A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement

For purposes of subsequent measurement, the company's assets are classified as:

Investment at fair value through profit or loss

As the company's business is investing in financial assets with a view profiting from their total return in the form of income or capital gains, investments are designated as held at fair value through profit or loss on initial recognition. Financial assets at fair value through profit or loss are carried in the Statement of Financial Position at fair value. Gains and losses arising from investments designated as held at fair value through profit or loss are included in the Statement of Comprehensive Income in the year in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest method, less impairment. This category generally applies to the company's debt investment, interest receivable and trade and other receivables.

Financial liabilities

The company's financial liabilities include trade and other payables. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

The market value of the listed investments continues to exhibit extreme volatility due to a number of unprecedented global shocks. At the start of the financial year, loose US Government monetary policy, deeply rooted inflation, and sanctions imposed as a result of the Ukraine war in Europe, continued to impact markets. Additional Black Swan events have since shaken the very foundations of the global markets and economies and include: the US Administration's 'Liberation Day' tariffs; the blockade of Venezuela and the forced deposing of its President, Nicholas Maduro; the US and Israeli attacks on Iran's Nantz nuclear facilities, which have destabilized the Middle East, impacting global oil supplies and prices. All of these events have created turbulence which will ultimately feed through to companies' balance sheets. Indeed, post balance sheet, turbulence-inducing events continue, with a wider US and Israeli bombardment of Iran, resulting in, inter alia, the closure of the Straits of Hormuz, suggesting exceptional volatility in these investments will continue into the next financial year.