NOTES TO THE FINANCIAL STATEMENTS
25 Financial instruments (Cont’d)
Credit risk (Cont’d)
Cash and fixed deposits are placed with financial institutions which are regulated.
At the reporting date, except as disclosed in Note 8, there were no significant concentrations of credit risk. The
maximum exposure to credit risk is represented by the carrying value of each financial asset on the Statement
of Financial Position.
Interest rate risk
The Group’s exposure to changes in interest rates relate primarily to its interest-bearing financial liabilities.
Interest rate risk is managed by the Manager on an ongoing basis with the primary objective of limiting the
extent to which net interest expense could be affected by adverse movements in interest rates. The Group
adopts a policy of ensuring that majority of its exposures to changes in interest rates on borrowings is on a fixed-
rate basis. This is achieved by entering into interest rate swaps and fixed rate borrowings.
(a)
Effective interest rates and repricing analysis
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table
indicates the effective interest rates as at 31 December 2014 and 31 December 2013 and the periods at
which they reprice.
Group
Effective
interest rate
Floating
interest
Fixed interest
rate maturing
within
1 to 5 years
Fixed interest
rate maturing
more than
5 years
Total
% $’000
$’000
$’000 $’000
2014
Financial liabilities
Interest-bearing borrowings
– S$ variable rate
2.67 200,000
–
– 200,000
– S$ variable rate
2.00 100,000
–
– 100,000
Medium Term Note
– S$ fixed rate
4.75
–
50,000
– 50,000
– S$ fixed rate
4.10
–
–
30,000 30,000
– S$ fixed rate
3.50
–
100,000
– 100,000
300,000
150,000
30,000 480,000
Financial assets
Derivative financial instruments
0.73
–
287
– 287
2013
Financial liabilities
Interest-bearing borrowings
– S$ variable rate
2.60 200,000
–
– 200,000
– S$ variable rate
2.57
12,172
–
– 12,172
– S$ variable rate
1.92 100,000
–
– 100,000
Medium Term Note
– S$ fixed rate
4.75
–
50,000
– 50,000
Derivative financial instruments
0.20
–
1,161
– 1,161
312,172
51,161
– 363,333
Financial assets
Derivative financial instruments
0.61
–
227
– 227
CAMBRIDGE INDUSTRIAL TRUST | ANNUAL REPORT 2014
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