NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
133
Annual Report 2014
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
$’000
$’000
$’000
$’000
At 31 December 2014
Financial assets
Cash and cash equivalents
and available-for-sale financial
assets
38,581 375,448 1,149,875 1,740 1,565,644
Trade and other receivables,
excluding advances paid to
suppliers
6,454 3,783,324 282,190 1,560 4,073,528
Receivables from subsidiaries
–
–
31,085
–
31,085
Other financial assets
100
–
2,874
–
2,974
45,135 4,158,772 1,466,024 3,300 5,673,231
Financial liabilities
Borrowings
– 4,290,927 681,767
– 4,972,694
Payables by subsidiaries
–
–
31,085
–
31,085
Other financial liabilities
10,434 106,107 1,972,479 13,527 2,102,547
10,434 4,397,034 2,685,331 13,527 7,106,326
Net financial assets/(liabilities)
34,701 (238,262) (1,219,307)
(10,227) (1,433,095)
Less: Net financial assets/(liabilities)
denominated in the
respective entities’ functional
currencies
(34,980)
(53,712) 1,219,307
–
Add: Firm commitments and
highly probable forecast
transactions in foreign
currencies
– 2,976,770
– (15,193)
Currency exposure
(279)
2,684,796
– (25,420)
* Others mainly include Euro, Norwegian Kronor and Japanese Yen.
