Bradken Limited Annual Report 2015 - page 78

43 l BRADKEN LIMITED ANNUAL REPORT 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
30 June 2015
(continued)
3 Financial risk management (continued)
Payables
Borrowings (excluding finance leases)
Redeemable convertible preference shares
Finance lease liabilities
Net settled interest rate swaps and caps
Redemable preference shares - option
Payables
Borrowings (excluding finance leases)
Finance lease liabilities
Net settled interest rate swaps and caps
(c) Market risk
(i)
Cash flow and fair value interest rate risk
(c) Market risk (continued)
(ii)
Foreign exchange risk
(iii)
Price risk
-
-
-
-
4,200
The Group is exposed to commodity price risk through the purchase of steel and various alloys.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity's functional currency. It is the policy of the Group to enter into forward foreign exchange contracts
to cover all foreign currency exposure other than those effectively covered within the natural hedging pool.
Refer to note 10 and 17 for receivables and payables denominated in foreign currencies.
337,840
56,683
21,999
72,933
123,034
The Group enters into forward exchange contracts to hedge foreign currency denominated receivables and also to manage
foreign currency denominated inventory and capital items.
A sensitivity analysis of foreign exchange risk on the Group's financial assets and liabilities is provided in the table at note
3(c)(iv).
Derivatives
-
-
189,057
66,226
5,547
-
52,488
63,700
Non-derivatives
Group - 2014
Derivatives
-
The tables below analyse the Group's financial liabilities and net settled derivative financial instruments into relevant maturity
groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the
tables are the contractual undiscounted cash flows. There is no liquidity risk at the Parent entity level.
Group - 2015
Non-derivatives
Less than 1 year
$'000
Between 1
and 3 years
$'000
Between 3
and 5 years
$'000
Between 5
and 8 years
$'000
Over 8 years
$'000
Less than 1 year
$'000
Between 1
and 3 years
$'000
Between 3
and 5 years
$'000
-
1,356
-
-
-
153,844
-
-
Refer to note 10(f) for receivables denominated in foreign currencies.
The Group has no significant interest-bearing assets and the Group's income and operating cash flows are not materially
exposed to changes in market interest rates.
The Group's interest-rate-risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest-rate-risk. Borrowings issued at fixed rates expose the Group to fair value interest-rate-risk. Group policy is to fix the
rates for between 30% and 70% of its borrowings.
-
Refer to note 20 for further details generally of the Group's borrowings.
A sensitivity analysis of interest rate risk on the Group's financial assets and liabilities is provided in the table at note 3(c)(iv).
The Group manages its cash flow interest-rate-risk by using floating-to-fixed interest rate swaps and interest rate caps. Such
instruments have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Group raises
long-term borrowings at floating rates and swaps them into fixed rates. Under the interest-rate swaps, the Group agrees with
other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating-rate
interest amounts calculated by reference to the agreed notional principal amounts.
-
4,261
4,477
2,132
147,984
237,889
2,111
1,548
143,504
4,676
Over 8 years
$'000
-
-
-
-
-
-
2,809
-
-
4,137
-
-
Between 5
and 8 years
$'000
1...,68,69,70,71,72,73,74,75,76,77 79,80,81,82,83,84,85,86,87,88,...131
Powered by FlippingBook