FINANCIAL STATEMENTS
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (a) Market Risk (Continued)
(i) Foreign exchange risk (Continued)
Group SGD USD Ringgit HKD RMB Others Total
2011 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial assets Trade
receivables 12,535 2,307 2,741 2,905 4,303 3,494 28,285
Other receivables
and deposits 367 - 305 67 153 601 1,493
Other fi nancial
assets 241 - - - 241
Fixed deposits 15,574 - 846 - - 1,504 17,924
Cash and bank
balances 25,219 1,744 2,045 629 1,182 1,589 32,408
53,936 4,051 5,937 3,601 5,638 7,188 80,351
Financial liabilities
Trade payables (3,626) (6,976) (1,873) (2,180) (4,694) (1,663) (21,012) Other payables
and accruals (5,045) - (528) (462) (382) (743) (7,160)
Other fi nancial
liabilities (108) - (203) - - (313) (624)
(8,779) (6,976) (2,604) (2,642) (5,076) (2,719) (28,796)
Net fi nancial assets /
(liabilities) 45,157 (2,925) 3,333 959 562 4,469 51,555
Less: Net fi nancial assets denominated in the respective entities’
functional
currencies (45,157) - (3,333) (894) (562) (4,088) (54,034)
Foreign currency
exposure - (2,925) - 65 - 381 (2,479)
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NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (a) Market Risk (Continued)
(i) Foreign exchange risk (Continued)
Group SGD USD Ringgit HKD RMB Others Total
2010 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Financial assets Trade
receivables 8,943 3,213 3,751 2,536 907 3,566 22,916
Other receivables
and deposits 214 - 161 86 194 636 1,291
Other fi nancial
assets 712 476 - - 1 555 1,744
Fixed deposits 15,009 1,679 928 - - 345 17,961
Cash and bank
balances 13,371 4,388 2,616 1,070 593 1,696 23,734
38,249 9,756 7,456 3,692 1,695 6,798 67,646
Financial liabilities
Trade payables (2,644) (1,865) (1,302) (2,998) (918) (2,162) (11,889) Other payables
and accruals (3,003) - (769) (388) (216) (501) (4,877)
Other fi nancial
liabilities (85) (17) (254) - (5) (241) (602)
(5,732) (1,882) (2,325) (3,386) (1,139) (2,904) (17,368)
Net fi nancial
assets 32,517 7,874 5,131 306 556 3,894 50,278
Less: Net fi nancial assets denominated in the respective entities’
functional
currencies (32,517) - (5,131) (306) (536) (3,698) (42,188)
Foreign currency
exposure - 7,874 - - 20 196 8,090
Annual Report 2011
71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (a) Market Risk (Continued)
(i) Foreign exchange risk (Continued)
Company SGD USD RMB Others Total
2011 $’000 $’000 $’000 $’000 $’000
Financial assets
Trade receivables 3,169 - - - 3,169
Other receivables and
deposits 296 - - 292 588
Other fi nancial assets 4,109 9,591 1,012 297 15,009
Fixed deposits 15,574 - - - 15,574
Cash and bank
balances 16,028 357 - 155 16,540
39,176 9,948 1,012 744 50,880
Financial liabilities
Trade payables (171) (46) - - (217)
Other payables and
accruals (2,080) - - - (2,080)
Other fi nancial
liabilities (107) - - - (107)
(2,358) (46) - - (2,404)
Net fi nancial assets 36,818 9,902 1,012 744 48,476
Less: Net fi nancial assets denominated in the respective entities’ functional
currencies (36,818) - - - (36,818)
Foreign currency
exposure - 9,902 1,012 744 11,658
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NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (a) Market Risk (Continued)
(i) Foreign exchange risk (Continued)
Company SGD USD RMB Others Total
2010 $’000 $’000 $’000 $’000 $’000
Financial assets
Trade receivables 4,757 90 - - 4,847
Other receivables and
deposits 146 - 20 314 480
Other fi nancial assets 3,162 7,185 709 1,545 12,601
Fixed deposits 15,009 1,678 - - 16,687
Cash and bank
balances 12,008 2,333 - 92 14,433
35,082 11,286 729 1,951 49,048
Financial liabilities
Trade payables (1,025) - - - (1,025)
Other payables and
accruals (1,197) - - - (1,197)
Other fi nancial
liabilities (85) - - - (85)
(2,307) - - - (2,307)
Net fi nancial assets 32,775 11,286 729 1,951 46,741
Less: Net fi nancial assets denominated in the respective entities’ functional
currencies (32,775) - - - (32,775)
Foreign currency
exposure - 11,286 729 1,951 13,966
Annual Report 2011
73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (a) Market Risk (Continued)
(i) Foreign exchange risk (Continued) Sensitivity analysis for foreign currency risk
The following table demonstrates sensitivity to a reasonable possible change in the USD, HKD and RMB against SGD, with all other variables held constant, of the Group’s (profi t) / loss before income tax.
Increase/(decrease) in profi t before income tax
Group 2011 2010
$’000 $’000
If SGD strengthens by 5%:
USD (146) 394
HKD 3 -
RMB - 1
Total (143) 395
If SGD weakens by 5%:
USD 146 (394)
HKD (3) -
RMB - (1)
Total 143 (395)
Increase/(decrease) in profi t before income tax
Company 2011 2010
$’000 $’000
If SGD strengthens by 5%:
USD 495 564
RMB 51 36
Total 546 600
If SGD weakens by 5%:
USD (495) (564)
RMB (51) (36)
Total (546) (600)
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74
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (b) Interest rate risk
The Group’s exposure to interest rate risk relates primarily to the interest-bearing fi xed deposits and interest on fi nance leases.
(c) Liquidity risk
In the management of liquidity risk, the Group monitors and maintains a level of cash and bank balances deemed suffi cient to fi nance the Group’s operations and mitigate the effects of fl uctuations in cash fl ows.
The following tables detail the remaining contractual maturity for non-derivative fi nancial liabilities. The table below analyses the maturity profi le of the Group’s and Company’s fi nancial liabilities based on contractual undiscounted cash fl ows.
Group
On demand or within 1 year
Within 2 to 5 years
After 5 years
As at 30 June 2011 $’000 $’000 $’000
Trade payables 21,012 - -
Other payables and accruals 7,160 - -
Other fi nancial liabilities 420 189 15
28,592 189 15
As at 30 June 2010
Trade payables 11,889 - -
Other payables and accruals 4,877 - -
Other fi nancial liabilities 383 219 -
17,149 219 -
Company
On demand or within 1 year
Within 2 to 5 years
After 5 years
As at 30 June 2011 $’000 $’000 $’000
Trade payables 217 - -
Other payables and accruals 2,080 - -
Other fi nancial liabilities 49 43 15
2,346 43 15
Annual Report 2011
75
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (c) Liquidity risk (Continued)
Company
On demand or within 1 year
Within 2 to 5 years
After 5 years
As at 30 June 2010 $’000 $’000 $’000
Trade payables 1,025 - -
Other payables and accruals 1,197 - -
Other fi nancial liabilities 60 25 -
2,282 25 -
(d) Credit risk
Financial instruments which potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents and trade and other receivables. The cash and cash equivalents are placed with various reputable fi nancial institutions.
The Group’s major customers’ base consists primarily of major fi nancial institutions and multi-national corporations in Singapore, Malaysia and Hong Kong. The Group performs ongoing credit evaluations of its customers and generally does not require collateral on trade receivables.
The age analysis of trade receivables which are not impaired is as follows:
Group Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Not past due and not
impaired 11,944 8,759 611 1,065
Past due but not impaired
- Past due 0 to 3 months 12,341 11,044 431 518
- Past due 3 to 6 months 1,914 1,427 70 229
- Past due over 6 months 2,086 1,686 2,057 3,035
16,341 14,157 2,558 3,782
28,285 22,916 3,169 4,847
The Group has provided allowance for impairment loss based on estimated irrecoverable amounts from the sale of products, installation works and maintenance, determined by reference to past default experience.
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76
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Financial risk management objectives and policies (Continued) (d) Credit risk (Continued)
Included in the Group’s and Company’s trade receivable balance are debtors with total carrying amount of approximately $16,341,000 and $2,557,000 respectively (2010: $14,157,000 and $3,782,000 respectively) which are past due but not impaired as there has not been a signifi cant change in credit quality and the amounts are still considered recoverable. The Group and Company does not hold any collateral over these balances.
Movement in allowance for impairment during the year are as follows:
Group Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
At beginning of the year 12,961 13,166 2,910 3,875
Allowance made for the year
/ (written back) 320 (658) - (465)
Written off against allowance (99) - - (500)
Translation adjustment (693) 453 - -
At end of the year 12,489 12,961 2,910 2,910
Geographical concentrations of the Group’s signifi cant fi nancial assets as at 30 June are as follows:
Group
2011 Singapore Malaysia Hong Kong China Others Total
$’000 $’000 $’000 $’000 $’000 $’000
Trade receivables 14,820 2,741 2,925 4,303 3,496 28,285
Other receivables and
deposits 660 305 67 153 308 1,493
Fixed deposits 15,574 846 - - 1,504 17,924
Cash and bank balances 26,670 2,363 577 1,189 1,609 32,408
2010 Singapore Malaysia Hong Kong China Others Total
$’000 $’000 $’000 $’000 $’000 $’000
Trade receivables 12,125 3,751 2,556 907 3,577 22,916
Other receivables and
deposits 214 161 86 194 636 1,291
Fixed deposits 16,687 929 - - 345 17,961
Cash and bank balances 16,217 3,698 1,178 601 2,040 23,734
Annual Report 2011
77
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
40. FINANCIAL INSTRUMENTS (Continued)
Fair values of fi nancial assets and fi nancial liabilities
The carrying amounts of cash and cash equivalent, trade and other receivables and payables approximate their respective fair values due to the relatively short-term maturity of these fi nancial instruments carried at amortised cost using the effective interest method. The fair values of other classes of fi nancial assets and liabilities are as disclosed in the respective notes to fi nancial statements.
The fair value of fi nance lease liabilities is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the reporting date of which the carrying value approximates to the fair value.
Capital risk management policies and objectives
The Group manages its capital to ensure that entity within the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimization of the debt and equity balance.
The capital structure of the Group consists of debt, which includes the lease obligations, cash and bank balances and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.
The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is calculated as equity plus net debt.
The Company’s management reviews the capital structure on an annual basis. As part of this review, management considers the cost of capital and the risks associated with each class of capital. Upon review, the Company will balance its overall capital structure through the payment of dividends and new share issues as well as the issue of new debt or the redemption of existing debt, if necessary. The Company’s overall strategy remains unchanged.
Group Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Net debt (20,461) (24,001) (29,702) (28,813)
Total equity 87,447 77,169 59,198 59,739
Total Capital 66,986 53,168 29,496 30,926
Adjusted Gearing Ratio (31%) (45%) (101%) (93%)
As disclosed in Note 17, subsidiaries of the Group are required by the relevant laws and regulations of their respective country of incorporation to contribute and maintain a non-distributable statutory reserve fund which utilisation is subject to the approval of the relevant authorities. This externally imposed capital requirement has been complied with by the above mentioned subsidiaries for the fi nancial years ended 30 June 2011 and 30 June 2010.
LanTroVision
Held by the Company 2011 2010
102F Pasir Panjang
8 Ayer Rajah Crescent Singapore 139939
A 3 storey terrace shop for offi ce and
A 3 storey terrace shop for offi ce and
Annual Report 2011