NOTES TO THE FINANCIAL STATEMENTS (cont’d)
44. FINANCIAL INSTRUMENTS (cont’d)
44.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (a) Market Risk (cont’d)
(ii) Interest Rate Risk (cont’d)
The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant:-
The Group The Company
2012 2011 2012 2011
Increase/ Increase/ Increase/ Increase/
(Decrease) (Decrease) (Decrease) (Decrease)
RM RM RM RM
Effects on profit after taxation
Increase of 50 basis points (739,000) (1,105,000) (9,600) -
Decrease of 50 basis points 739,000 1,105,000 9,600 -
Effects on equity
Increase of 50 basis points (739,000) (514,000) (9,600) 591,000 Decrease of 50 basis points 739,000 514,000 9,600 (591,000) ============== ============== ============== ==============
(iii) Equity Price Risk
The Group does not have any quoted investments and hence is not exposed to equity price risk.
(b) Credit Risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from its trade and other receivables. The Group manages its exposure to credit risk by the application of monitoring procedures on an ongoing basis. For other financial assets (including short-term investments, fixed deposits, and cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.
(i) Credit risk concentration profile
The Group’s major concentration of credit risk relates to the amounts owing by four (4) customers which constituted approximately 80% of its trade receivables at the end of the reporting period, due to the Group’s limited number of customers. Based on the Group’s historical collection of these receivables, management believes that they are fully recoverable.
(ii) Exposure to credit risk
As at the end of the reporting period, the maximum exposure to credit risk is represented by the
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
44. FINANCIAL INSTRUMENTS (cont’d)
44.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (b) Credit Risk (cont’d)
(iii) Ageing analysis
The ageing analysis of the Group’s trade receivables at the end of the reporting period is as follows:-
Gross Individual Collective Carrying
Amount Impairment Impairment Value
The Group RM RM RM RM
2012
Not past due 9,472,274 - - 9,472,274
Past due:-
- less than 3 months 1,933,482 - - 1,933,482
--- --- --- ---
11,405,756 - - 11,405,756
============== ============== ============== ==============
2011Not past due 16,996,961 - - 16,996,961
Past due:-
- less than 3 months 3,589 - - 3,589
--- --- --- ---
17,000,550 - - 17,000,550
============== ============== ============== ==============
Trade receivables that are past due but not impaired
The Group believes that no impairment allowance is necessary in respect of these trade receivables.
They are substantially companies with good collection track record and no recent history of default.
Trade receivables that are neither past due nor impaired
These trade receivables are regular customers who have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables.
(c) Liquidity Risk
Liquidity risk arises mainly from general funding and business activities. The Group manages its debt maturity profile, operating cash flows and availability of funding to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and prudently
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
44.FINANCIAL INSTRUMENTS ((cont’d) 44.1FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (c)Liquidity Risk (cont’d) The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):- Weighted Average ContractualOn Demand EffectiveCarrying Undiscountedor WithinWithinWithin 2 – 5More Than RateAmount Cash Flows1 Year1 – 2 YearsYears5 Years The Group%RMRMRMRMRMRM 2012 Trade and other payables:- - interest bearing 6.7510,200,00010,200,00010,200,000- - - - non-interest bearing - 77,937,75777,937,75777,937,757- - - Borrowings:- - bank overdrafts7.5124,159,03824,159,03824,159,038- - - - bankers’ acceptance4.049,644,0009,644,0009,644,000- - - - hire purchase obligations 5.435,105,6865,352,6613,377,3921,744,088231,181- - Islamic securities and obligations under Ijarah arrangements6.4738,300,00040,550,40032,387,3008,163,100- - - revolving credit4.615,000,0005,000,0005,000,000- - - - term loans 4.51258,968,894321,016,00028,618,00030,950,000150,032,000111,416,000 - unsecured loans 5.0022,520,00022,520,00022,520,000- - - 451,835,375516,379,856213,843,48740,857,188150,263,181111,416,000
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
44.FINANCIAL INSTRUMENTS (cont’d) 44.1FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (c)Liquidity Risk (cont’d) The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period) (cont’d):- Weighted Average ContractualOn Demand EffectiveCarrying Undiscountedor WithinWithinWithin 2 – 5More Than RateAmount Cash Flows1 Year1 – 2 YearsYears5 Years The Group%RMRMRMRMRMRM 2011 Trade and other payables:- - interest bearing 6.8011,450,00011,450,00011,450,000- - - - non-interest bearing - 107,512,775107,512,775107,512,775- - - Borrowings:- - bank overdrafts7.407,532,5477,532,5477,532,547- - - - bankers’ acceptance4.248,942,0008,942,0008,942,000- - - - hire purchase obligations 5.414,315,5754,572,1742,223,6871,988,847359,640- - Islamic securities and obligations under Ijarah arrangements6.4170,250,00076,053,30035,503,90032,387,3008,162,100- - term loans 4.48217,413,403265,802,00013,188,00027,301,000138,951,00086,362,000 - unsecured loans 3.0072,520,00072,520,00072,520,000- - - 499,936,300554,384,796258,872,90961,677,147147,472,74086,362,000
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
44.FINANCIAL INSTRUMENTS (cont’d) 44.1FINANCIAL RISK MANAGEMENT POLICIES (CONT’D) (c)Liquidity Risk (cont’d) The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period) (cont’d):- Weighted Average ContractualOn Demand EffectiveCarrying Undiscountedor WithinWithinWithin 2 – 5 RateAmount Cash Flows1 Year1 – 2 YearsYears The Company%RMRMRMRMRM 2012 Trade and other payables- 18,564,23718,564,23718,564,237- - Borrowings:- - bank overdrafts7.601,984,7981,984,7981,984,798- - - hire purchase obligations 5.43164,829169,990136,00833,982- - revolving credit4.615,000,0005,000,0005,000,000- - 25,713,86425,719,02525,685,04333,982- 2011 Trade and other payables- 4,452,7914,452,7914,452,791- - Borrowings:- - hire purchase obligations 4.75289,740305,998136,008136,00833,982 4,742,5314,758,7894,588,799136,00833,982
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
44. FINANCIAL INSTRUMENTS (cont’d)