2011/2012 Annual Report - Metro Tasmania

NOTES TO THE FINANCIAL STATEMENTS
Note 23. FINANCIAL INSTRUMENTS
Financial risk management policies
Metro’s financial instruments consist mainly of deposits with banks, accounts receivable and payable. It is
not current Metro policy to utilise derivative instruments as a means of managing exposure to risks.
Metro does not have any derivative instruments in either financial years.
Financial risk exposures and management
The main risks Metro is exposed to through its financial instruments are interest rate risk and credit risk.
(a) Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the Statement of Financial Position and Notes to the Financial Statements.
There are no material amounts of collateral held as security in either financial years.
Metro does not have any material credit risk exposure to any single receivable or group of receivables
under financial instruments entered into and manages risk with appropriate credit checks, regular review
of balances and structured payment options.
The following table analyses financial assets that are past due but not impaired.
Analysis of financial assets that are past due but not impaired:
CONSOLIDATED
0 days past due 1–30 days past due 31–90 days past due Total
2012 2011 2012 2011 2012 2011 2012 2011
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial assets:
Receivables 522 466 38 27 12 11 572 504
(b) Liquidity risk
Liquidity risk arises from the possibility that Metro might encounter difficulty in settlings its debts or otherwise
meeting its obligation related to financial liabilities.
Metro manages this risk through the following mechanisms:
• preparing forward looking cash flow analysis in relation to Metro’s operational, investing and financing
activities;
• obtaining funding from a variety of sources;
• only investing short term surplus cash with reputable organisations including Tascorp and the big four
financial institutions; and
• monitoring undrawn credit facilities.
Financial liability and Financial asset maturity analysis:
Financial assets:
Weighted average
effective
interest rate
Floating interest
rate
CONSOLIDATED
Non-interest
bearing
Total
2012 2011 2012 2011 2012 2011 2012 2011
% % $’000 $’000 $’000 $’000 $’000 $’000
Cash at bank 3.10 4.00 3,808 1,881 – – 3,808 1,881
Call deposit
at Tascorp
4.68 4.98 – 985 – – – 985
Receivables – – 572 504 572 504
3,808 2,866 572 504 4,380 3,370
50 METRO Annual Report 2011 | 2012