129.037-Mahitahi-Hauora-Annual-Report-2023-24-v8---Low-Res-Spreads (1) - Flipbook - Page 50
Notes to the Financial Statements for the Year Ended - 30 June 2024
13. Financial Risk Management
(i) Overall risk management framework
The Trust9s activities expose it to a variety of onancial instrument risks, including credit risk, interest risk and liquidity risk.
The Trust has a series of policies to manage the risks associated with onancial instruments and seeks to minimise exposure
from onancial instruments.
(ii) Credit Risk
Credit risk is the risk of onancial loss to the Trust if a customer or counterparty to a onancial instrument fails to meet
its contractural obligations. The Trust is mainly exposed to credit risk from its onancial assets, including cash and cash
equivalents, term deposits and receivables.
The Trust does not take guarantees, or security interest as collateral or charge penalty interest on receivables due.
Cash and cash equivalents and investments - short term deposits with maturities between 4 to 12 months are held with ANZ
which has an S&P credit rating of AA- (2023: AA-). This rating is considered investment grade and thus credit risk is low.
The carrying amount of the Trust9s onancial assets represents the Trust9s maximum exposure to credit risk.
Concentration of credit risk for funding receivables is high due to the small number of debtors, Collectively, Te Whatu Ora/NZ
Health and the Ministry of Health make up 91% (2023:94%) of the trade receivables balance as at 30 June 2024. However,
they are assessed as low-risk, high quality entities due to them being goverment funded purchasers of health and disability
services. All material receivables are current.
The aging of trade receivables at reporting date that were not impaired was as follows:
Neither past due nor impaired
1 - 90 days past due
Over 90 days past due
Allowance for impairment
Trade receivables not past due and not impaired
Trade receivables past due but not impaired
2024
2023
$
$
1,412,358
2,408,694
100,606
142,106
5,479
104,962
1,518,443
2,655,762
-
-
1,518,443
2,655,762
1,412,358
2,408,694
106,085
247,068
1,518,443
2,655,762
Loss allowance was determined to be immaterial.
(iii) Liquidity Risk
Liquidity risk arises from the Trust9s management of working capital. It is the risk that the Trust will encounter difoculty in
meeting its onancial obligations as they fall due.
The Trust mostly manages liquidity risk by continuously monitoring forecast and actual cashflow requirements. The Trust
also receives funding prior to making its payments to the various providers monthly.
The Trust is able to manage its liquidity risk by holding surplus cash. The Trust holds $8,281,758 of cash and cash
equivalents and term deposits of $2,678,238 as at 30 June 2024 (2023: $3,592,261 and $2,569,480 respectively). This
compares to payables of $1,348,879, funds held on behalf of $887,251 and deferred revenue of $7,174,562 (2023:
$2,177,455, $1,072,973 and $3,220,295 respectively). Trade payables are typically settled within 30 days as per their
standard trade terms.
The table below analyses the Trust9s onancial liabilities into relevent undiscounted contractual maturity bands, based on
the remaining period from reporting date to the contractural maturity date. The cash flow amounts disclosed in the table
represent undiscounted cash flows liable for payment by the Trust.
50.
