Baker Technology LimitedAnnual Report 2014
131
27.
Financial riskmanagement objectives andpolicies (cont’d)
Credit risk
Credit risk is the riskof loss thatmayariseonoutstandingfinancial instrumentsshouldacounterpartydefault
on itsobligations. TheGroup’sexposure tocredit riskarisesprimarily from tradeandother receivables. For
other financial assets (including cash and cash equivalents), the Group minimises credit risk by dealing
exclusivelywithhigh credit rating counterparties.
TheGroup’sobjective is toseekcontinual revenuegrowthwhileminimising losses incurreddue to increasedcredit
riskexposure.TheGroup tradesonlywith recognisedandcreditworthy thirdparties. It is theGroup’spolicy thatall
customerswhowish to tradeon credit terms are subject to credit verificationprocedures. In addition, receivable
balancesaremonitoredonanongoingbasiswiththeresultthattheGroup’sexposuretobaddebts isnotsignificant.
Credit risk concentrationprofile
TheGroupdeterminesconcentrationsof credit riskbymonitoring thecountryprofileof its trade receivables
onanongoingbasis. Thecredit riskconcentrationprofileof theGroup’s trade receivables at theendof the
reportingperiod is as follows:
Group
2014
2013
$
%
$
%
By country
Singapore
2,842,501
48
9,415,233
77
China
1,673,266
29
2,820,239
23
MiddleEast
937,030
16
39,530
–
AsiaPacific (excluding
China andSingapore)
352,094
6
17,297
–
Others
43,215
1
–
–
5,848,106
100
12,292,299
100
At theendof the reportingperiod, approximately:
–
74% (2013: 95%) of theGroup’s trade receivables were due from 4 (2013: 2) major customers who
are located inSingapore andChina.
–
A nominal amount of approximately $94,812,200 (2013: $53,607,000) relating to a corporate
guaranteeprovidedby theCompany tobanks for its subsidiaries’ banking facilities.
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31December 2014
