Zoological Parks Authority - Parliament of Western Australia - The ...

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Zoological Parks Authority ANNUAL REPORT 2012 Disclosures and Legal Compliance Financial Statements Zoological Parks Authority Notes to the Financial Statements for the Year Ended 30 June 2012 continued 34. Schedule of Income and Expenses by Service continued Community engagement and awareness in conservation 2012 2011 $ $ Wildlife management, medicine and research 2012 2011 $ $ 2012 $ Total 2011 $ INCOME FROM STATE GOVERNMENT Service appropriation 9,064,808 8,710,927 1,320,192 1,222,073 10,385,000 9,933,000 Resources received free of charge – – – – – – Total Income from State Government 9,064,808 8,710,927 1,320,192 1,222,073 10,385,000 9,933,000 Surplus/(deficit) for the period 2,439,316 1,140,569 (548,258) (317,828) 1,891,058 822,741 SEGMENT DESCRIPTIONS: Community engagement and awareness in conservation Perth Zoo promotes conservation messages to the community. This is achieved by providing educational programs and publications, interpretation and information services that educate and encourage the community in conservation. Perth Zoo maximises visits to the Zoo by providing a quality and unique ‘value-for-money’ attraction in ecologically themed botanic gardens. The Zoo’s commercial activities are also underpinned by conservation messages. Wildlife management, medicine and research The conservation value of wildlife will be optimised by effective management, high standards of animal welfare and animal husbandry, captive breeding, support for wildlife conservation, breeding for re-introduction and provision of research opportunities. GEOGRAPHICAL SEGMENTS: The Zoological Parks Authority operates within one geographical segment (Western Australian public sector). 106
Zoological Parks Authority ANNUAL REPORT 2012 Disclosures and Legal Compliance Financial Statements Zoological Parks Authority Notes to the Financial Statements for the Year Ended 30 June 2012 continued 35. Financial instruments (a) Financial risk management objectives and policies Financial instruments held by the Authority are cash and cash equivalents, restricted cash and cash equivalents, loans and receivables, payables and finance leases. The Authority has limited exposure to financial risks. The Authority’s overall risk management program focuses on managing the risks identified below: Credit risk Credit risk arises when there is the possibility of the Authority’s receivables defaulting on their contractual obligations resulting in financial loss to the Authority. The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any allowance for impairment as shown in the table at note 35(c) ‘Financial instruments disclosures’ and note 22 ‘Receivables’. Credit risk associated with the Authority’s financial assets is minimal because the main receivable is the amounts receivable for services (holding account). For receivables other than government, the Authority trades only with recognised, creditworthy third parties. Amounts owing by Government agencies are guaranteed and therefore no credit risk exists in respect of those amounts. The Authority has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Authority’s exposure to bad debts is minimal. At the end of the reporting period there were no significant concentrations of credit risk. The collectability of receivables is reviewed on an ongoing basis by individual assessment of the debts outstanding. The type of recovery action is determined by management and is based on individual assessment of debts. Consideration is given to factors such as debt amount, nature of debt and past history of debtor. Allowance for impairment of financial assets is calculated based on objective evidence such as past experience, and current and expected changes in client credit ratings. For financial assets that are either past due or impaired, refer to note 35(c) ‘Financial instruments disclosures’. Liquidity risk Liquidity risk arises when the Authority is unable to meet its financial obligations as they fall due. The Authority is exposed to liquidity risk through its trading in the normal course of business. The Authority has appropriate procedures to manage cash flows including drawdowns of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments. Market risk The market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the Authority’s income or the value of its holdings of financial instruments. The Authority does not trade in foreign currency and is not materially exposed to other price risks. Other than as detailed in the interest rate sensitivity analysis table at note 35(c), the Authority is not exposed to interest rate risk because the majority of cash and cash equivalents and restricted cash are non-interest bearing and it has no borrowings. The interest rate sensitivity is determined by reference to recent trends in interest rate movements and economic forecasts by the Reserve Bank of Australia. 107
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