Notes to the Financial Statementsfor the year ended 30 June 2006
33. Financial Instruments
Financial Risk Management Objectives and Policies
Financial instruments held by the Authority are cash and cash equivalents, receivables and payables. The Authority has limited exposure to financial risks. The Authority’s overall risk management program focuses on managing the risks identified below.
Credit risk
The Authority trades only with recognised, creditworthy third parties. The Authority has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Authority’s exposure to bad debts is minimal. There are no significant concentrations of credit risk.
Liquidity risk
The Authority has appropriate procedures to manage cash flows including drawdowns of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.
Cash flow interest rate risk
The Authority has no significant exposure to movements in interest rates. The Authority has no borrowings.
Financial Instrument disclosures
Financial instrument information for the year ended 2005 has been prepared under the previous AGAAP Australian Accounting Standard AAS 33 ‘Presentation and Disclosure of Financial Instruments’. Financial instrument information from 1 July 2005 has been prepared under AASB 132 ‘Financial Instruments: Presentation’ and AASB 139 ‘Financial Instruments: Recognition and Measurement’.
Interest Rate Risk Exposure
The following table details the Authority’s exposure to interest rate risk as at the reporting date:
Fixed Interest Rate Maturity |
Total $’000 |
|||
|---|---|---|---|---|
Weighted Average Effective Interest Rate % |
Variable Interest Rate $’000 |
Non- Interest Bearing $’000 |
||
2006 |
||||
Financial Assets |
||||
| Cash and cash equivalents | 5.5 |
2,072 |
– |
2,072 |
| Restricted cash and cash equivalents | – |
11 |
11 |
|
| Receivables | – |
478 |
478 |
|
| Amounts receivable for services | – |
102 |
102 |
|
2,072 |
591 |
2,663 |
||
Financial Liabilities |
||||
| Payables | – |
141 |
141 |
|
– |
141 |
141 |
||
Fixed Interest Rate Maturity |
Total $’000 |
|||
|---|---|---|---|---|
Weighted Average Effective Interest Rate % |
Variable Interest Rate $’000 |
Non- Interest Bearing $’000 |
||
2005 |
||||
Financial Assets |
||||
| Cash and cash equivalents | 4.75 |
1,212 |
– |
1,212 |
| Receivables | – |
823 |
823 |
|
| Amounts receivable for services | – |
31 |
31 |
|
1,212 |
854 |
2,066 |
||
Financial Liabilities |
||||
| Payables | – |
606 |
606 |
|
– |
606 |
606 |
||
Fair Values
The carrying amount of financial assets and financial liabilities recorded in the financial statements are not materially different from their net fair values.