Rangatira Investments Annual Report 2021 - Report - Page 60
Ran ga tira Annua l R ep or t 2 0 2 1
Notes to the Consolidated
Financial Statements (continued)
For the year ended 31 March 2021
Note 22 Financial Instruments (continued)
(b) Foreign Currency Risk Management
The Group’s risk management practices remain consistent with the prior year. The Group undertakes certain transactions denominated
in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved
policy parameters utilising forward foreign exchange contracts.
All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the
transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Nonmonetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Exchange differences are recognised in the profit or loss in the period in which they arise
except for exchange differences on the Group’s foreign operations assets and liabilities which are recognised in the Group’s foreign
currency translation reserve.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date was
(c) Forward Foreign Exchange Contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts.
The Group also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales and purchase
transactions out to 12 months within 25% to 85% of the exposure generated.