Financial instruments are recognised in the company's balance sheet when the company becomes party to the
contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially recorded 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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are
settled, or when the company transfers the financial asset and substantially all the risks and rewards of
ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the
asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference
shares that are classified as debt, are initially recorded at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of the future payments
discounted at a market rate of interest. Financial liabilities classified as payable within one year are not
amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Amounts payable are classified as current liabilities in payment is due within one year
or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction
price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or
cancelled.