NOTES TO THE FINANCIAL STATEMENTS
(CONT’D)
31 DECEMBER 2015
2.
SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION (CONT’D)
2A.
Significant accounting policies (cont’d)
Financial assets (cont’d)
Subsequent measurement (cont’d):
3.
Held-to-maturity financial assets: As at the reporting year date there were no financial assets classified
in this category.
4.
Available for sale financial assets: As at the reporting year date there were no financial assets classified
in this category.
Cash and cash equivalents
Cash and cash equivalents include bank and cash balances, and on demand deposits. For the statement of cash
flows, the items include cash and cash equivalents less cash subject to restriction.
Hedging
The entity is exposed to currency and interest rate risks. The policy is to reduce currency and interest rate
exposures through derivatives and other hedging instruments. From time to time, there may be borrowings and
foreign exchange arrangements or interest rate swap contracts or similar instruments entered into as hedges
against changes in interest rates, cash flows or the fair value of financial assets and liabilities. The gain or loss
from remeasuring these hedging or other arrangement instruments at fair value are recognised in profit or loss.
The applicable derivatives and other hedging instruments used are described below in the notes to the financial
statements.
Derivatives
All derivatives are initially recognised and subsequently carried at fair value. Certain derivatives are entered into
in order to hedge some transactions and all the strict hedging criteria prescribed by FRS 39 are not met. In those
cases, even though the transaction has its economic and business rationale, hedge accounting cannot be applied.
As a result, changes in the fair value of those derivatives are recognised directly in profit or loss and the hedged
item follows normal accounting policies.
Financial liabilities
Initial recognition, measurement and derecognition:
A financial liability is recognised on the statements of financial position when, and only when, the entity becomes
a party to the contractual provisions of the instrument and it is derecognised when the obligation specified in
the contract is discharged or cancelled or expires.
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