SCC Holdings Berhad Annual Report 2018

SCC Holdings Berhad | Annual Report 2018 84. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2018 (CONT’D) 30. Financial Instruments (cont’d) (c) Financial risk management (cont’d) (i) Credit risk (cont’d) Other receivables Risk management objectives, policies and processes for managing the risk Credit risks on other receivables are mainly arising from receivables from third parties. The Group manages the credit risk on an ongoing basis via Group’s management reporting procedures and action will be taken for long outstanding debts. 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. Recognition and measurement of impairment loss As there are only a few debtors, these other receivables have low credit risks. Consequently, the Group is of the view that the loss allowance is not material and hence, it is not provided for. 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 subsidiary companies. The Company monitors the ability of the subsidiary companies to service its loans on an individual basis. Exposure to credit risk, credit quality and collateral The maximum exposure to credit risk amounts to RM127,000 (2017: RM276,000) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period. The financial guarantees are provided as credit enhancements to the subsidiary companies’ secured loans. Recognition and measurement of impairment loss There is no history of default from subsidiary companies, and there are no indicates that any going concern from subsidiary companies. The Company is of the view that loss allowance is not material and hence, it is not provided for. Inter-company loans and advances Risk management objectives, policies and processes for managing the risk The Company provides unsecured loans and advances to subsidiary companies. The Company monitors the ability of the subsidiary companies to repay the loans 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. Recognition and measurement of impairment loss Generally, the Company considers loans and advances to subsidiary companies has low credit risk because there is no indicates that any going concern from subsidiary companies. Consequently, the Company is of the view that the loss allowance is not material and hence, it is not provided for.