Corporate Report for the year ended 30 June 2022
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
B15 Derivatives and financial risk management (continued) Market risk (continued) Foreign exchange risk (continued) Exposure to foreign currency risk at the reporting date, denominated in the currency in which the risk arises are as follows:
2022 Local
2021 Local
$M
$M
USD
EUR
CAD
CHF
NOK
USD
EUR
CAD
CHF
NOK
2 2
— — —
1
— — —
— — —
8 2
— — —
5
— — —
— — —
Cash and cash equivalents
—
Trade payables
—
2,073
567
Net investment in foreign operation
2,057
544
(4,210)
(3,300)
(650)
(765)
(750)
Borrowings
(4,373)
(3,300)
(650)
(765)
(750)
1
—
12 —
—
—
Foreign exchange forwards
10
—
20 —
—
—
3,710 1,578
3,300
765
750
Cross-currency interest rate swaps
3,710 1,414
3,300
765
750
—
(70)
—
—
Net exposure
—
(81)
—
—
Sensitivity to exchange rate movements based on the translation of financial instruments held at the end of the period is as follows:
2022
2021
$M
$M
Movement in post-tax profit
Increase/ (decrease) in equity
Movement in post-tax profit
Increase/ (decrease) in equity
AUD/USD + 10 cents – 10 cents AUD/EUR + 5 cents – 5 cents AUD/CAD + 10 cents¹ – 10 cents¹ AUD/CHF + 10 cents – 10 cents AUD/NOK + 50 cents – 50 cents
—
(219)
(1)
(226)
1
293
1
295
— —
(193)
— —
(43)
303
50
(7)
(1)
(7)
(1)
8
1
9
2
— —
(9)
— —
(7)
12
9
— —
— —
— —
(1)
1 1. Movement in post-tax profit relates to the ineffective portion of the net investment hedge in Canadian operations where the gain or loss is recognised in the profit and loss. The Group revalues its foreign currency denominated borrowings each period using market spot rates and, where these borrowings have been appropriately hedged, defers these movements in the cash flow hedge reserve in equity. The volatility in the cash flow hedge reserve is caused mainly by fair value movements of the cross-currency interest rate swaps, which are affected by changes in forward Australian dollar/foreign currency exchange rates.
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