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As at 31 December 2012, total current liabilities exceeded total current assets by $20.5 million
(2011 : $15.2 million) for the Company. This is mainly due to some of the Company’s bank loans being
arranged on short-term revolving basis, as the interest rates are more favourable.
Management assesses the availability of credit facilities and compliance with loan covenants on an on-going
basis and no matters have been drawn to its attention that the roll-over of the short-term financing may
not be forthcoming or that covenants have been breached. The Group and the Company have unutilised
credit facilities totalling $136.3 million (2011 : $139.4 million) and $98.9 million (2011 : $102.4 million)
respectively.
6. Capital risk
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of debt, which includes the bank borrowings disclosed in Notes
16, 18 and 20, and equity comprising share capital disclosed in Note 22, reserves and retained earnings.
The Group reviews the capital structure on an annual basis. As a part of this review, the Group considers
the cost of capital and the risks associated with each class of capital. The Group seeks to balance its overall
capital structure through the payment of dividends, new share issues and share buy-backs as well as the
obtaining of new debts, refinancing or redemption of existing debts.
The Group’s overall strategy remains unchanged from 2011. The bank loans require the Group to comply
with certain financial covenants with respect of the market values of asset collaterals, and there has been
no non-compliance with these externally imposed capital requirements during the year.
General business risks
The Group’s businesses are subject to general business risks. They are as follows:
a. War and terrorism, and its adverse effect on business;
b. The spread of contagious diseases and their adverse effect on tourist arrivals;
c. Global recession and its effect on the performance of the local economy; and
d. Changes in government regulations that burden the Group’s operating costs or restrict business.
It is recognised that such risks can never be eliminated totally and that the cost controls in minimising these risks
may outweigh their potential benefits. Accordingly the Group continues to focus on risk management and incident
management. Where appropriate, this is supported by risk transfer mechanism such as insurance.
RISK FACTORS AND RISK MANAGEMENT