Untitled - Swissco Holdings Limited

NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2005
30. Financial Risk Management (continued)
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the
management to finance the Group’s operations and mitigate the effects of fluctuations of cash
flows. Given the dynamic nature of the business, the Group endeavours to maintain flexibility in
funding by keeping committed credit facilities available.
Interest rate risk
The Group is exposed to significant market risk for changes in interest rates on interest bearing
assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available.
Foreign currency exchange risk
The Group operates regionally and is exposed to foreign exchange risk due to its trading
transactions in foreign currencies. The exposure to this risk is however minimum.
The Group has investment in an associated company, whose functional currency is denominated
in foreign currency and net assets are exposed to currency translation risk. However, the exposure
to this risk in the current financial year is not significant.
31. Related Party Transactions
The following related party transactions took place between the Group and related parties during
the financial year on terms agreed by the parties concerned:
(a)
Sales and purchases of goods and services
The Group
2005 2004
$ $
Rental expense paid to a company in which certain directors
have equity interest and directorship 432,000 432,000
Sales to associated companies 2,403,214 1,082,999
Sales of vessels/barges to an associated company – 2,677,200
Purchases from associated companies 29,769 117,347
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