The company only enters into basis financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable and loans to and from related parties.
Debt instruments like loans and other accounts receivable and payable are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and trade creditors, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received.
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period of evidence of impairment and if found, an impairment loss is recognised in profit or loss.
Finanial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
Cash and cash equivalents included cash in hand, deposits held at call with banks, other short-term highly liquid investments with orginal maturities of three months or less and bank overdrafts. Bank overdrafts, when applicable, are shown within borrowings in current liabilities.