65
ANNUAL REPORT 2014
NOTES TO
THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
19 Financial instruments (Continued)
Risk management framework (Continued)
(iii) Market risk
Risk management policy
Market risk is the risk that changes in market prices, such as foreign currencies and interest rates will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
The Group does not use derivatives to hedge its exposure in the fluctuations in foreign currencies
and interest rates.
Foreign currency risk
Exposure to foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings, including
inter-company sales, purchases and inter-company balances, that are denominated in a currency
other than the respective functional currencies of the Group entities. The currencies in which these
transactions primarily are denominated are the Singapore dollar (“SGD”) and US dollar (“USD”).
The summary of quantitative data about the Group’s exposure to foreign currency risk, primarily SGD
and USD, as reported to the management of the Group based on its risk management policy was as
follows:
Group
SGD
USD
$
$
2014
Trade and other receivables
13,392,281 3,532,699
Cash and cash equivalents
12,483
91,927
Trade and other payables
(16,427,257)
(3,598,253)
Zero-coupon convertible bonds
– 2,148,240
(3,022,493)
2,174,613
2013
Trade and other receivables
9,882,625 2,021,709
Cash and cash equivalents
5,754
229,475
Trade and other payables
(15,211,059)
(2,366,644)
(5,322,680)
(115,460)
The Company did not have any foreign currency transactions.
