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Notes to the financial statements
31 December 2012
(continued)
Annual Report 2012 KPJ Healthcare Berhad
37. Capital commitments
Capital expenditure not provided for in the financial statements is as follows:
Group
2012
2011
RM’000
RM’000
Approved by the directors and contracted
163,475
188,031
Approved by the directors but not contracted
267,441
244,494
430,916
432,525
Analysed as follows:
- Leasehold land
5,700
10,431
- Buildings
253,314
301,372
- Medical equipment
24,199
29,628
- Other property, plant and equipment
147,703
91,094
430,916
432,525
The Group’s interest in capital commitments of the associates is disclosed in Note 17.
38. Fair value of financial instruments
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair
value:
Note
Receivables
23
Deposits, cash and bank balances
24
Payables
26
Borrowings
27
Deposits
29
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they
are floating 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
flows 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 financial risks arising from their operations and the use of financial instruments. The key financial 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 financial 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 financial 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, trade and other receivables, cash and cash equivalents,
and deposits with financial 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 significant concentration of
credit risk with any single customer.