Comments

Document Feedback - Review and Comment

Step 1 of 4: Comment on Document

How to make a comment?

1. Use this Protected Document to open a comment box for your chosen Section, Part, Heading or clause.

2. Type your feedback into the comments box and then click "save comment" button located in the lower-right of the comment box.

3. Do not open more than one comment box at the same time.

4. When you have finished making comments proceed to the next stage by clicking on the "Continue to Step 2" button at the very bottom of this page.

 

Important Information

During the comment process you are connected to a database. Like internet banking, the session that connects you to the database may time-out due to inactivity. If you do not have JavaScript running you will recieve a message to advise you of the length of time before the time-out. If you have JavaScript enabled, the time-out is lengthy and should not cause difficulty, however you should note the following tips to avoid losing your comments or corrupting your entries:

  1. DO NOT jump between web pages/applications while logging comments.

  2. DO NOT log comments for more than one document at a time. Complete and submit all comments for one document before commenting on another.

  3. DO NOT leave your submission half way through. If you need to take a break, submit your current set of comments. The system will email you a copy of your comments so you can identify where you were up to and add to them later.

  4. DO NOT exit from the interface until you have completed all three stages of the submission process.

 

Foreign Exchange Risk Policy

Section 1 - Executive Summary

(1) The University receives payments and makes purchases in foreign currency, exposing the University to foreign currency risk. Movements in foreign currencies can positively or negatively impact the University's finances. The University will minimise exposure to these movements by using foreign currency bank accounts and foreign exchange hedging contracts. Hedging processes may also be used to reduce or eliminate the impact of currency movements.

Top of Page

Section 2 - Purpose

(2) The purpose of this Policy is to establish how the University will minimise the risk of significant cost from exposure to currency movements when transacting in a foreign currency using appropriate risk mitigation strategies.

(3) This Policy should be read in conjunction with the Foreign Exchange Risk Procedure.

Top of Page

Section 3 - Scope

(4) This Policy applies to foreign currency transactions conducted on behalf of the University. 

Top of Page

Section 4 - Audience

(5) This Policy should be read and understood by University staff who undertake transactions in foreign currency.

Top of Page

Section 5 - Definitions

(6) In the context of this document:

Defined Term Meaning
Foreign Currency Any currency other than $AUD.
Foreign Currency Risk The risk associated with movements in currency exchange rates which may impact the University's financial results.
Foreign Currency Account A bank account holding a foreign currency, held by the University.
Foreign Currency Movement The change in the foreign currency amount between one point (i.e. budget or contract agreement) and the time a related transaction is finalised.
Hedge A method of risk mitigation aimed at reducing financial loss.
Hedging Contract A binding transaction that aims to limit exposure in movements in exchange rates.
Top of Page

Section 6 - Foreign Exchange Transaction Exposure

(7) The primary sources of foreign exchange exposures are:

  1. foreign currency income associated with research grants, student tuition fees, and philanthropic grants;
  2. foreign currency expenditure associated with research grants;
  3. general capital and operational expenditure denominated in foreign currency; and
  4. expenditure associated with subscriptions and publications of the University library.

Management of the Risk

(8) To reduce foreign exchange exposure the University will seek to have contracts agreed to in Australian dollars.

(9) Where it is not practical to have contracts agreed to in Australian dollars, foreign currency risks will be managed through:

  1. currency accounts; or
  2. derivatives.

(10) Financial Services are responsible for managing the net foreign currency exposures using the guidelines prescribed in the Foreign Exchange Risk Procedure.  All other business units are prohibited from entering into hedging contracts.

Currency Accounts

(11) Where a foreign currency account is held by the University, foreign currency amounts will be received or paid from these accounts. 

(12) Where the required foreign currency amount exceeds the currency held, the University may purchase additional amounts of currency as soon as practicable, once the required amount is known, to provide budget certainty for the University.

Derivatives

(13) The University may hedge against a foreign currency exposure using forward exchange contracts. Forward exchange contracts shall only be entered into in accordance with the Delegations of Authority and the Foreign Exchange Risk procedure. The University will not undertake activities to speculate on foreign currency movements.

(14) All foreign currency hedging transactions must occur with one of the major Australian banks.

(15) The total value of foreign currency hedging contract transactions will not exceed the limits applied by Council. All derivative transactions must be approved as required by Section 16 of the Finance Committee Charter, Chancellor’s Committee Charter and Delegations of Authority. Where the circumstances warrant, based on risk and magnitude, advice from relevant expert advisors will be obtained by management.

(16) All hedging transactions are to be reported to Finance Committee by the Chief Financial Officer within the Financial Services Report.

Procedures and Control

(17)  The Foreign Exchange Risk Procedure outlines the approval process required for foreign currency transactions, hedge transactions and the management of foreign currency accounts. 

Top of Page

Section 7 - Related Documents

(18) Australian Accounting Standard (AASB) 139 Financial Instruments: Recognition and Measurement

(19) Foreign Exchange Risk Procedure