Page 59 - NZPM Annual Report 2017

The average credit period on sales of goods is 30 days. Trade receivables that are less than three months
past due are not considered impaired. The Group has recognised an allowance for doubtful debts of 100%
against receivables for specific debtors, because historical experience has been that receivables that are
past due beyond 120 days for these customers are not recoverable. An allowance for doubtful debts has
been recognised on the balance of receivables overdue at varying percentages, depending on the length of
time overdue. The percentage is based on estimated irrecoverable amounts determined by reference to past
default experience.

The Group does not charge interest on overdue receivables.

(c) Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group manages liquidity risk
by continuously monitoring cash flows and forecasts and matching maturity profiles of financial assets and
liabilities. The Group also maintains adequate headroom on its loan facilities.

Policies are established to ensure all obligations are met in a timely and cost effective manner. The secured
bank facility with Westpac New Zealand (Westpac) imposes various undertakings on NZPM and requires
compliance with several bank financial covenants.

All undertakings and covenants were met during the year. On 23 February 2017, the Group agreed to extend
the expiry date of the facility agreement with Westpac by one year to 31 December 2019.

The following table analyses the Group’s financial liabilities into relevant contractual maturity groupings
based on the remaining period at the reporting date to the contractual maturity date. For the purpose of this
table, it is assumed that year end interest rates applicable to the term loan will apply through to expiry of the
term loan facility, even though the Group has the option to repay the loan prior to its expiry date. The amounts
are contractual undiscounted cash flows at reporting date.

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