101
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.11 Financial instruments (continued)
(a)
Financial assets (continued)
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have
an insignificant risk of changes in fair value with original maturities of three (3) months or less, and are used by the Group and
the Company in the management of their short term commitments. For the purpose of the statement of cash flows, cash and
cash equivalents are presented net of bank overdrafts and pledged deposits.
A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration
received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been
recognised directly in other comprehensive income shall be recognised in profit or loss.
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the
asset within the time frame established generally by regulation or marketplace convention.
A regular way purchase or sale of financial assets shall be recognised and derecognised, as applicable, using trade date
accounting.
(b)
Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement.
A financial liability is classified into the following two (2) categories after initial recognition for the purpose of subsequent
measurement:
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives
(both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon
initial recognition.
Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair
value. Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through
profit or loss are recognised in profit or loss.
(ii)
Other financial liabilities
Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held
for trading nor initially designated as at fair value through profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest
method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are
derecognised and through the amortisation process.
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is
discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially
different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial
liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment
of the original financial liability and the recognition of a new financial liability.
Any difference between the carrying amount of a financial liability extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a
loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of
a debt instrument.
