The Company’s activities expose it to a variety of financial risk’s, market risk (including foreign exchange risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. The Company uses derivative financial instruments such as foreign exchange forward contracts and foreign exchange call options to hedge certain risk exposures.

Risk management is carried out by the Hedging Committee and Business & Advisory Services department under policies approved by the Audit and Risk Committee and Board of Directors. The Hedging Committee and the Business & Advisory Services department identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity.

Market risk

Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency.

The Company operates internationally and is exposed to foreign exchange risk arising from currency exposures due to the sale of international media rights and tours overseas. These exposures occur primarily in US dollars and Great British Pounds. The Company’s risk management policy is to hedge all specific arrangements greater than AUD $1 million once the amount and timing of the inflows are known and highly probable.

The Company has entered into an agreement with the Company’s banker to manage foreign exchange risk that permits the Company to take out individual forward exchange contracts or call options that match the specific arrangements at an agreed exchange rate. The agreement is non- transferable and contains no minimum or maximum level of forward exchange rates contracts or call options that can be entered into. External foreign exchange contracts are designated as hedges of foreign exchange risk on specific assets, liabilities or future transactions on a gross basis.

The carrying amounts of the Company’s financial assets and liabilities are denominated in Australian dollars except as set out below:

30/06/2016   30/06/2015
Forward Exchange Contracts






Investments       2,447 276 366             1699            125             224

Based on the financial instruments held at 30 June 2016, had the Australian dollar weakened/ strengthened by 10% against the US dollar and Great British Pound with all other variables held constant, the Company’s surplus for the year would have not changed, mainly as a result of no exposure to foreign exchange gains / losses on translation of foreign currency instruments as detailed in the above table. Equity would have been $1,894,600 lower/$2,084,060 higher (2015: $893,175 higher/ $982,493 lower) had the Australian dollar weakened/ strengthened by 10% against the US dollar and Great British Pound, arising mainly from foreign exchange contracts designated as cash flow hedges.

A sensitivity of 10% was selected following a review of historic trends.

Credit risk

The credit risk on financial assets of the Company which have been recognised on the Balance Sheet is generally the carrying amount, net of any provisions for impairment. Credit risk arises from the potential failure of counterparties to meet their obligations under the relevant contracts at maturity. An exposure therefore exists with respect to the forward exchange contracts discussed above, as these are all held with the Company’s banker.
For all bank deposits, only independently rated parties with a minimum rating of ‘AA’ are accepted. Managed fund investments are only held with independently related parties with a minimum of three stars.
Apart from this, the Company has no significant concentrations of credit risk. The Company has policies in place to ensure that licensing and sponsorship arrangements are made to organisations with an appropriate credit history.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets.

Amounts recognised in profit or loss

During the year, the following gains/(losses) were recognised in profit or loss in relation to impaired receivables.

 Impairment losses
  – individually impaired receivables  –  –
  – movement in provision for impairment  –
 Reversal of previous impairment losses  –  –

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet commitments associated with financial instruments. The Company manages liquidity risk through the preparation of cash projections and monthly review of investments, including cash funds.

Interest rate risk

With the exception of cash and cash equivalents, the assets and liabilities of the Company are non-interest bearing. Details of interest rate exposure are contained in the relevant notes. In addition, discount rates used in the determination of provisions for employee entitlements may be impacted by changes in interest rate.

Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

As of 1 July 2009, Cricket Australia has adopted the amendment to AASB 7 Financial Instruments: Disclosures which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

  1. quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
  2. inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2) and;
  3. inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following tables present the Company’s assets and liabilities measured and recognised at fair value.

At 30 June 2016 At 30 June 2015
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets / (Liabilities)
Derivatives used for hedging                    –


        –                 – 9,825      –


               3,794          –                 30,868              –      –
Total Assets / (Liabilities)



         –                 30,868



The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The company uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used to estimate fair value for long-term debt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the end of the reporting period. These instruments are included in level 2 and comprise debt investments and derivative financial instruments. In the circumstances where a valuation technique for these instruments is based on significant unobservable inputs, such instruments are included in level 3.