b) Credit risk exposure
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 creditworthiness of debtors is regularly monitored. Securities held to ensure
the performance of contractor guarantees or warrantees 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. PTA does not enter into hedge
transactions for speculative purposes.
PTA has an exposure to changes in foreign exchange rates resulting from the following:
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(i) |
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Bus replacement
program
The bus replacement program requires payment for bus chassis to be made in Euros.
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 year. |
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(ii) |
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Smartcard
ticketing
The Smartcard ticketing program requires payment for equipment purchases to be
made in Great Britain Pounds. 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:
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