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A M A R Q U E A B O V E T H E R E S T 92 E U R O S P O R T S G L O B A L L I M I T E D 93
2 0 1 4 A N N U A L R E P O R T
31 March 2014 31 March 2014
NOTES TO THE NOTES TO THE
F INANCI AL STATEMENTS F INANCI AL STATEMENTS
22. Financial Instruments: Information on Financial Risks (Cont’d)
22D. Liquidity Risk – Financial Liabilities Maturity Analysis
The following table analyses the non-derivative financial liabilities by remaining contractual maturity
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Group
Less than
1 year
2 – 5
years
After
5 years Total
2014: $’000 $’000 $’000 $’000
Non-derivative financial liabilities:
Trade and other payables 3,454 – – 3,454
Gross borrowing commitments 2,834 6,163 10,467 19,464
At end of the year 6,288 6,163 10,467 22,918
2013:
Non-derivative financial liabilities:
Trade and other payables 6,443 – – 6,443
Gross borrowing commitments 18,101 5,531 11,632 35,264
At end of the year 24,544 5,531 11,632 41,707
Company
2014:
Non-derivative financial liabilities:
Trade and other payables 100 – – 100
Financial guarantee contracts –
in favour of certain subsidiaries 40,751 – – 40,751
At end of the year 40,851 – – 40,851
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position. When the counterparty has a choice of when an amount is paid, the liability is included on
the basis of the earliest date on which it can be required to pay. At the end of the reporting year no
claims on the financial guarantees are expected.
The liquidity risk refers to the difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. It is expected that all the liabilities will be paid
at their contractual maturity. Purchases of new automobiles are generally conducted on a cash on
delivery basis and for purchase of new demo automobiles, a credit period of 90 days may be granted.
The average credit period taken to settle purchases of automobile parts and accessories and other
trade payables is about 30 days (2013: 30 days). The other payables are with short-term durations. In
order to meet such cash commitments the operating activity is expected to generate sufficient cash
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may be available to meet liquidity needs and no further analysis is deemed necessary.
Financial guarantee contracts - For financial guarantee contracts the maximum earliest period in
which the guarantee amount can be claimed by the other party is used. At the end of the reporting
year no claims on the financial guarantees are expected to be payable. The financial guarantee
contracts relates to the corporate guarantees given by the Company on the banking facilities of
certain subsidiaries (Note 20).
22. Financial Instruments: Information on Financial Risks (Cont’d)
22C. Credit Risk on Financial Assets
Financial assets that are potentially subject to concentrations of credit risk and failures by
counterparties to discharge their obligations in full or in a timely manner consist principally of cash
balances with banks, cash equivalents and receivables. The maximum exposure to credit risk is: the
total of the fair value of the financial assets; the maximum amount the entity could have to pay
if the guarantee is called on; and the full amount of any payable commitments at the end of the
reporting year. Credit risk on cash balances with banks is limited because the counter-parties are
entities with acceptable credit ratings. For credit risk on receivables, an ongoing credit evaluation is
performed on the financial condition of the debtors and a loss from impairment is recognised in profit
or loss. The exposure to credit risk with customers is controlled by setting limits on the exposure to
individual customers and these are disseminated to the relevant persons concerned and compliance
is monitored by management. There is no significant concentration of credit risk on receivables, as
the exposure is spread over a large number of counter-parties and customers.
Note 17 discloses the maturity of the cash and cash equivalents balances.
The Group generally does not grant credit terms except for distributors of watches where an average
credit term of 30 days is granted. However, the Group may grant credit terms to customers on a case
by case basis, depending on the contract value, relationship with the customer and payment track
record of the customer. But some customers take a longer period to settle the amounts.
(a) Ageing analysis of the age of trade receivable amounts that are past due as at the end of
reporting year but not impaired:
Group
2014
$’000
2013
$’000
Trade receivables:
Less than 30 days 802 807
31 to 60 days 169 58
61 to 90 days – 15
Over 90 days 328 539
Total 1,299 1,419
(b) Ageing analysis as at the end of reporting year of trade receivable amounts that are impaired:
Group
2014
$’000
2013
$’000
Trade receivables:
Over 90 days 231 228
Total 231 228
Other receivables are normally with no fixed terms and therefore there is no maturity. Trade receivable
amounts that are over 90 days are fully provided as at 31 March 2014 and 31 March 2013.