Full report - State Library of Victoria - Victoria Online

Interest rate exposure Not past
Past due but not impaired
Fixed Floating Non due and
interest interest interest not Less than 1 to 3 3 1 to 5 Over 5 Impaired
rate rate bearing impaired 1 month months months years years financial
2008 Consolidated Financial Assets (%) $‘000 $‘000 $‘000 $‘000 $‘000
to 1 year
assets
Cash and cash equivalents 1.9% 604 – 209 395 604 – – – – – –
Receivables 0.0% 2,187 – – 2,187 2,033 – 151 3 – – –
Short term deposits 7.0% 13,000 – 13,000 – 13,000 – – – – – –
Other financial assets 0.0% 15 – – 15 15 – – – – – –
Equity investments 3.1% 13,238 4,558 654 8,026 13,238 – – – – – –
Total Financial Assets 29,044 4,558 13,863 10,623 28,890 – 151 3 – – –
2007 Consolidated Financial Assets
Cash and cash equivalents 0.6% 1,315 – 197 1,118 1,315 – – – – – –
Receivables 0.0% 1,538 – – 1,538 1,456 – 74 8 – – –
Short term deposits 6.9% 13,500 – 13,500 – 13,500 – – – – – –
Other financial assets 0.0% – – – – – – – – – – –
Equity investments 6.1% 15,040 4,590 736 9714 15,040 – – – – – –
Total Financial Assets 31,393 4,590 14,433 12,370 31,311 – 74 8 – – –
(e)
Liquidity Risk
Liquidity risk may arise if the Board is unable to meet its financial obligations as they fall due. The Board operates under the government‘s fair payments policy of settling financial obligations
within 30 days and continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The Board’s exposure to
liquidity risk is deemed insignificant based on historical data and current risk assessment.
The carrying amount of financial liabilities recorded in the Financial Report represents the Board’s maximum exposure to liquidity risk.
The following table discloses the contractual maturity analysis of financial liabilities:
30 (Cont‘d)
(d) Interest Rate Exposure and Ageing Analysis of Financial Assets Weighted Consolidated
average
effective carrying
interest amount
(f) Interest Rate Exposure and Maturity Analysis of Financial Liabilities Weighted Consolidated
Interest rate exposure Nominal
Maturity dates
average
Fixed Floating Non amount Less than 1 to 3 3 1 to 5 Over 5
effective carrying interest interest interest
1 month months months years years
interest amount rate rate bearing
to 1 year
2008 Consolidated Financial Liabilities (%) $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000
Payables 0.0% 2,482 – – 2,482 2,482 2,482 – – – –
Finance lease liabilities 6.9% 94 94 – – 94 2 4 16 72 –
Total Financial Liabilities 2,576 94 0 2,482 2,576 2,484 4 16 72 –
2007 Consolidated Financial Liabilities
Payables 0.0% 3,047 – – 3,047 3,047 3,047 – – – –
Finance lease liabilities 6.9% 107 107 – – 107 2 4 16 85 –
Total Financial Liabilities 3,154 107 – 3,047 3,154 3,049 4 16 85 –
(g)
Market Risk
The Board is exposed to market risk primarily through interest rate risk and equity price movements quoted on the Australian Stock Exchange, with minimal exposure to foreign currency risk.
Foreign currency risk
Exposure to foreign currency risk arises only through the Board’s payables, relating to the acquisition of collection items from overseas.
This risk is mitigated by the fact that any adverse foreign currency movements will be offset by a reduction in purchases.
Interest rate risk
Exposure to interest rate risk may arise primarily through the Board’s interest-bearing assets. Mininisation of risk is achieved by continuous monitoring of investment rates and reinvestment
of funds for longer terms where possible. Also, the Board only undertakes fixed rate or non-interest-bearing, financial liability instruments.
Equity market risk
Exposure to equity market risk arises from the Board’s direct investments in equities and fixed interest securities quoted on the Australian Stock Exchange. Prior to 2008, this exposure was
reduced due to the fact that these investments were held within a diverse, managed fund. In 2008 the Board changed its Fund Manager and its investment policy to one of direct share holding.
The Board’s exposure to losses from adverse price movements is not hedged. The carrying amount of equity investments recorded in the Financial Report represents the Board’s maximum
exposure to equity market risk.
Sensitivity disclosure analysis
Taking into account past performance, future expectations and economic forecasts the Board believes that the following movements are ‘reasonably possible’ over the next 12 months
(base rates are sourced from Reserve Bank of Australia and Australian Stock Exchange):
A proportional exchange rate movement of +5% (depreciation of AUD) and -5% (appreciation of AUD) against the USD;
A parallel shift of +1% and -1% in market interest rates (AUD) from year end rates of 7.25%;
A proportional equity price movement of +5% (+261 points) and -5% (-261 points) from the year end S&P/ASX200 benchmark index of 5215.3.
The following table discloses the impact on net operating result and equity for each category of financial instrument held by the Board at year end.
2008 Consolidated Carrying
Foreign exchange risk Interest rate risk Equity market risk
amount
-5% +5% -1% +1% -5% +5%
Net result Equity Net result Equity Net result Equity Net result Equity Net result Equity Net result Equity
Financial Assets $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000 $‘000
Cash and cash equivalents 604 – – – – (2) (2) 2 2 – – – –
Receivables 2,187 – – – – – – – – – – – –
Short term deposits 13,000 – – – – (130) (130) 130 130 – – – –
Other financial assets 15 – – – – – – – – – – – –
Equity investments 13,238 – – – – (7) (7) 7 7 (401) (401) 401 401
Financial Liabilities – – – –
Payables 2,482 – – – – – – – – – – – –
Finance lease liabilities 94 – – – – – – – – – – – –
– – – – (139) (139) 139 139 (401) (401) 401 401