2012 Annual Report (2 April 2013) - Grange Resources

2012 ANNUAL REPORT
67
PAGE
(d) Tax consolidation legislation
On 6 January 2011, the Group merged its multiple income tax
consolidated groups into a single group with Grange Resources
Limited as the head entity. The entities in the merged tax
consolidated group have entered into a tax sharing agreement
which, in the opinion of the Directors, limits the joint and several
liability of the wholly owned entities in the case of a default by the
head entity, Grange Resources Limited.
The tax sharing agreement also requires all contributing members
to fully compensate Grange Resources Limited for any current tax
receivable and deferred tax assets related to unused tax losses
or unused tax credits that are transferred to Grange Resources
Limited under the tax consolidation legislation. The funding
amounts are determined by reference to the amounts recognised
in the wholly owned entities’ financial statements.
The amounts receivable / payable under the tax sharing
agreement are due upon receipt of the funding advice from the
head entities, which is issued as soon as practicable after the end
of the financial period. The head entity may also require payment
of an interim funding amount to assist with its obligations to
pay tax instalments. The funding amounts are recognised as
intercompany receivables or payables.
(e) Mineral Resources Rent Tax (MRRT)
As at 31 December 2012, the Group has unused MRRT royalty
credits and starting base allowances for which no deferred tax
asset has been recognised. The Group continues to assess its
options and assumptions in relation to the application of the
Mineral Resources Rent Tax Act 2012 and the extent of MRRT
allowances that may be available to be applied in later years.
NOTE 10. CASH AND CASH EQUIVALENTS
2012 2011
$’000 $’000
Cash at bank and in hand 16,991 41,556
Term deposits 102,927 130,713
119,918 172,269
(a) Total cash (current and non-current)
Cash at bank and in hand as per
statement of cash flows 119,918 172,269
Add:
Current term deposits 55,000 9,846
Non-current term deposits - 6,892
174,918 189,007
Total cash held in trading accounts or term deposits with
major financial institutions under normal terms and conditions
appropriate to the operation of the accounts. These deposits
earn interest at rates set by these institutions. As at 31 December
2012 the weighted average interest rate on the Australian
dollar accounts was 4.54% (31 December 2011: 6.18%) and
the weighted average interest rate on the United States dollar
accounts was 0.72% (31 December 2011: 0.75%).
(b) Risk exposure
The Group’s exposure to interest rate risk is discussed in Note
2. The maximum exposure to credit risk at the reporting date is
the carrying amount of each class of cash and cash equivalents
mentioned above.
NOTE 11. TRADE AND OTHER RECEIVABLES
2012 2011
$’000 $’000
Trade receivables 7,926 32,235
Security deposits (1) 6,805 250
Other receivables 4,035 5,017
Prepayments 3,631 3,661
22,397 41,163
(1) Security deposits comprises of restricted deposits that are used
for monetary backing for performance guarantees, including a debt
service reserve amount as part of a secured finance lease liability.
(a) Impaired trade receivables
The Group has no trade receivables past due as at 31 December
2012, nor does it consider there to be any potential impairment
loss on these receivables.
(b) Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign currency risk
and interest rate risk in relation to trade and other receivables is
provided in Note 2.
(c) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying
amount is assumed to approximate their fair value.
The maximum exposure to credit risk at the end of the reporting
period is the carrying amount of each class of receivables
mentioned above. Refer to Note 2 for more information on the
credit quality of the Group’s trade and other receivables.