annual report 2011–12 - Parliament of New South Wales - NSW ...

Department of Transport
Notes to the financial statements
for the year ended 30 June 2012
32 FINANCIAL INSTRUMENTS (cont'd)
Derivatives
Only two entities have undertaken both forward exchange currency swaps and commodity swaps, being Rail
Corporation and the State Transit Authority. The risks associated with these arrangements are mitigated by only
entering into arrangements with reputable, well established financial institutions with high level credit ratings.
The reporting entity held derivative financial assets $.816m (2010-11: $4.735m) and derivative financial liabilities
$16.166m (2010-11: $16.598m). Further details on derivates are provided in Notes 10 and 23.
Other financial assets
The repayment of the Sydney Harbour Tunnel loan ranks behind all creditors to be paid. Redemption of the M2 and
Eastern Distributor promissory notes is dependent upon counterparties generating sufficient cash flows to enable the
face value to be repaid.
(c)
Liquidity risk
Liquidity Risk is the risk that the reporting entity will be unable to meet its payment obligations when they fall due.
The reporting entity continuously manages risk through monitoring future cash flows and maturities planning to
ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between continuity of
funding and flexibility through the use of overdrafts, loans and other advances.
The reporting entity has access to credit facilities with NSW TCorp of $1,838 million (2011: $1,834 million) of which
$389 million (2011: $787 million) had been used at reporting date.
Financial statements
Financial statements
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