Telstra 2011 Annual Report Download - page 148

Telstra Corporation Limited and controlled entities
133
Notes to the Financial Statements (continued)
(a) Capital management (continued)
Gearing and net debt (continued)
Net debt included in the table above is based on the carrying values
of our financial instruments which are provided in Table C in the
following section (b). For interest bearing financial instruments we
adopt a ‘clean price’ whereby the reported balance of our derivative
instruments and borrowings excludes accrued interest. Accrued
interest is recorded in current ‘trade and other receivables’ and
current ‘trade and other payables’ in the statement of financial
position.
Our borrowings are unsecured, except for finance leases which are
secured, as the rights to the leased asset transfer to the lessor in
the event of a default by us. We have no assets pledged as security
for our borrowings. All our borrowings are interest bearing, except
for some loans from wholly owned controlled entities. Details of
interest rates and maturity profiles are included in note 18.
We are not subject to any externally imposed capital requirements.
(i) Offshore loans
Offshore loans comprise debt raised overseas. Our policy is to
swap foreign currency borrowings into Australian dollars, except
for a small proportion of foreign currency borrowings/cross
currency swaps used to hedge translation foreign exchange risk
associated with our offshore investments, and some cash
balances/finance leases held in foreign currencies by our foreign
controlled entities. The carrying amounts of offshore loans are
denominated in the following currencies.
(ii) Telstra bonds and domestic loans
Telstra bonds currently on issue relate to wholesale investors and
mature up until the year 2020. During fiscal 2011 no Telstra bonds
matured (2010: nil). During fiscal 2011 domestic loans totalling
$363 million were entered into with terms of 8 to 10 years (2010:
$148 million with a term of 10 years). During fiscal 2011, there
were no domestic loan repayments (2010: $1,350 million).
17. Capital management and financial instruments (continued)
TABLE B Telstra Group
As at 30 June
2011 2010
$m $m
Australian dollar . . . . . . . . . . . 249 249
Euro . . . . . . . . . . . . . . . . 5,242 7,064
United States dollar . . . . . . . . . 2,280 1,697
British pound sterling . . . . . . . . 299 352
Japanese yen . . . . . . . . . . . . 558 610
New Zealand dollar . . . . . . . . . 272 286
Swiss francs . . . . . . . . . . . . . 627 613
Hong Kong dollar . . . . . . . . . . 40 49
9,567 10,920