Investment holding company Jadason Enterprises responds to SGX queries

The Company’s receivables increased from S$24.98m to S$35.03m, and SGX is asking for clarifications.

According to a release, SGX was referring to the Company’s unaudited statements for the quarter and nine months period ended 30 September 2011.

SGX’s query: The Company explained that Bills Receivables increased from S$24.98 million as at 31 December 2010 to S$35.03 million as at 30 September 2011 due to higher interest rate and lesser need for the discounting of bills by the Group. Please clarify the reasons for the higher interest rate and why there is a lesser need for discounting of bills by the Group.

Jadason Enterprises answered:
The prevailing interest rate is high in China as a result of the Chinese government raising the bank reserve requirement ratio to curb loans growth so as to control inflation. As the Group’s liquidity position has improved, there is lesser need for the Group to discount the bills receivables to obtain funds for its operation. Lesser bills discounting has helped the Group to save on interest cost, especially when the interest rate is high.