187
CapitaLand Mall Trust
Annual Report 2015
Overview
Sustainability
Business
Review
Portfolio
Details
Corporate
Governance &
Transparency
Financials &
Additional
Information
25 Financial risk management
(continued)
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to interest-bearing financial liabilities.
Interest rate risk is managed 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.
Sensitivity analysis
The Group does not account for any fixed rate financial liabilities at fair value through profit or loss. Therefore,
in respect of the fixed rate borrowings, a change in interest rates at the reporting date would not affect the
Statement of Total Return.
For variable rate financial liabilities and cross currency derivative instruments used for hedging, a change
of 100 basis points (“bp”) in interest rate at the reporting date would increase/(decrease) the Statement
of Total Return and Unitholders’ Funds by $5,190,000 (2014: nil) and $1,605,000 (2014: $2,446,000) at
Group respectively and increase/(decrease) the Statement of Total Return by $5,190,000 (2014: nil) at Trust.
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
