Annual report - front page - Jubilee Insurance

NOTES TO THE FINANCIAL STATEMENTSAS AT 31ST DECEMBER 20111. GENERAL INFORMATIONJubilee Holdings Limited is a limited liability company incorporated and domiciled in Kenya. The address of its registered office is:Jubilee Insurance House, Wabera Street, Nairobi, Kenya. The company has a primary listing on the Nairobi Securities Exchange andis cross-listed on the Uganda Securities Exchange and Tanzania Stock Exchange.The Company through its subsidiaries and associates (together forming the Group) underwrites Life and non-life insurance risks, suchas those associated with death, disability, health, property and liability. The Group also issues a diversified portfolio of investmentcontracts to provide its customers with asset management solutions for their savings and retirement needs. All these products areoffered to both domestic and foreign markets. It has operations in Kenya, Uganda, Tanzania, Burundi and Mauritius and employs over500 (2010: 400) people through its subsidiaries.The insurance business of the Group is organized into two main divisions, short-term (general) business and long-term (life) business.Long-term business relates to the underwriting of life risks relating to insured persons, the issue of investment contracts and theadministration of pension funds. Short-term business relates to all other categories of insurance business written by the Group,analyzed into several sub-classes of business based on the nature of the assumed risks.With a view to diversifying the Group’s income base, operational activities have been extended to include fund management, propertydevelopment and management, power generation and international fibre optic broadband cable connectivity.For purposes of the Kenya Companies Act reporting purposes, the balance sheet is represented by statement of financial positionwhile the profit and loss account is represented by the income statement.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies adopted in the preparation of these financial statements are set out below and apply to the Groupand the Company. These policies have been consistently applied to all years presented, unless otherwise stated.2.1. BASIS OF PREPARATIONThe financial statements are prepared in compliance with International Financial Reporting Standards (IFRS). The measurementbasis applied is the historical cost basis, except where otherwise stated in the accounting policies below. The financial statements arepresented in Kenya Shillings (Shs), rounded to the nearest thousand.Standards and interpretations that have been adopted in the Company’s 2011 annual financial statementsRevised IAS 24 Related Party Disclosures (effective for years commencing on or after 1 January 2011) - this standard addressesthe disclosure requirements in respect of related parties, with the main changes relating to the definition of a related party wherenew related party relationships have been identified. This standard has been adopted retrospectively in the 2011 annual financialstatements, and did not have a significant impact on the disclosure.IFRS 7 Financial Instruments: Disclosures - Transfers of Financial Assets (effective from 1 July 2011) - this amendment introducesnew disclosure requirements about transfers of financial assets including disclosure for financial assets that are not derecognized intheir entirety and financial assets that are derecognized in their entirety but for which the entity retains continuing involvement. Thisstandard has been adopted in the 2011 annual financial statements, and did not have a significant impact on the disclosure.Future amendments not early adopted in the 2011 annual financial statementsA number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December2011, and have not been applied in preparing these financial statements. These are summarized below:IFRS 9 (2010) retains the classification and measurement requirements in IAS 39 for financial liabilities. The standard however requiresfor financial liabilities designated under the fair value option (other than loan commitments and financial guarantee contracts), thatthe amount of change in fair value attributable to changes in the credit risk of the liability be presented in other comprehensiveincome. The remaining amount of the total gain or loss is included in profit or loss. However, if this requirement creates or enlargesan accounting mismatch in profit or loss, then the whole fair value change is presented in profit or loss.Under IFRS 9 (2010) derivative liabilities that are linked to and must be settled by delivery of an unquoted equity instrument whosefair value cannot be reliably measured, are measured at fair value.IFRS 9 (2010) will be adopted for the first time for the year ending 31 December 2015 and will be applied retrospectively, subject tocertain transitional provisions. The impact on the financial statements has not yet been estimated.IAS 12 Deferred Tax: Recovery of Underlying Assets (effective from 1 January 2012 ) - this amendment introduces an exceptionto the general measurement requirements of IAS 12 Income Taxes in respect of investment properties measured at fair value. TheJUBILEE HOLDINGS LIMITEDAnnual Report and Financial Statements 2011 23