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NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 December 2013
28.
Fair value of financial instruments
Fair values
The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between
knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.
Management has determined that the carrying amounts of cash and cash equivalents, trade and other receivables,
trade and other payables reasonably approximate their fair values because these are mostly short term nature.
The fair values of the non-current school lease deposits and staff housing deposits approximate their carrying value
and are estimated using the discounted estimated cash flow analysis. Where repayment terms are not fixed, future
cash flows are projected based on management’s best estimates. The discount rates used are the current market
incremental lending rates for similar types of lending and borrowing arrangements.
29.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group 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 31 December 2013 and 31 December 2012.
The Group is in net cash position. The Group will continue to be guided by prudent financial policies which are to
finance the operations mainly through cash generated from the operating activities.
Group
2013
2012
S$
S$
Total gross debt ^
–
–
Equity attributable to owners of the company
Share capital
99,253,226
31,219,241
Revenue reserve
33,570,098
22,382,439
Other reserves
13,830,420
13,830,360
146,653,744
67,432,040
Gross debt equity ratio
–%
–%
Cash and bank balances and xed deposits
124,703,022
94,456,168
Less: Total gross debt
–
–
Net cash position
124,703,022
94,456,168
^ Gross debt relates to loans and borrowings. The Group does not have loans and borrowings as at 31 December 2013 and 31
December 2012.
75
Overseas Education Limited AR 2013
INVESTING IN EDUCATION