Page 184 - Annual Report 2015 - Mono Technology Public Company Limited

32. Financial instruments
32.1 Financial risk management
The Company and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No.107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, current investments, trade and other receivables, trade and other payables, loans, short-term and long-term borrowings, and financial lease liabilities. The financial risks associated with these financial instruments and how they are managed is described below.
Credit risk
The Company and its subsidiaries is exposed to credit risk primarily with respect to trade and other receivables, and loans. The Company and its subsidiaries manages the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. However, the Company and its subsidiaries is exposed to concentrations of credit risk with respect to trade receivables because it has a few major customers who are in the same industry. The maximum exposure to credit risk is limited to the carrying amounts of trade and other receivables and loans as stated in the statement of financial position.
Interest rate risk
The Company and its subsidiaries’ exposure to interest rate risk relates primarily to its cash at banks, current investments, loans, short-term and long-term borrowings and financial lease liabilities. Most of the Company and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate.
Foreign currency risk
The exposure of the Company and its subsidiary to foreign currency risk arise mainly from trading and services transactions that are denominated in foreign currencies. The Company and its subsidiary seek to reduce this risk by entering into forward exchange contracts when they considers appropriate. Generally, the forward contracts mature within one year.
The balances of financial assets and liabilities of the Company and its subsidiary denominated in foreign currencies which were unhedged are summarised below.
Foreign currency
US dollar
Consolidated financial statements
Financial assets as at 31 December
Financial liabilities as at 31 December
Average exchange rate as at 31 December
2015 (Million)
2014 (Million)
2015 (Million)
2014 (Million)
2015
2014
(Baht per 1 foreign currency unit)
-
-
1-
36.0886
32.9630
184
Mono Technology Public Company Limited