for the year ended 31 December 2016
NOTES TO THE
FINANCIAL STATEMENTS
Annual Report 2016
-
128
-
25.
Financialriskmanagementobjectivesandpolicies (cont’d)
Credit risk
Credit risk is the riskof loss thatmay ariseonoutstanding financial instruments should a counterpartydefault
on its obligations. TheGroup’s exposure to credit risk arises primarily from trade and other receivables. For
other financial assets (including cash and short-term deposits), the Group minimises credit risk by dealing
exclusivelywith high credit rating counterparties.
TheGroup’s objective is to seek continual revenue growthwhileminimising losses incurreddue to increased
credit risk exposure. TheGroup trades onlywith recognised and creditworthy third parties. It is theGroup’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances aremonitored on an ongoing basiswith the result that theGroup’s exposure to
bad debts is not significant.
Credit risk concentration profile
TheGroup determines concentrations of credit risk bymonitoring the country profile of its trade receivables
on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the end of the
reporting period is as follows:
Group
2016
2015
$’000
% $’000
%
By country
Singapore
2,323
56
6,693
83
China
1,031
25
399
5
MiddleEast
748
18
781
10
AsiaPacific (excludingChina andSingapore)
30
1
138
2
Others
–
–
2
–
4,132
100
8,013
100
At the end of the reporting period, approximately:
– 94% (2015: 94%) of theGroup’s trade receivablesweredue from4 (2015: 3)major customerswhoare
located inSingapore,MiddleEast andChina.
– Anominalamountofapproximately$88,083,000 (2015:$96,639,000) relating toacorporateguarantee
provided by theCompany to banks for its subsidiaries’banking facilities.
Financial assets that are neither past due nor impaired
Tradeandother receivables that areneitherpast duenor impairedarecreditworthydebtorswithgoodpayment
recordwith theGroup. Cash and short-termdeposits that are neither past due nor impaired are placedwithor
entered intowith reputable financial institutionswith high credit ratings and nohistory of default.
