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33.
Financial
instruments
top
of page
a)
Interest rate risk exposure
The following table details the PTA’s exposure to
interest risk as at the reporting date:
| 2004 |
Note |
Weighted
average
effective
interest
rate % |
Floating
interest
rate (l) |
Fixed
interest rate maturing in:
|
Non-
interest
bearing |
Total |
1
year
or less |
over
1 to 5
years |
more
than
5 years |
(i) Variable
interest rates represent the most recently determined rate
applicable to the instrument at balance date.
(ii) Western
Australian Treasury Corporation loans.
b)
Credit risk exposure
The PTA’s credit risk on financial assets, which have
been recognised in the Statement of Financial Position, is
generally the carrying amount, net of any provision for doubtful
debts.
Concentrations
of credit risk on financial assets are primarily related to
property rental agreements and other miscellaneous revenue.
Except
for securities held to ensure the performance of contractor
guarantees or warrantees, amounts due from major debtors are
not normally secured by collateral. However the credit-worthiness
of debtors is regularly monitored. Securities held to ensure
the performance of contractor guarantees or warranties include
Bank Guarantees, Personal (Directors) Guarantees or cash.
The value of securities held is dependant on the nature, including
the complexity and risk, of the contract.
c)
Financial exchange risk exposure
The purpose of foreign currency hedging activities is to protect
against the risk that the eventual Australian dollar outflows
in respect of purchases in foreign currency may be adversely
affected by changes in exchange rates. The PTA does not enter
into hedge transactions for speculative purposes.
The PTA
has an exposure to changes in foreign exchange rates resulting
from the following:
i)
Bus replacement program
The bus replacement program requires payment for bus chassis
to be made in Euros.The PTA uses forward exchange contracts
in Euros to hedge this risk. The contracts are timed to mature
when major bus chassis components are scheduled to be delivered
and to cover anticipated purchases for the ensuing financial
years.
ii)
Smartcard ticketing
The smartcard ticketing program requires payment for equipment
purchases to be made in Great Britain pounds. The PTA uses
forward exchange contracts in Great Britain pounds to hedge
this risk. The contracts are timed to mature when the equipment
is scheduled to be delivered and to cover anticipated purchases
for the ensuing financial year.
At reporting
date, the details of outstanding forward contracts are:
|
Contracts
|
| 2004 |
2004
$000
Buy Euro
Sell Aus $ |
2004
$000
Buy Great
British
Pound
Sell Aus $ |
2004
$000
Total |
|
Average
exchange rates
|
| 2004 |
2004
rate |
2004
rate |
|
As these
contracts are hedging anticipated purchases of bus chassis
and smartcard ticketing equipment, any unrealised gains or
losses on the contracts, together with the cost of the contracts,
have been deferred and will be recognised in the financial
statements at the time the purchase occurs.
Amounts
receivable and payable on forward contracts are included in
the Statement of Financial Position as at 30 June 2004.
The following
gains or losses have been deferred at 30 June 2004 and included
in the Statement of Financial Position:
d)
Net fair values
The carrying amount of financial assets and financial liabilities
recorded in the financial statements are not materially different
from their net fair values, determined in accordance with
the accounting policies disclosed in Note 1 to the Financial
Statements.
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