ga annual report 2014:layout 1 · s b r shah, mbs (chairman) sachit s raja shah v srivastava* (also...

GA INSURANCE LIMITED 1

table of contents

corporate information 2

financial highlights 3

chairman’s statement 4 - 5

board of directors 6

GA team 7

corporate social responsibility 8

director’s report 9

statement of corporate governance 10 - 11

statement of directors’ responsibilities 12

report of the independent auditors 13

consolidated statement of comprehensive income 14

company statement of comprehensive income 15

consolidated statement of financial position 16

company statement of financial position 17

consolidated statement of changes in equity 18 - 19

company statement of changes in equity 20

consolidated statement of cash flows 21

notes to financial statements 22 - 76

general business revenue account - GA Insurance Limited 77

general business revenue account - GA Insurance Tanzania Limited 78

life business revenue account - GA Life Assurance Limited 79

GA INSURANCE LIMITED2

DIRECTORSThe Directors who held office during the year and to the date of this report were:S B R Shah, MBS (Chairman)Sachit S Raja ShahV Srivastava* (Also Principal Officer and Chief Executive Officer)P J RansleyAmb. B A Kiplagat Sarit S Raja ShahM Soundararajan*

* Indian

COMPANY SECRETARYN P Kothari FCPS (Kenya)

INDEPENDENT AUDITORPricewaterhouseCoopers LimitedPwC Tower, Waiyaki Way / Chiromo RoadWestlands PO Box 43963 Nairobi - 00100

CONSULTING ACTUARYMr. Saket SinghalC1702, Palm Beach Residency, Sector 4Nerul (W), Navi Mumbai, MaharashtraIndia - 400706

REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESSGA Insurance HouseRalph Bunche Road PO Box 42166 Nairobi - 00100

BRANCH OFFICESMombasa BranchBiashara BuildingNyerere AvenuePO Box 84081 Mombasa - 80100

Kisumu BranchBon Accord HouseTemple RoadPO Box 7706Kisumu - 40100

BANKERSI&M Bank LIMITED2nd Ngong AvenuePO Box 30238Nairobi - 00100

Standard Chartered Bank Kenya Limited Kenyatta AvenuePO Box 30001Nairobi - 00100

corporate information


GA financial highlights


chairman’s statement

SBR Shah, MBSChairman

It is my great pleasure to present the annual report and financial statements ofGA Insurance Limited for the year ended 31st December 2014:

Despite the challenging operating environment, the company’s premiumincome grossed Kshs 3.8 billion, an impressive 24% growth over 2013. GAcontinued to deliver strong and sustainable returns with shareholder fundsgrowing 44% over the previous year.

In the year, the company harnessed group synergies in infrastructure andbancassurance. To enhance brand’s visibility, a unique billboards mediacampaign was launched.

Good corporate governance and robust risk management practices werecentral to the company’s strategy of pursuing balanced growth, increasingmarket share and maximising shareholder wealth.

Management and staff remained true to the core virtues of integrity, respect,and professionalism in fulfilling the company’s obligations to stakeholdersthrough efficient and prompt claims settlement and value-addedunderwriting.

The company’s nascent subsidiaries, GA Insurance Tanzania Limited and GALife Assurance added Kshs 1.7 billion to the group’s asset base.

Operational Environment

In 2014, the economy expanded to achieve a Gross Domestic Product (GDP)growth rate of 5.3% compared to 4.7% in 2013. The average annual inflationincreased from 5.72% in January to 6.88% in December 2014. Average interestrates for the 91-day Treasury bill declined during the year from 9.26% inJanuary to 8.58% in December 2014. Over the same period the Central BankRate (CBR) remained unchanged at 8.5%.

The Stock Exchange was bullish, with the Nairobi Stock Exchange (NSE) 20share index rising from 4,856 points in January to 5,113 points in December

2014. The Nairobi All Share index similarly appreciated from 135 points to 170 points over the same period. The dollarstrengthened against the shilling, having opened the year at Kshs 86.21 and closed at Kshs 90.44.

GA’s Performance

I am pleased to report that the Company attained a gross written premium of Kshs 3,817 million, up from Kshs 3,089million in 2013 and an underwriting profit of Kshs 205 million being an 89% growth over last year.

The profitability of the industry continues to be under threat from price undercutting, with attempts to standardiseminimum rates being undermined and challenged in court. GA continues to pursue prudent underwriting, optimalreinsurance programmes, robust risk management and maintenance of a balanced product mix.

Group profit before tax stood at Kshs 602 million while group profit after tax was Kshs 442 million. The group’s investmentincome rose 15% from Kshs 549 million in 2013 to Kshs 629 million.

Total group assets grew from Kshs 7.9 billion to Kshs 10.6 billion, while group investments amounted to Kshs 6.2 billionbeing 35% increase from Kshs 4.6 billion in 2013.


chairman’s statement cont’d

GA Life Assurance, in its second year of operation, grew its retirement funds from Kshs 733 million in 2013 to Kshs1,554 million in 2014 and declared an interest of 13.25%.

In its first year of operation, GA Insurance Tanzania wrote Kshs 46 million worth of premiums and attained an assetbase of Kshs 197 million.

The Board of directors recommended a payment of Kshs 225 million as dividend for the year 2014.

Looking Forward

The macroeconomic environment in 2015 is likely to be challenging, however the board and management areconfident that company’s strategy will bear dividends despite the constrained operating environment.

The company looks forward to opening its new branch in Westlands, Nairobi. This new channel coupled withbancassurance, vibrant marketing and cross-selling are expected to grow the company’s market share. The Companyplans to restructure its marketing function and continue strengthening its customer service delivery capacity.

GA insurance Tanzania operations have gained traction with plans underway to open a branch in Arusha. GA’sregional expansion strategy remains prudent in seeking value adding opportunities across the greater East Africanregion.

Appreciation

With sincere gratitude, I would like to salute all our customers and intermediaries for their unwavering support anddedication. I am equally grateful to all those who have maintained their confidence in the Board and Managementover the years. I would also like to thank the management and the staff for their selfless commitment towards makingGA the most trusted insurance company.

I take this opportunity to extend my sincere thanks to the Commissioner of Insurance and CEO of the InsuranceRegulatory Authority for his support during the year.

I am grateful to my fellow directors for their continued advice and guidance that made the excellent companyperformance possible.

SBR Shah, MBSChairmain

GA INSURANCE LIMITED

board of directors

From Left to Right:

M SoundararajanNon-Executive Director

Philip J RansleyNon-Executive Director

Sarit S Raja ShahNon-Executive Director

Sachit S ShahExecutive Director

Vijay SrivastavaCEO & Principal Officer

N P KothariCompany Secretary

S B R Shah, MBSChairman

Bethuel KiplagatNon-Executive Director

Not in the photo

6

GA team



corporate social responsibility

As a responsible corporate citizen, GA has continued to extend its relationship with the community through our sustainable CSRinitiatives. The partnerships are structured through five main pillars of Education scholarships, Clean water and sanitation, Healthsupport programmes, Environmental conservation, and Charity support through our business and social partners.

GA Education Scholarship has been the flagship CSR programmespanning over 7 years of sustained empowerment to bright but needystudents at different levels of their academics. The programme supportsover 40 students while more than 12 have successfully completed theirstudies under the scholarship programme. The scholarship caters for alltuition and examination fees, accommodation expenses, uniforms, books,pocket monies and all upkeep expenses.

Clean water and sanitation is an initiative which is in its 6th year ofsustainability having successfully donated and fully installed water tanks inover 38 primary schools in different counties. The programme aims torealize the GA social objective of provision of clean and safe drinking waterto susceptible school going pupils and the society.

Health support programmes is a sponsorship channelled through KenyaKamili Organisation supporting over 3,000 mental health patients and theirfamilies. Through the partnership, we are supporting 8 full-fledgedoutreach clinics and we have 13 trainee nurses. The long term objective isto have a Mental Health nurse within 100km reach of every Kenyan.

Environmental conservation is an initiative in its 5th year of sustainability.It has a double effect of supporting organized less fortunate self-helpgroups towards making a sustainable livelihood and environmentalpollution management.

Other Charities:We have extended our benevolence in many other activities in which wesupport various charities during the year. These included supporting thefund raising golf tournament for Sigona golf club, Palm house foundation,Lohana golfing society among others.

Equally we have directly given back to the society through RamgarhiaYouth Association, The Dear Diary Initiatives Kenya, Rotary Kilimanjaro andM.A. Math Charitable Trust Kenya.

director’s reportfor the year ended 31 december 2014

The directors submit their report together with the audited financial statements for the year ended 31 December 2014 whichdisclose the state of affairs of GA Insurance Limited (the “Company”) and its subsidiaries (collectively the “Group”).

PRINCIPAL ACTIVITIES

The Company underwrites general classes of insurance business as defined by the Insurance Act, while its subsidiaries GA LifeAssurance Limited and GA Insurance Tanzania Limited underwrite life and general insurance business respectively.

GROUP FINANCIAL RESULTS 2014 2013

Shs’000 Shs’000Profit before taxation 602,044 598,523Taxation charge (159,867 ) (152,120)Profit for the year transferred to retained earnings 442,177 446,403

DIVIDEND

The Directors propose a final dividend of Shs 10 per share (2013: interim Shs 10 per share) amounting to Shs 225,000,000/- inrespect of the year.

DIRECTORS

The directors who held office during the year and to the date of this report are set out on page 2.

INDEPENDENT AUDITOR

The Company’s auditor PricewaterhouseCoopers has expressed their willingness to continue in office in accordance with Section159(2) of the Companies Act (Cap 486), subject to Section 56(4) of the Insurance Act (Cap 487).

BY ORDER OF THE BOARD

N P KothariCompany Secretary

30 March 2015



GA Insurance Limited is committed to the best principles of Corporate Governance. Consequently, the Company emphasises oncompliance with the rules, regulations and laws of the land in the conduct of its business. The Company’s main purpose is thepursuit of earning credibility in the market and increasing value for the stakeholders. The decision making processes are run withthe values of integrity, responsibility, accountability and transparency in mind.

Board of Directors

The Board Charter details the mandate of the Board, its functions as well as the manner in which it will conduct its business.

The Directors of the Company during the year are listed on page 2.

The Directors are known for their competencies, integrity and experience in the field of banking, finance, manufacturing, businessand social services. Though the overall responsibility of monitoring and controlling the operational and financial performance ofGA Insurance vests with the Board, the day to day management of the Company has been delegated to the Executive Director.

The Board of Directors meets at least quarterly and is chaired by a non-executive director. The schedule below indicates Boardmeeting attendance for the year.

Date 27.03.2014 12.06.2014 25.09.2014 4.12.2014

Suresh BR Shah Chairman √ x √ √Sachit S Raja Shah Member √ √ √ √Sarit S Raja Shah Member √ √ √ √Phillip J Ransley Member √ √ √ √Madabhushi Soundararajan Member √ √ x √Bethuel A Kiplagat Member x √ x √Vijay Srivastava Principal Officer √ √ x √

√ Attendedx Not Attended

Board Committees

The Board has instituted various committees to assist it in fulfilling its role of monitoring key activities of GA Insurance. The Boardreviews the reports and minutes of the committees and is accountable for its decisions and functions.

Board Audit Committee

The Board Audit Committee comprises of the Executive Director and two Non-Executive Directors. The Chief Executive Officer, theGroup Internal auditor and Internal Auditor are regular invitees to the meetings. Its key objective is to assist the Board in providingan independent review of the effectiveness of the financial reporting process and internal control system of GA Insurance. Thecommittee reviews the performance and findings of the Internal Audit and Compliance function and recommends appropriateremedial action at least quarterly.

The schedule below indicates the attendance by directors of committee meetings during the year.

Date 18.3.2014 6.06.2014 11.09.2014 21.11.2014

Madabhushi Soundararajan Chairman √ √ √ √Sarit S Raja Shah Member √ √ √ √Sachit S Raja Shah Member √ √ √ √

√ Attended

statement of corporate governancefor the year ended 31 december 2014

statement of corporate governance cont’dfor the year ended 31 december 2014

Board Investment Committee

The Board Investment Committee comprises three Non-Executive Directors, the Executive Director, the Chief Executive Officer andthe Treasury Manager. Its key objective is to oversee the Investment Policy of the organisation. The Committee is mandated toensure that the Company holds sufficient assets of appropriate nature, term and liquidity to enable it to meet the liabilities of theCompany as they become due. It meets quarterly to monitor the Credit Committee strategy with the objective of ensuring theoptimum utilization of funds.

The schedule below indicates the attendance by directors of committee meetings during the year:

Date 18.3.2014 6.06.2014 11.09.2014 21.11.2014

Phillip J Ransley Chairman √ √ x √Madabhushi Soundararajan Member √ √ √ √Sarit S Raja Shah Member √ √ √ √Sachit S Raja Shah Member √ √ √ √Vijay Srivastava Principal Officer √ √ √ √

√ Attendedx Not Attended

Board Risk Management Committee

The Board Risk Management Committee comprises two Non-Executive Directors, the Executive Director, the Chief ExecutiveOfficer and the Group Internal auditor. The Internal Auditor and Risk & Compliance Manager are regular invitees to the meetings.Its key objective is to oversee the implementation of an effective Risk Management Framework. The committee reviews theperformance and findings of the Risk Management and Compliance function and recommends appropriate improvement onspecific risk and compliance areas at least quarterly.

The schedule below indicates the attendance by directors of committee meetings during the year:

Date 18.3.2014 6.06.2014 11.09.2014 21.11.2014

Sarit S Raja Shah Chairman √ √ √ √Madabhushi Soundararajan Member √ √ √ √Sachit S Raja Shah Member √ √ √ √Vijay Srivastava Principal Officer √ √ √ √

√ Attended



statement of directors’ responsibilitiesfor the year ended 31 december 2014

The Companies Act, CAP 486, Laws of Kenya requires the directors to prepare financial statements for each financial year that givea true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the Group’s profitor loss for that year. It also requires the directors to ensure that the company maintains proper accounting records that disclose,with reasonable accuracy, the financial position of the Group. The directors are also responsible for safeguarding the assets of theGroup.

The directors accept responsibility for the preparation and fair presentation of the annual financial statements that are free frommaterial misstatement whether due to fraud or error. They also accept responsibility for:

(i) designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statements;

(ii) selecting and applying appropriate accounting policies; and(iii) making accounting estimates and judgments that are reasonable in the circumstances.

The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of theGroup and company as at 31st December 2014 and of its profit/loss and cash flows for the year then ended in accordance withInternational Financial Reporting Standards and the requirements of the Kenyan Companies Act.

Nothing has come to the attention of the directors to indicate that the Company and its subsidiaries will not remain a goingconcern for at least twelve months from the date of this statement.

SBR Shah Sachit S ShahDirector Director

30th March 2015


report of the independent auditors

to the members of GA Insurance Limited

Report on the financial statements

We have audited the accompanying consolidated financial statements of GA Insurance Limited (the “Company”) and itssubsidiaries (together, the “Group”), as set out on pages 14 to 76. These financial statements comprise the consolidated statementof financial position at 31 December 2014 and the Consolidated statement of comprehensive income, consolidated statement ofchanges in equity and the consolidated statement of cash flows for the year then ended, together with the statement of financialposition of the company standing alone as at 31 December 2014, the statement of comprehensive income, and the statement ofchanges in equity of the company for the year then ended, and a summary of significant accounting policies and other explanatorynotes.

Directors’ responsibility for the financial statements

The directors are responsible for the preparation and fair presentation of these financial statements in accordance withInternational Financial Reporting Standards and the requirements of the Companies Act, CAP 486, Laws of Kenya. Thisresponsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting andapplying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlsrelevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

Opinion

In our opinion the accompanying financial statements give a true and fair view of the financial position of the Group and theCompany as at 31 December 2014 and of the financial performance and cash flows of the Group for the year then ended inaccordance with International Financial Reporting Standards and the Companies Act, CAP 486, Laws of Kenya.

Report on other legal requirements

As required by the Companies Act, CAP 486, Laws of Kenya, we report to you, based on our audit, that:i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purposes of our audit;ii) in our opinion proper books of account have been kept by the company, so far as appears from our examination of those

books;iii) the company’s statement of financial position and statement of comprehensive income are in agreement with the books of

account.

The engagement partner responsible for the audit resulting in this independent auditor’s report is CPA Kang’e Saiti - P/No1652.

Certified Public Accountants Nairobi

PricewaterhouseCoopers

30 March 2015


consolidated statement of comprehensive incomefor the year ended 31 december 2014

2014 2013Notes Shs'000 Shs'000

Insurance premium revenue 6 3,878,894 3,098,307Less: reinsurance premium ceded to reinsurers (1,818,021) (1,456,486)

Net insurance premiums revenue 2,060,873 1,641,821

Unearned insurance premiums brought forward 728,519 655,376Unearned insurance premiums carried forward (905,622) (728,519)

Net earned premiums 1,883,770 1,568,678

Investment income 7 546,235 438,826Net gains on financial assets held at Fair Value through profit & loss 7 40,183 73,414Commissions earned 505,326 378,634Other income 7 42,207 36,301

Net income 3,017,721 2,495,853

Claims incurred 2,455,998 1,731,727Less: amounts recoverable from reinsurers (1,062,820) (638,480)

Net claims incurred 8 1,393,178 1,093,247

Operating and other expenses 9 566,130 444,440Commissions payable 456,369 359,643

1,022,499 804,083

Profit before income tax 602,044 598,523

Income tax expense 10 (159,867) (152,120)

Profit for the year 442,177 446,403

Other comprehensive income, net of taxItems that will be reclassified to profit or lossNet gains on financial assets held at Fair Value through othercomprehensive income, net of tax 4,368 13,796

Total comprehensive income 446,545 460,199

Total Comprehensive income attributed to:Non-controlling interest (2,390) 189 Equity holders of the company 448,935 460,010

Total 446,545 460,199

The notes on pages 22 to 76 form an integral part of these financial statements.

company statement of comprehensive incomefor the year ended 31 december 2014

2014 2013Notes Shs'000 Shs'000

Insurance premium revenue 6 3,816,784 3,088,691Less: reinsurance premium ceded to reinsurers (1,779,560) (1,446,597)

Net insurance premiums revenue 2,037,224 1,642,094

Unearned insurance premiums brought forward 728,519 655,376Unearned insurance premiums carried forward (888,141) (728,519)

Net earned premiums 1,877,602 1,568,951

Investment income 7 369,180 399,274Net gains on financial assets held at Fair Value through profit & loss 7 19,331 73,413Commissions earned 496,855 375,816Other income 7 42,453 36,988

Total income 2,805,421 2,454,442

Claims incurred 2,283,064 1,714,256Amounts recoverable from reinsurers (1,052,600) (638,480)

Net claims incurred 8 1,230,464 1,075,776

Operating and other expenses 9 524,246 435,759Commissions payable 453,091 359,114

977,337 794,873

Profit before income tax 597,620 583,794

Income tax expense 10 (158,971) (149,263)

Profit for the year 438,649 434,531

Other comprehensive income, net of taxItems that will be reclassified to profit or lossNet gains on financial assets held at Fair Value through othercomprehensive income, net of tax 4,368 13,796

Total comprehensive income 443,017 448,327

The notes on pages 22 to 76 form an integral part of these financial statements.



consolidated statement of financial positionAs at 31 december 2014

2014 2013Notes Shs'000 Shs'000

CAPITAL EMPLOYEDShare capital 12 450,000 450,000Retained earnings 13 907,124 687,502Revaluation reserve 14 (a) 829,766 328,566Statutory reserve 1,284 1,339Other reserves 14 (b) 174,249 169,881

Equity attributable to owners of the company 2,362,423 1,637,288Non-controlling interest 52,206 54,596

Total equity 2,414,629 1,691,884

ASSETSProperty and equipment 15 1,221,939 732,373Intangible asset 16 8,705 14,024Investment property 17 1,478,891 1,002,986Equity investments at FVTPL – quoted 18 429,721 356,016Equity investments at FVTOCI - unquoted 18 139,582 133,342Loans receivable 19 292,640 171,243Deferred tax asset 29 4,206 -Receivables arising out of reinsurance arrangements 341,311 216,674Receivables arising out of direct insurance arrangements 670,348 410,798Reinsurers’ share of insurance contract liabilities 21 1,844,896 1,442,783Other receivables 22 33,448 136,437Deferred acquisition costs 23 236,737 173,736Government securities at Amortised cost 24 1,118,576 1,013,365Government securities at FVTPL 24 429,854 288,785Corporate bonds and commercial paper 20 438,666 309,951Deposits with financial institutions 33 1,852,378 1,365,200Tax recoverable 1,931 11,127Cash and bank balances 33 44,455 94,689

Total assets 10,588,284 7,873,529

LIABILITIESInsurance contract liabilities 26 3,901,735 3,310,554Payables under deposit administration contracts 25 1,533,684 728,730Unearned premium 28 1,631,947 1,292,529Deferred tax liability 29 385 16,633Current income tax 27,176 2,857Creditors arising from reinsurance arrangements 693,627 552,212Creditors arising from direct insurance arrangements 1,077 425Other payables 30 159,024 112,330Dividends payable 225,000 165,375

Total liabilities 8,173,655 6,181,645

Net assets 2,414,629 1,691,884

The financial statements on pages 14 to 76 were approved for issue by the board of directors on 30th March 2015 and signed onits behalf by:

S B R Shah Sachit S Shah V SrivastavaDirector Director Principal officer

company statement of financial positionAs at 31 december 2014

2014 2013Notes Shs'000 Shs'000

CAPITAL EMPLOYEDShare capital 12 450,000 450,000Retained earnings 13 890,807 677,158Revaluation reserve 14 (a) 829,766 328,566Other reserves 14 (b) 174,249 169,881

Shareholders’ funds 2,344,822 1,625,605

ASSETSProperty and equipment 15 1,216,230 730,251Intangible asset 16 8,705 14,024Deferred tax asset 29 4,206 -Investment property 17 1,273,291 1,002,986Equity investments at FVTPL - quoted 18 401,663 356,016Equity investments at FVTOCI - unquoted 18 139,582 133,342Loans receivable 19 292,640 171,243Receivables arising out of reinsurance arrangements 338,700 216,674Receivables arising out of direct insurance arrangements 662,216 410,798Reinsurers’ share of insurance contract liabilities 1,829,502 1,442,782Other receivables 22 27,416 135,965Deferred acquisition costs 23 232,966 173,736Government securities at Amortised cost 24 697,454 612,362Government securities at FVTPL 24 80,391 288,785Corporate bonds and commercial paper 20 309,350 259,670Investment in subsidiaries 37 308,827 308,827Deposits with financial institutions 33 1,087,507 724,967Tax recoverable - 11,127Cash and bank balances 33 12,218 79,948

Total assets 8,922,864 7,073,505

LiabilitiesInsurance contract liabilities 26 3,893,101 3,310,191Unearned premium 28 1,603,935 1,292,529Deferred tax liability 29 - 16,633Current income tax 27,176 -Creditors arising from reinsurance arrangements 673,111 551,478Other payables 30 155,719 111,693Dividends payable 225,000 165,375

Total liabilities 6,578,042 5,447,900

Net assets 2,344,822 1,625,605

The financial statements on pages 14 to 76 were approved for issue by the board of directors on 30th March 2015 and signed onits behalf by:

S B R Shah Sachit S Shah V SrivastavaDirector Director Principal officer



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company statement of changes in equityfor the year ended 31 december 2014

Notes Available Revenue RevenueShare for sale reserves reserves Revaluation

capital reserve Undistributable Distributable reserve TotalShs'000 Shs'000 Shs'000 Shs'000 Shs'000 Shs'000

Year ended 31 December 2013At start of year 300,000 186,507 156,085 431,120 328,566 1,402,278

- IFRS 9 Reclassification ofreserves 14(b) - (186,507) - 186,507 - -

Comprehensive incomeProfit for the year - - - 434,531 - 434,531Other comprehensive incomeNet change on financial assets atfair value through othercomprehensive income - - 13,796 - - 13,796

Total other comprehensive income - - 13,796 - - 13,796Transactions with ownersIncrease in Share Capital 150,000 - - (150,000) - -Dividends- Paid 11 - - - (59,625) - (59,625)- Transferred to dividends

payable 11 - - - (165,375) - (165,375)

Transactions with owners 150,000 - - (375,000) - (225,000)

At 31 December 2013 450,000 - 169,881 677,158 328,566 1,625,605

Year ended 31 December 2014At start of year 450,000 - 169,881 677,158 328,566 1,625,605

Comprehensive incomeProfit for the year - - - 438,649 501,200 939,849

Other comprehensive incomeNet change on financial assets atfair value through othercomprehensive income - - 4,368 - - 4,368

Total other comprehensive income - - 4,368 - - 4,368

Transactions with ownersDividends- Transferred to dividendsPayable - - - (225,000) - (225,000)

Transactions with owners - - - (225,000) - (225,000)

At 31 December 2014 450,000 - 174,249 890,807 829,766 2,344,822

The notes set out on pages 22 to 76 form an integral part of these financial statements.

consolidated statement of cash flowsfor the year ended 31 december 2014

2014 2013Notes Shs'000 Shs'000

Operating activitiesCash generated from operations 34 1,134,770 1,568,313Income tax paid (148,683) (166,854)

Net cash from operating activities 986,087 1,401,459

Investing activitiesPurchase of property and equipment 15 (17,970) (10,909)Purchase of computer software 16 (987) (20,035)Purchase of quoted shares 18 (85,300) (19,583)Purchase of investment property 17 (458,040) (754,478)Purchase of treasury bonds – Amortised cost 24 (581,540) (737,357)Purchase of treasury bonds – FVTPL 24 (510,200) (395,137)Purchase of corporate bonds and commercial paper 20 (156,919) (201,299)Loans advanced 19 (95,433) (214,243)Loans repaid 19 86,870 200,953Proceeds from disposal of property and equipment 989 -Proceeds from disposal of quoted shares 18 36,888 124,790Proceeds from redemption of corporate bonds 20 28,204 12,365Proceeds from treasury bonds – Amortised cost 479,673 200,000Proceeds from treasury bonds – FVTPL 388,788 362,199Net rental income received 59,356 54,732Interest received 427,947 312,348Dividends received 13,908 14,571

Net cash used in investing activities (383,766) (1,071,083)

Financing activitiesProceeds from issue of share capital - 53,863Dividends paid 11 (165,375) (59,625)

Net cash used in financing activities (165,375) (5,762)

Increase in cash and cash equivalents 436,946 324,614

Movement in cash and cash equivalents

At start of year 33 1,459,887 1,135,273Increase 436,946 324,614

At end of year 33 1,896,833 1,459,887

The notes set out on pages 22 to 76 form an integral part of these financial statements.



notes to the financial statementsfor the year ended 31 december 2014

1 General information

GA Insurance Limited is incorporated in Kenya under the Companies Act as a private limited liability Company, and is domiciled in Kenya. The address of its registered office is:GA Insurance HouseRalph Bunche Road PO Box 42166 Nairobi - 00100

The Company deals in general insurance business. For the Kenyan Companies Act reporting purposes, the balance sheet is represented by the statement of financial position and profit or loss account by the statement of comprehensive income in these financial statements.

GA Life Assurance, a fully owned subsidiary domiciled in Kenya, deals in life insurance business. It underwrites life risks relating to insured persons, issues investment contracts and administers pension funds.

GA Insurance Tanzania Limited, domiciled in Tanzania, is a general insurance underwriter in which the Company owns a 66.67% controlling interest.

2 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below and relate to both the Company’s and the Group’s activities. These policies have been consistently applied to all years presented, unless otherwise stated.

(a) Basis of preparation

The consolidated financial statements of GA Insurance Limited have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The measurement basis applied is the historical cost basis, except where otherwise stated in the accounting policies below. The financial statements are presented in Kenya Shillings (Shs), rounded to the nearest thousand.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3.

Changes in accounting policy and disclosures

(a) New and amended standards adopted by the Group

The following standards have been adopted by the group for the first time for the financial year beginning on or after 1 January 2014 and have a material impact on the group:

Amendment to IAS 32, ‘Financial instruments: Presentation’ on offsetting financial assets and financial liabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms. The amendment did not have a significant effect on the group financial statements.

Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financial assets. This amendment removed certain disclosures of the recoverable amount of CGUs which had been included in IAS 36 by the issue of IFRS 13.

notes to the financial statements cont’dfor the year ended 31 december 2014

2 Summary of significant accounting policies (continued)

(a) Basis of preparation (continued)

Changes in accounting policy and disclosures (continued)

(b) New standards and interpretations that are not yet effective and have not been early adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2014, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Company, except the following set out below:

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through P/L. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The company is yet to assess IFRS 9’s full impact.

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.





(b) Consolidation

i) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.

The excess of the consideration transferred the amount of any non-controlling interest in the acquiree and the acquisition-date fair value over any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.




(b) Consolidation (continued)

ii) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(iii) Disposal of subsidiaries

When the group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.The consolidated financial statements incorporate the financial statements of GA insurance Limited and its subsidiaries GA Life Assurance Limited and GA Insurance Tanzania Limited made up to 31 December 2014.

(c) Segment information

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses that relate to transactions with any of the Group’s other components, whose operating results are reviewed by the Board of Directors, to make decisions about resources allocated to each segment and assess its performance, and for which discrete information is available.

Group costs are allocated to segments on a reasonable and consistent basis. Transactions between segments are generally accounted for in accordance with Group policies as if the segment were a stand alone business with intra segment revenue and cost being eliminated in head office.

The Chief Operating Decision Maker within the Group is the GA Insurance Limited Board of Directors. The Group results are analysed across operating segments based on a combination of geographical areas and products and services. There are 2 geographical segments: Kenya and Tanzania. There are 2 product segments: General insurance business and Life assurance business.

The segments are individually considered by management when making decisions and they are the basis for resource allocation and performance measurement by the Board of Directors. There are no reconciling differences between the primary financial statements of the Group and the reported segmental information.

All transactions between business segments are conducted on an arm’s length basis, with intra-segment revenue and costs being eliminated on consolidation. Income and expenses directly associated with each segment are included in determining business segment performance.


2. Summary of significant accounting policies (continued)

(d) Insurance contracts

I. Classification

The Group issues contracts that transfer insurance risk or financial risk or both. Insurance contracts are those contracts that transfer significant insurance risk. Such contracts may also transfer financial risk. As a general guideline, the Group defines as significant insurance risk, the possibility of having to pay benefits on the occurrence of an insured event that are at least 10% more than the benefits payable if the insured event did not occur.

Insurance contracts are classified into two main categories; long term and general insurance business, depending on the duration of risk and in accordance with the provisions of the Insurance Act.

(a) Long term insurance business

Includes insurance business of all or any of the following classes, namely, life assurance business (ordinary life andGroup life), superannuating business, industrial life assurance business and bond investment business and business incidental to any such class of business.

Life assurance business means the business of, or in relation to, the issuing of, or the undertaking of liability to pay money on death (not being death by accident or in specified sickness only) or on the happening of any contingency dependent on the termination or continuance of human life (either with or without provision for a benefit under a continuous disability insurance contract), and include a contract which is subject to the payment of premiums for term dependent on the termination or continuance of human life and any contract securing the grant of an annuity for a term dependent upon human life. Superannuating business means life assurance business, being business of, or in relation to, the issuing of or the undertaking of liability under superannuating, Group life and permanent health insurance policy.

(b) Short term insurance business

Classes of Short term insurance include aviation, engineering insurance, fire insurance - domestic risks, Fire insurance - industrial and commercial risks, liability insurance, marine insurance, motor insurance - private vehicles, motor insurance - commercial vehicles, personal accident insurance, theft insurance, workmen's Compensation and employer's liability insurance, medical insurance and miscellaneous insurance (i.e. class of business not included under those listed above).

Motor insurance business means the business of affecting and carrying out contracts of insurance against loss of, or damage to, or arising out of or in connection with the use of, motor vehicles, inclusive of third party risks but exclusive of transit risks

Personal Accident insurance business means the business of affecting and carrying out contracts of insurance against risks of the persons insured sustaining injury as the result of an accident or of an accident of a specified class or dying as the result of an accident or of an accident of a specified class.

Fire insurance business means the business of affecting and carrying out contracts of insurance, otherwise than incidental to some other class of insurance business against loss or damage to property due to fire, explosion, storm and other occurrences customarily included among the risks insured against in the fire insurance business.

Medical insurance business means the business of affecting and carrying out contracts of insurance against the person insured falling sick and incurring a cost to meet the medical expenses. Medical insurance business is classified into two categories: inpatient and outpatient cover.




(d ) Insurance contracts

II. Recognition and measurement (continued)

(i) Premium incomeFor long term insurance business, premiums are recognised as revenue when they become payable by the contract holder. Premiums are shown before deduction of commission. For General business, Premium income is recognised on assumption of risks, and includes estimates of premiums due but not yet received, less an allowance for cancellations, and less unearned premium. Unearned premiums represent the proportion of the premiums written in periods up to the accounting date that relates to the unexpired terms of policies in force at the financial reporting date, and is computed using the 1/24th method. Premiums are shown before deduction of commission and are gross of any taxes or duties levied on premiums.

(ii) Deferred acquisition costsA proportion of commission payable is deferred and amortised over the period in which the related premium is earned. Deferred acquisition costs represent a proportion of acquisition costs that relate to policies that are in force at the year end.

(iii) Claims incurredFor long term insurance business, benefits are recorded as an expense when they are incurred. Claims arising on maturing policies are recognised when the claim becomes due for payment. Death claims are accounted for on notification. Surrenders are accounted for on payment.

A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation assumptions used (the valuation premiums). The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued. A margin for adverse deviations is included in the assumptions. Where insurance contracts have a single premium or a limited number of premium payments due over a significantly shorter period than the period during which benefits are provided, the excess of the premiums payable over the valuation premiums is deferred and recognised as income in line with the decrease of unexpired insurance risk of the contracts in-force or, for annuities in force, in line with the decrease of the amount of future benefits expected to be paid. The liabilities are recalculated at each financial reporting date using the assumptions established at inception of the contracts.

For General business, claims incurred comprise claims paid in the year and changes in the provision for outstanding claims. Claims paid represent all payments made during the year, whether arising from events during that or earlier years. Outstanding claims represent the estimated ultimate cost of settling all claims arising from incidents occurring prior to the financial reporting date, but not settled at that date. Outstanding claims are computed on the basis of the best information available at the time the records for the year are closed, and include provisions for claims incurred but not reported (“IBNR”). Outstanding claims are not discounted.

(iv) CommissionsCommissions payable and earned are recognised in the period in which the related premiums are written.





(d ) Insurance contracts (continued)


(v) Liability adequacy testAt each financial reporting date, liability adequacy tests are performed to ensure the adequacy of the contract liabilities net of DAC. In performing these tests, current best estimates of future contractual cash flows and claims handling and administration expenses, as well as investment income from the assets backing such liabilities, are used. Any deficiency is immediately charged to profit or loss. Long-term insurance contracts are measured based on the assumptions set out at the inception of the contract. When the liability adequacy test requires the adoption of new best estimate assumptions, such assumptions (without margins for adverse deviation) are used for the subsequent measurement of these liabilities.

(vi) Reinsurance contracts heldContracts entered into by the Group with reinsurers under which the Group is compensated for losses on one or more contracts issued by the Group and that meet the classification requirements for insurance contracts are classified as reinsurance contracts held. Contracts that do not meet these classification requirements are classified as financial assets. Insurance contracts entered into by the Group under which the contract holder is another insurer (inwards reinsurance) are included with insurance contracts.

The benefits to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets. These assets consist of short-term balances due from reinsurers, as well as longer term receivables that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms of each reinsurance contract. Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised as an expense when due.

The Group assesses its reinsurance assets for impairment on a quarterly basis. If there is objective evidence that the reinsurance asset is impaired, the Group reduces the carrying amount of the reinsurance asset to its recoverable amount and recognises that impairment loss in the profit or loss statement. The Group gathers the objective evidence that a reinsurance asset is impaired using the same process adopted for financial assets held at amortised cost. The impairment loss is also calculated following the same method used for these financial assets.

(vii) Receivables and payables related to insurance contracts and investment contractsReceivables and payables are recognised when due. These include amounts due to and from agents, brokers andinsurance contract holders.

If there is objective evidence that the insurance receivable is impaired, the Group reduces the carrying amount of the insurance receivable accordingly and recognises that impairment loss in the profit or loss statement. The Group gathers the objective evidence that an insurance receivable is impaired using the same process adopted for loans and receivables. The impairment loss is also calculated under the same method used for these financial assets. These processes are described in Note 2 (i).



(d) Insurance contracts (continued)


(viii)Salvage and subrogation reimbursements Some insurance contracts permit the Group to sell (usually damaged) property acquired in settling a claim (for example, salvage). The Group may also have the right to pursue third parties for payment of some or all costs (for example, subrogation).

Estimates of salvage recoveries are included as an allowance in the measurement of the insurance liability for claims, and salvage property is recognised in other assets when the liability is settled. The allowance is the amount that can reasonably be recovered from the disposal of the property.

Subrogation reimbursements are also considered as an allowance in the measurement of the insurance liability for claims and are recognised in other assets when the liability is settled. The allowance is the assessment of the amount that can be recovered from the action against the liable third party.

e) Investment property

Properties held for long-term rental yields that are not occupied by the Group are classified as investment properties.

Investment property comprises freehold land and buildings. It is carried at fair value. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. These valuations are reviewed every three years by an independent valuation expert. Investment property that is being redeveloped for continuing use as investment property, or for which the market has become less active, continues to be measured at fair value.

Changes in fair values are recorded in profit or loss.

Property located on land that is held under an operating lease is classified as investment property as long as it is held for long-term rental yields and is not occupied by the Group. The initial cost of the property is the lower of the fair value of the property and the present value of the minimum lease payments. The property is carried at fair value after initial recognition.

If an investment property becomes owner-occupied, it is reclassified as property and equipment, and its fair value at the date of reclassification becomes its cost for subsequent accounting purposes.

If an item of property and equipment becomes an investment property because its use has changed, any difference arising between the carrying amount and the fair value of this item at the date of transfer is recognised in other comprehensive income as a revaluation of property and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in the profit or loss statement. Upon the disposal of such investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.





(f) Property and Equipment

Land and buildings are shown at fair value, based on valuations every three years, by external independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Freehold land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:

Free hold buildings 50 yearsMotor vehicles 4 yearsComputers 4-8 yearsFurniture, fixtures and equipment 8 yearsLeasehold improvements 8 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each financial reporting date.

An asset’s carrying amount is written down immediately to its estimated recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(g) Intangible assets

Intangible assets represent computer software. Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets are amortised on a straight line basis over the useful economic life from the date it is available for use, currently at 30% and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method is reviewed at each financial year end.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense is recognised in profit or loss.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.



(h) Revenue recognition

(i) Insurance premium revenueThe revenue recognition policy relating to insurance contracts is set out under note 2(d)ii above.

(ii) CommissionsCommissions receivable are recognised as income in the period in which they are earned.

(iii) Interest incomeInterest income for all interest-bearing financial instruments, including financial instruments measured at fair value through profit or loss, is recognised within ‘investment income’ (Note 7) in the statement of comprehensive income using the effective interest rate method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.

(iv) Dividend incomeDividend income for equities is recognised when the right to receive payment is established - this is the ex-dividend date for equity securities.

(i) Financial assets

The Group classifies its financial assets into the following categories: financial assets at fair value through profit or loss (FVTPL), financial assets at fair value through other comprehensive income (FVTOCI) and financial assets at amortised cost. Management determines the appropriate classification of its financial assets at initial recognition.

i) Classification of financial assetsThe Group classifies a financial asset as an ‘equity instrument’ if it is a non-derivative and meets the definition of ‘equity’ for the issuer (under IAS 32 Financial Instruments: Presentation). All other non-derivative financial assets are classified as ‘debt instruments’.

a) Debt instruments at amortised costDebt instruments are measured at amortised cost using the effective interest method if both of the following conditions are met:• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash

flows; and• The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

Debt instruments meeting the above criteria are measured initially at fair value plus transaction costs (except if they are designated as at FVTPL. They are subsequently measured at amortised cost using the effective interest method less any impairment, with interest revenue recognised on an effective yield basis in investment income.

Subsequent to initial recognition, the Group assesses whether reclassification of debt instruments from amortised cost to FVTPL is required, if the objective of the business model changes so that the amortised cost criteria are no longer met.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts the estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.





(i) Financial assets (continued)

i) Classification of financial assets (continued)

a) Debt instruments at amortised cost (continued)

The Group may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised costcriteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had thefinancial asset been measured at amortised cost.

The Group’s receivables out of direct insurance and reinsurance arrangements, certain investments in government securities, corporate bonds, mortgage loans, loans to policy holders, deposits with financial institutions, reinsurer’s share of insurance liabilities, receivables from related parties and other receivables are classified in this category. The assets in this category had a total carrying value of Shs 6,306,550,000 at the reporting date (2013: Shs 3,701,251,000). The Company’s assets in this category at the end of the year were Shs 4,959,059,000 (2013: Shs 3,249,494,000).

b) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term. Financial assets are designated at fair value through profit or loss when doing so significantly reduces or eliminates a measurement inconsistency; or they form part of a Group of financial assets that is managed and evaluated on a fair value basis in accordance with a documented risk management or investment strategy and reported to key management personnel on that basis. Investments in equity instruments are classified as at FVTPL, unless the Group designates an investment that is not held for trading as at FVTOCI at initial recognition.

Debt instruments that do not meet the amortised cost criteria or that meet the criteria but the entity has chosen to designate as at FVTPL at initial recognition, are measured at FVTPL. Subsequent to initial recognition, the Group is required to reclassify debt instruments from FVTPL to amortised cost if the objective of the business model changes so that the amortised cost criteria starts to be met and the instrument’s contractual cash flows meet the amortised cost criteria. Reclassification of debt instruments designated as at FVTPL at initial recognition is not permitted.

Certain equity investments of the Group, government securities and certain corporate bonds are classified in this category. The assets in this category had a total carrying value of Shs 859,574,000 at the financial reporting date (2013: Shs 644,801,000). The Company’s assets in this Category at the end of the year were Shs 482,053,000 (2013: Shs 644,801,000).

c) Equity instruments at fair value through other comprehensive income

At initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading. A financial asset is held for trading if:• It has been acquired principally for the purpose of selling it in the near term; or• On initial recognition it is part of a portfolio of identified financial instruments that the Group manages

together and has evidence of a recent actual pattern of short-term profit-taking; or• It is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.




i) Classification of financial assets (continued)

c) Equity instruments at fair value through other comprehensive income (continued)

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the fair value reserve. Where the asset is disposed of, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is reclassified to retained earnings.

Dividends on these investments in equity instruments are recognised in the profit or loss statement when the Group’s right to receive the dividends is established in accordance with IAS 18 Revenue, unless the dividends clearly represent a recovery of part of the cost of the investment. Dividends earned are recognised in the profit or loss statement and are included in the ‘investment income’ line item. Dividend income recognised during the year amounted to Shs 13,908,000 (2013: Shs 14,571,000). None of the equity investments at FVTOCI were derecognized in the year.

Certain of the Group’s equity investment in unquoted companies are classified in this category as they are held for strategic purposes as opposed to trading. The Group’s assets in this category had a total carrying value of Shs 139,582,000 at the reporting date (2013: Shs 133,342,000). The Company assets in this category were Shs 139,582,000 at the reporting date (Shs 2013: 133,342,000).

Fair values of quoted investments in active markets are based on current bid prices. Fair values for unlisted equity securities are estimated using valuation techniques. These include the use of recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants. Equity securities for which fair values cannot be measured reliably are recognised at cost less impairment.

ii) De-recognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset.

iii) Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

iv) Impairment of Financial assets

The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.






iv) Impairment of Financial assets (continued)

Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the Group about the following events:• significant financial difficulty of the issuer or debtor;• a breach of contract, such as a default or delinquency in payments;• it becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;• the disappearance of an active market for that financial asset because of financial difficulties; or• observable data indicating that there is a measurable decrease in the estimated future cash flow from a group

of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Group, including:• An adverse changes in the payment status of issuers or debtors in the Group; or• National or local economic conditions that correlate with defaults on the assets in the Group.

a) Impairment of financial assets carried at amortised cost

The Group assesses whether objective evidence of impairment exists individually for financial assets. If there is objective evidence that an impairment loss has been incurred on investments carried at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with exception of receivables arising out of reinsurance or direct insurance arrangements, where the carrying amount is reduced through an allowance account. The impairment is recognised directly through the profit or loss statement.

b) Impairment of financial assets carried at fair value

The Group assesses at reporting date whether there is objective evidence that a financial asset at fair value through other comprehensive income financial asset is impaired, if any such evidence exists, the cumulative loss – measured as the difference between the acquisition cost and current fair value, less any impairment loss on the financial asset previously recognised in the profit or loss statement. Impairment losses recognised directly through other comprehensive income and transferred to retained earnings on disposal of the financial asset.



(j) Impairment of non-financial assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). The impairment test also can be performed on a single asset when the fair value less cost to sell or the value in use can be determined reliably. Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(k) Foreign currency translation

(i) Functional and presentation currencyItems included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency’). The consolidated financial statements are presented in currency’ Kenya Shillings which is the group’s presentation currency.

(ii) Transactions and balancesForeign currency transactions are translated into the functional currency of the respective entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other income’.

(l) Share capital

Ordinary shares are classified as ‘share capital’ in equity. Any premium received over and above the par value of the sharesis classified as ‘share premium’ in equity.

(m) Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(n) Employee benefits

The Group operates a defined contribution scheme. A defined contribution scheme is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.





(o) Income tax expense

(i) Current income taxThe tax expense for the period comprises current and deferred income tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax laws enacted or substantively enacted at the reporting date. The directors periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. They establish provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

(ii) Deferred income taxDeferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on the same entity.

(p) Actuarial liabilities and assumptions

In the process of applying the Group’s accounting policies, management made judgements in determining:• actuarial liabilities (see note 26 for the carrying amounts of these liabilities and assumptions respectively)• Valuation of unquoted investments• Fair valuation technique and model of financial assets• Classification of financial assets. As disclosed in note 2 (i)• whether land and building meet criteria to be classified as investment property as disclosed in note 2(e)

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including experience of future events that are believed to be reasonable under the circumstances.

(q) Dividends

Dividends payable to the Group’s shareholders are charged to equity in the period in which they are declared. Proposed dividends are shown as a separate component of equity until declared.


3 Critical accounting estimates

The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimation of incurred but not yet reported claims (IBNR) is the Company’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims. Note 27 contains further details on this process.

4 Management of insurance and financial risk

The Group’s activities expose it to a variety of risks, including insurance risk, financial risk, credit risk, and the effects of changes in property values, debt and equity market prices, foreign currency exchange rates and interest rates. The Group’s overall risk management programme focuses on the identification and management of risks and seeks to minimise potential adverse effects on its financial performance, by use of underwriting guidelines and capacity limits, reinsurance planning, credit policy governing the acceptance of clients, and defined criteria for the approval of intermediaries and reinsurers.

Investment policies are in place which help manage liquidity, and seek to maximise return within an acceptable level of interest rate risk.

This section summarises the way the Group manages key risks:

(a) Insurance risk

The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.

For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Group faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random and the actual number and amount of claims and benefits will vary from year to year from the level established using statistical techniques.

Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be. In addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the portfolio. The Group has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of these categories to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.

Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk, geographicallocation and type of industry covered.




4 Management of insurance and financial risk (continued)

(a) Insurance risk (continued)

Note 5 and the following tables disclose the concentration of insurance liabilities by the class of business in which the contract holder operates and by the maximum insured loss limit included in the terms of the policy. The amounts are the maximum insured loss limit amounts of the insurance liabilities (gross and net of reinsurance) arising from insurance contracts:

Class of business Maximum insured loss2014 2013

General Insurance Shs’000 Shs’000BusinessAviation Gross 444,200 184,900

Net 6,900 6,900Motor Gross 28,100 28,100

Net 2,750 2,250Fire Gross 13,257,000 13,257,000

Net 3,500 3,000Personal accident Gross 190,000 150,000

Net 2,750 2,250Marine Gross 505,000 600,000

Net 2,000 2,000Medical Gross 10,000 10,000

Net 2,000 2,000Others Gross 212,500 200,000

Net 2,750 2,250Long term Insurance business

Group Life Gross 16,000 16,000Net 300 300

(b) Financial risk

The Group is exposed to financial risk through its financial assets, financial liabilities (investment contracts and borrowings), reinsurance assets and insurance liabilities. In particular the key financial risk is that the proceeds from its financial assets are not sufficient to fund the obligations arising from its insurance contracts. The most important types of risk are credit risk, liquidity risk, market risk and other operational risks. Market risk includes currency risk, interest rate risk and equity price risk.

These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The risks that the Group primarily faces due to the nature of its investments and liabilities are interest rate risk and equity price risk.

The Group manages these positions within a Board Investment Committee (BIC) framework that has been developed to achieve long-term investment returns in excess of its obligations under insurance and investment contracts. The principal technique of the Group’s BIC is to match assets to the liabilities arising from insurance and investment contracts by reference to the type of benefits payable to contract holders.


4 Management of Insurance and financial risk (continued)

(b) Financial risk (continued)

Market risk

(i) Foreign exchange riskThe Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities. However, the Group has minimal transactions denominated in foreign currency hence the exposure is low.

The Group manages foreign exchange risk arising from future commercial transactions and recognised assets and liabilities.

At 31 December 2014, if the Shilling had weakened/strengthened by 10% against the US dollar with all other variables held constant, the post tax profit for the year would have been Shs 483,285 (2013: Shs 411,611) higher/lower, mainly as a result of US dollar bank balances.

(ii) Price risk The Group is exposed to equity securities price risk because of investments in quoted shares classified at fair value through profit or loss. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity and debt securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with limits set by the Group. All quoted shares held by the Group are traded on the Nairobi Stock Exchange (NSE).

At 31 December 2014, if the NSE Index had increased/decreased by 10% with all other variables held constant and all the Group’s equity instruments moved according to the historical correlation to the index, post tax profit for the year would have been Shs 3,351,401 (2013: Shs 5,601,615) higher/lower.

(iii) Cash flow and fair value interest rate riskFixed interest rate financial instruments expose the Group to fair value interest rate risk. Variable interest rate financial instruments expose the Group to cash flow interest rate risk.

The Group’s fixed interest rate financial instruments are government securities, deposits with financial institutions and mortgage loans. These are held at amortised cost thus no fair value risk.

Credit risk

The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where the Group is exposed to credit risk are:• receivables arising out of direct insurance arrangements;• receivables arising out of reinsurance arrangements; and• reinsurers’ share of insurance liabilities.

Other areas where credit risk arises include cash and cash equivalents, mortgage loans, Government securities and deposits with banks and other receivables.

The Group has no significant concentrations of credit risk. The Group structures the levels of credit risk it accepts by placing limits on its exposure to a single counterparty, or groups of counterparty. Such risks are subject to an annual or more frequent review. Limits on the level of credit risk by category and territory are approved periodically by the Board Investment Committee (BIC) and ratified quarterly by the Board of Directors.




(b) Financial risk (continued)Credit risk (continued)

Reinsurance is used to manage insurance risk. This does not, however, discharge the Group’s liability as primary insurer. If a reinsurer fails to pay a claim for any reason, the Group remains liable for the payment to the policyholder. The creditworthiness of reinsurers is considered on an annual basis by reviewing their financial strength prior to finalisation of any contract.

The exposure to individual counterparties is also managed by other mechanisms, such as the right of offset where counterparties are both debtors and creditors of the Group. Management information reported to the Group includes details of provisions for impairment on loans and receivables and subsequent write-offs. BIC makes regular reviews to assess the degree of compliance with the Group procedures on credit. Exposures to individual policyholders and groups of policyholders are collected within the ongoing monitoring of the controls associated with regulatory solvency. Where there exists significant exposure to individual policyholders, or homogenous groups of policyholders, a financial analysis equivalent to that conducted for reinsurers is carried out by the BIC of the Group.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings if available or historical information about counterparty default rates. None of the Group's credit risk counter parties are rated except the Government of Kenya, the issuer of the Group's government securities which has a B+ (2013: B+) credit rating.

The Group classifies counterparties without an external credit rating as below:Group 1 - new customers/related parties.Group 2 - existing customers/related parties with no defaults in the past.Group 3 - existing customers/related parties with some defaults in the past. All defaults were fully recovered.

Maximum exposure to credit risk before collateral heldGROUP Credit rating 2014 2013

or classification Shs’000 Shs’000

Corporate bonds and commercial paper Group 2 438,666 309,951Other receivables Group 2 33,448 136,437Receivables arising out of reinsurance arrangements Group 3 341,311 216,674Receivables arising out of direct insurance arrangements Group 3 670,348 410,798Reinsurers’ share of insurance liabilities Group 2 1,844,896 1,442,783Government securities - Amortised cost B+ 1,118,576 1,013,365Government securities - FVTPL B+ 429,854 288,785Loans receivable Group 3 292,639 171,243Deposits with financial institutions Group 2 1,852,378 1,365,200Tax recoverable Group 2 1,933 11,127Bank balances Group 2 44,455 94,689

7,068,504 5,461,052



(b) Financial risk (continued)Credit risk (continued)Maximum exposure to credit risk before collateral heldCOMPANY 2014 2013

Credit rating Shs’000 Shs’000or classification

Corporate bonds and commercial paper Group 2 309,350 259,670Other receivables Group 2 27,416 135,965Receivables arising out of reinsurance arrangements See note below 338,700 216,674Receivables arising out of direct insurance arrangements See note below 662,216 410,798Reinsurers’ share of insurance liabilities Group 2 1,829,502 1,442,783Government securities at amortised cost B+ 697,454 612,362Government securities FVTPL B+ 80,391 288,785Loans receivable Group 3 292,640 171,243Deposits with financial institutions Group 2 1,087,507 724,967Tax recoverable Group 2 - 11,127Bank balances Group 2 12,218 79,947

5,337,394 4,354,321

No collateral is held for any of the above assets. All receivables that are neither past due or impaired are within their approved credit limits, and no receivables have had their terms renegotiated.

None of the above assets are past due or impaired except for the following amounts in;• receivables arising out of direct insurance arrangements • receivables arising out of reinsurance arrangements

Financial assets that are past due or impaired

Receivables arising out of direct insurance arrangements are summarised as follows:

GROUP 2014 2013Shs’000 Shs’000

Past due but not impaired 670,348 410,798Impaired 20,063 11,684

Gross 690,411 422,482Allowance for impairment (20,063) (11,684)

Net 670,348 410,798

Allowance for impairmentAt start of year 11,684 10,563Recoveries (8,316) (3,446)Impairment allowance for the period 16,695 4,567

At end of year 20,063 11,684







Financial assets that are past due or impaired (continued)Receivables arising out of direct insurance arrangements are summarised as follows:

COMPANY 2014 2013Shs’000 Shs’000

Past due but not impaired 662,216 410,798Impaired 20,063 11,684

Gross 682,279 422,482Allowance for impairment (20,063) (11,684)

Net 662,216 410,798

Allowance for impairmentAt start of year 11,684 10,563Recoveries (8,316) (3,446)Impairment allowance for the period 16,695 4,567

At end of year 20,063 11,684

Receivables arising out of direct insurance arrangements past due but not impaired;

GROUP2014 2013

Shs’000 Shs’000Past due but not impaired:- by up to 30 days 137,763 79,500- by 31 to 60 days 191,082 122,962- by 61 to 150 days 234,109 143,421- over 151 days 107,394 64,915

Total past due but not impaired 670,348 410,798

Receivables arising out of direct insurance arrangements past due but not impaired;

COMPANY2014 2013

Shs’000 Shs’000Past due but not impaired:

- by up to 30 days 134,163 79,500- by 31 to 60 days 187,635 122,962- by 61 to 150 days 233,046 143,421- over 151 days 107,372 64,915

Total past due but not impaired 662,216 410,798

All receivables arising out of direct insurance arrangements that are past due by more than 360 days are considered to be impaired, and are carried at their estimated recoverable value.





Financial assets that are past due or impaired (continued)Receivables arising out of reinsurance arrangements are summarised as follows;

GROUP 2014 2013Shs’000 Shs’000

- by up to 3 months 46,919 28,581- by 3months to 12 months 224,622 142,481- by 1 year to 5 years 61,681 40,462- over 5 years 8,089 5,150

341,311 216,674

Receivables arising out of reinsurance arrangements aresummarised as follows;COMPANY- by up to 3 months 46,139 28,581- by 3months to 12 months 222,791 142,481- by 1 year to 5 years 61,681 40,462- over 5 years 8,089 5,150

338,700 216,674

Receivables arising out of direct insurance arrangements individually impaired

Of the total gross amount of impaired receivables, the following amounts have been individually assessed:

GROUP Direct insurance arrangements

2014 2013Shs’000 Shs’000

Individually assessed impaired receivables

- brokers 1,214 1,085- agents 1,264 312- direct clients 17,585 10,287

20,063 11,684





Financial assets that are past due or impaired (continued)Receivables arising out of reinsurance arrangements are summarised as follows;

Of the total gross amount of impaired receivables, the following amounts have been individually assessed:

COMPANY Direct insurance arrangements

2014 2013Shs’000 Shs’000

Individually assessed impaired receivables- brokers 1,214 1,085- agents 1,264 312- direct clients 17,585 10,287

20,063 11,684

Liquidity risk

Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities as they fall due and to replace funds when they are withdrawn.

The Group is exposed to daily calls on its available cash for claims settlement and other administration expenses. The Group does not maintain cash resources to meet all of these needs as experience shows that a minimum level of reinvestment of maturing funds can be predicted with a high level of certainty. The Board sets limits on the minimum level of bank overdraft facilities that should be in place to cover expenditure at unexpected levels of demand.

The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities (other than insurance contract liabilities which are based in expected maturities) at the financial reporting date. All figures are in thousands of Kenya Shillings.




(b) Financial risk (continued)Liquidity risk

GROUP Up to 3 3-12 1-5 Over 5months months years years Total

As at 31 December 2014: Shs’000 Shs’000 Shs’000 Shs’000 Shs’000LiabilitiesInsurance contract liabilities 657,523 4,083,241 703,394 89,524 5,533,682Payables under depositadministration contracts - - - 1,533,684 1,533,684Creditors arising fromreinsurance arrangements 129,646 430,204 118,673 15,104 693,627Creditors arising from directinsurance arrangements 1,077 - - - 1,077Dividends payables - 225,000 - - 225,000Other payables 159,024 - - - 159,024

Total financial liabilities 947,270 4,738,445 822,067 1,638,312 8,146,094

Up to 3 3-12 1-5 Over 5months months years years Total

As at 31 December 2013: Shs’000 Shs’000 Shs’000 Shs’000 Shs’000LiabilitiesInsurance contract liabilities 550,912 3,388,252 588,958 74,960 4,603,083Payables under depositadministration contracts 438,067 290,663 - - 728,730Creditors arising fromreinsurance arrangements 67,523 367,154 104,267 13,269 552,212Creditors arising from directinsurance arrangements 425 - - - 425Dividends payables - 165,375 - - 165,375Other payables 112,330 - - - 112,330

Total financial liabilities 1,169,257 4,211,444 693,225 88,229 6,162,155



(b) Financial risk (continued)Liquidity risk (continued)

COMPANY Up to 3 3-12 1-5 Over 5months months years years Total

As at 31 December 2014: Shs’000 Shs’000 Shs’000 Shs’000 Shs’000LiabilitiesInsurance contract liabilities 657,521 4,046,596 703,394 89,524 5,497,035Creditors arising fromreinsurance arrangements 121,451 417,883 118,673 15,104 673,111Tax payable - 27,176 - - 27,176Dividends payables - 225,000 - - 225,000Other payables 155,719 - - - 155,719

Total financial liabilities 934,691 4,716,655 822,067 104,628 6,578,041

Up to 3 3-12 1-5 Over 5months months years years Total

As at 31 December 2013: Shs’000 Shs’000 Shs’000 Shs’000 Shs’000LiabilitiesInsurance contract liabilities 550,549 3,388,252 588,958 74,960 4,602,720Creditors arising fromreinsurance arrangements 66,789 367,154 104,267 13,269 551,478Dividends payables - 165,375 - - 165,375Other payables 117,664 - - - 117,664

Total financial liabilities 735,002 3,920,781 693,225 88,229 5,437,237

Fair values estimation

Effective 1 January 2009, the Group adopted the amendment to IFRS 7 for financial instruments that are measured in the statement of financial position at fair value, this requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:hierarchy:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. This level includes listed equitysecurities on the Nairobi Securities Exchange.

• Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

All the Group’s financial assets at fair value are in active markets and are based on quoted market prices at the financial reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, pricing service, or regulatory agency, and those prices represent actual and regular occurring market transactions on an arm’s length basis.






Fair values estimation (continued)

The following table presents financial assets that are measured at fair value at 31 December 2014.GROUP31 December 2014 Level 1 Level 2 Level 3 Total

Shs'000 Shs'000 Shs'000 Shs'000- Equity investments - quoted 429,721 - - 429,721- Equity investments - unquoted - - 139,582 139,582- Investment property - 1,478,891 - 1,478,891- Government securities 429,854 - - 429,854

859,575 1,478,891 139,582 2,478,04831 December 2013

- Equity investments - quoted 356,016 - - 356,016- Equity investments - unquoted - - 133,342 133,342- Investment property - 1,002,986 - 1,002,986- Government securities 288,785 - - 288,785

644,801 1,002,986 133,342 1,781,129COMPANY31 December 2014 Level 1 Level 2 Level 3 Total

Shs'000 Shs'000 Shs'000 Shs'000- Equity investments - quoted 401,663 - - 401,663- Equity Investments unquoted - - 139,582 139,582- Investment property - 1,273,291 - 1,273,291- Government securities 80,391 - - 80,391

482,054 1,273,291 139,582 1,894,927

31 December 2013

- Equity investments - quoted 356,016 - - 356,016- Equity Investments - unquoted - - 133,342 133,342- Investment property - 1,002,986 - 1,002,986- Government securities 288,785 - - 288,785

644,801 1,002,986 133,342 1,781,129

There are no financial liabilities measured at fair value as at 31 December 2014 (2013: Nil).





Fair values estimation (continued)

The following table presents the changes in Level 3 instruments for the year ended 31 December 2014 and31 December 2013.

GROUP 2014 2013Shs'000 Shs'000

At start of year 133,342 221,158Transfer to Level 1 - (107,525)Total gains recognised in other comprehensive income 6,240 19,709

At end of year 139,582 133,342

The following table presents the changes in Level 3 instruments for the year ended 31 December 2014 and 31 December 2013.

COMPANY2014 2013

Shs'000 Shs'000At start of year 133,342 221,158Transfer to Level 1 - (107,525)Total gains recognised in other comprehensive income 6,240 19,709

At end of year 139,582 133,342

GROUPFinancial assets by category Amortised Fair value Fair value Financial assets cost through P&L through OCI TotalAt 31 December 2014 Shs’000 Shs’000 Shs’000 Shs’000

Equity instruments at market value-quoted - 429,721 - 429,721Equity instruments at directors valuation-unquoted - - 139,582 139,582Government securities 1,118,576 429,854 - 1,548,430Loans receivable 292,640 - - 292,640Receivables arising out of reinsurancearrangements 341,310 - - 341,310Receivables arising out of directinsurance arrangements 662,216 - - 662,216Other receivables 33,448 - - 33,448Corporate bonds and commercial paper 438,666 - - 438,666Tax recoverable 1,933 - - 1,933Deposits with financial institutions 1,852,378 - - 1,852,378Cash and cash equivalents 44,455 - - 44,455

4,785,622 859,575 139,582 5,784,779




Fair values estimation (continued)GROUPFinancial assets Amortised Fair value Fair value

cost through P&L through OCI TotalAt 31 December 2013 Shs’000 Shs’000 Shs’000 Shs’000

Equity instruments at market value-quoted - 356,016 - 356,016Equity instruments at directors valuation-unquoted - - 133,342 133,342Government securities 1,013,365 288,785 - 1,302,150Loans receivable 171,243 - - 171,243Receivables arising out of reinsurancearrangements 216,674 - - 216,674Receivables arising out of direct insurancearrangements 410,798 - - 410,798Other receivables 135,893 - - 135,893Corporate bonds and commercial paper 309,951 - - 309,951Tax recoverable 11,127 - - 11,127Deposits with financial institutions 1,365,200 - - 1,365,200Cash and cash equivalents 94,689 - - 94,689

3,728,940 644,801 133,342 4,507,083

COMPANY Amortised Fair value Fair value Financial assets cost through P&L through OCI TotalAt 31 December 2014 Shs’000 Shs’000 Shs’000 Shs’000

Equity instruments at market value-quoted - 401,663 - 401,663Equity instruments at directors valuation-unquoted - - 139,582 139,582Government securities 697,454 80,391 - 777,845Loans receivable 292,640 - - 292,640Receivables arising out of reinsurancearrangements 338,700 - - 338,700Receivables arising out of direct insurancearrangements 662,216 - - 662,216Other receivables 27,416 - - 27,416Corporate bonds and commercial paper 309,350 - - 309,350Deposits with financial institutions 1,087,507 - - 1,087,507Cash and cash equivalents 12,218 - - 12,218

3,427,501 482,054 139,582 4,049,137






Fair values estimation (continued)COMPANY Amortised Fair value Fair value Financial Assets cost through P&L through OCI TotalAt 31 December 2013 Shs’000 Shs’000 Shs’000 Shs’000

Equity instruments at market value-quoted - 356,016 - 356,016Equity instruments at directors valuation-unquoted - - 133,342 133,342Government securities 612,362 288,785 - 901,147Loans receivable 171,243 - - 171,243Receivables arising out of reinsurancearrangements 216,674 - - 216,674Receivables arising out of direct insurancearrangements 410,798 - - 410,798Other receivables 135,965 - - 135,965Corporate bonds and commercial paper 259,670 - - 259,670Tax recoverable 11,127 - - 11,127Deposits with financial institutions 724,967 - - 724,967Cash and cash equivalents 79,948 - - 79,948

2,622,754 644,801 133,342 3,400,897

Financial liabilitiesAll the Group’s financial liabilities are measured at amortised cost. The carrying value of the Group’s financial liabilities at the end of 2014 and 2013 is as shown on note 4 (b).

(c) Capital management

The Group’s objectives when managing capital, which is a broader concept than the ‘equity’ on the statement of financial position are:• to comply with the capital requirements as set out in the Insurance Act;• to comply with regulatory solvency requirements as set out in the Insurance Act; • to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide returns to

shareholders and benefits for other stakeholders; and• to provide an adequate return to shareholders by pricing insurance and investment contracts commensurately with

the level of risk.

The group has different capital requirements depending on the country in which it operates. The Group operates in Kenya and Tanzania.

In Kenya, the solvency and capital adequacy margins are calculated based on Kenyan Solvency Law, which requires the application of a formula that contains variables for expenses and admitted assets, as contained in section 41-1 of the Insurance Act.

The Insurance Act requires a General insurance company to hold the minimum level of paid up capital of Shs 300 million or 10% of gross premium written, whichever is higher. Long term insurance companies are required to hold the minimum level of paid up capital of Shs 150 million.



(c) Capital management (continued)

General insurance businesses are required to keep a solvency margin i.e. admitted assets less admitted liabilities equivalent to the higher of Shs 10 million or 15% of the net premium income during the preceding financial year.

Long term insurance businesses are required to keep a solvency margin i.e. admitted assets less admitted liabilities, equivalent to the higher of Shs 10 million or 5% of the total admitted liabilities.

In Tanzania, the Group is required to hold regulatory capital for its general insurance business with the rules issued by the insurance regulator as per Government notice published on 25th March 2003 and Government notice 189 published on 9th July 2003.

The table below summarises regulatory capital requirements and the capital maintained by Kenya insurance subsidiary at 31 December:

2014 2013Maintained Maintained

Regulatory by the Regulatory by therequirement Company requirement Company

Shs’000 Shs’000 Shs’000 Shs’000

Long-termCapital at 31 December 150,000 200,000 150,000 200,000Short-termCapital at 31 December 390,000 450,000 310,000 450,000

Capital at 31 December 540,000 650,000 460,000 650,000




5 Segment Information

Operating Segment results 31 December 2014General Life

Insurance Insurance TotalShs’000 Shs’000 Shs’000

Insurance premium revenue 3,863,050 15,844 3,878,894Less: reinsurance premium ceded (1,801,702) (16,319) (1,818,021)

Net insurance premiums revenue 2,061,348 (475) 2,060,873

Unearned insurance premiums brought forward 728,519 - 728,519Unearned insurance premiums carried forward (905,622) - (905,622)

Net earned premiums 1,884,245 (475) 1,883,770

Investment income 388,223 158,012 546,235Net gains on financial assets held at Fair Valuethrough profit or loss 19,331 20,852 40,183Commissions earned 500,675 4,651 505,326Other income 42,192 15 42,207

Total income 2,834,666 183,055 3,017,721

Claims incurred 2,297,425 158,573 2,455,998Amounts recoverable from reinsurers (1,061,536) (1,284) (1,062,820)

Net claims incurred 1,235,889 157,289 1,393,178

Operating and other expenses 535,608 30,522 566,130Commissions payable 454,774 1,593 456,367

990,382 32,115 1,022,497

Profit/(loss) before income tax 608,395 (6,349) 602,044

Income tax expense (158,729) (1,138) (159,867)

Profit/(loss) for the year 449,666 (7,487) 442,177

Other comprehensive income, net of tax

Net gains on financial assets held at Fair Valuethrough other comprehensive income, net of tax 4,368 - 4,368

Total comprehensive income 454,034 (7,487) 446,545


5. Segment Information (continued)

Operating Segment results 31 December 2013General Life

Insurance Insurance TotalShs’000 Shs’000 Shs’000

Insurance premium revenue 3,086,843 11,465 3,098,308Less: reinsurance premium ceded (1,446,597) (9,889) (1,456,486)

Net insurance premiums revenue 1,640,246 1,576 1,641,822

Unearned insurance premiums brought forward 655,376 - 655,376Unearned insurance premiums carried forward (728,519) - (728,519)

Net earned premiums 1,567,103 1,576 1,568,679

Investment income 401,084 37,742 438,826Net gains on financial assets held at Fair Valuethrough profit or loss 73,413 - 73,413Commissions earned 375,816 2,818 378,634Other income 36,301 - 36,301

Total income 2,453,717 42,136 2,495,853

Claims incurred 1,714,256 17,471 1,731,727Amounts recoverable from reinsurers (638,480) - (638,480)

Net claims incurred 1,075,776 17,471 1,093,247

Operating and other expenses 430,359 14,081 444,440Commissions payable 359,114 529 359,643

789,473 14,610 804,083

Profit before income tax 588,468 10,055 598,523

Income tax expense (149,505) (2,615) (152,120)

Profit for the year 438,963 7,440 446,403

Other comprehensive income, net of tax

Net gains on financial assets held at Fair Valuethrough other comprehensive income, net of tax 13,796 - 13,796

Total comprehensive income 452,759 7,440 460,199


6 Gross written premiums

The premium income of the Group and Company can be analysed between the main classes of business as shown below:

GROUP 2014 2013Shs’000 Shs’000

General insurance business:Medical 871,819 744,227Fire 726,508 552,579Motor commercial 403,506 363,173Workmen compensation 406,924 346,771Motor private 304,078 247,336Theft 276,423 232,190Marine 287,138 220,413Engineering 254,573 153,339Miscellaneous 193,771 135,286Personal accident 61,194 45,098Public liability 51,108 38,207Aviation 26,008 10,072

3,863,050 3,088,691Life Insurance business:Group life 15,844 9,616

Total 3,878,894 3,098,307


General insurance business:Medical 863,519 744,227Fire 720,019 552,579Motor commercial 398,313 363,173Workmen compensation 404,788 346,771Motor private 296,517 247,336Theft 276,423 232,190Marine 286,704 220,413Engineering 251,101 153,339Miscellaneous 191,388 135,286Personal accident 51,853 45,098Public liability 50,151 38,207Aviation 26,008 10,072

3,816,784 3,088,691





7 Investment incomeGROUP 2014 2013

Shs’000 Shs’000Interest on bank deposits 196,439 138,271Interest from government securities 175,999 125,929Rental income from investment properties 59,356 54,732Interest income-commercial loans 32,648 31,244Dividends receivable from equity investments 13,908 14,571Interest income-commercial paper 29,306 8,853Gain on sale of quoted shares 25,976 57,176Mortgage loan interest receivable 10,973 6,574Bank interest income 1,630 1,476

Total 546,235 438,826

Net Gains on Financial Assets at Fair ValueFair value gain on Investment properties 17,865 -Fair value (loss)/gain on Equities – Quoted (FVTPL) (682) 79,863Fair value gain/(loss) on Treasury bonds –FVTPL 23,000 (6,449)

40,183 73,414Other IncomeGain on disposal of property and equipment 400 -Premiums tax recoveries 14,175 12,395Bad debts recoveries 9,716 4,646Foreign exchange gain 1,863 976Other 16,053 18,284

Total 42,207 36,301


Interest on bank deposits 107,901 125,077Interest from government securities 98,696 99,852Rental income from investment properties 59,356 54,732Interest income-commercial loans 23,214 31,244Dividends receivable from equity investments 13,720 14,571Interest income-commercial paper 29,306 8,572Gain on sale of quoted shares 24,385 57,176Mortgage loan interest receivable 10,973 6,574Bank interest income 1,629 1,476

Total 369,180 399,274

Net Gains/(losses) on Financial Assets at Fair ValueFair value (loss)/gain on Equities – Quoted (FVTPL) (325) 79,863Fair value gain/(loss) on Treasury bonds – FVTPL 19,656 (6,449)

Total 19,331 73,414

7 Investment income (continued)


Other IncomeGain on disposal of property and equipment 400 687Premiums tax recoveries 14,175 12,395Bad debts recoveries 9,716 4,646Foreign exchange gain 2,124 976Other 16,038 18,284

Total 42,453 36,988

8 Claims payable

GROUP 2014 2013Shs’000 Shs’000

Claims incurred by principal class of business:General BusinessMotor commercial 268,270 300,421Workmen compensation 317,633 229,142Motor private 167,032 174,731Theft 144,040 152,474Medical 155,609 88,915Fire 65,429 43,635Marine 60,223 34,300Engineering 17,972 26,986Public liability 28,268 14,787Personal accident 8,416 10,696Miscellaneous 2,673 (322)Aviation 324 10

1,235,889 1,075,776

Life Insurance businessInterest on deposit administration contracts 156,999 17,108Increase in insurance contract liabilities 290 363

157,289 17,471





8 Claims payable (continued)


Claims incurred by principal class of business:General Business

Motor commercial 266,824 300,421Workmen compensation 317,633 229,142Motor private 165,672 174,731Theft 144,040 152,474Medical 154,483 88,915Fire 65,429 43,635Marine 60,223 34,300Engineering 17,972 26,986Public liability 28,268 14,787Personal accident 6,922 10,696Miscellaneous 2,673 (322)Aviation 325 10

1,230,464 1,075,776



9 Operating and other expenses

GROUP 2014 2013Shs’000 Shs’000

Staff costs 315,333 259,871Marketing and administrative expenses 174,843 132,251Depreciation (Note 15) 29,014 25,769Amortisation (Note 16) 6,306 6,025Impairment charge for doubtful receivables-premium debtors 16,696 4,567Occupancy costs 19,110 12,419Auditors’ remuneration (inclusive of VAT) 4,828 3,538

566,130 444,440

COMPANYStaff costs 299,125 260,041Marketing and administrative expenses 156,628 123,879Depreciation (Note 15) 27,364 25,754Amortisation (Note 16) 6,306 6,025Impairment charge for doubtful receivables-premium debtors 16,696 4,567Occupancy costs 14,736 12,419Auditors’ remuneration (inclusive of VAT) 3,391 3,074

524,246 435,759

10 Income tax expense

GROUP 2014 2013Shs’000 Shs’000

Current income tax 182,595 133,942Deferred income tax(credit)/change (Note 29) (22,728) 18,178

159,867 152,120

The Company’s current tax charge is computed in accordance with income tax rules applicable to Kenyan Insurance Companies. A reconciliation of the tax charge is shown below:

2014 2013Shs’000 Shs’000

Profit before tax 602,044 598,523

Tax calculated at a tax rate of 30%( 2013: 30%) 180,613 179,557Tax effect of income not subject to tax (73,324) (64,915)Tax effect of expenses not deductible for tax purposes 52,578 37,478

Income tax expense 159,867 152,120


10 Income tax expense (continued)2014 2013

COMPANY Shs’000 Shs’000

Current income tax 181,683 131,085Deferred income tax (credit)/charge(Note 29) (22,712) 18,178

158,971 149,263

The Company’s current tax charge is computed in accordance with income tax rules applicable to Kenyan Insurance Companies. A reconciliation of the tax charge is shown below:

2014 2013Shs’000 Shs’000


Tax calculated at a tax rate of 30% (2013:30%) 179,286 175,138Tax effect of income not subject to tax (57,087) (64,915)Tax effect of expenses not deductible for tax purposes 36,772 39,040

Income tax expense 158,971 149,263

11 Dividends

Proposed dividends are accounted for as a separate component of equity until they have been ratified at an annual general meeting. A final dividend in respect of the year ended 31 December 2014 of Shs 10 per share (2013: interim Shs 10 pershare) was proposed.

Payment of dividends is subject to withholding tax at the rate of either 5% or 10%, depending on the residence of the individual shareholders.

12 Share capitalGROUP & COMPANY Number of Ordinary

Shares shares(Thousands) Shs ‘000

Balance at 31 December 2013, 1 January 2014 and31 December 2014 22,500 450,000

The total authorised number of ordinary shares is 22,500,000 with a par value of Shs 20 per share.

All authorised shares are issued and fully paid.

13 Retained earnings

The retained earnings balance represents the amount available for dividend distribution to the shareholders of the Group.




14 Reserves

(a) Revaluation reserveGROUP & COMPANYThe revaluation reserve represents solely the surplus revaluation of freehold land and buildings net of deferred income tax and is non-distributable. Freehold land and buildings are classified under property and equipment.

2014 2013 Shs‘000 Shs‘000

At beginning of year 328,566 328,566Gain on revaluation 501,200 -

At end of year 829,766 328,566

(b) Other reservesGROUP & COMPANYInvestment Reserve The investment reserve represents the cumulative net change in the fair value of equity instruments and treasury bonds until the investment is derecognised. The reserves are non distributable.

2014 2013 Shs‘000 Shs‘000

At beginning of year - 186,507IFRS 9 reclassification - (186,507)

At end of year - -

On adoption of IFRS 9 investment reserves were reclassified to retained earnings

Other ReserveOther reserve represents the cumulative net change in fair value of investment properties, which is maintained until respective properties are derecognised. It also includes net change in fair value of unquoted equities. The reserves are not available for distribution as dividends.

2014 2013Shs’000 Shs’000

At beginning of year 169,881 342,592Revaluation gains - gross 6,240 19,709

- tax (Note 29) (1,872) (5,913)Reclassification - (186,507)

Total other reserves 174,249 169,881



15 Property and equipmentGROUP Computer

Land and Furniture and Motor and office Leaseholdbuildings equipment vehicles equipment improvements Total

Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000Year ended 31 December 2013At 1 January 2013Cost or valuation 700,000 56,388 29,844 34,500 27,599 848,331Accumulated depreciation (15,600) (36,697) (11,510) (29,230) (8,061) (101,098)

Net book amount 684,400 19,691 18,334 5,270 19,538 747,233

Opening net book amount 684,400 19,691 18,334 5,270 19,538 747,233Additions - 1,236 1,307 8,233 133 10,909Depreciation charge (7,800) (4,089) (6,262) (4,152) (3,466) (25,769)

Closing net book amount 676,600 16,838 13,379 9,351 16,205 732,373

At 31 December 2013Cost or valuation 700,000 57,623 31,151 42,733 27,733 859,240Accumulated depreciation (23,400) (40,785) (17,772) (33,382) (11,528) (126,867)

Net book amount 676,600 16,838 13,379 9,351 16,205 732,373

Year ended 31 December 2014Opening net book amount 676,600 16,838 13,379 9,351 16,205 732,373Additions - 5,193 6,179 6,598 - 17,970Revaluation 501,200 - - - - 501,200Disposals - - (3,332) (51) - (3,383)Depreciation charge (7,800) (4,665) (7,597) (5,486) (3,466) (29,014)Accumulated depreciationon disposal - - 2,749 45 - 2,794

Net book amount 1,170,000 17,365 11,378 10,457 12,739 1,221,939

Cost or valuation 1,170,000 62,815 33,998 49,280 27,733 1,343,826Accumulated depreciation - (45,450) (22,620) (38,823) (14,994) (121,887)

Net book amount 1,170,000 17,365 11,378 10,457 12,739 1,221,939


15 Property and equipment (continued)Computer

Land and Furniture and Motor and office Leaseholdbuildings equipment vehicles equipment improvements Total

Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000COMPANYYear ended 31 December 2013At 1 January 2013Cost or valuation 700,000 56,388 29,844 34,500 27,599 848,331Accumulated depreciation (15,600) (36,697) (11,510) (29,230) (8,061) (101,098)

Net book amount 684,400 19,691 18,334 5,270 19,538 747,233

Opening net book amount 684,400 19,691 18,334 5,270 19,538 747,233Additions - 1,162 1,307 8,233 133 10,835Disposals - - (2,750) - - (2,750)Depreciation charge (7,800) (4,074) (6,262) (4,152) (3,466) (25,754)Accumulated depreciation ondisposal - - 687 - - 687

Closing net book amount 676,600 16,779 11,316 9,351 16,205 730,251

Cost or valuation 700,000 57,549 28,401 42,733 27,733 856,416Accumulated depreciation (23,400) (40,770) (17,085) (33,382) (11,528) (126,165)

Net book amount 676,600 16,779 11,316 9,351 16,205 730,251

Year ended 31 December 2014Opening net book amount 676,600 16,779 11,316 9,351 16,205 730,251Additions - 2,394 4,215 6,124 - 12,733Revaluation 501,200 - - - - 501,200Disposals - - (3,332) (51) - (3,383)Depreciation charge (7,800) (4,301) (6,419) (5,379) (3,466) (27,365)Accumulated depreciation ondisposal - - 2,749 45 - 2,794

Net book amount 1,170,000 14,872 8,529 10,090 12,739 1,216,230

Cost or valuation 1,170,000 59,942 29,284 48,806 27,733 1,335,765Accumulated depreciation - (45,070) (20,755) (38,716) (14,994) (119,535)

Net book amount 1,170,000 14,872 8,529 10,090 12,739 1,216,230




15 Property and equipment (continued)GROUPThe Group’s land and buildings were last revalued in 2014, by Llyod Masika Limited, professional valuers, on the basis of open market value for existing use of Shs 1,170 million

If land and buildings were stated on a historical cost basis, the amounts would be as follows

2014 2013Shs‘000 Shs‘000

Cost 338,790 338,790Accumulated depreciation (67,756) (60,981)

Net book amount 271,034 277,809

Included in property and equipment are assets with a gross value of Shs 57,009,831 (2013 - Shs 53,558,358) which are fully depreciated and still in use. Such assets would have attracted a notional depreciation of Shs 11,059,742 (2013- Shs 9,493,926).

16 Intangible assets - computer softwareGROUP & COMPANY 2014 2013

Shs‘000 Shs‘000

At start of year 14,024 15Additions 987 20,035Amortisation charge (6,306) (6,025)

Net book amount 8,705 14,024

17 Investment propertyGROUP 2014 2013

Shs‘000 Shs‘000At start of year 1,002,986 248,508Additions 458,040 754,478Fair value gains 17,865 -

At end of year 1,478,891 1,002,986

COMPANY 2014 2013 Shs‘000 Shs‘000

At start of year 1,002,986 248,508Additions 270,305 754,478

At end of year 1,273,291 1,002,986



18 Equity investmentsGROUP 2014 2013

Shs‘000 Shs‘000Quoted securitiesAt start of year 356,016 216,659Additions 85,300 19,583Transfer from unquoted securities - 107,525Disposals (10,913) (67,614)Fair value (loss)/gain (682) 79,863

At end of year 429,721 356,016

Unquoted securitiesAt start of year 133,342 221,158Transfer to quoted securities - (107,525)Fair value gain 6,240 19,709

At end of year 139,582 133,342

COMPANY 2014 2013 Shs‘000 Shs‘000

Quoted securitiesAt start of year 356,016 216,659Additions 53,417 19,583Transfer from unquoted securities - 107,525Disposals (7,445) (67,614)Fair value (loss)/gain (325) 79,863

At end of year 401,663 356,016

Unquoted securitiesAt start of year 133,342 221,158Transfer to quoted securities - (107,525)Fair value gain 6,240 19,709

At end of year 139,582 133,342

Quoted Equity securities are designated as fair value through profit and loss upon initial recognition. Unquoted equities are designated as fair value through other comprehensive income upon initial recognition. Unquoted securities are valued by the directors who believe their valuation to be the best representation of fair value.

19 Loans receivableGROUP & COMPANY 2014 2013

Shs‘000 Shs‘000

At start of year 171,243 157,953Transfer from other receivables 113,531 -Loans advanced 98,455 183,000Interest due 5,906 31,243Loan repayments (96,495) (200,953)

At end of year 292,640 171,243

The weighted average effective interest rate on the loans was 15.63% (2013: 12.45%). There are no impaired loans and receivables at 31 December 2014 (2013: Nil).



19 Loans receivable (continued)GROUP & COMPANY 2014 2013

Shs‘000 Shs‘000

Due within 12 months 18,743 10,968Due after more than 12 months 273,897 160,275

292,640 171,24320 Corporate bonds and commercial papers

GROUP 2014 2013Shs’000 Shs’000

At start of year 309,951 121,016Additions 156,919 201,299Repayments (28,204) (12,364)

At end of year 438,666 309,951

COMPANY Shs’000 Shs’000At start of year 259,670 121,016Additions 77,884 151,018Repayments (28,204) (12,364)

At end of year 309,350 259,670

The weighted average effective interest rate on the corporate bonds and commercial papers was 12.62% (2013: 11.94%). There are no impaired corporate bonds and commercial papers at 31 December 2014 (2013: Nil).

GROUP 2014 2013Shs’000 Shs’000

- Within 1 year 22,978 6,968- In 1-5 years 415,688 45,346- After 5 years - 257,637

438,666 309,951COMPANY

- Within 1 year 22,978 6,968- In 1-5 years 286,372 45,346- After 5 years - 207,356

309,350 259,670

21 Reinsurers’ share of insurance liabilitiesGROUP & COMPANY 2014 2013

Shs’000 Shs’000Reinsurers’ share of:- unearned premium 726,324 564,009- notified claims outstanding 1,071,133 839,484- claims incurred but not reported 47,439 39,290

1,844,896 1,442,783

Amounts due from reinsurers in respect of claims already paid by the Company on contracts that are reinsured are included in receivables arising out of reinsurance arrangements on the statement of financial position.



22 Other receivablesGROUP 2014 2013

Shs’000 Shs’000

Loans receivables from directors and employees (Note 35) 113,531 113,531Transfer to loans receivable (113,531) -Prepayments 5,359 3,452Utilities and rental deposit 648 524Others 27,441 18,930

33,448 136,437


Loans receivables from directors and employees (Note 35) 113,501 113,501Transfer to loans receivable (113,501) -Prepayments 5,059 3,152Utilities and rental deposit 648 524Others 21,709 18,788

27,416 135,96523 Deferred acquisition cost

GROUP 2014 2013 Shs ‘000 Shs ‘000

At start of year 173,736 136,397Additions 236,737 173,736Charge for the year (173,736) (136,397)

At end of year 236,737 173,736


At start of year 173,736 136,397Additions 232,966 173,736Charge for the year (173,736) (136,397)

At end of year 232,966 173,736

24 Government securities GROUP 2014 2013

Shs’000 Shs’000At amortised costTreasury bills and bonds maturing:- Within 1 year 228,511 219,222- In 1-5 years 102,974 194,396- After 5 years 787,091 599,747

1,118,576 1,013,365The movement of Government securities in the year is shown belowAt start of the year 1,013,365 476,008Additions 581,540 763,489Maturities (476,329) (226,132)

At end of the year 1,118,576 1,013,365

24 Government securities (continued)


At fair value through profit & lossTreasury bills and bonds maturing:- Within 1 year 19,598 20,286- In 1-5 years 60,793 55,085- After 5 years - 213,414

80,391 288,785

At start of the year 288,785 262,296Additions 160,737 395,137Maturities (388,787) (362,199)Fair value gain/(loss) 19,656 (6,449)

At end of the year 80,391 288,785

There are no impaired amortised cost investments at 31 December 2014 (2013: Nil).Government securities classified as held to maturity are designated in this category upon initial recognition.


At amortised costTreasury bills and bonds maturing:- Within 1 year 104,730 156,620- In 1-5 years 80,021 82,807- After 5 years 512,703 372,935

697,454 612,362The movement of Government securities in the year is shown below

At start of the year 612,361 476,008Additions 265,093 336,354Maturities (180,000) (200,000)


There are no impaired amortised cost investments at 31 December 2014 (2013: Nil).Government securities classified as held to maturity are designated in this category upon initial recognition.

GROUP 2014 2013Shs’000 Shs’000

At fair value through profit & lossTreasury bills and bonds maturing:- Within 1 year 19,598 20,286- In 1-5 years 213,883 55,085- After 5 years 196,373 213,414

429,854 288,785




24 Government securities (continued)

GroupAt fair value through profit & loss

The movement of Government securities in the year is shown below 2014 2013Shs’000 Shs’000

At start of the year 288,785 262,296Additions 510,200 395,137Maturities (384,206) (362,199)Fair value gain/(loss) 15,075 (6,449)


Amounts held under lien are disclosed in Note 36.

25 Amounts payable under deposit administration contracts

Deposit administration contracts are recorded at amortised cost. Movements in amounts payable during the year were as shown below. The liabilities are shown inclusive of the interest accumulated to 31 December. Interest was declared and credited to the customer accounts at weighted average of 13.25% (2013:14.25%)

GROUP 2014 2013Shs’000 Shs’000

At 1 January 728,730 -Pension fund deposits received 712,436 712,414Withdrawals (64,481) (792)Interest payable to policyholders 156,999 17,108

At 31 December 1,533,684 728,730

26 Insurance contract liabilities 2014 2013

GROUP Shs’000 Shs’000

Long term Insurance contracts- Actuarial liabilities 353 363- Claims reported and claims handling expenses 1,484 -Short term non-life insurance contracts- Claims reported and claims handling expenses 3,714,746 3,158,877- Claims incurred but not reported 185,152 151,314

Total - Long term & short term 3,901,735 3,310,554

Movements in short term insurance liabilities and reinsurance assets are shown in note 27.



26 Insurance contract liabilities (continued)

Short term non-life insurance contracts

Gross claims reported, claims handling expenses liabilities and the liability for claims incurred but not reported are net of expected recoveries from salvage and subrogation. The expected recoveries at the end of 2014 and 2013 are not material.

The Company uses historical experience to estimate the ultimate cost of claims. This involves the analysis of historical claims development factors and the selection of estimated development factors based on this historical pattern. The selected development factors are then applied to claims data for each accident year that is not fully developed to produce an estimated ultimate claims cost for each accident year.

The development of insurance liabilities provides a measure of the Company’s ability to estimate the ultimate value of claims.The table below illustrates how the Company’s estimate of total claims outstanding for each accident year has changed at successive year ends.

Accident year 2010 2011 2012 2013 2014Shs’000 Shs’000 Shs’000 Shs’000 Shs’000

Estimate of ultimate claims costs:- at end of 64,427 60,775 101,819 208,777 672,828- one year later 59,948 85,344 250,477 306,495- two years later 59,974 172,391 253,958- three years later 101,124 172,146- four years later 92,009

Current estimate of cumulative claims 377,482 490,656 606,254 515,272 672,828Cumulative payments to date (18,423) (31,511) (28,300) (55,042) (80,127)

Liability in the statement of financial position 359,059 459,145 577,954 460,230 592,701Liability in respect of prior years 330,304

Total gross claims liability included in thestatement of financial position 689,363 459,145 577,954 460,230 592,701

Long term Insurance ContractsThe Group determines its liabilities on long term contracts based on assumptions in relation to future deaths, voluntary terminations, and investment returns and administration expenses. A margin for risk and uncertainty is added to these assumptions. The liabilities are determined on the advice of the consulting actuary and actuarial valuations are carried out on an annual basis.




26 Insurance contract liabilities (continued) 2014 2013

COMPANY Shs’000 Shs’000Long term Insurance contracts- Actuarial liabilities - -Short term non-life insurance contracts- Claims reported and claims handling expenses 3,709,082 3,158,877- Claims incurred but not reported 184,019 151,314

Total - Long term & short term 3,893,101 3,310,191

27 Movements in insurance liabilities and reinsurance assets

Short term insurance businessGROUP 2014 2013

Gross Reinsurance Net Gross Reinsurance NetShs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000

Notified claims 3,158,877 839,484 2,319,393 2,592,271 748,556 1,843,715Incurred but not reported 151,314 39,290 112,024 118,073 27,946 90,127

Total at the beginningof year 3,310,191 878,774 2,431,417 2,710,344 776,502 1,933,842

Cash paid for claimssettled in year (1,741,891) (857,074) (884,817) (1,114,405) (536,213) (578,192)

Increase in liabilities - arising from current

year claims 1,775,461 727,435 1,048,026 1,106,143 355,239 750,855

- arising from prioryear claims 556,137 370,136 186,001 608,108 283,246 324,912

Total at end of year 589,707 240,497 349,210 599,847 102,272 497,575

Notified claims 3,714,746 1,069,936 2,644,810 3,158,877 839,484 2,319,393Incurred but not reported 185,152 49,335 135,817 151,314 39,290 112,024

Total at end of year 3,899,898 1,119,271 2,780,627 3,310,191 878,774 2,431,417


27 Movements in insurance liabilities and reinsurance assets (continued)

Short term insurance businessCOMPANY

2014 2013Gross Reinsurance Net Gross Reinsurance Net

Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000

Notified claims 3,158,877 839,484 2,319,393 2,592,271 748,556 843,715Incurred but not reported 151,314 39,290 112,024 118,073 27,946 90,127

Total at the beginningof year 3,310,191 878,774 2,431,417 2,710,344 776,502 933,842

Cash paid for claimssettled in year (1,734,327) (851,801) (882,526 ) (1,114,405) (536,213) (578,192)Increase in liabilities - arising from current

year claims 1,761,100 718,500 1,042,600 1,106,143 355,239 750,855- arising from prior

year claims 556,137 368,235 187,902 608,108 283,246 324,912

Total at end of year 582,910 234,934 347,976 599,847 102,272 497,575

Notified claims 3,709,082 1,066,879 2,642,203 3,158,877 839,484 319,393Incurred but not reported 184,019 46,829 137,190 151,314 39,290 112,024

Total at end of year 3,893,101 1,113,708 2,779,393 3,310,191 878,774 431,417

28 Provisions for unearned premium GROUP

The unearned premium provision represents the liability for short term business contracts where the Group’s obligations are not expired at the year end. Movements in the reserves is shown below:

2014 2013Gross Reinsurance Net Gross Reinsurance Net

Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000

At beginning of year 1,292,529 564,009 728,520 1,025,986 370,610 655,376Increase in the period 339,419 162,317 177,102 266,543 193,399 73,144

At end of year 1,631,947 726,326 905,622 1,292,529 564,009 728,520

COMPANY 2014 2013Gross Reinsurance Net Gross Reinsurance Net

Shs’000 Shs’000 Shs’000 Shs’000 Shs’000 Shs’000At beginning of year 1,292,529 564,009 728,520 1,025,986 370,610 655,376Increase in the period 311,407 151,786 159,621 266,543 193,399 73,143

At end of year 1,603,935 715,795 888,141 1,292,529 564,009 728,520




29 Deferred income tax

Deferred tax is calculated using the enacted income tax rate of 30% (2013: 30%). The movement on the deferred income tax account is as follows:

GROUP2013 2012

Shs’000 Shs’000

At start of year - as previously reported (16,634) 7,457*Actuarial surplus (402) -At start of year - adjusted (17,036) 7,457Profit or loss statement charge (Note 10) 22,728 (18,178)Charge to other comprehensive income (Note 14) (1,872) (5,913)

At end of year 3,820 (16,634)

Deferred tax assets and liabilities and deferred tax (charge)/credit in profit or loss are attributable to the following items*To recognise deferred tax on actuarial surplus.

Year ended 31 December 2014

1.1.14 Cr to P/L Charged to OCI 31.12.14Shs’000 Shs’000 Shs’000 Shs’000

Property and equipment- on historical cost basis 5,418 1,314 - 6,732Fair value movement on quoted equities (23,959) 18,062 - (5,897)Fair value movement on unquoted equities (5,913) - (1,872 ) (7,785)Unrealised exchange gains (293) (344) - (637)Treasury bonds - FVTPL (1,918) (1,837) - (3,755)Provisions 10,031 5,518 - 15,549Actuarial Surplus - (386) - (386)

Net deferred tax asset/ (liability) (16,634) 22,327 (1,872) 3,820

Year ended 31 December 20131.1.13 Cr to P/L Charged to OCI 31.12.13

Shs’000 Shs’000 Shs’000 Shs’000

Property and equipment- on historical cost basis 3,904 1,514 - 5,418

Fair value movement on quoted equities - (23,959) - (23,959)Fair value movement on unquoted equities - - (5,913 ) (5,913)Unrealised exchange gains 33 (326) - (293)Treasury bonds - FVTPL (3,853) 1,935 - (1,918)Provisions 7,373 2,658 - 10,031

Net deferred tax asset/ (liability) 7,457 (18,178) (5,913 ) (16,634)


29 Deferred income tax (continued)

Deferred tax is calculated using the enacted income tax rate of 30% (2013: 30%) The movement on the deferred income tax account is as follows:COMPANY

2014 2013Shs’000 Shs’000

At start of year (16,634) 7,457Profit or loss statement charge (Note 10) 22,712 (18,178)Charge to other comprehensive income (Note 14) (1,872) (5,913)

At end of year 4,206 (16,634)

Deferred tax assets and liabilities and deferred tax (charge)/credit in profit and loss are attributable to the following items.


Shs’000 Shs’000 Shs’000 Shs’000Property and equipment- on historical cost basis 5,418 1,314 - 6,732Fair value movement on quoted equities (23,959) 18,062 - (5,897)Fair value movement on unquoted equities (5,913) - (1,872 ) (7,785)Unrealised exchange gains (293) (344) - (637)Treasury bonds - FVTPL (1,918) (1,837) - (3,755)Provisions 10,031 5,517 - 15,548

Net deferred tax asset/ (liability) (16,634) 22,712 (1,872 ) 4,206


Shs’000 Shs’000 Shs’000 Shs’000

Property and equipment- on historical cost basis 3,904 1,514 - 5,418Fair value movement on quoted equities - (23,959) - (23,959)Fair value movement on unquoted equities - - (5,913 ) (5,913)Unrealised exchange gains 33 (326) - (293)Treasury bonds - FVTPL (3,853) 1,935 - (1,918)Provisions 7,373 2,658 - 10,031

Net deferred tax asset/ (liability) 7,457 (18,178) (5,913 ) (16,634)

30 Other payablesGROUP 2014 2013

Shs’000 Shs’000

Accrued expenses 11,881 8,469Leave accrual 7,706 6,483Other liabilities 139,437 97,378

159,024 112,330




30 Other payables (continued)2014 2013

COMPANY Shs’000 Shs’000

Accrued expenses 11,841 10,752Leave accrual 7,706 6,483Other liabilities 136,172 94,458

Total 155,719 111,693

31 Contingent liabilities

In common with the insurance industry in general, the Group is subject to litigation arising in the normal course of insurance business. Directors are of the view that no material claims will crystallise.

The Group has given guarantees in the ordinary course of business amounting to Shs174,818,134 (2013 - Shs 174,818,134) to third parties for which the Group has secured by counter guarantees or other form of securities.

32 CommitmentsGROUPOperating lease commitmentsThe Group leases out its investment property under operating leases. Operating lease rentals are receivable as follows:

2014 2013Shs’000 Shs’000

Not later than 1 year 57,863 60,069Later than 1 year and not later than 5 years 63,408 122,288

121,271 182,357

During the year ended 31 December 2014, Shs 59,356,197 (2013 - Shs 54,731,964) was recognised as net rental income in the statement of comprehensive income, and Shs 24,188,424 (2013 - Shs 22,204,624) in respect of direct operating costs was recognised in the statement of comprehensive income relating to the investment property.

33 Cash and cash equivalentsGROUPFor the purposes of the statement of cash flows, cash and cash equivalents comprise the following:

2014 2013Shs’000 Shs’000

Cash and bank balances 44,455 94,689Deposits with financial institutions 1,852,378 1,365,198

1,896,833 1,459,887COMPANY

2014 2013Shs’000 Shs’000

Cash and bank balances 12,218 79,947Deposits with financial institutions 1,087,507 724,967

1,099,725 804,914



34 Cash generated from operationsGROUPReconciliation of profit before tax to cash generated from operations:

2014 2013Shs’000 Shs’000


Adjustments for:Interest income (427,947) (312,348)Net rental income (59,356) (54,732)Dividend income (13,908) (14,571)Depreciation (Note 15) 29,014 25,769Amortisation charge (Note 16) 6,307 6,025Gain on sale of equipment (400) -Gain on sale of quoted shares (25,974) (57,176)Fair value gain on investment property (17,865) -Fair value gain on Equity investments (FVTPL) 682 (79,863)Fair value gain on Treasury bonds (FVTPL) (23,000) 6,449Changes in:- technical provisions 1,333,440 1,299,813- deferred acquisition costs (63,001) (37,339)- trade and other payables 47,347 30,334- trade and other receivables (9,842) (41,523)- premiums outstanding (259,550) (38,755)- amounts due from bodies engaged in insurance business (113,049) (16,845)- amounts due to bodies engaged in insurance business 129,828 254,553

Cash generated from operations 1,134,770 1,568,313

35 Related party transactions

The Company is related to other Companies through common shareholdings or common directorships.

In the normal course of business, insurance policies are sold to related parties at terms and conditions similar to those offered to major clients.

(i) Transactions with related parties 2014 2013Shs’000 Shs’000

Gross earned premium:- Related parties - directors 1,380 836- Related parties - other 64,347 55,932

Net claims incurred- Related parties 7,867 40,577

(ii) Outstanding balances with related parties2014 2013

Shs’000 Shs’000Amounts due from related partiesKey management personnel 21,506 13,069Other receivables 7,404 14,800

28,910 27,869


35 Related party transactions

(iii) Loans to directors and employees2014 2013

Shs’000 Shs’000At start of year 113,531 72,998Loans advanced during the period 98,455 83,770Loan repayments received (59,524) (43,237)

At end of year 152,462 113,531

The related interest income in 2014 was Shs10,949,289 (2013 - Shs 6,574,535).The above loans were given on standard terms and conditions and the average interest rate during the year was 8% (2013 - 8%).

One director holds a car loan with the Company of Shs 180,838 (2013 - Shs 568,483).

(iv) Directors’ remuneration2014 2013

Shs’000 Shs’000

Directors’ fees 56,460 52,100Other remuneration 2,850 9,242

59,310 61,342

(v) Included in bank deposits are balances with related companies amounting to Shs 173,888,858 (2013 - Shs 202,077,158).

(vi) The Group holds a corporate bond of Shs 112,500,000 (2013 - Shs 225,000,000) from a related party.

(vii) The Group holds shares in a related party amounting to Shs 145,336,800 (2013 - Shs 127,356,000).

36 Assets held under lien

Treasury bonds include bonds with a face value of Shs.393,500,000 (2013 - Shs 348,500,000) for short term business and Shs 107,000,000 (2013 - Shs 80,000,000) for long term business which are held under lien in favour of the Commissioner of Insurance in accordance with Section 32 of the Insurance Act.

37 Investment in subsidiaries

2014 2013Shs’000 Shs’000

Entity Holding Investment InvestmentGA Life Assurance Limited 100% 200,000 200,000GA Insurance Tanzania Limited 66.67% 108,827 108,827

308,827 308,827


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(126

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Prem

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1,38

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64,

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1,37

625

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(4,5

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(612

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(24,

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gene

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GA

Insu

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imite

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ar e

nded

31

dece

mbe

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14

GA

INSU

RAN

CE L

IMIT

ED


life business revenue accountfor the year ended 31 december 2014

Long term business revenue account – GA Life Assurance LimitedGroup Other Total Total

Life 2014 2013Shs’000 Shs’000 Shs’000 Shs’000

Gross earned premium 17,704 - 17,704 11,465Reinsurance premiums ceded (16,319) - (16,319) ( 9,889)

Net earned premium 1,385 - 1,385 1,576

Investment income 1,115 154,130 155,245 19,404Commission earned 4,651 - 4,651 2,818

Total income 7,151 154,130 161,281 23,798

Claims and policy holder benefitsLife and death claims (300) - (300) -Decrease /(increase) in insurance contract liabilities 10 - 10 (363)Interest payable on deposit administration contracts - (156,999) (156,999) (17,108)

Net claims and policyholder benefits payable (290) (156,999) (157,289) (17,471)

Expenses Operating and other expenses (5,831) (7,411) (13,241) (4,459)Commissions payable (571) (1,022) (1,593) (529)

Total expenses and commissions (6,402) (8,433) (14,834) (4,988)

Profit/(loss) before taxation 459 (11,302) (10,843) 1,339Taxation - - - -

Profit/(loss) after taxation 459 (11,302) (10,843) 1,339


notes

ga annual report 2014:layout 1 · s b r shah, mbs (chairman) sachit s raja shah v srivastava* (also...

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