Asia-Pacific Strategic Investments Limited - Annual Report 2021

Notes to the Financial Statements For the financial year ended 30 June 2021

27

Fair value reserve

Fair value reserve relates to the movements in fair values of investments classified as FVOCI and is non- distributable.

28

Financial risk management

Financial risk factors

The Group’s activities expose it to market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on the Group’s financial performance. It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken. The Board of Directors and AC are responsible for setting the objectives and underlying principles of financial risk management for the Group and further provide oversight to the effectiveness of the risk management process. This includes establishing policies such as authority levels, oversight responsibilities, risk identification and measurement and exposure limits, in accordance with the objectives and underlying principles approved by the Board of Directors.

(a)

Market risk

(i)

Currency risk

The Group has transactional currency exposures arising from transactions that are denominated in a currency other than the respective functional currencies of the Group’s entities.

Currency risk arises within the entities in the Group when transactions are denominated in foreign currencies such as Renminbi (“RMB”) and Malaysian Ringgit (“RM”). To manage the currency risk, the Group relies on natural hedging as a risk management tool and does not enter into derivative foreign exchange contracts to hedge its foreign currency risk.

ASIA-PACIFIC STRATEGIC INVESTMENTS LIMITED

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