Inventories are stated at the lower of cost or net realisable value. Costs incurred in bringing each product to its present location and conditions are accounted for as follows:

• Raw materials: Purchase cost on a first-in, first-out basis
• Finished goods and work-in-progress: Cost of direct material and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs

Consumables are written down with regard to their age, condition, and utility. Costs of inventories include the transfer from other comprehensive income of gains and losses on qualifying cash flow hedges in respect of the purchases of raw materials. Net realisable value is the estimated selling price in the ordinary course of business less estimated completion and selling costs.

Obsolete, redundant, and slow-moving items are identified on a regular basis and are written down to their estimated net realisable values. The amount of the write-down is recognised in cost of sales in the year in which it occurs.

^# Refer to note 36 for details on restatements