THONG GUAN INDUSTRIES BERHAD
Recognised financial instruments
The carrying amounts approximate fair values due to the relatively short-term nature of these financial instruments in respect of cash and bank balances, receivables, payables and short term borrowings.
The Company provides financial guarantees to banks for credit facilities extended to certain subsidiaries. The fair value of such financial guarantees is not expected to be material as the probability of the subsidiaries defaulting on the credit lines is remote.
It was not practicable to estimate the fair value of the Group’s investment in unquoted shares due to the lack of The aggregate fair values of other financial liabilities carried on the balance sheet as at 31 December are shown below :
Secured term loans Unsecured term loans
The fair values of these fixed financial instruments are determined by discounting the relevant cash flows using current interest rates for similar financial instruments at the balance sheet date. Since the current interest rates do not significantly differ from the intrinsic rate of these financial instruments, the fair values of these financial instruments therefore, closely approximate their carrying values as at the balance sheet date.
Unrecognised financial instruments The contracted amount and fair value of financial instruments not recognised in the balance sheet as at 31 December are :
Forward foreign exchange contracts
Forward exchange contracts are either marked to market using listed market prices or by discounting the contractual forward price and deducting the current spot rate.
Subsequent to balance sheet date, the Customs Department of Wujiang District, Jiangsu Province,The People’s Republic of China, commenced a detailed inquiry into the customs’duties paid by one of the subsidiaries in China. As at to-date, the additional customs’ duties payable, if any, has yet to be determined by the Customs Authority.
Group and Company
Subsequent to balance sheet date, the Group and the Company incorporated a wholly-owned subsidiary in Viet- nam,TG Plaspack (Vietnam) Co.,Ltd..The proposed charter capital is VND80,000,000,000 (equivalent to approximately RM15,900,000).The charter capital will be increased as and when necessary.