CONSOLIDATED HALLMARK INSURANCE : QUARTER 3 - FINANCIAL STATEMENT FOR 2023

CONSOLIDATED HALLMARK INSURANCE PLC

AND SUBSIDIARY COMPANIES

COMPANY RC:168762

INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2023

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

Contents	Page
Report of the Audit Committee	3
General Information	4
Statement of Significant Accounting Policies	8
Statement of Consolidated Financial Position	35
Statement of Comprehensive Income	36
Statement of Change in Equity	37
Statement of Cash Flows	38
Notes to the Financial Statements	39
Segment information	68
Capital Management Policy	69
Revenue Accounts	71

General Information;

CHI PLC Q3 2023	Page 1

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

The Group

The group comprises of Consolidated Hallmark Insurance Plc (the company) and its subsidiaries - CHI Capital Limited, Hallmark Health Services Limited, CHI Microinsurance Limited and Hallmark Finance Company Limited (formerly Grand Treasurers Limited). CHI Capital Limited has one wholly owned subsidiary 'CHI Support Services Limited'.

Company Information:

Consolidated Hallmark Insurance Plc (formerly Consolidated Risk Insurers Plc) was incorporated on 2 August 1991 and domiciled in Nigeria. The Registered Office Address of the Company is 266 Ikorodu road Lagos (formerly plot 33d Bishop Aboyade Cole Street, Victoria Island, Lagos).

The Company changed its name from Consolidated Risk Insurers Plc to Consolidated Hallmark Insurance Plc following its merger with Hallmark Assurance Plc and The Nigerian General Insurance Company Limited in line with the consolidation reform of the National Insurance Commission (NAICOM) announced in 2005. Consolidated Hallmark Insurance Plc came into effect from 1 March 2007.

These consolidated and separate financial statements have been authorized for issue by the Board of Directors on October 19, 2023.

Principal Activities

Consolidated Hallmark Insurance Plc is a General Business and Special Risks Insurance underwriting firm fully capitalized in line with statutory requirements of the industry regulatory body

• National Insurance Commission. The company underwrites Aviation, Oil and Gas, Marine Cargo and Hull and other non - life insurance underwriting including Motor, Fire and Special Perils, Goods- in-transit, Engineering Insurance and General Accident insurance businesses.

The Company identifies prompt claims payment as a means to achieving customer satisfaction and therefore emphasizes prompt claims payment in its operations. The company also invests its available funds in interest bearing and highly liquid instruments to generate adequate returns to meet its claims obligations.

The Company is a public limited company incorporated and domiciled in Nigeria. Its shares are listed on the floor of the Nigerian Stock Exchange and have its registered office at Consolidated Hallmark House, 266, Ikorodu Road, Lagos.

Going concern assessment

These consolidated financial statements have been prepared on a going concern basis. The group has neither intention nor need to reduce substantially its business operations. The management believes that the going concern assumption is appropriate for the group and there are no going concern threats to the operations of the group.

Subsidiaries;

CHI Microinsurance Limited

CHI Microinsurance Limited is a fully owned subsidiary of Consolidated Hallmark Insurance Plc, incorporated in 2016 and Licensed by NAICOM to provide Life microinsurance services. Microinsurance is a financial arrangement to protect low-income people against specific perils in exchange for regular premium payment proportionate to the likelihood and cost of risk involved.

CHI Capital Limited

CHI PLC Q3 2023	Page 2

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

CHI Capital Limited is a fully owned subsidiary of Consolidated Hallmark Insurance Plc. It carries on the business of corporate support services. CHI Capital Limited incorporated CHI Support Services Limited in 2014 with 100% shareholdings.

Hallmark Finance Company Limited

Hallmark Finance Company Limited was an indirect subsidiary of Consolidated Hallmark Insurance up to November 2019 before the Board of CHI Capital limited transferred her holding 100% to the Parent (Consolidated Hallmark Insurance Plc).

Hallmark Finance Company Limited is now a direct subsidiary of the Consolidated Hallmark Insurance Plc. The business of the company is consumer lending, lease financing and other finance company business.

CHI Support Services Limited is a company incorporated as a limited liability company in 2014. CHI Support Services ltd started as an autotrack business but has now focused on providing corporate support services for the Group. CHI Support Services was incorporated in Nigeria.

Hallmark Health Services Ltd

Hallmark Health Services Ltd is a fully owned subsidiary of Consolidated Hallmark Insurance Plc. Incorporated in 2017. It is envisioned to be a leading health insurance company to meet the need for quality health maintenance services providing affordable and lasting health care plan for all Nigerians. Hallmark Health Services Ltd. Is fully accredited by the National Health Insurance Service as a National HMO.

Impact of Covid 19 on Financial Statement

Following the outbreak of COVID-19 pandemic, the Group instituted various measures to preserve the health and well-being of its employees, clients and communities while minimizing the impact of the pandemic on its Businesses in all the jurisdiction where it operates. The Group activated its Business Continuity Plans and came up with various initiatives to prevent business disruptions while ensuring adequate customer service delivery. The Group also came up with palliative measures to ease the difficulty encountered by obligors in identified vulnerable segments and partnered with Government on initiatives aimed at alleviating suffering brought by COVID-19.

In 2021, following medical breakthrough with vaccines for the Covid 19 pandemic, a number of countries, including Nigeria, had relaxed the strict rules around social distancing and other COVID- 19 protocol. This has positive impact on our ability to return most of our staff back to the office without necessarily letting go of the flexibility and efficiency that came along with the remote working regime. It also enabled our marketing activities as the nature of our businesses still demand some level of physical engagement with existing and potential customers.

In 2022, most of the general apprehension about COVID 19 had literally disappeared, aside from its resurgence in China towards the third quarter of the year. But, global air travel had resumed in full swing and this impacted positively on our Aviation Insurance class of business. Suffice to mention that COVID 19 had no adverse economic on our business during the period.

The group will continue to closely monitor the national and global developments on the COVID 19 pandemic, and we are confident in our capacity to respond with promptness as may be needed to safeguard the health and safety of our staff and collaborate with all other stakeholders to contain any untoward development in this regard. We will also continue to sustain the Group's Business Continuity Plans, and our ICT capabilities order to take advantage of the flexible work environment that has come to stay as a measure for efficiency and employee work life balance.

CHI PLC Q3 2023	Page 3

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

Securities Trading Policy

In compliance with Rule 17.15 Disclosure of Dealings in Issuers' Shares, Rulebook of the Exchange 2015 (Issuers Rule) Consolidated Hallmark Insurance Plc maintains a Security Trading Policy which guides Directors, Audit Committee members, employees and all individuals categorized as insiders as to their dealing in the Company's securities. The Policy is periodically reviewed by the Board and updated. The Company has made specific inquiries of all its directors and other insiders and is not aware of any infringement of the policy during the period under review.

		Free Float Computation
Directors	Direct		Indirect	Total	December 31, 2022	Direct	Indirect	Total	September 30, 2023
	As at December 2022	As at December	As at December	% of Holding	As at 30	As at 30	As at 30	% of Holding
	2022	2022	September 2023	September 2023	September 2023
Issued ShareCapital				10,840,000,000	100%			10,840,000,000	100%
Mr. Obinna Ekezie		-	526,537,893	526,537,893	4.86%	-	526,537,893	526,537,893	4.86%
Mrs. Adebola Odukale			1,151,979,358	1,151,979,358	10.63%		1,151,979,358	1,151,979,358	10.63%
Mr. Eddie Efekoha		1,040,000,000	586,798,809	1,626,798,809	15.01%	1,040,000,000	586,798,809	1,626,798,809	15.01%
Mrs. Ngozi Nkem		277,333,333	659,326,671	936,660,004	8.64%	277,333,333	659,326,671	936,660,004	8.64%
Dr. Layi Fatona			2,818,442,750	2,818,442,750	26.00%		2,818,442,750	2,818,442,750	26.00%
				7,060,418,814	65.13%	1,317,333,333	5,743,085,481	7,060,418,814	65.13%
Directors' Shareholdings (direct and indirect), excluding directors with substantial interests
Mr. Babatunde Daramola		26,834,481		26,834,481	0.25%	26,834,481		26,834,481	0.25%
Mrs. Mary Adeyanju		33,953,777		33,953,777	0.31%	33,953,777		33,953,777	0.31%
Prince Ben Onuora		43,655,598		43,655,598	0.40%	43,655,598		43,655,598	0.40%
				104,443,856	0.96%			104,443,856	0.96%
Other Influential Shareholdings				-				-
Free Float in Units and Percentage			3,675,137,330	33.90%			3,675,137,330	33.90%
Free Float in Value				1,837,568,665.00				1,837,568,665

1. CONSOLIDATED HALLMARK INSURANCE Plc with a free float percentage of 33.90% as at 30 September 2023, is compliant with The Exchange's free float requirements for companies listed on the Main Board.
2. CONSOLIDATED HALLMARK INSURANCE Plc with a free float value of N1,837,568,665 as at 30 September 2023, is compliant with The Exchange's free float requirements for companies listed on the Main Board.

Statement of Significant Accounting Policies

The following are the significant accounting policies adopted by the Group in the preparation of its consolidated financial statements. These policies have been consistently applied to all year's presentations, unless otherwise stated

1. Basis of presentation:

1.1 Statement of compliance with IFRS

CHI PLC Q3 2023	Page 4

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

These financial statements are the separate and consolidated financial statement of the company and its subsidiaries (together, "the group"). The group's financial statements for the year 2021 have been prepared in accordance with the International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standard Board ("IASB"), and interpretations issued by IFRS's interpretation committee (IFRIC) and in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011.

These are the Group's financial statements for the year ended 31 December 2022, prepared in accordance with IFRS 10 - Consolidated Financial Statements.

1.1.2 Application of new and amended standards

New and amended standards and interpretations

New standards and interpretations

6.1 Standards and interpretations effective for the first time for 31 December 2022 year end

In the current year, the Group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

Reference to the Conceptual Framework -Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.

The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential "day 2" gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.

At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. The amendments are not expected to have a material impact on the Group.

Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16

In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities from deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.

Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37

In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making.

CHI PLC Q3 2023	Page 5

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

The amendments apply a "directly related cost approach". The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group will apply these amendments to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the amendments. The amendments are not expected to have a material impact on the Group.

IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first- time adopter

As part of its 2018-2020 annual improvements to IFRS standards process, the IASB issued an amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported by the parent, based on the parent's date of transition to IFRS. This amendment is also applied to an associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The amendments is not applicable to the Group.

IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received by the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.

IFRS 17 Insurance Contracts

In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17 will replace IFRS 4 Insurance Contracts (IFRS 4) which was issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of IFRS 17 is the general model, supplemented by:

CHI PLC Q3 2023	Page 6

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

• A specific adaptation for contracts with direct participation features (the variable fee approach)
• A simplified approach (the premium allocation approach) mainly for short-duration contracts

1. Level of aggregation
2. Liability Measurement
3. Presentation and disclosure
4. Production Classification
5. Transition Approach

(1) LEVEL OF AGGREGATION

(1a) IDENTIFICATION OF PORFOLIO OF CONTRACT;- There three options provided by the standard. These are;

Current Product Segmentation;- Where the current product segmentation meets the requirements of IFRS 17, the current product segmentation option may be adopted.

Further Breakdown of Current Product Segmentation: - To meet the requirement of IFRS 17, an entity may decide to further breakdown the current product segmentation based on contracts with similar risks that are managed together.

Create a New Product Portfolio: - A new product portfolio may be created to meet the requirements of IFRS 17.

The Group has adopted the Current Product Segmentation because this is what CHI PLC does currently and the Naicom grouping meets this requirement as each group has similar risk and can be managed together.

(1b) DETERMINATION OF COHORTS:- There three options provided by the standard. These are;

Quarterly Cohorts:- Group the contracts into quarterly time buckets that coincides with an entity's quarterly reporting period.

Semi-AnnualCohorts:- Alternatively, group the contracts into semi-annual time buckets that coincides with entity's half year reporting period.

Annual Cohorts:- Group the contracts into annual time buckets that coincides with an entity's financial reporting period.

The Group has adopted the contracts into quarterly cohorts so as to close each group on a more frequent basis and also identify trends with profitability faster and at a more granular level.

(1c) ASSESSMENT OF PROFITABILITY FOR NON-LIFE:- There three options provided by the standard. These are;

Combined Ratio:- Use the combined ratio to assess the profitability of insurance contracts by comparing the insurance outflows with inflows.

Expected Combined Ratio:- however, under this method, a weighted ratio is derived.

The expected combined ratio is very similar to combined ratio, the profitability of contracts is assessed under different scenarios and

CHI PLC Q3 2023	Page 7

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

Pricing Basis:- Perform annual pricing of each non-life insurance product to determine the profitability of the non-life insurance contracts.

The Group has adopted the option of Expected Combined Ratio. This helps to develop appropriate models to determine possible scenarios and respective scenario weights. However, given that these contracts are one year or less, this approach may be feasible.

(2)LIABILITY MEASUREMENT

(2a) DETERMINATION OF MEASUREMENT MODELS;- There three options provided by the standard. These are;

General Measurement Model (GMM):- Default measurement model for all insurance contracts

Premium Allocation Approach (PAA):- Premium allocation approach (PAA) is an optional measurement model and a simplification to the GMM but can only be applied if certain criteria are met.

Variable Fee Approach (VFA):- Applied if an entity has contracts with direct participatory features.

The Group has adopted the approach of Premium Allocation Approach because its feasible for the group life and non-life contracts because they have a duration of one year or less.

(2b) ESTIMATION OF FULFILLMENT CASH FLOWS:- There three options provided by the standard. These are;

Individual Policies Level:- Estimate fulfillment cash flows at the individual policies/contract level.

Premium Allocation Approach (PAA):- Alternatively, estimate fulfillment cash flows at the unit of account level.

Aggregate portfolio level:- Estimate fulfillment cash flows at a higher level of aggregation. This will entail combining different portfolio of contracts.

The Group has adopted the Individual policies approach since the Company currently has the required data for in-force contracts so it will be easy to allocate the estimated fulfilment cash flows to the different Unit of accounts which is consistent with Level of Aggregation.

(2c) DETERMINATION OF DISCOUNTING APPROACH:- There two options provided by the standard. These are;

Bottom-UpApproach:- Under this approach, a liquid risk-free yield curve is adjusted "to reflect the differences between the liquidity characteristics of the financial instruments that underlie the rates observed in the market and the liquidity characteristics of the insurance contracts."

Top-downapproach:- In this approach, the yield to maturity of a reference portfolio of assets is adjusted "to eliminate any factors that are not relevant to insurance contracts." The liquidity characteristics of the reference portfolio would reasonably reflect the liquidity characteristics of the cash flows, but the entity "is not required to adjust the yield curve for differences in characteristics of the insurance contracts and the reference portfolio.

CHI PLC Q3 2023	Page 8

CONSOLIDATED HALLMARK INSURANCE PLC AND SUBSIDIARY COMPANIES

REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 2023

The Group has adopted the bottom-upapproach as yield curve can be generated from government bonds.

(2d) CALCULATION OF RISK ADJUSTMENT:- There are three options provided by the standard. These are;

Cost of Capital Approach:- Cost of capital approach assesses the cost of holding capital sufficient to cover the relevant risks over the lifetime of the business. It requires judgement to determine the appropriate level of capital in the future and the cost of capital rate. This approach is used to determine the risk margin under Solvency 2.

Value at risk (VAR) approach:- Value at risk approach also called the confidence level technique is calculated with reference to a particular confidence level. Choosing a VAR methodology requires an entity to calculate the discounted value of the best estimate future cash flows under a range of different scenarios to produce a risk distribution.

Tail value at risk approach:- Tail value at risk approach also called conditional tail expectation is also calculated with reference to a particular confidence level, however the tail value at risk is the expected value above that confidence level.

The Group has adopted the option of Cost of Capital Approach. The use of solvency II prescribed cost of capital for its risk margin. This approach could be complex to adopt, the major complexity that will be encountered in adopting this approach will be the determination of the cost of capital rate and the future capital required.

(2e) DETERMINATION OF COVERAGE UNITS FOR CSM AMORTIZATION NON-LIFE:-There three options provided by the standard. These are;

Straight Line Allocation Approach:- This approach requires straight line allocation of CSM over the passage of time but reflecting the number of contracts in a group. This is only applicable where the BBA is adopted for the non-life contracts.

Maximum Contractual Cover Approach:- Under this approach, CSM is amortised based on the maximum contractual cover in each period. This is only applicable where the BBA is adopted for the non-life contracts.

Expected outflows approach:- Under this approach, CSM is amortised based on the amount of expected outflows (e.g. claims expected at inception) over the term of the insurance contract. This is only applicable where the BBA is adopted for the non-life contracts.

The Group has adopted the Maximum contractual cover approach as this is feasible to adopt.

(3)PRESENTATION AND DISCLOSURES

(3a) INSURANCE FINANCE AND EXPENSES:- There are two options provided by the standard. These are;

Present Within Profit or Loss:- Accounting policy choice to present the total insurance finance income or expenses in the profit or loss.

CHI PLC Q3 2023	Page 9