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71 Annual Report 2012
29 Commitments (cont’d)
(d) Operating Lease Receipts
The future minimum lease receivables under non-cancellable operating leases, with varying terms and
renewal rights contracted for at the balance sheet date but not recognised as receivables, are as follows:
Group
2012
S$
2011
S$
Rental receivables
- within one year 323,370 352,960
- between one to fve years 108,400 200,220
431,770 553,180
30 Corporate Guarantees
As at 30 September 2012, the Company has corporate guarantees amounting to S$114,390,960 (2011:
S$93,133,413) issued to banks for term loans and bank overdrafts of the Group’s subsidiaries, of which
S$81,345,260 (2011: S$57,646,204) has been drawn down. The fair value of the corporate guarantee is estimated
to be insignifcant as the loans are fully collateralised by the related mortgaged property and subsidiaries have
the ability to generate suffcient cash fows from their operations to fnance their continuing operations and
repay the bank borrowings.
31 Financial Risks Management Policies
The Group’s activities exposed it to a variety of fnancial risks, including the effects of credit risk, interest rate risk,
currency risk and liquidity risk arising in the normal course of the Group’s business. The Group’s risk management
policy seeks to minimise the potential adverse effects from these exposures. Management continuously
monitors the Group’s risk management process to ensure that an appropriate balance between risk and
control is achieved. Risk management policies and systems are reviewed regularly to refect changes in market
conditions and the Group’s activities.
The Board of Directors is responsible for setting the objectives, the underlying principles of fnancial risk
management for the Group and establishing the policies such as authority levels, oversight responsibilities,
risk identifcation and measurement and exposure limits, in accordance with the objectives and underlying
principles approved.
(a) Credit risk
Credit risk refers to the risk that the customer or counterparty failed to discharge an obligation which resulted
in a fnancial loss to the Group.
As the Group does not hold any collateral, the maximum exposure to credit risk is the carrying amount of
the related fnancial assets presented on the balance sheet, except as follows:
2012
S$
2011
S$
Corporate guarantees provided to fnancial institutions on
subsidiaries borrowings:
- Total facilities 114,390,960 93,133,413
- Total outstanding facilities undrawn 28,455,913 31,266,209
Notes to the Financial Statements
30 September 2012