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APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
14. DERIVATIVE FINANCIAL INSTRUMENTS (continued)
(b) Forward exchange contracts – cash flow hedges
During the year forward exchange contracts were used to hedge future foreign capital purchase commitments. The contracts are timed
to mature as payments are scheduled to be made to suppliers.
The tables below analyse the Group’s derivative financial instruments that will be settled on a gross basis, into relevant maturity groupings
based on the remaining period at balance date to the contractual maturity date. The amounts disclosed in the tables are the contractual
undiscounted cash flows.
Less than
one year
$’000
Between
one and
two years
$’000
Between
two and
five years
$’000
Over
five years
$’000
31 December 2011
Forward foreign exchange contracts
Cash flow hedges
– inflow
441
–
–
–
– outflow
578
–
–
–
31 December 2010
Forward foreign exchange contracts
Cash flow hedge
– inflow
942
442
–
–
– outflow
1,197
578
–
–
As at balance date the details of the outstanding contracts are:
Buy British Pounds
Sell Australian dollars
Average exchange rate
2011
$’000
2010
$’000
2011
2010
Maturity
Zero to 12 months
578
1,197
0.502
0.516
One to two years
–
578
–
0.502
The foreign currency contracts are considered to be fully effective hedges as they are matched against the highly probable foreign capital
purchases with any gain or loss on the contracts taken to equity. When the cash flows occur, the Group adjusts the initial measurement of
the component recognised in the balance sheet by removing the related amount from other comprehensive income.
During the year ended 31 December 2011 a loss of $0.1 million (2010: $0.3 million) was reclassified from other comprehensive income and
included in the initial measurement of capital purchases.