70a z t e c h a n n u a l r e p o r t 2 0 0 9F i n a n c i a l S t a t e m e n t s6 RELATED PARTY TRANSACTIONS (cont’d)During the year, <strong>Group</strong> entities entered into the following transactions with related parties:GROUP2009 2008$’000 $’000(1) Transaction with companies in which Michael Mun Hong Yew has an equity interest:Rental income (71) (71)Sale of goods (1) (66)Purchase of goods 2 1(2) Transaction with companies in which an Independent Director has an interest:Consulting services 134 47Corporate secretarial services 12 18(3) Salaries paid to employees of the <strong>Group</strong> who are relatives of Michael Mun Hong Yew:Salary expenses 349 401Compensation of directors and key management personnelThe remuneration of Directors and other members of key management during the year was as follows:GROUP2009 2008$’000 $’000Short-term benefits 4,000 3,794Share-based payments 226 132Total 4,226 3,926The remuneration of Directors and key management is determined by the Remuneration Committee having regard to the performance ofindividuals.7 CASH AND BANK BALANCESGROUPCOMPANY2009 2008 2009 2008$’000 $’000 $’000 $’000Cash at bank 18,809 8,234 1,985 698Fixed deposits 17,234 29,256 10,334 15,970Cash on hand 69 159 - 4Total 36,112 37,649 12,319 16,672Bank balances and cash comprise cash held by the <strong>Group</strong> and the Company and short-term bank deposits with an original maturity of threemonths or less. The carrying amounts of these assets approximate their fair values.Fixed deposits bear interest at a weighted average rate of 0.6% (2008 : 0.9%) per annum and for a tenure of approximately 50 days (2008 : 30days).
F i n a n c i a l S t a t e m e n t sa z t e c h a n n u a l r e p o r t 2 0 0 9717 CASH AND BANK BALANCES (cont’d)The <strong>Group</strong>’s and the Company’s cash and bank balances that are not denominated in the functional currencies of the respective entities are asfollows:GROUPCOMPANY2009 2008 2009 2008$’000 $’000 $’000 $’000Singapore dollars 3,000 - - -Renminbi 5,903 10,997 - -United States dollars 7,795 7,030 313 3,542Euro 87 42 - -Hong Kong dollars 3 2 - -8 TRADE RECEIVABLESGROUPCOMPANY2009 2008 2009 2008$’000 $’000 $’000 $’000Outside parties 27,829 36,671 101 5,744Allowance for doubtful trade receivables (552) (539) - -Total 27,277 36,132 101 5,744The average credit period on sale of goods is 45 days (2008 : 45 days). No interest is charged on the trade receivables.Before accepting any new customer, the <strong>Group</strong> uses both an internal and external credit scoring system to assess the potential customer’s creditquality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed once per year. 58.7% (2008 : 71.1%) ofthe trade receivables that are neither past due nor impaired have the best credit scoring attributable under credit scoring system used by the<strong>Group</strong>.Included in the <strong>Group</strong>’s trade receivable balance are debtors with a carrying amount of $11.28 million (2008 : $10.43 million) which are pastdue at the end of the reporting period for which the <strong>Group</strong> has not provided as there has not been a significant change in credit quality and theamounts are still considered recoverable. The <strong>Group</strong> does not hold any collateral over these balances. The average age of these receivables are41 days (2008 : 36 days) past due.In determining the recoverability of a trade receivable the <strong>Group</strong> considers any change in the credit quality of the trade receivable from the datecredit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the customer base beinglarge and unrelated. Accordingly, the management believes that there is no further impairment required in excess of the allowance for doubtfuldebts.During the year, the <strong>Group</strong> discounted exporting letters of credit of $6,144,000 (2008 : $10,927,000) to the banks. As part of the discounting, the<strong>Group</strong> provided the banks a credit guarantee over the expected losses of those receivables and has recognised the cash received on the transferas a secured borrowing. At the end of the reporting period, the carrying amount of the exporting letters of credit transferred and the associatedliability is $575,000 (2008 : $1,712,000) (Note 18).Included in the allowance for doubtful debts are specific trade receivables with a balance of $525,000 (2008 : $539,000) relating to customerswho have been placed in liquidation. The impairment recognised represents the difference between the carrying amount of the specific tradereceivable and present value of expected liquidation proceeds. The <strong>Group</strong> does not hold any collateral over these balances.