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47. FINANCIAL INSTRUMENTS cont’d
(d) Liquidity risk
WCT Berhad (66538-K)
annual report 2011
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting 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’s and the Company’s objective is to maintain a
balance between continuity of funding and flexibility through the use of stand-by bank borrowings.
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting
date based on contractual undiscounted repayment obligations.
Group
As at 31 December 2011
Less than 1 2 - 5
On demand year years Total
RM'000 RM'000 RM'000 RM'000
Trade and other payables - 958,193 435,091 1,393,284
Loans and borrowings - 466,754 963,053 1,429,807
Company
As at 31 December 2011
- 1,424,947 1,398,144 2,823,091
Trade and other payables - 226,534 89,360 315,894
Due to related companies 164,950 - 33,741 198,691
Loans and borrowings - 153,815 800,266 954,081
(e) Credit risk
164,950 380,349 923,367 1,468,666
The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and
creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject
to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the
Group’s exposure to bad debts is not significant.
The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents arises from default
of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.
The Group's significant concentration of credit risk is disclosed in Notes 13(a).
187
NOTES TO THE FINANCIAL STATEMENTS
31 December 2011
cont’d