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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
12. Derivative financial instruments (continued)
The Group enters into interest rate swaps to manage its exposure to interest rate movements on its floating rate
interest-bearing borrowings (Note 18). Under the interest rate swaps, the Group receives floating interest equal
to Singapore Dollar Swap Offer Rate (“SGD SOR”) at every 3 months and pays fixed rates of interest at 1.485%
per annum.
As at 31 December 2016, the Group had also entered into currency options to manage its foreign currency risk.
There are no derivative transactions entered into during the financial period from 5 August 2015 till 31 December 2015.
13. Loans to subsidiaries
ECW
2016
2015
S$’000
S$’000
Loans to subsidiaries
241,557
–
As at 31 December 2016, the loans to subsidiaries are unsecured, repayable on demand and approximate their
fair values.
14. Investment properties
Group
2016
2015
S$’000
S$’000
Beginning of the year/period
1,383,809
–
Acquisition of subsidiaries
–
448,676
Asset enhancements during the year/period
8,228
3,784
Fair value changes
(1,732)
949,332
Transfer from investment properties under development (Note 15)
3,856
–
Currency translation differences
(60,864)
(17,983)
End of the year/period
1,333,297
1,383,809
All investment properties are mortgaged to secure bank loans (Note 18).
Investment properties are stated at fair value based on valuations performed by independent professional valuers.
In determining the fair value, the valuers have used valuation methods which involved certain estimates.
The overall portfolio valuation in “RMB” increased from RMB6,356,500,000 (equivalent to S$1,383,809) as at
31 December 2015 to RMB6,407,000,000 (equivalent to S$1,333,297) as at 31 December 2016.
Details of the investment properties are shown in the investment properties portfolio statement.