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Notes to the Consolidated Financial Statements

31st March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.12 Impairment of financial assets carried at amortised cost (continued)

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised (such as an
improvement in the debtor’s credit rating), the reversal of the previously recognised impairment
loss is recognised in the consolidated income statement.

2.13 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the
weighted average method. The cost of finished goods and work in progress comprises design
costs, raw materials, direct labour, other direct costs and related production overheads (based
on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated
selling price in the ordinary course of business, less applicable variable selling expenses.

2.14 Trade and other receivables

Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. If collection of trade and other receivables is expected in one year
or less (or in the normal operating cycle of the business if longer), they are classified as current
assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment.

2.15 Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents include cash on hand,
deposits held at call with banks and other short term highly liquid investments with original
maturities of three months or less.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2015 47