Page 192 - S P Setia Annual Report 2016
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190   S P Setia Berhad Group
                Annual Report 2016




          Notes To The Financial Statements

          For The Financial Year Ended 31 December 2016

          40.  FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)
              (b)   Credit risk


                   Credit risk arises from the possibility that a counter party may be unable to meet the terms of a contract in which the Group has
                   a gain position.

                   The Group and the Company minimise and monitor its credit risk by dealing with credit worthy counter-parties and applying
                   credit approval controls for material contracts. If necessary, the Group may obtain collaterals from counter-parties as a means of
                   mitigating losses in the event of default.

                   In respect of trade receivables arising from the sale of development properties, the Group mitigates its credit risk by maintaining
                   its name as the registered owner of the development properties until full settlement by the purchaser of the self-financed portion
                   of the purchase consideration or upon undertaking of end-financing by the purchaser’s end-financier.

                   At the reporting date, the Group did not have any significant concentration of credit risk that may arise from exposure to a single
                   debtor or to group of debtors.

                   The ageing analysis of receivables which are trade in nature is disclosed in Note 15 to the financial statements. Short-term
                   deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with
                   reputable financial institutions with high credit ratings and no history of default.
              (c)   Foreign currency exchange risk


                   The Group is exposed to currency translation risk arising from its net investments in foreign operations, mainly United Kingdom,
                   Australia, Singapore and China.

                   Sensitivity analysis for foreign currency risk

                   The closing rates used in translation are as follows:

                                                                                                  2016          2015

                   Great British Pound                                                            5.514         6.381
                   Australian Dollar                                                              3.239         3.137
                   Singapore Dollar                                                              3.099          3.044
                   Chinese Yuan                                                                  0.645          0.663
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