NOTICE OF MEETINGhihgycom.startlogic.com/wp-content/uploads/2016/06/annual-report-life-2014.pdfBERBICE: 1) New Amsterdam Lots 15 & 16B New Street, New Amsterdam, Berbice. 2) Corriverton

1

NOTICE OF MEETING

49th Annual General Meeting

Notice is hereby given that the Forty Ninth Annual General Meeting of the above named Companywill be held at the Company’s Offices at Lots 1,2,3 & 4, Avenue of the Republic, Georgetown, onThursday, May 21, 2015, at 10:00 a.m. for the following purposes:-

AGENDA

1. To receive the Report of the Directors and the Accounts for the year endedDecember 31, 2014 and the Report of the Auditors thereon.

2. Election of Directors.

3. To fix the remuneration of the Directors.

4. Election of Auditors.

5. To fix the remuneration of the Auditors.

6. Any other business which may properly be brought before the meeting.

BY ORDER OF THE BOARDShaheed EssackCompany Secretary/Finance Controller.

1, 2, 3 & 4 Avenue of the RepublicGeorgetown, Guyana.

April 28, 2015

N.B. A Member entitled to attend and vote at the Meeting may appoint a Proxy to attend and voteinstead of him. A proxy need not be a Member of the Company. A proxy form requires a$10.00 stamp.

2

HEAD OFFICE

1, 2, 3 & 4 Avenue of the RepublicGeorgetown, Guyana.Email: [email protected]: www.hihgy.comTelephone: 225-1865-7Fax: 225-7519P.O. Box: 10188

DIRECTORS

J.G. CARPENTER, B.Sc. - Chairman

W.A. LEE, A.A., B.Sc., B.S.P., E.M.S.C.P., B.Soc.Sc., - Vice ChairmanDip.M., F.C.I.M

C.R. QUINTIN

I.A. MCDONALD, A.A., M.A. (Hons) Cantab., F.R.S.L., Hon D.LITT. UWI

P.A. CHAN-A-SUE, A.A., F.C.A.

T.A. PARRIS, B.A. (Econs.), M.A. (Econs. & Ed.)

K. EVELYN, B.A.(Hons) Sheff.Hallam., B.Sc.UMIST., M.B.A. Liv.,F.C.I.I., A.C.I.B – Chartered Insurer

H. COX, A.C.I.I., Chartered Insurer

3

MANAGEMENT:Chief Executive Officer - Keith Evelyn, B.A.(Hons) Sheff. Hallam,

B.Sc.UMIST., M.B.A.Liv., F.C.I.I., A.C.I.B.Chartered Insurer.

Manager - Omadatt Singh, B.Sc.(Hons.),M.B.A., F.C.C.A., C.G.A., C.P.C.U.

Deputy Manager - Lalita Sukhram, F.L.M.I., A.C.S., A.R.A.Company Secretary/ - Shaheed Essack, M.A.A.T., A.C.I.S., M.C.M.I

.Finance ControllerAccountant - Compton Ramnaraine, M.A.A.T., A.I.C.B.,

A.C.C.A.affiliate.Accountant/ - Kin Sue, B.Sc., M.Sc., C.I.S.I.Investment AnalystHuman Resource Manager - Zaida Joaquin, Dip. P.M., F.L.M.I., A.C.S.,

A.I.R.C., A.I.A.A., A.R.A.Sales Manager - Colin WelcomeManager - Berbice Operations - Tajpaul Adjodhea, F.L.M.I.Internal Auditor/ - Ronald Stanley, A.C.C.A., C.P.C.U.Compliance Officer

AUDITORS: TSD LAL and CompanyChartered Accountants

ATTORNEYS-AT-LAW: Cameron & ShepherdHughes, Fields & Stoby

MEDICAL ADVISOR: Dr. Janice Imhoff

CONSULTING ACTUARIES: Apex Consulting Ltd.

BANKERS: Republic Bank (Guyana) Ltd.Guyana Bank for Trade & Industry Ltd.Bank of Nova Scotia.Citizens Bank (Guyana) Inc.Demerara Bank Ltd.Bank Of BarodaGuyana Americas Merchant Bank Inc.Lloyds TSB Offshore Private Banking.

4

BRANCH OFFICES:

BERBICE: 1) New Amsterdam Lots 15 & 16B New Street,New Amsterdam, Berbice.

2) Corriverton Lot 101 Ramjohn Square, No. 78 Village (Springlands) Corriverton, Berbice.

3) D’Edward Lot 11 Section ‘A’ D’Edward Village,West Coast, Berbice.

4) Rosehall 45'A’ Public Road, Rosehall Town, Corentyne.

5) Bush Lot Lot 5 Section ‘C’ Bushlot Public Road,West Coast Berbice.

LINDEN: 23 Republic Avenue,Linden, Demerara River.

VREED-EN-HOOP: Lot 4 New Road, Vreed-en-Hoop,West Coast Demerara.

PARIKA: 1995 Parika HighwayEast Bank Essequibo.

BARTICA: Top Floor, WK Shopping Mall1st Avenue, Bartica.

MON REPOS: 30 Tract “A” Mon Repos,East Coast Demerara.

GREAT DIAMOND: LG3 Mall, ot M Plantation,Great Diamond, East Bank Demerara.

ESSEQUIBO Lot 18 Cotton Field,Doobay’s Complex,Essequibo Coast.

SOESDYKE

GEORGETOWN

212 Barr Street, Kitty Village,Georgetown.

Shawnee Service StationBlock’X’ Soesdyke,East Bank Demerara.

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REVIEW OF THE REPORT AND ACCOUNTSFOR THE YEAR ENDED DECEMBER 31, 2014

BY THE CHAIRMAN – MR. JOHN CARPENTER B.Sc.

WELCOME

Ladies and Gentlemen, it is with pleasure that I welcome you to our Company's 49th Annual General Meeting to

review the performance of the Company for the year ended December 31, 2014.

ECONOMIC REVIEW

Global economic growth strengthened to 3.2 percent in 2014, this masked marked growth divergences among

major economies. Specifically, the recovery in the United States was stronger than expected, while economic

performance in all other major economies, most notably Japan and the Eurozone fell short of expectations.

Geopolitical risk returned in 2014, having a significant impact on markets. Central banks were busy going in

opposite directions which contributed to volatility. In addition, Oil prices dominated the end of the year, plunging

Russia into crisis, but leaving some upside risks for 2015.

The local economy growth slowed down in 2014 (3.2 percent) reflecting the softening in global commodity prices

– mainly gold and bauxite. The construction sector performed well in light of ongoing infrastructural projects and

the manufacturing sector is estimated to have benefitted from higher value-added in rice and sugar.

Inflation remained low at 0.5 percent due to moderate increases in food prices. Even though the US dollar has

increased dramatically against other global currencies, the exchange rate between the US dollar and Guyana

Dollar remained stable. This is due to effective monetary policy that is geared towards maintaining price and

exchange rate stability.

PERFORMANCE REVIEW

The company's Gross Revenue was $656.2 m for the year 2014 compared to $625.8 m in the preceding year. This

reflected a moderate increase of $30.4 m or 5 percent between the two comparable years. However, total Expenses

had also increased sharply. This is due to an increase of 48.6 percent or $73.5 m in claims as compared to the

previous year. This has led to a decrease of net income before Actuarial Adjustments from $197.7 m to $154.1 m

in 2014.

Total Assets also decreased from $4.9 B to $4.5 B in the year under reviewed. The revaluation of investments fair

value (mainly Citizens Bank) contributed to the sharp decrease in Total Assets under control.

NEW BUSINESS

Our Individual Life insurance portfolio performed creditably in 2014 with 140 new policies being issued,

providing coverage to the extent of $295.4 m, which realized a Total Annualized Premium Income of $41.7 m.

Total Premiums increased from $632.4 m in 2013 to $653.1 m in 2014, an increase of 3.0 percent.

Congratulations are extended to the Brokers and the Sales Team for their effort in this performance. Special

mention must be made of Mrs. Shirley Mc Donald and Mr. Reynold Jones who emerged as the leading Sales

Representatives in 2014.

The Ordinary Life, Group Life, Group Medical and Group Pension Funds continued to expand and reached $3.2 B

at the end of 2014, up from $2.8 B at the end of 2013.

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CLAIMS

Our Company was happy to have met the needs of our policyholders who made claims. The cost of claims arising

from death under Individual Life policies after reinsurance recoveries was reduced by 46 percent to $3.8 m from

the previous year. However, payments after Reinsurance recoveries for Group Life have increased significantly

by 442 percent to $29.3 m. Group Medical payments have also increased by 31 percent to $162.7 m for the year

under review.

Payments and provisions to the extent of $26.6 m were also made in respect of policies which had reached full

maturity and policies which during the year became eligible for part payments in accordance with the terms of

the policies.

THE INSURANCE ACT

The Insurance Supervision Department of the Bank of Guyana, with the assistance of the World Bank is in the

process of finalizing new insurance legislation to repeal and replace the Insurance Act 1998 and the Insurance

(Supplementary Provisions) Act 2009. The legislation will provide for the effective regulation of insurance in

Guyana, the promotion of competition in the insurance industry and the protection of customers.

In addition, a second draft relating to developing new Pension legislation was circulated to stakeholders. The

feedback period has closed and this is currently with the regulator/consultants. We are encouraged by this

legislation and believe that the proposals in the draft will go a long way towards addressing the operations of

pension schemes and removing many of the weaknesses of the current Act. We have submitted extensive

feedback on the areas that we felt needed improvement and further work, and we are confident that our

recommendations will be seriously considered.

ACTUARIAL VALUATION

A triennial Actuarial Valuation was completed for the year ended December 31 2012 and revealed a surplus of

$724.8 m or liability coverage of 1.3 times. A Liability Adequacy test was completed for the year ended

December 31, 2012 and revealed a surplus of $1.2 B or liability coverage of 1.4 times. The next triennial

Actuarial valuation is due on December 31, 2015.

STAFF AND CUSTOMER SERVICES

Our customer service continues to be our number one priority. The staff remains committed to providing, on a

consistent basis, a high quality of service to our many customers and members of the public. In this regard,

several staff members are pursuing relevant courses for professional development. The Company continues to

place emphasis on providing robust training both internally and externally. In addition, we are delighted to

announce the opening of our Barr Street branch to give our customers easier access to our products and services.

We will constantly strive to implement the critical initiatives required to achieve our vision.

FUTURE OUTLOOK

Global growth in 2015–16 is projected at 3.5 and 3.7 percent, with downward revisions of 0.3 percent relative to

the October 2014 World Economic Outlook (WEO). The revisions reflect a reassessment of prospects in China,

Russia, the Euro area, and Japan as well as weaker activity in some major oil exporters due to the sharp drop in oil

prices. The United States is the only major economy for which growth projections have been raised.



7

The Guyana economy outlook for 2015 is tentative due to upcoming general elections. However, the outlook is

still broadly positive. Growth is projected to remain strong, averaging about 4 percent per year over the medium-

term. Economic activities will be driven by continued investments in primary industries. Potential offshore and

hydro-energy projects may also attract foreign investment and boost growth. Inflation is expected to remain

relatively subdued. Nonetheless, volatile commodity prices such as rice and gold represent a significant risk.

The company is expected to continue its long-term growth and development. We are well positioned to

effectively take advantage of market opportunities while monitoring risk to ensure stable and sustainable growth

in the future.

ACKNOWLEDGEMENT

I wish to thank most sincerely, our policyholders and all those who supported us during the past year, my fellow

Directors, Management, the Sales Force and the indoor Staff Members of our Head Office and Branches for their

dedication and commitment without which our Company would not have had a successful 2014. Furthermore, I thwould like to celebrate the 150 Anniversary of our founding company The Hand In Hand Mutual Fire Insurance

Company Limited and wish them continued success in the future.

I sincerely look forward to your continued support during the year 2015.

Thank you,

JOHN CARPENTER B.Sc.

CHAIRMAN



8

REPORT OF THE DIRECTORS

The Directors have pleasure in submitting for the information of Members and Policyholders the

Forty ninth Annual Report and Audited Financial Statement for the year ended December 31, 2014.

1. Principal ActivitiesThe Company is engaged in the underwriting of long term business and associatedinsurance activities.

2. Operational ResultsThe Net increase in Funds for the year before actuarial adjustment was $154.1mas compared to $197.7m for the previous year.

3. Life BusinessGross premiums received for Life Business for the year was $157.1m as compared with$123.7m for the previous year.

4. Group BusinessGross premiums received in respect of Group Business amounted to $495.9m ascompared with $508.6m for the previous year.

5. Ordinary Life FundThis fund now stands at $665.7m the comparative for the year ended December 31, 2013being $533.2m.

6. Group Life FundThis fund stands at $551.7m the previous year’s figures being $468.5m.

7. Group Health FundThis fund stands at $8.2m the previous year’s figures being 6.1m.

8. Deposit administration FundThis fund now stands at $2,020.0m the previous year’s figures being $1,758.9m.

9. Actuarial ValuationAn Actuarial Valuation for the year ended December 31, 2014 was completed. Thisrevealed a surplus of $1,166.9m.

10. ClaimsTotal death claims paid and provided for during the year amounted to $71.3m of which$38.2m is recoverable from our re-insurer resulting in a net cost to the Company of$33.1 m. Policies matured during the year were $26.6m while medical claims amounted to$162.7m.

9

REPORT OF THE DIRECTORS

14. Corporate Governance

The Directors apply principles of good governance by adopting policies and proceduresfor the better management of the Company. The Board meets monthly and has adopted astructure of mandates granted to committees whilst retaining specific matters for itsdecisions. Non-executives are considered independent and bring wide knowledge,experience and professionalism to the deliberations of the Board.

The committees established by the Board and their Chairpersons are:

1. Finance and Audit Committee – Mr. P.A. Chan-A-Sue2. Sales and Marketing Committee – Mr. W.A. Lee3. Human Resources Committee – Mr. C.R. Quintin4. Buildings Committee – Mr. J.G.Carpenter

15. AuditorsThe Auditors, TSD Lal and Company, retire and have indicated their willingness to bereappointed.

By Order of the BoardShaheed EssackCompany Secretary/Finance Controller.

11. InvestmentsAt December 31, 2014 the total amount invested was $2,823.4m. Investments inGovernment, Municipal and other Securities stood at $2,475.1m, Mortgages amounted to$58.3m, Share Purchase Plans $1.4m, Loan to Berbice Bridge $254m and Loans onpolicies $52.5m.The Company’s investment in Local Share Purchases during thefinancial year are as follow:

12. Employee RelationsRelations with employees throughout the year were cordial. Training is provided at alllevels for technical and personal development.

13. DirectorateThe following Directors

directors

retire on this occasion in accordance with Article 141 and 147 ofthe Articles of Association and being eligible, offer themselves for re-election.

Messrs: T.A ParisW.A. LeeJ.G. Carpenter

Securities No. of Shares Total Cost‘000

Banks DIH Limited. 90,906 1.8Guyana Bank for Trade and Industry Limited 44,000 27.8Republic Bank (Guyana) Limited 3,584,143 373.2Citizens Bank Limited 50,000 9.4Demerara Tobacco Company Limited 17,138 18.2

10

INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OFHAND IN HAND MUTUAL LIFE ASSURANCE COMPANY LIMITED

ON THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Hand In Hand Mutual Life Assurance Company Limited, which comprise the statement of financial position as at 31 December 2014, the statement of profit or loss and other comprehensive income, statement of changes in equity and funds and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes as set out on pages 12 to 52.

Directors'/Management's Responsibility for the Financial Statements

The Directors/ Management are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. 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.

Auditors 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 auditors judgement, 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.

11

INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OFHAND IN HAND MUTUAL LIFE ASSURANCE COMPANY LIMITED

ON THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2014

Opinion

In our opinion, the financial statements give a true and fair view, in all material respects of the financial position of Hand In Hand Mutual Life Assurance Company Limited as at 31 December 2014 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Report on Other Legal and Regulatory Requirements

The financial statements comply with the requirements of the Companies Act 1991.

The Insurance Act 1998 came into effect in 2002. As explained in Note 33, the company did not fully comply with the requirements of the Act.

TSD LAL & CO.CHARTERED ACCOUNTANTS

Date: 30 April 2015

77 Brickdam,Stabroek, Georgetown ,Guyana

12

STATEMENT OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

Notes 2014 2013G$ G$

Revenue

Premiums 5 653,062,946 632,361,270Reassurance premiums 5 63,475,441

63,979,805

589,587,505

568,381,465Investment income "Held to Maturity" 6 -

89,638

"Available for Sale" 6 15,865,317

3,704,493

"Loans and Receivables" 6 43,042,639

47,920,636

"Other Income" 6 1,686,395

923,314

60,594,351

52,638,081

Gain/(Loss) on exchange 196,135

(231,352)

Gain on disposal of investments 5,848,540

4,980,428

6,044,675

4,749,076

656,226,531

625,768,622

Deduct:

Expenditure

Management expenses 7 193,538,508 197,138,068Commissions 8 59,698,819 54,386,317Claims 9 224,472,562 150,995,484Surrenders 10 16,932,688 16,208,062Annuities and pensions 11 5,895,914 4,702,947Taxation 12 1,551,975

4,666,974

502,090,466

428,097,852

Net increase in funds for the year 154,136,065

197,670,770

before actuarial adjustment

Actuarial adjustment to:Policyholders' liabilities 24 217,872,462

231,654,815

Reinsurance assets 19 (9,861,939)

(23,531,342)

208,010,523

208,123,473

Net decrease in funds for the year (53,874,458)

(10,452,703)

Other comprehensive incomeItems that may be subsequently reclassifiedto profit or loss

Currency Translation Difference 25,622,844

3,233,655

Fair value adjustment on investments (842,102,815)

1,319,666,631

Other comprehensive income (816,479,971)

1,322,900,286

Total comprehensive incomefor the year (870,354,429)

1,312,447,583

"The accompanying notes form an integral part of these financial statements".

13

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14

STATEMENT OF FINANCIAL POSITIONAT 31 DECEMBER 2014

Notes 2014 2013G$ G$

ASSETSNon current assetsFixed assets 13 246,681,494

244,132,135

Other assetsInvestments "Held to Maturity" 14(a) 62,792,527

62,792,527

"Available for Sale" 14(b) 2,412,349,221

2,789,372,854

"Loans and Receivables" 14(c) 348,278,886

372,438,522

Reinsurance assets 19 76,648,489

69,028,704

Statutory deposit 16 18,750,000

18,750,000

3,165,500,617

3,556,514,742

Current assetsShort Term Loan 14(c) 18,000,000

18,000,000

Interest accrued 17 4,671,467

13,662,123

Debtors and prepayments 18 767,845,291

833,105,607

Stocks of stationery 428,574

281,826

Tax recoverable 8,046,280

4,950,089

Cash on hand and at bank 20 555,934,870

484,108,370

1,354,926,482

1,354,108,015

TOTAL ASSETS 4,520,427,099

4,910,622,757

EQUITY AND LIABILITIESCapital and reservesIssued share capital 21 275,000

275,000

Other reserve 22 1,343,197,985

2,185,300,800

General reserve 23 (176,560,211)

(148,308,597)

1,166,912,774

2,037,267,203

Non - Current LiabilitiesPolicyholders' Liabilities 24 1,225,660,700

1,007,788,238

Deposit administration fund 25 2,020,012,949

1,758,900,443

3,245,673,649

2,766,688,681

Current liabilitiesClaims admitted or intimated but not paid 26 20,749,302

18,440,587

Tax payable 2,946,502

5,779,481

Creditors and accrued expenses 27 73,245,499

72,890,482

Insurance contract liabilities 28 - 6,136,493Bank overdraft (unsecured) 29 10,899,373 3,419,830

107,840,676 106,666,873

TOTAL EQUITY AND LIABILITIES 4,520,427,099 4,910,622,757

These Financial Statements were approved by the Board of Directors on …………………………..…

On behalf of the Board:

…………………………………………..Director

…………………………………………..Director

…………………………………………..Company Secretary/Finance Controller

"The accompanying notes form an integral part of these financial statements".

April 30, 2015

15

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013G$ G$

Operating activities

Decrease in funds and reserves for theyear before taxation (52,322,483) (5,785,729)

Adjustments for:

Depreciation 1,867,337 1,497,742Redemption of securities - Gain (5,848,540)

(4,980,428)

Disposal of fixed assets - loss 143,173

-

Investment income (60,594,351)

(52,638,081)

Decrease in funds for the year beforeworking capital changes (116,754,864)

(61,906,496)

(Incresase)/decrease in interest accrued 8,990,656

(6,724,251)

(Incresase)/decrease in debtors and prepayments 65,260,316

(46,878,112)

(Increase)/decrease in Reinsurance assets (7,619,785)

(17,021,842)

(Increase)/decrease in stocks of stationery (146,748) 342,032Increase/(decrease) in claims admitted or intimated but not paid 2,308,715

(12,050,408)

Increase/(decrease) in creditors and accrued expenses 355,017 (409,829)Increase in Policyholders' liabilities 217,872,462 231,654,815Increase in Deposit administration fund 261,112,506 256,948,027Decrease in insurance contract liabilities (6,136,493)

(9,597,493)

Cash generated from operations 425,241,782 334,356,443Taxes paid (7,481,145)

(1,566,259)

Net cash provided by operating activities 417,760,637

332,790,184

Investing activities

Purchase of fixed assets (4,566,869)

(63,495,070)

Proceeds from sale of fixed assets 7,000

-

Proceeds from redemption of securities 54,750,236 120,108,636Purchase of securities (488,358,034)

(126,082,395)

Mortgages repayments 902,677 (12,125,958)Loans on policies repayments (9,453,791)

(5,585,335)

MCG- Loan (Giftland Office Max) 10,000,000

-

Share purchase plans repayments 4,710,750

-

Short Term Loan 18,000,000

18,000,000

Dividends and interest received 60,594,351

52,638,081

Net cash used in investing activities (353,413,680)

(16,542,041)

Net Increase in cash and cash equivalents 64,346,957

316,248,143Cash and cash equivalents at beginning ofperiod 480,688,540

164,440,397

Cash and cash equivalents at end of period 545,035,497 480,688,540

"The accompanying notes form an integral part of these financial statements"

16

NOTES ON THE ACCOUNTS

1. Incorporation and activities

Hand in Hand Mutual Life Assurance Company Limited was incorporated in Guyanaon 23 June 1966. It is engaged in the underwriting of long term insurance business andassociated insurance activities.

Employees

During the year the number of employees was 25 (2013 – 29).

2. New and amended standards and interpretations

Effective for the current year endEffective forannualperiodsbeginningon or after

New and Amended Standards

IFRS 10 Consolidated Financial Statements (Exemptions) 1 January 2014IFRS 12 Disclosure of Interests in Other Entities (Exemptions) 1 January 2014IAS 27 Separate Financial Statements (Exemptions) 1 January 2014IAS 32 Financial Instruments - Offsetting Financial Assets and

Financial Liabilities 1 January 2014IAS 36 Impairment of Assets 1 January 2014IAS 39 Financial Instruments: Recognition and Measurement 1 January 2014

New interpretation

IFRIC 21 Levies 1 January 2014

Of the above, the following are relevant to the entity.

Amendments to IAS 32: Offsetting Financial Assets and Financial Liabilities

Amends IAS 32 Financial Instruments: Presentation to clarify certain aspects because ofdiversity in application of the requirements on offsetting, focused on four main areas.The amendment did not have a material impact on the Company as it does not have anyfinancial assets and financial liabilities that quality for offset.

A

New and amended Standards and Interpretations - cont’d

Effective for the current year end - cont’d

2.

mendments to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets

Amends IAS 36 Impairment of Assets to reduce the circumstances in which the recoverableamount of assets or cash-generating units is required to be disclosed, clarify the disclosuresrequired, and to introduce an explicit requirement to disclose the discount rate used indetermining impairment.The amendment did not have a material impact on the disclosures or on amounts recognised inthe Company’s financial statement.

IFRIC 21 Levies

Provides guidance on when to recognise a liability for a levy imposed by a government, bothfor levies that are accounted for in accordance with IAS 37 and those where the timing andamount of the levy is certain.

Available for early adoption for the current year endEffective forannual periodsbeginning on orafter

New and Amended Standards

IAS 19 Employee Benefits 1 July 2014Annual Improvements 2010-2012 Cycle 1 July 2014Annual Improvements 2011-2013 Cycle 1 July 2014

IFRS 14 Regulatory Deferral Accounts 1 January 2016IFRS 11 Joint Arrangements 1 January 2016IAS 16 & IAS 38 Clarification of Acceptable Methods of

Depreciation And Amortisation 1 January 2016IAS 16 & IAS 41 Agriculture: Bearer Plants 1 January 2016IAS 27 Separate Financial Statements 1 January 2016IFRS 10 & IAS 28 Sale or Contribution of Assets Between

Investor and Associate or Joint Venture 1 January 2016Disclosure Initiative Amendments to IAS 1 1 January 2016

IFRS 10, IFRS 12 & IAS 28 Applying Consolidation Exceptions 1 January 2016Annual Improvements 2012-2014 Cycle 1 July 2016

IFRS 15 Revenue From Contracts With Customers 1 January 2017IFRS 7 Financial Instruments: Disclosures 1 January 2017IFRS 9 Financial Instruments: Classification and Measurement 1 January 2018IFRS 9 Additions for Financial Liability Accounting 1 January 2018

The Company has not opted for early adoption.

17


18


2. New and amended standards and interpretations- cont’d

The standards and amendments that are expected to have a material impact on the Company’saccounting policies when adopted are explained below.

Annual Improvements

The annual improvements programme of the International Accounting Standards Board dealswith amendments and clarifications to IFRS.IFRS 1 First-time Adoption of International Financial Reporting StandardsIFRS 2 Share-based PaymentIFRS 3 Business CombinationsIFRS 5 Non-current Assets Held for Sale and Discontinued OperationsIFRS 7 Financial Instruments DisclosureIFRS 8 Operating SegmentsIFRS 9 Financial InstrumentsIFRS 13 Fair Value MeasurementIAS 16 Property, Plant and EquipmentIAS 24 Related Party DisclosuresIAS 34 Interim Financial ReportingIAS 38 Intangible AssetsIAS 40 Investment Property

The directors do not anticipate that the application of the foregoing amendments will have asignificant impact on the company’s financial statements.

Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation andAmortisation

Amends IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets to clarify that adepreciation method for the use of an asset that is not appropriate for property, plant andequipment.The application of the amendments may have impact on amounts reported in respect ofdepreciation. However, the directors do not anticipate a significant effect.

Disclosure Initiative (Amendments to IAS 1)

Amends IAS 1 Presentation of Financial Statements to address perceived impediments topreparers exercising their judgement in presenting their financial reports.

19


3. Summary of significant accounting policies

(a) Accounting convention The accounts have been prepared under the historical cost convention, modified by the revaluation of “available for sale” investments and conform with International Financial Reporting Standards.

(b) Segregated funds

All income and direct expenses related to the funds are allocated accordingly. Indirect expenses are apportioned based on the amount of premiums generated in the year. Policyholders’ Liabilities (i) Ordinary Life

All income and expenses relating to its individual life and annuities businesses are allocated to this fund. (ii) Group Life

Income and expenses relating to group life businesses are allocated to this fund and is represented by assets included in the cash on hand and at banks and securities.

(iii) Group Health This fund is administered by the company on behalf of several group medical schemes and is represented by assets included in the cash on hand and at banks and securities. Deposit administration fund (i) Group Pension Fund This fund is administered by the company on behalf of several group pension schemes and is represented by assets included in investments, cash at bank and on deposit.

20


3. Summary of significant accounting policies -cont’d

(c) Revenue recognition

Revenue is measured at the fair value of the consideration received orreceivable in the normal course of business.

Interest income is accrued on a time basis by reference to the principaloutstanding and the effective interest rate.

Dividend income from investments is recognized when the shareholders rightsto receive payment have been established.

(d) Reassurance

The company transfers some of its insurance risk to other insurers throughreinsurance both locally and overseas. The reinsurer assumes part of the riskand part of the premium originally taken by the company. Reinsurer reimbursesthe company for claims paid to policyholders according to various standingagreements reached. The company has both treaty and facultative reinsurance.Under a treaty each party automatically accepts specific percentage of theinsurers’ business. Facultative reinsurance covers specific individual risks thatare unusual or so large that it cannot be covered in the company’s reinsurancetreaties.Reinsurance premium paid and reinsurance recoveries that are set off againstclaims are accounted for in the statement of profit or loss and othercomprehensive income.Reinsurance recoveries on outstanding claims are shown as a current asset in thestatement of financial position.

(e) Foreign currencies

Transactions in currencies other than Guyana dollars are recorded at the rates ofexchange prevailing on the dates of the transaction. At the end of the reportingperiod, monetary assets and liabilities that are denominated in foreign currenciesare retranslated at the rates prevailing on that date. Non monetary assets andliabilities carried at fair value that are denominated in foreign currencies aretranslated at rates prevailing at the date when the fair value was determined.Gains and losses are recognized in the statement of profit or loss and othercomprehensive income.

21


3 Summary of significant accounting policies -cont’d (f) Management expenses

These expenses are allocated based on the gross premium written on each class of business for the year.

(g) Commission and allowances

This represents expenses incurred in the acquisition of insurance business contracts mainly through sales representatives and brokers. Various rates are used in the computation of commission and allowances paid.

(h) Claims

Claims are made against the company for losses incurred by its various policy holders. Management minimizes this expense by prudent underwriting policies and efficient handling and settlement of claims. Management also minimizes this expense by reinsurance. Claims that are reported but not paid are provided for in the accounts. A claim must be made immediately and then put in writing within 14 days according to the insurance contract. Claims are recognized when reported to the company, whether or not settled at the end of the reporting period. Claims are reflected in the statement of profit or loss and other comprehensive income net of reassurance recoveries. The liability for claims reported and unpaid at the end of the reporting period is disclosed net of amounts recoverable from Reassurers.

(i) Maturities

Some of the company’s policies mature after the contractual period has elapsed. Such amounts whether or not claimed for by the policyholder is accrued in the statement of profit or loss and other comprehensive income and provided for as claims unpaid under current liabilities.

(j) Taxation

Life insurance business is taxed at 30% on the income from the statutory fund less 12% allowance for expenses.

22


3 Summary of significant accounting policies -cont’d

(k) Fixed assets and depreciation

Land and building held for use in the provision of services, or for administrativepurposes is stated in the statement of financial position at cost or revaluedamounts. No revaluation was done for the financial year. Based on the Directorsopinion the net book value of this land and building approximated the statedvalue in the financial statements.

Furniture, equipment, machinery and motor vehicles are stated at cost lessaccumulated depreciation and any accumulated impairment losses.

Depreciation of fixed assets is calculated on the reducing balance method at therates specified below which are estimated to write off the cost or valuation ofthese assets to their residual values over their estimated useful life.

Office Machinery and Equipment - 10%Motor Vehicles - 20%Computers - 50%

(l) Investments

Investments are recognized in the financial statements to comply withInternational Accounting Standards.

The company classifies its investment portfolio into the following categories:“held to maturity”, “available for sale” and “loans and receivables”.Management determines the appropriate classification at the time of purchasebased on the purpose for which the investment securities were acquired. Theclassification is reviewed annually.

Held to maturity

Investments held to maturity are carried at amortized cost. Any gain or loss on theseinvestments is recognized in the statement of profit or loss and other comprehensive incomewhen the assets are de-recognized or impaired.

23


3 Summary of significant accounting policies-cont’d

(l) Investment cont’d

Available for sale

These investments are initially recognized at cost and adjusted to fair value insubsequent periods.Gains or losses on “available for sale financial assets” are recognized throughthe statement of profit and loss and other comprehensive income

Loans and receivables

Loans and receivables are stated net of unearned interest and provision forlosses. Specific provisions are established on individual loans to recognizeanticipated losses, and doubtful debts are written off when the possibility offurther recovery seems remote.Loans and receivables are classified as non-accrual whenever there isreasonable doubt regarding the collectability of principal or interest andprincipal is ninety days past due.

(m) Financial instruments

Financial assets and liabilities are recognized on the company’s statement offinancial position when the company becomes a party to the contractualprovisions of the instruments.

Trade receivablesTrade receivables are stated at amortized cost. Appropriate allowances forestimated unrecoverable amounts are recognized in the statement of profit orloss and other comprehensive income when there is objective evidence that theyare not collectible.

Trade payablesTrade payables are recognized at amortized cost.

Bank borrowingsInterest bearing bank loans and overdrafts are recognized at amortized cost.

Cash and cash equivalentsCash and cash equivalents in the cash flow statement consist of cash at bankwith maturity period of 3 months or less and cash on hand and bank overdraft.

24


Summary of significant accounting policies-cont’d

( m ) Financial instruments- cont’d

De-recognitionFinancial assets are derecognized when the right to receive cash flows from theasset has expired.

Financial liabilities are derecognized when they are extinguished, i.e. whenobligation is discharged, cancelled or expired.

( n ) Insurance contracts

The company issues contracts that transfer insurance risk.Short-duration life insurance contracts protect the company’s customers fromthe consequences of events such as death or disability that would affect theability of the customer or his/her dependents to maintain their current level ofincome

Long-term insurance contracts with fixed and guaranteed terms are contractsthat insure events associated with human life such as death over a long duration.Premiums received and reinsurance premiums ceded are recognized as revenueand expense over the period of coverage

(o) Pension Funding

A defined benefit plan was established on 1 January 1971, and is administeredunder a Trust Deed executed on that date amended later by supplemental deeds.

All employees of the Hand-in-Hand Mutual Life Assurance Company Limitedare contracted with Hand-in-Hand Mutual Fire Insurance Company Limited.They provide services to Hand-in-Hand Mutual Life Assurance CompanyLimited, for which the company pays on a monthly basis. The company alsopays the corresponding portion of pension contribution to the pension scheme.

A defined benefit pension plan is also operated for the Sales Representatives ofthe Hand-in-Hand Mutual Life Assurance Company Limited. Contributions tothe scheme are paid by The Hand-in-Hand Mutual Fire Insurance Company Limited,and the relevant portion is then reimbursed by Hand-in-Hand Mutual LifeAssurance Company Limited.

25


4. Critical accounting judgement and key sources of estimation uncertainty

The preparation of financial statements in conformity with InternationalFinancial Reporting Standards requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities at the dateof the financial statements and the reported amounts of revenues and expensesduring the reported period. Actual results could differ from those estimated.

The estimation of the liability arising from claims made under insurancec

Key Sources of estimation uncertainly

ontracts is the company’s most critical accounting estimate.

(i) Debtors and other receivablesOn a regular basis, management reviews debtors and other receivables toassess impairment. Based on the information available as to the likelyimpairment in cash flows, decisions are taken in determining appropriateprovisions to be made for impairment.

(ii) Useful lives of fixed assetsManagement reviews the estimated useful lives of fixed assets at the endof each year to determine whether the useful lives should remain thesame.

(iii) Other financial assetsIn determining the fair value of investments in the absence of a market,the directors estimate the likelihood of impairment by using discountedcash flows.

(iv) Method of actuarial valuationValuation has been performed on a seriatim, record-by-record basis foreach individual life coverage.

Actuarial liabilities have been calculated using the Policy PremiumReserve Method.

Under this valuation method the reserve is based on cash flow matching.The liability is equal to the value of the assets that will be sufficient,without being excessive, to provide for future policy cash flows. Thereserve is strictly prospective.

(iv) M

Critical accounting judgement and key soucres of estimation uncertainty - cont’d

Key Sources of estimation uncertainly -cont’d

ethod of actuarial valuation- cont’d

Acquisition expenses are ignored. Future cash flows are based on bestestimates with Provisions for Adverse Deviation. An expectedassumption and a Provision for Adverse Deviation must be made foreach contingency and factor which materially affect the futurecash flows.

Typically, all cash flows are included: premiums, commissionsexpenses, guaranteed and, non-guaranteed benefits such as dividends,reinsurance premiums and benefits, and asset cash flows net of defaults.

Non-guaranteed benefits are based on policyholders’ reasonableexpectations and for this purpose we have allowed for future bonusesand dividends.

Cash flows are determined over the term of the liability. The term of theliability is the last possible date to which the policyholder can prolongcoverage without requiring consent of the insurer.

Best estimates are used for expected cash flows. These are based on pastexperience of the Company, where credible, in conjunction with otherpublished data subject to modifications appropriate to the circumstances.

Provisions for Adverse Deviations are added to each expectedassumption. The PfADs are to provide for mis-estimation of the mean,and deterioration of the mean. They do not provide for statisticalfluctuation, which is effectively catastrophic risk and should be providedfor in the capital and surplus held by the Company. The PfADs are to besufficient, but not excessive.

The Policy Premium Method is an appropriate Method by which todetermine the adequacy of the liabilities as it is a Gross PremiumValuation Method with explicit assumptions.

26


27


5 Premiums2014 2013

Gross Reassurance Net Gross Reassurance NetG$ G$ G$ G$ G$ G$

Ordinary Life 157,133,577 18,407,499 138,726,078 123,730,414 17,506,062 106,224,352

Group Life 282,617,988 45,067,942 237,550,046 306,747,145 46,473,743 260,273,402

Group Health 213,311,381 - 213,311,381 201,883,711 - 201,883,711

653,062,946 63,475,441 589,587,505 632,361,270 63,979,805 568,381,465

6 Investment income2014 2013G$ G$

"Held to Maturity"Bonds and debentures -

89,638

"Available for sale"Shares and stocks 15,865,317

3,704,493

"Loans and receivable"Policy loans 3,989,489 6,715,762MCG Loan(Giftland) 1,976,986 (39,178)Hand in Hand Mutual Fire Ins.Co. Ltd 36,794,294 40,725,212Share purchase plans 281,870

518,840

43,042,639

47,920,636

"Other Income"Cash on deposits 1,685,958

922,333

Miscellaneous 437

981

1,686,395

923,314

60,594,351

52,638,081

Summary of interest receivedCash on deposits 1,685,958

922,333

Shares and stocks 15,865,317

3,704,493

Bonds and debentures -

89,638

Policy loans 3,989,489

6,715,762

Share purchase plans 281,870

518,840

MCG Loan(Giftland) 1,976,986

(39,178)

Hand in Hand Mutual Fire Ins.Co. Ltd 36,794,294

40,725,212

Miscellaneous 437

981

60,594,351

52,638,081

28


2014 2013G$ G$

7 Management expenses

Actuarial fees 7,552,090 7,936,920Auditors' remuneration 3,524,924 2,064,765Directors' emoluments (Note a) 5,109,960 4,866,588Depreciation 1,867,337 1,497,742Employment cost 119,270,001 132,282,412Pension Contributions 5,387,625 5,987,704Operating expenses 50,826,571

42,501,937

193,538,508

197,138,068

(a) Directors emoluments:

Chairman: J.G.Carpenter 1,238,700

1,179,708Non Executive Directors:

W.A. Lee 774,252 737,376 P.A. Chan-A-Sue 774,252 737,376 I.A. Mc Donald 774,252 737,376 T. A. Parris 774,252 737,376 C.R. Quintin 774,252 737,376

Executive Directors: K.Evelyn - - H.Cox - -

5,109,960 4,866,588

8 Commissions

Ordinary Life 11,022,755 12,051,273Group Life 38,283,137 32,008,198Group Health 10,392,927

10,326,846

59,698,819

54,386,317

29


9 Claims2014 2013

Gross Reassurance Net Gross Reassurance NetG$ G$ G$ G$ G$ G$

Ordinary Life Death 3,782,563

-

3,782,563

33,324,625

26,289,473

7,035,152

Maturities 26,651,024

-

26,651,024

13,141,887

-

13,141,887

Other claims 1,987,917

-

1,987,917

1,057,952

-

1,057,952

32,421,504

-

32,421,504

47,524,464 26,289,473

21,234,991

Group Life 67,469,398

38,159,887

29,309,511

23,967,000

18,561,841

5,405,159

Group Health 162,741,547

-

162,741,547

124,355,334

-

124,355,334

262,632,449

38,159,887

224,472,562

195,846,798

44,851,314

150,995,484

Claims paid in financial year

2014 2013Gross Reassurance Net Gross Reassurance Net

G$ G$ G$ G$ G$ G$Ordinary Life Death 1,720,250

-

1,720,250

28,506,250

23,064,473

5,441,777

Maturities 22,787,255

-

22,787,255

11,582,558

-

11,582,558

Other claims 1,987,917

-

1,987,917

1,057,952

-

1,057,952

26,495,422

-

26,495,422

41,146,760 23,064,473

18,082,287

Group Life 55,499,976

33,329,041

22,170,935

17,096,000

14,985,841

2,110,159

Group Health 162,741,547

-

162,741,547

124,355,334

-

124,355,334

244,736,945

33,329,041

211,407,904

182,598,094

38,050,314

144,547,780

10 Surrenders 2014 2013G$ G$

Ordinary Life 16,932,688

16,208,062

11 Annuities

Ordinary Life 5,895,914

4,702,947

12 Taxation

Taxes deducted at source from income on deposits 1,551,975

4,666,974

Taxation on the company have been computed based on the applicable tax laws relating to life insurance companies.

30


13 Fixed assetsOffice

Freehold furniture and Computer MotorLand and building equipment equipment vehicle Total

G$ G$ G$ G$ G$

CostAt 1 January 2014 237,860,480 9,307,446 25,635,134 2,000,000

274,803,060Additions -

230,354

136,515

4,200,000

4,566,869

Disposals -

(394,364)

-

-

(394,364)

At 31 December 2014 237,860,480

9,143,436

25,771,649

6,200,000

278,975,565

Depreciation

At 1 January 2014 -

4,725,356 24,497,867 1,447,702

30,670,925Charge for the year -

465,674

612,300

789,364

1,867,337

Written back on disposals -

(244,191)

-

-

(244,191)

At 31 December 2014 -

4,946,839

25,110,167

2,237,066

32,294,071

Net book values:

At 31 December 2014 237,860,480

4,196,598

661,482

3,962,935

246,681,494

At 31 December 2013 237,860,480

4,582,090

1,137,267

552,298

244,132,135

14 Investments2014 2013G$ G$

(a) Held to Maturity:Local Bonds 10,000,000

10,000,000

Foreign Bond 52,792,527

52,792,527

62,792,527

62,792,527

(b) Available for saleUnited Kingdom Securities 161,110,677

155,503,505

United Kingdom Stocks 14,530,581

10,346,832

United States Securities 18,338,307

15,592,004

Local Securities 2,218,369,656

2,607,930,513

2,412,349,221

2,789,372,854

31


14 Investments- cont'd

(c) Loans and Receivables:2014 2013G$ G$

(i) Mortgages on properties

At 1 January 59,238,753

54,397,436Advances -

26,188,085

Repayments (313,424)

(20,748,397)

58,925,329

59,837,124Less: Provision for impairment 589,253

598,371

At 31 December 58,336,076

59,238,753

Provision for impairment individually assessed

At 1 January 598,371

7,484,611

Provision for the year -

196,042

Recoveries (9,118)

(7,082,282)

At 31 December 589,253

598,371

(ii) Loans on policies 52,506,470

43,052,679

This represents loans granted to policyholders taking into account the cash value of the policies.

(iii) Share purchase plans

Beneficiaries:

Banks DIH Limited 224,780

4,935,530Guyana National Industrial Company Inc. 1,211,560

1,211,560

1,436,340

6,147,090

The capital sums earn interest and arerepayable in ten (10) years.

(iv) MCG -Loan (Giftland Office Max) -

10,000,000

MCG Investments Ltd (Giftland)The terms and conditions for this loan is as follows:10 years with a moratorium on interest and capital for a period of one (1) year.The rate of interest is 11% per annum.

(v) Berbice Bridge Loan

At 1 January 272,000,000 290,000,000 Disbursed -

-

Repayment (18,000,000)

(18,000,000)

At 31 December 254,000,000

272,000,000

Current 18,000,000

18,000,000

Long term 236,000,000

254,000,000

254,000,000

272,000,000

Second LoanThis loan was granted in January and March 2010 for $40 million and $50 million respectively.Capitalrepayment commence in 2013

Third LoanThis Loan was granted in June 2011 for $200M.Capital repayment has not yet commence.

The terms and conditions for these loans are as follows:Payment of interest commence immediately and ispayable annually for the first three(3) years thereafter repayment of the principal and interest will commence three (3) years after the drawn down by (5) equal annual installments. The rate of interest is 7.5%.Security held on these loans are promissory notes for $200 million, $50 million and $40 million respectfully in favour of the company.

At 31 December 366,278,886 390,438,522

Comprised of:Short Term Loan 18,000,000

18,000,000

Loans and Receivables 348,278,886

372,438,522

366,278,886

390,438,522

32


15 Fair Value of Financial Instruments

The following table details the carrying costs of financial assets and liabilities and their fair value.

Carrying Value Fair Value Carrying Value Fair ValueG$ G$ G$ G$

Financial assets

InvestmentsHeld to Maturity 62,792,527

62,792,527

62,792,527

62,792,527

Available for sale 2,412,349,221

2,412,349,221

2,789,372,854

2,789,372,854

Loans and receivables 348,278,886

348,278,886

372,438,522

372,438,522

Statutory Deposits 76,648,489

76,648,489

18,750,000

18,750,000

Reinsurance assets 18,750,000

18,750,000

69,028,704

69,028,704

Short term loan 18,000,000

18,000,000

18,000,000

18,000,000

Accrued and unpaid interest 4,671,467

4,671,467

13,662,123

13,662,123

Debtor and prepayments 767,845,291

767,845,291

833,105,607

833,105,607

Cash resources 555,934,870

555,934,870

484,108,370

484,108,370

Tax recoverable 8,046,280

8,046,280

4,950,089

4,950,089

4,273,317,031

4,273,317,031

4,666,208,796

4,666,208,796

Financial liabilities

Policyholders' liabilities 1,225,660,700

1,225,660,700

1,007,788,238

1,007,788,238

Group Pension Fund 2,020,012,949

2,020,012,949

1,758,900,443

1,758,900,443

Claims admitted and intimated (net of amounts recoverable from reinsurers) 20,749,302

20,749,302

18,440,587

18,440,587

Insurance Contract Liabilities -

-

6,136,493

6,136,493

Creditors and accruals 73,245,499

73,245,499

72,890,482

72,890,482

Bank overdraft 10,899,373

10,899,373

3,419,830

3,419,830

Tax payable 2,946,502

2,946,502

5,779,481

5,779,481

3,353,514,325

3,353,514,325

2,873,355,554

2,873,355,554

Valuation techniques and assumptions applied for the purpose of measuring fair value

The fair values of financial assets and financial liabilities are determined as follows:

"Held to maturity"

The carrying value of these investments were determined using the level 2 fair value measurement.

"Loans and receivables"

These investments are carried net of provision for impairment. The fair value is based on the expected realisation of outstanding balances. Mortgages are secured against the borrowers' properties, and policy loans are secured by the cash value of the policies.

" Available for sale"

The carrying values of these investments were valued using quoted market prices.Quoted market prices are obtained from independentmarket valuators using level 1 fair value measurements as follows:

Guyana Association of Securities Companies & Intermediaries Inc.London Stock Exchange

For unquoted available for sale investments level 2 fair value measurement was used to determine carrying value.

"Financial instruments where the carrying amounts is equal to fair value "

The carrying amounts of certain financial instruments is assumed to approximate their fair value due to their short-term nature. These includes cash resources and other financial assets and liabilities.

20132014

33


15 Fair Value of Financial Instruments - cont'd

Fair value measurements recognised in the statement of financial position

for identical assets or liabilities.

Level 1 Level 2 Level 3 TotalG$ G$ G$ G$

Held to maturity -

62,792,527

-

62,792,527

Available for sale 177,539,268

2,077,412,624

157,397,329

2,412,349,221

177,539,268

2,140,205,151

157,397,329

2,475,141,748

Level 1 Level 2 Level 3 TotalG$ G$ G$ G$

Held to maturity -

62,792,527

-

62,792,527

Available for sale 124,052,668

2,507,922,857

157,397,329

2,789,372,854

124,052,668

2,570,715,384

157,397,329

2,852,165,381

2013

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.derived from prices).

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the assets or liabilities that are notbased on observable market data (unobservable inputs).

2014

34


16 Statutory deposit 2014 2013G$ G$

Citizen Bank Inc. 18,750,000

18,750,000

This is a statutory one year term deposit to thedirect order of the Commissioner of Insurance

17 Interest accrued

Mortgages 2,331,393

290,200

Loans on policies -

3,046,454

Deposits at banks 574,252

515,625

Interest on Banks DIH Share Purchase Plan -

283,420

Interest on MCG Loan-(Giftland Office Max) -

530,411

Interest on Courts Bond 800,000

773,698

Investment Income 965,822

8,222,315

4,671,467

13,662,123

18 Debtors and prepayments

Hand-in-Hand Mutual Fire Insurance Company Ltd (i) 735,454,338

800,454,338

Other debtors (ii) 32,390,953

32,651,269

767,845,291

833,105,607

Republic Georgetown.

(i) This represent loan to the Hand-in-Hand Mutual Fire Insurance Company Limited. Interest is charged at a rate of 8% per annum.This loan is secured by unallocated portion of land and building situated at 1-4 Avenue of the

(ii) This is comprised of securities pending redemption, sales representatives, staff and other sundry debtors.

35


Single premiumOrdinary life Group life mortgage

19 Reinsurance assets fund fund protection TotalG$ G$ G$ G$

Balance as at 31 December 2012 38,561,862

13,445,000

-

52,006,862

Actuarial decrease 4,149,015

2,284,687

17,097,640

23,531,342

Claims recoverable 3,359,500

(9,869,000)

-

(6,509,500)


5,860,687

17,097,640

69,028,704

.Actuarial Increase/Decrease 3,371,616

(724,432)

7,214,755

9,861,939

Claims recoverable/(payable) (3,848,000)

1,605,846

-

(2,242,154)


6,742,101

24,312,395

76,648,489

20 Cash on hand and at banks

Non Statutory Deposits:Deposits - others 455,150,181

364,266,533

Current Accounts 100,774,689

119,831,837

Cash on hand 10,000

10,000

555,934,870

484,108,370

The interest rates on deposits vary from 2% to 6%.

21 Share capital

Authorised Number of 6% cumulative redeemable preference shares 10,000 10,000

Issued and fully paid

2,750 - 6% cumulative redeemable preference shares 275,000

275,000

The Capital of the company is G$1,000,000: divided into 10,000 Redeemable Cumulative Preference shares ofG$100 each.This amount issued to The Hand in Hand Fire Insurance Company Limited is not available for thepayment of any expenses or claims incurred by the company until all other funds are exhausted. The Company shall be entitled to redeem the whole or any part of the shares as shall be determined by the board.

2014 2013G$ G$

2014 2013G$ G$

36


22 Other reserve

2014 2013G$ G$

At 1 January 2,185,300,800 865,634,169 Fair value adjustment on investments (842,102,815) 1,319,666,631

At 31 December 1,343,197,985 2,185,300,800

23 General reserve2014 2013

G$ G$

At 1 January (148,308,597) (141,089,550) Net increase in fund for the year (53,874,458) (10,452,702) Currency translation difference 25,622,844 3,233,655

- - At 31 December (176,560,211) (148,308,597)

24 Policyholders' liabilities Single premiumOrdinary life Group life mortgage Group health

Gross liabilities fund fund protection fund TotalG$ G$ G$ G$ G$

Balance as at 31 December 2012 472,284,590 7,933,796 299,334,282 (3,419,245) 776,133,423

Actuarial Increase 60,906,281 158,950 161,085,083 9,504,501 231,654,815

Balance as at 31 December 2013 533,190,871 8,092,746 460,419,365 6,085,256 1,007,788,238

Actuarial Increase 132,473,799 72,945 83,168,215 2,157,503 217,872,462

Balance as at 31 December 2014 665,664,670 8,165,691 543,587,580 8,242,759 1,225,660,700

37


25 Deposit Administration Funds2014 2013G$ G$

At 1 January 1,758,900,443

1,501,952,416

Contributions received plus interest 331,583,389

315,399,342

Refund of contributions (38,288,958)

(32,429,645)

Charges, claims and benefits (32,181,925)

(26,021,670)

At 31 December 2,020,012,949

1,758,900,443

26 Claims admitted or intimated but not paid

Ordinary life 6,878,880 9,668,587Group life 13,870,422

8,772,000

20,749,302

18,440,587

27 Creditors and accrued expenses

Other creditors 22,782,235

19,738,973Accruals 50,463,264

53,151,509

73,245,499

72,890,482

28 Insurance Contract Liabilities-

6,136,493

This represents reinsurance premiums outstanding for the year.

29 Bank overdraft (unsecured)Bank of Nova Scotia -

3,419,830

Guyana Bank for Trade & Industry Limited 10,899,373

10,899,373 3,419,830

-

38


30 Pending litigation

There are several income tax appeals pending for the years 1976 - 1988 and 1995 inclusive. The tax in dispute has been lodged with the Guyana Revenue Authority.

31 Related party transactions

Parties are considered to be related if one party has the ability to control the other party orexercise significant influence over the other party in making financial or operating decisions.

Listed below are transactions with related parties.

Related company

The Hand in Hand Mutual Fire Insurance Company Limited and the Hand in Hand Mutual LifeAssurance Company Limited share a common Board of Directors.

2014 2013(i) Interest received G$ G$

Interest received during the year on loans granted to The Hand-in-Hand Mutual Fire Insurance Company Limited 58,009,048

61,244,484

Loans to The Hand-in-Hand Mutual Fire Insurance Company Limited. Interest is charged at a 735,454,338

800,454,338

rate of 8% per annum.

The Hand in Hand Fire Insurance Company Limited 2,750 - 6% Cumulative Redeemable Preference Shares 275,000

275,000

39


31 Related party transactions - cont'd

Related company

(ii) Fees paid

The Hand in Hand Mutual Life Assurance Company Limited utilised the staff and facilities of The Hand in Hand Mutual Fire Insurance Company Limited.

2014 2013G$ G$

Fees charged

(iii) Insurance

Insurance Coverage

Premiums of the year

77,323,317

45,000,000

180,000 180,000

45,000,000

69,225,296

Key management personnel

(i) Compensation

The company's key management personnel comprises of its Directors, its Chief Executive Officer and Managers. The renumeration paid during the year was as follows:

2014 2013G$ G$

Short term employee benefits - Managers - 10 (2013 -10) 26,688,888

22,298,822

Long term benefit is derived from the Pension Scheme.

Directors' emoluments - 6 (2013 - 6) 5,109,960

4,866,588

40

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62,7

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2014

41


33 INSURANCE ACT 1998

The Insurance Act 1998 became effective in 2002 upon the appointment of a Commissioner of Insurance,the duties of whose office were then conferred onto the Bank of Guyana in 2009.Part XVI of the act relates to pension plans, their registrations, management and all other stipulations.The Company has not fully complied with this section for all the plans it manages.This is a continuing effort.

34 FINANCIAL RISK MANAGEMENT

Financial risk mangement objectives

The Company's management monitors and manages the financial risk relating to the operation of the

These risks include market risk (Currency risk, interest rate risk and price risk), credit risk and liquidity risk.

management's policies on foreign exchange risk, interest rate risk and credit risks.

(a) Market risk

(i) Price risk

(ii) Interest sensitivity analysis

A positive number indicates an increase in profits where the interest rate appreciates by 50 basis points.

Company through internal risk reports which analyse exposure by degree and magnitude of risk.

The Company seeks to minimise the effects of these risks by the use of techniques that are governed by

The Company's activities expose it to the financial risks of changes in foreign currency exchange ratesand interest rates. The Company uses gap analysis, interest rate sensitivity and exposure limits to financial instruments to manage its exposure to interest rate and foreign currency risk. There has beenno change in the Company's exposure to market risks or the manner in which it manages these risks.

Price risk is the risk that the value of financial instruments will fluctuate as a result of changes in marketprices whether those changes are caused by factors specific to individual security, of its issuer, or factorsaffecting all securities traded in the market. Management continually identifies the risk and diversifies the

For a decrease of 50 basis points in the interest rate, there would be an equal and opposite impact on profit and the balances would be negative.

portfolio in order to minimise the risk.

The table on the following page analyses the sensitivity of interest rates exposure for both financial assets and financialliabilities at the end of the reporting period. The sensivity analysis includes only outstanding balances atthe end of the reporting period. A 50 basis point increase or decrease is used when reporting interestrate risk internally to key management personnel and represents management's assessment of thereasonably possible change in interest rates.

42


34 Financial risk management - cont'd

(a) Market risk - cont'd

(ii) Interest sensitivity analysis - cont'd

If interest rates has been 50 basis points higher/lower and all other variables were held constant, the impact on the Company's profit would have been as illustrated on the following table:

Impact on profit for year2014 2013

Increase /decrease in basis point

G$M G$M+/-50 1.78

1.33+/-50 0.32

0.46

liabilities.

(iii) Interest rate risk

The Company's exposures to interest rate risk on financial assets and financial liabilities are listed below:

AverageInterest Within 1 to 5 Over Non-interest

Rate 1 year years 5 years bearing Total% G$ G$ G$ G$ G$

Assets

Investments 5.97 -

62,792,527

-

2,412,349,221

2,475,141,748Mortgages on properties 7.48 -

58,336,076

-

-

58,336,076Loans on policies 15.57 -

52,506,470

-

-

52,506,470Berbice Bridge loan 7.50 18,000,000

236,000,000

-

-

254,000,000Share purchase plans 14.31 -

-

1,436,340

-

1,436,340Statutory deposits 3.00 -

18,750,000

-

-

18,750,000Debtors & prepayments 8.00 735,454,338

-

-

32,390,953

767,845,291Cash on hand and at banks 3.18 455,160,181

-

-

100,774,689

555,934,870Others -

-

-

89,366,236

89,366,236

1,208,614,519

428,385,073

1,436,340

2,634,881,099

4,273,317,031

Liabilities

Policholders' Liabilities -

-

-

-

1,225,660,700

1,225,660,700Group Pension Fund -

-

-

-

2,020,012,949

2,020,012,949Claims -

-

-

-

20,749,302

20,749,302

Creditors -

-

-

-

73,245,499

73,245,499Bank Overdraft -

10,899,373

-

-

-

10,899,373Others -

-

-

-

2,946,502

2,946,502

10,899,373 - - 3,342,614,952 3,353,514,325

Interest sensitivity gap 1,197,715,146 428,385,073 1,436,340

Maturing 31-12-2014

Local Currency Foreign Currencies

Cash and cash equivalents

change in interest rates on profit or equity as other factors such as credit risks, market risks, political and disaster risks can affect the value of the assets andApart from the foregoing with respect to other financial assets and liabilities, it was not possible to determine the expected impact of a reasonable possible

The Company's exposure to interest rate risk is minimal but the Company's management continuously monitors and manages these risks through the use ofappropriate tools and implements strategies to hedge against any adverse effects.



(a) Market risk - cont'd

(iii) Interest rate risk - cont'd

AverageInterest Within 1 to 5 Over Non-interest

Rate 1 year years 5 years bearing Total% G$ G$ G$ G$ G$

Assets Restated

Investments 5.97 - 62,792,527 - 2,789,372,854 2,852,165,381Mortgages on properties 7.48 - 59,238,753 - - 59,238,753Loans on policies 15.57 - 43,052,679 - - 43,052,679Berbice Bridge loan 7.50 18,000,000 254,000,000 - - 272,000,000Share purchase plans 14.31 - - 6,147,090 - 6,147,090MCG Loan(Giftland) 11 - 10,000,000 - - 10,000,000Statutory deposits 3.00 - 18,750,000 - - 18,750,000Debtors & prepayments 8.00 800,454,338 - - 32,651,269 833,105,607Cash on hand and at banks 3.18 364,266,533 - - 119,841,837 484,108,370Others - - - 87,640,916 87,640,916

1,182,720,871 447,833,959 6,147,090 3,029,506,876 4,666,208,796 Liabilities

Policyholders' liabilities - - - - 1,007,788,238 1,007,788,238Deposit Administration Fund - - - - 1,758,900,443 1,758,900,443Claims - - - - 18,440,587 18,440,587Creditors - - - - 72,890,482 72,890,482Bank Overdraft - 3,419,830 - - - 3,419,830Others - - - - 11,915,974 11,915,974

3,419,830 - - 2,869,935,724 2,873,355,554

Interest sensitivity gap 1,179,301,041 447,833,959 6,147,090

Maturing 31-12-2013

43

44



(a) Market risk-cont'd

(iv) Foreign currency risk

The equivalent Guyana dollar value of assets in pounds sterling are shown below:

Total Total£ US$ T.T$ G$ £ US$ T.T$ G$

Assets 566,585

91,235

-

193,979,565

552,834 82,332 -

181,442,341

Foreign currency sensitivity analysis:

The following table details the company's sensitivity to a 3% increase or decrease in the Guyana dollar against the relevant currencies.

T.T dollar £ Sterling US dollar T.T dollar £ Sterling US dollarimpact impact impact impact impact impactG$ M G$ M G$ M G$ M G$ M G$ M

Profit/(loss) -

5.27 0.57 -

4.98 0.50

The sensitivity analysis shows the impact of all assets and liabilities that are held in foreign currencies. A positive number below indicates an increase in reserves if the currency were strenghtened 3% against the Guyana dollar. If the currencies were weaken 3%

2014 2013

2014

Although a rate is not formally adopted and used as a measure, 3% gives prudent possibility of a change in rate.

2013

against the Guyana dollar, there would be an equal and opposite impact on the reserves and the balances would be negative.

The company is exposed to foreign currency risk due to fluctuations in exchange rates on investments and foreign bank balances.The currencies which the company are mainly exposed to are United States Dollar and Pounds Sterling.

45


46



(c) Liquidity risk

1 to 3 4 to 12 1 to 5 Over 5On Demand months months years years Total

G$ G$ G$ G$ G$ G$ Assets Securities 2,412,349,221

-

-

- - 2,412,349,221 Bonds -

-

-

62,792,527 - 62,792,527 Mortgages on properties 131,783

258,469

811,626

7,099,030 50,624,420 58,336,076 Loans on policies -

-

-

52,506,470 - 52,506,470 Share purchase plans -

-

-

- 1,436,340 1,436,340 Berbice Bridge loan -

-

18,000,000

236,000,000 - 254,000,000 Statutory deposits -

-

-

18,750,000 - 18,750,000 Interest accrued 4,671,467

-

-

- - 4,671,467 Debtors and others -

-

767,845,291

- 8,046,280 775,891,571 Insurance contract assets 76,648,489

-

-

- 76,648,489 Cash on deposits 455,160,181

-

-

- - 455,160,181 Cash on hand & at banks 100,774,689

-

-

- - 100,774,689

3,049,735,830

258,469

786,656,917

377,148,028 60,107,040 4,273,317,031 Liabilities Policyholders liabilities -

-

-

1,225,660,700 - 1,225,660,700 Deposit Administration Fund -

-

-

2,020,012,949 - 2,020,012,949 Claims 20,749,302

-

-

- - 20,749,302 Creditors 50,463,264

2,161,396

3,275,555

17,345,284 - 73,245,499 Bank overdraft 10,899,373

-

-

- - 10,899,373 Insurance Contract Liabilities -

-

-

- - - Others -

-

2,946,502

- - 2,946,502

82,111,939

2,161,396

6,222,057

3,263,018,933 - 3,353,514,325

Net current assets 2,967,623,891

(1,902,927)

780,434,860

(2,885,870,905) 60,107,040 919,802,706

1 to 3 4 to 12 1 to 5 Over 5On Demand months months years years Total

G$ G$ G$ G$ G$ G$ Assets

Securities 2,789,372,854 -

-

- - 2,789,372,854 Bonds -

-

-

62,792,527 - 62,792,527 Mortgages on properties 122,299

240,654

755,645

6,607,435 51,512,719 59,238,752

Loans on policies -

-

-

43,052,679 - 43,052,679 Share purchase plans -

-

-

- 6,147,090 6,147,090 Berbice Bridge loan - - 18,000,000 254,000,000 - 272,000,000 Statutory deposits - - - 18,750,000 - 18,750,000 MCG Loan(Giftland) - - - - 10,000,000 10,000,000 Interest accrued 13,662,123 - - - - 13,662,123 Debtors and others - - 833,105,607 - 4,950,089 838,055,696 Insurance contract assets 69,028,704 - - - - 69,028,704 Cash on deposits 364,266,533 - - - - 364,266,533

Cash on hand & at banks 119,841,837 - - - - 119,841,8373,356,294,350 240,654 851,861,252 385,202,641 72,609,898 4,666,208,796

Liabilities Policyholders liabilities - - - 1,007,788,238 - 1,007,788,238 Deposit Administration Fund - - - 1,758,900,443 - 1,758,900,443 Claims 18,440,587 - - - - 18,440,587 Creditors 53,151,509 305,715 5,338,849 14,094,409 - 72,890,482 Bank overdraft 3,419,830 - - - - 3,419,830 Insurance Contract Liabilities 6,136,493 - - - - 6,136,493 Others - - 5,779,481 - - 5,779,481

81,148,419 305,715 11,118,330 2,780,783,090 - 2,873,355,554

Net current assets/(liablities) 3,275,145,931 (65,061) 840,742,922 (2,395,580,449) 72,609,898 1,792,853,242

Liquidity risk is the risk that the company will encounter difficulty in raising funds to meet its commitments associated with financial instruments.

The company manages its liquidity risk by maintaining an appropriate level of resources in liquid or near liquid form.

2014

2013

47


35 Reporting by class of business2013

Ordinary Group GroupLife Life HealthFund Fund Fund Total Total

G$ G$ G$ G$ G$

Revenue

Premiums 157,133,577

282,617,988

213,311,381

653,062,946

632,361,270

Reassurance premiums 18,407,499

45,067,942

-

63,475,441

63,979,805

138,726,078

237,550,046

213,311,381

589,587,505

568,381,465

Investment income 32,058,674

28,169,794

365,883

60,594,351196,135

52,638,081

Gain/(loss) on exchange -

196,135

-

(231,352)

Gain on disposal of investments -

5,848,540

-

5,848,540

4,980,428

170,784,752

271,764,515

213,677,264

656,226,531

625,768,622

Deduct:

Expenditure

Management expenses 52,976,297

95,282,338

45,279,873

193,538,508

197,138,068

Commissions 11,022,755

38,283,137

10,392,927

59,698,819

54,386,317

Claims 32,421,504

29,309,511

162,741,547

224,472,562

150,995,484

Surrenders 16,932,688

-

-

16,932,688

16,208,062

Annuities and pensions 5,895,914

-

-

5,895,914

4,702,947

119,249,158

162,874,986

218,414,347

500,538,491

423,430,878

Surplus/(deficit) of revenue over expenditure for the year ended31 December 51,535,594

108,889,529

(4,737,83)

155,688,040

202,337,744

Taxation 1,551,975

4,666,974

Surplus of revenue over expenditure after Taxation 154,136,065

197,670,770

ASSETS 1,261,638,954

1,233,198,501 5,576,695

3,151,722,314

UNALLOCATED ASSETS

2,500,414,150

2,020,012,949

1,758,900,443

LIABILITIES 62,664,166

42,163,929 66,079

104,894,174

100,887,392

UNALLOCATED LIABILITIES 2,022,959,451

1,764,679,924

36 ACTUARIAL VALUATION

An actuarial valuation of the Company was done as at 31 December 2014. This revealed a surplus of G$1,166,912,774

2014

48


37. Insurance Risk

of the amount of the resulting claim.

geographical location and type of industry covered.

(a) Frequency and severity of claims

number and amount of claims and benefits will vary from year to year.

about the expected outcome will be.The company has developed its insurance underwriting strategy to diversify the type of insurance risks accepted and within each of these categories to achieve a sufficiently largepopulation of risks to reduce the variability of the expected outcome.

Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk,

payments exceed the carrying amount of the insurance liabilities.Insurance events are random and the actual

and survival risk across its portfolio. The company has a retention limit of G$1,500,000 on the vast proportion of lives insured. The company reinsures the excess of the insured benefit over G$1,500,000 for

For contracts where death is the insured risk, the most significant factors that could increase the overall frequency of claims are epidemics or wide spread changes in lifestyle resulting in earlier or more claims than expected.

At present, these risks do not vary significantly in relation to the location of the risk insured by the company. However under concentration by amounts could have an impact on the severity of benefit payments on a portfolio basis. For contracts with fixed and guaranteed benefits and fixed future premiums,

standard risks (as measured by the sum insured) under a yearly renewable term reinsurance arrangement. The company does not have in place any reinsurance for contracts that insure survival risk.

By the very nature of an insurance contract, this risk is random and therefore unpredictable.

The risk under any one insurance contract is the possibility that the insured event will occur and the uncertainty

The principal risk that the company faces under its insurance contract is that the actual claims and benefit

Experience shows that the larger the portfolio of similar insurance contract, the smaller the relative variability

there are no mitigating terms and conditions that reduce the insurance risk accepted.

The company manages these risks through its underwriting strategy and reinsurance arrangements.

The underwriting strategy is intended to ensure that the risks underwritten are well diversified in terms of type of risk and the level of insured benefits. For example, the company to some extent balances death risk

49


37 Insurance Risk - cont'd

(a) Frequency and severity of claims - cont'd

(b) Sources of uncertainty in the estimation of future benefit payments and premium receipts

mortality and variability in contract holder behaviour.

(c) Guaranteed annuity options

risk from variability in contract holder behaviour.

behaviour. On the assumption that contract holders will make decisions rationally, overall insurancerisk can be assumed to be aggravated by such behaviour. For example, it is likely that contractholders whose health has deteriorated significantly will be less inclined to terminate contractsinsuring death benefits than those contract holders remaining in good health.

Uncertainty in the estimation of future benefit payments and premium receipts for long-terminsurance contract arises from the unpredictability of long-term changes in overall levels of

The company has no annuity policy with the guaranteed annuity option, hence is not exposed to the

Insurance risk for contracts disclosed in this note is also affected by the contract holders' right to reduced or no future premiums, to terminate the contract completely, or to exercise a guaranteedpay annuity option. As a result, the amount of insurance risk is also subject to the contract holders'

37. Insurance Risk - cont’d

Policy liabilities are calculated using best estimate assumptions with margins foradverse deviation.

(i) Mortality

An assumption was made which reflected the Actuary’s knowledge ofmortality experience in the Caribbean. The mortality assumption used for allpolicies was 120% of the CIA 86-92 Male Aggregate Table(240% forSpecial Whole Life) plus a margin for adverse deviation equal to 15 perthousand (7.5% per thousand for the participating business), divided by lifeexpectancy. In addition, an allowance for AIDS was included in accordancewith 100% of that recommended for Canadian Life companies by theCanadian Institute of Actuaries. A margin is added for adverse deviation.

(ii) Investment yields

It is impossible to predict long- term interest rates in the Guyanese environmentsince the longest government security is 12 months. The valuation as at December31, 2013 used an interest assumption of 4.75% scaling down uniformly over 10years to 3.0% per annum, after tax and after a Margin for Adverse Deviation of85% per annum.

For the current valuation, this assumption has been maintained.

(iii) Persistency

The assumed lapse rates were derived from a lapse study conducted using thecompany’s experience as at December 31, 2012 was updated with 2013 &2014 lapses. A margin for adverse deviation assumes a 20% fluctuation inthe lapse rate for all years.

50


51


37. Insurance Risk - cont’d

(iv) Expenses

Expenses are based on best estimates of Company experience. Expenses areincreased 10% as a margin for adverse deviation. Expenses per policy are assumedto increase with inflation. Administration expenses per policy was thereforeincreased to $9,000 per annum for 2014, thereafter, inflation on expenses has beenapplied at a rate of 3.25% per annum decreasing to 1.5% per annum over 10 years.Paid up policies have been assigned one-eighth of the expenses of in-force policies.For the single mortgage protection policies expenses was determined as $3,182(versus $4,372 in 2013). This reduction was primarily due to the increase in policycount from 3,151 to 4,074.

(v) Ongoing review

Actuarial assumptions are continuously reviewed based on emerging Company andindustry experience and revised if appropriate and material.

(vi) Margins for adverse deviation assumptions

The basic assumptions made in establishing policy liabilities are best estimates for arange of possible outcomes. To recognise the uncertainty in establishing these bestestimates, to allow for possible deterioration in experience and to provide greatercomfort that the reserves are adequate to pay future benefits, the appointed actuaryis required to include a margin in each assumption. The impact of these margins isto increase reserves and so decrease the income that would be recognised oninception of the policy. The Canadian Institute of Actuaries prescribes a range ofallowable margins. The Company uses assumptions at the conservative end of therange, taking into account the risk profiles of the business and its small size.

(vii) Sensitivity Analysis

The following table shows the sensitivity of the reserves for the Ordinary Life,Individual Annuity and Single Premium business to a change in the valuationassumptions as noted:

Sensitivity $’000

2% Increase in Mortality 10,600

5% Increase in Expenses 20,200

10% Change in Lapse Rates 20,300

100 Basis Points Decrease in Investment Earnings 121,300

52


38 Assets held under Trust

Assets

2014 2013

G$ G$

Statutory Deposit at Citizens Bank 18,750,000

18,750,000

Land & Building 50,000,000

50,000,000

Mortgages 19,837,123

20,735,399

Short term loan - Berbice Bridge -

290,000,000

Short term loan - MCG (GiftLand) -

10,000,000

88,587,123

389,485,399

Government Bonds & Bills

Government of Saint Lucia Bond -

-

Government of Trinidad and Tobago Bond -

52,792,527

-

52,792,527

Ordinary Shares-

Guyana-

Demerara Tobacco Co. Ltd 40,696,300

22,275,000

Demerara Distillers Limited 43,168,145

22,381,845

Carribbean Containers Incorporated 4,172,820

4,172,820

Guyana Bank for Trade and Industry Ltd. 89,880,000

62,008,000

Hand In Hand Trust Corporation 157,367,329

157,367,329

Banks DIH Limited 109,974,720

89,657,069

Republic Bank(Guyana) Limited 576,228,000

532,752,528

Citizens Bank Guyana Incorporated 1,571,913,200

338,565,920

Hand In Hand Investment 30,000

30,000

Rupununi Development Co. Ltd 14,500,000

14,500,000

2,607,930,514

1,243,710,511

Bond & Debentures of Companies Incorporated

in Guyana-

Courts Bond -

10,000,000

Loan granted to The Hand in Hand Mutual Fire

Insurance Company Limited-secured 18,341,369

313,794,894

Fixed Deposit at Republic Bank (Guyana) Limited -

60,650,879

18,341,369 374,445,773

- -

TOTAL 2,714,859,006 2,070,434,210

53

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

2010 2011 2012 2013 2014

Movement In Premium G$M 399.0 515.7 610.0 632.4 653.1

G

$

M

Movement In Premium G$M

Movement In Premium

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

2010 2011 2012 2013 2014

Movement In Funds G$M 1,388.9 1,727.9 2,278.1 2,776.7 3,245.7

G

$

M

Movement In Funds G$M

Movement In Funds G$M

54

38.5

0.3

44.7

3.4 11.9

1.2

2014 Expenditure

Manag. Exp

Taxation

Claims

Surrenders

Comm.

Annuities

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014

Revenue G$M 394.1 498.3 600.5 625.8 656.2

Expenditure G$M 348.5 392.1 424.8 428.1 502.1

G

$

M

Revenue VS Expenditure

Revenue G$M

Expenditure G$M

55

SOURCES OF REVENUE FOR THE YEAR

DISTRIBUTION OF INVESTMENT PORTFOLIO

21.8

68.9

8.2 1.1

Source Of Revenue

Ordinary Life Premiums 21.8%

Group Premiums 68.9%

Investment Income 8.2%

Other Income 1.1%

0.525.1

0.1

59.6

1.413.3

Distribution Of Investment

Statutory Deposit 0.5%

Loans 25.1%

Share Purchase Plan 0.1%

Securities & Bonds 59.6%

Mortgages 1.4%

Cash on Deposit 13.3%

56

PLANS OF INSURANCE OFFERED: RIDERS - may be attached to most plans

HOSPITAL INDEMNITYJOINT WHOLE-OF-LIFE

ACCIDENTAL MEDICAL EXPENSESSPECIAL WHOLE-OF-LIFE

ACCIDENTAL DEATH AND DISMEMBERMENTWHOLE-OF-LIFE LIMITED PAYMENT

ACCIDENTAL DISABILITY INCOMEEXECUTIVE BONUS WHOLE-OF-LIFE

TOTAL PERMANENT DISABILITYRETIREMENT BONUS WHOLE-OF-LIFE

TOTAL DISABILITY WAIVER OF PREMIUMANTICIPATED BONUS WHOLE-OF-LIFE

PAYOR WAIVER OF PREMIUM &ENDOWMENT

ACCIDENTAL MEDICAL EXPENSES RIDERS -ANTICIPATED ENDOWMENT

only are attached to children’s policiesSECONDARY SCHOOL EDUCATION ENDOWMENT

UNIVERSITY EDUCATION ENDOWMENT TERM

5 YEARS RENEWABLE & CONVERTIBLE TERM

ANNUITIES (IMMEDIATE AND DEFERRED)

G

GROUP ANNUITIES

ROUP LIFE

GROUP MEDICAL

GROUP PENSION

GROUP CREDITORS

Documents

NOTICE OF MEETINGhihgycom.startlogic.com/wp-content/uploads/2016/06/annual-report-life-2014.pdfBERBICE: 1) New Amsterdam Lots 15 & 16B New Street, New Amsterdam, Berbice. 2) Corriverton