STATE INSURANCE COMPANY OF MAURITIUS LTD

Transcription

1 You re really covered Annual Report 2008

2 Contents Main business lines 2 Our mission, shared values and objectives 3 Quality Policy 4 Corporate Information 5-7 Report of the Directors 8-14 Certificate from the Company Secretary 15 Report of Auditors 16 Balance Sheets 17 Income Statements 18 Statement of changes in equity 19 Cash flow statements 20 Notes to the Financial Statements Statutory Disclosures 63

3 Main Business Lines Life Assurance Investment and Savings Child Education Loan protection Serious Illness Cover General Insurance Motor Insurance Home Insurance Marine Insurance Fire and Allied Perils Insurance Personal Accident Insurance All Risks Insurance Liability Insurance Travel Insurance Engineering (Contractors All Risks, Plant and Equipment, etc) Miscellaneous (Money, Fidelity Guarantee, etc) Directors and Officers Liability Insurance Pensions and Life Management of Pension Schemes Family protection scheme Life schemes Medical schemes Personal Pension Plans Loans Housing Multipurpose Loans on Deposit Personal Financial Services Fund Management in a broad array of financial instruments Deposit Taking Unit Trust Leasing Trustee Services Management Services Actuarial Services Actuarial Valuations Advice on investment strategy / funding policy / transfer values / winding up/distribution of Surplus New product design and profit testing Advice on surrenders, paid up values, alterations Disclosures under IAS 19 2 State Insurance Company of Mauritius Limited

4 our MISSION Dedicated to providing the best in insurance and financial services, with focus on competitive quality products and excellent levels of customer care our SHARED VALUES Our customers: the focus of all our actions Our employees: the source of our success Our products and services: competitive and first-class security Commitment to innovation and teamwork Assisting the development of the community our OBJECTIVES Provide excellent customer service Maximise profits and returns to stakeholders Highly effective staff and agents Increase market share Respond to new customer needs Identify diversification opportunities State Insurance Company of Mauritius Limited 3

5 Quality Policy Service We are committed to service excellence through providing a professional and timely service to our customers while maintaining value adding relationship with all stakeholders. Meeting Customer Expectations Our ultimate goal is to meet customer expectations with a diligent and efficient service. People Development Our people are our most valuable asset and we shall provide them with appropriate training in line with organisational needs and objectives, aim at achieving employee satisfaction and encouraging their participation in decision making processes, and promote safe, sound and motivating work environment. Continual Improvement We are committed towards developing and maintaining efficient and reliable processes. We undertake to continually improve / innovate our products and services. Competitive Products and Services We will design and deliver competitive products and services to suit the requirements of our customers as well as the market at large. Compliance and Good Governance We ensure compliance with relevant laws and regulations and are committed to good governance and effective practices. Quality Objectives This Quality Policy will serve as basis for defining SICOM s Quality Objectives and we will ensure that it is reviewed on a regular basis. 4 State Insurance Company of Mauritius Limited

6 Corporate Information BOARD OF DIRECTORS Servansingh T K (Chairman) Bhoojedhur-Obeegadoo K G (Mrs) Chooramun B Dhaliah-Utchanah B D (Mrs) Gopee G Lim Hoye Yee V (Mrs) Purryag D Sewpaul A Company Secretary Ramdewar N (Mrs) State Insurance Company of Mauritius Limited 5

7 Corporate Information (Continued) MANAGEMENT Managing Director Bhoojedhur Obeegadoo G Karuna (Mrs) Senior Manager Sewpaul Anil Senior Manager Ramdewar Nandita (Mrs) Senior Manager Chaperon J M C Gilles Senior Manager Balgobin Vijay Manager/Internal Auditor Appadoo Appanah Pritty (Mrs) Manager (IT) Baguant Chemanlall Manager (Financial Services) Gopy Dev K Manager (Life) Koomar Bodun Manager (Legal) Lee Shing Po Theresa M (Mrs) Manager (General Insurance) Leung Lam Hing Suzanne H Y K (Mrs) Manager (Finance) Ramruttun Heman K Manager (Administration & Loans) Rughoo Rajkamal Manager (Actuarial & Pensions) Seeroo Vasoodevsing Registered Office SICOM Building Sir Celicourt Antelme Street, Port Louis Telephone : (230) Fax : (230) Address: @sicom.intnet.mu Website : Rodrigues Branch Office Cliderlex Building, Port Mathurin, Rodrigues Telephone : Fax : Curepipe Branch Office N Parsuramen Building, Impasse Pot de Terre, Curepipe Telephone : / Fax : Auditors Kemp Chatteris Deloitte Consulting Actuaries QED Actuaries & Consultants (Pty) Ltd Main Bankers State Bank of Mauritius Ltd Mauritius Commercial Bank Ltd Barclays Bank PLC Hong Kong & Shanghai Banking Corporation Ltd SBI International (Mauritius) Ltd Main Reinsurers Swiss Re Africa Ltd G E Frankona Reinsurance Corporation African Reinsurance Corporation (Mtius) Main Reinsurance Brokers Heath Lambert Marsh Ltd Alexander Forbes (Mtius) Ltd J B Boda Reinsurance Brokers Private Limited 6 State Insurance Company of Mauritius Limited

8 Structure STATE INSURANCE COMPANY OF MAURITIUS LTD (Insurance, Pension, Investment Management, Trustee Services, Actuarial Services, Medical & Surgical Schemes) SICOM Global Fund Limited (Global Business Activity) SICOM Financial Services Ltd (Deposit taking,leasing, Investment Management) SICOM Management Limited (Global Business Activity) SICOM General Fund (Unit Trust) SICOM Overseas Diversified Fund (Unit Trust) State Insurance Company of Mauritius Limited 7

9 Directors Report The Board of Directors of the State Insurance Company of Mauritius Ltd (SICOM) is pleased to present the nineteenth Annual Report together with the audited financial statements of the and Company. ECONOMIC REVIEW The growth rate for the Mauritian Economy for 2007 stood at 5.4% based on estimates of the Central Statistics Office as at June The main contributor to this growth was the tertiary sector representing 69% of the GDP. The investment rate in 2007 stood at 25.1% as compared to 24.4% the previous year while the savings rate rose to 21.3% in 2007 from 16.9% in The inflation rate for the financial year ended 30 June 2008 was 8.8%. The interest rate stance of the Bank of Mauritius for the financial year under review was to lower rates so as to promote economic growth mainly by preserving the competitiveness of the export industry. The Bank Rate decreased by 32.1% for the financial year ended 30 June The local stock market posted a positive growth for the financial year ended 30 June During the period under review, the rupee appreciated against several foreign currencies such as the US Dollar, Pound Sterling and the South African Rand. Overseas, the sub-prime crisis, the persistent increase in oil prices combined with rising inflation and slower economic growth resulted in a negative impact on overseas financial markets for the financial year ended 30 June FINANCIAL OVERVIEW Despite severe competition in the financial services market and a general lowering of interest rates and financial markets, the profit after tax reached Rs million, representing a growth of 16.7%. 400 Profit After Tax 300 Amount (Rs' m) Financial year ended 30 June 8 State Insurance Company of Mauritius Limited

10 Directors Report (Continued) FINANCIAL OVERVIEW (CONTINUED) On the other hand, the post-tax profit of the Company increased from Rs million to Rs million, representing an increase of 20.0%. 300 Company Profit After Tax Amount (Rs' m) Financial year ended 30 June Gross Revenue of the increased to Rs 1.0 billion, representing a growth of 12.5% as compared to the previous financial year Gross Revenue Amount (Rs' m) Financial year ended 30 June State Insurance Company of Mauritius Limited 9

11 Directors Report (Continued) FINANCIAL OVERVIEW (CONTINUED) As for the Gross Revenue of the Company, it increased from Rs million last year to Rs million for the financial year ended 30 June Company Gross Revenue Amount (Rs' m) Financial year ended 30 June Shareholders Fund increased by 11.5% to reach Rs 2.3 billion during the year under review. REVIEW OF OPERATIONS Long-Term Business Review The year under review was marked by the coming into force of the new Insurance Act This new legislation has enhanced significantly the regulatory and supervisory framework of the industry and will ultimately strengthen the industry for the safeguard of consumers. Strategic and operational measures were taken to face the new regulatory framework and we also maintained our competitiveness by pursuing in our quest of meeting our customer needs. Gross premium income of the Life Assurance Business grew by 7.0% to reach Rs million for the financial year ended 30 June 2008 (Rs 874.7million - 30 June 2007) while contributions received under our Personal Pension Plans increased markedly by 21.3%. The total bonus paid out to our with-profit policyholders also witnessed a growth of 9.5 % to reach Rs million (Rs million - 30 June 2007) confirming again the soundness of our Life Fund. On the other hand the Company also sustained death and disability claims to the tune of Rs 28.2 million during the year (Rs 25.8 million - 30 June 2007). New product development, customer - focused services, cultural change in the mindset of our sales force and staff members, competitive products offered, and the launching of a Customer loyalty concept have been the main drivers of the encouraging results for the year ended 30 June Furthermore, as usual, our sales force has contributed significantly to our good performance and has shown very keen interest to adapt to the new legal environment. Short-Term Business Review A gross premium income of the General Insurance Business of Rs million has been posted, representing a growth of 26.1% over last year s premium amount of Rs million. There has also been an appreciable increase in retained premium with an amount of Rs million for the year under review compared to Rs million for the previous year. An underwriting profit of Rs 44.3 million was achieved for the year (Rs 36.3 million 30 June 2007). The results of the Insured Medical Business have also been included under Short Term Business. 10 State Insurance Company of Mauritius Limited

12 Directors Report (Continued) REVIEW OF OPERATIONS (CONTINUED) Short-Term Business Review (Continued) In line with the development of Mauritius as a financial services hub, there has been a marked increase in demand for specialist insurances to cover the players in the financial services sector. With the collaboration of the right partners, we have been able to address these new needs and are poised to becoming one of the leaders in the field. The regulatory framework was strengthened with the passing of the Broker Rules which lay down the legal framework for broker business. A major event has been the implementation stage of a new IT system for General Insurance business. With the new IT system, we aim at improving further the quality of our customer service as one of the key benefits. Pension, Life and Medical Schemes As at 30 June 2008, SICOM is managing 159 group pension schemes, with assets of some Rs 15 billion and an active membership of 27,000 members. We are also currently making payments of Rs 37.8 million to some 5300 pensioners on a monthly basis. SICOM Life Portfolio consisted of 107 schemes covering more than 11,000 members and annual premium grew by some 10.4 % over the year. The major share of our Life Portfolio consists of our Family Protection Schemes. During the course of the year, major amendments have been brought to the scheme, enabling payment of benefits under the Scheme, while the employee is still alive. This has improved the marketability of the Scheme, while increasing the customer flow to our Life desk. As regards Corporate Medical Insurance business, the number of Medical Schemes stood at 51, covering some 7,230 members. During the course of the year, SICOM made an agreement with Momentum (Mtius) Ltd to develop a medical insurance product geared towards the public sector and also outsource the claims processing and payment services of our existing Medical portfolio. Life and General Insurance businesses have required significant actuarial resources this year, in order to comply with the respective changes in legislation. The main actuarial focus of the changes is the measurement of risk, capital adequacy requirements and solvency margins. An annual valuation of the Life Assurance Fund is henceforth required, while General insurance technical reserves also have to be certified by the Actuary every year. Loans In line with our policy of providing competitive products, we reviewed our loan schemes with flexible conditions and attractive interest rates during the last financial year. For the year under review, we sanctioned a total loan amount of Rs 383 million, under our Housing, Multipurpose and Personal Loan Schemes as compared to Rs 353 million for the financial year ended 30 June 2007, thus registering an increase of 8.5%. The balance of our loans portfolio stood at Rs 2.24 billion as at 30 June 2008 as compared to Rs 2.16 billion last year. Investment SICOM has a long history of investment management and provides services with investments spread locally and overseas in a broad array of financial instruments. Through the selection of quality investment products and investing in a wide range of assets, continuous security, and stability of investments are ensured. Moreover, the asset allocations of funds under management are based on current and future forecasts of economic and market conditions. Our local investments posted a good performance for the year under review driven by our investment approach that hinges on both quantitative analysis and market judgment to produce consistent investment returns. On the other hand, the performance of our overseas investments was adversely affected by the turmoil in global financial markets. The total assets managed by the SICOM reached Rs 24.0 billion as at 30 June 2008 as compared to Rs 22.4 billion for the previous financial year. Legal & Compliance The Legal & Compliance Department provides support to the SICOM on legal and compliance matters. It attends to requests for advice emanating from the various Business Units, provides guidance to staff and management, develops required policies and procedures in conjunction with Business Units (implementation and control), monitors their effectiveness through testing (monitoring), reports on findings and makes appropriate recommendations in the light of the findings. The major part of the compliance activity for the year under review was devoted to the Insurance Act 2005, which came into operation on 28 September State Insurance Company of Mauritius Limited 11

13 Directors Report (Continued) REVIEW OF OPERATIONS (CONTINUED) Information Systems & Internal Audit (ISIA) The Information Systems & Internal Audit (ISIA) Department has the responsibility of providing independent, objective assurance and consulting activity designed to add value and improve SICOM s operations. The scope of work of the auditing function is to enable SICOM accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of its risk management, control, information systems and governance processes. Quality Management System The was subject to a full certification audit this year, following the expiration of its 3-year certification. In this respect all functions of SICOM, together with its subsidiaries were reviewed by our Certifying Body and the was awarded its new 3-year certificate. The Quality Policy of the Company is set out on page 4. SUBSIDIARY COMPANIES The profit before tax of SICOM Financial Services Ltd increased by 36.0% to reach Rs 30.6 million for the financial year under review, as compared to Rs 22.5 million last year. The total deposits of the Company increased by a healthy 13.1% as compared to last year to reach Rs 2.5 billion, while with the revamping of the lease business of the company a significant improvement has been registered in this line of business. SICOM Financial Services Ltd also manages two Unit Trusts, namely SICOM General Fund and SICOM Overseas Diversified Fund, which had total values of Rs million and Rs 67.9 million respectively as at 30 June SICOM Management Ltd maintained its profitability growth track record for the financial year ended 30 June 2008, with its profit before tax reaching USD 1.7 million as compared to USD 0.8 million for the financial year ended 30 June The income of the Company reached USD 1.7 million for the financial year ended 30 June 2008, which compares favourably with an income of USD 0.8 million registered in the previous financial year. The interest income of SICOM Global Fund Ltd reached USD 2.3 million as compared to USD1.9 million last year. However, the profit before tax of the company was USD 2.9 million for the financial year ended 30 June 2008 as compared to USD 3.8 million for the financial year ended 30 June 2007 mainly due to the impact of the general decline of overseas stock markets. CORPORATE GOVERNANCE REPORT DIRECTORS RESPONSIBILITIES Company Law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit of the Company for that period. In preparing those financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Board of Directors of SICOM has the overall responsibility for ensuring that the Company complies with the standards of good corporate governance. Corporate governance is the framework by which institutions are directed and controlled, that is it takes into consideration relationships between a company and its different stakeholders. The objective of good corporate governance is to ensure the safety, soundness and to enhance the shareholder value of a company. 12 State Insurance Company of Mauritius Limited

14 Directors Report (Continued) CORPORATE GOVERNANCE REPORT (CONTINUED) DIRECTORS RESPONSIBILITIES (CONTINUED) The Directors have adopted and will continue to adopt international best practice in the governance of the Company. The Directors are fully aware of their responsibilities towards its stakeholders and as such consider the establishment of good governance practices to be a key function of the Board. The Board of Directors met four times during the year. BOARD COMMITTEES In compliance with the principles of good governance, the Board of Directors has set up three Board Committees, namely: Investment Committee Risk and Audit Committee Corporate Governance Committee Investment Committee The Investment Committee consists of Mr T K Servansingh (Chairman), Mrs K G Bhoojedhur-Obeegadoo, Mr G Gopee and Mrs B D Dhaliah-Utchanah. The Investment Committee of SICOM lays down and reviews on a regular basis the investment strategy of the different funds under our management, that is, the Committee has the objective of selecting investments and investment products to yield superior returns within a preset risk management structure. It also takes key investment decisions and ensures that investments are in all respect reasonable and proper. Moreover, the Committee monitors and reviews the performance of our different portfolios. During the year, the Investment Committee met nine times. Risk and Audit Committee The Risk and Audit Committee consists of four non-executive Directors, namely, Messrs G Gopee (Chairman), T K Servansingh, B Chooramun, and D Purryag. The Risk and Audit Committee operates under a formally approved Charter, which clearly spells out the roles and responsibilities of the Committee members. Its main tasks are to maintain and, where necessary, review the effectiveness of internal controls in the in the light of the findings of the external and internal auditors and review the financial statements. During the year, the Risk and Audit Committee met on two occasions. Corporate Governance Committee The Corporate Governance Committee consists of Mr T K Servansingh (Chairman), Mrs K G Bhoojedhur-Obeegadoo, Mr B Chooramun and Mrs V Lim Hoye Yee. The Corporate Governance Committee operates under an approved mandate, which includes the nomination of Directors, determination of the Company s general policy on Directors fees, executive and senior management remuneration and consideration of other important staff-related matters. During the year, the Corporate Governance Committee met five times. State Insurance Company of Mauritius Limited 13

15 Directors Report (Continued) CORPORATE GOVERNANCE REPORT (CONTINUED) RISK MANAGEMENT As part of the risk management project undertaken by SICOM, the Company has completed its risk identification exercise and has moved on to the next phase in its Risk Management Framework. The risks to which the is exposed include reputation risk, technology risk, compliance risk, operational risk, business continuity risk and physical risk. The financial risks of the are listed in Note 4 to the financial statements. SOCIAL RESPONSIBILITY ROLE The Company is fully conscious of its role as a social partner in the Community. During the year under review, the Company has actively participated in various activities and has sponsored several events. CODE OF CONDUCT The Company is committed to ethical practices in the conduct of its business and its Code of Conduct sets out standards of business behaviour for its employees. RELATED PARTY TRANSACTIONS The related party transactions are disclosed in Note 38 to the Accounts. ACKNOWLEDGEMENT The Board of Directors expresses its deep appreciation of the support given to all the stakeholders of the SICOM by the Government of Mauritius, the Financial Services Commission, the Bank of Mauritius, Reinsurers, Reinsurance Brokers, Investment Managers, Bankers, Assurance Salesmen and Stockbrokers. The Board of Directors is also thankful to its customers and shareholders for their loyalty and trust. The Board of Directors would also like to thank Management and staff for their dedicated effort and commitment to the. For and on behalf of the Board of Directors T.K Servansingh Chairman Date: 22 September 2008 Bhoojedhur-Obeegadoo K G (Mrs) Director 14 State Insurance Company of Mauritius Limited

16 Secretary s Certificate I certify to the best of my knowledge and belief that, the Company has filed with the Registrar of Companies, all such returns as are required of the Company under the Companies Act N Ramdewar (Mrs) Company Secretary State Insurance Company of Mauritius Ltd Port Louis Date: 22 September 2008 State Insurance Company of Mauritius Limited 15

17 Auditorsʼ Report to the Shareholders of State Insurance Company of Mauritius Ltd STATE INSURANCE NCE COMPANY OF MAURITIUS LTD This report is made solely to the company s shareholders, as a body, in accordance with section 205 of the Companies Act Our audit work has been undertaken so that we might state to the company s shareholders those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company s shareholders as a body, for our audit work, for this report, or for the opinions we have formed. Report on the Financial Statements We have audited the financial statements of State Insurance Company of Mauritius Ltd on pages 17 to 62 which comprise the balance sheets as at 30 June 2008 and the income statements, statements of changes in equity and cash flow statements for the year then ended and a summary of significant accounting policies and other explanatory notes. Directors responsibilities for the financial statements. The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001 and the Financial Reporting Act This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with 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 the auditor s 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, the auditor considers 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 audit opinion. Opinion In our opinion, the financial statements on pages 17 to 62 give a true and fair view of the financial position of the group and of the company as at 30 June 2008, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the requirements of the Companies Act 2001 and the Financial Reporting Act Report on other legal requirements In accordance with the requirements of the Companies Act 2001, we report that: we have no relationship with, or interests in, the company other than in our capacities as auditors. we have obtained all information and explanations that we have required; and in our opinion, proper accounting records have been kept by the company as far as appears from our examination of those records. Insurance Act 2005 The financial statements have been prepared in the manner and meet the requirements specified by the Financial Services Commission. Chartered Accountants 22 September State Insurance Company of Mauritius Limited

18 Financial Statements Year Ended 30 June 2008

19 Balance Sheets at 30 June 2008 Company Note Rs 000 Rs 000 Rs 000 Rs 000 NON-CURRENT ASSETS Property, plant and equipment 6 216, , , ,936 Intangible assets 7 17,711 7,803 17,711 7,803 Statutory deposits 8 23,855 23,855 23,855 23,855 Investments in subsidiaries ,420,557 1,169,370 Investment in associate Investments in securities 11 4,853,070 4,457,823 3,048,750 2,868,500 Investment properties 12 55,632 49,242 55,632 49,242 Fixed deposits , ,545 49,828 95,718 Finance lease receivables 14 23,234 2, Mortgage and other loans 15 1,453,139 1,346,789 1,453,139 1,346,789 CURRENT ASSETS Investment in securities 11 1,058,032 1,685, , ,103 Finance lease receivables 14 5, Mortgage and other loans , , , ,991 Accounts receivable , , , ,791 Short-term deposits 17 1,899,836 1,121, , ,932 Reinsurance assets , , , ,002 Bank and cash balances 317, , , ,598 4,064,037 3,472,564 2,371,960 1,731,417 CURRENT LIABILITIES Borrowings 19 10,600 12,300 27,290 53,394 Accounts payable , , , ,910 Taxation 21 59,404 75,406 53,317 71,391 Bank overdraft 5,752-5,607 - Deposits , , ,316,950 1,343, , ,695 NET CURRENT ASSETS 2,747,087 2,129,356 2,116,701 1,486,722 10,041,326 8,810,867 8,403,116 7,263,335 CAPITAL AND RESERVES Stated capital 23 70,000 70,000 70,000 70,000 Reserves 24 2,266,649 2,025,393 1,912,343 1,639,968 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 2,336,649 2,095,393 1,982,343 1,709,968 MINORITY INTEREST 3,342 2, TOTAL EQUITY 2,339,991 2,097,998 1,982,343 1,709,968 TECHNICAL PROVISIONS Long term insurance Funds 25 5,734,881 5,108,733 5,498,395 4,653,333 Outstanding claims and IBNR , , , ,959 Gross unearned premiums ,485 91, ,485 91,076 NON-CURRENT LIABILITIES Borrowings 19 16,150 26, , ,624 Retirement benefit obligations 26 6,520 11,899 6,520 11,899 Long term deposits 22 1,588,536 1,238, Deferred taxation 21 7,448 8,441 7,448 8,441 STATUTORY RESERVE FUND 27-27,035-27,035 Approved by the Board of Directors and authorised for issue on 22 September ,041,326 8,810,867 8,403,116 7,263,335 Servansingh T K Chairman Bhoojedhur-Obeegadoo K G (Mrs) Director State Insurance Company of Mauritius Limited 17

20 Income Statements Company Note Rs 000 Rs 000 Rs 000 Rs 000 GROSS REVENUE - Short Term Business 28 1,008, , , ,518 Underwriting Surplus 29 44,516 36,304 44,516 36,304 Investment and Other Income , , , ,016 Share of surplus transferred from Life Assurance Fund 31 38,000-38, , , , ,320 Administrative and Other Expenses 32 (410,468) (375,204) (127,634) (166,176) Results of Operating Activities 338, , , ,144 Finance Costs 33 (2,924) (3,327) (70,465) (75,007) PROFIT BEFORE TAXATION 335, , , ,137 TAXATION 21 (32,831) (56,007) (27,346) (52,361) PROFIT AFTER TAXATION 302, , , ,776 Attributable to: Equity holders of the Parent 302, , , ,776 Minority Interest , , , , State Insurance Company of Mauritius Limited

21 Statement of Changes in Equity STATE INSURANCE COMPANY for the year OF ended MAURITIUS 30 June 2008 LTD Attributable Insured Properties Investments to Equity Stated Retained Medical Revaluation Revaluation Other Contingencies Translation Holders Minority Capital Earnings Scheme Reserve Reserve Reserve Reserve Reserve Of Parent Interest Total Note Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 GROUP Balance at 1 July ,000 1,510,594 18,504 87,343 37,207-40,523 23,115 1,787,286 2,407 1,789,693 Transfer to statutory reserve fund 27 - (2,285) (2,285) - (2,285) Transfer from/(to) reserve - (2,964) - - (2,372) 2, (2,372) - (2,372) Revaluation adjustment ,843 49, ,646-63,646 Exchange movement on retranslation of subsidiaries ,641 8,641-8,641 Net income & expense recognised directly in equity 70,000 1,505,345 18, ,186 84,638 2,964 40,523 31,756 1,854,916 2,407 1,857,323 Profit for the year - 259,014 2, , ,925 Total recognised income & expense for the year 70,000 1,764,359 21, ,186 84,638 2,964 40,523 31,756 2,116,643 2,605 2,119,248 Dividend 36 - (21,250) (21,250) - (21,250) Balance at 30 June ,000 1,743,109 21, ,186 84,638 2,964 40,523 31,756 2,095,393 2,605 2,097,998 Balance at 1 July ,000 1,743,109 21, ,186 84,638 2,964 40,523 31,756 2,095,393 2,605 2,097,998 Transfer from statutory reserve fund 27-27, ,035-27,035 Transfer from/(to) reserve - (3,571) - - (5,471) 3, (5,071) - (5,071) Revaluation adjustment ,340 (12,967) (11,627) - (11,627) Exchange movement on retranslation of subsidiaries (47,426) (47,426) - (47,426) Net income & expense recognised directly in equity 70,000 1,766,573 21, ,526 66,200 6,935 40,523 (15,670) 2,058,304 2,605 2,060,909 Increase in share capital Profit for the year - 302, , ,359 Total recognised income & expense for the year 70,000 2,068,668 21, ,526 66,200 6,935 40,523 (15,670) 2,360,399 3,369 2,363,768 Dividend 36 - (23,750) (23,750) (27) (23,777) Balance at 30 June ,000 2,044,918 21, ,526 66,200 6,935 40,523 (15,670) 2,336,649 3,342 2,339,991 COMPANY Balance at 1 July ,000 1,268,412 18,504 87,343 24,448-40,523-1,509,230-1,509,230 Transfer to statutory reserve fund 27 - (2,285) (2,285) - (2,285) Transfer from reserve (193) (193) - (193) Revaluation adjustment ,843 20, ,977-33,977 Net income & expense recognised directly in equity 70,000 1,266,127 18, ,186 44,389-40,523-1,540,729-1,540,729 Profit for the year - 187,776 2, , ,489 Total recognised income & expense for the year 70,000 1,453,903 21, ,186 44,389-40,523-1,731,218-1,731,218 Dividend 36 - (21,250) (21,250) - (21,250) Balance at 30 June ,000 1,432,653 21, ,186 44,389-40,523-1,709,968-1,709,968 Balance at 1 July ,000 1,432,653 21, ,186 44,389-40,523-1,709,968-1,709,968 Transfer from statutory reserve fund 27-27, ,035-27,035 Transfer from reserve (4,545) (4,545) - (4,545) Revaluation adjustment ,340 47, ,536-48,536 Net income & expense recognised directly in equity 70,000 1,459,688 21, ,526 87,040-40,523-1,780,994-1,780,994 Profit for the year - 225, , ,099 Total recognised income & expense for the year 70,000 1,684,787 21, ,526 87,040-40,523-2,006,093-2,006,093 Dividend 36 - (23,750) (23,750) - (23,750) Balance at 30 June ,000 1,661,037 21, ,526 87,040-40,523-1,982,343-1,982,343 Other reserve consists of a transfer from the net profit after tax of SICOM Financials Services Ltd as per Section 21 of the Banking Act The contingencies reserve was to cater for any under-provision arising from the general insurance risk, including future losses or other unforseeable risk. State Insurance Company of Mauritius Limited 19

22 Cash Flow Statements Company Rs 000 Rs 000 Rs 000 Rs 000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 335, , , ,137 Adjustments for: Exchange differences (99,941) 18, Depreciation 13,364 9,532 13,364 9,532 Amortisation of intangibles 2, , Surplus on revaluation of property (2,185) (2,691) (2,185) (2,691) Retirement benefit obligations (5,380) 1,800 (5,380) 1,800 Loss on disposal of property, plant and equipment 1, , Profit on disposal of investments and investment properties (37,665) (28,695) (37,305) (7,881) Investment income (417,722) (323,969) (176,650) (154,024) Interest on loan 269, ,504 70,465 75,007 Management Fees 1,486 1, Net surplus/(deficit) - Life Assurance Fund 591, , , ,101 - Insured Medical Fund - 2,713-2,713 - Medisave Fund 36 (57) 36 (57) - Personal Pension Plan Fund 26,643 22,783 26,643 22,783 - Insured Pension Scheme Fund 2,986 2,850 2,986 2,850 OPERATING CASH FLOWS BEFORE WORKING CAPITAL CHANGES 681, , , ,364 Increase in accounts receivable (53,885) (34,715) (54,104) (33,781) (Increase)/decrease in reinsurance assets (28,286) 20,866 (28,286) 20,866 Increase/(decrease) in accounts payable 44,610 (2,951) 49,436 (3,647) Increase/(decrease) in insurance liabilities 56,766 (3,047) 56,766 (3,047) CASH GENERATED FROM OPERATIONS 700, , , ,755 Interest paid (274,035) (177,403) (70,765) (75,013) Interest and dividend received 363, , , ,363 Income tax paid (76,633) (52,168) (72,789) (47,912) Dividend paid (23,750) (21,250) (23,750) (21,250) NET CASH GENERATED FROM OPERATING ACTIVITIES 690, , , ,943 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (20,572) (16,248) (20,572) (16,248) Purchase of intangible (12,240) (3,919) (12,240) (3,919) Proceeds from sale of property, plant and equipment and Investments 66,340 74,762 65,436 19,204 Deposit takings 290, , Net investments 92,743 (968,249) (149,853) (558,166) Net loans (130,816) (43,497) (130,816) (43,497) NET CASH GENERATED/(USED) IN INVESTING ACTIVITIES 286,085 (721,921) (248,045) (602,626) CASH FLOWS FROM FINANCING ACTIVITIES Issue of shares Loan received - 15,500-15,500 Loan repaid (12,300) (12,100) (27,118) (43,033) NET CASH (USED IN)/GENERATED FROM FINANCING ACTIVITIES (11,800) 3,400 (27,118) (27,533) Net increase/(decrease) in cash and cash equivalents 964,676 (1,665) 447,211 (5,216) CASH AND CASH EQUIVALENTS AT 1 JULY 1,247,067 1,248, , ,746 CASH AND CASH EQUIVALENTS AT 30 JUNE 2,211,743 1,247, , ,530 CASH AND CASH EQUIVALENTS Bank and cash balances 317, , , ,598 Short term deposits 1,899,836 1,121, , ,932 Bank overdraft (5,752) - (5,607) - 2,211,743 1,247, , , State Insurance Company of Mauritius Limited

23 Notes to the Financial Statements 1. GENERAL INFORMATION State Insurance Company of Mauritius Ltd is a public Company incorporated in Mauritius. Its registered office is situated at Sir Celicourt Antelme Street, Port-Louis, Mauritius. The Company is mainly engaged in long term and general insurance business whilst its subsidiaries carry out depository, investment and management activities. 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of financial statements are set out below: 2.1 Basis of preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements are prepared under the historical cost basis, as modified by the revaluation of buildings, investment properties and certain available-for-sale investments. In the current year, the and Company have adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1 July The adoption of these new and revised Standards and Interpretations has not resulted in changes to the company s accounting policies. The and Company have adopted IFRS 7: Financial Instruments: Disclosures which are effective for annual reporting periods beginning on or after 1 January 2007 and the consequential amendments to IAS 1: Presentation of Financial Statements. The impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided in these financial statements regarding financial instruments. At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet effective: IAS 1 Presentation of Financial Statements - Comprehensive revision including requiring a statement of comprehensive income IAS 1 Presentation of Financial Statements - Amendments relating to disclosure of puttable instruments and obligations arising on liquidation IAS 1 Presentation of Financial Statements - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 16 Property, Plant and Equipment - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 19 Employee Benefits - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 20 Government Grants and Disclosure of Government Assistance - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 23 Borrowing Costs - Comprehensive revision to prohibit immediate expensing IAS 23 Borrowing Costs - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 27 Consolidated and Separate Financial Statements - Consequential amendments arising from amendments to IFRS 3 IAS 27 Consolidated and Separate Financial Statements - Amendment relating to cost of an investment on first-time adoption IAS 27 Consolidated and Separate Financial Statements - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 28 Investments in Associates - Consequential amendments arising from amendments to IFRS 3 IAS 28 Investments in Associates - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 29 Financial Reporting in Hyperinflationary Economies - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 31 Interests in Joint Ventures - Consequential amendments arising from amendments to IFRS 3 IAS 31 Interests in Joint Ventures - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 32 Financial Instruments: Presentation - Amendments relating to puttable instruments and obligations arising on liquidation IAS 36 Impairment of Assets - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 38 Intangible Assets - Amendments resulting from May 2008 Annual Improvements to IFRSs IAS 39 Financial Instruments: Recognition and Measurement - Amendments resulting from May 2008 Annual Improvements to IFRSs State Insurance Company of Mauritius Limited 21

24 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.1 Basis of preparation (Continued) IAS 40 IAS 41 IFRS 1 IFRS 2 IFRS 3 IFRS 5 IFRS 8 IFRIC 12 IFRIC 13 IFRIC 14 IFRIC 15 IFRIC 16 Investment Property - Amendments resulting from May 2008 Annual Improvements to IFRSs Agriculture - Amendments resulting from May 2008 Annual Improvements to IFRSs First-time Adoption of International Financial Reporting Standards - Amendment relating to cost of an investment on first-time adoption Share-Based Payment - Amendment relating to vesting conditions and cancellations Business Combinations - Comprehensive revision on applying the acquisition method Non-current Assets Held for Sale and Discontinued Operations - Amendments resulting from May 2008 Annual Improvements to IFRSs Operating segments Service Concession Arrangements Customer Loyalty Programme IAS 19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Agreements for the construction of Real Estate Hedges of a Net Investment in a Foreign Operation It is anticipated that the adoption of the relevant Standards and Interpretations in future periods will have no material impact on the financial statements of the group and the separate financial statements of the company. 2.2 Investments in subsidiaries Separate financial statements Investments in subsidiaries are carried at cost. The carrying amount is reduced if there is any impairment in the value of investments. Consolidated financial statements The financial statements include the results of the Company and its subsidiaries. The results of subsidiaries acquired or disposed of during the year are included in the consolidated financial statements from the date of their acquisition or up to date of disposal as appropriate. All intragroup transactions, balances, income and expenses are eliminated on consolidation. The consolidated financial statements have been prepared in accordance with the purchase method. The excess of the cost of acquisition over the fair value of the s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the Income Statement. 2.3 Investments in associates An associate is an entity over which the has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Investments in associates are accounted for at cost in the Company s accounts and under the equity method of accounting in the s accounts. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the s interest in that associate are not recognised. Any excess of the cost of acquisition over the s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss. 22 State Insurance Company of Mauritius Limited

25 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.4 Property, plant and equipment Buildings held for use in the production or supply of goods or services or for administrative purposes, are stated in the balance sheet at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation increase is credited to properties revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to the Income Statement to the extent of the decrease previously charged. A decrease in carrying amount arising on revaluation is charged to Income Statement to the extent that it exceeds the balance, if any, held in properties revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings is charged to Income Statement. On the subsequent disposal or retirement of a revalued property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to retained profits. Land is not depreciated. With the exception of buildings, other assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated to write off the cost or revalued amount of the assets on a straight line basis over their estimated useful lives as follows: - Buildings - 1%-10% Furniture and fittings - 10% Office equipment - 10% Computer equipment %-25% Motor vehicles - 20%-25% The assets residual values and useful lives are reviewed and adjusted if appropriate at each balance sheet date. 2.5 Revenue recognition Premium written on General Insurance Business is accounted for when the policies incept while premium on Life Business is accounted for on the accrual basis except for individual life where premium is recorded in the accounting period when the premium is received. Provision for unearned premium has been made in respect of the General Insurance Business and Temporary Assurance Business and represent the proportion of premium written in the year which relate to the unexpired terms of policies in force at the balance sheet date, calculated on the basis of the 365th method. Investment income comprises dividend, interest and rent receivable for the year. Dividend is accounted for when declared. Interest and rental income are recognised on an accruals basis. Management fees and commissions are accounted on an accrual basis. 2.6 Foreign currencies In preparing the financial statements of the individual entities, transactions in currencies other than the entity s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in the net profit or loss for the period. State Insurance Company of Mauritius Limited 23

26 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.6 Foreign currencies (Continued) For the purpose of presenting consolidated financial statements the assets and liabilities of subsidiaries denominated in foreign currencies are translated into Mauritian rupees at closing rate of exchange. Income and expense items are translated at the average rates of exchange for the year. Gains and losses on translation are taken to translation reserve. 2.7 Financial assets Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which initially are measured at fair value. Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss (FVTPL), held-to-maturity investments, available-for-sale (AFS) financial assets and Loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Except where stated separately, the carrying amounts of the s and Company s financial assets approximate their fair values. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments other than those financial assets designated as at FVTPL. Financial assets at FVTPL Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held for trading if: It has been acquired principally for the purpose of selling in the near future; or It is a part of an identified portfolio of financial instruments that the and the Company manage together and have a recent actual pattern of short-term profit-taking; or It is a derivative that is not designated and effective as a hedging instrument. A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or The financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the s documented risk management or investment strategy, and information about the grouping is provided internally in that basis; or It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments; Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL. 24 State Insurance Company of Mauritius Limited