The Company applies FRS 102 Sections 11 and 12 to its financial instruments. The Company holds basic financial instruments comprising cash, trade and other receivables, trade and other payables, and directors’ current accounts. No derivatives or complex financial instruments were entered into during the year.
Recognition and measurement
Financial instruments are recognised when the Company becomes party to the contractual provisions of the instrument and are initially measured at transaction price, including transaction costs where applicable. Subsequently, basic financial assets and liabilities are measured at amortised cost. Short-term balances are generally carried at the undiscounted amount expected to be received or paid. Material award-related and other long-outstanding receivables are assessed individually for impairment at each reporting date.
Trade and other creditors
Trade creditors are obligations to pay for goods or services acquired in the ordinary course of business. Other creditors include obligations for legal costs and associated expenses. Amounts payable are classified as current where due within one year and are initially recognised at transaction price.
Other debtors
Other debtors are amounts due from parties other than trade debtors and include amounts arising from arbitral awards, compensation, settlements and related legal matters. Amounts receivable are classified as current assets where expected to be recovered within the operating cycle or otherwise meet the criteria for current classification.
Impairment of financial assets
At each reporting date the Company assesses whether there is objective evidence that a financial asset measured at cost or amortised cost is impaired. Where such evidence exists, an impairment loss is recognised in profit or loss.
Offsetting
Financial assets and liabilities are offset only when there is a legally enforceable right to set off the recognised amounts and an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term highly liquid deposits with original maturities of three months or less.
Directors’ current accounts
Amounts due to directors are interest-free.
Risk disclosures
(a) Credit risk: arises principally on trade and other receivables, including award-related receivables. The directors monitor recoverability and the progress of relevant enforcement and recovery processes and recognise impairment where required.
(b) Liquidity risk: liabilities are primarily current trade and other payables and directors’ current accounts. The directors monitor cash resources, expected receipts and liabilities as they fall due.
(c) Market / foreign exchange risk: some cash balances, receivables and payables are denominated in EUR and GBP. Foreign currency monetary items are retranslated at the closing rate, with exchange differences recognised in profit or loss.
(d) Interest rate risk: the Company has no bank loans or other interest-bearing borrowings; finance costs in the year principally comprised bank charges.