The Company only enters into basic financial instruments and transactions that result in the recognition of financial
assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to and
from related parties and investments in non-puttable ordinary shares.
Financial assets
Basic financial assets, including trade and other debtors, and amounts due from related companies, are initially
recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of
impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present
value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is
recognised in the Statement of Income and Retained Earnings/Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled,
or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c)
control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to
an unrelated third party without imposing additional restrictions.
Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Trade creditors are classified as current liabilities if 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is
discharged, cancelled or expires.
Financial assets and liabilities are offset and 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.