NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
121
MTQ CORPORATION LIMITED
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade
and other receivables. For other financial assets (including quoted investment securities and cash and cash
equivalents), the Group and the Company minimise credit risk by dealing exclusively with high credit rating
counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. It is the Group’s policy to enter into transactions with a diversity of creditworthy
parties to mitigate any significant concentration of credit risk. The Group ensures that sales of products and
services are made to customers with appropriate credit history and has internal mechanisms to monitor the
granting of credit and management of credit exposures. The Group has made allowances, where necessary,
for potential losses on credits extended.
Exposure to credit risk
At the end of the reporting period, the Group’s maximum exposure to credit risk is represented by:
–
the carrying amount of each class of financial assets recognised in the balance sheets
–
corporate guarantees provided by the Company for bank facilities granted to subsidiaries as at the
end of the reporting period is $20,265,000 (2015: $37,217,000) (Note 27(c)).
