125
A N N U A L R E P O R T 2 0 1 6
For the Financial Year Ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
33.
Financial risk management objectives and policies
The Group is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit
risk, liquidity risk, interest rate risk and foreign currency risk. The Board of Directors reviews and agrees policies and procedures for the
management of these risks, which are executed by the CEO and Group Financial Controller. Exposure to key financial risks is monitored on
an on-going basis and management will assess the extent of such risks in order to ensure that these risks are kept at a minimal level. It is,
and has been throughout the current and previous financial year the Group’s policy that no derivatives shall be undertaken except for the use
as hedging instruments where appropriate and cost-efficient. The Group does not apply hedge accounting.
The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and
processes for the management of these risks.
(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 exposure to credit risk arises primarily from trade and other receivables. For other financial assets which include cash and
cash equivalents, the Group minimises 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. The
Group trades mainly in cash. Credit terms are only extended to reputable business associate companies, recognised and creditworthy
third parties. Transactions with credit terms relate mainly to delivery and catering sales, voucher sales and export sales. The Group
monitors the creditability of existing customers on a regular basis and terms with such customers are adjusted if the customers do not
abide by the terms extended. In addition, receivable balances are monitored on an on-going basis with the result that the Group’s
exposure to bad debts is not significant.
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 sheet.
Information regarding credit enhancements for trade and other receivables is disclosed in Note 19.
There is no significant concentration of credit risk within the Group.
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the
Group. Cash and cash equivalents that are neither past due nor impaired are placed with financial institutions with high credit ratings
and no history of default.
Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19.
