NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
138
THE STRAITS TRADING COMPANY LIMITED
41.
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
(a)
The Group has the following derivative financial instruments at balance sheet date:
At 31 December 2015:
Notional Amount
Fair Value
Asset
Liability
Asset
Liability
$’000
$’000
$’000
$’000
Forward currency contracts
648
49,965
1
1,807
Forward commodity contracts
–
3,249
–
1,514
Contract for differences
9,258
8,993
199
413
Interest rate swap contracts
– 100,327
–
24
9,906 162,534
200
3,758
At 31 December 2014:
Notional Amount
Fair Value
Asset
Liability
Asset
Liability
$’000
$’000
$’000
$’000
Forward currency contracts
– 72,395
–
2,142
Forward commodity contracts
–
2,118
–
160
Interest rate swap contracts
–
9,926
–
21
– 84,439
–
2,323
Please refer to note 23 for detailed information relating to the risk being hedged.
(b)
Hedge of net investments in foreign operations
Included in borrowings (note 32) at 31 December 2015 was a loan of Japanese Yen1.23 billion which has been
designated as a hedge against the net investment denominated in Japanese Yen. It is being used to hedge the Group’s
exposure to foreign currency risk on this investment. Gain or loss on the retranslation of the borrowing is taken to
the exchange translation reserve to offset any exchange differences on the translation of the net foreign investment.
