Euro Arab Insurance : F.S (AMMI) 23 05 2023

EURO ARAB INSURANCE GROUP

PUBLIC SHAREHOLDING COMPANY

AMMAN-JORDAN

31 DECEMBER 2022

Ernst & Young Jordan

P.O. Box 1140

300 King Abdulla Street Amman 11118 Jordan

Tel:[phone] Fax:[phone]

www.ey.com

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Euro Arab Insurance Group-

Public Shareholding Company

Amman- Jordan

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Euro Arab Insurance Group )Public Shareholding Company( (the "Company"), which comprise the statement of financial position as at 31 December 2022, statement of income, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards, are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (including International Independence Standards) issued by (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Jordan, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other matter

The financial statements for the year ended on 31 December 2021 were audited by another auditor, and an unqualified opinion was issued on 28 February 2022.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended 31 December 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

1. Revenue recognition

Key Audit matter

Revenue is an important determinant of the Company's profitability. In addition, there is a risk of improper revenue recognition, particularly with regards to revenue recognition at the cut- off date. Gross written premium amounted to JD 40,462,224 for the year ended 31 December 2022.

How the key audit matter was addressed in the audit

Our audit procedures included evaluating the Company's revenue recognition accounting policies and assessing compliance with the policies in terms of International Financial Reporting Standards (IFRSs). We tested the Company's controls over revenue recognition and key controls in the revenue cycle. We also selected a representative sample and tested premiums written at either side of the revenue cutoff date to, assess whether the revenue was recognized in the correct period. Analytical procedures were performed on income accounts by lines of business. We independently re-performed the revenue calculation of each line of business using data extracted from the Company's system. In order to rely on the data extracted, we tested a sample of transactions to their related policies to assess the accuracy of the data extracted. We also selected and tested a representative sample of journal entries at the cut off period.

Disclosures of accounting policies for revenue recognition are detailed in note (2-3) to the financial statements.

2. Estimates used in calculation and completeness of insurance liabilities

Key Audit matter			How the key audit matter was addressed in
					the audit
The Company has significant insurance liabilities	Our	audit	procedures	included,	amongst
of JD	27,244,998 representing 73% of the
others, assessing the Company's methodology
Company's total liabilities as of 31 December
for calculating the insurance liabilities and their
2022. The measurement of insurance liabilities
analysis of	the movements	in	insurance
(outstanding claims reserve, unearned premium
liabilities	during	the	year,	including
reserve	and	mathematical	reserve)	involves
consideration of whether the movements are in
significant judgment over uncertain future
line with the accounting policy adopted by the
outcomes including primarily the timing and	Company. We tested management's liability
ultimate	full	settlement	of	long-term	adequacy testing which is a key test performed
policyholders' liabilities.			to check that the liabilities are adequate in the
					context of expected experience. We evaluated
					the competence, capabilities and objectivity of
					the	management's	specialist.	Our audit
					procedures on the liability adequacy tests
					included assessing the reasonableness of the
					projected cash flows and reviewing the
					assumptions adopted in the context of both the
					Company and industry experience and specific
					product features. We also assessed the
					adequacy of the disclosures regarding these
					liabilities.
					Disclosures of assumptions and accounting
					policies related to insurance contracts liabilities
					are detailed in note (2-3) to the financial
					statements.

Other information included in the Company's 2022 annual report.

Other information consists of the information included in the Company's 2022 Annual Report other than the consolidated financial statements and our auditor's report thereon. Management is responsible for the other information. The Company's 2022 Annual Report is expected to be made available to us after the date of this auditor's report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exist. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.