NOTE 11
DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
NOTE 12
CURRENT ASSETS – CURRENT TAX RECEIVABLES
Consolidated
2013
$’000
2012
$’000
Current tax receivables
2,697
-
NOTE 13
NON-CURRENT ASSETS – ALLIANCE PARTNER DEPOSITS
Consolidated
2013
$’000
2012
$’000
Alliance partner deposits
935
900
935
900
into profit or loss (2012:nil). Hedge effectiveness was
assessed at the inception of the lease and was found
to be effective. Hedge effectiveness was also assessed
prospectively and retrospectively using the cumulative
dollar offset method as at 30 June 2013 as a part of the
bi-annual testing. There was no hedge ineffectiveness
in the year ended to 30 June 2013.
(ii) Forward exchange contracts -
cash flow hedges
ARTC purchases grinding stones used in the rail
grinding process from the United States and in the
previous financial year entered into a contract to
purchase a Shoulder Ballast Cleaner also from the
United States. In order to protect against exchange
rate movements as required by the Treasury Policy,
the Group enters into forward exchange contracts to
purchase US dollars.
The contracts are timed to mature when payments for
the shipment of these items are scheduled to be paid.
The portion of the gain or loss on the hedging
instrument that is determined to be an effective hedge
is recognised directly in equity. When the cash flows
occur, the Group adjusts the initial measurement of
the component recognised in the Consolidated Income
Statement by the related amount deferred in equity.
Group
During the year ended 30 June 2013 there was a
reclassification of cash flow hedge from equity to profit
or loss of $(99k) (2012: $7k). There was no hedge
ineffectiveness in the current or prior year.
(b) Risk exposures and fair value
measurements
Credit risk arises from the potential failure of
counterparties to meet their obligations under the
respective contracts at maturity. This arises on
derivative financial instruments with unrealised gains.
At reporting date the risk is nil in the current year.
Information about the Group’s exposure to credit
risk, foreign exchange and interest rate risk is
provided in note 30. The maximum exposure to
credit risk at the end of the reporting period is the
carrying amount of each class of derivative financial
assets mentioned above.
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