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Whitehaven Coal Limited : Annual Report 2009
Whitehaven Coal Limited -- Annual Report 2009 67 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2009 5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Risk exposures and responses (continued) Interest rate risk The consolidated entity's borrowings comprise both variable and fixed rate instruments. The variable rate borrowings expose the consolidated entity to a risk of changes in cash flows due to the changes in interest rates. The consolidated entity does not engage in any hedging to mitigate interest rate risk, instead management analyses its exposure on an ongoing basis. At the reporting date the interest rate profile of the Company's and consolidated entity's interest-bearing financial instruments was: Consolidated Carrying amount Company Carrying amount In thousands of AUD 2009 2008 2009 2008 Fixed rate instruments Financial liabilities (78,268) (40,008) -- -- (78,268) (40,008) -- -- Variable rate instruments Financial assets 131,159 80,867 81 50 Financial liabilities -- (15,218) -- -- 131,159 65,649 81 50 Net exposure 52,891 25,641 81 50 Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2008. The Company's exposure to interest rate risk is small, and as such no sensitivity analysis has been undertaken. Profit or loss Equity Effect in thousands of AUD 100bp increase 100bp decrease 100bp increase 100bp decrease 30 June 2009 Variable rate instruments 1,312 (1,312) -- -- Cash flow sensitivity (net) 1,312 (1,312) -- -- 30 June 2008 Variable rate instruments 656 (656) -- -- Cash flow sensitivity (net) 656 (656) -- -- Commodity price risk The consolidated entity's major commodity price exposure is to the price of coal. The consolidated entity has chosen not to hedge against the movement in coal prices but enters into sales contracts with durations of more than 12 months to mitigate this risk. For the following financial year 78% of coal sales tonnages have had the sales price fixed. Net Fair Values The carrying values of financial assets and financial liabilities recorded in the financial statements approximates their respective net fair values, determined in accordance with the accounting policies disclosed in note 3 to the financial statements.
Annual Report 2008
Annual Report 2010