Page 81 - ar2012

77 Annual Report 2012
31 Financial Risks Management Policies (cont’d)
(e) Capital risk (cont’d)
In the management of capital risk, management takes into consideration the net debt equity ratio as well
as the Group’s working capital requirement. The net debt equity ratio is calculated as net debt divided by
total equity. Net debt is calculated as total liabilities less total income tax payable, deferred tax liabilities
and cash and cash equivalents. Total equity comprises of share capital and reserves.
Group Company
2012
S$
(Restated)
2011
S$
2012
S$
2011
S$
Net debt 71,654,070 53,582,365 (767,152) 1,485,995
Total equity 53,019,280 30,244,974 10,566,343 8,858,766
Net debt against equity ratio 135% 177% N.M. 17%
N.M. - Not meaningful as the Company has cash and cash equivalent more than total borrowings.
There were no externally imposed capital requirements that the Group needs to be in compliance with for
the fnancial years ended 30 September 2012 and 2011. There were no changes in the Group’s approach
to capital management during the fnancial years ended 30 September 2012 and 2011.
(f) Fair values
The fair value information presented represents the Group’s best estimate of those values and may be
subject to certain assumptions and limitations. The methodologies and assumptions used in the estimation
of fair values depend on the terms and characteristics of the various fnancial instruments.
The following table presents assets measured at fair value and classifed by level of the following fair value
measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets (Level 1);
(b) inputs other than quoted prices included with Level 1 that are observable for the asset, either directly
(i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(c) inputs for the asset that are not based on observable market data (unobservable inputs) (Level 3)
Level 1
S$
Level 2
S$
Level 3
S$
Total
S$
Group
2012
Financial assets, at fair value through
proft or loss 164,221 - - 164,221
2011
Financial assets, at fair value through
proft or loss 114,095 - - 114,095
The carrying amounts of other fnancial assets and liabilities recognised as at 30 September 2012 and 2011,
with a maturity of less than one year approximate their fair values due to their short term maturities.
The fair values of long term borrowings and fnance lease liabilities are calculated based on discounted
expected future principal and interest cash fows. The discount rates used are based on market rates for
similar instruments at the balance sheet date. As at 30 September 2012 and 2011, the carrying amounts of
the long term borrowings and fnance lease liabilities approximate their fair values, except as disclosed in
the fnancial statements.
Notes to the Financial Statements
30 September 2012