NOTES TO THE
FINANCIAL STATEMENTS
Year ended 31 December 2014
24 FINANCIAL INSTRUMENTS (CONT’D)
Liquidity risk (cont’d)
<------------- Cash flow ------------->
Carrying
amount
Contractual
cash flows
Within
1 year
2 to
5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
Trust
2013
Non-derivative financial liabilities
S$ unsecured bank loans
84,400
(86,511)
(5,253)
(81,258)
–
JPY unsecured bank loans
419,277
(435,772)
(5,027)
(371,125)
(59,620)
Security deposits
115
(115)
(115)
–
–
Trade and other payables
^
5,757
(5,757)
(5,757)
–
–
509,549
(528,155)
(16,152)
(452,383)
(59,620)
Derivative financial instruments
Forward foreign exchange
contracts (gross-settled)
– assets
(32,847)
32,847
11,223
20,833
791
– liabilities
26,570
(26,273)
(8,836)
(16,697)
(740)
Interest rate swaps (net-settled)
1,725
(1,801)
(572)
(1,173)
(56)
(4,552)
4,773
1,815
2,963
(5)
504,997
(523,382)
(14,337)
(449,420)
(59,625)
^ Excludes rent received in advance
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
Exposure to foreign currency risk
The Manager’s investment mandate covers the Asia-Pacific region. In order to manage the currency risk involved
in investing in assets outside of Singapore, the Manager may, as appropriate, adopt currency risk management
strategies including:
•
the use of foreign currency denominated borrowings to match the currency of the asset investment as a
natural currency hedge;
•
the use of derivative or other hedging instruments to hedge against fluctuations in the exchange rates of
foreign currency income received from offshore assets against Singapore dollars; and
•
the use of cross currency swaps to hedge against the fluctuations in the exchange rates of any foreign
currency denominated net assets of the Group against Singapore dollars.
136
PA R K WAY L I F E R E I T
