A Rejoinder to an article written by Ifeanyi John and published in the BusinessDay Newspaper of July 6, 2020
Niger Insurance plc is a leading Insurance Company in Nigeria that transacts all classes of Insurance business and offers a wide range of innovative and customer-oriented insurance products in Life and Non-life insurance to its clientele. The publicly quoted Composite Insurance Company presently operates with an asset base in excess of N21 billion.
We refer to your newspaper publication titled “Niger Insurance Strange Expense reporting confuses analysts’’ dated July 6, 2020. We wish to set the records straight and correct any misgivings therein for the benefit of our stakeholders and general public.
The “strange expense reporting” as captioned arose from an interpolation error between the “realised Gain on available for sale financial assets” and “Management expenses” reporting lines and therefore NOT deliberate. There was no strange reporting and we did not confuse the analysts. It is important to state categorically that the report presented is a true financial report of Niger Insurance for Q1 2020, as the company’s bottom line for the period remains unchanged.
The Management expenses for the period under review is N354.85 million while the N620 million captioned in the article as a positive management expenses is actually our gain on the available for sale financial assets and therefore an “income” and NOT an “expense”.
The N620 million (gain on available for sale) when added to the Underwriting profit of N16.81 million plus Investment/other operating income of N108.66 million gives a total N745.47 million as income. Therefore, when the Management expenses of N354.85 million plus
Depreciation/Amortization of N4.32 million are deducted from the income of N745.47 million, the result is the Net Operating Profit before tax of N386.30 million.
Management expenses are a deductible item and had been treated and reported accordingly in the Company’s financial statement in line with the requirement of the IFRS. The Management expenses of N354.85 million as reported are made up of the Finance Charges of N10.6 million plus other Expenses totalling N344.19 million.
The misrepresented amount of N620 million for the sake of clarity is the gain arising from the disposal of Niger’s investment in TRUSTFUND shares. We did not with all intent and purpose create a mix-up to cause confusion. Niger Insurance actually ended Q1 2020 on a positive note by making and reporting a Total Comprehensive Income of N261.63 million.
For avoidance of doubt, our first quarter 2020 returns to NAICOM state it very clearly that the N620 million is a net realised gain. We wish to state that as a publicly quoted company, our books are readily available for scrutiny. We remain committed to ensuring adherence to corporate governance standards while ensuring full disclosure and transparency of our business and financial reporting to stakeholders and general public.