Page 55 - ar2011

Notes to the Financial Statement
For the year ended 31st December 2011
NATURAL COOL HOLDINGS LIMITED
Annual Report 2011 53
3 Signifcant accounting policies (Continued)
3.3 Financial instruments (Continued)
(i) Non-derivative financial assets (Continued)
Loans and receivables
Loans and receivables are fnancial assets with fxed or determinable payments that are not
quoted in an active market. Such assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, loans and receivables are
measured at amortised cost using the effective interest method, less any impairment losses.
Loans and receivables comprise cash and cash equivalents, and trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and bank deposits with original maturities
of three months or less. For the purpose of the consolidated cash fow statement, pledged
deposits are excluded whilst bank overdrafts that are repayable on demand and that form an
integral part of the Group’s cash management are included in cash and cash equivalents.
(ii) Non-derivative financial liabilities
All fnancial liabilities are recognised initially on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a fnancial liability when its contractual obligations are discharged,
cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the balance sheet
when, and only when, the Group has a legal right to offset the amounts and intends either to
settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifes non-derivative fnancial liabilities into the other fnancial liabilities
category. Such fnancial liabilities are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, these fnancial liabilities are
measured at amortised cost using the effective interest method.
Other fnancial liabilities comprise loans and borrowings, bank overdrafts and trade and other
payables.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
management are included as a component of cash and cash equivalents for the purpose of
the cash fow statement.
(iii) Share capital
Ordinary shares are classifed as equity. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of any tax effects.