NIG Prospectus - London Stock Exchange

Level: 8 – From: 8 – Thursday, August 9, 2007 – 2:20 pm – mac5 – 3776 Section 10c : 3776 Section 10cTrade and settlement date accountingAll “regular way” purchases and sales of financial assets are recognised on the trade date, i.e. thedate that the group commits to purchase or sell the asset. Regular way purchases or sales arepurchases or sales of financial assets that require delivery of assets within the time framegenerally established by regulation or convention in the market place concerned.Recognition and derecognition of financial assets and liabilitiesA financial asset or a financial liability is recognised when the group becomes a party to thecontractual provisions of the instrument. A financial asset (in whole or in part) is derecognisedeither when the group has transferred substantially all the risk and rewards of ownership or whenit has neither transferred nor retained substantially all the risks and rewards and when it no longerhas control over the asset or a proportion of the asset. A financial liability is derecognised whenthe obligation specified in the contract is discharged, cancelled or expired.Impairment of financial assetsAn assessment is made at each balance sheet date to determine whether there is objectiveevidence that a specific financial asset, or group of similar assets, may be impaired. If suchevidence exists, the estimated recoverable amount of that asset is determined and anyimpairment loss based on the net present value of future anticipated cash flows is recognised inthe consolidated statement of income.TaxationDeferred taxation is provided in respect of all temporary differences. Deferred tax assets arerecognised in respect of unutilised tax losses when it is probable that the loss will be used againstfuture profits.InventoriesInventories are valued at the lower of cost and net realisable value. In respect of finished goodsand work-in-progress, cost includes all direct costs of production and an appropriate proportion ofproduction overheads. Cost of raw materials, consumables and spare parts is calculated using theweighted average cost method and provision is taken for slow moving and obsolete items.Wakala investmentsWakala investments are financial assets originated by the group and are stated at amortised cost.Treasury sharesTreasury shares are stated at cost as a deduction within shareholders’ equity and they are notentitled to cash dividends.Gains or losses resulting from the trading in treasury shares are taken directly to shareholders’equity under “Gain on sale of treasury shares reserve”. Should the reserve fall short of any lossesfrom the sale of treasury shares, the difference is charged to retained profits then reserves,subsequent to this, should profits arise from sale of treasury shares an amount is transferred toreserves then retained profits equal to the loss previously charged to these accounts.Bonds payableBonds payable are stated at their principal amount. Interest is charged as an expenses as itaccrues, with unpaid amounts included in other liabilities.F-60