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Whitehaven Coal Limited : Annual Report 2013
147 Whitehaven Coal Limited Annual Report 2013 Notes to the Financial Statements 30 June 2013 Instruments used by the consolidated entity Derivative nancial instruments are used by the consolidated entity in the normal course of business in order to hedge exposure to uctuations in foreign exchange and interest rates. Interest rate swaps -- cash ow hedges The consolidated entity has debt facilities subject to variable interest rates. In order to protect against interest rate movements and reduce the interest rate related volatility of the consolidated entity's nancial expenses, the consolidated entity enters into interest rate swaps. The fair value of interest rate swaps at 30 June 2013 was $120,000 (2012: nil). Forward currency contracts -- cash ow hedges The consolidated entity undertakes sales in US dollars, and has made speci c capital purchases in Euros. In order to protect against exchange rate movements and reduce the foreign exchange rate related volatility of the consolidated entity's revenue and purchase streams, the consolidated entity enters into forward exchange contracts to sell US dollars, and historically to buy Euros, in the future at stipulated exchange rates. Forward exchange contracts are entered for future sales undertaken in US dollars, and future purchases undertaken in Euros. The contracts are timed to mature when funds for coal sales are forecast to be received, and when amounts for capital purchases are forecast to be paid. At 30 June 2013, the forward exchange contracts are designated as cash ow hedges and are expected to impact pro t and loss in the periods speci ed below. Forward exchange contracts In thousands of AUD (except exchange rates) Fair value 2013 Average exchange rates 2013 Fair value 2012 Average exchange rates 2012 Sell US dollars Less than 6 months 4,938 0.9725 4,637 0.9694 6 months to 1 year -- -- 1,637 0.9694 4,938 0.9725 6,274 0.9694 Buy Euros Less than 6 months -- -- (2,053) 0.5443 -- -- (2,053) 0.5443 The ine ectiveness recognised in nancial expenses in the income statement for the current year was $nil (see Note 12). The cumulative e ective portion of $3,530,000 is re ected in other comprehensive income. The recycling of gains from the hedge reserve to the income statement for sales amounted to $7,893,000, which has been recognised in revenue. The recycling of losses from the hedge reserve to the balance sheet for purchases amounted to $2,374,000, which has been recognised in property, plant and equipment. 18. INVESTMENTS Consolidated In thousands of AUD 2013 2012 Current investments Investment in unlisted preference shares -- 6,899 Non-current investments Investment in unlisted shares 37 1,210 Investment in listed shares 1,015 4,418 1,052 5,628 During the year the Group disposed of the remaining $6.9m in preference shares in NCIG. During the year ended 30 June 2011 the Group acquired a total of $37.3m in preference shares ($14.8m) and shareholder loan notes ($22.5m) as part of the funding requirement of the NCIG Stage 2AA expansion. The shareholder loan notes were all disposed of during the year of acquisition and during the prior year $8.0m in preference shares were disposed as NCIG secured funding from other investors. As part of one of these disposals the Company issued a put option giving the acquirer the right, subject to certain criteria being met, to sell back the shareholder loan notes. The likelihood of the put option being exercised is considered remote.
Annual Report 2012