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Notes to the Financial Statements
31 December 2015
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Fair value estimates (continued)
For derivative financial instruments that are measured at fair value, the fair values are determined using a valuation technique which utilises
data from recognised financial information sources. Assumptions are based on market conditions existing at each reporting date. The fair
values of cross currency interest rate and interest rate swaps are calculated as the present value of estimated future cash flow using an
appropriate market-based yield curve. The fair values of forward foreign exchange contracts are determined using the forward exchange
rates as at each reporting date.
(j) Inventories
Inventories, which comprise telecommunications components, incidentals and devices, are stated at the lower of cost and net realisable
value. Cost includes the actual cost of materials and incidentals in bringing the inventories to their present location and condition, and is
determined on a weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
(k) Receivables
Receivables are carried at invoice amount and/or income earned less an allowance for impairment. The allowance is established when
there is objective evidence that the Group and the Company will not be able to collect all amounts due according to the original terms
of receivables. When the debt becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are recognised in the statement of profit or loss.
(l) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the
statement of financial position. For the purposes of the statement of cash flows, cash and cash equivalents are presented net of pledged
deposits.
(m) Share capital
(i)
Classification
Ordinary shares and redeemable preference shares with discretionary dividends are classified as equity. Other shares are classified
as equity and/or liability according to the economic substance of the particular instrument. Distributions to holders of a financial
instrument classified as an equity instrument are charged directly to equity.
(ii)
Share issue costs
External costs directly attributable to the issue of new shares are deducted, net of tax, against proceeds and shown in equity.
(iii) Dividends to shareholders of the Company
Dividend distribution to the Company’s shareholders is recognised as a liability in the period they are approved by the Directors except
for the final dividend which is subject to approval by the Company’s shareholders.
