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Annual Report 2013
KPJ HEALTHCARE BERHAD
251
39.
Financial risk management objectives and policies (continued)
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding nancial 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 nancial 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 signi cant concentration of credit risk with any single customer.
The Group seeks to invest cash assets safely and pro tability and buys insurance to protect itself against insurable risk. In
this regard, counterparties are assessed for credit limits that are set to minimise any potential losses. The Group’s cash and
cash equivalents and short term deposits are placed with creditworthy nancial institutions and the risks arising there from are
minimised in view of the nancial strength of these nancial institution.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:
-
The carrying amount of each class of nancial assets recognised in the statements of nancial position.
Information regarding credit enhancements for trade and other receivables is disclosed in Note 23.
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 23. Cash and cash equivalents
that are neither past due nor impaired are placed with or entered into with reputable nancial institutions.
Financial assets that are either past due or impaired
Information regarding trade receivables that are either past due or impaired is disclosed in Note 23.
Apart from those disclosed above, none of other nancial assets is either past due or impaired.
(b)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter dif culty in meeting nancial 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 nancial
assets and liabilities.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)