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removed from equity and recognised in the income statement. Impairment losses recognised in the income
statement on equity instruments are not reversed through the income statement.
2.7 Derivative Financial Instruments and Hedging Activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
the income statement within other gains/(losses) – net, unless the derivatives are designated as hedging
instruments. Derivatives that are designated as hedging instruments are classified as either fair value hedges
or cash flow hedges and are accounted for in terms of the requirements of IAS 9 “Financial Instruments:
Recognition and Measurement”.
The Company does not have any derivative financial instruments at the year end date or during the current
or prior periods presented.
2.8 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using
the weighted average method. Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of
any gains/(losses) on qualifying cash flow hedges purchases of raw materials.
2.9 Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for impairment. A provision for impairment of trade receivables
is established when there is objective evidence that the Company will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments
are considered indicators that the trade receivable is impaired. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted
at the original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss is recognised in the income statement within selling and
marketing costs. When a trade receivable is uncollectible, it is written off against the allowance account
for trade receivables. Subsequent recoveries of amounts previously written off are credited in the income
statement.
2.10 Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities on the balance sheet.
Cash and cash equivalents exclude any restricted cash that comprises deposits that are used in order to
secure loan instalments. Such deposits may only be used for the purpose of loan repayments since they
are restricted. Accordingly, these deposits are classified as restricted cash under current or non-current
assets, as is appropriate.
2.11 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
statement on equity instruments are not reversed through the income statement.
2.7 Derivative Financial Instruments and Hedging Activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
the income statement within other gains/(losses) – net, unless the derivatives are designated as hedging
instruments. Derivatives that are designated as hedging instruments are classified as either fair value hedges
or cash flow hedges and are accounted for in terms of the requirements of IAS 9 “Financial Instruments:
Recognition and Measurement”.
The Company does not have any derivative financial instruments at the year end date or during the current
or prior periods presented.
2.8 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using
the weighted average method. Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of
any gains/(losses) on qualifying cash flow hedges purchases of raw materials.
2.9 Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for impairment. A provision for impairment of trade receivables
is established when there is objective evidence that the Company will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments
are considered indicators that the trade receivable is impaired. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted
at the original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss is recognised in the income statement within selling and
marketing costs. When a trade receivable is uncollectible, it is written off against the allowance account
for trade receivables. Subsequent recoveries of amounts previously written off are credited in the income
statement.
2.10 Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities on the balance sheet.
Cash and cash equivalents exclude any restricted cash that comprises deposits that are used in order to
secure loan instalments. Such deposits may only be used for the purpose of loan repayments since they
are restricted. Accordingly, these deposits are classified as restricted cash under current or non-current
assets, as is appropriate.
2.11 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
