UAP HOLDINGS LIMITED ANNUAL REPORT & FINANCIAL STATEMENTS 2015 CONTENTS CORPORATE BUSINESS FINANCIAL GOVERNANCE REVIEW STATEMENTS 30 Corporate Governance Report 44 Consolidated Statement of 02 UAP Old Mutual at a Glance 40 03 Old Mutual Plc at a Glance Directors’ Report Profit or Loss 04 Board of Directors 42 Statement of Directors’ 45 Consolidated Statement of 14 UAP Old Mutual Management Responsibilities Other Comprehensive Income 43 Report of the Independent 46 Consolidated Statement Auditors of Financial Position 47 Company Statement of Financial Position 48 Consolidated Statement of Changes in Equity 50 Company Statement of Changes in Equity 51 Consolidated Statement of Cash Flows 26 CSR 52 Notes to Financial Statements CHAIRMAN’S 16 STATEMENT 20 Group CEO’s Report 26 Sustainability and CSR Report 29 Five Year Financial Highlights 40 DIRECTORS’ REPORT KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA 1. ANNUAL REPORT & FINANCIAL STATEMENTS 2015 UAP HOLDINGS LIMITED UAP OLD MUTUAL GROUP - EAST AFRICA AT A GLANCE The UAP Old Mutual Group is comprised of Faulu, UAP and Old Mutual, forming one of the largest financial services groups with a growing footprint in East and Central Africa. The Group was formed in 2015 as a result of the acquisition of a controlling stake by Old Mutual in Faulu Microfinance Bank in 2014 and UAP Holdings in 2015. The merger process kicked off in June 2015 with Old Mutual Africa (OMA) assigning UAP Holdings as the board of reference to provide strategic oversight for the East Africa businesses, with their headquarters in Nairobi. The Group pursues an integrated financial services model to avail to customers a comprehensive range of financial solutions which include Investment, Insurance, Banking and Savings through a wider and more accessible distribution network. Our customers can now be assured of holistic solutions and unrivalled convenience to enable them realise their dreams. PETER MWANGI GROUP CEO, UAP OLD MUTUAL GROUP The UAP Old Mutual Group is part of the Old Mutual Emerging Markets (OMEM). As part of OMEM, UAP Old Mutual is able to leverage technology, technical expertise and the ability to offer broad career growth prospects for employees. The UAP Old Mutual Group will operate under the banner of: The business will drive two key brands in the market. Banking Business Non Banking Businesses At 33 storeys high, the UAP Old Mutual Tower is the Group’s flagship property project Quick facts about the Group CUSTOMER 160+ 6 1.2 SEGMENTS 4, 000 COUNTRIES MILLION PLUS OUTLETS Kenya, Uganda, Customers Retail Employees Service & 12 Properties in South Sudan, Business & agents Distribution 4 countries Rwanda, DR Congo Corporate Outlets and Tanzania. 2. KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA UAP HOLDINGS LIMITED ANNUAL REPORT & FINANCIAL STATEMENTS 2015 PLC AT A GLANCE OLD MUTUAL IS AN INTERNATIONAL INVESTMENT, SAVINGS, INSURANCE & BANKING GROUP Old Mutual began in Cape Town in 1845 as South Africa’s first mutual life insurance company, offering financial security in uncertain times. Today, 171 years on, Old Mutual plc is made up of four strong businesses comprising Old Mutual Emerging Markets, Nedbank, Old Mutual Wealth and OM Asset Management serving a combined 18.9 million customers. Headquartered in London, we do business in Africa, Europe, the Americas and Asia. From our origins in South Africa, we have expanded through organic growth and strategic acquisitions. Our customers are at the heart of everything we do. We know that we can only be successful with their continued support and trust – we aim to be their most trusted financial partner, helping them achieve their lifetime financial goals, while in- vesting their funds in ways that will secure a positive future for themselves and their families. 64, 043 In Over 30 £327.9 Bn 18.9 M Countries Customers Employees Funds under management The Business Model: Old Mutual Nedbank Old Mutual Old Mutual Asset Emerging Is one of South Africa’s four Wealth Management largest banking groups with Markets a wide range of wholesale Is the leading wealth A diverse range of investment and retail banking services management business in the strategies and products for An African financial services UK and international markets institutions, delivered worldwide leader, providing long-term 7m customers in through seven US-based savings, protection, investment 9 African Countries 3, 000 UK financial boutiques and lending to retail and advisors corporate customers £ 168.2bn funds under management 15 Countries across Africa Currently, our 4 businesses have a central reporting structure. Going forward, we will be working towards actively managing the separation of our four strong businesses to realise their full potential as standalone entities, in a manner consistent with our responsible business values. KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA 3. ANNUAL REPORT & FINANCIAL STATEMENTS 2015 UAP HOLDINGS LIMITED BOARD OF DIRECTORS 8 5 6 3 1 4 2 7 1. Peter de Beyer 3. Anisha Archary 5. A.K. Maina 7. Dr. Joseph Barrage Wanjui 2. Ralph Mupita 4. David Marshall 6. Dr. Peter Muthoka 8. James Wambugu 4. KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA UAP HOLDINGS LIMITED ANNUAL REPORT & FINANCIAL STATEMENTS 2015 BOARD OF DIRECTORS (CONTINUED) 10 11 13 15 12 9 14 9. James Muguiyi 11. Rose Ogega 13. Paul Truyens 15. Tavaziva Madzinga 10. Mike Harper 12. Susan Omanga 14. Peter Mwangi KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA 5. ANNUAL REPORT & FINANCIAL STATEMENTS 2015 UAP HOLDINGS LIMITED BOARD OF DIRECTORS & PROFILES Dr. JB Wanjui, the Chairman of the Board has a long and illustrious career in the Kenyan corporate scene, the most prominent being the Chief Executive of East Africa Industries (which later became Unilever). He is a graduate of Ohio Wesleyan University, (BA Physics and Mathematics) and Columbia University, (MSC Engineering). Dr. Wanjui was the Chancellor of the University of Nairobi and was previously the Chairman of CfC Stanbic Bank Limited. He is also chairman and Board member of a number of other Kenyan and international organizations. Dr. Wanjui has been a director of the Company since 1986 and the Chairman of the Board since 1998. In recognition of his exemplary contributions to positive change in society, he received the Chief of the Order of the Burning Spear (CBS) of the Republic of Kenya award. Dr. Joseph Barrage Wanjui CBS Chairman Peter de Beyer, is the Deputy Chairman of the Board having been appointed in June 2015. He joined Old Mutual in 1978 and has served the business in various arms and capacities as Development Actuary and Executive General Manager. In September 2000, Peter became Deputy Managing Director, South Africa, responsible for all Retail Business. In December 2003, Mr de Beyer, as Deputy MD, was given responsibility for Old Mutual Service, Mr de Beyer retired from Old Mutual in November 2008 and continues to serve on its several boards. Peter de Beyer Deputy Chairman Dr. Peter Muthoka is an Independent Director of the Board, and he is the current Chairman of the Faulu Micro Finance Bank, which is a member of the UAP Old Mutual Group. He is also the Chairman of the UAP Old Mutual Foundation. He previously served as the Group Chairman of Kenya Commercial Bank. He is the Chairman of the Board of Fellows of the Kenya Institute of Management (KIM) and Chairman of the Board of Trustees of the Management University of Africa (MUA). He has been a corporate leader and an entrepreneur with long and varied experience in public and private sectors in the fields of management, education, finance, investment, export promotion, agriculture, real estate, corporate governance, international diplomacy and community voluntary work. In recognition of his exemplary service rendered to the Kenyan Public Service and international organizations, he was awarded the medal of Dr. Peter Muthoka Moran of the Burning Spear (MBS) in 2004 and the medal of Elder of the Burning Spear (EBS) in EBS, MBS, FKIB, FKIM 2012 by H.E The President of the Republic of Kenya. Independent Director James Muguiyi is a Non-Executive Director at UAPHL, having previously served as Group Managing Director. During his tenure as the Group MD he oversaw the growth of the Group’s business in Kenya and expansion into Uganda in 2004 and South Sudan in 2006. He presided over the group restructuring in 2008 and the demerger of the Life Insurance Business from General Insurance Business in Kenya. Between 1988 and 2001, he was the Deputy Managing Director. During this time, he oversaw the merger of Provincial Insurance with Union Insurance to form UAP Provisional Insurance in 1994. Mr. Muguiyi is a director of several other companies and is Chairman of Centum Investment Company Limited, a company listed on the Nairobi Securities Exchange. He is a Fellow of the Institute of Certified Public Accountants of Kenya (FCPA (K)) where he was at one time the Chairman. He is also a Certified Company Secretary James Muguiyi (CPS (K)) and a Chartered Management Accountant (ACMA). Director 6. KENYA • UGANDA • SOUTH SUDAN • RWANDA • DR CONGO • TANZANIA UAP HOLDINGS LIMITED ANNUAL REPORT & FINANCIAL STATEMENTS 2015 BOARD OF DIRECTORS & PROFILES (CONTINUED) Ralph is currently the Chief Executive Officer, Old Mutual Emerging Markets. Ralph joined Old Mutual in 2001 in Old Mutual’s Individual Life business. He has served as Managing Director Old Mutual Unit Trust and Strategy Director within Old Mutual South Africa(OMSA) and Chief Executive Officer for Old Mutual Emerging Markets: Life and Savings. In February 2012, Ralph took up the position of CEO of Old Mutual SA and Emerging Markets. He is an engineer by training, (BSc. Eng Hons.), and obtained a Masters of Business Administration (MBA) from the University of Cape Town in 2000. He is a graduate of Harvard Business School’s GMP programme, and has also attended executive programmes at London Business School and INSEAD.