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Whitehaven Coal Limited : Annual Report 2011
WhitehavenCoalLimited–AnnualReport2011 79 noteS to the Financial StatementS 30 june 2011 5. fiNANCiAL Risk mANAGEmENT OBJECTivEs ANd POLiCiEs (CONTiNuEd) Risk exposures and responses (continued) Commodity price risk The consolidated entity’s major commodity price exposure is to the price of coal The consolidated entity has chosen not to hedge against the movement in coal prices but enters into sales contracts with a duration of more than 12 months to mitigate this risk For the following financial year 50% of coal sales tonnages have had the sales price fixed Net fair values As of 1 July 2009, the Group has adopted the amendment to AASB 7 Financial Instruments: Disclosures which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: • Level 1 – measurements based upon quoted prices (unadjusted) in active markets for identical assets or liabilities, • Level 2 – measurements based upon inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices), and • Level 3 – measurements based on inputs for the asset or liability that are not based on observable market data (unobservable inputs) The fair value of derivative financial instruments is derived using valuation techniques based on observable market inputs, such as forward currency rates, at the end of the reporting period The amounts disclosed in the statement of financial position are the fair values and are classified under level 2 in the fair value measurement hierarchy (refer note 17) The fair value of the Group’s investment in unlisted shares is classified under level 3 in the fair value measurement hierarchy (refer note 18) The carrying values of financial assets and financial liabilities recorded in the financial statements approximates their respective net fair values, determined in accordance with the accounting policies disclosed in note 3 to the financial statements Financial assets and liabilities by categories In thousands of AUD 2011 2010 Consolidated Entity Note Loans and receivables1 Available for sale Other Loans and receivables1 Available for sale Other financial assets Cash and cash equivalents 14 207,602 – – 141,049 – – Trade and other receivables 15 95,067 – – 326,365 – – Investments 18 – 14,866 1,210 – – 1,210 Other financial assets2 – – 55,998 – – 23,127 Total financial assets 302,669 14,866 57,208 467,414 – 24,337 financial liabilities Trade and other payables 22 154,264 – – 128,408 – – Borrowings 23 178,593 – – 94,929 – – Other financial liabilities2 – – 7,208 – – 19,422 Total financial liabilities 332,857 – 7,208 223,337 – 19,422 1 Loans and receivables are non-derivatives with fixed or determinable payments and are not quoted on an active market Loans and receivables are valued at amortised cost 2 Other financial assets include $56 0 million (2010: $23 1 million) relating to derivatives that qualified as being in a hedging relationship Similarly, other financial liabilities include amounts of $72 million (2010: $19 4 million)
Annual Report 2010
Annual Report 2012