Paragraph 6 Financial instruments
In relation to the use of financial instruments by a company, the directors’ report must contain an indication of—
the financial risk management objectives and policies of the company, including the policy for hedging each major type of forecasted transaction for which hedge accounting is used, and
the exposure of the company to price risk, credit risk, liquidity risk and cash flow risk,
unless such information is not material for the assessment of the assets, liabilities, financial position and profit or loss of the company.
In relation to a group directors’ report sub-paragraph (1) has effect as if the references to the company were references to the company and its subsidiary undertakings included in the consolidation.
In sub-paragraph (1) the expressions “hedge accounting”, “price risk”, “credit risk”, “liquidity risk” and “cash flow risk” have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, and in Council Directive 83/349/EEC on consolidated accountsf1.
Annotations
Footnotes
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O.J.L222 of 14.8.1978, page 11, and O.J. L193 of 18.7.1983, page 1, as amended in particular by Directives 2001/65/EEC and 2003/51/EEC of the European Parliament and of the Council (O.J. L238 of 27.12.2001, page 28, and O.J. L178 of 17.7.2003, page 16).