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Financials - Sydney Metropolitan Development Authority Notes to the Financial Statements for year ending 30 June 2012 (g) Other price risk - TCorp Hour-Glass Facilities Exposure to ‘other price risk’ primarily arises through investments with NSW Treasury Corporation Hour-Glass Investment Facilities, which are held for strategic rather than trading purposes. The entity has no direct equity investments. The entity holds units in the following Hour-Glass investments trusts. Consolidated Facility Investment sectors Investment Horizon 2012 $’000 Cash facility Cash, money market instrument Up to 1.5 years 73,253 - SMDA Facility Investment sectors Investment Horizon 2012 $’000 Cash facility Cash, money market instrument Up to 1.5 years 50,715 - 2011 $’000 2011 $’000 The unit price of each facility is equal to the total fair value of the net assets held by the facility divided by the number of units on issue for that facility. Unit prices are calculated and published daily. NSW TCorp is trustee for each of the above facilities and is required to act in the best interest of the unit holders and to administer the trusts in accordance with the trust deeds. As trustee, TCorp has appointed external managers to manage the performance and risks of each facility in accordance with a mandate agreed by the parties. However, TCorp acts as manager for part of the Cash and Strategic Cash Facilities and also manages the Australian Bond portfolio. A significant portion of the administration of the facilities is outsourced to an external custodian. Investment in the Hour-Glass facilities limits the entity’s exposure to risk, as it allows diversification across a pool of funds with different investment horizons and a mix of investments. NSW TCorp provides sensitivity analysis information for each of the Investment facilities, using historical based volatility information collected over a ten year period, quoted at two standard deviations (i.e. 95% probability). The TCorp Hour-Glass Investment facilities are designated at fair value through profit or loss and therefore any change is based on the percentage change in unit price (as advised by TCorp) multiplied by the redemption value as at 30 June each year for each facility (balance from Hour-Glass statement). ATPSL is also exposed to price risk based on the demand and supply of lettable area at the Australian Technology Park. 58 SYDNEY METROPOLITAN DEVELOPMENT AUTHORITY
Consolidated Impact on profit/loss Change in unit price 2012 $’000 Hour-Glass Investment - Cash Facility +/- 1% +/-673 - 2011 $’000 SMDA Impact on profit/loss Change in unit price 2012 $’000 Hour-Glass Investment - Cash Facility +/- 1% +/-447 - 2011 $’000 (h) Operational Risk The Authority manages its operational risk as part of the risk management strategy. Operational risk is the direct and indirect losses arising from a wide variety of causes associated with the Authority’s processes, personnel, technology, legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risk arises from all of the Authority’s operations. The Authority’s objective is to manage operational risk so as to balance the avoidance of financial losses and damages to the Authority’s reputation with overall cost effectiveness and to avoid control procedures that restricts initiative and creativity. The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit. The responsibility is supported by the development of standards, policies and procedures in the following areas: –– Requirements for appropriate segregation of duties, including the independent authorisation of transactions –– Requirements for the reconciliation and monitoring of transactions –– Compliance with regulatory and legal requirements –– Documentation of controls and procedures –– Requirements for the periodic reporting to senior management, relevant committees and the Board. –– Training and professional development –– Risk mitigation, including insurance where this is effective. Compliance with established standards, policies and procedures is supported by a programme of periodic review undertaken by Internal Audit. The results of the internal audit reviews are discussed with management of the business unit to which they relate, with reports submitted to Senior Management, the Audit and Risk Management Committee, and to the Board where appropriate. 2011-12 ANNUAL REPORT 59
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SYDNEY METROPOLITAN DEVELOPMENT AUT
Page 3 and 4:
Contents 4 To the Minister 5 Statem
Page 5 and 6:
Statement from the Chairperson and
Page 7 and 8: Board Members Dr Col Gellatly AO B
Page 9 and 10: Giovanni Cirillo BUrbRegPlan (Hons)
Page 11 and 12: Redfern-Waterloo Precinct Redfern W
Page 13 and 14: -- Ensure interpretive devices and
Page 15 and 16: Social Inclusion Socially Inclusive
Page 17 and 18: Statement by Members of the Board S
Page 19 and 20: 2011-12 ANNUAL REPORT 19
Page 21 and 22: Financials - Sydney Metropolitan De
Page 23 and 24: Financials - Sydney Metropolitan De
Page 25 and 26: (g) Accounting for the Goods and Se
Page 27 and 28: -- Buildings 40 years -- Leasehold
Page 29 and 30: Unused non-vesting sick leave does
Page 31 and 32: 2 Expenses Excluding Losses (a) Con
Page 33 and 34: Consolidated Consolidated SMDA SMDA
Page 37 and 38: 10 (b) Reconciliation of movements
Page 41 and 42: SASS SANCS SSS TOTAL 30-Jun-12 30-J
Page 43 and 44: (c) Reconciliation of the fair valu
Page 45 and 46: (f) Amounts recognised in other com
Page 49 and 50: 16 Increase in Net Assets from Equi
Page 53 and 54: (a) Financial instruments categorie
Page 55 and 56: (c ) Liquidity risk Liquidity risk
Page 57: Interest rate risk $’000 Consolid
Page 61 and 62: Internal Audit and Risk Management
Page 63 and 64: 2011-12 ANNUAL REPORT 63
Page 65 and 66: Financials - The Office of Sydney M
Page 73 and 74: 30 June 2012 30 June 2011 $’000 $
Page 77 and 78: (c) Reconciliation of the fair valu
Page 79 and 80: (e) Expense recognised in income st
Page 81 and 82: (iii) Demographic Assumptions The d
Page 83 and 84: (d) Economic assumptions The econom
Page 85 and 86: Staff Numbers by Employment Basis a
Page 87 and 88: Payment of Accounts All agreed acco
Page 89 and 90: Table A: Number of applications by
Page 91 and 92: Index Aims & Objectives 6 Appendice
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