N o t e s t o t h e f i n a n c i a l s t a t e m e n t s
Year ended 31 March 2015
31 Financial risk management (continued)
Interest rate risk
The Group’s exposure to fluctuations in interest rates relates primarily to interest rate swaps, cross currency swaps, loans
and borrowings (Note 16) and the ECS (Note 17). Interest rate risk is managed on an on-going basis with the primary
objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates.
As at 31 March 2015, the Group has interest rate swaps and offsetting interest rate swaps with total notional amount of
$1,338.2 million (2014: $1,245.2 million) and $200.0 million (2014: $457.0 million) respectively, whereby the Group has
agreed with counterparties to exchange, at specified intervals, the difference between the floating rate pegged to the
Singapore dollar SOR and fixed rate interest amounts calculated by reference to the agreed notional amounts of the loans
and borrowings. $150.0 million (2014: $407.0 million) of the interest rate swaps have been used to hedge the exposure to
changes in the variability of interest rate fluctuations of its loans and borrowings. The Group classifies these interest rate
swaps as hedging instruments in qualifying cash flow hedges.
At the reporting date, the interest rate profile of the interest-bearing financial instruments that are subject to interest rate
risk was:
Group
Trust
Notional amount
Notional amount
2015
2014
2015
2014
$’000
$’000
$’000
$’000
(Restated)
Fixed rate instruments
Investment in debt securities
– 194,574
– 194,574
Loans and borrowings
(319,140)
(439,904)
(319,140)
(439,904)
Exchangeable Collateralised Securities
(366,024)
(341,091)
–
–
Collateral loan
–
– (366,024)
(341,091)
(685,164)
(586,421)
(685,164)
(586,421)
Variable rate instruments
Loans and borrowings
(2,052,829) (1,352,948) (2,037,304) (1,391,200)
Interest rate swaps
1,138,200 788,200 1,138,200 788,200
Cross currency swaps
(210,678)
(605,678)
(210,678)
(210,678)
(1,125,307) (1,170,426) (1,109,782)
(813,678)
Sensitivity analysis
A 100 basis points (“bp”) movement in interest rates at the reporting date would increase/(decrease) total return and
Unitholders’ funds (before any tax effects) as shown in the table below. This analysis has not taken into account the effects
of qualifying borrowing costs which are capitalised as part of investment property under development and assumes that all
other variables remain constant. The analysis was performed on the same basis for 2014.
ASCENDAS REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2014/15
