SCC Holdings Berhad Annual Report 2019

notes to the financial statement 31 december 2019 (cont’d) 92 SCC Holdings Berhad | Annual Report 2019 31. Financial Instruments (Cont’d) (b) Financial risk management (cont’d) (i) Credit risk (cont’d) Inter-company loans and advances (cont’d) 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. (ii) Liquidity risk Liquidity risk refers to the risk that the Group and the Company will encounter difficulty in meeting its financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises primarily from its various payables. The Group and the Company actively manage their operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Group and the Company maintain sufficient levels of cash and cash equivalents to meet its working capital requirements and prudently balances its portfolio of short term and long-term funding requirements. The Group and the Company’s financial liabilities at the end of the reporting period either mature within one year or are repayable on demand.