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<strong>CIC</strong> INSURANCE GROUP LIMITEDNotes to the Financial StatementsFor the year ended 31 December 20111 ACCOUNTING POLICIESStatement of compliance with International Financial Reporting Standards (IFRS)The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).For the purposes of reporting under the Kenyan companies Act, in these financial statements the balance sheet isrepresented by/is equivalent to the statement of financial position and the profit and loss account is presented in thestatement of comprehensive income.Adoption of new and revised International Financial Reporting Standards (IFRSs)(a)Relevant new and revised IFRS affecting amounts reported in the current year (and /or prior years)The following new and revised IFRSs have also been adopted in these consolidated financial statements. Theapplication of these new and revised IFRSs has not had any material impact on the amounts reported for thecurrent and prior years but may affect the accounting for future transactions or arrangements.Amendments to IAS 1 - Presentation of Financial Statements (as part of Improvements to IFRSs issued in 2010)The amendments to IAS 1 clarify that an entity may choose to disclose an analysis of other comprehensive incomeby item in the statement of changes in equity or in the notes to the financial statements. In the current year, thegroup has chosen to continue presenting this analysis in the statement of changes in equity and therefore this hasnot resulted to any change in presentation.Amendments to IAS 24 - Related Party Disclosures (as revised in 2009)IAS 24 (as revised in 2009) has been revised on the following two aspects: (a) IAS 24 (as revised in 2009) haschanged the definition of a related party and (b) IAS 24 (as revised in 2009) introduces a partial exemption from thedisclosure requirements for government-related entities.The Company and its subsidiaries are not government-related entities and the adoption of the revised standard hasnot led to identification of related parties that were not identified as related parties under the previous Standard.Amendments to IFRS 3 - Business CombinationsAs part of Improvements to IFRSs issued in 2010, IFRS 3 was amended to clarify that the measurement choiceregarding non-controlling interests at the date of acquisition is only available in respect of non-controlling intereststhat are present ownership interests and that entitle their holders to a proportionate share of the entity’s netassets in the event of liquidation. All other types of non-controlling interests are measured at their acquisition-datefair value, unless another measurement basis is required by other Standards. In addition, IFRS 3 was amendedto provide more guidance regarding the accounting for share-based payment awards held by the acquiree’semployees. Specifically, the amendments specify that share-based payment transactions of the acquiree thatare not replaced should be measured in accordance with IFRS 2 Share-based Payment at the acquisition date(‘market-based measure’).The group has not entered into business combinations where the acquiree’s employees had share based payments.If the group enters into such transactions in future the standard will be applicable.PAGE 302011 ANNUAL REPORT & FINANCIAL STATEMENTS
<strong>CIC</strong> INSURANCE GROUP LIMITEDNotes to the Financial Statements continuedFor the year ended 31 December 20111 ACCOUNTING POLICIES (Continued)Adoption of new and revised International Financial Reporting Standards (IFRSs) (Continued)(a)Relevant new and revised IFRS affecting amounts reported in the current year (and /or prior years) (Continued)Amendments to IAS 32 - Classification of Rights IssuesThe amendments address the classification of certain rights issues denominated in a foreign currency as eitherequity instruments or as financial liabilities. Under the amendments, rights, options or warrants issued by an entityfor the holders to acquire a fixed number of the entity’s equity instruments for a fixed amount of any currency areclassified as equity instruments in the financial statements of the entity provided that the offer is made pro ratato all of its existing owners of the same class of its non-derivative equity instruments. Before the amendments toIAS 32, rights, options or warrants to acquire a fixed number of an entity’s equity instruments for a fixed amount inforeign currency were classified as derivatives. The amendments require retrospective application.The application of the amendments has had no effect on the amounts reported in the current and prior yearsbecause the group has not issued instruments of this nature.Amendments to IFRIC 14 - Prepayments of a Minimum Funding RequirementIFRIC 14 addresses when refunds or reductions in future contributions should be regarded as available in accordancewith paragraph 58 of IAS 19; how minimum funding requirements might affect the availability of reductions in futurecontributions; and when minimum funding requirements might give rise to a liability. The amendments now allowrecognition of an asset in the form of prepaid minimum funding contributions. The application of the amendmentshas not had any effect on the group’s consolidated financial statements.IFRIC 19 - Extinguishing Financial Liabilities with Equity InstrumentsThe Interpretation provides guidance on the accounting for the extinguishment of a financial liability by the issueof equity instruments. Specifically, under IFRIC 19, equity instruments issued under such arrangement will bemeasured at their fair value, and any difference between the carrying amount of the financial liability extinguishedand the consideration paid will be recognised in profit or loss.The application of IFRIC 19 has had no effect on the amounts reported in the current and prior years because thegroup has not entered into any transactions of this nature.Improvements to IFRSs issued in 2010Except for the amendments to IFRS 3 and IAS 1 described earlier in this section, the application of Improvements toIFRSs issued in 2010 has not had any material effect on amounts reported in the consolidated financial statements.2011 ANNUAL REPORT & FINANCIAL STATEMENTS PAGE 31
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