Ni Hsin Berhad Annual Report 2018

23. Financial instruments (continued) 23.4 Credit risk (continued) Other receivables Credit risks on other receivables are mainly arising from deposits paid for office buildings and fixtures rented. These deposits will be received at the end of each lease terms. The Group manages the credit risk together with the leasing arrangement. 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. As at the end of the reporting period, the Group did not recognised any allowance for impairment losses. Financial guarantees Risk management objectives, policies and processes for managing the risk The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries. As at the end of the reporting period, the Company provided total corporate guarantees amounting to RM26,140,000 (2017: RM26,140,000). Exposure to credit risk, credit quality and collateral The maximum exposure to credit risk amounts to RM1,755,000 (2017: RM Nil) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment. The financial guarantees have not been recognised since the fair value on initial recognition was immaterial. Inter-company loans and advances Risk management objectives, policies and processes for managing the risk The Company provides unsecured loans and advances to subsidiaries. The Company monitors the ability of the subsidiaries to repay the loan and advances on an individual basis. 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 not secured by any collateral or supported by any other credit enhancements. Notes to the financial statements (continued) Annual Report 2018 89