ASCENDAS india trust ANNUAL REPORT 2014/15
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
For the financial year ended 31 March 2015
27.
Financial risk management (continued)
Financial risk factors (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
If SGD changes against INR by 10% (2014: 10%) respectively with all other variables including tax rate being
held constant, the effects on profit and loss from the net position will be as follow:
2015
2014
S$'000
S$'000
<----------- Increase/(Decrease) ----------->
Sgd Against Inr
– Strengthened
(8,935)
(7,218)
– Weakened
8,935
7,218
USD Against Inr
– Strengthened
(8)
1
– Weakened
8
(1)
(ii)
Fair value interest rate risk
Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes
in market interest rates. The Group has minimal interest rate risk as the Group has substantially hedged its
floating rate financial liabilities, and its profits after tax and operating cash flows are substantially independent
of changes in market interest rates.
(b)
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial
and contractual obligations to the Group, as and when they fall due.
The Trustee-Manager has established credit limits for customers and monitors their balances on an on-going basis.
Credit appraisal is performed by the Trustee-Manager before lease agreements are entered into with customers. The
risk is also mitigated due to customers placing significant amount of security deposits for lease and fit-out rentals.
Cash and short-term bank deposits are placed with financial institutions which are regulated.
At the balance sheet date, there was no significant concentration of credit risk. The maximum exposure to credit risk
is represented by the carrying value of each financial asset in the balance sheet.
The credit risk for trade receivables based on the information provided to key management is as follows:
(i)
Financial assets that are neither past due nor impaired
Bank deposits are mainly deposits with banks which are regulated. Trade and other receivables that are neither
past due nor impaired are substantially from companies with a good collection track record with the Group.
Deposits that are neither past due nor impaired are substantially due from the Indian Statutory Undertakings paid
as guarantee deposits. Management does not foresee any uncertainty in ultimate collection of these amounts.
