HAW PAR CORPORATION LIMITED
100
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
26. FINANCIAL RISK MANAGEMENT
(CONTINUED)
(c)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group.
The maximum exposure of the Group and the Company to credit risk in the event that the counterparties fail
to perform their obligations as of 31 December 2013 in relation to each class of recognised financial assets
is the carrying amount of those assets as indicated in the statements of financial position with the exception
that the Company has the following additional exposure to credit risk:
The Company
2014
2013
$’000
$’000
Corporate guarantees provided to banks on subsidiaries’ obligations
68
68
The Group’s and Company’s major classes of financial assets that are subject to credit risk are short-term
bank deposits and trade receivables.
It is the Group’s policy to transact with creditworthy counterparties. In addition, the granting of material
credit limits to counterparties is reviewed and approved by senior management. The Group does not expect
to incur material credit losses on its financial assets or other financial instruments.
(i)
Financial assets that are neither past due nor impaired
Short-term bank deposits that are neither past due nor impaired are mainly deposits with banks with
high credit-ratings assigned by international credit rating agencies. Trade receivables that are neither
past due nor impaired are substantially companies with a good collection track record with the Group.
(ii)
Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables.
The age analysis of trade receivables past due but not impaired is as follows:
The Group
2014
2013
$’000
$’000
Past due within 1 month
1,688
320
Past due 1 to 3 months
6
8
1,694
328
There is $8,000 (2013: $23,000) trade and other receivables that are individually determined to be
impaired and the movement of the related allowance for impairment are as follows:
2014
2013
$’000
$’000
Beginning of financial year
Allowance made during the year
23
1
345
39
Allowance utilised
(16)
(361)
End of financial year
8
23
