China XLX Fertiliser Ltd

NOTES TO THE FINANCIAL STATEMENTS31 December 200817. Loans and other receivables (cont’d)Receivables that are impairedGroupIndividually Impaired2008 2007Rmb’000 Rmb’000Trade receivables 322 409Less: Allowance for doubtful trade receivables (322) (409)– –Movement in allowances:At 1 January 409 49(Write-back)/charge for the year (83) 360Written-off (4) –At 31 December 322 409Trade receivables that are individually determined to be impaired at the balance sheet date relate todebtors that are in significant financial difficulties and have defaulted on payments. These receivables arenot secured by any collateral or credit enhancements.18. DerivativesAs at 31 December 2008, the Group entered into two non-deliverable interest rate swap agreements whichpays a fixed rate interest of 2.55% per annum and receives a variable interest rate equal to USD LIBOR +2.25% per annum on the notional amount on a quarterly basis. The swaps are being used to hedge cashflow interest rate risks arising from its floating rate USD bank loan amounting to USD 45,000,000 (Note 20).The floating rate bank loan and interest rate swaps have the same critical terms.The fair value and notional amount of the non-deliverable interest rate swaps of the Group are as follows:Group2008 2007Rmb’000 Rmb’000Fair value of net interest rate swaps 19,807 –Notional amount of net interest rate swaps 263,816* –* Equivalent to USD 38,600,000.The group holds derivative financial instruments to hedge its foreign currency and interest rate riskexposures.The above fair value changes on derivatives that are designated as hedging instruments in cash flow hedgesto the extent that the hedge is effective are recognised directly in equity as hedging reserve as described inNote 2.24.China XLX Fertiliser Ltd.73