29.
CATEGORIES OF FINANCIAL INSTRUMENTS (CONT'D)
Carrying
amount
L&R
AFS
FL
FVTPL
RM
RM
RM
RM
RM
COMPANY
2014
Financial assets
Other investments
1,359,900
- 1,359,900
-
-
Other receivables
3,400
3,400
-
-
-
Inter-company balances
11,798,146 11,798,146
-
-
-
Cash and cash
equivalents
580,845 580,845
-
- -
13,742,291 12,382,391 1,359,900
-
-
Financial liabilities
Other payables
935,947
-
-
935,947
-
2013
Financial assets
Other investments
1,359,900
-
1,359,900
-
-
Other receivables
2,200
2,200
-
-
-
Inter-company balances
37,583,192 37,583,192
-
-
-
Cash and cash
equivalents
566,433
566,433
-
-
-
39,511,725 38,151,825 1,359,900
-
-
Financial liabilities
Other payables
881,976
-
-
881,976
-
30.
FINANCIAL RISK MANAGEMENT
The Group and the Company are exposed to a variety of financial risks arising from their operations and
the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and
foreign currency exchange risk. The Group operates within clearly defined guidelines that are approved by
the Board and the Group’s policy is not to engage in speculative activities.
30.1
Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in
financial loss to the Group and to the Company. The Group’s exposure to credit risk arises principally
from its trade receivables whilst the Company’s exposure to credit risk arises principally from advances
to its subsidiaries and financial guarantees provided to financial institutions in respect of credit facilities
granted to the subsidiaries.
30.1.1
Trade receivables
Credit risk arising from trade customers is addressed by the application of credit evaluation
and close monitoring procedures by the management. The Group extends to existing
customers credit terms that range between 30 to 90 days. In deciding whether credit terms
shall be extended, the Group will take into consideration factors such as the relationship with
the customer, its payment history and credit worthiness.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2014 (CONT’D)
Pentamaster Corporation Berhad
(572307-U)
•
Annual Report 2014
82
