ITF

2014 2013 Carrying Contractual 1 year Carrying Contractual 1 year amount cash flows or less amount cash flows or less $000 $000 $000 $000 $000 $000 Assets 354 354 354 1,370 1,370 1,370 Liabilities (450) (450) (450) (91) (91) (91) (96) (96) (96) 1,279 1,279 1,279 31. Financial instruments (cont.) (d) Cash flow hedges The following table indicates the periods in which the cash flows associated with cash flow hedging instruments are expected to occur: (e) Market risk Financial risk management Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The Group's financial risk management objective is to control the exposure to foreign exchange fluctuations especially in sterling and to a lesser extent the Euro and Australian Dollar, against the US Dollar. Sterling: The group has entered into forward currency contracts to buy £8,900,00 (2013: £12,200,00) at an average exchange rate of US$1.608/£1 (2013: US$1.538/£1). These contracts mature at various dates throughout 2015 and 2016 to match budgeted sterling expenditure. The fair value of these hedges, based on the mark to market valuations of the contracts at the balance sheet date, using prices on that date to purchase the same forward contracts, was an liability of $450,000 (2013: Asset of $1,370,000) with a corresponding entry in reserves. Euro: The group entered into forward currency contracts to sell €2,310,000 (2013: €1,480,000) at an average exchange rate of US$/€1.364 (2013: US$1.316/€1). The fair value of these hedges, based on the mark to market valuations of the contracts at the balance sheet date, using prices on that date to purchase the same forward contracts, was a asset of $354,000 (2013: Liability of $91,000) with a corresponding entry in reserves. Australian Dollar: The group did not enter into forward currency contracts to sell A$ in 2014 (2013: A$nil). 2014 2013 Carrying Contractual 1 year Carrying Contractual 1 year amount cash flows or less amount cash flows or less $000 $000 $000 $000 $000 $000 Assets 354 354 354 1,370 1,370 1,370 Liabilities (450) (450) (450) (91) (91) (91) (96) (96) (96) 1,279 1,279 1,279 The following table indicates the periods in which the cash flows associated with cash flow hedging instruments are expected to affect profit or loss: NOTES (FORMING PART OF THE FINANCIAL STATEMENTS) ITF FINANCIAL STATEMENTS 69

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