Notes to the Financial Statements - Swissco Holdings Limited

Notes
to the Financial Statements
For the financial year ended 31 December 2009
30. Financial risk management (continued)
Financial risk factors (continued)
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk
management for the Group. The management team then establishes the detailed policies such as authority
levels, oversight responsibilities, risk identification and measurement and risk exposure limits such as
customer credit limits, in accordance with the objectives and underlying principles approved by the Board
of Directors.
Financial risk management is carried out by the Finance Department in accordance with policies set by
management team. The Finance Department measures the actual exposures against the limits set and
prepares regular reports for review by the management team and the Board of Directors.
(a)
Market risk
(i)
Currency risk
The Group is exposed to foreign exchange risk primarily with respect to United States Dollar
(“USD”) as significant sales and purchases are denominated in USD. The Group does not
undertake any foreign exchange contracts to hedge its USD exposure as the management
matches financial assets and liabilities denominated in USD whenever possible.
The Company’s transactions are predominantly denominated in the Singapore Dollar (“SGD”)
and there is no significant exposure to foreign currency risk.
The Group’s currency exposure based on the information provided to key management is as
follows:
SGD USD Total
$ $ $
At 31 December 2009
Financial assets
Cash and cash equivalents 7,819,717 6,758,746 14,578,463
Financial assets, available-for-sale 27,540,000 – 27,540,000
Trade and other receivables 954,543 14,502,399 15,456,942
36,314,260 21,261,145 57,575,405
Financial liabilities
Trade and other payables 14,562,996 4,240,501 18,803,497
Borrowings 21,315,501 5,190,075 26,505,576
35,878,497 9,430,576 45,309,073
Net financial assets 435,763 11,830,569 12,266,332
Less: Net financial assets denominated in the
respective entities’ functional currencies (435,763) –
Less: Firm commitments in foreign currency* – (13,571,085)
Currency exposure on financial assets and
liabilities – (1,740,516)
* Expenditure contracted for the purchase of vessels/barges
73 Annual Report 2009 Swissco International Limited