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 balance sheet 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 debtors 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. Financial assets classified as receivable within one year are not discounted.
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 its liabilities.
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 recognised at transaction price unless the arrangement constitutes a financing transaction where they are
subsequently carried at amortised cost using effective interest method. Financial liabilities that constitute a financing transaction are
measured at present value of future payments discounted at a market rate of interest. Financial liabilities classified as payable within
one year are not discounted.
Debt instruments are subsequently carried at amortised cost, using effective interest rate method.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in ordinary course of business from suppliers.
Amounts payable under trade creditors classified as current liabilities if payment is due within one year or less. If not they presented as
non-current liabilities. Trade creditors recognised initially at transaction price and subsequently measured amortised cost using effective
interest method.