notes to the
financial statements
31 December 2015
31.
Financial instruments: information on financial risks (cont’d)
Financial risk management (cont’d)
Credit risk on financial assets
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet 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 24 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 18 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 (2014: 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
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Past due less than 30 days
5,951
4,725
–
–
Past due 31 to 60 days
1,075
2,002
131
–
Past due 61 to 90 days
1,565
1,216
419
268
Past due over 90 days
8,811
8,291
32
68
17,402
16,234
582
336
Ageing analysis of trade receivables as at the end of the reporting year that are impaired is as follows:
Group
Company
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Past due over 365 days
1,028
1,065
–
–
• e x p e r i e n c i n g
k i n g s m e n
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