Sustainability and Governance Report
Notes to the FINANCIAL STATEMENTS
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2. Summary of significant accounting policies (cont'd)
2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and fixed deposits which are subject to an insignificant risk of changes in value.
2.14 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes all costs incurred in bringing the inventories
to their present location and condition.
Where necessary, allowance is provided for damaged, obsolete and slow-moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.15 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be
required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that
reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
2.16 Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Government grants
shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to
compensate. Grants related to income are presented as a credit in profit or loss under "Other income".
2.17 Financial guarantee
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the terms of a debt instrument.
Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent
to initial recognition, financial guarantees are measured at the higher of the amount of expected credit loss determined in accordance with the policy set out in Note 2.12
and the amount initially recognised less, when appropriate, the cumulative amount of income recognised over the period of the guarantee.
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