ANNUAL REPORT AND FINANCIAL STATEMENTS 2010 VISIO N Enabling people to overcome uncertainty MISSIO N Provide solutions to protect our customers VALUES Integrity, Passion, Excellence, Teamwork JUBILEE HOLDINGS ANNUAL REPORT AND FINANCIAL STATEMENTS 1 FOR THE YEAR ENDED 31ST DECEMBER 2010 Contents 2 Group Information 3 Notice of Annual General Meeting 4-5 Board of Directors 6-7 Chairman’s Statement 8 Report of the Directors 8 Statement of Directors’ Responsibilities 9-10 Corporate Goveranance Statement 11 Report of the Independent Auditor to the Members of Jubilee Holdings Limited Financial Statements: 12 Consolidated Income Statement 12 Consolidated Statement of Comprehensive Income 15 Consolidated Statement of Financial Position 16 Company Statement of Financial Position 17 Consolidated Statement of changes in Equity 18 Company Statement of Changes in Equity 19 Statement of Cash Flows 20-52 Notes 53 Additional group information JUBILEE HOLDINGS JUBILEE HOLDINGS JUBILEE HOLDINGS 2 ANNUAL REPORT AND FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS 3 FOR THE YEAR ENDED 31ST DECEMBER 2010 FOR THE YEAR ENDED 31ST DECEMBER 2010 Group Information Notice of Annual General Meeting 2010 2009 NOTICE IS HEREBY GIVEN that the 73RD ANNUAL GENERAL MEETING 7. Bonus Issue Capital and reserves Shs’ 000 Shs’ 000 of the Shareholders will be held at the Nairobi Serena, Kenyatta Authorised Capital 247,500 225,000 Avenue, on Thursday 26th May, 2011 at 11:00 a.m. to transact the “RESOLVED that, pursuant to Article 128 of the Articles of Issued Capital 247,500 225,000 following business: Association and subject to the passing of resolution 6 above and to Paid-up Capital 247,500 225,000 approval from the Capital Markets Authority and the Nairobi Stock Exchange, the retained profits amounting to Kshs. 24,750,000 Retained Earnings 4,431,484 3,142,327 be capitalised and the Directors be and are hereby authorised 1. To consider and, if thought fit, to adopt the Consolidated Accounts and directed to utilise such sums to the holders of ordinary shares for the year ended 31st December, 2010, the Report of the as at 26th May, 2011 and to apply such sum on behalf of such Directors and the Report of the Auditor thereon. Registered Office Associates holders in paying up in full at par value 4,950,000 ordinary unissued shares in the capital of the Company, such shares to Jubilee Insurance House PDM (Holdings) Limited (37.10%) be allocated and credited as fully paid up to and amongst such 2. To confirm the payment of the interim dividend of 20% made on holders in the proportion of One New Ordinary Share for every Wabera Street IPS Power Investment Limited (27.00%) th 8 October, 2010 and approve the payment of a final dividend Ten Ordinary shares as held on May, 26th 2011 upon the terms P O Box 30376–00100 GPO Bujagali Holding Power Company Limited (25.0%) of 90% on the issued and paid-up capital of the Company on that such new shares when issued shall not rank for dividend in th th or about 8 July, 2011 to the Shareholders registered as at 26 st Nairobi, Kenya FCL Holdings Limited (30%) respect of the year ended 31 December, 2010 but shall rank, in May, 2011. all other respects, pari passu with the existing ordinary shares of Telephone: 3281000 IPS Cable Systems Limited (33.3%) the Company and the Directors be and are hereby authorised to Telefax: 3281150 do all acts required to give effect to this resolution and deal with 3. To elect the following Directors who retire by rotation and, being fractions in such manner as they think fit subject always to the E-mail: [email protected] Auditor eligible, offer themselves for re-election: Articles of Association of the Company” Website: www.jubileeholdings.com PricewaterhouseCoopers - Kenya (a) Mr. Nizar Juma 8. Special Notice has been received by the Company pursuant to (b) Mr. Sultan Khimji Subsidiaries Corporate Lawyers section 142 of the Companies Act (Cap. 486 of the Laws of Kenya) that the following Resolution be proposed in accordance with The Jubilee Insurance Company of Tanzania Limited (51%) Daly & Figgis Advocates section 186 (5) of the Act for consideration by the Shareholders: 4. To approve the Directors’ remuneration. The Jubilee Insurance Company of Uganda Limited (65%) The Jubilee Insurance Burundi S.A. (70%) Share Registrar “RESOLVED that Mr. Tom D Owuor who being over the age of 5. To consider the following Resolution, Special Notice having been The Jubilee Insurance (Mauritius) Ltd (80%) Jubilee Holdings Limited seventy years and, having previously received the approval of received under sections 142 and 160 (1) of the Companies Act the Shareholders to continue in office on attaining the age of 70 Jubilee Center Burundi (80%) (Cap. 486 of the Laws of Kenya): years, be and is hereby re-elected as a Director until he comes up The Jubilee Insurance Company of Kenya Limited (100%) Principal Bankers for retirement by rotation under the Company’s Memorandum and “RESOLVED that KPMG East Africa Limited be appointed Articles of Association”. The Jubilee Investments Company Limited (Uganda) (100%) Diamond Trust Bank Kenya Limited Auditors of the Company in place of the retiring Auditors Messrs. PricewaterhouseCoopers, and hold office until the conclusion of Jubilee Investments Tanzania Limited (100%) Barclays Bank of Kenya Limited the next Annual General Meeting, and to authorise the Directors Jubilee Financial Services Limited (100%) Standard Chartered Bank Kenya Limited to fix their remuneration.” By order of the Board Jubilee Investments Burundi Ltd (100%) Citibank N.A. J L Oyuyo Githinji Diamond Trust Bank Uganda Limited Special Business: Company Secretary To consider and, if thought fit, to pass the following resolutions as Nairobi Ordinary Resolutions: 1st April, 2011 6. Increase of Authorised Share Capital Note: A member entitled to attend and vote at this meeting may appoint “RESOLVED that the authorised share capital of the Company a proxy to attend and vote on his/her behalf and such proxy need be and is hereby increased from the current Kshs. 247,500,000 not be a member of the Company. The proxy form is available on divided into 49,500,000 ordinary shares of par value Kshs. 5 the Company’s website www.jubileeafrica.com and was circulated by per share to Kshs. 272,250,000 divided into 54,450,000 million post. ordinary shares of par value Kshs. 5 per share ranking pari passu in all respects with the existing ordinary shares in the capital of the Company” JUBILEE HOLDINGS JUBILEE HOLDINGS JUBILEE HOLDINGS JUBILEE HOLDINGS 4 ANNUAL REPORT AND FINANCIAL STATEMENTS ANNUAL REPORT AND FINANCIAL STATEMENTS 5 FOR THE YEAR ENDED 31ST DECEMBER 2010 FOR THE YEAR ENDED 31ST DECEMBER 2010 Board of Directors Audit and Compliance Committee Finance Committee Juma Kisaame* Jackie Oyuyo Githinji Sultan K. Khimji - Chair, BACC Nizar N. Juma - Chairman and Chair, BNHRC John J. Metcalf*** Mr. Kisaame joined the Board in Company Secretary Mr. Khimji joined the Board in 1998 and Mr. Juma is the Chairman of Jubilee Holdings Limited and Mr. Metcalf was appointed to the Board in Nominating and Human Resource Committee June 2006, and is currently the Mrs. Githinji was appointed Company chairs its Audit and Compliance Committee. its subsidiaries, and has served in this capacity since July November 2006. He has had extensive Managing Director of DFCU Bank. Secretary in August 2010, and also serves on Since 1977, Mr. Khimji has served on the 2004. He chairs the Company’s Board Nominating and international experience in the insurance *Ugandan **Tanzanian Prior to joining DFCU, Mr. Kisaame the Boards of its subsidiaries and Committees Boards of various banking and financial Human Resource Committee. Mr. Juma is also the regional industry, and is currently Head of Insurance was the Managing Director of the in this capacity. Prior to her appointment, ***British ****Pakistani institutions, and is an Executive Director of Chairman of the Industrial Promotion Services group of for the Aga Khan Fund for Economic Eurafrican Bank in Tanzania. He she served as Legal Officer in the Company Fidelity Commercial Bank. companies, and a Director of Diamond Trust Bank (DTB). Development (AKFED). Mr. Metcalf sits on the Company’s Board Audit Secretarial Department of Jubilee Insurance sits on the Company’s Board Audit and and Compliance Committee. Kenya. She is an Advocate of the High Court Compliance Committee, Board Finance of Kenya, a Certified Public Secretary and Committee and Board Nominating and Member of the Chartered Institute of Arbitrators Human Resource Committee. (Kenya Branch). Sultan A. Allana**** Ramadhani K. Dau** Mr. Allana was appointed a Director of the Company in April 2006, and Dr. Dau joined the Board in June 2006, is presently the Chairman of Habib and is currently the Director-General of Bank Limited as well as a Director the National Social Security Fund (NSSF) Lutaf R. Kassam - Chair, BFC Tom D. Owuor of the Aga Khan Fund for Economic in Tanzania. Prior to his appointment at Mr. Kassam joined the Board in April 2006 and Mr. Owuor has served on the Board since 1998 Development (AKFED) where he the NSSF in 2001, Dr. Dau held various chairs its Finance Committee. Currently, he is the and sits on the Company’s Board Audit and oversees AKFED’s investments in the academic posts at the University of Dar es Group Managing Director of Industrial Promotions Compliance Committee and Board Nominating Financial Sector. Salaam. Dr. Dau sits on the Company’s Services Limited (IPS) in East Africa. Mr. Kassam is and Human Resource Committee. Until 2004, Board Finance Committee. responsible for AKFED’s global portfolio on Industry he was the Executive Director of the Federation and Infrastructure, and is a member of AKFED’s of Kenya Employers, a position he held from Executive Committee.