The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section
12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company
becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset , with the net amounts presented in the financial statements , when
there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a
net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially
measured at transaction price including transaction costs and are subsequently carried at amortised cost
using the effective interest method unless the arrangement constitutes a financing transaction, where the
transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the
assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group
companies and preference shares that are classified as debt, are initially recognised at transaction price
unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the
present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified
as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course
of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within
one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially
at transaction price and subsequently measured at amortised cost using the effective interest method.