TCI NIB Annual Report 2014 / 2015

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD FINANCIAL STATEMENT Notes to Financial Statements, continued 2015 Year ended March 31, 2015 3. Significant accounting policies, continued (f) Impairment, continued (i) Financial assets, continued Available-for-sale financial assets Impairment losses on available-for-sale investment securities are recognised by NIB in the statement of income, expenses and reserves. Changes in cumulative impairment losses attributable to application of the effective interest rate method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt and equity security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised in the statement of income, expenses and reserves, then the impairment loss is reversed by NIB, with the amount of the reversal recognised in the statement of income, expenses and reserves. (ii) Non-financial assets The carrying amounts of NIB’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash- generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGUs. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Impairment losses are recognised in the statement of income, expenses and reserves. In respect of other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised. 22 49

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 FINANCIAL 3. Significant accounting policies, continued STATEMENT (g) Leases (i) Operating leases 2015 Leases in which a significant portion of the risks and rewards of ownership are 50 retained by the lessor, are classified as operating leases. Assets leased out under operating leases are included in investment property on the statement of financial position. Rental expenses and rental income are recognised in the statement of income, expenses and reserves on a straight-line basis over the term of the lease. (ii) Finance leases Assets held by NIB under leases which transfer substantially all of the risks and rewards of ownership to NIB are classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Assets held under other leases are classified as operating leases and are not recognised on NIB’s statement of financial position. NIB considers whether a lease is a finance lease or an operating lease based on the substance of the transaction rather than the form. The following characteristics are considered by NIB that would normally lead to a lease being classified as a finance lease:  the lease transfers ownership of the asset to the lessee by the end of the lease term;  the lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable and, at the inception of the lease, it is reasonably certain that the option will be exercised;  the lease term is for the major part of the economic life of the asset, even if title is not transferred;  at the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset; and  the leased assets are of a specialised nature such that only the lessee can use them without major modifications being made. 23

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD FINANCIAL STATEMENT Notes to Financial Statements, continued 2015 Year ended March 31, 2015 3. Significant accounting policies, continued (h) Taxation Under current TCI law, NIB is not required to pay any taxes in TCI on either income or capital gains. Consequently, no tax liability or expense has been recorded in these financial statements. (i) Actuarial present value of promised retirement benefits IAS 26 permits the recognition of long-term liabilities for retirement benefits on the statement of financial position, in the notes to the financial statements or in an accompanying actuarial report. NIB has elected to recognise the actuarial present value of its promised retirement benefits in the notes to the financial statements (note 22). The actuarial present value of other long-term benefits have been recognised as a liability for all reporting periods. (j) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.   (k) New standards, amendments to standards and interpretations not yet adopted New and amended standards adopted by NIB New standards, amendments and interpretations to published standards that became effective for the financial year beginning April 1, 2014 were either not relevant or not significant to NIB’s operations and accordingly did not have a material impact on NIB’s accounting policies or financial statements. New standards, amendments and interpretations issued but not effective for the financial year beginning April 1, 2014 and not early adopted by NIB The application of new standards and amendments and interpretations to existing standards that have been published but are not yet effective are not expected to have a material impact on NIB’s accounting policies or financial statements in the period of initial application. 24 51

FINANCIAL TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD STATEMENT Notes to Financial Statements, continued 2015 Year ended March 31, 2015 4. Determination of fair values A number of NIB’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes, as described below. Where applicable, further information about the assumptions made in determining fair value has been disclosed in the notes specific to that asset or liability. Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Where an active market exists market price is used as the best evidence of the fair value of a financial instrument. Where no market price is available, the fair values presented have been estimated using present value or other estimation and valuation techniques based on market conditions existing at the reporting date. The values derived from applying these techniques are significantly affected by the underlying assumptions used concerning both the amounts and timing of future cash flows and the discount rates. The following methods and assumptions have been used:  The fair value of liquid assets and other assets maturing within one year is assumed to approximate their carrying amount. This assumption is applied to liquid assets and the short-term elements of all other financial assets and financial liabilities; and  The fair value of variable-rate financial instruments is assumed to approximate their carrying amounts. (a) Available-for-sale financial assets The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date. (b) Investment in, and assets held with, TCI Bank NIB’s investment in TCI Bank Limited (TCI Bank) has been accounted for using the fair value model so as to comply with IAS 26. Changes in fair value are recognised in the statement of income, expenses and reserves. The fair value of NIB’s investment in TCI Bank was assessed by NIB’s management to be US$nil at March 31, 2015 and March 31, 2014 as a consequence of TCI Bank entering provisional liquidation on April 9, 2010 and liquidation on October 29, 2010. The fair value of NIB’s other, non-secured, assets held with TCI Bank were reduced by 56% of the total amounts held at the date TCI Bank entered provisional liquidation, being management’s best estimate of an appropriate fair value adjustment in the circumstances. 52 25

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 4. Determination of fair values, continued FINANCIAL (c) Loans and receivables STATEMENT With the exception of assets held with TCI Bank the fair value of loans and 2015 receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. The fair value of assets held with TCI Bank has been estimated by NIB’s management. (d) Provisions for long-term benefits, other than retirement benefits The fair value of provisions for long-term benefits, other than retirement benefits, is estimated as the present value of future cash out flows discounted at a rate of 4.5% at the reporting date (note 22). (e) Other financial instruments Due to their short-term nature the carrying amounts of other financial assets and liabilities of NIB approximate their fair value. When measuring the fair value of an asset or a liability, NIB uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:  Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;  Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. NIB recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. 5. Cash and cash equivalents 2015 2014 Cash on hand US$ 3,428 3,428 Cash at investment managers US$ 4,643,918 5,696,221 Cash at banks – savings and current accounts 30,628,019 39,205,846 35,275,365 44,905,495 26 53

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 5. Cash and cash equivalents, continued The US$4,643,918 cash held with investment managers at March 31, 2015 (2014: US$5,696,221) was held for the following investment accounts: 2015 2014 Non U.S. equities US$ 1,971,562 1,802,149 U.S. equities US$ 400,459 433,198 Large cap growth 705,471 585,984 Large cap value 347,966 297,533 Mid cap growth 142,389 362,904 Small cap core 402,709 451,634 Convertibles 379,339 Hedge funds 294,023 – Fixed income 1,667,205 Alternative investments – 95,614 4,643,918 5,696,221 During the year, cash held with investment managers earned interest at rates of 0.01% (2014: 0.01% to 0.02%). For NIB’s internal investment guidelines cash held by investment managers is considered to be part of available-for-sale financial assets. The US$30,628,019 cash at banks – savings and current accounts at March 31, 2015 (2014: US$39,205,846) were held as follows: 2015 2014 FINANCIAL CIBC First Caribbean International Bank US$ 22,898,003 30,844,839 STATEMENT (Bahamas) Limited (CIBC) 540,007 1,199,692 2015 Interest bearing account 7,189,164 7,160,470 Non-interest bearing account 845 845 Scotiabank (Turks and Caicos) Ltd. (Scotiabank) Interest bearing account US$ 30,628,019 39,205,846 Non-interest bearing account During the year, interest bearing accounts with CIBC and Scotiabank earned interest at rates of 0.40% to 0.45% (2014: 0.40% to 0.45%). 54 27

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 6. Contributions and other receivables 2015 2014 Contributions receivable US$ 3,959,971 3,144,005 Other receivables – net 683,354 553,163 Allowance for impairment 4,643,325 3,697,168 (1,399,755) (906,601) US$ 3,243,570 2,790,567 The movement on the allowance for impairment of contributions receivable for the year ended was as follows: 2015 2014 At April 1 US$ 906,601 1,054,876 Impairment losses recognised US$ 612,457 11,850 Accounts directly written-off (119,303) (160,125) At March 31 1,399,755 906,601 The US$683,354 other receivables at March 31, 2015 (2014: US$553,163) comprised the following: 2015 2014 Interest receivable – net of change in fair value US$ 305,394 332,531 FINANCIAL of US$97,012 (2014: US$97,012) US$ STATEMENT 199,146 220,632 Other receivables – net of change in fair value 2015 of US$129,477 (2014: US$125,076) 178,814 – 683,354 553,163 Surcharges receivable – net of change in fair value of US$1,543,617 (2014: US$nil) Surcharges On April 1, 2014 NIB changed its accounting policy with respect to recognition of surcharges due on late contributions from a cash basis of accounting to an accruals basis of accounting to comply with IAS 18. IAS 8 requires this change in accounting policy to be applied retrospectively when the effect of applying the new accounting policy is material. NIB’s management decided not to restate the corresponding figures as there was no material impact on NIB’s financial statements. Due to this change in accounting policy from a cash to an accruals basis of accounting, NIB recognised surcharges receivable of US$1,722,431 (gross of impairment loss of US$1,543,617) at March 31, 2015, additional surcharge income of U$1,722,431 and an impairment loss of US$1,543,617 (note 16) in the statement of income, expenses and reserves for the year ended March 31, 2015. Combined with the other surcharge income recognised of US$367,258, total surcharge income for the year ended March 31, 2015 was US$2,089,689 (2014: US$434,134). 28 55

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 7. Available-for-sale financial assets Available-for-sale financial assets at March 31, 2015 and 2014 can be analysed as follows: Cost Market Value 2015 2014 2015 2014 Equity securities US$ 109,374,542 79,517,147 125,429,367 98,691,907 Government debt securities 24,496,251 35,117,953 25,130,562 34,983,153 Corporate debt securities 21,400,018 12,313,758 21,980,160 13,349,903 US$ 155,270,811 126,948,858 172,540,089 147,024,963 During the year, equity securities earned dividends with rates of return of 0.72% to 5.38% (2014: 0.75% to 4.63%) while government and corporate debt securities earned interest at rates of 1.41% to 3.23% (2014: 2.15% to 2.86%) with coupon rates ranging from 0.25% to 8.5% (2014: 0.25% to 6.5%). The US$172,540,089 available-for-sale financial assets at March 31, 2015 (2014: US$147,024,963) were held by UBS Financial Services Inc. and managed by investment managers. Available-for-sale financial assets, excluding cash held with investment managers (note 5), at March 31, 2015 and 2014 were classified per NIB’s Investment Policy Statement (IPS) (note 20(c)(ii)) as follows: 2015 2014 FINANCIAL Fixed income US$ 38,894,978 42,240,020 STATEMENT U.S. equities 18,386,736 16,475,473 2015 Large cap growth 16,516,746 14,499,035 Large cap value Mid cap growth 9,715,558 1,698,538 Small cap core 6,259,040 4,987,380 Non U.S. equities 42,101,306 41,984,747 Hedge Funds 21,908,504 Convertibles 11,152,341 – Commodities 6,554,880 7,466,863 Private Equity 1,050,000 Alternative investments – – – 17,672,907 US$ 172,540,089 147,024,963 56 29

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 8. Long-term receivables 2015 2014 Loans to TCI Investment Agency Ltd. US$ 1,853,811 2,346,893 TCIG bonds US$ 1,039,213 1,209,989 Less current portion 2,893,024 3,556,882 (562,721) (643,082) 2,330,303 2,913,800 (a) Loans to TCI Investment Agency Ltd. Loan one US$ 2015 2014 Loan two US$ Loan three 125,000 187,500 500,000 562,500 Less current portion 1,228,811 1,596,893 1,853,811 2,346,893 (412,721) (493,082) 1,441,090 1,853,811 (i) Loan one On September 20, 1997, NIB entered into a US$1 million loan agreement with TCI Investment Agency Ltd., an inward investment agency in TCI with a mandate to attract new inward investment, encourage entrepreneurship amongst residents and provide financing to the local population. The remaining outstanding balance of US$125,000 at March 31, 2015 (2014: FINANCIAL US$187,500) bears interest at a rate of 4.75% per annum. The maturity date of STATEMENT the loan is September 30, 2017 and it is being repaid in equal quarterly instalments of US$12,500 of principal plus related interest. 2015 During the year ended March 31, 2015, NIB collected US$62,500 (2014: US$50,000) in principal and recognised US$7,424 (2014: US$9,799) in interest income. The loan is guaranteed by TCIG. (ii) Loan two On February 24, 2005, NIB entered into a second US$1 million loan agreement with TCI Investment Agency Ltd. The remaining outstanding balance of US$500,000 at March 31, 2015 (2014: US$562,500) bears interest at a rate of 5.00% per annum. The maturity date of the loan is March 31, 2025 and it is being repaid in equal quarterly instalments of US$12,500 of principal plus related interest. During the year ended March 31, 2015, NIB collected US$62,500 (2014: 57 US$50,000) in principal and recognised US$26,565 (2014: US$29,065) in interest income. The loan is guaranteed by TCIG. 30

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 8. Long-term receivables, continued (a) Loans to TCI Investment Agency Ltd., continued (iii) Loan three On January 30, 2006, NIB entered into a US$3 million loan agreement with TCI Investment Agency Ltd. as follows: Purpose of loan Interest rate Maturity date Loan per annum granted Low income support lending 5.0% December 31, 2025 US$ 600,000 Educational lending 5.0% December 31, 2017 US$ 1,200,000 Commercial lending 6.0% December 31, 2017 1,200,000 3,000,000 The remaining outstanding balance of US$1,228,811 at March 31, 2015 (2014: US$1,596,893) is being repaid in equal quarterly instalments of principal including interest. Principal repayments for the educational loan commenced in March 2010. The loan is guaranteed by TCIG. During the year ended March 31, 2015, NIB collected US$368,082 (2014: US$277,248) in principal and recognised US$75,128 (2014: US$90,569) in interest income. Principal payment Interest earned 2015 2014 2015 2014 FINANCIAL Low income support lending US$ 33,490 25,334 20,675 21,981 STATEMENT Educational lending 192,175 145,374 28,227 35,726 Commercial lending 142,417 106,540 26,226 32,862 2015 US$ 368,082 277,248 75,128 90,569 The contractual maturity of total outstanding loans to TCI Investment Agency Ltd. at year end, which will be repaid by TCIG, were due as follows: 2015 2014 Within one year US$ 412,721 493,082 More than one year, less than two years US$ 429,920 412,721 More than two years, less than three years 353,845 429,920 More than three years, less than four years 353,845 More than four years 82,885 657,325 574,440 2,346,893 1,853,811 58 31

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 8. Long-term receivables, continued (b) TCIG bonds 2015 2014 Face value of TCIG bonds US$ 1,500,000 1,500,000 Repayment of face value US$ (600,000) (450,000) Premiums 900,000 1,050,000 Accumulated change in fair value 250,000 250,000 Fair value (110,787) (90,011) 1,039,213 1,209,989 During the year the change in fair value of TCIG bonds was US$20,776 (2014: US$20,776) (note 14). 2015 2014 Fair value US$ 1,039,213 1,209,989 Less current portion (150,000) (150,000) US$ 889,213 1,059,989 On December 28, 2009 TCI Bank, a beneficial owner of 150 non-callable bonds FINANCIAL issued by TCIG, transferred these bonds to NIB pursuant to a Deed of Assignment. STATEMENT The TCIG bonds have a US$10,000 par value each, a coupon rate of 8% and a maturity date of November 30, 2021. The TCIG bonds are repayable in twenty equal 2015 semi-annual instalments of US$75,000 on the 31st day of May and the 30th day of November in each and every year commencing on May 31, 2011. The 150 non-callable bonds were transferred for a total cash consideration of US$1,750,000. Interest is payable on a semi-annual basis and secured by TCIG’s reserves and assets. The premium paid is being recognised as a fair value change over the period to maturity. During the year NIB earned US$56,034 (2014: US$67,498) of interest on the non- callable bonds which was included as part of interest and other income in the statement of income, expenses and reserves. The total remaining face value of TCIG bonds due at year end was as follows: 2015 2014 Within one year US$ 150,000 150,000 More than one year, less than two years US$ 150,000 150,000 More than two years, less than three years 150,000 150,000 More than three years, less than four years 150,000 150,000 More than four years 300,000 450,000 900,000 1,050,000 32 59

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 9. Long-term deposits 2015 2014 Current account US$ 12,924 12,924 Certificates of deposit US$ 4,151,674 4,151,674 Less current portion 4,164,598 4,164,598 (3,470,498) – 694,100 4,164,598 On May 20, 2015, subsequent to the year end, NIB received a second interim distribution of US$3,511,002 from the liquidator of TCI Bank representing 20 cents on the dollar for NIB’s current account (US$10,770), certificates of deposit (US$3,459,728) and interest receivable (US$40,504) held with TCI Bank. 2015 2014 Current account US$ 53,849 53,849 Certificates of deposit 17,298,642 17,298,642 17,352,491 Less: first interim distribution Current account 17,352,491 (10,770) Certificates of deposit (3,459,728) (10,770) (3,470,498) Balance (3,459,728) Current account 43,079 Certificates of deposit (3,470,498) 13,838,914 . 13,881,993 Less: reductions in fair value 43,079 Current account 13,838,914 (30,155) Certificates of deposit (9,687,240) . 13,881,993 (9,717,395) FINANCIAL (30,155) STATEMENT (9,687,240) 2015 (9,717,395) US$ 4,164,598 4,164,598 All long-term deposits are held with TCI Bank. TCI Bank was placed into provisional liquidation on April 9, 2010 and liquidation on October 29, 2010. NIB management estimated a 56% reduction in fair value of NIB’s deposits with TCI Bank as being appropriate at March 31, 2015 and March 31, 2014, representing NIB management’s best estimate of an appropriate fair value adjustment in the circumstances. On September 10, 2012 NIB received a first interim distribution of US$3,511,002 from the liquidator of TCI Bank representing 20 cents on the dollar for NIB’s current account (US$10,770), certificates of deposit (US$3,459,728) and interest receivable (US$40,504) held with TCI Bank. NIB received a second interim distribution of US$3,511,002 subsequent to the year end. 60 33

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 9. Long-term deposits, continued Due to the uncertainty regarding when, and how much, of NIB’s deposits with TCI Bank will be repaid, NIB’s management determined it appropriate to classify the current account and certificates of deposit held with TCI Bank, net of subsequent collections, as non-current assets for financial reporting purposes. 10. Property and equipment Land and Furniture & Computer Motor Buildings Fixtures Equipment Vehicles Total Cost: US$ 3,722,797 729,074 1,506,382 239,581 6,197,834 130,779 99 27,436 97,819 256,133 April 1, 2013 – (64,919) (490,057) Additions (1,812) (423,326) Disposals 3,853,576 272,481 5,963,910 727,361 1,110,492 March 31, 2014 April 1, 2014 3,853,576 727,361 1,110,492 272,481 5,963,910 Additions 1,027,063 12,482 10,387 – 1,049,932 Disposals – (388,167) – (192,429) (195,738) March 31, 2015 272,481 6,625,675 4,880,639 547,414 925,141 Accumulated depreciation: 1,172,955 510,007 1,379,618 176,167 3,238,747 145,837 72,567 44,186 35,088 297,678 April 1, 2013 – (1,812) (64,919) (490,057) Charge for the year (423,326) Disposals 1,318,792 580,762 146,336 3,046,368 1,000,478 March 31, 2014 April 1, 2014 1,318,792 580,762 1,000,478 146,336 3,046,368 FINANCIAL Charge for the year 165,075 41,635 59,183 55,746 321,639 STATEMENT Disposals – – (388,167) (192,429) (195,738) 2015 March 31, 2015 1,483,867 202,082 2,979,840 429,968 863,923 Carrying amounts: US$ 2,534,784 146,599 110,014 126,145 2,917,542 March 31, 2014 US$ 3,396,772 117,446 61,218 70,399 3,645,835 March 31, 2015 The cost of land included in land and buildings was US$70,500 representing US$500 for 61 land transferred by TCIG to NIB in April 2003 and US$70,000 for land leased for 999 years by TCIG to NIB in December 2012. Included in land and buildings is the Hon. L. Headley Durham building (previously TC Invest building) located on Grand Turk and a 999 year lease from TCIG on 0.56 acres of land where the building is located. NIB purchased the building from TCIG in November 2012. The original cost of the building was US$1,257,808 plus incidentals of US$15,070 while the total lease payment for the land for the entire 999 years was US$70,000. 34

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 FINANCIAL 10. Property and equipment, continued STATEMENT The fair value of the property, including land, in November 2012 was approximately 2015 US$1.33 million based on a September 2012 valuation, using a cost approach, by BCQS International, an external, independent valuation company, with recognised and relevant professional qualifications and recent experience in the location and category of property being valued. On January 18, 2013 TCIG granted a lease, in accordance with the provisions of the Crown Land Ordinance, to NIB for the aforementioned 0.56 acres of land. The term of the lease agreement is 999 years from the date of commencement of the lease term, being December 28, 2012. The total lease payment throughout the term of the lease is US$70,000 amortised over the lease term. Annual amortisation is included as part of depreciation expense in the statement of income, expenses and reserves. The cost of the building and the total payments for the leased land were paid in full by NIB in November 2012 as part of an Omnibus Agreement between NIB and TCIG. During the year NIB spent US$1.018 million (2014: US$117,880) for the renovation and modernisation of the Hon. L. Headley Durham building. No impairment losses were recognised for the years ended March 31, 2015 and 2014. 11. Investment in TCI Bank Limited At March 31, 2015 NIB owned 2,000,000 (2014: 2,000,000) ordinary shares in TCI Bank with an issued value of US$2,000,000 (2014: US$2,000,000), representing approximately 15.95% of the total issued ordinary shares of TCI Bank. NIB was represented on the board of directors of TCI Bank. As disclosed in notes 9 and 20 to these financial statements NIB also held a current account and certificates of deposit with TCI Bank at March 31, 2015 and 2014. The fair value of this investment at March 31, 2015 and 2014 was assessed by NIB’s management to be US$nil as a consequence of TCI Bank entering provisional liquidation on April 9, 2010 and liquidation on October 29, 2010. 12. Accounts payable and accrued expenses 2015 2014 Accrued employment injury costs US$ 790,058 340,058 Deferred contribution income US$ 372,207 217,292 Accrued short-term benefits 234,017 234,151 Other accrued expenses 156,749 308,707 Accounts payable 76,879 71,215 1,629,910 1,171,423 62 35

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 12. Accounts payable and accrued expenses, continued NIB is liable, per the Ordinance, for the cost of medical services provided in connection with employment injuries. NIB’s liabilities for medical costs relating to employment injuries for the period from its establishment to March 31, 2010 were settled as part of an Omnibus Agreement with TCIG. For the period from April 1, 2010 to March 31, 2015 NIB made an advance payment to the TCI National Health Insurance Board (NHIB) of US$612,000 towards medical costs in connection with employment injuries in the year ended March 31, 2011 and recognised this payment as an expense in that year. No medical care costs were paid or provided for during the years ended March 31, 2012 and March 31, 2013. Medical costs in connection with employment injuries of US$340,058 and US$450,000 were provided for during the years ended March 31, 2014 and March 31, 2015 respectively. At March 31, 2015 NIB included in accounts payable and accrued expenses US$790,058 (2014: US$340,058) representing NIB’s best estimate of its remaining obligation for medical costs in connection with employment injuries as at that date. Despite efforts by NIB, as at the date of issuance of these financial statements, no documentation has been provided to NIB to support medical costs incurred in relation to employment injuries for the period April 1, 2010 to March 31, 2015. 13. Income from, and net gains on, available-for-sale financial assets Dividend income, interest income 2015 2014 and realised gains from equity securities US$ 7,596,368 3,958,360 Interest income and realised gains 2,608,060 1,207,776 from government and corporate debt securities 5,166,136 US$ 10,204,428 FINANCIAL 14. Interest and other income STATEMENT 2015 Interest income from loans and receivables US$ 2015 2014 Interest income from savings and current accounts 188,222 219,574 138,937 144,747 Rental income 327,159 364,321 Other income 128,000 128,000 Change in fair value of TCIG Bond (note 8(b)) 17,414 20,821 US$ (20,776) (20,776) 451,797 492,366 36 63

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 14. Interest and other income, continued Rental income of US$128,000 (2014: US$128,000) is from TCIG. It relates to the rental of office space included in property and equipment. 15. Benefits 2015 2014 Long-term benefits US$ 7,357,129 6,453,572 Retirement pension benefit 911,555 878,848 Survivors benefit 740,918 792,015 Old age non contributory 719,228 749,902 Invalidity pension 147,810 116,398 Funeral grant 86,653 78,925 Retirement grant 22,466 2,420 Survivors grant 9,985,759 9,072,080 Short-term benefits Maternity allowance 843,509 822,154 Sickness benefit 828,482 716,382 Maternity grant 180,350 194,300 1,852,341 1,732,836 Employment injury benefits/disablement and death benefits 499,089 385,034 247,037 232,857 Injury benefit 108,418 129,728 Disablement benefit Death benefit 7,800 7,800 Constant attendance allowance 755,419 862,344 US$ 12,700,444 11,560,335 FINANCIAL Refer to note 22 for additional information on long-term benefits. STATEMENT For the period from April 1, 2010 to March 31, 2015 NIB made an advance payment to 2015 NHIB of US$612,000 towards medical costs in connection with employment injuries in the year ended March 31, 2011 and recognised this payment as an expense in that year. No medical care costs were paid or provided for during the years ended March 31, 2012 and March 31, 2013. Medical costs in connection with employment injuries of US$340,058 and US$450,000 were provided for during the years ended March 31, 2014 and March 31, 2015 respectively. At March 31, 2015 NIB included in accounts payable and accrued expenses US$790,058 (2014: US$340,058) representing NIB’s best estimate of its remaining obligation for medical costs in connection with employment injuries as at that date. Despite efforts by NIB, as at the date of issuance of these financial statements, no documentation has been provided to NIB to support medical costs incurred in relation to employment injuries for the period April 1, 2010 to March 31, 2015. 64 37

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 16. General and administrative expenses 2015 2014 Salaries and wages US$ 2,565,210 2,562,157 Impairment loss on surcharges receivable (note 6) 1,543,617 – Impairment loss on contributions receivable 612,457 11,850 297,678 Depreciation 321,639 368,449 277,546 Rent and utilities 259,211 135,540 117,300 Professional fees 242,473 116,154 Insurance 139,846 90,293 98,606 Board of directors and committee allowances 136,017 91,516 123,054 Security 114,082 46,316 Other expenses – net 104,878 – Communications 101,698 38,972 26,392 Maintenance expenses 94,928 21,318 21,962 Office supplies, stationery and postage 79,712 24,585 125,076 Travel and subsistence 78,705 (8,345) 4,586,419 Restoration and moving expenses 63,619 2014 Vehicle expenses 53,317 801,282 Training 33,225 135,233 Employees' allowances 23,791 59,409 44,122 Computer services 18,432 1,040,046 Advertising 16,198 143,233 25,454 Impairment loss on other receivables 4,401 1,208,733 Gain on sale of property and equipment (2,620) US$ 6,604,836 17. Investment expenses 2015 FINANCIAL STATEMENT Brokers’ fees on available-for-sale financial assets UBS Financial Services Inc. 2015 Merrill Lynch, Pierce Fenner & Smith Incorporated US$ 942,804 Morgan Stanley Smith Barney LLC US$ Wells Fargo Advisors, LLC – – Salaries of NIB’s investment personnel – Other investment expenses 942,804 132,044 72,067 1,146,915 38 65

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 18. Other comprehensive (loss)/income The US$2,806,827 other comprehensive loss for the year ended March 31, 2015 (2014: other comprehensive income US$9,218,322) related to changes in market value of available-for-sale financial assets in the year ended March 31, 2015 and 2014, respectively. The changes in market value of available-for-sale financial assets included in NIB’s reserves at March 31, 2015 and 2014 can be analysed as follows: Changes in market value at March 31 Movement 2015 2015 2014 Equity securities US$ 16,054,825 19,174,760 (3,119,935) Government debt securities US$ 634,311 (134,800) 769,111 Corporate debt securities 580,142 1,036,145 (456,003) 17,269,278 20,076,105 (2,806,827) Changes in market value at March 31 Movement 2014 2014 2013 Equity securities US$ 19,174,760 9,471,852 9,702,908 Government debt securities US$ (134,800) 596,635 (731,435) Corporate debt securities 789,296 246,849 1,036,145 10,857,783 9,218,322 20,076,105 FINANCIAL 19. Related party balances and transactions STATEMENT The following are transactions and balances with TCI Bank and TCIG, related parties by 2015 virtue of significant influence and common directors, including transactions with key management personnel, which are not separately disclosed elsewhere in these financial statements. 2015 2014 TCI Bank transactions US$ – 822,695 Repayment of interest on debenture loan - net 66 TCI Bank balances US$ 13,881,993 13,881,993 Long-term deposits (gross of change in fair value) US$ (9,814,407) (9,814,407) Reduction in fair value of assets held with TCI Bank US$ 2,000,000 2,000,000 Investment (before change in fair value) US$ (2,000,000) (2,000,000) Reduction in fair value of investment US$ Interest receivable (gross of change in fair value) 166,205 166,205 39

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 19. Related party balances and transactions, continued 2015 2014 TCIG transactions US$ 3,429,253 3,374,326 Collection of contributions US$ 2,146,575 2,173,106 (Employer and employees’ contributions) US$ 1,282,678 1,201,220 US$ Contributions – private sector US$ 450,000 340,058 (Employer and employees’ contributions) US$ 154,976 157,687 US$ 150,000 150,000 Contributions – civil servants US$ 128,000 128,000 US$ 124,295 128,621 Employment injury costs accrued 56,034 67,498 NIB’s payment of NHIB contributions Repayment of Treasury bond Rent income NIB’s payment of NIB contributions Interest income TCIG balances US$ 900,000 1,050,000 Treasury bonds – at par US$ 790,058 340,058 US$ 11,461 Accrued employment injury costs 11,461 Interest receivable Per the Ordinance, contributions from TCIG of US$1,282,678 (2014: US$1,201,220) FINANCIAL comprise contributions relating to TCIG officers only and these are reflected in the STATEMENT statement of income, expenses and reserves as contributions from civil servants. Contributions for TCIG employees are charged at the same rates as the private sector 2015 and, on this basis, have been included within the private sector contributions in the statement of income, expenses and reserves and for the purpose of allocating contributions amongst branches. 2015 2014 Key management personnel compensation US$ 300,986 293,920 Salary of the director and deputy directors US$ 23,000 23,000 Housing and gratuity benefits of the director US$ 10,707 10,707 Other benefits of the director and deputy directors US$ 85,200 78,600 Allowances of the board of directors Subsequent to year end the director’s employment ended and he received US$2,443 in termination benefits. 40 67

FINANCIAL TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD STATEMENT Notes to Financial Statements, continued 2015 Year ended March 31, 2015 20. Financial instruments NIB has exposure to the following risks from its use of financial instruments: (a) Credit risk (b) Liquidity risk (c) Market risk This note presents information about NIB’s exposure to each of the above risks, NIB’s objectives, policies and processes for measuring and managing risk, and NIB’s management of capital. Further quantitative disclosures are included throughout these financial statements. Risk management framework The Minister with responsibility for National Insurance (the Minister) appoints the Directors. The Directors have full discretionary power to direct, manage, allocate and rebalance or liquidate NIB’s investments in compliance with the terms of the IPS. The Directors established the IPS which communicates the investment philosophy of the Directors regarding NIB’s investments. The IPS creates a general framework within which the investment assets of NIB can be managed. The IPS envisages a rebalancing exercise at least semi-annually to keep asset allocations within recommended ranges. At March 31, 2015 and 2014 NIB kept its asset allocation, except for cash and money market instruments, within ranges recommended by the IPS (note 20 (c)(ii)). The Directors may appoint such person(s) as necessary to achieve NIB’s investment objectives. The pursuit of these objectives also involves assuming responsibility for the establishment and oversight of NIB’s risk management framework and for developing and monitoring NIB’s risk management policies. NIB’s risk management policies are established to identify and analyse the risks faced by NIB, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and NIB’s activities. The Directors appoint an Investment Committee and designate its Chairman who is a Director. The Directors also appoint an Investment Manager who has responsibility for the day to day management of NIB’s assets. NIB’s investment portfolio is comprised of mainly quoted equity securities and debt securities, long-term receivables and deposits. 68 41

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (a) Credit risk Credit risk is the risk that a contributor or counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with NIB, resulting in a financial loss to NIB. NIB’s credit risk policy is to minimise its exposure to counterparties with perceived higher risk of default by taking collateral. Credit risk is monitored on a regular basis by the Investment Committee. NIB management are of the opinion that NIB’s policies governing delinquent accounts and provisions for impairment / fair value adjustments ensure that these financial statements accurately reflect any credit risk associated with amounts due from contributors and other debtors. As explained in note 3(e)(i), NIB recognises surcharges on a cash basis. The provision for impairment represents the estimate of incurred losses in respect of contributions receivable, excluding surcharges, and is made up of a specific loss component relating to individual exposures. The maximum exposure to credit risk is represented by the carrying amount of each financial asset on the statement of financial position. The maximum exposure to credit risk at the reporting date was: Carrying Amount 2015 2014 Current assets: US$ 35,275,365 44,905,495 Cash and cash equivalents 3,243,570 2,790,567 Contributions and other receivables 562,721 643,082 FINANCIAL Current portion of long-term receivables 3,470,498 – STATEMENT Current portion of long-term deposits 42,552,154 48,339,144 2015 Non-current assets: Available-for-sale financial assets 172,540,089 147,024,963 Long-term receivables 2,330,303 2,913,800 Long-term deposits 694,100 4,164,598 175,564,492 154,103,361 US$ 218,116,646 202,442,505 42 69

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (a) Credit risk, continued The exposure to credit risk for contributions receivable, excluding surcharges, at the reporting date, by type of counterparty and by type of contribution risk accepted, was as follows: Carrying Amount 2015 2014 Private employers US$ 2,470,796 2,148,092 Self-employed 89,420 89,312 TCIG – – US$ 2,560,216 2,237,404 The exposure to credit risk for contributions receivable at the reporting date, by geographical location, was as follows: 2015 Carrying Gross Impairment Amount Providenciales US$ 3,513,844 1,251,874 2,261,970 Grand Turk US$ 250,258 53,681 196,577 North Caicos 83,252 16,990 66,262 South Caicos 97,004 73,454 23,550 Pine Cay 10,265 1,027 9,238 Middle Caicos 3,088 1,409 1,679 Salt Cay 2,260 1,320 940 3,959,971 1,399,755 2,560,216 FINANCIAL 2014 Carrying STATEMENT Gross Impairment Amount 2015 1,996,121 137,078 Providenciales US$ 2,803,892 807,771 78,332 Grand Turk US$ 175,786 38,708 15,065 North Caicos 117,900 39,568 7,836 South Caicos 32,410 17,345 1,772 Pine Cay 8,707 871 1,200 Middle Caicos 3,434 1,662 Salt Cay 1,876 676 2,237,404 3,144,005 906,601 70 43

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (a) Credit risk, continued NIB’s activities may give rise to risk at the time of settlement of transactions. Settlement risk is the risk of loss due to the failure of an entity to honour its obligations to deliver cash, securities or other assets as contractually agreed. For the vast majority of transactions NIB mitigates this risk by conducting settlements through a compliance officer to ensure that a contribution is settled only when both parties have fulfilled their contractual settlement obligations. The aging of contributions receivable, excluding surcharges, at the reporting date, by type of counterparty, was as follows: 2015 2014 Gross Impairment Gross Impairment Private employers US$ 117,736 23,547 82,905 16,581 Past due 89,323 35,729 51,208 20,483 Not later than one month 1,294,057 976,581 810,304 544,116 Later than one month but 2,228,375 222,838 1,983,172 198,317 779,497 not later than two months 3,729,491 1,258,695 2,927,589 Later than two months 2,933 Outstanding but not past due 16,032 3,206 14,666 FINANCIAL 4,361 STATEMENT Self-employed 11,952 4,781 10,902 114,865 Past due 151,504 127,974 141,394 2015 4,945 Not later than one month 50,992 5,099 49,454 127,104 Later than one month but 230,480 141,060 216,416 not later than two months Later than two months Outstanding but not past due US$ 3,959,971 1,399,755 3,144,005 906,601 The movement in the allowance for impairment in respect of contributions receivable during the year is disclosed in note 6 to these financial statements. The allowance for impairment reflects estimates of losses arising from the failure or inability of NIB’s contributors to make required payments. The allowance is based on the aging of contributor accounts, contributor credit worthiness and NIB’s historical write-off experience. Changes to the provision may be required if the financial condition of its contributors improve or deteriorate. An improvement in financial condition may result in lower actual write-offs. Historically, changes to the estimate of losses have not been material to NIB’s financial position and results of operations. 44 71

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (a) Credit risk, continued There was no change to the basis in the year ended March 31, 2015. During the year ended March 31, 2014 NIB changed its basis for estimating the impairment allowance for contributions receivable. Provision is made against outstanding contributions receivable and surcharges on the following basis: 2015 2014 Outstanding but not past due 10% 10% Past due: 20% 20% Not later than one month 40% 40% Later than one month but not later than two months 90% 90% Later than two months Contributions receivable with pending legal matters that are past due for more than 90 days are 50% provided for (2014: 50%) and all surcharges receivable with pending legal matters at March 31, 2015 were 90% provided for. The credit quality of available-for-sale financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (Standard & Poor’s Ratings Services and Moody's Investor Services, Inc.) or to historical information about counterparty default rates: 2015 2014 UBS Financial Services Inc. A; A2 A; A2 FINANCIAL At the reporting date, NIB held financial assets with the following TCI entities: STATEMENT 2015 2014 2015 US$ 23,438,010 32,044,531 CIBC Cash at banks – savings and current accounts 7,190,009 7,161,315 Scotiabank 1,853,811 2,346,893 Cash at banks – savings and current accounts 900,000 1,050,000 TCI Investment Agency Ltd. 14,020,581 14,020,581 Loans US$ 47,402,411 56,623,320 TCIG Treasury bonds – at par TCI Bank (gross of change in fair value) 72 45

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (a) Credit risk, continued The following comprise financial assets held with TCI Bank at March 31, 2015 and 2014 including those deemed to have suffered a reduction in fair value: 2015 2014 Reduction in Reduction Gross fair value Gross in fair value Other receivables US$ 138,588 97,012 138,588 97,012 Long-term deposits US$ 13,881,993 9,717,395 13,881,993 9,717,395 14,020,581 9,814,407 14,020,581 9,814,407 (b) Liquidity risk Liquidity risk is the risk that NIB will encounter difficulty in meeting obligations arising FINANCIAL from its financial liabilities that are settled by delivering cash or another financial STATEMENT asset, or that such obligations will have to be settled in a manner disadvantageous to NIB. 2015 NIB’s policy for managing liquidity is to have sufficient liquidity to meet its liabilities, including estimated payments of benefits, as and when due, without incurring undue losses or risking damage to NIB’s reputation. NIB’s financial assets include long-term receivables which are generally illiquid. In addition, NIB’s deposits with TCI Bank are now subject to restrictions over their future redemption. NIB also holds a TCIG issued debt security investment which is exposed to redemption restrictions (note 8(b)). Consequently, NIB may not be able to quickly liquidate some of its investments in these instruments in order to meet its liquidity requirements. NIB’s U.S. equity securities are considered to be readily realisable as they are listed on United States stock exchanges. NIB’s overall liquidity risks are monitored on a regular basis by the Investment Committee. At the reporting date there were no significant concentrations of liquidity risk. NIB ensures that it has sufficient liquid financial assets comprising cash and cash equivalents and short-term investments to meet its current financial liabilities. 46 73

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (b) Liquidity risk, continued NIB’s management believe the placing of TCI Bank into liquidation has not affected NIB’s ability to meet its current financial liabilities. The following are the contractual maturities of non-derivative financial instruments, including estimated interest payments and the impact of netting agreements: 2015 (in US$) Carrying Contractual Under 1 More than 4 Amount cash flows year 1-2 years 2-4 years years Cash and cash equivalents 35,275,365 35,275,400 35,275,400 – –– – Contributions and other receivables Current portion of long-term receivables 3,243,570 3,243,570 3,243,570 – –– Current portion of long-term deposits Available-for-sale financial assets 562,721 719,660 719,660 – –– Long-term receivables Long-term deposits 3,470,498 3,470,498 3,470,498 – –– Accounts payable and accrued 172,540,089 189,670,683 1,561,951 128,915,704 9,682,265 49,510,763 expenses 2,330,303 2,594,165 – 702,785 889,023 1,002,357 694,100 694,100 – – – 694,100 (1,629,910) (1,629,910) (1,629,910) – –– 216,486,736 234,038,166 42,641,169 129,618,489 10,571,288 51,207,220 2014 (in US$) Carrying Contractual Under 1 More than 4 Amount cash flows year 1-2 years 2-4 years years Cash and cash equivalents 44,905,495 44,906,634 44,906,634 ––– Contributions and other receivables Current portion of long-term receivables 2,790,567 2,790,567 2,790,567 ––– Available-for-sale financial assets Long-term receivables 643,082 863,679 863,679 ––– Long-term deposits Accounts payable and accrued 147,024,963 200,529,549 3,840,951 105,847,268 12,376,296 78,465,034 expenses 2,913,800 3,313,825 – 719,659 1,294,612 1,299,554 4,164,598 4,164,598 – – – 4,164,598 FINANCIAL (1,171,423) (1,171,423) (1,171,423) ––– STATEMENT 201,271,082 255,397,429 51,230,408 106,566,927 13,670,908 83,929,186 2015 Due to the uncertainties regarding the status of NIB’s assets held at TCI Bank, NIB management consider it appropriate to recognise the maturity period of assets held at TCI Bank, net of the current portion, as greater than four years for liquidity disclosure purposes. 74 47

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (c) Market risk Market risk is the risk that changes in market prices, such as interest rates and equity prices, will affect NIB’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. NIB’s strategy for the management of market risk is driven by NIB’s investment objectives as reflected in its IPS. NIB’s market risk is managed on a regular basis by the Investment Committee. NIB may not invest in margin transactions; acquisition of shares that would permit the portfolio to exercise control over the issuer; uncovered speculative positions; direct investments in physical commodities; futures contracts and options and derivative investments. (i) Interest rate risk NIB’s operations are subject to the risk of interest rate fluctuation to the extent that interest-earning assets mature or reprice at different times or in differing amounts. Risk management activities are aimed at optimising net interest income, given market interest rate levels consistent with NIB’s strategies. At the reporting date, the interest rate profile of NIB’s interest-bearing financial instruments was: Cash flow sensitivity analysis for fixed rate instruments 2015 2014 Fixed rate instruments: US$ 47,110,722 48,333,056 FINANCIAL Financial assets STATEMENT 2,893,024 3,556,882 Available-for-sale financial assets – – 2015 Long-term receivables (current and non-current) US$ 50,003,746 51,889,938 Financial liabilities A change of 100 basis points in interest rates for fixed rate instruments at the reporting date would have increased/(decreased) income in the statement of income, expense and reserves by US$500,037/(US$500,037) (2014: US$518,899/(US$518,899)) assuming all other variables remained constant. 48 75

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (c) Market risk, continued (i) Interest rate risk, continued While long-term deposits held at TCI Bank were interest bearing, following TCI Bank being placed into provisional liquidation on April 9, 2010, and liquidation on October 29, 2010, interest has ceased to accrue on these amounts. These have therefore been excluded from the above analysis. NIB’s investment portfolio is permitted to utilise derivatives for hedging and income enhancing strategies. However, derivatives are not used to expressly employ leverage or other speculative strategies. Therefore, unless a specific type of security is allowed by the IPS, the Investment Manager must seek permission from the Investment Committee to invest in derivative instruments. Cash flow sensitivity analysis for variable rate instruments 2015 2014 Variable rate instruments: US$ 34,731,085 43,701,530 Financial assets – – Cash and cash equivalents US$ 34,731,085 43,701,530 Financial liabilities A change of 100 basis points in interest rates for variable rate instruments at the reporting date would have increased/(decreased) income in the statement of income, expenses and reserves by US$347,311/(US$347,311) (2014: US$437,015/(US$437,015)) assuming all other variables remained constant. FINANCIAL NIB’s interest rate risks are monitored on a regular basis by the Investment STATEMENT Committee and third party investment managers. 2015 (ii) Price risk Price risk is the risk that the fair value of the financial instrument will fluctuate as a result of changes in market prices other than those arising from interest rate risk, whether caused by factors specific to an individual investment, its issuer or factors affecting all instruments traded in the market. NIB’s procedures require price risks to be monitored on a regular basis by the Investment Committee and third party investment managers. 76 49

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (c) Market risk, continued (ii) Price risk, continued NIB’s policy over concentration of its investment portfolio profile, based on its IPS, was as follows at March 31: Asset Class 2015 2014 Cash and money market instruments 0–10% 0–10% Fixed income 10–40% 10–40% U.S. equities 6–15% 6–15% Large cap value 6–15% 6–15% Large cap growth 0–05% 0–05% Mid cap growth 0–05% 0–05% Small cap core 5–30% 5–30% Non U.S. equities 5–15% Hedge Funds 2–08% – Convertibles 0–08% 2–07% Commodities 0–10% Private Equity – Alternative investments – – Real estate and real estate investment trust – 0–10% 0–15% Effective April 1, 2014 NIB made changes on its IPS particularly on asset allocation guidelines. The following table sets out concentration of the investment portfolio held by NIB at March 31: Asset Class According to IPS 2015 % Amount Cash and money market instruments US$ 30,628,019 14.5% FINANCIAL Fixed income US$ 42,082,025 20.0% STATEMENT U.S. equities 17,222,217 8.2% 2015 Large cap value 18,787,195 8.9% Large cap growth 10,063,524 4.8% Mid cap growth 3.0% Small cap core 6,401,429 20.9% Non U.S. equities 44,072,868 10.6% Hedge Funds 22,287,843 5.5% Convertibles 11,555,050 3.1% Commodities 0.5% Private Equity 6,554,880 1,050,000 100.0% 210,705,050 50 77

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (c) Market risk, continued (ii) Price risk, continued Asset Class According to IPS 2014 % Amount Cash and money market instruments US$ 39,205,846 20.1% Fixed income 47,464,107 24.3% U.S. equities 15,085,019 7.7% Large cap value 16,908,671 8.6% Large cap growth 1.0% Mid cap growth 1,996,071 2.7% Small cap core 5,350,284 22.4% Non U.S. equities 43,786,896 4.1% Convertibles 7,918,497 9.1% Alternative investments 17,768,521 Real estate and Real estate investment trust 0% – US$ 100.0% 195,483,912 With the exception of cash and money market instruments at March 31, 2015 and 2014, NIB kept its asset allocation within ranges recommended by the IPS. The investment portfolio held by NIB at March 31, 2015 and March 31, 2014 was presented in these financial statements as follows: 2015 2014 Cash and cash equivalents US$ 4,643,918 5,696,221 Cash at investment managers FINANCIAL Cash at banks – savings and 30,628,019 39,205,846 STATEMENT current accounts 172,540,089 147,024,963 2015 Available-for-sale financial assets 2,893,024 3,556,882 Long-term receivables 210,705,050 195,483,912 US$ In compliance with internal investment guidelines a money market fund held by investment managers is considered by NIB as part of available-for-sale financial assets. Effective April 1, 2011 the long term deposits held with TCI Bank were, for IPS reporting purposes, written down to zero. The balance reported per the financial statements of US$4,164,598, net of impairment, (note 9) at March 31, 2015 (2014: US$4,164,598) has therefore been excluded from the above tables. 78 51

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 20. Financial instruments, continued (c) Market risk, continued (iii) Fair value The following table sets out the fair values of financial instruments measured at fair value/historical value at the reporting date and analyses them by the level in the fair value hierarchy into which each fair value measurement is categorised: Carrying Level 1 2015 (in US$) Level 3 Amount Fair Value Level 2 Cash and cash equivalents 35,275,365 – 35,275,365 – 3,243,570 –– 3,243,570 Contributions and other receivables Current portion of long-term 562,721 – – 562,721 3,470,498 – – 3,470,498 receivables 172,540,089 149,581,585 22,958,504 Current portion of long-term deposits 2,330,303 – – – – – 2,330,303 Available-for-sale financial assets 694,100 694,100 Long-term receivables (1,629,910) –– Long-term deposits (1,629,910) 8,671,282 Accounts payable and accrued expenses 216,486,736 149,581,585 58,233,869 Carrying Level 1 2014 (in US$) Level 3 Amount Fair Value Level 2 Cash and cash equivalents 44,905,495 – 44,905,495 – 2,790,567 –– 2,790,567 Contributions and other receivables 643,082 – – 643,082 FINANCIAL Current portion of long-term 147,024,963 129,352,055 17,672,908 – STATEMENT receivables 2,913,800 – – 2,913,800 2015 Available-for-sale financial assets 4,164,598 – – 4,164,598 Long-term receivables (1,171,423) –– (1,171,423) 9,340,624 Long-term deposits Accounts payable and accrued expenses 201,271,082 129,352,055 62,578,403 Due to their short-term nature, the carrying amounts of NIB’s financial assets and liabilities approximate their fair value. 52 79

FINANCIAL TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD STATEMENT Notes to Financial Statements, continued 2015 Year ended March 31, 2015 80 20. Financial instruments, continued (c) Market risk, continued (iii) Fair value, continued Observable prices or model inputs are usually available in the market for listed debt and equity securities. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determining fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. NIB’s equity securities classified as available-for-sale financial assets are listed on US and non-US stock exchanges. For such investments, a five percent increase in value at the reporting date would have increased income in the statement of income, expenses and reserves by US$6,271,468 (2014: US$4,934,595) and an equal change in the opposite direction would have decreased income in the statement of income, expenses and reserves by US$6,271,468 (2014: US$4,934,595). The value of NIB’s investment holdings with TCI Bank has been reduced by management’s best estimate following TCI Bank entering provisional and then full liquidation. A 10% increase or decrease in the provision on the gross, non- secured, non-equity, balance would have increased / decreased the change in fair value and net income in the statement of income, expenses and reserves for the year by US$1.75 million (2014: US$1.75 million). 21. Capital management Under the Regulations NIB is required to maintain the following reserves: (a) The minimum level of the Long-term Benefit Reserve shall be equivalent to the expenditure for benefits under the Long-term Benefit Branch during the three previous financial years. (b) The minimum level of the Short-term Benefit Reserve shall be equivalent to one- fourth of the expenditure for benefits under the Short-term Benefit Branch during the two previous financial years. 53

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 21. Capital management, continued (c) An Employment Injury Benefit Reserve shall be constituted to finance injury benefit, disablement grant, death grant and medical care by transferring thereto annually as much of the excess of income over expenses of the Employment Injury Benefit Branch as is needed to maintain the level of the Employment Injury Benefit Reserve at one-half of the amount paid for the said benefits in the two previous financial years. The Employment Injury Benefit Reserve at March 31, 2015 and 2014 was determined as follows: Paid benefits Required reserve at 2015 2014 March 31, 2015 Injury benefit US$ 49,089 44,976 47,033 Accrued employment US$ – – 790,058 injury costs (note 12) 49,089 44,976 837,091 Paid benefits Required 2014 2013 reserve at March 31, 2014 Injury benefit US$ 44,976 8,547,043 4,296,010 Disablement grant US$ – 12,476 6,238 Medical care – 589 294 44,976 8,560,108 4,302,542 The US$340,058 expense for medical care costs (note 12) which was recognised during FINANCIAL the year ended March 31, 2014 was not included in the Employment Injury Benefit STATEMENT Reserve calculation as it had not been paid at March 31, 2014. At March 31, 2015 NIB management decided to include in the Employment Injury Benefits Reserve the accrued 2015 employment injury costs of US$790,058 as these will ultimately be paid from this reserve once the exact liability has been determined. During the year ended March 31, 2015 US$3,465,451 (2014: US$48,094) was transferred to the Disablement and Death Benefit Reserve from the Employment Injury Benefit Reserve so as to maintain the required reserve for Employment Injury Benefit at March 31, 2015 and March 31, 2014. There was no change to NIB’s management of capital during the year ended March 31, 2015 and 2014. NIB has complied with the above regulatory imposed capital requirements at the year-end. NIB is not subject to any externally imposed capital requirements. 54 81

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 FINANCIAL 22. Actuarial review STATEMENT Actuarial present value of promised retirement benefits 2015 NIB has elected to apply IAS 26 for retirement benefits which requires the actuarial 82 present value of promised retirement benefits to be recognised on the statement of financial position, in the notes to the financial statements or in an accompanying actuarial report. NIB has chosen to disclose the actuarial present value of promised retirement benefits in the notes to these financial statements. The 7th actuarial review of NIB was conducted by Trinity Consulting Ltd. (the Actuary) at March 31, 2013 and a report issued on June 25, 2014 (the 6th actuarial review was conducted by Horizonow Consultants Ltd. (the Previous Actuary) at March 31, 2010 and a report issued on December 13, 2010). NIB provides retirement and other benefits to qualifying beneficiaries. A summary of these benefits is disclosed in note 3(e)(iv) to these financial statements. NIB currently finances the Fund by considering expected cash inflows from contributors and cash outflows to beneficiaries over an extended period, alongside the assets that have accumulated to date from contributions exceeding benefit payments. The actuarial present value of promised retirement benefits has been calculated on an accrued benefits basis using a current salary approach. Under this methodology the actuarial present value of promised retirement benefits at March 31, 2013, the date of NIB’s latest actuarial review, was US$387,724,867 (March 31, 2010: US$262,807,189). The next actuarial review is scheduled to be conducted as at March 31, 2016. The key assumptions and methods used in this calculation were as follows:  Inflation – 2.5% per annum (2010: 2.5% per annum)  Discount rate – 4.5% per annum (2010: 5.5% per annum)  Average retirement age – 63 years old (2010: 63 years old)  Other than in death, all active insured persons in 2012/13 are assumed to reach age 63 (2009/10: 63) and qualify for a retirement pension  Mortality rate – The average life expectancy in 2013 is assumed to be as follows: i. A 65 year old current male beneficiary – 16.2 years (2010: 17.8 years) ii. A 65 year old current female beneficiary – 17.5 years (2010: 20.3 years) The calculation of the actuarial present value of promised retirement benefits is sensitive to the key assumptions and methods used. 55

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 22. Actuarial review, continued FINANCIAL STATEMENT Actuarial present value of promised retirement benefits, continued 2015 The Fund had total reserves of US$152,790,198 (as restated) at March 31, 2013 (2010: US$143,202,037 excluding provisions for long-term benefits, other than retirement benefits). At March 31, 2013 there was therefore a shortfall of US$234,934,669 (as restated) (2010: US$119,605,152) between the total reserves of the Fund of US$152,790,198 (2010: US$143,202,037) and the actuarial present value of promised retirement benefits of US$387,724,867 (2010: US$262,807,189 (excluding provisions for long-term benefits, other than retirement benefits)). The Directors are examining ways in which this shortfall can be resolved. All key assumptions remained the same for the actuarial present value of promised retirement benefits calculations at March 31, 2010 and at March 31, 2013 with the exception of the discount rate, which reduced from 5.5% to 4.5%, and the mortality rates, which reduced from 17.8 years to 16.2 years for 65 year old males and 20.3 years to 17.5 years for 65 year old females. If the discount rate had remained at 5.5% the actuarial present value of promised retirement benefits at March 31, 2013 would have decreased by US$76,791,454 to US$310,933,413. If mortality rates had remained at 17.8 years for 65 year old males and 20.3 years for 65 year old females the actuarial present value of promised retirement benefits at March 31, 2013 would have decreased by US$17,542,365, using a discount rate of 4.5%, or US$13,819,450, using a discount rate of 5.5%. The actuarial present value of long-term benefits, other than retirement benefits With effect from the year ended March 31, 2015 the actuarial present value of long-term benefits, other than retirement benefits, was quantified by the Actuary at March 31, 2013, 2014 and 2015 and recognised in NIB’s financial statements in accordance with IAS 8 and IAS 37, with appropriate restatement of the 2014 and 2013 financial statements in accordance with IAS 8 (note 25), as follows: Present value at Change reporting date during the year At March 31, 2013 US$ 29,600,000 (2,100,000) At March 31, 2014 US$ 26,800,000 (2,800,000) At March 31, 2015 US$ 29,100,000 2,300,000 56 83

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 22. Actuarial review, continued The actuarial present value of long-term benefits, other than retirement benefits, continued The change in present value of long-term benefits, other than retirement benefits, of US$2,300,000 during the year ended March 31, 2015 (2014: (US$2,800,000)) was recognised in the statement of income, expenses and reserves. The details of the actuarial present value of long-term benefits, other than retirement benefits, at the reporting date was as follows: 2015 2014 2013 Long-term benefit branch US$ 10,500,000 8,700,000 10,300,000 Invalidity pension 8,900,000 8,000,000 9,300,000 Survivors’ benefit 4,300,000 4,700,000 4,700,000 Non-contributory old aged pension 21,400,000 23,700,000 24,300,000 Employment injury benefit branch 5,400,000 Employment injury benefit 5,400,000 26,800,000 5,300,000 Total US$ 29,100,000 29,600,000 FINANCIAL The key assumptions and methods used in this calculation of present value of other long- STATEMENT term benefits for 2015, 2014 and 2013 were as follows: 2015  Inflation – 2.5% per annum  Discount rate – 4.5% per annum  For widows/widowers pension – assume to be paid for life  For orphan pension – assume to be paid until age of 21 For invalidity pensions the NIB is liable for insured persons who are invalid and less than sixty years of age. For employment injuries the NIB is liable for the period the insured person is incapacitated. 23. Contingent liabilities In the ordinary course of its activities NIB is a party to several legal actions. NIB is contingently liable for costs and damages in the event of any adverse finding by the TCI court (the Court) in relation to any of these legal actions. However, it is not possible to predict the decision of the Court or estimate the amount of such awards, if any. Accordingly, no provision has been made in these financial statements regarding these legal proceedings. Management is of the opinion that the resolution of these matters will not have a material impact on NIB’s financial statements. 84 57

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD FINANCIAL STATEMENT Notes to Financial Statements, continued Year ended March 31, 2015 2015 24. Commitments Employment injury costs NIB is liable, per the Ordinance, for the cost of medical services provided in connection with employment injuries. NIB’s liabilities for medical costs relating to employment injuries for the period from its establishment to March 31, 2010 were settled as part of an Omnibus Agreement with TCIG. For the period from April 1, 2010 to March 31, 2015 NIB made an advance payment to NHIB of US$612,000 towards medical costs in connection with employment injuries in the year ended March 31, 2011 and recognised this payment as an expense in that year. No medical care costs were paid or provided for during the years ended March 31, 2012 and March 31, 2013. Medical costs in connection with employment injuries of US$340,058 and US$450,000 were provided for during the years ended March 31, 2014 and March 31, 2015 respectively. At March 31, 2015 NIB included in accounts payable and accrued expenses US$790,058 (2014: US$340,058) representing NIB’s best estimate of its remaining obligation for medical costs in connection with employment injuries as at that date. Despite efforts by NIB, as at the date of issuance of these financial statements, no documentation has been provided to NIB to support medical costs incurred in relation to employment injuries for the period April 1, 2010 to March 31, 2015. Investments NIB has committed to contribute US$2.5 million to the capital of Strategic Value Special Situations Feeder Fund III, L.P. (Partnership), a private equity fund. This obligation to contribute capital to the Partnership is irrevocable, unconditional and not subject to any defense, counterclaim or offset of any kind whatsoever. In August 2014 the first capital call for 42% of committed capital (US$1.05 million) was made. Subsequent capital calls of committed capital were made of 5% in April 2015, 5% in May 2015 and an additional 5% in August 2015. At March 31, 2015 NIB had a remaining contribution commitment to the Partnership of US$1.45 million. 58 85

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements The 2014 and 2013 financial statements were restated to conform with IAS 37, IAS 1 and the current year’s financial statement presentation. Statement of financial position March 31, 2014 As restated As previously reported Adjustment Liabilities US$ 1,171,423 – 1,171,423 Accounts payable – 26,800,000 26,800,000 and accrued expenses US$ 1,171,423 26,800,000 27,971,423 Provisions for long-term benefits, US$ 155,293,101 (21,541,192) 133,751,909 other than retirement benefits 19,439,377 245,148 19,684,525 4,302,542 – 4,302,542 Reserves 25,180,810 Long-term benefit branch reserve (5,503,956) 19,676,854 Short-term benefit branch reserve US$ 204,215,830 (26,800,000) 177,415,830 Employment injury benefit reserve Disablement and death benefit reserve March 31, 2013 As restated As previously reported Adjustment FINANCIAL Liabilities US$ 1,472,113 – 1,472,113 STATEMENT Accounts payable – 29,600,000 29,600,000 2015 and accrued expenses US$ 1,472,113 29,600,000 31,072,113 Provisions for long-term benefits, US$ 140,007,075 (24,300,000) 115,707,075 other than retirement benefits 16,885,953 – 16,885,953 4,350,636 – 4,350,636 Reserves 21,146,534 Long-term benefit branch reserve (5,300,000) 15,846,534 Short-term benefit branch reserve US$ 182,390,198 (29,600,000) 152,790,198 Employment injury benefit reserve Disablement and death benefit reserve 86 The US$26.8 million adjustment to provisions for long-term benefits, other than retirement benefits at March 31, 2014 (2013: US$29.6 million) related to the actuarial present value of long-term benefits, other than retirement benefits, which were not recognised in NIB’s 2014 and 2013 issued financial statements (note 22). These adjustments were recognised during the year and adjusted in the 2014 and 2013 reported balances to comply with IAS 37 and IAS 1. 59

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements, continued Statement of financial position, continued The US$21,541,192 adjustment to long-term benefit branch reserve at March 31, 2014 (2013: US$24.3 million) comprised US$21.4 million related to the actuarial present value of long-term benefits (invalidity pension, survivors’ benefit and non-contributory old age pension) of NIB at March 31, 2014 (2013: US$24.3 million) and a US$141,192 adjustment on reallocation of investment income/(expenses) to the short-term benefit branch reserve of US$245,148 and disablement and death benefit reserve of (US$103,956) during the year ended March 31, 2014 (2013: US$nil). The US$5,503,956 adjustment to disablement and death benefit reserve at March 31, 2014 (2013: US$5.3 million) comprised US$5.4 million related to the actuarial present value of long-term benefits on employment injury of NIB at March 31, 2014 (2013: US$5.3 million) and US$103,956 adjustment on reallocation of investment expenses from long- term benefit branch reserve during the year ended March 31, 2014 (2013: US$nil). Statement of income, expenses and reserves For the year ended March 31, 2014 As previously As reported Adjustment restated Income: US$ 21,989,629 – 21,989,629 Contributions: 1,201,220 – 1,201,220 672,657 – 672,657 Private sector 6,655 – 6,655 Civil servants 23,870,161 – 23,870,161 Self employed 434,134 – 434,134 Voluntary 5,166,136 492,366 Surcharges – 5,166,136 FINANCIAL Income from, and net gains on, 29,962,797 – 492,366 STATEMENT available-for-sale financial assets (11,560,335) – 29,962,797 2015 Interest and other income (4,586,419) Expenses: – – (11,560,335) Benefits (1,208,733) – (4,586,419) (17,355,487) General and administrative expenses 2,800,000 2,800,000 Decrease in provisions for long-term benefits, – (1,208,733) other than retirement benefits 2,800,000 (14,555,487) Investment expenses Net income before other 12,607,310 2,800,000 15,407,310 comprehensive income 9,218,322 – 9,218,322 Other comprehensive income US$ 21,825,632 2,800,000 24,625,632 Net income for year 60 87

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements, continued Statement of income, expenses and reserves, continued For the year ended March 31, 2014 As previously As reported Adjustment restated Net income for year transferred to: US$ 15,286,026 2,758,808 18,044,834 Long-term benefit branch reserve US$ 2,553,424 245,148 2,798,572 (48,094) – (48,094) Short-term benefit branch reserve 4,034,276 (203,956) 3,830,320 Employment injury benefit reserve 21,825,632 2,800,000 24,625,632 Disablement and death benefit reserve During the year ended March 31, 2014, the actuarial present value of long-term benefits, other than retirement benefits, decreased by US$2.8 million which were recognised as a decrease in provisions for long-term benefits, other than retirement benefits, in the statement of income, expenses and reserves. Long-term benefit branch For the year ended March 31, 2014 As previously As reported Adjustment restated Income: US$ 15,117,870 – 15,117,870 Contributions: 964,483 – 964,483 FINANCIAL 544,061 – 544,061 STATEMENT Private sector 6,655 – 6,655 Civil servants 2015 Self employed 16,633,069 – 16,633,069 305,985 – 305,985 Voluntary 3,965,650 Surcharges 377,952 (53,367) 3,912,283 Income from, and net gains on, (5,086) 372,866 21,282,656 available-for-sale financial assets (58,453) 21,224,203 Interest and other income (9,072,080) (3,072,901) Expenses: – (9,072,080) Benefits – – (3,072,901) General and administrative expenses (927,853) Decrease in provisions for long-term benefits, (13,072,834) 2,900,000 2,900,000 other than retirement benefits 12,487 (915,366) Investment expenses 2,912,487 (10,160,347) Net income before other comprehensive income 8,209,822 2,854,034 11,063,856 (95,226) 6,980,978 Other comprehensive income 7,076,204 2,758,808 18,044,834 Net income for year US$ 15,286,026 88 61

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements, continued Statement of income, expenses and reserves, continued Short-term benefit branch For the year ended March 31, 2014 As previously As reported Adjustment restated Income: US$ 3,573,315 – 3,573,315 Contributions: 128,596 – 128,596 26,304 – 26,304 Private sector Self employed 3,728,215 – 3,728,215 Civil servants 72,324 – 72,324 Surcharges 478,288 92,659 570,947 Income from, and net gains on, 45,584 8,831 54,415 available-for-sale financial assets 4,324,411 101,490 4,425,901 Interest and other income (1,732,836) – (1,732,836) Expenses: (779,691) – (779,691) Benefits (111,906) (21,680) (133,586) General and administrative expenses Investment expenses (2,624,433) (21,680) (2,646,113) Net income before other 1,699,978 79,810 1,779,788 comprehensive income 853,446 165,338 1,018,784 Other comprehensive income US$ 2,553,424 245,148 2,798,572 Net income for year FINANCIAL STATEMENT 2015 62 89

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements, continued Statement of income, expenses and reserves, continued Employment injury benefit / disablement and death benefit For the year ended March 31, 2014 As previously As reported Adjustment restated Income: US$ 3,298,444 – 3,298,444 Contributions: 210,433 – 210,433 Private sector 3,508,877 – 3,508,877 55,825 – 55,825 Civil servants 722,198 Surcharges 68,830 (39,292) 682,906 Income from, and net gains on, (3,745) 65,085 4,355,730 available-for-sale financial assets (43,037) 4,312,693 Interest and other income (755,419) (733,827) Expenses: (168,974) – (755,419) Benefits – (733,827) General and administrative expenses – 9,193 (159,781) Investment expenses (1,658,220) Increase in provisions for long-term benefits, (100,000) (100,000) 2,697,510 (90,807) (1,749,027) other than retirement benefits 1,288,672 3,986,182 Net income before other US$ (133,844) 2,563,666 comprehensive income (70,112) 1,218,560 Other comprehensive income (203,956) 3,782,226 FINANCIAL Net income for year STATEMENT Net income for year transferred to: US$ (48,094) – (48,094) 2015 Employment injury benefit reserve US$ 4,034,276 (203,956) 3,830,320 Disablement and death benefit reserve 3,986,182 (203,956) 3,782,226 90 63

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Notes to Financial Statements, continued Year ended March 31, 2015 25. Restatement of 2014 and 2013 financial statements, continued Statement of cash flows For the year ended March 31, 2014 As previously As reported Adjustment restated Cash flows from operating activities: Net income for year US$ 21,825,632 2,800,000 24,625,632 Adjustments for: (8,345) – (8,345) 20,776 – 20,776 Gain on sale of property and equipment 297,678 – 297,678 (364,321) – (364,321) Change in fair value of TCIG bonds 1,040,046 – 1,040,046 Depreciation of property and equipment (5,166,136) – (5,166,136) Interest income (9,218,322) – (9,218,322) Investment expenses on available-for-sale 8,427,008 2,800,000 11,227,008 financial assets 558,510 – 558,510 1,245 – 1,245 Income from, and net gains on, (300,690) – (300,690) available-for-sale financial assets – (2,800,000) (2,800,000) Change in market value of 8,686,073 – 8,686,073 available-for-sale financial assets Changes in operating assets: FINANCIAL Change in contributions and STATEMENT other receivables Change in other assets 2015 Changes in operating liabilities: Change in accounts payable and accrued expenses Change in provisions for long-term benefits, other than retirement benefits Net cash from operating activities US$ 26. Subsequent events On May 20, 2015, subsequent to the year end, NIB received a second interim distribution of US$3,511,002 from the liquidator of TCI Bank representing 20 cents on the dollar for NIB’s current account (US$10,770), certificates of deposit (US$3,459,728) and interest receivable (US$40,504) held with TCI Bank. At March 31, 2015 NIB had US$172.54 million of available-for-sale financial assets (note 7) held at UBS Financial Services Inc. and managed by various investment managers. From April 1, 2015 to March 31, 2016 NIB reported fair value decreases of its available- for-sale financial assets of US$13.68 million. 64 91

Turks & Caicos Islands NATIONAL INSURANCE BOARD ANNUAL REPORT Financial Report For the Year 2014 / 2015