IGO Interactive Annual Report 2018

Notes to the consolidated financial statements 30 June 2018 (continued) Risk This section of the notes includes information on the Group's exposure to various risks and shows how these could affect the Group's financial position and performance. 20 Derivatives Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not meet the hedging criteria, they are classified as ‘held for trading’ for accounting purposes below. The Group has the following derivative financial instruments: 2018 $'000 2017 $'000 Current assets Diesel hedging contracts - cash flow hedges 1,990 - Foreign currency contracts - cash flow hedges - 657 1,990 657 Current liabilities Commodity hedging contracts - cash flow hedges - 910 Diesel hedging contracts - cash flow hedges - 55 - 965 Non-current liabilities Diesel hedging contracts - cash flow hedges - 251 - 251 (a) Instruments used by the Group Derivative financial instruments are used by the Group in the normal course of business in order to hedge exposure to fluctuations in foreign exchange rates, commodity prices and diesel prices. The derivative financial instruments are classified as held for trading and accounted for at fair value through profit or loss unless they are designated as cash flow hedges. The Group's accounting policy for its cash flow hedges is set out below. The fair value of the derivative instruments at the reporting date is reflected in current and non-current assets and liabilities in the balance sheet and is calculated by comparing the contracted rate to the market rates for derivatives with the same length of maturity. Refer to note 21 and below for details of the foreign currency, commodity prices and diesel fuel risk being mitigated by the Group’s derivative instruments as at 30 June 2018 and 30 June 2017. Diesel The Group held various diesel fuel hedging contracts at 30 June 2018 and 30 June 2017 to reduce the exposure to future increases in the price of the Singapore gasoil component of diesel fuel. The following table details the diesel fuel hedging contracts outstanding at the reporting date: Independence Group NL 36 100 — IGO ANNUAL REPORT 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2018