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72 GoodLand Group Limited
31 Financial Risks Management Policies (cont’d)
(a) Credit risk (cont’d)
The Group’s credit risk is primarily attributable to its trade and other receivables. The Group establishes
an allowance for impairment that represents its estimate of incurred losses in respect of trade and other
receivables. This allowance account in respect of trade and other receivables is used to record impairment
losses unless the Group is satisfed that no recovery of the amount owing is possible. At that point, the
fnancial asset is considered irrecoverable and the amount charged to the allowance account is written
off against the carrying amount of the impaired fnancial asset.
Trade and other receivables balances are monitored on an ongoing basis and whether the trade and other
receivables are recoverable are estimated by the Group’s management based on prior experience and
the current economic environment.
Cash and fxed deposits are placed with banks and fnancial institutions which are regulated.
Signifcant concentrations of credit risk
Concentrations of credit risk exist when changes in economic, industry or geographic factors similarly affect
groups of counterparties whose aggregate credit exposure is signifcant in relation to the Group’s total
credit exposure. The Group’s credit exposure is concentrated mainly in Singapore.
(i) Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy companies or
individuals with a good payment record with the Group. Bank deposits that are neither past due nor
impaired are mainly deposits with banks with high credit ratings and no history of default.
(ii) Financial assets that are past due but not impaired
There are no other class of fnancial assets that is past due but not impaired except for trade and other
receivables.
The age analysis of trade and other receivables past due but not impaired are as follows:
Group
2012
S$
2011
S$
Past due within 30 days 459,568 -
Past due within 31 to 60 days 117 300
Past due over 60 days 843,242 136,916
1,302,927 137,216
There are no classes of trade and other receivables that are past due and impaired at the respective
end of the fnancial years.
(b) Interest rate risk
Interest rate risk arises on interest-bearing fnancial instruments recognised in the balance sheet. It is the
risk that, changes in interest rates, will affect the Group’s income or the value of its holdings of fnancial
instruments. The Group’s exposures to interest rate risk for changes in interest rates mainly arise from its
borrowings and bank deposits. Interest rate risk is managed by the Group on an on-going basis with the
primary objective of limiting the extent to which net interest expense could be affected by an adverse
movement in interest rates.
The Group’s policy is to obtain the most favorable interest rates available for its borrowings and bank
deposits without increasing its foreign currency exposure. Bank deposits are placed where the interest rates
are benefcial whilst mitigating the risk of market changes in interest rate.
Notes to the Financial Statements
30 September 2012