DERI
VATI
VES:I
nt
er
estr
at
eswap,
For
war
dcont
r
act
,
Fut
ur
escont
r
act
,
Opt
i
on
 Ent
i
t
i
esuseder
i
v
at
i
v
esf
i
nanci
al
i
nst
r
ument
st
omanagef
i
nanci
al
r
i
skssuchas:
1.Changei
ncommodi
t
ypr
i
ce
2.Changei
ncashf
l
ows
3.For
ei
gncur
r
encyexposur
e
 Reduct
i
onoff
i
nanci
al
l
ossduet
of
i
nanci
al
r
i
ski
st
hemot
i
v
at
i
ngf
act
ori
nt
r
adi
ngi
nder
i
v
at
i
v
es.
 Der
i
v
at
i
v
escr
eat
er
i
ght
sandobl
i
gat
i
onst
hathav
et
heef
f
ectoft
r
ansf
er
r
i
ngbet
weent
hepar
t
i
es
t
hef
i
nanci
al
r
i
sks.
TYPESOFFI
NANCI
ALRI
SKS
1.PRI
CERI
SK–t
heuncer
t
ai
nt
yaboutt
hef
ut
ur
epr
i
ceofanasset
.
a.Ent
i
t
i
esar
eexposedt
ot
hi
ssuchasi
nv
est
ment
si
nt
r
adi
ngsecur
i
t
i
es,
pur
chase
commi
t
ment
sandequi
pmentt
obei
mpor
t
edi
nf
ut
ur
edat
e.
2.CREDI
TRI
SK–t
heuncer
t
ai
nt
yov
erwhet
heracount
er
par
t
ywi
l
l
honort
het
er
msoft
hecont
r
act
.
a.Banks&ot
herf
i
nanci
ali
nst
i
t
ut
i
onsar
eexposedt
ot
hi
sbygr
at
i
ngl
oanst
obor
r
ower
s.
3.I
nt
er
estr
at
er
i
sk–t
heuncer
t
ai
nt
yaboutf
ut
ur
ei
nt
er
estr
at
esandt
hei
ri
mpactont
hecash
f
l
ows&t
hef
ai
rv
al
ueofi
nst
r
ument
s.
a.Bor
r
owerwi
t
hav
ar
i
abl
er
at
el
oani
sexposedt
ot
hi
sbyt
hef
l
uct
uat
i
onofi
nt
er
estr
at
es
i
nt
hef
ut
ur
e.
b.Bor
r
owerwi
t
hf
i
xedr
at
el
oani
sexposedt
ot
hi
sbecauseoft
hepossi
bi
l
i
t
yt
hatt
he
i
nt
er
estr
at
ewi
l
l
decr
ease.
4.For
ei
gncur
r
encyr
i
sk–t
heuncer
t
ai
nt
yaboutf
ut
ur
ePhi
l
i
ppi
nepesocashf
l
owsst
emmi
ngf
r
om
t
heasset&l
i
abi
l
i
t
i
esdenomi
nat
edi
nf
or
ei
gncur
r
ency
/
DEFI
NI
TI
ONOFDERI
VATI
VE
 Si
mpl
yaf
i
nanci
al
i
nst
r
umentt
hatder
i
v
esi
t
sv
al
uef
r
om t
hemov
ementi
ncommodi
t
ypr
i
ce,
f
or
ei
gnexchanger
at
e&i
nt
er
estr
at
eofanunder
l
y
i
ngassetorf
i
nanci
al
i
nst
r
ument
.
“
t
aki
ngbet
sonwhatwi
l
lhappent
ot
heunder
l
y
i
ngf
i
nanci
ali
nst
r
umenti
nt
hef
ut
ur
e”
 Anexecut
or
ycont
r
act–I
ti
smotat
r
ansact
i
onbutanexchangeofpr
omi
sesaboutf
ut
ur
eact
i
on.
 I
tgi
v
esonepar
t
yacont
r
act
ual
r
i
ghtt
oexchangef
i
nanci
al
asset
/
l
i
abi
l
i
t
ywi
t
hanot
herpar
t
y
.
“
NOTE:t
heot
herpar
t
yhasacont
r
act
ualobl
i
gat
i
ont
oexchangeunderpot
ent
i
al
l
yunf
avor
abl
e
condi
t
i
ons.
”
CHARACTERI
STI
CSOFADERI
VATI
VE
1.Thev
al
ueofi
tchangesi
nr
esponset
ot
hechangei
nan“
under
l
y
i
ng”v
ar
i
abl
e.
Under
l
y
i
ngv
ar
i
abl
es:
1.Speci
f
i
edi
nt
er
estr
at
e
2.Commodi
t
ypr
i
ce
3.For
ei
gnexchanger
at
e
4.Pr
i
cei
ndex
5.Ot
herv
ar
i
abl
es
2.I
tr
equi
r
esei
t
hernoi
ni
t
i
al
neti
nv
est
mentorani
ni
t
i
al
smal
l
neti
nv
est
ment
.
3.I
ti
sr
eadi
l
yset
t
l
edataf
ut
ur
edat
ebyanetcashpay
ment
HEDGI
NG
 I
ti
sdesi
gnat
i
ngoneormor
ehedgi
ngi
nst
r
ument
ssot
hatt
hechangei
nf
ai
rv
al
ueorcashf
l
ows
i
sanof
f
set
,
i
nwhol
eori
npar
t
,
t
ot
hechangei
nf
ai
rv
al
ueorcashf
l
owsoft
hehedgedi
t
em.
 I
ti
sameansofpr
ot
ect
i
ngaf
i
nanci
all
ossort
hest
r
uct
ur
i
ngofat
r
ansact
i
ont
oREDUCERI
SK.
 3t
y
pesofhedgi
ngr
el
at
i
onshi
p:
1.Fai
rv
al
uehedge
2.Cashf
l
owhedge
3.Hedgeofaneti
nv
est
menti
naf
or
ei
gnoper
at
i
on
 2component
sofahedge:
1.Hedgi
ngi
nst
r
ument–t
heder
i
v
at
i
v
ewhosef
ai
rv
al
ueorcashf
l
owswoul
dbe
expect
edt
oof
f
setchangesi
nt
hef
ai
rv
al
ueorcashf
l
owsoft
hehedgedi
t
em.
2.Hedgedi
t
em –anasset
,
l
i
abi
l
i
t
y
,
f
i
r
m commi
t
ment
,
hi
ghl
ypr
obabl
ef
or
ecast
t
r
ansact
i
onorneti
nv
est
menti
naf
or
ei
gnoper
at
i
on.
- t
obedesi
gnat
edashedgedi
t
em,
i
tshoul
dexposet
heent
i
t
yt
or
i
sk
ofchangesi
nf
ai
rv
al
ueorf
ut
ur
ecashf
l
ows.
MEASUREMENTOFDERI
VATI
VES
 measur
eal
l
der
i
v
at
i
v
esasei
t
herassetorl
i
abi
l
i
t
yatf
ai
rv
al
ue.
 Bot
hef
ai
rv
al
ue&not
i
onal
shal
l
bedi
scl
osed.
 Unr
eal
i
zedgai
norl
ossi
sr
ecogni
zedwhent
her
ei
sachangei
nt
hef
ai
rv
al
ue.
 Changei
nf
ai
rv
al
uei
sr
ecogni
zed(
i
f
,
i
n)
:
o Der
i
v
at
i
v
ei
snotdesi
gnat
edasahedgi
ngi
nst
r
ument–Pr
of
i
torLoss
o Der
i
v
at
i
v
ei
sdesi
gnat
edasacashf
l
owhedge–Ot
herCompr
ehensi
v
eI
ncome(
ef
f
ect
i
v
e
por
t
i
on)&Pr
of
i
torLoss(
i
nef
f
ect
i
v
epor
t
i
on)
o Der
i
v
at
i
v
ei
sdesi
gnat
edasaf
ai
rv
al
uehedge–Pr
of
i
torLoss
NOHEDGI
NGDESTI
NATI
ON
 Shal
l
ber
ecogni
zedi
npr
of
i
torl
oss
 Theder
i
v
at
i
v
ecanbet
houghtofasaspecul
at
i
on
CASHFLOW HEDGE
 Der
i
v
at
i
v
et
hatof
f
set
si
nwhol
eori
npar
tt
hev
ar
i
abi
l
i
t
ycashf
l
owsf
r
om apr
obabl
ef
or
ecast
t
r
ansact
i
on(
i
ti
sanuncommi
t
t
edbutant
i
ci
pat
edf
ut
ur
et
r
ansact
i
on)
a.Der
i
v
at
i
v
ei
smeasur
edatf
ai
rv
al
ue.
b.changei
nf
ai
rv
al
uei
sr
ecogni
zedascomponentofot
hercompr
ehensi
v
ei
ncomeunt
i
l
t
he
hedgei
sef
f
ect
i
v
e.
c.i
nef
f
ect
i
v
epor
t
i
oni
sr
ecogni
zedi
npr
of
i
torl
oss
d.hedgedi
t
em i
snotadj
ust
edt
oconf
or
m wi
t
hf
ai
rv
al
ue
FAI
RVALUEHEDGE
 Der
i
v
at
i
v
ei
smeasur
edatf
ai
rv
al
ue
 Hedgedi
t
em i
sal
someasur
edatf
ai
rv
al
ue
 Changesi
nf
ai
rv
al
uei
sr
ecogni
zedi
npr
of
i
torl
oss
EXAMPLESOFDERI
VATI
VES:
1.I
nt
er
estr
at
eswap
-
“
st
andal
one”der
i
v
at
i
v
es
2.For
war
dcont
r
act
-
Der
i
v
at
i
v
ef
i
nanci
al
I
nst
r
ument
ssepar
at
ef
r
om pr
i
mar
yFI
s
3.Fut
ur
escont
r
act
-
Woul
dnotexi
sti
nt
hei
rownr
i
ghtbuthav
ebeencr
eat
ed
4.Opt
i
on
I
nt
er
estr
at
eswap–acont
r
actwher
ebyt
wopar
t
i
esagr
eet
oexchangecashf
l
owsf
orf
ut
ur
e
i
nt
er
estpay
ment
sbasedonacont
r
actofl
oan.
 Cont
r
actofl
oan=pr
i
mar
yFI
 I
nt
er
estr
at
eswap=der
i
v
at
i
v
eFI
For
war
dcont
r
act–anagr
eementbet
weent
wopar
t
i
est
oexchangespeci
f
i
edamountof
commodi
t
i
es,
secur
i
t
yorf
or
ei
gncur
r
encyonaspeci
f
i
eddat
ei
nt
hef
ut
ur
eataspeci
f
i
edpr
i
ceor
exchanger
at
e.
“
Si
mpl
yst
at
ed,
i
ti
sacommi
t
mentt
opur
chaseorsel
laspeci
f
i
edcommodi
t
yonaf
ut
ur
edat
eata
speci
f
i
edpr
i
ce.”
Fut
ur
escont
r
act–samewi
t
hf
or
war
dcont
r
actexceptt
hati
ti
st
r
adedi
naf
ut
ur
esexchange
mar
keti
nmucht
hesamemannerasdebt&equi
t
ysecur
i
t
i
esbei
ngt
r
adedi
nst
ockmar
ket
s.
 I
ti
sapr
i
v
at
econt
r
actbet
weent
wopar
t
i
eswhoknoweachot
herv
er
ywel
l
.
 I
ti
sast
andar
dcont
r
actt
r
adedi
naf
ut
ur
esexchangemar
ket&onepar
t
ywi
l
l
nev
erknow
whoi
sont
heot
hersi
deoft
hecont
r
act
 Al
l
cashset
t
l
ement
sar
emadet
hr
ought
heexchangemar
ket
.
Opt
i
on–acont
r
actt
hatgi
v
est
hehol
dert
her
i
ght(
NOTOBLI
GATI
ON)t
opur
chaseosel
l
anasset
ataspeci
f
i
edpr
i
cedur
i
ngadef
i
ni
t
eper
i
odatsomef
ut
ur
et
i
me.
 Ther
ear
e2opt
i
ons:
1.Cal
lopt
i
on–r
i
ghtt
opur
chaseanasset(
BUYER)
2.Putopt
i
on–r
i
ghtt
osel
l
anasset(
SELLER)
 I
tmustbepai
df
or
 Thi
sr
equi
r
esani
ni
t
i
alsmal
lpay
ment(
OPTI
ONPREMI
UM)
I
LLUSTRATI
ONS:
I
NTERESTRATESWAP
*
OnJanuar
y1,
2019,
Easycompanybor
r
owed5,
000,
000f
r
om Fi
r
stBankatav
ar
i
abl
er
at
eodi
nt
er
estf
or
t
woy
ear
s.
*
Ter
msoft
hel
oanar
e:
a. Thepr
i
nci
pal
l
oani
spay
abl
eonDecember21,
2020.
b. Thei
nt
er
esti
spay
abl
eonDecember31ofeachy
earbasedont
hepr
ev
ai
l
i
ng
i
nt
er
estr
at
eatt
hebegi
nni
ngoft
hey
ear
.
*
Topr
ot
ecti
t
sel
ff
r
om f
l
uct
uat
i
onofi
nt
er
estr
at
e,
onJanuar
y1,
2019,
EasyCompanyent
er
edi
nt
oan
agr
eementwi
t
hSecondBankast
hespecul
at
ort
or
ecei
v
ev
ar
i
abl
ei
nt
er
estandt
opayaf
i
xedi
nt
er
est
basedonan“
under
l
y
i
ng”i
nt
er
estr
at
eof10%andnot
i
onal
amountof5,
000,
000.
 Cont
r
actofl
oan=Pr
i
mar
yFI
 “
Recei
v
ev
ar
i
abl
e,
parf
i
xedi
nt
er
estr
at
eswapagr
eement
”=Der
i
v
at
i
v
eFI
*
Thi
sder
i
v
at
i
v
econt
r
actmeanst
hatEasyCompanyshal
l
r
ecei
v
easwappay
mentf
r
om t
heSecondBank
basedont
he5,
000,
000i
ft
heJanuar
y1i
nt
er
estr
at
ei
smor
et
han10%andwi
l
lmakeaswappay
mentt
o
SecondBanki
ft
heJanuar
y1i
nt
er
estr
at
ei
sl
esst
han10%
*
Thei
nt
er
estr
at
eswapagr
eementi
sdesi
gnat
edasacashf
l
owhedgeagai
nstav
ar
i
abl
ei
nt
er
estr
at
e
whi
chmaybei
ncr
easi
ngov
ert
het
er
m oft
hel
oan.
*
Thei
nt
er
estr
at
eont
hel
oanar
e:
Januar
y1,
2019
10%
Januar
y1,
2020
12%
Netcashset
t
l
ement
Comput
at
i
on:
Recei
v
ev
ar
i
abl
e
Pay10%f
i
xed
NetCashSet
t
l
ement
Recei
pt
Dec.31,
2019
Dec.31,
2020
500,
000
600,
000
(
500,
000)
(
500,
000)
-
100,
000
Anot
hercomput
at
i
on:
Var
i
abl
er
at
eonJan.1,
2020
12%
Under
l
y
i
ngi
nt
er
estr
at
e
10%
Var
i
abl
er
at
emor
et
hanunder
l
y
i
ngr
at
e
EasyCompanyshal
l
r
ecei
v
e
100,
000f
r
om SecondBankon
December31.2020
2%
Netcashset
t
l
ement–r
ecei
pt(
5M x2%) 100,
000
Wi
t
hr
espectt
ot
hecont
r
actofl
oanwi
t
hFi
r
stBank,
t
hef
ol
l
owi
ngschedul
eofi
nt
er
estpay
ment
s:
Var
i
abl
ei
nt
er
estt
obepai
dt
o
Dec.31,
2019
Dec.31,
2020
500,
000
600,
000
-
(
100,
000)
500,
000
500,
000
Fi
r
stBank
Netcashset
t
l
ementwi
t
h
SecondBank
NetI
nt
er
estExpense
Jour
nal
Ent
r
i
es
2019
Jan.1 Cash
5,
000,
000
LoanPay
abl
e
5,
000,
000
#
Dec.31 I
nt
er
estexpense(
5Mx10%)
500,
000
Cash
500,
000
#
Dec.31 I
nt
er
estr
at
eswapr
ecei
v
abl
e
89,
300
Unr
eal
i
zedGai
nI
nt
er
estr
at
eswap
89,
300
(
100Tx.
893)PVof1f
oroneper
i
odat12%
NOTE:
Theunr
eal
i
zedgai
ni
sacomponentofOCIbecauset
heder
i
v
at
i
v
eagr
eementi
sdesi
gnat
edasa
cashf
l
owhedge.
2020
Dec.31 I
nt
er
estExpense(
5Mx12%)
600,
000
Cash
600,
000
#
Dec.31 Cash
100,
000
I
nt
er
estr
at
eswapr
ecei
v
abl
e
89,
300
Unr
eal
i
zedgai
ni
nt
er
estr
at
eswap
10,
700
*
Thi
si
sf
r
om t
heSecondBankasar
esul
tofhi
gheri
nt
er
estr
at
e
Dec.31LoanPay
abl
e
Cash
5,
000,
000
5,
000,
000
#
Dec.31 Unr
eal
i
zedgai
nI
nt
er
estr
at
eswap 100,
000
I
nt
er
estexpense
100,
000
Thi
sr
epr
esentt
hei
ncr
ease
i
nf
ai
rv
al
ueoft
hei
nt
er
est
r
at
eswapr
ecei
v
abl
eduet
o
passageoft
i
me.
I
NTERESTRATESWAP
Wi
t
ht
hesamedat
aabov
eexceptt
hatt
hei
nt
er
estr
at
eonJanuar
y1,
2020i
s7%.
Comput
at
i
on:
Var
i
abl
ei
nt
er
estr
at
eonJanuar
y1,
2020
7%
Under
l
y
i
ngi
nt
er
estr
at
e
10%
Var
i
abl
er
at
el
esst
hanunder
l
y
i
ngdat
e
3%
EasyCompanyshal
l
pay150,
000t
o
SecondBankonDec.31,
2020by
r
easonofal
oweri
nt
er
estr
at
e.
Netcashset
t
l
ementwi
t
hSecondbank(
5Mx3%) 150,
000
Jour
nal
Ent
r
i
es
2019
Jan.1 Cash
5,
000,
000
LoanPay
abl
e
5,
000,
000
#
Dec.31 I
nt
er
estexpense(
5Mx10%)
500,
000
Cash
500,
000
#
Dec.31Unr
eal
i
zedl
ossI
RS
140,
250
I
RSPay
abl
e
140,
250
(
150,
000x.
935)PVof1f
oroneper
i
odat7%
NOTE:
Theunr
eal
i
zedgai
ni
sacomponentofOCIbecauset
heder
i
v
at
i
v
eagr
eementi
sdesi
gnat
edasa
cashf
l
owhedge.
2020
Dec.31 I
nt
er
estexpense(
5Mx7%)
350,
000
Cash
350,
000
#
Dec.31 LoanPay
abl
e
5,
000,
000
Cash
#
Thi
sr
epr
esentt
hei
ncr
ease
i
nf
ai
rv
al
ueoft
hei
nt
er
est
r
at
eswapr
ecei
v
abl
eduet
o
5,
000,
000passageoft
i
me.
Dec.31 I
RSPay
abl
e
140,
250
Unr
eal
i
zedl
ossI
RS
9,
750
Cash
150,
000
#
Dec.31 I
nt
er
estExpense
150,
000
Unr
eal
i
zedl
ossI
RS
150,
000
I
NTERESTRATESWAP
*
OnJanuar
y1,
2019,
Si
mpl
eCompanyr
ecei
v
eda5y
earv
ar
i
abl
ei
nt
er
estr
at
el
oanof5,
000,
000
wi
t
hi
nt
er
estpay
mentatt
heendofeachy
earandt
hepr
i
nci
pal
t
ober
epai
donDecember31,
2023.
*
Thei
nt
er
estr
at
ef
or2019i
s10%andt
her
at
ei
neachsucceedi
ngy
eari
sequal
t
ot
hemar
ket
i
nt
er
estr
at
eonJanuar
y1ofeachy
ear
.
*
Si
mpl
eCompanyent
er
edi
nt
oani
nt
er
estr
at
eswapagr
eementwi
t
hanot
herbank.Theswap
pay
ment
sar
emadeatt
heendoft
hey
ear
.
*
Theder
i
v
at
i
v
econt
r
acti
sdesi
gnat
edasacashf
l
owhedge
Mar
ketr
at
esofi
nt
er
est
s:
Januar
y1,
2020
11%
Januar
y1,
2021
8%
Januar
y1,
2022
6%
Januar
y1,
2023
7%
2019
VI
R1/
1/
20
Jo
ur
nal
ent
r
i
es
UI
R
Mo
et
han
20
19r
NCS(
5M x1%)
5
0,
000
Ja
n1
Cash
11%
10%
1%
2020
VI
R1/
1/
20
UI
R
Lesst
han
NCS(
5M x2%)
1
0
0
,
000
5,
000
,
0
0
0
2021 L
oanPay
abl
e
000,
000
20195,
VI
R1/
1/
20
6%
VI
R1/
1/
20
#
UI
R
10%
UI
R
Lesst
han
4%
Lesst
han
De
c
.3
15M
I
n
t
e
r
es
xpense(
5Mx10%)500
,
0
05M x3%)
N
C
S(
x
4
%
)te
N
C0
S(
200,
000
150,
000
Cash
500,
000
8%
10%
2%
7%
10%
3%
#
Dec.31 I
RSRecei
v
abl
e
155,
000
Unr
eal
i
zedgai
nI
RS
155,
000
(
50,
000x3.
10)PVofor
di
nar
yannui
t
yof1at11%f
or4per
i
od
2020
Dec.31 I
nt
er
estexpense(
5Mx11%) 550,
000
Cash
550,
000
#
Dec.31 Cash
50,
000
I
RSRecei
v
abl
e
50,
000
#
Dec.31 Unr
eal
i
zedgai
nI
RS
50,
000
I
nt
er
estexpense
50,
000
#
Dec.31 Unr
eal
i
zedgai
nI
RS
105,
000
I
RSRecei
v
abl
e
105,
000
(
155,
000–50,
000)
#
Dec.31 Unr
eal
i
zedl
ossI
RS
Cancel
at
i
onoft
hebal
anceoft
he
I
RSr
ecei
v
abl
eandt
her
el
at
ed
unr
eal
i
zedgai
nbecauseoft
he
r
educedi
nt
er
estr
at
eonJanuar
y1.
2021.
258,
000
I
RSPay
abl
e
258,
000
(
100,
000x2.
58)PVofanor
di
nar
yannui
t
yof1at8%f
or3per
i
ods
2021
Dec.31 I
nt
er
estexpense(
5Mx8%) 400,
000
Cash
400,
000
#
Dec.31I
RSPay
abl
e
Cash
100,
000
100,
000
#
Dec.31 I
nt
er
estExpense
100,
000
Unr
eal
i
zedl
oss–12/
31/
21(
200Tx1.
83)
Unr
eal
i
zedl
ossI
RS
100,
00
0
3
66T
Unr
eal
i
zedl
ossperbook(
258T100T)
158T
I
ncr
easei
nUnr
eal
i
zedl
oss
208T
#
Dec.31 Unr
eal
i
zedl
ossI
RS
208,
000
I
RSPay
abl
e
208,
000
2022
Dec.31 I
nt
er
estexpense(
5Mx6%) 300,
000
Cash
300,
000
#
Dec.31 I
RSPay
abl
e
200,
000
Cash
#
Dec.31 I
nt
er
estexpense
Unr
eal
i
zedl
ossI
RS
#
Dec.31 I
RSPay
abl
e
200,
000
Unr
eal
i
zedl
oss–12/
31/
22(
150Tx.
93)
1
3
9
,
5
0
0
200,
000
Unr
eal
i
zedl
ossperbook(
366T200T)
1
6
6
,
0
0
0
200,
000
Decr
easei
nUnr
eal
i
zedl
oss
(
26,
500)
26,
500
Unr
eal
i
zedl
ossI
RS
26,
500
2023
Dec.31I
nt
er
estExpense(
5Mx7%)
Cash
350,
000
350,
000
#
Dec.31I
RSPay
abl
e
Unr
eal
i
zedl
ossI
RS
139,
500
10,
500
Cash
150,
000
#
Dec.31 I
nt
er
estexpense
150,
000
Unr
eal
i
zedl
ossI
RS
150,
000
#
Dec.31 LoanPay
abl
e
5,
000,
000
Cash
5,
000,
000