Creative 2014 Annual Report Download - page 53

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53
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
28. COMMITMENTS
(a) Capital and other commitments
Capital and other expenditures contracted for at the balance sheet date but not recognised in the nancial statements are as
follows:
Group Company
2014 2013 2014 2013
US$’000 US$’000 US$’000 US$’000
Property and equipment 9 328 9 328
Other purchase obligaons 2,695 8,144 2,674 8,123
2,704 8,472 2,683 8,451
(b) Operating lease commitments – where the Group is a lessee
The Group leases ofce space from non-related parties under non-cancellable operating lease agreements. The leases have
varying terms, escalation clauses and renewal rights.
The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not
recognised as liabilities, are as follows:
Group
2014 2013
US$’000 US$’000
Not later than one year 4,131 3,936
Between one and ve years 11,442 15,082
15,573 19,018
29. FINANCIAL RISK MANAGEMENT
The Group is exposed to nancial risks arising from its operations and the use of nancial instruments. The Group’s principal
nancial instruments, other than foreign exchange contracts, comprise bank loans, investments, cash at bank and short-term
bank deposits. All nancial transactions with the banks are governed by banking facilities duly accepted with Board of
Directors’ resolutions, with banking mandates, which dene the permitted nancial instruments and facility limits, approved
by the Board of Directors. The Group has various other nancial assets and liabilities such as trade receivables and trade
payables, which arise directly from its operations.
It is the Group’s policy not to engage in foreign exchange and/or derivatives speculation or trading or enter into any complex
foreign exchange or derivatives transactions. From time to time, the Group enters into forward exchange contracts to reduce
its exposure to currency translation gains and losses.
The main nancial risks arising from the Group’s operations and the use of nancial instruments are market risk (including
price risk, interest rate risk and currency risk), credit risk and liquidity risk. Management does not view the Company on a
standalone basis and therefore all risks relevant to the Group are considered and managed at the Group level. The policies
for managing each of these risks at the Group level are summarised below.