Page 133 - ar2013.pdf

NOTES TO THE FINANCIAL STATEMENTS

For the Ànancial year ended 31 December 2013

131

Annual Report 2013

F i nanc i a l Statement s

34. Financial risk management

Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk

and price risk), credit risk and liquidity risk.

Risk management is carried out under policies approved by the Board of Directors. The Board approves guidelines

for overall risk management, as well as policies covering these specific areas.

(a)

Market risk

(i)

Currency risk

Currency risk arises from transactions denominated in currencies other than the respective functional

currencies of the entities in the Group.

The Group monitors its foreign currency exchange risk closely and where appropriate, enters into

forward currency contracts to manage the currency exposure.

In addition, the Group has certain investments in foreign operations, whose net assets are exposed to

currency translation risk. Currency exposure to the net assets of the Group’s foreign operations in the

People’s Republic of China is managed primarily through borrowings denominated in RMB and USD.

The Group’s currency exposure based on the information available to key management is as follows:

SGD

USD

RMB Others*

Total

$’000

At 31 December 2013

Financial assets

Cash and cash equivalents and

available-for-sale financial assets

18,955

793,135 1,217,874

2,824 2,032,788

Trade and other receivables, excluding

advances paid to suppliers

2,057 2,192,357

158,691

13 2,353,118

Receivables from subsidiaries

–

30,359

–

30,359

Other financial assets

103

–

2,557

–

2,660

21,115 2,985,492 1,409,481

2,837 4,418,925

Financial liabilities

Borrowings

–

2,880,348

902,180

–

3,782,528

Payables by subsidiaries

–

30,359

–

30,359

Other financial liabilities

4,940

228,350 1,796,294 12,398 2,041,982

4,940 3,108,698 2,728,833 12,398 5,854,869

Net financial assets/(liabilities)

16,175

(123,206)

(1,319,352)

(9,561)

(1,435,944)

Less: Net financial assets/(liabilities)

denominated in the respective

entities’ functional currencies

(15,741)

(56,118)

1,319,225

–

Add: Firm commitments and highly

probable forecast transactions

in foreign currencies

–

2,249,944

– (79,581)

Less : Currency forwards

–

(125,906)

–

Currency exposure

434 1,944,714

(127)

(89,142)

* Others mainly include Euro, Norwegian Kronor and Japanese Yen.