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This excerpt taken from the ICI 20-F filed Mar 31, 2006. Hedging Interest rate swaps, denominated in US dollars and Sterling, have been executed to hedge the Group’s exposure to interest rate risks in accordance with its interest rate policy. These swaps are matched in maturity to the underlying debt. At 31 December 2005, the Group had interest rate swaps with a notional contract amount of £2,330m (2004 £1,860m). The maturity profile of the net fixed rate exposure on loans is spread over several years to reduce re-financing and re-pricing risk and matures between 2006 and 2013. Interest rate swaps (including those in effective fair value hedging relationships) are measured at fair value under IAS 39. The fair value of interest rate swaps at 1 January 2005 was adjusted against the opening balance of the hedging reserve at that date. This amounted to a gain of £8m. The fair value adjustment relating to loans that form part of designated fair value hedge relationships at 1 January 2005 was a loss of £14m. The fair value of interest rate swaps recognised as hedges at 31 December 2005 is a net liability of £4m (comprised of assets of £17m and liabilities of £21m). From 1 January 2005 interest rate swaps designated as fair value hedges are fair valued through the income statement as part of net finance expense. Underlying loans that form part of fair value hedge relationships are adjusted for fair value attributable to hedged risk through the income statement to offset any mark-to-market adjustment arising on the interest rate swaps. Hedge documentation is prepared for all fair value hedges at inception and effectiveness testing is carried out quarterly. All designated hedges have remained effective throughout the current financial year. This excerpt taken from the ICI 6-K filed Mar 14, 2006. Hedging Interest rate swaps, denominated in US dollars and Sterling, have been executed to hedge the Group’s exposure to interest rate risks in accordance with its interest rate policy. These swaps are matched in maturity to the underlying debt. At 31 December 2005, the Group had interest rate swaps with a notional contract amount of £2,330m (2004 £1,860m). The maturity profile of the net fixed rate exposure on loans is spread over several years to reduce re-financing and re-pricing risk and matures between 2006 and 2013. Interest rate swaps (including those in effective fair value hedging relationships) are measured at fair value under IAS 39. The fair value of interest rate swaps at 1 January 2005 was adjusted against the opening balance of the hedging reserve at that date. This amounted to a gain of £8m. The fair value adjustment relating to loans that form part of designated fair value hedge relationships at 1 January 2005 was a loss of £14m. The fair value of interest rate swaps recognised as hedges at 31 December 2005 is a net liability of £4m (comprised of assets of £17m and liabilities of £21m). From 1 January 2005 interest rate swaps designated as fair value hedges are fair valued through the income statement as part of net finance expense. Underlying loans that form part of fair value hedge relationships are adjusted for fair value attributable to hedged risk through the income statement to offset any mark-to-market adjustment arising on the interest rate swaps. Hedge documentation is prepared for all fair value hedges at inception and effectiveness testing is carried out quarterly. All designated hedges have remained effective throughout the current financial year. | EXCERPTS ON THIS PAGE:
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