169
AirAsia X Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2014
29 FINANCIAL RISK MANAGEMENT POLICIES (CONTINUED)
(b)
Credit risk
Credit risk is the risk of financial loss to the Group and Company if a customer or a counter party to a financial instrument fails to meet its contractual obligations and arises
principally from the Group’s and Company’s receivables from customers, cash and cash equivalents and financial assets (derivative instruments).
The Group’s and Company’s exposure to credit risk or the risk of counterparties defaulting arises mainly from various deposits and bank balances, and receivables. As the Group
and Company do not hold collateral, the maximum exposure to credit risk is represented by the total carrying amounts of these financial assets in the balance sheet. Credit risk,
or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures.
Credit risk relating to receivables is minimised by regular monitoring and, in addition, credit risk is controlled as the majority of the Group’s and Company’s deposits and bank
balances are placed with major financial institutions and reputable parties. The Directors are of the view that the possibility of non-performance by the majority of these financial
institutions is remote on the basis of their financial strength and support of their respective governments.
The Group and Company generally have no concentration of credit risk arising from trade receivables, other than as disclosed in Note 21 to the financial statements.
(c)
Liquidity and cash flow risk
The Group’s and Company’s policy on liquidity risk management is to maintain sufficient cash and cash equivalents and to have available funding through adequate amounts of
committed credit facilities and credit lines for working capital requirements.
Whilst the Group’s and Company’s current liabilities exceeded their current assets by RM1,462,163,000 and RM1,464,271,000 (2013: RM762,703,000 and RM764,439,000)
respectively as at 31 December 2014, the Directors are of the view that no material uncertainty relating to these conditions exists that may cast significant doubt on the Group’s
or Company’s ability to continue as a going concern. The Directors believe that the Group and Company are able to realise their assets and discharge their liabilities in the normal
course of business and that the financial position will be improved through future operating profits and cash flows. In addition, on 27 January 2015, the Company had secured
an additional term loan facility amounting to RM75 million for working capital purposes.
The table below analyses the Group’s and Company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the
contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows.
Group
At 31 December 2014
Under 1 year
RM’000
1-2 years
RM’000
2-5 years
RM’000
Over 5 years
RM’000
Term loans
197,977
192,574
544,588
432,552
Revolving credit
319,627
-
-
-
Commodity structured trade finance
35,079
-
-
-
Hire purchase
19
19
37
-
Trade and other payables
828,802
-
-
-
Amounts due to related parties
23,173
-
-
-
Amount due to an associate
196
-
-
-
1,404,873
192,593
544,625
432,552
At 31 December 2013
Under 1 year
RM’000
1-2 years
RM’000
2-5 years
RM’000
Over 5 years
RM’000
Term loans
248,771
468,421
423,324
714,822
Revolving credit
307,437
152,336
-
-
Hire purchase
19
37
37
-
Trade and other payables
346,778
-
-
-
Amounts due to related parties
1,916
-
-
-
904,921
620,794
423,361
714,822
