Note 2 - Summary of Significant Accounting Policies

2.1

Basis of Preparation

The financial statements of the Company have been prepared in accordance with
Philippine Financial Reporting Standards (PFRS). PFRS includes statements
named PFRS, Philippines Accounting Standards (PAS) and Philippine
Interpretations from International Financial Reporting Interpretations Committee
(IFRIC), issued by the Financial Reporting Standards Council (FRSC) and adopted
by SEC.
Basis of Measurement
The financial statements have been prepared in conformity with generally
accepted accounting principles in the Philippines using the historical cost basis,
except for the Companys available for sale securities that are measured using
fair market value.
2.2

Adoption of New and Revised PFRS

The accounting policies adopted are consistent with those of the previous
financial year, except for the adoption of the following new and amended PFRS
and Philippine Interpretation from International Financial Reporting Interpretation
Committee (IFRIC) which the Company adopted effective January 1, 2014:

Amendments to PAS 32, Financial Instruments: Presentation - Offsetting

Financial Assets and Financial Liabilities The amendments address
inconsistencies in current practice when applying the offsetting criteria in PAS
32. The amendments clarify (1) the meaning of currently has a legally
enforceable right of set-off; and (2) that some gross settlement systems may
be considered equivalent to net settlement.

Amendments to PAS 36, Impairment of Assets - Recoverable Amount

Disclosures for Non-Financial Assets These amendments remove the
unintended consequences of PFRS 13, Fair Value Measurement, on the
disclosures required under PAS 36. In addition, these amendments require
disclosure of the recoverable amounts for the assets or cash-generating units
(CGUs) for which impairment loss has been recognized or reversed during the
period. The amendments affect disclosures only and have no impact on the
Companys financial position or performance.

Amendments to PAS 39, Financial Instruments: Recognition and

Measurement - Novation of Derivatives and Continuation of Hedge
Accounting These amendments provide relief from discontinuing hedge
accounting when novation of a derivative designated as a hedging instrument
meets certain criteria.

Amendments to PFRS 10, Consolidated Financial Statements, PFRS 12,

Disclosure of Interests in Other Entities and PAS 27, Separate Financial

Statements - Investment Entities These amendments provide an exception

to the consolidation requirement for entities that meet the definition of an
investment entity under PFRS 10. The exception to consolidation requires
investment entities to account for subsidiaries at fair value through profit or
loss.

Philippine Interpretation IFRIC 21, Levies This interpretation clarifies that an

entity recognizes a liability for a levy when the activity that triggers payment
occurs as identified by the relevant legislation. For a levy that is triggered
upon reaching a minimum threshold, the interpretation clarifies that no
liability should be anticipated before the specified minimum threshold is
reached.

The adoption of the foregoing new and revised PFRS did not have any material
effect on the financial statements. Additional disclosures have been included in
the notes to financial statements, as applicable.
New and Revised PFRS Not Yet Adopted
Relevant new and revised PFRS which are not yet effective for the year ending
December 31, 2014 and have not been applied in preparing the financial
statements are summarized below.
Effective for annual periods beginning on or after July 1, 2014:

Amendment to PAS 16, Property, Plant and Equipment - Revaluation Method Proportionate Restatement of Accumulated Depreciation The amendment
clarifies that, upon revaluation of an item of property, plant and equipment,
the carrying amount of the asset shall be adjusted to the revalued amount,
and the asset shall be treated in one of the following ways: (a) the gross
carrying amount is adjusted in a manner that is consistent with the
revaluation of the carrying amount of the asset. The accumulated
depreciation at the date of revaluation is adjusted to equal the difference
between the gross carrying amount and the carrying amount of the asset
after taking into account any accumulated impairment losses; or (b) the
accumulated depreciation is eliminated against the gross carrying amount of
the asset.

Amendments to PAS 19, Employee Benefits - Defined Benefit Plans:

Employee Contributions The amendments apply to contributions from
employees or third parties to defined benefit plans. Contributions that are set
out in the formal terms of the plan shall be accounted for as reductions to
current service costs if they are linked to service or as part of the
remeasurements of the net defined benefit asset or liability if they are not
linked to service. Contributions that are discretionary shall be accounted for
as reductions of current service cost upon payment of these contributions to
the plans.

Amendments to PAS 24, Related Party Disclosures - Key Management

Personnel The amendments clarify that an entity is a related party of the
reporting entity if the said entity, or any member of a group for which it is a

part of, provides key management personnel services to the reporting entity
or to the parent company of the reporting entity. The amendments also clarify
that a reporting entity that obtains management personnel services from
another entity (also referred to as management entity) is not required to
disclose the compensation paid or payable by the management entity to its
employees or directors. The reporting entity is required to disclose the
amounts incurred for the key management personnel services provided by a
separate management entity.

Amendments to PAS 38, Intangible Assets - Revaluation Method Proportionate Restatement of Accumulated Amortization The amendments
clarify that, upon revaluation of an intangible asset, the carrying amount of
the asset shall be adjusted to the revalued amount, and the asset shall be
treated in one of the following ways: (a) the gross carrying amount is
adjusted in a manner that is consistent with the revaluation of the carrying
amount of the asset. The accumulated amortization at the date of revaluation
is adjusted to equal the difference between the gross carrying amount and
the carrying amount of the asset after taking into account any accumulated
impairment losses; or (b) the accumulated amortization is eliminated against
the gross carrying amount of the asset.
The amendments also clarify that the amount of the adjustment of the
accumulated amortization should form part of the increase or decrease in the
carrying amount accounted for in accordance with PAS 38.

Amendment to PAS 40, Investment Property - Clarifying the Interrelationship

between PFRS 3, Business Combination and PAS 40 when Classifying Property
as Investment Property or Owner-occupied Property The amendment
clarifies that determining whether a specific transaction meets the definition
of both a business combination and investment property requires the
separate application of PAS 40 and PFRS 3, Business Combination.

Amendment to PFRS 1, First-time Adoption of International Financial

Reporting Standards - Meaning of Effective PFRSs This amendment clarifies
the meaning of each PFRS effective at the end of an entity's first PFRS
reporting period as used in PFRS 1. Consequently, if a first-time adopter
chooses to early apply a new PFRS, that new PFRS will be applied throughout
all the periods presented in its first PFRS financial statements on a
retrospective basis, unless PFRS 1 provides an exemption or an exception
that permits or requires otherwise.

Amendment to PFRS 2, Share-based Payment - Definition of Vesting

Condition This amends the definitions of 'vesting condition' and 'market
condition' and adds definitions for 'performance condition' and 'service
condition' (which were previously part of the definition of 'vesting condition').

Amendments to PFRS 3, Business Combinations - Accounting for Contingent

Consideration in a Business Combination and Scope Exceptions for Joint
Ventures The amendments require that the contingent consideration that is
classified as an asset or liability is measured at fair value at each reporting

date and changes in fair value are recognized in profit or loss, including
contingent considerations that are classified as financial instrument.
The amendments also clarifies that the accounting for the formation of a joint
arrangement in the financial statements of the joint arrangement itself is
excluded in the scope of PFRS 3.

Amendments to PFRS 8, Operating Segments - Aggregation of Operating

Segments and Reconciliation of the Total of the Reportable Segments Assets
to the Entitys Assets The amendments require entities to disclose the
judgment made by management in aggregating two or more operating
segments. This disclosure should include a brief description of the operating
segments that have been aggregated in this way and the economic indicators
that have been assessed in determining that the aggregated operating
segments share similar economic characteristics. The amendments also
clarify that an entity shall provide reconciliations of the total of the reportable
segments assets to the entitys assets if such amounts are regularly
provided to the chief operating decision maker.

Amendments to PFRS 13, Fair Value Measurement - Short-term Receivables

and Payables and Portfolio Exception The amendments clarify that shortterm receivables and payables with no stated interest rates can be measured
at invoice amounts when the effect of discounting is immaterial.
It also clarifies that the scope of the portfolio exception includes all contracts
accounted for within the scope of PAS 39, Financial Instruments: Recognition
and Measurement or PFRS 9, Financial Instruments, regardless of whether
they meet the definition of financial assets or financial liabilities.

Effective for annual periods beginning on or after January 1, 2016:

PFRS 14, Regulatory Deferral Accounts This standard specifies the financial
reporting requirements for regulatory deferral account balances that arise
when an entity provides goods or services to customers at a price or rate that
is subject to rate regulation.

Effective for annual periods beginning on or after January 1, 2017:

PFRS 15, Revenue from Contracts with Customers This standard establishes
the principles that an entity shall apply to report useful information to users
of financial statements about the nature, timing, and uncertainty revenue
and cash flows arising from a contract with a customer.

Effective for annual periods beginning on or after January 1, 2018:

PFRS 9, Financial Instruments: Classification and Measurement This

standard establishes principles for the financial reporting of financial assets
and liabilities that will present relevant and useful information to users of
financial statements for their assessment of the amount, timing and
uncertainty of an entitys future cash flows.

Under prevailing circumstances, the adoption of the foregoing new and revised
PFRS are not expected to have any material effect on the financial statements.
Additional disclosures will be included in the financial statements, as applicable.
2.3

Financial Instruments

Recognition
Financial instruments are recognized in the statements of financial position when
the Company becomes a party to the contractual provisions of the instrument.
Purchases or sales of financial assets that require delivery of assets within the
time frame established by regulation or convention in the market place are
recognized on the trade date.
Financial instruments are recognized initially at fair value of the consideration
given (in case of an asset) or received (in case of a liability). Except for financial
instruments at fair value through profit or loss (FVPL), the initial measurement of
financial instruments includes transaction costs.
Day 1 Difference.Where the transaction price in a non-active market is
different from the fair value from other observable current market transactions in
the same instrument or based on a valuation technique whose variables include
only data from observable market, the Company recognizes the difference
between the transaction price and fair value (a Day 1 difference) in profit or
loss, unless it qualifies for recognition as used some other type of asset. In cases
where data used as inputs in a valuation model are not observable, the Company
deemed the transaction price as the best estimate of fair value and recognizes
the difference in the statement of comprehensive income when the inputs
become observable or when the instruments is derecognized. For each
transaction, the Company determines the appropriate method of recognizing the
Day 1 difference.
Classification
The Company classifies its financial asset as: financial assets at FVPL, Availablefirst-sale (AFS) securities, held-to-maturity (HTM) investments, and loans and
receivables. The Company classifies its financial liabilities as: financial liabilities
at FVPL and other financial liabilities at amortized cost. The classification
depends on the purpose for which the instruments were acquired or incurred and
whether these are quoted in an active market. Management determines the
classification of its financial instruments at initial recognition and, where allowed
and appropriate, re-evaluates such designation at every reporting date.
Financial Assets
Financial Assets at FVPL. Financial assets at FVPL include financial assets
held for trading or is designated as such upon initial recognition. Financial assets
are classified as held for trading if they are acquired for the purpose of selling in
the near term. Financial assets at FVPL are carried in the statements of financial

position at fair value with gains or losses recognized in profit or loss. Interest
earned is recorded in interest income while dividend income is recorded in other
income when the right to receive payment has been established. Reassessment
only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required. The Company
determines the cost of investments sold using specific identification method.
The Company had no outstanding balances of financial assets at FVPL as at
December 31, 2015.
Available for Sale Financial Assets. AFS financial assets are non-derivative
financial assets that are either designated in this category or not classified in
any of the other financial asset categories. Subsequent to initial recognition, AFS
financial assets are measured at fair value and changes therein, other than
impairment losses and foreign currency differences on AFS debt instruments, are
recognized in other comprehensive income and presented in the Fair value
reserve in equity.
The effective yield component of AFS debt securities is reported as part of
Interest income in the statements of income. Dividends earned on holding AFS
equity securities are recognized as Dividend income when the right to receive
payment has been established.
When individual AFS financial assets are either derecognized or impaired, the
related accumulated unrealized gains or losses previously reported in equity are
transferred to and recognized in profit or loss. AFS financial assets also include
unquoted equity instruments with fair values which cannot be reliably
determined. These instruments are carried at cost less impairment in value, if
any.
The Company had no investments included under AFS financial assets as at
December 31, 2015.
Held-to-Maturity Investments. Bonds with fixed or determinable payments
and fixed maturity dates where the group has a positive intent and ability to hold
to maturity are classified as held-to-maturity investments. Held-to-maturity
investments are recorded at amortized cost using the effective interest method
less impairment, with revenue recognized on an effective yield basis.
The Company had no Held-to-maturity investments account as at December
31, 2015.
Loans and Other Receivables. Loans and other receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. Such financial assets are carried at amortized cost using the
effective interest method less any allowance for impairment. Amortized cost is
calculated by taking into account any discount or premium on acquisition and
fees that are integral part of the effective interest rate. The periodic amortization
is included as part of Interest income in the statements of comprehensive
income. Gains and losses are recognized in profit or loss when the loans and

other receivables are derecognized or impaired, as well as through the

amortization process. Loans and other receivables are included in current assets
if maturity is within twelve months from reporting date. Otherwise, these are
classified as noncurrent assets.
The Companys cash and other cash, loans and other receivables and refundable
deposit are classified under this category.
Financial Liabilities
Financial Liability at FVPL. Financial liabilities are classified in this category if
they result from trading activities or derivative transactions that are not
accounted for as accounting hedges, or when the Company elects to designate a
financial liability under this category.
Other Financial Liabilities. This category pertains to financial liabilities that
are not held for trading or not designated as at FVPL upon the inception of the
liability. These include liabilities arising from operations or borrowings.
The financial liabilities are recognized initially at fair value and are subsequently
carried at amortized cost, taking into account the impact of applying the
effective interest method of amortization (or accretion) for any related premium,
discount and any directly attributable transaction costs.
Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount reported in the
statements of financial position if, and only if, there is a currently enforceable
right to offset the recognized amounts and there is intention to settle on a net
basis, or to realize the asset and settle the liability simultaneously.
Derecognition of Financial Assets and Liabilities
Financial Assets. A financial asset (or, where applicable a part of a financial
asset or part of a group of similar financial assets) is derecognized when:

the rights to receive cash flows from the asset expired;

the Company retains the right to receive cash flows from the asset, but
has assumed an obligation to pay them in full without material delay to a
third party under a pass-through arrangement; or

the Company has transferred its rights to receive cash flows from the
asset and either:
a. has transferred substantially all the risks and rewards of the assets; or
b. has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.

Where the Company has transferred its rights to receive cash flows from an
asset and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the asset is recognized
to the extent of the Companys continuing involvement in the asset. Continuing
involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the
maximum amount of consideration that the Company could be required to repay.
Financial Liabilities. A financial liability is derecognized when the obligation
under the liability is discharged, cancelled, or has expired. When an existing
financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognized in profit or loss.
Impairment of Financial Assets
The Company assesses at each reporting date whether there is any objective
evidence that a financial asset or a group of financial assets is impaired. A
financial asset or a group of financial assets is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the assets (an incurred
loss event) and the loss event has an impact on the estimated future cash
flows of the financial asset or of the group of financial assets that can be reliably
estimated.
Evidence of impairment may include indications that the debtors or a group of
debtors is experiencing significant financial difficulty, default or delinquency in
interest or principal payments, the probability that they will enter bankruptcy or
other financial reorganization and where observable data indicate that there is a
measurable decrease in the estimated future cash flows such as changes in
arrears or economic conditions that correlate with defaults.
Assets Carried at Amortized Cost. For assets carried at amortized cost, the
Company first assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, and collectively
for financial assets that are not individually significant.
If there is objective evidence that an impairment loss has been incurred, the
amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows discounted at the
financial assets original effective interest rate. The carrying amount of the
financial asset is reduced through use of an allowance account and the amount
of the loss is recognized in profit or loss. Interest income continues to be accrued
on the reduced carrying amount based on the effective interest rate of the asset.
If it is determined that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not, the asset is
included in a group of financial assets with similar credit risk characteristics and
that group of financial assets is collectively assessed for impairment. Assets that

are individually assessed for impairment and for which an impairment loss is, or
continues, to be recognized are not included in the collective assessment of
impairment. The Company provides an allowance for loans and receivables
which are deemed to be uncollectible despite the Companys continuous effort to
collect such balances from the respective clients. The Company considered those
past due receivables as still collectible if they become past due only because of
a delay on the completion of the services to be rendered by the Company as
agreed in the contract and not due to incapability of the clients to fulfill their
obligation. However, for those receivables associated to pre-terminated
contracts, the Company directly writes them off from the account since there is
no realistic prospect of future recovery. If, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed. Any subsequent reversal of an impairment loss is
recognized in profit or loss, to the extent that the carrying value of the asset
does not exceed its amortized cost at the reversal date. In relation to trade
receivables, impairment loss is made when there is objective evidence (such as
probability of insolvency or significant financial difficulties of the debtor) that the
Company will not be able to collect all of the amounts due under the original
terms of the invoice. The carrying amount of the receivable is reduced through
the use of an allowance account. The financial assets, together with the
associated allowance accounts, are written off when there is no realistic prospect
of future recovery and all collateral has been realized.
Available for Sale Financial Assets.
If an AFS financial asset is impaired, an amount comprising the difference
between the cost (net of any principal payment and amortization) and its current
fair value, less any impairment loss on that financial asset previously recognized
in profit or loss, is transferred from equity to profit or loss. Reversals in respect of
equity instruments classified as AFS financial assets are not recognized in profit
or loss. Reversals of impairment losses on debt instruments are recognized in
profit or loss, if the increase in fair value of the instrument can be objectively
related to an event occurring after the impairment loss was recognized in profit
or loss.
In the case of an unquoted equity instrument or of a derivative asset linked to
and must be settled by delivery of an unquoted equity instrument, for which its
fair value cannot be reliably measured, the amount of impairment loss is
measured as the difference between the assets carrying amount and the
present value of estimated future cash flows from the asset discounted using its
historical effective rate of return on the asset.
2.15 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalized as part of the cost of the
respective assets. All other borrowing costs are expensed in the period they

occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
The Company did not incur borrowing costs for the year ended December 31,
2015.
2.20

Basic/Diluted Earnings Per Share (EPS)

Basic EPS is computed by dividing the net income for the period of the
Company by the weighted-average number issued and outstanding share
capital during the period.
For the purpose of computing diluted EPS, the net income for the period of the
Company and the weighted-average number of issued and outstanding share
capital are adjusted for the effects of all potential dilutive instruments.
Note 3 - Financial Risks and Capital Management
The Companys activities expose it to a variety of financial risks and those
activities involve the analysis, evaluation, acceptance and management of some
degree of risk or combination of risks. Taking risk is core to the financial
business, and the operational risks are an inevitable consequence of being in
business. The Companys aim is therefore to achieve an appropriate balance
between risk and return and minimize potential adverse effects on the
Companys financial performance.
The Companys risk management policies are designed to identify and analyze
these risks, to set appropriate risk limits and controls, and to monitor the risks
and adherence to limits by means of reliable and up-to-date information
systems. The Company regularly reviews its risk management policies and
systems to reflect changes in markets, products and emerging best practice.
The Board of Directors provides written principles for overall risk management,
as well as policies covering specific areas such as interest rate risk and credit
risk.
The management is responsible for the management of market and liquidity
risks. Their objective is to minimize adverse impacts on Companys financial
performance due to the unpredictability of financial markets. Market and credit
risks management is carried out through policies approved by the Board of
Directors.
The most important types of risk that Company manages are liquidity risk, credit
risk, market risk.
Capital Management Framework
The primary objective of the Companys capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to support its
business and maximize shareholder value.

The Company considers capital to include paid-up capital and retained earnings.
The Company manages its capital structure and makes adjustments to it, in light
of changes in economic conditions. To maintain or adjust its capital structure,
the Company may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares.
No changes were made in the objectives, policies or processes during the years
ended December 31, 20125 and 20114.
The Company manages its capital structure and makes adjustments to it, in light
of changes in economic conditions. To maintain or adjust the capital structure,
the Company may adjust the dividend payment to shareholders, return capital to
shareholders, re-acquire its own shares, or issue new shares. The Company
monitors capital on the basis of current ratio and debt-to-equity ratio. The
Companys strategy, which was unchanged from the prior year, was to maintain
current ratio and debt-to-equity ratio at manageable levels.
The Companys current ratio, calculated as total current assets over total current
liabilities, and debt-to-equity ratio, calculated as total liabilities over equity, as at
December 31, 20125 and 20114 are as follows.
Current ratio
2015

2014
26,649,898
1,400,167
19.03:1

2015

2014
12,207,843
14,825,474
0.82:1

Current assets
Current liabilities
Current ratio
Debt-to-equity ratio

Total liabilities
Total equity
Debt-to-equity ratio

The determination of the Companys compliance with the regulatory

requirements is based on the amount of the Companys capital (net worth)
reported to the SEC, determined on the basis of regulatory accounting policies
which are the PFRS.
Under the RA No 8556 Section 2, financing companies with head office in 1 st
class municipalities are required to comply with the minimum capital
requirement of ten million pesos (PhP 10,000,000). As at December 31,
20125, the Company is in compliance with the above capitalization
requirements.
The Company complied with all the externally imposed capital requirements
throughout the period

3.1

Credit Risk
The Company takes on exposure to credit risk, which is the risk that
counterparty will cause a financial loss for the Company by failing to discharge
an obligation. Significant changes in the economy, or in the health of a
particular industry segment that may represent a concentration in the
Companys portfolio, could result in losses that are different from those
provided for at the reporting date. Management therefore carefully manages its
exposure to credit risk. Credit exposures arise principally in loan receivables.
The management works with the finance in managing credit risks and reports
are regularly provided to the Board of Directors.
Credit Risk Management
In measuring credit risk of loan receivables at a counterparty level, the
Company reflects three components:
The probability of default by the client or counterparty on its contractual
obligations;
Current exposures to the counterparty and its likely future development; and
The likely recovery ratio on the defaulted obligations.
The following are the financial position assets that are exposed to credit risk as
at December 31:
2015
Cash
Loans and other receivables

2014
6,670,9
16
19,898,6
24
26,569,5
40

An ageing analysis of the Companys receivables as at December 31, 20124 and

20113 are as follows:
2015
Neither past due nor impaired
Past due but not impaired
Impaired

2014
13,062,55
3
5,560,05
8
3,506,07
6
22,128,68
8

Allowance for receivable impairment

(2,230,06
4)
19,898,62
4

In providing credit quality of financial assets, the Company maintains all its cash
in bank in its universal banks. Further, the Company does not have significant
exposure to any individual customer or counterparty nor does it have any major
concentration of credit risk related to any financial instrument.
3.2

Market Risk
The Company takes on exposure to credit risk, which is the risk that that
changes in market prices, such as interest rates and foreign exchange rates, will
affect the Companys income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing
the return.
Interest Rate Risk
Cash flow interest rate risk is the risk that the future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. Fair value
interest rate risk is the risk that the value of a financial instrument will fluctuate
because of changes in market interest rates. The Company takes on exposure
to the effects of fluctuations in the prevailing levels of market interest rates on
both its fair value and cash flow risks. Interest margins may increase as a result
of such changes but may reduce losses in the event that unexpected
movements arise
The Company is exposed to interest rate risk only to the extent that it earns
bank interest on cash and deposits.

3.3 Foreign Currency Risk

Cash flow foreign currency risk is the risk that the future cash flows of a
financial instrument will fluctuate because of changes in market exchange
rates. Fair value foreign currency risk is the risk that the value of a financial
instrument will fluctuate because of changes in market exchange rates. The
Company takes on exposure to the effects of fluctuations in the prevailing levels
of market exchange rates on both its fair value and cash flow risks.
The Companys exposure to foreign exchange risk results from its business
transactions and financing arrangements denominated in foreign currency.
3.4

Liquidity Risk
Liquidity risk is the risk that the Company is unable to meet its payment
obligations associated with its financial liabilities when they fall due and to

replace funds when they are withdrawn. The consequence may be the failure to
meet obligations to repay creditors.
Liquidity Risk Management Process
The Companys liquidity management process, as carried out within the
Company and monitored by management includes:
Day-to-day funding, monitoring and projection of cash flows to ensure that
requirements can be met. This includes replenishment of funds as they
mature.
Monitoring and reporting take the form of cash flow measurement and
projections. They are performed every day, weekly and monthly, respectively.
These are the key periods for liquidity management. The starting point for
those projections is an analysis of the contractual maturity of the financial
liabilities and the expected collection date of the financial assets .
2015
Less
than 3
Months

3 to 12
Months

More
than a
Year

Total

More
than a
Year

Total

Cash
Loans and other
receivables

2015
Less
than 3
Months

3 to 12
Months

Trade and other

payables
*Excluding other current liabilities representing statutory payments to the government.

2014

Cash
Loans and other
receivables

Less
than 3
Months
6,670,9
16
7,865,7
46
14,536,6
62

3 to 12
Months

More
than a
Year

5,196,8
07
5,196,8
07

6,836,
071
6,836,
071

Total
6,670,9
16
19,898,6
24
26,569,5
40

2013

Trade and other

payables

Less
than 3
Months
150,
208
150,
208

3 to 12
Months
823,
444
823,
444

More
than a
Year
-

Total
973,
652
973,
652

*Excluding other current liabilities representing statutory payments to the government.