Financial Statements - Mewah Group

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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
Building Capabilities Notes to the Financial Statements For the financial year ended 31 December 2011 32. Financial risk management (continued) (b) Credit risk (continued) (i) Financial assets that are neither past due nor impaired Bank deposits that were neither past due nor impaired were mainly deposits with banks of good credit-ratings. Trade receivables that were neither past due nor impaired were substantially companies with a good collection track record with the Group and for which there was no historical track record of default. (ii) Financial assets that are past due and/or impaired There was no other class of financial assets that was past due and/or impaired except for trade receivables. The age analysis of trade receivables past due but not impaired was as follows: Group 2011 2010 US$’000 US$’000 Past due < 3 months 59,811 47,001 Past due 3 to 6 months 10,072 1,196 Past due 6 to 12 months 2,337 623 Past due over 1 year 1,646 - 73,866 48,820 The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment were as follows: Group 2011 2010 US$’000 US$’000 Gross amount 21,237 16,391 Less: Allowance for impairment (21,237) (16,391) - - Beginning of the financial year (16,391) (18,102) Currency translation differences 556 (2,316) Allowance (made)/reversed and utilised (5,402) 4,027 End of the financial year (21,237) (16,391) The impaired trade receivables arose mainly from sales to customers which were under financial difficulties. 109
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Financial Statements - Mewah Group

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