Notes to The
Financial Statements
Year ended 31 December 2015
24 Financial instruments (Cont’d)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group’s reputation.
The Manager monitors and maintains a level of cash and cash equivalents deemed adequate to finance the
Group’s operations and to cater for the fluctuations in cash flow requirements. Typically, the Group ensures that it
has sufficient cash on demand to meet expected operational expenses for a reasonable period of time, including
the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters. In addition, the Manager also monitors and observes the CIS
Code issued by the MAS concerning limits on total borrowings.
As at 31 December 2015, the Group has unutilised short term credit facilities of approximately $149.0 million
(2014: $69.1 million) that can be drawn down to meet short term financing needs. Furthermore, the Group has
put in place a $500 million MTN Programme, of which there were no outstanding notes issued under the MTN
Programme as of 31 December 2015.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
<----------- Cash flow ----------->
Carrying
amount
Contractual
cash flows
Within
1 year
2 to
5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
Group
2015
Non-derivative financial liabilities
S$ unsecured bank loans
176,188 (194,831)
(5,096)
(139,188)
(50,547)
JPY unsecured bank loans
413,210 (427,341)
(4,465)
(422,876)
–
Security deposits
20,092
(20,092)
(1,724)
(1,954)
(16,414)
Trade and other payables
^
9,461
(9,461)
(9,461)
–
–
618,951 (651,725)
(20,746)
(564,018)
(66,961)
Derivative financial instruments
Forward foreign exchange contracts
(gross-settled)
– assets
(40,279)
41,825
13,225
28,600
–
– liabilities
38,050
(39,564)
(11,595)
(27,969)
–
Cross currency interest rate swap
(gross-settled)
– assets
(2,986)
3,100
655
2,445
–
– liabilities
2,980
(3,094)
(654)
(2,440)
–
Interest rate swaps used for hedging
(net-settled)
3,045
(3,162)
(1,042)
(2,120)
–
810
(895)
589
(1,484)
–
619,761 (652,620)
(20,157)
(565,502)
(66,961)
129
ParkwayLife REIT
Annual Report 2015
