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Consolidated statement of cash flows
For the year ended 31 December 2009
2009 2008
Note £000 £000
Profit before tax 320,618 105,180
Adjustments for:
Interest and equity dividend income (78,298) (92,227)
Interest expense 5,293 5,158
Net fair value (gains)/losses on financial investments and derivatives (87,692) 180,085
Depreciation and amortisation 15,16 6,046 5,323
Charges in respect of share based payments 10 5,260 5,269
Other non-cash movements (975) (766)
Effect of exchange rate fluctuations on cash presented separately 30,844 (62,086)
Changes in operational assets and liabilities:
Insurance and reinsurance contracts (58,366) 281,633
Financial assets carried at fair value (338,556) (284,069)
Financial liabilities carried at fair value (52,533) –
Other assets and liabilities 36,560 (10,474)
Cash flows from operations (211,799) 133,026
Interest received 74,584 89,608
Equity dividends received 3,714 2,619
Interest paid (5,066) (5,327)
Current tax paid (1,463) (18,982)
Net cash flows from operating activities (140,030) 200,944
Cash outflow from the acquisition of subsidiary 34 – (3,137)
Cash outflow from the sale of subsidiaries 35 – (42)
Cash outflow from the acquisition of associates 17 – (5,438)
Cash flows from the purchase of property, plant and equipment (8,802) (4,521)
Cash flows from the purchase of intangible assets (2,911) (3,530)
Net cash flows from investing activities (11,713) (16,668)
Proceeds from the issue of ordinary shares 25 2,504 4,632
Cash flows from the purchase of own shares including those arising on share buy-back programme 26 – (65,066)
Dividends paid to owners of the Company 33 (48,613) (46,756)
Net receipts/(repayments) of borrowings 47,721 (1,292)
Net cash flows from financing activities 1,612 (108,482)
Net (decrease)/increase in cash and cash equivalents (150,131) 75,794
Cash and cash equivalents at 1 January 440,622 302,742
Net increase in cash and cash equivalents (150,131) 75,794
Effect of exchange rate fluctuations on cash and cash equivalents (30,844) 62,086
Cash and cash equivalents at 31 December 24 259,647 440,622
The purchase, maturity and disposal of financial assets is part of the Group’s insurance activities and is therefore classified
as an operating cash flow. The purchase, maturity and disposal of derivative contracts is also classified as an operating cash flow.
Included within cash and cash equivalents held by the Group are balances totalling £31,607,000 (2008: £47,094,000) not available
for immediate use by the Group outside of the Lloyd’s syndicate within which they are held.
The notes on pages 52 to 99 are an integral part of these consolidated financial statements.
Consolidated statement of cash flows Hiscox Ltd Report and Accounts 2009
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