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Notes to the Consolidated Financial Statements

31st March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

2.14 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.

2.15 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares and share options are shown in equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the Company’s equity share capital (treasury shares), the
consideration paid, including any directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to owners of the Company until the shares are cancelled or
reissued. Where such ordinary shares are subsequently reissued, any consideration received, net
of any directly attributable incremental transaction costs and the related income tax effects, is
included in equity attributable to owners of the Company.

2.16 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Trade payables are classified as current liabilities if payment is
due within one year or less (or in the normal operating cycle of the business if longer). If not, they
are presented as non-current liabilities.

Trade and other payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2016 45