Airways Corporation of New Zealand Limited Annual Report 2018 2019
NOTES TO THE FINANCIAL STATEMENTS
SECTION B Risk CONTINUED
Foreign exchange risk Airways is exposed to foreign exchange (FX) risk through: a) revenue streams denominated in foreign currencies b) operational costs requiring payment in foreign currencies c) capital expenditure requiring payment in foreign currencies
CHAIR AND CEO’S REVIEW
INVESTING IN THE FUTURE
Airways’ primary objective in managing foreign exchange risk is to protect foreign exchange rates implicit in project or expenditure approvals and foreign revenue streams. This is achieved by using forward exchange contracts to hedge: a) all transactions greater than NZD $50,000 and with a transaction date greater than one month; and b) all transactions greater than NZD $500,000 regardless of transaction date. In addition, management monitor all residual exposures to ensure they do not become material. To ensure these policies are adhered to, Airways operate the following controls: • no purchase order or invoice request for FX exposures above control limit levels can be approved without a hedge in place; • residual exposures are monitored and reported internally on a monthly basis; and • All hedging transactions are approved in accordance with delegated financial authorities. Airways’ exposure to foreign exchange risk is set out in the table below, which shows the NZD value of financial exposures denominated in foreign currency (at their hedged rates, where applicable), and the quantum of forward exchange contracts in place to hedge them. Revenue Expenditure*
INTEGRATING DRONES INTO OUR AIRSPACE
AIRWAYS INTERNATIONAL
SUSTAINABILITY
AIRWAYS BOARD OF DIRECTORS
Expend iture com- mitments not yet
Revenue contracts not yet invoiced ($’000)
Current trade debtors ($’000)
Current trade payables ($’000)
FINANCIALS
invoiced ($’000)
FINANCIAL PERFORMANCE
As at 30 June 2019 Amount unhedged
248
–
(123)
–
PERFORMANCE AND PROGRESS AGAINST SCI METRICS
Amount hedged
870
1,148
–
(12,880)
Total NZD value
1,118
1,148 100%
(123)
(12,880)
Percentage of exposure hedged
78%
–
100%
As at 30 June 2018 Amount unhedged
FINANCIAL STATEMENTS
77
–
(82)
–
NOTE STRUCTURE
Amount hedged
1,080
1,440
(145)
(20,531)
HOW THE NUMBERS ARE CALCULATED
Total NZD value
1,157
1,440
(227)
(20,531)
RISK
Percentage of exposure hedged
93%
100%
64%
100%
GROUP STRUCTURE UNRECOGNISED ITEMS OTHER INFORMATION
*Operating and capital expenditure
Possible fluctuations in foreign exchange rates are not expected to have a material impact on Airways’ financial position or performance.
AUDIT REPORT
EVA KEY PERFORMANCE INDICATORS
ADDITIONAL FINANCIAL INFORMATION
GOVERNANCE AT AIRWAYS
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