Download - AHG Limited

Notes to the Consolidated Financial Statements
(continued)
Liquidity risk
The objective of the Group’s liquidity risk policy is to ensure that it has adequate financing facilities and
operating cash flows available to meet its financial commitments.
The Group’s liquidity risk management approach is to identify and manage its financial commitments on
the following basis:
• long-term liquidity management involving the structuring of the Group’s statement of financial position
and debt maturity profile to protect against liquidity problems in the future; and
• maintain flexible funding arrangements with financiers so as to allow for additional lines of credit to be
established as required.
The following table provides a maturity profile for the Group’s financial liabilities. The amounts disclosed in
the table are the gross contractual undiscounted cash flows required to settle the respective liabilities.
Consolidated 2012
Gross Contractual Liability Cash Flow Outgoings ($’000)
Carrying
Amount
1 - 12
months
1 - 2
years
2 - 5
years
5 +
years
Total Gross
Cash flow
Used car VIL borrowings 44,878 45,200 - - - 45,200
New car floor-plan* 457,067 460,560 - - - 460,560
Trade payables 93,579 93,561 18 - - 93,579
Other payables and accruals 108,930 107,908 515 507 - 108,930
Finance lease liabilities 21,405 4,991 5,489 15,089 622 26,191
Hire purchase liabilities 29,153 11,526 9,492 12,373 291 33,682
External loans 101,489 4,159 3,876 100,227 500 108,761
Consolidated 2011
856,501 727,904 19,390 128,195 1,413 876,903
Gross Contractual Liability Cash Flow Outgoings ($’000)
Carrying
Amount
1 - 12
months
1 - 2
years
2 - 5
years
5 +
years
Total Gross
Cash flow
Used car VIL borrowings 48,829 49,245 - - - 49,245
New car floor-plan* 308,305 310,928 - - - 310,928
Trade payables 73,049 72,415 35 598 1 73,049
Other payables and accruals 70,334 69,646 495 192 1 70,334
Finance lease liabilities 27,055 9,437 4,756 10,304 8,891 33,387
Hire purchase liabilities 20,153 5,761 6,672 11,109 532 24,074
External loans 71,785 4,242 73,670 380 551 78,842
619,509 521,673 85,628 22,583 9,977 639,860
*The Group finances the acquisition of its new vehicle inventory via a bailment arrangement, with multiple financiers, known as floor-plan financing. Under
its floor-plan financing arrangement, the Group’s total inventory borrowings are comprised of individually secured loans against specific items of inventory.
Generally, upon finalisation of a retail sale and receipt of retail customer funds (COD delivery) in respect of an item of inventory, the Group discharges the
specific amount owing under its floor-plan financing arrangement. In this way, cash flow required to meet the Group’s floor-plan financing obligations is
available as part of the Group’s working capital cycle.
Fair value measurements
The fair value of financial instruments traded in active markets is based on quoted market prices at the end
of the reporting period (current bid price). These instruments are included in level 1. $Nil at 30 June 2012
(2011: $Nil).
The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available
and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2. The group has level 2 derivative financial
instruments at fair value comprising derivative assets of $Nil (2011: $6,000) and derivative liabilities of
$2,450,000 (2011: $66,000).
If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3. This is the case for unlisted securities. Specific valuation techniques used to value financial
instruments include discounted cash flow analysis and other techniques.
As of 30 June 2012, there was only one level 3 investment, being an unlisted investment in One Way Traffic
Pty Ltd with a fair value of $2.25 million (2011: $Nil).
The fair value of the unlisted equity security is determined based on the present value of net cash inflows
from future profits and subsequent disposal of the security. These net cash inflows are discounted to their
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Automotive Holdings Group