Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)
Tabled paper 1556
Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT
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Northern Territory Motor Accidents (Compensation) Commission Annual Report 2015 Notes to the Financial Statements - 30 June 2015 Page 86 Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 73 33. Risk management and financial instruments information continued and are compared to returns earned by a suitable peer group of other professional fund managers. Price Risk Sensitivity Analysis The analysis below demonstrates the impact of a movement in the prices of units held in unlisted unit trusts. It is assumed that any relevant price change occurs as at the reporting date. 2015 2014 MACC Change in unit price Impact on profit after tax Impact on Equity Impact on profit after tax Impact on Equity $000 $000 $000 $000 Upside Australian equities +20% 11,627 11,627 22,294 22,294 International equities +20% 16,488 16,488 33,058 33,058 Global listed properties +20% 4,512 4,512 6,581 6,581 Australian fixed interest +2% 476 476 815 815 International fixed interest +2% - - - - Australian inflation linked +2% - - 296 296 International inflation linked +2% - - - - Total 33,103 33,103 63,044 63,044 Downside Australian equities -20% (11,627) (11,627) (22,294) (22,294) International equities -20% (16,488) (16,488) (33,058) (33,058) Global listed properties -20% (4,512) (4,512) (6,581) (6,581) Australian fixed interest -2% (476) (476) (815) (815) Australian inflation linked -2% - - (296) (296) Total (33,103) (33,103) (63,044) (63,044) The sensitivity analysis in 2015 represent MACCs instruments held in unit trusts, whereas the 2014 comprises of TIO Insurance and Banking business and MAC Fund investments held in unit trusts. b) Credit risk Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Trade and other receivables Trade receivable balances are monitored on an ongoing basis to ensure that MACCs exposure to bad debts is not significant. A provision for impairment is recognised when there is objective evidence that the receivable is impaired. Other receivable balances do not contain impaired assets as they are not past due, they are expected to be received when due. Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 72 33. Risk management and financial instruments information continued Interest Rate Risk Sensitivity Analysis The following table demonstrates MACCs sensitivity to movement in interest rates in relation to the value of interest bearing financial assets and liabilities. 2015 2014 MACC Change in interest rate Impact on profit after tax Impact on Equity Impact on profit after tax Impact on Equity $000 $000 $000 $000 Interest bearing financial assets and liabilities +100 basis points 26,200 26,200 15,794 15,794 Interest bearing financial assets and liabilities -100 basis points (33,097) (33,097) (19,826) (19,826) TIO - Insurance and Banking Interest bearing financial assets and liabilities +100 basis points - - 525 525 Interest bearing financial assets and liabilities -100 basis points - - (704) (704) MAC Fund Interest bearing financial assets and liabilities +100 basis points 26,200 26,200 15,269 15,269 Interest bearing financial assets and liabilities -100 basis points (33,097) (33,097) (19,122) (19,122) The effect of interest rate movements on MACCs provision for outstanding claims is included in note 3. (ii) Currency Risk MACC does not have any exposure to currency risk, as there are no sales, purchases, liabilities or assets denominated in a currency other than the Australian dollar. (iii) Price Risk MACC is exposed to price risk through the holding of units in unlisted unit trusts. Price risk arises due to the changes in the market value of the units as advised by the respective fund managers. Price risk is managed through the use of strictly monitored allocation limits for units held in each class of managed fund. MACC invests in a diverse range of managed funds thereby limiting the impact of any one underlying variable affecting unit prices. Returns achieved by appointed fund managers are continuously assessed by the Board in relation to their stated objectives and the objectives of each business unit
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