Singapore Airlines 2015 Annual Report Download - page 201

38 Financial Risk Management Objectives and Policies (in $ million) (continued)
(e) Liquidity risk (continued)
2014
Within
1 year
1 – 2
years
2 – 3
years
3 – 4
years
4 – 5
years
More than
5 years Total
The Group
Notes payable 22.5 319.3 16.1 16.1 16.1 520.5 910.6
Finance lease commitments 57.0 52.5 22.3 22.1 – – 153.9
Loans 8.4 0.7 1.2 1.8 1.8 8.9 22.8
Trade and other creditors 2,977.9 – – – – – 2,977.9
Derivative financial instruments:
Currency hedging contracts 27.9 – – – – – 27.9
Fuel hedging contracts 1.3 – – – – – 1.3
Cross currency swap contracts 25.0 – – – – – 25.0
Interest rate swap contracts 2.6 – – – – – 2.6
3,122.6 372.5 39.6 40.0 17.9 529.4 4,122.0
The Company
Notes payable 22.5 319.3 16.1 16.1 16.1 520.5 910.6
Trade and other creditors 2,287.4 – – – – – 2,287.4
Amounts owing to
Subsidiary companies 1,034.8 – – – – – 1,034.8
Derivative financial instruments:
Currency hedging contracts 27.9 – – – – – 27.9
Fuel hedging contracts 1.3 – – – – – 1.3
3,373.9 319.3 16.1 16.1 16.1 520.5 4,262.0
(f) Credit risk
The Group has an independent Group Debts Review Committee to review the follow up actions on outstanding receivables
monthly. On a day-to-day basis, the respective Finance divisions have the primary responsibility for measuring and
managing specific risk exposures.
The maximum exposure to credit risk for the Group and the Company is represented by the carrying amount of each
financial asset in the statement of financial position.
There are no significant concentrations of credit risk other than on derivative counterparties where transactions are limited
to financial institutions possessing high credit quality and hence the risk of default is low.
The sale of passenger and cargo transportation is largely achieved through IATA accredited sales agents. The credit risk
of such sales agents is relatively small owing to a broad diversification. In specific instances, the contract may require
special collateral.
Unless expressly stated otherwise in the contract, receivables and payables among airlines are settled either bilaterally
or via the IATA Clearing House. Receivables and payables are generally netted and settled at weekly intervals, which lead
to a clear reduction in the risk of default.
For all other service relationships, depending on the nature and scope of the services rendered, collateral is required,
credit reports or references are obtained and use is made of historical data from previous business relations, especially
with regard to payment behaviour, in order to avoid non-performance.
Collaterals requested from debtors include bank guarantees, cash-in–lieu of deposit and security deposits.
Allowance is made for doubtful accounts whenever risks are identified.
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