Company’s response
The Group’s total trade and other receivables increased by 8.8% from $427.2 million as at 30 September 2012 to $464.7 million as at 30 September 2013. The increase in trade and other receivables between these two dates is mainly due to the result of sales between 1 October 2012 and 30 September 2013. Sales recorded during this period amounted to $804.1 million against $771.4 million for the comparable period of 1 October 2011 to 30 September 2012 (an increase of 4.2%). The higher percentage increase in trade and other receivables compared to percentage increase in sales is due to credit sales reported during this period, together with timing difference in receipt of trade receivables and the reclassification of debit balances in other payables to other receivables during the quarter.
In accordance with our accounting policy, which complies with FRS39, an allowance for impairment is established when there is objective evidence that the trade receivables have been impaired. Impairment loss is determined based on the review of current status of the existing receivables and historical collection experience. The allowance for impairment of
trade receivables as at 30 September 2012 was $20.9 million representing 4.2% of trade receivables as compared to $21.1 million representing 4.0% of trade receivables as at 30 September 2013. The Board is of the opinion that the allowance for receivables has been
computed on a consistent basis with previous quarters and is adequate as at 30 September 2013 and nothing has come to the attention of the Board to date, that the allowance for receivables is insufficient for the Group's current purposes.
Impairment risk? The price dropped lately, is it becos most of their sales are based on credits (instalments), that there is a impairement risk as economies weakens? So if next year economies strong, means it's share price is directly proportional to the economies?
Alvin Law says:
Courts dont make much revenue from their sales.. its their loans and rental. Ppl put their products at courts and pay a rental for the space. Courts also liase with them to give warranty period and in turn they sell an extended warranty to custoners that is also good revenue. Courts provide solid advertising and this attracts products distributors to rent a space from them. Whehter their product move or dun move they must still pay rent to courts. To help their distributors they focus and hire alot of solid salesman to help push their products. Courts also provide installment plans which is very hot among average singaporeans.
