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185StarHub Ltd Annual Report 2015

29 Financial Risk Management Overview
Financial risk management objectives and policies
Strategy
Exposure to credit, liquidity, interest rate and foreign currency risk arises in the normal course of the Group’s business. The
Group has written risk management policies and guidelines which set out its overall business strategies, its tolerance of risk and Performance
its general risk management philosophy, and has established processes to monitor and control the hedging of transactions in a
timely and accurate manner.

Derivative financial instruments are used to reduce exposure to fluctuations in foreign exchange rates and interest rates. While
these are subject to the risk of market rates changing subsequent to acquisition, such changes are generally offset by opposite
effects on the items being hedged.

The Group’s accounting policy in relation to derivative financial instruments is set out in Note 2.23.

Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Periodic frequent

credit review and counterparty credit limits are practised.
The Group has no significant concentration of credit risk from trade receivables due to its large diversified customer base.

Credit evaluations are performed on corporate customers requiring credit. Identification documents are obtained from retail
customers. Deposits are obtained for certain categories of higher-risk customers.
The Group places its cash and cash equivalents and enters into treasury transactions only with creditworthy banks and financial
institutions.
The maximum credit risk exposure is represented by the carrying value of each financial asset in the statement of financial position.

Liquidity risk
The Group monitors its liquidity risk and actively manages its operating cash flows, debt maturity profile and availability of

funding. The Group maintains sufficient level of cash and cash equivalents, and has available funding through diverse sources
of committed and uncommitted credit facilities from banks and the capital market through its medium term note programme.

Governance & Sustainability

Financials