Every Note Counts
N otes to the Financial Statements
Year ended 31 December 2010
The Group operates principally in South East Asia, Europe and North East Asia. Contributions from the other individual overseas operations are not significant and are therefore presented in aggregate as “others”. Segment revenue is based on geographical location of the operations. Segment assets are based on the geographical location of the assets.
Revenue South East Asia Europe North East Asia Others
Non-current assets South East Asia Europe North East Asia Others
Financial risk management
Risk management is integral to the whole business of the Group. Exposure to credit, liquidity and market risks (including interest rate, currency and price risks) arises in the normal course of the Group’s business. The Group has written risk management policies and guidelines. In addition, the Group has established processes to monitor and manage major exposures. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Cash and fixed deposits are placed with banks and financial institutions which are regulated. Investments and transactions involving swap hedging instruments are allowed only with counter parties that are of certain credit standing.
At 31 December 2010, there is no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including swap hedging instruments, in the statement of financial position.
The principal risk to which the Company is exposed is credit risk in connection with the guarantee contracts it has issued. The credit risk represents the loss that would be recognised upon a default by the parties to which the guarantees were given on behalf of. To mitigate these risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of.
The Company only issues guarantees on behalf of its subsidiaries and jointly-controlled entities, which amounted to $1.84 billion (2009: $3.53 billion) as at 31 December 2010.