KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
ANNUAL REPORT 2014
87
NOTES
TO THE FINANCIAL STATEMENTS
16
FINANCIAL RISK MANAGEMENT (Cont’d)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
rates will affect the Group’s profit or loss or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Foreign currency risk
The Group’s exposure to market risk mainly relates to changes in foreign exchange rates on sales,
cash and cash equivalents and purchases that are denominated in currencies other than the
functional currencies of the respective entities within the Group. The currencies giving rise to this risk
are primarily United States dollar and Australian dollar.
The Group’s exposure to foreign currencies is as follows:
Group
2014
2013
$’000
$’000
United States dollar
Trade and other receivables
8,094
23,511
Cash and cash equivalents
13,280
1,670
Trade and other payables
(4,351)
(558)
17,023
24,623
Australian dollar
Trade and other receivables
–
92
Trade and other payables
(27)
(28)
(27)
64
The Group does not have a formal policy to hedge its financial assets and liabilities denominated in
foreign currencies.
