GLOBAL

29. FINANCIAL RISK MANAGEMENT (cont'd)(ii)Interest rate riskThe Group's income and operating cash ¯ows are affected by changes in market interestrates. Interest rate risk arises mainly from interest-bearing borrowings. The Companyborrows mainly at ¯oating rates and monitors the movement in interest rates closely.(iii)Credit riskThe Company has no signi®cant concentration of credit risk as its sales are predominantlytransacted on a cash basis, which minimises its exposure to credit risk. In respect of theGroup's wholesale sales, the Group has policies in place to ensure that sales of productsare made to third party customers with an appropriate credit history.(iv)Liquidity riskThe Group's liquidity risk is minimal as it maintains suf®cient funds through its ownresources and an adequate amount of committed credit facilities to meet its committedliabilities.30. FAIR VALUE INFORMATIONThe ®nancial assets and liabilities of the Group comprise bank and cash balances, ®xeddeposits, trade and other receivables, trade and other payables, bank bills payable, bankoverdraft, hire purchase creditors and bank loan. The carrying values of the ®nancial assets andliabilities as shown in the balance sheets approximate their fair value amounts at the balancesheet date.31. SEGMENT INFORMATIONThere is no business segment information presented as the Group's retail sales constitute over90% of the Group's total sales. As the Group's sales are predominantly derived in Singapore,there is no geographical segment information presented.32. EVENTS SUBSEQUENT TO THE BALANCE SHEET DATEBeginning from 2000, Mr Donald Eugene Black (``DB'') obtained the GNC franchise to operateGNC retail outlets at certain US military and naval bases in Japan and Korea. DB operated thisfranchise business (``Business'') as a sole proprietor until October 2002 when a Guamcorporation, USB Inc. (``USB''), which is bene®cially owned by DB, was set up to take over theBusiness from DB. In connection therewith, all assets and liabilities (including amounts due byDB to GNC Inc for purchases of products from GNC Inc (``GNC Debt'') and the franchise rights,so far as it relates to the Business, were transferred to USB.In September 2002, DB appointed the Company's subsidiary, Nutri-Active Pte Ltd, as his solesupplier of nutraceutical products for all his GNC retail outlets located in US military bases inJapan and Korea. As at 31 March 2003, there were 9 retail outlets located in US military andnaval bases in Japan and Korea.In March 2003, the Company's subsidiary, Victoria House Pte Ltd (``Victoria House''), agreed inprinciplewith DB to take a 50% interest in the Business. As part of the in-principle agreement, toenable Victoria House to take a 50% interest in the Business, a loan of approximately US$0.94million (the ``Loan'') was extended by Victoria House to USB in April 2003 to enable USB tosettle the GNC Debt.E-102