94 / 113
Financial assets that carry fixed interest rates are amounted to EGP 144 270
as at December 31, 2016 (EGP 175 867 as at
December 31, 2015).
December 31, 2016
December 31, 2015
Time deposits
USD
139 980
2 392
Time deposits
EGP
4 290
173 475
144270
175 867
B Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, and deposits with banks, as well as
credit exposures to wholesalers and retail customers, including outstanding accounts and notes receivables.
For banks, the Group is dealing with the banks which have a high independent rating and banks with a good solvency in the
absence of an independent credit rating.
For suppliers and wholesalers, the Credit Controllers assess the credit quality of the wholesale customer, taking into account
their financial position, past experience and other factors.
For individuals the legal arrangements and documents accepted by the customer are minimizing the credit risk to its lowest
level. Provisions are accounted for doubtful debts on an individual basis.
The ratio of allowance for impairment of accounts and notes receivables to the total debts is as following:
December 31, 2016
December 31, 2015
Notes and accounts receivables
4 021 697
2 608 744
Impairment of accounts and notes receivable balances
(379 729)
(290 783)
The ratioof the allowance to total accounts andnotes receivable
9.44%
11%
C Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate
amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, the Group’smanagement aims
at maintaining f lexibility in funding by keeping committed credit lines available.
2 Fair value estimation
The fair value of financial assets or liabilities withmaturity dates less than one year is assumed to approximate their carrying
value less any estimated credit adjustments.The fair value of financial liabilities – for disclosure purposes – is estimated by
discounting the future contractual cash f lows at the current market interest rate that is available to the Group for similar
financial instruments.
For the fair value of financial instruments that are not traded in an active market, The Group uses a variety of methods and
makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer
quotes for the financial instruments or similar instruments are used for long-termdebt.
Other techniques, such as estimated discounted cash f lows, are used to determine fair value for the remaining financial in-
struments. At the balance sheet date, the fair value of non-current liabilities does not significantly differ from their carrying
amount, as the interest rates do not significantly differ.
2016 ANNUAL REPORT
92
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2016
(In thenotes all amounts are shown inThousandEgyptianPounds unless otherwise stated)