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01 INTEGRATED 73 STATUTORY 178 FINANCIAL
REPORTS
STATEMENTS
REPORT
Consolidated

2.15.2 Debt and equity instruments flow hedges). When the Group opts to undertake
Debt and equity instruments are classified as either hedge accounting, the Group documents,
financial liabilities or as equity in accordance with at the inception of the hedging transaction,
the substance of the contractual arrangement. the economic relationship between hedging
instruments and hedged items including whether
An equity instrument is any contract that the hedging instrument is expected to offset
evidences a residual interest in the assets of an changes in cash flows or fair values of hedged
entity after deducting all of its liabilities. Equity items. The Group documents its risk management
instruments issued by the Group are recorded at objective and strategy for undertaking various
the proceeds received, net of direct issue costs.
hedge transactions at the inception of each hedge
2.15.3 Financial liabilities relationship.
The Group’s financial liabilities comprise Derivatives are initially recognised at fair value on
borrowings, lease liabilities, trade payables and the date the derivative contract is entered into and
other liabilities. These are initially measured are subsequently remeasured to their fair value at
at fair value, net of transaction costs, and are the end of each reporting period. The accounting
subsequently measured at amortised cost using for subsequent changes in fair value depends on
the EIR method. The EIR is a method of calculating whether the derivative is designated as a hedging
the amortised cost of a financial liability and of instrument, and if so, the nature of the item
allocating interest expense over the relevant period being hedged and the type of hedge relationship
at effective interest rate. The effective interest rate designated.
is the rate that exactly discounts estimated future Cash flow hedges that qualify for hedge
cash payments through the expected life of the accounting
financial liability, or, where appropriate, a shorter
period. The effective portion of changes in the fair value
of derivatives that are designated and qualify
Changes to the carrying amount of a financial
liability as a result of renegotiation or modification as cash flow hedges, is recognised through OCI
of terms that do not result in derecognition of the and as cash flow hedging reserve within equity,
financial liability, is recognised in the Consolidated limited to the cumulative change in fair value of
Statement of Profit and Loss. the hedged item on a present value basis from the
inception of the hedge. The gain or loss relating to
Derecognition of financial liabilities the ineffective portion is recognised immediately
in the Consolidated Statement of Profit and Loss.
The Group derecognises financial liabilities when,
and only when, its obligations are discharged, Amounts accumulated in equity are reclassified to
cancelled or they expire. the Consolidated Statement of Profit and Loss on
settlement. When the hedged forecast transaction
Presentation results in the recognition of a non-financial asset,
Borrowings are classified as current liabilities the amounts accumulated in equity with respect
unless the Group has an unconditional right to gain or loss relating to the effective portion of
to defer settlement of the liability for at least 12 the spot component of forward contracts, both
months after the reporting period. the deferred hedging gains and losses and the
deferred aligned forward points are included
Trade and other payables are presented as current
liabilities unless payment is not due within 12 within the initial cost of the asset. The deferred
months after the reporting period. amounts are ultimately recognised in the
Consolidated Statement of Profit and Loss as the
2.15.4 Derivatives and hedging activities hedged item affects profit or loss.
In the ordinary course of business, the Group When a hedging instrument expires, is sold or
uses certain derivative financial instruments terminated, or when a hedge no longer meets
to reduce business risks which arise from its the criteria for hedge accounting, then hedge
exposure to foreign exchange, fuel and interest accounting is discontinued prospectively and
rate fluctuations associated with borrowings (cash any cumulative deferred gain or loss and deferred

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