2007 - April

2.0
Notes to the consolidated financial statements at December 31 st 2007
1.20. Receivables from cession operations on
reinsurance
Receivables from cession operations on reinsurance
represent the sums to be collected from reinsurers: claims
pending compensation and commissions to be received.
1.21. Cash and cash equivalents
Cash and cash equivalents comprise liquid assets and units
in cash-based UCITS other than those held by insurance
companies recorded under financial investments (cf. Note
1.17).
They represent very short-term, liquid investments that may
be converted at any time into a known cash amount and
subject to a low risk of changes in value.
Cash investments are valued on a fair value basis, with any
unrealized or realized gains or losses booked on the income
statement under “financial income net of charges and
excluding cost of debt”.
The fair value is determined in relation to the market price as
on the closing date for the period.
1.22. Trade receivables
Trade receivables group together premium requests pending
payment issued by APRIL GROUP brokerage companies as
well as receivables relating to services provided.
Premiums requested are only recorded in the accounts as on
the date that the cover effectively takes effect, and not on
the date on which premium requests are sent out when this
is earlier.
A provision for depreciation may be recorded for trade
receivables relative to the share of commissions on the
premiums for clients whose policies have been cancelled for
non-payment of premiums.
This share is calculated based on the historical results
for disputed collection operations on such cancelled
policyholders.
1.23. Underwriting provisions for insurance policies
Underwriting provisions linked to insurance companies are
recorded gross of reinsurance operations as liabilities on
the balance sheet, with the reinsurance section booked
as an asset under “transferee and retrocession share in
underwriting provisions”. Such underwriting provisions
are determined based on statistical and actuarial data in
accordance with the French Insurance Code (Code des
Assurances), notably the laws governing disability and
invalidity appended to this code.
1.24. Liability adequacy tests for Group insurance
companies
At the time of each close of accounts, liability adequacy tests
are carried out for each consolidated company in order to
ensure the adequacy of insurance liabilities. To conduct these
tests, the companies consolidate policies based on common
criteria, factoring in how they have been acquired, how they
are managed and how their profitability is measured.
Any inadequate provisions are recorded against earnings. In
the specific case of non-life insurance policies, a provision for
current contingencies is booked for policies whose premiums
are estimated to fall short of the level required to cover
future management costs and claims.
1.25. Provisions for contingencies and losses
In accordance with IAS 37 “Provisions, contingent liabilities
and contingent assets”, a provision is recorded when the
Group has a legal or implied obligation resulting from past
events that will generate an outflow of resources without at
least an equivalent counterparty, provided that future cash
outflows may be estimated on a reliable basis.
This item comprises commitments with uncertain maturities
or amounts stemming from commercial and tribunal disputes
or other risks.
In general, each known dispute in which the company is
involved has been reviewed by management as on the
date for the close of accounts, further to advice from
external advisors as relevant, with the provisions deemed
necessary recorded in order to cover the estimated risks.
1.26. Staff benefits
Short-term benefits due within 12 months of the end of
the financial year are recorded for the period during which
the services were provided by members of staff and for the
amount that the company expects to pay.
Provisions are recorded for these amounts on a nondiscounted
basis.
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