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4 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Financial assets (continued) (v) De-recognition

Financial assets are de-recognised when the rights to receive cash fows from the investments have expired or have been

transferred and the Group has transferred substantially all risks and rewards of ownership.

When available-for-sale fnancial assets are sold, the accumulated fair value adjustments recognised in other comprehensive

income are reclassifed to proft or loss.

Financial assets and liabilities are offset and the net amount presented in the statement of fnancial position when there is a

legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to

use an asset for an agreed period of time. (i) Finance leases

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are

classifed as fnance leases.

Finance leases are capitalised lease’s commencement at the lower of the fair value of the leased assets and the present

value of the minimum lease payments. Each lease payment is allocated between the liability and fnance charges so as to achieve a constant rate of interest on the lease principal outstanding. The corresponding rental obligations, net of fnance charges, are included in payables. The interest element of the fnance charge is charged to proft or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Property, plant and equipment acquired under fnance leases is depreciated over the shorter of the lease term and its

useful life.

Initial direct costs incurred by the Group in negotiating and arranging fnance leases are added to the carrying amount

of the leased assets and recognised as an expense in proft or loss over the lease term on the same basis as the lease expense.

Leases of assets where a signifcant portion of the risks and rewards of ownership are retained by the lessor are classifed

as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to proft or loss on the straight line basis over the lease period.

Initial direct costs incurred by the Group in negotiating and arranging operating leases are recognised in proft or loss

when incurred.

Following the adoption of the improvement to FRS 117 “Leases”, leasehold land in which the Group has substantially all

the risks and rewards incidental to ownership has been reclassifed retrospectively from operating lease to fnance lease. Previously, leasehold land was classifed as an operating lease unless title is expected to pass to the lessee at the end of the lease term. Refer to Note 44 for the impact of this change in accounting policy.

For the purpose of cash fow statement, cash and cash equivalents comprise cash on hand, bank balances and deposits held

at call with banks and licensed fnancial institutions, other short term and short term, highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the statements of fnancial position.