THONG GUAN INDUSTRIES BERHAD
Related parties - Group/Company (Cont’d)
Purchases from :
Rental expense payable to :
The terms and conditions for the above transactions are based on normal trade terms. All the amounts out standing are unsecured and expected to be settled with cash.
There are no individually significant outstanding balances arising from transactions other than nor mal trade transactions. Details of the balances are disclosed in Notes 7 and 15.
There were no transactions with key management personnel and Directors of the Company other than the following :
Remuneration package paid to them as employees of the Group/Company.
Share options granted to key management personnel The share options were given to these key management personnel under the same terms and conditions as those offered to other employees of the Group pursuant to the ESOS (Note 21).
Rental of RM624,000 (2006 : RM507,000) payable to Bounty Values Sdn. Bhd., a company in which Messrs. Ang Poon Chuan, Ang See Ming and Ang See Cheong have substantial financial interests.
Financial risk management objectives and policies
Exposure to credit, interest rate and currency risk arises in the normal course of the Group and Company’s business. The Group and the Company have no formal financial risk management policies and guidelines which set out its overall business strategies, their tolerance to risk and their general risk management philosophy and have established processes to monitor and control the hedging of transactions in a timely and accurate manner.
Derivative financial instruments are used to reduce exposure to fluctuations in foreign exchange rates.While these are subject to the risk of market rates changing subsequent to acquisition, such changes are generally offset by opposite effects on the items being hedged.
Credit risk At balance sheet date, there were no significant concentrations of credit risk other than the following :
Amount due from subsidiaries
Management has credit policy in place and the exposure to credit risk is monitored on an ongoing basis.Credit evaluations are per- formed on all customers requiring credit over a certain amount. The Group and the Company do not require collateral in respect of financial assets.
At balance sheet date, there were no significant concentrations of credit risk.The maximum exposure to credit risk is represented by the carrying amount of each financial assets.
Interest rate risk
The Group and the Company have no formal policy on interest rate risk. However, the Group and the Company manage their interest rate risk by having a combination of fixed and floating rates for their borrowings.