Page 115 - ar2012

Annual Report 2012
Financial Report / 113
NOTES TO THE
FINANCIAL STATEMENTS
31 MARCH 2012
37. Financial instruments (cont’d)
Determination of fair value
Quoted equity securities (Note 14) and Equity derivatives (Note 19): Fair value is determined by direct reference to their published
market bid price at the end of the reporting period.
(b) Financial instruments that are not carried at fair value and whose carrying amount approximates fair value
Management has determined that the carrying amount of cash and cash equivalents (Note 20), trade and other receivables
(Notes 15 and 17), trade and other payables (Note 21) fnance lease payable (Note 22), bank borrowings (Note 23)
and loans from a non-controlling shareholder of a subsidiary (Note 24) based on their notional amounts, reasonably
approximate their fair values either due to their short-term nature or that they are foating rate instruments that are re-priced
to market interest rates on or near the end of the reporting period.
(c) Financial instruments that are not carried at fair value and whose carrying amounts are not reasonable
approximation of fair value
The fair value of non-current amounts due from/(to) subsidiaries (Notes 15 and 21) are not determinable as the timing of
the future cash fows arising from the repayment cannot be estimated reliably.
38. Hedge accounting
Hedge of net investments in foreign operations
Included in loans at 31 March 2012 was a borrowing of USD13,510,000, which has been designated as a hedge of the net
investment in the Premier Sea and Land Pte Ltd and is being used to hedge the Group’s exposure to foreign exchange risk on
these investments. Gains or losses on the retranslation of this borrowing are transferred to equity to offset any gains or losses
on translation of the net investments in the subsidiaries. There is no ineffectiveness in the year ended 31 March 2012.
The foreign currency translation reserve is also used to record the effect of hedging of net investments in foreign operations
39. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains an appropriate capital structure in order
to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain
or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders, issue
new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings. No changes were made in the
objectives, policies or processes during the fnancial years ended 31 March 2012 and 31 March 2011.
The Group monitors capital using a gearing ratio, which is net debt divided by net capitalisation. The Group includes within its
net debt, bank borrowings and fnance lease payable, less cash and cash equivalents. Net capitalisation refers to net debt plus
shareholders’ funds less non-controlling interests.