Jersey Mutual 144th Annual Report

144th ANNUAL REPORT AND FINANCIAL STATEMENTS 30th September 2013

INDEX

Notice of 144th Annual General Meeting Board of Administration Report of the Board of Administration Claims Paid Value of Property Insured Independent Auditors’ Report Profit and Loss Account Balance Sheet Cash Flow Statement Notes to the Financial Statements

INDEX

1 2 3-5 6 7 8-9 10-11 12-13 14 15-22

THE 144th ANNUAL GENERAL MEETING OF MEMBERS will be held at St. Paul's Centre, Dumaresq Street, St Helier, on Friday the 6th day of December 2013 at 3.15 p.m.

BUSINESS: 1.

2.

3.

4.

5.

Annual Report for 2013 Financial Statements for 2013 Election of Directors Appointment of Auditors Vote Remuneration of the Directors for the ensuing year

An electronic copy of the financial statements and annual report is available on the Society's website at the following address: www.jerseymutual.com.

R Le Cornu President Note Please contact Mr R Jeanne, General Manager, if you would like to request a printed copy to be delivered to you by post.

If any member has any questions on the Financial Statements, it would be appreciated if they would address them to the Society a few days before the meeting in order that they may be more fully considered and answered.

1

BOARD OF ADMINISTRATION The directors of the Society during the year ended 30 September 2013 were:Appointed J DE GRUCHY T DU FEU L ROLLAND R DUPRE D WEBBER L LE BROCQ D WALLIS G PIROUET R MALETROIT (for S Godel) M BIRCH N LE COCQ J WILDING R LE CORNU K FAUDEMER D LE QUESNE S HEWLETT A HARVEY K PALLOT S LE BRETON E W LE BRUN ST J CABOT C LE CORNU M EVANS A HARRIS A J LAMY R LE MARCHAND L RICHARDSON B LE LIEVRE N GILLARD P PALLOT P LE CLAIRE R MALETROIT P WARREN A DIX D HENRY P WADE

Retired 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012

26 January 2013

25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012 25 December 2012

2

REPORT OF THE BOARD OF ADMINISTRATION TO BE PRESENTED AT THE ONE HUNDRED AND FORTY FOURTH ANNUAL GENERAL MEETING OF MEMBERS TO BE HELD ON FRIDAY THE 6TH DAY OF DECEMBER 2013 at 3.15 p.m.

The Board of Administration, in accordance with Article 22 of the Fundamental Rules, has pleasure in presenting their one hundred and forty fourth annual report, and the audited financial statements for the year ended 30 September 2013.

BOARD OF ADMINISTRATION'S RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS The Board of Administration (the Board) are responsible for preparing the Board's report and the financial statements in accordance with the Fundamental Rules of the Society and with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required to give a true and fair view of the state of affairs of the Society and the surplus or deficit of the Society for that period. In preparing these financial statements, the Board are required to: 

select suitable accounting policies and apply them consistently;



make judgements and estimates that are reasonable and prudent; and



prepare financial statements on the going concern basis unless it is inappropriate to presume that the Society will continue in business.

The Board are responsible for keeping proper accounting records that are sufficient to show and explain the Society's transactions which disclose with reasonable accuracy, at any time, the financial position of the Society.

They are also responsible for safeguarding the assets of the Society and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Society is licensed to operate as an insurance society by the Jersey Financial Services Commission. As such the Board are required to comply with the requirements of the Insurance Business (Jersey) Law 1996.

THE INSURANCE BUSINESS (JERSEY) LAW 1996 On 25 February 2013 the Society became a regulated insurance society in accordance with the Insurance Business (Jersey) Law 1996. The Society is now regulated by the Jersey Financial Services Commission.

RESULTS The financial statements show a net surplus after tax of £235,289 (2012: £1,608,040).

The total members funds have showed an increase of £235,289 to £26,466,840 (2012: £26,231,551).

The value of the real and personal property insured during the year has increased by 2.3% (£101,881,392) to £4,507,475,516 as at 30 September 2013 as shown on page 7. A list of claims is available for inspection at the Society's offices.

3

RESULTS (continued) Gross premium income has increased in the year by 1.3% (£74,755) to £5,931,111. Discounts granted to members during the year amounted to £1,782,314 (2012: £1,682,438).

An analysis of claims paid is shown on page 6.

There was a reduction in the unrealised gain on financial investments held at the year end of £96,542.

Nevertheless the value of the investment portfolio still exceeded cost by £459,111 at 30 September 2013.

Realised gains on the disposal of certain investments during the year, amounted to £62,115 (2012: £1,966,598).

The Society is restricted in its investment strategy since it must maintain 75% of assets as approved assets. Our investment brokers, with our approval, have therefore continued with a cautious approach, maintaining a high level of investments in low risk bonds. For the coming year we intend to maintain the current conservative investment policy in order to preserve and grow the value of the investment portfolio.

REINSURANCE AGREEMENTS Your directors have pleasure in reporting that under the agreements entered into by the Society with Lloyd's Underwriters and Reinsurers, the latter, during the past year, accepted all individual risks above £17,500 in Class 1, subject to an event limit of £20 million. In addition to the foregoing, Lloyd's Underwriters and Reinsurers indemnified the Society for each and every ultimate net loss occurring under all policies covering Fire, Lightning, Explosion and Comprehensive Risks (including All Risks) which exceeded £225,000, and in respect of Public Liability and Employer's Liability which exceeded £200,000.

DIRECTORS In accordance with Article 22 of the Fundamental Rules, you are called upon to elect nine directors to replace the following members for a term of three years to commence from 25 December 2013: M BIRCH N LE COCQ J WILDING R LE CORNU K FAUDEMER D LE QUESNE S HEWLETT A HARVEY K PALLOT

St. Saviour St. Helier St. Helier St. Martin St. Clement St. Brelade St. John St. Peter St. Ouen

RULES OF THE SOCIETY The contingent liability of policy holders is set out in rules 10, 16 and 26 of the Fundamental Rules of the Society, copies of which are available on request from the General Manager. The Board wishes to state that in their opinion calling upon members to contribute in accordance with these Rules is a remote possibility, particularly in view of the Society's reinsurance arrangements.

WEBSITE As part of a 'green' policy our financial statements are published on our website. A limited number of printed copies will be available on request (see Notice of Meeting).

4

ACCOUNTANTS AND AUDITORS Rosscot Limited assist the Society as accountants, and Rosscot Assurance Limited act as the Society's auditors.

In accordance with Institute of Chartered Accountants in England and Wales' best practice, Rosscot have segregated their engagements with the Society, incorporating separate reporting Principals and members of staff.

Rosscot Limited are willing to continue to act as accountants for the forthcoming year and Rosscot Assurance Limited are willing to continue in office as auditors for the forthcoming year.

VOTE OF THANKS The advent of Regulation has not only brought increased costs but also an increased workload.

The Board wish to record a vote of thanks to all members of staff for all the hard work that they have carried out during a busy but successful year.

R Le Cornu

President

R A Jeanne

General Manager

Date: 6 November 2013

5

CLAIMS PAID 2013 CLAIMS PAID 2013

Accidental Damage 8.5%

Theft 1.2%

Other 3.5% Storm 20.1%

Glass/Basins 0.5% All Risks 6.0% Liability Personal/Public 0.3% Fires 3.9% Subsidence 12.2%

Water Overflow 4.1%

Burst Pipes 39.7%

6

VALUE OF PROPERTY INSURED 2013

£5,000

£4,500

£4,000

£3,500

!"#$%%$&'(

£3,000

£2,500

£2,000

£1,500

£1,000

£500

£0

2003 £3,064

2004 £3,289

2005 £3,372

2006 £3,362

2007 £3,599

2008 £3,736

2009 £3,983

2010 £4,127

2011 £4,281

2012 £4,406

£ MILLIONS

7

2013 £4,507

INDEPENDENT AUDITORS' REPORT To the members of Jersey Mutual Insurance Society, Incorporated We have audited the financial statements of Jersey Mutual Insurance Society, Incorporated for the year ended 30 September 2013 on pages 10 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Society's members, as a body, in accordance with the Fundamental Rules of the Society and article 18(1) of the Insurance Business (Jersey) Law 1996. Our audit work has been undertaken so that we might state to the Society's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Society and the Society's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Board of Administration and Auditors As explained more fully in the Statement of The Board of Administration's Responsibilities, set out on page 3, the Board are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Society’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Board of Administration's report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements:  give a true and fair view of the state of the Society's affairs as at 30 September 2013 and of its results for the year then ended;  have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and  have been properly prepared in accordance with the Fundamental Rules of the Society and the Insurance Business (Jersey) Law 1996.

8

Opinion on other matters In our opinion the information given in the Board of Administration's report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Insurance Business (Jersey) Law 1996 requires us to report to you if, in our opinion:  proper accounting records have not been kept; or  the financial statements are not in agreement with the accounting records; or  we have not received all the information and explanations we require for our audit.

ROSSCOT ASSURANCE CHARTERED ACCOUNTANTS Thomas Edge House Tunnell Street St Helier Jersey JE2 4LU

Date: 21 November 2013

9

PROFIT AND LOSS ACCOUNT For the year ended 30 September 2013

Notes

2013

2012

TECHNICAL ACCOUNT - GENERAL BUSINESS £ 5,931,111 (1,782,314)

£ 5,856,356 (1,682,438)

4,148,797

4,173,918

Cost of reinsurance

(2,993,757)

(2,928,559)

EARNED PREMIUMS, NET OF REINSURANCE

1,155,040

1,245,359

Claims paid

2,217,114 (2,084,121)

1,722,185 (1,555,225)

Gross premiums written before discounts to members Discounts given to members

- gross amount - reinsurers' share

CLAIMS INCURRED NET OF REINSURANCE

2

132,993

166,960

Net operating expenses

3

1,271,161

1,141,194

TOTAL CHARGES

1,404,154

1,308,154

BALANCE ON THE TECHNICAL ACCOUNT FOR GENERAL BUSINESS

£ (249,114)

£ (62,795)

10

PROFIT AND LOSS ACCOUNT continued For the year ended 30 September 2013 Notes BALANCE ON THE TECHNICAL ACCOUNT FOR GENERAL BUSINESS

2013 £

2012 £

(249,114)

(62,795)

886,224 62,115 (96,542) (818) (160,862) (199,340)

887,353 1,966,598 (1,053,128) (33,401) (87,256) (9,331)

490,777

1,670,835

NON-TECHNICAL ACCOUNT Investment income Realised net gains on investments Movement in unrealised net gains on investments Foreign exchange (losses) Investment management and custody fees Repairs to investment property

5

18

SURPLUS BEFORE TAX Taxation

6

241,663 6,374

1,608,040 -

SURPLUS AFTER TAX FOR THE FINANCIAL YEAR

12

£ 235,289

£ 1,608,040

RECOGNISED GAINS AND LOSSES All results are derived from continuing operations.

There are no recognised gains and losses other than the surplus attributable to the members of the Society of £235,289 in the year ended 30 September 2013 and a surplus of £1,608,040 in the year ended 30 September 2012.

The inclusion of unrealised gains and losses in the profit and loss account to reflect the marking to market value of investments and the revaluation of freehold and investment property is deemed not to be a departure from the unmodified historical cost basis of accounting. Accordingly a separate note of historical cost results is not given.

11

BALANCE SHEET As at 30 September 2013 Notes

2013 £

2012 £

765,000 23,260,089

765,000 22,740,669

24,025,089

23,505,669

1,588,896 920,730

1,557,180 1,047,213

2,509,626

2,604,393

112,205 691,858

104,688 321,423

804,063 214,500

426,111 265,500

1,018,563

691,611

1,410,000 124,346 1,417,091

1,410,000 56,564 1,798,240

2,951,437

3,264,804

256,951 367,126

195,394 469,214

624,077

664,608

£ 31,128,792

£ 30,731,085

ASSETS INVESTMENTS Investment property Financial investments

7 7

REINSURERS ' SHARE OF TECHNICAL PROVISIONS Provision for unearned premiums Claims outstanding

DEBTORS Amounts owed by policy holders Amounts owed by reinsurers Debtors arising out of direct insurance operations Loans

8

OTHER ASSETS Land and buildings Other tangible assets Cash at bank and broker

9 10

PREPAYMENTS AND ACCRUED INCOME Accrued interest Claim payments and prepayments

TOTAL ASSETS

11

12

BALANCE SHEET continued As at 30 September 2013 Note

2013 £

2012 £

12

26,466,840

26,231,551

2,501,072 1,006,660

2,398,569 1,127,287

3,507,732

3,525,856

840,082 309,105 5,033

820,261 153,417 -

1,154,220

973,678

£ 31,128,792

£ 30,731,085

LIABILITIES RESERVES Members' funds TECHNICAL PROVISIONS Provision for unearned premiums - gross amount Claims outstanding - gross amount

CREDITORS Amounts due to reinsurers Other creditors Taxation

TOTAL LIABILITIES

These financial statements on pages 10 to 22 were approved and authorised for issue by the Board of Administration on 6 November 2013 and were signed on their behalf by:

President: R Le Cornu

General Manager: R A Jeanne

Date: 6 November 2013

13

CASH FLOW STATEMENT For the year ended 30 September 2013 Notes NET CASH INFLOW FROM OPERATING ACTIVITIES

13

2013 £ 191,575

2012 £ 1,115,470

(1,341)

JERSEY INCOME TAX PAID CAPITAL EXPENDITURE AND LOANS Purchase of fixed assets Repayment of staff loans

(68,537) 51,000

(56,562) 36,000

£ 172,697

£ 1,094,908

CASH FLOWS WERE INVESTED AS FOLLOWS : (381,149)

1,130,671

134,001 419,845

(1,451,645) 1,415,882

14

553,846

(35,763)

15

£ 172,697

£ 1,094,908

(DECREASE)/INCREASE IN CASH HOLDINGS NET PORTFOLIO INVESTMENT Listed equity shares Listed fixed income securities

NET INVESTMENT OF CASH FLOWS

14

NOTES TO THE FINANCIAL STATEMENTS 30 September 2013 1. ACCOUNTING POLICIES Basis of preparation The financial statements are prepared on the basis of historical cost, adjusted by the revaluation of freehold property and quoted investments, and in accordance with United Kingdom Generally Accepted Accounting Practice.

The recommendations of the Statement of Recommended Practice of Accounting for Insurance Business issued by the Association of British Insurers in December 2005 (as amended in December 2006) (the "SORP") have been adopted.

Premiums and unearned premium provisions General business premiums written reflect business incepted during the year. General business unearned premiums are those proportions of the premiums written in a year that relate to the periods of risk after the balance sheet date. Unearned premiums are calculated on a monthly pro rata basis.

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct business being reinsured.

Claims General business claims incurred include all losses occurring during the year, related handling costs, a reduction for the value of salvage and other recoveries, and any adjustments to claims outstanding from previous years.

The provision for claims outstanding is based on information available at the balance sheet date. Significant delays are sometimes experienced in the quantification of certain claims, and accordingly the ultimate cost of such claims cannot be known with certainty at the balance sheet date. Subsequent information and events may result in the ultimate liability being less than, or greater than, the amount provided. Any differences between provisions and subsequent settlements are dealt with in the technical account - general business of later years.

General business outstanding claims provisions are based on the estimated ultimate cost of all claims incurred but not settled at the balance sheet date, together with related handling costs and a reduction for the value of salvage and other recoveries.

No provision is necessary for claims incurred but not reported, as all claims must be reported within 3 days of the incident from which the claim arises. Thus, at the date the financial statements were approved, all valid claims incurred during the financial year would have been reported.

15

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 1. ACCOUNTING POLICIES (continued) Investment income and unrealised investment gains or losses Investment income consists of interest, dividends and rents receivable for the year, together with realised and unrealised investment gains and losses. Dividends are included as investment income when the investments to which they relate are declared ex-dividend. Rent (net of expenses) and interest income are recognised on an accruals basis.

Realised investment gains and losses represent the difference between the net sale proceeds and the cost of acquisition. Unrealised investment gains and losses represent the difference between the carrying value at the year end and the carrying value at the previous year end or purchase value during the year.

Taxation Technical income is not taxed. Jersey income tax of 20% is payable on rental income net of attributable expenses. Under the 0/10 regime introduced in Jersey with effect from the 2009 year of assessment the Society, being a mutual trading organisation, is taxed at 0% on investment income.

Investments Investments, consisting of land and buildings, listed equities and fixed interest securities, are stated at their current values at the end of the year. The market values of quoted investments are calculated using the closing prices on the last business day in the financial year. Unlisted financial investments are included at the last available valuation.

Land and buildings are revalued periodically at open market value, by qualified external valuers and reassessed annually by the directors. No depreciation is provided on properties held for investment purposes, as recommended in Statement of Standard Accounting Practice 19.

Tangible assets Items purchased for less than £1,000 are written off to revenue in the year of purchase. Items of between £1,000 and £5,000 are capitalised and fully depreciated in the year of purchase.

Items exceeding £5,000 are capitalised and depreciated on a straight line basis as follows: Computer equipment Office furniture and equipment

20% per annum 10% per annum

Depreciation is charged to the technical account - general business and is included in administrative expenses.

Land and buildings are stated at valuation.

Pension costs The Society operates three defined contribution pension schemes. Contributions are charged to the revenue account as they become payable in accordance with the rules of the schemes.

16

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 2. CLAIMS INCURRED NET OF REINSURANCE

Claims payable

Change in the provision for claims

2013 £ 2,337,741 (2,210,604)

2012 £ 1,953,348 (1,774,102)

- net of reinsurance

127,137

179,246

- gross amount - reinsurers' share

(120,627) 126,483

(231,163) 218,877

- gross amount - reinsurers' share

- net of reinsurance

5,856

(12,286)

£ 132,993

£ 166,960

3. NET OPERATING EXPENSES 2013 £

Restated 2012 £

526,819 208,230 105,464 286,408 92,735 24,850 16,000 9,900 755

510,435 199,392 85,387 240,040 67,440 23,500 15,000 -

Administrative expenses comprise: Salaries and other employment costs (see note 4) Advertising Professional fees Other office and administration expenses Directors' remuneration Auditors' remuneration Accountancy - Final Accounts - Interim Accounts Depreciation £

1,271,161

£

Certain expenses have been reclassified in prior year figures from 'Professional fees' to 'Other office and administration expenses' for comparative purposes.

17

1,141,194

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 4. STAFF COSTS 2013 £ 450,329 18,598 57,892

Salaries Social security costs Other pension costs £

2012 £ 400,603 17,326 92,506

526,819

£

510,435

The average number of employees, including Directors, during the year was as follows: Directors Management Administration

2013 26 2 7

2012 27 2 7

35

36

2013 £ 92,278 782,828 11,118

2012 £ 88,819 786,402 12,132

5. INVESTMENT INCOME Income from land and buildings Income from listed investments Income from other investments Total Investment Income

£

886,224

£

887,353

6. TAXATION AND GOODS AND SERVICES TAX The basis of taxation is set out in note 1 on page 16.

Insurance transactions are exempt transactions for Goods and Services Tax (GST) but the Society incurs GST at 5% on various goods and services from registered suppliers. This cost is included in administrative expenses.

18

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 7. INVESTMENTS Current Value 2013 £ Investment property Listed financial investments: Equity shares Fixed income securities Unlisted financial investments Aviva bond Total financial investments Total investments

£

Historical Cost 2013 £

2012 £

2012 £

765,000

765,000

24,866

24,866

4,376,932 18,520,452

3,619,567 18,782,602

3,657,879 18,858,099

3,537,718 18,362,299

22,897,384

22,402,169

22,515,978

21,900,017

362,705

338,500

285,000

285,000

23,260,089

22,740,669

22,800,978

22,185,017

24,025,089 £

23,505,669

22,825,844 £

22,209,883

£

The investment property 28 Halkett Place was professionally valued, at open market value, by Buckley & Company Limited (Commercial Property Specialists) as at 30 September 2011 at £845,000 and revalued by the directors at 30 September 2012 at £765,000. It is the opinion of the directors, on receipt of an interim valuation, that the value of 28 Halkett Place remains unchanged at 30 September 2013.

A detailed list of financial investments is available for inspection at the Society’s offices.

The Aviva (formerly Norwich Union International) with-profit bond is valued on an annual basis and the value included in the accounts is the last known valuation.

8. LOANS Loans secured on freehold property have been made to certain members of staff. These loans are interest bearing and are repayable by specified annual instalments. The value of the loans receivable due after more than one year is £190,750 (2012: £234,500).

9. LAND AND BUILDINGS Current Value 2013 Freehold land and buildings

£

1,410,000 £

Historical Cost 2013

2012 1,410,000

£

282,916

£

2012 282,916

The freehold property 74-78 Halkett Place occupied by the Society was professionally valued, at open market value, by Buckley & Company Limited (Commercial Property Specialists) in September 2010 at £1,330,000 (original cost £282,916) and revalued by the directors at 30 September 2012 at £1,410,000. It is the opinion of the directors, on receipt of an interim valuation, that the value of the freehold property remains unchanged at 30 September 2013.

19

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 10. OTHER TANGIBLE ASSETS Computer Equipment £

Office Furniture and Equipment £

Total £

Cost At 1 October 2012 Additions

160,425 60,982

419,202 7,555

579,627 68,537

At 30 September 2013

221,407

426,757

648,164

Depreciation At 1 October 2012 Charge for the year

103,862 -

419,201 755

523,063 755

At 30 September 2013

103,862

419,956

523,818

Net book values At 30 September 2013

£

117,545 £

6,801 £

124,346

At 30 September 2012

£

56,563 £

1 £

56,564

The Society is in the process of installing a new computer and operating system and has budgeted £200,000 for its procurement and installation. To date £117,544 has been expended. Depreciation of the new system will not commence until installation is complete.

11. CLAIM PAYMENTS AND PREPAYMENTS 2013 £ 358,331 8,795

Interim claim payments made Prepayments £

2012 £ 457,897 11,317

367,126

£

469,214

12. RECONCILIATION OF MOVEMENTS IN MEMBERS' FUNDS

At 1 October 2012 Surplus for the year At 30 September 2013

2013 £ 26,231,551 235,289

2012 £ 24,623,511 1,608,040

£ 26,466,840

£ 26,231,551

Included within members' funds are £1,127,084 (2012: £1,127,084) of revaluation reserves relating to the revaluation of freehold property occupied by the Society (note 9).

20

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 13. RECONCILIATION OF SURPLUS PER ACCOUNTS TO NET CASH INFLOW FROM OPERATING ACTIVITIES

Surplus before tax Depreciation charges Realised and unrealised investment gains Movement in technical provisions Movement in other debtors and creditors

2013 £ 241,663 755 34,427 76,643 (161,913)

2012 £ 1,608,040 (913,470) (68,600) 489,500

Net cash inflow from operating activities

£ 191,575

£ 1,115,470

2013 £ (1,375,219) (9,374,892) 1,241,218 8,955,047

2012 £ (3,311,286) (19,705,315) 4,762,931 18,289,433

14. ANALYSIS OF NET PORTFOLIO INVESTMENT

Purchase of ordinary shares Purchase of fixed income securities Sale of ordinary shares Sale of fixed income securities Net cash (outflow)/inflow in portfolio investments

£ (553,846)

£ 35,763

15. MOVEMENT IN CASH AND PORTFOLIO INVESTMENTS At 1 October 2012 £ Cash at bank and in hand Listed equity shares Listed fixed income securities Unlisted financial investments

1,798,240 3,619,567 18,782,602 338,500 £

24,538,909 £

Cash Flow £

Changes to market value and other movements £

(381,149) 134,001 419,845 172,697 £

623,364 (681,995) 24,205 (34,426) £

21

At 30 September 2013 £ 1,417,091 4,376,932 18,520,452 362,705 24,677,180

NOTES TO THE FINANCIAL STATEMENTS continued 30 September 2013 16. PENSION COSTS The Society operates three defined contribution pension schemes. The pension benefit is dependent upon the value of the individual’s fund at retirement date.

Previously two of the defined contribution pension schemes were run on a linked basis. Additional payments have been made to meet targeted requirements with a final provision of £35,000 included in the 2012 accounts.

Contributions have since been capped at 15% of salary.

The pension cost for the year ended 30 September 2013 was £57,892 (2012: £92,506).

17. RELATED PARTY TRANSACTIONS The Rules of the Society require that the directors are selected from members of the Society. As such, insurance premiums are received from, and insurance claims may be paid to, directors in accordance with the Society’s usual terms of business.

18. REPAIRS TO INVESTMENT PROPERTY The Society has provided £190,000 for remedial works planned to the roof of 28 Halkett Place.

19. ULTIMATE CONTROLLING PARTY There is no ultimate controlling party since the Society is owned by its members.

22

Established 1869 Incorporated 1908 Jersey Mutual Insurance Society 74 Halkett Place St. Helier Jersey Channel Islands JE1 1BT Tel. 01534 734246 Fax. 01534 733381 www.jerseymutual.com