BankVic Annual Report 2019
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Notes To and Forming Part of<br />
the Financial Statements (continued)<br />
Note 21: Financial Instruments (continued)<br />
Financial Instruments<br />
Floating<br />
Interest Rate<br />
Fixed interest rate maturing in<br />
Over 1 to 5<br />
years<br />
1 year or<br />
less<br />
More than 5<br />
years<br />
Non-interest<br />
bearing<br />
Total<br />
carrying<br />
amount as<br />
per Balance<br />
Sheet<br />
30 June 2018 $’000 $’000 $’000 $’000 $’000 $’000<br />
i. Financial assets<br />
Cash and Cash Equivalents 46,458 - - - 817 47,275<br />
Receivables - - - - 2,856 2,856<br />
Term Deposits - 54,776 - - - 54,776<br />
Certificates of Deposit - 94,740 - - - 94,740<br />
Floating Rate Notes - 26,650 156,300 - - 182,950<br />
Loans and Advances - Gross* 1,287,180 26,216 129,265 - - 1,442,661<br />
Equity Investments - - - - 2,225 2,225<br />
ii. Financial liabilities<br />
1,333,638 202,382 285,565 - 5,898 1,827,483<br />
Payables - - - - 9,506 9,506<br />
Deposits 1,235,779 327,339 32,617 - - 1,595,735<br />
Borrowings 7,486 35,310 - - 1,874 44,670<br />
*Comparative figures have been restated to align with the current year presentation<br />
1,243,265 362,649 32,617 - 11,380 1,649,911<br />
b. Credit risk exposure<br />
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.<br />
On-Balance Sheet Financial Instruments<br />
The credit risk on financial assets, excluding investments of the Company, which have been recognised on balance sheet, is the<br />
carrying amount, net of any provision for impairment. Receivables from other financial institutions are receivables with highcredit<br />
quality financial institutions and therefore credit risk is minimal. The Company is not materially exposed to any individual<br />
customer. The company has a concentration to the Victorian Police and Health industries as disclosed in Note 9 and 13.<br />
c. Net fair value of financial assets and liabilities<br />
Valuation Approach<br />
Net fair value of financial assets and liabilities are determined by the Company on the following basis:<br />
The carrying value of loans and advances is net of the provision for impairment. For variable rate financial assets and liabilities,<br />
including loans and advances, deposits and securitised funding, the carrying value approximates the fair value. For fixed rate<br />
financial assets and liabilities, adjustment has been made based on the differences between historical rates and current fixed<br />
rates.<br />
The carrying amounts of cash and liquid assets, receivables, term deposits, certificates of deposit, equity investments and<br />
payables approximate fair value.<br />
52 | BANKVIC // ANNUAL REPORT <strong>2019</strong>
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