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The preparation of financial statements in conformity with IFRS requires the use of certain crit-
ical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Company's accounting policies. The areas involving a higher degree of judg-
ment or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 2.17.
(a) New and amended standards adopted by the Company
There are no IFRSs or IFRIC interpretations that are effective for the first time for the finan-
cial year beginning on or after 1 October 2012 that were adopted and had a material
impact on the Company.
(b) New standards, amendments and interpretations issued but not effective for the financial
year beginning 1 October 2012 and not early adopted:
The following new standards, interpretations and amendments, which have not been
applied in these financial statements, will or may have an effect on the Company's future
IAS 32 'Financial Instruments: Presentation' (Amendments) clarify some of the require-
ments for offsetting financial assets and financial liabilities in the statement of financial
position. In connection therewith, IFRS 7, 'financial instruments: Disclosures' amendments
were also issued. These new IFRS 7 disclosures are intended to facilitate comparison
between IFRS and US GAAP preparers. The converged offsetting disclosures in IFRS 7 are
to be retrospectively applied, with an effective date of annual periods beginning on or
after 1 January 2013. The IAS 32 changes are retrospectively applied, with an effective
date of annual periods beginning on or after 1 January 2014. Master netting agreements
where the legal right of offset is only enforceable on the occurrence of some future event,
such as default of the counterparty, continue not to meet the offsetting requirements. The
disclosures focus on quantitative information about recognised financial instruments that
are offset in the statement of financial position, as well as those recognised financial instru-
ments that are subject to master netting or similar arrangements irrespective of whether
they are offset. The new amendments are not expected to have any significant impact on
the Company's financial position or performance.
IFRS 9, 'Financial instruments' - This new standard introduces new requirements for the
classification, measurement and recognition of financial assets and financial liabilities and
replaces parts of IAS 39. The standard is effective for annual periods beginning on or after
1 January 2015 with early adoption permitted. IFRS 9 is required to be applied retro-
spectively. IFRS 9 uses business model and contractual cash flow characteristics to deter-
mine whether a financial asset is measured at amortised cost or fair value, replacing the
four category classification in IAS 39. The determination is made at initial recognition. The
approach is also based on how an entity manages its financial instruments (its business
model) and the contractual cash flow characteristics of the financial assets. For financial
liabilities, the standard retains most of the IAS 39 requirements. The main change is that,
in cases where the fair value option is taken for financial liabilities, the part of a fair value
change due to an entity's own credit risk is recorded in other comprehensive income rather
than the income statement, unless this creates an accounting mismatch. The Company is yet to
assess IFRS 9's full impact and intends to adopt IFRS 9 no later than the accounting period
beginning on or after 1 January 2015.
IFRS 10, Consolidated financial statements' builds on existing principles by identifying the
concept of control as the determining factor in whether an entity should be included with-
in the consolidated financial statements of the parent company. The standard provides
additional guidance to assist in the determination of control where this is difficult to assess.
The Company is yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later
than the accounting period beginning on or after 1 January 2013.
IFRS 12, 'Disclosure of Interests in Other Entities' includes the disclosure requirements for
all forms of interests in other entities, including joint arrangements, associates, special
purpose vehicles and other off balance sheet vehicles. The Company is yet to assess IFRS
12's full impact and intends to adopt IFRS 12 no later than the accounting period begin-
ning on or after January 1, 2013.
IFRS 13 'Fair Value Measurements' is effective prospectively for annual periods beginning
on or after 1 January 2013. Earlier application is permitted. IFRS 13 defines fair value,
sets out in a single IFRS a framework for measuring fair value and requires disclosures
about fair value measurements. The standard applies, except in some specified cases (e.g.
share-based payments) when other IFRSs require or permit fair value measurements. It
does not introduce any new requirements to measure an asset or a liability at fair value,
change what is measured at fair value in IFRSs or address how to present changes in fair
value. Although IFRS 13 describes some of the fair value measurements and disclosure
requirements in a different way from how they were expressed previously, there are a few
changes to the requirements it replaces (principally the requirement to use an exit price).
Instead, IFRS 13 is intended to clarify the measurement objective, harmonise the disclosure
requirements and improve consistency in application.
Other standards, amendments and interpretations to existing standards in issue but not yet
effective are not considered to be relevant to the Company and have not been disclosed.
(c) Standards and amendments to published standards early adopted by the Company
The Company did not early adopt any new, revised or amended standards.
Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of
the primary economic environment in which the entity operates ('the functional currency'). The
financial statements are presented in Trinidad and Tobago dollars, which is the functional and
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income. Translation differences on non monetary items, such as
equities held at fair value through the profit or loss are reported as part of the fair value gain
Cash and cash equivalents comprise balances with less than three months maturity from the
date of acquisition including liquid cash in hand, deposits held at call with banks and other
short term highly liquid investments.
The Company classifies its financial assets in the following categories: financial assets at fair
value through profit or loss, loans and receivables and available-for-sale financial assets.
Management determines the classification of its financial instruments at initial recognition.
(a) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets classified as held-for-trading and
financial assets designated at fair value through profit or loss upon initial recognition.
A financial asset is classified as held for trading if it is acquired or incurred principally for
the purpose of selling or repurchasing in the near term or if it is part of a portfolio of iden-
tified financial instruments that are managed together and for which there is evidence of
a recent actual pattern of short term profit-taking. Derivatives are also categorised as held-
for-trading unless they are designated as hedges. Financial assets held for trading consist
of debt instruments, including money-market paper, traded corporate and bank loans and
equity instruments as well as financial assets with embedded derivatives.
Financial instruments included in this category are recognised initially at fair value. Gains
and losses arising from changes in the fair value are included directly in the statement of
comprehensive income and are reported as "net trading gain/ (loss)". Interest income and
expenses and dividend income and expenses on financial assets held for trading are
included in "interest income" and "dividend and other income" respectively. The instru-
ments are derecognised when the rights to receive cash flows have expired or the
Company has transferred substantially all the risks and rewards of ownership and the
transfer qualifies for derecognisation.
The Company designated certain financial assets upon initial recognition as at fair value
through profit or loss. This designation cannot subsequently be changed. According to IAS
39, the fair value option is only applied when the following conditions are met:
o The application of the fair value option reduces or eliminates accounting mismatch that
would otherwise arise or
o The financial assets are part of a portfolio of financial instruments which is risk
managed and reported to senior management on a fair value basis or
o The financial assets consist of debt host and an embedded derivative that must be
(b) Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable pay-
ments that are not quoted in an active market. Loans to customers are initially recognised
at fair value, which is the cash consideration to originate the loan including any transac-
tion costs, and measured subsequently at amortised cost using the effective interest rate
method. Interest on loans to customers is included in the statement of comprehensive
income and is reported as "interest income". In the case of impairment, the impairment
loss is reported as a deduction from the carrying value of the loan and recognised in the
statement of comprehensive income as "impairment losses on loans".
(c) Available-for-sale financial assets
Available-for-sale financial assets are those intended to be held for an indefinite period of
time, which may be sold in response to needs for liquidity or changes in interest rates,
exchange rates or equity prices.
Available-for-sale financial assets are initially recognised at fair value, which is the cash
consideration including any transaction costs, and measured subsequently at fair value
with gains and losses being recognised in other comprehensive income until the financial
assets is derecognised. If an available-for-sale financial asset is determined to be
impaired, the cumulative gain or loss previously recognised in other comprehensive
income is recognised in the profit or loss. However, interest is calculated using the effec-
tive interest method and is recognised in the statement of comprehensive income.
Dividends on available-for-sale equity instruments are recognised in the statement of com-
prehensive income when the Company's right to receive payment is established.
The fair values of quoted investments in active markets are based on current bid prices. If
the market for a financial asset is not active (and for unlisted financial assets), the
Company establishes fair value by using valuation techniques. These include the use of
recent arm's length transactions, discounted cash flow analysis, option pricing models and
other valuation techniques commonly used by market participants.
The Company uses trade-date accounting for regular way contracts when recording finan-
cial asset transactions.
When assets are held subject to a finance lease, the present value of the lease payments is
recognised as a receivable and is reported on the statement of financial position in "loans to
customers". The difference between the gross and the present value of the receivable is recog-
nised as unearned finance income. Lease income is recognised over the term of the lease using
net investment method before tax, which reflects a constant periodic rate of return.
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