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.
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, 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
receipts discounted at a market rate of interest.
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. Accounts 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.