28. Financial risk management (continued)
(d)
Capital risk
Management¡¯s objective when managing capital is to optimise the Group¡¯s capital structure within the borrowing
limits set out in the Trust Deed to fund future acquisitions and asset enhancement works at the Group¡¯s properties.
To maintain or achieve an optimal capital structure, Management may issue new units or source for additional
borrowing from both financial institutions and capital markets.
Management monitors capital based on gearing ratio. As provided for in the Trust Deed, the maximum gearing
ratio is 40% or higher if allowed under Property Funds Appendix (¡°PFA¡±) or up to a maximum of 60% only if a
credit rating is obtained. In January 2016, the approved gearing ratio allowed under the PFA was amended to a
single ratio of 45%.
The gearing ratio is calculated as total effective borrowings, which takes into account the derivative financial
instruments used to hedge borrowings, divided by value of Trust Property.
2016
2015
$'000
$'000
Total effective borrowings
344,570
312,148
Value of Trust Property
1,349,730
1,256,820
Gearing ratio
26%
25%
Trust Property consists of all property and rights of any kind whatsoever which are held on trust for the Unitholders,
in accordance with the terms of the Trust Deed.
The Group is in compliance with the borrowing limit requirements imposed by the Trust Deed and all externally
imposed capital requirements for the financial years ended 31 March 2016 and 2015.
.141
ASCENDAS india trust ANNUAL REPORT
2015/2016
