enl commercial limited annual report 2011 - Investing In Africa

Notes to the Financial Statements
Year ended June 30, 2011
(n) Non-current assets classified as held for sale
Non-current assets held for sale relate to investments which will be sold in the next financial year and
are measured at the lower of carrying amount and fair value less costs to sell.
(o)
Financial instruments
(i) Categories of financial assets
The group classifies its financial assets in the following categories: held for trading and available-for-sale
financial assets.
The classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and re-evaluates this designation at
every reporting date.
The group’s accounting policies in respect of the main financial instruments are set out below.
Initial measurement
Purchases and sales of financial assets are recognised on trade-date, the date on which the group
commits to purchase or sell the asset. Investments are initially measured at cost inclusive of transaction
costs.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments have
expired or have been transferred and the group has transferred substantially all risks and rewards of
ownership.
Subsequent measurement
Financial assets are subsequently carried at their fair values.
The fair values of some quoted investments are based on current bid prices. If the market for the financial
asset is not active (and for unlisted securities), the group 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, adjusted net asset value, capitalised earnings method, dividend yield
method and market prices refined to reflect the issuer’s specific circumstances.
Investments in equity instruments that do not have a quoted market price in an active market and whose
fair value cannot be reliably measured are reflected at cost.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets 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 twelve months of the end of the reporting
period.
Unrealised gains and losses arising from changes in the fair value of financial assets classified as
available-for-sale are recognised in other comprehensive income. When financial assets classified as
available-for-sale are sold or impaired, the accumulated fair value adjustments are included on the
statement of comprehensive income as gains and losses.
Held for trading financial assets
A financial asset is classified in this category if acquired principally for the purpose of selling in the short
term or if so designated by management. Assets in this category are classified as current assets.
Realised and unrealised gains and losses arising from changes in the fair value of financial assets
classified as available-for sale are recognised in other comprehensive income.
Realised and unrealised gains and losses arising from changes in the fair value of held for trading financial
assets are included in the statement of comprehensive income.
Impairment of financial assets
The group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or a group of financial assets is impaired. In the case of financial assets classified as
available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is
considered in determining whether the securities are impaired. If any such evidence exists for availablefor-sale
financial assets, the cumulative loss-measured as the difference between acquisition cost and
the current fair value, less any impairment loss on that financial asset previously recognised in profit or
loss - is removed from equity and recognised on the statement of comprehensive income.
ENL Commercial Limited
Annual Report 2011
77