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ANNUAL REPORT FY13/14 185
NOTESTOTHE FINANCIAL STATEMENTS
Year ended 31 March 2014
30 FINANCIAL RATIOS
Group
2014 2013
% %
Ratio of expenses to weighted average net asset value (1) 1.35 0.92
Ratio of expenses to weighted average net asset value (2) 1.35 1.09
Portfolio turnover rate (3) 1.48 –
(1)The annualised ratio is computed in accordance with guidelines of the Investment Management Association of Singapore. The
expenses used in the computation relate to expenses at the Group level, excluding property related expenses, borrowing costs
and performance component of management fees.
(2)The annualised ratio is computed in accordance with guidelines of the Investment Management Association of Singapore. The
expenses used in the computation are the same as in (1) above except that performance fee has been included.
(3)The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties of the Group
expressed as a percentage of weighted average net asset value.
31 FINANCIAL RISK MANAGEMENT
Capital management
The Group’s and the Trust’s objective when managing capital is to optimise Unitholders’ value through the mix of available capital sources
which include debt and equity instruments, whilst complying with statutory and constitutional capital and distribution requirements,
maintaining gearing, interest service coverage and other ratios within approved limits.
The Board of Directors of the Manager (the “Board”) reviews the Group’s and the Trust’s debt and capital management as well as
fnancing policy regularly so as to optimise the Group’s and the Trust’s funding structure. The Board also monitors the Group’s and the
Trust’s exposure to various risk elements and externally imposed requirements by closely adhering to clearly established management
policies and procedures.
The Group is subject to the aggregate leverage limit as defned in the Property Funds Appendix of the CIS Code. The CIS Code
stipulates that the total borrowings and deferred payments (together the “Aggregate Leverage”) of a property fund should not exceed
35.0% of the Deposited Property. The Aggregate Leverage of a property fund may exceed 35.0% of the Deposited Property (up to a
maximum of 60.0%) only if a credit rating of the property fund from Fitch Inc., Moody’s or Standard and Poor’s is obtained and disclosed
to the public. The property fund should continue to maintain and disclose a credit rating so long as its Aggregate Leverage exceeds
35.0% of the Deposited Property. The Trust currently has an issuer rating of A3 by Moody’s (2013: A3). The Group and the Trust have
complied with the Aggregate Leverage limit of 60.0% during the fnancial year.
As at the reporting date, the gross amounts of the Group’s loans and borrowings (including collateral loan) as a percentage of net assets
of the Group is 45.1% (2013: 42.3%).
There was no change in the Group’s and the Trust’s approach to capital management during the current fnancial year.