Apata Limited and Group

Note 17 : Employee benefits (Company and Group)
2008 2007
Annual leave 327,183 155,742
Wages Accrued 271,142 124,086
Total employee benefits 598,325 279,828
Note 18 : Trade and other payables
2008 Group 2008 Company 2007 Group 2007 Company
Trade payables 3,310,115 3,170,718 3,690,224 3,574,334
Non-trade payables and accrued expenses 1,258,738 1,176,462 544,446 544,221
4,567,853 4,347,180 4,234,670 4,118,555
Note 19 : Financial instruments
Exposure to credit, interest rate and liquidity risks arises in the
normal course of the Group’s business.
Credit risk
Financial instruments which potentially subject the Group to
credit risk principally consist of cash and cash equivalents and
accounts receivable. The Group performs credit evaluations on
all customers requiring credit and generally does not require
collateral. The majority of revenue is generated from transactions
with growers, however payment for packaging and coolstorage
is received directly by the Group via Zespri as a deduction of
returns to growers. The Group places its cash with high credit
quality financial institutions.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual
obligations. The Group evaluates its liquidity requirements on an
ongoing basis. In general, the Group generates sufficient cash
flows from its operating activities to meet its obligations arising
from its financial liabilities and has credit lines in place to cover
potential shortfalls that may occur seasonally during the year.
The Group seeks to mitigate liquidity risks by structuring debt
with a spread of maturity dates, keeping sufficient undrawn
credit lines available for short term needs. At balance date, the
Group held an overdraft facility of $2m, (2007: $2m) which was
undrawn (2007: undrawn).
Interest rate risk
Interest rate risk is the risk that the value of the Groups assets and
liabilities will fluctuate due to changes in market interest rates.
The Group is exposed to interest rate risk primarily through its
cash and cash equivalents and bank borrowings. Interest rate
swaps have been entered into to achieve an appropriate mix of
fixed and floating exposure within the Group.
Quantitative disclosures
Credit risk
The carrying amount of financial assets represents the Group’s
maximum credit exposure. There is considered to be no
impairment of trade receivables at the reporting date, and therefore
no impairment allowance has been recorded (2007: $nil). Within
other trade receivables are $271,004 of past due receivables
between 30 and 90 days (2007: $54,934).
Liquidity risk
The Groups contractural cashflows for financial assets and
liabilities fall within six months or less except for secured bank
loans as set out below:
Balance Contractual 6 months 6 – 12 1 – 2 2– 5 More than
Group sheet cash flows or less months years years 5 years
2008
Secured bank loans 5,900,000 5,900,000 – – 1,000,000 4,900,000 –
2007
Secured bank loans 3,200,000 3,200,000 – – – 3,200,000 –
Interest rate risk – repricing analysis
The Company and Group have secured bank loans of $5,900,000
(2007: $3,200,000), which will reprice within 6 months.
The Company has an interest rate swap in place at balance date
for $3,000,000. The swap rate is 8.25% plus a margin of 1% and
matures on 21 March 2011.
Capital management
The Group’s capital includes share capital, reserves and
retained earnings.
The Group’s policy is to maintain a strong capital base so as
to maintain investor and creditor confidence and to sustain
future development of the business. The impact of the level of
capital on shareholders’ return is also recognised and the Group
recognises the need to maintain a balance between the higher
apata (annual report 2007/08)
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