Notes to the financial statementsfor the financial year ended 31 December 2011NOTE 26 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHODLogistics Planning <strong>Services</strong> Pty <strong>Limited</strong> (LPS) was incorporated on 18 October 2004. LPS was placed into member'svoluntary liquidation on 26 November 2010 and was subsequently deregistered on 4 October 2011. On this date <strong>Port</strong><strong>Waratah</strong> <strong>Coal</strong> <strong>Services</strong> <strong>Limited</strong> ceased holding it's 50% ownership of the company.For the year ended 31 December 2011, LPS contributed $Nil (2010: $0.3 Million) to the pre tax profit of theconsolidated entity.Investments in associates are accounted for in the financial statements using the equity method of accounting and arecarried at cost by the parent (see Notes 1 and 8). Information relating to the associate is set out below.Name of CompanyPrincipal ActivityOwnership Interest31-Dec-1131-Dec-10% %Logistics Planning <strong>Services</strong> Pty <strong>Limited</strong> Software development - 50LPS had a reporting date of 30 June. The carrying amount of the investment in LPS is $Nil (2010: $50).Summarised Financial Information of Associates31-Dec-11$'00031-Dec-10$'000Current assetsNon-current assetsCurrent liabilitiesNon-current liabilitiesNet assetsRevenueNet profit- 872- -- 872- 265- -- 265- 606- 890- 606NOTE 27 CONTROLLED ENTITY INFORMATIONThe parent entity holds a 100% interest in PWCS Refinancing Pty <strong>Limited</strong>, a company incorporated in Australia.The book value of the parent entity's investment in the controlled entity is $2.35
Notes to the financial statementsfor the financial year ended 31 December 2011NOTE 28 FINANCIAL INSTRUMENTS(i)Interest Rate RiskThe parent entity's exposure to interest rate risk and the effective interest rates on financial instruments at balance date are:Weightedaverageeffective Floating Fixed interest rate maturities Noninterestinterest 1 year 2 to 5 over 5 interestrate rate or less years years bearing Total% $'000 $'000 $'000 $'000 $'000 $'00031 December 2011AssetsCash 4.0% 6,560 - - - - 6,560Debtors - - - - - 19,285 19,285Other receivables - - - - - 244 244Shares at fair value - othercorporations - - - - - 15,591 15,591Total financial assets 6,560 - - - 35,120 41,680LiabilitiesTrade and other payables - - - - - 43,548 43,548Secured bank loans 5.5% 1,004,458 - - - - 1,004,458Total financial liabilities 1,004,458 - - - 43,548 1,048,006Net financial (liabilities) (997,898) - - - (8,428) (1,006,326)31 December 2010AssetsCash 4.5% 2,331 - - - - 2,331Debtors - - - - - 17,068 17,068Receivables - - - - - 2,310 2,310Shares at cost - othercorporations - - - - - 2,835 2,835Total financial assets 2,331 - - - 22,213 24,544LiabilitiesTrade and other payables - - - - - 45,398 45,398Secured bank loans 5.7% 866,855 - - - - 866,855Total financial liabilities 866,855 - - - 45,398 912,253Net financial (liabilities) (864,524) - - - (23,185) (887,709)(ii)Credit Risk ManagementThe carrying amounts of financial assets included in the consolidated Statement of Financial Position represent the parent entity'smaximum exposure to credit risk in relation to these assets. The parent entity holds no security in relation to financial assets.The company continues to adopt a policy of only dealing with creditworthy counterparties.Ongoing credit evaluation is performed on the financial condition of trade debtors and where appropriate, services are not performeduntil payment in advance of services to be rendered occurs.(iii)Net Fair ValuesThe carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their fair values,unless stated expressly.(iv)Capital risk managementThe capital structure of the company consists of debt, which includes borrowings disclosed in note 12 and 14, cash and cashequivalents, disclosed in Note 4 and equity attributable to equity holders of the parent, comprising issued capital, reserves andretained earnings as disclosed in notes 16, 17 and 18.36