The Company only enters into basic financial instrument 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 and loans
to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other
debtors and creditors, are initially measured at present value of the future cash flows and subsequently at
amortised cost using the effective interest method. Debt instruments that are payable or receivable within one
year, typically trade creditors or debtors, are measured, initially and subsequently, at the undiscounted amount of
the cash and other consideration, expected to be paid or received.
However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a
trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in
case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the
present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and
subsequently at amortised cost.
Financial assets that are measured at cost and amortised are assessed at the end of each reporting
period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is
recognised in the Profit and Loss Account.