Page 61 - ar2012

TEHO INTERNATIONAL INC LTD Annual Report 2012 59
Notes to the
Financial Statements
30 June 2012
28. Financial Instruments: Information on Financial Risks (Continued)
28E. Liquidity Risk (Continued)
The above amounts disclosed in the maturity analysis are the contractual undiscounted
cash fows and such undiscounted cash fows differ from the amount included in the
statement of fnancial position. When the counterparty has a choice of when an amount
is paid, the liability is included on the basis of the earliest date on which it can be
required to pay. At the end of the reporting year no claims on the fnancial guarantees
are expected.
Financial guarantee contracts – For fnancial guarantee contracts the maximum earliest
period in which the guarantee would be called is used. At the end of the reporting
year no claims on the fnancial guarantees are expected. The following table shows the
maturity analysis of the contingent liabilities.
Less than
1 year
$
Total
$
Company
2012:
Corporate guarantee in favour of a subsidiary 62,090,000 62,090,000
At end of the year 62,090,000 62,090,000
2011:
Corporate guarantee in favour of a subsidiary 59,240,000 59,240,000
At end of the year 59,240,000 59,240,000
The liquidity risk is managed on the basis of expected maturity dates of the fnancial
liabilities. The average credit period taken to settle trade payables is about 30 days
(2011: 30 days). The other payables are with short-term durations.
The liquidity risk refers to the diffculty in meeting obligations associated with fnancial
liabilities that are settled by delivering cash or another fnancial asset. It is expected that
all the liabilities will be paid at their contractual maturity. In order to meet such cash
commitments the operating activity is expected to generate suffcient cash infows.
The classifcation of the fnancial assets is shown in the statement of fnancial position
as they may be available to meet liquidity needs and no further analysis is deemed
necessary.
28. Financial Instruments: Information on Financial Risks (Continued)
28E. Liquidity Risk (Continued)
Bank facilities:
Group
2012
$
2011
$
Undrawn borrowing facilities 35,144,920 33,556,198
Unused bank guarantees 383,689 119,389
The undrawn borrowing facilities are available for operating activities and to settle other
commitments. Borrowing facilities are maintained to ensure funds are available for the
operations. A monthly schedule showing the maturity of fnancial liabilities and unused
bank facilities is provided to management to assist them in monitoring the liquidity risk.
28F. Interest Rate Risk
The interest rate risk exposure is mainly from changes in fxed rate and foating interest
rates. The following table analyses the breakdown of the signifcant fnancial instruments
by type of interest rate:
Group
2012
$
2011
$
Financial assets:
Fixed rates 25,000 –
Floating rates 615,638 4,551,856
At end of year 640,638 4,551,856
Financial liabilities:
Fixed rates 5,402,607 1,457,623
Floating rates 8,554,302 10,722,022
At end of year 13,956,909 12,179,645
The foating rate debt obligations are with interest rates that are re-set regularly at one,
three or six month intervals. The interest rates are disclosed in the respective notes.