2012 Annual Report (2 April 2013) - Grange Resources

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2012 ANNUAL REPORT
Notes to the Financial Statements (cont.)
NOTE 2. FINANCIAL RISK MANAGEMENT (cont.)
(c) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Maturities of financial liabilities
The table below analyses the Groups financial liabilities into relevant maturity groupings based on the remaining period as at the
reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
2012 – Consolidated
Between Between Total Carrying
less than 6 6 - 12 1 and 2 2 and 5 Over 5 contractual amount
months months years years years cash flows liabilities
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Non-derivatives
Non-interest bearing
Trade and other payables 34,982 - - - - 34,982 34,982
Deferred consideration 4,325 3,551 7,029 21,309 41,750 77,964 49,586
Variable rate borrowings 225 220 440 1,349 6,819 9,053 9,053
Fixed rate borrowings 14,165 - - - - 14,165 13,876
Total non-derivatives 53,697 3,771 7,469 22,658 48,569 136,164 107,497
2011 – Consolidated
Between Between Total Carrying
less than 6 6 - 12 1 and 2 2 and 5 Over 5 contractual amount
months months years years years cash flows liabilities
$’000 $’000 $’000 $’000 $’000 $’000 $’000
Non-derivatives
Non-interest bearing
Trade and other payables 49,424 - - - - 49,424 49,424
Deferred consideration 5,529 5,372 10,082 29,970 52,058 103,011 65,352
Variable rate borrowings 225 10,225 445 1,351 6,883 19,129 19,129
Fixed rate borrowings 5,973 6,991 15,334 - - 28,298 25,758
Total non-derivatives 61,151 22,588 25,861 31,321 58,941 199,862 159,663
d) Fair Value Estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available for sale
securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group
is the current bid price.
Derivative contracts classified as held for trading are fair valued by comparing the contracted rate to the current market rate for a
contract with the same remaining period to maturity.
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives and investments
in unlisted subsidiaries) is determined using valuation techniques. The fair value of interest rate swaps is calculated as the present value
of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at
the reporting date.