72 CSE Global Limited RISK GOVERNANCE AND INTERNAL CONTROL CREDIT RISK Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s exposure to credit risk arises primarily from trade and other receivables, and contract assets. For other financial assets (including other investments and cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties. In respect of credit risk arising from the inability of customers of the Group to make payments when their receivables fall due, it is the Group’s policy to provide credit terms to creditworthy and reputable customers. These receivables are monitored on an ongoing basis to ensure that issues arising from non-collectibility are minimised. Exposure to credit risk The Group’s maximum exposure to credit risk, in the event that the counter-parties to the transactions with the Group fails to perform their obligations at the end of reporting period in relation to each class of recognised financial assets, is the carrying amount of those assets as indicated in the balance sheet, and is generally limited to the amounts, if any, by which the counterparties’ obligations exceed the obligations of the Group. The Group has no significant concentration of credit risk. LIQUIDITY RISK Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. The Group’s and the Company’s liquidity risk management policy is to maintain sufficient liquid financial assets and stand-by credit facilities with different banks. At the end of the reporting period, 84% (2023: 83%) of the Group’s loans and borrowings (Note 14) of the financial statements will mature in less than one year based on the carrying amount reflected in the financial statements. As at 31 December 2024, the Group has S$330.5 million of undrawn revolving credit facilities and S$144.2 million of undrawn import loan facilities. Notwithstanding the headwinds, we continued a disciplined pursuit of new opportunities and revenue streams to safeguard shareholders’ interests and the Group’s assets. Supported by a robust risk management system, we are able to respond effectively to shifting business demands and seize opportunities that create value for our stakeholders.
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