Annual Report 10/11 - Campus Living Villages

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Campus Living Villages Annual Report 10/11 Campus Living Overseas Trust NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011 A$’000 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. 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 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: Notes June 2011 June 2010 Financial assets Cash and cash equivalents 7 4,526 6,792 Trade and other receivables 9 5,116 7,522 Non-current receivables 11 11,847 16,997 21,489 31,311 Financial liabilities Trade and other payables 15 10,555 11,640 Borrowings 17 151,125 134,186 Derivative financial instruments 8 4,452 3,845 166,132 149,671 a) Currency risk 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 $1.3m. Management will institute the appropriate action and utilise the necessary derivative financial instruments should there be a change in agreement with the unit holders. 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011 A$’000 Campus Living Villages Annual Report 10/11 Campus Living Overseas Trust 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. 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 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. 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 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 June 2011 Loans from financial institutions - 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 June 2010 Loans from financial institutions - 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 Loans from related parties - 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
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Page 153: Contact Us If you have any further
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