NOTE 30
FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risk arising from financial instruments:
•
•
Credit risk
•
•
Liquidity risk
•
•
Market Risk, inclusive of interest rate risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies
and processes for measuring and managing risk and the Group’s management of capital.
Risk management framework
The Company’s board of directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Chief Executive Officer has established a Treasury Committee, which is responsible for
developing and monitoring the Group’s Treasury Policy and cash management procedure. The Audit and Compliance
Committee regularly receives updates on Treasury activities. The Group’s Treasury Policy is established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, provides a structure to monitor
risk and adherence to limits. The policy is reviewed regularly to reflect changes in market conditions and the Group’s
activities. The cash management procedure supports a controlled environment ensuring appropriate management
of liquidity risk.
The Group holds the following financial instruments:
Consolidated
2013
$’000
2012
$’000
Financial assets
Cash and cash equivalents
217,375
45,924
Trade and other receivables
95,701
102,870
Derivative financial instruments - foreign exchange
100
175
313,176
148,969
Financial liabilities
Trade and other payables
94,132
157,893
Bond issue
750,231
498,927
Borrowings
329,909
20,002
Derivative financial instruments - foreign exchange
-
33
Derivative financial instruments - interest rate swap
7,981
5,446
Other financial liabilities
400
625
1,182,653
682,926
NOTE 29
RESERVES AND RETAINED EARNINGS (CONTINUED)
(ii) Hedging reserve - cash flow hedge
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred. Amounts are reclassified to profit or loss when
the associated hedged transaction affects profit or loss.
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