TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
120
NOTES TO THE FINANCIAL STATEMENTS
33. Financial instruments (continued)
33.6 Market risk (continued)
33.6.2 Interest rate risk (continued)
Excess funds are placed with licensed financial institutions for certain periods during which the interest
rates are fixed. The management reviews the rates at regular intervals.
On the other hand, the Group provides hire purchase loans at fixed rates for tenures of up to 7 years. These
loans are funded by internal and external resources.
Risk management objectives, policies and processes for managing the risk
The Group adopts a policy of ensuring that between 40% and 60% of its exposure to changes in interest
rates on borrowings is on a fixed rate basis.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,
based on carrying amounts as at the end of the reporting period was:
Group
Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Fixed rate instruments
Financial assets:
Assets-backed notes
-
-
5,846
16,355
Hire purchase receivables
440,441
489,730
-
-
Finance lease receivables
1,734
3,410
-
-
Amount due from subsidiaries
-
-
209,057
278,378
Deposits with licensed banks
138,690
131,565
3,380
26,039
Financial liabilities:
Term loans
(120,166)
(308,280)
-
(50,000)
Medium Term Notes
(746,591)
-
(746,591)
-
Recourse obligation on financing sold
to Cagamas Berhad
(24,021)
(90,532)
-
-
Amount due to subsidiaries
-
-
(380,212)
(236,394)
(309,913)
225,893
(908,520)
34,378
Floating rate instruments
Financial assets:
Amount due from subsidiaries
-
-
748,474
49,211
Financial liabilities:
Term loans
(113,152)
(106,496)
-
-
Bills payables
(162,640)
(401,784)
-
-
Revolving credit
(246,170)
(544,582)
-
-
Amount due to subsidiaries
-
-
(82,365)
(216,935)
(521,962)
(1,052,862)
666,109
(167,724)
