Port Nelson Annual Report 2012 (pdf)

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notes to the accounts notes note 15: intangible assets Accumulated Accumulated Ammortisation Current Current Ammortisation and Current Year Year Cost/ and Cost/ Impairment Carrying Year Current Impair- Ammort- Revalu- Impairment Carrying Revaluation Charges Amount Additions/ Year ment isation ation Charges Amt 1/07/11 1/07/11 1/07/11 Transfers Disposals Charges Charges 30/6/12 30/6/12 30/6/12 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 2012 asset class Software 3,525 (2,726) 799 283 - - (354) 3,808 (3,080) 728 3,525 (2,726) 799 283 - - (354) 3,808 (3,080) 728 2011 asset class Software 3,383 (2,381) 1,002 142 - - (345) 3,525 (2,726) 799 3,383 (2,381) 1,002 142 - - (345) 3,525 (2726) 799 All Intangible Assets are externally generated. note 16: financial instruments Financial Risk Management Objectives Port Nelson does not enter into or trade financial instruments, including derivative financial instruments for speculative purposes. Treasury functions are governed by a Treasury Policy approved by the Board of Directors. Approved instruments include: • Forward rate agreements • Options on a swap • Interest rate collars • Interest rate swaps • Interest rate options • Spot and forward foreign exchange Fixed rate hedging parameters are as follows: Term Minimum Fixed Rate Amount Maximum Fixed Rate Amount Less than 1 year 50% 100% 1 year to 4 years 30% 70% 5 years to 10 years 0% 50% Market Risk Currency Risk Port Nelson purchases plant and equipment from time to time from overseas which require it to enter into forward foreign exchange contracts to hedge the foreign currency risk exposure. This means that Port Nelson is able to fix the New Zealand dollar amount payable prior to delivery of the plant and equipment from overseas. As at balance date Port Nelson had NIL currency risk exposure. Cash flow interest rate risk Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate due to changes in market interest rates. Borrowings issued at variable interest rates expose Port Nelson to cash flow interest rate risk. Port Nelson’s Treasury Policy is to maintain a portion of its borrowings using interest rate swap instruments within the parameters as set out in the Hedging Parameter table disclosed under the Financial Risk Management Objectives section. Under the interest rate swaps, Port Nelson agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional principle amounts. Credit Risk Port Nelson is exposed to credit risk from the possibility of counter-parties failing to perform their obligations. Credit risk exposure on financial assets other than cash at bank and at call has been recognised in the balance sheet net of any provision for doubtful debts. Principally any risk is in respect of cash and bank, and accounts receivable. The major components of debtor exposure are to shipping companies and forestry exporters. Terms of trade are either payment on the 20th of the month following or 7 working days. The majority of debtors are major international companies with extensive histories of payment. There are no major concentrations of credit risk with respect to accounts receivable and any single debtor. 34
notes to the accounts note 16: financial instruments (...continued) Maximum exposures to credit risk at balance date are: 2012 2011 $000 $000 Cash and Cash Equivalents - 504 Trade and Other Receivables 4,705 4,455 Advance to Associate - 611 TOTAL CREDIT RISK 4,705 5,570 notes The above maximum exposures are net of any recognised provision for losses on these financial instruments. No collateral is held on the above accounts. The Directors do not consider there is any significant exposure to interest rate risk on its investments. Credit Quality of Financial Assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor’s credit rating (if available) or to historical information about counterparty default rates: 2012 2011 $000 $000 Cash and Cash Equivalents AA - 504 Debtors and receivables arise in the ordinary course of Port Nelson’s business. There are no procedures in place to monitor or report the credit quality of debtors and other receivables with reference to internal or external credit ratings. Port Nelson does instigate a credit check on new debtors prior to providing business on Port Nelson Standard Terms and Conditions. Liquidity Risk Management of liquidity risk Liquidity risk is the risk that Port Nelson will encounter ‘difficulty’ raising funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Port Nelson aims to maintain flexibility in funding by keeping committed credit lines available. Port Nelson has financing arrangements with Westpac Banking Corporation. The total facility is $50,000,000 for a term of 2 years. (2011: $50,000,000 for a term of 2 years). Security for the multi-option credit facility is by a first and exclusive debenture charge over the assets and undertakings of Port Nelson. The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at reporting date. Note: Swaps expiring within 12 months are treated as core debt and will be replaced with another approved instrument. 2012 (at balance date) Notional Amount Fair Value Interest 0 to 1 1 to 2 2 to 3 3 to 4 4 to 5 6 to 7 8 to 9 9 to 10 ($000’s) gain/(loss) rate %* year years years years years years years years $4,000 Swap (144) 6.95 4,000 - - - - - - - Total Current (144) 4,000 - - - - - - - $9,000 Swap (412) 6.19 - 9,000 - - - - - - $4,000 Swap (252) 6.34 - - 4,000 - - - - - $5,000 Swap (434) 6.50 - - - - 5,000 - - - $6,000 Swap (819) 6.49 - - - - 6,000 - - - $5,000 Swap (170) 5.70 - - - - - 5,000 - - $5,000 Swap (747) 5.99 - - - - - 5,000 - - $4,000 Swap (212) 5.90 - - - - - - 4,000 - $5,000 Swap (56) 5.35 - - - - - - - 5,000 $4,000 Swap (49) 3.99 - - - - - - - 4,000 Total Non-Current (3,151) - - - - - - - - - 2012 Total (3,295) - 4,000 9,000 4,000 - 11,000 10,000 4,000 9,000 2011 Total (1,942) - - 4,000 9,000 4,000 - 11,000 - 10,000 *Interest rate is exclusive of margin and line of credit fee. All interest rate options and interest swap options are on 90 day roll-over terms. The following table summarises the Port Nelson exposure to interest rate risk as at 30 June 2012. 35
Page 1 and 2: annual report 2012
Page 3 and 4: content Directors’ Report........
Page 5 and 6: directors’ report As Chairman of
Page 7 and 8: financial results A sustainable bus
Page 9 and 10: community governance highlights Som
Page 11 and 12: Photo: Nelson Mail environment A le
Page 13 and 14: our vision port people Percentage o
Page 15 and 16: 2012 financial report customers An
Page 17 and 18: statutory information to the shareh
Page 19 and 20: statement of corporate intent missi
Page 21 and 22: alance sheet as at 30 june 2012 Not
Page 23 and 24: statement of cash flows for the yea
Page 25 and 26: summary of significant accounting p
Page 27 and 28: summary of significant accounting p
Page 29 and 30: notes to the accounts note 4: defer
Page 31 and 32: notes to the accounts note 9: equit
Page 33: notes to the accounts note 14: prop
Page 37 and 38: notes to the accounts note 16: fina
Page 39 and 40: notes to the accounts note 23: rela

Port Nelson Annual Report 2012 (pdf)

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