CAHYA MATA SARAWAK ANNUAL REPORT 2016

www.cmsb .com.my Cahya Mata Sarawak Berhad 186 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D.) (a) Credit risk (cont'd.) (iii) Inter-company loans and advances • Risk management objectives, policies and process for managing the risk The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiaries regularly. • Exposure to credit risk, credit quality and collateral 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, there was no indication that the loans and advances to the subsidiaries are not recoverable. The Company does not specifically monitor the ageing of current advances to the subsidiaries. Nevertheless, these advances are not overdue. (b) Liquidity risk Liquidity risk is the risk that theGroup or theCompany will encounter difficulty inmeeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group and the Company adopt a prudent approach to manage their liquidity risk. The Group and the Company always maintain sufficient cash and cash equivalents, and have available funding through a diverse source of committed and uncommitted credit facilities from various banks. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. Analysis of financial instruments by remaining contractual maturities The table below analyses the maturity profile of the Group’s and the Company’s financial liabilities based on contractual undiscounted repayment obligations. Cash Flows Carrying amount On demand or within 1 year 1 to 5 years Over 5 years Total Group RM’000 RM’000 RM’000 RM’000 RM’000 At 31 December 2016 Financial liabilities: Trade and other payables 479,420 402,532 77,967 38,397 518,896 Loans and borrowings 247,956 148,484 97,330 19,472 265,286 Financial guarantees* - 512,223 - - 512,223 727,376 1,063,239 175,297 57,869 1,296,405