AUB Group Limited Annual Report 2023

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2023

19 FINANCIAL INSTRUMENTS (CONTINUED)

d) Market Risk (continued) The following sensitivity analysis is based on the interest rate exposures in existence at year end. The sensitivity for the prior year has been prepared on an equivalent basis. At year end, had interest rates moved as illustrated in the table below, with all other variables held constant, post-tax profits and equity would have been affected as follows:

Post tax profits Higher/(lower)

Impacts directly to equity Higher/(lower)

2023 $’000

2022 $’000

2023 $’000

2022 $’000

Judgements of reasonably possible movements

+1.00% (100 basis points) (2022 +0.50% (50 basis points)) -1.00% (100 basis points) (2022 -0.50% (50 basis points))

6,876

2,808

– –

– –

(6,876)

(2,808)

Equity securities price risk Equity securities price risk arises from investments in equity securities. The Group does not invest in listed equity securities or derivatives. At year end, the Group had no material exposure to equities other than to shares in associates and controlled entities and therefore has no exposure to price risk that has not already been reflected in the financial statements. The Group tests for impairment annually and reviews all investments at least half yearly. The methodology for testing for impairment and results is shown in Note 14. Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expenses is denominated in a foreign currency) and the Group’s investment in overseas controlled entities. The Group maintains a hedge program to manage its foreign currency risks in relation to cash flows. Refer to Note 12 for further information on the Group’s hedge instruments. The majority of the foreign exchange rate exposure relates to the investment in New Zealand and Tysers operations, although some controlled entities raise client invoices in foreign currency denominations. The Group does not hedge its net investment in foreign operations through derivatives. The Group’s syndicate facility arrangement includes a component of borrowing in New Zealand Dollars utilised by the Group’s New Zealand arm which reduces the net assets the Group exposed to foreign currency. At year end, had foreign exchange rates moved as illustrated in the table below, with all other variables held constant, post-tax profits and equity would have been affected as follows:

Post tax profits Higher/(lower)

Impacts directly to equity Higher/(lower)

2023 $’000

2022 $’000

2023 $’000

2022 $’000

Judgements of reasonably possible movements

-10% NZD:AUD +10% NZD:AUD -10% GBP:AUD +10% GBP:AUD -10% USD:AUD +10% USD:AUD

(250)

(118)

(15,533)

(11,792)

250

118

15,533

11,742

9,165

– (40,599)

– – – –

(9,165) (2,680)

–

40,599

– (18,266)

2,680

–

18,266

AUB GROUP ANNUAL REPORT 2023

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