ACCOUNTABILITY | NOTES TO THE FINANCIAL STATEMENTS 185 INTEGRATED ANNUAL REPORT 2026 2. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 2.17 Derivative financial instruments (continued) For other derivative liabilities with a final maturity date later than 12 months after the end of the reporting period, for which no settlement will occur within 12 months, are classified in their entirety as non-current liabilities. However, for those derivatives with a final maturity date later than 12 months that have periodic cash settlements, including some occurring within 12 months, the Group classifies the portion due to be settled within 12 months as a current liability and the portion due to be settled later than 12 months as a non-current liability. (a) Cash flow hedge For derivatives that qualify as cash flow hedges, the gain or loss relating to the ineffective portion of changes in the fair value is recognised in profit or loss. The gain or loss relating to the effective portion is recognised in other comprehensive income and later reclassified to profit or loss when the hedged item affects profit or loss. Deferred tax is recognised on the temporary difference arising from the changes in the fair value of the hedging instrument recorded in other comprehensive income. The deferred tax effect is also recognised in other comprehensive income and accumulated in the Cash Flow Hedge Reserve. When the hedged item impacts profit or loss, the deferred tax previously recognised in other comprehensive income is reclassified to profit or loss in line with the hedged item. The Group amends its hedge documentation to reflect this change in designation by the end of the reporting period in which the changes are made. These amendments to the hedge documentation do not require the Group to discontinue its hedge relationships. (b) Net investment hedge Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in reserves within equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is disposed or partially disposed of. (c) Warrants Warrants that may be settled other than by the exchange of a fixed amount of cash for a fixed number of the Group’s own equity instruments are classified as derivative financial liabilities. Such warrants are initially recognised at fair value on the date of issuance and are subsequently measured at fair value at each reporting date, with changes in fair value recognised in profit or loss. The fair value of the warrants is determined using appropriate valuation techniques, taking into account the terms and conditions of the instruments, including any variable exercise price features, caps or floors. 2.18 Impairment of non-financial assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU fair value less costs of disposal and its value-in-use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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