Financial Statements - Mewah Group

MEWAH INTERNATIONAL INC.
ANNUAL REPORT 2011
Notes to the Financial Statements
For the financial year ended 31 December 2011
32. Financial risk management (continued)
(b)
Credit risk (continued)
The Group has a credit risk policy in place to manage credit risk. All new customers are subject to credit worthiness
check; counterparties are ranked and assigned a credit limit appropriately. Such credit limit would be approved by a Risk
Committee. In addition, any increase in credit limit requires approval from the Risk Committee. The Risk Committee is
mandated to monitor the payment ageing profile of the third party receivables, to review all the outstanding receivables
regularly and to identify any potential uncollectible for doubtful debts provision and/or write-off.
As the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the
carrying amount of that class of financial instruments presented on the statement of financial position, except as follows:
Company
2011 2010
US$’000 US$’000
Corporate guarantees provided to financial institutions for subsidiaries’ borrowings 292,420 53,125
The management is of the view that no loss is expected to arise from the guarantees.
The major trade receivables of the Group comprised of 1 debtor for 2011 (2010: 1 debtor) and represented 26% of trade
receivables (2010: 38%). The Company did not have trade receivables in 2011 and 2010.
The credit risk for trade receivables based on the information provided to key management was as follows:
Group
2011 2010
US$’000 US$’000
By geographical segment
- Asia
Malaysia 158,152 203,153
Singapore 33,306 32,850
Rest of Asia 36,745 23,725
- Africa 39,903 62,913
- Middle East 73,492 75,527
- Europe 47,624 18,143
- Pacific Oceania 5,450 3,146
- America 16,291 7,652
410,963 427,109
108