Telstra 2007 Annual Report Download - page 248

Telstra Corporation Limited and controlled entities
245
Notes to the Financial Statements (continued)
(b) Risks and mitigation (continued)
Market risk (continued)
(i) Interest rate risk (continued)
Interest rates on our fixed and float ing rate financial instruments
which do not have offsetting risk positions are shown in Table G and
Table H below. Foreign interest rate positions on our foreign cross
currency and foreign interest rate swaps and on the majority of our
foreign borrowings are fully offset, resulting in a nil net foreign
interest position.
Accordingly, apart from some finance leases, bank deposits and
foreign borrowings / cross currency swaps used to hedge our net
foreign investments, only the Australian interest rate positions are
included in the table below.
(a) The average rate is calculated as the weighted average (based on
principal/notional value) effective interest rate.
(b) Used to hedged our net foreign investments.
(c) Rate on cash at bank balances represents average rate earned on
net positive cash balances after taking into account bank set-off
arrangements.
34. Financial and capital risk management (continued)
Table G Telstra Group
As at 30 June 2007 As at 30 June 2006
Interest rate range Interest rate range
Average (a) From To Average (a) From To
% % %%
%%
Australian dollar interest rates
Fixed rate instruments
Financial assets
Finance lease receivable . . . . . . . . . . 8.12 4.34 11.43 8.12 4.34 11.43
Financial liabilit ies
Interest rate swaps . . . . . . . . . . . . . 6.33 5.60 7.01 6.47 5.60 7.66
Cross currency swaps . . . . . . . . . . . . 6.69 6.25 7.05 6.69 6.25 7.05
Telstra bonds and domestic loans . . . . 7.21 6.48 12.60 7.21 6.48 12.60
Finance lease liabilities. . . . . . . . . . . 8.28 4.34 11.43 7.43 7.56 8.50
Deferred cash settlements. . . . . . . . . 12.00 12.00 12.00 12.40 12.00 12.90
Floating rate instruments
Financial assets
Cash and cash equivalent s (c). . . . . . . 6.22 4.75 6.37 5.76 5.12 5.93
Cross currency swaps . . . . . . . . . . . . 6.36 6.36 6.36 5.89 5.89 5.89
Financial liabilit ies
Promissory notes . . . . . . . . . . . . . . 6.48 6.43 6.51 5.68 5.65 5.73
Interest rate swaps . . . . . . . . . . . . . 6.95 6.24 7.66 6.21 5.34 7.71
Cross currency swaps . . . . . . . . . . . . 7.27 6.44 7.90 6.67 5.88 7.49
Bank loans . . . . . . . . . . . . . . . . . . - - - 5.82 5.80 5.85
Foreign currency interest rates
Fixed rate instruments
Financial liabilit ies
Finance lease liabilities. . . . . . . . . . . 11.25 11.25 11.25 10.50 10.50 10.50
Bank deposits greater than 90 days . . . 2.40 1.62 2.52 ---
Offshore loans (b) . . . . . . . . . . . . . . 7.11 7.03 7.19 7.11 7.03 7.19
Floating rate instruments
Financial liabilit ies
Promissory notes (b) . . . . . . . . . . . . 6.00 4.15 8.49 7.48 7.44 7.54
Cross currency swaps - Hong Kong dollar (b) 4.51 4.50 4.51 4.61 4.60 4.62
Financial assets
Cash at bank and cash equivalents (c) . 4.74 0.20 8.00 4.60 0.16 7.25