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notes to the financial Statements
for the year ended 31 March 2012
37. Financial instruments
Interest rate swaps
Group
Parent
2012
2011
2012
2011
Note
$’000
$’000
$’000
$’000
Fair value of interest rate swaps at balance date were: 24
(1,695)
(1,450)
(1,695)
(1,450)
The following interest swap contracts were in place at balance date:
Notional Amount
Reset
Fixed Rate Expiry Date
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
7.27% 2-Apr-12
Interest rate collar (effective from 2 Nov ‘09) $10,000,000 Quarterly
6.38%-8.5% 2-Nov-12
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
6.53% 1-Nov-13
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
5.17% 1-May-14
Receive floating - Pay fixed interest swap
$4,000,000 Quarterly
4.74% 30-Jan-18
Receive floating - Pay fixed interest swap
$2,500,000 Quarterly
4.10% 8-Aug-17
Receive floating - Pay fixed interest swap
$2,500,000 Quarterly
4.59% 8-Aug-18
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
4.49% 29-Nov-16
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
4.16% 2-Oct-15
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
4.67% 4-May-15
Receive floating - Pay fixed interest swap
$5,000,000 Quarterly
4.89% 2-May-16
The Group is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk
is managed by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of
interest rate swap contracts.
Under interest rate swap contracts the Group agrees to exchange the difference between fixed and floating
rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to
mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps are based on
market rates of equivalent instruments at balance date and are disclosed above.
All of the interest rate swaps are designated and are effective as cash flow hedges and changes in their fair
value has been charged directly to equity.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged from 2011 and is based on risk management strategies and
treasury management policies set and monitored by the Board.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in notes 23 and
24, and equity attributable to equity holders of the parent, comprising issued capital, retained earnings and
reserves as disclosed in notes 27, 28 and 29 respectively.
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