Singapore Press Holdings annual report 2011 Singapore Press ...

Notes to the
Financial StatementS
August 31, 2011
159
31. FINANCIAL RISK MANAGEMENT (CONT’D)
(b)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations, thereby
resulting in financial loss to the Group. For trade receivables, the Group manages its credit risk through
the application of credit approvals, credit limits and monitoring procedures. Where appropriate,
the Group obtains collateral in the form of deposits, bankers’/insurance guarantees from its
customers, and imposes cash terms and/or advance payments from customers of lower credit
standing. For other financial assets, the Group adopts the policy of dealing only with high credit
quality counterparties.
As at the balance sheet date, the Group has no significant concentration of credit risks.
The maximum exposure to credit risk for each class of financial instruments is the carrying amount
of that class of financial instruments presented on the balance sheet which comprise mainly trade
receivables, investments in bonds and notes, and cash balances placed with banks. In addition, the
Company is the primary obligor for an unsecured composite advance facility which could be utilised
by the Company and its designated subsidiaries. The amount utilised by the subsidiaries as at August
31, 2011 was S$0.8 million (2010: S$0.8 million) [Note 7(f)].
The credit risk for trade receivables based on the information provided to key management is as
follows:
Group
Company
2011 2010 2011 2010
S$’000 S$’000 S$’000 S$’000
By types of customers
Advertisement 98,309 86,976 81,157 70,932
Circulation 11,438 12,671 10,239 11,525
Multimedia 2,467 2,806 1,379 1,383
Broadcasting 1,572 861 - -
Rental 6,528 1,376 - -
Others 14,027 30,196 9,735 8,556
134,341 134,886 102,510 92,396
(i)
Financial assets that are neither past due nor impaired
Bank deposits and investments in bonds are neither past due nor impaired. Bank deposits are
placed with reputable banks and financial institutions. The Group’s bond portfolio is primarily
invested in investment grade securities. Trade receivables that are neither past due nor
impaired are substantially due from companies with a good collection track record with the
Group.