71
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
11 TRADEAND OTHER RECEIVABLES (CONT’D)
(a) This amount arose from provisions in the sale and purchase agreement relating
to the acquisition of a subsidiary, TIEC Holdings Pte. Ltd. that allows the Group to
recover certain project costs that exceeded the agreed budgets.
(b) The related party is a company inwhich a substantial shareholder has a controlling
interest. The balance was non-trade in nature, unsecured, interest-free and
repayable on demand.
(c)
During the financial year ended 30 June 2015, the Group exercised an option to
purchase a property. Subsequently the Group and the counterparty mutually
agreed not to proceed with the transaction. This amount comprised stamp duties
and option fees recoverable in relation to the transaction.
Outstanding balances with subsidiaries are unsecured. The loan due from a subsidiary
bears interest of 6.0% per annum (2015: 6.0%) and is repayable by January 2020 over
60 monthly instalments. The non-trade amounts due from subsidiaries are interest-
free and repayable on demand. At the end of the reporting period, the Company has
provided an allowance for impairment loss of $14,712,166 (2015: Nil) on amounts due
from a subsidiary.
The trade receivables and the non-trade amounts due from subsidiaries that are
impaired at the end of the reporting period and the respective movements in allowance
for impairment loss during the year were as follows:
Group
2016
2015
$
$
Trade receivables
Nominal amounts
13,628,338 14,286,970
Less: Allowance for impairment
(579,037)
(418,180)
13,049,301 13,868,790
11 TRADEAND OTHER RECEIVABLES (CONT’D)
Group
2016
2015
$
$
At beginning of the year
418,180 20,809
Impairment loss recognised
266,335 464,728
Allowance utilised
(105,478)
(67,357)
At end of the year
579,037
418,180
Company
2016
2015
$
$
Amounts due from subsidiaries (non-trade)
Nominal amounts
35,540,928 28,015,485
Less: Allowance for impairment
(14,712,166)
–
20,828,762 28,015,485
At beginning of the year
–
–
Impairment loss recognised
14,712,166
–
At end of the year
14,712,166
–
The allowance for impairment loss was included in other operating expenses.
An allowance is made for doubtful trade receivables for estimated losses resulting from
the subsequent inability of the customers to make required payments. If the financial
conditions of the customers were to deteriorate, resulting in an impairment of their
ability to make payments, additional allowances may be required in future periods.
Management generally analyses trade receivables and historical bad debts, customer
concentrations, and customer creditworthiness when evaluating the adequacy of the
allowance for doubtful trade receivables. To the extent that it is feasible, impairment
and uncollectibility are determined individually for each item.
