Page 140 - ar2013.pdf

NOTES TO THE FINANCIAL STATEMENTS
For the Ànancial year ended 31 December 2013
138
COSCO Corporation (Singapore) Limited
F i nanc i a l Statement s
34. Financial risk management (continued)
(e) Fair value measurements (continued)
The fair value of financial instruments traded in active markets (such as trading and available-for-sale
securities) is based on quoted market prices at the balance sheet date. The quoted market price used for
financial assets held by the Group is the current bid price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques. The Group uses a variety of methods and makes
assumptions that are based on market conditions existing at each balance sheet date. The fair value of
forward currency contracts is determined using quoted forward exchange rates at the balance sheet date.
These investments are included in Level 2. In infrequent circumstances, where a valuation technique for
these instruments is based on significant unobservable inputs, such instruments are included in Level 3.
Changes in Level 3 financial instruments for the financial year ended 31 December 2013 is disclosed in Note
18.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values. The fair value of financial liabilities for disclosure purposes is estimated based on quoted
market prices or dealer quotes for similar instruments by discounting the future contractual cash flows at the
current market interest rate that is available to the Group for similar financial instruments. The fair value of
current borrowings approximates their carrying amount.
(f) Financial instruments by category
The carrying amount of different categories of financial instruments is as disclosed on the face of the balance
sheets and in Note 18 to the financial statements, except for the following:
The Group The Company
2013 2012 2013 2012
$’000 $’000 $’000 $’000
Loans and receivables 4,384,175 3,804,788 86,182 100,788
Financial liabilities at amortised cost 5,824,510 4,746,585 18,149 17,886
35. Immediate and ultimate holding corporation
The Company’s immediate and ultimate holding corporation is China Ocean Shipping (Group) Company, registered
in the People’s Republic of China.
36. Related party transactions
(a) The Company is controlled by China Ocean Shipping (Group) Company (“COSCO”), the parent company and
a state-owned enterprise established in the People’s Republic of China (“PRC”).
COSCO itself is controlled by the PRC government, which also owns a significant portion of the productive
assets in the PRC. In accordance with amendment to FRS 24, other government-related entities and
their subsidiaries (other than COSCO group companies), directly or indirectly controlled, jointly-controlled
or significantly influenced by the PRC government are also defined as related parties of the Group. On
that basis, related parties include COSCO and its subsidiaries, other government-related entities and
their subsidiaries directly or indirectly controlled, jointly controlled or significantly influenced by the PRC
government, other entities and corporations in which the Company is able to control or exercise significant
influence and key management personnel of the Company and COSCO as well as their close family
members.