FAIRFAX MEDIA  LIMITED  2013  87 NOTEs TO THE FINANCIAL sTATEMENTs  16. DERIVATIVE FINANCIAL INsTRUMENTs FAIRFAx MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 30 JUNE 2013 *  Present value of exercise price of the put option over subsidiary shares. The put and the call option are exercisable in the period July 2013 –  September 2013. The Group uses derivative financial instruments to reduce the exposure to fluctuations in interest rates and foreign  currency rates. The Group formally designates hedging instruments to an underlying exposure and details the risk management objectives  and strategies for undertaking hedge transactions. The Group assesses at inception and on a semi-annual basis thereafter, as  to whether the derivative financial instruments used in the hedging transactions are effective at offsetting the risks they are  designed to hedge. Due to the high effectiveness between the hedging instrument and underlying exposure being hedged,  value changes in the derivatives are generally offset by changes in the fair value or cash flows of the underlying exposure. Any  derivatives not formally designated as part of a hedging relationship are fair valued with any changes in fair value recognised in  the income statement. The derivatives entered into are over the counter instruments within liquid markets. At 30 June 2013, the Group held cross currency swaps designated as hedges of future contracted interest payments on the  USD denominated senior notes issued in July 2007. The cross currency swaps are being used to hedge a combination of future  movements in interest rates and foreign currency exchange rates. (i)  CASH FloW HedGeS – inTeReST RATe And CRoSS CuRRenCy SWAPS HEDGING ACTIVITIES 30June 2013 $’000 24 JUNE 2012 $’000 Current assets Cross currency swap – cash flow hedge  3,193   –  Cross currency swap – net investment hedge  5,617   –  Forward contracts  1,808   123  Call option derivative  400   –  Total current derivative assets  11,018   123  non-current assets Cross currency swap – cash flow hedge  7,107   2,464  Cross currency swap – net investment hedge  708   23,976  Call option derivative  –   600  Total non-current derivative assets  7,815   27,040  Current liabilities Interest rate swap – cash flow hedge  4,381   –  Cross currency swap – cash flow hedge  598   –  Cross currency swap – fair value hedge  35,741   –  Forward contracts  822   –  Obligation under put option *  6,436  – Total current derivative liabilities  47,978   –  non-current liabilities Interest rate swap – cash flow hedge  19,453   27,243  Cross currency swap – fair value hedge  7,290   59,172  Cross currency swap – cash flow hedge  196   1,792  Obligation under put option *  –   7,421  Total non-current derivative liabilities  26,939   95,628 