mitigating exposure to variable market prices. Credit risks relating to derivative financial instruments are disclosed in Note 45(b) to the financial statements. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 253 20 INVENTORIES Accounting Policy Inventories are stated at the lower of cost and net realisable value. Cost of work-in-progress and finished goods comprise raw materials, direct labour and a proportion of the production overheads. Cost is determined on the weighted average basis and comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. Accounting Policy Trade and other receivables Trade receivables are amountsdue from customers for goods sold or services performed in the ordinary course of business. Other receivables generally arise from transactions outside the usual operating activities of the Group and the Company. If collection 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, which is the amount of consideration that is unconditional unless they contain significant financing components. The Group and the Company hold the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost less accumulated impairment losses. The impairment is determined based on the ECL model and is further disclosed in Note 45. Insurance contracts Reinsurance contracts - initial recognition The Group applies the premium allocation approach (‘PAA’) to all the reinsurance contracts it holds, as: • The coverage period of each contract in the group is one year or less, including insurance contract services arising from