Annual Report - Campus Living Villages
Annual Report - Campus Living Villages
Annual Report - Campus Living Villages
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1 2 4 <strong>Campus</strong> <strong>Living</strong> <strong>Villages</strong> <strong>Annual</strong> <strong>Report</strong> 09/10<br />
<strong>Campus</strong> <strong>Living</strong> Overseas Trust<br />
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />
FOR THE YEAR ENDED 30 JUNE 2010<br />
A$’000<br />
CLOT<br />
d) Cash flow interest rate risk<br />
Floating to fixed interest rate swaps are utilised to hedge against cash flow interest rate risks. Such interest rate swaps have<br />
the economic effect of converting borrowings from floating rates to fixed rates. Generally the Fund raises long term borrowings<br />
at floating rates and swaps them into fixed rates. Under the interest rate swap contracts, the Fund agrees with financial<br />
institutions to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating-rate<br />
interest amounts calculated by reference to agreed notional principal amounts.<br />
Interest payments are fixed through the use of interest rate swaps and fixed interest rate loans. The hedged portion of the<br />
loans in NZ and the UK is 85% and 100% respectively and bears interest at a 6.6% and 5.4% respectively. The variable portion<br />
of the interest payments are subject to change in floating interest rates and a 50 basis points increase results in $0.36m (2009:<br />
$0.19m) additional interest per annum. The carrying amount of borrowings is summarised below:<br />
June 2010 June 2009<br />
Loans from financial institutions<br />
- Variable 7,241 6,740<br />
- Swaps 58,881 54,656<br />
Total loans from financial institutions 66,122 61,396<br />
Lease liabilities - fixed 1,463 1,374<br />
Loans from related parties<br />
- Interest free 26,668 34,658<br />
- Variable 39,933 28,942<br />
Total undiscounted financial liabilities 134,186 126,370<br />
The weighted average interest rates of the borrowings are summaried below:<br />
June 2010 June 2009<br />
% %<br />
Loans from financial institutions 5.20 4.80<br />
Lease liabilities - fixed 7.99 7.99<br />
Loans from related parties - variable 5.50 5.88<br />
e) Fair value measurement<br />
Derivative financial instruments<br />
The fair value of derivative financial instruments is recorded from external valuations and is measured using forward interest<br />
rates with the same maturity dates as the underlying instruments. Changes in fair value are recorded in profit or loss. In<br />
accordance with AASB 7 Financial Instruments: Disclosures, the interest rate swap instruments are considered a level 2<br />
financial instrument in the fair value measurement hierarchy.<br />
3. Revenue<br />
June 2010 June 2009<br />
Accommodation rental revenue 19,003 19,359<br />
Management fees 6,446 7,688<br />
Development revenue 987 987<br />
Interest 848 703<br />
Total revenue 27,284 28,737
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