NOTES TO THE STATEMENTS OF FINANCIAL POSITION OF THE COMPANY AS AT 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) 9. Financial risk management • Interest rate risk: No interest rate risk exposure was disclosed as the Company had assessed that a reasonable change in the interest rates would not result in any significant impact on the Company’s results. • Foreign exchange risk: No foreign exchange sensitivity analysis was disclosed as the Company had assessed that a reasonable change in exchange rates would not result in any significant impact on the Company’s results. • Liquidity risk: It is not expected that the cash flows associated with the liabilities of the Company could occur at significantly different amounts. • Credit risk: The Company limits its exposure to credit risk on amounts due from related parties which are mostly short-term in nature and bank balances and other liquid funds placed with reputable financial institutions. Management actively monitors the credit ratings of its debtors and does not expect any counterparty to fail to meet its obligations. Derivatives are entered into with financial institutions which have long-term rating of at least A3 by Moody’s, A- by Standard & Poor’s or the equivalent by a reputable credit rating agency. Cash and bank deposits are placed with reputable financial institutions. As at 31 December 2022, there were no significant concentrations of credit risk. • Financial instruments by category: The carrying amount of the different categories of financial instruments are as follows: 2022 $’000 2021 $’000 Financial assets, at amortised cost 125,594 97,324 Financial liabilities, at amortised cost (12,471) (15,627) 268 ST ENGINEERING ANNUAL REPORT 2022
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