Asia Media Annual Report 2018

122 | P a g e (iii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposures to interest rate risk arises primarily from their loans and borrowings. The Group does not hedge its investment in fixed rate debt securities as they have active secondary or resale markets to ensure liquidity. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes. The Group manages the net exposure to interest rate risks by maintaining sufficient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. Management does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweighs the potential risk of interest rate fluctuation. (iv) Market Rate Risk Market price risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates). The Group and the Company have in place policies to manage the Group’s and the Company’s exposure to fluctuations in the selling price of the Group’s and of the Company’s products and purchase prices of the key raw materials used in the operations. The management conducts constant survey of the global market price and trend in order to determine the selling price. (d) Fair value information At the end of the reporting period, there were no financial instruments carried at fair values in the statements of financial position. The fair values of the financial assets and financial liabilities of the Group and of the Company that maturing within the next 12 months approximated their carrying amounts due to the relatively short-termmaturity of the financial instruments or repayable on demand terms. 27. CAPITAL MANAGEMENT The primary objective of the Group’s and of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratio in order to support its business and maximise shareholders’ value. The Group and the Company manage its capital structure and make adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and 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 financial year ended 31 December 2018. The Group and the Company monitor capital using a gearing ratio, which is total debts divided by total capital plus total debts. The Group’s and the Company’s total debts include