Annual Report 2014
83
Financial Risk Management
Operation Risk
The investments made by the Group (including investments held by the Company, Little Rock Group Limited
and Killian Court Pte. Ltd., both special purpose investment vehicles which are wholly owned by the Company)
are primarily in private companies, which are generally illiquid in nature. In addition to general business risks in
any investment, such investments can be adversely affected by political instability as well as exchange controls,
changes in taxation laws, foreign investment policies and other restrictions and controls which may be imposed
by the relevant authorities of the countries in which investments are made.
Currency Risk
The Company makes long-term investments and treats foreign exchange risks as part of the overall risks to
be considered in its investments decisions. The Company does not use any derivative financial instruments to
hedge these exposures. However, to cover other currency exposures denominated in non-functional currency
arising from the Company’s short-term assets and liabilities and expected sales proceeds from investments with
definitive certainty, the Company may enter into forward currency contracts to hedge against these foreign
currency exposures.
Credit Risk
Credit Risk is the Group’s exposure to potential losses if the counterparty fails to fulfil its contracture obligations.
The Group’s credit risk exposure arises mainly from its loan extended to a portfolio company in conjunction
with the Group’s investment in the portfolio company. The loan is regularly reviewed in line with the Group’s
valuation and monitoring process.
Liquidity Risk
The Company maintains sufficient cash to meet its operating needs.
Shareholders Communication
Principle 14: Fair and Equitable Treatment to all Shareholders. Recognition, Protection and Facilitation of
Shareholders’ Rights
Principle 15: Regular, Effective and Fair Communication with Shareholders
Principle 16: Greater Shareholder Participation at General Meetings
In addition to complying with the requirements to make announcements under the SGX-ST Listing Manual, the
Company adopts the practice of providing Shareholders regularly with information on major developments in its
business through SGXNET announcements. The announcements of the results and material developments are
released in a timely and non-discriminatory manner to ensure fair disclosure of information. The Board reports to
shareholders, amongst other things, a clear assessment of the Company’s performance and financial position on a
quarterly basis.
The Company ensures that all shareholders receive a copy of the Company’s Annual Report, circular(s), notice(s)
and agenda of general meetings at least 14 days before the meetings. Notices and agendas of general meetings
are also advertised in a major local newspaper and announced on SGXNET for greater awareness. Press
Releases are issued as and when the Company wish to draw shareholders’ attention to certain developments. The
Board is aware that there should be separate resolutions at general meetings on each substantially separate issue
and avoids “bundling” resolutions without valid reasons.
