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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Annual Report 2016 93
Notes to the consolidated financial statements
30 June 2016
(continued)
Risk
This section of the notes includes information on the Group's exposure to various risks and shows how these could
affect the Group's financial position and performance.
20 Derivatives
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where
derivatives do not meet the hedging criteria, they are classified as ‘held for trading’ for accounting purposes below. The
Group has the following derivative financial instruments:
2016
$'000
2015
$'000
Current assets
Commodity hedging contracts - held for trading
-
4,981
Diesel hedging contracts - cash flow hedges
784
-
784
4,981
Non-current assets
Diesel hedging contracts - cash flow hedges
799
-
799
-
Current liabilities
Commodity hedging contracts - cash flow hedges
2,487
762
Foreign currency contracts - held for trading
-
1,622
2,487
2,384
Non-current liabilities
Commodity hedging contracts - cash flow hedges
-
717
-
717
(a) Instruments used by the Group
Derivative financial instruments are used by the Group in the normal course of business in order to hedge exposure to
fluctuations in foreign exchange rates, commodity prices and diesel prices.
The derivative financial instruments are classified as held for trading and accounted for at fair value through profit or
loss unless they are designated as cash flow hedges. The Group's accounting policy for its cash flow hedges is set out
below.
The fair value of the derivative instruments at the reporting date is reflected in current and non-current assets and
liabilities in the balance sheet and is calculated by comparing the contracted rate to the market rates for derivatives with
the same length of maturity.
Refer to note 21 and below for details of the foreign currency, commodity prices and diesel fuel risk being mitigated by
the Group’s derivative instruments as at 30 June 2016 and 30 June 2015.
Gold
Gold collar structures (i.e. purchased put and sold call) have been designated as hedges of future gold sales and have
been designated as cash flow hedges. These comprise:
Independence Group NL
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