Financial Report 2008 - Leighton Holdings

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Notes to the Financial Statements continuedfor the year ended 30 June 200833. FINANCIAL INSTRUMENTS CONTINUEDe) Interest RateInterest rate risk is the risk that the value of a financial instrument or cash flow associated with the instrument will fluctuate dueto changes in the market interest rates. The Group uses derivative financial instruments to assist in managing its interest rateexposure. Speculative trading is not undertaken.At reporting date it is estimated that an increase of one percentage point in floating interest rates would have decreased theGroup’s profit after tax and retained earnings by $4,565 (2007: increased by $2,860). A one percentage point decrease ininterest rates would have an equal and opposite effect. The Group’s exposure to interest rate risk and the effective weightedaverage interest rate for classes of financial assets and financial liabilities are set out below:Fixed rate, maturing in:2008Weightedaveragerate%Floatingrate$’0001 yearor less$’000Over 1year to5 years$’000Morethan5 years$’000Noninterestbearing$’000Total$’000GroupFinancial assetsCash and cash equivalents 5.11 686,563 - - - - 686,563Trade and other receivables 7.70 3,402 - - - 1,685,690 1,689,092Other investments - - - - - 411,126 411,126689,965 - - - 2,096,816 2,786,781Financial liabilitiesTrade and other payables - - - - - 2,885,237 2,885,237Interest-bearing loans 8.17 750,473 - 22,529 - - 773,002Interest bearing limited recourse loans 7.67 - 104,211 460,866 - - 565,077Leighton Notes 8.51 200,000 - - - - 200,000950,473 104,211 483,395 - 2,885,237 4,423,316Leighton Holdings Limited Financial Report 2008 NOTES TO THE FINANCIAL STATEMENTS 46
Notes to the Financial Statements continuedfor the year ended 30 June 200833. FINANCIAL INSTRUMENTS CONTINUEDFixed rate, maturing in:2007Weightedaveragerate%Floatingrate$’0001 yearor less$’000Over 1year to5 years$’000Morethan5 years$’000Noninterestbearing$’000Total$’000GroupFinancial assetsCash and cash equivalents 5.58 823,632 - - - 7,740 831,372Trade and other receivables 8.43 25,346 - - - 1,701,773 1,727,119Other investments 10.65 - - - 68,600 111,450 180,050848,978 - - 68,600 1,820,963 2,738,541Financial liabilitiesTrade and other payables - - - - - 2,504,968 2,504,968Interest-bearing loans 8.08 - - 32,698 - - 32,698Interest bearing limited recourse loans 7.88 - - 129,412 - - 129,412Leighton Notes 8.01 200,000 - - - - 200,000200,000 - 162,110 - 2,504,968 2,867,078f) Net fair values of financial assets and liabilitiesGroupLeighton Notes fair value: $201,000; carrying value $200,000 (2007: fair value $204,200; carrying value $200,000). LeightonFinance International Notes fair value: $118,117; carrying value: $115,789 (2007: fair value $130,706; carrying value $129,412).The carrying amounts of other financial assets and liabilities in the Group’s balance sheet approximate fair values.CompanyOther than the Leighton Notes referred to above, the carrying amounts of financial assets and liabilities in the Company’sbalance sheet approximate fair values.g) Leighton NotesThe Company issued 2,000,000 Convertible Unsecured Subordinated Resettable Notes (“Leighton Notes”) at $100 each on 9December 2003, maturing in October 2103. The notes are convertible to ordinary shares at the option of the Company or theNoteholder in accordance with the terms and conditions as detailed below.Conversion by LeightonLeighton may convert all (but not some only) Leighton Notes to Ordinary Shares where a Tax Event 1 or Regulatory Event 2occurs.Conversion by NoteholdersSubject to Leighton’s redemption right, Noteholders may request conversion of some or all of their Leighton Notes on a ResetDate 5 or earlier if a Trigger Event 3 occurs.If a Noteholder requests conversion, Leighton retains an overriding right to redeem each Leighton Note the Noteholder wishesto convert for the Redemption Amount plus Outstanding Interest or arrange for a third party to acquire each of those LeightonNotes for Face Value plus Outstanding Interest.Leighton Holdings Limited Financial Report 2008 NOTES TO THE FINANCIAL STATEMENTS 47
Page 4: Statements of Recognised Income and
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Financial Report 2008 - Leighton Holdings

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