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TEHO INTERNATIONAL INC LTD Annual Report 2012 56
Notes to the
Financial Statements
30 June 2012
27. Derivatives Financial Instruments
Forward Currency Contracts
This includes the gross amount of all notional values for contracts that have not yet
been settled or cancelled. The amount of notional value outstanding is not necessarily a
measure or indication of market risk, as the exposure of certain contracts may be offset
by that of other contracts.
Principal
Reference
currency Maturity
Fair value
gain/(loss)
2012:
Forward currency contract 150,000 USD 31 Dec 2012 2,671
2011:
Forward currency contract 30,000 USD 19 July 2011 (2,963)
The purpose of these contracts is to mitigate the fuctuations of expected purchases
(forecast transactions) denominated in USD.
The net fair value gains/(losses) of the group’s forward currency contracts were not
considered to be signifcant, no adjustment were made to the proft or loss. The fair
value is regarded as a level 2 fair value measurement for fnancial instruments.
Interest Rate Swap
The notional amount of the interest rate swap at 30 June 2011 was $3,440,000. They
were designed to convert foating rate borrowings to fxed rate exposure at 3.08% over
a two year period which expired on 11 April 2009. The swap was renewed and expired
on 11 April 2012.
The fair value loss and gain of $5,802 and $53,303 arising from the mark-to-market
exercise (Level 2) of this derivative for the year ended 30 June 2012 and 30 June 2011
respectively were recognised in the proft or loss.
28. Financial Instruments: Information on Financial Risks
28A. Classifcation of Financial Assets and Liabilities
The following table summarises the carrying amount of fnancial assets and liabilities
recorded at the end of the reporting year by FRS 39 categories:
Group Company
2012
$
2011
$
2012
$
2011
$
Financial assets:
Cash and bank
balances 7,054,224 8,111,180 33,433 60,024
Loans and receivables 8,491,003 7,088,834 1,826,922 3,924,346
At end of year 15,545,227 15,200,014 1,860,355 3,984,370
Financial liabilities:
Financial Liabilities at
fair value through
proft or loss
designated as
such upon initial
recognition – 89,399 – –
Borrowings at
amortised cost 13,956,909 12,179,646 – –
Trade and other
payables at
amortised cost 4,217,182 1,839,038 3,564,746 118,848
At end of year 18,174,091 14,108,083 3,564,746 118,848
Further quantitative disclosures are included throughout these fnancial statements.