In 2019, both National Bank of Australia (NAB) market and home loans have been re-negotiated and merged into one loan facility totalling $2,967,000 effective from 18 October 2018. The new NAB corporate market loan is secured by a registered mortgage over the property situated at 32 Dripstone, Darwin NT. Registered mortgage holdings under the previous loans (45 Mitchell Street, Darwin and 15,17 and 19 Bradshaw Crescent) have been released by the bank in the current financial year.

The length of the loan has been negotiated at 2 years which aligns the loan to the average lease terms on the security held. The loan will be re-negotiable upon expiry terms. The variable floating interest rate is set at the Bank Bill Swap Bid Rate (BBSY) plus the drawn margin of 1.75% per annum. The quarterly principal repayment of the renegotiated loan is $125,000.

Accounting Policy

Financial liabilities

Financial liabilities are classified as other financial liabilities.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.