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NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.9 Financial instruments (cont’d)
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference

between its carrying amount, and the present value of the estimated future cash flows discounted at the original
effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are
recognised in the profit or loss.
Non-derivative financial liabilities
The Group recognises financial liabilities when the Group becomes a party to the contractual provisions of the
instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position 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 classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Non-derivative financial liabilities comprise loans and borrowings, and other payables and accruals.
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 consolidated statement of cash
flows.
Derivative financial instruments and hedging instruments
The Group holds derivative financial instruments, through its external fund managers, to hedge its foreign currency
exposure. Further details of derivative financial instruments are disclosed in Note 10 to the financial statements.

50 NTU ANNUAL REPORT 2016