DEFINING DESIGN
QUALITY
88
Notes to the Financial Statements
31 December 2014
30.
Financial instruments: information on financial risks (cont’d)
Financial risk management
The main purpose for holding or issuing financial instruments is to raise and manage the finances for the Group’s
operating, investing and financing activities. There are exposures to the financial risks on the financial instruments
such as credit risk, liquidity risk and market risk comprising interest rate risk, foreign currency risk and equity price
risk. Management has certain practices for the management of these financial risks. All financial risk management
activities are carried out based on good market practices and are monitored by management staff. The Group’s
overall financial risk management strategy seeks to minimise the potential material adverse effects from these
financial risk exposures. The information about the Group’s exposure to each of the above risks and the Group’s
objectives, policies and processes for measuring and managing these risks are presented below. There has been no
change to the Group’s exposure to these financial risks or the manner in which it manages and measures these risks.
Credit risk on financial assets
Credit risk is the risk of financial loss to theGroup if a counterparty to a financial instrument fails tomeet its contractual
obligations and arises principally from the Group’s cash and cash equivalents, trade and other receivables and other
investments. The maximum exposure to credit risk is the total of the fair values of the financial instruments.
Credit risk on cash balances with banks and financial institutions, other receivables and other investments is limited
because the counterparties are entities with acceptable credit ratings. Note 23 discloses the maturity of the cash
and cash equivalents balances. Other receivables are normally with no fixed terms and therefore there is no maturity.
Note 17 discloses the maturity of the other investments balances.
For credit risk on trade receivables, an ongoing credit evaluation is performed on the financial condition of the
debtors and an impairment loss is recognised in profit or loss where necessary. The Group’s exposure to credit risk on
trade receivables is controlled by setting limits on the exposure to individual customers and these are disseminated
to the relevant persons concerned and compliance is monitored by management. Other than as disclosed below,
there is no significant concentration of credit risk on trade receivables as the exposure is spread over a large number
of customers. As part of the process of setting customer credit limits, different credit terms are used. The credit
period granted to customers is generally between 60 to 90 (2013: 60 to 90) days.
Ageing analysis of trade receivables that are past due as at the end of the reporting year but not impaired is as
follows:
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Past due less than 30 days
4,725
2,347
–
59
Past due 31 to 60 days
2,002
1,575
–
–
Past due 61 to 90 days
1,216
818
268
394
Past due over 90 days
8,291
9,015
68
337
16,234
13,755
336
790
Ageing analysis of trade receivables as at the end of the reporting year that are impaired is as follows:
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Past due over 365 days
1,065
771
–
–
At the end of the reporting year, approximately 19% (2013: 18%) and 45% (2013: 48%) of the Group and the Company’s
trade receivables are due from three customers as follows:
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Top 1 customer
8,119
9,112
182
353
Top 2 customer
4,561
3,786
120
170
Top 3 customer
2,315
3,593
92
154
