Business performance
Directors' Report
Financial statements
Assurance statements
Security holder information
Introduction
Stakeholders Sustainability Governance and risk
Contents
Section B: Notes to the Group financial statements for the year ended 30 June 2026
B14 Financial risk management and derivative financial instruments (continued) Market risk Foreign exchange risk Foreign currency risk is the risk that the value of a financial commitment, forecast transaction, recognised asset or liability will fluctuate due to changes in foreign exchange rates. The Group operates internationally and is exposed to foreign exchange risk when future transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. The Group has foreign currency risk from borrowings denominated in foreign currencies, investments and operating activities. The Group uses hedging instruments such as cross-currency interest rate swaps, as well as natural hedges such as foreign currency-denominated operating exposures and foreign currency borrowings, to manage these exposures. The Group generally manages exposures from investments in foreign assets using foreign currency borrowings comprising a portion of the Group’s borrowings denominated in USD. For all other borrowings denominated in foreign currencies the Group manages foreign currency risk over the life of the borrowing by converting these borrowings to Australian dollars using cross-currency interest rate swaps. The Group’s policy is to ensure that, at any time, all known material operating exposures for the following 12 months are hedged using hedging instruments or by drawing on foreign currency funds. Exposure The Group's exposures to foreign currency risk after hedging at the reporting date, denominated in the currency in which the risk arises are as follows: 2026 Local 2025 Local M M USD EUR CAD CHF NOK GBP USD EUR CAD CHF NOK GBP Cash and cash equivalents 4 1 286 — — — 11 — — — — — Trade payables (1) — — — — — 2 — — — — — Net investment in foreign operation 2,138 — — — — — 2,105 — 309 — — — Borrowings (3,870) (4,591) (650) (485) (750) (300) (4,143) (4,500) (650) (685) (750) (300) Forward exchange contracts — — 493 — — — 10 — 280 — — — Cross-currency interest rate swaps 3,320 4,591 — 485 750 300 3,643 4,500 — 685 750 300 Net exposure to foreign currency risk 1,591 1 129 — — — 1,628 — (61) — — —
153
Made with FlippingBook Digital Publishing Software