Page 130 - SAR141018_Forterra AR 2013

FORTERRA
ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS
128
29 FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates,
interest rates and equity prices, will affect the Group’s income and its holdings of financial
instruments. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters while optimising the return on risk. Market risk
is managed through established policies and guidelines. These policies and guidelines are
reviewed regularly taking into consideration changes in the overall market environment.
The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage
market risk.
Foreign currency risk
The Group incurs foreign currency risk as a result of its operations in the PRC and interest-
bearing liabilities. The currency giving rise to this risk at the date of the statement of
financial position is primarily the United States dollar. Exposures to significant foreign
currency risk are as follows:
US Dollar
$’000
Group
As at 31 December 2013
Cash and cash equivalents 80,077
Derivative financial liabilities (85)
Interest-bearing borrowings (470,453)
(390,461)
As at 31 December 2012
Cash and cash equivalents 14,086
Derivative financial liabilities (1,240)
Interest-bearing borrowings (597,217)
(584,371)