TERRENO NORTEAMERICA
II.7.2 Estructural y tectónica 1 Estructural
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers from outstanding receivables and committed transactions. For banks and financial institutions only parties with a minimum long-term Standard and poors rating of A+ or A1 are accepted. Gross limits are set for financial institutions and the usage of these limits is determined by assigning product weightings to the principal amount of the transaction. Transactions are spread across a number of counterparties to avoid concentrations of credit exposure. No credit limits were exceeded during the reporting period and management does not expect any losses from non-performance by counterparties.
No collateral is held over receivables that are mainly due from the oil companies as detailed in note 23(d). Little credit risk has been identified by the Group in relation to these oil companies.
The maximum exposure to credit risk at balance date is the carrying amount of cash and cash equivalents, derivative financial instruments, and trade and other receivables (excluding prepayments). Credit risk due to significant concentration of receivable balances is detailed in note 23(d).
Overdue trade receivable balances at 31 December 2010 totalled $47 thousand (2009: $45 thousand). management consider that these balances are not impaired.
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114
26 financial risk management cont.
lIquIDITy RISk
The Group monitors rolling forecasts of liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on the Group’s un-drawn borrowing facilities (note 14).
Surplus cash held by the Group over and above the balance required for working capital management is invested in interest bearing current accounts, time deposits, and money market deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.
The table below analyses the Group’s financial liabilities including gross and net-settled derivative financial liabilities, into relevant maturity groupings, based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. The maturity date for bank borrowings is based on the next rollover date of the draw-downs, rather than the expiry of the facility.
GROuP 2010
CARRyING CONTRACTuAl lESS ThAN bETwEEN bETwEEN AmOuNT CASh FlOwS 6 mONThS 6 mONThS -1 yEAR 1 -2 yEARS
$000 $000 $000 $000 $000
NON-DERIvATIvE FINANCIAl lIAbIlITIES
bank overdraft (5) (5) (5) - -
Trade and other payables (124,285) (124,285) (124,285) - -
bank borrowings (85,700) (86,530) (86,530) - -
(209,990) (210,820) (210,820) - -
DERIvATIvE FINANCIAl INSTRumENTS
Gross settled derivatives
Gross settled derivatives outflow - (204) (204) - -
Gross settled derivatives inflow - 168 168 - -
(36) (36) (36) - -
26 financial risk management cont.
Electricity spot price
2010 2009
-$20/ -$20/ +$10/ +$10/ -$10/ -$10/ +$20/ +$20/
CARRyING mwhR mwhR mwhR mwhR CARRyING mWhR mWhR mWhR mWhR
AmOuNT PROFIT EquITy PROFIT EquITy AmOuNT pROFIT equITy pROFIT equITy
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Trade and other payables (124,285) 472 472 (236) (236) (108,795) 229 229 (458) (458)
TOTAl INCREASE/ (DECREASE) 472 472 (236) (236) 229 229 (458) (458) PARENT Interest rate 2010 2009 CARRyING -50bP -50bP +100bP +100bP CARRyING -50bp -50bp +200bp +200bp
AmOuNT PROFIT EquITy PROFIT EquITy AmOuNT pROFIT equITy pROFIT equITy
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Cash and cash equivalents 1,001 (5) (5) 10 10 1,039 (6) (6) 24 24
Loan to subsidiary - - - - - 460 (2) (2) 8 8
bank overdraft (5) - - - - (27) - - (1) (1)
Term loan (85,700) 429 429 (857) (857) (147,000) 735 735 (2,940) (2,940)
TOTAl INCREASE/
(DECREASE) 424 424 (847) (847) 727 727 (2,909) (2,909)
Foreign exchange rates
2010 2009
CARRyING -10% -10% +10% +10% CARRyING -10% -10% +10% +10%
AmOuNT PROFIT EquITy PROFIT EquITy AmOuNT pROFIT equITy pROFIT equITy
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Cash and cash equivalents 1,001 3 3 (3) (3) 1,039 3 3 (3) (3)
Derivative financial instruments (36) - 18 - (16) (2,987) - 2,591 - (2,145)
Trade and other payables (124,183) (35) (35) 41 41 (108,795) (93) (93) 91 91
TOTAl INCREASE/
(DECREASE) (32) (14) 38 22 (90) 2,501 88 (2,057)
Electricity spot price
2010 2009
-$20/ -$20/ +$10/ +$10/ -$10/ -$10/ +$20/ +$20/
CARRyING mwhR mwhR mwhR mwhR CARRyING mWhR mWhR mWhR mWhR
AmOuNT PROFIT EquITy PROFIT EquITy AmOuNT pROFIT equITy pROFIT equITy
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Trade and other payables (124,183) 472 472 (236) (236) (108,795) 229 229 (458) (458)
TOTAl INCREASE/
(DECREASE) 472 472 (236) (236) 229 229 (458) (458)
Notes to the financial Statements
For the Year ended 31 december 2010
Notes to the financial Statements
The New ZealaNd refiNiNg compaNy limiTed
Notes to the financial Statements
For the Year ended 31 december 2010
26 financial risk management cont.
CARRyING CONTRACTuAl lESS ThAN bETwEEN bETwEEN AmOuNT CASh FlOwS 6 mONThS 6 mONThS-1 yEAR 1-2 yEARS
$000 $000 $000 $000 $000
GROuP 2009
NON-DERIvATIvE FINANCIAl lIAbIlITIES
bank overdraft (27) (27) (27) - -
Trade and other payables (108,795) (108,795) (108,795) - -
bank borrowings (147,000) (148,734) (148,734) - -
(255,822) (257,556) (257,556) - -
DERIvATIvE FINANCIAl INSTRumENTS Gross settled derivatives
Gross settled derivatives outflow - (26,537) (26,537) - -
Gross settled derivatives inflow - 23,645 23,645 - -
(2,987) (2,892) (2,892) - -
CARRyING CONTRACTuAl lESS ThAN bETwEEN bETwEEN AmOuNT CASh FlOwS 6 mONThS 6 mONThS -1 yEAR 1–2 yEARS
$000 $000 $000 $000 $000
PARENT 2010
NON-DERIvATIvE FINANCIAl lIAbIlITIES
bank overdraft (5) (5) (5) - -
Trade and other payables (124,183) (124,183) (124,183) - -
bank borrowings (85,700) (86,530) (86,530) - -
(209,888) (210,718) (210,718) - -
DERIvATIvE FINANCIAl INSTRumENTS
Gross settled derivatives
Gross settled derivatives outflow - (204) (204) - -
Gross settled derivatives inflow - 168 168 - -
(36) (36) (36) - -
26 financial risk management cont.
CARRyING CONTRACTuAl lESS ThAN bETwEEN bETwEEN AmOuNT CASh FlOwS 6 mONThS 6 mONThS-1 yEAR 1-2 yEARS
$000 $000 $000 $000 $000
PARENT 2009
NON-DERIvATIvE FINANCIAl lIAbIlITIES
bank overdraft (27) (27) (27) - -
Trade and other payables (108,757) (108,757) (108,757) - -
bank borrowings (147,000) (148,734) (148,734) - -
(255,784) (257,518) (257,518) - -
DERIvATIvE FINANCIAl INSTRumENTS
Gross settled derivatives
Gross settled derivatives outflow (26,537) (26,537) - -
Gross settled derivatives inflow 23,645 23,645 - -
(2,987) (2,892) (2,892) - -
CAPITAl RISk mANAGEmENT
The Group’s objective when managing capital (net assets of the Group) is to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefit for other stakeholders and to maintain an appropriate capital structure. The Group borrows under a negative pledge arrangement (refer note 14). The Group monitors rolling forecasts which takes into consideration the Group’s debt financing plans and covenant compliance, to ensure that it is able to continue meeting funding requirements.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
DERIvATIvE FINANCIAl INSTRumENTS
At 31 December 2010 the Group had entered into forward exchange contracts to sell the equivalent of NZ$0.2 million (2009: NZ$26.5 million). The fair value of forward exchange contracts is based on accepted valuation methodologies. These contracts are hedging committed or highly probable forecast purchases of property, plant and equipment denominated in foreign currency expected to occur at various dates during the next 12 months. The contracts are timed to mature when the liability is scheduled to be settled.
At balance date there were no contracts that had not been designated as hedges (2009: nil). There was no ineffectiveness to be recorded from cash flow hedges (2009: nil).
Notes to the financial Statements
For the Year ended 31 december 2010
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118
Notes to the financial Statements
For the Year ended 31 december 2010
26 financial risk management cont.
FINANCIAl INSTRumENT ClASSIFICATION
All financial assets other than derivatives are classified as loans and receivables. All financial liabilities other than derivatives are classified as measured at amortised costs. The fair value of financial assets and liabilities approximates their carrying value.
GROuP GROuP PARENT PARENT 2010 2009 2010 2009 $000 $000 $000 $000
Trade and other receivables 126,212 106,994 125,874 106,698
Cash and cash equivalents 1,001 1,137 1,001 1,039
Loan to subsidiary - - - 460
TOTAl lOANS AND RECEIvAblES 127,213 108,131 126,875 108,197
bank overdraft (5) (27) (5) (27)
Trade and other payables (124,285) (108,795) (124,183) (108,757)
bank borrowings (85,700) (147,000) (85,700) (147,000)
FINANCIAl lIAbIlITIES mEASuRED AT AmORTISED COST (209,990) (255,822) (209,888) (255,784)
Derivative liabilities designated in hedging relationships
Forward foreign exchange contracts (36) (2,987) (36) (2,987)
TOTAl DERIvATIvE lIAbIlITIES DESIGNATED
IN hEDGING RElATIONShIPS (36) (2,987) (36) (2,987)
Financial instruments are measured at fair value using the following fair value measurement hierarchy: • quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). All the Group’s financial instruments have been measured at the fair value measurement hierarchy of level 2 (2009: level 2).