Financial instrumentsThe Company only enters into basic financial instruments transactions that result in the recognition offinancial assets and liabilities such as bank and cash balances, trade and other accounts receivableand payable, loans from banks and other third parties and loans to and from related parties.Debt instruments (other than those wholly repayable or receivable within one year), including loansand other accounts receivable and payable, are initially measured at the transaction price andsubsequently at amortised cost using the effective interest method. Debt instruments that are payableor receivable within one year, typically trade debtors and creditors, are measured, initially andsubsequently, at the undiscounted amount of the cash or other consideration expected to be paid orreceived. However, if the arrangements of a short-term instrument constitute a financing transaction,the financial asset or liability is measured, initially, at the present value of the future cash flowdiscounted at a market rate of interest for a similar debt instrument and subsequently at amortisedcost.Financial assets and liabilities are offset and the net amount reported in the Balance Sheet whenthere is an enforceable right to set off the recognised amounts and there is an intention to settle on anet basis or to realise the asset and settle the liability simultaneously.PensionsThe Company operates a defined contribution plan for its employees. A defined contribution plan is apension plan under which the Company pays fixed contributions into a separate entity. Once thecontributions have been paid the Company has no further payment obligations.The contributions are recognised as an expense in the Statement of Income and Retained Earningswhen they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. Theassets of the plan are held separately from the Company in independently administered funds.TaxationTax is recognised in the Statement of Income and Retained Earnings.The current tax charge is calculated on the basis of tax rates and laws that have been enacted orsubstantively enacted by the balance sheet date in the countries where the Company operates andgenerates income.Deferred tax balances are recognised in respect of all timing differences that have originated but notreversed by the Balance Sheet date, except that:The recognition of deferred tax assets is limited to the extent that it is probable that they will berecovered against the reversal of deferred tax liabilities or other future taxable profits; and anydeferred tax balances are reversed if and when all conditions for retaining associated tax allowanceshave been met.