Annual Report 10/11 - Campus Living Villages

Annual Report 10/11 

For the year ended 30 June 2011 

Campus Living Villages Fund 

Campus Living Villages 1

Campus Living Villages Annual Report 10/11 


campus 

living 

villages 

fund 

Directors’ Report ............................................................................................................................................................. 2 

Auditor’s Independence Declaration ................................................................................................................. 12 

Consolidated Statement of Comprehensive Income .................................................................................. 13 

Consolidated Statement of Changes in Equity .............................................................................................. 14 

Consolidated Balance Sheet .................................................................................................................................... 15 

Consolidated Cash Flow Statement .................................................................................................................... 16 

Notes to the Consolidated Financial Statements ......................................................................................... 17 

Directors’ Declaration ................................................................................................................................................ 49 

Independent Auditor’s Report................................................................................................................................ 50 

Corporate Directory ..................................................................................................................................................... 51 

Campus Living Land Trust (USA) 

ARSN: 122 414 073 

Financial report for the 

year ended 30 June 2011 

The financial report was authorised for issue by the 

Directors on 6 September 2011. The Directors have 

the power to amend and reissue the financial report. 

Campus Living Land Trust (USA) is domiciled in Australia. 

The registered office of Campus Living Funds 

Management, the responsible entity, is: 

Campus Living Funds Management Limited 

Pier 8/9, 23 Hickson Road, Walsh Bay 

Sydney NSW 2000, Australia 

P +61 2 9037 7100



DIRECTORS’ REPORT 

FOR THE YEAR ENDED 30 JUNE 2011 

Introduction 

The Directors of Campus Living Funds Management Limited (‘‘CLFM’’) as the Responsible Entity (‘‘RE’’) of the Campus 

Living Villages Fund (‘‘the Fund’’) present their report on the Fund consisting of CLLT (USA), other trusts within the stapled 

group and their subsidiaries for the year ended 30 June 2011. 

Fund structure and formation 

The Fund is a stapled arrangement of four trusts and their controlled subsidiaries , which was established on 9 January 

2007. The four trusts are Campus Living Land Trust (USA) (‘‘CLLT (USA)’’) which is the parent entity, Campus Living Finance 

Trust (‘‘CLFT’’), Campus Living Australia Trust (‘‘CLAT’’) and Campus Living Overseas Trust (‘‘CLOT’’). The units of the four 

trusts forming the Fund can only be purchased or sold in its current stapled arrangement. 

Directors 

The following persons are the Directors of CLFM and were in office during the whole of the financial year and up to the 

date of this report, except where otherwise stated: 

Professor John Niland AC 

Luca Belgiorno-Nettis (appointed 29 November 2010) 

Professor Steve Burdon 

Walter Carpenter 

Nicholas James 

Gayle Tollifson 

Principal activities 

The principal business activities of the Fund are to provide accommodation to students through owned and managed 

facilities and project management and development of new facilities, some of which will be owned by the Fund. These 

businesses are located in United States of America (‘‘US’’), Australia, New Zealand (‘‘NZ’’) and the United Kingdom (‘‘UK’’). 

Distributions 

The Fund declared the following distributions: 

2011 financial year 

Date Amount Cents per unit 

15 June 2011 $7,000,000 0.98 

Total $7,000,000 



28 September 2009 $1,000,204 0.30 

18 December 2009 $999,743 0.24 

31 March 2010 $3,999,748 0.97 

29 June 2010 $10,099,966 2.44 

Total $16,099,661 

2





Review of operations 

This financial year the Fund has focused on refinancing the original Century 16 (C16) assets, Illini Tower, Delaware and 

Studio Green Tallahassee in the US, evaluating underperforming assets and ensuring the structure of the Fund is well 

positioned to support the delivery of appropriate returns. The bed numbers in the Fund continued to grow, with CLV 

achieving financial close on a new development at the University of Bedfordshire in the UK. However, the overall 

performance of the Fund was negatively impacted, largely due to factors linked to the Global Financial Crisis (GFC). The 

loss for the year was $45.6m (2010: $32.4m). Although total revenue has increased from the previous year, impairment of 

assets of $24.1m has negatively impacted the results. 

The effects of the GFC impacted the Fund’s US operations, particularly its off-campus properties. In addition, 

development slowed in the post GFC environment as a result of tight liquidity. In light of this slower growth phase, the 

overhead structure of the Fund has been reviewed. 

The Fund was awarded a £40m contract to design, build, operate and finance an 853 bed en suite student accommodation 

facility at the University of Bedfordshire’s Luton campus in the United Kingdom. Financial close was achieved on 2 July 

2010. In addition to the new construction, CLV UK was appointed to manage 854 beds of University owned 

accommodation. At the date of this report, completion of phase 1 construction of 579 rooms is imminent. 

The Fund made an equity call during July 2010 of $28.3m to repay the EBF and cash back letters of credit and bank 

guarantees effective 28 July 2010, relating to assets acquired and developed in the previous financial year. 

The RE raised total equity commitments of $160m under an Offering Memorandum issued in March 2011. To support the 

refinancing of the original C16 assets in the US, $105.3m was called in March and $89m to repay the RBS borrowings, 

together with US$120m which was raised via a US private placement. A further equity call was made on 30 June 2011 for 

$6.64m which was used to repay the Illini borrowings together with a CMBS loan, which fell due in July 2011. During March 

2011 uncalled Committed Capital under the 2008 Information Memorandum of $119.3m was cancelled. This was outlined in 

the March 2011 Offering Memorandum under section 1.8 ‘Cancellation of Existing Commitment’. 

During the year the RE approved the listing for sale of Studio Green Tallahassee. It is expected to be sold for 

approximately US$7m (net of selling costs). At the time of signing this report, CLV is finalising an agreement with the 

lender, stipulating that the Fund will be released from the debt obligation of US$12.1m once the proceeds from the sale and 

the US$2m cash backed letter of credit are provided. 

Solvency Position 

As at 30 June 2011, the Fund had a current asset deficit of $66.8m (current liabilities: $159.2m; current assets $92.4m). The 

Directors believe that consolidated entity will be able to pay its debts as and when they fall due, due to the existence of 

uncalled equity, the status of the refinancings and the limited recourse nature of the current borrowings. 

Changes in state of affairs 

There have been no other changes in the state of affairs of the Fund. 

Fund Valuation 

The Directors of CLFM have determined the final Net Asset Value (‘‘NAV’’) of the Fund as at 30 June 2011 to be 

$426,608,436 (2010: $388,311,717). The NAV has been determined in accordance with the Fund’s Valuation Protocol. Under 

the Valuation Protocol the Fund’s NAV is determined using a discounted cash flow analysis. The discounted cash flow is 

determined by estimating the future cash flows that are expected to be generated by the Fund’s Assets, discounted to 

their present value using appropriate discount rates determined with regard to independent advisors. 

Outlook for the following financial year 

The next financial year will be a period of consolidation of the existing portfolio and growth. The main focus will be on 

existing assets and that the committed developments meet projected outcomes. At the same time the Fund will continue 

to look for opportunities in existing markets. 

3





Environmental regulation 

The Fund undertakes the development and construction of new student accommodation facilities in the US, Australia, NZ 

and the UK and is subject to the regulations of those countries and the respective states and counties. The Fund is subject 

to and complies with the regulations and legislation that govern development and construction of new student 

accommodation facilities in these regions. 

Loans to Directors and executives 

There were no loans to or from Directors or executives during the year, at year end or at the date of this report. 

Insurance of officers 

During the financial year, the RE paid a premium to insure the Directors, officers and senior management of the RE and the 

Fund. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be 

brought against the officers in their capacity as officers of entities in the Fund, and any other payments arising from 

liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from 

conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of 

information to gain advantage for themselves or someone else or to cause detriment to the Fund. It is not possible to 

apportion the premium between amounts relating to the insurance against legal costs and those relating to other 

liabilities. 

Fees paid to and units held by the responsible entity and the responsible entity’s associates 

Fees paid to the RE and the RE’s associates is included in the Related party transactions note 27 in the financial 

statements. The RE and the RE’s associates hold 65,619,242 units in the Fund. 

Proceedings on behalf of the fund 

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on 

behalf of the Fund, or to intervene in any proceedings to which the Fund is a party, for the purpose of taking responsibility 

on behalf of the Fund for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of 

the Fund with leave of the Court under section 237 of the Corporations Act 2001. 

Auditor’s independence declaration 

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out 

on page12. 

Rounding of amounts 

The Fund is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, 

relating to the ‘’rounding off’’ of amounts in the Directors’ report. Amounts in the Directors’ report have been rounded off in 

accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar. 

Auditor 

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001. 

4





Information on Directors 


Chairman and Independent Director 

Age 71 

Appointed 11 October 2006 and re-elected 28 September 2009 

Experience and Expertise 

Professor Niland has extensive commercial and leadership experience in the university sector, both in Australia and 

internationally. He is Professor Emeritus of UNSW, and a former Vice-Chancellor and President of UNSW (1992-2002). 

John was formerly President of the Australian Vice-Chancellors Committee; founding Director of the Group of Eight 

Universities and Universitas 21; former Chairman of the EPA in NSW, and of realestate.com.au. 

In the Australian Honour’s system, John was awarded an AO in 1992 for his research and policy development in the area of 

labour market reform, and in 2002 he was awarded an AC for his contributions to the internationalisation of Australia’s 

higher education system. In 2007 he received the President’s Prize of the Royal Australia Institute of Architects (NSW) 

for his contributions to architecture through the development of the UNSW campus. 

Academic and Professional Qualifications 

BCom, MCom Hon, PhD (UNSW), PhD (Illinois), DUniv (SCU); Fellow of the Academy of Social Sciences in Australia 

(FASSA), Fellow of the Institute of Company Directors (FAICD) 

Other current directorships 

Independent Director, Macquarie Group and Macquarie Bank 

Deputy Chairman, Board of Trustees of Singapore Management University 

Managing Director, John Niland Pty Ltd 

Former directorships in last 3 years 

Member, University Grants Council of Hong Kong 

Chairman, Centennial Park and Moore Park Trust 

President, National Trust (NSW) 

Special responsibilities 

Chairman, CLFM Board 

Chairman, CLFM Investment Committee 

Member, CLFM Audit, Compliance and Risk Management Committee 

Member, CLFM Human Resources Committee 

Interests in shares and options issued by the CLV Fund or any member or associates of the CLV Fund 

None 

5





Luca Belgiorno-Nettis AM 

Director (Transfield Appointed) 

Age 57 

Appointed 29 November 2010 

Experience and expertise 

Mr Belgiorno-Nettis is the joint Managing Director of the Transfield Holdings Group, a director of its subsidiary 

companies and has held senior positions within Transfield Holdings for more than 20 years. 

Luca is a Director of Transfield Services Limited, Chairman of the Biennale of Sydney, Chairman of the Arts Advisory 

Committees at the University of Technology, Sydney (UTS) and the University of Western Sydney, a member of the 

Australian International Cultural Committee and founder of the newDemocracy Foundation, a not-for-profit organisation 

focused on political reform. 

Luca is a founder of the Transfield Foundation Fund, a philanthropic vehicle which invests in innovative programs that 

help support communities, with particular emphasis on the arts, technology and education. 

Luca won the UTS Chancellor’s Award for Excellence in 2007 for his contribution to Sydney’s culture and was made a 

Member of the Order of Australia in 2009 for services to the arts and the community. 


Bachelor of Architecture (UNSW) 

Graduate Diploma in Urban Estate Management (UTS) 


Biennale of Sydney Ltd 

Collinsville Solar Limited 

newDemocracy Foundation Limited 

NovatecSolar Australia Pty Limited 

NovatecSolar Liddell Pty Limited 

Transfield Foundation Pty Limited 

Transfield Pty Limited and associated subsidiary companies 

Transfield Services Limited 


None 


None 

Interests in shares and options issued by the CLV Fund or any members or associates of the CLV Fund 

Luca holds a 42.65% ownership interest in the Transfield Holdings Group of which Transfield Property Pty Limited and 

CLFM are wholly owned subsidiaries. Transfield Property Pty Limited holds a 7.38% ownership interest in the CLV Fund. 

CLFM holds a 1.77% ownership interest in the CLV Fund. 

6






Director (Transfield Appointed) 

Age 68 

Appointed 11 October 2006 (originally appointed as an Independent Director and 

appointed by Transfield on 29 February 2008) 


Professor Burdon has extensive management experience. He previously held the position of Managing Director of OTC, 

Group Managing Director of Telstra, and Managing Director of British Telecom Asia Pacific. In addition, Steve has 

experience as a non-executive director on over a dozen private and public company boards in Australia, NZ, India and 

Japan. He is currently a Visiting Professor of Management at the University of Technology Sydney and CASS Business 

School London. 

. 


MBA (Cranfield); Fellow of the Australian Institute of Company Directors (FAICD), Fellow of the Australian Institute of 

Management (FAIM) and Fellow of the Institution of Engineers Australia (FIEAust) 


Silex Systems Pty Ltd 

VisAsia Limited/Art Gallery of NSW 

Criteria Research and Analysis Pty Limited 

Chairman, AIM Advisory Board 


Transfield Services Limited 


None (former Chairman, CLFM Human Resources Committee) 


None 

7






Independent Director 

Age 52 

Appointed 29 February 2008 and re-elected 20 October 2010 


Mr Carpenter has extensive leadership experience in corporate and project finance. He commenced his career in 1980 

with Price Waterhouse in Sydney, moving into merchant banking in 1983 with ABN Bank then to Lloyds Bank and 

Jardine Fleming. 

Walter joined the First Pacific Davies Group as General Manager, Hong Kong in 1989. In 1992 he returned to Sydney to 

establish a franchise of First Pacific Davies (now renamed Savills). Under his leadership the business grew to employ 

over 1,000 people. Walter sold the business to Savills Plc in 2003 and remained as CEO until mid-2006. He is currently 

a director of Flat Glass Industries Limited and Chairman of the Middle Harbour Yacht Club. 


BEc (Syd); Fellow of the Australian Property Institute (FAPI) 


Middle Harbour Yacht Club 

WR Carpenter & Sons Pty Ltd 

Flat Glass Industries Limited 


Savills (Aust) Pty Limited 


Member, CLFM Audit, Compliance and Risk Management Committee 

Chairman, CLFM Human Resources Committee 

Member, CLFM Investment Committee 


None 

8






Director (Transfield Appointed) and Responsible Manager 

Age 47 

Appointed 2 November 2005 


Mr James is the Chief Financial Officer of Transfield Holdings Group. 

Nicholas has extensive experience in investment and transaction management in infrastructure and property. He was 

previously a Director of Deutsche Bank in London and prior to that a Director with Macquarie Bank, where he worked on a 

number of infrastructure transactions in Australia, London and New York, including the establishment of Macquarie 

Infrastructure Group (MIG) and the acquisition, financing and management of a number of motorway assets for MIG. 

Since joining Transfield in 2005, Nicholas has been closely involved with the acquisition and development of a number of 

CLVF’s properties and also with the establishment of CLVF. 


BCom (with Merit) (UNSW) 


None 


Campus Living Accommodation Company (USA) Pty Limited 

Campus Living Accommodation Company Pty Limited 

Campus Living Flemington Road Pty Limited 

Campus Living Funds Management (USA) Pty Limited 

Campus Living Investments Pty Limited 

Campus Living Villages (Canberra) Pty Limited 

Campus Living Villages (Parramatta) Pty Limited 

Campus Living Villages (SCU) Pty Limited 

Campus Living Villages at ECU Pty Limited 

Campus Living Villages Bedfordshire Pty Limited 

Campus Living Villages Murdoch Pty Limited 

Campus Living Villages Pty Ltd 

Campus Living Villages Salford Pty Limited 

CLV (SCU) Holdings Pty Limited 

CLV Accommodation Holdings Pty Ltd 

CLV at ECU Holdings Pty Limited 

CLV Finance Pty Limited 

CLV Management Services Pty Limited 

CLV Parramatta Holdings Pty Limited 

CLV UK Accommodation Holdings Pty Limited 

UNSW Village Pty Ltd 

Campus Living Villages NZ Limited (NZ) 

Novatec Biosol AG (now Novatec Solar GmBH) (Germany – Supervisory Board) 


Member, CLFM Human Resources Committee 

Member, CLFM Investment Committee 

Responsible Manager and Key Person, CLFM 

9






None 


Independent Director 

Age 57 

Appointed 16 April 2010 


Ms Tollifson is a finance professional with extensive audit and risk management experience. In 1994, she joined QBE 

Insurance Group Limited as Group Financial Controller and became the Group’s first Chief Risk Officer, a position she held 

until her retirement from full time employment in 2006. Prior to joining QBE, Gayle spent 14 years in public accounting in 

Canada, Bermuda and Australia. 

Gayle was previously a director of many QBE subsidiaries in Australia, Bermuda and Europe and until 2005 chaired the 

Insurance Council of Australia/Australian Prudential Regulation Authority Liaison Working Party, an industry committee 

that worked closely with APRA to develop prudential reforms for the general insurance industry. 


BCom (Saskatchewan); Fellow of the Australian Institute of Company Directors (FAICD), Fellow of the Institute of 

Chartered Accountants in Australia (FCA). 


Genworth Financial Mortgage Insurance Pty Limited and associated companies (Independent Chairman) 

Munich Reinsurance Company of Australasia Limited and associated companies (Chairman, Audit Committees) 

RAC Insurance Pty Limited 

Oasis Youth Support Network Foundation (Member of Advisory Board) 

Former directorships in the last 3 years 

Group GSA Pty Ltd 

Special Responsibilities 

Chairman, CLFM Audit, Compliance and Risk Management Committee 


None 

10





Matters subsequent to the end of the financial year 

The Fund received $6.6m of equity during July 2011 to fund refinancing projects. 

Illini external borrowings were US$41.7m as at 30 June, 2011. The Fund secured refinancing of the Illini debt with CIBC Inc. 

totalling US$38m on 5 July 2011 with a tenor of 10 years. 

Delaware external borrowings were US$55.5m as at 30 June, 2011. This includes senior debt of US$47m and a mezzanine 

loan of US$8.5m. The RE has resolved to list Waterview Court (the non-student accommodation asset in the Delaware 

portfolio) with proceeds used to partially reduce the existing senior and mezzanine debt. Delaware external borrowings 

were due for repayment in July 2011 and therefore the borrowers are in default. The underlying assets relating to these 

properties have a book value of US$53.4m which were subject to risk as at 30 June 2011 as the assets are security for 

external borrowings if the default is not remedied. The Fund anticipates that the Delaware refinancing will be completed 

by 31 December 2011 and equity will be contributed to cover the refinancing shortfall including the refinancing costs. The 

Fund has A$48.1m of uncalled equity available which can be utilised to fund the shortfall. 

The Directors have not identified any other matters since 30 June 2011 that would require disclosure in the annual report or 

adjustment to the financial statements or that may significantly affect the Fund’s operations in future financial years, the 

results of those operations in future financial years, or the Fund’s state of affairs in future financial years. 

This report is made in accordance with a resolution of Directors. 

John Niland 

Chairman 


Director 

Sydney 

6 September 2011 

11



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 


A$’000 

Notes June 2011 June 2010 

Revenue 4 166,212 160,509 

Other income 5 28 2,404 

Unrealised interest rate swap gains 9,739 944 

Employee benefit expense (34,300) (32,685) 

Impairment of assets (24,080) (3,500) 

Depreciation and amortisation (35,553) (34,836) 

Borrowing costs expense 6 (51,517) (54,101) 

Other expenses 6 (75,792) (66,964) 

Equity accounted (loss)/profits 42 (6) 

Loss before taxation (45,221) (28,235) 

Income tax expense 7 (346) (4,189) 

Loss for the year (45,567) (32,424) 

Allocation of loss for the year 

Parent entity (29,122) (1,378) 

Other equity holders of stapled group: 

CLAT (14,080) (24,090) 

CLOT (9,259) (10,633) 

CLFT 6,667 3,094 

Total other equity holders of stapled group (16,672) (31,629) 

Non-controlling interests 227 583 


Other comprehensive income 

Exchange differences arising on translation of foreign operations 

(25,371) (3,550) 

Movement in hedging reserves (1,266) - 

Other comprehensive income for the year (26,637) (3,550) 


Total comprehensive loss for the year (72,204) (35,974) 

Allocation of total comprehensive loss for the year 

Parent entity (53,097) (4,291) 

Other equity holders of stapled group: 

CLAT (14,080) (24,090) 

CLOT (8,647) (11,065) 

CLFT 3,392 2,869 

Total other equity holders of stapled group (19,335) (32,286) 



The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 

13

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 


A$’000 



Issued Capital 

Attributable to stapled security holders 

Accumulated 

Losses 

Reserves 

Non-Controlling 

Interest 

Total Equity 

June 2011 

Balance at the beginning of the year 346,334 (136,801) 442 4,877 214,852 

Exchange differences - - (25,372) 1 (25,371) 

Hedging reserve differences - - (1,266) - (1,266) 

Share of profit to non-controlling interests - (227) - 227 - 

Loss for the year - (45,567) - - (45,567) 

Total Comprehensive Loss for the year - (45,794) (26,638) 228 (72,204) 

Issue of capital 138,569 - - - 138,569 

Equity raising costs (180) - - - (180) 

Acquisition of non-controlling interest - - (1,725) (3,630) (5,355) 

Distributions (191) (6,809) - (193) (7,193) 

Balance at the end of the year 484,532 (189,404) (27,921) 1,282 268,489 


Balance at the beginning of the year 265,101 (102,622) 4,012 4,869 171,360 

Exchange differences - - (3,570) 20 (3,550) 



Total Comprehensive Loss for the year - (33,007) (3,570) 603 (35,974) 



Distributions (14,927) (1,172) - (595) (16,694) 

Balance at the end of the year 346,334 (136,801) 442 4,877 214,852 

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 

14



CONSOLIDATED BALANCE SHEET 

AS AT 30 JUNE 2011 

A$’000 


Current Assets 

Cash and cash equivalents 8 72,210 75,213 

Trade and other receivables 10 4,864 9,715 

Inventory 65 57 

Other current assets 11 2,866 3,472 

Assets held for sale 12 12,407 - 

Total Current Assets 92,412 88,457 

Non-Current Assets 

Other financial assets 13 338 338 

Equity accounted investments 13 1,452 2,054 

Derivative financial instruments 9 - 56 

Property, plant and equipment 14 904,787 1,032,430 

Intangible assets 15 39,153 43,735 

Deferred taxation assets 7 1,103 952 

Other non-current assets 16 1,403 1,765 

Total Non-Current Assets 948,236 1,081,330 

TOTAL ASSETS 1,040,648 1,169,787 

Current Liabilities 

Trade and other payables 17 44,934 53,022 

Provisions 18 1,138 1,010 

Income tax liability 886 487 

Borrowings 19 112,258 228,761 

Total Current Liabilities 159,216 283,280 

Non-Current Liabilities 

Provisions 18 123 1,203 

Borrowings 19 580,601 627,704 

Derivative financial instruments 9 20,673 30,391 

Deferred taxation liabilities 7 11,546 12,357 

Total Non-Current Liabilities 612,943 671,655 

TOTAL LIABILITIES 772,159 954,935 

NET ASSETS 268,489 214,852 

EQUITY 

Parent entity equity 

Issued capital 20 235,258 178,739 

Accumulated losses 21 (94,176) (65,054) 

Reserves 22 (25,550) 150 

Total parent entity interest 115,532 113,835 

Other entities in stapled group 



Reserves 22 (2,371) 292 

Total equity of other stapled entities 151,675 96,140 

Non-controlling interest 23 1,282 4,877 

TOTAL EQUITY 268,489 214,852 

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes. 

15



CONSOLIDATED CASH FLOW STATEMENT 


A$’000 


Cash flows from operating activities 

Receipts from customers 166,775 170,330 

Payments to suppliers and employees (106,371) (107,145) 

Interest received 1,337 948 

Interest paid (50,465) (50,577) 

Dividends received 493 625 

Income taxes paid (538) 625 

Net cash inflow from operating activities 8(b) 11,231 14,806 

Cash flows from investing activities 

Disposal of assets - 17,224 

Capital expenditure (62,622) (139,036) 

Net cash outflow from investing activities (62,622) (121,812) 

Cash flows from financing activities 

Proceeds from issue of equity 138,569 96,187 

Equity raising costs (180) (28) 

Net (payments)/proceeds from external borrowings (66,510) 45,847 

Foreign exchange loss (1,045) - 

Transactions with non-controlling interests (5,534) - 

Distributions to unit holders (10,100) (8,899) 

Net cash inflow from financing activities 55,200 133,107 

Net increase in cash and cash equivalents 3,809 26,101 

Effects of exchange rate changes on cash and cash equivalents 

(6,812) (1,026) 

Cash and cash equivalents at the beginning of the financial year 

75,213 50,138 

Cash and cash equivalents at the end of the year 72,210 75,213 

The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes. 

16

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 


A$’000 



1. Summary of accounting policies 

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies 

have been consistently applied to the entire period presented, unless otherwise stated. The financial statements for the 

Fund consist of the parent entity and its subsidiaries. 

a) Fund structure 

The Campus Living Villages Fund (‘‘the Fund’’) is a stapled arrangement of four trusts and their subsidiaries established on 

9 January 2007. 

The four trusts are Campus Living Land Trust (USA) (‘‘CLLT (USA)’’) which is the parent entity, Campus Living Finance Trust 

(‘‘CLFT’’), Campus Living Australia Trust (‘‘CLAT’’) and Campus Living Overseas Trust (‘‘CLOT’’). The units of the four trusts 

forming the Fund can only be purchased or sold in its current stapled arrangement. 

The financial report has been prepared based upon a business combination of the parent entity, the Trusts in the stapled 

arrangement and their subsidiaries in accordance with Australian Accounting Standards Board Interpretation 1002: Post- 

Date-of-Transition Stapling Arrangements. Refer to Stapled arrangement section of note 1 (c) ‘‘Principles of 

consolidation’’ for further details and the impact thereof. 

b) Basis of preparation 

This general purpose financial report has been prepared in accordance, with Australian Accounting Standards, other 

authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and 

the Corporations Act 2001. 

Compliance with IFRS 

The consolidated financial statements and notes of the Fund comply with International Financial Reporting Standards 

(IFRS) as issued by the International Accounting Standards Board. 

Historical cost convention 

These financial statements have been prepared under the historical cost convention except for financial assets and 

liabilities (including derivative instruments) which are carried at fair value. 

Critical accounting estimates 

The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain 

critical accounting estimates. It also requires management to exercise its judgement in the process of applying the entity’s 

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and 

estimates are significant to the financial statements are set out in the applicable accounting policy note. Refer to 

“Intangibles” note 15 and “Provisions” note 18. 

c) Principles of consolidation 

Stapled arrangements 

Australian Accounting Standards Board Interpretation 1002: Post-Date-of-Transition Stapling Arrangements (‘‘AASB 

1002’’) provides guidance on stapling arrangements relative to other Australian Accounting Standards. In particular, it 

requires one of the stapled entities to be identified as the parent entity of the stapled structure when preparing the 

consolidated financial report. Management has identified CLLT (USA) as the parent entity in the consolidated financial 

report. Equity of the other three trusts has been included in the balance sheet in the ‘‘Other entities in stapled group’’ 

equity section of the balance sheet. The consolidated profit or loss after taxation and total Comprehensive Income of the 

three trusts has been separately identified in the allocation of profit after taxation on the face of the statement of 

comprehensive income. Further details of AASB 1002 and its impacts on the Fund have been included in the note 1 (i), 

‘‘Business combinations’’. 

Subsidiaries 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CLLT (USA) as at 30 June 

2011 and the results of all subsidiaries for the year then ended. CLLT (USA) and its subsidiaries together are referred to in 

this financial report as the Fund. 

17



A$’000 



Subsidiaries are all those entities (including special purpose entities) over which the Fund has the power to govern the 

financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The 

existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing 

whether the Fund controls another entity. 

Subsidiaries are fully consolidated from the date on which control is transferred to the Fund. They are de-consolidated 

from the date that control ceases. 

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Fund (as set out in 

‘‘Business combinations’’ accounting policy note 1 (i). 

The Fund treats transactions with non-controlling interests as transactions with parties external to the Fund. Disposals to 

non-controlling interests result in gains and losses for the Fund that are recorded in the Statement of Comprehensive 

Income. Purchases from non-controlling interests result in goodwill, being the difference between any consideration paid 

and the relevant share acquired of the carrying value of identifiable net assets of the subsidiary. 

Intercompany transactions, balances and unrealised gains on transactions between Fund entities are eliminated. 

Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset 

transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the 

policies adopted by the Fund. 

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of 

comprehensive income and balance sheet respectively. 

Associates 

Associates are all entities over which the Fund has significant influence but not control, generally accompanying a 

shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the 

consolidated financial statements using the equity method of accounting, after initially being recognised at cost. 

The Fund’s share of its associates’ post-acquisition profits or losses is recognised in the Statement of Comprehensive 

Income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative postacquisition 

movements are adjusted against the carrying amount of the investment. Dividends receivable from associates 

reduce the carrying amount of the investment. 

When the Fund’s share of losses in an associate equals or exceeds its interest in the associate, including any other 

unsecured long-term receivables, the Fund does not recognise further losses, unless it has incurred obligations or made 

payments on behalf of the associate. Unrealised gains on transactions between the Fund and its associates are eliminated 

to the extent of the Fund’s interest in the associates. Unrealised losses are also eliminated unless the transaction 

provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where 

necessary to ensure consistency with the policies adopted by the Fund. 

d) Segment Reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating 

Decision makers being the board of Directors and senior executives, essentially a management approach. 

e) Foreign currency translation 

Functional and presentation currency 

Items included in the financial statements of each of the Fund’s entities are measured using the currency of the primary 

economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are 

presented in Australian dollars, which is the Fund’s functional and presentation currency. 

Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates 

of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the 

translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are 

recognised in the Statement of Comprehensive Income. 

18



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Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or 

loss are recognised in profit or loss as part of the fair value gain or loss. 

Fund subsidiaries 

The results and financial position of all of the subsidiaries of the Fund that have a functional currency different from the 

presentation currency are translated into the presentation currency as follows: 

> Assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that 

balance sheet; 

> Income and expenses for each Statement of Comprehensive Income are translated at average exchange rates 

(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction 

dates, in which case income and expenses are translated at the dates of the transactions); and 

> All resulting exchange differences are recognised as a separate component of equity. 

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the 

foreign entities and translated at the closing rate. 

f) Revenue recognition 

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net 

of discounts and refunds. 

The Fund recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic 

benefits will flow to the entity and specific criteria have been met for each of the Fund’s activities as described below. The 

amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been 

resolved. The Fund bases its estimates on historical results, taking into consideration the type of customer, the type of 

transaction and the specifics of each arrangement. 

Revenue is recognised for the major business activities as follows: 

Accommodation rental revenue 

Accommodation rental revenue is recognised on a time proportion basis in income on a straight line basis over the lease 

term. Revenue received in advance is carried as a liability on the Balance Sheet. 

Other accommodation related revenue 

Other accommodation related revenue is recognised when the service has been provided or goods have been sold to the 

customer. Other accommodation related revenue typically includes income from catering, laundry, conferences, casual 

accommodation and other incidental fees. 

Management and development fees 

Income is recognised when services have been provided to a customer in accordance with terms prescribed in formal 

Operating Agreements and Development Contracts. 

Interest 

Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is 

impaired, the Fund reduces the carrying amount to its recoverable amount, being the estimated future cash flow 

discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest 

income. Interest income on impaired loans is recognised using the original effective interest rate. 

Dividends and distributions 

Dividends and distributions are recognised as revenue when the right to receive payment is established. 

g) Income tax 

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the 

national income tax rate (or State tax rates for US operations) for each jurisdiction adjusted by changes in deferred tax 

assets and liabilities attributable to temporary differences and to unused revenue tax losses. 

19



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Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax 

bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred 

income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a 

business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred 

income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet 

date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability 

is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is 

probable that future taxable amounts will be available to utilise those temporary differences and losses. 

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and 

tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the 

temporary differences and it is probable that the differences will not reverse in the foreseeable future. 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and 

liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities 

are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise 

the asset and settle the liability simultaneously. 

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly 

in equity. 

Tax consolidation legislation 

Under current tax legislation, the stapled trusts are not liable for Australian income tax, provided that they are not taxed 

as companies under division 6C of the Income Tax Assessment Act (1936) and the taxable income is fully distributed to 

unit holders each year, and any taxable capital gain derived from the sale of an asset acquired after 19 September 1985 is 

fully distributed to unit holders. 

CLAT and CLOT (division 6C trusts) are the head entities of their respective tax consolidated groups. The head entity and 

the member entities in the relevant tax consolidated groups account for their own current and deferred tax amounts. 

These tax amounts are measured as if each entity in the tax consolidated groups continues to be a stand alone taxpayer in 

its own right, adjusted for the relevant tax consolidation entries. 

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities or 

assets and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled 

entities in the relevant tax consolidated group. 

Assets or liabilities arising under tax funding agreements with other group members are recognised as amounts 

receivable from or payable to other entities in the separate financial statements of each group member. Upon receipt of a 

funding advice, a group member will pay the head entity the amount allocated to the group member within the time frame 

specified in the funding advice. In the event that the head entity owes the group member, the same terms apply. 

The tax funding arrangement allows this payment to be settled by way of intercompany account. 

Non-Australian tax entities 

The Fund has subsidiaries in the United States of America (‘‘US’’), New Zealand (‘‘NZ’’)and the United Kingdom (‘‘UK’’), which 

do not form part of the tax consolidation group and comply with tax legislation in those countries. 

The US Property business is a Real Estate Investment Trust (‘‘REIT’’) and the taxable income of the business is taxed in the 

hands of the partners of the REIT. 

h) Leases 

Leases of property, plant and equipment where the Fund, as lessee, has substantially all the risks and rewards of 

ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the 

leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net 

of finance charges, are included in other short-term and long-term payables. Each lease payment is allocated between the 

liability and finance cost. The finance cost is charged to the statement of comprehensive income over the lease period so 

as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, 

20



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plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the lease 

term. 

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Fund as lessee are 

classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are 

charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease. 

i) Business combinations 

The purchase method of accounting is used to account for all business combinations, including business combinations 

involving entities or businesses under common control, regardless of whether equity instruments or other assets 

are acquired. Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or 

assumed at the date of exchange. Where equity instruments are issued in an acquisition, the fair value of the instruments 

is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the 

published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation 

methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are 

recognised directly in equity. 

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured 

initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of 

the cost of acquisition over the fair value of the Fund’s share of the identifiable net assets acquired is recorded as 

goodwill. If the cost of acquisition is less than the Fund’s share of the fair value of the identifiable net assets of the 

subsidiary acquired, the difference is recognised directly in the Statement of Comprehensive Income, but only after a 

reassessment of the identification and measurement of the net assets acquired. 

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their 

present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate 

at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. 

Identification of the acquirer 

The acquirer in a business combination must be identified. The acquirer is the combining entity that obtains control of 

the other combining entities or businesses. Control is the power to govern the financial and operating policies of an 

entity or business so as to obtain benefits from its activities. 

In the event that the acquirer identified is not the legal parent of the business combination, the issued capital of the Fund 

reflects the issued capital of the acquirer amended for the appropriate fair value adjustments of the business. 

j) Impairment of assets 

Goodwill is not subject to amortisation and is tested annually for impairment or more frequently if events or changes in 

circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or 

changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for 

the amount by which the asset’s carrying amount exceeds its recoverable amount. 

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes 

of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows 

which are largely independent of the cash inflows from other assets or Fund’s assets (cash-generating units). Non-financial 

assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each 

reporting date. 

k) Cash and cash equivalents 

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call 

with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that 

are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and 

bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. 

l) Trade receivables 

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective 

interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. 

21



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Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written 

off. A provision for impairment of trade receivables is established when there is objective evidence that the Fund will not 

be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the 

debtor and default or delinquency in payments more than 30 days overdue are considered indicators that the trade 

receivable is impaired. The amount of the provision on impairment is the difference between the asset’s carrying amount 

and the present value of estimated future cash flows, discounted at the original effective interest rate. 

Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of 

the provision on impairment is recognised in the Statement of Comprehensive Income in other expenses. When a trade 

receivable for which an impairment has been recognised becomes uncollectible, it is written off against the allowance 

account for trade receivables. Subsequent recoveries of amounts previously written off are credited against other 

expenses in the Statement of Comprehensive Income. 

m) Other financial assets 

Classification 

The Fund classifies its investments in the following categories: financial assets at fair value through profit or loss, loans 

and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the 

purpose for which the investments were acquired. 

Management determines the classification of its investments at initial recognition and, in the case of assets classified as 

held-to maturity, re-evaluates this designation at each reporting date. 

Financial assets at fair value through profit or loss 

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this 

category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading 

unless they are designated as hedges. Assets in this category are classified as current assets. 

Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an 

active market. They are included in current assets, except for those with maturities greater than 12 months after the 

balance sheet date which are classified as non-current assets. 

Loans and receivables are included in trade and other receivables, other current assets, receivables and other non-current 

assets in the balance sheet. 

Held-to-maturity investments 

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed 

maturities that the Fund’s management has the intention and ability to hold to maturity. If the Fund was to sell other than 

an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as 

available-for-sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities 

less than 12 months from the reporting date, which are classified as current assets. 

Available-for-sale 

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either 

designated in this category or not classified in any of the other categories. They are included in non-current assets unless 

management intends to dispose of the investment within 12 months of the balance sheet date. 

Recognition and derecognition 

Regular purchases and sales of financial assets are recognised on trade-date, being the date on which the Fund commits 

to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets 

not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially 

recognised at fair value and transaction costs are expensed in the Statement of Comprehensive Income. Financial assets 

are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred 

and the consolidated entity has transferred substantially all the risks and rewards of ownership. 

22



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When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are 

included in the Statement of Comprehensive Income as gains and losses from investment securities. 

Subsequent measurement 

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest 

method. 

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair 

value. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are 

presented in the Statement of Comprehensive Income within other income or other expenses in the period in which they 

arise. Dividend income from financial assets at fair value through profit and loss is recognised in the Statement of 

Comprehensive Income as part of revenue from continuing operations when the Fund’s right to receive payment is 

established. 

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are 

analysed between translation differences resulting from changes in amortised cost of the security and other changes in 

the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in 

profit or loss, and other changes in carrying amount are recognised in equity. Changes in the fair value of other monetary 

and non-monetary securities classified as available-for-sale are recognised in equity. 

Fair value 

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (as 

for unlisted securities), the Fund establishes fair value by using valuation techniques. These include the use of recent arm’s 

length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and 

option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs. 

Impairment 

The Fund assesses at each balance date whether there is objective evidence that a financial asset is impaired. In the case 

of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below 

its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale 

financial assets, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, 

less any impairment loss) on that financial asset previously recognised in profit or loss is removed from equity and 

recognised in the Statement of Comprehensive Income. Impairment losses recognised in the Statement of 

Comprehensive Income on equity instruments classified as available-for-sale are not reversed through the Statement of 

Comprehensive Income. 

n) Derivatives 

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently 

remeasured to their fair value, which has been determined by comparing the contracted rate to the current market rate for 

a contract with the same maturity at each reporting date. Changes in the fair value of any derivative instrument that does 

not qualify for hedge accounting are recognised immediately in the statement of comprehensive income. 

Cash flow hedge 

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is 

recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the 

ineffective portion is recognised immediately in profit or loss within other income or other expense. 

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss 

(for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of 

interest rate swaps hedging variable rate borrowings is recognised in profit or loss within ‘finance costs'. The gain or loss 

relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in profit or loss 

within ‘sales'. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for 

example, inventory or fixed assets) the gains and losses previously deferred in equity are reclassified from equity and 

included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in profit or 

loss as cost of goods sold in the case of inventory, or as depreciation or impairment in the case of fixed assets. 

23



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When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge 

accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the 

forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, 

the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss. 

o) Fair value estimation 

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for 

disclosure purposes. 

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and 

available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used 

for financial assets held by the Fund is the current bid price. 

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) 

is determined using valuation techniques. The Fund uses a variety of methods and makes assumptions that are based on 

market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used 

for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine 

fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of 

the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange 

market rates at the balance sheet date. 

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair 

values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by 

discounting the future contractual cash flows at the current market interest rate that is available to the Fund for similar 

financial instruments. 

p) Deferred expenses and other capitalised costs 

New business and tender costs are deferred to the extent they can be separately identified, measured reliably and 

it is probable that the costs are recoverable out of future revenue, do not relate to revenue which has already been 

brought into account but will contribute to the future earning capacity of the Fund. Capitalised tender expenditure is 

included to property, plant and equipment in respect of owned sites and intangible assets for management contracts. 

Costs related to unsuccessful tenders are recognised as an expense in the period in which they are incurred. 

q) Property, plant and equipment 

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is 

directly attributable to the acquisition of the items. 

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when 

it is probable that future economic benefits associated with the item will flow to the Fund and the cost of the item can be 

measured reliably. The carrying amount of any replaced part is derecognised. All other repairs and maintenance are 

charged to the Statement of Comprehensive Income during the reporting period in which they are incurred. 

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or 

revalued amounts, net of their residual values, over their estimated useful lives, as follows: 

Buildings 

Leasehold improvements 

Leased plant and equipment 

Furniture, fittings and equipment 

Vehicles 

25-40 years 

25-35 years 

10-15 years 

3-8 years 

3-5 years 

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An 

asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater 

than its estimated recoverable amount. 

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the 

Statement of Comprehensive Income. 

24



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When revalued assets are sold, amounts included in other reserves in respect of those assets are transferred to retained 

earnings. 

r) Intangibles 

Goodwill 

Goodwill represents the excess of the cost of an acquisition over the fair value of the Fund’s share of the net identifiable 

assets of the acquired subsidiary/associate at the date of acquisition. Goodwill is not amortised and is tested for 

impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is 

carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying 

amount of goodwill relating to the entity sold. 

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Cash-generating units represent the 

Fund’s investment in each country of operation by each primary reporting segment. 

Management contracts 

Management contracts acquired as part of a business combination are recognised separately from goodwill. The 

management contracts are carried at their fair value at the date of acquisition less accumulated amortisation and 

impairment losses. Amortisation of management contracts is calculated based on the timing of projected cash flows of 

the contracts over their estimated useful lives, which currently vary from 20 to 30 years. 

s) Trade and other payables 

These amounts represent liabilities for goods and services provided to the Fund prior to the end of financial year which 

are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Deferred revenue represents 

income received in advance from students at the beginning of the semester and is released to revenue when the 

recognition criteria have been met. 

t) Borrowings and borrowing costs 

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured 

at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is 

recognised in the Statement of Comprehensive Income over the period of the borrowings using the effective interest 

method. 

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or 

expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to 

another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in 

other income or other expenses. 

Borrowings are classified as current liabilities unless the Fund has an unconditional right to defer settlement of the 

liability for at least 12 months after the balance sheet date. All borrowing costs incurred for the construction of any 

qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its 

intended use or sale. Other borrowing costs are expensed. 

u) Provisions 

Provisions for legal claims and employee benefits are recognised when the Fund has a present legal or constructive 

obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and 

the amount has been reliably estimated. Provisions are not recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement 

is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an 

outflow with respect to any one item included in the same class of obligations may be small. 

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the 

present obligation at the balance sheet date. The discount rate used to determine the present value reflects current 

market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to 

the passage of time is recognised as interest expense. 

25



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v) Employee benefits 

Wages and salaries, annual leave 

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 

months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date 

and are measured at the amounts expected to be paid when the liabilities are settled. 

Long service leave 

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value 

of expected future payments to be made in respect of services provided by employees up to the reporting date using the 

projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee 

departures and periods of service. Expected future payments are discounted using market yields at the reporting date on 

national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future 

cash outflows. 

Bonus plan 

The Fund recognises a liability and an expense for bonuses based on a formula that takes into consideration the 

performance of the Fund after certain adjustments. The Fund recognises a provision where contractually obliged or where 

there is a past practice that has created a constructive obligation. 

w) Issued capital 

The issued capital of the parent entity is the unit holdings of CLLT (USA). The issued capital of the Fund is the capital of 

the acquirers identified in the business combinations in the underlying trusts. 

x) Distributions 

A provision is made for the amount of any distribution approved by the Directors on or before the end of the financial year 

but not distributed at balance date. 

y) Goods and Services Tax (GST) 

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not 

recoverable from the taxation authority, in which case it is recognised as part of the cost of acquisition of the asset 

or as part of the expense. 

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST 

recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. 

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing 

activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. 

z) Rounding of amounts 

The Fund is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investments Commission, 

relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been rounded off in 

accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar. 

aa) Parent entity financial information 

The financial information for the parent entity disclosed in note 30 has been prepared on the same basis as the 

consolidated financial statements except as set below. 

Investment in subsidiaries 

Investments in subsidiaries are accounted for at cost in the individual financial statements of the parent entity. 

26



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ab) 

New accounting standards 

AASB 9 Financial Instruments, AASB-2009-11 Amendments to the Australian Accounting Standards arising from 

AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) 

(effective from 1 January 2013). AASB 9 Financial Instruments addresses the classification and measurement of financial 

assets and is likely to affect the Fund’s accounting for its financial assets. The standard is not applicable until 1 January 

2013 but is available for early adoption. 

Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards 

(effective from 1 January 2011). In December 2009 the AASB issues a revised AASB 124 Related Party Disclosures. It is 

effective for accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment 

clarifies and simplifies the definition of a related party. When the amendments are applied, the Fund will need to disclose 

any transactions between its subsidiaries and its associates. However, there will be no impact on any of the amounts 

recognised in the financial statements. 

AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project and 

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project 

(effective for annual periods beginning on or after 1 July 2010/1 January 2011) In June 2010, the AASB made a number of 

amendments to Australian Accounting Standards as a result of the IASB's annual improvements project. The group will 

apply the amendments from 30 June 2012. The Fund does not expect that any adjustments will be necessary as the result 

of applying the revised rules. 

IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other 

Entities and revised IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures 

(effective 1 January 2013). In May 2011, the IASB issued a suite of five new and amended standards which address the 

accounting for joint arrangements, consolidated financial statements and associated disclosures. The AASB is expected 

to issue equivalent Australian standards shortly. 

IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 Consolidated and Separate Financial 

Statements, and SIC-12 Consolidation -- Special Purpose Entities. The core principle that a consolidated entity presents a 

parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of 

consolidation. However the standard introduces a single definition of control that applies to all entities. It focuses on the 

need to have both power and rights or exposure to variable returns before control is present. Power is the current ability 

to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. While 

the Fund does not expect the new standard to have a significant impact on its composition, it has yet to perform a detailed 

analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules. 

IFRS 11 introduces a principles based approach to accounting for joint arrangements. As the Fund is not party to any joint 

arrangements, this standard will not have any impact on its financial statements. 

IFRS 12 sets out the required disclosures for entities reporting under the two new standards, IFRS 10 and IFRS 11, and 

replaces the disclosure requirements currently found in IAS 28. Application of this standard by the Fund will not affect any 

of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the 

Fund’s investments. 

The Fund does not expect to adopt the new standards before their operative date. They would therefore be first applied in 

the financial statements for the annual reporting period ending 30 June 2014. 

IFRS 13 Fair Value Measurement (effective 1 January 2013). IFRS 13 was released in May 2011. The AASB is expected to 

issue an equivalent Australian standard shortly. IFRS 13 explains how to measure fair value and aims to enhance fair value 

disclosures. The Fund does not use fair value measurements extensively. It is therefore unlikely that the new rules will 

have a significant impact on any of the amounts recognised in the financial statements. However, application of the new 

standard will impact the type of information disclosed in the notes to the financial statements. The Fund does not intend 

to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting 

period ending 30 June 2014. 

27



A$’000 



Revised IAS 1 Presentation of Financial Statements (effective 1 July 2012). In June 2011, the IASB made an amendment to 

IAS 1 Presentation of Financial Statements. The AASB is expected to make equivalent changes to AASB 101 shortly. The 

amendment requires entities to separate items presented in other comprehensive income into two groups, based on 

whether they may be recycled to profit or loss in the future. It will not affect the measurement of any of the items 

recognised in the balance sheet or the profit or loss in the current period. The Fund intends to adopt the new standard 

from 1 July 2012. 

Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2011 

reporting period other than those mentioned above. The Fund has assessed the new standards and interpretations as 

unlikely to have a material impact. 

2. Financial risk management 

The Fund’s activities expose it to a variety of financial risks, which include market risk (currency risk and cash flow interest 

rate risk), credit risk and liquidity risk. The Fund’s overall risk management program focuses on the unpredictability of 

financial markets and seeks to minimise potential adverse effects on the financial performance of the Fund. 

The Fund uses derivative financial instruments such as interest rate swaps to mitigate cash flow interest rate risk. 

The Fund uses different methods to measure different types of risk to which it is exposed. These methods include 

sensitivity analysis in the case of interest rate and foreign exchange risk; age analysis for credit risk; and cash flow 

forecasts for liquidity risks. 

The Fund holds the following financial instruments: 


Financial assets 

Cash and cash equivalents 8 72,210 75,213 

Trade and other receivables 10 4,864 9,715 

Derivative financial instruments 9 - 56 


77,412 85,322 

Financial liabilities 


Borrowings 19 692,859 856,465 


758,466 939,878 

a) Currency risk 

Subsidiaries of the Fund are located in Australia, the US, NZ and the UK and operate and source external financing in their 

local currencies. Management of the Fund monitors the exchange rate fluctuations between the Australian Dollar and the 

local currencies of the foreign subsidiaries on a regular basis. If the exchange rates fluctuated by 10% the loss after tax 

would vary by $2.3m and the net assets would vary by $63.2m. 

Management have not utilised any derivative financial instruments to date to hedge the foreign currency risk of earnings 

from subsidiaries in accordance with an agreement with the unit holders of the Fund. Management will institute the 

appropriate action and utilise the necessary derivative financial instruments should there be a change in agreement with 

the unit holders. Forward exchange contracts are utilised to hedge currency risk on the equity portion of capital projects. 

Loans are made during the year between entities within the Fund for purposes of providing funding for capital 

expenditure or the net investment in subsidiaries. The currency of the loan is generally denominated in the currency of the 

lender and the loans are valued at balance sheet spot rate at each reporting date. 

b) Credit Risk 

Credit risk arises from cash and cash equivalents, deposits with major banks and financial institutions, as well as credit 

exposure to students and universities, including outstanding receivables and committed transactions. Credit granted to 

28



A$’000 



customers is monitored regularly and past due receivables are followed up with customers. Student deposits are used as 

security and applied against outstanding amounts. Legal contracts provide the basis for collection of outstanding 

amounts relating to management and development contracts. Only banks and financial institutions with high credit ratings 

are used to deposit funds. Refer to ‘Trade and other receivables’ note 10. 

c) Liquidity risk 

Cash flow forecasts are utilised to manage liquidity risk. Capital expenditure is funded through borrowings and equity 

calls from investors. Repayments of borrowings are funded through cash generated from operations and equity calls from 

investors where required. 

The financing facilities available are included in note 8 (c). The forecasted payments of interest and principal of 

borrowings for the remaining contractual liabilities are: 

Due within 

one year 

Due within 

1-5 years 

Due after 

five years 


Loans from financial institutions 

- Fixed 124,474 89,350 217,870 431,694 

- Variable 21,305 218,721 233,822 473,848 

- Swaps 5,310 13,621 7,418 26,349 

Total loans from financial institutions 151,089 321,692 459,110 931,891 

Lease liabilities - fixed 2,094 7,435 39,940 49,469 

Total undiscounted financial liablities 153,183 329,127 499,050 981,360 



- Fixed 16,249 171,537 74,800 262,586 

- Variable 246,747 151,093 256,176 654,016 

- Swaps 12,313 17,173 14,792 44,278 

Total loans from financial institutions 275,309 339,803 345,768 960,880 


Total undiscounted financial liablities 277,248 346,902 387,824 1,011,974 

Total 

d) Cash flow interest rate risk 

Floating to fixed interest rate swaps are utilised to hedge against cash flow interest rate risks. Such interest rate swaps 

have the economic effect of converting borrowings from floating rates to fixed rates. Under the interest rate swap 

contracts, the Fund agrees with financial institutions to exchange, at specified intervals (mainly quarterly), the difference 

between fixed contract rates and floating-rate interest amounts calculated by reference to agreed notional principal 

amounts. 

Interest payments are fixed through the use of interest rate swaps and fixed interest rate loans. The fixed loans from 

financial institutions relate to loans raised in the US. The table below is a summary of the hedged portion of debt and the 

weighted average interest rates (excluding credit margins) for the hedged debt. 

Bookmark052 

Hedged 

Weighted average 

portion 

interest rates 

June 2011 June 2010 June 2011 June 2010 

Region % % % % 

United States - 90 - 5.3 

Australia 90 90 6.6 6.7 

New Zealand 85 85 6.8 6.6 

United Kingdom 100 100 3.3 5.4 

The variable portion of the interest payments are subject to change in floating interest rates and a 50 basis points 

increase results in $151k (2010 $360k) additional interest per annum. 

29



A$’000 

The carrying amount of the borrowings is summarised below: 



June 2011 June 2010 


- Fixed 313,711 258,464 

- Variable 33,967 71,083 

- Swaps 322,645 504,636 

Total loans from financial institutions 670,323 834,183 

Lease liabilities - fixed 22,536 22,282 

Total undiscounted financial liablities 692,859 856,465 

The weighted average interest rates (excluding credit margins) of the borrowings are summarised as: 

Bookmark009 


% % 

Loans from financial institutions 6.34 6.00 

Lease liabilities - fixed 6.95 6.95 

e) Fair value measurement 

Derivative financial instruments 

The fair value of derivative financial investments is based on external valuations and is measured using forward interest 

rates with the same maturity dates as the underlying instruments. Changes in fair value are recorded in profit or loss. In 

accordance with AASB 7 Financial Instruments: Disclosures, the interest rate swap instruments are considered a level 2 

financial instrument in the fair value measurement hierarchy. 

3. Segment information 

The Fund manages the business by country and reports to the board and senior management reflect the information set 

out below. 

AU NZ US UK Group Eliminations Total 

30 June 2011 

Revenue* 68,883 12,045 79,208 4,954 97 (283) 164,904 

Operating expenses (35,737) (8,655) (52,334) (3,350) (7,699) (648) (108,423) 

EBITDA 33,146 3,390 26,874 1,604 (7,602) (931) 56,481 

Net borrowing costs (32,537) (2,619) (27,324) (519) 11,734 (934) (52,199) 

Depreciation, amortisation and impariment (14,631) (4,140) (21,843) (754) (28) (18,236) (59,632) 

Loss on disposal of assets (3) - (158) (81) - - (242) 

Fair value adjustments 4,220 206 4,189 (183) (137) 2,076 10,371 

- Interest rate swaps 3,162 206 6,295 76 - - 9,739 

- Net foreign exchange movements - - 14 (329) (1,070) - (1,385) 

- Foreign exchange on group borrowings 1,058 - (2,120) 70 933 2,076 2,017 

Loss before taxation (9,805) (3,163) (18,262) 67 3,967 (18,025) (45,221) 

30 June 2010 

Revenue* 55,029 12,957 88,041 4,253 11,607 (11,726) 160,161 

Operating expenses (34,596) (7,142) (49,906) (3,453) (4,562) 4 (99,655) 

EBITDA 20,433 5,815 38,135 800 7,045 (11,722) 60,506 

Net borrowing costs (23,009) (2,653) (30,185) (1,359) 7,405 - (49,801) 

Depreciation, amortisation and impariment (15,639) (2,890) (20,720) (802) (434) (563) (41,048) 

Profit on disposal of assets - - 1,804 - - - 1,804 

Fair value adjustments (5,244) 282 5,131 (2,295) (286) 2,716 304 

- Interest rate swaps (4,891) 282 7,042 (1,489) - - 944 

- Foreign exchange on group borrowings (353) - (1,911) (806) (286) 2,716 (640) 

Loss before taxation (23,459) 554 (5,835) (3,656) 13,730 (9,569) (28,235) 

* Revenue includes other income. 

30



A$’000 



4. Revenue 


Accommodation rental revenue 161,606 155,721 

Management fees 3,000 3,366 

Development revenue - 256 

Interest 1,337 948 


Total revenue 166,212 160,509 

5. Other income 


Profit on disposal of property, plant and equipment - 1,804 

Other income 28 600 

Total other income 28 2,404 

6. Expenses 

Profit before taxation includes the following items: 


Borrowing and Finance Costs 

Interest and finance charges 52,401 53,424 

Interest capitalised (1,406) (2,675) 

Interest and finance charges expensed 50,995 50,749 

Foreign exchange on intercompany borrowings (2,018) 640 

Amortisation of borrowing costs 2,540 2,712 

Total borrowing and finance costs expensed 51,517 54,101 

Other expenses includes: 

Property running costs 38,513 34,850 

Development costs written off 970 9 

Loss on disposal of assets 242 - 

Marketing 4,727 4,586 

Auditors remuneration 698 1,072 

Professional fees 3,726 1,849 

Net foreign exchange gains and losses 1,386 - 

Bad debts 4,224 2,908 

Other administrative expenses 9,649 10,418 

Rent 11,657 11,272 

Total other expenses 75,792 66,964 

31





A$’000 

7. Taxation 

a) Income tax expense 



Current tax 

- Current year 890 521 

- Prior year under provision 10 67 

Deferred tax 

- Current year (554) 3,637 

- Change in New Zealand tax rate - (555) 

- Prior year under provision - 519 

Total tax expense 346 4,189 

b) Reconciliation of income tax expense to prima facie tax payable 



Tax at the Australian tax rate rate of 30% (2010: 30%) (13,566) (8,471) 

Non-taxable trust profits (distributions) (2,043) (352) 

Difference in overseas tax rates (1,836) (141) 

Losses not recognised 16,847 8,143 

New Zealand tax law changes - 4,446 

Prior year under provision and utilisation of prior year losses - 533 

Witholding tax 126 67 

Other 818 (36) 

Income tax expense 346 4,189 

c) Deferred taxation 


Deferred taxation asset (1,103) (952) 

Deferred taxation liability 11,546 12,357 

Net deferred taxation liability 10,443 11,405 

This balance comprises temporaty differences attributed to: 

- Derivative financial instruments (4,853) (5,716) 

- Property, plant and equipment 24,675 25,989 

- Intangible assets 6,366 6,688 

- Provisions (389) (306) 

- Other (437) (1,003) 

Net temporary differences 25,362 25,652 

Deferred tax attributible to unused tax losses and tax credits (14,919) (14,247) 

Net deferred taxation liability 10,443 11,405 

The movement in the deferred tax balance for the year is: 

- Opening balance 11,405 7,398 

- Charge recorded in the income statement (554) 3,601 

- Reclassification of tax receivable - 440 

- Foreign currency translation movements (408) (34) 

Closing balance 10,443 11,405 

32



A$’000 



d) Unrecognised tax losses 

CLOT, as head entity of an Australian tax consolidated group from 1 July 2007, did not recognise a deferred tax asset for 

Australian tax losses incurred from 1 July 2007. The estimated tax losses of A$82k will potentially recognise a deferred tax 

asset of A$25k. 

Campus Living Villages UK Limited did not recognise a deferred tax asset for UK tax losses incurred from 1 July 2008 . The 

estimated tax losses of £1.427m will potentially recognise a deferred tax asset of £371k. 

CCHM Management Holdings Corporation did not recognise a deferred tax asset for US tax losses incurred from 9 January 

2007. The estimated tax losses of US$10.4m will potentially recognise a deferred tax asset of US$3.6m. 

CLLT (USA) did not recognise a deferred tax asset for Australian tax losses incurred from 1 July 2007. The estimated tax 

losses of A$894k will potentially recognise a deferred tax asset of A$268k. 

CLAT, as head entity of an Australian tax consolidated group from 1 July 2007, did not recognise a deferred tax asset for a 

proportion of Australian tax losses incurred from 1 July 2007. The estimated tax losses of A$35.9m will potentially recognise 

a deferred tax asset of A$10.7m. 

8. Cash and cash equivalents and notes to the cash flow statement 

a) Cash at year end comprises 


Cash at bank and on hand 26,441 38,692 

Restricted cash 45,769 36,521 

Cash and cash equivalents 72,210 75,213 

The property business holds restricted cash for certain uses under loan agreements, statutory requirements such as rules 

relating to resident security deposits, and asset maintenance agreements with the universities. 

33



A$’000 



b) Reconciliation of loss for the year to net cash flow from operating activities: 



Adjustment of non-cash items: 

Depreciation and amortisation 38,093 37,548 

Impairment of assets 24,080 3,500 

Equity profits not received (42) 6 

Fair value adjustments of derivatives (9,739) (944) 

Dividends received from equity accounted investments 224 407 

Bad debts 4,224 2,908 

Development costs written off 970 - 

Unrealised foreign exchange on borrowings (2,018) 640 

Foreign exchange loss 1,386 - 

Profit on disposal of property, plant and equipment 242 (1,804) 

Total non-cash items 57,420 42,261 

Movements in operating assets and liabilities: 

Trade and other receivables (48) 353 

Inventories (15) (5) 

Other current assets (58) (265) 

Tax balances (181) 4,300 

Interest accruals 531 171 

Trade and other payables (19) 3,681 

Provisions (832) (3,266) 

Net cash inflow from operating activities 11,231 14,806 

c) Financing facilities 


Used at balance sheet date 

Letters of credit - 10,752 

Loans from financial institutions 680,634 865,956 

Unused at balance sheet date 



34



A$’000 



9. Derivative financial instruments 

The Fund entered into variable to fixed interest rate swaps and forward exchange contracts as included in note 2 (d). 

The derivative instruments that have met the hedge criteria in AASB 139 Financial Instruments: Recognition and 

Measurement record the changes in fair value in hedging reserves and the derivative instruments that do not meet the 

hedging criteria or have an ineffective portion are recorded in profit or loss. 


Non-current assets 

Interest rate swaps - 56 

Non-current liability 

Interest rate swaps 20,673 30,391 

Total 20,673 30,335 

10. Trade and other receivables 


Trade receivables 7,188 8,746 

Provision for impairment of receivables (3,627) (3,192) 

3,561 5,554 

Loan to US non-controlling shareholder - 3,440 

Other debtors 1,303 721 

Total trade and other receivables 4,864 9,715 

The movement of the provision is: 

- Opening balance 3,192 2,249 

- Net impairments during the year 1,064 546 

- Foreign exchange movements (629) 397 

Closing balance 3,627 3,192 

The ageing of the impaired receivables are: 

- Less than 60 days 9 4 

- 61 to 90 days - 278 

- 91 days and greater 3,618 2,910 

Total provision 3,627 3,192 

The total trade receivables balance represents: 

- Not past due and not impaired 1,961 2,786 

- Past due and not impaired 1,600 2,768 

- Past due and impaired 3,627 3,192 

Total trade receivables 7,188 8,746 

The ageing of the past due and not impaired receivables are: 

- Less than 60 days 612 711 

- 61 to 90 days 597 153 

- 91 days and greater 391 1,904 

Total past due and not impaired receivables 1,600 2,768 

The carrying value of other debtors and other current assets approximates the fair value due to the short term nature of 

the receivable. These assets do not earn interest nor is collateral obtained. 

35



A$’000 



11. Other current assets 


Prepayments 2,679 3,161 

Deposits 187 311 

Total other current assets 2,866 3,472 

12. Assets and liabilities classified as held for sale 


Non-current assets held for sale 

Land and buildings 12,407 - 

Total assets held for sale 12,407 - 

During the 2011 financial year the Fund’s Directors decided to sell the following properties: 

> Studio Green Tallahassee property in Florida is expected to be sold for approximately US$7m net of selling costs. 

As at the time of signing this report, CLV is finalising an agreement with the lender which stipulates that the Fund 

will be released from the debt obligation of US$12.1m once the proceeds from the sale and the net proceeds from 

the related US$2m cash backed letter of credit are provided to the lender. 

> Delaware Waterview Court property in Delaware was intended to be sold as part of the original strategy when the 

Delaware Studio Green and Waterview Court Properties were purchased in 2008 as it is not a student 

accommodation. It is expected to be sold for approximately US$6.2m net of selling costs. The proceeds from the 

sale will be used to partially settle the senior and mezzanine loans attached to the Delaware properties. 

13. Financial Assets 


Other financial assets 338 338 

Equity accounted investments 1,452 2,054 

Total financial assets 1,790 2,392 

Other financial assets relates to a 2.5% holding in Carillon Avenue Pty Limited and is held at cost and subject to 

impairment. The Directors are of the opinion that cost approximates fair value. 

The equity accounted investment is a 49% holding in a US incorporated student accommodation company University of 

Advancing Technology (“UAT”) . 

a) Movement in the carrying amount of the equity accounted investment 


Opening balance 2,054 2,585 

Share of profit/(loss) after tax 35 (6) 

Dividend received (224) (407) 

Foreign exchange movements (413) (118) 

Closing balance 1,452 2,054 

36



A$’000 



b) Summarised financial information of the associate (Fund’s share) 


Assets 4,517 6,299 

Liabilities 3,304 4,328 

Revenue 922 1,056 

Profit after tax 35 (6) 

14. Property, plant and equipment 

Land and 

Buildings 

Plant and 

Equipment Leased Assets Total 


Cost 962,990 34,588 46,719 1,044,297 

Accumulated depreciation (78,290) (15,892) (7,923) (102,105) 

Accumulated impairment (37,405) - - (37,405) 

Net book amount 847,295 18,696 38,797 904,787 

Reconciliation of opening to closing net book amount 

Opening net book amount 967,023 24,464 40,943 1,032,430 

Additions 57,068 4,225 445 61,738 

Impairment of assets (24,080) - - (24,080) 

Depreciation (27,470) (4,869) (1,425) (33,764) 

Disposals (239) (206) - (445) 

Reclassification to Assets Held for Sale (12,407) - - (12,407) 

Foreign currency movements (112,601) (4,918) (1,166) (118,685) 

Closing net book amount 847,294 18,696 38,797 904,787 


Cost 1,059,480 37,978 47,610 1,145,068 

Accumulated depreciation (79,132) (13,514) (6,667) (99,313) 


Net book amount 967,023 24,464 40,943 1,032,430 


Opening net book amount 906,431 19,781 42,025 968,237 

Additions 128,470 10,566 - 139,036 


Depreciation (27,157) (4,606) (1,464) (33,227) 

Disposals (15,420) - - (15,420) 

Foreign currency movements (21,801) (1,277) 382 (22,696) 

Closing net book amount 967,023 24,464 40,943 1,032,430 

The carrying amounts of the assets include expenditure for the asset under construction of $37.9m (2010: $17.8m). Details 

of assets pledged as security is included in the borrowings note (refer note 19 (c) ). 

Impairment of assets 

Oklahoma City University, University of New Orleans, University of Canterbury and University of Western Sydney have 

had lower than expected occupancy due to a variety of factors. The long term assumptions and forecasts have been 

amended in the NAV to reflect these factors which has resulted in the following impairments in 2011: 

> Oklahoma City University - US$0.9m 

> University of New Orleans -- US$2.9m 

> University of Canterbury - NZ$1.9m 

> University of Western Sydney - A$0.1m 

The Directors have decided to sell the Studio Green Tallahassee property in Florida which has been reclassified as a noncurrent 

asset held for sale and has been written down to the estimated selling price net of selling costs of US$7m. Total 

impairment for the year on this property was US$2.5m. 

The Directors have decided to sell the Delaware Waterview Court property, which has been reclassified as a non-current 

asset held for sale and has been written down to the estimated selling price net of selling costs of US$ 6.2m. Total 

impairment for the year on this property was US$2.6m. 

37



A$’000 



The Delaware Studio Green property was due for refinancing in July 2011. As these borrowings were not refinanced by the 

due date, the Fund is in default of the debt facility agreement. The carrying amount of Property, plant and equipment has 

been written down to the fair value of the debt outstanding as at 30 June 2011 of US$47.2m. Total impairment for the year 

on this property was US$14.7m. 

The city of Christchurch (location of University of Canterbury) continues to experience earthquake activity. There is 

uncertainty about the extent of economic impact on the city and the university and on the timeframe over which the city 

might rebuild and recover. 

Sensitivity Analysis 

If the discount rate used had been 1% higher than management’s estimate, the Fund would have recognised a further 

impairment of $13.9m. 

If the budgeted revenue was 5% lower each quarter than management’s estimate, the Fund would have recognised a 

further impairment of $13m. 

If the budgeted operating expenditure was 5% higher each quarter than management’s estimate, the Fund would have 

recognised no further impairment. 

15. Intangibles 

Goodwill Other intangibles Total 


Cost or fair value 16,287 29,036 45,323 

Accumulated amortisation - (6,170) (6,170) 

Net book amount 16,287 22,866 39,153 


Opening net book amount 19,803 23,932 43,735 

Amortisation - (1,788) (1,788) 

Foreign currency movements (3,516) 722 (2,794) 

Closing net book amount 16,287 22,866 39,153 







Amortisation - (1,609) (1,609) 

Foreign currency movements (941) 450 (491) 


Goodwill 

Goodwill is largely recorded in the US Property and Management businesses. Goodwill is not amortised and is subject to 

an annual impairment test. The recoverable amount is determined by value-in-use calculations. 

The value-in-use calculations use cash flow projections based on financial budgets in the Fund valuation model adjusted 

for latest market conditions and business developments. 

The key assumptions in the cash flow forecasts are rental growth, facility management fee income growth, capital 

expenditure growth and discount rate. The recoverable amounts of the US Property and Management non-current assets 

are $492m and $29m (2010: $579m and $19m) respectively which is in excess of the carrying amount of $419m and $18m 

(2010: $561m and $9m) respectively. Management do not consider changes in the underlying assumptions to have a 

significant effect on the recoverable amount. 

Other Intangibles 

Other Intangibles include student and management contracts. Management contracts acquired as part of a business 

combination are recognised separately from goodwill. The management contracts are carried at their fair value at the 

date of acquisition less accumulated amortisation and impairment losses. Amortisation of management contracts is 

calculated based on the timing of projected cash flows of the contracts over their estimated useful lives, which currently 

vary from 20 to 30 years. 

38



A$’000 



16. Other non-current assets 


Deferred expenses and other capitalised costs 1,403 1,765 

These deferred expenses and other capitalised costs represent development and tender costs incurred on capital 

projects. Upon financial close of the project, these costs will be included in Property, plant and equipment. 

17. Trade and other payables 


Trade creditors 3,874 5,792 

Distribution accruals 7,000 10,100 

Prepaid rent and deferred rent revenue 12,396 11,940 

Security deposits 5,453 5,925 

Other creditors and accruals 16,211 19,265 

Total trade and other payables 44,934 53,022 

18. Provisions 


Current portion 

Annual leave 1,138 1,010 

Non-current portion 

Long service leave 123 151 

Performance fee - 1,052 

123 1,203 

Total provisions 1,261 2,213 

The performance fee payable to CLFM is subject to the total fund management fees being capped at 1.5% of the NAV as 

determined in the final NAV of the Fund. The fee above the cap is nil (2010: $1.1m) . 

39



A$’000 



19. Borrowings 

a) Borrowings are classified into current and non-current borrowings as follows: 


Current 

Loans from financial institutions 111,512 228,164 

Lease liabilities 746 597 

Total current borrowings 112,258 228,761 

Loans from financial institutions 558,811 606,019 

Lease liabilities 21,790 21,685 

Total non-current borrowings 580,601 627,704 

Total borrowings 692,859 856,465 

The sum of the carrying amount of borrowings and the interest rate swap asset and liabilities approximate the fair value 

of the borrowings. 

The first and second lien loans on the Century 16 portfolio amounting to US$201m were refinanced on 31 March 2011 with a 

US Private Placement (USPP) note issue amounting to US$120m. The balance of the loans were repaid via equity called 

from investors. 

Delaware (US$55.5m) and Illini (US$41.7m) external borrowings were due for repayment in July 2011. Illini was refinanced in 

July 2011. Delaware is in term default. The underlying assets relating to the Delaware loans have a carrying value of 

US$53.4m and are security for the external borrowings if the default is not remedied. A$48.1m of uncalled equity is 

available for capital projects which can be utilised to fund any shortfall. 

The carrying amount of borrowings for Studio Green Tallahassee of US$12.1m has been classified as current as the 

underlying property has been classified as an Asset held for sale.. 

b) Borrowings are classified as secured and unsecured as follows: 


Secured borrowings 




40



A$’000 



c) Assets pledged as security 

The external loans have been financed with limited recourse debt. The package of securities that is normally provided is as 

follows: 

> A first ranking all assets fixed and floating charge granted by the Borrower in favour of the financial institution; 

> A first ranking mortgage of the lease from the University to the Borrower; and 

> A first ranking share mortgage granted by the Parent of the Borrower in relation to all shares held by the Parent 

in the Borrower. 

Assets pledged as security June 2011 June 2010 


Cash and cash equivalents 55,508 54,703 

Trade and other receivables 2,989 5,924 


Other current assets 2,262 3,473 

Assets held for sale 12,407 - 


Non-current Assets 

Equity accounted investments 1,452 2,054 

Derivative financial instruments - 52 

Property, plant and equipment 892,296 1,020,516 

Intangible assets 16,622 25,953 

Other non-current assets 258 362 

Total Non-current Assets 910,628 1,048,937 

Total Assets 983,823 1,113,073 

20. Issued capital 

a) Reconciliation of parent entity issued capital 



Issue of capital for the year 56,587 52,530 


Balance at the end of the year 235,258 178,739 

b) Reconciliation of other stapled entities issued capital 




Equity raising costs (112) (13) 

Distribution of capital for the year (191) (14,927) 


The stapled entity has 717,213,643 (2010: 413,458,590) units in issue. The issued capital of the Fund is the capital of the 

acquirers identified in the business combinations in the underlying trusts. 

The Fund has uncalled committed equity from unit holders of $48.1m (2010: $28.3m). Distributions to shareholders are 

based on cash generated during the year and forecasted cash requirements 

41



A$’000 



21. Accumulated losses 

a) Reconciliation of parent entity accumulated losses 


Opening balance (65,054) (63,676) 


Distribution of income for the year - - 

Balance at the end of the year (94,176) (65,054) 

b) Reconciliation of other stapled entities accumulated losses 




Distribution of income for the year (6,809) (1,172) 


22. Reserves 


Parent entity 

Foreign currency translation reserves (23,825) 150 

Acquisition of non-controlling interest (1,725) - 

(25,550) 150 

Other stapled entities 

Foreign currency translation reserves (4,428) (3,031) 

Business combination reserves 3,324 3,323 

Hedging Reserve (1,267) - 

(2,371) 292 

Balance at the end of the year (27,921) 442 

Foreign currency translation reserve 

The Fund has subsidiaries that operate in the US, NZ and the UK with functional currencies of US Dollar (USD), New 

Zealand Dollar (NZD) and the British Pound (GBP) respectively. As such, exchange differences arise when translating the 

financial information of these entities into the Australian Dollar, the reporting currency of the Fund. 

Business combination reserve 

The reserve arose on formation of the Fund as a result of the deemed acquisition of the consolidated entities of CLAT, 

CLOT and CLFT by CLLT (USA). 

Acquisition of non-controlling interest 

During the financial year the Fund acquired the 11% non-controlling interest of the Temple property. The difference 

between the purchase price and the non-controlling interest previously recognised is recorded in reserves. 


The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in 

other comprehensive income . Amounts are reclassified to profit or loss when the associated hedged transaction affects 

profit or loss. 

42





A$’000 

23. Non-controlling interests 


Balance at the beginning of the year 4,877 4,869 

Profit for the year 227 583 

Acquisition of non-controlling interest (3,630) - 

Distributions to minorites (193) (595) 

Foreign currency movements 1 20 


24. Distributions 


Income distribution 6,809 1,172 

Capital distribution 191 14,927 

Total distribution 7,000 16,099 

25. Key management personnel remuneration (denominated in A$) 


Short term employee benefits 3,107,155 1,814,126 

Post employment benefits 117,005 124,179 

Long term benefits 5,158 11,865 

Total key management personnel remuneration 3,229,318 1,950,170 

26. Auditor’s remuneration (denominated in A$) 


Remuneration for the audit of the financial report: 

PwC Australia 273,000 331,000 

PwC Overseas 351,000 492,000 

624,000 823,000 

Remuneration for other services: 


PwC Overseas 64,586 241,428 

73,716 248,695 

43



A$’000 



27. Related party transactions 

A description of the stapled entities and subsidiaries is provided in the Subsidiaries note 31 and disclosure of key 

management personnel remuneration is included in the key management personnel disclosures note 25. 

The nature and type of related party transactions include (denominated in A$): 

Management fees 

Management fees charged by management companies to the village operations are based on a percentage of revenue or 

gross operating profit. 

Sub-lease of university accommodation 

The ground lease from certain universities is sub-leased to the related accommodation companies at a margin. 

Development fees 

The development companies that manage the construction of new facilities charge a development management fee to the 

companies that own the new facilities. The fee is based on a percentage of construction cost. Development fees earned on 

acquisition of an asset are determined on a sliding scale that is market related. 

Bid costs for new sites are incurred by development companies and charged to the subsidiary that will earn 

revenue from the new contract and own the new facilities. 

Loans and interest 

Loans are made between subsidiary companies and stapled entities to provide short term and long term financing to 

better utilise group funds available. Loans are also in place between stapled entities and subsidiary companies on 

formation of the stapled entity. Interest is charged on loans between entities within the Fund at rates that approximate 

bank lending rates. CLFT obtained financing from Transfield Finance Pty Limited in the current year and repaid the loan of 

$6.3m during the year. Interest charged on this loan was $0.01m and was market related. 


Dividends and distributions are declared from subsidiary companies to entities within the Fund. 

Fund manager fees paid to the Responsible Entity 

The Fund manager fees are allocated to each trust based on the NAV of the trust. The constitutions of the individual trusts 

prescribe the method of calculation of the fund manager fees, which are borne by the individual trusts. The total fees 

payable to CLFM is subject to the total fund management fees being capped at 1.5% of the NAV of the trust as determined 

and calculated in the final NAV of the Fund. The fees above the cap can be payable in future years if the fees earned in 

those years are below the cap at that date. This amount is recorded as a provision (refer note 18) and is discounted to 

reflect the estimated timing and value of the future payment. 

Management fees paid to the Responsible Entity (‘‘RE’’) CLFM include base fees $2,048,815 (2010: $1,476,384), 

performance fees below the cap $899,000 (2010: $4,196,015) and performance fees above the cap which are included in 

provisions (refer note 18). 

Directors fees paid to Responsible Entity 

Directors’ fees of $542,348 (2010: $303,142) have been paid to the non-executive Directors of the RE. 

Support service costs 

The Fund paid CLFM $179,957 (2010: $27,850) in equity raising costs and paid Transfield Holdings Pty Ltd nil (2010: 

$377,689) for development projects, $529,136 (2010: $939,503) for IT services and hardware and $988,700 (2010: 

$1,264,030) for secondment of staff. 

Sydney head office premises 

The Fund leases head office premises from Transfield Holdings Pty Ltd and paid rent of $513,915 (2010: $377,098). 

Lease 

Campus Living Flemington Road paid a lease payment of $4,272,441 (2010:$ 3,839,216) to Transfield Siruya Joint Venture. 

44



A$’000 



28. Commitments 

a) Capital commitments 

Capital expenditure contracted for at reporting date but not recognised as a liability is: 

Property, plant and equipment June 2011 June 2010 

Payable within one year 21,989 17,521 

Total property, plant and equipment 21,989 17,521 

b) Lease commitments 

Commitments in relation to leases contracted for at reporting date but not recognised as liabilies is as follows: 



Payable within two to five years 12,144 10,068 

Payable after five years 36,986 41,259 

Total lease commitments 52,796 54,762 

These lease commitments represent: 

Non-cancellable operating leases (c) 25,864 25,950 

Future finance charges on finance leases (d) 26,932 28,812 


c) Operating leases 

The Fund leases office space and accommodation from certain universities, which have varying terms, escalation clauses 

and renewal rights. Commitments for minimum lease payments of non-cancellable operating leases are: 



Payable within two to five years 6,835 4,654 


Total operating leases 25,864 25,950 

d) Finance leases 

The Fund leases various property, plant and equipment under finance leases. Commitments of finance leases are: 



Payable within two to five years 7,435 7,099 


Minimum lease payments 49,469 51,094 

Future finance charges (26,932) (28,812) 

Total finance lease liability 22,537 22,282 

29. Contingencies 

The Fund has provided AUD$435k, NZD$450k and USD$2.6m (2010: $10.8m) of letters of credit and bank guarantees. 

These items relate to operator bonds, guarantees and debt service payments. 

45



A$’000 



30. Parent entity financial information 

a) Summary financial information 

Parent entity financial information is as follows: 

Balance sheet June 2011 June 2010 

Current assets 1,104 2,766 

Total assets 239,864 185,627 

Current liabilities 946 2,667 

Total liabilities 946 3,001 

Equity 

Issued capital 235,254 178,739 

Retained earnings 3,664 3,887 

238,918 182,626 

Loss for the year 223 106 

Total comprehensive income 223 106 

b) Contingent liabilities of the parent entity 

The parent entity did not have any contingent liabilities as at 30 June 2011 or 30 June 2010. 

c) Contractual commitments of the parent entity 

The parent entity did not have any contractual commitments as at 30 June 2011 or 30 June 2010. 

46



A$’000 



31. Subsidiaries 

Country incorporated 

Percentage ownership (%) 


Direct subsidiaries 

CCHM Property Holding Parent LLC USA 100 100 

Campus Living Investments Pty Ltd Australia 100 100 

Stapled entities 

Campus Living Finance Trust Australia 100 100 

Campus Living Australia Trust Australia 100 100 

Campus Living Overseas Trust Australia 100 100 

Subsidiaries of CLAT 

CLV Accommodation Holdings Pty Ltd Australia 100 100 

CLV Land Trust Australia 100 100 

Campus Living Land Trust Australia 100 100 

Campus Living Villages Pty Ltd Australia 100 100 

Campus Living Flemington Road Pty Ltd Australia 100 100 

Campus Living Land Trust (Kelvin Grove) Australia 100 100 

Campus Living Accommodation Company Pty Limited Australia 100 100 

Campus Living Villages Murdoch Pty Ltd Australia 100 100 

UNSW Village Pty Ltd Australia 100 100 

Campus Living Villages (Canberra) Pty Ltd Australia 100 100 

CLV Parramatta Holdings Pty Ltd Australia 100 100 

Campus Living Villages (Parramatta) Pty Ltd Australia 100 100 

CLV at ECU Holdings Pty Ltd Australia 100 100 

Campus Living Villages AT ECU Pty Ltd Australia 100 100 

CLV (SCU) Holdings Pty Limited Australia 100 100 

Campus Living Villages (SCU) Pty Limited Australia 100 100 

CLV Management Services Pty Ltd Australia 100 100 

Subsidiaries of CLOT 

CCHM Management Holdings Corp USA 100 100 

Campus Living Accommodation Company (USA) Pty Limited Australia 100 100 

CLV UK Accommodation Holdings Pty Limited Australia 100 100 

Campus Living Villages Salford Pty Limited Australia 100 100 

Campus Living Villages Bedfordshire Pty Limited Australia 100 100 

Campus Living Villages NZ Limited New Zealand 100 100 

Campus Living Villages UK Limited UK 100 100 

Campus Living Villages (Operations) UK Limited UK 100 100 

Campus Living Villages (Salford) Pty Limited UK 100 100 

Campus Living Villages (Bedfordshire) Limited UK 100 100 

Subsidiaries of CLFT 

CLV Finance Pty Ltd Australia 100 100 

CLV Finance UK Limited UK 100 100 

32. Solvency position 

As at 30 June 2011, the Fund had a current asset deficit of $66.8m (current liabilities: $159.2m; current assets $92.4m). The 

Directors believe that the going concern assumption remains appropriate due to the existence of uncalled equity, the 

status of the refinancings and the limited recourse nature of the current borrowings. 

47



A$’000 



33. Events occurring after the balance sheet date 

The Fund received $6.6m of equity during July 2011 to fund refinancing projects. 

Illini external borrowings were US$41.7m as at 30 June, 2011. The Fund secured refinancing of the Illini debt totalling 

US$38m on 5 July 2011 with a tenor of 10 years. 

Delaware external borrowings were US$55.5m as at 30 June, 2011. This includes senior debt of US$47m and a mezzanine 

loan of US$8.5m. The RE has resolved to list Waterview Court (the non-student accommodation asset the Delaware 

portfolio) with proceeds used to partially reduce the existing senior and mezzanine debt. 

Delaware external borrowings were due for repayment in July 2011 and therefore the borrowers are in default. The 

underlying assets relating to these properties have a book of US$53.4m which were subject to risk as at 30 June 2011 as 

the assets are security for external borrowings if the default is not remedied. 

The Fund anticipates that the Delaware refinancing will be completed 31 December 2011 and equity will be contributed to 

the project to cover the refinancing shortfall including the refinancing costs. The Fund has A$48.1m of uncalled equity 

available which can be utilised to fund the shortfall. 


adjustment to the financial statements or may significantly affect the Fund’s operations in future financial years, the 

results of those operations in future financial years, or the Fund’s state of affairs in future financial years. 

48



DIRECTORS’ DECLARATION 


In the Directors’ opinion: 

a) The financial statements and notes set out on pages 13 to 48 are in accordance with the Corporations Act 2001, 

including: 

> complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional 

reporting requirements; 

> giving a true and fair view of the parent entity’s and Fund’s financial position as at 30 June 2011 and of their 

performance for the year ended on that date; and 

b) There are reasonable grounds to believe that the parent entity and Fund will be able to pay their debts as and when 

they become due and payable.; and 

c) The financial statements also comply with International Financial Reporting Standards as issued by the 

International Accounting Standards Board. 

This declaration is made in accordance with a resolution of the Directors. 

John Niland 

Chairman 


Director 

Sydney 


49

INDEPENDENT AUDITOR’S REPORT 

TO THE UNITHOLDERS OF CAMPUS LIVING LAND TRUST (USA) 

Report on the financial report 

We have audited the accompanying financial report of Campus Living Land Trust (USA) (the trust), which comprises the consolidated balance 

sheet as at 30 June 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated 

cashflow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ 

declaration for the Campus Living Land Trust (USA) group (the consolidated entity). The consolidated entity comprises the trust and the 

entities it controlled at the year's end or from time to time during the financial year. 

Directors’ responsibility for the financial report 

The directors of the Campus Living Funds Management Limited (the directors), as responsible entity of the trust are responsible for the 

preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 

2001 and for such internal controls as the directors determine is necessary to enable preparation of the financial report that is free from 

material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 

Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. 

Auditor’s responsibility 

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian 

Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and 

plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures 

selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether 

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair 

presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting 

policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the 

financial report. 

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with 

the financial report. 

Our audit did not involve an analysis of the prudence of business decisions made by directors or management. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 

Independence 

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. 

Auditor’s opinion 

In our opinion: 

(a) the financial report of Campus Living Land Trust (USA) is in accordance with the Corporations Act 2001, including: 

(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended 

on that date; and 

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations 

Regulations 2001; and 

(b) the financial report and notes also complies with International Financial Reporting Standards as disclosed in Note 1(a). 

N R McConnell 

Sydney 

Partner 6 September 2011 

PricewaterhouseCoopers, ABN 52 780 433 757 

Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 

DX 77 Sydney, Australia 

T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au 

Liability limited by a scheme approved under Professional Standards Legislation.



CORPORATE DIRECTORY 


Responsible Entity 


Pier 8/9, 23 Hickson Road 

Walsh Bay 

Sydney, NSW 2000 

+61 2 9037 7100 

Directors 

The Directors Campus Living Funds Management Limited, 

are: 







Secretary 

The company secretary of the Responsible Entity is 

Richard Gabelich. 

Principal registered office in Australia 

The principal registered office in Australia is the office of 

the 

Responsible Entity. 

Trust register 

The trust register is held by the Responsible Entity. 

Auditor 

The auditors of the Fund are PricewaterhouseCoopers 

based in Sydney. 

Website address 

www.campuslivingvillages.com 

51


Campus Living Australia Trust 

campus 

living 

australia 

trust 

Directors’ Report .......................................................................................................................................................... 53 

Auditor’s Independence Declaration .................................................................................................................. 56 

Consolidated Statement of Comprehensive Income .................................................................................. 57 

Consolidated Statement of Changes in Equity ............................................................................................. 58 

Consolidated Balance Sheet ................................................................................................................................... 59 

Consolidated Cash Flow Statement ...................................................................................................................60 

Notes to the Consolidated Financial Statements ........................................................................................ 61 

Directors’ Declaration ................................................................................................................................................ 86 

Independent Auditor’s Report................................................................................................................................ 87 

Corporate Directory .................................................................................................................................................... 88 


ARSN: 122 418 204 




Directors on 6 September 2011. The Directors have the 

power to amend and reissue the financial report. 

Campus Living Australia Trust is domiciled in Australia. The 

registered office of Campus Living Funds Management, the 

responsible entity, is: 




P +61 2 9037 7100





Introduction 


Living Australia Trust (‘‘CLAT’’), one of the four trusts in the Campus Living Villages Fund (‘‘the Fund’’), present their report 

on the consolidated entity consisting of CLAT and its subsidiaries for the year ended 30 June 2011. 


‘‘The Fund’’ is a stapled arrangement of four trusts and their controlled subsidiaries), and was established on 9 January 

2007. The four trusts are Campus Living Land Trust (USA) (‘‘CLLT (USA)’’) which is the parent entity, Campus Living Finance 

Trust (‘‘CLFT’’), Campus Living Australia Trust (‘‘CLAT’’) and Campus Living Overseas Trust (‘‘CLOT’’). The units of the four 

trusts can only be purchased or sold in its current stapled arrangement. 

Directors 


date of this report except where otherwise stated: 








The principal business activities of CLAT and its subsidiaries are to provide accommodation to students through owned 

and managed facilities and project management and development of new facilities, some of which will be owned by the 

CLAT group. These businesses are located in Australia. 

Distributions 

CLAT did not declare a distribution for the year ended 30 June 2011 (2010: nil). 


The performance of the Australian operations improved over the year to 30 June 2011. This is as a result of additional new 

beds at UNSW Village in January 2010 as well as Edith Cowan University in January 2011. 

Solvency position 

The consolidated entity has a net liability position of $30.7m. The Directors have satisfied themselves that the 

consolidated entity will be able to pays its debts as and when they fall due based on cash flow estimates from underlying 

assets after servicing external debt costs and intercompany debt, allowing for capitalisation of intercompany interest 

where required. 


There have been no other changes in the state of affairs during this financial year. 


The next financial year will be a period of consolidation and growth. The Fund’s main focus will be the performance of 

existing assets and seeking new development opportunities. 


CLAT undertakes the development and construction of new student accommodation facilities in various states in 

Australia, and is subject to the regulations of those states. CLAT is subject to and complies with the regulations and 

legislation that govern development and construction of new student accommodation facilities in these regions. 

53






There were no loans to or from Directors or executives during the year, at year end or at the date of this report. 




brought against the officers in their capacity as officers of entities in the consolidated entity, and any other payments 

arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities 

that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their 

position or of information to gain advantage for themselves or someone else or to cause detriment to the Fund. It is not 

possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to 

other liabilities. 


Fees paid to the RE and the RE’s associates are included in the Related party transactions note 21 in the financial 


Proceedings on behalf of the company 


behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking 

responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or 

intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001. 



on page 56. 


The consolidated entity is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments 

Commission, relating to the ‘’rounding off’’ of amounts in the Directors’ report. Amounts in the Directors’ report have been 

rounded off in accordance with that Class Order to the nearest thousand dollars or, in certain cases, to the nearest dollar. 

Auditor 




adjustment to the financial statements or that may significantly affect CLAT’s operations in future financial years, the 

results of those operations in future financial years, or CLAT’s state of affairs in future financial years. 

54

Campus Living g Villages Annual Report 10/11 



FOR THE 

YEAR ENDED 30 JUNE 2011 


John Niland 

Chairman 


Director 

Sydney 


55





A$’000 


Revenue 3 69,719 55,432 

Other income 6 103 

Unrealised interest rate swap gains/(losses) 3,162 (4,891) 

Employee benefit expense (14,571) (12,496) 

Impairment of assets 10 (133) (3,500) 

Depreciation and amortisation (14,226) (11,409) 

Borrowing costs expense 4 (30,193) (22,711) 


Loss before taxation (14,080) (24,310) 

Income tax credit 5 - 331 


Other comprehensive income - - 



57





A$’000 


Accumulated 

Losses Reserves Total Equity 


Balance at the beginning of the year 24,400 (48,991) (4,857) (29,448) 

Loss for the year - (14,080) - (14,080) 

Total comprehensive loss for the year - (14,080) - (14,080) 

Issue of capital 12,852 - - 12,852 

Equity raising costs (17) - - (17) 

Balance at the end of the year 37,235 (63,071) (4,857) (30,693) 


Balance at the beginning of the year 22,199 (25,012) (4,857) (7,670) 

Loss for the year - (23,979) - (23,979) 

Total comprehensive loss for the year - (23,979) - (23,979) 

Issue of capital 2,202 - - 2,202 


Balance at the end of the year 24,400 (48,991) (4,857) (29,448) 

The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes 

58





A$’000 

30 June 2011 30 June 2010 


Cash and cash equivalents 6 28,714 27,877 

Trade and other receivables 7 1,830 1,870 


Other current assets 8 792 756 





Property, plant and equipment 10 396,071 389,942 

Intangible assets 11 7,172 7,362 

Deferred taxation assets 5 - - 

Other non-current assets 12 1,145 1,344 

Total Non-Current Assets 404,726 399,042 

TOTAL ASSETS 436,091 429,563 



Provisions 14 977 800 

Borrowings 15 542 311 



Provisions 14 123 221 

Borrowings 15 433,837 423,762 

Derivative financial instruments 15,891 19,109 

Deferred taxation liabilities 5 - - 


TOTAL LIABILITIES 466,784 459,011 

Net Liabilities (30,693) (29,448) 

Equity 



Reserves 18 (4,857) (4,857) 

Total Equity (30,693) (29,448) 


59





A$’000 



Receipts from customers 66,500 60,578 

Payments to suppliers and employees (39,053) (40,825) 

Interest received 846 507 

Interest paid (30,361) (21,628) 


Net cash outflow from operating activities 6(b) (1,799) (1,150) 





Proceeds from issue of equity 16 12,852 2,202 

Equity raising costs 16 (17) (1) 

Proceeds from external borrowings 17,741 62,148 

Net advances (to)/from related parties (7,266) 15,077 

Net cash inflow from financing activities 23,310 79,426 

Net increase in cash and cash equivalents 837 10,279 


27,877 17,598 

Cash and cash equivalents at the end of the financial year 6(a) 28,714 27,877 


60



A$’000 





have been consistently applied for the entire year presented, unless otherwise stated. The financial statements include 

Campus Living Australia Trust (‘‘CLAT’’) and its subsidiaries (‘‘consolidated entity’’) . CLAT is one of four trusts in a stapled 

group that form the Campus Living Villages Fund (‘‘the Fund’’), the units of which can only be purchased or sold in their 

current stapled arrangement. 

a) Basis of preparation 

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other 

authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. 






liabilities (including derivative instruments) which are carried at fair value through profit or loss. 


The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain 

critical accounting estimates. It also requires management to exercise its judgement in the process of applying the entity’s 

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and 

estimates are significant to the financial statements, are set out in the applicable accounting policy note. Refer to 

Intangible Assets note 11 and Provisions note 14. 

b) Principles of consolidation 

Subsidiaries 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CLAT as at 30 June 2011 

and the results of all subsidiaries for the year then ended. CLAT and its subsidiaries together are referred to in this 

financial report as the consolidated entity. 

Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has the power to 

govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting 

rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered 

when assessing whether the consolidated entity controls another entity. 

Subsidiaries are fully consolidated from the date on which control is transferred to the ‘consolidated entity’. They are deconsolidated 


The acquisition method of accounting is used to account for the acquisition of subsidiaries by the consolidated entity as 

set out in ‘‘Business combinations’’ accounting policy note 1 (g). 

Intercompany transactions, balances and unrealised gains on transactions between consolidated entity companies are 

eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset 


policies adopted by the consolidated entity. 

61



A$’000 



c) Foreign currency translation 


Items included in the financial statements of each of the consolidated entity’s entities are measured using the currency of 

the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial 

statements are presented in Australian dollars, which is the consolidated entity’s functional and presentation currency. 





recognised in the income statement. 

Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss. 



d) Revenue recognition 



The consolidated entity recognises revenue when the amount of revenue can be reliably measured, it is probable that 

future economic benefits will flow to the entity and specific criteria have been met for each of the consolidated entity’s 

activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies 

relating to the sale have been resolved. 

The consolidated entity bases its estimates on historical results, taking into consideration the type of customer, the type 

of transaction and the specifics of each arrangement. 



Accommodation rental revenue is recognised on a time proportion basis in income on a straight line basis over the lease 

term. Revenue received in advance is carried as a liability on the balance sheet. 


Other accommodation related revenue is recognised when the service has been provided or goods have been sold to the 

customer. Other accommodation related revenue typically includes income from catering, conferences, casual 





Interest 


impaired, the consolidated entity reduces the carrying amount to its recoverable amount, being the estimated future cash 

flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest 




62



A$’000 



e) Income tax 


national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to 

temporary differences and to unused revenue tax losses. 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases 

of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred 


business combination that at the time of the transaction affects neither accounting, nor taxable profit or loss. Deferred 



is settled. 

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that 

future taxable amounts will be available to utilise those temporary differences and losses. 

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax 

bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the 





the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised 

directly in equity are also recognised directly in equity. 



as companies under division 6C of the Income Tax Assessment Act (1936) and the taxable income is fully distributed to 



On 1 July 2007, CLAT (a division 6C trust) became the head entity of the tax consolidated group. The head entity and the 

member entities in the tax consolidated group account for their own current and deferred tax amounts. These tax 

amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own 

right, adjusted for the relevant tax consolidation entries. 

In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities or assets 

and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the 

tax consolidated group. 

Assets or liabilities arising under tax funding agreements with the group members are recognised as amounts receivable 

from or payable to other entities in the separate financial statements of each group member. 

Upon receipt of a funding advice any group member will pay the head entity the amount allocated to the group member 

within the time frame specified in the funding advice. In the event that the head entity owes the group member, the same 

terms will apply. The tax funding arrangement allows this payment to be settled by way of intercompany account. 

f) Leases 

Leases of property, plant and equipment where the consolidated entity, as lessee, has substantially all the risks and 

rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair 

value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental 

obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is 

allocated between the liability and finance cost. 

63



A$’000 



The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of 

interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under 

finance leases is depreciated over the shorter of the asset’s useful life and the lease term. 

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the consolidated entity 

as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from 

the lessor) are charged to the income statement on a straight-line basis over the period of the lease. 

g) Business combinations 


involving entities or businesses under common control, regardless of whether equity instruments or other assets are 

acquired. Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or 

assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued 

in an acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in rare 

circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair 

value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs 

arising on the issue of equity instruments are recognised directly in equity. 


initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. 

The excess of the cost of acquisition over the fair value of the consolidated entity’s share of the identifiable net assets 

acquired is recorded as goodwill. If the cost of acquisition is less than the consolidated entity’s share of the fair value of 

the identifiable net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but 

only after a reassessment of the identification and measurement of the net assets acquired. 





The acquirer in a business combination must be identified. The acquirer is the combining entity that obtains control of the 

other combining entities or businesses. Control is the power to govern the financial and operating policies of an entity or 

business so as to obtain benefits from its activities. 

In the event that the acquirer identified is not the legal parent of the business combination, the issued capital of the 

consolidated entity reflects the issued capital of the acquirer amended for the appropriate fair value adjustments of the 

business combination. 

h) Impairment of assets 


circumstances indicate that it might be impaired. Other assets are reviewed for impairment whenever events or changes 

in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the 

amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an 

asset’s fair value less costs to sell or value in use. For the purposes of assessing impairment, assets are grouped at the 

lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows 

from other assets or consolidated entity’s assets (cash-generating units). Non-financial assets other than goodwill that 

suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 

i) Cash and cash equivalents 

For cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with 

financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are 

readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank 

overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. 

64



A$’000 



j) Trade receivables 




off. A provision for impairment of trade receivables is established when there is objective evidence that the consolidated 

entity will not be able to collect all amounts due according to the original terms of the receivables. Significant financial 

difficulties of the debtor and default or delinquency in payments more than 30 days overdue are considered indicators 

that the trade receivable is impaired. The amount of the provision on impairment is the difference between the asset’s 

carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. 


the provision on impairment is recognised in the income statement in other expenses. When a trade receivable for which 

an impairment has been recognised becomes uncollectible, it is written off against the allowance account for trade 

receivables. Subsequent recoveries of amounts previously written off are credited against other expenses in the income 

statement. 

k) Other financial assets 


The consolidated entity classifies its investments in the following categories: financial assets at fair value through profit 

or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification 

depends on the purpose for which the investments were acquired. Management determines the classification of its 

investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at 

each reporting date. 


Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in 

this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for 

trading unless they are designated as hedges. Assets in this category are classified as current assets. 




balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other 

receivables, other current assets, receivables and other non-current assets in the balance sheet. 

Held-to-maturity investments 


maturities that the consolidated entity’s management has the intention and ability to hold to maturity. If the consolidated 

entity were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be 

tainted and reclassified as available-for sale. 

Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months 

from the reporting date, which are classified as current assets. 

Available-for-sale 





Regular purchases and sales of financial assets are recognised on trade-date, being the date on which the consolidated 

entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all 

financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss 

are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are 

65



A$’000 



derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and 

the consolidated entity has transferred substantially all the risks and rewards of ownership. 

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are 

included in the income statement as gains and losses from investment securities. 



method. 

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair 

value. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or loss are 

presented in the income statement within other income or other expenses in the period in which they arise. 

Dividend income from financial assets at fair value through profit and loss is recognised in the income statement as part 

of revenue from continuing operations when the consolidated entity’s right to receive payment is established. 






Fair value 


for unlisted securities), the consolidated entity establishes fair value by using valuation techniques. These include the use 

of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow 

analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity 

specific inputs. 

Impairment 

The consolidated entity assesses at each balance date whether there is objective evidence that a financial asset is 

impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value 

of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for 

available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the 

current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed from 

equity and recognised in the income statement. Impairment losses recognised in the income statement on equity 

instruments classified as available-for-sale are not reversed through the income statement. 

l) Derivatives 


remeasured to their fair value at each reporting date, which has been determined by comparing the contracted rate to the 

current market rate for a contract with the same maturity. 

Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised 

immediately in the income statement. 

m) Fair value estimation 




available -for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used 

for financial assets held by the consolidated entity is the current bid price. 

66



A$’000 



The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) 

is determined using valuation techniques. The consolidated entity uses a variety of methods and makes assumptions that 

are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar 

instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are 

used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as 

the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using 

forward exchange market rates at the balance sheet date. 



discounting the future contractual cash flows at the current market interest rate that is available to the consolidated 

entity for similar financial instruments. 

n) Deferred expenses and other capitalised costs 

New business and tender costs are deferred to the extent they can be separately identified, measured reliably and it is 

probable that the consolidated entity will realise the economic benefits. Further, the costs are to be recoverable out of 

future revenue and not relate to revenue which has already been brought into account and will contribute to the future 

earning capacity of the consolidated entity. 

Capitalised tender expenditure is transferred to property, plant and equipment in respect of owned sites and intangible 

assets for management contracts. 

Costs related to unsuccessful tenders are recognised as an expense in the period in which they are incurred. 

o) Property, plant and equipment 


directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or 

recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the 

item will flow to the consolidated entity and the cost of the item can be measured reliably. The carrying amount of any 

replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the 

reporting period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the 

straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful 

lives, as follows: 

Buildings 




Vehicles 

25-40 years 

25-35 years 


3-8 years 

3-5 years 



than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with 

carrying amount. These are included in the Statement of Comprehensive Income. When revalued assets are sold, amounts 

included in other reserves in respect of those assets are transferred to retained earnings. 

p) Intangibles 

Goodwill 

Goodwill represents the excess of the cost of an acquisition over the fair value of the consolidated entity’s share of the 

net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill is not amortised. Instead, 

goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might 

be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity 

include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the 

purpose of impairment testing. 

67



A$’000 








q) Trade and other payables 

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of financial 

year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Deferred revenue 

represents income received in advance from students at the beginning of the semester and is released to revenue when 

the recognition criteria have been met. 

r) Borrowings and borrowing costs 



recognised in the income statement over the period of the borrowings using the effective interest method. 

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled 

or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to 



Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer 

settlement of the liability for at least 12 months after the balance sheet date. All borrowing costs incurred for the 

construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the 

asset for its intended use or sale. Other borrowing costs are expensed. 

s) Provisions 

Provisions for legal claims and employee benefits are recognised when the consolidated entity has a present legal or 

constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the 

obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is 

determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow 

with respect to any one item included in the same class of obligations may be small. 





t) Employee benefits 

Wages and salaries, annual leave, sick leave 









68



A$’000 





Bonus plan 

The consolidated entity recognises a liability and an expense for bonuses based on a formula that takes into consideration 

the performance of the Fund. The consolidated entity recognises a provision where contractually obliged or where there is 

a past practice that has created a constructive obligation. 

u) Issued capital 

The issued capital of the parent entity reflects the unit holdings in CLAT. The issued capital of the consolidated entity is 

the capital of the acquirers identified in the business combinations in the underlying trusts. 

v) Distributions 

A provision is made for the amount of any distribution approved by the Directors on or before the end of the financial year 


w) Goods and Services Tax (GST) 


recoverable from the taxation authority, in which case it is recognised as part of the cost of acquisition of the asset or as 

part of the expense. 


recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. 

Cash flows are presented on a gross basis. 

The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to 

the taxation authority, are presented as an operating cash flow. 

x) Rounding of amounts 

The consolidated entity is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investments 

Commission, relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been 

rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar. 

y) Parent entity information 


consolidated financial statements except as set below. 


Investments in subsidiaries are accounted for at cost in the financial information provided for the parent entity. 

z) New accounting standards 








effective for the accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The 

amendment clarifies and simplifies the definition of a related party. When the amendments are applied, the Fund will need 

to disclose any transactions between its subsidiaries and its associates. However, there will be no impact on any of the 

amounts recognised in the financial statements. 

69



A$’000 














































70



A$’000 




The consolidated entity’s activities expose it to a variety of financial risks, which include market risk (currency risk and 

cash flow interest rate risk), credit risk and liquidity risk. The consolidated entity’s overall risk management program 

focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial 

performance of the consolidated entity. The consolidated entity uses derivative financial instruments such as interest 

rate swaps to mitigate cash flow interest rate risk. 

The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods 

include sensitivity analysis in the case of interest rate and foreign exchange risk, age analysis for credit risk, and cash flow 

forecasts for liquidity risks. The consolidated entity holds the following financial instruments: 




Trade and other receivables 7 1,830 1,870 



Total financial assets 30,882 30,141 



Borrowings 15 434,379 424,073 

Derivative financial instruments 15,891 19,109 

Total financial liabilities 465,684 457,990 


Management of the consolidated entity monitors the exchange rate fluctuations between the Australian Dollars and the 

local currencies of the foreign subsidiaries of the CLV Fund on a regular basis. Management have not utilised any 

derivative financial instruments to date to hedge the foreign currency risk of earnings from subsidiaries in accordance 

with an agreement with the unit holders of the consolidated entity. Management will institute the appropriate action and 

utilise the necessary derivative financial instruments should a change in the agreement with the unit holders occur. 

Loans are made during the year between Australian and foreign subsidiaries of the Fund and are short term loans. Foreign 

currency contracts are utilised when loans are significant in amount and provided for acquisitions, or repayment of the 

loan. Derivative instruments are not used for other loans. 

CLV Accommodation Holdings Pty Limited, a subsidiary of CLAT, has a loan denominated in New Zealand Dollars with a 

related party CLVNZ Limited (refer note 15) of $11.8m (2010 $16.1m). A change of 10% in exchange rates will result in a 

change of $1.2m (2010 $2.0m) in profit and borrowings. 

b) Credit risk 






are used to deposit funds. Refer to Trade and other receivables note 7. 

71





A$’000 



calls from investors. Repayments of borrowings are funded through cash generated from operations, refinancing and 

equity calls from investors where required. The financing facilities available are included in note 6 (c).The forecasted 

payments of interest and principal for the financial liabilities of the contractual liabilities are: 

Due within 

one year 

Due within 

1-5 years 

Due after 

5 years Total 



- variable 17,421 136,714 233,822 387,957 

- swaps 4,335 14,323 7,418 26,076 



Loans from related parties - variable 9,614 49,067 137,728 196,409 




- variable 14,957 106,547 256,176 377,680 

- swaps 4,914 17,762 14,792 37,468 



Loans from related parties - variable 9,263 43,295 187,208 239,766 




have the economic effect of converting borrowings from floating rates to fixed rates. Generally the consolidated entity 

raises long term borrowings at floating rates and swaps the specified notional principal amount into fixed rates. Under the 

interest rate swap contracts, the consolidated entity agrees with financial institutions to exchange, at specified intervals 

(mainly quarterly), the difference between contracted fixed rates and floating-rate interest amounts calculated by 

reference to agreed notional principal amounts. 

Interest payments on loans from financial institutions are fixed through the use of interest rate swaps and fixed interest 

rate loans. The loans in Australia are hedged on a weighted average of 90% (2010: 90%) of total debt and bear interest at 

a weighted average rate of 6.6% (2010: 6.6%) excluding credit margins. The variable portion of the interest payments is 

subject to change in floating interest rates and a 50 basis points increase results in $0.1m (2010: $0.1m) additional interest 

per annum. The carrying amount of borrowings is summarised below: 


Loans from financial institutions: 

- variable 27,740 27,708 

- hedged 252,933 234,023 



Loans from related parties - variable 133,198 141,523 

Total 434,379 424,073 

The weighted average interest rates of the borrowings are summarised as: 


% % 

Loans from financial institutions (excluding credit margins) 6.64 6.59 


Loans from related parties - variable 6.94 7.10 

72



A$’000 





The fair value of derivative financial instruments is recorded from external valuations and is measured using forward 

interest rates with the same maturity dates as the underlying instruments. Changes in fair value are recorded in profit or 

loss. In accordance with AASB 7 Financial Instruments: Disclosures, the interest rate swap instruments are considered a 

level 2 financial instrument in the fair value measurement hierarchy. 

3. Revenue 



Management fees 560 395 

Interest 846 507 



4. Expenses 



Borrowing and Finance Costs 

Interest and finance charges 30,832 24,303 

Interest capitalised (471) (2,675) 

Interest and finance charges expensed 30,361 21,628 

Foreign exchange on borrowings (1,058) 353 

Amortisation of borrowing costs 890 730 

Total borrowing and finance costs expensed 30,193 22,711 

Other expenses includes: 

Property running costs 12,012 9,709 

Marketing 1,927 2,060 

Auditors remunertaion 171 263 

Professional fees 1,412 1,022 

Bad debts 214 112 

Other administrative expenses 3,489 3,557 

Rent 8,619 8,115 


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A$’000 



5. Taxation 



Current tax 

- Current year - - 

Deferred tax 

- Current year - (843) 

- Prior year over provision - 512 

Total tax credit - (331) 



Loss before taxation (14,080) (24,310) 


Australian tax losses not recognised 4,217 6,405 

Over/under provisions and recognition of prior year losses - 524 

Other 7 33 

Income tax credit - (331) 



Deferred taxation asset - - 

Deferred taxation liability - - 

Net deferred taxation (asset)/liability - - 

This balance comprises temporaty differences attributed to: 

- Derivative financial instruments (4,768) (5,716) 




- Other (583) (935) 

12,318 11,528 

Deferred tax attributible to unused tax losses and tax credits (12,318) (11,528) 

Net deferred taxation liability - - 


Opening Balance - 331 

Charge recorded in the income statement - (331) 

Closing balance - - 

CLAT, as head entity of the Australian tax consolidated group from 1 July 2007, did not recognise a deferred tax asset for a 

portion of Australian tax losses incurred from 1 July 2007. The estimated tax losses of A$36m will potentially result in a 

deferred tax asset of A$10.8m. 

74



A$’000 




a) Cash and cash equivalents comprise 


Cash at bank and on hand 10,226 9,667 

Restricted cash 18,488 18,210 


Cash at bank and on hand and restricted cash earn interest at floating rate with a weighted average of 5% (2010: 4%) 

excluding the cash held for construction costs which are non-interest bearing. The property business holds restricted cash 

for certain uses under loan agreements, statutory requirements such as rules relating to resident security deposits, and 

asset maintenance agreements with the universities. There are no bank overdrafts at the year end. 

b) Reconciliation of loss for the year to net cash flow from operating activities 



Adjustment of non-cash tems: 

Depreciation and amortisation 15,116 12,139 

Impairment of assets 133 3,500 

Unrealised foreign exchange on borrowings (1,058) 353 

Fair value adjustments of derivatives (3,162) 4,891 

Bad debts 80 112 

Loss on disposal of property, plant and equipment 3 - 

Bid costs written off 571 369 


Trade and other receivables (21) 1,139 

Inventories (11) (14) 

Other current assets 93 (140) 

Deferred taxation - (331) 

Trade and other payables 458 546 

Provisions 79 265 

Net cash outflow from operating activities (1,799) (1,150) 



Total facilities 





Loans from financial institutions - 17,313 

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A$’000 

7. Trade and other receivables 


Trade receivables 1,511 1,588 

Provision for impairment of receivables (118) (38) 

p y 

1,393 1,550 

Other debtors 437 320 

Total trade and other receivables 1,830 1,870 

The movement in the provision is: 

Opening balance 38 - 

Net impairments during the year 80 38 

Closing balance 118 38 


Less than 60 days 9 4 

61 to 90 days - - 

91 days and greater 109 34 

Total provision 118 38 


Not past due and not impaired 1,003 1,142 

Past due and not impaired 390 408 

Past due and impaired 118 38 

Total trade receivables 1,511 1,588 


Less than 60 days 95 138 

61 to 90 days 30 39 

91 days and greater 265 231 

Total past due and not impaired receivables 390 408 

8. Other current assets 


Prepayments 790 754 

Deposits 2 2 

Total other current assets 792 756 

76



A$’000 



9. Other financial assets 


Investments 338 338 

Total other financial assets 338 338 

Investments in other companies relates to a 2.5% holding in Carillon Avenue Pty Limited. The investment is held at cost 

and subject to impairment testing. The Directors are of the opinion that cost approximates fair value. 

10. Property, plant and equipment 

Land and 

Buildings 

Plant and 



Cost or fair value 406,524 10,535 21,733 438,792 

Accumulated depreciation (29,975) (5,006) (4,108) (39,088) 





Additions 18,221 2,080 - 20,301 

Impairment of assets (133) - - (133) 

Disposals - (3) - (3) 

Depreciation (11,110) (2,203) (724) (14,036) 



Cost or fair value 388,303 8,459 21,733 418,495 






Additions 70,089 1,948 - 72,037 


Depreciation (9,070) (1,419) (725) (11,214) 


The carrying amount of the assets included above includes expenditure for the asset under construction of nil (2010: 

$17.8m). Details of assets pledged as security are included in the borrowings note (refer note 15 (c)). 

Impairment of assets 

The University of Western Sydney Village in Australia opened in January 2009. Occupancy achieved at this village has 

been lower than planned due to the traditionally late student enrolment at the University and therefore later than 

expected lease up at the Village. The long term assumptions and forecasts have been amended to reflect the late 

enrolment and lease up which has resulted in an impairment to the land and buildings of $0.133m (2010: $3.5m). The 

recoverable amount of the asset was determined to be the cash flows generated from operating the asset discounted at a 

rate applicable for the risks of the asset and the market it operates in. The recoverable amount was calculated at A$ 23.3 

million. 

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A$’000 

11. Intangible assets 

Goodwill Intangibles Total 


Cost or fair value 2,390 5,710 8,100 

Accumulated amortisation - (928) (928) 




Amortisation - (190) (190) 



Cost or fair value 2,390 5,710 8,100 

Accumulated amortisation - (738) (738) 




Amortisation - (195) (195) 


Goodwill 

Goodwill was recorded in the Australian businesses for the CLV Pty Limited management and development business in 

previous periods. Goodwill is not amortised and is subject to an annual impairment test. The recoverable amount is 

determined on value-in-use calculations. 

The value-in-use calculations use cash flow projections based on financial budgets in the annual valuation of the 

Fund adjusted for latest market conditions and business developments. The key assumptions in the cash flow forecasts 

are rental growth, facility management fee income growth and discount rate . The recoverable amount of the goodwill is 

$34.1m (2010: $15.7m). Management do not consider changes in the underlying assumptions to have a significant effect on 

the recoverable amount and possible impairment of goodwill. 

Other intangibles 

Other intangibles include management contracts. Management contracts acquired as part of a business combination are 

recognised separately from goodwill. The management contracts are carried at their fair value at the date of acquisition 

less accumulated amortisation and impairment losses. Amortisation of management contracts is calculated based on the 

timing of projected cash flows of the contracts over their estimated useful lives, which currently vary from 20 to 30 years. 



Deferred expenses and other capitalised costs 1,145 1,344 

Total Deferred expenses and other capitalised costs 1,145 1,344 

78





A$’000 




Prepaid rent and deferred rent revenue 5,516 4,122 

Security deposits 3,392 3,180 

Other creditors and accruals 5,286 4,847 





Annual leave 977 800 


Long service leave 123 151 

Performance fee - 70 

Total provisions 1,100 1,021 

The performance fee payable to CLFM is subject to the total fund management fees in any year being capped at 1.5% 

(2010: 1.5%) of the NAV calculated in the final NAV of the Fund as at 30 June 2011. The fee above the cap is nil (2010:$0.1m) 

and can be payable in future years if the cumulative fees earned in those years are below the cap at that date. 

The projected payment of these amounts has been discounted at 0% (2010: 12%) resulting in recognition of a provision 

in the amount of nil (2010: $0.1m). 


a) Borrowings are classified into current and non-current as follows: 


Current 

Loans from financial institutions 209 - 

Lease liabilities 333 311 

Total current borrowings 542 311 

Non-current 



Loans from related parties 133,198 141,523 

Total non-current borrowings 433,837 423,762 



The consolidated entity has three loans with CLFT totalling $116.7m (2010: $121.3m). The first loan of $7.5m (2010: $18.1m) 

bears interest at the 30 day BBSY rate of 4.87% (2010: 4.73%) plus a 2.35% margin and is repayable on 21 January 2018. 

79



A$’000 



The second loan of $97.3m (2010: $92.1m) bears interest at the 30 day BBSY rate of 4.93% (2010: 4.79%) plus a 2.35% 

margin and is repayable on 1 June 2018. The third loan of $11.9m (2010: $11.1m) bears interest at the 30 day BBSY rate of 

4.93% (2010: 4.79%) plus a 2.35% margin and is repayable on 20 December 2014. The consolidated entity also has a loan 

with CLVNZ Limited of $11.8m (2010: $16.1m) which bears interest at the NZ 90 day bank bill rate of 2.65% (2010: 2.9%) 

plus 4% margin (2010: 4% margin) and is repayable on 22 November 2017. The consolidated entity has a loan from Campus 

Living Investments Pty Ltd of $4.7m (2010: $4.1m) which bears interest at the 30 day BBSY rate of 4.93% (2010: 4.79%) 

plus a margin of 2.35% and is repayable on 5 April 2019. 






Total secured borrowings 301,181 282,550 

Unsecured borrowings 



c) Assets pledged as security: 

The loans from financial institutions have been financed with limited recourse debt. The package of securities that is 

normally provided is as follows: 

> A first ranking all assets fixed and floating charge granted by the Borrower in favour of the financial institution; 

> A first ranking mortgage of the Lease from the University to the Borrower; 

> A first ranking share mortgage granted by the Parent of the Borrower in relation to all shares held by the Parent in 

the borrower. 

Assets pledged as security June 2011 June 2010 

Current assets 


Trade and other receivables 1,064 675 


Other current assets 615 343 

Total current assets 26,735 28,250 



Property, plant and equipment 392,284 385,172 

Management contracts 4,841 5,031 

Total non-current assets 397,125 390,259 

Total assets 423,860 418,509 

80



A$’000 



16. Issued Capital 






The stapled entity has 717,213,643 (2010: 413,458,590) units on issue. 





Balance at end of the year (63,071) (48,991) 

18. Reserves 


Business combination reserve (4,857) (4,857) 

Total reserves (4,857) (4,857) 

19. Key management personnel disclosures 

Key management personnel include Directors of the Responsible Entity, Campus Living Funds Management Limited 

(‘‘CLFM’’), and senior management of operations and development in the subsidiaries of the consolidated entity. 

a) Key management personnel remuneration (denominated in A$) 


Short term employee benefits 1,902,190 858,818 

Post employment benefits 94,650 73,618 

Total key management personnel remuneration 1,996,840 932,436 

Other transactions with key management personnel are included in the related party transactions note. 

81





A$’000 

20. Auditor’s remuneration (denominated in A$) 

During the year the following fees were paid or payable for services provided by the auditors of the stapled entity: 


Remuneration to PwC Australia for: 

- Audit of financial report 171,000 255,881 

- Other services - 7,267 

Total auditor's remuneration 171,000 263,148 


A description of the stapled entities and subsidiaries is provided in the Subsidiaries note 24 and disclosure of key 

management personnel remuneration is included in the Key Management Personnel disclosures note 19. 

a) Transactions with related parties 



Management fees charged by management companies to the village operations are based on a percentage of gross 

operating profit. 

Sub-lease of university accommodation 

The ground lease from certain universities is sub-leased to the related accommodation companies at a margin. 

Bid costs for new sites are incurred by development companies and charged to the subsidiary that will earn revenue from 

the new contract and own the new facilities. 

Development 

The development companies that manage the construction of new facilities charge a development management fee to the 

companies that own the new facilities. The fee is based on a percentage of construction cost. Development fees earned on 

acquisition of an asset are determined on a sliding scale that is market related. 


Loans are made between subsidiary companies and stapled entities to provide short term financing and better utilise 

group funds available. Loans are also in place between stapled entities and subsidiary companies from the formation of 

the stapled entity. Interest is charged on loans between entities within the consolidated entity at rates that approximate 

bank lending rates. Refer to note 7 and note 15 for the related party receivables and loans. 

Support services costs 

CLAT paid CLFM $18,170 (2010:$1,173) equity raising costs and paid Transfield Holdings Pty Ltd nil (2010: $377,689) for 

services on capital projects, $384,556 (2010: $939, 503) for IT services and hardware, and $566,870 (2010: $688,030) for 

secondment of staff. 

Management fees paid to the Responsible Entity 

The constitution of the trust prescribes the method of calculation of the fund manager fees, which is borne by the trusts. 

The total fees payable to CLFM is subject to total fund management fees in any year being capped at 1.5% of the NAV of 

the trust as determined and calculated in the final NAV of the CLV Fund as at 30 June 2011. The fees above the cap will be 

payable in future years if the fees earned in those years are below the cap at that date. This amount is recorded as a 

provision (refer note 14) and is discounted to reflect the estimated timing and value of the future payment. 

Management fees paid to the Responsible Entity CLFM include base fees $177,625 (2010: $49,539) and performance fees 

below the cap $354,729 (2010: $281,406) performance fees above the cap are included in provisions (refer note 14). 

82



A$’000 

Directors fees paid to Responsible Entity 




Sydney head office premises 

The Fund leases head office premises from Transfield Holdings Pty Ltd and paid rent of $513,915 (2010:$ 377,098). 

Lease arrangement 

Campus Living Flemington Road Pty Ltd paid a lease payment of $4,272,441 (2010:$ 3,839,216) to Transfield Siruya Joint 

Venture. 


a) Capital Commitments 



Payable within one year 179 17,513 

Total property, plant and equipment 179 17,513 

b) Lease Commitments 

Commitments in relation to leases contracted for at reporting date but not recognised as liabilities are as follows: 



Payable within one to five years 8,788 8,755 








The consolidated entity leases office space and accommodation from certain universities, which have varying terms, 

escalation clauses and renewal rights. 





Total operating leases 18,407 19,152 

83





A$’000 


The consolidated entity leases $17.6m (2010: $18.3m) of property, plant and equipment under finance lease. Commitments 

under finance leases are: 









CLAT has bank guarantees of A$435k and NZ$450k (2010: A$1.6m) in favour of third parties. Management are not aware 

of any other significant contingencies at year end. 


COUNTRY 

INCORPORATED PERCENTAGE OWNERSHIP (%) 


Subsidiaries of CLAT 

CLV Accommodation Holdings Pty Ltd Australia 100 100 

CLV Land Trust Australia 100 100 

Campus Living Land Trust Australia 100 100 

Campus Living Villages Pty Ltd Australia 100 100 

Campus Living Flemington Road Pty Ltd Australia 100 100 

Campus Living Land Trust (Kelvin Grove) Australia 100 100 

Campus Living Accommodation Company Pty Limited Australia 100 100 

Campus Living Villages Murdoch Pty Ltd Australia 100 100 

UNSW Village Pty Ltd Australia 100 100 

Campus Living Villages (Canberra) Pty Ltd Australia 100 100 

CLV Parramatta Holdings Pty Ltd Australia 100 100 

Campus Living Villages (Parramatta) Pty Ltd Australia 100 100 

CLV At ECU Holdings Pty Ltd Australia 100 100 

Campus Living Villages AT ECU Pty Ltd Australia 100 100 

CLV (SCU) Holdings Pty Limited Australia 100 100 

Campus Living Villages (SCU) Pty Limited Australia 100 100 

CLV Management Services Pty Ltd Australia 100 100 

84



A$’000 



25. Parent entity information 


The individual financial statements for the parent entity show the following aggregate amounts: 


Current assets 681 3,346 

Total assets 157,224 146,744 

Current liabilities 578 971 

Total liabilities 134,804 134,569 

Equity 

Issued capital 29,944 17,111 

Retained earnings (7,524) (4,936) 

22,420 12,175 

Profit/(loss) for the year (2,588) (5,253) 

Total comprehensive income (2,588) (5,253) 


The parent entity did not have any contingent liabilities as at 30 June 2011 or 30 June 2010. 




There are no significant events occurring after the balance sheet date. 


The consolidated entity has a net liability position of $30.7m. The Directors have satisfied themselves that the 

consolidated entity will be able to pays its debts as and when they fall due based on cash flow estimates from underlying 

assets after servicing external debt service costs and intercompany debt service, allowing for capitalisation of 

intercompany interest where required. 

85

DIRECTORS DECLARATION 

FOR THE 





a) The financial statements and notes set out on pages 57-85 are in accordance with the Corporations Act 2001, 

including: 

> 

> 

complying with Australian Accounting Standards, the 

Corporationss Regulations 2001 and other mandatory 

professional reporting requirements; 

r 

giving a true and fair view of the parent entity’s and Fund’s financial position as at 30 June 2011 and of their 


b) There are reasonable grounds to believe that the parent entity and Fund will be able to payy its debts as and when 

they become due 

and payable; and a 

c) The financial statements also comply with International Financial Reportingg Standards ass issued by the 

International Accounting Standards Board. 


John Niland 

Chairman 


Director 

Sydney 


86


TO THE UNITHOLDERS OF CAMPUS LIVING AUSTRALIA TRUST 


We have audited the accompanying financial report of Campus Living Australia Trust (the trust), which comprises the consolidated balance 

sheet as at 30 June 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated 

cashflow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ 

declaration for the Campus Living Australia Trust group (the consolidated entity). The consolidated entity comprises the trust and the entities 

it controlled at the year's end or from time to time during the financial year. 


The directors of the Campus Living Funds Management Limited (the directors), as responsible entity of the trust, are responsible for the 

preparation of the financial report that gives a true and fair view in accordance with Australian Accounting and the Corporations Act 2001 and 

for such internal control as the directors determine is necessary to enable preparation of the financial report that is free from material 

misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101 

















Independence 




(a) the financial report of Campus Living Australia Trust is in accordance with the Corporations Act 2001, including: 






N R McConnell 

Sydney 













Walsh Bay 


+61 2 9037 7100 

Directors 

The Directors of Campus Living Funds Management 

Limited, are: 







Secretary 




The principal registered office in Australia is the office 

of the Responsible Entity. 



Auditor 

The auditors are PricewaterhouseCoopers based in 

Sydney. 



88


Campus Living Finance Trust 

campus 

living 

finance 

trust 

Directors’ Report ..........................................................................................................................................................90 

Auditor’s Independence Declaration .................................................................................................................. 93 

Consolidated Statement of Comprehensive Income ................................................................................. 94 

Consolidated Statement of Changes in Equity ............................................................................................. 95 

Consolidated Balance Sheet ...................................................................................................................................96 

Consolidated Cash Flow Statement ................................................................................................................... 97 

Notes to the Consolidated Financial Statements ....................................................................................... 98 

Directors’ Declaration ................................................................................................................................................ 111 

Independent Auditor’s Report............................................................................................................................... 112 

Corporate Directory ................................................................................................................................................... 113 


ARSN: 122 414 242 




Directors on 6 September 2011. The Directors have the 

power to amend and reissue the financial report. 

Campus Living Finance Trust is domiciled in Australia. The 

registered office of Campus Living Funds Management, the 

responsible entity, is: 




P +61 2 9037 7100





Introduction 


Living Villages Fund (‘‘the Fund’’) present their report on Campus Living Finance Trust (‘‘CLFT’’) for the year ended 30 June 

2011. 


The Fund is a stapled arrangement of four trusts and their subsidiaries and was established on 9 January 2007. The four 

trusts are Campus Living Land Trust (USA) (‘‘CLLT (USA)’’) which is deemed to be the parent entity for accounting 

purposes, Campus Living Finance Trust (‘‘CLFT’’), Campus Living Australia Trust (‘‘CLAT’’) and Campus Living Overseas 

Trust (‘‘CLOT’’). The units of the four trusts forming the Fund can only be purchased or sold in their current stapled 

arrangement. 

Directors 

The following persons were the only Directors of CLFM and were in office during the whole of the financial year and up to 

the date of this report except where otherwise stated: 








The principal business activity of CLFT is to provide financing to the other trusts in the stapled arrangement and the 

controlled entities of those trusts. 

Distributions 

CLFT declared the following distributions: 



15 June 2011 $7,000,000 0.98 

Total $7,000,000 



28 September 2009 $1,000,204 0.30 

18 December 2009 $999,743 0.24 

31 March 2010 $3,999,748 0.97 

29 June 2010 $10,099,966 2.44 

Total $16,099,661 


Profit for the year was $6.7m (2010: $3.1m). The profit was earned from interest income on loans with related parties, net 

of Directors’ fees, audit fees, foreign exchange losses and fees paid to the RE, CLFM. 


There have been no changes in the state of affairs of the consolidated entity. 

90





Repayment of borrowings 

The Fund made an equity call during July 2010 of $28.3 million to repay the Equity Bridge Facility and cash back letters of 

credit and bank guarantees effective 28 July 2010. The Fund made an additional equity call on investors during December 

2010 of $2 million to repay the Equity Bridge Facility which had been utilised during November 2010. 

Outlook for following financial year 

CLFT will continue to provide financing to the other trusts in the stapled arrangement and the controlled entities of those 

trusts. 


There are no loans to or from Directors or executives during the year, at year end or at the date of this report 







brought against the officers in their capacity as officers of entities in the Group and any other payments arising from 

liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from 

conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of 

information to gain advantage for them or someone else or to cause detriment to the trust. It is not possible to apportion 

the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. 

Proceedings on behalf of the trust 


behalf of the trust, or to intervene in any proceedings to which the trust is a party, for the purpose of taking responsibility 

on behalf of the trust for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of 

the trust with leave of the Court under section 237 of the Corporations Act 2001. 



on page 93. 


The entity is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, 

relating to the ‘’rounding off’’ of amounts in the Directors’ Report. Amounts in the Directors’ report have been rounded off 

in accordance with that Class Order to the nearest thousand dollars or, in certain cases, to the nearest dollar. 

Auditor 




adjustment to the financial statements or that may significantly affect CLFT’s operations in future financial years, the 

results of those operations in future financial years, or CLFT’s state of affairs in future financial years. 

91


FOR THE 




This report is made in accordance with a resolution of the Directors. 

John Niland 

Chairman 


Director 

Sydney, 


92





A$’000 


Revenue 3 11,192 7,118 


Loss on foreign currency derivatives not qualifying as hedges (329) - 

Borrowing costs expense 4 (2,201) (2,064) 


Profit before taxation 6,582 3,367 

Income tax credit/(expense) 6 85 (273) 

Profit for the year 6,667 3,094 


Exchange differences arising on translation of foreign operations (3,275) (226) 

Other comprehensive loss for the period (net of tax) (3,275) (226) 

Total comprehensive income for the year 3,392 2,868 


94



A$’000 




Retained 

Earnings Reserves Total Equity 


Total equity at the beginning of the year 129,483 3,034 (226) 132,291 

Exchange differences on translation of foreign entities - - (3,275) (3,275) 

Profit for the year - 6,667 - 6,667 

Total comprehensive income for the year - 6,667 (3,275) 3,392 

Issue of capital (refer note 12) 64,423 - - 64,423 


Distributions to members (refer note 15) (191) (6,809) - (7,000) 

193,627 2,892 (3,501) 193,018 


Total equity at the beginning of the year 105,032 1,113 - 106,145 

Exchange differences on translation of foreign entities - - (226) (226) 

Profit for the year - 3,094 - 3,094 

Total comprehensive income for the year - 3,094 (226) 2,868 

Issue of capital (refer note 12) 39,387 - - 39,387 


Distributions to members (refer note 15) (14,927) (1,173) - (16,100) 

129,483 3,034 (226) 132,291 


95





A$’000 




Receivables 8 22,284 26,692 

Other current assets 22 - 



Receivables 8 193,748 136,392 

Deferred taxation assets 6 85 - 


TOTAL ASSETS 224,861 182,044 



Borrowings 11 - 12,608 



Provisions 10 - 420 

Derivative financial instruments 329 - 

Borrowings 11 23,535 24,539 


TOTAL LIABILITIES 31,843 49,753 

NET ASSETS 193,018 132,291 

Equity 


Retained earnings 13 2,892 3,034 

Reserves 14 (3,501) (226) 

TOTAL EQUITY 193,018 132,291 


96





A$’000 



Payments to suppliers (2,581) (2,085) 

Interest received 11,192 7,119 

Interest paid (2,201) (1,630) 

Net cash inflow from operating activities 7b 6,410 3,404 


Capital expenditure - - 

Net cash from investing activities - - 


Proceeds from issue of equity 12 64,423 39,387 

Equity raising costs 12 (88) (9) 

Repayments from external borrowings (12,608) (58,701) 


Net advances (to)/from related parties (56,426) 43,633 

Distributions to unit holders (10,100) (8,899) 

Net cash inflow from financing activities (15,844) 15,411 

Net increase in cash and cash equivalents (9,434) 18,815 

Effects of exchange rate changes on cash and cash equivalents (804) 131 

Cash and cash equivalents at the beginning of the financial year 18,960 14 

Cash and cash equivalents at the end of the financial year 7a 8,722 18,960 


97



A$’000 





have been consistently applied for the entire year presented, unless otherwise stated. The financial statements includes 

Campus Living Finance Trust (‘‘CLFT’’) and its subsidiaries (‘‘consolidated entity’’) which was established on 25 July 2006. 

CLFT is one of four trusts in a stapled group that form the Campus Living Villages Fund (‘‘the Fund’’), the units of which can 

only be purchased or sold in their current stapled arrangement. 


This general purpose financial report has been prepared in accordance, with Australian Accounting Standards, other 






These financial statements have been prepared under the historical cost convention, except for, financial assets and 

liabilities which are carried at fair value. 


The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting 

estimates. It also requires management to exercise its judgement in the process of applying the entity’s accounting 

policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are 

significant to the financial statements, are set out in the applicable accounting policy note. Refer to Provisions note 10. 


Subsidiaries 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CLFT as at 30 June 2011 

and the results of all subsidiaries for the year then ended. CLFT and its subsidiaries together are referred to in this 

financial report as the consolidated entity. 

Subsidiaries are all those entities (including special purpose entities) over which the consolidated entity has the power to 

govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting 

rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered 

when assessing whether the consolidated entity controls another entity. 

Subsidiaries are fully consolidated from the date on which control is transferred to the ‘Consolidated entity’. They are deconsolidated 


The acquisition method of accounting is used to account for the acquisition of subsidiaries by the consolidated entity. 










98



A$’000 







recognised in the income statement. 



Consolidated entity companies 

The results and financial position of all of the subsidiaries of the consolidated entity that have a functional currency 

different from the presentation currency are translated into the presentation currency as follows: 

> Assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that 


> Income and expenses for each income statement are translated at average exchange rates (unless this is not a 

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case 

income and expenses are translated at the dates of the transactions); and 





Revenue is measured at the fair value of the consideration received or receivable. The entity recognises revenue 

when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity 

and specific criteria have been met for each of the entity’s activities as described below. The amount of revenue is not 

considered to be reliably measurable until all contingencies relating to the revenue have been resolved. 


impaired, the entity reduces the carrying amount to its recoverable amount, being the estimated future cash flow 

discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest 


e) Income tax 

Under current tax legislation, the trust is not liable for Australian income tax, provided that the taxable income is fully 

distributed to unit holders each period and any taxable capital gain derived from the sale of an asset acquired after 19 

September 1985 is fully distributed to unit holders. 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases 

of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not 

accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination 

that at the time of the transaction affects neither accounting nor taxable profit or loss. 

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the 

balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred 

income tax liability is settled. 


future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and 

liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the 

deferred tax balances relate to the same taxation authority. 

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends 

either to settle on a net basis, or to realise the asset and settle the liability simultaneously. 

99



A$’000 



f) Cash and cash equivalents 

For cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with 

financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are 

readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank 

overdrafts. Bank overdrafts, where applicable, are shown within borrowings in current liabilities on the balance sheet. 

g) Financial assets 


The entity classifies its financial assets as loans and receivables. The classification depends on the purpose for which the 

financial assets were acquired. Management determines the classification of its financial assets at initial recognition. 



balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other 

receivables, other current assets, receivables and other noncurrent assets in the balance sheet. 


Loans and receivables are recognised on the date on which the entity commits to or enters into the relevant loan 

agreement. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired 

or have been transferred and the entity has transferred substantially all the risks and rewards of ownership. 


Loans and receivables are carried at amortised cost using the effective interest method. 

Fair value 

If the market for a financial asset is not active, the entity establishes fair value by using valuation techniques. These 

include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, 

discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as 

possible on entity-specific inputs. 

Impairment 

The entity assesses at each balance date whether there is objective evidence that a financial asset or entity of financial 

assets is impaired. Impairment losses are recognised in the income statement. 

h) Fair value estimation 



The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. 

The entity uses a variety of methods and makes assumptions that are based on market conditions existing at each balance 

date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining 




discounting the future contractual cash flows at the current market interest rate that is available to the entity for similar 


i) Trade and other payables 

These amounts represent liabilities for goods and services provided to the entity prior to the end of financial period which 

are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. 

100



A$’000 



j) Borrowings and borrowing costs 



recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings 

are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The 

difference between the carrying amount of a financial liability that has been extinguished or transferred to another party 

and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income 

or other expenses. Borrowings are classified as current liabilities unless the entity has an unconditional right to defer 

settlement of the liability for at least 12 months after the balance sheet date. Borrowing costs are expensed. 

k) Issued capital 

The issued capital of the parent entity reflects the unit holdings in CLFT. 

l) Distributions 

A provision is made for the amount of any distribution approved by the Directors, on or before the end of the financial 

year but not distributed at balance sheet date. 

m) Provisions 

Provisions are recognised when the entity has a present legal or constructive obligation as a result of past events, it is 

probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. 

Provisions are not recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined 

by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with 

respect to any one item included in the same class of obligations may be small. 





n) Rounding of amounts 

The entity is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, 

relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been rounded off in 

accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar. 

o) New accounting standards 








effective for the accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The 

amendment clarifies and simplifies the definition of a related party. When the amendments are applied, the Fund will need 

to disclose any transactions between its subsidiaries and its associates. However, there will be no impact on any of the 

amounts recognised in the financial statements. 








A$’000 










































p) Parent entity information 


consolidated financial statements except as set below: 






A$’000 




CLFT’s activities expose it to a variety of financial risks, which include credit risk, cash flow interest rate risk and liquidity 

risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise 

potential adverse effects on the financial performance. 

a) Currency Risk 

Subsidiaries of the Fund operate in Australia and the UK and operate and source external financing in their local currency. 

Management of the Fund monitors the exchange rate fluctuations between the Australian Dollar and the local currencies 

of the foreign subsidiaries on a regular basis. Management have not utilised any derivative financial instruments to date to 

hedge the foreign currency risk of earnings from subsidiaries in accordance with an agreement with the unit holders of the 

Fund. If the exchange rate fluctuated by 10% the loss after tax would vary by $54k and the net assets would vary by $2.2m. 

Management will institute the appropriate action and utilise the necessary derivative financial instruments should there 

be a change in agreement with the unit holders. 

Loans are made between entities within the Fund for purposes of providing funding for capital expenditure or the net 

investment in subsidiaries. The currency of the loan is generally denominated in the currency of the lender and the loans 

are valued at balance sheet spot rate at each reporting date. 


Credit risk arises from cash and cash equivalents, deposits with major banks and financial institutions and loans to related 

parties and entities within the CLV Fund. Only banks and financial institutions with high credit ratings are used to deposit 

funds. Credit granted to related parties is monitored regularly and the loan agreements contain unsecured recourse 

against the borrower for default of the loans. 

c) Cash flow interest rate risk 

The borrowings of CLFT (refer note 11) are variable and the entity does not utilise interest rate swaps to mitigate 

fluctuations in interest rates. 

The ANZ facility was repaid and the bank guarantees and letters of credit were cash backed in July 2010. A summary of the 

undrawn facility at 30 June 2011 is: 


Total facilty - 23,400 

Funds drawn - (12,608) 

Letters of credit provided and indemnity guarentee - (10,792) 

Undrawn facility - - 

d) Liquidity risk 

Funds drawn from the ANZ facility were lent to entities within the group at the variable rate plus an appropriate margin to 

cover interest and finance charges incurred. The related party borrowings bear interest at a variable rate (refer note 11). 

The forecasted payments of interest and principal of all external borrowings are: 


Payments within one year - 12,680 

Payments within one to five years - - 

Total payments - 12,680 




A$’000 



The forecasted payments of interest and principal of all internal borrowings are: 


Payments within one year 1,819 2,142 

Payments within one to five years 6,817 5,532 

Payments after five years 29,148 38,221 

Total payments 37,784 45,895 



The fair value of derivative financial instruments is based on external valuations and is measured using forward interest 




3. Revenue 


Interest 

- Related parties 10,947 7,109 

- External 245 9 

Total Revenue 11,192 7,118 

4. Borrowing Costs 


Interest and finance charges 

- Related parties 2,017 273 

- External 184 1,358 

2,201 1,631 

Amortisation of borrowing costs - 433 

Total Borrowing costs 2,201 2,064 

5. Other expenses 


Directors' remuneration 32 4 

Auditors' remuneration (refer note 17) 32 78 

Fund managers' fees (refer note 18) 

- Base fees 863 591 

- Performance fees (below cap) - 1,638 

- Performance fees (above cap) - (973) 

Other expenses 108 349 


Directors’ fees are an allocation of total non-executive Directors’ remuneration of CLFM approved by the board which, 

under the constitutions of the trusts, is borne by the individual trusts. The allocation is based on estimates of work 

performed for each trust. The fund manager fees are allocated to each trust based on the Net Asset Value (‘‘NAV’’) of the 

trust. 




A$’000 



The constitutions of the individual trusts prescribe the method of calculation of the fund manager fees, which is borne by 

the individual trusts. The total fund management fees payable are capped at 1.5% of the NAV of the trust as determined 

and calculated in the final NAV of the Fund as at 30 June 2011. The fees above the cap can be payable in future years if the 

cumulative fees earned are below the cap at that date. This amount is recorded as a provision (refer note 10) and is 

discounted to reflect the estimated timing and value of the future payment. 

6. Taxation 

a) Reconciliation of income tax expense to prima facie tax payable 


Profit before taxation 6,582 (3,367) 

Tax at the Australian tax rate rate of 30% (2010: 30%) 1,975 1,010 

Tax effect of of non-deductible items: 

- Non-taxable trust profit (Distribution) (2,043) (352) 

- Difference in overseas tax rates (15) (5) 

- Other (2) (380) 

Total income tax (credit)/expense (85) 273 

b) Deferred taxation asset 


Derivative financial instruments 85 - 

Provisions - - 

Total deferred tax asset 85 - 


a) Cash and cash equivalents comprise: 




Cash at bank and on hand includes $435k Australian denominated and $2.6m US denominated cash which is held as 

security for contingent liabilities of other entities within the group. 

b) Reconciliation of profit for the year to net cash flow from operating activities 



Amortisation of borrowing costs - 433 

Forward exchange contract movements 329 - 

Foreign exchange loss 1,045 - 


Deferred tax assets (85) 273 

Trade payables and accruals (1,107) 592 

Other current assets (20) 174 

Provisions (419) (1,162) 

Net cash inflow from operating activities 6,410 3,404 

The distribution declared in the June quarter of $7m (2010: $10.1m) has not been paid at year end and is excluded from 

operating and financing cash flows. Refer to note 2 (c) for the external borrowings facility available. 






A$’000 

8. Receivables 


Loans receivable from related parties: 

Campus Living Overseas Trust 22,284 26,692 

Campus Living Villages UK Limited 3,063 2,616 

CLV UK AH Pty Ltd - 123 

CLV Salford UK Limited 10,733 12,045 

Campus Living Australia Trust 104,728 110,221 

CLV Accommodation Holdings Pty Limited 11,939 11,115 

CLV (Bedfordshire) UK Ltd 16,481 - 

CLLT (USA) - 272 

CCHM Property Holdings Parent LLC 46,804 - 

Total Receivables 216,032 163,084 

Total current receivables 22,284 26,692 

Total non-current receivables 193,748 136,392 

Total Receivable 216,032 163,084 

Refer to note 18 Related party transactions and balances. 

The loan to Campus Living Overseas Trust (‘‘CLOT’’) $22.3m (2010: $26.7m) is non interest bearing and repayable on 

demand. 

There are three loans to CLAT totalling $116.7m (2010: $121.3m). The first loan of $7.5m (2010: $18.1m) bears interest at the 

30 day BBSY rate of 4.87% (2010: 4.73%) plus a 2.35% margin and is repayable on 21 January 2018. The second loan of 

$97.3m (2010: $92.1m) bears interest at the 30 day BBSY rate of 4.93% (2010: 4.79%) plus a 2.35% margin and is repayable 

on 1 June 2018. The third loan of $11.9m (2010: $11.1m) bears interest at the 30 day BBSY rate of 4.93% (2010: 4.79%) plus a 

2.35% margin and is repayable on 20 December 2014. 

The loan to CLV Accommodation Holdings Pty Limited (‘‘CLVAH’’) for $11.9m (2010: $11.1m) bears interest at the 30 day 

BBSY rate of 4.93% plus 2.35% (2010: 4.79%) and is repayable on 20 December 2014. 

The loan to CLLT (USA) was repaid during the year and bore interest at the 30 day BBSY rate of 4.93% plus 2.35% margin 

(2010: 4.79%). 

The loan to CCHM Property Holdings Parent LLC of $46.9m bears interest at a 90 day BBSY rate of 5.03% plus 2.35% and 

is repayable on 17 November 2018. 

A loan established on 30 November 2009 between CLV Finance UK Limited and Campus Living Villages UK Ltd remains in 

place. It bears interest at LIBOR plus 2.25% margin (2011: 3.47%, 2010: 2.79%) and is repayable on 1 November 2019. 

A loan established on 30 November 2009 between CLV Finance UK Limited and Campus Living Villages (Salford) UK Ltd 

remains in place. It bears interest at LIBOR plus 4% margin (2011: 5.22%, 2010: 4.54%) and is repayable on 1 November 

2019. 

A loan was established between CLV Finance UK Limited and Campus Living Villages (Bedfordshire) UK Ltd on 2 July 2010. 

It bears interest at LIBOR + 6% (2011: 6.59%) and is repayable on 1 May 2020. 




A$’000 





Trade payables and accruals - 336 

Fund manager fee and directors' fees and accruals (refer to note 18) 

979 1,750 

Distribution payable (refer to note 15) 7,000 10,100 


10. Provisions 


Performance Fee - 420 

The performance fee payable to CLFM is subject to total fund management fees being capped at 1.5% of the NAV as 

determined and calculated in the final NAV of the Fund at 30 June 2011. 

The fee above the cap is nil (2010: $0.4m). 

11. Borrowings 


Unsecured 

Loans from entities within the Fund 

Campus Living Investments Pty Ltd 23,421 5,556 

CCHM Property Holdings Parent LLC - 18,052 

CLV (Bedfordshire) UK Ltd - 931 

CLLT USA 114 - 

Secured 

External Borrowings 

Loans from financial institutions (refer to note 2) - 12,608 

Total Borrowings 23,535 37,147 

The loan between Campus Living Investments Pty Ltd and CLFT bears interest at a variable rate of 7.03% plus a margin of 

0.25% (2010: 6.89%). The principal amount of the loan is repayable on the 8 November 2019. 


CLFT has 717,213,643 units (2010: 413,458,590 units) on issue. 


Reconciliation of Issued Capital: 

Balance at beginning of the year 129,483 105,032 



Distribution of capital for the year (191) (14,927) 







A$’000 

13. Retained earnings 


Reconciliation of Retained Earnings 

Balance at beginning of the year 3,034 1,113 


Distributions for the year (6,809) (1,173) 


14. Reserves 


Reconciliation of foreign currency translation reserves 

Balance at beginning of the year (226) - 

Exchange differences during the year (3,275) (226) 

Balance at end of the year (3,501) (226) 


The consolidated entity has subsidiaries that operate in the UK with a functional currency of British Pound (GBP) . As such, 

exchange differences arise when translating the financial information of these entities into the Australian Dollar, the 

reporting currency of the consolidated entity. 


The trust declared the following distributions during the year: 


Cents 

per unit 

Distribution 

$'000 

Date of payment 

Tax 

deferred % 

June distribution 0.98 7,000 29 July 2011 

Total distribution 7,000 2.7 


Cents 

per unit 

Distribution 

$'000 

Date of payment 

Tax 

deferred % 

September distribution 0.30 1,000 6 November 2009 

December distribution 0.24 1,000 5 February 2010 

March distribution 0.97 4,000 7 May 2010 

June distribution 2.44 10,100 30 July 2010 

Total distribution 16,100 92.7 






A$’000 

16. Key management personnel disclosures 

a) Identification of key management personnel 

Key management personnel include Directors of the Responsible Entity (‘‘RE’’), CLFM. 

b) Key management personnel remuneration (denominated in A$) 


Short term employee benefits 26,773 3,974 

Total key management personnel remuneration 26,773 3,974 

Other transactions with key management personnel are included in the Related party transactions note 18. 

17. Remuneration of auditors (denominated in A$) 

During the period the following fees were paid or payables for services provided by the auditor of the stapled entity: 


Audit of financial reports 32,220 78,300 

Taxation services - - 

32,220 78,300 

18. Related party transactions and balances 

Related party transactions include key management personnel remuneration (refer note 16), loans between related 

parties (refer note 8 and 11), interest received from and paid to related parties (refer note 3 and 4) and fees paid to the 

fund managers CLFM (refer note 5). 


Interest received from related parties: 

- CLV Accommodation Holdings Pty Ltd 823 567 

- Campus Living Australia Trust 7,637 5,700 

- CLLT USA 7 13 

- CCHM Property Holdings Parent LLC 933 247 

- CLV Salford UK Ltd 512 469 

- Campus Living Villages UK Limited 72 107 

- CLV UK Accommodation Holdings Pty Ltd 1 6 

- CLV Bedfordshire UK Ltd 962 - 

Interest paid to related parties: 

- Campus Living Investments Pty Ltd 1,504 188 

- CCHM Property Holdings Parent LLC 513 85 

Fund manager's fees (refer note 5) 863 1,256 

Related balances include: 

Loans to related parties are included in Financial Assets (refer note 8) 216,032 163,084 

Loans from related parties are included in Financial Liabilities (refer note 11) 23,535 24,539 

Intercompany payable to CLFM for payment of Directors' fees and 

fund manager fees 

979 1,750 




A$’000 




The letters of credit and guarantees are included in note 7 (a). Management have not identified any other contingencies at 

year end. 


The Fund received $6.6m of equity during July 2011 to fund refinancing projects. The Directors are not aware of any other 

significant events occurring after the balance sheet date. 





Current assets 28,590 85 

Total assets 226,986 163,058 

Current liabilities 7,994 12,187 


Shareholders' equity 



195,455 132,263 

Profit/(loss) for the year after tax 5,858 2,840 

Total comprehensive income 5,858 2,840 


Other than the letters of credit and bank guarantees included in the consolidated entity Contingent Liabilities note, the 

parent entity did not have any contingent liabilities as at 30 June 2011 or 30 June 2010. 

c) Commitments liabilities of the parent entity 


110


FOR THE 





a) The financial statements and notes set out on pages 94-110 are in accordance with the Corporations Act 

2001, 

including: 

> 

> 




r 

giving a true and fair view of the parent entity’s and Fund’s financial position as at 30 June 2011 and of their 


b) There are reasonable grounds to believe that the parent entity and Fund will be able to payy its debts as and when 

they become due 

and payable; and a 

c) That the financial statements also comply withh International Financial Reporting Standards as issued byy the 

International Accounting Board. 


John Niland 

Chairman 


Director 

Sydney 




TO THE UNITHOLDERS OF CAMPUS LIVING FINANCE TRUST 


We have audited the accompanying financial report of Campus Living Finance Trust (the trust), which comprises the balance sheet as at 30 June 

2011, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a 

summary of significant accounting policies, other explanatory notes and the directors’ declaration for the Campus Living Finance Trust group 

(the consolidated entity). The consolidated entity comprises the trust and the entities it controlled at the year's end or from time to time during 

the financial year. 


The directors of the Campus Living Funds Management Limited (the directors), as responsible entity of the trust, are responsible for the 


2001 and for such internal control as the directors determine is necessary to enable preparation of the financial report that is free from 


















Independence 




(a) the financial report of Campus Living Finance Trust is in accordance with the Corporations Act 2001, including: 






N R McConnell 

Sydney 














Walsh Bay 


+61 2 9037 7100 

Directors 

The Directors of Campus Living Funds Management Limited, are: 







Secretary 






Auditor 

The auditors are PricewaterhouseCoopers based in Australia. 





Campus Living Overseas Trust 

campus 

living 

overseas 

trust 

Directors’ Report ......................................................................................................................................................... 115 

Auditor’s Independence Declaration ................................................................................................................. 118 

Consolidated Statement of Comprehensive Income ................................................................................ 119 

Consolidated Statement of Changes in Equity ........................................................................................... 120 

Consolidated Balance Sheet .................................................................................................................................. 121 

Consolidated Cash Flow Statement .................................................................................................................. 122 

Notes to the Consolidated Financial Statements ...................................................................................... 123 

Directors’ Declaration .............................................................................................................................................. 149 

Independent Auditor’s Report.............................................................................................................................. 150 

Corporate Directory ................................................................................................................................................... 151 


ARSN: 122 418 188 




Directors on 6 September 2011. The Directors have 

the power to amend and reissue the financial report. 

Campus Living Overseas Trust is domiciled in Australia. 

The registered office of Campus Living Funds 

Management, the Responsible Entity, is: 




P +61 2 9037 7100





Introduction 


Living Overseas Trust (‘‘CLOT’’) present their report on the consolidated entity consisting of CLOT and its subsidiaries for 

the year ended 30 June 2011. 


The Campus Living Villages Fund (‘the Fund’) is a stapled arrangement of four trusts and their subsidiaries, and was 

established on 9 January 2007. The four trusts are Campus Living Land Trust (USA) (‘‘CLLT (USA)’’) which is the parent 

entity, Campus Living Finance Trust (‘‘CLFT’’), Campus Living Australia Trust (‘‘CLAT’’) and Campus Living Overseas Trust 

(‘‘CLOT’’). The units of the four trusts forming the Fund can only be purchased or sold in its current stapled arrangement. 

Directors 


date of this report except where otherwise noted: 








The principal business activities of CLOT are to provide accommodation to students through owned and managed 

facilities and project management and development of new facilities, some of which will be owned by CLOT and its 

subsidiaries. These businesses are located in United States of America (‘‘US’’), New Zealand (‘‘NZ’’) and the United Kingdom 

(‘‘UK’’). 

Distributions 

CLOT did not declare a distribution for the year ended 30 June 2011 (2010: nil). 


During the year the US has focused on operational performance and the completion of refinancings. The UK has 

substantially completed the University of Bedfordshire redevelopment and NZ’s main focus has been on the challenges 

facing the occupancy at UC Accommodation Student Village in the wake of the Christchurch earthquakes. 

Payment of borrowings 

CLOT has borrowings with CLFT of $22.3m. These borrowings are repayable on demand. CLOT will use its share of future 

equity calls to repay its borrowings to CLFT. 


The next financial year will be a period of consolidation and growth. The main focus will be the performance of existing 

assets, seeking new development opportunities and completing refinancing’s in the US. 


The Fund undertakes the development and construction of new student accommodation facilities in the US, NZ and the 

UK and is subject to the regulations of those countries and the respective states and counties. The Fund is subject to and 

complies with the regulations and legislation that govern development and construction of new student accommodation 

facilities in these regions. 


There are no loans to or from Directors or executives during the year, at year end or at the date of this report. 









brought against the officers in their capacity as officers of entities in the consolidated entity, and any other payments 

arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities 

that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their 

position or of information to gain advantage for themselves or someone else or to cause detriment to the Fund. It is not 

possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to 

other liabilities. 




Proceedings on behalf of the Fund 


behalf of the Fund, or to intervene in any proceedings to which the Fund is a party, for the purpose of taking responsibility 

on behalf of the Fund for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of 

the Fund with leave of the Court under section 237 of the Corporations Act 2001. 



on page 118. 



Commission, relating to the ‘’rounding off’’ of amounts in the Directors’ report. Amounts in the Directors’ report have been 

rounded off in accordance with that Class Order to the nearest thousand dollars or, in certain cases, to the nearest dollar. 

Auditor 


Solvency position 

The consolidated entity has a net liability position of $11.3m. The Directors have satisfied themselves that the 

consolidated entity will be able to pay its debts as and when they fall due based on cash flow estimates from underlying 

assets after servicing external debt service costs and intercompany debt service, allowing for capitalisation of 

intercompany interest where required. 



adjustment to the financial statements or that may significantly affect the consolidated entity’s operations in future 

financial years, the results of those operations in future financial years, or CLOT’s state of affairs in future financial years. 



FOR THE 





John Niland 

Chairman 


Director 

Sydney 







A$’000 


Revenue 3 25,270 27,284 

Other income 4 7 44 

Unrealised interest rate swap gains/(losses) 283 (1,207) 

Employee benefit expense (10,001) (10,626) 

Impairment of assets 13 (1,489) - 

Depreciation and amortisation (5,031) (5,070) 

Borrowing costs expense 5 (6,430) (7,337) 



Income tax credit/(expense) 6 580 (4,051) 

Loss for the year (8,944) (10,820) 


Exchange differences arising on translation of foreign operations 

1,887 614 

Movement in fair value of hedges (1,267) - 

Other comprehensive income for the year (net of tax) 620 614 

Total comprehensive loss for the year (8,324) (10,206) 

Allocation of loss for the year 

Parent entity (9,262) (11,440) 



Allocation of other comprehensive inome for the year 

Parent entity (8,643) (10,833) 


Total comprehensive loss for the year (8,324) (10,206) 



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 


A$’000 



Attributable to stapled security holders 

Issued 

Capital 

Accumulated 

Losses 

Reserves 

Non-controlling 

Interest 

Total Equity 


Balance at the beginning of the year 57,323 (26,190) (39,684) 1,035 (7,516) 

Exchange differences - - 1,886 1 1,887 

Hedging reserve movements - - (1,267) - (1,267) 



Total Comprehensive Loss for the year - (9,262) 619 319 (8,324) 

Issue of capital 4,711 - - - 4,711 


Distributions to non-controlling interests - - - (141) (141) 

Balance at the end of the year 62,028 (35,452) (39,065) 1,213 (11,276) 


Balance at the beginning of the year 55,255 (14,750) (40,291) 702 916 

Exchange differences - - 607 7 614 


Loss for the year - (10,820) - - (10,820) 

Total Comprehensive Loss for the year - (11,440) 607 627 (10,206) 



Distributions to non-controlling interests - - - (294) (294) 

Balance at the end of the year 57,323 (26,190) (39,684) 1,035 (7,516) 


. 

120





A$’000 




Trade and other receivables 9 5,116 7,522 


Other current assets 10 716 892 

Total Current Assets 10,397 15,245 


Receivables 11 11,847 16,997 

Property, plant and equipment 13 126,020 103,084 

Intangible assets 14 16,165 17,428 

Deferred taxation assets 6 1,211 872 

Other non-current assets 12 - 143 


Total Assets 165,640 153,769 


Trade and other payables 15 10,555 11,640 

Provisions 16 161 210 

Income tax liability 236 272 

Borrowings 17 22,919 26,954 



Provisions 16 - 31 

Borrowings 17 128,206 107,232 


Deferred taxation liabilities 6 10,387 11,101 


Total Liabilities 176,916 161,285 

Net Liabilities (11,276) (7,516) 

Equity 



Reserves 20 (39,065) (39,684) 

Total Parent Equity (12,489) (8,551) 

Non-controlling interest 21 1,213 1,035 

Total Equity (11,276) (7,516) 


121





A$’000 



Receipts from customers 24,779 27,110 

Payments to suppliers and employees (21,771) (19,637) 

Interest received 1,088 556 

Interest paid (6,224) (6,246) 

Income taxes paid/refunded (210) 435 

Net cash inflow from operating activities 7 (2,338) 2,218 


Disposal of assets - 12 




Proceeds from issue of equity 4,711 2,070 


Proceeds from external borrowings 15,703 6,229 

Net advances from/(to) related parties 20,716 (6,681) 

Net cash inflow from financing activities 41,124 1,616 

Net increase in cash and cash equivalents (1,448) (1,967) 

Effects of exchange rate changes on cash and cash equivalents 

(818) (478) 


6,792 9,237 

Cash and cash equivalents at the end of the financial year 4,526 6,792 


122



A$’000 





have been consistently applied for the entire period presented, unless otherwise stated. The financial statements for the 

Campus Living Overseas Trust (‘‘CLOT’’), consist of the parent entity and its subsidiaries. CLOT is one of four tusts in a 

stapled group that form the Campus Living Villages Fund (’The Fund’’), the units of which can only be purchased or sold in 

their current stapled arrangement. 


This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other 







liabilities (including derivative instruments) which are carried at fair value through profit or loss. 


The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting 

estimates. It also requires management to exercise its judgement in the process of applying the entity’s accounting 

policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are 

significant to the financial statements are set out in the applicable accounting policy note. Refer to Intangible Assets note 

14 and Provisions note 16. 


Subsidiaries 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of CLOT as at 30 June 2011 

and the results of all subsidiaries for the year then ended. CLOT and its subsidiaries together are referred to in this 

financial report as the consolidated entity. Subsidiaries are all those entities (including special purpose entities) over 

which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a 

shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are 

currently exercisable or convertible are considered when assessing whether the consolidated entity controls another 

entity. 

Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are 

de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the 

acquisition of subsidiaries by the consolidated entity, as set out in ‘‘ Business combinations’’ note 1 (g). 

CLOT treats transactions with non-controlling interests as transactions with parties external to CLOT. Disposals to noncontrolling 

interests result in gains and losses for CLOT that are recorded in the statement of comprehensive income. 

Purchases from non-controlling interests result in goodwill, being the difference between any consideration paid and the 

relevant share acquired of the carrying value of identifiable net assets of the subsidiary. 





Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of 

comprehensive income and balance sheet respectively. 

123



A$’000 









Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at 

the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and 

from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are 

recognised in the statement of comprehensive income. 

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value 

through profit or loss are recognised in profit or loss as part of the fair value gain or loss. 

Consolidated entity companies 

The results and financial position of all of the subsidiaries of the consolidated entity that have a functional currency 

different from the presentation currency are translated into the presentation currency as follows: 

> Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that 


> Income and expenses for each income statement are translated at average exchange rates (unless this is not a 

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case 

income and expenses are translated at the dates of the transactions); and 







The consolidated entity recognises revenue when the amount of revenue can be reliably measured, it is probable 

that future economic benefits will flow to the entity and specific criteria have been met for each of the consolidated 

entity’s activities as described below. The amount of revenue is not considered to be reliably measurable until 

all contingencies relating to the sale have been resolved. The consolidated entity bases its estimates on historical 

results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. 



Accommodation rental revenue is recognised on a time proportion basis in income on a straight line basis over the 

lease term. Revenue received in advance is carried as a liability on the balance sheet. 


Other accommodation related revenue is recognised when the service has been provided or goods have been sold 

to the customer. Other accommodation related revenue typically includes income from catering, conferences, casual 





124



A$’000 



Interest 


impaired, the consolidated entity reduces the carrying amount to its recoverable amount, being the estimated future cash 

flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest 




e) Income tax 


national income tax rate (or State tax rates for US operations) for each jurisdiction adjusted by changes in deferred tax 

assets and liabilities attributable to temporary differences and to unused revenue tax losses. 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax 

bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred 


business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred 



is settled. 


future taxable amounts will be available to utilise those temporary differences and losses. 

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax 

bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the 





the asset and settle the liability simultaneously. 

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly 

in equity. 



as companies and are division 6C of the Income Tax Assessment Act (1936) and the taxable income is fully distributed to 



On 1 July 2007 CLOT (a division 6C trust) became the head entity of a tax consolidated group. The head entity and the 

member entities in the tax consolidated group account for their own current and deferred tax amounts. These tax 

amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own 

right, adjusted for the relevant tax consolidation entries. In addition to its own current and deferred tax amounts, the head 

entity also recognises the current tax liabilities or assets and the deferred tax assets arising from unused tax losses and 

unused tax credits assumed from controlled entities in the tax consolidated group. 

Assets or liabilities arising under tax funding agreements with other group members are recognised as amounts 

receivable from or payable to other entities in the separate financial statements of each group member. 

Upon receipt of a funding advice any group member will pay the head entity the amount allocated to the group member 

within the time frame specified in the funding advice. In the event that the head entity owes the group member, the same 

terms will apply. The tax funding arrangement allows this payment to be settled by way of intercompany account. 

125



A$’000 



Non-Australian tax entities 

CLOT has subsidiaries in the United States of America (‘‘US’’), New Zealand (‘‘NZ’’) and the United Kingdom (‘‘UK’’), which do 

not form part of the tax consolidation group and comply with tax legislation in those countries. 

f) Leases 

Leases of property, plant and equipment where the consolidated entity, as lessee, has substantially all the risks 

and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the 

fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental 

obligations, net of finance charges, are included in other short -term and long-term payables. Each lease payment is 

allocated between the liability and finance cost. The finance cost is charged to the statement of comprehensive income 

over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each 

period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s 

useful life and the lease term. 

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the consolidated entity 

as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from 

the lessor) are charged to the statement of comprehensive income on a straight -line basis over the period of the lease. 

g) Business combinations 


involving entities or businesses under common control, regardless of whether equity instruments or other assets 

are acquired. Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or 

assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued 

in an acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in rare 

circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair 

value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs 

arising on the issue of equity instruments are recognised directly in equity. 


initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the 

cost of acquisition over the fair value of the consolidated entity’s share of the identifiable net assets acquired is recorded 

as goodwill. 

If the cost of acquisition is less than the consolidated entity’s share of the fair value of the identifiable net assets of the 

subsidiary acquired, the difference is recognised directly in the statement of comprehensive income, but only after a 

reassessment of the identification and measurement of the net assets acquired. 





The acquirer in a business combination must be identified. The acquirer is the combining entity that obtains control of the 

other combining entities or businesses. Control is the power to govern the financial and operating policies of an entity or 

business so as to obtain benefits from its activities 

In the event that the acquirer identified is not the legal parent of the business combination, the issued capital of the 

consolidated entity reflects the issued capital of the acquirer amended for the appropriate fair value adjustments of the 

business combination. 

126



A$’000 



h) Impairment of assets 


circumstances indicate that it might be impaired. Other assets are reviewed for impairment whenever events or changes 

in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the 

amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an 

asset’s fair value less costs to sell or value in use. For the purposes of assessing impairment, assets are grouped at the 

lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows 

from other assets or consolidated entity’s assets (cash-generating units). Non-financial assets other than goodwill that 

suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 

i) Cash and cash equivalents 

For cash flow statement presentation purposes, cash and cash equivalents include cash on hand, deposits held at call 

with financial institutions, other short-term, highly liquid investments with original maturities of three months or 

less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in 

value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. 

j) Trade receivables 




off. A provision for impairment of trade receivables is established when there is objective evidence that the consolidated 

entity will not be able to collect all amounts due according to the original terms of the receivables. Significant financial 

difficulties of the debtor and default or delinquency in payments more than 30 days overdue are considered indicators 

that the trade receivable is impaired. The amount of the provision on impairment is the difference between the asset’s 

carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. 


the provision on impairment is recognised in the statement of comprehensive income in other expenses. When a trade 

receivable for which an impairment has been recognised becomes uncollectible, it is written off against the allowance 

account for trade receivables. Subsequent recoveries of amounts previously written off are credited against other 

expenses in the statement of comprehensive income. 

k) Other financial assets 


The consolidated entity classifies its investments in the following categories: financial assets at fair value through 

profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The 

classification depends on the purpose for which the investments were acquired. Management determines the 

classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates 

this designation at each reporting date. 


Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this 

category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading 

unless they are designated as hedges. Assets in this category are classified as current assets. 




balance sheet date which are classified as non-current assets. 

Loans and receivables are included in trade and other receivables, other current assets, receivables and other non-current 

assets in the balance sheet. 

127



A$’000 



Held–to–maturity investments 


maturities that the consolidated entity’s management has the intention and ability to hold to maturity. If the consolidated 

entity were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be 

tainted and reclassified as available-for sale. Held-to-maturity financial assets are included in non-current assets, except 

for those with maturities less than 12 months from the reporting date, which are classified as current assets. 

Available–for–sale 





Regular purchases and sales of financial assets are recognised on trade-date, being the date on which the consolidated 

entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all 

financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss 

are initially recognised at fair value and transaction costs are expensed in the statement of comprehensive income. 

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have 

been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When 

securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are 

included in the statement of comprehensive income as gains and losses from investment securities. 



method. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently 

carried at fair value. Gains or losses arising from changes in the fair value of financial assets at fair value through profit or 

loss are presented in the statement of comprehensive income within other income or other expenses in the period in 

which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement 

of comprehensive income as part of revenue from continuing operations when the consolidated entity’s right to receive 

payment is established. 






Fair value 


for unlisted securities), the consolidated entity establishes fair value by using valuation techniques. These include the use 

of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow 

analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entityspecific 

inputs. 

Impairment 

The consolidated entity assesses at each balance date whether there is objective evidence that a financial asset is 

impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value 

of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for 

available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the 

current fair value, less any impairment loss on that financial asset previously recognised in profit or loss -- is removed from 

equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of 

comprehensive income on equity instruments classified as available-for-sale are not reversed through the statement of 

comprehensive income. 

128



A$’000 



l) Derivatives 


remeasured to their fair value, which has been determined by comparing the contracted rate to the current market rate for 

a contract with the same maturity at each reporting date. Changes in the fair value of any derivative instrument that does 

not qualify for hedge accounting are recognised immediately in the statement of comprehensive income. 


The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is 

recognised in other comprehensive income and accumulated reserves in equity. The gain or loss relating to the ineffective 

portion is recognised immediately in profit or loss within other income or other expense. 

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss 

(for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of 

interest rate swaps hedging variable rate borrowings is recognised in profit or loss within ‘finance costs'. The gain or loss 

relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in profit or loss 

within ‘sales'. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for 

example, inventory or fixed assets) the gains and losses previously deferred in equity are reclassified from equity and 

included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in profit or 

loss as cost of goods sold in the case of inventory, or as depreciation or impairment in the case of fixed assets. 

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge 

accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the 

forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, 

the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss. 

m) Fair value estimation 




available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used 

for financial assets held by the consolidated entity is the current bid price. The fair value of financial instruments that are 

not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The 

consolidated entity uses a variety of methods and makes assumptions that are based on market conditions existing at 

each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments 

held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining 

financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash 

flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance 

sheet date. 

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their 

fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by 

discounting the future contractual cash flows at the current market interest rate that is available to the consolidated 

entity for similar financial instruments. 

n) Property, Plant and equipment 


directly attributable to the acquisition of the items. 

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when 

it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of 

the item can be measured reliably. The carrying amount of any replaced part is derecognised. All other repairs and 

maintenance are charged to the Statement of Comprehensive Income during the reporting period in which they are 

incurred. 

129



A$’000 



Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or 

revalued amounts, net of their residual values, over their estimated useful lives, as follows: 

Buildings 




Vehicles 

25-40 years 

25-35 years 


3-8 years 

3-5 years 



than its estimated recoverable amount. 

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the 

statement of comprehensive income. When revalued assets are sold, amounts included in other reserves in respect of 

those assets are transferred to retained earnings. 

o) Intangibles 

Goodwill 

Goodwill represents the excess of the cost of an acquisition over the fair value of the consolidated entity’s share of the 

net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill is not amortised and 

tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be 

impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include 

the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose 

of impairment testing. Cash-generating units represents the consolidated entity’s investment in each country of operation 

by each primary reporting segment. 






p) Trade and other payables 

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of 

financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Deferred 

revenue represents income received in advance from students at the beginning of the semester and is released to revenue 

when the recognition criteria have been met. 

q) Borrowings and borrowing costs 



recognised in the statement of comprehensive income over the period of the borrowings using the effective interest 

method. 

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or 

expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to 



Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer 

settlement of the liability for at least 12 months after the balance sheet date. All borrowing costs incurred for the 

construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the 

asset for its intended use or sale. Other borrowing costs are expensed. 

130



A$’000 



r) Provisions 

Provisions for legal claims and employee benefits are recognised when the consolidated entity has a present legal or 

constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the 

obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined 

by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with 

respect to any one item included in the same class of obligations may be small. 





s) Employee benefits 

Wages and salaries, annual leave, sick leave 











Bonus plan 

The consolidated entity recognises a liability and an expense for bonuses based on a formula that takes into consideration 

the performance of the Fund certain adjustments. The consolidated entity recognises a provision where contractually 

obliged or where there is a past practice that has created a constructive obligation. 

t) Issued capital 

The issued capital of the parent entity is the unit holdings of CLOT. The issued capital of the consolidated entity 

is the capital of the acquirers identified in the business combinations in the underlying trusts. 

u) Distributions 

A provision is made for the amount of any distribution approved by the Directors, on or before the end of the financial year 


v) Goods and Services Tax (GST) 


recoverable from the taxation authority, in which case it is recognised as part of the cost of acquisition of the asset or 

as part of the expense. 


recoverable from, or payable to, the taxation authority, is included with other receivables or payables in the balance 

sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing 

activities which are recoverable from, or payable to the taxation authority, are presented as an operating cash flow. 

w) Rounding of amounts 


Commission, relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been 

rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar. 

131



A$’000 



x) Parent entity financial information 


consolidated financial statements except as set below: 



y) New accounting standards 








effective for accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment 

clarifies and simplifies the definition of a related party. When the amendments are applied, the Fund will need to disclose 

any transactions between its subsidiaries and its associates. However, there will be no impact on any of the amounts 

recognised in the financial statements. 




























132





A$’000 


















The consolidated entity’s activities expose it to a variety of financial risks, which include market risk (currency risk and 

cash flow interest rate risk), credit risk and liquidity risk. The consolidated entity’s overall risk management program 

focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial 

performance of the group. 

CLOT uses derivative financial instruments such as interest rate swaps to mitigate cash flow interest rate risk. 

CLOT uses different methods to measure different types of risk to which it is exposed. These methods include 

sensitivity analysis in the case of interest rate and foreign exchange risk, age analysis for credit risk, and cash flow 

forecasts for liquidity risks. 

CLOT holds the following financial instruments: 




Trade and other receivables 9 5,116 7,522 

Non-current receivables 11 11,847 16,997 

21,489 31,311 


Trade and other payables 15 10,555 11,640 

Borrowings 17 151,125 134,186 


166,132 149,671 


Subsidiaries of the Fund operate in the US, NZ and the UK and trade and source external financing in their local currency. 

Management of the Fund monitors the exchange rate fluctuations between the Australian Dollar and the local currencies 

of the foreign subsidiaries on a regular basis. Management have not utilised any derivative financial instruments to date to 

hedge the foreign currency risk of earnings from subsidiaries in accordance with an agreement with the unit holders of the 

Fund. If the exchange rates fluctuated by 10% the loss after tax would vary by $0.9m and the net assets would vary by 

$1.3m. Management will institute the appropriate action and utilise the necessary derivative financial instruments should 

there be a change in agreement with the unit holders. 

133



A$’000 



Loans are made between entities within the Fund for the purposes of providing funding for capital expenditure or the net 

investment in subsidiaries. The currency of the loan is generally denominated in the currency of the lender and the loans 

are valued at balance sheet spot rate at each reporting date. As at 30 June 2011 CLOT did not have any foreign currency 

denominated loans. 







are used to deposit funds. 



calls from investors. Repayments of borrowings are funded through cash generated from operations and equity calls from 

investors where required. The financing facilities available are included in note 7 (c). The forecasted payments of principal 

and interest of borrowings of the remaining contractual liabilities are: 

Due within 

one year 

Due within 

1-5 years 

Due after 

five years 



- Variable 3,884 82,007 - 85,891 

- Swaps 975 (702) - 273 

Total loans from financial institutions 4,859 81,305 - 86,164 

Lease liabilities - fixed 253 189 6,322 6,764 

Loans from related parties 

- Interest free 22,284 - - 22,284 

- Variable 1,589 27,354 35,158 64,101 

Total undiscounted financial liablities 28,985 108,848 41,480 179,313 



- Variable 3,352 71,740 - 75,092 

- Swaps 1,269 1,726 - 2,995 

Total loans from financial institutions 4,621 73,466 - 78,087 

Lease liabilities - fixed 215 203 6,714 7,132 


- Interest free 26,668 - - 26,668 

- Variable 625 27,159 17,366 45,150 

Total undiscounted financial liablities 32,129 100,828 24,080 157,037 

Total 

134





A$’000 



have the economic effect of converting borrowings from floating rates to fixed rates. Under the interest rate swap 

contracts, the Fund agrees with financial institutions to exchange, at specified intervals (mainly quarterly), the difference 

between fixed contract rates and floating-rate interest amounts calculated by reference to agreed notional principal 

amounts. 

Interest payments are fixed through the use of interest rate swaps and fixed interest rate loans. The hedged portion of the 

loans in NZ and the UK is 95% and 100% respectively and bears interest at rates on the NZ debt of between 6.52% and 

8.17% and between 2.85% and 3.89% on the UK debt. The variable portion of the interest payments are subject to change 

in floating interest rates and a 50 basis points increase results in NZ$12k (2010: $0.36m) additional interest per annum. 

The carrying amount of borrowings is summarised below: 



- Variable 6,133 7,241 

- Swaps 69,802 58,881 




- Interest free 22,284 26,668 

- Variable 51,276 39,933 

Total undiscounted financial liablities 151,125 134,186 

The weighted average interest rates of the borrowings are summarised below: 


% % 

Loans from financial institutions 5.10 5.20 


Loans from related parties - variable 6.38 5.50 



The fair value of derivative financial instruments is based on external valuations and is measured using forward interest 




3. Revenue 



Management fees 5,532 6,446 

Development revenue - 987 

Interest 1,088 848 


135



A$’000 



4. Other Income 


Profit on disposal of property, plant and equipment - 12 

Other income 7 32 

Total other income 7 44 

5. Expenses 



Borrowing and finance costs 

- Interest and finance charges 7,160 6,246 

- Interest capitalised (936) - 

- Interest and finance charges expensed 6,224 6,246 

- Unrealised foreign exchange on borrowings (44) 806 

- Amortisation of borrowing costs 250 285 

Total borrowing and finance costs expensed 6,430 7,337 

Other expenses include: 

- Property running costs 5,310 4,448 

- Development costs written off 398 - 

- Marketing 605 551 

- Auditors remuneration 272 290 

- Professional fees 704 686 

- Bad debts 770 298 

- Other administrative expenses 1,989 1,924 

- Loss on disposal of property, plant and equipment 204 - 

- Rent 1,881 1,660 


6. Taxation 



Current tax 

- Current year 127 263 

Deferred tax 

- Current year (707) 4,335 

- Change in rate - (555) 

- Prior year under provision - 8 

Total tax (credit)/expense (580) 4,051 

136



A$’000 







New Zealand tax law changes - 4,446 

Difference in overseas tax rates (299) (71) 

Losses not recognised 1,882 1,326 

Prior year (over)/under provision - 8 

Witholding tax 126 67 

Other 568 306 

Total tax (credit)/expense (580) 4,051 



Deferred taxation asset (1,211) (872) 

Deferred taxation liability 10,387 11,101 

Net deferred taxation liability 9,176 10,229 

This balance comprises temporary differences attributed to: 



- Provisions (28) 12 

- Other (48) 14 

11,776 12,948 

Deferred tax attributible to unused tax losses and tax credits (2,600) (2,719) 

Net deferred taxation liability 9,176 10,229 


- Opening balance 10,229 5,988 

- Charge recorded in the income statement (707) 3,788 

- Reclassification of tax receivable - 440 

- Foreign currency translation movements (346) 13 

Closing balance 9,176 10,229 

d) Unrecognised tax losses 

CLOT, as head entity of the Australian tax consolidated group from 1 July 2007, did not recognise a deferred tax asset for 

Australian tax losses incurred from 1 July 2007. The estimated tax losses of A$82k will potentially recognise a deferred tax 

asset of A25k. 

Campus Living Villages UK Limited did not recognise a deferred tax asset for UK tax losses incurred from 1 July 2008 . The 

estimated tax losses of £1.4m will potentially recognise a deferred tax asset £0.3m. 

CCHM Management Holdings Corporation did not recognise a deferred tax asset for US tax losses incurred from 9 January 

2007. The estimated tax losses of US$10.4m will potentially recognise a deferred tax asset of US$3.6m. 

137



A$’000 




a) Cash at year end comprises: 



Restricted cash 1,445 2,145 


Cash balance per cash flow statement 4,526 6,792 

Cash at bank and on hand and restricted cash earns interest at floating rates with average rates in New Zealand of 3% and 

average rates in the UK of between 0.3% to 0.375% (2010: weighted average 3%). The property business holds restricted 

cash for certain uses under loan agreements, statutory requirements such as rules relating to resident security deposits, 

and asset maintenance agreements with the universities. 

b) Reconciliation of loss for the year to net cash flow from operating activities 



Adjustment of non-cash items: 

- Depreciation and amortisation 5,281 5,355 

- Impairment of assets 1,489 - 

- Fair value adjustments of derivatives (283) 1,207 

- Bad debts 770 298 

- Unrealised foreign exchange on borrowings (44) 806 

- Development costs written off 398 - 

- Loss on disposal of property, plant and equipment 204 (12) 

Total non-cash items 7,815 7,654 


- Trade and other receivables 221 (1,124) 

- Inventories (4) 9 

- Other current assets (334) (159) 

- Tax balances (790) 4,487 

- Trade and other payables (94) 2,677 


- Other (141) (292) 

Net cash inflow/(outflow) from operating activities (2,338) 2,218 







138



A$’000 



8. Derivative financial instruments 

Interest rate swaps 

The New Zealand and UK businesses entered into variable to fixed interest rate swaps for 95% (2010: 85%) and 100% 

(2010: 100%) respectively of the borrowings in that business at an average interest rate of 6.77% and 3.29% respectively. 

Interest rate swaps that do not meet the hedge criteria in AASB 139 Financial Instruments: Recognition and Measurement 

have changes in fair value recorded in the profit and loss. 

9. Trade and other receivables 


Trade receivables 2,023 2,516 

Provision for impairment of receivables (1,025) (615) 

998 1,901 

Related party receivable 3,318 5,273 

Other debtors 800 348 

Total trade and other receivables 5,116 7,522 

The movement of the provision is: 

- Opening balance 615 20 

- Impairments during the year 528 598 

- Foreign exchange movements (118) (3) 

Closing balance 1,025 615 


- Less than 60 days - - 

- 61 to 90 days - 3 

- 91 days and greater 1,025 612 

Total provision 1,025 615 


- Not past due and not impaired 680 554 

- Past due and not impaired 318 1,347 

- Past due and impaired 1,025 615 

Total trade receivables 2,023 2,516 


- Less than 60 days 45 139 

- 61 to 90 days 147 43 

- 91 days and greater 126 1,165 

Total past due and not impaired receivables 318 1,347 

10. Other current assets 


Prepayments 710 850 

Tender and deposits 6 42 

Total other current assets 716 892 

139



A$’000 



11. Non-current receivables 


Loans to group companies 11,847 16,997 

Total non-current receivables 11,847 16,997 

The consolidated entity has a loan with CLV Accommodation Holdings Pty Limited of $11.8m (2010: $16m), which bears 

interest at the NZ 90 day bank bill rate of 2.65% (2010: 2.9%) plus 4% margin (2010: 4% margin) and is repayable on 22 

November 2017. 



Deferred expenses and other capitalised costs - 143 

13. Property, plant and equipment 

Land and 

Buildings 

Plant and 



Cost or fair value 110,586 7,978 24,542 143,106 



Net book amount 101,072 4,221 20,727 126,020 


Opening net book amount 75,013 5,477 22,594 103,084 

Additions 37,283 1,067 - 38,350 

Capitalised interest 936 - - 936 


Depreciation (1,683) (1,537) (701) (3,921) 

Disposals (239) (174) - (413) 

Foreign currency movements (8,749) (612) (1,166) (10,527) 

Closing net book amount 101,072 4,221 20,727 126,020 


Cost or fair value 81,244 8,894 25,877 116,015 


Net book amount 75,013 5,477 22,594 103,084 


Opening net book amount 76,365 3,895 22,952 103,212 

Additions 2,779 3,034 - 5,813 

Depreciation (2,036) (1,255) (739) (4,030) 

Disposals - (12) - (12) 

Foreign currency movements (2,095) (185) 381 (1,899) 

Closing net book amount 75,013 5,477 22,594 103,084 

The carrying amount of the assets included above, includes expenditures for the asset under construction of $37.9m (2010: 

nil). Details of assets pledged as security are included in the borrowings note (refer note 17). 

The University of Canterbury has been impacted by economic and environmental factors. The long term assumptions and 

forecasts have been amended in the Fund valuation to reflect these factors which has resulted in an impairment of 

NZ$1.9m. 

140



A$’000 



14. Intangible assets 

Goodwill Other Intangibles Total 







Amortisation - (1,110) (1,110) 

Foreign currency movements (545) 392 (153) 








Amortisation - (1,040) (1,040) 

Foreign currency movements (134) 222 88 


Goodwill 

Goodwill relates to the Management businesses. Goodwill is not amortised and is subject to an annual impairment test. 

The recoverable amount is determined by value-in-use calculations. 

The value-in-use calculations use cash flow projections based on financial budgets in the Fund valuation model adjusted 

for latest market conditions and business developments. 

The key assumptions in the cash flow forecasts are rental growth, facility management fee income growth, capital 

expenditure growth and discount rates. The recoverable amounts of the US Management non-current assets are $17.5m 

(2010: $18.4m) which is in excess of the carrying amount of $11.2m (2010: $9m). Management do not consider changes in the 

underlying assumptions to have a significant effect on the recoverable amount and possible impairment of goodwill. Other 

intangibles include management and student contracts. 

Other Intangibles 

Other Intangibles include student and management contracts. Management contracts acquired as part of a business 

combination are recognised separately from goodwill. The management contracts are carried at their fair value at the 

date of acquisition less accumulated amortisation and impairment losses. Amortisation of management contracts is 

calculated based on the timing of projected cash flows of the contracts over their estimated useful lives, which currently 

vary from 20 to 30 years. 




Other creditors and accruals 9,224 9,760 

Total trade and other payables 10,555 11,640 

141



A$’000 






Annual leave 161 210 


Performance fee - 31 

Total provisions 161 241 

The performance fee payable to CLFM is subject to total fund management fees in any year being capped at 1.5% of the 

Net Asset Value (‘‘NAV’’) as determined in the final NAV of the Fund. The fee above the cap is nil (2010: nil). 


a) Borrowings are classified into current and non-current borrowings as follows: 


Current 

Loans from financial institutions 310 - 

Lease liabilities 325 286 


Total current borrowings 22,919 26,954 


Non-current 




Total non-current borrowings 128,206 107,232 

A loan established on 30 November 2009 between CLV Finance UK Limited and Campus Living Villages UK Ltd remains in 

place. It bears interest at LIBOR plus 2.25% margin (2011: 3.47%, 2010: 2.79%) and is repayable on 1 November 2019. 

A loan established on 30 November 2009 between CLV Finance UK Limited and Campus Living Villages (Salford) UK Ltd 

remains in place. It bears interest at LIBOR plus 4% margin (2011: 5.22%, 2010: 4.54%) and is repayable on 1 November 

2019. 

A new loan was established between CLV Finance UK Limited and Campus Living Villages (Bedfordshire) UK Ltd on 2 July 

2010. It bears interest at LIBOR + 6% (2011: 6.59%) and is repayable on 1 May 2020. 



142





A$’000 






Total current borrowings 77,565 67,585 

Unsecured borrowings 


c) Assets pledged as security 

The loans from financial institutions have been financed with limited recourse debt. The package of securities normally 

provided is as follows: 

> A first ranking all assets fixed and floating charge granted by the Borrower in favour of the bank; 

> A first ranking mortgage of the Lease from the University to the borrower; 

> A first ranking share mortgage granted by the Parent of the Borrower in relation to all shares held by the 

Parent in the borrower. 


Current assets 

Cash and cash equivalents 501 6,036 

Trade and other receivables 441 2,157 

Inventory - 18 

Other current assets 288 423 


Property, plant and equipment 101,018 97,886 

Intangible Assets - 5,966 

Total Assets 102,248 112,486 




Issue of capital for the year 4,711 2,070 



The stapled entity has 717,213,643 (2010: 413,458,590) units on issue. 

The issued capital of the consolidated entity is the capital of the acquirers identified in the business combinations. 

143



A$’000 








20. Reserves 

a) Total reserves comprise: 



Currency translation differences 1,886 607 

Hedging differences (1,267) - 


b) Reconciliation of total reserves 


Foreign currency translation reserves 146 (1,740) 

Business combination reserves (37,944) (37,944) 

Hedging reserves (1,267) - 



The consolidated entity has subsidiaries that operate in the US, NZ and the UK with functional currencies of US Dollar 

(USD), New Zealand Dollar (NZD) and British Pound (GBP) respectively. As such, exchange differences arise when 

translating the financial information of these entities into the Australian Dollar, the reporting currency of the consolidated 

entity. 


The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in 

other comprehensive income . Amounts are reclassified to profit or loss when the associated hedged transaction affects 

profit or loss. 

Business combination reserve 

The reserve arose on formation of the CLOT group as a result of the deemed acquisition of the subsidiaries by Campus 

Living Villages NZ Limited. 

21. Non controlling interest 


Balance at the beginning of the year 1,035 702 

Profit for the year 318 620 

Distributions to non-controlling interests (141) (294) 

Foreign currency movements 1 7 


The non-controlling interest represents 50% of the Student Furniture business in the US owned by another party. 

144





A$’000 


There were no dividends or distributions made during the year (2010: nil). 

23. Key management personnel remuneration (denominated in A$) 

Key management personnel include Directors of the Responsible Entity, Campus Living Funds Management Limited 

(‘‘CLFM’’) and senior management of operations and development in the subsidiaries of the stapled entity. 


Short term employee benefits 960,908 935,924 

Post employment benefits 22,355 51,011 

Long term benefits 5,158 11,865 

Total key management personnel remuneration 988,421 998,800 

24. Auditors remuneration (denominated in A$) 


Remuneration for the audit of the financial report: 


PwC Overseas 180,041 153,214 

205,041 180,214 

Remuneration for other services: 

PwC Australia 2,750 - 

PwC Overseas 64,585 109,709 

67,335 109,709 


A description of the parent entity and subsidiaries is provided in the Subsidiaries note 29 and disclosure of key 

management personnel remuneration is included in the Key management personnel disclosures note 23. 

Transactions with related parties 



Management fees charged by management companies to the village operations are based on a percentage of revenue or 

gross operating profit. 


Loans are made between subsidiary companies and stapled entities to provide short term financing and better utilise 

group funds available. 

Loans are also in place between stapled entities and subsidiary companies on formation of the stapled entity. Interest is 

charged on loans between entities within the consolidated entity at rates that approximate bank lending rates. Refer to 

note 11 and 17 for Related party loans. 


Dividends and distributions are declared from subsidiary companies to entities within the group. 

Tax consolidation 

Refer to the Income Tax accounting policy note 1(e). 

145



A$’000 



Fund manager fees paid to the Responsible Entity 

The fund manager fees are allocated to each trust based on the NAV of the trust. The constitutions of the individual trusts 

prescribe the method of calculation of the fund manager fees, which is borne by the individual trusts. The total fees 

payable are subject to the total fund management fees in any year being capped at 1.5% of the net asset value of the trust 

as determined and calculated in the final NAV of the Fund. The fees above the cap will be payable in future years if the fees 

earned in those years are below the cap at that date. This amount is recorded as a provision (refer note 16) and is 

discounted to reflect the estimated timing and value of the future payment. 

Management fees include base fees $65,547 (2010: $28,764) and performance fees below the cap $240,008 (2010: 

$124,996). Performance fees above the cap are included in provisions (refer note 16). 

Directors’ fees paid to Responsible Entity 


Support services costs 

CLOT paid CLFM $6,344 for equity raising costs. 


a) Capital commitments 



Payable within one year 21,810 8 

Total plant, property and equipment 21,810 8 

b) Lease commitments 

Commitments in relation to leases contracted for at reporting date but not recognised as liabilities is are follows: 


Payable within one year 1,040 786 









The consolidated entity leases office space and accommodation from certain universities, which have carrying terms, 

escalation clauses and renewal rights. 

Commitments in relation to leases contracted for at reporting date but not recognised as liabilities is as follows: 


Payable within one year 1,112 786 


Payable after five years 278 1,061 

Total operating lease liabilities 4,560 2,938 

146



A$’000 




The group leases various property, plant and equipment under finance leases. Commitments under finance leases are: 


Payable within one year 253 215 

Payable within one to five years 189 203 






CLOT has bank guarantees of US$2.6m (2010: $9.1m) in favour of third parties. Management are not aware of any other 

significant contingencies at year end. 


a) Summary of financial information 



Current assets 415 478 

Total assets 55,228 55,142 

Current liabilities 22,438 27,097 


Shareholders' equity 



32,790 28,045 

Profit /(loss) for the year 43 5,758 

Total comprehensive income 43 5,758 


The parent entity did not have any contingent liabilities as at the 30 June 2011 or 30 June 2010. 


The parent entity did not have any contractual commitments as at the 30 June 2011 or 30 June 2010. 

147



A$’000 




COUNTRY INCORPORATED PERCENTAGE OWNERSHIP (%) 

2011 2010 

Subsidiaries of CLOT 

CCHM Management Holdings Corp USA 100 100 

Campus Living Accommodation Company (USA) Pty Limited Australia 100 100 

CLV UK Accommodation Holdings Pty Limited Australia 100 100 

Campus Living Villages Salford Pty Limited Australia 100 100 

Campus Living Villages Bedfordshire Pty Limited Australia 100 100 

Campus Living Villages NZ Limited New Zealand 100 100 

Campus Living Villages UK Limited UK 100 100 

Campus Living Villages (Operations) UK Limited UK 100 100 

Campus Living Villages (Salford) Pty Limited UK 100 100 

Campus Living Villages (Bedfordshire) Limited UK 100 100 


There are no significant events occurring after the balance sheet date. 


The consolidated entity has a net liability position of $11.276m and a net current liability position of $23.474m. The 

Directors have satisfied themselves that the consolidated entity will be able to pays its debts as and when they fall due 

based on cash flow estimates from underlying assets after servicing external debt service costs and intercompany debt 

service, allowing for capitalisation of intercompany interest where required. 

148


FOR THE 


Campus C Living Villages Annual Report 10/11 



a) The financial statements and notes set out on pages 119 to 148 are in accordance with the Corporations Act 2001, 

including: 

> 

> 




r 

giving a true and fair view of the parent entity’s and consolidated entity’s financiall position as at 30 June 

2011 and of their performance for the year ended on that date; and 

b) There are reasonable grounds to believe that the parent entity and consolidated entity will be able to pay their 

debts as and when they becomee due and payable; and 

c) The financial statements comply with International Financiall Reporting Standards as issu ed by the International 

Accounting Standards Board. 


John Niland 

Chairman 


Director 

Sydney 


149


TO THE UNITHOLDERS OF CAMPUS LIVING OVERSEAS TRUST 


We have audited the accompanying financial report of Campus Living Overseas Trust (the trust), which comprises the consolidated balance 

sheet as at 30 June 2011, the statement of comprehensive income, consolidated statement of changes in equity and consolidated cashflow 

statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration 

for the Campus Living Overseas Trust group (the consolidated entity). The consolidated entity comprises the trust and the entities it controlled 

at the year's end or from time to time during the financial year. 


The directors of the Campus Living Funds Management Limited (the directors), as responsible entity of trust are responsible for the 


2001 and for such internal controls as the directors determine is necessary to enable preparation of the financial report that is free from 


















Independence 




(a) the financial report of Campus Living Overseas Trust is in accordance with the Corporations Act 2001, including: 






N R McConnell 

Sydney 














Walsh Bay 


T +61 2 9037 7100 

Directors 

The Directors Campus Living Funds Management 

Limited, are: 







Secretary 

The company secretary of the Responsible Entity 

is Richard Gabelich. 






Auditor 

The auditors of the group are PricewaterhouseCoopers 

based in Sydney. 



151

Contact Us 

If you have any further queries or 

require any further information, 

please contact us. 

Campus Living Funds Management 

Limited 

Pier 8/9 Walsh Bay, 23 Hickson Road 

Sydney NSW 2000 Australia 

phone +61 2 9270 1600 

email info@clv.com.au 

visit campuslivingvillages.com

Annual Report 10/11 - Campus Living Villages

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