NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
132
THE STRAITS TRADING COMPANY LIMITED
40.
FINANCIAL RISK MANAGEMENT (CONT’D)
(b)
Interest rate risk (cont’d)
Group
Increase/
decrease
in basis point
Effect on
profit
after tax
$’000
31 December 2014
– Singapore Dollar
+25
505
–25
(505)
– Malaysian Ringgit
+25
(165)
–25
165
– Japanese Yen
+25
(20)
-25
20
At the end of the reporting period, for the increase/decrease in the various basis points on interest rates for the
various currencies, the effects associated with such changes on the Group’s profit after tax are as illustrated above.
(c)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on
its obligation. The credit risk arising from the Group’s normal commercial operations is controlled by individual
operating units within strict credit control and guidelines. Policies are in place to ensure on-going credit evaluation
and active account monitoring.
At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented
by the carrying amount of each class of financial assets recognised on the balance sheet.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment
record with the Group. Cash and cash equivalents, investment/marketable securities and derivatives that are neither
past due nor impaired are placed with or entered into with reputable financial institutions or companies.
