Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument.
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.
Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally
enforceable right to set off the recognised amounts and the Company intends either 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
amortised.
Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset
expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership
of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of
ownership, has transferred control of the asset to another 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 recognised 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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 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 company’s contractual obligations expire or are discharged or cancelled.