NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

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NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007

ANNUAL REPORT 2007NOTES TO BOSNA RE Co. Ltd. ANNUAL REPORT FOR 2007a) This Report is based on true and credible bookkeeping data and accounting standards in force inFederation of BH. The Report is prepared in accordance with obligations arising out of Article 53. ofArticles of Association of Bosna Reinsurance Co. Ltd. in force. The Report was prepared by the Managementof Bosna RE Co. Ltd.b) The audit of financial operations was made by the world renowned company DELOITTE. The reportby this auditing company is published separately.c) In order to clarify 2007 Annual Report the following must be emphasised:In 2007 Bosna RE applied a new accounting method which implies that all quarters belonging to one financialyear are recorded in that year. This assumes that IV quarter is based on prognosis i.e. actuarial calculation.The accounting method to date that includes one quarter from the previous year plus three quarters of a currentyear is now abandoned. Considering this change, 2007, and only this year, shall comprise 5 quarters (IVQuarter from 2006, three Quarters and IV Quarter estimate for 2007), therefore the Report for 2007 shall berepresented somewhat differently. That is to say that the tables shall include results that comprise the premiumfrom IV Quarter of 2006 and I, II and III Quarters from 2007 and total premium for 2007, which denoteprevious result increased for IV Quarter from 2007. This will enable comparison with preceding year.The 2007 brought also changes in chart of accounts and balance schemes for insurance companies. The dataon income and expenditure represent net income and net expenditure. This means that all expenses andearnings from retrocession are already calculated as an increase or decrease of a certain position of a balancesheet.10

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