Brainworks_Capital_Management_2012_Annual_Report

2012 FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2012
47
The fair value of the put option was determined at year-end through comparison of the closing price of the shares
at 31 December 2012 and the exercise price of the shares as per the put agreement. Apart from the financial
assets shown above, the Company had no other financial assets and liabilities that were carried at fair value,
as at 31 December 2012.
Adequacy and effectiveness of risk management system
The risk management system has proved adequate and effective in managing equity price risk.
Sensitivity analysis
A 5% increase/decrease in the value of listed shares as at 31 December 2012 would have resulted in an
increase/decrease of US$ 3 472 to the reported Company’s profit and an increase/decrease in the statement
of financial position of US$ 3 472.
24.3 CREDIT RISK
Definition
Credit risk is the risk that a counter party will not honour its obligations to the Company as and when they
become due.
Identification techniques
The company assesses prospective customers or investees prior to granting credit facilities to them.
Measurement methods
The risk is measured through assessing the risk of default through investigations of the counterparty’s credit
worthiness.
Impact evaluation
Credit risk is rated low in the Company as the systems for identification measurement and controlling the risk
are effective.
Strategies for management/mitigation
The Company has a credit risk management process which operates through authorisation limits.
Exposure to credit risk
The carrying amounts of the financial assets represent the maximum credit exposure. The maximum exposure
at reporting date was as follows:
NOTE 2012 2011
US$
US$
CARRYING CARRYING
AMOUNT AMOUNT
Receivables 13 2 341 569 636 812
BRAINWORKS CAPITAL MANAGEMENT (PRIVATE) LIMITED
2012 ANNUAL REPORT