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NOTE 23
INTEREST BEARING LIABILITIES
23
Credit risk exposures of derivative financial instruments – forward exchange contracts
Credit risk arises from the potential failure of counterparties to meet their obligations under the respective
contracts at maturity. A material exposure arises from forward exchange contracts and the Group is exposed
to losses in the event that counterparties fail to deliver the contracted amount. Refer to note 20 for additional
information.
At balance date the details of outstanding forward exchange contracts are:
Sell US dollars
Buy Australian dollars
Average
exchange rate
2016
2015
2016
2015
$’000
$’000
$’000
$’000
Maturity
0 to 6 months
7,297
82,116
0.68520
0.84027
6 to 12 months
21,831
84,188
0.68709
0.80771
29,128
166,304
Accounting policy –
Interest bearing liabilities
Interest bearing liabilities are initially recognised at fair value, net of any transactions costs incurred. These
balances are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the income statement over the period of the liability using
the effective interest method. Interest bearing liabilities are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Lease liabilities
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value
of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and long-term payables.
The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over
the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that the group will obtain
ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the income statement on a straight line basis over the period of the lease.
2016
2015
$’000
$’000
Current Liabilities
Deposits accepted – Directors and Director related parties (refer below)
49,861
47,326
Lease liabilities (refer to note 23b)
2,306
21
52,167
47,347
Non-Current Liabilities
Long term borrowings (refer to note 23a)
22,825
–
Lease liabilities (refer to note 23b)
12,733
104
35,558
104