Page 156 - Mono Technology Public Company Limited : Annual Report 2013

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 subisidiaries 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 short-term loans to subsidiaries 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, short-term loans to subsidiaries and short-term loans from subsidiaries 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.

26.2 Fair values of financial instruments
Since the majority of the Company and its subsidiaries’ financial instruments are short-term in
nature or bear floating interest rates, their fair value is not expected to be materially different from

the amounts presented in statement of financial position.

A fair value is the amount for which an asset can be exchanged or a liability settled between
knowledgeable, willing parties in an arm’s length transaction. The fair value is determined

by reference to the market price of the financial instruments or by using an appropriate valuation
technique, depending on the nature of the instrument.

27. Capital management
The primary objective of the Company and its subsidiaries’ capital management is to ensure
that it has appropriate capital structure in order to support its business and maximise shareholder

value. As at 31 December 2013, the Company and its subsidiaries’ debt-to-equity ratio was 0.09:1
(2012: 0.57:1) and the Company’s was 0.07:1 (2012: 1.37:1).

28. Approval of financial statements
These financial statements were authorised for issue by the Company’s Board of Directors on

19 February 2014.

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