Notes to The
Financial Statements
Year ended 31 December 2015
24 Financial instruments (Cont’d)
<----------- Cash flow ----------->
Carrying
amount
Contractual
cash flows
Within
1 year
2 to
5 years
More than
5 years
$’000
$’000
$’000
$’000
$’000
Trust
2014
Non-derivative financial liabilities
S$ unsecured bank loans
174,388 (181,185)
(21,332)
(84,075)
(75,778)
JPY unsecured bank loans
412,294 (427,744)
(65,647)
(323,369)
(38,728)
Security deposits
36
(36)
–
(36)
–
Trade and other payables
^
6,758
(6,758)
(6,758)
–
–
593,476 (615,723)
(93,737)
(407,480)
(114,506)
Derivative financial instruments
Forward foreign exchange contracts
(gross-settled)
– assets
(31,751)
32,903
10,601
21,717
585
– liabilities
25,349
(26,254)
(8,018)
(17,722)
(514)
Cross currency interest rate swap
(gross-settled)
– assets
(7,882)
8,168
1,436
5,743
989
– liabilities
3,371
(3,493)
(614)
(2,456)
(423)
Interest rate swaps (net-settled)
2,629
(2,724)
(758)
(1,957)
(9)
(8,284)
8,600
2,647
5,325
628
585,192 (607,123)
(91,090)
(402,155)
(113,878)
^ 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.
131
ParkwayLife REIT
Annual Report 2015
