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91
APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and
committed transactions. For banks and financial institutions, the creditworthiness is assessed prior to entering into arrangements and
approved by the Board. For other customers, risk control assesses the credit quality, taking into account financial position, past experience
and other factors. The utilisation of credit limits is regularly monitored.
Credit risk further arises in relation to financial guarantees given to certain parties (refer note 21 for details).
Credit risk arises from the potential failure of counterparties to meet their obligations under the respective contracts at maturity. This arises
on derivative financial instruments with unrealised gains. At reporting date, no amount was receivable (Australian dollar equivalents) for
the Group from forward exchange contracts (2010: $nil). The Group undertakes 100% of its transactions in foreign exchange contracts
with financial institutions.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying
business, Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available. Management monitors rolling
forecasts of the Group’s liquidity reserve on the basis of expected cash flows.
The tables below analyse the Group’s financial liabilities including interest to maturity into relevant maturity groupings based on the
remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the tables are the contractual
undiscounted cash flows.
Less than
one year
$’000
Between
one and
two years
$’000
Between
two and
five years
$’000
Over
five years
$’000
31 December 2011
Trade and other payables
133,408
1,348
2,696
–
Bank loans
272,344
53,292
357,497
–
New Zealand Bond
5,982
5,982
89,562
–
Other loans
2,331
–
–
–
Gross liability
414,065
60,622
449,755
–
Less interest
(39,598)
(30,065)
(45,635)
–
Principal
374,467
30,557
404,120
–
31 December 2010
Trade and other payables
114,555
865
1,731
–
Bank loans
92,023
321,599
380,526
–
New Zealand Bond
5,928
5,928
17,783
76,897
Other loans
5,264
–
–
–
Gross liability
217,770
328,392
400,040
76,897
Less interest
(47,350)
(46,050)
(75,044)
(1,482)
Principal
170,420
282,342
324,996
75,415
(i) The majority of bank loans have been extended to September 2015 with $211 million due to mature in 2012. See note 32 for details of available facilities