Note 21: Administered Financial Instruments 

 

 

	2011 $’000	2010 $’000
Note 21A: Categories of Financial Instruments
Financial Assets
Loans and receivables:
Cash	2,528	6,376
Goods and services receivables	330	1,947
Traveller Emergency loans	851	699
Other - passport and consular fees	1,228	2,166
Total Loans and receivables	4,937	11,188
Available for sale:
Investment - Export Finance and Insurance Corporation	408,082	407,606
Total Available for sale	408,082	407,606
Carrying amount of financial assets	413,019	418,794
Financial Liabilities
At amortised cost:
Suppliers	332	12,559
NIA	21,061	42,908
Total Financial liabilities at amortised cost	21,393	55,467
Carrying amount of financial liabilities	21,393	55,467
Note 21B: Net Income and Expense from Financial Assets
Loans and receivables
Interest revenue	97	91
Impairment Decrease/(Increase)	12	(189)
Write Off	(48)	( 39)
Net gain/(loss) from loans and receivables	61	(137)
Available for sale
Dividend revenue	28,708	16,802
Revaluation gain/loss recognised in equity	476	30,906
Net gain/(loss) from available for sale	29,184	47,708
	2011 $’000	2010 $’000
Note 21C: Net Income and Expense from Financial Liabilities
Financial liabilities - at amortised cost
NIA
Interest revenue	5,154	5,946
Other Revenue	19,234	9,542
Exchange gains/(loss)	2,483	1,160
Impairment decrease/(increase)	-	(9,652)
Interest Expense	(4,954)	(7,006)
Administration costs	(1,567)	(2,862)
Net gain/(loss) - NIA	20,350	(2,872)
Net gain/(loss) from financial liabilities	20,350	(2,872)

 

Note 21D: Fair Value of Financial Instruments
	Carrying amount 2011 $'000	Fair value 2011 $'000	Carrying amount 2010 $'000	Fair value 2010 $'000
Financial Assets
Cash	2,528	2,528	6,376	6,376
Receivables for goods and services (net)	1,181	1,181	2,646	2,646
Accrued revenue	1,228	1,228	2,166	2,166
Investments	408,082	408,082	407,606	407,606
Total	413,019	413,019	418,794	418,794
Financial Liabilities
Trade creditors	332	332	12,559	12,559
Other payables	21,061	21,061	42,908	42,908
Total	21,393	21,393	55,467	55,467

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	-	-	408,082	408,082
Financial assets at fair values	-	-	408,082	408,082

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

 

Reconciliation of Level 3 fair value hierarchy
	Investment 2011 $'000	Investment 2010 $'000
Financial assets at fair value
Opening balance	407,606	376,700
Revaluation gain/loss recognised in equity*	476	30,906
Total	408,082	407,606

*This revaluation gain/loss is presented in the schedule of administered items and is related to the movements in the carrying amount of investments.

 

Note 21E: Credit Risk

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 the Administered gross exposure to credit risk, excluding any collateral or credit enhancements.

	2011 $'000	2010 $'000
Financial assets
as per balance sheet	413,176	423,794
Total	413,176	423,794

 

Credit Quality
The Department's Administered Traveller Emergency Loans receivable includes debtors with a carrying amount of approximately $0.476 million (2010: $0.378  million) that are past due at the reporting date and for which the Department has not provided. Based on 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 2011
	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	2,528	-	-	-	-	2,528
Goods and Services Receivables, Other and Passport fees	1,552	-	5	-	1	1,558
Traveller Emergency Loans	375	2	42	30	402	851
Investments - Export Finance and Investment Corporation	408,082	-	-	-	-	408,082
Total	412,537	2	47	30	403	413,019
The following list of assets have been individually assessed as impaired
Traveller Emergency Loans*	-	-	-	-	553	553
Total	412,537	2	47	30	956	413,572
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	6,376	-	-	-	-	6,376
Goods and Services Receivables, Other and Passport fees	3,800	312	-	-		4,112
Traveller Emergency Loans	321	3	-	51	324	699
Investments - Export Finance and Investment Corporation	407,606	-	-	-	-	407,606
Total	418,103	315	-	51	324	418,793
The following list of assets have been individually assessed as impaired
Traveller Emergency Loans*	-	1	2	-	561	564
Total	418,103	316	2	51	885	419,357

* 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.

 

Note 21F: 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 2011
	On demand $'000	within 1 year $'000	1 to 2 years $'000	2 to 5 years $'000	> 5 years $'000	Total $'000
Trade creditors	-	332	-	-	-	332
NIA	-	5,578	7,473	2,762	5,248	21,061
Total	-	5,910	7,473	2,762	5,248	21,393
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
NIA	-	7,793	9,545	10,125	15,445	42,908
Total	-	20,352	9,545	10,125	15,445	55,467

The entity had no derivative financial liabilities in both the current and prior year.

 

Note 21G: Market Risk 

The following table illustrates the effect on the Department's Administered net income less expenses and equity as at 30 June 2011 from a 15 % (2009-10: 14%) increase or decrease against the AUD in the currencies in which financial instruments were administered by the Department, with all other variables held constant.

	2011 $'000	2011 USD $'000	2010 $'000	2010 USD $'000
Other Payables - NIA	(3,127)	(3,358)	(13,007)	(11,242)
Supplier Payable - Grants and Contributions	24	25	(5,061)	(4,374)
Total Exposure USD		(3,333)		(15,616)
	2011 $'000	2011 EUR $'000	2010 $'000	2010 EUR $'000
Supplier Payable - Grants and Contributions	0	0	(93)	(66)
Other Payables - NIA	227	168	256	180
Total Exposure EUR		168		114

 

Sensitivity analysis of the risk that the entity is exposed to for 2011
	Risk variable	Change in risk  variable	Effect on
			Profit and loss	Equity
		%	$'000	$'000
Currency risk- All Currencies	-	15%	375	375
Currency risk- All Currencies	-	-15%	(508)	(508)

 

Sensitivity analysis of the risk that the entity is exposed to for 2010
	Risk variable	Change in risk  variable	Effect on
			Profit and loss	Equity
		%	$'000	$'000
Currency risk- All Currencies	-	14%	2,199	2,199
Currency risk- All Currencies	-	14%	(2,915)	(2,915)

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