annual report - Pumpkin Patch investor relations

PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
PUMPKIN PATCH LIMITED & SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS 31 JULY 2010
25 FINANCIAL RISK MANAGEMENT continued
(B) CREDIT RISK
Credit risk is managed on a Group basis and refers to the risk of a counterparty failing to
discharge an obligation. In the normal course of business, the Group incurs credit risk from
trade receivables and transactions with financial institutions. The Group places its cash,
short-term deposits and derivative financial instruments with only high credit quality financial
institutions. Sales to retail customers are required to be settled in cash or using major credit
cards, mitigating credit risk. Trade receivables arising from wholesale arrangements are
individually reviewed regularly for impairment as part of normal operating procedures
and provided for where appropriate. Overdue amounts that have not been provided for
relate to customers that have no recent history of default. Less than 9.2% (2009: 10.4%) of
reported sales give rise to trade receivables. The top five wholesale customers account for
54% (2009: 84%) of the trade receivables balance. Refer also to note 8 for further details.
(C) LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and the availability
of funding through an adequate amount of committed credit facilities. Due to the dynamic
nature of the underlying businesses, Management aims at maintaining flexibility in funding
by keeping committed credit lines available.
Management monitors rolling forecasts of the GroupÕs liquidity reserve on the basis of
expected cash flow. Bank facilities are provided under the terms of an ANZ National Bank
Limited Revolving Advances Facility Agreement dated 24 June 2009. The bank facilities
outlined in this agreement expire in December 2011. The Company draws down on its
bank facility as required via short-term loans which are required to be disclosed under
current liabilities for external financial reporting purposes. For details of available facilities,
refer note 16 for further details.
The table below analyses the GroupÕs financial liabilities into relevant maturity groupings
based on the remaining period at the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Less than
1 year
Between 1
& 2 years
Between 2
& 5 years Total
$Õ000 $Õ000 $Õ000 $Õ000
Consolidated maturity analysis
31 July 2010
Trade payables 12,932 - - 12,932
Employee benefits 6,475 - - 6,475
Interest bearing liabilities 26,507 8,413 - 34,920
Derivative financial instruments 15,696 9,854 - 25,550
Guarantees issued 3,801 - - 3,801
65,411 18,267 - 83,678
31 July 2009
Trade payables 7,471 - - 7,471
Sales tax payable 898 - - 898
Employee benefits 6,484 - - 6,484
Interest bearing liabilities 10,178 - 21,000 31,178
Derivative financial instruments 10,409 13,313 - 23,722
Guarantees issued 4,000 - - 4,000
39,440 13,313 21,000 73,753
Parent maturity analysis
31 July 2010
Trade payables 549 - - 549
Amounts due to subsidiaries 207,221 - - 207,221
Sales tax payable 519 - - 519
Employee benefits 2,388 - - 2,388
Interest bearing liabilities 28 - - 28
Guarantees issued 3,801 - - 3,801
214,506 - - 214,506
31 July 2009
Trade payables 984 - - 984
Amounts due to subsidiaries 179,867 - - 179,867
Sales tax payable 856 - - 856
Employee benefits 2,422 - - 2,422
Interest bearing liabilities 319 - - 319
Guarantees issued 4,000 - - 4,000
188,448 - - 188,448
20
years
young
91