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SACOS GROUP LIMITED

TABLE OF CONTENTS· DECEMBER 31, 2014

Corporate Information

Notice of the Meeting

Chairman's Report

Directors' Report

Auditors' Report

Statements of Financia l Position

Statements of Profit or Loss and Other Comprehens ive Income

Statements of Changes in Equit y

Statements of Cash Flows

Notes to the Financia l Statements

PAGES

1 · 1 (a)

2

3 · 3(b)

4 · 4(b)

5 • S(a)

6 · 6(b)

7

8

9

10 · 64

SACOS GROUP LIMITED

CORPORATE INFORMATION

Vision Statement

Mission Statement

Core Values

Board of Directors

Chairman

Directors

Managing Director

Company Secretary

To be the leading insurer in terms of premium volume and profitability in

Seychelles. To be a major real estate developer.

To provide quality insurance solutions, strong security and excellent service to

our customers. To look after the interests of our stakeholders including customers,

shareholders, employees and the community at large

Integrity - Honesty - Customer Satisfaction - Loyalty to stakeholders

Mr M. Felix

Mr L. Rivalland

Business Consultant

C.E.O.

Swan Group

Appointed July 16, 2007


Mr Y. Suleman Businessman Appointed May 28, 2009

Mr J.C. D'Offay Retiree Appointed December 11, 2009

Mr P. Bastide Senior Manager Appointed March 28, 2013 Swan Group

Mr J . Raguin Executive Manager Appointed August 2, 2013

SACOS Group

Mr. M. Inch Managing Partner Appointed September 30, 2014

Bluebird lnvestissements

Mr. R. Tharrington Consultant Appointed April 2, 2015

Mrs. L. Nair C.E.O. Appointed April 22, 2015

Seychelles Pension Fund

Ms E. Agathine

Mr A. Hassan

Mr W. Confait

A. Lucas

C. Payet

Director General Ministry of Finance

Senior Trade Officer

Ministry of Finance

Former C.E.O.

Seychelles Pension Fund

Resigned June 23, 2014

Resigned June 23, 2014

Resigned February 27, 2015



SACOS GROUP LIMITED 1 (a)

CORPORA TE INFORMATION (CONT'D)

Legal Advisers

Auditors

Actuaries

Bankers

K.B Shah Attorney-at -Law f:t Notary Public

D. Lucas Attorney-at-Law ft Notary Public

BOO Associates

Chartered Accountants

State Insurance Company of Mauritius Limited Port Louis, Mauritius

Bank of Baroda (Seychelles)

Barclays Bank (Seychelles) Limited Habib Bank (Seychelles) Seychelles International Mercantile Banking Corporation Limited (Nouvobanq) Seychelles Commercial Bank Limited

The Mauritius Commercial Bank (Seychelles) Limited

SACOS GROUP LIMITED 2

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 9th Annual General Meeting of SACOS Group Limited will be held at the International Conference Centre, Latanier Road on Thursday July 9, 2015 at 10.15 a.m. for the following

purposes:

1. To approve the Minutes of the 8th Annual General Meeting held on Tuesday July 8, 2014 at 10:15a.m.

2. To receive the Chairman's Report.

3. To receive and, if thought fit, adopt the Directors'and Auditors' Reports together with the Financial Statements for the year ended December 31, 2014.

4. To declare a final dividend.

5. To consider, if thought fit , to pass the following ordinary resolutions:

a) That Mr Louis Rivalland who retires by rotation at the Annual General Meeting be re-elected as a

Director of the Company.

b) That Mr Mark Inch who was appointed a Director by the Board of Directors on September 30, 2014 and who retires under section 163(4) of the Companies Act, 1972 be elected as a Director of the Company.

c) That Mrs Lekha Nair who was appointed a Director by the Board of Directors on April 2, 2015 and who retires under section 163(4) of the Companies Act; 1972 be elected as a Director of the Company.

d) That Mr Rod Thorrington who was appointed a Director by the Board of Directors on April 22, 2015 and who retires under section 163(4) of the Companies Act , 1972 be elected as a Director of the Company.

e) That Mr Basil Hoareau who was nominated a Director by the Board of Directors on May 7, 2015 subject to approval by the Financial Services Authority and who retires under section 163(4) of the Companies

Act, 1972 be elected as a Director of the Company.

f) That the Directors' remuneration of SR 826,466 per annum be approved for the financial year 2015.

g) That the Directors' remuneration of approximately SR 500,718 per annum be approved in respect of the Managing Director for the year up to J.une 30, 2015.

h) That the directors be authorised to appoint its auditors and fix their remuneration.

6. Any Other Business

Note A member is entitled to appoint a proxy, who need not also be a member, to attend and vote ih his or her

stead. A form of proxy is enclosed.

All appointments of proxies must be delivered to the Company not later than forty-eight hours before the

time at which the meeting will commence.

By Order of The Board Of Directors

C&!il!:~L.t!!.-C .

C. Payet (Mrs) Company Secretary

June 8, 2015


CHAIRMAN'S REPORT - DECEMBER 31, 2014

Dear Shareholders ,

We have come to the end of yet another rewarding year and it gives me great pleasure to report on the company affairs for the year ended December 31, 2014. I also take the opportunity to welcome you all to

the 9th Annual General Meeting .

During 2014, we continued to place emphasis on business development and communication in the face of stiff competition by othe r playe rs in the market. There are now 5 insurance companies in operation in Seychelles, and this has presented the business with a challenge not only to maintain our market share, but to improve on it. Notwi t hstanding this , the management and staff have been up to the challenges. The company managed to secure some additional new significant business, namely , The Eden Bleu Hotel , Seypec, the Avani Hotels and the Eden Island Assets and Infrastructure. Despite some rates reduction, we stil l reta ined the majority of our business. This resulted in improved revenue and likewise profitability. Face to face meetings at all levels in the business has been maintained , with senior management playing the leading role. There is no better way to stay in touch and secure customer satisfaction, and ensure we have the edge over our competitors. We have conti nued our marketing campaign through advertisements on TV, Radio, and in newspapers, throughout the year .

Reinsurance Premium was marginally up, despite our securing some significant new business, due to the withdrawal of a Quota Share Treaty, which was a requirement of the Munich Re. However the switch of lead Reinsurer in 2014 to Swiss Re enabled us to increase our retention effectively. We now have a panel of highly rated Reinsurers, as recommended by the FSA namely Swiss Re, Africa Re, and Trust Re who are all A rated security for our Treaties, which give us much comfort in dealing with large claims when they arise. We also received strong support from our main Reinsurance Broker , Aon Benfield, with whom we remain in close contact in particular regarding the Reinsurance Treaties.

We have noted a trend over the past few years of major disasters, resulting in large claims in marine hull, and buildings but more particu larly in vehicle accidents. That said, there was a remarkab le change in 2014 in that our gross claims for General Insurance in 2014 actually dropped by some SR 13m, to SR 45.38m(2013 SR 58.26m) . We recorded a net increase of SR 14.8m to SR 144.6m (2013 SR 129.84mi in Gross Written Premium. The consolidate d results showed Profit before tax of SR 31.13m (2013- SR 25.81 m). After provision for business tax of SR 5.12m, we are left with SR 26m fo r disposal. The Group's full year performance has thus once again delivered furt her prof itable growth. Nevertheless, management must still work closely on cost containment and operational efficiencies to ensure that administrative ratios are commensurate with planned growth. Income from invest ments was down by SR 1.33m to SR 6.69m as a direct result of low interest rates on bank deposits and treasury bil ls. Rental income however increased by SR 841 k from the new apartments at Pointe Larue. One bone of contention needs to be resolved on the issue of business tax. The tax benefit for listing only applies to Sacos Group, the holding company, whereas we had anticipated this would also apply to the subsidiary, Sacos Insurance which is the core business generating the overall income. The matter has been taken up with the Ministry of Finance.

After careful consideration , the Board has recommended the payment of a final dividend of SR 8.50 per share (2013- SR 7) for the tota l sum of SR 17m. We remain conscious of the need to build up our retained earnings and maintain a good level of equity. We are also fully aware of our responsibility to improve shareholders wealth. It is worth mentioning that the value of the shares has increased considerably since we were listed and curre ntly stands at SR 110 per share from SR 68 on the first trading day. So long as the company performs well, we can only expect an upward t rend, which will satisfy all shareholders.

SACOS GROUP LIMITED 3(a)

CHAIRMAN'S REPORT (CONT'D) - DECEMBER 31, 2014

After Government sold its shares, the board composition has changed. Mr. Willy Confait stood down earlier this year, and is replaced by Mrs Lekha Nair, the new CEO of the Seychelles Pension Fund. Mr Mark Inch and Mr Rod Thorrington are two other Non Executive Directors, replacing Mr. Ashik Hassan and Mrs Elisabeth Agathine who both resigned in 2014. Mr. Basil Hoareau, a lawyer is also joining the board. The new NEDs bring with them a wide range of experience from other businesses, which no doubt would be of benefit to the business. We appointed Mr. Patrice Bastide as Chairman of the Human Resources and Remunerations Committee to lead the process to ensure we have a robust succession plan. The composition of the Board will continuously be reviewed to ensure we have the right mix of skill to set the strategic direction of your company, and ensure it is implemented satisfactorily. I would like at this point to recognize the highly valued contribution made by Mr Willy Confait over the period of significant growth and financial success of

the company.

Needless to say we have suffered a setback with the General Insurance software system to the point we have had to terminate the supplier's contract at i t was unlikely they would be able to deliver what we requi red. We have taken the decision to purchase a completely new system that is being used by other insurance companies. The product has been tested and gives us comfort that eventually an up to date and modern system will be in place for the foreseeable future. The process is underway, for completion and implementation in January, 2016. The focus on new technology is necessary to provide the company the tool to improve the efficient delivery of service, information and products. We feel it will create real-time customer communication to improve the customer experience and fuel profitable business growth.

We are naturally conscious of the role played by our staff in driving the business forward and investment in human resources is thus ongoing. Much more focus is placed on building talent, by identifying employees with potential and with commitment to develop themselves. In so doing, Sacos will have its own pool of talent to take on leadership roles in the future. Charmayne De Comarmond from Sacos Life is on an 1 year course in Insurance and Risk Management for a Master's Degree. Likewise, Lynn Moncion fro m General Insurance is on an 18 month course for a Master's Degree in Business Administration.

Locally, 23 staff attended the in house insurance course level 1, whereas 8 others attended the In-house Level 2. It is to be noted that some staff opt out, and this is taken into consideration at year end assessment. A further 8 staff also attempted their CII course by correspondence. Management have also exposed staff to various duties , to ensure they gain all round knowledge of the whole business. Staff turnover was better than in 2013 when 15 staff at various levels resigned from the company. Last year we recruited 13 new staff, including a Legal advisor, of which 9 were replacements. We remain fully committed in staff development, and will continue to nurture talent, which we believe will bode well for the future.

As part of good governance our Internal audit team has been reviewing control systems, and report ing to the audit committee for action where it is deemed appropriate. The execut ive as well as departmental heads are very much aware they are accountable where issues raised by the audit team are not meeting standards,

and the audit committee do request for explanation and rectification.

The Risk register has been updated and is discussed at executive level after discussions with Line Managers to enhance their understanding of their roles and responsibilities in the undertaking of their tasks, applying internal control measures and risk responses when processing business transactions. The customer due diligence (COD) process has improved with the integration of COD information requirements into proposal forms. Newly recruited staff members have received basic training in Anti Money Laundering (AML) suspicious activity reporting requirements. The Risk and Compliance Manager also attended several seminars on Risk Management in 2014.Organizational and manpower capacity are being acquired whilst the

mechanisms are being improved to tackle the increasing challenges.

SACOS GROUP LIMITED 3(b)

CHAIRMAN'S REPORT (CONT'D)· DECEMBER 31, 2014

The executive is in the process of reviewing the Business Plan for the next 3 years and will shortly submit to the board for approval. Over the last 12 months, we have continued to focus on our core market segments in General Insurance, and it was notable that significant new business was secured. The board acknowledges the hard work and commitment of the management and staff for thei r part in deliver ing the good results in

Sacos Life Assurance remained focused in selling its wide range of life products in 2014. Some 1266 new policies were sold, a combination of ordinary life and mortgage protection. The company's policyholder portfolio stands at just over 12,500. Gross written premium of SR 53.59m showed no growt h over the previous year. However claims paid rose by 23% to SR 38.63m (2013 SR 31.3m). Rental income increased by 18% to SR 10.31m (2013 SR 8.77m) . The Investment income consisting of interest on Deposits, T/ Bills and Bonds at SR 11.635m performed well against 2013 at SR 11. 544m. The net surplus for the year of SR 17. 56m was consistent with 2013, and from this SR 1. 563m is attributable to shareholders compared to SR 1. 362m in 2013. The Life Fund has continued with its policy of investments for better return and improving value to policyholders. Construct ion of apartments at Anse Aux Pins has gone out to tender, and work is expected to be completed over 12 months at a cost of SR 30m. As for t he Anse Royale development , the infras tr ucture is now complete d and construction work will go for tender shortly. We have continued to experience a continuous demand for rental accommodation, and withi n the next two years, these two developments will secure significant added income to the life fund. Overall the Life Fund has made good progress over the years and now stands at SR 395m.

Despite the competiti ve natu re of the insurance business at present , we have managed to improve on our earnings. There is no doubt that the company will once again deliver strong profitable growth in 2015. I am of the view that there is still room for improvement , and it is the duty of everyone to work on this for the continued progress of the company for years to come to increase the market share.

The Board of Directors are committed to you, and against expectations, the performance has delivered increased shareholder value. It is planned to launch a Customer Service Survey later this year as we believe it is important to measure the level of customer satisfaction of the group.

This is my last report as Chairman of the Board. It was an honour to serve on the Board and work for a better SACOS. I wish to record my appreciation to you all for all the support that you have given me and wish the company cont inued success.

In conclusion, I wish to thank the management and staff for the job well done and look forward to their commitment to ensure continuous and profitable growt h in 2015. My thanks also go to the Board members for their support in the past year.

Thank you

71!-f:. Michel Felix Chairman May 8, 2015


DIRECTORS' REPORT - DECEMBER 31, 2014

The Directors are pleased to submit t heir report together with the audited financial statements of the Group and the Company for the year ended December 31, 2014.

PRINCIPAL ACTIVITIES 8; CURRENT YEAR EVENTS

The principal activity of the Company (hereafter refer red as 'SGL') is that of an investment holding and sale of spare parts and related services. These activities have remained unchanged during the year under review. The subsidiaries are listed below: (i) SACOS Insurance Company Limited (hereaf ter referred as 'SICL'); (i i) SACOS Life Assurance Company Limited (hereafter referred as 'SLACL'); and (i ii) Sun Investment (Seychelles) Limi ted (hereafter referred as 'SISL')

The activities of the subsidiaries are detaile d in note 8 to the f inancial statements.

The Company has adopted International Financial Reporting Standards (IFRS) for the first t ime i n 2014. The date of transition is January 1, 2013 and as per the requirement s of lFR51, 'First-time adoption of International Financial Reporting Standards', comparatives the refore include three statements of financial position, two statements of profit or loss and other comprehensive income, two statements of changes in equity and two statements of cash flows and related notes incl uding comparative information for all statements presented.

RESULTS THE THE

GROUP COMPANY SR'000 SR'000

Profit befo re taxat ion 31,131 18,794 Taxation (charge)/cred it (5,119) 783 Profit after taxation 26,012 19,577 Retained earnings brought forward 74 ,693 31,185 Profits available for distribution 100,705 50,762 Dividends (14,000) (14,000) Retained earnings carried forward 86,705 36,762

DIVIDENDS

Dividends of SR 8. 5 per share amount ing to SR 17m were proposed for the year under review (2013: SR 6 per share amounting to SR 12m).

EQUIPMENT AND INVESTMENT PROPERTIES

Additions to equipment during the year amounting to SR 734k (2013: SR 809k) for the Group and SR 25k (2013: Nil) for the Company and these comprised mainly motor vehicles, computer equip ment and furniture & fittings.

Addit ions to investmen t properties during the year amounted to SR 9.4m (2013: SR 2.3m) comprised mainly

work-in-progress.

The Directors have estimated that the carrying amount of equipment and investment properties as at the date of the reporting period approximate their fair value.

SACOS GROUP LIMITED 4(a)

DIRECTORS' REPORT (CONT'D) - DECEMBER 31, 2014

DIRECTORS AND DIRECTORS' INTERESTS

The Directors of the Company and its subsidiaries since the date of the last report and the date of this report are:

Number of shares held at year-end SGL SICL SLACL SISL

2014 2013 M Felix (Chairman) 180 180 ./ ./ ../ ,/

A Lucas 3,510 3,510 .,/ .,/ ./ .,/

L Rivalland .,/ -./ -./ X

JC D'Offay 670 170 ./ -./ ./ -./

Y Suleman 208 180 ./ -./ ./ .,/

P Bastide ./ ./ ./ X

J Raguin 244 10 ./ ./ , / X M Inch (As from September 30, 2014) 250,000 ./ ./ ./ X

R Thor rington (As from April 2, 2015) ,/ ./ v X

L Nair (As from April 22, 2015) 280 ./ ./ ./ X

W Confait (Up to March 6, 2015) 130 130 ,/ ,/ -./ .,/

A Hassan (Up to June 23, 2014) -./ ./ ,/ ./

E Agathine (Up to June 23, 2014) 180 180 ./ ./ ./ X

*Mr.Inch also holds shares in SACOS Group Limited through Bluebird lnvestissement SARL (83,774 shares).

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for the overall management of the affairs of the Group including its operations and making investment decisions.

The Board is responsible for the preparation and fair presentation of these financial statements in accordance with Interna ti onal Financial Reporting Standards (IFRS) and in compliance with the Seychelles Companies Act, 1972 and the Insurance Act 2008. This responsibil ity incl udes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatem ent, whether due to fr aud or error ; selecting and applying appropriate accounting poli cies; and making account ing estimates tha t are reasonable in the circumstances. The Dir ectors have the general responsibil i ty of safeguarding the assets, both owned by the Group and those that are held in t rust and used by the Group.

The Directors consider they have met the aforesaid responsibilities.

AUDITORS

The auditors, Messrs. BDO Associates, ret ire and being eligible offer themselves for re-appoin t ment.

SACOS GROUP LIMITED

DIRECTORS' REPORT (CONT'D) · DECEMBER 31, 2014

BOARD APPROVAL

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M Felix A Lucas Director Director

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J Raguin JC D'Ottay Director Direct or

Dated: May 12, 2015 Victoria , Seychelles

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L Rivalland Director

I ' -,,,r::.:-(yy::,// Y Suleman Director

4(b)

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M Inch L Nair Director Director

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P Bastide R Thorrington Directo r Director

1800

SACOS GROUP LIMITED

Tel: +248 4612 612 Fax: +248 4612 300 [email protected]

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS

P.O. Box 18 The Creole Spirit Quincy Street, M~he Victoria Seychelles

5

This report is made solely to the members of SACOS Group Limited and its subsidiaries, (the "Group") , as a body, in terms of our engagement to conduct the audit on their behalf. Our audit work has been undertaken so that we might state to the members those matters which we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the members as a body, for our audit work, for this report, or for the opinions we have formed.

Report on the Financial Statements

We have audited the attached financia l statements of SACOS Group Limited set out on pages 6 to 64 which comprise the Statements of Financial Position as at December 31, 2014, the Statements of Profit or Loss and Other Comprehensive Income, the Statements of Changes in Equity and the Statements of Cash Flows for the year then ended and a summary of significant accounting policies and explanatory notes.

Board's Responsibility for the Financial Statements

As stated on page 4(a) of the Directors' Report, the Board of Directors are responsible for preparation of the financial statements.

Auditors' Responsibility

Our responsibility is to express an opinion on those financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of 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 auditors· judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making these risk assessments, the auditors consider internal control relevant to the Group's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of 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.

BDO Associates, a partnersh ip registered i n Seychelles, is a member of BOO International Limited, a UK company limited by guarantee , and forms part of the internationa l BOO network of independent member firms.

BOO is the brand name for the BOO network and for each of t he BOO Member Firms.

IBDO

SACOS GROUP LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS (CONT'D)

Opinion

In our opinion , the financial statements on pages 6 to 64 give a true and fair view of the financial position of the Group and the Company at December 31, 2014 and of its financial performance and its cash flows for the year then ended in accordance with Internat ional Financial Reporting Standards, it comply with the Companies Act, 1972 and the Insurance Act, 2008.

Report on Other Legal Regulatory Requirements

Companies Act, 1972

We have no relationship with, or interests, in the Group other than in our capacity as auditors, tax and business advisers and dealings in the ordinary course of business.

We have obtained all information and explanations we have required.

In our opinion , proper accounting records have been kept by the Group as far as it appears from our examination of those records and comply with the provisions of the Seychelles Companies Act, 1972.

Insurance Act, 2008

The financia l statements have been prepared in compliance with the requirements specified by the Act.

Dated: May 14, 2015 Victoria, Seychelles

{lA)o ~~~~d~ BDO ASSOCIATES Chartered Accountants

5(a)

SACOS GROUP LIMITED

STATEMENTS OF FINANCIAL POSITION (CONT'D) - DECEMBER 31, 2014

Notes

2014 SR

Technical provisions Life Assurance Fund 14 395,022,911

Gross outstanding claims and IBNR 17/23 18,345,286

Gross unearned premiums 17/23 67,646,244

Mortgage protection fund 18 506,453

Fisheries and Agricultural fund 19 2,000,000 483,520,894

LIABILITIES Non-current liabilities Retirement benefit obligations 20 2,827,665

Deferred tax liabilities 10 -2,827,665

Current liabilities Trade and other payables 21 26,634,097

Current tax liabilities 22 882,574

Bank overdraft 13 -27,516,671

Total liabilities 30,344,336

Total equity and liabilities 670,569,789

The notes on pages 10 to 64. form an integral part of these financ ia l statements. Auditors' report on pages 5 and 5(b).

THE GROUP Re-stated

2013 SR

381,428,035 11,707,236 53,153,197

680,796 2,000,000

448,969,264

2,125,180

2,125,180

15,286,198 2,951,408 7,220,828

25,458,434

27,583,614

621,245,642

6(a)

THE COMPANY Re-stated Re-stated Re-stated

2012 2014 2013 2012 SR SR SR SR

367,520,176 27,811,391 48,802,857

885,598 2,000,000

447,020,022

1,734,960 - 3,156 24,3 17

1,734,960 . - _ 3,156 _ 24,3 17

24,246,504 2,301,362 10,381,501 19,556,738 3,201,873 67,352 2,822,284 3,612,169 3,815,569 - 3,220,173 751,347

31,263,946 2,368,714 16,423,958 23,920,254

32,998,906 2,368,714 16,427, 114 23,944,571

618,169,787 109, 1 31 , 08 3 117,611,675 123,556!675

SACOS GROUP LIMITED

STATEMENTS OF FINANCIAL POSITION (CONT'D)· DECEMBER 31, 2014

These financial statements have been approved for issue by the Board of Directors on May 12, 2015.

~~ M Felix Director

~ I-' tsast1de Director

~ J Raguin Director

R Thorrington Director

G-9 A Lucas Director

I

' I I \ .. J.r-_;/ \J.l' // /

M Inch Director

(Y~~ . Y ::.uIeman

Director

The notes on pages 10 to 64 form an integral part of these financial statements. Auditors' report on pages 5 and 5(b).

,1vJ ,_,.,_,(ly,:;) f~

L Rivalland Director

~ -JC D'Offay Director

~ ~ ~~

L Nair Director

6(b)


STATEMENTS OF PROFIT OR LOSS ANO OTHER COMPREHENSIVE INCOME· YEAR ENDED DECEMBER 31, 2014

Notes THE GROUP Re-stated

2014 2013

SR SR

Turnover 2(v) 144,604,512 129,838,864

Gross written premiums 23(b) 144,604,512 129,838,864 Premiums ceded to rei nsurers 23(b) (51,734,504) (50,827,751) Change in gross unearned premium 23(b) (14,493,047) (4,350,342)

Recoverable from reinsurers 23(b) 8,929,638 6,174,962 Net premium earned 87,306,599 80,835,733

Gross claims paid 23(a) (45,605,522) (58,258,534) Recoverable from reinsurers 23(a) 8,022,927 6,474,791 Movement in gross outstanding claims 23(a) (6,638,050) 16,104,155 Recoverable from reinsurers 23(a) 1,811,042 (7,138,224)

Net claims incurred (42,409,603) (42,817,812)

Commission receivable from reinsurers 6,185,062 6,703,980 Commission paid to agents and brokers (7,935,061) (9,482,209)

Net commission paid (1,749,999) (2,778,229)

Underwriting surplus 43,146,997 35,239,692

Rental income 2,218,550 1,377,717 Investment income 24 6,693,521 8,023,258 Sundry income 25 8,483,845 8,251,994 Increase in fair value of investment properties 6 1,153 ,549 1,757,689

18,549,465 19,410,658

Staff costs 26 (15,339,172) (13,661,290) Marketing and administrative expenses 27 (16,095,643) (14,945,880) Other operating expenses 28 (1, 116,268) (1,137,305)

(32,551,083) (29,744,475 )

Share of surplus of Life Assurance Fund 14(a) 1,986,028 900,000 Profit before taxation 31,131,407 25,805,875 Taxation (charge)/credit 22(b) (5,119,612) (7,263,970)

Total comprehensive income for the year 26,011,795 18,5411905

The notes on pages 10 to 64 form an integral part of these financial statements.

Auditors' report on pages 5 and 5(b).

THE COMPANY

Re-stated 2014 2013

SR SR

14,128,130 12,847,015 3,426,391 1,815,136

17,554,521 14,662,151

(180,464) (153,615) (519,379) (628,778)

(45,919) (58,462) (745,762) (840,855)

1,986,028 900,000 18,794,787 14,721,296

783,021 (1,148,839)

19,577,808 13,572,457

SACOS GROUP LIMITED

STATEMENTS OF CHANGES IN EQUITY· YEAR ENDED DECEMBER 31, 2014

THE GROUP Share Share Retained

capital premium earnings SR SR SR

At January 1, 2014 - As previously stated 70,000,000 71,124,947 - Effect of adopting IFRS (note 35) 3,567,817 - As re-stated 70,000,000 74,692,764 Total comprehensive income for the year 26,011,795 Dividends (note 31) (14,000,000) At December 31, 2014 70,000,000 86,704,559

At January 1, 2013 - As previously stated 35,000,000 23,239,094 76,315,637 - Effect of adopting IFRS (note 35) 3,596,128 · As re-stated 35,000,000 23,239,094 79,911,765 Transfer to share capital 35,000,000 (23,239,094) (11,760,906) Total comprehensive income for the year 18,541,905 Dividends (note 31) (12,000,000) At December 31, 2013 70,000,000 74,692,764

THE COMPANY Share Share Retained

capital premium earnings SR SR SR

At January 1, 2014 - As previously stated 70,000,000 31,187,717 • Effect of adopting IAS 12 (note 35) (3,156) - As re-stated 70,000,000 31,184,561 Total comprehensive income for the year 19,577,808 Dividends (note 31) (14,000,000) At December 31, 2014 · 70,000,000 36,762,369

At January 1, 2013 - As previously stated 35,000,000 23,239,094 41,397,327 · Effect of adopting IAS 12 (note 35) (24,317) · As re-stated 35,000,000 23,239,094 41,373,010 Transfer to share capital 35,000,000 (23,239,094) (11,760,906) Total comprehensive income for the year 13,572,457 Dividends (note 31) (12,000,000) At December 31, 2013 70,000,000 31,184 ,561

The notes on pages 10 to 64 form an integral part of these financial statements. Auditors ' report on pages 5 and S(b).

8

Total SR

141,124,947 3,567,817

144,692,764 26,011,795

(14,000,000) 156,704,559

134,554,731 3,596,128

138,150,859

18,541,905 (12,000,000) 144,692,764

Total SR

101,187,717 (3,156)

101,184 ,561 19,577,808

(14,000,000) 106,762,369

99,636,421 (24,317)

99,612,104

13, 572,457 (12,000,000) 101, 1841561

SACOS GROUP LIMITED

STATEMENTS OF CASH FLOWS· YEAR ENDED DECEMBER 31, 2014

Notes THE GROUP Re-stated

2014 2013 SR SR

Cash flows from operating activities Profit befo re taxation 31,131,407 25,805,875

Adjustments for: Depreciation of equipment 5 1,099,108 1,070,090 Profit on sale of investment properties (465,253) Change in fair value of investment properties 6 (1,153,549) (1,757 ,689) Amortisation of intangible asset 7 9,584 36,025 Impairment of intangible asset 7 411,367 Release of Mortgage Protection Fund 18 (174,343) (204,802) Movement in retirement benefit obligations 702,485 390,220 Accrued interests 9 (3,872,935) (7,897,546) Provision for credit impairment 12 453,269 86,664 Effect of change in exchange rates (1,874,560) (2,842,033)

26,731,833 14,221,551 Changes in working capital: - Inventories 424,893 484,779 - Trade and other receivables 2,191,132 3,094,007 - Trade and other payables 11,347 ,899 (8,960,306)

- Gross claims liabilities 23(a) 6,638,050 (16,104,155) - Recoverable from reinsurers

- oustand ing claims 23(a) (1,811,042) 7,138,224

- unearned premium 23(b) (8,929,638) (6,174,962)

- Unearned premium 23(b) 14,493,047 4,350,340 51,086,174 (1,950,522)

Tax paid 22 (7,357,956} (6,729,448) Net cash inflow/(outflow) from operating activities 43,728,218 (8,679,970)

Cash flows from investing activities Purchase of equipment 5 (734,103) (809,286)

Purchase of investment properties 6 (9,368,510) (2,260 ,717) Proceeds from sale of investment properties 9,770 ,321 Purchase of intangible assets 7 (49,913) (164,725) Additions to investment in financial assets 9 (71,141,705) (97,859,779) Redemption of investment in financial assets 9 94,734,265 119,097,416 Net cash inflow from investing activities 13,440,034 27,773,230

Cash flows from financ ing activity Dividends paid and net cash outflow from financing activity 31 (14,000,000) (12,000,000)

Net change in cash and cash equivalents 43,168,252 710931260

Movement in cash and cash equivalents At January 1, 16,506,506 6,571,213

Change 43,168,252 7,093,260

Effect of change in exchange rates 1,874,560 2,842,033

At December 31, 13 611549,318 16,506,506

The notes on pages 10 to 64 form an integral part of these financial statements. Auditors· report on pages .5 and S(b).

9

THE COMPANY Re-stated

2014 2013 SR SR

18,794,787 14,721,296

45,919 51, 190

7,273

(2,628, 130) (2,847,015)

16,212,576 11,932,744

424,893 484,779 (2,153,548) 4,636,616 (8,080, 139) (9,175,237)

6,403,782 7,878,902 p,977,657} (1,959,885 ) 4,426,125 5,919 017

(24,957)

(49,913) (36,614,351) (60,985,910) 50,958,974 64,238,895 14,269,753 3,252,985

(14,000,000) (12,000,000)

4,695,878 (2,8271998)

(3,078,399) (250,401 ) 4,695,878 (2,827,998)

1,6171479 {3,078,399}

SACO$ GROUP LIMITED 10

NOTES TO THE FINANCIAL ST A TEMENTS • YEAR ENDED DECEMBER 31, 2014

1. GENERAL INFORMATION

SACOS Group Limited was incorporated under the Companies Act, 1972 on November 22, 2005. The activities of the Company and the subsidiaries are detailed under the Directors' report on page 4 and note 8 respectively.

The Company is domiciled in Seychelles and its registered office is SACOS Tower, Palm Street, Victoria, Mahe, Seychelles. ·

These financial statements will be submitted for consideration and approval at the forthcoming Annual General Meeting of the shareholders of the Company.

2. PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financia l statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated .

(a) Basis of preparation

The financial statements of SACOS Group Limited have been prepared in accordance with International Financial Reporting Standards (IFRS), the Seychelles Companies Act , 1972 and the Insurance Act, 2008. These financial statements have been prepared under the historical cost convention , except that: (i) investment properties are stated at their revalued amounts; (ii) held-to-maturity investments and relevant financial assets are carried at amortised cost; and (iii) relevant financial assets are stated at their fair value.

Standards, Amendments to published Standards and Interpretations effective in the reporting period

Amendments to IAS 32, 'Offsetting Financial Assets and Financial Liabilities', clarify the requirements relating to the offset of financial assets and financial liabilities. The amendment is not expected to have any impact on the Group 's financial statements.

Amendments to IFRS 10, IFRS 12 and IAS 27, 'Investment Entities' , define an investment entity and require a reporting entity that meets the definition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair value through profit or loss in its consolidated and separate financial statements. Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new disclosure requirements for investment entities. The standard has no impact on the Group's financial statements.

IFRIC 21, 'Levies', sets out the accounting for an obligation to pay a levy that is not income tax . The interpretation addresses what obligating event that gives rise to pay a levy and when should a liability be recognised. The Company is not subject to levies so the interpretation has no impact on the Group's financial statements.

Amendments to IAS 36, 'Recoverable Amount Disclosures for Non- financial Assets' , remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated. The amendment has no impact on the Group's financial statements.


NOTES TO THE FINANCIAL STATEMENTS - YEAR ENDED DECEMBER 31, 2014

2. PRINCIPAL ACCOUNTING POLICIES (CONT'D)

/

(a) Basis of preparation (Cont'd)

Standards, Amendments to published Standards and Interpretations effective in the reporting period (Cont'd)

Amendments to IAS 39, 'Novation of Derivatives and Continuation of Hedge Accounting', provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness. The amendment has no impact on the Group's financial statements.

Annual Improvements 2010-2012 Cycle

IFRS 13 (Amendment}, 'Fair Value Measurement' clarifies in the Basis for Conclusions that short-term receivables and payables with no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial. The amendment does not have any impact on the Group's financial statements.

Annual Improvements 2011--2013 Cycle

IFRS 13 (Amendment), 'First-time Adoption of International Financial Reporting Standards' clarifies in the Basis for Conclusions that an entity may choose to apply either a current standard or a new standard .. that is not yet mandatory, but permits early application, provided either standard is applied consistently throughout the periods presented in the entity's first IFRS financial statements. The Group is a first time IFRS preparer but has chosen not to early adopt any non-mandatory standards.

Standards, Amendments to published Standards and Interpretations issued but not yet effective

Certain standards, amendments to published standards and interpretations have been issued that are mandatory for accounting periods beginning on or after 1 January 2015 or later periods, but which the Group has not early adopted.

At the reporting date of these financial statements, the following were in issue but not yet effective: IFRS 9 Financial Instruments Defined Benefit Plans: Employee contributions (Amendments to IAS19) Annual Improvements to IFRSs 2010-2012 cycle Annual Improvements to IFRSs 2011-2013 cycle IFRS 14 Regulatory Deferral Accounts Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11} Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)

IFRS 15 Revenue from Contract with Customers Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41} Equity Method in Separate Financial Statements (Amendments to IAS 27) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) .

Annual Improvements to IFRSs 2012-2014 Cycle

SACOS GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS· YEAR ENDED DECEMBER 31, 2014


(a) Basis of preparation (Cont'd)

12

Where relevant, the Group is still evaluating the effect of these Standards, amendments to published Standards and Interpretations issued but not yet effective, on the presentation of its financial statements.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are .disclosed in Note 4.

(b) Equipment

All equipment is 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 assets' 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.

Depreciation on property and equipment is calculated on the straight line method to write off the cost of each asset to their residual values over their estimated useful life as follows:

Furniture and fittings Computer and equipment Motor vehicles

Rates 10%

15% - 20% 25%

The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date .

Where the carrying amount is greater than its recoverable amount, it is written down to its recoverable amount.

Gains and losses on disposals of equipment including revalued assets are determined by comparing proceeds with thei r carrying amount and are included in the statement of profit or loss.

(c) Investment properties

Investment properties , held to earn rentals/or for capital appreciat ion or both and not occupied by the Group are initially stated at cost, including transaction costs are carried at fair value, representing open value determined annually by external valuers.

Gains and losses arising from changes in fair values of investment properties are recognised in the statement of profit or loss.

(d) Intangible assets

Computer software

Acquired computer software licenses are capitalised on the basis of costs incurred to acqui re and bring to use the specific software and are amortised using the straight line method over the estimated useful life of 3½ years.

SACOS GROUP LIMITED



(d) Intangible assets (Cont'd)

Website

13

Costs that are directly associated with the development of the Group's website and which will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff costs of the software development team and an appropriate portion of relevant overheads. Website development costs recognised as assets are amortised using a straight -line method over their useful lives of 3½ years.

(e) Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation 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 carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an assets' 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 the re are separately identifiable cash flows (cash-generating units).

(f) Investments in subsidiaries

Separate financial statements of the investor

In the separate financial statements of the investor, investment in subsidiary company is carried at cost. The carrying amount is reduced to recognise any impairment in the value of investment.

Consolidated financial statements

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 de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred 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. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date . On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.

SACOS GROUP LIMITED



(f) Investments in subsidiaries (Cont'd)

Consolidated financial statements (Cont'd)

14

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of 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 the statement of profit or loss.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions and non-controlling inte rests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between 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.

Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in statement of 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 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 statement of profit or loss.

(g) Financial instruments

Categories of financial assets

The Group classifies its financial assets as held-to-maturity investments. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the investments at initial recognition and re-evaluates this at every reporting date.

Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative instruments with fixed or determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity. Interest on held-to-maturity financial assets are included in the income statement. Held-to-maturity financial assets are treasury bonds which are recognised initially at fair value and subsequently at amortised cost using the effective interest method.

SACOS-GROUP LIMITED 15



(g) Financial instruments (Cont'd)

Recognition and measurement

Purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the ass.et. Investments are initially recorded at fair value plus transaction costs.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or they have been transferred and the Group has also transferred substantially all risks and reward~ of ownership.

Impairment of financial assets

Financial assets carried at amortised cost

If there is objective evidence that an impairment loss on assets carried at amortised cost has been incurred, the amount of the impairment 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 not been incurred) discounted at the financial asset's original effective interest rate.

The carrying amount of the asset is reduced and, the amount of the loss is recognised in the statement of profit or loss. If a held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

If, in a subsequent period, the amount of the impairment loss decreases and the decreases can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the.:. statement of profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairm1nt not been recognised.

(h) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

A provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of provision is recognised in the statement of profit or loss.

(i) Trade and other payables

Trade and other payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.

(j) Cash and cash equivalents

Cash and cash equivalents include cash in hand, cash at bank and deposits held at call with banks and other short-term highly liquid investments with original maturities of 3 months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

SACOS GROUP LIMITED



(k) Share capital

Ordinary shares are classified as equity.

(l) Deferred tax

16

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabil ities 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 tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply jn the period when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

(m) Retirement benefit obligations

Defined benefit plans

The Group provides for a payment of gratuity to permanent employees. Gratuit ies are paid every five years (except in the case of early retirement) as from January 2007, for continuous service. The amount provisioned every year is based on the number of years the employee has worked after the last payment date. This type of employee benefits has the characteristics of a defined benefit plan. The liability recognised in the statement of financial position in respect of the defined benefit plan is the present value of the defined obligation at the reporting date less fair value of plan assets together with adjustments for unrecognised actuarial gains and losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability.

The Group does not carry out any actuarial valuation since the Directors have based themselves on the method as prescribed by the Seychelles Employment Act and they have estimated that the amount of liability provided will not be materially different had it been computed by an external Actuary.

(n) Foreign currencies

Functional and presentation currency

Items included in the financial statements are measured in the currency of the primary economic environment in which the Group operates. The Group's functional currency is the Seychelles Rupee, the currency in which the financial statements are also presented.


NOTES TO THE FINANCIAL STATEMENTS • YEAR ENDED DECEMBER 31, 2014


(n) Foreign currencies (Cont'd) .

Transactions and balances

Foreign currency transactions are translated in the functional currency using the exchange rates prevailing on the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in a currency other than the presentation currency, are recognised in the statement of profit or loss. Non-monetary items that are measured at historical cost and at fair value in a foreign currency are translated using the exchange rates at the date of the transaction and at the date of the fair value was determined

respectively .

Translation differences on non-monetary assets classified as available-for-sale financial assets, are included in the statement of profit or loss.

(o) Insurance Contracts


Insurance contracts are those contracts that transfer significant insurance risk at the inception of the contract. Insurance contracts are derecognised when all rights and obligations are extinguished or

expire.

Contracts that do not transfer significant insur~rnce risk are investment contracts. The Group considers that all its short term and long term products are insurance contracts. Insurance risk is transferred when the Group agrees to compensate a policyholder if a specified uncertain event (the insured event) adversely affects the policyholder.

Types of insurance contracts

Short-term insurance

Insurance contracts issued by the Subsidiary, SACOS Insurance Company Limited, are short-term insurance contracts. These contracts are in respect of the following classes of business: motor, fire, marine, engineering, personal accident, household and miscellaneous and they provide compensation following damage to or loss of property, goods, equipment, losses and expenses incurred, and loss of earnings resulting from the occurrence of the events insured against.

Long-term insurance

The Subsidiary, SACOS Life Assurance Company Limited, transacts in long term insurance contracts and

insures events associated with human life.

Insurance contracts are further classified as being either with or without Discretionary Participation Features (DPF). DPF is a contractual right to receive, as a supplement to guaranteed benefits,

additional benefits: - which are likely to be significant portion of the total contractual benefits; and - whose amount or timing is contractually at the discretion of the issuer;




(o) Insurance Contracts (Cont'd)

Types of insurance contracts (Cont'd)

Long-term insurance (Cont'd)

and which are contractually based on the : - performance of specified pool of contracts or a specified pool of contracts or a specified type and

realised and unrealised investment returns on a specified pool of assets held by the Group.

Categories of insurance contracts issued by the Subsidiary

Long-term insurance contracts with fixed and guaranteed terms

These contracts insure events associated with human life (i.e. death or survival) over a long duration. Premiums are recognised as revenue when they become payable by the contract holder. Benefits are recorded as an expense when they are incurred. A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums under such a contract have been recognised. The liability is based on assumptions such as mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued. The best estimate assumptions are adjusted to include a margin for prudence and adverse deviations.

Long-term insurance contracts without fixed terms and with DPF

These contracts also insure events associated with human life (i.e. death or survival) over a long duration. Premiums are recognised directly as liabili t ies which are increased by credited interest and decreased by administration fees, mortality, surrender charges and any withdrawals. These types of contracts entitles the contract holders to a minimum guara teed amount per annum. They contain a DPF which entitles the contract holders, in supplement to the minimum guaranteed amount, a contractual right to receive additional bonuses. kh.-o ....... .._...,eclared when the actual return on backing assets is higher than the expected return at inception of the contract.

The amount and timing of the settlement of the DPF element is however at the discretion of the Subsidiary. The bonus is derived from the DPF eligible surplus available .arising mainly upon revaluation of backing assets, carried out by independent Actuaries on a yearly basis.

The Subsidiary has l~gal obligation to eventually pay to contract holders at least 90% of the DPF eligible surplus. Any portion of the DPF eligible surplus that is not declared as a bonus and not credited to individual contract holders accounts is retained as a liability in the Life Assurance Fund for the benefit of all contract holders until declared and credited to them individually in future periods.

Equity holders' share of the DPF eligible surplus, equal to 10%, is transferred from the Life Assurance Fund to them on a yearly basis when bonuses are de.dared.

SACOS GROUP LIMITED


2. PRINCIPAL ACCOUNTING POLICIES (CONTD)

(p) Reinsurance Contracts


19

Contracts entered into by the Group with Reinsurers under which they are indemnified for losses are classified as reinsurance contracts held. Insurance contracts entered into and under which the contract holder is another insurer (inwards facultative reinsurance) are included with insurance contracts.

The indemnity to which the Group is entitled under its reinsurance contracts held are recognised as reinsurance assets. Short term balances due from both Insurers and Reinsurers are classified within Trade and other receivables and non current ones are classified as long term receivables. Amounts recoverable from reinsurers are estimated on a manner consistent with the outstanding claims provisions or settle claims associated with the reinsured policies and in accordance with the relevant insurance contract.

Reinsurance liabilities are primarily premium payable for reinsurance contracts and are recognised as an expense when due.

Ceded reinsurance arrangements do not relieve the Subsidiary from its obligations to policyholders.

Types of reinsurance contracts

Short-term reinsurance contracts

The Subsidiary, SACOS Insurance Company Limited, reinsures either on a proportional or nonproportional treaty basis, with all risk falling within the t reaty terms, conditions and limi~s being reinsured automatically, or on a facultative basis. Proportional reinsurance can be either 'quota share· where the proportion of each risk reinsured is stated or 'surplus' which is a more flexible form of reinsurance and where the Subsidiary fixes its retention limit. Non-proportional reinsurance is mainly 'excess-of-loss' type of reinsurance where, in consideration for a premium, the reinsurer agrees to pay all claims in excess of a specified amount i.e. the retent ion and up to a maximum amount. Under facultative reinsurance, risk are offered to the reinsurer on an individual basis and can be accepted or rejected by the reinsurer. Under the treaty method, all risks written by· the Subsidiary that fall within the terms and limits of the treaty will be reinsured by the reinsurer automatically.

Long-term reinsurance contracts

The benefits to which the Subsidiary, SACOS Life Assurance Company Limited, is entitled under its reinsurance contracts held are recognised as reinsurance assets. Reinsurance liabilities are primarily premium payable for reinsurance contracts and are recognised as an expense when due.

The Subsidiary's reinsurance assets arise from an Individual Life Treaty and a Group Life Treaty.




(p) Reinsurance Contracts

Types of reinsurance contracts (Cont'd)

Impairment of reinsurance assets

Reinsurance assets are reviewed for impairment at each reporting date or more frequently when an indication of impairment arises during the reporting year. If a reinsurance asset is impaired, the Group reduces the carrying amount accordingly and recognises that impairment in the statement of profit or loss. A reinsurance asset is impaired if t~ere is objective evidence, as a result of an event that occurred after initia l recognition of that asset , that the Group may not recover all amounts due under the terms of the cont ract and that t he event has a measurable impact on the amounts that the Group will receive from the reinsurer .

Derecognition

Reinsurance assets or liabili t ies are derecognised when the contractual rights are extinguished or expired or when the contract is transfer red to another party.

(q) Life Assurance Fund

The surplus on the Life Assurance Fund Account for the year is retained in the Life Assurance Fund. The adequacy of the fund to meet insurance obligations is determined by actuarial valuation on a triennial basis with yearly re-assessment.

(r) Unearned Premiums

The provision for unearned premiums represents the proportion of written premiums relating to periods of insurance risks subsequent to the end of the reporting period calculated on a daily pro-rata basis. The change in this provision is taken to the statement of profit or loss. The unearned premium is derecognised when the contract is discharged, expires or cancelled .

(s) Claims expenses and Outstanding claims provisions


Claims expenses are charged to profit or loss as incur red based on the estimated liability for compensation owed to cont ract holders or third parties.

Outstanding claims provisions made up of: (a) provisions for claims incurred but not reported (IBNR) and (b) the net estimated costs of claims admitted OT intimated but not yet settled at the end of the

reporting period.

SACOS GROUP LIMITED



(s) Claims expenses and Outstanding claii:ns provisions (Cont'd)

Short-term insurance (Cont'd)

21

Some delays may occasionally be experienced in the notification and settlement of certain types of claims, particularly in respect of liability business, the ultimate cost of which cannot be known with certainty at the end of the reporting period. The Subsidiary, SACOS Insurance Company Limited, does not discount its liabilities for unpaid claims. Any estimate represents a determination within a range of possible outcomes. Outstanding claims provisions are valued excluding allowances for expected future recoveries. Recoveries are accounted for, on a cash basis based on experts' estimate, and include noninsurance assets that have been acquired by exercising rights to sell (usually damaged) motor vehicles, to settle a claim (salvage)/obtain refund from third parties for some or all costs (subrogation) under the terms of the insurance contracts. Salvage of motor vehicles are accounted for on a cash basis.

(t) Liability adequacy test

For the Subsidiary SACOS Life Assurance Company Limited, an independent Actuary reviews contract liabilities and carry out a liability adequacy test using current estimates of future contractual cash flows after taking into account the investment return expected on assets relating to the relevant long term business. For SACOS Insurance Company Limited, management carries out reviews and any deficiency is immediately recognised in the Life Assurance Fund or the Statement of Profit or Loss by establishing a provision for the losses arising from liability adequacy test (the unexpired risk provision).

(u) Tax

Current tax is the expected amount of taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.

(v) Revenue recognition

Gross written premiums


Gross written premium comprise the total premium receivable for the whole period of cover provided by contracts entered into during the accounting period and are recognised as revenue (earned premiums) on the date on which the policy incepts, proportionally over the period of coverage.

Long-term insurance

Premiums earned on long-term life contracts are recognised as revenue when they become payable by the policyholder, i.e. the date when payments are due.

Premiums on long term insurance contracts which have been in force for less than three years and for which not all premium have been received are accrued for three months. When these policies lapse due to non receipt of premium after three months, then all related premium income accrued but not received from the date they are deemed to have lapsed is released to the Life Assurance Fund.

SACOS GROUP LIMITED



(v) Revenue recognition (Cont'd)

Earned premiums

22

Earned premiums represent gross written premiums net of reinsurance ceded to reinsurers and adjusted for unearned premiums.

Underwriting surplus

Underwriting surplus is determined for each class of business after taking into account inter alia , unearned premium reserves, outstanding claims and additional reserves.

Other income

Other income earned by the Group are recognised on the following bases: - Interest income

Interest income is recognised in the statement of profit or loss as it accrues and is calculated by using the effective interest rate method. Fees and commissions that are an integral part of the effective yield of the financia l asset or liability are recognised as an adjustment to the effective interest rate of the instrument. Investment income Investment income comprises dividend and rental income. Dividend income is recognised when the shareholders' right to receive payment is established while rental income is recognised on an accrual basis. Commission receivable Commission receivable is recognised as it accrues in accordance with the substance of the relevant agreements.

(w) Commission and agency expenses

Commission and agency expenses represent costs directly incurred in securing premium on insurance policies. Income derived from reinsurers in the course of ceding of premium to reinsurers is netted off against the commission and agency expenses and the balances are charged to the statement of profit or loss in the period in which they are incurred.

(x) Management fees

The Company, SACOS Group Limited , charges 1% of the Gross written Premium to it s subsidiary, SACOS Insurance Company Limited at the end of each financial year as management fee. It also charges 0. 5% of the balance of the Life Fund at the end of each reporting period as management fee for managing the Life Fund.

(y) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliab le estimate can be made of the amount of the obligation.

(z) Dividend distribution

Dividend distribution to the shareholders of SACOS Group Limited is recognised as a liability in the Group's financial statements in the period in which the dividends are declared.

SACO$ GROUP LIMITED 23


3. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS

The Group issues contracts that transfer insurance or financial risk or both. This section summarises the main risks linked to long-term insurance business and the way they are managed.

A description of the significant risk factors is given below together with the risk management policies

applicable.

(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 pncmg 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.

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 variabil ity of the expected outcome.

(i) Insurance Contracts

Concentration, frequency and severity of claims


The frequency and severity of claims can be affected by several facrors , the most significant resulting from severe weather events like cyclones, fire and allied perils and their consequences and liability claims awarded by the Court. Inflation is another factor that may affect claims payments.

Underwriting measures are in place to enforce appropriate risk selection criteria. For example, the Subsidiary has the right to review terms and conditions on renewal or not to renew an insurance contract.

The reinsurance arrangements for proportional and non-proportional treaties are such that the Subsidiary is adequately protected and would only suffer predetermined amounts.

Long-term insurance

For contracts where death is the insured risk, the most significant factors that could increase the overall frequency of claims are epidemics or wide spread changes in lifestyle, such as eating, smoking and exercise habits, resulting in earlier or more claims than expected. For contracts where survival is the insured risk, the most significant factor is continued improvement in medical science and social conditions that would increase longevity. Insurance risk is therefore subject to contract holders' behaviours and the impact of contract holders' behaviours have been factored into the assumptions used

to measure insurance liabilities.

For contracts with fixed and guaranteed benefits and fixed future premiums, there are no mitigating items and conditions that reduce the insurance risk accepted.



3. MANAGEMENT OF .INSURANCE AND FINANCIAL RISKS (CONT'D)

(a) Insurance risk (Cont'd)

(i) Insurance Contracts (Cont'd)

Long-term insurance (Cont'd)

For contracts with DPF, the participating nature of these contracts results in a significant portion of the insurance risk being shared with the insured party.

The Subsidiary manages these risks through its underwriting strategy and reinsurance arrangements. The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. For example, death risk and survival risk are balanced across its portfolio. -Medical selection is also included in the underwrit ing procedures with premiums varied to reflect the health condition and family medical history of the applicants. There are defined retention limit on any single life or group life insured and reinsures the excess of the insured benefit over its retention limit. The Subsidiary does not have any reinsurance covers for contracts that insure survival risk.

Concentration of insurance risk

The following tables disclose the concentration of claims by class of business gross and net of reinsurance for short -term insurance:

Class of business

Fire ft Allied Perils Motor Marine

IBNR Total outstanding claims at December 31, 2014 (notes 17 & 23(a))

Class of business

Fire ft Allied Perils Motor Marine

IBNR Total outstanding claims at December 31, (notes 17 8: 23(a))

No. of Claims

295 2,294

35 2,624

No. of Claims

370 2,444

27 2,841

Gross SR'000 5,705 6,840 2,800

15,345

3,000 18,345

Gross SR'OOO

2,149 5,945

613 8,707

3,000 11,707

2014

Net SR'000 4,346 6,840

755 11,941

3,000 14,941

2013

Net SR'OOO 1,934 5,945 (765)

7,114

3,000 10,114



3. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONT'D)



Sources of uncertainty in the estimation of future claim payments


Claims are payable on a mix of claims-occurrence and claims-made basis. On a claims-occurrence basis, mostly for the liabilities classes of business, the Subsidiary is liable for all insured events that occurred during the term of the contract , even if the loss is discovered after the end of the contract term. On a claims-made basis, which is mostly with respect to the property classes of business, the claim is only enterta ined if the policy was in force at the time the claim is asserted for coverage to apply. As a result, liability claims are settled over a long period of time. There are several variables that affect the amount and timing of cash flows from these contracts . These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures adopted. The compensation paid on these contracts is the mone· 'Y awards granted for bodily injury by employees (for employer's liability covers) or members of the public (for public liability covers). Such awards are lump-sum payments that are calculated as the present value of the lost earnings and rehabilitation expenses that the inju red party will incur as a result of the accident.

Claims can be either long tail or short tail. Short tail claims are settled within a short time and the estimation processes reflect with a higher degree of certainty all the factors that influence the amount and timing of cash flows about the estimated costs of claims. However, for long tail claims (e.g. bodily injury), the estimation process is more uncertain and depends largely on external factors such as Court awards for example.

All reasonable steps are taken to ensure that appropriate information are available regarding claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established. The liability for these contracts comprise a provision for IBNR and a provision for reported claims not yet paid at the reporting date. The Subsidiary has ensured that liabilities on the statement of financial position at reporting date for existing claims whether reported or not, are adequate.

Long-term insurance

Uncertainty in the estimation of future benefit payments and premium receipts for long-term insurance contracts arises from the unpredictability of long-term changes in overall levels of mortality and the variability in contract holders' behaviour.

The Subsidiary uses appropriate base tables of standard mortality according to the type of contract being written and statistical data are used to adjust the crude mortality rates to produce a best estimate of expected mortality for the future. When data is not sufficient to be statistically credible, the best estimate of future mortality is based on standard industry tables adjusted for experience.



3. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS



Claims development

The development of insurance liabilities for the short-term insurance business provides a measure of the Subsidiary's ability to estimate the ultimate value of claims. The table below illustrates how the estimates of net claims outstanding for each year have changed at successive year ends and the table reconciles the cumulative claims to the net amount appearing in the statements of financial position (see notes 17 and 23) for the gross and net claims outstanding at December 31, 2014.

Net insurance contract liabilities Accident year

At end of accident year One year later

Two years later Three years later

Four years later Current estimate of cumulative claims incurred

At end of accident year One year later

Two years later Three years later

Four years later Cumulative claims paid to date

Net contract liabilities at reporting date

Incurred but not reported (IBNR) Net outstanding claims at December 31, (notes 17 &: /23(a))

2010 2011 SR'OOO SR'OOO

29,741 48,912 36,927 63,847

37,426 62,558 36,729 62,074 35,469

35,469 62,074

(23,684) ' (48,912) (32,374) (63,847) (35,085) (62,558) (35,400) (61,356) (35,447)

(35,447) (61,356)

2Z 718

2012 SR'OOO

35,267 47,892

51,995

51,995

(33,331) (46,971)

(50,706)

(50,706)

1,289

2013 SR'OOO

37,912 50,384

50,384

(37,043)

(47,335)

(47,335)

3,049

2014 Total SR'OOO sR·ooo

34,775

34,775 234,697

(27,912)

(27,912) (222,756)

6,863 11,941

3,000 14,941

SACOS GROUP LIMITED




(i) Jnsvrance Contracts (Cont'd)

Claims development (Cont'd)

27

The Subsidiary has taken advantage of the disclosure requirement of Para 44 of IFRS 4 which allows disclosure of info rmation about claims development limited to five years prior to first time adoption of this IFRS.

Due to lack of available informat ion, the claims development tables have been disclosed for gross claims only.

The Subsidiary has in place a series of quota-share and excess of loss covers in each of the last four years to cover for losses on these cont racts.

(b) Financial risk

The Group's activities are exposed to financial risks through its financial assets, financial liabilities, insurance and reinsurance assets and liabilities. In particular, the key financial risk is that investment proceeds are not sufficient to fund the obligations arising from insurance contracts.

The most important components of this financial risk are: • Market risk (which includes currency risk, interest rate risk and equity price risk); • Credit risk; • Liquidity risk; • Capital management; and • Fair value estimation.

The Group's risk management policies are designed to identify and analyse these risks, to set appropriate risk limits and control , and to monitor the risks and adherence to limits by means of reliable and up-to-date administrative and information systems.

The Group regularly reviews its risk management policies and systems to reflect changes in markets, products and emerging best practice. The Board recognises the critical importance of having efficient and effective risk management policies and systems in place. To this end, there is a clear organisational structure with delegated authorities and responsibilities from the Board to Board Committees, executives and senior management. Individual responsibility and accountability are designed to deliver a disciplined, conservative and constructive culture of risk management and control.

(i) Market risk

Market risk is the risk of adverse financial impact due to changes in fair values or future cash flows of financial instruments from fluctuation in interest rates, equity prices, property prices and foreign currency exchange rates.

The Group has established policies which set out the principles that they expect to adopt in respect of management of the key market risks to which they are exposed. The Group monitors adherence _to this market risk policy through the Group's Investment Committee which is also responsible for managing

market risk at Group level.

SACOS GROUP LIMITED



(b) Financial risk (Cont'd)

(i) Market risk (Cont'd)

28

The financial impact from market risk is monitored at board level through investment reports which examine impact of changes in market risk on investment returns and asset values. The Group's market risk policy sets out the principles for matching liabilities with appropriate assets, the approaches to be taken when liabilities cannot be matched and the monitoring processes that are required.

Currency risk

The Group purchases reinsurance contracts internationally, thereby exposing it to foreign currency fluctuations. The Group's primary exposures are with respect to the Euro, US Dollar and UK pound sterling.

The Group also has a number of investments in foreign currencies, namely US Dollar, which are exposed to currency risk.

Management closely monitors currency risk exposures against pre-determ ined limits. Exposure to foreign currency exchange risk is not hedged.

THE GROUP

· The Group's financial assets and financial liabilities are detailed below:

At December 31, 2014 Rupee USO Euro GBP Total SR'OOO SR'OOO SR'OOO SR'OOO SR'OOO

Assets Investment in financial assets 87,455 14,029 101,484 Trade and other receivables 19,866 33,659 113 482 54,120 Cash & cash equivalents 48,610 12,939 61,549 Total assets 155,931 60,627 113 482 217,153

Liabilities Gross outstanding claims and IBNR 18,345 18,345 Gross unearned premiums 67,646 67,646 Trade and other payables 13,804 11,490 455 885 26,634 Total liabilities 99,795 11,490 455 885 112,625



3.

(b)

(i)

MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONT'D)

Financial risk (Cont'd)

Market risk (Cont'd)

Currency risk (Cont 'd)

At December 31, 2013 - re-stated Rupee USO Euro GBP Total SR'OOO SR'OOO SR'OOO SR'OOO SR'OOO

Assets Investment in financial assets 108,900 12,304 121,204 Trade and other receivables 17,350 26,708 1,375 591 46,024 Cash & cash equivalents 19,924 3,803 23,727 Total assets 146,174 42,815 1,375 591 190,955

Liabilities Gross outstanding claims and IBNR 11,707 11,707 Gross unearned premiums 53,153 53,153 Trade and other payables 4,959 9,629 310 388 15,286 Bank overdraft 7,221 7,221 Total liabilities 77,040 9,629 310 388 87,367

THE COMPANY

The Company's financial assets and financial liabilities are denominated in Seychelles Rupees.

Sensitivity analysis

If the rupee had weakened/strengthened against the following currencies with all variables remaining constant, the impact on the results for the year would have been as shown below mainly as a result of foreign exchange gains/losses.

Impact of a + / -5% change on results

At December 31, 2014 Investment in financial assets Cash & cash equivalents

At December 31, 2013 Investment in financial assets Cash & cash equivalents

Interest rate risk

THE GROUP USD

SR'OOO

701 647

615 190

Interest rate risk arises from the Group's investments in fixed income securities (held-to-maturity Investments), bank balances and deposits which are exposed to fluctuations in interest rates. Exposure to interest rate · risk on short term business is monitored by the Investment Committee through a close matching of assets and liabilities. The impact of exposure to sustained low interest rates is also

regularly monitored .

SACOS GROUP LIMITED




(i) Market rjsk (Cont'd)

Interest rate risk (Cont'd)

30

Short term insurance liabilities are not directly sensitive to the. level of market interest rates as they are undiscounted and contractually non-interest bearing. However, due to the time value of money and the impact of interest rates on the level of bodily injury related claims incurred by certain insurance contract holders, a reduction for interest rates would normally produce a higher insurance liabil ity .

The inte rest rate profiles of the financial assets of the Group as at December 31, were as follows: 2014 2013

Held-to-maturity investments Short term deposits Bank balances

Rates 1.90% · 14%

3.10% · 3.40% 1%

Rates 1.74% · 16.50%

Nil 1%

If interest rates had been 50 basis points higher /lower and all other variables were held constant, the Group's surplus for the year ended December 31, 2014 would increase/decr ease by SR 33k (2013: SR 40k):

The Company does not have any interest-rate bearing assets and liabilities.

(ii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instruments fails to meet all or part of their obligations. The Group's credit risk is primarily attributable to: - reinsurer's share of insurance liabilities; - amounts due from reinsurers in respect of claims already paid; - amounts due from insurance contract holders, and · amounts due from insurance intermediaries.

The amounts presented in the statements of f inancial position are net of allowances for estimated irrecoverable amount receivables, based on management's prior experience and the current economic environment ..

The Group has no significant concentration of credit risk in respect of its insurance business with exposure spread over a large number of clients, agents and brokers. The Group has policies in place to ensure that sales of services are made to clients and brokers with sound credit history.

Reinsurance credit exposures

The Group is however exposed to concentrations of risks with respect to its reinsurers due to the nature of the reinsurance market and th-e restric ted range of reinsurers that have acceptable credit ratings. The Group is exposed to the possibility of default by its reinsurers in respect of share of insurance liabilities and refunds in respect of claims already paid.

SACOS GROUP LIMITED


3. MANAGEMENT OF INSURANCE ANO FINANCIAL RISKS (CONT'D)


(ii) Credit risk

Reinsurance credit exposures (Cont'd)

31

The Group manages its reinsurance counterparty exposures and the reinsurance department has a monitoring role over this risk. The Group's largest reinsurance counterparty are International General Insurance (IGI) and Swiss Re. At December 31, 2014, the reinsurance assets recoverable was SR 1. 7k (2013: IGI and Munich Re was SR 1.3m).

This exposure is monitored on a regular basis for any shortfall in the claims history to verify that the contract is progressing as expected and that no further exposure for the Group will arise.

Management also monitors the financial strength of reinsurers and there are policies in place to ensure that risks are ceded to top-rated and credit worthy reinsurers only.

The following table provides information regarding the carrying value of trade and other receivables that have been impaired.

Neither past due nor impaired Impaired Carrying amount at year-end

(iii) Liquidity risk

Trade a other receivables THE GROUP THE COMPANY

2014 2013 2014 2013 SR'000 SR'000 SR'000 SR'000 53,216 45,574 3,057 904

904 450 54,120 46,024 3,057 904

The Group has strong liquidity positions and liquidity risk is considered to be low. Through the application of the liquidity management policy, the Group seeks to maintain sufficient financial resources to meet its obligations as they fall due.

The tables below analyses the Group and the Company's financial assets and liabilities to the relevant maturity groupings based on the remaining years of repayment.

'

SACOS GROUP LIMITED


3. MANAGEMENT OF INSURANCE ANO FINANCIAL RISKS (CONT'D)


(iii) Liquidity risk

Maturities of financial assets and liabilities

THE GROUP < 1 year

SR'OOO At December 31, 2014 Assets Investment in financial assets 101,484 Trade and other receivables 51,120 Cash and cash equivalents 61,549 Total assets 214,153

Liabilities Outstanding claims 18,345 Gross unearned premiums 67,646 Trade and other payables 26,634 Total liabilities 112,625

At December 31, 2013 Assets Investment in financial assets 70,228 Trade and other receivables 46,024 Cash and cr.'.'f-. c•uu1va!ents 23,727 Total asseL 139,979

Liabilities Outstanding claims 11,707 Gross unearned premiums 53,153 Trade and other payables 15,286 Bank overdraft 7,221 Total liabilities 87,367

THE COMPANY

The maturities of financial assets and liabilities are all less than one year.

(iv) Capital Management

THE GROUP

32

1 to 5 years Total SR'OOO SR'OOO

101,484 3,000 54,120

61,549 3,000 217,153

18,345 67,646 26,634

112,625

50,976 121,204

46,024 23,727

50,976 190,955

11,707 53,153 15,286 7,221

87,367

The operat ions of the Group are subject to regulatory requirements within the jurisdiction where it operates, Such regulations not only prescribe approval and monitoring of activities but also impose certain restrictive provisions to minimise the risk of default and insolvency on the part of the Group to meet unforeseen liabilities as these arise.

SACOS GROUP LIMITED




(iv) Cap;tal Management (Cont'd)

THE GROUP (CONT'D)

33

As per Section 15 of the Insurance Regulations 2009, the stated capital of a licensed insurer carrying short (general) insurance and long term (life) insurance businesses shall be SR 3m respectively.

The solvency margin of an insurance fund established in respect of short (general) insurance business to be maintained by a licensed insurer at all times during any accounting period shall be:-

Short-term insurance - Not less than SR 2m;

• 20% of net premium income of the Fund in the preceeding accounting period; or - 20% of loss reserves of the fund at the end of the preceeding accounting period.

whichever is the highest.

Long-term insurance

- 3 per cent of the insurer's liabilities as determined under regulation 19 in respect of nonparticipating policies, and 2 per cent of such liabilities in respect of participating policies, as at the end of the preceding accounting period; and

- 1 per cent of the sum insured at risk for policies the original term of which is two years or less, and 0.2 per cent of the sum insured at risk for policies the original term of which is more than two years, as at the end of the preceding accounting period.

THE COMPANY

The Company has no long term debt. The prior year overdraft balance resulted from book entries.

(v) Fair Value estimation

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from for example, a stock exchange and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise primarily quoted equity investments classified as trading securities or available-for-sale classified as trading securities or available-for-sale.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.lf one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.



4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

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

circumstances.

Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabil ities within

the next financial year are discussed below.

(a) Insurance Contracts

The uncertainty inherent in the financial statements of the Group arises. principally in respect of the technical provisions. The technica l provisions of the Group include provision for unearned premiums and outstanding claims (including IBNR).

Estimates of future claims payments


Outstanding claims provision is determined based upon knowledge of events, terms and conditions of relevant policies, on interpretation of circumstances as well as previous claims experience. Similar

cases and historical claims payment trends are also relevant .

The Group employs a variety of techniques and a number of different bases to determine appropriate

provisions. These include: • terms and conditions of the insurance contracts; • knowledge of events; • court judgement; • economic conditions; • previously settled claims; • estimates based upon a projection of claims numbers and average cost; and

• expected loss ratios.

Large claims impacting each relevant business class are generally assessed separately, being measured either at the face value of the loss adjuster's recommendations or based on management's experience.

Provisions are calculated gross of any reinsurance recoveries. A separate estimate is made of the amounts that will be recoverable from reinsurers based upon the gross provision and having due regard

to collectability.



4.· CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT'D)

Critical accounting estimates and assumptions (Cont'd)

(a) Insurance Contracts (Cont'd)

Estimates of future claims payments (Cont'd)

Long-term insurance

Long-term business technical provisions are computed using statistical or mathematical methods.

The computations are made by the Subsidiary's Actuaries on the basis of recognised actuarial methods, with due regard to the actuarial principles laid down by the law and by actuarial best practices. The methodology takes into account the risks and uncertainties of the particular classes of long-term business written and the results are certified by the professionals undertaking the valuations.

The determination of the liabilities under long-term insurance contracts is dependent on estimates made by the Subsidiary. Estimates are made as to the expected number of deaths for each of the years in which the Subsidiary is exposed to risk. The Subsidiary bases these estimates on standard industry mortality tables that reflect recent historical mortality experience, adjusted where appropriate to reflect the Subsidiary's own experience. For contracts that insure the risk of longevity, appropriate but not excessively prudent allowance is made for expected mortality improvements. However, continuing improvements in medical care and social conditions could result in improvements in longevity in excess of those allowed for in the estimates used to determine the liability for contracts where the Subsidiary is exposed to longevity risk.

For contracts without fixed terms, it is assumed that the Subsidiary will be able to increase mortality risk charges in future years in line with emerging mortality experience.

Estimates are also made as to the future investment income arising from the assets backing long-term insurance contracts . These estimates are based on current market returns as well as expectations about future economic and financial developments.

For long-term insurance contracts with fixed and guaranteed terms and with DPF, estimates are made in two stages. Estimates of futu re deaths, voluntary terminations , investment returns and administration expenses are made at the inception of the contract and form the assumptions used for calculating the liabilities during the life of the contract.

A margin for risk and uncertainty is added to these assumptions. These assumptions are ' locked in' for the duration of the contract. New estimates are made each subsequent year in order to determine whethe r the previous liabilities are adequate in the light of these latest estimates. If the liabilities are considered adequate, the assumptions are not altered. If they are not adequate, the assumptions are altered ('unlocked') to reflect the best estimate assumptions.

Sensitivity

The reasonableness of the estimation process is tested by an analysis of sensitivity around several different scenarios and the best estimate is used.

SACOS GROUP LIMITED


4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT'D)


(a) Insurance Contracts (Cont'd),

Uncertainties and judgements

36

The uncertainty arising under insurance contracts may be characterised under a number of specific headings, such as:

• uncertainty as to whether an event has occurred which would give rise to a policy holder suffering

an insured loss; • uncertainty as to the amount of insured loss suffered by a policyholder as a result of the event

occurring; and • uncertainty over the timing of a settlement to a policyholder for a loss suffered.

The degree of uncertainty will vary by policy class according to the characteristics of the insured risks. For certain classes of policy, the maximum value of the settlement of a claim may be specified under the policy terms while for other classes, the cost of a claim will be determined by an actual loss suffered by the policyholder.

There may be some reporting lags between the occurrence of the insured event and the time it is actually reported . Following the identification and notification of an insured loss, there may still be uncertainty as to the magnitude and timing of the settlement of the claim. There are many factors that will determine the level of uncertainty such as judicial trends, unreported information etc.

(b) Reinsurance

The Group is exposed to disputes on, and defects in, contract wordings and the possibility of default by their Reinsurers. The Group monitors the financial strength of their Reinsurers. Allowance is made in the financial statements for non-recoverability due to Reinsurer's default as required.

(c) Held-to-maturity investments

The Group follows the guidance of International Accounting Standard (IAS) 39 · Recognition and Measurement" on classifying non-derivative financial assets with fixed or determinable payments and fixed maturity as held-to-maturity. In making their judgement for classification, the Group evaluates its intention and ability to hold such investments to maturity.

If the Group fails to keep these investments to maturity other than for specific circumstances explained in IAS 391 it will be required to reclassify the whole class as available-for-sale. The investments would therefore be measured at fair value and not amortised cost.

(d) Impairment of other assets

At the end of each reporting period, management reviews and assesses the carrying amounts of other assets and where relevant write them down to their recoverable amounts based on best estimates.

( e) Pension benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost for pensions include the discount rate. Any changes in these assumptions wil l impact the carrying amount of pension obligations.


NOTES TO THE FINANCIAL STATEMENTS -YEAR ENDED DECEMBER 31, 2014

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT'D)


(e) Pension benefits (Cont'd) The Group determines the appropriate discount rate at the end of each year . This is the interest rate that should be used to determined the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension li~bility .

The Group has not carried out any actuarial valuation since the Directors have based themselves on the method as prescribed by the Seychelles Employment Act and they have estimated that the amount of liability provided will not be materially different had it been computed by an external Actuary.

(f) Revaluation of investment property

The Group carries its investment properties at revalued amounts, with changes in fair value being recognised in the statement of profit or loss. The Group engaged an Independent Professional Valuer to determine the revalued amounts at December 31, 2014. The Valuer used a mix of valuation techniques consisting of discounted cash flow model and comparable market data. The valuation for the year ended December 31, 2013 was based on Directors' best estimates. They considered that the carrying amounts of the assets approximate their fair values.

The determined fair value of the investment properties is most sensitive to the estimated yield as well as the tong term occupancy rate .

(g) Shareholder's share of surplus of the Life Assurance Fund

Per the Insurance Act 2008, the surplus of the Life Assurance Fund is to be shared irrespectively by the policyholders and shareholders in the. ratio 90: 10. The determination of the share of surplus is usually done by the Group's Actuary based on assumptions and judgement. In the absence of the Actuarial report, the Directors usually base themselves on their best estimates and judgements to transfer the share of the surplus to shareholders.

(h) Claims incur red but not reported (IBNR)

The Group is yet to carry out an actuarial valuation of its general insurance business. In the meantime, the Directors have estimated an amount of SR 3m as IBNR based on previous years trends of incurred but not yet reported claims.

(i) Limitation of sensitivity analysis

The sensitivity analyses do not take into consideration that the Group's assets and liabilit ies are actively managed. Other limitations include the use of hypothetical market movements to demonstrate potential risk that only represent the Group's views of possible near-term market changes that cannot be predicted with any certainty .



5. EQUIPMENT

(a) THE GROUP

Furniture Motor Computer and fittings veh icles equipment Total

SR SR SR SR COST At January 1, 2013 2,331,277 4,572,387 6,739,162 13,642,826

Additions 168,077 300,000 341,209 809,286

At December 31, 2013 2,499,354 4,872,387 7,080,371 14,452,112 Additions 120,648 249,953 363,502 734,103 At December 31, 2014 2,620,002 5, 122,340 7,443,873 15,186,215

DEPRECIATION At January 1, 2013 1,271,971 3,319,005 6,033,391 10,624,367 Charge for the year 166,320 625,230 278,540 1,070,090 At December 31, 2013 1,438,291 3,944,235 6,311,931 11,694,457 Charge for the year 243,183 540,911 315,014 1,099,108 At December 31, 2014 1,681,474 4,485,146 6,626,945 12,793,565

NET BOOK VALUE At December 31, 2014 938,528 637 194 816,928 2,392,650

At December 31, 2013 1,061,063 928,152 768 440 2,757,655

(b) THE COMPANY Furniture Computer

and fittings equipment Total SR SR SR

COST At January 1, 2013 and December 31, 2013 195,694 60,254 255,948 Additions 24,957 24,957 At December 31, 2014 195,694 85,211 280,905

DEPRECIATION At January 1, 2013 57,961 33,140 91,101 Charge for the year 39,140 12,050 51, 190 At December 31, 201 3 97, 101 45,190 142,291 Charge for the year 35,877 10,042 45,919 At December 31, 2014 132,978 55,232 188,210

NET BOOK VALUE At December 31, 2014 62,716 29 979 92,695

At December 31, 2013 98,593 15,064 113 657

(C) Depreciation has been wholly charged in marketing and administrative expenses.



6. INVESTMENT PROPERTIES

At January 1, Additions Disposals Increase in fair value At December 31,

THE GROUP 2014

SR 36,911,468 9,368,510

1,153,549 47,433,527

2013 SR

42,198,130 2,260 ,717

(9,305,068) 1,757,689

36,911,468

(a) The investment property was valued in December 2014 at present market value by Messrs Hubert Alton Et Co., an independent professionally qualified valuer, and they have appropriate qualifications and .recent experience in the valuation of properties in the relevant locations. The present market value was determined on an open-market basis by reference to market evidence of transaction prices for similar propert ies. There has been no change to the valuation technique during the year as compared to the prior year.

(b) The fair value of the property has been valued based on valuation techniques used by external valuers and falls within category level 2 of the fair value hierarchy. No change was noted during the year as compared to the prior year.

(c) The following amounts have been recognised:

Rental income

Direct operating expenses generating rental income

7. INTANGIBLE ASSETS

(a) THE GROUP Computer software

SR COST At January 1, 2013 1,100,600 Additions 164,725 At December 31, 2013 1,265 ,325 Impairment loss (note 27) (411,367) Additions 49,913 At December 31, 2014 903,871

AMORTISATION At January 1, 2013 18,438 Charge for the year 7,273 At December 31, 2013 25,711 Charge for the year At December 31, 2014 25,711

NET BOOK VALUE

At December 31, 2014 878,160

At December 31, 2013 1,239,614

THE GROUP 2014

SR 2,218,550

693,702

Website SR

95,840

95,840

95,840

57,504 28,752

86,256 9,584

95,840

2013 SR

1,377,717 572,718

Total SR

1,196,440 164,725

1,361,165 (411,367)

49,913 999,711

75,942 36,025

111,967 9,584

121,551

878,160

9,584 1,249,198 ======

SACOS GROUP LIMITED


7. INTANGIBLE ASSETS (CONT'D)

(b) THE COMPANY

COST At January 1, 2013 and December 31, 2013

Additions At December 31, 2014

AMORTISA Tlo'N At January 1, 2013 Charge for the year At December 31, 201 3 Charge for the year At December 31, 2014

NET BOOK VALUE At December 31, 2014

At December 31, 2013

(c) Amortisation has been wholly charged in marketing and administrative expenses.

8. INVESTMENT IN SUBSIDIARIES

Investment at cost Investment recognised upon split (note 8(a)) Long-term receivables (note 8(b))

(a) Investment recognised upon split

40

Computer software

SR 25,711 49,913 75,624

18,438 7,273

25,711

25,711

49,913

THE COMPANY 2014&2013

SR 13,100,000 28,651,590 22,519,772 64,271,362

An amount of SR 35. 7m resulted upon the split of the SACOS Group Limited on January 1, 2009 when the retained earnings generated by the General Insurance bu_siness up to the split date was transferred to the Capital Contribution account. Subsequently in 2011, SR 7m was used to issue bonus shares to the Company's shareholders, thus resulting in remain ing balance above. No movement has been noted since then as well as

during the year ended December 31, 2014.

(b) The long term receivables are unsecured, interest free and with no fixed repayment terms. The Directors are of the opinion that these should be classified as non-current assets.

(c) Details of the subsidiary companies are as follows: 2014 & 2013

Name of subsidiaries Activities ~,;__;.;,..;.,;__ ______ _ Shareholding Amount % SR'OOO

SACOS Insurance Company Limited (SICL) Short-term insurance business 100 10,000

SACOS Life Assurance Company Limited (SLACL) Long-ter m insurance business 100 3,000

Sun Investment (Seychelles) Limited (SISL) Investment property 100 100

13,100



8. · INVESTMENT IN SUBSIDIARIES (CONT'D)

(d) All the above subsidiaries are incorporated in Seychelles and have December 31st year ends.

(e) The carrying amount of the long term receivable approximate its cost which is considered to be its fair value.

(f) Summarised f inancial information in respect of the Group's subsidiaries

Summarised statement of financial position and statement of profit or loss and other comprehensive income

December 31, 2014

Non-current assets Current assets Non-current liabilities Current liabilities Revenue Profit and total comprehensive income for the year

December 31, 2013

Non-current assets Current assets Non-current liabilities Current liabilities Revenue

Profit and total comprehensive income for the year

For SACOS Life Assurance Company Limited, there is no Business Assets and the Life Fund are consolidated.

SICL SISL Total SR'000 SR'000 SR'000 7,395 43,599 50,994

175,118 3,127 178,245 2,360 468 2,828

24,852 1,849 26,701 144,605 144,605

14 994 2,940 17 934

SICL SISL Total SR'000 SR'000 SR'000 52,732 33,500 86,232 98,873 9,072 107,945

1,759 366 2,125 18,996 736 19,732

129,839 129,839 13,556 1,414 14,970

line-by-line consolidation since only the Life

9. INVESTMENTS IN FINANCIAL ASSETS

(a) Investment in financial assets comprises held -to-maturity financial assets.

(b) The movement in investments in held-to-maturity financial assets may be summarised as follows: THE GROUP THE COMPANY

2014 2013 2014 2013 SR SR SR .SR

At January 1, 121,203,734 134,543,825 44,502,576 44,908,546 Additions 72,002,567 108,535,186 36,614,351 60,985,910 Matured (95,639,695) (127,654,769) (50,958,974) (64,238,895) Accrued interest 3,917,503 5,779,492 2,628,130 2,847,015 At December 31, 101,484,109 121,203,734 32,786,083 44,502,576

Analysed as fallows: Non-current 50,975,847 5,816,664 Current 101,484,109 70,227,887 32,786,083 38,685,912

101,484,109 121,203/34 32,786,083 44,502,576



9. INVESTMENTS IN FINANCIAL ASSETS (CONT'D)

(c) Held-to-maturity financial assets include the following:

(i) THE GROUP Maturity date Interest rate 2014 2013

% SR SR

At amortised cost Treasury bonds Nov 2015 8% 49,010,074 50,975,847

Term deposits with banks Jan 2015 to Jul 2015 1. 90% - 3.80% 47,204,563 70,227,887

Treasury bills Apr 2015 to May 2015 14% 5,269,472 101,484!109 121,203,734

(ii) THE COMPANY Maturity dnte Interest rate 2014 2013

% SR SR At amortised cost Treasury bonds r·fov 2015 8% 5,562,911 5,816,664 Term deposits with banks Jan 201~ to Jun 2015 1.50% - 3.80% 26,074,106 38,685,912

Treasury bills Apr 2015 to May 2015 14% 1,149,066 32,786!083 44,502,576

(d) Held-to maturity investments are all denominated in Seychelles rupees.

10. DEFERRED TAX ASSETS/(LIABILITIES)

(a) The movement on the deferred tax account is as follows: THE GROUP THE COMPANY

2014 SR

At January 1, - As previously reported - Effect of adopting IAS 12 265,905 - As restated 265,905 Charge for the year (notes 10(c) a 13(b)) 169,510 -------At December 31, 435,415

Re-stated 2013

SR 2014

SR

Re-stated

2013 SR

1,050,892 (3,156) (24,317) --------------1,050,892 (3,156) (24,317) (784,987) 5,746 21,161 ---~-265,905 2,590 (3,156)

(b) Deferred tax assets and liabilities are offset when the income taxes relate to the same fiscal authority on the same enti+" ThP following amounts are shown in the statements of financial position:

THE GROUP THE COMPANY

Re-stated Re-stated

2014 2013 2014 2013

SR SR SR SR

Deferred tax assets 1,054,020 1,203,776 2,590 Deferred tax liability (618,605) (937,871) (3,156)

Net deferred tax assets 4351415 265,905 2 590 {3,156)



10. DEFERRED TAX ASSETS/LIABILITIES (CONT'D)

(c) Deferred tax assets and liabilities during the year are attributable to the following items:

(i) Deferred tax assets

THE GROUP Retirement Accelerated

benefit tax obligations depreciation Total

SR SR SR At January 1, 2014 - As previously reported - Effect of adopting IAS 1 2 672,006 531,770 1,203,776

- As restated 672,006 531,770 1,203,776

Charge for the year 223,709 (373,465) !149,756)

At December 31, 2014 895,715 158,305 1,054,020

At January 1, 2013 - As previously reported · Effect of adopting IAS 12 547,792 645,967 1,193,759

· As restated 547,792 645,967 1,193,759

Charge for the year 124,214 (114,197) 10,017

At December 31, 2013 672,006 531,770 1,203,776

THE COMPANY Accelerated

tax depreciation

SR

At January 1, 20 14 - As previously reported - Effect of adopting IAS 12 (3,156)

- As restated (3, 156)

Charge for the year 5,746

At December 31, 2014 2,590

At January 1, 2013 · As previously repor ted - Effect of adopting IAS 12 (24,317)

· As restated (24,317)

Charge for the year 21,161

At December 31, 2013 (3,156}

SACOS GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS - YEAR ENDED DECEMBER 31, '2014

10. DEFERRED TAX ASSETS/LIABILITIES (CONTD)

(ii) Deferred tax liability

THE GROUP

At January 1, 2014 - As previously reported - Effect of ad9pting IAS 12

- As restated Charge for the year

At December 31, 2014

At January 1, 2013 - As previously reported - Effect of adopting IAS 12 - As restated Charge for the year At December 31, 2013

There were no deferred tax liability for the Company.

11. INVENTORIES

Spare parts

44

Unrealised exchange

differences SR

(937,871) (937,871) 319,266

(618,605)

(142,867) (142,867) (795,004)

(937,871)

THE GROUP AND THE COMPANY

2014 SR

7,253,647

2013 SR

7,678,540

The cost of inventories recognised as expense and included in cost of sales amounted to SR 424,893 (2013:

SR 823,142) for both the Group and for the Company (note 27).

12. TRADE AND OTHER RECEIVABLES

Premium receivables Provision for credit impairment (note 12{a))

Recoverable from reinsurers - share of notified claims

(notes 17 & 23(a)) · - share of unearned premiums

(notes 17 & 23(b)) Amount receivable from related company (note 12(d))

Other receivables and prepayments

THE GROUP Re-stated

201 4 2013

SR SR

22,584,130 19,811,035

(903,505) (450,236) 21,680,625 19,360,799

3,404,709 1,593,667

17,357,334 8,427,696

2,354,575 2,217,943

9,322,809 14,423,668

54, 120,052 . 46,023,773

THE COMPANY

2014 SR

3,056,209 1,105

3,057,314

Re-stated

2013 SR

900,000 3,766

903,766

SACOS GROUP LIMITED


12. TRADE AND OTHER RECEIVABLES (CONT'D)

(a) The movement in the provision for credit impairment is as follows:

At January 1, Charged to the statement of profit or loss At December 31,

THE GROUP

2014 SR

450,236 453,269 903,505

45

2013 SR

363,572 86,664

450,236

(b) As at December 31, 2014, SR 903,505 (2013: SR 450,236) aged over 6 months were past due and impaired. These relate to a number of independent customers who are in unexpectedly difficult economic situations.

(c) The carrying amount of trade and other receivables are denominated in the following currencies: THE GROUP THE COMPANY

2014 SR

Seychelles rupee 19,866,395 US dollar 33,658,791 Euro 113,046 UK pound sterling 481,820

54,120,052

Re-stated 2013

SR 17,350,076 26,707,769

1,374,699 591,229

46,023,773

2014 SR

3,057,314

3,057,314

Re-stated 2013

SR 903,766

903,766

(d) The amount receivable from related company is from SACOS Life Company Limited. The above amount is unsecured, interest free and with no fixed repayment terms. It has been classified as a current asset based on Director's opinion.

(e) The carrying amounts of 'trade and other receivables' approximate their fai r values.

(f) The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables ment ioned above.

(g) The Company does not hold any collateral as security.

(h) The other classes within trade and other receivables do not contain any impaired assets.

13. CASH AND CASH EQUIVALENTS THE GROUP THE COMPANY

2014 2013 2014 2013 SR SR SR SR

Cash in hand 10,072 7,026 1,000 1,000 Bank balances 51,701,960 23,610,756 63,153 31,222 Short term deposits 9,837,286 109,552 1,553,326 109,552

61,549,318 23,727,334 1,617,479 141,774 Bank overdraft (note 13(a)) (7,220,828) (3,220,173)

61,549,318 16,506,506 1,617,479 p,078,399}

(a) The bank overdraft was unsecured and resulted from book entries.



14. LIFE BUSINESS ASSETS/LIFE ASSURANCE FUND THE GROUP

2014 2013 SR SR

Non-current Assets Property and Equipment 2,872,735 24,076,081

Investment properties 215,224 ,538 177,716,222

Intangible assets 561,487 106,100

Investment in f inancia l assets 8,188,912 40,368,328

Loans and receivables 19,283,061 15,170 ,724

Deferred lease rental 10,947,178 11,097,139 257,077,911 268,534,594

Current Assets Trade and other receivables 13,714,173 13,735,156 Loans and receivables 12,398,726 11,124,704 Investment in financial assets 116,567,398 96,058 ,922 Cash and cash equivalents 10,997,749 8,848,364

153,678,046 129,767,146 Technical Provisions Gross outstanding claims 627,280 3,036,680 Gross unearned premiums 4,717,413 3,401,116

5,344,693 6,437,796 Non-Current liabilities Retirement benefit obligation 1,279,959 1,543,855

Current Liabilities Trade and other payables 6,068,832 5,190,593

Bank overdraft 39,562 701,461 6,108,394 5,892,054

Less: Share capital (3,000,000) (3,000,000)

Total life business assets/ Life Assurance Fund 395,022,911 381,428,035

(a) Movement in the Life Assurance Fund is as follows: THE GROUP

Re-stated

2014 2013 SR SR

At January 1, - As previously stated 382,352,996 364,520 ,175

- Adjustment for movement in deferred lease rental (149,961)

• Adjustment for operating lease rental paid (775,000)

· Adjustment for retirement benefit obligation (906,050)

· As re-stated 381,428,035 363,614,125

Surplus on life assurance fund for the year 15,427,148 17,682,829

Fair value change of available-for-sale assets 153,756 1,031,081

Share of surplus to shareholder for the year (1,523,828) (900,000)

Prior year underprovision of share of surplus to shareholder (462,200)

At December 31, 395!022, 911 381,428,035



14. LIFE BUSINESS ASSETS/LIFE ASSURANCE FUND (CONT'D)

(b) The transfer of share of surplus to shareholders for 2014 was based on the actuarial report from State Insurance Company of Mauritius Ltd and on Directors' best estimate in 2013.

(c) The liability component of the Discretionary Participating Feature (DCF) is included in the Life Assurance Fund.

15. SHARE CAPITAL

Authorised and fully paid up At January 1, Capitalised in prior year: · Share premium (note 16)

· Retained earnings (page 7) ·

At December 31,


2014 2013 -----SR SR

70,000,000

70,000,000

35,000,000

23,239,094 11,760,906 70,000,000

(a) In 2013, following the bonus issues, there was also a share split in the ratio 5: 1, thus increasing the number of shares from 400,000 shares of SR175 each to 2,000,000 shares of SR35 each.

16. SHARE PREMIUM

At January 1, Issue of bonus shares (note 15) At December 31,

17. INSURANCE LIABILITIES AND REINSURANCE ASSETS

Gross Claims notified (note 23(a)) Unearned premiums (note 23(b))

Claims incurred but not reported (IBNR) (notes 17(a) & 23(a)) Total gross insurance liabilities (note 23)

Recoverable from reinsurers Claims notified Unearned premiums Total reinsurer's share of insurance liabilities (note 23)

Net Notified claims (note 12) Unearned premiums (note 12) Claims incurred but not reported (IBNR)

Total net insurance liabilities (note 23)


2014 SR

2013 SR

23,239,094 (23,239,094)

THE GROUP

2014 SR

15,345,286 67,646,244

3,000,000 85,991,530

3,404,709 17,357,334 20,762,043

11,940,577 50,288,910

3,000,000 65,229,487

2013 SR

8,707,236 53,153,197 3,000,000

64,860,433

1,593,667 8,427,696

10,021,363

7,113,569 44,725,501

3,000,000 54,839,070



17. INSURANCE LIABILITIES AND REINSURANCE ASSETS (CONT'D)

(a) The Company has not carried out any actuarial valuation with respect to its insurance liabil i ties . In this respect, the amount provided as IBNR has been based on Directors' best estimates and disclosed as a gross

and a net amount of SR 3m.

18. MORTGAGE PROTECTION FUND

At January 1, Release during the year At December 31,

THE GROUP

2014 2013 SR SR

680,796 885,598

(174,343) _ ____,_(2_0-'4 ''-80_2-"-) 506,453 680,796

(a) The Fund is designated for Mortgage Protection Insurance under a Home Ownership Scheme. Under this scheme, upon approval of their mortgage loan, borrowers are automatically charged 6% of the nominal value of the loan towards mortgage protection which is expected to cover the loan repayments in case of death or permanent disability. The 6% consists of 4% risk premium and 2% management fee for the Company which arises at inception of the loan.

(b) The full premium is amortised based on the duration of the loan with a corresponding amount being recognised each year, and the remainder carried forward as unearned premium .

19. FISHERIES AND AGRICULTURAL FUND

At January 1, and December 31,

THE GROUP 2014 & 2013

SR

2,000,000

(a) The Fund is designated for contributions to premiums payable under a Government sponsored/subsidised voluntary scheme. Under this scheme, the Agricultural Disaster and Fisheries Voluntary Insurance Scheme, farmers registered with the SAA and boat owners registered with the SF A are charged 4% of the insured values, to which the fund contributes 50%. The contributions would cover the insured items (crop, livestock , boats and employees/crew) in case of loss or damage, death following natural disasters and

· accidents, depending on the scheme applicable.

20. RETIREMENT BENEFIT OBLIGATIONS

Retirement benefit obligations is in respect of length-of-service compensation as per the Seychelles Employment Act , 1995 (as amended), Movement during the year is shown below:

At January 1, - As previously stated · Effect of adopting IFRS - As re-stated Charge for the year (note 26) Paid during the year At December 31,

THE GROUP 2014 2013

SR SR

2,125,180 1,734,960 2, 125 , 180 1,734,960

765,420 415,557 (62,935) __ ..l;.;.(2~5,:..;..3_37..:..)

2,827,665 2,125,180

SACOS GROUP LIMITED


21. TRADE AND OTHER PAYABLES

THE GROUP

Re-stated 2014 2013

SR SR Reinsurance liabilities 14,395,667 5,468,603 Other payables and accruals 12,238 ,430 8,989,828 Amount payable to related companies . (note 21 (a)) 827,767

261634,097 15,286,198

{a) The breakdown of amount payable from re lated companies is as follows:

SACOS Life Assurance Company Limited SACOS Insurance Company Limited

THE GROUP

2014 SR

2013 SR

827,767

827,767

49

THE COMPANY

Re-stated 2014 2013

SR SR

2,301,362 217,087

10,164,414 2,301,362 10,381,501

THE COMPANY

2014 SR

2013 SR

10,164,414

10,164 414

The amounts payable to related companies are unsecured, interest free and with no fixed repayment terms. These have been classified as current liabilities based on Directors· opinion.

(b) Currency analysis of trade and other payables is disclosed in note 3 (b )(i) .

{c) The carrying amount of trade and other payables approximate their amortised costs.

22. CURRENT TAX LIABILITIES

(a) Statement of financial position THE GROUP THE COMPANY Re-stated

2014 2013 2014 2013 SR SR SR SR

At January 1, - As previously stated 1,042,425 (3,201,873) (2,822,284) (3,612,169) - Effect of adopting IAS 12 (3,993,833) - As re-stated (2,951,408) (3,201,873) (2,822,284) (3,612,169) Paid during the year 7,357,956 6,729,448 1,977,657 1,959,885 Charge for the year (7,391,494) (6,478,983) (1,325,097) (1,170,000) Overprov ision in the prior years 2,102,372 2,102,372 At December 31, (882,574) (2,951,408) (67,352) (2,822,284)

{b) Statement of profit or loss THE GROUP THE COMPANY Re-stated

2014 2013 2014 2013 SR SR SR SR

Tax charge on the adjusted profit for the year (note 22(c)) 7,391,494 6,478,983 1,325,097 1,170,000

Overprovision in the prior years (2,102,372) (2,102,372) Deferred tax (cre dit )/charge (note 10) (169,510) 784,987 (5,746) (21, 161)

51119,612 7,263,970 (7831021) 11148,839



22. CURRENT TAX LIABILITIES (CONT'D)

(c ) The tax on the Company's profit before tax differs from the theoretical amount that would arise using the

basic rate of the Group as follows: THE GROUP

Re-stated

2014 2013 SR SR

Profit before taxation 31,131,407 25,805,875

Tax calculated at rates as shown below (note 22(d)) 11,849,683 10,020,482

Income not subject to tax (5,272,976) (4,826,624) (Excess of capital allowance over depreciation )/ Excess of depreciat ion over capital

allowance (276,737) (94,624) Expenses not deductible for tax purposes 606,5~1 333,757 Tax losses carried forwar d 526,642 Utilisation of previous years' tax losses (118,303) Tax cushion 603,236 519,350

7,391,494 6,478,983 Underprovision from prior years (2,102,372)

Tax charge for the year 5,289,122 6,478,983

(d) Applicable tax rates for 2013 and 2014 are as follows:

Taxable income threshold

5 SR, 1,000,000 > SR. 1,000,000

THE THE

COMPANY SUBSIDIARIES % %

25% 25%

========25=%= 30%

THE COMPANY Re-stated

2014 2013 SR SR

18,794,787 14,721,296

4,698,697 3,680,324 (3,422,581) (2,500,000)

(7,238) 5,741

56,219 (16,065) 1,325 ,097 1,170,000

(2, 102,372)

!]77,275~ 1,170,000



23. MOVEMENTS IN INSURANCE LIABILITIES AND REINSURANCE ASSETS

(a) Outstanding claims THE GROUP

2014 2013 Gross Reinsurance Net Gross Reinsurance Net -

SR SR SR SR SR SR

At January 1, 8,707,236 (1,593,667) 7,113,569 24,811,391 (8,731,891) 16,079,500 Notified claims Claims incurred during the year 52,243,572 (9,833,969) 42,409,603 42,154,379 663,433 42,817,812 Cash paid for claims settled in the year (45,605,522) 8,022,927 (37,582,595) (58,258,534) 6,474,791 (51,783,743}

15,345,286 (3,404,709) 11,940,577 8,707,236 (1,593,667) 7,113,569 Incurred but not reported (IBNR) 3,000,000 - 3,000,000 3,000,000 3,000,000 At December 31, (notes 12 & 17) 18,345,286 (3,404,709) 14,940,577 11,707,236 (1,593,667) 10,113,569

(b) Provision for unearned premiums THE GROUP

2014 2013 Gross Reinsurance Net Gross Reinsurance Net -

SR SR SR SR SR SR At January 1 , 53, 153,197 (8,427,696) 44 ,725,501 48,802,855 (2,252,734) 46,550,121 Written premiums in the year 144,604,512 (51,734,504) 92 ,870,008 129,838,864 (50,827,751) 79,011,113 Premiums earned during the year (130, 111,465) 42,804,866 (87,306,599) (125,488,522) 44,652,789 (80,835,733) At December 31, (notes 12 8: 17) 67,646,244 {17,357,334) 50,288,910 53,153,197 {8,427,696) 44,725,501

SACOS GROUP.LIMITED 52


24. INVESTMENT INCOME THE GROUP THE COMPANY

Re-stated Re-stated

2014 2013 2014 2013

SR SR SR SR

Interest income was in respect of:

· Financial assets 6,693,521 7,898,235 2,628,130 2,844,058

· Others 125,023 2,957

Dividend income and share of profit 11,500,000 10,000,000

6,693,521 8,023,258 14,128,130 12,847,015

25. SUNDRY INCOME THE GROUP THE COMPANY

Re-stated Re-stated

2014 2013 2014 2013

SR SR SR SR

Gain on foreign exchange differences 1,874,560 2,842,033

Write-back of surplus provision for VAT 2,043,969 1,289,302

Write-back of unutilised provision 585,939 Management fees 3,091,750 2,817,413 3,410,156 1,778,606

Profit on sale of investment properties 465,253

Sundry income 887,627 837,993 16,235 36,530

8,483,845 8,251,994 3,426,391 1,815,136

26. STAFF COSTS THE GROUP THE COMPANY

Re-stated Re-stated

2014 2013 2014 2013

SR SR SR SR

Salaries and wages 12,767,562 11,014,762 172,202 147,065

Retirement benefit obligations (note 20) 765,420 415,557

Other staff costs 1,806,190 2,230,971 8,262 6,550

15,339,172 13,661,290 180 464 153,615

27. MARKETING AND ADMINISTRATIVE EXPENSES THE GROUP THE COMPANY

Re-stated Re-stated

2014 2013 2014 2013

SR SR SR SR

Repairs and maintenance 532,501 563,359 825 3,126

Directors· emoluments (note 27(a)) 1,465,214 985,751

Lease rentals 3,328,735 3,125,334 250,000

Legal and professional fees 708,514 785,556

Marketing fees 1,204,141 733,678 29,096 22,200

Sponsorships 330,348 309,357

Corporate social responsibility 325,482 418,361 23,926

Tourism marketing tax 603, 111 . 667,281

Auditors ' remuneration 210,066 378,523 36,972 110,917

Electricity and water charges 1,336,567 1,265,458 62,077 69,838

Telecommunication 879,872 874,991

Intangib le asset impaired (note 7) 411,367

Travelling expenses 764,369 668,722 8,983 39,000

Printing, postage and stationery 1,058,957 1,080,039

Other administrative expenses 2,936,399 . 3,089,470 107,500 383,697

16,095,643 14,945,880 519,379 628,778


NOTES TO THE FINANCIAL STATEMENTS, YEAR ENDED DECEMBER 31, 2014

27. MARKETING AND ADMINISTRATIVE EXPENSES (CONT'D)

(a) Directors' emoluments THE GROUP 2014 2013

Fees Emoluments Total Total

SR SR SR SR E Agathine 28,766 28,766 43,081 P Bastide 82,805 82,805 68,790 W Confai t 84,574 84,574 86,472 JC O'Offay 80,291 80,291 86,472 M Felix 170,883 170,883 174,710 M Inch 32,794 32,794 G Ferley 151,638 A Hassan 28,766 28,766 48,027 A Lucas 15,535 937,716 953,251 842,640 J Ragain 84,574 271,920 356,494 45,215 L Rivalland 84,511 84,511 86,472 Y Suleman 88,856 88,856 86,472

782,355 1,209 ,636 1,99 1,991 1,719,989 Directors f ees ft emoluments for SLACL • (197,944) (328,833) (526,777) (734,238)

584 411 8801803 1,465,214 985,751

* For SACOS Life Assurance Company Limited (SLACL), there is no line-by-line consolidation and consequent ly its directors· fees and emoluments are not included i n the consolid ated marketing and administrative expenses.

28. OTHER OPERATING EXPENSES THE GROUP

Re-stated 2014 2013

SR SR Deprec iatio n of equipment 1,099,108 1,070,090 Amortisation of intangible asset 9,584 36,025 Other expenses 7,576 31,190

1,116,2 68 1, 137!305

29. EARNINGS PER SHARE

Earnings attributabl e to shareholders is based on:

Tota l comprehens ive income

Number of shares in issue

Earnings per share

30. CAPITAL COMMITMENTS

THE GROUP 2014

SR

SR 26,011,795

2,000,000

SR 13.01 =====

2013 SR

18,541,905

2,000,000

9.27

THE COMPANY

Re-stated 2014 2013

SR SR 45,919 51, 190

7,272

45 919 58,462

THE COMPANY

2014 SR

19,577 ,808

2,000,000

9.79

2013 SR

13,572,457

2,000,000

7

Capital commitments amounted to SR 450k as at December 31, 2014 (2013: SR 4.7m).


NOTES TO THE FINANCIAL ST A TEMENTS • YEAR ENDED DECEMBER 31, 2014

31. DIVIDENDS

Dividends of SR 7 per share amounting to SR 14m were declared and paid during the year under review (2013: SR 6 per share amounting to SR 12m).

32. CONTINGENT LIABILITIES

There were no contingent liabil ities as at December 31, 2014 (2013: Nil) .

33. RELATED PARTY TRANSACTIONS

(a) Transactions and balances with the following related part ies THE GROUP THE COMPANY

2014 2013 2014 2013 SR SR SR SR

Fellow subsidiaries

Sales of services 517,380 172,345 Loans and receivables 51,171,362 51,171,362 Management fees . 3,047,845 2,977,522 3,410,156 1,778,606 Dividends 11,500,000 10,000,000

Investment 64,271,362 64,271,362 Amount receivable 2,354,575 648,016 3,056,209 900,000 Amount payable 827,767 10,164,414

Ke':{_ management eersonnel

Sales of services 111,432 95,192 Loans and receivables 26,303 25,752

Shareholders

Dividends 14,000,000 12,000,000 14,000,000 12,000,000

Directors

Remuneration 1,991,991 1,719,989

(b) Key management personnel compensation THE GROUP 2014 2013

SR SR

Salaries and short-term employee benefits 2!772,907 1,939!846

(c) The related party transactions are within the normal course of the business.

(d) The terms and conditions in respect of related party receivables and payables have been disclosed under

respective notes.

(e) For the year ended December 31, 2014, the Group and the Company has not recorded any impai rment of receivables relating to amounts owed by related parties (2013: Nil) and this assessment is undertaken at the end of each financial year through examining the financial position of the related party and the market

in which the latter operate.

(f) There has been no guarantees provided or received for any related party receivables or payables.

SACOS GROUP LIMITED

55 NOTES TO THE FINANCIAL STATEMENTS -YEAR ENDED DECEMBER 31, 2014

34. SEGMENnNFORMATION

(a) Basis of segmentation

The Group generates revenue from prov1s10n of insurance services, sales motor vehicle spare parts and letting out residential apartments. The basis. of segmentation is however Casualty and Property and both segments provide insurance services.

Casualty The segment provides insurance services on liability claims of individuals/organisations for negligent acts/omissions. The segment accounts for 65% (2013: 62%) of the revenue of the Group.

Property The segment provides protection against risks to property such as fire, theft and some weather damage. The segment accounts for 35% (2013: 38%) of the revenue of the Group.

(b) Measurement of operating segment profit or loss, assets and liabilities

Management has determined the operating segments based on the reports reviewed by the Chief Executive Officer, who is responsible for allocating resources to the reportable segments and assesses their performance. The chief operating decision-maker assesses the performance of the operating segments based on a measure of profit or loss.

The accounting policies of the operating segments are the same as those described in· the summary of significant accounting policies.

There were no inter-segment sales during the year under review.

SACOS GROUP LIMITED


34. SEGMENT INFORMATION (CONT'D)

(c) Operating segment for the Group

December 31, 2014

Income

Gross written premiums

Net earned premiums

Underwriting surplus Rental incom e Investment income Other income Increase in fair value of investment properties

Expenses Staff costs Marketing and administrative expenses Other operating expenses Share of surplus of Life Assurance Fund

Profit before taxation Taxation charge Profit for the year

Short-term insurance Casualty Property

SR'OOO SR'OOO

93t488 51,117

7.!.,,L]93 1_b514

31,896 11,250

Unallocated SR'OOO

2,219 6,694 8,484 1,154

56

Total SR'OOO

144,605

8]L30]

43,146 2,219 6,694 8,484 1,154

61,697

(15,339) (16,096)

(1,116) 1,986

31,132 J_5, 120) 26L012

SACO$ GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS - YEAR ENDED DECEMBER 31 , 2014


(a) Operating segment for the Group (Cont'd)

December 31, 2014 (Cont'd)

Segment assets

Segment liabiliti es

Equity hold ers· inte rest

Capital expenditure

Depreciation

Amortisation

Lif e

SR'000

395,023

395,023


Casualty Property

SR'000 SR'000

138,135 24,899

45,928 16,301

Unallo cated

SR'000

112,513

56,613

57

Total

SR'000

~70,570

513,865

156~705

10, !5}

1,099

10

SACOS GROUP LIMITED




December 31 , 2013

Income Gross written premiums

Net earned premiums

Underwriting surplu s Rental income Investment incom e Other income Increase in fair value of investment properties

Expenses Staff costs Marketing and administrat ive expenses

Other operating expenses Share of surplus of Life Assurance Fund

Profit before taxation Taxation charge Profit for the year


Casualty Proper ty SR'OOO SR'OOO

80,722 49,117

67L677 13,159

28 ,104 7, 135 .

Unallocated SR'OOO

1,378 8,023

8,252

1,758

58

Total SR'OOO

129,839

80,836

35,239 1,378 8,023 8,252 1,758

54,650

(13,661)

(14,946)

(1,137) 900

25,806

(7,~64)

18,542

SACOS GROUP LIMIT ED




December 31, 2013 (Cont'd)

Segment assets

Segment liabilities

Equity holders · interest

Capital expenditure

Depreciation

Amortisation

Life SR'000

381,428

381,428

Short -term insurance

Casualty Property

SR'000 SR'000

81,026 8,336

46,320 5,596

Unallocated

SR'000

150,456

43,209

59

Total

SR'000

621,246

476,553

1441-693

3,235

1,070

36



35. RECONCILIATION OF TRANSITION FROM SEYCHELLES GAAP TO IFRS

(a) Reconciliation of Statement of Financial Position and the Statement of profit or loss from Seychelles GAAP to IFRS

The following table reconciles the relevant items of the Statement of Financial Position and the Statement of Profit or Loss reported under Seychelles GAAP to the amounts reported under IFRS as at the Transition Date of January 1, 2013 and December 31, 2013. Certain adjustments did not impact the Statement of Profit or

Loss but resulted in reclassifications.

THE GROUP December 31, 2013 January 1, 2013

Balance Balance reported reported

under Balance under Balance Seychelles Impact report ed Seychelles Impact reported

Notes GAAP of IFRS under IFRS GAAP of IFRS under IFRS --SR SR SR SR SR SR

Statement ot Financial Position

Deferred tax assets 35(b)(i) 265,905 265,905 1,050,892 1,050,892

Trade and other receivables 35(b)(ii) 41,264,256 4,759,517 46,023,773 34,704,410 15,463,296 50,167,706 Amount receivable from related companies 35(b)(ii) 1,548,016 (1,548,016) 4,447,536 (4,447,536) Current tax recoverable/ (liabilities) 35(b)(i) (1,042,425) (1,908,983) (2,951 ,408) (3,201,873) (3,201,873)

Retained earnings 35(b)(i) 71,124,947 3,567,8 17 74,692,764 76,315,637 3,596,128 79,911,765

Unearned premiums 35(b)(ii) 44,725,503 8,427,694 53,153,197 46,550,123 2,252,734 48,802,857

Retirement benefit obligations 35(b)(iii) 2,125,180 2,125,180 1,734,960 1,734,960

Trade and other payables 35(b )(iii) 28,604 ,366 (13,318,168) 15,286,198 27,384,879 (3,138,375) 24,246 ,504

Amount payable to related companies 35(b)(iii) 827,767 (827,767) 1,110,685 (1,110,685)

Statement ot..E{Q[jt or Loss

Profit for the year 35(b)(i) 18,570,216 (28,310) 18,541,906

SACOS GROUP LIMITED

61 NOTES TO THE FINANCIAL STATEMENTS -YEAR ENDED DECEMBER 31, 2014

35. RECONCILIATION OF TRANSITION FROM SEYCHELLES GAAP TO IFRS (CONT'D)

(a) Reconciliation of Statement of Financial Position and the Statement of profit or loss from Seychelles GAAP to IFRS (Cont'd)

THE COMPANY December 31, 2013 January 1, 2013

Balance Balance reported reported

under Balance under Balance Seychelles Impact reported Seychelles Impact reported

Notes GAAP of IFRS under IFRS GAAP of lFRS underlFRS -SR SR SR SR SR SR

Statement of Financial Position Trade and other receivables 35(b)(ii) 3,766 900,000 903,766 1,092,846 4,447,536 5,540,382 Amount receivable from related companies 35(b)(ii) 900,000 (900,000) 4,447,536 (4,447,536) Retained earnings 35(b)(i) 31,187,717 (3,156) 31,184,561 41,397,327 (24,317) 41,373,010 Trade and other payables 35(b)(iii) 217,087 10,164,414 10,381,501 191,624 19,365,114 19,556,738 Deferred tax liabilities 3S(b)(i) 3,156 3,156 24,317 24,317

Statement of Profit or Loss

Profit for the year 3S(b)(i) 13,551,296 21,161 13,572,457




(b) Analysis of adjustments arising on transition from Seychelles GAAP to IFRS

(i) Retained earnings THE GROUP THE COMPANY

December 31, January 1, December 31, January 1, 2013 2013 2013 2013

SR SR SR SR

Balance as reported under Seychelles GAAP 71,124,947 76,3 15,637 31,187,717 41,397 ,327

Adjustments under IFRS - Accounting of deferred taxes 265,905 1,050,892 (3,156) (24,317) - Adjustment for retirement benefit obligations (358,602) (1,734,960) - Write backs of surplus provisi on for VAT 5,569, 497 4,280,196 - Additional tax on the adjus ted profit for t he year (1,908,983)

3,567,817 3,596,128 (3,156) (24,317)

Balance as reported under IFRS 7416921764 79 911 765 31 I 1841561 4113731010

(ii) Trade Et. oth er receivabl es THE GROUP THE COMPANY

December 31, January 1, December 31 , January 1, 2013 2013 2013 2013

SR SR SR SR

Balance as reported under Seychelles GAAP 41,264,256 34,704,410 3,766 1,092,846

Adjustment under IFRS - Reclassification of amount receivable from related companies 1,548,016 4 ,447,53 6 900,000 4,447,536 - Recoverabl e from reinsurers

- Claims 1,593,667 8,731,890 - Adjustment against trade and othe r payables 669,929 31,136 - Unearned premiums 8,427,694 2,252,734

- Recoverable from reinsur ers (7,479,789) 4,759,517 15,463 ,296 9001000 _4,447,536

Balance as reported under IFRS 46,023J73 so1167J06 903 766 5,5401382

SACOS GROUP LIMITED



(b) Analysis of adjustments arising on transition from Seychelles GAAP to IFRS (Cont'd)

(iii) Trade Et other payables

Balance as reported under Seychelles GAAP

Adjustment under IFRS - Reclassification of amount payable to related parties - Reclassification of retirement benefit obligations - Adjustment against trade and other payables - Write back of surplus provision for VAT - Recoverable from reinsurers

Balance as reported under IFRS

THE GROUP December 31 , January 1,

2013 2013 SR SR

28,604,366 27,384,879

827,767 1,110,685 (1,766,578)

669,929 31, 136 (5,569,497) (4,280,196) (7,479,789)

(13,318,168) (3,138,375)

1512861198 2412461504

63

THE COMPANY December 31, January 1,

2013 2013 SR SR

217,087 191,624

10,164,414 19,365,114

10,164,414 19,365,114

1013811501 1915561738



36. EVENT AFTER THE REPORTING PERIOD

During the Board of Directors· Meeting held on May 12, 2015, a dividend of SR 8.50 per share amounting to SR 17m was proposed for the year ended December 31, 2014. This divide nd will be subject to rat ification

at th e next Annual General Meeting of the Company .

37. FIVE YEAR FINANCIAL SUMMARY

(a) THE GROUP 2014 2013 2012· 2011* 2010*

SR'OOO SR'000 SR'000 SR'000 SR'00O

Profi t before tax 31,131 25,806 23,866 33,622 27,193

Tax charge (5,119) (7,264) (6,955) (7,479) (7,389)

Profit for the year 26,012 18,542 16,911 26,143 19,804

Retained earnings brought forwar d 74,693 79,912 71,405 55,262 43,458

Effect of adopting IFRS 3,596

Transfer to share capital (11,76 1)

Dividends (14,000) (12,000) (12,000) (10,000) (8,000)

Retained earnings carried forward 86,705 74,693 79,912 71,405 55,262

EQUITY Share capital 70,00 0 70,000 35,000 35,000 35,000

Capital contribution 23,239 23,239 23,239

Retained earnings 86,705 74,693 79,912 . 71,405 55,262

Total equity 156,705 144,693 138,151 129,644 113,501

(b) THE COMPANY 2014 2013 2012* 2011· 2010*

SR'000 SR'000 SR'000 SR'000 SR'000

Profit before tax 18,794 14,72 1 16,790 14,787 11,847

Tax charge 783 (1,148 ) (2, 162) {1,535) (1, 189)

Profit for the year 19,577 13, 573 14,628 13,252 10,658

Retained earnings brought forward 31, 185 41,373 38,770 35,518 32,860

Effect of adopting IFRS (25)

Transfer to share capi t al {11,761)

Dividends (14,000) (12,000) {12,000) (10,000) (8,000)

Retained earnings carried forward 36,762 31,185 41,373 38,770 35,518

EQUITY Share capital 70,000 70,000 35,000 35,000 35,000

Capital contribution 23,239 23,239 23,239

Retained earnings 36·,762 31, 185 41,373 38,770 35,518

Total equity 106,762 101,185 99,61 Z 97,009 93,757

* Figures prior to year 2013 have not been restated to comply with the require ments of adoption of IFRS due

to impracticability and costs out of proportion to the benefit of stakeholders.

SACOS GROUP LIMITED SAGOS TOWER I PALM STREET· VICTORIA • MAHE

MAHE • SEYCHELLES I PHONE: + 248 4295 000 E-mail: [email protected] I www.sacos.sc

~s t Wtssu-red, G.Be 5nsureal

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