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146 Qantas Annual Report 2009
Notes to the Financial Statements
for the year ended 30 June 2009
34. Financial Risk Management continued
(C) CREDIT RISK
Creditriskisthepotentiallossfromatransactionintheeventofdefaultbythecounterpartyduringthetermofthetransactionoronsettlementofthe
transaction.Creditexposureismeasuredasthecosttoreplaceexistingtransactionsshouldacounterpartydefault.
TheQantasGroupconductstransactionswiththefollowingmajortypesofcounterparties:
i. tradedebtorcounterparties–thecreditriskistherecognisedamount,netofanyimpairmentlosses.Asat30June2009,thisamountedto$824million
(2008:$1,085million).TheQantasGrouphascreditriskassociatedwithtravelagents,industrysettlementorganisationsandcreditprovidedtodirect
customers.TheQantasGroupminimisesthiscreditriskthroughtheapplicationofstringentcreditpoliciesandaccreditationoftravelagentsthrough
industry programs;
ii. SomeothertradedebtorcounterpartiesarerequiredtopostcashcollateraltosupporttheirtransactionswiththeQantasGroupandQantas.Asat
30June2009$32millionwasheldascollateralbyQantasGroupand$45millionwasheldbyQantas;and
iii.othernancialassetcounterparties–theQantasGrouprestrictsitsdealingstocounterpartiesthathaveacceptablecreditratings.Shouldtheratingof
acounterpartyfallbelowcertainlevels,internalpolicydictatesthatapprovalbytheBoardisrequiredtomaintainthelevelofthecounterpartyexposure.
Thetablebelowsetoutthemaximumexposuretocreditriskasat30June2009:
Qantas Group Qantas
2009 2008 2009 2008
$M $M $M $M
On Balance Sheet
Cash and cash equivalents 3,617 2,599 3,404 2,461
Tradedebtors 824 1,085 548 841
Aircraft security deposits 42 37 22 27
Sundrydebtors 582 702 520 628
Other loans 128 143 3,464 1,994
Other financial assets 905 1,423 905 1,425
Off Balance Sheet
Operating leases as lessor 114 126 61 67
Total 6,212 6,115 8,924 7, 4 43
TheQantasGroupminimisestheconcentrationofcreditriskbyundertakingtransactionswithalargenumberofcustomersandcounterpartiesinvarious
countriesinaccordancewithBoardapprovedpolicy.Asat30June2009,thecreditriskoftheQantasGrouptocounterpartiesinrelationtoothernancial
assets,cashandcashequivalents,andothernancialliabilitieswherearightofoffsetexistsamountedto$4,364million(2008:$3,832million)andwas
spreadoveranumberofregions,includingAustralia,Asia,EuropeandtheUnitedStates.Excludingassociatedentities,QantasGroup’screditexposureis
withcounterpartieswhichhaveaminimumcreditratingofA-/A3,unlessindividuallyapprovedbytheBoard.