38 (Expressed in Trinidad and Tobago Dollars) NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS 30th June 2017 4 Summary of significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all years presented, unless otherwise stated. a. Basis of preparation These special purpose financial statements are prepared in accordance with the financial reporting provisions of The National Insurance Act. In cases where the financial reporting provision is not clear or does not address particular situations, reference is made to International Financial Reporting Standards (IFRS) for guidance in determining NIBTT’s accounting policy. The Board and management of NIBTT are currently reviewing its financial reporting framework to determine whether it can in the future prepare its special purpose financial statements in accordance with IFRS. These special purpose financial statements are the parent company unconsolidated financial statements of the NIBTT. NIBTT does not prepare consolidated financial statements. Further, these special purpose financial statements are prepared on the historical cost basis, except for the following items in the statement of financial position: - Financial assets at fair value through profit or loss are measured at fair value; - Investment properties are measured at fair value; - Investments in subsidiary companies are measured at fair value; - Artwork and freehold properties classified as property, plant and equipment are measured at fair value; - The defined benefit asset/liability is recognised as plan assets, plus unrecognised past service cost, less the present value of the defined benefit obligation and based on actuarial valuations. The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Information about critical estimates in applying accounting policies that have the most significant effect on the amounts recognised in the audited special purpose financial statements is included in Note 4 n. b. Investments in subsidiary companies Subsidiaries are all entities over which the NIBTT has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. These are as follows: Companies Percentage Ownership 2017 2016 National Insurance Property Development Company Limited (NIPDEC) 100% 100% Trinidad and Tobago Mortgage Finance Company Limited (TTMF) 51% 51% Home Mortgage Bank (HMB) 100% 99.38%