ITF

ITF FINANCIAL STATEMENTS I 69 31. Financial Instruments (continued) (d) Cash fl ow hedges Cash fl ow hedges – The following table indicates the periods in which the cash fl ows associated with cash fl ow hedging instruments are expected to occur: The following table indicates the periods in which the cash fl ows associated with cash fl ow hedging instruments are expected to affect profi t or loss: (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 fi nancial instruments. The Group's fi nancial risk management objective is to control the exposure to foreign exchange fl uctuations 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 £9,900,000 (2014: £8,900,000) at an average exchange rate of $1.542/£1 (2014: $1.608/£1). These contracts mature at various dates throughout 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 a liability of $660,000 (2014: liability of $450,000) with a corresponding entry in reserves. Euro: The group entered into forward currency contracts to sell €1,595,000 (2014: €2,310,000) at an average exchange rate of $1.130/€1 (2014: $1.364/€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 an asset of $64,000 (2014: asset of $354,000) with a corresponding entry in reserves. Australian Dollar: The group did not enter into forward currency contracts to sell A$ in 2016 (2015: A$nil). 2015 2014 Carrying Contractual 1 year Carrying Contractual 1 year amount cash fl ows or less amount cash fl ows or less $000 $000 $000 $000 $000 $000 Assets 64 64 64 354 354 354 Liabilities (660 (660 (660 (450 (450 (450 Total fi nancial assets (596 (596 (596 (96 (96 (96 ) ) ) ) ) ) 2015 2014 Carrying Contractual 1 year Carrying Contractual 1 year amount cash fl ows or less amount cash fl ows or less $000 $000 $000 $000 $000 $000 Assets 64 64 64 354 354 354 Liabilities (660 (660 (660 (450 (450 (450 Total fi nancial assets (596 (596 (596 (96 (96 (96 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Notes (forming part of the fi nancial statements)

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