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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 22: Administered - Financial Instruments

2012
2011
$’000
$’000
Note 22A: Categories of Financial Instruments
Financial Assets
Loans and receivables:
Cash
191
2,528
Goods and services receivables
413
330
Dividend - Export Finance and Investment Commission
30,194
-
Traveller Emergency Loans
902
851
Other - passport and consular fees
1,784
1,228
Total loans and receivables
33,484
4,937
Available for sale:
Investment - Export Finance and Insurance Corporation
418,063
408,082
Total available for sale
418,063
408,082
Carrying amount of financial assets
451,547
413,019
Financial Liabilities
At amortised cost:
Suppliers
1,242
332
NIA
10,689
21,061
Total financial liabilities at amortised cost
11,931
21,393
Carrying amount of financial liabilities
11,931
21,393
Note 22B: Net Income and Expense from Financial Assets
Loans and receivables
Interest revenue
118
97
Impairment Decrease/(Increase)
7
12
Write-off
(4)
(48)
Net gain/(loss) from loans and receivables
121
61
Available for sale
Dividend revenue
30,194
28,708
Revaluation gain/(loss) recognised in equity
9,981
476
Net gain/(loss) from available for sale
40,175
29,184
Net gain/(loss) from financial assets
40,296
29,245

 

2012
2011
$’000
$’000
Note 22C: Net Income and Expense from Financial Liabilities
Financial liabilities - at amortised cost
NIA
Interest revenue
4,560
5,154
Other revenue
26,137
19,234
Exchange gains/(loss)
(305)
2,483
Interest expense
(1,809)
(4,954)
Administration costs
(1,463)
(1,567)
Net gain/(loss) financial liabilities - at amortised cost
27,120
20,350
Net gain/(loss) from financial liabilities
27,120
20,350

 

Note 22D: Fair Value of Financial Instruments
Carrying amount
Fair value
Carrying amount
Fair value
2012
2012
2011
2011
$'000
$'000
$'000
$'000
Financial Assets
Cash
191
191
2,528
2,528
Receivables for goods and services (net)
1,315
1,315
1,181
1,181
Dividend
30,194
30,194
Accrued Revenue
1,784
1,784
1,228
1,228
Investments
418,063
418,063
408,082
408,082
Total
451,547
451,547
413,019
413,019
Financial Liabilities
Trade creditors
1,242
1,242
332
332
Other payables
10,689
10,689
21,061
21,061
Total
11,931
11,931
21,393
21,393
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.
Fair value measurements categorised by fair value hierarchy
The following table provides an analysis of financial instruments that are measured at fair value, by valuation method.
The different levels are defined below:
Level 1: Fair value obtained from unadjusted quoted prices in active markets for identical instruments
Level 2: Fair value derived from inputs other than quoted prices included within Level 1 that are observable for the instrument, either directly or indirectly.
Level 3: Fair value derived from inputs that are not based on observable market data.
Fair value hierarchy for financial assets
Level 3
Total
2012
2011
2012
2011
$'000
$'000
$'000
$'000
Financial Assets
Financial assets at fair value
EFIC - Valuation by net assets
418,063
408,082
418,063
408,082
Total
418,063
408,082
418,063
408,082
As the Department only administered basic financial instruments (outlined above), the carrying amounts are a reasonable approximation of fair value.
The department holds no financial instruments measured at fair value by valuation method Level 1 or Level 2 (2010-11: Nil).
Reconciliation of Level 3 fair value hierarchy for financial assets
Financial assets at fair value
Total
Investments
2012
2011
2012
2011
$'000
$'000
$'000
$'000
Opening balance
408,082
407,606
408,082
407,606
Total gains or losses recognised in other comprehensive income *
9,981
476
9,981
476
Closing balance
418,063
408,082
418,063
408,082
* 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 22E: 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 entity's gross exposure to credit risk, excluding any collateral or credit enhancements.
2012
2011
$'000
$'000
Financial assets
as per balance sheet
451,901
413,176
Total
451,901
413,176
Credit Quality
The Department's Administered Traveller Emergency Loans receivable includes debtors with a carrying amount of approximately $0.523 million (2011: $0.476 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 2012
Not past due nor impaired
0 to 30 days
31 to 60 days
61 to 90 days
90+ days
Total
$'000
$'000
$'000
$'000
$'000
$'000
Not Impaired
-
Cash and Cash Equivalents
191
-
-
-
-
191
Goods and Services Receivables, Other and Passport fees
2,193
3
1
-
-
2,197
Dividend
30,194
-
-
-
-
30,194
Traveller Emergency Loans
378
7
8
2
507
902
Investments - Export Finance and Investment Corporation
418,063
-
-
-
-
418,063
Total
451,019
10
9
2
507
451,547
The following list of assets have been individually impaired:
Travellers Emergency Loans*
-
-
-
1
545
546
Total
451,019
10
9
3
1,052
452,093
Ageing of financial assets that were past due but not impaired for 2011
Not past due nor impaired
0 to 30 days
31 to 60 days
61 to 90 days
90+ days
Total
$'000
$'000
$'000
$'000
$'000
$'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 impaired:
Travellers Emergency Loans*
-
-
-
-
553
553
Total
412,537
2
47
30
956
413,572
* 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 22F: 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 2012          
  On demand within 1 year 1 to 2 years 2 to 5 years > 5 years Total
  $'000 $'000 $'000 $'000 $'000 $'000
Trade creditors - 1,242 - - - 1,242
NIA - 2,597 6,075 1,626 391 10,689
Total - 3,839 6,075 1,626 391 11,931
             
Maturities for non-derivative financial liabilities 2011          
  On within 1 1 to 2 2 to 5 > 5  
  demand year years years years Total
  $'000 $'000 $'000 $'000 $'000 $'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
             
The entity had no derivative financial liabilities in both the current and prior financial year.    

 

Note 22G: Market Risk
The following table illustrates the effect on the Department's Administered net income less expenses and equity as at 30 June 2012 from a 15 % (2011: 15%) increase or decrease against the AUD in the currencies in which financial instruments were administered by the Department, with all other variables held constant.
2012
2012
2011
2011
$'000
USD $'000
$'000
USD $'000
Other Payables - NIA
6,288
6,408
(3,127)
(3,358)
Supplier Payable - Grants and Contributions
(184)
(188)
24
25
Total Exposure USD
6,220
(3,333)
2012
2012
2011
2011
$'000
EUR $'000
$'000
EUR $'000
Other Payables - NIA
193
156
227
168
Total Exposure EUR
156
168
Sensitivity analysis of the risk that the entity is exposed to for 2012
Change in
risk
variable
Effect on
Risk variable
Profit and loss
Equity
%
$'000
$'000
Currency risk - All currencies
-
15%
(821)
(821)
Currency risk - All currencies
-
-15%
1,111
1,111
Sensitivity analysis of the risk that the entity is exposed to for 2011
Change in
risk
variable
Effect on
Risk variable
Profit and loss
Equity
%
$'000
$'000
Currency risk - All currencies
-
15%
375
375
Currency risk - All currencies
-
-15%
(508)
(508)
All other items are denominated in AUD and are not subject to market risk due to exchange rate fluctuations.

Department of Foreign Affairs and Trade