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175
Maxis Berhad
Annual Report 2014
Notes to the
Financial Statements
31 December 2014
33 FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk
The objectives of the Group’s and of the Company’s credit risk management policies are to manage their exposure to credit
risk from deposits, cash and bank balances, receivables, derivative financial instruments and inter-company loans. They do not
expect any third parties to fail to meet their obligations given the Group’s and the Company’s policies of selecting creditworthy
counterparties.
The Group has no significant concentration of credit risk as the Group’s policy limits the concentration of financial exposure to
any single counterparty. Credit risk of trade receivables is controlled by the application of credit approvals, limits and monitoring
procedures. Credit risks are minimised and monitored via limiting the Group’s dealings with creditworthy business partners
and customers. Trade receivables are monitored on an ongoing basis via the Group’s management reporting procedures. At the
Company level, inter-company loans exposure to bad debts is not significant since the subsidiaries do not have historical default.
For deposits, cash and bank balances, the Group and the Company seek to ensure that cash assets are invested safely and
profitably by assessing counterparty risks and allocating placement limits for various creditworthy financial institutions. As for
derivative financial instruments, the Group and the Company enter into the contracts with various reputable counterparties to
minimise the credit risks. The Group and the Company consider the risk of material loss in the event of non-performance by
the above parties to be unlikely. The Group’s and the Company’s maximum exposure to credit risk is equal to the carrying value
of those financial instruments.
(c) Liquidity risk
The objectives of the Group’s and of the Company’s liquidity risk management policies are to monitor rolling forecasts of the
Group’s and of the Company’s liquidity requirements to ensure they have sufficient cash to meet operational and financing
needs as and when they fall due, availability of funding by keeping committed credit lines and to meet external covenant
compliance. Surplus cash held is invested in interest bearing money market deposits and time deposits. The Group and the
Company are exposed to liquidity risk where there could be difficulty in raising funds to meet commitments associated with
financial instruments.
As at 31 December 2014, the Group and the Company has available financing facility of RM350,000,000 (2013: RM Nil)
under the Commodity Murabahah Term Financing as disclosed in Note 30(f) to the financial statements. This available facility
together with new facility which the Group and the Company is pursuing, are to be used to part refinance borrowings, capital
expenditure and general working capital requirements of the Group and the Company.
