2001 Qantas Financial Report

Notes to the FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2001
34. FINANCIAL INSTRUMENTS (continued)
Weighted
Fixed Rate Maturing in:
Average Less More Non-
Interest Floating than 1 to 5 than Interest
Rate Rate 1 year years 5 years Bearing Total
2000 Notes (% p.a.) $M $M $M $M $M $M
RECOGNISED FINANCIAL ASSETS
Cash 8 5.75 118.2 – – – – 118.2
Trade debtors 9 – – – – – 1,112.0 1,112.0
Short-term money market securities, term
deposits and bills of exchange 9 6.24 – 570.6 4.3 – – 574.9
Aircraft security deposits 9 5.93 126.1 1.1 377.7 57.7 – 562.6
Sundry debtors 9 – – – – – 75.0 75.0
Loans receivable 9 9.20 – – 21.0 – – 21.0
Net receivables under swap contracts (i) – (1,039.2) 68.5 985.0 917.3 – 931.6
RECOGNISED FINANCIAL LIABILITIES
(794.9) 640.2 1,388.0 975.0 1,187.0 3,395.3
Trade creditors 15 – – – – – 1,598.5 1,598.5
Sundry creditors and accruals 15 – – – – – 159.6 159.6
Bank loans – unsecured 16 7.41 – 100.7 67.6 – – 168.3
Other loans – secured 16 5.76 6.7 – – – – 6.7
Other loans – unsecured 16 7.76 – 329.8 289.8 579.9 – 1,199.5
Lease residual values 16 11.09 – 49.3 284.4 – – 333.7
Finance lease and hire purchase liabilities 16 7.57 407.3 55.4 567.3 375.0 – 1,405.0
Provision for dividends 17 – – – – – 581.3 581.3
Current tax liabilities 18 – – – – – 119.9 119.9
Systems development put contract liability 19 – – – – – 37.1 37.1
UNRECOGNISED FINANCIAL LIABILITIES
414.0 535.2 1,209.1 954.9 2,496.4 5,609.6
Interest rate swaps (ii) 351.2 (48.1) (128.1) (175.0) – –
765.2 487.1 1,081.0 779.9 2,496.4 5,609.6
(i) Notional principal amounts. Interest payable/receivable has been included in the calculation of the effective interest rate of the underlying financial
liability or asset. Excludes unrealised loss on revenue back to back hedges.
(ii) Notional principal amounts.
(b)
FOREIGN EXCHANGE RISK
Cross-currency swaps are used to convert long-term foreign currency borrowings (both recognised and unrecognised) to currencies
in which the Qantas Group has forecast sufficient surplus net revenue to meet the principal and interest obligations under the swaps.
These foreign currency borrowings have a maturity of between one and ten years. Where this has occurred, back to back forward
foreign exchange contracts have been used to hedge the cash flows arising under the borrowings with the expected revenue
surpluses used to hedge the borrowings. To the extent a gain or loss is incurred, this is deferred until the net revenue is realised.
Forward foreign exchange contracts and currency options are used to hedge a portion of remaining net foreign currency revenue or
expenditure in accordance with Qantas Group policy. Net foreign currency revenue and expenditure out to five years may be hedged
within specific parameters, with any hedging outside these parameters requiring approval by the Board of Directors. Purchases and
sales of property, plant and equipment denominated in a foreign currency are hedged using a combination of forward foreign
exchange contracts and currency options at the date a firm commitment is entered into to buy or sell unless otherwise approved
by the Board of Directors.
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42 QANTAS ANNUAL REPORT 2001