Page 156 - ar2011

154 TRANS FORMATION
NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2011
40 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (cont’d)
(i) Cash flow hedges (cont’d)
(c) Interest rate swap contracts designated as hedges against interest rate risk arising from floating rate
borrowings in Singapore Dollar (SGD) are as follows:
Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate
(S$ million)
40.0 September 2011 3 month 2.87%
Swap Offer Rate
40.0 September 2011 3 month 2.58%
Swap Offer Rate
50.0 September 2011 3 month 1.85%
Swap Offer Rate
30.0 September 2011 3 month 1.83%
Swap Offer Rate
The cash flow hedges of the interest rate risk were assessed to be highly effective. The contracts were
closed out during the financial year. Fair value loss of $2,178,000 and settlement cost of $3,198,000
relating to the hedging instruments were transferred from hedging reserve to profit or loss.
(ii) Interest rate swap contract
(a) The interest rate swap contract to manage interest rate risk arising from floating rate borrowings in
United States Dollar (USD) is as follows:
Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate
(US$ million)
16.5 March 2014 3 month London 2.47%
Inter-bank Offer Rate
During the financial year, a fair value loss of $239,000 with a deferred tax credit of $60,000 relating to
the interest rate swap contract was recognised in the profit or loss.