36. FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (CONTINUED) Credit risk (Continued) Cash and bank balances The cash and bank balances are held with bank and financial institution counterparties, which are rated A3 to Aa1 for long-term deposit and P2 to P1 for short term deposit, based on Moody’s rating. The Board of Directors monitors the credit ratings of counterparties regularly. Impairment on cash and bank balances has been measured on the 12-month expected credit loss model. At the reporting date, the Group and the Company did not expect any material credit losses from non-performance by the counterparties. Market risk Market risk is the risk that changes in market prices, such as equity prices, foreign exchange rates and interest rates that will affect the Group’s income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return. (i) Equity prices The Group is exposed to equity price risks arising from equity investments classified as financial assets at FVTOCI. Equity investments carried at FVTOCI are held for strategic reasons rather than trading purpose. The Group does not actively trade equity investments. Further details of these equity investments can be found in Note 17 to the financial statements. Equity price sensitivity analysis The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period. In respect of quoted equity investments carried at FVTOCI, if the prices for equity securities listed on the Catalist Board of the Singapore Exchange Securities Trading Limited had been 33% (2023: 32%) higher or lower with all other variables including tax rate being held constant, the effects on loss after tax and other comprehensive income would be as follows: – The Group’s net loss for the financial years ended 30 September 2024 and 30 September 2023 would have been unaffected as the equity investments are classified as financial assets at FVTOCI and no investments were disposed of or impaired; and – The Group’s fair value reserves would increase or decrease by $776,000 (2023: $789,000). The equity price sensitivity analysis for unquoted equity investments carried at FVTOCI is disclosed in Note 38. (ii) Foreign exchange risk management Currency risk arises from transactions denominated in currency other than the functional currency of the entities within the Group. The currencies that give rise to this risk are primarily United States dollar, Malaysian Ringgit and Maldives rufiyaa. It is not the Group’s policy to take speculative positions in foreign currency. 131 ANNUAL REPORT 2024 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2024
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