2018 INTEGRATED REPORT & FINANCIAL STATEMENTS REPORT INTEGRATED 2018 INTEGRATED REPORT & FINANCIAL 2018 STATEMENTS Family Bank Towers, Muindi Mbingu Street | P.O. Box 74145 - 00200, Nairobi, Kenya | Tel: 254-2-3252 445/0703095 445 www.familybank.co.ke Email: [email protected] | Website: www.familybank.co.ke 1 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 2 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 FAMILY BANK LIMITED INTEGRATED REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018 1 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 ABOUT THE INTEGRATED REPORT AND AUDITED FINANCIAL STATEMENTS 2018 Family Bank Limited is pleased to present its annual Integrated Report, which covers the period from 1 January 2018 to 31 December 2018. This report contains comprehensive information of our financial performance, stakeholders, governance, material issues, risks and opportunities and how these influence our strategic initiatives. In this report, Family Bank demonstrates how we create and sustain value through our business. Family Bank Vision, Mission and Core Values 4 This report is compiled and presented in accordance with the Corporate Governance Guidelines and Codes of Conduct prescribed by the Central Bank of Kenya, the Corporate Governance Guidelines of the Capital Markets Authority Subsidiary 5 (CMA), the Continuing Listing Obligations of the CMA as required by the Nairobi Securities Exchange and the Global Reporting International (GRI). AGM Notice 6 We have implemented the framework as far as practical and our approach to integrated reporting will continue to Corporate Information 7 - 8 evolve over time, in line with the framework. Board of Directors 9 - 12 Our Annual Financial Statements were prepared in accordance with International Financial Reporting Standards (IFRS) Chairman’s Statement 13 - 16 and the requirements of the Companies Act, 2015. We received external assurance from our auditor, PWC Kenya on the fair presentation of these annual financial statements. See the Independent Auditor’s Report on pages 47 to 50. Statement from Ag. MD & CEO 17 - 20 Sustainability Review 22 - 35 Corporate Governance Statement 36 - 43 Report of the Directors 44 - 45 Statement of Directors Responsibilities 46 Independent Auditor’s Report 47 - 50 Financial Statements: Statement of comprehensive income 51 Statement of financial position 52 Consolidated statement of changes in equity 53 Bank statement of changes in equity 54 Statement of cash flows 55 Notes to the financial statements 56 - 127 2 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 Family Bank Vision, Mission and Core Values 4 Subsidiary 5 AGM Notice 6 Corporate Information 7 - 8 Board of Directors 9 - 12 Chairman’s Statement 13 - 16 Statement from Ag. MD & CEO 17 - 20 Sustainability Review 22 - 35 Corporate Governance Statement 36 - 43 Report of the Directors 44 - 45 Statement of Directors Responsibilities 46 Independent Auditor’s Report 47 - 50 Financial Statements: Statement of comprehensive income 51 Statement of financial position 52 Consolidated statement of changes in equity 53 Bank statement of changes in equity 54 Statement of cash flows 55 Notes to the financial statements 56 - 127 3 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 Family Bank Vision, Mission and Core Values 4 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 SUBSIDIARY FAMILY BANK INSURANCE AGENCY LIMITED Family Bank Insurance Agency Limited (FBIA), a fully-fledged subsidiary of Family Bank Limited, was established in 2008. The Insurance Agency is licensed by the Insurance Regulatory Authority (IRA) since May 2010. In the ten years since its establishment, the Agency has recorded an impressive growth year-on-year, attaining a Gross Written Premium (GWP) of KES 850 Million as at December 2018, mainly from its General, Life and Medical insurance businesses. This growth is attributed to improved customer experience, technological innovations in underwriting & distribution and new products. FBIA is a leading provider of risk management & insurance brokerage solutions. It has more than 50 members of staff, adequately experienced and qualified to handle your insurance and risk management needs with representation in over 90 branches across the country. The Agency’s main objective is to address the insurance needs of Kenyans across the wide economic strata. Through partnerships with reputable insurance companies in the industry, FBIA offers a full bouquet of innovative insurance products and services using the Bancassurance model. Bancassurance is the provision of insurance and banking products and services, through a common distribution channel and to the same client base. The Agency also facilitates access to professional insurance advisory services and also avails convenient and accessible insurance policies and claims service by our customers through the wide branch outreach and alternative banking channels. OUR SERVICES • Advisory Insurance services on General, Marine, Agriculture and Medical insurance policies • Life Assurance products for groups and individuals • Group and Staff medical scheme administration services • Claims Management • Insurance Premium Financing All these services and products are offered through an integrated and robust Banc assurance IT system to ensure that insurance business is well served and all branches are well connected to enhance efficiency of service delivery across the country. 5 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 THE COMPANIES ACT 2015 FAMILY BANK LIMITED ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 12TH ANNUAL GENERAL MEETING of the shareholders will be held at KENYATTA INTERNATIONAL CONFERENCE CENTRE AMPHITHEATRE on Thursday 30th May 2019 at 10:00 am to transact the following business: Ordinary Business: 1. To receive, consider and if thought fit, adopt the Integrated Report, the Audited Financial Statements for the year ended 31st December, 2018, together with the Chairman’s, Directors’ and Auditors’ reports thereon. 2. To consider and if deemed fit, approve the recommendation of the Board that there shall be no dividend paid for the year ended 31st December 2018. 3. Resignation, Rotation and Election of Directors in accordance with Article 112 of the Articles of Association: 3.1 with section 132 of the Companies Act. 3.2 with section 132 of the Companies Act. 3.3 Dr. W. Kiboro, a Director and Chairperson to the Board, having attained the age of seventy years retires 4. To receive, consider and if thought fit approve the Directors’ remuneration for the year ending 31st December 2018. 5. To approve that the auditors PricewaterhouseCoopers (PwC), being eligible and having expressed their authorize the directors to fix their remuneration. Special Business: 6. To consider and if thought fit pass the following resolution as a special resolution, as recommended by the Directors: “That the name of the Company be and is hereby changed from “Family Bank Limited” to “Family Bank PLC” in of Change of Name issued in that regards by the Registrar of Companies”. By order of the Board Company Secretary Nairobi 30th April 2019 Notes: A member entitled to attend and vote at this Meeting may appoint a proxy to attend and vote on his/her behalf and such proxy need not be a member of the Company. The proxy shall be required to be deposited at forty-eight hours before the time for holding the meeting failing which it shall be invalid. In the case of a corporate body the proxy must be under its common seal. The proxy form is available on the Company’s website www.familybank.co.ke The full set of audited accounts for the year ended 31st December 2018 is available at the Company’s registered www.familybank.co.ke 6 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 CORPORATE INFORMATION DIRECTORS Non-Executive Dr. Wilfred D. Kiboro- Chairman Mr. Titus K. Muya Dr. Ruth Waweru Mr. Lazarus Muema Mr. Lerionka S. Tiampati Mr. Francis Gitau Mungai COMPANY SECRETARY Rebecca Mbithi Certified Public Secretary (Kenya) 8th Floor, Family Bank Towers, Muindi Mbingu Street P.O. Box 74145 - 00200, Nairobi Tel: 254-2-318173/318940/2/7/0720 098 300 Fax: 254-2-318174 Email: [email protected] Website: www.familybank.co.ke REGISTERED OFFICE Family Bank Limited 6th Floor, Family Bank Towers, Muindi Mbingu Street P.O. Box 74145- 00200, Nairobi Tel: 254-2-318173/318940/2/7/0720 098 300 Fax: 254-2-318174 Email: [email protected] Website: www.familybank.co.ke AUDITOR PricewaterhouseCoopers Kenya Certified Public Accountants PWC Tower, Waiyaki Way/Chiromo Road, Westlands P.O. Box 43963-00100 Nairobi, Kenya LEGAL ADVISERS Mboya Wangong’u & Waiyaki Advocates Lex Chamber, Maji Mazuri Road Off James Gichuru Road Nairobi 7 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 INTEGRATED REPORT & FINANCIAL STATEMENTS 2018 CORPORATE INFORMATION CORRESPONDENT BANKS Deutsche Bank AG London 6 Bishopsgate London EC2P 2AT United Kingdom DZ Bank AG 60265 Frankfurt am Main Deutsche Bank Trust Company Americas P O Box 318, Church Street Station New York, New York 10008 – 0318 National Bank of Canada P.O. Box 600 rue de la Gauchetière Ouest Montréal, Québec, Canada BOARD COMMITTEES Credit Committee Mr. Francis Mungai - Chairman Mr. Titus K. Muya Dr.