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Financial risks
The Group’s activities expose it to a variety of financial risks, including the effects of changes in debt and equity
market prices, foreign currency exchange rates and interest rates. The Group may use derivative financial
instruments such as interest rate swap to hedge certain exposures. The Group does not hold or issue derivative
financial instruments for speculative purposes.
1. Credit risk
The Group’s credit risk is primarily attributable to its cash and bank balances, trade and other receivables and
investments. Cash and fixed deposits are placed with creditworthy financial institutions. The trade and other
receivables presented in the statement of financial position are net of allowances for doubtful receivables,
estimated by management based on prior experience and the current economic condition. Investments are
also subject to credit risk, which have been factored in the determination of their fair values.
The Group has no significant concentration of credit risk, with exposure spread over a large number of
counterparties and customers.
The carrying amounts of financial assets recorded in the financial statements, grossed up for any allowances
for losses, represents the Group’s maximum exposure to credit risk.
2. Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest rate bearing
liabilities and assets. Those exposures are managed as far as possible by using natural hedges that arise
from offsetting interest rate sensitive assets and liabilities.
Further information related to interest rate and maturities of bank loans is disclosed in Notes 16 and 20 to
the financial statements.
3. Foreign currency risk
The Group has investments in funds under management of certain banks and cash deposits which are
exposed to foreign exchange risk arising from the exchange rate movements of the United States dollar, the
Euro, the Australian dollar, the Great Britain pound, the Malaysian ringgit and the Swiss franc vis-à-vis the
Singapore dollar. In addition, the Group is exposed to currency translation risk as it has significant subsidiaries
operating in New Zealand, Malaysia and Thailand. For the year ended 31 December 2012, approximately
11% (2011 : 12%) is denominated in Malaysian ringgit, approximately 15% (2011 : 11%) of the Group’s net
assets is denominated in New Zealand dollar and approximately 5% (2011 : 2%) of the Group’s net assets is
denominated in Thai baht.
4. Price risk
The Group is exposed to price risks arising from its investments classified as held-for-trading and
available-for-sale. These investments include equity shares, and instruments whose fair values are subject
to volatility in equity prices, commodity prices or real estate prices.
Further details of these investments can be found in Notes 7 and 8 to the financial statements.
5. Liquidity risk
Liquidity risk reflects the risk that the Group will have insufficient resources to meet its financial liabilities
as they fall due.
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RISK FACTORS AND RISK MANAGEMENT