Goodwill is reviewed for impairment at least annually. Any
impairment is recognised immediately in the income statement and is
not subsequently reversed. For the purpose of impairment testing
goodwill is allocated to cash generating units of the acquirer
which represent the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. On disposal of a
subsidiary, associate or joint venture, the attributable amount of
goodwill is included in the determination of the profit or loss on
disposal.
Property, plant and equipment
All items of property, plant and equipment are stated at
historical cost less depreciation (see below) and impairment.
Historical cost includes expenditure that is directly attributable
to the acquisition. Subsequent costs are included in the asset's
carrying value when it is considered probable that future economic
benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each item,
as follows:
Buildings and leasehold improvements 5% - 20% depending on the lease
agreement
Plant and equipment 20% - 25%
Medical equipment 12.5% - 25%
Aircraft 10%
Motor vehicles 25%
Office furniture and equipment 12.5% - 33.3%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date. Gains and
losses on disposals are determined by comparing proceeds with
carrying amount and are included in the income statement.
Impairment of property, plant and equipment
Whenever events or changes in circumstance indicate that the
carrying amount of an asset may not be recoverable an asset is
reviewed for impairment. An asset's carrying value is written down
to its estimated recoverable amount (being the higher of the fair
value less costs to sell and value in use) if that is less than the
asset's carrying amount.
Impairment reviews for assets under construction are carried out
on a project by project basis, with each project representing a
potential single cash generating unit. An impairment review is
undertaken when indicators of impairment arise but typically when
one of the following circumstances applies:
-- Title to the asset is compromised; or
-- The Group determines it no longer wishes to continue with or develop the project.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion
and selling expenses. The cost of inventories is based on the first
in, first out principle and includes expenditure incurred in
acquiring the inventories and bringing them to their existing
location and condition.
Financial assets at fair value through profit or loss
Financial assets carried at fair value through profit and loss
are initially recognised at fair value, and transactions costs are
expensed in the income statement. Financial assets are derecognised
when the rights to receive cash flows from the investments have
expired or been transferred.
For financial assets subsequently carried at fair value, gains
or losses arising from changes in fair value are presented in the
income statement within other gains or losses in the period in
which they arise.
Trade and other receivables
Trade and other receivables are not interest bearing and are
initially recognised at their fair value and are subsequently
stated at amortised cost using the effective interest method as
reduced by appropriate allowances for estimated irrecoverable
amounts.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments
with original maturities of three months or less which are subject
to an insignificant risk of changes in value. Bank overdrafts are
included in Trade and other payables.
Financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value
and are subsequently measured at amortised cost, using the
effective interest rate method.
Provisions
Provisions are recognised when the Group has a legal or
constructive obligation as a result of past events, it is probable
that an outflow of the resources will be required to settle the
obligation and the amount can be reliably estimated.
Convertible loan notes
Convertible loan notes are recognised as compound financial
instruments, consisting of a liability component and an equity
component. At the date of issue, the fair value of the liability
component is estimated using the prevailing market interest rate
for similar non-convertible debt. The difference between the
proceeds of issue of the convertible loan notes and the fair value
assigned to the liability component, representing the embedded
option to convert the liability into equity of the Group, is
included in equity in other reserves.
Issue costs are apportioned between the liability and equity
components of the notes based on their relative carrying amounts at
the date of issue. The portion relating to the equity component is
charged directly against equity.
The interest expense on the liability component is calculated by
applying the prevailing market interest rate for similar
non-convertible debt to the liability component of the
instrument.
Equity instruments
Equity instruments issued by the Company are recorded at fair
value on initial recognition, net of transaction costs.
Share based payment
Certain Group employees and consultants are rewarded with share
based instruments. These are stated at fair value at the date of
grant and are expensed to the income statement, over the vesting
period of the instrument, or to the balance sheet when the share
based payment relates to the provision of fund raising
services.
Fair value is estimated using the Black-Scholes option pricing
model. The estimated life of the instrument used in the model is
adjusted for management's best estimate of the effects of
non-transferability, exercise restrictions and behavioural
considerations.
Operating segments
The chief operating decision maker is the Board of Directors.
The board reviews the Group's internal reporting in order to assess
performance of the business. Management has determined the
operating segments based on the reports reviewed by the Board. The
Board considers the activities from a business viewpoint.
3. Financial risk factors
The Group's principal financial instruments comprise cash and
short-term deposits. The main purpose of these is to finance the
Group operations and expansion. The Group has other financial
instruments such as trade receivables and trade payables which
arise directly from normal trading.
The main risks arising from the Group's financial instruments
are credit risk, liquidity risk and market risk (including interest
rate risk and currency risk). The board reviews and agrees policies
for managing each of these risks and these are summarised
below.
Credit risk
Credit risk arises from cash and cash equivalents, and deposits
with banks and financial institutions, as well as outstanding
receivables. The Group's principal deposit is held with a bank with
a high credit rating to reduce credit risk. Receivables are
regularly monitored and assessed for recoverability.
Liquidity risk
The Group's policy throughout the period has been to ensure that
it has adequate liquidity by careful management of its working
capital. At 29 February 2012 the Group was in a position of
overdraft to the amount of US$ 88,000 (2011: cash deposits of US$
4.7 million). Liquidity requirements are projected to be met by
subscription for new Convertible Loan Notes by Harbinger Capital
Partners Master Fund 1, Ltd (refer to note 33 for further details)
by, the proceeds from sale of AMI Aviation coupled with direct
shareholder funding and support and the further raising of short
term facilities in currencies that match the requirement and
raising of long term facilities to achieve an appropriately geared
balance sheet. To further confirm liquidity status, the convertible
loan notes held are not redeemable before February 2016 except at
the instance of the Company.
Market risk
The significant market risk exposures to which the Group is
exposed are interest rate risk and foreign currency risk. These are
discussed further below:
Interest rate risk
The Group finances its operations through the use of cash
deposits at variable rates of interest for a variety of short term
periods, depending on cash requirements. The rates are reviewed
regularly and the best rate obtained in the context of the Group's
need. The weighted average interest rate on deposits was 0.06%
(2010: 0.06%).
The exposure of the Group's financial assets to interest rate
risk is as follows:
2012 2011
$'000 $'000
---------- ----------
Financial assets at floating rates 195 4,681
========== ==========
Foreign currency risk
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