Annual Report 2011 - Watercare

Watercare Services Limited
2011 ANNUAL REPORT
Notes to the financial statements (continued)
for the year ended 30 June 2011
21. Financial Assets and Liabilities (continued)
Foreign currency sensitivity
The following sensitivity analysis is based on the foreign currency risk exposures in existence at year-end. At 30 June, had the New Zealand dollar
exchange rate changed, as illustrated in the table below, with all other variables held constant, post-tax surplus and equity would have been
affected as follows:
group and Company
company
2011 2010
Post-tax deficit equity Post-tax deficit equity
higher/(lower) higher/(lower) higher/(lower) higher/(lower)
$000 $000 $000 $000
Sensitivity to reasonable movements
Change in United States dollar exchange rate
10% increase (309) (309) (256) (256)
10% decrease 380 380 313 313
Change in Euro Monetary Union euro exchange rate
10% increase (18) (18) - -
10% decrease 22 22 - -
Change in United Kingdom pound exchange rate
10% increase (11) (11) - -
10% decrease 13 13 - -
Change in Australian dollar exchange rate
10% increase (289) (289) (18) (18)
10% decrease 353 353 22 22
Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. Financial instruments
which potentially subject the group to credit risk principally consist of cash and cash equivalents, derivative assets held for risk management,
and trade and other receivables.
The group’s cash and cash equivalents are placed with major trading banks with a minimum AA- credit rating assigned by international creditrating
agencies. Debtors and other receivables arise from the group’s statutory functions. Therefore, there are no procedures in place to monitor
the credit quality of debtors and other receivables with reference to credit evaluations or external credit rating. However, there is no concentration
of credit risk with respect to receivables as the company has a large number of customers. The ageing of the trade receivables at balance date
was as follows:
group and Company
company
2011 2010
Carrying amount Provision for Net carrying Carrying amount Provision for Net carrying
doubtful debts amount doubtful debts amount
$000 $000 $000 $000 $000 $000
Not past due 18,415 - 18,415 18,852 - 18,852
Past due one to thirty days 7,229 (302) 6,927 145 - 145
Past due thirty to sixty days 3,337 (124) 3,213 35 - 35
Past due more than sixty days 12,128 (2,702) 9,426 15 - 15
Total 41,109 (3,128) 37,981 19,047 - 19,047
group and Company Company
2011 2010
$000 $000
Movement in the provision of doubtful debts
Balance at 1 July 2010 - -
Acquisition through integration on 1 November 2010 1,845 -
Additions during the year 1,313 -
Bad debts written off (30) -
Balance at 30 June 2011 3,128 -
2011 Financial Report
PAGE 101
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