Consolidated statement of cash flows
For the year ended 31 December 2012
2012 2011
Note £000 £000
Profit before tax 217,124 17,271
Adjustments for:
Interest and equity dividend income (45,699) (50,333)
Interest expense 8,605 6,698
Net fair value (gains)/losses on financial assets (37,654) 30,878
Depreciation, amortisation and impairment 14, 15 7,833 8,098
Charges in respect of share based payments 9, 24 6,135 8,677
Other non-cash movements 1,239 (1,070)
Effect of exchange rate fluctuations on cash presented separately 9,481 (1,451)
Changes in operational assets and liabilities:
Insurance and reinsurance contracts (8,245) 138,667
Financial assets carried at fair value (49,377) 78,501
Financial liabilities carried at fair value 301 (457)
Other assets and liabilities 12,850 (18,888)
Cash flows from operations 122,593 216,591
Interest received 51,743 50,244
Equity dividends received 1,631 1,531
Interest paid (7,256) (6,163)
Current tax received/(paid) 56,403 (4,003)
Net cash flows from operating activities 225,114 258,200
Cash flows from the sale and purchase of associates 16 (3,104) 729
Cash flows from the purchase of property, plant and equipment (3,103) (2,561)
Cash flows from the purchase of intangible assets (7,505) (9,992)
Net cash flows from investing activities (13,712) (11,824)
Proceeds from the issue of ordinary shares 24 1,701 3,215
Dividends paid to owners of the Company 32 (62,507) (50,512)
Net repayments of borrowings – (20,000)
Net cash flows from financing activities (60,806) (67,297)
Net increase in cash and cash equivalents 150,596 179,079
Cash and cash equivalents at 1 January 516,547 336,017
Net increase in cash and cash equivalents 150,596 179,079
Effect of exchange rate fluctuations on cash and cash equivalents (9,481) 1,451
Cash and cash equivalents at 31 December 23 657,662 516,547
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 totaling £86,168,000 (2011: £77,203,000) not available
for immediate use by the Group outside of the Lloyd’s syndicate within which they are held.
The notes on pages 55 to 103 are an integral part of these consolidated financial statements.
54 Consolidated statement of cash flows Hiscox Ltd Report and Accounts 2012