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Whitehaven Coal Limited : Annual Report 2012
Whitehaven Coal Limited -- Annual Report 2012 99 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012 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. 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 Group held the following financial instruments carried at fair value in the statement of financial position: In thousands of AUD 30 June 2012 Level 1 Level 2 Level 3 Assets measured at fair value Forward exchange contracts -- receivable 6,274 -- 6,274 -- Equity shares 5,628 4,418 -- 1,210 Preference shares 6,899 -- -- 6,899 Liabilities measured at fair value Forward exchange contracts -- payable (2,053) -- (2,053) -- 30 June 2011 Level 1 Level 2 Level 3 Assets measured at fair value Forward exchange contracts -- receivable 55,998 -- 55,998 -- Equity shares 1,210 -- -- 1,210 Preference shares 14,866 -- -- 14,866 Liabilities measured at fair value Forward exchange contracts -- payable (7,208) -- (7,208) -- 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 listed shares is classified under level 1 in the fair value measurement hierarchy (refer note 18). 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.
Annual Report 2011
Annual Report 2013