Page 49 - GMT and GMT Bond Issuer Annual Report 2017 v2

NOTES TO THE
5. DERIVATIVEFINANCIALINSTRUMENTS
Derivative nancial instruments are used to manage exposure to interest rate risks and foreign exchange risks arising from GMT’s borrowings.
2017 2016
6.3 (9.3) (11.2) 20.8
(4.9) 11.5
2.4 (16.8)
(2.5) (5.3)
FINANCIAL
5.1 Movement in fair value of nancial instruments
$ million
Interest rate derivatives
Cross currency interest rate derivatives relating to US Private Placement notes Total movement in fair value of derivative financial instruments
Foreign exchange rate movement on US Private Placement notes
Total movement in fair value of financial instruments
STATEMENTS
continued
For the year ended 31 March 2017
ACCOUNTING POLICIES
Derivative nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured at fair value at each reporting date. Derivative nancial instruments are classi ed as current or non-current based on their date of maturity.
Movements in the fair value of derivative nancial instruments are recognised through Pro t or Loss. GMT does not apply hedge accounting.
KEY JUDGEMENT
The fair values of derivative nancial instruments are determined from valuations using Level 2 valuation techniques (2016: Level 2). These are based
on the present value of estimated future cash ows, taking account of the terms and maturity of each contract and the current market interest rates
at reporting date. Fair values also re ect the creditworthiness of the derivative counterparty and GMT at balance date. The valuations were based on market rates at 31 March 2017 of between 1.99% (2016: 2.34%) for the 90 day BKBM and 3.46% (2016: 3.01%) for the 10 year swap rate. There were no changes to these valuation techniques during the period.
5.2 Derivative nancial instruments
$ million
Cross currency interest rate derivatives Non-current assets
Interest rate derivatives
Current assets Non-current assets Current liabilities Non-current liabilities
Net derivative financial instruments
47 NOTES TO THE FINANCIAL STATEMENTS
2017 2016
9.7 20.8
0.6 - 9.2 13.0 - (0.1)
(18.2) (40.8)
1.3 (7.1)
GOODMAN PROPERTY TRUST ANNUAL REPORT 2017 FINANCIAL STATEMENTS