Port Nelson Annual Report 2012 (pdf)

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.
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