AWB Limited - 2004 Annual Report

31. FINANCIAL INSTRUMENTS (continued)
(c) Commodity price risk (continued)
The net deferred costs and gains and losses on commodity hedges of anticipated sales and purchases recognised in the statement of financial position
and the timing of their anticipated recognition as part of sales and purchases are:
Consolidated
Net deferred gains/(losses)
2004 2003
$'000 $'000
Not later than one year 3,256 1,567
Later than one year but not later than two years 84 –
3,340 1,567
The consolidated entity enters into commodity transactions with external counterparties on behalf of AWB (International) Limited. These
transactions are then passed on to AWB (International) Limited via a commodity contract.
At year end, the consolidated entity has the following commodity futures and options on behalf of AWB (International) Limited:
Consolidated
2004 2003 2004 2003
Commodity futures AUD per tonne tonnes tonnes
Not later than one year
Buy futures 170.56 196.04 892,806 526,349
Sell futures 170.46 195.24 (2,325,840) (693,180)
Total (1,433,034) (166,831)
Commodity options
Not later than one year
Buy Call option 177.23 201.31 670,999 1,339,685
Sell Call option 188.97 202.14 (411,635) (221,943)
Buy Put option 186.95 180.56 (851,846) (1,087,669)
Sell Put option 167.55 184.17 234,734 1,100,188
Total (357,748) 1,130,261
(d) Freight
Consolidated
Forward freight agreements 2004 2003 2004 2003
Weighted average rate per day days days
Buy USD Freight
Not later than one year (31,228) (14,613) 3,465 2,619
Later than one year but not later than two years (30,251) (14,050) 276 853
Later than two years but not later than three years – (12,950) – 122
Sell USD Freight
Not later than one year 31,586 17,149 3,288 1,798
Later than one year but not later than two years 21,581 – 276 –
Later than two years but not later than three years – 16,683 – 366
The marked to market value of forward freight agreements is recognised in the statement of financial performance.
(e) Credit risk exposure
Credit risk reports the loss that would be recognised if counterparties failed to perform as contracted.
Recognised financial instruments
The credit risk on financial assets, excluding investments, of the consolidated entity which have been recognised on the statement of financial
position, is the carrying amount net of any provision for doubtful debts or counterparty risk.
The consolidated entity minimises concentration of credit risk by undertaking transactions with a large number of customers and obtaining credit
insurance for certain customers.
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