KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
82
Notes to the financial statements
15 Financial risk management (Cont’d)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Group’s receivables.
The Group has a credit policy in place which establishes credit limits for customers and monitors their balances
on an ongoing basis. Credit evaluations are performed on all new customers.
At reporting date, the Group has a concentration of credit risk with 8 customers (2014: 7 customers) engaged in
the Oil and Gas sector accounting for approximately 48% (2014: 45%) of the total trade receivables.
The carrying amounts of the financial assets in the statement of financial position represent the Group’s
maximum exposure to credit risk. The maximum exposure to credit risk at the reporting date was:
Group
Company
Note
2015
2014
2015
2014
$’000
$’000
$’000
$’000
Loans and receivables
8
14,432
13,695
19,338
15,691
Cash and cash equivalents
9
32,804
49,894
25,479
32,168
47,236
63,589
44,817
47,859
The maximum exposure to credit risk for loans and receivables (excluding cash and cash equivalents) at the
reporting date (by geographical region) was:
Group
Company
2015
2014
2015
2014
$’000
$’000
$’000
$’000
Singapore
2,454
7,244
19,337
15,691
Southeast Asia excluding Singapore
5,791
3,640
1
–
Australasia
2,053
663
–
–
Middle East
744
112
–
–
Europe and others
3,390
2,036
–
–
14,432
13,695
19,338
15,691
The ageing of loans and receivables that were not impaired at the reporting date was:
Group
Company
2015
2014
2015
2014
$’000
$’000
$’000
$’000
Not past due
4,213
6,846
19,338
15,691
Past due 0 – 30 days
4,404
1,950
–
–
Past due 31 – 120 days
4,248
1,346
–
–
More than 120 days
1,567
3,553
–
–
14,432
13,695
19,338
15,691
