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2 Cash management
We monitor and maintain a level of cash and cash
equivalents deemed adequate to meet the Trust’s
operations as well as to meet any short term liabilities.
The cash generated from operations at Indian entities
are placed in bank fxed deposits to maximise interest
income prior to the intended repatriation date.
Liquidity and cash fows
Liquidity risk
We maintain suffcient cash and cash equivalents
to meet the normal operating cash requirement.
We monitor and comply with bank covenants
for borrowings.
Operating Activities
Net cash generated from operating activities for FY13/14
increased to S$78 million, compared to S$68 million in
the preceding fnancial year.
Investing Activities
During the year, S$18 million was invested to complete
the construction of Aviator, the new IT building in
International Tech Park Bangalore. An additional S$19
million worth of capital expenditure was spent on
refurbishing existing properties.
In terms of new investment, we invested S$9 million
towards the acquisition of aVance 3 via the subscription
of Fully Compulsorily Convertible Debentures
(“FCCDs”) issued by the vendor. The subscription
of FCCDs is part of a multi-stage acquisition process
which will be completed upon the satisfaction of all
conditions precedent.
In the preceding fnancial year, we invested S$10 million
on the development of Aviator while S$6 million of
capital expenditure was spent on refurbishing existing
properties. A total of S$41 million was invested in aVance
3 FCCDs.
Financing Activities
During the year, we raised loans of S$29 million.
3 Income hedging strategy
Income is repatriated semi-annually from India to
Singapore in May and November to fund distributions.
We enter into forward contracts on a monthly basis to
hedge a substantial portion of income, tying six forward
contracts to each semi-annual repatriation of income. This
mitigates the risk of large currency fuctuations in the
period before income is repatriated to Singapore.
The gain or loss associated with the forward contract
before its expiry or termination is recognised as
unrealised fair value gain or loss on derivative fnancial
instruments in the income statement. On maturity of
the forward contract, the gain or loss is recognised as
realised fair value gain or loss on derivative fnancial
instruments in the income statement.
4 Distribution policy
Our policy is to distribute at least 90% of its distributable
income. Since April 2012, a-iTrust has retained 10% of
its distributable income to provide greater fexibility
in growing the Trust. a-iTrust makes distributions to
unitholders on a semi-annual basis for every six-month
period ending 31 March and 30 September.