. During the year under review, there was no disabled person in its employment.Employee health, safety and welfareThe Group’s employees are adequately insured against occupational hazards. In addition, medical facilities at specified limits are providedto employees and their immediate families at the Group’s expense. Staff are regularly trained on health and safety regulations.The Group operates a Group Personal Accident and the Workmen's Compensation Insurance Cover for the benefit of its employees. It alsooperates a contributory pension plan in line with the Pension Reform Act. The Covid-19 pandemic also presented an opportunity for hegroup to develop and implement additional health and safety protocols for its staff in compliance with the guidelines isssued by the stateand federal governments.Employee trainingThe Group considers its employees one of its greatest assets and ensures a premium is placed on the development of its employees.Training programs have been put in place to ensure that staff are adequately trained and empowered to perform their roles in theorganisation.Employee involvementThe Group places considerable value on the engagement and contribution of its employees and has continued its practice of involving themin matters that affect them and the various factors affecting the performance of the Group. This is achieved through regular meetingsbetween management and staff of the Group not restricted to regular staff retreats, strategy sessions, town hall meetings and businessperformance reviews. Feedback received from employees are also used in decision making.Gender analysisThe number and percentage of male and female employed during the financial year vis-à-vis total workforce were as follows:31 December 2020EmployeesMaleNumber125TotalFemaleNumber nder analysis of the Board and top management is as follows:8Board31170%30%841250%50%Detailed analysis of the Board and top management is as follows:Principal Manager2Assistant General Manager3General Manager2Executive Director /CEO2Non-executive 67%33%17%Top Management4

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020Management’s Discussion and AnalysisThis Management’s Discussion and Analysis (“MD&A”) is designed to provide the reader with a greater understanding of theGroup’s business, business strategy and performance, as well as how it manages risk and capital resources. This has been preparedas at 31 December 2020.It is intended to enhance the understanding of the audited annual consolidated financial statements and accompanying notes, andshould therefore be read in conjunction with these documents.Reference in this MD&A to the “Company” or to “Zenith General Insurance Company Limited” means, as the context may require,Zenith General Insurance Group and its subsidiary.Unless otherwise indicated, all financial information presented in this MD&A, including tabular amounts, is in Nigeria Naira and isprepared in accordance with International Financial Reporting Standards (“IFRS”).Zenith General Insurance Company Limited comprises of the parent company, Zenith General Insurance Limited and its solesubsidiary "Venus Medicare Limited". The Company is 99.9% held by Veritas Registrars Limited after the divestment of ZenithBank.(a)Forward-Looking StatementsThis Annual Report – Financial Review for Zenith General Insurance Company limited contains forward-looking statements aboutthe Company’s objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance,prospects and opportunities.The forward-looking statements in this document reflects the Company’s expectations as at 29 March 2020 when the Company’sBoard of Directors approved this document, and are subject to change after this date. These forward-looking statements are nothistorical facts but reflect the Company’s current expectations concerning future results and events. They also reflect management’scurrent assumptions regarding the risks and uncertainties and their respective impact on the Company. The Company does notundertake any obligation to update publicly or to revise any such forward-looking statements, unless required by applicablelegislation or regulation.In this Annual Report – Financial Review, forward looking statements include the Company’s expectation that:- Revenue will increase by at least 15% in 2021. This is expected as the Company largely diverisifies its portfolio to include retailand agency.- The Company's net earnings in 2021 would improve by over 15% and this is based on the assumption that the Nigerian economywill grow by at 15% in 2021.(b)Overview of Our Business and StrategyThe Company is within the last few years of its 5 years strategic plan (2017-2021). The focus of which was improved revenue,greater market visibility and improved profitability. The Company focused on doing this by leveraging on digital innovation,improving its service delivery to the customers utilising its pool of talent.(c)Vision and StrategiesTo be the trusted and best provider of insurance and financial services.We aim to be the preferred insurer by all our brokers and clients on the basis ofProfessionalismIntegrityCustomer focusTeam workInnovationEmpathyWe operate from 13 locations, four within Lagos, Abuja, Kano, Ibadan, Enugu, Port harcourt, Warri, Asaba, Uyo, Benin. Eachbranch or operational office is situated strategically to serve a wider area.MissionEnsuring peace of mind and creating value to people in a world of uncertainities.Strategic Priorities Include·Operational excellence·Stronger relationships with clients·Geographical diversification and growth of markets and offerings7

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020····Building sustainable people and organizational capabilitiesFinancial strength and flexibilityInnovative product offeringEquipped workforceOur BoardThe Company has enjoyed a steady growth in its commitment to providing integrated financial services to its customers fromvarious sectors of the economy.The Company’s growth, since its acquisition, is premised upon sound business standards backed by being an former associate(formerly a subsidiary) of Zenith Bank Plc, one of the leading and most respected banks in Nigeria and the uncompromisingintegrity and dedication of its directors.Our BusinessThe Company offers unique, customer based products to clients in various sectors. The services we offer include;·General Business Services·Other financial services such as Guarantees and bonds.Our ReinsuranceThe Company underwrites with the support of various reinsurance companies and brokers to ensure its risk management is alwaysoptimal. We also consult with reinsurance companies and brokers on technical issues/alliance.Our reinsurers are: Swiss Reinsurance, Africa Reinsurance, Continental Reinsurance, and Ghana Reinsurance. We also get specialtechnical support from Reinsurance solutions of Mauritius.On our special risk segments, we liaise with international brokers and have their agreement to work with us. They are Marsh andHSBC Insurance brokers.Our ClientsThe Company is proud to be of service to companies in all sectors. Our clientele base spans across all major industries including Oil& Gas, Transportation, Marine, Power, Construction, Engineering, Ministries, Government, Missions, Embassies and Individuals.Revenue and Underwriting ActivitiesItemsGroup 2020Gross premium writtenGross premium incomeReinsurance expensesNet premium incomeFees and commission incomeNet underwriting incomeProfit or loss before taxationIncome tax expenseProfit after oup e%8%12%-1%22%-9%18%-8%-25%-5%Company y %7%13%-1%28%4%24%-10%-12%-10%Key Financial Performance IndicatorsThe Group has identified specific key financial performance indicators to measure the progress of short and long term objectives.Financial trends and ratiosBusiness volumes and trendsPremium growth rateUnderwriting (Net) profit ratioAverage return on investmentReturn on equityClaims ratioOperating expense %41%40%8

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020(e)Financial instrumentsThe Company discloses information on the classification and fair value of its financial instruments, as well as on the natureand extent of risks arising from financial instruments, and related risk management in the 2020 audited annual consolidatedfinancial statements.(f)Disclosure Controls and ProceduresManagement is responsible for establishing and maintaining a system of disclosure controls and procedures to providereasonable assurance that all material information relating to the Company and its subsidiary is gathered and reported tosenior management on a timely basis so that appropriate decisions can be made regarding public disclosure.(g)Internal Control over Financial ReportingManagement is also responsible for establishing and maintaining adequate internal controls over financial reporting toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with IFRS.It should be recognized that due to inherent limitations, any controls, no matter how well designed and operated, can provideonly reasonable assurance of achieving the desired control objectives and may not prevent or detect misstatements.Projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Additionally, management is required to use judgment in evaluating controls and procedures.Changes in Internal Control over Financial ReportingManagement has also evaluated whether there were changes in the Company’s internal controls over financial reporting thatoccurred during the period beginning on 1 January 2020 and ended on 31 December 2020 that materially affected, or arereasonably likely to materially affect, the Company’s internal control over financial reporting. Management determined thatno material changes occurred during this period.(h)Enterprise Risk ManagementThe Company is committed to establishing a framework that ensures risk management is an integral part of its activities. Toensure the continued growth and success of the Company, risks are identified and managed through an Enterprise RiskManagement (“ERM”) program. The Board has approved an ERM policy and oversees the ERM program through approvalof the Company’s risks and risk prioritization. The ERM program assists all areas of the business in managing appropriatelevels of risk tolerance by bringing a systematic approach, methodology and tools for evaluating, measuring and monitoringkey risks. The results of the ERM program and other business planning processes are used to identify emerging risks to theCompany, prioritize risk management activities and develop a risk-based internal audit plan.Risk is not eliminated through the ERM program. Risks are identified and managed within understood risk tolerances. TheERM program is designed to:·Promote a culture of awareness of risk management and compliance within the Company;·Facilitate corporate governance by providing a consolidated view of risks across the Company and insight intothe methodologies for identification, assessment, measurement and monitoring of the risks;·Assist in developing consistent risk management methodologies and tools across the organization;·Ensure that resources are acquired economically, used efficiently and adequately protected; and·Enable the Company to focus on its key risks in the business planning process and optimizefinancial performance through responsible risk management.Risk identification and assessments are important elements to the Company’s ERM framework. An annual ERM assessment iscompleted to assist in the update and identification of financial, operational or reputational risks affecting the Company and toeffectively prioritize the risks.The annual ERM assessment is carried out primarily through interviews and risk assessments with senior management. Risksare assessed and evaluated based on the Company’s vulnerability to the risk and the potential impact that the underlying riskwould have on the Company’s ability to execute its strategies and achieve its objectives. Risk owners are assigned relevantrisks and metrics are developed for the top risks for monitoring. Management provides a quarterly update to the ERMCommittee of the status of the top risks based on significant changes from the prior update, anticipated impacts in futurequarters and significant changes in key risk metrics.9

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020CORPORATE GOVERNANCE REPORTa. IntroductionZenith General Insurance Company Limited ("the Company") has in place an effective governance mechanism that not onlyensures proper oversight of its business by the Directors and other principal organs of the Company, but also that it carries on itsbusiness in a manner that engenders public trust and confidence while meeting the expectations of all stakeholders.b. ShareholdingThe Company's shareholders are:Veritas Registrars LimitedJim Ovia, CON2020No of shares10,149,999,99372020% Holding99.99%0.01%2019No of shares10,149,999,99372019% Holding99.99%0.01%c. Board of DirectorsThe Board is responsible for driving the Corporate Governance mechanism of the Company.In addition to possessing the requisite academic qualifications and experience in Board affairs, Directors are well abreast of theirresponsibilities and are conversant with the Company’s business.They are therefore able to exercise sound judgment on matters relating to its business.d. Board StructureThe Board is made up of a Non-Executive Chairman, (4) four Non-Executive Directors; of which (1) one is an Independent NonExecutive Directors and (2) two, Executive Directors including the Managing Director.The Managing Director is responsible for the day to day running of the Company, assisted by the Management Committee.e. The Board is responsible for: Reviewing and providing guidance for the Company’s corporate and business strategy, major plans of action and risk policy. Review and approval of annual budgets and business plans; setting performance objectives, monitoring implementation andcorporate performance. Overseeing major capital expenditures, acquisitions and divestitures. Monitoring the effectiveness of the governance practices under which the Company operates and making appropriate changes asnecessary. Ensuring the integrity of the Company’s accounting and financial reporting systems, including the internal audit function andthat appropriate systems of control and risk monitoring are in place. Establishment of the various Committees of the Board including the terms of reference and review of reports of suchCommittees to address key areas of the Company’s business. Approving financial statements for issuance to the public.11

Zenith General Insurance Company LimitedConsolidated and separate financial statements for the year ended 31 December 2020Board of DirectorsNAMEMr. Jim Ovia, CONKehinde BorisadeElaine DelaneyJoseph OnwubuyaPatience UgboajahClifford MensahProfessor Oyewusi Ibidapo-ObeVictor AbuleleChukwuemeke IgumborOmotola SotadeOlamide OlajoloPOSITIONChairmanManaging DirectorNon-Executive DirectorNon-Executive DirectorExecutive DirectorExecutive Director (appointed December 8, 2020)Non-Executive (Independent) Director (died January 3, 2021)Non-Executive (Independent) Director (resigned w.e.f. December 8, 2020)Non-Executive Director (resigned w.e.f. February 24, 2020)Executive Director (resigned w.e.f. August, 2020)Executive Director (resigned w.e.f. February 24, 2020)*w.e.f: With Effect FromThe Board meets at least once every quarter but may hold extraordinary sessions to address urgent matters requiring the attentionof the Board.f. Board CommitteesThe Board carries out its oversight functions using its various board committees. This makes for efficiency and allows fordeeper attention to specific matters for the board. The committees are set up in line with statutory and regulatory requirementsand consistent with global best practice.Membership of the committees of the board is intended to make the best use of the skills and experience of non-executivedirectors in particular.The Committees have well defined terms of reference and charters defining their scope of responsibilities in such a way as toavoid overlap of functions.The Committees of the Board meet quarterly but may hold extraordinary sessions as business of the Company demand.The following are the current standing Committees of the Board:i. Finance, Investment and General Purpose CommitteeThis Committee is made up of four (4) members. It is chaired by a Non-Executive Director. The Committee considers largescale procurement by the Company, as well as matters bordering on staff welfare, discipline, staff remuneration and promotion.The membership of the Committee is as follows:Elaine DelaneyVictor AbuleleJoe OnwubuyaKehinde BorisadeChairmanMemberMemberMemberCommittee’s Terms of Reference Consideration and recommendation to the Board, of all financial and administrative matters whose aggregate monetary value isbeyond the limit of the Company's Management approving power. Consideration and recommendation of staff compensation package. Setting limit of approval of commission by Management. Consideration and recommendation for promotion of senior management staff. Any other matter that may be referred to the Committee by the Board from time to time. Oversee major investments by the Company, approve and allocate

The name was changed to Zenith General Insurance Company Limited in 2004. Zenith General Insurance Company Limited is incorporated in Nigeria under the Companies and Allied Matters Act as a private limited company and it is domiciled in Nigeria. By 2015 Zenith Bank divested its holdings in the company to Veritas Registrars in line with .