25. HEDGING RESERVE
 
      Group/Company
(All amounts in Sri Lanka Rupees millions)   2004 2003
At beginning of year   (745)   (1,146)
 
 
Cash flow hedges        
- Foreign currency translation difference   (408)   (208)
- Income Statement charge (Note 5)   476   609
 
 
At end of year   (677)   (745)
 
 

(a) The Company's risk management objective is to minimise losses on foreign currency translation relating to the repayment of loans denominated in foreign currency. This is accounted for as a cash flow hedge.
   
(b) The policy for hedging each type of forecast transaction is stated in Accounting Policy S.
   
(c) The future transactions are forecasted for a period of five years.
   

 
     
 
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