content_image/200922.jpg content_image/200923.jpg content_image/200924.jpg
The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period: 

<img src='content_image/200922.jpg'>

The aggregate notional principal amount of the outstanding interest rate swap contracts at 30 June 2012 was $3,159.0 million (2011: $880.0 million). Included in this amount are $400.0 million (2011: $370.0 million) of forward interest rate swap contracts, of which $235.0 million commenced in the 2013 financial year, $145.0 million commences in the 2015 financial year and $20.0 million commences in the 2016 financial year. 

The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is the Australian BBSW. The consolidated entity will settle the difference between the fixed and floating interest rate on a net basis. 

All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the consolidated entity’s cash flow exposure resulting from variable interest rates on borrowings. Interest rate swap settlement dates coincide with the dates on which interest is payable on the underlying borrowings. 

The gain or loss from remeasuring the hedging instruments at fair value is recognised in other comprehensive income, to the extent that the hedge is effective. The gain or loss relating to the ineffective portion of the hedge is recognised immediately in profit or loss as part of finance costs. Amounts previously recognised in other comprehensive income and accumulated in equity in the hedging reserve are reclassified to profit or loss and included in finance costs when the hedged interest expense is recognised. 

When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately to profit or loss. During the year, no hedges were de-designated and all underlying forecast transactions remain highly probable to occur as per originalforecast. 

The following table details the movements in the hedging reserve from interest rate swap contracts: 

<img src='content_image/200923.jpg'>

## Interest rate sensitivity 

The following sensitivity analysis has been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. 

At the end of the reporting period, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the consolidated entity’s profit after tax and other comprehensive income would have been affected as follows: 

<img src='content_image/200924.jpg'>

The sensitivity to a 50 basis point increase or decrease in interest rates is considered reasonable, given the market forecasts available at the reporting date and under the current economic environment in which the consolidated entity operates. 

The movements in profit after tax are mainly attributable to an increase/decrease in interest expense from floating rate borrowings and an increase/decrease in interest income from cash and cash equivalents. The movement in other comprehensive income is due to an increase/ decrease in the fair value of interest rate swaps designated as cash flow hedges. 

