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Yangzijiang clarifies 233m yuan write-off of trade and other receivables
SHIPBUILDER Yangzijiang on Wednesday responded to queries from the Singapore Exchange (SGX) on several points in its financial results for FY18, including a 233 million yuan (S$47 million) write-off of trade and other receivables.
The company explained that the provision was for advance payment to a supplier which ran into financial difficulties and had ceased operations. The company said that it plans to recover part of the advance payment via legal proceedings against the supplier, which commenced in mid-2018.
It added that the company had "made a thorough review" of the remaining trade and other receivables after the discovery of the issue and has appointed a designated team to review the financial situation of its debtor and perform field investigation periodically to mitigate the risk of potential impairment.
"The board had also assessed the recoverability of the remaining trade and other receivables at the end of FY2018, and is satisfied with the recoverability of the remaining trade receivables and of the view that no further impairment is needed," said the company.
In addition, Yangzijiang also responded to SGX queries on its decrease in trade and other receivables.
The company said that the movement was due to forfeiture of security guarantee deposits received from lessees and advances received from construction contracts, amounting to 207 million yuan and 169 million yuan respectively. The remaining movement was due to settlement of trade and other payables during the year.
It also elaborated on several disposals it made during the period which resulted in a decrease in investment in financial assets, at fair value through profit or loss.
The decrease is mainly due to the disposal of unlisted preference shares of a listed corporation in 3Q2018, which was valued at 749 million yuan as at Dec 31, 2017. The remaining was due to disposal and fair-value movement of several other listed and unlisted equity securities in China over the year, said Yangzijiang.