ANNUAL REPORT

3.9. Inventories
Inventories are stated at the lower of cost and net realizable
value. Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and selling expenses.
The cost of inventories is based on the weighted average
principle and includes expenditure incurred in acquiring the
inventories and bringing them to their existing location and
condition. In the case of manufactured inventories and work in
progress, cost includes the direct cost of materials, direct
manufacturing expenses and an appropriate, systematically
allocated share of overheads, based on normal operating
capacity.
3.10. Trade and other receivables
Trade and other receivables are stated at their cost less
impairment losses. An estimate is made for doubtful receivables
based on a review of all outstanding amounts at each balance
sheet date. Impairment losses are recorded during the year in
which they are identified.
3.11. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts repayable on demand are included as
cash and cash equivalents for the purpose of the cash-flow
statement if and when they form an integral part of the entity’s
cash management.
3.12. Impairment
3.12.1. Methodology
The carrying amounts of the Company’s assets, other than
inventories and deferred tax assets, are reviewed at each
balance sheet date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s
recoverable amount is estimated.
For goodwill, assets that have an indefinite useful life and
intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance sheet date.
An impairment loss is recognized whenever the carrying amount
of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognized in the income
statement.
Impairment losses recognized in respect of cash-generating
units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (group of units) and
then to reduce the carrying amount of the other assets in the
unit (group of units) on a pro rata basis.
3.12.2. Calculation of recoverable amount
The recoverable amount of the Company’s investments in heldto-maturity
securities and receivables carried at amortized cost
is calculated as the present value of estimated future cash
flows, discounted at the original effective interest rate (i.e., the
effective interest rate computed at initial recognition of these
financial assets). Receivables with a short duration are not
discounted.
The recoverable amount of other assets is the greater of their
fair value less cost to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset
belongs.
3.12.3. Reversals of impairment
A previously recognized impairment loss is reversed if there has
been a change in the estimates used to determine the
recoverable amount.
An impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
An impairment loss recognized for goodwill shall not be
reversed in a subsequent period.
3.13. Share capital
When share capital recognized as equity is repurchased, the
amount of the consideration paid, including directly attributable
costs, is recognized as a change in equity. Repurchased shares
are classified as treasury shares and presented as a deduction
from total equity.
Dividends are recognized as a liability in the period in which they
are declared.
Transaction costs related to the issuance of shares are
accounted for as a deduction from equity, net of any tax effects.
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