HUANENG POWER INTERNATIONAL INC | CIK:0000929058 | 3

  • Filed: 4/12/2018
  • Entity registrant name: HUANENG POWER INTERNATIONAL INC (CIK: 0000929058)
  • Generator: Unknown
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/929058/000114420418020280/0001144204-18-020280-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/929058/000114420418020280/hnp-20171231.xml
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    • ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory

    14
    Derivative financial instruments

    Details of derivative financial instruments are as follows:
     
       
    As at 31 December
    		  
       
    2017
    		    
    2016
    		  
    Derivative financial assets
    		            
    －Hedging instruments for cash flow hedge (fuel swap contracts)
    		    
    330,966
    		      
    264,535
    		  
    －Hedging instruments for cash flow hedge (exchange forward contracts)
    		    
    -
    		      
    107,907
    		  
    －Financial instruments at fair value through profit or loss (fuel swap contracts)
    		    
    2,726
    		      
    5,881
    		  
    Total 
    		    
    333,692
    		      
    378,323
    		  
    Less: non-current portion
    		                
    －Hedging instruments for cash flow hedge (fuel swap contracts)
    		    
    75,328
    		      
    71,341
    		  
    －Hedging instruments for cash flow hedge (exchange forward contracts)
    		    
    -
    		      
    28,380
    		  
    Total non-current portion 
    		    
    75,328
    		      
    99,721
    		  
    Current portion 
    		    
    258,364
    		      
    278,602
    		  
    Derivative financial liabilities
    		                
    －Hedging instruments for cash flow hedge (fuel swap contracts)
    		    
    11,794
    		      
    164,464
    		  
    －Hedging instruments for cash flow hedge (exchange forward contracts)
    		    
    68,102
    		      
    454
    		  
    －Hedging instruments for cash flow hedge (interest rate swap contracts)
    		    
    130,643
    		      
    169,201
    		  
    －Financial instruments at fair value through profit or loss (fuel swap contracts)
    		    
    125
    		      
    619
    		  
    Total 
    		    
    210,664
    		      
    334,738
    		  
    Less: non-current portion
    		                
    －Hedging instruments for cash flow hedge (fuel swap contracts)
    		    
    2,026
    		      
    31,673
    		  
    －Hedging instruments for cash flow hedge (exchange forward contracts)
    		    
    21,745
    		      
    295
    		  
    －Hedging instruments for cash flow hedge (interest rate swap contracts)
    		    
    124,715
    		      
    169,201
    		  
    Total non-current portion 
    		    
    148,486
    		      
    201,169
    		  
    Current portion 
    		    
    62,178
    		      
    133,569
    		  

    For the years ended 31 December 2016 and 2017, no material ineffective portion was recognized in the profit or loss arising from cash flow hedges.

    The Company uses an interest rate swap contract to hedge its interest rate risk against one of its variable rate loans. The notional principal amount of the outstanding interest rate swap contract at 31 December 2017 was US$176million (RMB equivalents of RMB1,150 million) (2016: US$208 million (RMB equivalents of RMB1,443 million)). Through this arrangement, the Company pays an annual fixed interest of 4.40% while the original annual floating interest expense (6-month LIBOR+1%) attached in the loan is offset by the receivable leg of the interest rate swap. Such a swap is settled on a quarterly basis from September 2009 to September 2019.

    TPG uses exchange forward contracts to hedge its foreign exchange risk arising from highly probable forecast purchase transactions. It also uses fuel oil swap contracts to hedge its fuel price risk arising from highly probable forecast purchases of fuel purchases.

    TPG also uses various interest rate swap contracts to hedge floating semi-annual interest payments on borrowings with maturity dates up to 2020. The notional principal amount of these outstanding interest rate swap contracts at 31 December 2017 was S$1,069million (RMB equivalents of RMB5,220 million) (2016: S$1,359million (RMB equivalents of RMB6,522 million)). Through these arrangements, TPG swaps original floating interest (6-month SOR) to annual fixed interest determined by individual swap contracts. Such swap contracts are settled semi-annually from September 2011 to March 2020. As at 31 December 2017, these interest rate swap contracts are carried on the consolidated statements of financial position as financial liability of RMB108 million (2016: financial liability of RMB99 million).

    The analysis of contractual cash inflows/(outflows) of major derivative financial instruments are as follows:
     
             
    Cash flows
    		  
        Carrying amounts     Contractual cash flows    
    Within 1 year
    		    
    Between 1 and 5 years
    		    
    After 5 years
    		  
    As at 31 December 2017 Derivative financial assets
    Fuel derivatives used for hedging (net settlement)
    		    
    330,966
    		      
    330,966
    		      
    255,638
    		      
    75,328
    		      
    -
    		  
    Fuel derivatives that do not qualify as hedges (net settlement)
    		    
    2,726
    		      
    2,726
    		      
    2,726
    		              
    -
    		  
    Derivative financial liabilities
    		                                        
    Fuel derivatives used for hedging  (net settlement)
    		    
    11,794
    		      
    (11,794
    )
    		    
    (9,768
    )
    		    
    (2,026
    )
    		    
    -
    		  
    Forward exchange contracts used for hedging
    		                                        
      - inflows
    		            
    2,509,363
    		      
    2,041,812
    		      
    467,551
    		      
    -
    		  
      - outflows
    		            
    (2,568,034
    )
    		    
    (2,083,441
    )
    		    
    (484,593
    )
    		    
    -
    		  
         
    68,102
    		      
    (58,671
    )
    		    
    (41,629
    )
    		    
    (17,042
    )
    		    
    -
    		  
    Net-settled interest rate swaps used for hedging
     - net cash inflows/(outflows)
    		    
    130,643
    		      
    (154,367
    )
    		    
    (82,533
    )
    		    
    (71,834
    )
    		    
    -
    		  
    Fuel derivatives that do not qualify as hedges (net settlement)
    		    
    125
    		      
    (125
    )
    		    
    (125
    )
    		    
    -
    		          
    As at 31 December 2016 derivative financial assets
    Fuel derivatives used for hedging (net settlement)
    		    
    264,535
    		      
    264,535
    		      
    193,194
    		      
    71,341
    		      
    -
    		  
    Forward exchange contracts used for hedging
    		                                        
      - inflows
    		            
    2,118,946
    		      
    1,488,071
    		      
    630,875
    		      
    --
    		  
      -  outflows
    		            
    (2,009,205
    )
    		    
    (1,407,606
    )
    		    
    (601,599
    )
    		    
    -
    		  
         
    107,907
    		      
    109,741
    		      
    80,465
    		      
    29,276
    		      
    -
    		  
    Fuel derivatives that do not qualify as hedges (net settlement)
    		    
    5,881
    		      
    5,881
    		      
    5,881
    		      
    -
    		      
    -
    		  
    Derivative financial liabilities
    		                                        
    Fuel derivatives used for hedging (net settlement)
    		    
    164,464
    		      
    (164,464
    )
    		    
    (132,792
    )
    		    
    (31,672
    )
    		    
    -
    		  
    Forward exchange contracts used for hedging
    		                                        
      - inflows
    		            
    527,939
    		      
    475,881
    		      
    52,058
    		      
    -
    		  
      - outflows
    		            
    (528,454
    )
    		    
    (476,104
    )
    		    
    (52,350
    )
    		    
    -
    		  
         
    454
    		      
    (515
    )
    		    
    (223
    )
    		    
    (292
    )
    		    
    -
    		  
    Net―settled interest rate swaps used for hedging
    - net cash inflows/(outflows)
    		    
    169,201
    		      
    (228,905
    )
    		    
    (113,563
    )
    		    
    (115,342
    )
    		    
    -
    		  
    Fuel derivatives that do not qualify as hedges (net settlement)
    		    
    619
    		      
    (619
    )
    		    
    (619
    )
    		    
    -
    		      
    -