Group Financial Statements 2012 - Riverside
Group Financial Statements 2012 - Riverside
Group Financial Statements 2012 - Riverside
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18<br />
Derivatives and financial instruments<br />
<strong>Group</strong><br />
The operating and financial review on pages 9 to 14 includes an explanation of the role financial instruments have had<br />
during the period in managing the risks The <strong>Riverside</strong> <strong>Group</strong> faces in its treasury activities.<br />
<strong>Financial</strong> assets and liabilities<br />
<strong>Financial</strong> assets and liabilities at 31 March <strong>2012</strong> have book and fair values as detailed below.<br />
<strong>2012</strong> <strong>2012</strong> 2011 2011<br />
Book value Fair value Book value Fair value<br />
£’000 £’000 £’000 £’000<br />
Charifund 7,668 7,668 7,423 7,423<br />
8¾% Treasury stock 2017 309 309 335 335<br />
Interest rate swap agreements — (41,430) — (18,003)<br />
Unit trusts, investment trusts and listed investments 3,498 3,498 3,410 3,410<br />
Unlisted investments 1,859 1,859 1,966 1,966<br />
———— ———— ———— ————<br />
————<br />
13,334<br />
————<br />
(28,096)<br />
————<br />
13,134<br />
————<br />
(4,869)<br />
Fixed asset investments are detailed at note 12A. The investment in 8¾% Treasury Stock 2017 is held as a requirement<br />
of the loan from Funding For Homes Limited and cannot be disposed of until the loan has been repaid (see note 27). The<br />
investment in Charifund is held by virtue of a Board decision to actively provide for the bullet repayment of the loans due<br />
to HACO Limited and Funding For Homes Limited in 2017 and 2018 respectively.<br />
The fair value of the interest rate swap agreement at 5 July <strong>2012</strong> was £47.7m in favour of the counterparties.<br />
Interest rate risk profile of financial assets<br />
With the exception of the investment of £309,375 (2011: £335,500) in 8¾% Treasury Stock 2017, all investments have<br />
variable rates of return. Money market deposits and other cash deposits, all of which are denominated in sterling, bear<br />
interest at variable rates based upon LIBOR.<br />
Interest rate risk profile of financial liabilities <strong>2012</strong> 2011<br />
£’000 £’000<br />
Floating rate 138,221 56,631<br />
Fixed rate 577,017 560,955<br />
Interest free 488 488<br />
———— ————<br />
————<br />
715,726<br />
————<br />
618,074<br />
The floating rate financial instruments comprise sterling denominated bank borrowings that bear interest at rates based<br />
upon LIBOR. The weighted average rate of interest paid on the fixed rate debt during the year is 5.9% and the weighted<br />
average of the period for which the interest rates are fixed is 8.6 years.<br />
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