Description
The activity requires students to perform research and analysis on competing companies and the potential implications of international standards. This real-world analysis is key to understanding how a company's profitability, liquidity, and solvency can be useful for all users. Students also learn to analyze financial statements and use managerial tools to make decisions from an investor's and creditor's standpoint.
Assignment Steps
Resources: U.S. Securities and Exchange Commission (SEC), websites such as Annual Reports (AnnualReports.com)
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.
Select two competing companies, one of which must be an international company, and locate annual reports for these two companies on the Internet.
Research the two companies on the Internet and download the Income Statement, Statement of Shareholders' Equity, Balance Sheet, and Statement of Cash Flows.
Develop a minimum 525-word examination of the financial statements and include the following:
- Make a 5-year trend analysis for each company, using 2011 as the base year, of:
- Net sales.
- Net income. Discuss the significance of the trend results.
- Compute for 2015 and 2014 the:
- Debt to assets ratio.
- Times interest earned. How would you evaluate each company's solvency?
- Compute for 2015 and 2014 the:
- Profit margin.
- Asset turnover.
- Return on assets.
- Return on common stockholders' equity. How would you evaluate each company's profitability?
- Evaluate the financial opportunity presented by the companies. If you were a creditor, which company would you be more likely to lend money to? Defend your decision.
- Which company would you recommend as an investment? Discuss the items that were considered in your decision.
- Research global implications for the international company selected. How might changing environmental factors affect organizational choices?
- Consider the ethical climate (internal or external) of your chosen companies. Describe the ethical issues and impact on the stakeholders. What has been/is being done to resolve these issues? Do you agree with these methods for resolution? If not, what might you do differently?
Show your work in Microsoft® Word or Excel®.
Complete calculations/computations using Microsoft® Word or Excel®.
Include the four financial statements along with your assignment.
Format your assignment consistent with APA guidelines.
Explanation & Answer
Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work Good luck in your study and if you need any further help in your assignments, please let me know Can you please confirm if you have received the work? Once again, thanks for allowing me to help you R MESSAGE TO STUDYPOOL NO OUTLINE IS NEEDED AS IT IS A
Running head: Financial Statement Analysis
1
Financial Statement Analysis
By
Institution
Lecturer
Date
Financial Statement Analysis
2
The two companies in comparison will be in the insurance company. The companies are
AON insurance company and Jubilee Insurance based in Kenya. From the financial statements
from both companies, net sales from both companies have been on an upward trend from 2011
since there has been a realization on the importance of securing property and personal lives.
However, net sales of AON are higher than those of Jubilee owing to the fact that AON operates
on a larger geographical area with subsidiary companies all over the world.
Net income varied from year to year were during some years there was an increase from
the previous year while in other cases there was a decrease from the previous year. This could
owe to various factors such as unfavorable foreign exchange rates or a decrease in commissions
and fees related to acquisitions. Debt to asset ratio is the percentage of the total assets that were
financed by creditors, liabilities and debt. This calculated by dividing a corporation's total
liabilities by its total assets.
Debt to asset ratio =
In 2014 Jubilee insurance had total assets amounting to Kenya shillings 74,505,374 and
liabilities amounted to Kenya shillings 58,026,343. In 2015 total assets in Jubilee Insurance
accumulated to Kenya shillings 82,378,010 and liabilities stood at Kenya Shillings 61,996,803.
Debt to asset ratio at Jubilee insurance in 2014=
=0.78%
Debt to asset ratio at Jubilee insurance in 2015=
= 0.75%
Financial Statement Analysis
3
In 2014 AON insurance had total assets amounting to $ 26883 and liabilities amounted to $
20824. In 2015 total assets at AON insurance accumulated to $ 26615 and liabilities stood at $
21083.
Debt to asset ratio at AON insurance in 2014 =
= 0.77%
Debt to asset ratio at AON insurance in 2015 =
= 0.79%
Times interest earned is the coverage ratio which measures the proportionate amount of
income that can be used to cover interest expenses in the future. The time's interest earned ratio
is calculated by dividing income before interest and income taxes by the interest expense.
Times interest earned ratio at AON insurance in 2014=
= 6.9
Times interest earned ratio at AON insurance in 2015 =
=6.2
Financial Statement Analysis
4
Creditors mostly prefer companies with higher interest ratio because that shows the
company can afford to pay its interest payments when they come due. Higher ratios show less
risk while lower ratios indicate credit risk. The profit margin includes the gross profit margin,
operating profit margin and net profit margin. They are all calculated by dividing the profit
figure by revenue and multiplying by 100.
Gross profit of jubilee insurance in 2014 =
*100
=15.93%
Gross profit of jubilee insurance in 2015 =
*100
=18%
The asset turnover ratio is calculated by dividing net sales by average total assets.
The asset turnover for Jubilee insurance in 2014 =
Asset turnover for Jubilee Insurance in 2014=1.05
The Asset Turnover for Jubilee Insurance in 2015=
=0.5
Financial Statement Analysis
5
The Asset Turnover for AON Insurance in 2014=
=0.4
The Asset Turnover for AON Insurance in 2015=
=0.5
Return on assets is the financial ratio that shows the percentage of profit a company earns in
relations to its overall resources. It is calculated by net income divided by average total assets.
Return on assets for Jubilee insurance in 2015 =
= 0.08
Return on assets for Jubilee insurance in 2014 =
=0.08
Return on assets for AON in2015=
=0.1
Return on assets for AON in2014=
=1.09
The company I would lend money is AON insurance because of its higher interest ratio.
This is because it is out of the risk to run into a credit risk. AON insurance will be considered for
investment because of the financial muscle the company owes. Its expenses are distributed
Financial Statement Analysis
6
amongst all other subsidiaries such that the shareholders do not bear such loss in case of a
financial crisis. Changes in financial rates always affect the activities done by AON insurance in
different countries. This makes it experience a decrease in revenues which if it goes on might
plunge the company into more problems. Internal malpractices may be unethical in the company.
In the case of these companies, management malpractices have been dealt with through dismissal
and handing over cases to authorities to take over and help settle matters. Management
malpractices can make shareholders make decisions to withdraw their shares which may make
the company collapse or experience financial crisis.
Financial Statement Analysis
7
REFERENCES
Annual 2016 Financial Report.AON(2016). Washington, D.C.
Annual Report & Financial Statements 2015.Jubilee Holdings (2015). Nairobi.
Larson, K., & Miller, P. (1995). Financial accounting. Chicago: Irwin.
Return on Assets Ratio - ROA | Analysis | Formula | Example. (2017). My Accounting Course.
Retrieved 1 July 2017, from http://www.myaccountingcourse.com/financial-ratios/returnon-assets
LIVE FREE
B r i n g i n g o u r Va l u e s t o L i f e
Enabling people to overcome uncertainty.
OUR MISSION
To provide solutions to protect the future of our customers.
OUR VALUES
Integrity, Passion, Excellence and Teamwork.
www.jubileeinsurance.com
Jubilee Holdings Annual Report & Financial Statements 2015
OUR VISION
Annual Report & Financial Statements 2015
INTEGRITY
At Jubilee we act with honesty and adhere to the highest
standards of moral and ethical principles through our personal and professional conduct. We uphold these principles
in every action and decision. In acting in an accountable,
transparent and socially conscious manner, we achieve our
ultimate goal: our customers’ trust and therefore their peace
of mind.
LIVE FREE
www.jubileeinsurance.com
TABLE OF CONTENTS
Financial Highlights
Group Information
Notice of The Annual General Meeting
Board of Directors
Chairman’s Statement
Report of The Directors
Statement of Directors’ Responsibilities
Corporate Governance Statement
Report of The Independent Auditors
Consolidated Statement of Profit or Loss
Consolidated Statement of Profit or Loss And Other
Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes In Equity
Company Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Supplementary Information
Advertisements
Corporate Social Responsibility
Achievements
Regional Group Offices and Branches
Notes
2
3
4
6
9
12
13
16
19
20
20
21
22
23
24
25
26
86
87
88
89
91
92
FINANCIAL HIGHLIGHTS
GROSS WRITTEN PREMIUM (Kshs BILLIONS)
EARNINGS PER SHARE (Kshs PER SHARE)
2015
2014
2013
2012
2011
2015
2014
2013
2012
2011
15.98
20.25
27.4
32.1
23.42
34.2
30.16
43.7
29.47
42.7
Gross Written Premiums grew by 2% to Kshs 30.16 billion. This
growth was mainly supported by the medical and individual
life lines of business which grew by 32% and 14% respectively.
Earnings per share dropped by 2% to Kshs 42.71 from
Kshs 43.71 explained by the slight reduction in the earnings
attributable to equity holders recorded over 2014.
PROFIT BEFORE TAX (Kshs BILLIONS)
TOTAL ASSETS (Kshs BILLION)
2015
2014
2013
2012
2011
2015
2014
2013
2012
2011
2.14
2.69
38.04
47.42
3.15
61.16
3.95
4.15
Profit before tax grew by 5% to Kshs 4.15 billion attributed
to growth in returns from the investments in associates,
underwriting profits as well as better returns to shareholders
from the life business.
2
Jubilee Holdings Annual Report & Financial Statements 2015
82.38
74.51
Total assets grew by 11% to Kshs 82.38 billion mainly as a
result of increased funds generated by the business and growth
in deposit investments.
GROUP INFORMATION
Capital and reserves
2015
2014
Kshs’ 000
Kshs’ 000
Authorised Capital
350,000
350,000
Issued Capital
329,423
299,475
Paid-up Capital
Retained Earnings
329,423
299,475
13,759,189
11,484,875
Registered Office
Jubilee Insurance House
Wabera Street
P O Box 30376–00100 GPO
Nairobi, Kenya
Telephone: 3281000
Telefax: 3281150
E-mail: jic@jubileekenya.com
Website: www.jubileeinsurance.com
Subsidiaries
The Jubilee Insurance Company of Kenya Limited (100%)
The Jubilee Insurance Company of Uganda Limited (65%)
Jubilee Life Insurance Company of Uganda Limited (65%)
The Jubilee Insurance Company of Tanzania Limited (51%)
Jubilee Life Insurance Corporation of Tanzania Limited (51%)
The Jubilee Insurance Company of Burundi S.A. (70%)
Jubilee Insurance (Mauritius) Limited (80%)
Jubilee Financial Services Limited (100%)
Jubilee Investments Company Limited (Uganda) (100%)
Jubilee Investments Tanzania Limited (100%)
Jubilee Investments Burundi Limited (100%)
Jubilee Center Burundi Limited (80%)
Associates
PDM (Holdings) Limited (37.1%)
IPS Cable Systems Limited (33.3%)
FCL Holdings Limited (30.0%)
IPS Power Investment Limited (27.0%)
Bujagali Holding Power Company Limited (25.0%)
Auditors
KPMG Kenya
Corporate Lawyers
Daly & Inamdar Advocates
Share Registrar
Jubilee Holdings Limited
Principal Bankers
Diamond Trust Bank Kenya Limited
Barclays Bank of Kenya Limited
Standard Chartered Bank Kenya Limited
Citibank N.A.
Diamond Trust Bank Uganda Limited
Diamond Trust Bank Tanzania Limited
Diamond Trust Bank Burundi Limited
Habib Bank Limited
Barclays Bank Plc
Jubilee Holdings Annual Report & Financial Statements 2015
3
NOTICE OF THE ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 78TH ANNUAL GENERAL MEETING of the Shareholders will be held at the Nairobi Serena,
Kenyatta Avenue, on Tuesday 31 May 2016 at 11:00 a.m. to transact the following business:
1.
To consider and, if thought fit, to adopt the Consolidated Financial Statements for the year ended 31 December 2015, the Report of the
Directors and the Report of the Auditors thereon.
2.
To confirm the payment of the interim dividend of Kshs. 1.00 per share made on 6 October 2015 and approve the payment of a final
dividend of Kshs. 7.50 per share to be paid on or about 25 July 2016 to Shareholders registered as at 31 May 2016.
3.
To elect the following Directors:
a) Mr. Nizar Juma retires by rotation in accordance with Article 86 of the Company’s Articles of Association and being eligible,
offers himself for re-election.
b) Mr. Shabir Abji retires by rotation in accordance with Article 86 of the Company’s Articles of Association and being eligible,
offers himself for re-election.
c)
Mr. Juma Kisaame retires by rotation in accordance with Article 86 of the Company’s Articles of Association and being eligible,
offers himself for re-election.
4.
To approve the Directors’ remuneration for the year ended 31 December 2015, as provided in the Annual Report and Audited
Financial Statements.
5.
To note that the auditors, KPMG Kenya, will continue in office and to authorize the Directors to set their remuneration.
By Order of the Board
Margaret M. Kipchumba (Mrs.)
Company Secretary
31 March 2016
Note:
1.
A member entitled to attend and vote at this meeting and who is unable to attend may appoint a proxy to attend and vote on his/her
behalf and such proxy need not be a member of the Company.
2.
To be valid, a proxy must be duly completed by a member and should be returned to the Company by hand delivery or by post to P.O.
Box 30376 Nairobi to arrive no later than 48 hours before the meeting. If the member is a corporate body, the proxy must be given
under its Common Seal or under the hand of a duly authorised attorney of such corporation.
4
Jubilee Holdings Annual Report & Financial Statements 2015
TEAMWORK
The glue that binds us together and the oil that makes our
teams work. Teamwork creates synergy, empowers people,
encourages flexibility and responsiveness, and fosters
camaraderie and motivation. This means that our customers
enjoy an efficient and positive experience when dealing
with any member of our valued team.
LIVE FREE
Jubilee Holdings Annual Report & Financial Statements 2015
5
BOARD OF DIRECTORS
SULTAN ALLANA
JANE MWANGI
NIZAR JUMA
CHAIRMAN
6
Jubilee Holdings Annual Report & Financial Statements 2015
LUTAF KASSAM
JOHN METCALF
BOARD OF DIRECTORS
JUMA KISAAME
RAMADHANI DAU
SHABIR ABJI
ZUL ABDUL
MOEZ JAMAL
SULTAN KHIMJI
Board Audit and Compliance Committee
Board Finance Committee
Board Nominating and Human Resource Committee
Board IT Committee
Board Regional Technical Committee
Board Property Committee
Jubilee Holdings Annual Report & Financial Statements 2015
7
8
Jubilee Holdings Annual Report & Financial Statements 2015
CHAIRMAN’S STATEMENT
DEAR SHAREHOLDERS,
I am pleased to introduce Jubilee Holding Limited’s 2015 Annual report and financial statements. The Group has delivered another strong,
broad-based performance in 2015, delivering value to our customers, contributing to the development of the insurance industry in the
markets where we operate and producing record profits for our shareholders. The sustained growth over the past decade and Jubilee’s
reputation as the most trusted insurer in the region has been built on our solid values and unyielding ethical practices, a strong and growing
balance sheet and a commitment to fair settlement of claims and customer service. We are indeed very proud of these accomplishments and
strive to continue to build on this foundation.
Jubilee’s performance resulted in Gross Written Premium, including Deposit Administration contributions, of Kshs 30.2 billion, with strong
contributions from all five territories in which Jubilee operates. The Group reported a Pre-tax profit of Kshs 4.1 billion, a growth of 5% over
2014, which was supported by a 25% increase in insurance results to Kshs. 1.7 billion, despite the pressures of an increasingly competitive
insurance market across the region. Jubilee has maintained its position as the largest composite insurance company in Kenya and overall in
East Africa for seven consecutive years, retaining the No.1 position in Kenya, Uganda and Tanzania.
These excellent results were achieved against the backdrop of a difficult year for the insurance industry. In particular, the NSE 20 index
declined by 21% over 2015 resulting in significant fair value losses for the majority of insurance companies. Jubilee was able to absorb the
declines in quoted securities, as in recent years the Group has implemented a strategy to diversify its investment portfolio by increasing its
holdings in government bonds and real estate in addition to investing in projects that generate US Dollar returns, such as Tsavo Power and
Bujagali, in the energy sector and in other infrastructure projects such as SEACOM. This investment strategy has proven sound during a
period of stock market volatility for the benefit of both the shareholders and life insurance and pension clients. In addition, the major swings
in currency values and depreciation of all the regional currencies versus the US Dollar generated significant foreign exchange gains.
EAST AFRICA’S ECONOMY
The East African economy continued to show strong growth across the region in 2015 averaging over 5% growth for the year. Continued
investments in infrastructure projects and increase in trade contributed to this growth, as did the lower price of oil which significantly reduced
the import bill. East Africa’s growing recognition as a trade hub for the Sub-Saharan region is also contributing to the rapid economic
growth.
The Kenyan economy grew by 5.8% during the third quarter of 2015, an improvement over the 5.3% gross domestic product (GDP)
growth rate recorded in 2014. Economic prospects for 2016 and beyond remain strong, with lower inflation and stable interest rates. The
economies of Uganda and Tanzania grew 8.2% and 6.3% respectively in the third quarter of 2015 and continue to be equally important to
Jubilee. Both countries are expected to continue strong growth in the near future.
INSURANCE INDUSTRY
The regional insurance market continues to face numerous challenges including very low insurance penetration, high risk and increasing
incidence and cost of fraud and increased competition due to the arrival of new entrants in an already crowded industry, including an
increasing number of global players. A number of market participants have responded to these developments by reducing premiums and as
a result underwriting results have deteriorated with a consequent impact on industry profitability and service standards. Jubilee is committed
to matching the highest international standards of product and service delivery and believes that the quality of our people and the focus on
meeting the needs of our customers will enable the Group to continue to outperform both regional peers and new entrants. Despite these
challenges, Jubilee has been able to consolidate its market leadership in Kenya, Uganda and Tanzania and also made important market
share gains in Burundi.
In 2015, the Kenyan Insurance Act was amended through the Finance Act, 2015 to require insurance companies to compute their capital
adequacy ratios using a new Risk Based Capital (RBC). Insurance companies are required to be fully compliant with the new regulations by
30 June 2018. Risk Based Capital measures the minimum amount of capital that an insurance company needs to support its overall business
operations taking into consideration the actual level and degree of risk taken by each individual insurer. The Risk Based Capital model is
based on four major categories of risk: asset/market risk, credit risk, insurance underwriting risk and operational risk, and the capital
required increases in line with the Regulator’s assessment of underlying risk. Jubilee welcomes this development as the RBC framework
resonates well with best practice in supervision of the insurance industry globally, and will provide higher levels of stability and consumer
protection in the industry.
Jubilee experienced strong growth in Bancassurance and Micro-insurance throughout the region following the establishment of structures
and initiatives to take a leadership role in the development of these important business segments. The growth of insurance penetration is
expected to increase with the development of new regulations, growth in the middle class income earners, the on-going revolution in retail
payment and growth in financial inclusion. Kenya has fully embraced the opportunities afforded by technology in enhancing financial
inclusion, and has the highest share of population with access to financial services in Sub-Saharan Africa (more than 70 percent).
FINANCIAL PERFORMANCE
Jubilee Holdings Limited reported Gross Written Premium (including Deposit Administration contributions) of Kshs 30.16 billion (2014: Kshs
30.35 billion). Profit before tax stood at Kshs 4.15 billion an increase of 5% (2014: Kshs 3.95 billion). The Group posted insurance results of
Kshs 1.72 billion which saw contribution from all lines of business and is significantly higher than those of our key peers. This performance
Jubilee Holdings Annual Report & Financial Statements 2015
9
CHAIRMAN’S STATEMENT (CONTINUED)
was achieved despite the challenges faced in our local markets and underlines our capability to deliver superior value and returns for our
shareholders and other stakeholders even under difficult circumstances.
Based on this impressive 2015 performance, I am pleased to report that the Board has recommended a cash dividend of 170% for the year
2015 (2014: 170%), on the share capital of Kshs 329.4 million. An interim dividend of 20% (Kshs 1.00 per share) was paid on 6th October
2015. The Board is seeking approval for a final cash dividend of Kshs 7.50 per share. In addition, I am pleased to note that the Jubilee
Holdings Limited’s share price increased from Kshs 450 to Kshs 484 per share during the year, an increase of 7.6% making it one of the best
performing investments on the Nairobi Securities Exchange, which fell by 21% during this period.
MEDICAL INSURANCE
Medical insurance business achieved a strong growth in premiums of 32% to reach Kshs 10.03 billion (2014: Kshs 7.62 billion). Jubilee
continues to penetrate new markets and client segment to consolidate and enlarge its market leadership in medical insurance business
throughout the region and retain market leadership. Jubilee’s retail medical product, J-Care, tailored for families continued to do well
during the year under review and this contributed towards the positive medical business performance. Sound underwriting and provider
relationship management enabled Jubilee to report excellent underwriting profitability of Kshs 437 million in 2015, and once again, Jubilee
is one of the very few companies to report underwriting profitability in medical insurance business in the region.
GENERAL INSURANCE
General insurance Gross Written Premium recorded growth of 3% in 2015 to reach Kshs 10.52 billion, as several large infrastructure
projects in the region were delayed and Jubilee took steps to withdraw from unprofitable segments until regional premium rates return to
sustainable levels. Jubilee is extremely proud that the combined ratio has been maintained at 90%, which reflects our continued and strong
focus on claims control and risk management, and which resulted in an underwriting profit of Kshs 604 million in 2015. The Group continues
to implement strategies to improve operating efficiency and launch innovative new products, especially those targeted towards Small and
Medium Enterprises, and to make insurance more accessible to rural communities
LIFE INSURANCE AND PENSION
Life insurance business Gross Written Premium and Deposit Administration inflows registered a drop to Kshs 9.61 billion (2014: Kshs
11.59 billion) as the exceptionally strong growth in annuity business in 2014 was not repeated in 2015 as expected. Individual life business
registered a growth of 14% as new business continued to grow through Jubilee’s expanding agency network. This is in line with the Group’s
strategy to expand its individual and group life insurance portfolio penetration and the success of the company’s asset building products,
which are built around the long term saving, education and protection needs of Jubilee’s customers.
OPERATIONS
Jubilee continues to strengthen its senior management team to consolidate its position as the leading insurance franchise in the region
and provide the capacity and competence base to pursue further growth. Significant investments continue to be made in Information
Communication and Technology (ICT) in order to support our growing business portfolio, and ensure that Jubilee’s service delivery is second
to none.
To support and sustain robust growth, Jubilee will continue to expand its agency office network across East Africa, targeting developing
commercial hubs that are being created by the devolved governance implementation that is currently underway. Various strategic initiatives
to grow the retail medical business, Bancassurance and Micro-insurance products are underway and an online sales platform has been
developed which will see Jubilee strive to continue to lead the market in product innovation, distribution channels and customer service.
BOARD OF DIRECTORS
The Directors who held office in 2015 are listed on page 6 & 7 of this report. As we continue to expand our horizons, the Board continues to
reflect your Company’s regional and growth related outlook, while drawing from the Company’s Vision, Mission and Values which continue
to steer your Company to greater heights in achieving its strategic objectives.
CORPORATE SOCIAL RESPONSIBILITY
During the year under review, Jubilee Insurance continued to commit resources towards key Corporate Social Responsibility (CSR)
initiatives that go towards supporting critical needs of the local communities, through partnerships with like-minded organizations, as well
as implementing its trademark CSR projects. Jubilee Insurance has contributed to sustainable development in its CSR initiatives through
integration of CSR programs that ensure compliance in reporting, exhibiting a good image as corporate citizens through its philanthropic
initiatives both at organizational level and staff level and we are therefore very proud to have won the Company of the Year CSR and
Environmental Focus award.
With the overwhelming support from the Jubilee family, The Jubilee Children’s Fund (JCF) continues to grow in supporting health and
education initiatives to orphaned and bright children from poor families. The fund donated heart surgery beds to Kenyatta Hospital’s
Pediatric Patients’ Ward 4 B, which is a children’s heart surgery Critical Care Unit. The Unit admits 208 children on average annually, aged
between 4 months to 3 years. Additionally, Jubilee continued the partnership of its staff participating in key impacting projects that include
the Standard Chartered Marathon and Mater Heart Run, which target health-related afflictions of cardiac illness and blindness respectively.
10
Jubilee Holdings Annual Report & Financial Statements 2015
CHAIRMAN’S STATEMENT (CONTINUED)
MARKET PRESENCE AND RECOGNITION
Jubilee was very pleased to be recognized by the business community and the insurance industry for the excellence of our business practices
by winning several awards. During 2015, Jubilee scooped 25 awards in total including the 2015 Overall Company of the Year Award
(COYA) award in Kenya. Our major awards are listed on page 90 of this Annual Report.
2016 OUTLOOK
Whilst the regional economy is expected to grow at around 6% in 2016, the business and regulatory environment is expected to remain
challenging influenced by global economic trends and local events. Potential risks arising from the volatility of the global markets and
exchange rates could have a negative impact on capital flows. Other risks include uncertainty over sustainability of the expected growth in
tourism, El Nino’s effect on agriculture and continued delays in the development of oil and gas infrastructure projects. Recent bank closures
in Kenya has undermined confidence in the financial sector and resulted in increased lending rates putting pressure on economic growth.
Interest rates are expected to come down in the latter part of the year which may spur growth in the region’s economy which is expected to
be supported by lower energy costs, investment in infrastructure, growth in financial services, telecommunications, manufacturing and other
industries. These factors and growth in the economy will continue to generate growth in the insurance industry.
Jubilee will continue to focus on risk selection and best management practices so as to balance our entrepreneurial approach to business
opportunities whilst protecting profitability. Key strategic initiatives for 2016 include implementation of new and enhanced IT infrastructure
and systems to increase presence in the growing digital economy, innovation of new products, improved renewal retention, enhanced
product mix, continued development of new agency networks and reinvigorated producer incentive schemes that will help us drive our top
line.
It is this quality and financial stability that will continue to strengthen our customer relationships and grow business.
We continue to be optimistic as we focus on our strategic goals to ensure that Jubilee continues to perform strongly in 2016 and generate
sustainable and stable returns for our shareholders.
APPRECIATION
The contributions of Jubilee’s various stakeholders have ensured that continued strong performance is achieved. These are none other than
our business partners, intermediaries and customers. I would like to thank you for your continued support and loyalty, which have been
instrumental in reinforcing Jubilee’s position as the invincible market leader in Kenya and in East Africa.
I also thank all our staff across the region who continue to show dedication and provide superior service to our customers. I would also like
to acknowledge with appreciation my colleagues in the Board and those on the Boards of the subsidiaries for their diligence, guidance and
support that has ensured that we achieve superior and excellent results during the year.
Nizar Juma
Chairman
31 March 2016
Jubilee Holdings Annual Report & Financial Statements 2015
11
REPORT OF THE DIRECTORS
The Directors submit their report together with the audited consolidated financial statements for the year ended 31 December 2015 which
disclose the state of affairs of Jubilee Holdings Limited (the “Company”) and its subsidiary companies (together the “Group”).
Country of incorporation
The Company is incorporated in the Republic of Kenya and is domiciled in Kenya. The Company is also registered as a foreign company in
the Republic of Uganda and in the United Republic of Tanzania.
Principal activities
The Company is an investments holding company. The Company, through its subsidiaries, The Jubilee Insurance Company of Kenya Limited,
The Jubilee Insurance Company of Uganda Limited, Jubilee Life Insurance Company of Uganda Limited, The Jubilee Insurance Company
of Tanzania Limited, Jubilee Life Insurance Corporation of Tanzania Limited and The Jubilee Insurance Company Burundi (SA), transacts
all classes of general and long term insurance business as defined by the Kenyan Insurance Act while Jubilee Insurance (Mauritius) Limited
transacts all classes of general insurance. It also owns investment companies in Kenya, Uganda, Tanzania and Burundi, as well as a fund
management company in Kenya (Jubilee Financial Services Limited).
Results
The following is the summary of the results for the year ended 31 December 2015:
Profit analysis
Group profit before income tax
2015
2014
Kshs ‘000
Kshs ‘000
4,145,139
3,949,285
Income tax expense
(1,024,046)
(845,632)
Group profit after income tax
3,121,093
3,103,653
(307,037)
(224,081)
2,814,056
2,879,572
Non controlling interest
Profit attributable to equityholders of the company
Dividend
An interim dividend of Kshs 1.00 per share amounting to Kshs 65.885 million (2014:Kshs 59.895 million) was paid on 6 October 2015.
The Directors recommend a final dividend of Kshs 7.50 per share amounting to Kshs 494.133 million (2014: Kshs. 449.212 million). The
total dividend for the year represents 170% of the issued share capital as at 31 December 2015 (2014: 170%).
Directors
The Directors who held office during the year under review and up to the date of this report were:
Nizar N Juma (Chairman)
Sultan A Allana *
Ramadhani K Dau **
Juma Kisaame***
Lutaf R Kassam
Sultan K Khimji
John J Metcalf ****
Shabir Abji**
Jane S Mwangi
Moez Jamal ****
Zul Abdul
* Pakistani
** Tanzanian
***Ugandan **** British
Auditors
The Company’s independent auditors, KPMG Kenya, continue in office in accordance with Section 159(2) of the Companies Act (Cap. 486).
On behalf of the Board
Nizar Juma, Chairman
31 March 2016
12
Jubilee Holdings Annual Report & Financial Statements 2015
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for the preparation and fair presentation of the Group and Company financial statements of Jubilee Holdings
Limited set out on page 20 to 85 which comprise consolidated and company statements of financial position at 31 December 2015,
consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income, consolidated and company
statements of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting
policies and other explanatory information, in accordance with International Financial Reporting Standards and in the manner required by
the Kenyan Companies Act. The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial
affairs and the operating results of the Group and the Company.
The Directors’ responsibilities include: determining that the basis of accounting described in Note 2 is an acceptable basis for preparing
and presenting the financial statements in the circumstances, preparation and presentation of financial statements in accordance with
International Financial Reporting Standards and the Kenyan Companies Act and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.
Under the Kenyan Companies Act the Directors are required to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the operating results of the Group
for that year. It also requires the Directors to ensure the Group keeps proper accounting records which disclose with reasonable accuracy
the financial position of the Group and Company.
The Directors accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial
statements, as well as adequate systems of internal financial control.
The Directors have made an assessment of the Group and the Company’s ability to continue as a going concern and have no reason to
believe the Group and the Company will not be a going concern for at least the next twelve months from the date of this statement.
Approval of the financial statements
The Group and Company financial statements, as indicated above, were approved by the Board of Directors on 31 March 2016 and were
signed on its behalf by:
Nizar N Juma
Zul Abdul
Chairman Director
Jubilee Holdings Annual Report & Financial Statements 2015
13
PASSION
We’re passionate about our customers and our company.
We care about our products and are courageous in pursuing
their full potential. And we’re innovative, continuously
searching for new ideas that drive growth and customer
satisfaction. Jubilee’s recent investment in a suite of digital
tools is a testament to this culture of continuous growth and
improvement.
LIVE FREE
14
Jubilee Holdings Annual Report & Financial Statements 2015
EXCELLENCE
We strive to be the best but we are always learning and
always improving. We set high standards and then ensure
we surpass them. We deliver results, win where we compete
and celebrate our successes. We are delighted to have
been voted East Africa’s most Trusted Insurer and Company
of the Year 2015. However, the Jubilee team is not content
with achieving No. 1, we will only be content if we remain
No. 1.
LIVE FREE
Jubilee Holdings Annual Report & Financial Statements 2015
15
CORPORATE GOVERNANCE STATEMENT
The Board of Directors, duly cognisant of its role in safeguarding shareholders’ assets and ensuring a decent return on investment, reaffirms
its commitment to upholding policies and strategies that enhance transparency and accountability as part of the Company’s continuing
listing obligations and as advocated by the Capital Markets Authority guidelines for good corporate governance practices by public listed
companies in Kenya. The Company is reviewing the new Code of Corporate Governance Practices For Issuers of Securities To the Public
2015 (Code), with a view to reporting on the same and the status of application at the next reporting period.
Board of Directors
The Directors represent diverse skills and experience to provide the necessary stewardship to the Company. The Board draws from its
considerable collective experience in finance, insurance, investment, law, strategic management and human resource management in order
to provide overall strategic guidance to the Group.
The Board currently comprises eleven Directors, out of whom eight are independent. The strong contingent of independent Directors ensures
that no individual or small group of individuals can dominate the Board’s decision-making processes. The Chairman and Directors adhere
to the rules of multiple directorships set under CMA’s guidelines for good corporate governance to ensure effective participation by all
Directors. At the Annual General Meeting in every year, one-third of the Directors or, if their number is not a multiple of three, the number
nearest to one-third retire from office. A Director retiring at a meeting is eligible for re-election.
In accordance with the Company’s Articles of Association, the Board meets at regular intervals to, amongst others things:
•
Agree on the Company’s strategic objectives, as well as plans to achieve these;
•
Review and approve the Company’s annual budget;
•
Review the Company’s performance against agreed goals and strategies;
•
Review the Company’s policies and procedures;
•
Consider and approve the annual and interim financial statements;
•
Review and if thought fit recommend dividends to the shareholders for approval; and
•
Approve other matters of fundamental significance.
Senior management attend Board Meetings by invitation to ensure informed and efficient decision-making by the Board of Directors. In
addition, the Board invites independent professionals to attend meetings and provide opinions and advice as necessary to enable the Board
discharge its fiduciary mandate.
The Directors’ attendance of Board Meetings for the year 2015 is as follows:
Name
March
June
August
November
Nizar Juma (Chairman)
√
√
√
√
Sultan Allana
x
√
x
√
Ramadhani Dau
√
√
√
x
Lutaf Kassam
√
x
√
√
Sultan Khimji
√
√
√
√
Juma Kisaame
√
√
√
√
John Metcalf
√
√
√
√
Shabir Abji
x
x
x
√
Jane Mwangi
√
√
x
√
Moez Jamal
√
√
√
x
Zul Abdul
√
√
√
√
*Key:
16
√ Present
× Absent with apologies
Jubilee Holdings Annual Report & Financial Statements 2015
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Role of the Chairman and Chief Executive Officer (CEO)
The roles and responsibilities of the Chairman and CEO are clear and distinct. The primary role of the Chairman is to provide leadership
to the Board and ensure that the Board is effective in its task of setting and implementing the Company’s direction and strategy. The CEO is
principally responsible for implementing Board decisions and overseeing the day to day running of the Company.
Board Committees
Pursuant to the Company’s Articles of Association, the Board of Directors has delegated authority to the Committees as listed below.
These committees operate under clearly articulated terms of reference (summarized below) which clarify their responsibilities and scope
of authority. The Committees have unrestricted access to Group information and are authorized by the Board to obtain independent
professional advice in the discharge of their functions. All Committees report to the Board at each meeting highlighting matters discussed at
their respective meetings and recommended actions.
The mandates of the Committees and their membership are as follows:
(a) Board Audit and Compliance Committee:
The committee oversees the financial reporting process, internal controls, and compliance issues in the Company, including any legislative
and regulatory changes that impact on the Company’s operations. The members are:
i.
ii.
ii.
iii.
Mr. Zul Abdul (Chairman)
Mr. Sultan Khimji
Mr. Juma Kisaame
Mr. John Metcalf
(b) Board Finance Committee:
The Committee supervises the financial and investment business of the Company, and provides guidelines and limits for investment of the
Company’s funds. The members are:
i.
ii.
iii.
iv.
v.
Mr. Lutaf Kassam (Chairman)
Mr. John Metcalf
Mr. Sultan Khimji
Mr. Shabir Abji
Mr. Moez Jamal
(c) Board Nominating and Human Resource Committee:
This Committee reviews all new nominees to the Board and is mandated to assess the performance and effectiveness of Directors. The
Committee also reviews and approves the HR strategy in the Company. The members are:
i.
ii.
iii.
Mr. Nizar Juma (Chairman)
Mr. John Metcalf
Mrs. Jane Mwangi
(d) Board IT Committee:
The Committee approves the IT strategy. The Committee also reviews IT investments, such as new system recommendations from a
technical and operational perspective. The members are:
i.
ii.
iii.
Mr. Shabir Abji (Chairman)
Mr. John Metcalf
Mr. Juma Kisaame
(e) Board Regional Technical Committee:
This is a technical committee that reviews and approves new products, sets the underwriting and claims authority limits, reviews the
business performance, and reviews the technical business recommendations. The members are:
i.
ii.
iii.
Mr. John Metcalf (Chairman)
Mr. Amin Datoo
Mr. Patrick Tumbo
(f) Board Property Committee:
The committee deals with the Company’s property portfolio and makes recommendations to the Board. The members are:
i.
ii.
iii.
Mr. Nizar Juma (Chairman)
Mr. Lutaf Kassam
Mr. Sultan Khimji
For services on the Board and its Committees, the Directors receive remuneration approved by shareholders at the Annual General Meeting.
In 2015, the aggregate amount of emoluments received by the Directors is shown under note 10 (iii). No loans were advanced to the
Directors during the year under review.
Jubilee Holdings Annual Report & Financial Statements 2015
17
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Directors’ interest in the shares of the company as at 31 December 2015
Name
Mr Sultan K Khimji (including shares held by his family and
company in which he has an interest)
Number of
shares held
%
Shareholding
12,420
0.02%
Number of shares
held
%
Shareholding
Distribution of Shareholders as at 31 December 2015
Number of shares
Number of
shareholders
Less than 500 shares
1,732
271,369
0.41%
500 – 5,000 shares
3,336
6,403,164
9.72%
5,001 – 10,000 shares
762
5,005,266
7.60%
10,001 – 100,000 shares
565
13,413,209
20.36%
33
5,635,161
8.55%
100,001 – 1,000,000 shares
Over 1,000,000 shares
Total
5
35,156,331
53.36%
6,433
65,884,500
100.00%
List of 10 largest shareholders as at 31 December 2015
Names
Number of
shares held
%
Shareholding
25,026,127
37.98%
1
Aga Khan Fund for Economic Development SA
2
Pyrus Investments Limited
6,471,255
9.82%
3
Freight Forwarders Kenya Limited
1,286,423
1.95%
4
United Housing Estates Limited
1,195,407
1.81%
5
Adam’s Brown and Company Limited
1,177,119
1.79%
6
Pulin Mahendrakumar & Mita Pulin Gandhi
348,480
0.53%
7
Gulshan Noorali Sayani
329,552
0.50%
8
Ariff Aziz Shamji & Farah Bahadur Alibhai Ukani
324,602
0.49%
9
Ameerali K. Abdulrasul Somji
250,140
0.38%
10
Gulzar Shamshudeen Somji
Total
18
Jubilee Holdings Annual Report & Financial Statements 2015
227,410
0.35%
36,636,515
55.61%
REPORT OF THE INDEPENDENT AUDITORS
KPMG Kenya
Certififed Public Accountants
ABC Towers, 8th floor
Waiyaki way
P.O. Box 40612 - 00100 GPO
Nairobi, Kenya
Tel: +254 20 2806000
Fax: +254 20 2215695
Email: info@kpmg.co.ke
www.kpmg.com/eastafrica
Report on the financial statements
We have audited the financial statements of Jubilee Holdings Limited set out on pages 20 to 85 which comprise the consolidated and
company statements of financial position at 31 December 2015, consolidated statement of profit or loss, consolidated statement of profit or
loss and other comprehensive income, consolidated and company statements of changes in equity and consolidated statement of cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory information.
Directors’ responsibility for the financial statements
As stated on page 13, the Directors are responsible for the preparation and fair presentation of these financial statements in accordance
with International Financial Reporting Standards and the Kenyan Companies Act, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
International Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’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 entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, 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 opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the consolidated and company financial position of Jubilee Holdings Limited
at 31 December 2015, and the consolidated financial performance and consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards and the Kenyan Companies Act.
Report on other legal requirements
As required by the Kenyan Companies Act we report to you, based on our audit, that:
•
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose
of our audit;
•
In our opinion, proper books of account have been kept by the Company, in so far as appears from our examination of those books;
and
•
The statement of financial position of the Company is in agreement with the books of account.
The engagement partner responsible for the audit resulting in this independent auditors’ report is FCPA Eric Aholi P/NO:1471.
KPMG Kenya
Certified Public Accountants
P. O. Box 40612
00100, Nairobi
31 March 2016
Jubilee Holdings Annual Report & Financial Statements 2015
19
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2015
2015
Kshs ‘000
2014
Kshs ‘000
6
6
23,029,932
(8,153,775)
14,876,157
24,782,043
(8,450,822)
16,331,221
7
19 & 20
8
6,093,468
(1,109,494)
1,837,783
21,697,914
4,833,582
1,234,767
1,976,315
24,375,885
Note
Gross earned premium revenue
Outward reinsurance
Net insurance premium revenue
Investment and other income
Net fair value (losses)/gains on financial assets at fair value through profit or loss
Commission earned
Total income
Claims and policy holders benefits payable
Claims recoverable from re-insurers
Net insurance benefits and claims
9
9
(16,355,448)
4,790,173
(11,565,275)
(20,482,024)
4,611,545
(15,870,479)
Operating and other expenses
Commission payable
Total expenses and commissions
10
8
(3,870,544)
(3,134,107)
(7,004,651)
(3,106,716)
(2,881,228)
(5,987,944)
3,127,988
2,517,462
(34,861)
1,052,012
4,145,139
(1,024,046)
3,121,093
(49,745)
1,481,568
3,949,285
(845,632)
3,103,653
2,814,056
307,037
3,121,093
2,879,572
224,081
3,103,653
42.7
43.7
Result of operating activities
Finance costs
Share of result of associates
Group profit before income tax
Income tax expense
Profit for the year
Attributable to:
Equityholders of the company
Non-controlling interest
Total
Earnings Per Share (Kshs)
Basic and diluted
32
18 (i)
11
18 (iii)
12
The notes on pages 26 to 85 are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE YEAR ENDED 31 DECEMBER 2015
Note
Profit for the year
Other comprehensive income
Items that will not be reclassified to profit or loss
Net fair value (losses)/gains on financial assets
Deferred Tax on other comprehensive income
Items that are or/may be reclassified subsequently to profit or loss
Net translation gains/(losses)
Associate share of other comprehensive income
Total other comprehensive income, net of tax
Total comprehensive income for the year
Attributable to:
Equityholders of the Company
Non-controlling interest
Total comprehensive income for the year
The notes on pages 26 to 85 are an integral part of these financial statements.
20
Jubilee Holdings Annual Report & Financial Statements 2015
19 & 20
28
18 (i)
18 (iii)
2015
Kshs ‘000
2014
Kshs ‘000
3,121,093
3,103,653
(362,297)
(7,963)
225,399
-
242,776
(27,085)
(154,569)
2,966,524
(503,913)
515,239
236,725
3,340,378
2,723,772
242,752
2,966,524
3,209,242
131,136
3,340,378
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
2015
2014
Note
Kshs ‘000
Kshs ‘000
Property and equipment
16(i)
226,341
184,548
Intangible assets
16(ii)
64,950
23,082
17
5,535,330
5,073,192
18 (i)
ASSETS
Investment properties
Investment in associates
Deferred tax asset
8,735,980
7,733,043
28
73,331
76,149
2,344,998
Unquoted equity investments at fair value through profit or loss
19
2,675,147
Unquoted equity investments at fair value through other comprehensive income
19
104,445
96,868
Quoted equity investments at fair value through profit or loss
20
6,446,523
8,002,990
20
1,377,303
1,721,076
67,524
44,102
Quoted equity investments at fair value through other comprehensive income
Mortgage loans receivables
21 (i)
Loans on life insurance policies
21 (ii)
Government securities at armortised cost
495,153
361,981
22
29,604,698
21,923,229
Commercial bonds at amortised cost
23
1,859,070
1,696,519
Deferred acquisition costs
24
264,081
189,248
Current tax recoverable
11
45,840
27,725
Receivables arising out of direct insurance arrangements
4(c)
4,214,950
3,653,899
Receivables arising out of reinsurance arrangements
4(c)
2,179,849
1,713,259
Reinsurers’ share of insurance contract liabilities
25
6,641,579
6,833,940
Other receivables
26
1,035,593
659,145
Deposits with financial institutions
27
10,029,209
11,022,305
Cash and bank balances
27
Total assets
701,114
1,124,076
82,378,010
74,505,374
LIABILITIES
Deferred tax liability
28
196,841
158,618
Insurance contract liabilities
29
18,709,163
19,644,653
Payable under deposit administration contracts
30
30,958,100
26,864,350
Unearned premium reserve
31
7,760,661
6,608,846
Dividends payable
269,627
265,928
32
-
1,373,680
Other payables
33
2,287,144
1,600,892
Current tax payable
11
228,195
192,229
137,591
130,325
Borrowings
Creditors arising out of direct insurance arrangements
Creditors arising out of reinsurance arrangements
Total liabilities
1,449,481
1,186,822
61,996,803
58,026,343
EQUITY
Share capital
13
329,423
299,475
Reserves
14
4,515,296
3,205,055
13,759,189
11,484,875
Retained earnings
Proposed dividends
15
Equity attributable to owners of the Company
Non-controlling interest (NCI)
18 (iii)
494,133
449,212
19,098,041
15,438,617
1,283,166
1,040,414
Total equity
20,381,207
16,479,031
Total liabilities and equity
82,378,010
74,505,374
The financial statements on pages 20 to 85 were approved by the Board of Directors on 31 March 2016 and signed on its behalf by:
Nizar N Juma Zul Abdul
Chairman
Director
The notes on pages 26 to 85 are an integral part of these financial statements.
Jubilee Holdings Annual Report & Financial Statements 2015
21
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
2015
2014
Note
Kshs ‘000
Kshs ‘000
Property and equipment
16(i)
26,625
23,790
Investment in associates
18 (i)
838,251
838,251
Investment in subsidiaries
18 (ii)
1,810,627
1,782,129
Deferred income tax asset
28
2,505
316
Unquoted equity investments at fair value through other comprehensive income
19
23,565
12,007
Quoted equity investments at fair value through other comprehensive income
20
16,056
12,785
Current income tax recoverable
11
8,811
9,218
Due from related parties
35
148,080
153,367
Other receivables
26
12,159
24,439
Deposits with financial institutions
27
23,731
1,961
Cash and bank balances
27
93,818
66,686
3,004,228
2,924,949
435,158
538,857
269,627
265,928
13,324
14,634
718,109
819,419
ASSETS
Total assets
LIABILITIES
Due to related parties
35
Dividends payable
Other payables
33
Total liabilities
EQUITY
Share capital
13
329,423
299,475
Reserves
14
76,995
64,981
1,385,568
1,291,862
494,133
449,212
Total equity
2,286,119
2,105,530
Total liabilities and equity
3,004,228
2,924,949
Retained earnings
Proposed dividends
15
The financial statements on pages 20 to 85 were approved by the Board of Directors on 31 March 2016 and signed on its behalf by:
Nizar N Juma Zul Abdul
Chairman Director
The notes on pages 26 to 85 are an integral part of these financial statements.
22
Jubilee Holdings Annual Report & Financial Statements 2015
15
15
15
14 (c )
14 (d)
14 (e)
28
18 (i)
15
15
15
14 (a)
14 (a)
14 (c )
14 (d)
14 (e)
Note
974,878
-
299,475
-
29,948
29,948
329,423
528,488
(27,085)
(370,474)
(2,967)
(45,864)
- (446,390)
974,878
515,239
228,251
(48)
743,442
299,475
-
231,436
-
299,475
Fair Value
Reserves
Kshs ‘000
The notes on pages 26 to 85 are an integral part of these financial statements.
Profit for the year
Other comprehensive income
Other fair value gains on share of associates through OCI
Change in fair value of financial assets through OCI
Transfer to retained earnings on disposal
Net translation loss
Transfer to contingency reserves
Transfer from life fund
Total comprehensive income for the year
Transactions with owners:
Dividends: Final for 2013 paid
Interim for 2014 paid
Final for 2014 proposed
Total transactions with owners
At end of year
Year ended 31 December 2015
At start of year:
Profit for the year
Other comprehensive income
Other fair value gains on share of associates through OCI
Change in fair value of financial assets through OCI
Deferred tax on other comprehensive income
Transfer to retained earnings on disposal
Net translation gains/(loss)
Transfer to contingency reserves
Transfer from life fund
Transfer from subsidiary group life
Total comprehensive income for the year
Transactions with owners:
Bonus issue
Dividends: Final for 2014 paid
Interim for 2015 paid
Final for 2015 proposed
Total transactions with owners
At end of year
At start of year
Year ended 31 December 2014
Share
Capital
Kshs ‘000
-
310,242
310,242
70,000 (240,449)
-
70,000 (550,691)
-
70,000 (550,691)
(413,820)
- (413,820)
-
70,000 (136,871)
Statutory
Reserve
Kshs ‘000
217,163
217,163
48
(97,670)
2,781,950
2,879,572
9,212,032
Retained
Earnings
Kshs ‘000
45,864
(76,881)
81,241
2,864,240
Equity
Attributable
to Owners
Kshs ‘000
515,239
228,251
(413,820)
217,163
3,426,405
2,879,572
Total Equity
Kshs ‘000
(2,852)
(90,093)
131,136
224,081
515,239
225,399
(503,913)
217,163
3,557,550
3,103,653
909,278 13,340,755
Non
Controlling
Interest
Kshs ‘000
(27,085)
(370,474)
(2,967)
310,242
1,369,508
81,241
4,174,521
8,177
(4,996)
(67,466)
242,752
(27,085)
(362,297)
(7,963)
242,776
1,369,508
81,241
4,417,273
23
(449,212)
(449,212)
(449,212)
(65,885)
(65,885)
494,133
44,921
(515,097)
(515,097)
494,133 19,098,041 1,283,166 20,381,207
-
-
449,212 15,438,617 1,040,414 16,479,031
- 2,814,056 307,037 3,121,093
(359,370)
(359,370)
(359,370)
(59,895)
(59,895)
449,212
89,842
(419,265)
(419,265)
449,212 15,438,617 1,040,414 16,479,031
-
-
-
359,370 12,431,477
Proposed
Dividends
Kshs ‘000
Jubilee Holdings Annual Report & Financial Statements 2015
(29,948)
(65,885)
(494,133)
(589,966)
829,413 3,327,844 13,759,189
76,881
- 1,369,508
76,881 1,369,508
752,532 1,958,336 11,484,875
- 2,814,056
(59,895)
(449,212)
(509,107)
752,532 1,958,336 11,484,875
97,670
97,670
-
654,862 1,741,173
General Translation Contingency
Reserves
Reserves
Reserves
Kshs ‘000
Kshs ‘000 Kshs ‘000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015
The notes on pages 26 to 85 are an integral part of these financial statements.
At end of year
Total transactions with owners
Final for 2015 proposed
Interim for 2015 paid
Dividends: Final for 2014 paid
Bonus issue
Transactions with owners:
Total comprehensive income for the year
Change in fair value of financial assets through other comprehensive income
Other comprehensive Income
Profit for the year
At start of year
Year ended 31 December 2015
At end of year
Total transactions with owners
Final for 2014 proposed
Interim for 2014 paid
Dividends: Final for 2013 paid
Transactions with owners:
Total comprehensive income for the year
Change in fair value of financial assets through other comprehensive income
Other comprehensive Income
Profit for the year
At start of year
Year ended 31 December 2014
-
15
329,423
29,948
-
-
29,948
-
-
-
299,475
299,475
15
15
14 (a)
-
15
-
-
-
-
-
-
299,475
15
15
14 (a)
Note
Share
Capital
Kshs ‘000
6,995
-
-
-
-
-
12,014
12,014
-
(5,019)
(5,019)
-
-
-
-
(8,970)
(8,970)
-
3,951
Fair Value
Reserves
Kshs ‘000
1,385,568
(589,966)
(494,133)
(65,885)
-
(29,948)
683,673
-
683,673
1,291,861
1,291,861
(509,107)
(449,212)
(59,895)
-
504,333
-
504,333
1,296,635
Retained
Earnings
Kshs ‘000
494,133
44,921
494,133
-
(449,212)
-
-
-
-
449,212
449,212
89,842
449,212
-
(359,370)
-
-
-
359,370
Proposed
Dividends
Kshs ‘000
24
2,286,119
(515,097)
-
(65,885)
(449,212)
-
695,687
12,014
683,673
2,105,529
2,105,529
(419,265)
-
(59,895)
(359,370)
495,363
(8,970)
504,333
2,029,431
Total
Equity Kshs
‘000
Jubilee Holdings Annual Report & Financial Statements 2015
70,000
-
-
-
-
-
-
-
-
70,000
70,000
-
-
-
-
-
-
-
70,000
General
Reserves
Kshs ‘000
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
GROUP
Note
2015
2014
Kshs ‘000
Kshs ‘000
4,145,139
3,949,285
Cash flow from operating activities
Profit before income tax
Adjustments for: Depreciation and amortisation
Impairment of insurance receivables
Fair value gains on equity investments at fair value through profit and loss
Investment income and other income
Share of result of associates after income tax
16
116,081
84,701
4 (c)
138,583
123,247
19 & 20
1,109,494
(1,234,767)
7
(6,093,468)
(4,833,582)
18 (i)
(1,052,012)
(1,481,568)
Operating profit before changes to receivables and payables
Change in deposit administration contracts
Change in insurance contract liabilities and reserves
(1,636,183)
(3,392,684)
30 & 14(e)
4,334,110
6,362,350
29, 31 & 14(e)
1,215,181
4,488,552
Change in premium, reinsurance and other receivables
Change in reinsurance and other payables
Cash generated from operations
Income tax paid
11
Net cash inflow from operating activities
(1,286,558)
(982)
956,177
(578,928)
3,582,727
6,878,308
(888,044)
(657,445)
2,694,683
6,220,863
5,247,934
4,234,650
740,889
213,445
368,332
151,465
Cash flow from investing activities
Rent, interest and dividend received
Dividends received from associates
18 (i)
Proceeds from sale of quoted shares
Proceeds from disposal of property and equipment
812
3,204
18 (i)
(108,932)
492,016
Purchase of property and equipment and intangible assets
16
(205,984)
(134,564)
Net additions of investment properties
17
(84,699)
(106,031)
Purchase of quoted shares
20
(330,745)
(1,297,005)
19
(11,784)
(6,862)
21 (i)
(34,307)
(26,011)
Proceeds from (additions)/redemption of shares in investment in associate
Purchase of unquoted shares
Mortgage loans advanced
Mortgage loans repaid
21 (i)
8,498
11,630
Loans on life insurance policies advanced
21 (ii)
(232,528)
(117,281)
Loans on life insurance policies repaid
21 (ii)
99,028
268,087
Net purchase of government securities
22
(7,665,194)
(2,855,596)
Net purchase of commercial bonds
23
(163,269)
(809,102)
(2,371,949)
22,045
(1,373,680)
-
Net cash (outflow)/inflow from investing activities
Cash flow from financing activities
Settlement of borrowings
32
Dividends paid
Net cash outflow from financing activities
(Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents at start of year
27
Exchange gain/(loss) on translation of cash and cash equivalents in foreign currencies
Cash and cash equivalents at end of year
14(c)
27
(515,097)
(419,265)
(1,888,777)
(419,265)
(1,566,043)
5,823,643
12,146,381
6,736,558
310,242
(413,820)
10,890,580
12,146,381
The notes on pages 26 to 85 are an integral part of these financial statements.
Jubilee Holdings Annual Report & Financial Statements 2015
25
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Jubilee Holdings Limited is a limited liability company incorporated and domiciled in Kenya. The address of its registered office is: Jubilee
Insurance House, Wabera Street, Nairobi, Kenya. The Company has a primary listing on the Nairobi Securities Exchange and is cross-listed
on the Uganda Securities Exchange and Dar es Salaam Stock Exchange.
The Company through its subsidiaries and associates (together forming the Group) underwrites Life and non-life insurance risks, such as
those associated with death, disability, health, property and liability. The Group also issues a diversified portfolio of investment contracts to
provide its customers with asset management solutions for their savings and retirement needs. All these products are offered to both domestic
and foreign markets. It has operations in Kenya, Uganda, Tanzania, Burundi and Mauritius and employs over 878 (2014:750) people
through its subsidiaries.
The insurance business of the Group is organized into two main divisions, short-term (general) business and long-term (life) business. Longterm business relates to the underwriting of life risks relating to insured persons, the issue of investment contracts and the administration of
pension funds. Short-term business relates to all other categories of insurance business written by the Group, analyzed into several subclasses of business based on the nature of the assumed risks.
With a view to diversifying the Group’s income base, operational activities have been extended to include fund management, property
development and management, power generation and international fibre optic broadband cable connectivity.
For purposes of the Kenya Companies Act reporting purposes, the balance sheet is represented by the statement of financial position while
the profit and loss account is represented by the statement of profit or loss and other comprehensive income.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out in Note 38 and apply to the Group and
the Company. These policies have been consistently applied to all years presented, unless otherwise stated.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates
and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. The critical accounting estimates and assumptions applied in the year are:
a) Insurance contracts liabilities
The estimation of future benefit payments from long-term insurance contracts is the Group’s most critical accounting estimate. There are
several sources of uncertainty that need to be considered in the estimate of the liability that the Group will ultimately pay for such claims.
Management applies judgment in the estimation of incurred but not yet reported claims (IBNR) whereby the Group uses historical experience
to estimate the ultimate cost of claims and the IBNR provision. This involves the analysis of historical claims development factors and the
selection of estimated development factors based on this historical pattern. The selected development factors are then applied to claims data
for each accident year that is not fully developed to produce an estimated ultimate claims cost for each accident year. Note 29 contains
further details on the estimation of insurance liabilities.
The development of insurance liabilities provides a measure of the Group’s ability to estimate the ultimate value of claims.
The determination of the liabilities under long-term insurance contracts is dependent on estimates made by the Group. Estimates are made as
to the expected number of deaths for each of the years in which the Group is exposed to risk. The Group bases these estimates on standard
mortality tables that reflect historical mortality experience. The estimated number of deaths determines the value of the benefit payments and
the value of the valuation premiums. The main source of uncertainty is that epidemics such as AIDS could result in future mortality being
significantly worse than in the past for the age groups in which the Group has significant exposure to mortality risk. 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 Group is exposed to longevity risk.
For contracts without fixed terms, the Group will be able to increase mortality risk charges in future years in line with emerging mortality
experience.
Under certain contracts, the Group has offered guaranteed annuity options. In determining the value of these options, estimates have been
made as to the percentage of contract holders that will exercise them. There is not enough historical information available on which to base
these estimates. Changes in investment conditions could result in significantly more contract holders exercising their options than has been
assumed.
Estimates are also made as to 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.
26
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING ACCOUNTING POLICIES (CONTINUED)
b) Income tax
The Group is subject to income taxes in various jurisdictions. There are many transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based
on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
c) Measurement of fair value
Valuation of investment property
Investment property comprises freehold land and buildings carried at fair value. Fair value is based on valuation performed by an independent
valuation expert. In performing the valuation the valuer uses discounted cash flow projections which incorporate assumptions around the
continued demand for rental space, sustainability of growth in rent rates as well as makes reference to recent sales. The change in these
assumptions could result in a significant change in the carrying value of investment property.
Valuation of unquoted equity investments
The Group uses valuation techniques for valuing unquoted shares that are not based on observable market data. The Group reviewed
several valuation techniques and selected a value that is based on discounted cash flow. The critical management judgment is in the selection
of the discount rate and the growth rate applied and the determination of normalized earnings for the underlying investments.
d) Receivables
Critical estimates are made by the Directors in determining the recoverable amount of the impaired receivable. The process is set out in Note
38.10. The carrying amount of the receivables are shown on Note 4 (c) and Note 26.
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK
The Group’s activities expose it to a variety of risks, including insurance risk, financial risk, credit risk, and the effects of changes in property
values, debt and equity market prices, foreign currency exchange rates and interest rates. The Group’s overall risk management programme
focuses on the identification and management of risks and seeks to minimise potential adverse effects on its financial performance, by use
of underwriting guidelines and capacity limits, reinsurance planning, credit policy governing the acceptance of clients, and defined criteria
for the approval of intermediaries and reinsurers. Investment policies are in place which help manage liquidity, and seek to maximise return
within an acceptable level of interest rate risk.
This section summarises the way the Group manages key risks:
(i) 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 contracts without fixed terms, it is assumed that the Group will be able to increase mortality risk charges in future years in line with
emerging mortality experience.
Estimates are also made as to 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. The average estimated rate
of investment return is 12% p.a. In Kenya, were the average future investment returns to decrease by 1% from management’s estimates,
the insurance liability would increase by Kshs 42.4 million (2014: Kshs 35 million) while significant enough deterioration in estimates is
immediately recognized to make the liabilities adequate.
For a portfolio of insurance contracts where the theory of probability is applied to pricing and provisioning, the principal risk that the Group
faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities. This
could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random and the actual
number and amount of claims and benefits will vary from year to year from the level established using statistical techniques.
Experience shows that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome
will be. In addition, a more diversified portfolio is less likely to be affected across the board by a change in any subset of the portfolio. The
Group has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of these categories
to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.
Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk, geographical location and type
of industry covered.
Jubilee Holdings Annual Report & Financial Statements 2015
27
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
(i) Insurance risk (continued)
The following tables disclose the maximum insured risk (sum assured) by the class of business in which the contract holder operates and
included in the terms of the policy. The amounts are the carrying amounts of the insurance liabilities (gross and net of reinsurance) arising
from insurance.
Year ended
31 December 2015
Maximum insured loss
Class of business
Kshs 0 m Kshs 15m
Kshs 15m Kshs 250m
Kshs 250m Kshs 1000m
Kshs 1000m
+
Total
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Gross
52,200,394
10,421,380
5,119,087
1,204,820
68,945,681
Net
40,125,762
10,421,380
5,119,087
1,204,820
56,871,049
Gross
21,577,613
112,269,155
85,561,036
184,646,563
404,054,367
Net
General Insurance business
Motor
Fire
Personal accident
Other
17,347,822
66,692,651
12,540,980
4,500,000
101,081,453
Gross
3,774,980
45,370,406
8,366,345
2,569,142
60,080,873
Net
2,987,447
45,370,406
8,366,345
2,569,142
59,293,340
Gross
49,673,831
236,943,002
135,879,500
588,540,806
1,011,037,139
Net
34,838,073
143,471,829
83,580,772
254,540,566
516,431,240
-
-
-
-
Gross
18,367,649
431,044
-
-
Net
17,794,116
115,755
-
-
17,909,871
898,744,542
247,369,430
793,073
-
1,146,907,045
-
775,956,374
Life assurance business
Ordinary life
Group life
Gross
Net
Total
Gross
Net
18,798,693
659,820,253
115,605,041
531,080
1,044,339,009
652,804,417
235,719,041
776,961,331 2,709,823,798
772,913,473
381,677,062
110,138,264
262,814,528 1,527,543,327
Kshs 0 m Kshs 15m
Kshs 15m Kshs 250m
Kshs 250m Kshs 1000m
Kshs 1000m
+
Year ended
31 December 2014
Maximum insured loss
Class of business
General Insurance
business
Motor
Fire
Personal accident
Other
Total
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Gross
46,058,765
10,441,576
5,078,625
1,503,986
63,082,952
Net
34,045,790
10,441,576
5,078,625
1,503,986
51,069,977
Gross
20,749,734
109,490,017
108,305,393
287,540,660
526,085,804
Net
16,541,542
58,912,204
13,638,728
4,880,000
93,972,474
Gross
3,909,530
41,590,397
4,442,235
10,939,515
60,881,677
Net
3,126,019
18,233,255
780,000
180,000
22,319,274
Gross
44,950,457
212,084,786
96,110,426
374,742,620
727,888,289
Net
32,085,883
122,545,250
58,810,877
131,127,884
344,569,894
Gross
16,197,680
383,429
-
-
16,581,109
Net
15,921,908
27,000
-
-
15,948,908
885,783,841
222,241,508
1,987,408
-
1,110,012,757
-
704,712,292
Life assurance business
Ordinary life
Group life
Gross
Net
Total
Gross
Net
679,272,292
25,425,000
15,000
1,017,650,007
596,231,713
215,924,087
674,726,781 2,504,532,588
780,993,434
235,584,285
78,323,230
137,691,870 1,232,592,819
(ii) Financial risk
The Group is exposed to financial risk through its financial assets, financial liabilities (investment contracts and borrowings), reinsurance
assets and insurance liabilities. In particular the key financial risk is that the proceeds from its financial assets are not sufficient to fund the
obligations arising from its insurance and investment contracts.
28
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
(ii) Financial risk (continued)
These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market
movements. The risks that the Group primarily faces due to the nature of its investments and liabilities are interest rate risk and equity price
risk.
The Group manages these positions within an asset liability management (ALM) framework that has been developed to achieve long-term
investment returns in excess of its obligations under insurance and investment contracts. The principal technique of the Group’s ALM is to
match assets to the liabilities arising from insurance and investment contracts by reference to the type of benefits payable to contract holders.
For each distinct category of liabilities, a separate portfolio of assets is maintained.
The Group has exposure to the following risks arising from financial instruments:
(a) Market risk
(i) Foreign exchange risk
The Group operates regionally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to
the US Dollar, Uganda shilling and Tanzania Shilling. Foreign exchange risk arises from future commercial transactions, recognized assets
and liabilities and net investments in foreign operations.
The Group manages foreign exchange risk arising from future commercial transactions and recognized assets and liabilities using forward
contracts, but has not designated any derivative instruments as hedging instruments. Currency exposure arising from the net assets of foreign
operations is managed primarily through borrowings denominated in the relevant foreign currencies.
The Group had the following significant foreign currency positions (all amounts expressed in Kenya Shillings thousands):
GROUP
Kshs’000
Uganda
Shillings
Kshs’000
Tanzania
Shillings
Kshs’000
850,337
850,337
155,807
151,033
834,323
58,959
1,200,122
63,731
190,996
12,606
267,333
54,970
9,620
28,309
96,435
189,334
1,394,951
1,590,990
275,089
- 3,261,030
850,337 (2,060,908)
21,886
122,409
90,691
234,986
32,347
368,739
262,604
87,575
718,918
(529,584)
Kshs’000
Uganda
Shillings
Kshs’000
Tanzania
Shillings
Kshs’000
505,401
505,401
134,318
2,773,160
164,930
3,072,408
343,420
13,829
1,219,986
135,013
1,712,248
93,240
92,295
55,275
32,052
272,862
1,373,680
1,373,680
(868,279)
1,008,566
1,801,825
31,121
327,374
3,168,886
(96,478)
820,789
1,247,252
329,271
2,397,312
(685,064)
531,032
370,919
50,234
952,185
(679,323)
Exchange Risk
US Dollar
As at 31 December 2015:
ASSETS
Receivables arising out of reinsurance arrangements
Deferred acquisition costs
Deposit with financial institutions
Cash and bank balances
Total assets
LIABILITIES
Provision for unearned premium
Insurance contract liabilities
Deferred acquisition costs
Creditors arising out of reinsurance arrangements
Borrowings
Total liabilities
Net position
US Dollar
As at 31 December 2014:
ASSETS
Receivables arising out of reinsurance arrangements
Deferred acquisition costs
Deposit with financial institutions
Cash and bank balances
Total assets
LIABILITIES
Provision for unearned premium
Insurance contract liabilities
Deferred acquisition costs
Creditors arising out of reinsurance arrangements
Borrowings
Total liabilities
Net position
Mauritius
Burundi
Rupees
Francs
Kshs’000 Kshs’000
62,723
7,688
70,411
Total
Kshs’000
337,231
168,341
1,903,965
168,000
2,577,537
34,439
1,820,015
36,526
2,012,529
453,355
70,965 4,285,899
(554) (1,708,362)
Mauritius
Burundi
Rupees
Francs
Kshs’000 Kshs’000
62,462
299,636
44,313
406,411
Total
Kshs’000
633,440
106,124
4,853,458
376,308
5,969,330
161,215
2,521,602
105,274
3,525,270
8,555
39,676
119,461
826,340
1,373,680
394,505 8,286,568
11,906 (2,317,238)
Jubilee Holdings Annual Report & Financial Statements 2015
29
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
(ii) Financial risk (continued)
(a) Market Risk Continued
(i) Foreign exchange risk (continued)
Company
Exchange Risk
US Dollar
Uganda
Shillings
Tanzania
Shillings
Mauritius
Rupees
Burundi
Francs
Total
As at 31 December 2015:
Kshs’000
Kshs’000
Kshs’000
Kshs’000 Kshs’000
Kshs’000
ASSETS
Due from Related parties
-
-
2,137
44,785
101,159
148,081
2,268
-
-
-
-
2,268
-
4,036
-
1
-
4,037
2,268
4,036
2,137
44,786
101,159
154,386
Due to related parties
-
187,017
21,045
-
-
208,062
Total liabilities
-
187,017
21,045
-
-
208,062
2,268
(182,981)
(18,908)
44,786
101,159
(53,676)
Kshs’000
Uganda
Shillings
Kshs’000
Tanzania
Shillings
Kshs’000
Deposit with financial institutions
Cash and bank balances
Total assets
LIABILITIES
Net position
US Dollar
As at 31 December 2014:
Mauritius
Burundi
Rupees
Francs
Kshs’000 Kshs’000
Total
Kshs’000
ASSETS
Due from Related parties
Deposit with financial institutions
-
-
641
72,439
80,287
153,367
1,961
-
-
-
-
1,961
-
3,366
-
84
-
3,450
1,961
3,366
641
72,523
80,287
158,778
-
211,707
14,990
-
-
226,697
Cash and bank balances
Total assets
LIABILITIES
Due to related parties
Total liabilities
Net position
-
211,707
14,990
-
-
226,697
1,961
(208,341)
(14,349)
72,523
80,287
(67,919)
At 31 December 2015, if the Shilling had weakened/strengthened by 10% against the US dollar with all other variables held constant,
the post-tax profit for the year would have been Kshs 36.2 million (2014: Kshs 15.2 million) higher/lower, mainly as a result of US dollar
receivables and bank balances in the Kenyan entity.
Average Rate
Closing Rate
2015
2014
2015
2014
Kshs
Kshs
Kshs
Kshs
US Dollar
98.5946
88.4538
102.3114
90.5978
Ugandan Shilling
31.7354
29.8745
32.9876
30.5748
Tanzanian Shilling
20.0532
18.8573
21.1121
19.0954
Mauritian Rupee
Burundi Franc
2.7152
2.7122
2.7221
2.7086
16.0269
17.5144
15.0228
17.1749
(ii) Price risk
The Group is exposed to equity securities price risk because of investments in quoted and unquoted shares classified either as financial assets
at fair value through other comprehensive income or at fair value through profit or loss. The Group is not exposed to commodity price risk. To
manage its price risk arising from investments in equity and debt securities, the Group diversifies its portfolio. Diversification of the portfolio
is done in accordance with limits set by the Group. All quoted shares held by the Group are traded on the Nairobi Securities Exchange
(NSE), the Uganda Securities Exchange (USE) and Dar es Salaam Stock Exchange (DSE).
30
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
(ii) Financial risk (continued)
(b) Market Risk Continued
(ii) Price risk (continued)
Group
At 31 December 2015, if the NSE, indices had increased/decreased by 8% with all other variables held constant and all the Group’s equity
instruments moved according to the historical correlation to the index, the post-tax profit would have been Kshs 70.8 million (2014: Kshs
74.9 million) higher/lower and equity would have been Kshs 613.4 million (2014: Kshs 767.3 million) higher/lower. The Group also has
investment in the USE and DSE. The change of price in these stock exchanges would not materially affect the Group.
Company
At 31 December 2015 the Company did not hold any shares in the Nairobi Securities Exchange. If the USE and DSE indices had increased/
decreased by 8% with all other variables held constant, all the companies’ equity instruments moved according to the historical correlation
to the index, than equity movement would not have been significant.
(iii) Cash flow and fair value interest rate risk
Fixed interest rate financial instruments expose the Group to fair value interest rate risk. Variable interest rate financial instruments expose
the Group to cash flow interest rate risk.
The Group’s fixed interest rate financial instruments are government securities, deposits with financial institutions and corporate bonds.
The Group’s variable interest rate financial instruments are some of the quoted corporate bonds.
The sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates at the reporting date.
For liabilities under long-term insurance contracts with fixed and guaranteed terms, changes in interest rate will not cause a change to the
amount of the liability, unless the change is severe enough to trigger a liability adequacy test adjustment. The level of the reduction of the level
of interest rate that will trigger an adjustment is an interest rate of 1%. An additional liability of Kshs 261 million (2014: Kshs 250 million)
would be required as a result of a further worsening of 20% in mortality, in the Jubilee Kenya portfolio, which contributes ninety-five percent
of the long-term insurance business.
Investment contracts with fixed and guaranteed terms, government securities and deposits with financial institutions held to maturity are
accounted for at amortized cost and their carrying amounts are not sensitive to changes in the level of interest rates.
At 31 December 2015, if interest rates on quoted corporate bonds at that date had been 5% higher/lower with all other variables held
constant, post-tax profit for the year would have been Kshs 7.4 million (2014: Kshs 8.5 million) higher/lower, mainly as a result of higher/
lower interest income on floating rate quoted corporate bonds. The majority of quoted corporate bonds are held in the Kenyan insurance
entity, and is the basis of sensitive applied above.
(c) Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where
the Group is exposed to credit risk are:
•
Receivables arising out of direct insurance arrangements;
•
Receivables arising out of reinsurance arrangements; and
•
Reinsurers’ share of insurance liabilities.
Other areas where credit risk arises include cash and cash equivalents, corporate bonds and deposits with banks and other receivables.
Reinsurance is used to manage insurance risk. This does not, however, discharge the Group’s liability as primary insurer. If a reinsurer fails
to pay a claim for any reason, the Group remains liable for the payment to the policyholder. The credit worthiness of reinsurers is considered
on an annual basis by reviewing their financial strength prior to finalization of any contract.
The exposure to individual counterparties is also managed by other mechanisms, such as the right of offset where counterparties are both
debtors and creditors of the Group. Management information reported to the Group includes details of provisions for impairment on
loans and receivables and subsequent write-offs. Internal audit makes regular reviews to assess the degree of compliance with the Group
procedures on credit. Exposures to individual policyholders and groups of policyholders are collected within the ongoing monitoring of the
controls associated with regulatory solvency. Where there exists significant exposure to individual policyholders, or homogenous groups of
policyholders, a financial analysis equivalent to that conducted for reinsurers is carried out by the Group risk department.
Jubilee Holdings Annual Report & Financial Statements 2015
31
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(c) Credit risk (continued)
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings if
available or historical information about counterparty default rates. None of the Group’s credit risk counter parties are rated except the some
Governments of countries we operate in, the issuer of the Group’s government securities which has B+ and B rating for the Government of
Kenya and the Government of Uganda respectively. The Group classifies counterparties without an external credit rating as below:
Group 1 - new customers/related parties.
Group 2 - existing customers/related parties with no defaults in the past.
Group 3 - existing customers/related parties with some defaults in the past. All defaults were fully recovered.
The amount that best represents the Group’s and Company’s maximum exposure to credit risk at 31 December 2015 is made up as follows:
Group
Company
Maximum exposure to
Credit rating/
credit risk before collateral held
Classification
Receivables arising out of reinsurance arrangements
Group 2
Receivables arising out of direct insurance arrangements
Group 2
Reinsurers’ share of insurance liabilities
Group 2
Government securities at armortised cost
Group 2
Commercial bonds
Group 2
1,859,070
1,696,519
-
-
Cash and bank balances
Group 2
701,114
1,124,076
93,818
66,686
Loans on life insurance policies
Group 2
495,153
361,981
-
-
Mortgage loans
Group 2
67,524
44,102
-
-
Deposits with financial institutions
Group 2
10,029,209
11,022,305
23,731
1,961
Other receivables
Group 2
Totals
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
2,179,849
1,713,259
-
-
4,214,950
3,653,899
-
-
6,641,579
6,833,940
-
-
29,604,698
21,923,229
-
-
1,035,593
659,145
12,159
24,439
56,828,739
49,032,455
129,708
93,086
Surrender values of the life insurance policies and title documents are held as collateral for loans on life policies and mortgage loans
respectively. All receivables that are neither past due or impaired are within their approved credit limits, and no receivables have had their
terms renegotiated.
None of the above assets are past due or impaired except for the following amounts in;
•
Receivables arising out of direct insurance arrangements (which are due on inception of insurance cover); and
•
Receivables arising out of reinsurance arrangements.
Receivables arising out of direct insurance and re-insurance arrangements are summarized as follows:
Direct Insurance Arrangements
Reinsurance Arrangements
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Neither past due nor impaired
1,882,724
1,561,997
295,395
254,427
Past due but not impaired
2,332,226
2,091,902
1,174,282
641,276
Impaired
Gross
Less: allowance for impairment
Net
32
Jubilee Holdings Annual Report & Financial Statements 2015
565,788
427,205
719,782
827,166
4,780,738
4,081,104
2,189,459
1,722,869
(565,788)
(427,205)
(9,610)
(9,610)
4,214,950
3,653,899
2,179,849
1,713,259
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(c) Credit risk (continued)
Movements on the provision for impairment of receivables are as follows:
Direct Insurance Arrangements
Reinsurance Arrangements
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
At start of year
427,205
303,958
9,610
9,675
Increase/(decrease) in the year
138,583
123,247
-
(65)
565,788
427,205
9,610
9,610
At end of year
Receivables arising out of insurance arrangements past due but not impaired:
Direct Insurance Arrangements
Reinsurance Arrangements
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Past due but not impaired:
- by up to 30 days
659,786
628,848
773,379
346,289
- by 31 to 60 days
581,203
591,925
1,973
179,557
- by 61 to 150 days
672,034
517,154
35,442
51,302
- by 151 to 360 days
Total past due but not impaired
419,203
353,975
363,488
64,128
2,332,226
2,091,902
1,174,282
641,276
All receivables past due by more than 360 days are considered to be impaired, and are carried at their estimated recoverable value. No
collateral is held in respect of receivables arising out of direct or reinsurance arrangements.
Receivables arising out of direct insurance arrangements individually impaired:
Of the total gross amount of impaired receivables, the following amounts have been individually assessed:
Direct Insurance Arrangements
Reinsurance Arrangements
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
262,405
198,645
-
88,991
Individually assessed impaired receivables
- brokers
- agents
- insurance companies
- direct clients
Total
45,168
13,058
-
-
234,304
191,591
719,782
738,175
23,911
23,911
-
-
565,788
427,205
719,782
827,166
(d) Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities as they fall due and to
replace funds when they are withdraw.
The Group is exposed to daily calls on its available cash for claims settlement and other administration expenses. The Group does not
maintain cash resources to meet all of these needs as experience shows that a minimum level of reinvestment of maturing funds can be
predicted with a high level of certainty. The Board sets limits on the minimum level of bank overdraft facilities that should be in place to cover
expenditure at unexpected levels of demand.
The table below presents the cash flows payable by the Group under financial liabilities by remaining contractual maturities (other than
insurance contract liabilities which are based on expected maturities) at the financial reporting date. The amounts disclosed are the
contractual undiscounted cash flows.
Jubilee Holdings Annual Report & Financial Statements 2015
33
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(c) Liquidity risk (continued)
GROUP
Year ended 31 December 2015
Up to 1
month
Kshs ‘000
1 to 3
months
Kshs ‘000
3 to 12
months
Kshs ‘000
1 to 5
years
Kshs ‘000
Kshs ‘000
30,753
6,992
122,808
18,548,610
18,709,163
Payable under deposit administration contracts
-
-
201,260
30,756,840
30,958,100
Creditors arising out of direct insurance arrangements
-
-
-
137,591
137,591
Insurance contract liabilities
Creditors arising out of reinsurance arrangements
Total
-
-
-
1,449,481
1,449,481
265,928
13,326
-
2,277,517
2,556,771
-
-
-
-
-
296,681
20,318
324,068
53,170,039
53,811,106
Up to 1
month
Kshs ‘000
1 to 3
months
Kshs ‘000
3 to 12
months
Kshs ‘000
1 to 5
years
Kshs ‘000
Total
Kshs ‘000
Insurance contract liabilities
-
-
-
19,644,653
19,644,653
Payable under deposit administration contracts
-
-
-
26,864,350
26,864,350
Creditors arising out of direct insurance arrangements
-
-
-
130,325
130,325
Creditors arising out of reinsurance arrangements
-
-
-
1,186,822
1,186,822
275,711
27,495
-
1,563,614
1,866,820
-
-
1,408,541
-
1,408,541
275,711
27,495
1,408,541
49,389,764
51,101,511
Up to 1
month
Kshs ‘000
1 to 3
months
Kshs ‘000
3 to 12
months
Kshs ‘000
1 to 5
years
Kshs ‘000
Total
Kshs ‘000
Dividend and other payables
Borrowings
Totals
Year ended 31 December 2014
Dividend and other payables
Borrowings
Totals
COMPANY
Year ended 31 December 2015
Due to related parties
435,158
-
-
-
435,158
Dividend and other payables
269,627
13,324
-
-
282,951
704,785
13,324
-
-
718,109
Up to 1
month
Kshs ‘000
1 to 3
months
Kshs ‘000
3 to 12
months
Kshs ‘000
1 to 5
years
Kshs ‘000
Total
Kshs ‘000
Due to related parties
538,857
-
-
-
538,857
Dividend and other payables
265,928
14,634
-
-
280,562
804,785
14,634
-
-
819,419
Totals
Year ended 31 December 2014
Totals
34
Jubilee Holdings Annual Report & Financial Statements 2015
9,121,670
Government securities
Commercial bonds
Other receivables
Insurance and reinsurance receivables
Deposits in financial institutions and cash and bank balances
-
-
Borrowings
-
-
Dividend payable
-
6,394,799
1,035,593
1,859,070
29,604,698
Other payables
Financial liabilities not measured at fair value
10,730,323
50,187,160
-
495,153
-
Loans on life insurance policies
67,524
-
Kshs ‘000
Kshs ‘000
9,121,670
Amortised
cost
Designated
at fair value
through
profit or loss
Mortgage loans
Financial assets not measured at fair value
Equity securities
Financial assets measured at fair value
31 December 2015
GROUP
-
-
-
-
1,481,748
-
-
-
-
-
-
-
1,481,748
Kshs ‘000
Designated
at fair value
through OCI
Carrying Amount
10,730,323
6,394,799
1,035,593
1,859,070
29,604,698
495,153
67,524
10,603,418
Kshs ‘000
Total
-
(269,627)
(2,287,144)
(2,556,771) (2,556,771)
-
(269,627)
(2,287,144)
- 60,790,578
-
-
-
-
-
-
-
-
Kshs ‘000
Other
financial
liabilities
(2,556,771)
-
(269,627)
(2,287,144)
20,353,390
10,730,323
6,394,799
1,035,593
1,629,998
-
495,153
67,524
-
Kshs ‘000
Level 2
-
-
-
-
2,779,592
-
-
-
-
-
-
-
2,779,592
Kshs ‘000
Level 3
Total
35
(2,556,771)
-
(269,627)
(2,287,144)
59,035,907
10,730,323
6,394,799
1,035,593
1,859,070
27,850,027
495,153
67,524
10,603,418
Kshs ‘000
Jubilee Holdings Annual Report & Financial Statements 2015
-
-
-
-
35,902,925
-
-
-
229,072
27,850,027
-
-
7,823,826
Kshs ‘000
Level 1
Fair value hierarchy
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial
assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service, or regulatory agency, 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
fair value through profit or loss and fair value through other comprehensive income. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity 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.
(e) Fair value estimation
ii) Financial risk (continued)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
1,696,519
659,145
-
Government securities
Commercial bonds
42,198,515
10,347,988
-
-
-
-
Dividend payable
Borrowings
-
-
Other payables
Financial liabilities not measured at fair
value
12,146,381
-
Cash and cash equivalents
5,367,158
-
Other receivables
Insurance and reinsurance receivables
21,923,229
361,981
-
Mortgage loans
44,102
-
Kshs ‘000
Kshs ‘000
10,347,988
Amortised
cost
-
-
-
-
1,817,944
-
-
-
-
-
-
-
1,817,944
Kshs ‘000
Designated
at fair value
through OCI
Carrying Amount
Designated at
fair value
through
profit
or loss
Loans on life insurance policies
Financial assets not measured at fair value
Equity securities
Financial assets measured at fair value
31 December 2014
GROUP
(e) Fair value estimation (continued)
ii) Financial risk (continued)
3. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
(3,240,500)
(1,373,680)
(265,928)
(1,600,892)
-
-
-
-
-
-
-
-
-
Kshs ‘000
Other financial liabilities
Total
(3,240,500)
(1,373,680)
(265,928)
(1,600,892)
54,364,447
12,146,381
5,367,158
659,145
1,696,519
21,923,229
361,981
44,102
12,165,932
Kshs ‘000
Level 1
Level 2
(3,240,500)
(1,373,680)
(265,928)
(1,600,892)
20,046,214
12,146,381
5,367,158
659,145
1,467,447
-
361,981
44,102
-
Kshs ‘000
Level 3
-
-
-
-
2,441,866
-
-
-
-
-
-
-
2,441,866
Kshs ‘000
Total
36
(3,240,500)
(1,373,680)
(265,928)
(1,600,892)
54,367,502
12,146,381
5,367,158
659,145
1,696,519
21.926,284
361,981
44,102
12,165,932
Kshs ‘000
Jubilee Holdings Annual Report & Financial Statements 2015
-
-
-
-
31,879,422
-
-
-
229,072
21,926,284
-
-
9,724,066
Kshs ‘000
Fair value hierarchy
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
-
-
-
-
Other payables
Dividend payable
-
93,086
-
Financial liabilities not measured at fair value
68,647
-
24,439
-
Cash and cash equivalents
-
Kshs ‘000
Kshs ‘000
Other receivables
Financial assets not measured at fair value
Equity securities
Financial assets measured at fair value
Amortised
cost
Designated
at fair value
through
profit or
loss
-
-
Dividend payable
31 December 2014
-
-
Other payables
-
129,708
-
Financial liabilities not measured at fair value
117,549
-
Cash and cash equivalents
12,159
-
Kshs ‘000
Kshs ‘000
-
Amortised
cost
Designated
at fair value
through
profit or
loss
Other receivables
Financial assets not measured at fair value
Equity securities
Financial assets measured at fair value
31 December 2015
COMPANY
(e) Fair value estimation (continued)
ii) Financial risk (continued)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
-
-
-
24,792
-
-
24,792
Kshs ‘000
Designated
at fair value
through OCI
Carrying Amount
-
-
-
39,622
-
-
39,622
Kshs ‘000
Designated
at fair value
through OCI
Carrying Amount
(280,562)
(265,928)
(14,634)
-
-
-
-
Kshs ‘000
Other
financial
liabilities
(282,951)
(269,627)
(13,324)
-
-
-
-
Kshs ‘000
Other
financial
liabilities
Total
(280,562)
(265,928)
(14,634)
117,878
68,647
24,439
24,792
Kshs ‘000
Total
(282,951)
(269,627)
(13,324)
169,330
117,549
12,159
39,622
Kshs ‘000
Level 1
Level 2
Level 3
(280,562)
(265,928)
(14,634)
93,086
68,647
24,439
-
Kshs ‘000
Level 2
-
-
-
12,007
-
-
12,007
Kshs ‘000
Level 3
-
-
-
23,566
-
-
23,566
Kshs ‘000
Fair value hierarchy
(282,951)
(269,627)
(13,324)
129,708
117,549
12,159
-
Kshs ‘000
Total
37
(280,562)
(265,928)
(14,634)
117,878
68,647
24,439
24,792
Kshs ‘000
Total
(282,951)
(269,627)
(13,324)
169,330
117,549
12,159
39,622
Kshs ‘000
Jubilee Holdings Annual Report & Financial Statements 2015
-
-
-
12,785
-
-
12,785
Kshs ‘000
Level 1
-
-
-
16,056
-
-
16,056
Kshs ‘000
Fair value hierarchy
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(e) Fair value estimation (continued)
Specific valuation techniques used to value financial and non-financial instruments include:
•
Quoted market prices or dealer quotes for similar instruments.
•
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield
curves.
•
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the
resulting value discounted back to present value.
•
Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
Note that all of the resulting fair value estimates are included in level 2 except for certain unquoted shares and investment property as
explained below.
Valuation of unquoted shares
The Group uses valuation techniques for valuing unquoted shares that are not based on observable market data. The Group reviewed
several valuation techniques and selected a value that is based on discounted cash flow. The critical management judgment is in the selection
of the discount rate and the growth rate applied and the determination of normalized earnings for the underlying investments.
In accordance with the transitional provisions of IFRS 13, the Group has applied the Level 3 fair value measurement guidance prospectively
and has not provided any comparative information for new disclosures. The table below shows the valuation techniques used in measuring
fair vales as well as significant unobservable inputs used:
Inter-relationships between
unobservable inputs and fair value
measurements
Valuation technique
Significant unobservable inputs
(a) Unquoted Shares
1. Expected growth rate of the earnings of
7%
2. Discount rate used on the expected
cashflow – 12.5% - 13.5%
The estimated fair values would increase /
( decrease) if:
1. Expected market rental growth – 3.75%
- 6%
2. Occupancy rates (90% - 95%)
3. Risk-adjusted discount rate (9%)
The estimated fair values would increase /
( decrease) if:
Discounted cash flows:
The valuation model considers the present
value of net cash flows to be generated by
the unquoted entities. The net cash flows
are discounted using the risk adjusted
discount rate.
(b) Investment property
Discounted cash flows:
The valuation model considers the present
value of net cash flows to be generated
from the property taking into account
expected rental growth, occupancy rates
and other costs not paid by tenants. The
net cash flows are discounted using the risk
adjusted discount rate.
(c )Leasehold land held for value
appreciation and development
Market approach:
The valuation model uses prices and other
relevant information generated by market
transactions involving identical or similar
assets. The fair value is determined as
the price that would be paid to sell the
land in an orderly transaction to market
participants.
38
1. Property prices in the locality
2. Infrastructure developments
Jubilee Holdings Annual Report & Financial Statements 2015
1. Expected earnings and cash flows
growth were higher /(lower)
2. Risk-adjusted discount rate was lower /
(higher)
1. Expected rental growth were higher /
(lower)
2. Occupancy rates were higher / (lower)
3. Risk-adjusted discount rate was lower /
(higher)
The estimated fair values would increase /
(decrease):
1. If property prices were higher / (lower)
2. Increase with improvements in
infrastructure.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(e) Fair value estimation (continued)
Please refer to Note 17 on investment property
The following table presents the changes in level 3 financial instruments for the year ended 31 December 2015:
Group
Unquoted shares
Opening balance
Additions
Gains recognised in other comprehensive income
Gains recognised in profit or loss
Exchange differences
Closing balance (Note 19)
Total gains or losses for the period included in profit or loss for assets held at the end of the
reporting period (Note 19)
Unquoted shares
2015
2014
Kshs ‘000
Kshs ‘000
2,441,866
2,161,843
11,784
6,862
8,742
1,420
328,012
273,739
(10,812)
(1,998)
2,779,592
2,441,866
328,012
273,739
Unquoted equity
investments
Unquoted equity
investments
Company
Opening balance
2015
2014
Kshs ‘000
Kshs ‘000
12,007
12,007
Additions
2,816
-
Gains recognised in other comprehensive income
8,742
-
23,565
12,007
8,742
-
Closing balance (Note 19)
Total gains or losses for the period included in profit or loss for assets
held at the end of the reporting period (Note 19)
(f) Capital risk management
The Group’s objectives when managing capital, which is a broader concept than the ‘equity’ on the statement of financial position, are to:
•
Comply with the capital requirements as set out in the regulations of the jurisdictions in which the Group entities operate;
•
Comply with regulatory solvency requirements as set out in the Insurance Act;
•
Safeguard the Group’s ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits for
other stakeholders; and
•
Provide an adequate return to shareholders by pricing insurance and investment contracts commensurately with the level of risk.
The table below summarises the minimum required capital across the Group and the capital held against each of them. These figures are an
aggregate number, being the sum of the statutory capital and surplus for each insurance company in each country subject to local regulatory
requirements, which may differ from jurisdiction to jurisdiction. The current year is, in general, an estimate that is updated once calculations
prepared for the regulators are final.
Jubilee Holdings Annual Report & Financial Statements 2015
39
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT OF INSURANCE AND FINANCIAL RISK (CONTINUED)
ii) Financial risk (continued)
(f) Capital risk management (continued)
2015
Kenya
Uganda
Tanzania
Burundi
Mauritius
Total
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Amount of paid up capital
2,500,000
392,706
214,958
92,969
310,465
3,511,098
Regulatory capital requirements
1,000,000
228,947
117,442
92,969
275,561
1,714,919
Kenya
Uganda
Tanzania
Burundi
Mauritius
Total
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
2,500,000
392,706
127,690
30,574
140,234
3,191,204
450,000
228,947
108,553
19,380
75,000
881,880
2014
Amount of paid up capital
Regulatory capital requirements
The Group has different requirements depending on the country in which it operates. The three main countries are Kenya, Uganda and
Tanzania.
In Kenya the capital adequacy margins are calculated based on the Insurance Act Cap 487 which requires the application of the higher of:
•
in the case of general insurance, six hundred million, risk based capital determined from time to time or 20% of the net earned premiums
of the preceding financial year.
•
in the case of life insurance, six hundred million, risk based capital determined from time to time or 20% of the net earned premiums of
the preceding financial year.
In terms of solvency, general insurance businesses are required to keep a solvency margin, admitted assets less admitted liabilities, equivalent
to the higher of Kshs 10 million or 15% of the net premium income during the preceding financial year, while that for life insurance businesses
is equivalent to the higher of Kshs 10 million or 5% of total admitted liabilities.
In Uganda, required capital is determined to be the ‘company action level risk based capital’, based on Section 6 of the Insurance Statute
1996.
In Tanzania, capital requirement is regulated by regulations 27 (2) (a) of the Insurance Regulations and 27 (2) (b) on contingency reserve.
General insurance businesses are required to transfer 20% of their net profit to the capital reserve and 3% on the net premium or 20% of net
profit, whichever is higher, to the contingency reserve.
Long term insurance businesses are required to transfer 1% on premium to the contingency reserve.
40
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. SEGMENT INFORMATION
OPERATING SEGMENTS
Below is the break-down in profit or loss and financial balances in the operating segments:
GROUP
2015:
For the year ended 31 December 2015
Gross earned premium revenue
Outward reinsurance
Kshs ‘000
General
Ordinary, Group
Life & Pensions
Investments
Total
19,374,636
3,655,296
-
23,029,932
(7,759,035)
(394,740)
-
(8,153,775)
11,615,601
3,260,556
-
14,876,157
1,460,372
4,203,560
429,536
6,093,468
Net fair value gains on financial assets
(194,964)
(914,530)
-
(1,109,494)
Commission earned
1,786,574
51,209
-
1,837,783
14,667,583
6,600,795
429,536
21,697,914
(11,886,764)
(4,468,684)
-
(16,355,448)
4,519,667
270,506
-
4,790,173
(7,367,097)
(4,198,178)
-
(11,565,275)
(2,789,815)
(963,875)
(116,854)
(3,870,544)
Net insurance premium revenue
Investment and other income
Total income
Claims and policy holders benefits payable
Claims recoverable from re-insurers
Net insurance benefits and claims
Operating and other expenses
Commission payable
Total expenses and commissions
Result of operating activities
Finance costs
(2,198,782)
(935,325)
-
(3,134,107)
(4,988,597)
(1,899,200)
(116,854)
(7,004,651)
2,311,889
503,417
312,682
3,127,988
-
-
(34,861)
(34,861)
68,494
170,633
812,885
1,052,012
2,380,383
674,050
1,090,706
4,145,139
(755,203)
(202,756)
(66,087)
(1,024,046)
1,625,180
471,294
1,024,619
3,121,093
Gross earned premium revenue
18,341,964
6,440,079
-
24,782,043
Less: outward reinsurance
(8,065,604)
(385,218)
-
(8,450,822)
10,276,360
6,054,861
-
16,331,221
Share of result of associates
Group profit before income tax
Income tax expense
Profit for the year
2014:
For the year ended 31 December 2014
Net insurance premium revenue
Investment and other income
971,742
3,269,356
592,483
4,833,582
Net fair value gains on financial assets
175,742
1,059,025
-
1,234,767
Commission earned
Total income
Claims and policy holders benefits payable
Claims recoverable from re-insurers
Net insurance benefits and claims
1,853,692
122,623
-
1,976,315
13,277,536
10,505,865
592,483
24,375,885
(11,090,551)
(9,391,473)
-
(20,482,024)
4,400,238
211,307
-
4,611,545
(6,690,313)
(9,180,166)
-
(15,870,479)
Operating and other expenses
(2,116,741)
(818,826)
(171,149)
(3,106,716)
Commission payable
(2,089,762)
(791,466)
-
(2,881,228)
(4,206,503)
(1,610,292)
(171,149)
(5,987,944)
2,380,720
(284,593)
421,334
2,517,462
-
-
(49,745)
(49,745)
Total expenses and commissions
Result of operating activities
Finance costs
Share of result of associates
Group profit before income tax
Income tax expense
Profit for the year
256,773
424,552
800,243
1,481,568
2,637,493
139,959
1,171,832
3,949,285
(714,668)
(41,894)
(89,070)
(845,632)
1,922,825
98,065
1,082,762
3,103,653
Jubilee Holdings Annual Report & Financial Statements 2015
41
42
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. SEGMENT INFORMATION (CONTINUED
OPERATING SEGMENTS (CONTINUED)
2015:
As at 31 December 2015
Property and equipment
Intangible assets
Investment properties
Investment in associates
Deferred income tax asset
Investment in shares
Mortgage loans
Loans on life insurance policies
Government securities at armortised cost
Commercial bonds
Insurance and reinsurance receivables
Reinsurers’ share of insurance contract liabilities receivables
Deferred acquisition costs
Other receivables
Current income tax recoverable
Deposits with financial institutions
Cash and bank balances
Total assets
Deferred income tax liability
Insurance contract liabilities
Unearned premium reserve
Payable under deposit administration contracts
Creditors arising out of direct insurance arrangements
Creditors arising out of reinsurance arrangements
Other payables
Current income tax payable
Total liabilities
Net assets
2014:
As at 31 December 2014
Property and equipment
Intangible assets
Investment properties
Investment in associates
Deferred income tax asset
Investment in shares
Mortgage loans
Loans on life insurance policies
Government securities at armortised cost
Commercial bonds
Insurance and reinsurance receivables
Reinsurers’ share of insurance contract liabilities receivables
Deferred acquisition costs
Other receivables
Current income tax recoverable
Deposits with financial institutions
Cash and bank balances
Total assets
Deferred income tax liability
Insurance contract liabilities
Unearned premium reserve
Payable under deposit administration contracts
Creditors arising out of direct insurance arrangements
Creditors arising out of reinsurance arrangements
Other payables
Borrowings
Current income tax payable
Total liabilities
Net assets
42
Jubilee Holdings Annual Report & Financial Statements 2015
General
138,888
61,778
290,038
1,536,823
67,581
2,565,169
67,524
958
5,042,347
230,538
6,055,082
6,459,626
264,081
830,155
18,022
3,442,770
390,339
27,461,719
83,687
7,330,210
7,760,661
84,864
1,331,501
1,450,025
239,751
18,280,699
9,181,020
109,175
18,650
257,606
1,478,431
72,131
3,238,135
4,503
3,127,382
147,381
4,801,690
6,728,940
189,248
408,688
17,133
3,504,958
558,414
24,662,465
56,094
7,857,416
6,608,846
93,966
1,091,739
851,459
147,965
16,707,485
7,954,980
Kshs ‘000
Ordinary, Group
Life & Pensions
59,691
3,172
3,930,000
1,725,518
1,837
7,869,456
494,195
24,562,351
1,628,532
339,717
181,953
190,331
18,330
6,205,648
141,861
47,352,592
63,508
11,378,953
30,958,100
52,727
117,980
789,330
6,243
43,366,841
3,985,751
50,031
4,432
3,577,000
1,606,762
8,739,714
39,599
361,981
18,795,847
1,549,138
565,468
105,000
223,891
6,208,562
467,514
42,294,939
63,508
11,787,237
26,864,350
36,359
95,083
669,666
39,516,203
2,778,736
Investments
Total
27,762
1,315,292
5,473,639
3,913
168,793
15,107
9,488
380,791
168,914
7,563,699
49,646
317,416
(17,799)
349,263
7,214,436
226,341
64,950
5,535,330
8,735,980
73,331
10,603,418
67,524
495,153
29,604,698
1,859,070
6,394,799
6,641,579
264,081
1,035,593
45,840
10,029,209
701,114
82,378,010
196,841
18,709,163
7,760,661
30,958,100
137,591
1,449,481
2,556,771
228,195
61,996,803
20,381,207
25,342
1,238,586
4,647,850
4,018
188,083
26,566
10,592
1,308,785
98,148
7,547,970
39,016
345,695
1,373,680
44,264
1,802,655
5,745,315
184,548
23,082
5,073,192
7,733,043
76,149
12,165,932
44,102
361,981
21,923,229
1,696,519
5,367,158
6,833,940
189,248
659,145
27,725
11,022,305
1,124,076
74,505,374
158,618
19,644,653
6,608,846
26,864,350
130,325
1,186,822
1,866,820
1,373,680
192,229
58,026,343
16,479,031
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. SEGMENT INFORMATION (CONTINUED)
GEOGRAPHICAL SEGMENTS
The Group’s geographical segments are Kenya, Uganda, Tanzania, Burundi and Mauritius. Kenya is the home country of the parent
Company. The Group has investments in these geographical segments.
Kshs ‘000
2015:
For the year ended 31 December
2015
Gross earned premium revenue
Outward reinsurance
Net insurance premium revenue
Investment and other income
Net fair value gains on financial assets
Commission earned
Total income
Claims and policy holders benefits payable
Claims recoverable from re-insurers
Net insurance benefits and claims
Kenya
Uganda
Tanzania
Mauritius
Burundi
Total
14,417,172
3,228,414
3,922,695
1,063,648
398,003
23,029,932
(3,414,380)
(1,680,123)
(2,268,776)
(503,600)
(286,896)
(8,153,775)
11,002,792
1,548,291
1,653,919
560,048
111,107
14,876,157
4,289,800
1,413,611
297,790
22,224
70,043
6,093,468
(1,109,494)
-
-
-
-
(1,109,494)
722,591
360,872
552,697
142,011
59,612
1,837,783
14,905,689
3,322,774
2,504,406
724,283
240,762
21,697,914
(11,410,238)
(1,613,958)
(2,396,369)
(738,505)
(196,378)
(16,355,448)
2,267,082
738,998
1,340,576
322,816
120,701
4,790,173
(9,143,156)
(874,960)
(1,055,793)
(415,689)
(75,677)
(11,565,275)
Operating and other expenses
(2,537,800)
(460,240)
(618,367)
(154,220)
(99,917)
(3,870,544)
Commission payable
(2,123,692)
(342,871)
(516,727)
(126,806)
(24,011)
(3,134,107)
(4,661,492)
(803,111)
(1,135,094)
(281,026)
(123,928)
(7,004,651)
1,101,041
1,644,703
313,519
27,568
41,157
3,127,988
-
(34,861)
-
-
-
(34,861)
Total expenses and commissions
Result of operating activities
Finance costs
Share of result of associates
357,012
695,000
-
-
-
1,052,012
1,458,053
2,304,842
313,519
27,568
41,157
4,145,139
Income tax expense
(634,372)
(239,993)
(127,650)
-
(22,031)
(1,024,046)
Profit for the year
823,681
2,064,849
185,869
27,568
19,126
3,121,093
Group profit before income tax
2014:
For the year ended 31 December
2014
Gross earned premium revenue
16,021,325
3,161,907
4,082,245
1,217,070
299,496
24,782,043
Less: outward reinsurance
(3,049,642)
(1,920,634)
(2,631,088)
(634,133)
(215,325)
(8,450,822)
12,971,683
1,241,273
1,451,157
582,937
84,171
16,331,221
Investment and other income
3,716,430
853,326
207,803
8,216
47,807
4,833,582
Net fair value gains on financial assets
1,234,767
-
-
-
-
1,234,767
Net insurance premium revenue
Commission earned
Total income
Claims and policy holders benefits payable
Claims recoverable from re-insurers
Net insurance benefits and claims
742,537
401,143
615,342
170,098
47,195
1,976,315
18,665,417
2,495,742
2,274,302
761,251
179,173
24,375,885
(15,596,326)
(1,474,042)
(2,266,264)
(961,123)
(184,269)
(20,482,024)
1,883,519
850,350
1,280,711
472,832
124,133
4,611,545
(13,712,807)
(623,692)
(985,553)
(488,291)
(60,136)
(15,870,479)
Operating and other expenses
(2,005,641)
(370,664)
(497,141)
(168,285)
(64,985)
(3,106,716)
Commission payable
(1,882,611)
(311,527)
(530,700)
(136,806)
(19,584)
(2,881,228)
(3,888,252)
(682,191)
(1,027,841)
(305,091)
(84,569)
(5,987,944)
1,064,359
1,189,858
260,908
(32,131)
34,468
2,517,462
-
(49,745)
-
-
-
(49,745)
Total expenses and commissions
Result of operating activities
Finance costs
Share of result of associates
Group profit before income tax
Income tax expense
Profit for the year
1,046,587
434,981
-
-
-
1,481,568
2,110,946
1,575,094
260,908
(32,131)
34,468
3,949,285
(422,638)
(320,375)
(95,269)
-
(7,350)
(845,632)
1,688,308
1,254,719
165,639
(32,131)
27,118
3,103,653
Jubilee Holdings Annual Report & Financial Statements 2015
43
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
5. SEGMENT INFORMATION (CONTINUED)
GEOGRAPHICAL SEGMENTS (CONTINUED)
2015:
As at 31 December 2015
Property and equipment
Intangible assets
Investment properties
Investment in associates
Deferred income tax asset
Investment in shares
Mortgage loans
Loans on life insurance policies
Government securities at armortised cost
Commercial bonds
Insurance and reinsurance receivables
Reinsurers’ insurance contract liabilities
Deferred acquisition costs
Other receivables
Current income tax recoverable
Deposits with financial institutions
Cash and bank balances
Total assets
Deferred income tax liability
Insurance contract liabilities
Unearned premium reserve
Payable under deposit administration contracts
Creditors arising out of direct insurance
Creditors arising out of reinsurance
Other payables
Current income tax payable
Total liabilities
Net assets
2014:
As at 31 December 2014
Property and equipment
Intangible assets
Investment properties
Investment in associates
Deferred income tax asset
Investment in shares
Mortgage loans
Loans on life insurance policies
Government securities at armortised cost
Commercial bonds
Insurance and reinsurance receivables
Reinsurers’ insurance contract liabilities
Deferred acquisition costs
Other receivables
Current income tax recoverable
Deposits with financial institutions
Cash and bank balances
Total assets
Deferred income tax liability
Insurance contract liabilities
Unearned premium reserve
Payable under deposit administration contracts
Creditors arising out of direct insurance
Creditors arising out of reinsurance
Other payables
Borrowings
Current income tax payable
Total liabilities
Net assets
44
Kshs ‘000
Tanzania Mauritius
Kenya
Uganda
126,327
49,254
3,930,001
6,297,954
58,038
10,385,584
64,709
480,008
27,326,312
1,854,523
3,683,546
3,081,294
332,949
720,372
9,488
7,139,257
346,737
65,886,353
78,958
15,423,397
4,631,562
30,162,589
126,037
553,319
1,987,253
209,470
53,172,585
12,713,768
34,378
1,216,278
2,438,026
14,609
164,309
2,815
9,328
2,014,829
4,547
1,267,851
1,677,735
(32,748)
73,035
888
1,231,106
157,579
10,274,565
53,322
1,753,650
1,329,931
208,354
5,449
348,243
367,538
(547)
4,065,940
6,208,625
45,508
10,226
290,037
45
53,525
4,664
187,007
1,072,018
1,387,684
(9,048)
88,505
35,464
1,212,149
44,835
4,422,619
64,561
1,195,746
1,325,452
385,897
348,434
99,370
3,419,460
1,003,159
104,096
1,968
3,577,000
5,813,937
64,124
11,731,365
39,599
354,352
20,809,635
1,686,707
3,355,480
3,361,596
266,554
421,959
10,592
6,588,056
730,005
58,917,025
79,003
16,512,506
3,702,736
26,214,963
90,053
360,615
1,439,951
84,203
48,484,030
10,432,995
18,303
1,152,320
1,919,106
11,070
376,717
4,503
3,071
809,085
9,812
971,158
1,487,947
(34,277)
40,047
2,859,887
163,677
9,792,426
37,157
1,663,314
987,471
181,412
327,374
288,971
1,373,680
102,884
4,962,263
4,830,163
44,890
14,702
257,607
57,850
3,389
304,509
721,473
1,445,017
(14,475)
34,065
17,133
1,219,986
134,881
4,241,027
42,458
1,101,776
1,407,417
342,988
40,272
329,138
44,449
3,308,498
932,529
Jubilee Holdings Annual Report & Financial Statements 2015
Burundi
Total
8,933
5,470
269,297
278,427
(11,611)
109,019
22,708
94,557
776,800
213,562
287,750
6,105
37,535
23,138
568,090
208,710
11,195
99,014
639
1,153
76,550
102,087
216,439
(15,461)
44,662
423,989
57,406
1,017,673
122,808
185,966
201,260
161,950
79,472
19,272
770,728
246,945
226,341
64,950
5,535,330
8,735,980
73,331
10,603,418
67,524
495,153
29,604,698
1,859,070
6,394,799
6,641,579
264,081
1,035,593
45,840
10,029,209
701,114
82,378,010
196,841
18,709,163
7,760,661
30,958,100
137,591
1,449,481
2,556,771
228,195
61,996,803
20,381,207
7,516
6,412
255,958
383,075
(12,721)
117,677
49,674
43,549
851,140
287,692
378,865
50,234
22,175
738,966
112,174
9,743
86,265
955
1,169
63,089
156,305
(15,833)
45,397
304,702
51,964
703,756
79,365
132,357
124,987
119,461
71,274
5,142
532,586
171,170
184,548
23,082
5,073,192
7,733,043
76,149
12,165,932
44,102
361,981
21,923,229
1,696,519
5,367,158
6,833,940
189,248
659,145
27,725
11,022,305
1,124,076
74,505,374
158,618
19,644,653
6,608,846
26,864,350
130,325
1,186,822
1,866,820
1,373,680
192,229
58,026,343
16,479,031
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
6. GROSS EARNED PREMIUM
GROUP
Short-Term business
Premium earned by principal class
of business:
2015
2014
Gross
Reinsurance
Net
Gross
Reinsurance
Net
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Motor
4,436,205
(909,250)
3,526,955
4,444,057
(912,138)
3,531,919
Fire
2,454,865
(1,884,518)
570,347
2,640,923
(2,032,060)
608,863
Accident
3,157,354
(1,515,165)
1,642,189
3,046,384
(1,935,386)
1,110,998
Medical
8,816,291
(3,195,027)
5,621,264
7,441,256
(2,699,857)
4,741,399
509,920
(255,075)
254,845
769,344
(485,849)
283,495
19,374,635
(7,759,035)
11,615,600
18,341,964
(8,065,290)
10,276,674
Other
Total Short-Term
Long-Term business
Premium earned by principal class
of business:
2015
2014
Gross
Reinsurance
Net
Gross
Reinsurance
Net
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Ordinary life
2,298,858
(6,492)
2,292,366
2,016,950
(3,653)
2,013,297
Group life
1,085,317
(388,248)
697,069
1,144,337
(381,879)
762,458
271,122
-
271,122
3,278,792
-
3,278,792
3,655,297
(394,740)
3,260,557
6,440,079
(385,532)
6,054,547
23,029,932
(8,153,775)
14,876,157
24,782,043
(8,450,822)
16,331,221
Pension/annuity
Total Long-Term
Total Short-Term and
Long-Term
7. INVESTMENT INCOME
GROUP
2015
2014
Kshs ‘000
Kshs ‘000
Government securities interest
3,009,239
2,316,134
Bank deposit interest
1,439,515
1,011,888
42,125
57,161
4,819
17,932
Policy loans interest
Mortgage loan interest
Realized (losses)/gains on disposal of quoted equity investments
(44,721)
24,351
Rental income from investment properties (net of expenses)
290,391
257,159
Dividends receivable from equity investments
409,968
517,570
Fair value gain on investment properties (Note 17)
482,807
574,582
Exchange gains
336,602
23,244
Other income
Total
122,723
33,561
6,093,468
4,833,582
Jubilee Holdings Annual Report & Financial Statements 2015
45
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
8. COMISSION PAYABLE AND EARNED
GROUP
Short Term Business
2015
Premium earned by principal class of business:
2014
Gross
Reinsurance
Net
Gross
Reinsurance
Net
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Motor
548,587
(203,440)
345,147
615,933
(226,250)
389,683
Fire
420,482
(390,278)
30,204
406,160
(406,956)
(796)
Accident
458,918
(362,737)
96,181
398,346
(472,580)
(74,234)
Medical
692,610
(740,071)
(47,461)
578,868
(641,606)
(62,738)
78,185
(90,048)
(11,863)
90,458
(106,491)
(16,033)
2,198,782
(1,786,574)
412,208
2,089,765
(1,853,883)
235,882
Other
Total Short-Term
Long Term Business
2015
Premium earned by principal class of business:
2014
Gross
Reinsurance
Net
Gross
Reinsurance
Net
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Ordinary life
665,942
(2,708)
663,234
534,483
(10,956)
523,527
Group life
224,230
(48,501)
175,729
153,796
(111,476)
42,320
45,153
-
45,153
103,184
-
103,184
Pension/annuity
Total Long -Term
Total Short-Term and Long-Term
935,325
(51,209)
884,116
791,463
(122,432)
669,031
3,134,107
(1,837,783)
1,296,324
2,881,228
(1,976,315)
904,913
9. CLAIMS AND POLICY HOLDER BENEFITS PAYABLE
GROUP
Short Term Business
Claims payable by principal class of
business
2015
2014
Gross
Reinsurance
Net
Gross
Reinsurance
Net
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
2,896,340
(515,525)
2,380,815
2,752,488
(556,325)
2,196,163
565,746
(413,049)
152,697
431,659
(297,121)
134,538
Accident
1,617,823
(976,704)
641,119
2,262,582
(1,293,599)
968,983
Medical
6,565,415
(2,463,589)
4,101,826
5,411,986
(2,147,733)
3,264,253
241,439
(150,800)
90,639
231,836
(105,460)
126,376
11,886,763
(4,519,667)
7,367,096
11,090,551
(4,400,238)
6,690,313
Motor
Fire
Other
Total Short-Term
Long Term Business
Ordinary life
623,203
(482)
622,721
679,980
(1,119)
678,861
Group life
757,458
(270,024)
487,434
531,352
(210,188)
321,164
Pension/annuity
744,107
-
744,107
420,879
-
420,879
2,124,768
(270,506)
1,854,262
1,632,211
(211,307)
1,420,904
937,873
Total Long -Term
Increase in policy holders
benefits
Ordinary life
846,413
-
846,413
937,873
-
Group life
(316,449)
-
(316,449)
472,313
-
472,313
Pension/annuity
1,813,953
-
1,813,953
6,349,076
-
6,349,076
Total Long-Term
2,343,917
-
2,343,917
7,759,262
-
7,759,262
4,468,685
(270,506)
4,198,179
9,391,473
(211,307)
9,180,166
16,355,448
(4,790,173)
11,565,275
20,482,024
(4,611,545)
15,870,479
Total Long-Term - Claims &
policy holders benefits
Total Short-Term and
Long-Term
46
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
10. (i) OPERATING EXPENSES
GROUP
The breakdown of operating expenses is given below:
Employee benefits expense (Note 10)
2015
2014
Kshs ‘000
Kshs ‘000
1,833,523
1,544,405
Administrative costs
842,734
686,344
Premium tax and policy holder compensation fund
284,991
216,302
Impairment charge for doubtful premium receivables
139,260
123,247
Operating lease rentals - land and buildings
180,993
114,321
50,734
97,850
Marketing costs
Professional fees
204,920
87,420
Depreciation and amortisation (Note 16)
116,081
84,701
Travelling costs
52,153
48,294
Repairs and maintenance expenditure
32,013
39,122
Communication costs
92,034
26,609
Auditors’ remuneration
27,111
19,755
Software maintenance and printing costs
13,997
18,346
3,870,544
3,106,716
2015
2014
Total
10. (ii) EMPLOYEE BENEFITS EXPENSE
GROUP
Kshs ‘000
Kshs ‘000
Salaries and wages
1,499,812
1,313,522
Social security costs
85,984
30,750
Retirement benefit costs – defined contribution plan
78,012
53,907
169,715
146,226
1,833,523
1,544,405
Other benefits
Total
10. (iii) KEY MANAGEMENT COMPENSATION AND DIRECTORS’ REMUNERATION
GROUP
Salaries and other employment benefits
Fees for services as directors
Total
2015
2014
Kshs ‘000
Kshs ‘000
462,020
261,879
6,539
4,705
468,559
266,584
There were no loans given to Directors in the year ended 31 December 2015 (2014: Nil).
Jubilee Holdings Annual Report & Financial Statements 2015
47
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
11. INCOME TAX EXPENSE
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the statutory income tax rate as
follows:
Group
Company
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Profit before income tax
4,145,135
3,949,285
681,958
787,631
Tax calculated at the enacted domestic tax rate
1,531,706
1,247,365
204,587
236,289
(703,027)
(577,433)
(228,916)
(275,125)
319,208
194,916
25,513
51,299
(194,354)
(41,894)
-
-
70,513
22,678
(2,898)
(2,708)
1,024,046
845,632
(1,714)
9,755
905,895
845,388
475
370
Effect of :
Income not subject to income tax
Expenses not deductible for tax purposes
Transfer of life fund to shareholders
Prior year under/(over) provision
Income tax charge
Current income tax
Deferred income tax (Note 28)
118,151
244
(2,189)
9,385
1,024,046
845,632
(1,714)
9,755
2015
2014
2015
2014
Movement in the tax payable/(recoverable) account is as follows:
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
At start of year
164,504
(23,439)
(9,218)
(9,354)
Taxation charge
835,382
822,710
475
3,078
70,513
22,678
-
(2,708)
Taxation paid
(888,044)
(657,445)
(68)
(234)
At end of year
182,355
164,504
(8,811)
(9,218)
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
Current income tax recoverable
(45,840)
(27,725)
(8,811)
(9,218)
Current income tax payable
228,195
192,229
-
-
182,355
164,504
(8,811)
(9,218)
Prior year under/(over) provision
Disclosed as follows:
Total
12. EARNINGS PER SHARE
Earnings per ordinary share of Kshs 5 each is calculated by dividing the net profit attributable to Shareholders by the number of shares
outstanding at the end of the year.
Group
Net profit attributable to Shareholders (Kshs ‘000)
Number of ordinary shares in issue
Earnings per share (Kshs) - Basic and diluted
2015
2014
2,814,056
2,879,572
65,885
65,885
42.7
43.7
There were no potentially dilutive shares in issue at 31 December 2015 and 31 December 2014. Diluted earnings per share are therefore the same as
basic earnings per share.
48
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
13. SHARE CAPITAL
The total authorized number of ordinary shares is 70,000,000 (2014: 70,000,000) with a par value of Kshs 5 per share. At 31 December
2015. 65,884,500 ordinary shares were in issue (2014:59,895,000 ordinary shares). All issued shares are fully paid.
Share Capital (Group and Company)
Share Capital
Authorised
Share Capital
Number of
shares
Number of
shares
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
‘000
‘000
350,000
350,000
70,000
70,000
299,475
299,475
59,895
59,895
29,948
-
5,990
-
329,423
299,475
65,885
59,895
Issued and fully paid:
At start of year
Bonus issue of shares
At end of year
All shares rank equally with regard to the company residual assets. The holders of ordinary shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share at meetings of the Company.
14. RESERVES
The breakdown of reserves is as follows:
Group
Fair value reserves
General reserves
Translation reserves
Contingency reserves
Statutory reserve
Total
Company
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
528,488
974,878
6,995
(5,019)
70,000
70,000
70,000
70,000
(240,449)
(550,691)
-
-
829,413
752,532
-
-
3,327,844
1,958,336
-
-
4,515,296
3,205,055
76,995
64,981
2015
2014
2015
2014
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
974,878
231,436
(5,019)
3,951
The movement in the reserves during the year is given below.
a) Fair value reserves
At start of year
Impairment of equity investments
Associate share of other comprehensive income
Net fair value gain through other comprehensive income
Transfer to retained earnings on disposal
At end of year
-
-
-
-
(27,085)
515,239
-
-
(373,441)
228,251
12,014
(8,970)
(45,864)
(48)
-
-
528,488
974,878
6,995
(5,019)
The fair value reserve relates to unrealized gains or losses on the Group’s equity investments that are carried at fair value through other
comprehensive income. It also include the Group’s share of other comprehensive income in associates. The fair value reserve is nondistributable.
b) General reserves
Group and Company
At start and end of year
2015
2014
Kshs ‘000
Kshs ‘000
70,000
70,000
The general reserves were an appropriation of retained earnings in 1992, and are therefore distributable.
Jubilee Holdings Annual Report & Financial Statements 2015
49
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
14. RESERVES (CONTINUED)
c) Translation reserve (Group)
At start of year
Movement for the year
At end of year
2015
2014
Kshs ‘000
Kshs ‘000
(550,691)
(136,871)
310,242
(413,820)
(240,449)
(550,691)
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
The movement for the year is the net of an exchange gain of Kshs 610 million on translation of foreign currency denominated investment in
associates (refer to Note 18 (i)) and an exchange loss of Kshs 300 million.
d) Contingency reserve (Group)
At start of year
Transfer from retained earnings
At end of year
2015
2014
Kshs ‘000
Kshs ‘000
752,532
654,862
76,881
97,670
829,413
752,532
The contingency reserve is in line with the provisions of the Insurance Act in Tanzania and Uganda which require an annual transfer to the
contingency reserve of between 1% - 3% of the gross premium.
e) Statutory reserve (Group)
2015
2014
Kshs ‘000
Kshs ‘000
At start of year
1,958,336
1,741,173
Allocated from the life funds
1,369,508
217,163
3,327,844
1,958,336
At end of year
The statutory reserve represents the actuarial surplus of the Kenyan life fund after distribution of profits to the shareholders and bonuses to
policy holders.
15. DIVIDENDS PER SHARE
Proposed dividend is accounted for as a separate component of equity until ratified at an Annual General Meeting. During the year, the
bonus issue of 1:10 was effected and subsequently an interim dividend of Kshs 65.885 million was paid (2014: Kshs 59.895 million) or
Kshs 1.00 per share (2014: Kshs 1.00 per share). At the Annual General Meeting to be held on 31 May 2016, a final dividend of Kshs
494.133 million (2014: Kshs 449.212 million) is to be proposed, which is Kshs 7.50 per share (2014: Kshs 7.50 per share). The total
dividend for the year 2015 is therefore Kshs 560.018 million (2014: Kshs 509.107 million) or Kshs 8.50 per share (2014: Kshs 8.50 per
share).
Payment of dividend is subject to withholding tax at the rate of either 0%, 5% or 10%, depending on the percentage shareholding and/or
residential status of the respective shareholders.
50
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16. PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
(i) PROPERTY AND EQUIPMENT
GROUP
2015:
Year ended 31 December 2015
Computer
equipment
Motor vehicles
Furniture,
fixtures, fittings &
office equipment
Total
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
330,875
68,858
310,947
710,680
65,986
15,327
50,882
132,195
Cost
At start of year
Additions
Disposals
Exchange differences
At end of year
(730)
(1,401)
-
(2,131)
(6,647)
(3,219)
(3,333)
(13,199)
389,484
79,565
358,496
827,545
289,533
45,268
191,331
526,132
42,088
9,641
33,677
85,406
-
(1,400)
-
(1,400)
Accumulated depreciation
At start of year
Charge for the year
Disposals
Exchange differences
At end of year
Carrying amounts
(4,313)
(2,564)
(2,057)
(8,934)
327,308
50,945
222,951
601,204
62,176
28,620
135,545
226,341
Kshs ‘000
Kshs ‘000
Kshs ‘000
Kshs ‘000
312,592
61,929
245,907
620,428
34,381
9,576
66,411
110,368
-
(1,500)
(32)
(1,532)
(8,150)
-
-
(8,150)
2014:
Year ended 31 December 2014
Cost
At start of year
Additions
Disposals
Reclassification to intangible assets
Exchange differences
At end of year
(7,948)
(1,147)
(1,339)
(10,434)
330,875
68,858
310,947
710,680
254,129
37,512
165,458
457,099
39,200
10,135
27,126
76,461
Accumulated depreciation
At start of year
Charge for the year
On disposals
Reclassification to intangible assets
Exchange differences
At end of year
Carrying amounts
-
(1,500)
(23)
(1,523)
(955)
-
-
(955)
(2,841)
(879)
(1,230)
(4,950)
289,533
45,268
191,331
526,132
41,342
23,590
119,616
184,548
Jubilee Holdings Annual Report & Financial Statements 2015
51
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16. PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (CONTINUED)
(i) PROPERTY AND EQUIPMENT (CONTINUED)
COMPANY
Computer
equipment
Furniture, fixtures,
fittings & office
equipment
Total
Kshs ‘000
Kshs ‘000
Kshs ‘000
At start of year
201
28,164
28,365
Additions
184
7,995
8,179
385
36,159
36,544
At start of year
134
4,441
4,575
Charge for the year
128
5,216
5,344
At end of year
262
9,657
9,919
Carrying amounts
123
26,502
26,625
2015:
Year ended 31 December 2015
Cost
At end of year
Accumulated depreciation
2014:
Year ended 31 December 2014
Cost
At start of year
Additions
At end of year
201
1,452
1,653
-
26,712
26,712
201
28,164
28,365
67
145
212
Accumulated depreciation
At start of year
Charge for the year
At end of year
Carrying amounts
52
Jubilee Holdings Annual Report & Financial Statements 2015
67
4,296
4,363
134
4,441
4,575
67
23,723
23,790
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
16. PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS (CONTINUED)
(ii) INTANGIBLE ASSETS
GROUP
2015:
Total
Year ended 31 December 2015
Kshs ‘000
Cost
32,179
At start of year
Additions
73,789
Exchange differences
(1,843)
At end of year
104,125
Accumulated amortisation
At start of year
9,097
Charge for the year
30,675
Exchange differences
(597)
At end of year
39,175
Carrying amounts
64,950
2014:
Total
Year ended 31 December 2014
Kshs ‘000
Cost
At start of year
-
Additions
24,196
Reclassification from computer equipment
8,150
Exchange differences
(167)
At end of year
32,179
Accumulated amortisation
At start of year
-
Charge for the year
8,240
Reclassification from computer equipment
955
Exchange differences
(98)
At end of year
9,097
Carrying amounts
23,082
Intangible assets relates to computer software.
17. INVESTMENT PROPERTIES
Group
At start of year
Net additions
Fair value gains (Note 7)
Exchange differences
At end of year
2015
2014
Kshs ‘000
Kshs ‘000
5,073,192
4,445,591
84,699
106,031
482,807
574,582
(105,368)
(53,012)
5,535,330
5,073,192
Investment property comprises a number of commercial properties that are leased to third parties. Investment property for the Group was
valued by Redfearn International Limited on the basis of open market value. Investment properties include properties situated within Kenya
valued at Kshs 3,930 million (2014: Kshs 3,577 million) while those outside Kenya valued at Kshs 1,605 million (2014: Kshs 1,496 million).
Refer to Note 37 on operating leases for net operating income in profit or loss from investment properties.
Jubilee Holdings Annual Report & Financial Statements 2015
53
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. INVESTMENT IN ASSOCIATED COMPANIES AND SUBSIDIARIES
(i) INVESTMENT IN ASSOCIATES
Movement in Net Assets
GROUP
Year 2015
Opening
Balance
Additions/
(disposals)
Dividends
received
Share of
result
Share of
OCI
Translation
gain
Closing
Balance
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
169,268
-
-
11,499
-
29,932
210,699
PDML (Holding) Limited
1,914,566
-
(9,903)
74,803
61,455
-
2,040,921
Bujagali Holding Power
Company Limited
1,919,106
108,932
(543,576)
695,001
-
149,630
2,329,093
FCL Holding Limited
2,083,118
-
(187,410)
214,270
(88,540)
-
2,021,438
IPS Cable Holding Systems
Limited
1,646,985
-
-
56,439
-
430,405
2,133,829
Total
7,733,043
108,932
(740,889)
1,052,012
(27,085)
609,967
8,735,980
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
169,268
-
-
-
-
-
169,268
PDML (Holding) Limited
1,550,517
-
(9,904)
373,953
-
-
1,914,566
Bujagali Holding Power
Company Limited
2,020,129
(492,016)
(20,102)
434,981
-
(23,886)
1,919,106
FCL Holding Limited
1,308,321
-
(183,439)
442,997
515,239
-
2,083,118
IPS Cable Holding Systems
Limited
1,417,348
-
-
229,637
-
-
1,646,985
Total
6,465,583
(492,016)
(213,445)
1,481,568
515,239
(23,886)
7,733,043
IPS Power Investments Limited
Year 2014
IPS Power Investments Limited
COMPANY
Investment at cost
FCL Holding Limited
IPS Cable Holding Systems Limited
Total
2015
2014
Kshs’000
Kshs’000
484,969
484,969
353,282
353,282
838,251
838,251
IPS Power Investment Limited is an investment vehicle company, which through its subsidiary has invested in the equity of Tsavo Power
Company Limited that generates electricity for sale. Bujagali Holding Power Company Limited is an investment vehicle company which
through its subsidiary has invested in the equity of Bujagali Energy Limited an electricity generating company in Uganda. PDM (Holding)
Limited is an investment vehicle company which has invested in the equity of Property Development and Management (K) Limited which
conducts property investment, development and management. FCL Holdings Limited is an investment vehicle company which has invested in
the equity of Farmers Choice Limited with it’s main objective being sale of fresh and processed meat products. IPS Cable Systems Limited is
an investment vehicle company which has invested in the 15,000 km Seacom submarine fiber optic cable project.
The associates have been equity accounted in these financial statements using results based on draft financial statements as at 31 December
2015. Final audited financial statements will be available later in the year and the adjustment to reflect the final audited financial statements
will be made in the subsequent year. The total adjustment for the year ended 31 December 2014 of Kshs 62 million is included in the current
year share of result.
The following table summarizes the information relating to each of the Group’s associates:
54
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. INVESTMENT IN ASSOCIATES AND SUBSIDIARIES (CONTINUED)
(i) INVESTMENT IN ASSOCIATES (CONTINUED)
GROUP
IPS Power
Investments
Limited
PDML
Holdings
Limited
Bujagali
Holding
Power
Company
Limited
FCL
Holding
Limited
IPS Cable
Holding
Systems
Limited
Total
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kshs’000
Kenya
Kenya
Uganda
Kenya
Mauritius
27%
37%
25%
30%
33%
1,505,556
7,353,661
9,317,008
6,030,743
9,579,659
33,786,627
(253)
(1,378,165)
(621)
(1,512,166)
(2,295,850)
(5,187,055)
1,505,303
5,975,496
9,316,387
4,518,577
7,283,809
28,599,572
Revenue
422,863
566,391
1,288,397
8,405,965
1,035,243
11,718,859
Profit after tax
422,528
623,057
1,365,392
998,048
927,276
4,336,301
-
(164,104)
-
(93,751)
-
(257,855)
(450)
339,726
(58,377)
873,524
(7,415)
1,147,008
Cash flows from/(used in) investing activities
585,465
(687,406)
2,139,491
(109,600)
1,035,243
2,963,193
Cash flows (used in)/from financing activities
(585,146)
329,847
(2,087,899)
(625,000)
(836,601)
(3,804,799)
(131)
(17,833)
(6,785)
138,924
191,227
305,402
1,482,715
6,355,774
8,894,240
5,692,714
8,461,750
30,887,193
Country of incorporation
Interest held
Year 2015
Assets
Liabilities
Net assets
Other comprehensive income
Cash flows (used in)/from operating activities
Net (decrease)/increase in cash and cash
equivalents
Year 2014
Assets
Liabilities
(331)
(809,347)
(5,039)
(1,471,182)
(2,709,345)
(4,995,244)
1,482,384
5,546,427
8,889,201
4,221,532
5,752,405
25,891,949
Revenue
382,619
501,168
1,542,478
8,091,091
809,447
11,326,803
Profit after tax
382,108
1,007,992
1,319,166
923,785
687,803
4,320,854
Net assets
Other comprehensive income
Cash flows from/(used in) operating activities
Cash flows (used in)/from investing activities
Cash flows used in financing activities
Net increase/(decrease) in cash and cash
equivalents
-
14,931
-
1,181,342
-
712,426
256,013
(305,717)
845,536
(2,965)
1,505,293
-
(368,710)
4,087,288
(98,978)
659,427
4,279,027
(712,092)
(30,080)
(3,845,922)
(624,894)
(770,508)
(5,983,496)
334
(142,777)
64,351)
121,664
(114,046)
(199,176)
Jubilee Holdings Annual Report & Financial Statements 2015
55
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. INVESTMENT IN ASSOCIATES AND SUBSIDIARIES (CONTINUED)
(i) INVESTMENT IN ASSOCIATES (CONTINUED)
COMPANY
Country of incorporation
Interest held
FCL Holding
Limited
IPS Cable
Holding
Systems
Limited
Total
Kshs’000
Kshs’000
Kshs’000
Kenya
Mauritius
30%
33%
Year 2015
6,030,743
9,579,659
15,610,402
Liabilities
Assets
(1,512,166)
(2,295,850)
(3,808,016)
Net assets
4,518,577
7,283,809
11,802,386
8,405,965
1,035,243
9,441,208
Revenue
Profit after tax
998,048
927,276
1,925,324
Other comprehensive income
(93,751)
-
(93,751)
Cash flows from/(used in) operating activities
873,524
(7,415)
866,109
Cash flows (used in)/from investing activities
(109,600)
1,035,243
925,643
Cash flows used in financing activities
(625,000)
(836,601)
(1,461,601)
Net increase in cash and cash equivalents
138,924
191,227
330,151
Year 2014
5,692,714
8,461,750
14,154,464
Liabilities
Assets
(1,471,182)
(2,709,345)
(4,180,527)
Net assets
4,221,532
5,752,405
9,973,937
8,091,091
809,447
8,900,538
923,785
687,803
1,611,588
1,181,342
-
Revenue
Profit after tax
Other comprehensive income
Cash flows from/(used in) operating activities
845,536
(2,965)
842,571
Cash flows (used in)/from investing activities
(98,978)
659,427
560,449
Cash flows used in financing activities
(624,894)
(770,508)
(1,395,402)
Net increase/(decrease) in cash and cash equivalents
121,664
(114,046)
7,618
56
Jubilee Holdings Annual Report & Financial Statements 2015
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
18. INVESTMENT IN ASSOCIATES AND SUBSIDIARIES (CONTINUED)
ii. INVESTMENT IN SUBSIDIARIES
Company
Investment
at Cost
Investment at
Cost
Equity Held
Equity Held
2015
2014
2015
2014
Kshs’000
Kshs’000
%
%
450,000
450,000
100%
100%
The Jubilee Insurance Company of Tanzania Limited
36,456
36,456
51%
51%
Jubilee Life Insurance Corporation of Tanzania Limited
36,455
36,455
51%
51%
The Jubilee Insurance Company of Uganda Limited
12,598
12,598
65%
65%
Jubilee Life Insurance Company of Uganda Limited
12,597
12,597
65%
65%
157,204
129,5...