TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
116
NOTES TO THE FINANCIAL STATEMENTS
33. Financial instruments (continued)
33.4 Credit risk (continued)
Investments and other financial assets (continued)
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the Group has only invested in domestic securities. The maximum exposure
to credit risk is represented by the carrying amounts in the statement of financial position.
In view of the sound credit rating of counterparties, management does not expect any counterparty to fail to meet
its obligations.
Impairment losses
As at the end of the reporting period, there was no indication that the investments and other financial assets are
not recoverable.
The investments and other financial assets are unsecured and the management is of the view that credit and
interest rate risks exposure to licensed banks and financial institutions is minimal.
Inter-company loans and advances
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured advances to subsidiaries. The Company monitors the results of the subsidiaries
regularly.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts
in the statement of financial position.
Loans and advances are only provided to subsidiaries of the Company.
Impairment losses
At the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable.
The Company does not specifically monitor the ageing of current advances to subsidiaries. Nevertheless, these
advances have been overdue for less than a year. Non-current advances to subsidiaries are not overdue.
33.5 Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
exposure to liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management
to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at
significantly different amounts.
