/ 1 4 0
NOTES TO THE FINANCIAL STATEMENTS
C A M B R I D G E I N D U S T R I A L T R U S T
A N N U A L R E P O R T 2 0 1 5
10.
Derivative financial instruments
Group and Trust
2015
2014
$’000
$’000
Non-current asset
Interest rate swaps
–
107
Current asset
Interest rate swaps
604
180
Total derivative assets
604
287
Derivative financial instruments as a percentage of net assets
0.07% 0.03%
Interest rate swaps
The Group manages its exposure to interest rate movements on its floating rate loans and borrowings by entering
into interest rate swaps. As at reporting date, the Group has interest rate swaps with a total notional amount of
$100.0 million (2014: $250.0 million) to provide fixed rate funding at a weighted average effective interest rate
of 0.88% (2014: 0.73%) per annum.
Offsetting financial assets and financial liabilities
The Group’s derivative transactions that are not transacted on an exchange are entered into under International
Swaps and Derivatives Association (ISDA) Master Netting Agreements. In general, under such agreements the
amounts owed by each counterparty that are due on a single day in respect of all transactions outstanding in
the same currency are aggregated into a single net amount being payable by one party to the other. In certain
circumstances, for example if a credit event such as a default occurs, all outstanding transactions under the
agreement are terminated, the termination value is assessed and only a single net amount is due or payable in
settlement of all transactions.
The above ISDA agreements do not meet the criteria for offsetting in the statement of financial position. This is
because the right of set-off of recognised amounts is enforceable only following an event of default, insolvency
or bankruptcy of the Group and of the counterparties. In addition, the Group and its counterparties do not intend
to settle on a net basis or to realise the assets and settle the liabilities simultaneously.
