Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
ANNUAL REPORT 2015
90
BUILDING ON OUR EXTENSIVE NETWORK
35. Financial risk management objectives and policies (cont’d)
(b)
Interest rate risk
Interest rate risk is the risk that changes in interest rates will have an adverse financial effect on the
Group’s financial conditions and/or results. The primary source of the Group’s interest rate risk is its
borrowings from banks and other financial institutions primarily in Singapore, Malaysia and Thailand.
The Group ensures that it obtains borrowings at competitive interest rates under the most favourable
terms and conditions. Where appropriate, the Group uses interest rate swaps to hedge its interest
rate exposure for specific underlying debt obligations. Risk variables are based on volatility in interest
rates. This analysis assumes that all other variables, in particular foreign currency rates and tax rates
remain constant. Information relating to the interest rate is disclosed in Notes 22, 24, 25 and 27. At
the end of the reporting period, approximately 10% (2014: 2%) of the Group’s borrowings are at
fixed rates of interest. Cash and bank balances are excluded from the table below as fluctuations of
interest rates are determined to have no significant impact on the Group’s profit net of tax. Included
in the table below are the Group’s interest-bearing financial instruments, categorised by the earlier
contractual re-pricing or maturity dates.
Group
Within 1
year
Within 1-2
years
Within 2-3
years
Within 3-4
years
Within 4-5
years
More than
5 years
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2015
Fixed rate
Derivatives assets
41
–
–
–
–
–
41
Derivatives liabilities
3
3
Obligations under hire-purchase 1,115
844
560
553
13
–
3,085
Bank loans
9,136
92
92
92
72
–
9,484
Floating rate
Obligations under hire-purchase
54
24
16
101
–
–
195
Trust receipts
70,641
–
–
–
–
–
70,641
Bank loans
13,060
4,632 14,795
2,177
2,142 10,614 47,420
2014
Fixed rate
Derivatives liabilities
58
–
–
–
–
–
58
Obligations under hire-purchase
681
372
119
86
78
–
1,336
Bank loans
91
111
111
111
60
–
484
Floating rate
Obligations under hire-purchase
94
82
41
27
–
–
244
Trust receipts
61,806
–
–
–
–
–
61,806
Bank loans
13,705
4,933
4,511 14,703
2,130 12,441 52,423
