Annual Report - AWB Limited

AWB LIMITED Notes to and forming part of the financial statements for the year ended 30 September 200831. Financial Risk Management Objectives and Policies (continued)The impact to profit and loss as disclosed in the sensitivity on the FECs and currency options (on the previous page) will be over 90%(2007: 90%) offset by the future net receipt of foreign currency proceeds on settlement of the forward sale and purchase contracts. This isdepicted by the following analysis of notional values of the FECs and the gross cash flows expected from the forward purchase and sale contracts.ConsolidatedAUD functional currencyUSD EUR CADA$’000 A$’000 A$’00030 September 2008Net future receipts/(payments) on settlement of forward purchase and sale contracts 357,484 (14,666) -Net buy/(sell) cash flows arising from foreign currency derivatives that are economic hedges onfuture sale and purchase commodity contracts(353,972) 14,185 -Net position (3,512) 481 -30 September 2007Net future receipts/(payments) on settlement of forward purchase and sale contracts 57,468 470 9,955Net buy/(sell) cash flows arising from foreign currency derivatives that are economic hedges onfuture sale and purchase commodity contracts(60,873) (463) (10,132)Net position 3,405 (7) 177USD functional currencyINR functional currencyEUR BRL USDA$’000 A$’000 A$’00030 September 2008Net future receipts/(payments) on settlement of forward purchase and sale contracts - 26,909 (2,503)Net buy/(sell) cash flows arising from foreign currency derivatives that are economichedges on future sale and purchase commodity contracts - (26,909) 2,503Net position - - -30 September 2007Net future receipts/(payments) on settlement of forward purchase and sale contracts 32,798 - 12,114Net buy/(sell) cash flows arising from foreign currency derivatives that are economichedges on future sale and purchase commodity contracts (32,798) - (12,114)Net position - - -Management through its specialised treasury function actively monitors foreign currency positions held by the Group to ensure that no materialexposure to foreign currency outside of economic relationships arises.The analysis above does not include translation of foreign subsidaries, and as the Group does not enter into cash flow hedges, the sensitivityanalysis does not result in an impact on equity reserves. The balances in the tables above will not remain constant throughout the 2009 financialyear, and therefore should be used with care.106 www.awb.com.au