Annual report 2014
149
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
35. FINANCIAL INSTRUMENTS (continued)
(e) The following table shows a reconciliation of Level 3 fair values:
Company
2014
2013
RM
RM
Financial asset
Balance as at 1 January
2,980,841 1,364,240
Advances
5,000,488 8,299,182
Settlement
(2,654,154) (5,746,704)
Gains and losses recognised in profit or loss:
- impairment losses on trade and other receivables
-
(551,091)
- unrealised foreign exchange gain/(loss)
486,670
(384,786)
Balance as at 31 December
5,813,845 2,980,841
(f) The following table shows sensitivity analysis for the Level 3 fair values measurements:
2014
2013
Company
RM
RM
Profit after tax
Discount rate
- Increase by 0.1%
(3,733)
(2,236)
- Decrease by 0.1%
3,733
2,236
(g) The Group has guidelines in respect to the measurement of fair values of financial instruments. The
management regularly reviews significant unobservable inputs and valuation adjustments.
36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s and the Company’s financial risk management policy is to ensure that adequate financial
resources are available for the development of theGroup’s and the Company’s operations whilst managing
its financial risks, including credit risk, liquidity risk and cash flow risk, interest rate risk and foreign currency
exchange risk. The Group and the Company operate within clearly defined guidelines that are approved
by the Board and the Group’s and the Company’s policy is not to engage in speculative transactions.
(a) Credit risk
Cash deposits and trade and other receivables could give rise to credit risk which requires the loss to
be recognised if a counter party fails to perform as contracted. The counter parties are creditworthy
counterparties. It is the policy of the Group to monitor the financial standing of these counter parties
on an ongoing basis to ensure that the Group is exposed to minimal credit risk.
