Creative 2015 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2015 Creative annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

53
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
29. 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
2015 2014 2015 2014
US$’000 US$’000 US$’000 US$’000
Property and equipment 5 9 5 9
Other purchase obligaons 2,714 2,695 2,680 2,674
2,719 2,704 2,685 2,683
(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
2015 2014
US$’000
US$’000
Not later than one year 3,903 4,131
Between one and ve years 7,133 11,442
11,036 15,573
30. 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 investments, cash at bank and short-term bank deposits.
All nancial transactions with the banks are 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.
(a) Market risk
(i) Price risk
As part of its long-term business strategy, from time to time, the Group makes strategic equity investments in companies
that can provide the Group with technologies or products that management believes will give the Group a competitive
advantage in the markets in which the Group competes. The Group has strategic investments in quoted equity shares. The
Group manages the risk of unfavourable changes by cautious review of the investments before investing and continuous