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PSA International Pte Ltd Annual Report 2010

N otes to the Financial Statements

Year ended 31 December 2010

Capital management

16

Note

2010

2009

2010

2009

$’000

$’000

$’000

$’000

Capital reserve

(a)

52,000

51,560

-

-

Insurance reserve

( b)

97,357

97,357

-

-

Foreign currency translation reserve

(c)

(942,459)

(448,614)

-

-

Hedging reserve

(d)

(42,174)

(30,025)

-

-

Fair value reserve

(e)

254,600

86,572

-

-

Accumulated profits

7,979,750

7,092,517

6,472,153

5,695,715

The Group defines capital as share capital and all components of equity. The Group’s primary objectives when managing capital are to safeguard the Group’s ability to continue to provide returns for shareholders and to support the Group’s stability and growth. The Group regularly reviews and manages its capital structure to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions.

There were no changes to the Group’s approach to capital management during the year.

Certain subsidiaries within the Group are subject to externally imposed capital requirements as required by law. These subsidiaries have complied with the requirements during the financial year. The Company and rest of its subsidiaries are not subject to any externally imposed capital requirements.

Reserves

Group

Company

The capital reserve comprises:

    • (i)

      statutory reserve of foreign jointly-controlled entities set aside as required under local laws; and

    • (ii)

      the Group’s share of capital reserve of associates.

  • ( b)

    Insurance reserve

7,399,074

6,849,367

6,472,153

5,695,715

(a)

Capital reserve

The insurance reserve relates to a sum transferred from the former Port of Singapore Authority to PSA Corporation Limited in 1997 as part of the vesting of property, rights and liabilities. This reserve is to cover potential past liabilities and for funding future potential liabilities in relation to the port related activities undertaken by PSA Corporation Limited.

73

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