Annual report 2014
145
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
35. FINANCIAL INSTRUMENTS (continued)
(b) Financial instruments (continued)
Loans and
receivables
Company
RM
31 December 2013
Financial assets
Trade and other receivables
11,509,419
Cash and bank balances
5,276,593
16,786,012
Other
financial
liabilities
RM
Financial liabilities
Borrowings
451,622
Trade and other payables
973,847
1,425,469
(c) Methods and assumptions used to estimate fair value
The fair values of financial assets and financial liabilities are determined as follows:
(i) Financial instruments that are not carried at fair value and whose carrying amounts are a
reasonable approximation of fair value
The carrying amounts of financial assets and liabilities, such as trade and other receivables under
current assets, trade and other payables and borrowings, are reasonable approximation of fair
value, either due to their short-term nature or that they are floating rate instruments that are re-
priced to market interest rates on or near the end of the reporting period.
The carrying amounts of the current position of hire purchase creditors and borrowings are
reasonable approximations of fair values due to the insignificant impact of discounting.
The fair value of these borrowings has been determined using discounted cash flows technique.
The discount rates used are based on the risk-free MGS rates with a credit spread added to reflect
the default risk of the Group.
(ii) Non-current amounts owing by subsidiaries and hire purchase creditors
The fair value of these financial instruments are estimated by discounting expected future
cash flows at market incremental lending rate for similar types of lending, borrowing or leasing
arrangements at the end of each reporting period.
(iii) Available-for-sale investment
The fair value of the investments are determined by reference to the exchange quoted market
bid price at the close of the business at the end of the reporting period.
