NOTICE OF ANNUAL GENERAL MEETING
statisTICS OF SHAREHOLDINGs
FINANCIAL CONteNts
CORPORATE GOVERNANCE REPORT
83
Navigating Challenges • EMBRACING DIVERSITY | ANNUAL REPORT 2015
Notes to the financial statements
15 Financial risk management (Cont’d)
Credit risk (Cont’d)
The movements in the allowance for impairment in respect of loans and receivables during the year were as
follows:
Group
Company
2015
2014
2015
2014
$’000
$’000
$’000
$’000
At 1 January
5,497
6,212
–
–
Impairment loss recognised
3,104
3,748
–
–
Utilised
(528)
(4,464)
–
–
Translation differences
1
1
–
–
At 31 December
8,074
5,497
–
–
Based on the Group’s monitoring of customer credit risk, the Group believes that, apart from the above, no
additional impairment allowance is necessary in respect of trade receivables.
Cash and cash equivalents
The Group and the Company held cash and cash equivalents of $32,804,000 and $25,479,000 respectively at
31 December 2015 (2014: $49,894,000 and $32,168,000 respectively) – these figures represent their maximum
credit exposures on these assets. The cash and cash equivalents are held with reputable banks and financial
institutions which are regulated.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
To ensure the continuity of funding, the Group’s policy is to use a mix of long-term and short-term financing.
Short-term funding is obtained through overdrafts and trust receipts. Long-term funding is primarily used for
acquisition of property, plant and equipment. The Group evaluates various alternative financing arrangements
to balance its debt leverage.
As at 31 December 2015, included in total assets of the Group at the reporting date are net trade receivables
totalling $12,254,000 (2014: $10,665,000). The liquidity of the Group is primarily dependent on the timely
settlement of trade receivables. The Group monitors current and expected liquidity requirements to ensure
that it maintains sufficient working capital and adequate external financing to meet its liquidity requirements
in the short and longer term.
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by
management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
