Vanguard Life Assurance Company Limited
ABRIDGED AUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2014
ABRIDGED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2014
Audited
31-Dec-14
K’000
Audited
31-Dec-13
K’000
Gross premium
1,307,283 1,014,474
Reinsurance cost
(40,952)
(13,551)
Net income
1,266,331 1,000,923
Investment and other income
334,003
513,583
Total revenue
1,600,334 1,514,506
Gross insurance benefits and commissions
(255,426)
(172,058)
Reinsurance recoveries
19,305 11,626
Operating expenses
(512,117)
(399,971)
Net benefits, commissions and operation expenses
(748,238)
(560,403)
Profit before change in insurance liabilities
852,096 954,103
Change in insurance contract liabilities
(730,767)
(694,193)
Profit after change in insurance contract liabilities
121,329 259,910
Finance costs
(5,680)
(3,826)
Profit before tax
115,649 256,084
Income tax expense
(52,338)
(60,473)
Profit for the year 63,311 195,611
Other comprehensive income
4,420 1,700
Total comprehensive income
67,732
197,311
91 282
Basic earnings per share (Tambala)
ABRIDGED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014
Audited
Audited
31-Dec-14
31-Dec-13
K’000
K’000
ASSETS
Property, equipment and intangible assets
173,145 137,455
Investment property
1,035,400
968,626
Deferred acquisition cost
215,404
266,853
Held for trading investments
290,727
225,319
Inventories
1,798 3,598
Trade and other receivables
345,941 189,835
Cash and cash equivalents
1,212,289 746,895
Total assets
3,274,704 2,538,581
EQUITY AND LIABILITIES
Capital and reserves
Share capital
69,355 69,355
Share premium
277,069 277,069
Revaluation reserves
6,120 1,700
Retained earnings
317,235 268,924
Total equity and reserves
669,779 617,048
Liabilities Life assurance policyholder liabilities
2,422,927 1,792,195
Trade and other payables
181,998 129,339
Total liabilities
2,604,925 1,921,534
Total equity and liabilities
3,274,704 2,538,581
ABRIDGED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014
Audited
Audited
31-Dec-14
31-Dec-13
K’000
K’000
Cash flows from operating activities
Profit before tax
115,649
256,084
Adjustments for non cash items:
117,024
(147,222)
Changes in working capital
(102,543)
(5,567)
Cash generated from operations
130,130 103,295
Income taxes paid
(51,322)
(44,821)
Net cash from operating activities
78,808
58,474
Cash flows from investing activities
(229,146)
(505,963)
Cash flows from financing activities
615,732 624,566
Net increase in cash and cash equivalents
465,394
177,077
Cash and cash equivalents at beginning of year
746,895 569,818
Cash and cash equivalents at end of year
1,212,289
746,895
Statement of changes in equity for the year ended 31 December 2014
Share
Share Revaluation
Retained
Total capital
premium
reserve
earnings
equity
MKMKMKMKMK
Balance at 1 January 2013
69,354,839 277,069,081 - 73,313,026 419,736,946
Total comprehensive income for the year
- - 1,700,000 195,610,716 197,310,716
Balance at 31 December 2013
69,354,839 277,069,081 1,700,000 268,923,742 617,047,662
Dividend paid
- - - (15,000,000) (15,000,000)
otal comprehensive income for the year
Balance at 31 December 2014
- 69,354,839 - 277,069,081 4,420,499 63,311,084 67,731,583
6,120,499 317,234,826 669,779,245
ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER
2014 PERFORMANCE OVERVIEW
Gross premiums increased from K1.01 billion to K1.31 billion representing a growth of 29% while total revenue
grew by 7% from MK1.51 billion in 2013 to MK1.65 billion in 2014. Total assets grew by 29% from MK2.5 billion to
MK3.3 billion due to growth in investments assets which grew by 31% from MK1.8 billion in 2013 to MK2.5 billion
in 2014. These favourable growth levels have been achieved on account of The Pension Act 2010 combined with
the company’s marketing efforts.
Due to reduction in rates, money market investment and other income went down by 35% from MK508 million
to MK334 million in 2014.
The Company made a profit of MK852 million before changes in insurance liabilities of MK731 million which were
transferred to the policyholders.
Profit before tax at MK116 million was down by 55% on 2013 profit of MK256 million due to a decision to impair
deferred acquisition cost PROSPECTS
The stabilisation of the Kwacha and the downward trend in inflation, if sustained, is expected to bring positive
results as this should translate into disposable incomes that allow potential customers to take up insurance. The
ongoing reforms in the pensions industry will continue to positively impact on the business.
ACTUARY’S CERTIFICATE I hereby certify that, to the best of my knowledge and belief, as at 31st of December 2014, the value of assets
in respect of all classes of Life and Pension business carried out by Vanguard Life Assurance Company Limited
exceeds the amount of liabilities.
Piyush I Majmudar Fellow of the Institute of Actuaries, UK
REPORT OF THE INDEPENDENT AUDITORS ON THE ABRIDGED FINANCIAL STATEMENTS
TO THE MEMBERS OF VANGUARD LIFE ASSURANCE COMPANY LIMITED
The accompanying abridged financial statements, which comprise the abridged statement of financial position as
at 31 December 2014 and the abridged statements of profit or loss and other comprehensive income, changes
in equity and cash flows for the year then ended, are derived from the audited financial statements of Vanguard
Life Assurance Company Limited for the year ended 31 December 2014. We expressed an unmodified audit
opinion on those financial statements in our report dated 7th of March 2015. Those financial statements, and
the summary financial statements, do not reflect the effects of events that occurred subsequent to the date of
our report on those financial statements.
The abridged financial statements do not contain all the disclosures required by International Financial Reporting
Standards applied in the preparation of the audited financial statements of Vanguard Life Assurance Company
Limited. Reading the abridged financial statements, therefore, is not a substitute for reading the audited financial
statements of Vanguard Life Assurance Company Limited.
Directors’ responsibility
The directors are responsible for the preparation and fair presentation of these abridged financial statements in
accordance with the provisions of the Companies Act (Chapter 46:03) and in conformity with the International
Financial Reporting Standards (IFRS).
Auditors’ responsibility
Our responsibility is to express an opinion on these abridged financial statements based on our procedures which
were conducted in accordance with International Standards on Auditing (ISA) 810, Engagements to Report on
Summary Financial Statements.
Opinion
In our opinion, the abridged financial statements derived from the audited financial statements of Vanguard Life
Assurance Company Limited for the year ended 31st December 2014 are consistent, in all material respects,
with those financial statements, in accordance with the International Financial Reporting Standards (IFRS), the
Financial Services Act, 2010, and the Companies Act (Chapter 46:03).
BDO Chartered Accountants
Public Accountants and Business Advisors Blantyre, Malawi
7th March 2015
BY ORDER OF THE BOARD
G. Kambale
N. Mupfurutsa
Chairman Managing Director Every part of life, throughout life, for life.