Qantas 2013 Annual Report Download - page 158

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156
Qantas Group
Prot Before Tax Hedge Reserve
2013
$M
2012
$M
2013
$M
2012
$M
100bps increase in interest rates
Variable rate interest-bearing instruments (net of cash) (25) (29) – –
Derivatives designated in a cash ow hedge relationship ––3034
Derivatives and xed rate debt in a fair value hedge relationship (14) 5 – –
100bps decrease in interest rates
Variable rate interest-bearing instruments (net of cash) 25 29 – –
Derivatives designated in a cash ow hedge relationship – – (32) (36)
Derivatives and xed rate debt in a fair value hedge relationship 15 (5) – –
20% movement in foreign currency pairs
20% (2012: 20%) USD depreciation (101) (27) (350) (205)
20% (2012: 20%) USD appreciation 101 60 728 422
20% movement in fuel indices
20% (2012: 20%) increase per barrel in fuel indices 60 88 200 70
20% (2012: 20%) decrease per barrel in fuel indices (70) (45) (51) (82)
C CREDIT RISK
Credit risk is the potential loss from a transaction in the event of default by the counterparty during the term of the transaction
oron settlement of the transaction. Credit exposure is measured as the cost to replace existing transactions should a
counterpartydefault.
The Qantas Group conducts transactions with the following major types of counterparties:
»Trade debtor counterparties – the credit risk is the recognised amount, net of any impairment losses. As at 30 June 2013 trade
debtors amounted to $898 million (2012: $794 million). The Qantas Group has credit risk associated with travel agents, industry
settlement organisations and credit provided to direct customers. The Qantas Group minimises this credit risk through the
application of stringent credit policies and accreditation of travel agents through industry programs.
»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 sets out the maximum exposure to credit risk as at 30 June 2013:
Qantas Group
Notes
2013
$M
2012
$M
On Consolidated Balance Sheet
Cash and cash equivalents 10 2,829 3,398
Trade debtors 11 898 794
Sundry debtors 11 712 661
Other loans 11 – 128
Other nancial assets 26 207 105
Off Consolidated Balance Sheet
Operating leases as lessor 29 12 90
Total 4,658 5,176
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 2013 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 $3,037 million (2012: $3,423 million) and was spread over a number of regions, including Australia, Asia,
Europe and the United States. Excluding associated entities, the Qantas Group’s credit exposure is with counterparties that have
a minimum credit rating of A-/A3, unless individually approved by the Board.
35. Financial Risk Management
continue
d
Notes to the Financial Statements continued
FOR THE YEAR ENDED 30 JUNE 2013