Annual Report 2007 - The Link REIT

106 The Link Real Estate Investment Trust Annual Report 2007
Notes to the Consolidated Financial Statements
19 Deferred tax liabilities (continued)
The movements in deferred tax assets and liabilities during the year/period were as follows:
Temporary
differences Tax losses Total
HK$’M HK$’M HK$’M
At 6 September 2005 – – –
Acquisition of RC Operations 3,744 – 3,744
Recognised in the consolidated income statement:
Increase in fair values of investment properties 341 – 341
Capital allowance claimed 275 – 275
Tax losses recognised – (173) (173)
443
At 31 March 2006 4,360 (173) 4,187
At 1 April 2006 4,360 (173) 4,187
Recognised in the consolidated income statement:
Increase in fair values of investment properties 614 – 614
Capital allowance claimed 149 – 149
Tax losses utilised – 152 152
915
At 31 March 2007 5,123 (21) 5,102
20 Other non-current liabilities
2007 2006
HK$’M
HK$’M
Interest rate swaps – cashflow hedges 111 –
The Group uses interest rate swaps to minimise its exposure to movements in interest rates in relation to itsfloating rates
interest bearing liabilities by swapping from floating rates tofi xed rates. The full fair value of these cashflow hedges are
classified as non-current items as the remaining maturities of the hedged items extend for more than 12 months.
Derivativefinancial instruments qualifying as cashflow hedges as at 31 March 2007 have an average maturity of 4.6 years
from the balance sheet date. The notional principal amount and the averagefi xed interest rate of the outstanding interest
rate swap contracts at 31 March 2007 were HK$4 billion and 5.05% respectively.