NOTE 30
FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(ii) Cash flow and interest rate risk (continued)
Interest rate risk
Foreign exchange risk
At 30 June 2013
-0.5%
+0.5%
-10%
+10%
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Financial assets
Cash and cash
equivalents
(760)
(760)
760
760
-
-
-
-
Derivatives cash flow
hedge - foreign
exchange
-
-
-
-
-
(66)
-
54
Total increase/
(decrease) in
financial assets
(760)
(760)
760
760
-
(66)
-
54
Interest rate risk
Foreign exchange risk
30 June 2012
-0.5%
+0.5%
-10%
+10%
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Profit
$’000
Equity
$’000
Financial assets
Cash and cash
equivalents
(161)
(161)
161
161
-
-
-
-
Derivatives cash flow
hedge - foreign
exchange
-
-
-
-
-
(547)
-
458
Total increase/
(decrease) in
financial assets
(161)
(161)
161
161
-
(547)
-
458
Financial liabilities
Derivatives cash flow
hedge - foreign
exchange
-
-
-
-
-
(44)
-
36
Net increase/
(decrease)
(161)
(161)
161
161
-
(591)
-
494
This analysis assumes all other variables are constant.
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk
arises from cash and cash equivalents and deposits
with banks and financial institutions, as well as trade
and other receivables. The Group’s exposure to credit
risk arises from potential default of the counter party,
with a maximum exposure equal to the carrying
amount of these instruments. Exposure at balance
date is addressed in each applicable note.
The Group does not hold any credit derivatives to
offset its credit exposure.
The Group has a Treasury Policy as approved by
the Board that manages the level of risk in relation
to cash investments with banks and third parties.
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