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Financial Statements
b) Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than 1
months after the balance sheet date. These are classified as non-current assets. Loans and receivables are
classified as trade and other receivables in the balance sheet.
c) Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management intends
to dispose of the investment within 1 months of the balance sheet date.
Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the
Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried
at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed
in the income statement. Financial assets are derecognised when the rights to receive cash flows from the
investments have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit
or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the
effective interest method.
Gains or losses arising from changes in the fair value of the “financial assets at fair value through profit or
loss” category are presented in the income statement within other (losses)/gains – net, in the period in which
they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the
income statement as part of other income when the Company’s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as
available-for-sale are analysed between translation differences resulting from changes in amortised cost
of the security and other changes in the carrying amount of the security. The translation differences on
monetary securities are recognised in profit or loss; translation differences on non-monetary securities
are recognised in equity. Changes in the fair value of monetary and non-monetary securities classified as
available for sale are recognised in equity.
When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments
recognised in equity are included in the income statement as gains and losses from investment
securities.
Interest on available-for-sale securities calculated using the effective interest method is recognised in
the income statement as part of other income. Dividends on available-for-sale equity instruments are
recognised in the income statement as part of other income when the Company’s right to receive payments
is established.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not
active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are substantially
the same, discounted cash flow analysis and option pricing models, making maximum use of market inputs
and relying as little as possible on entity-specific inputs.
The Company assesses at each balance sheet date whether there is objective evidence that a financial
asset or a group of financial assets is impaired. In the case of equity securities classified as available for
sale, a significant or prolonged decline in the fair value of the security below its cost is considered as
an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial
assets, the cumulative loss – measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is
b) Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for maturities greater than 1
months after the balance sheet date. These are classified as non-current assets. Loans and receivables are
classified as trade and other receivables in the balance sheet.
c) Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management intends
to dispose of the investment within 1 months of the balance sheet date.
Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the
Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus
transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried
at fair value through profit or loss is initially recognised at fair value, and transaction costs are expensed
in the income statement. Financial assets are derecognised when the rights to receive cash flows from the
investments have expired or have been transferred and the Company has transferred substantially all risks
and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit
or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the
effective interest method.
Gains or losses arising from changes in the fair value of the “financial assets at fair value through profit or
loss” category are presented in the income statement within other (losses)/gains – net, in the period in which
they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the
income statement as part of other income when the Company’s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as
available-for-sale are analysed between translation differences resulting from changes in amortised cost
of the security and other changes in the carrying amount of the security. The translation differences on
monetary securities are recognised in profit or loss; translation differences on non-monetary securities
are recognised in equity. Changes in the fair value of monetary and non-monetary securities classified as
available for sale are recognised in equity.
When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments
recognised in equity are included in the income statement as gains and losses from investment
securities.
Interest on available-for-sale securities calculated using the effective interest method is recognised in
the income statement as part of other income. Dividends on available-for-sale equity instruments are
recognised in the income statement as part of other income when the Company’s right to receive payments
is established.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not
active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are substantially
the same, discounted cash flow analysis and option pricing models, making maximum use of market inputs
and relying as little as possible on entity-specific inputs.
The Company assesses at each balance sheet date whether there is objective evidence that a financial
asset or a group of financial assets is impaired. In the case of equity securities classified as available for
sale, a significant or prolonged decline in the fair value of the security below its cost is considered as
an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial
assets, the cumulative loss – measured as the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is
