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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 307

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(z) Earnings per share

The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated
based on the consolidated profit after taxation attributable to equity shareholders of the Company and divided by the
weighted number of ordinary shares in issue.

(aa) Fair value measurement
The fair value measurement prescribes that fair value of an asset or a liability, except for share-based payment and lease
transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The measurement assumes that the transaction
to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market,
in the most advantageous market.
(ab) Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
re-measured at their fair value.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and the nature of the item being hedged. The Group designates certain derivatives as hedges of a particular
risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group
also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are
used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
The fair values of various derivative instruments used for hedging purposes are disclosed in Note 27 to the financial
statements. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining
hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item
is less than 12 months.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately
in profit or loss within ‘finance income/(costs)’ and ‘foreign exchange losses’.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or
loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion
of interest rate swaps hedging variable rate borrowings is recognised in profit or loss and presented separately after
net operating profit.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in equity is immediately transferred to profit or loss within
‘finance income/(costs)’ (Note 10).