2009 - TDM Berhad

122 TDM Berhad (6265-P)Notes to the Financial Statements35. Financial Instruments (cont’d.)(e)Credit riskThe 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 verifi cation procedures. In addition,receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not signifi cant. For transactionsthat are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without thespecifi c approval of the Head of Credit Control. Since the Group trades only with recognised and creditworthy third parties, there isno requirement for collateral.The credit risk of the Group’s other fi nancial assets, which comprise cash and cash equivalents, marketable securities and non-currentinvestments, arises from default of the counterparty, with a maximum exposure equal to the carrying amounts of these fi nancialassets.The Group does not have any signifi cant exposure to any individual customer or counterparty nor does it have any major concentrationof credit risk related to any fi nancial assets.(f)Fair valuesThe carrying amounts of fi nancial asset and fi nancial liabilities of the Group and of the Company at the balance sheet date approximatedtheir fair values except for the following:GroupCompanyCarrying Fair Carrying FairNote amount value amount valueRM’000 RM’000 RM’000 RM’000Financial assetsAs at 31 December 2009:Due from subsidiaries 19 – – 88,851 #As at 31 December 2008:Due from subsidiaries 19 – – 168,267 #Financial liabilitiesAs at 31 December 2009:Due to subsidiaries 23 – – 3,178 #Hire purchase payables 30 3,096 3,440 233 236Term loans 21 922 978 – –As at 31 December 2008:Due to subsidiaries 23 – – 88,396 #Hire purchase payables 30 2 ,682 2,879 331 234Term loans 21 1 ,109 978 – –# It is not practical to estimate the fair values of amount due from/to subsidiaries due principally to a lack of fi xed repayment termsentered into by the parties involved.The fair value of hire purchase payables and term loans is estimated by discounting the expected future cash fl ows using the currentinterest rates for liabilities with similar risk profi les.