NOTE 30
FINANCIAL RISK MANAGEMENT (CONTINUED)
The policy provides a number of criteria to manage
and spread the level of risk such as: minimum
rating of counterparty, maximum credit exposure
to any one counterparty and maintaining greater
than one counterparty.
It is the Group’s policy that all customers enter
into access agreements meeting the terms and
conditions as set out in the agreement before
entering the Group’s rail network and receiving any
trade credit facilities.
The Group’s exposure to bad debts has been
historically low and statistically insignificant,
therefore no collective loss provision is determined.
The Group does have significant concentration of
credit risk associated with major customers providing
a high proportion of access revenue, therefore any
bad debt provision’s required are assessed on an
individual basis.
The receivable balances are monitored on an ongoing
basis and constant dialogue is maintained with major
customers. Outstanding queries and administrative
delays are followed up promptly. Conditions for
customers accessing the rail network, allow for
interest to be charged on late payments and security
can be taken on default of payment. Typically, for the
remaining rail network, the contract allows the raising
of formal disputes on late payments, with a favourable
outcome resulting in interest being charged as well as
the ability to seek upfront security, where required.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining
sufficient cash and marketable securities, the
availability of funding through an adequate amount of
committed credit facilities and the ability to close out
market positions. The Group manages liquidity risk
by continuously monitoring forecast and actual cash
flows and matching this with available cash through
matching the maturity profile of financial assets.
Financing arrangements
In November 2012 ARTC negotiated an $800m dual
tranche Syndicated Debt Facility with a consortium
of major Australian Banks replacing the previous
$550m Syndicated Debt Facility. The dual tranche was
Tranche A $500m for 2 years and Tranche B $300m for
4 years. As at 30 June 2013, $329m of the funds have
been utilised.
In April 2013 ARTC issued a $250m 3yr Australian
Domestic Bond with a maturity date of 29 April 2016.
This was the final issue in the $750mAustralian Dollar
Domestic Note programme that was established in
December 2010 which is now fully issued.
As at the reporting date of 30 June 2013, as the bond
issuer ARTC has EBITDAI and Net Tangible Assets that
are greater than 85% of the EBITDAI and Net Tangible
Assets of the Group and is therefore in compliance
with clause 4.3 Earnings and Asset Covenant of the
Information Memorandum.
The Group had access to the following undrawn
borrowing facilities at the end of the reporting period:
Consolidated
2013
$’000
2012
$’000
Floating rate
- Expiring within one year (bank overdraft, business card and
revolving lease facility)
20,000
20,000
The bank overdraft facilities may be drawn at any time and the extension of such facilities beyond the expiry date is at
the discretion of the bank.
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