Notes to the financial statements (continued)
The specialist Internal Audit area undertakes regular and ad-hoc reviews of financial risk management controls and procedures, the findings of which are reported to the ARC. The Western Power Financial Management Policy sets the principles and framework for governing financial risks arising from business operations. Adherence to this policy ensures that at all times, Western Power maintains an appropriate level of control over financial and associated risks that accords with strategic objectives and legal responsibilities. The principal financial risks arising from Western Power’s current operations as described in this note are summarised in table 35 below.
In this section This section presents the liabilities relating to Western Power’s financing activities, as well as the key financial risks and equity of the business.
Section 4: Debt and equity 17. Financial risk management
A. Overview The Western Power Board has overall responsibility for financial risk management. To assist in the performance of this responsibility, the Board has established an Audit and Risk sub-Committee ( ARC ). The ARC is supported in its oversight role by the Treasury Management Committee ( TMC ) and the Internal Audit area. The TMC, comprising senior business experts, considers all financial risk management policies and activities.
Table 35: Principal financial risks arising from Western Power’s current operations Risk: Note: Arises from: Measured by:
Managed by:
Market risk Interest rate risk
17(b)(i) • Borrowing obligations • Sensitivity analysis
• Interest rate swaps • Forward borrowing commitments • Forward exchange contracts • Credit ratings • Counterparty limits • Exposure monitoring • Bank guarantees, insurance bonds or cash deposits • Legal collection of debts • Available cash and borrowing facilities • Debt maturity profiles
Foreign currency risk
17(b)(ii) • Commercial transactions
• Sensitivity analysis
Credit risk
• Carrying and fair value amounts • Ageing analysis
17(c)
• Cash and cash equivalents • Trade and other receivables (excluding prepayments) • Derivative financial instuments • Trade and other payables • Borrowings • Lease liabilities • Derivative financial instruments
Liquidity risk
• Contractual maturities
17(d)
Western Power Annual Report 2025
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