NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 21 FINANCIAL RISK MANAGEMENT (CONT’D) Market risk (cont’d) Foreign Currency risk (cont’d) Group Trust 2025 US$’000 2024 US$’000 2025 US$’000 2024 US$’000 SGD (28) 21 (27) 23 A 5.0% strengthening of USD against the above currency would have had an opposite effect of similar quantum on the above currency to the amounts shown above, on the basis that all other variables remain constant. Interest rate risk As at 31 December 2025, the Group had US$417.0 million (2024: US$517.0 million) of fixed rate interest-bearing borrowings, including borrowings which are hedged with interest rate swaps, and US$142.0 million (2024: US$228.0 million) of unhedged variable rate interest-bearing borrowings. For the variable rate interest-bearing borrowings, a 1.0% increase in interest rate at the reporting date, with all other variables held constant, would decrease the Group’s profit or loss by US$1.4 million (2024: US$2.3million). A 1.0% decrease in interest rate would have had an opposite effect of similar quantum on the basis that all other variables remain constant. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers. In addition, tenants may experience financial difficulty and are unable to fulfil their lease commitments or tenants may fail to occupy and pay rent in accordance with lease agreements. The Group mitigates credit risk through staggered lease maturities, diversification of revenue sources by ensuring no individual tenant contributes a significant percentage of the Group’s gross revenue and obtaining security deposits or letter of credits from the tenants. At the end of the reporting period, approximately 68% (2024: 47%) of the Group’s trade receivables were due from 3 tenants. The Group’s risk for trade receivables is disclosed in Note 5. The Manager believes that there is no other credit risk inherent in the Group’s remaining trade receivables, based on historical payment behaviours and the security deposits held. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position. Cash is placed with financial institutions which are regulated. Financial derivatives are entered into with bank and financial institution counterparties which are regulated. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Manager monitors the liquidity risk of the Group and maintains a level of cash and credit facilities deemed adequate to finance its operations and to mitigate the effects of fluctuations in cash flows. The Manager also monitors and observes the CIS Code issued by the MAS concerning limits on total borrowings. The Group’s credit facilities are set out in Note 9. As disclosed in Note 2.3, 6 and 9, the Group has undertaken a Recapitalisation Plan to strengthen the Group’s balance sheet, fund the liquidity needs of the Group, and allow it to manage its aggregate leverage level. / 140 / EXPANDING HORIZONS
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