118
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
31. RELATED PARTY DISCLOSURE (CONT’D)
(b)
Compensation of key management personnel
Key management personnel are defined as persons who have authority and responsibility for planning,
directing and controlling the activities of the Group.
Details of their remuneration paid during the year have been disclosed in Note 5(a).
(c)
Interested party transactions
During the year, purchases made by a subsidiary of the Group from a company, in which a director has
effective control, amounted to $Nil (2014: $122,000). There was no outstanding balance arising from these
transactions as at 31 March 2015 and 31 March 2014.
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group and the Company is exposed to financial risks arising from its operations and the use of financial
instruments. The Group's principal financial instruments, other than quoted securities, comprise bank borrowings,
finance leases and cash and cash equivalents. All financial transactions with the banks are governed by banking
facilities duly accepted with Board of Directors ("Board") resolutions, with banking mandates which define the
permitted financial instruments and facilities limits, approved by the Board. The Group has various other financial
assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.
The key financial risks faced by the Group include credit risk, foreign currency risk, liquidity risk and interest
rate risk. The Board reviews and agrees policies and procedures for the management of these risks, which are
executed by the key management personnel of the Group. The Audit Committee provides independent oversight
to the effectiveness of the risk management process. It is, and has been throughout the current and previous
financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments
where appropriate and cost–efficient. The Group does not apply hedge accounting, other than the hedge of net
investment in foreign operations as disclosed in Note 34.
The following sections provide details regarding the Group’s and Company’s exposure to the above–mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade
and other receivables. For other financial assets (including quoted investment securities and cash and cash
equivalents), the Group and the Company minimise credit risk by dealing exclusively with high credit rating
counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. It is the Group's policy to enter into transactions with a diversity of creditworthy
parties to mitigate any significant concentration of credit risk. The Group ensures that sales of products and
services are made to customers with appropriate credit history and has internal mechanisms to monitor the
granting of credit and management of credit exposures. The Group has made allowances, where necessary,
for potential losses on credits extended.
