BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
128
Notes to the
Financial Statements
for the financial year ended 31December 2013
30. Financial riskmanagementobjectivesandpolicies (cont’d)
Credit risk
Credit risk is the riskof loss thatmay ariseonoutstandingfinancial instruments should a counterpartydefault on its obligations. The
Group’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and cash
equivalents), theGroupminimises credit risk by dealing exclusivelywith high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.
TheGroup trades onlywith recognised and creditworthy third parties. It is theGroup’s policy that all customers whowish to trade
on credit terms are subject to credit verificationprocedures. In addition, receivablebalances aremonitoredon anongoingbasiswith
the result that theGroup’s exposure to bad debts is not significant.
Credit risk concentration profile
The Group determines concentrations of credit risk bymonitoring the country profile of its trade receivables on an ongoing basis.
The credit risk concentration profile of theGroup’s trade receivables at the end of the reporting period is as follows:
Group
By country
2013
$
%of
total
2012
$
%of
total
Singapore
9,415,233
77 6,598,194
36
China
2,820,239
23 10,262,496
56
Middle East
39,530
–
172,424
1
Asia Pacific (excludingChina and Singapore)
17,297
– 1,210,645
7
12,292,299
100 18,243,759
100
At the end of the reporting period, approximately:
-
95% (2012: 97%) of theGroup’s trade receivableswere due from2 (2012: 5)major customerswho are located in Singapore
andChina.
-
A nominal amount of approximately $53,607,000 (2012: $39,040,000) relating to a corporate guarantee provided by the
Company to banks for its subsidiaries’ banking facilities.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the
Group. Cash and short-termdeposits that areneither past duenor impaired areplacedwithor entered intowith reputablefinancial
institutionswithhigh credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed inNote 19 (Trade andother receivables).
