i'mpact Singapore Tourism Board Annual Report 2010/2011
i'mpact Singapore Tourism Board Annual Report 2010/2011
i'mpact Singapore Tourism Board Annual Report 2010/2011
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NOTES TO THE FINANCIAL STATEMENTS<br />
31 March <strong>2011</strong><br />
(i)<br />
Foreign exchange risk management<br />
STB has exposure to foreign currency risk from transactions denominated in foreign currencies arising from its normal<br />
course of operations and from its investment portfolio arising from securities denominated in foreign currencies. Where<br />
appropriate, STB may hedge these risks as they arise.<br />
At the reporting date, the carrying amounts of monetary assets and monetary liabilities denominated in significant foreign<br />
currencies other than STB’s functional currency are disclosed in the respective notes to the financial statements.<br />
Foreign currency sensitivity analysis has not been presented as management do not expect any reasonable possible<br />
changes in foreign currency exchange rates to have a significant impact on STB’s operations and cashflows.<br />
(ii)<br />
Interest rate risk management<br />
STB’s exposure to changes in interest rates relates primarily to investments in fixed income instruments and fixed deposits.<br />
Fixed income instruments are managed by external fund managers appointed by STB. It is STB’s policy to obtain the<br />
most favourable interest rate for its fixed deposits depending on the immediate cash requirements. Interest rate sensitivity<br />
analysis has not been presented as management do not expect any reasonable possible changes in interest rates to have<br />
a significant impact on STB’s operations and cash flows.<br />
(iii)<br />
Credit risk management<br />
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to STB.<br />
Cash and fixed deposits are placed with reputable financial institutions. Investments in financial instruments are managed<br />
by approved and reputable fund managers.<br />
Credit risks, or the risk of counterparties defaulting, are controlled by the application of regular monitoring procedures. The<br />
extent of STB’s credit exposure is represented by the aggregate balance of financial assets at the end of each reporting<br />
period.<br />
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