Notes to the Financial Statements For the financial year ended 31 December 2024 16 FINANCIAL RISK MANAGEMENT (CONTINUED) Risk management framework (continued) (b) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Of the total trade and other receivables balance at the end of the financial year, $8,776,035 (2023: $ Nil) pertains to amount due from immediate holding company. Apart from this, the Company does not have significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. The Company assesses trade and other receivables due from related corporations to have low credit risk because the related corporations have strong financial capacity to meet the contractual obligation. Accordingly, the loss allowance on trade and other receivables due from related corporations is determined to be immaterial. No ageing analysis are presented as the outstanding balances as at 31 December 2024 are current. The Company’s other receivables are considered to have low risk of default. The Company held cash and cash equivalents of $1,087,033 at 31 December 2024 (2023: $650,125). The cash and cash equivalents are placed with banks and financial institutions which are regulated. Impairment on cash and cash equivalents has been measured on the 12-month expected loss basis and reflects the short maturities of the exposures. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties. The amount of the loss allowance on cash and cash equivalents is negligible. The Company has guidelines governing the process of granting credit as a service or product provider in its respective segments of business. Investments and financial transactions are restricted with counterparties that meet the appropriate credit criteria and of high credit standing. (c) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s policy on liquidity risk management follows that of its immediate holding company. CapitaLand Investment Limited actively manages the debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. 303 Annual Report 2024
RkJQdWJsaXNoZXIy NTkwNzg=