Powering growth - Aztech Group Ltd - Investor Relations

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 Group’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 Group 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 theGroup.Included in the Group’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 Group has not provided as there has not been a significant change in credit quality and theamounts are still considered recoverable. The Group 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 Group 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 Group discounted exporting letters of credit of $6,144,000 (2008 : $10,927,000) to the banks. As part of the discounting, theGroup 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 Group does not hold any collateral over these balances.