105 I N T E G R A T E D R E P O R T 2 0 2 1 2. ACCOUNTING POLICIES (CONT’D) 2.8 Significant accounting policies (Cont’d) (c) IFRS 9 - Financial Instruments (Cont’d) Financial liabilities The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. Other than financial liabilities in a qualifying hedging, the Group’s accounting policy for each category is as follows: (i) Fair value through profit or loss This category comprises only out-of-the-money derivatives. They are carried in the statement of financial position at fair value with changes in fair value recognised in the statement of comprehensive income. (ii) Other financial liabilities Other financial liabilities include the following items: Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position. For the purpose of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. Trade payables and other short term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Explanatory Notes 30 SEPTEMBER 2021 E x p l a n a t o r y N o t e s
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