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.
| (i) | Non-derivative financial assets |
The Company’s non-derivative financial assets include trade and other receivables, cash and cash equivalents and, in 2016, certificates of deposit at banks with original maturities of more than three months.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets and are subsequently carried at amortized cost using the effective interest method.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
| (ii) | Non-derivative financial liabilities |
The Company’s classes of financial liabilities are borrowings and trade and other payables. The Company initially recognizes non-derivative financial liabilities on the date that they are originated and measures them at amortized cost using the effective interest rate method. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
| (iii) | Compound financial instruments |
The Company entered into certain loan agreements pursuant to which it issued warrants to purchase common shares of the Company at the option of the respective holders (see note 17). The number of shares to be issued does not vary with changes in their fair value.
The liability component of the loans was recognized initially at the fair value of a similar liability without a warrant. The equity component was recognized initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Subsequent to initial recognition, the liability component is measured at amortized cost using the effective interest method. The equity component is not re-measured subsequent to initial recognition.
In 2017, the Company entered into a convertible note agreement (see note 13). The Company designated the combined contract consisting of the loan component and the conversion feature embedded in the loan agreement at fair value through profit and loss and recognizes changes of fair value re-measured on a recurring basis in ‘Finance income / (costs) – net.’
| (i) | Derivatives |
The Company acquired warrants to purchase common shares of Amphivena Therapeutics Inc. (“Amphivena”) at a specified price (see note 13). Initially, the warrants were recognized at fair value. Subsequently the fair value is re-measured on a recurring basis with changes recognized in ‘Finance income / (costs) – net.’