Note 24: Administered Financial Instruments

	2010 $'000	2009 $'000
Note 24A: Categories of Financial Instruments
Financial Assets
Held-to-maturity:
Cash	11,376	5,233
Total	11,376	5,233
Loans and receivables:
Goods and services receivables	1,947	5,017
Consular - Traveller Emergency loans	699	793
National Interest receivable	-	9,652
Other - passport fees and VAT	2,166	1,338
Total	4,812	16,800
Available for sale:
Investment - Export Finance and Insurance Corporation	407,606	376,700
Total	407,606	376,700
Carrying amount of financial assets	423,794	398,733
Financial Liabilities
At amortised cost:
Suppliers	12,559	3,961
National Interest Account (EFIC)	42,908	46,679
Total	55,467	50,640
Carrying amount of financial liabilities	55,467	50,640
Note 24B Net Income and Expensefrom Financial Assets
Held-to-maturity
Interest revenue	91	123
Net gain/(loss) held-to-maturity	91	123
Consular - Traveller Emergency loans
Impairment decrease/(increase)	(189)	(241)
Write off	(39)	(82)
Net gain/(loss) Consular - Traveller Emergency loans	(228)	(323)
Net gain/(loss) loans and receivables	(137)	(200)
Available for sale
Investment - Export Finance and Investment Corporation
Dividend revenue	16,802	9,866
Revaluation gain/loss recognised in equity	30,906	45,500
Net gain/(loss) available for sale	47,708	55,366
Net gain/(loss) from financial assets	47,571	55,166
	2010 $'000	2009 $'000
Note 24C: Net Income and Expense from Financial Liabilities
Financial liabilities - at amortised cost
National Interest Account (EFIC)
Interest revenue	5,946	8,803
Other Revenue	9,542	190
Exchange gains/(loss)	1,160	(2,937)
Impairment decrease/(increase)	(9,652)	-
Interest Expense	(7,006)	(6,949)
Other Expense	(2,862)	(743)
Net gain/(loss) - National Interest Account EFIC	(2,872)	(1,636)
Net gain/(loss) financial liabilities - at amortised cost	(2,872)	(1,636)
Net gain/(loss) from financial liabilities	(2,872)	(1,636)

 

Note 24D: Fair Value of Financial Instruments
	Carrying amount 2010 $'000	Fair value 2010 $'000	Carrying amount 2009 $'000	Fair value 2009 $'000
Financial Assets
Cash	11,376	11,376	5,233	5,233
Receivables for goods and services (net)	2,646	2,646	5,810	5,810
Accrued revenue	2,166	2,166	1,338	1,338
National Interest receivable	-	-	9,652	9,652
Investments	407,606	407,606	376,700	376,700
Total	423,794	423,794	398,733	398,733
Financial Liabilities
Trade creditors	12,559	12,559	3,961	3,961
Other payables	42,908	42,908	46,679	46,679
Total	55,467	55,467	50,640	50,640

Valuation Method used for determining the Fair Value of Financial Instruments

The following table identifies for those assets and liabilities (those at fair value through profit and loss or available for sale) carried at fair value (above) whether fair value was obtained by reference to market prices or by a valuation technique that employs observable market transactions, or one that uses non-observable market inputs to determine a fair value.

	Market Values $'000	Market  Inputs $'000	Non-market Inputs $'000	Total $'000
Financial Assets at Fair Values
EFIC - valuation by net assets	-	-	407,606	407,606
Financial Assets at Fair Values	-	-	407,606	407,606

 As the Department only administers basic financial instruments (outlined above), the carrying amounts are a reasonable approximation of fair value.

Reconciliation of level 3 fair value hierachy

	Investment 2010 $'000	Investment 2009 $'000
Financial assets at fair value
Opening balance	376,700	331,200
Total gains or losses recognised in other comprehensive income¹	30,906	45,500
Closing balance	407,606	376,700

¹ These gains and losses are presented in the reconciliation of administered items.

Recognised in the DFAT Administered Accounts

Maximum exposure

The Department's Senior Executive has endorsed policies and procedures for debt management (including the provision of credit terms) to reduce the incidence of credit risk. The majority of services provided by the Department on behalf of the Australian Government are delivered to another government entity and therefore represent minimal credit risk. Collateral is not required on any loan.

The Department’s maximum exposure to credit risk at reporting date in relation to each class of recognised administered financial asset is the carrying amount of those assets as indicated in the Schedule of Administered Items, unless otherwise detailed in the table below:

The following table illustrates Administered gross exposure to credit risk, excluding
any collateral or credit enhancements

	2010 $'000	2009 $'000
Financial assets
as per balance sheet	423,794	389,081
Total	423,794	389,081

 

Credit Quality

The Department's Administered Consular Loans receivable includes debtors with a carrying amount of approximately $0.378 million (2009: $0.465 million) which are past due at the reporting date and for which the Department has not provided. Based on past experience, the Department believes that the amounts are still considered receivable. The Department does not  hold any collateral over these balances.  However it requires settlement of the outstanding debt before the debtor's passport is renewed.

Ageing of financial assets that were past due but not impaired for 2010

	not past due nor impaired $'000	0 to 30 days $'000	31 to 60 days $'000	61 to 90 days $'000	90+ days $'000	Total $'000
Not Impaired
Cash and Cash Equivalents	11,376	-	-	-	-	11,376
Goods and Services Receivables, Other and Passport fees	3,800	312	-	-	-	4,113
Consular  - Traveller Emergency Loans	321	3	0	51	324	699
Investments - Export Finance and Investment Corporation	407,606	-	-	-	-	407,606
	423,103	315	0	51	324	423,794
Impaired
Consular  - Traveller Emergency Loans*	-	1	2	0	561	564
	-	1	2	0	561	564
Total	423,103	316	2	51	885	424,358

* DFAT impaired some traveller emergency loans immediately on issuance as the loan recipient, while requiring consular assistance and legally able to enter into a loan contract, was assessed as not likely to be in a position to repay the loan based on observable evidence and factors.

Ageing of financial assets that were past due but not impaired for 2009

 

	not past due nor impaired $'000	0 to 30 days $'000	31 to 60 days $'000	61 to 90 days $'000	90+ days $'000	Total $'000
Not Impaired
Cash and Cash Equivalents	5,233	-	-	-	-	5,233
Goods and Services Receivables, Other and Passport fees and VAT	5,860	495	-	-	-	6,355
National Interest receivable	-	-	-	-	9,652	9,652
Consular  - Traveller Emergency Loans	328	60	1	3	401	793
Investments - Export Finance and Investment Corporation	376,700	-	-	-	-	376,700
	388,121	555	1	3	10,053	398,733
Impaired
Consular  - Traveller Emergency Loans*	-	68	-	-	308	376
	-	68	-	-	308	376
Total	388,121	623	1	3	10,361	399,109

Note 24F: Liquidity Risk

The Department receives an annual Administered Appropriation to fund payments due on the financial liabilities listed and therefore does not carry any liquidity risk.

The following tables illustrates the maturities for financial liabilities.

Maturities for non-derivative financial liabilities 2010

	On demand $'000	within 1 year $'000	1 to 2 years $'000	2 to 5 years $'000	> 5 years $'000	Total $'000
Trade creditors	-	12,559	-	-	-	12,559
National Interest Account - EFIC	-	7,793	9,545	10,125	15,445	42,909
Total Financial Liabilities - Ageing Analysis	-	20,352	9,545	10,125	15,445	55,468
Maturities for non-derivative financial liabilities 2009
	On demand $'000	within 1 year $'000	1 to 2 years $'000	2 to 5 years $'000	> 5 years $'000	Total $'000
Trade creditors	-	3,961	-	-	-	3,961
National Interest Account - EFIC^	-	8,038	7,931	11,397	19,313	46,679
Total Financial Liabilities - Ageing Analysis	-	11,999	7,931	11,397	19,313	50,640

^ Ageing of the National Interest Account - EFIC liability has been restated in the 2008-09 comparatives due to changes in the disclosure of the NIA.

Note 24G: Market Risk

The following table illustrates the effect on the Department's Administered net income less expenses and equity as at 30 June 2010 from a 14% (2008-09: 12%) increase or decrease against the AUD in the currencies in which financial instruments were administered by the Department, with all other variables held constant.

			2010 USD $'000	2010 USD $'000	2009 USD $'000	2009 USD $'000
National Interest Account - EFIC			(7,064)	(6,105)	(8,977)	(7,297)
Accrued Expenses - EFIC			(6,178)	(5,339)	(6,569)	(5,339)
NIA Receivable - Indonesia Late Interest			234	203	263	214
Supplier Payable - IOPKO Payable Accrual			(5,061)	(4,374)	0	0
Total Exposure USD				(15,616)		(12,423)
			2010 EUR $'000	2010 EUR $'000	2009 EUR $'000	2009 EUR $'000
Supplier Payable - IOPKO Payable Accrual			(93)	(66)	247	(142)
NIA Receivable - Indonesia Late Interest			256	180	336	192
Total Exposure EUR				114		50
			Effect on		Effect on
	variable	Change in  risk  variable %	Profit and loss 2010 $'000	Equity 2010 $'000	Profit and loss 2009 $'000	Equity 2009 $'000
Currency Risk - All Currencies	+14% (2008-09: +12%)		2,199	2,199	1,628	1,628
Currency Risk - All Currencies	-14% (2008-09: -12%)		(2,915)	(2,915)	(2,072)	(2,072)

All other items are denominated in AUD and are not subject to market risk due to exchange rate fluctuations.