Annual Report 2012 - singapore land limited

Singapore Land Limited - Annual Report 2012
85
NOTES TO THE FINANCIAL STATEMENTS
For the fi nancial year ended 31 December 2012
28. FINANCIAL RISK MANAGEMENT
Financial risk factors
The Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity
risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability
of fi nancial markets on the Group’s fi nancial performance.
Risk management is carried out in accordance with established policies and guidelines approved by the Board
of Directors.
(a)
Market risk
(i)
Currency risk
The Group operates dominantly in Singapore, with some operations in the People’s Republic of
China. Entities in the Group transact in currencies other than their respective functional currencies
(“foreign currencies”).
Currency risk arises when transactions are denominated in foreign currencies. As the entities in the
Group transact substantially in their respective functional currencies, the currency exposure at the Group
is minimal.
In addition, the Group is exposed to currency risk on its monetary assets and liabilities denominated
in foreign currencies when they are translated at the statement of fi nancial position date. As these
assets and liabilities are substantially denominated in their respective functional currencies, the currency
exposure is minimal.
The Company’s exposure to currency risk is minimal as revenue and expenses and assets and liabilities
are substantially denominated in Singapore Dollars.