86
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
(v) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations 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 payment from customers of lower
credit standing.
Trade receivables consist of a large number of customers, spread across diverse industries. Ongoing credit evaluation
is performed on the financial condition of accounts receivable.
Although the Group’s credit exposure is concentrated mainly in Singapore, it has no significant concentration of credit
risk with any single customer or group of customers.
The Group and Co-operative places its cash with creditworthy financial institutions.
The carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for
losses, represents the Group’s maximum exposure to credit risk without taking into consideration the value of any
collateral obtained.
Further details of credit risks on trade and other receivables are disclosed in Notes 7, 9 and 10.
(vi) Fair value of financial assets and financial liabilities
The carrying amounts of cash and cash equivalents, trade and other current receivables and payables, and other
liabilities approximate their respective fair values due to the relatively short-term maturity of these financial
instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes
to financial statements.
4. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL ASSETS MANAGEMENT (cont’d)
