Page 184 - KPJ_2011

37. Capital commitments
Capital expenditure not provided for in the financial statements is as follows:
38. Fair value of financial instruments
The following are classes of mnancial instruments that are not carried at fair value and whose carrying amounts are
reasonable approximation of fair value:
The carrying amounts of these mnancial assets and liabilities are reasonable approximation of fair values, either due
to their short-term nature or that they are noating rate instruments that are re-priced to market interest rates on or near
the reporting date.
The fair values of long term receivables and payables, which comprise advances to or from subsidiaries, are estimated
by discounting expected future cash nows at market incremental lending rate for similar types of lending, borrowing
or leasing arrangement at the reporting date.
39. Financial risk management objectives and policies
The Group and the Company are exposed to mnancial risks arising from their operations and the use of mnancial
instruments. The key mnancial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
mnancial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding mnancial instruments should a counterparty default
on its obligations. The Group’s and the Company’s exposure to credit risk arises mainly from revenue made on
deferred credit terms, cash and cash equivalents, and deposits with mnancial institutions. Risk arising from these
are minimised through effective monitoring of receivable accounts that exceeded the stipulated credit terms.
Credit limits are set and credit history is reviewed to minimise potential losses. The Group has no signimcant
concentration of credit risk with any single customer.
Note
Receivables 23
Deposits, cash and bank balances 24
Payables 26
Borrowings 27
Deposits 29
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
Group
2011
RM’000
2010
RM’000
Approved by the directors and contracted 188,031 88,969
Approved by the directors but not contracted 244,494 323,514
432,525 412,483
Analysed as follows:
- Leasehold land 10,431 9,536
- Buildings 301,372 267,804
- Medical equipment 29,628 106,506
- Other property, plant and equipment 91,094 28,637
432,525 412,483
The Group’s interest in capital commitments of the associates is disclosed in Note 17.
179 ANNUAL REPORT 2011