Download PDF - Hiscox

More documents

Recommendations

Info

Notes to the consolidated financial statements continued 14 Foreign currency items on economic hedges and intragroup borrowings continued The contracts expired in January 2009 and a gain of £314,000 was recognised for the year ended 31 December 2009. Formal hedge accounting designation was not achievable due to the specific effectiveness requirements of IAS 39. The Group did not enter into any new economic hedging derivative contracts during the current year. 15 Intangible assets 78 Notes to the consolidated financial statements <strong>Hiscox</strong> Ltd Report and Accounts 2009 State Syndicate authorisation Goodwill capacity licences Other Total £000 £000 £000 £000 £000 At 1 January 2008 Cost 8,496 24,505 5,083 5,361 43,445 Accumulated amortisation and impairment (2,430) – – (563) (2,993) Net book amount 6,066 24,505 5,083 4,798 40,452 Year ended 31 December 2008 Opening net book amount 6,066 24,505 5,083 4,798 40,452 Additions in year on business combinations 1,909 – 1,225 – 3,134 Other additions – – – 5,230 5,230 Amortisation charges – – – (259) (259) Closing net book amount At 31 December 2008 7,975 24,505 6,308 9,769 48,557 Cost 10,405 24,505 6,308 10,591 51,809 Accumulated amortisation and impairment (2,430) – – (822) (3,252) Net book amount 7,975 24,505 6,308 9,769 48,557 Year ended 31 December 2009 Opening net book amount 7,975 24,505 6,308 9,769 48,557 Other additions – – – 2,775 2,775 Amortisation charges – – – (919) (919) Closing net book amount At 31 December 2009 7,975 24,505 6,308 11,625 50,413 Cost 10,405 24,505 6,308 13,366 54,584 Accumulated amortisation and impairment (2,430) – – (1,741) (4,171) Net book amount 7,975 24,505 6,308 11,625 50,413 Goodwill is allocated to the Group’s cash generating units (CGUs) identified according to country of operation and business segment. Goodwill is considered to have an indefinite life and as such is tested for impairment annually on a value in use basis similar to that described below for the Group's intangible asset relating to Syndicate capacity. Accumulated amortisation and impairment of goodwill relates to the amortisation charged prior to the Group’s adoption of IFRS. The Group’s intangible asset relating to Syndicate capacity has been allocated, for impairment testing purposes, to one individual CGU being the active Lloyd’s corporate member entity. The Group has considered the recoverable amount from the active Lloyd’s corporate member entity on a value in use basis. This calculation uses cash flow projections based on financial forecasts approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated based on an average level of return and annual growth estimated at 2.5% (2008: 2%) consistent with the industry long-term average. A pre-tax discount factor of 1.8% (2008: 7%) has been applied to projected cash flows as part of the exercise. The results of this exercise indicate that the recoverable amount significantly exceeds the intangible’s carrying value and would not be sensitive to reasonably possible changes in assumptions. The Group’s weighted average cost recognised on the balance sheet is significantly below the average open market price witnessed in the recent Lloyd’s of London Syndicate 33 capacity auctions in Autumn 2009. The Group has previously recognised intangible assets totalling £6,308,000 relating to insurance authorisation licences for 50 US states acquired in the business combination of ALTOHA Inc. (note 34). This intangible asset has been allocated for impairment testing purposes to one individual CGU being the Group’s North American underwriting businesses. The Group has considered the recoverable amount of this CGU on a consistent basis to the active Lloyd’s corporate member entity outlined above.
15 Intangible assets continued Other intangible assets relate to the costs of acquiring rights to customer contractual relationships from AON Limited in 2007, and the additions during 2008 and 2009 relate to software licence and development costs. The amortisation charge for the year includes £660,000 (2008: £nil) relating to capitalised software costs and is included in other expenses in the income statement. The net book value of capitalised software costs at 31 December 2009 was £7,368,000 (2008: £5,230,000). There are no charges for impairment during the current or prior financial year. At 31 December 2009 there were no assets under development on which no amortisation has been charged (2008: £5,230,000). 16 Property, plant and equipment Furniture, fittings and Land and Leasehold equipment buildings improvements Vehicles and art Total £000 £000 £000 £000 £000 At 1 January 2008 Cost 2,985 1,044 896 34,978 39,903 Accumulated depreciation (160) (379) (300) (19,686) (20,525) Net book amount Year ended 31 December 2008 2,825 665 596 15,292 19,378 Opening net book amount 2,825 665 596 15,292 19,378 Additions – 257 145 4,450 4,852 Disposals – – (47) (23) (70) Depreciation charge (40) (222) (144) (4,917) (5,323) Foreign exchange movements – 254 – 577 831 Closing net book amount At 31 December 2008 2,785 954 550 15,379 19,668 Cost 2,985 1,700 968 40,413 46,066 Accumulated depreciation (200) (746) (418) (25,034) (26,398) Net book amount 2,785 954 550 15,379 19,668 Year ended 31 December 2009 Opening net book amount 2,785 954 550 15,379 19,668 Additions 3,022 2,286 – 2,938 8,246 Disposals – (214) (13) (69) (296) Depreciation charge (59) (330) (94) (4,644) (5,127) Foreign exchange movements – (95) (1) (151) (247) Closing net book amount At 31 December 2009 5,748 2,601 442 13,453 22,244 Cost 6,007 3,807 940 42,732 53,486 Accumulated depreciation (259) (1,206) (498) (29,279) (31,242) Net book amount 5,748 2,601 442 13,453 22,244 The Group’s land and buildings assets relate to freehold property in the UK and US. Assets with a net book value of £398,000 were held under finance leases (2008: £582,000). The total depreciation charge for the year in respect of assets held under finance leases was £56,000 (2008: £116,000) and is included in other expenses. At 31 December 2009 there were £1,906,000 of assets under development upon which no depreciation has yet been charged (2008: £3,106,000). Notes to the consolidated financial statements <strong>Hiscox</strong> Ltd Report and Accounts 2009 79
Page 1 and 2:
Hiscox Ltd Report and Accounts 2009
Page 3 and 4:
Corporate highlights Group key perf
Page 5 and 6:
Chairman’s statement It is an eno
Page 7 and 8:
Chief Executive’s report In 2009
Page 9 and 10:
Hiscox London Market Hiscox London
Page 11 and 12:
We have also worked hard to develop
Page 13 and 14:
We have continued to invest in trai
Page 15 and 16:
Hiscox London Market Hiscox London
Page 17 and 18:
Group financial performance Group f
Page 19 and 20:
The expense ratio deteriorated by 7
Page 21 and 22:
High quality and well diversified p
Page 23 and 24:
Risk management The risk management
Page 25 and 26:
Credit Reinsurance counterparties T
Page 27 and 28:
Boxplot and whisker diagram of Hisc
Page 29 and 30: in essence a non-bureaucratic organ
Page 31 and 32: Cougar Syndicate 6104 Cougar Syndic
Page 33 and 34: Hiscox Insurance Company (Bermuda)
Page 35 and 36: Independent Non Executive Directors
Page 37 and 38: ecent and relevant financial experi
Page 39 and 40: Directors’ remuneration report Th
Page 41 and 42: Executive Directors’ cash incenti
Page 43 and 44: Remuneration of Executive Directors
Page 45 and 46: Share options Number of Number of M
Page 47 and 48: Directors’ report The Directors h
Page 49 and 50: Report of the independent registere
Page 51 and 52: Consolidated balance sheet At 31 De
Page 53 and 54: Consolidated statement of cash flow
Page 55 and 56: 2 Significant accounting policies c
Page 63 and 64: 3 Management of risk continued 3.1
Page 75 and 76: 4 Operating segments continued (a)
Page 77 and 78: 5 Net asset value per share 2009 20
Page 79: 12 Auditors’ remuneration continu
Page 83 and 84: 19 Reinsurance assets 2009 2008 Not
Page 85 and 86: 22 Derivative financial instruments
Page 87 and 88: 23 Fair value measurements continue
Page 89 and 90: 25 Share capital continued Share op
Page 91 and 92: 27 Insurance liabilities and reinsu
Page 93 and 94: 27 Insurance liabilities and reinsu
Page 95 and 96: 30 Deferred tax continued (b) Group
Page 97 and 98: 31 Employee retirement benefit obli
Page 99 and 100: 36 Contingencies and guarantees con
Page 101 and 102: 38 Principal subsidiary companies o
Page 103 and 104: To request a copy of the 2009 Hisco
show all

Download PDF - Hiscox

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?