Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally



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. 

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