SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

18. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Capital expenditure contracted for as at the end of the reporting period but not recognised in the financial statements are as follows:

Capital commitments

Capital commitments in respect of refurbishment plan on building at 47 Hill Street

Matter relating to refurbishment costs at 47 Hill Street

As at the date of this report, there were refurbishment work claims at 47 Hill Street amounted to $1,983,000 that was not recorded in the financial statement for the year ended 31 December 2022. Finalisation of the claim is subject to on-going discussion and agreement with the main contractor.

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Chamber is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk and interest rate risk. The Council members review and agree on policies and procedures for the management of these risks, which are executed by the management.

The following provides details regarding the Chamber’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Chamber’s exposure to credit risk arises primarily from receivables and amount due from related party. Forother financial assets (including cash and cash equivalents), the Chamber minimises credit risk by dealing exclusively with high credit rating counterparties.

The Chamber has policies in place to ensure that rental of premises is made to tenants with satisfactory credit history. For the credit risk relating to the amounts due from tenants, the Chamber has addressed this risk by charging rental deposits. In addition, receivable balances are monitored on an ongoing basis with the result that the Chamber’s exposure to bad debts is not significant.

At reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.