notes to the financial statements - Investor Relations

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2011
41 DISPOSAL OF INTERESTS IN SUBSIDIARIES
Annual Report 2011
On 15 June 2011, the Group disposed of its equity interest in CWT Cayman (Jinshan) Ltd for a total consideration of
$12,971,000.
Group
2011
$’000
Carrying amounts of assets and liabilities disposed of
Property, plant & equipment 7,739
Total assets 7,739
Trade and other payables (3)
Other liabilities (1)
Total liabilities (4)
Net assets derecognised 7,735
Less: Non-controlling interests –
Net assets disposed of 7,735
The aggregate cash inflows arising from the disposal of CWT Cayman (Jinshan) Ltd and its subsidiaries were as follow:
123
Group
2011
$’000
Net assets disposed of (as above) 7,735
Reclassification of currency translation reserve (1,195)
6,540
Gain on disposal 6,431
Net cash inflow on disposal 12,971
In connection with the disposal, the Group entered into a 3 year lease for a warehouse owned by the disposed group. The
gain on disposal of CWT Cayman (Jinshan) Ltd included an amount of $1,713,000 representing the gain in excess of the fair
value of the warehouse owned by the disposed group. Accordingly, the Group recognised the amount of $1,713,000 as a
deferred gain to be amortised over the period of the lease of the warehouse.
42 FINANCIAL RISK MANAGEMENT
Overview
The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the
cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an
appropriate balance between risk and control is achieved.
The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The
Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and adhoc reviews
of risk management controls and procedures, the results of which are reported to the Audit Committee.
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or a counter party to settle its financial and
contractual obligations to the Group, as and when they fall due.