| Reasons of increase (decrease) for the quarter compared with same quarter last year |
The company reported net profit for the fourth quarter of 2016 amounting to 17,359 thousand riyals compared to the net profit of same quarter of last year amounting to 6,958 thousand riyals. The increase in net profit is due to decrease in other reserves by 10,831 thousand riyals, increase in net premium earned by 9,068 thousand riyals, decrease in shareholders impairment of goodwill by 8,459 thousand riyals, increase in commission income by 1,769 thousand riyals increase in reinsurance commission income by 1,458 thousand riyals and decrease in policy acquisition costs by 941 thousand riyals, which are partly offset by decrease in other income, net by 12,418 thousand riyals, increase in operating and administrative salaries by 3,777 thousand riyals increase in net claims incurred by 3,677 thousand riyals, increase in other general and administrative expenses by 1,212 thousand riyals, decrease in change in unexpired risk reserve by 1,084 thousand riyals. |
| Reasons of increase (decrease) for the period compared with same period last year |
The company reported net profit for the twelve months ended December 31, 2016 amounting to 24,965 thousand riyals compared to the net profit of same period of last year amounting to 12,358 thousand riyals, the increase in net profit is due to decrease in net claims incurred by 26,537 thousand riyals, decrease in shareholders impairment of goodwill by 8,459 thousand riyals, decrease in other reserves by 7,457 thousand riyals decrease in policy acquisition costs by 5,597 thousand riyals, increase in commission income by 2,865 thousand riyals increase in shareholders income from investment by 1,497 thousand riyals and increase in change in unexpired risk reserve by 1,187 thousand riyals, which are partly offset by decrease in net premium earned by 18,204 thousand riyals, increase in other general and administrative expenses by 8,004 thousand riyals, decrease in other income, net by 5,662 thousand riyals, increase in operating and administrative salaries by 4,705 thousand riyals, decrease in reinsurance commission income by 3,234 thousand riyals and increase in shareholders general and administrative expenses by 801 thousand riyals. |
| Reasons of increase (decrease) for the quarter compared with the previous quarter |
The company reported net profit for the fourth quarter of 2016 amounting to 17,359 thousand riyals compared to the net loss of the third quarter of the year 2016 amounting to 235 thousand riyals. The increase in net profit is due to decrease in net premium earned by 10,163 thousand riyals, decrease in other reserves by 6,244 thousand riyals, increase in other income, net by 2,960 thousand riyals, increase in other general and administrative expenses by 2,566 thousand riyals, increase in reinsurance commission income by 2,517 thousand riyals, increase in commission income by 1,183 thousand riyals decrease in shareholders general and administrative expenses by 527 thousand riyals and increase in change in unexpired risk reserve by 241 thousand riyals which are partly offset by decrease in net claims incurred by 3,866 thousand riyals, increase in operating and administrative salaries by 2,988 thousand riyals, increase in transfer to shareholders' surplus by 1,895 thousand riyals. |
| External auditor's report containing reservation |
External Auditors drew attention in their limited review report to the following Note 1 to the accompanying interim condensed financial statements. On 2 Muharram 1438H (October 3, 2016), the Company received Saudi Arabian Monetary Agencys (SAMA) approval to decrease its share capital in order to absorb the accumulated deficit up to a maximum amount of Saudi Riyals 90 million Note 7(b) to the accompanying interim condensed financial statements. The Company had a net balance receivable from Gulf Union Insurance and Projects Management Holding Company B.S.C. (c.) (GUIPMC), a shareholder of the Company, amounting to Saudi Riyals 22.29 million as it was under dispute till June 2015. Upon resolution of the dispute and certain adjustments as required in SAMAs Letter, this balance was increased to Saudi Riyals 29.07 million. GUIPMC had earlier confirmed that the balance will be settled by June 30, 2016 but the amounts have not been settled as of December 31, 2016. Subsequent to December 31, 2016, GUIPMC has confirmed that the outstanding amount will be fully settled by June 30, 2017. The Companys management believes that such amount will be collected before the date as confirmed by GUIPMC and Note 2 to the accompanying interim condensed financial statements. These interim condensed financial statements are prepared in accordance with IAS 34 and not in accordance with the Standard on Interim Financial Reporting issued by SOCPA. |
| Reclassifications in quarterly financial results |
In the statement of insurance operations for the three-month period and year ended December 31, 2016, the unexpired risk reserve and other reserves have been reclassified from the changes in unearned premiums and changes in outstanding claims respectively. There is no impact on the reported surplus from insurance operations for the comparative three-month period and year ended December 31, 2015 consequent to the aforementioned reclassifications. |
| Other notes |
Profit / (loss) per share calculated before Zakat and income tax. Total shareholders' equity (there are no minority rights) as at 31 December 2016 was 149,847 thousand riyals compared to 127,007 thousand riyals for same period of last year, an increase of 17.9%. |
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