191 / 220
1 8 7
NOTES TO THE FINANCIAL STATEMENTS
31 MARCH 2018
Kumpulan Fima Berhad (11817-V) •
Annual Report 2018
39. Financial risk management objectives and policies (cont’d.)
(a) Interest rate risk
The Group’s primary interest rate risk relates to interest-bearing debt as at year end. The investments in financial assets
are mainly short term in nature and they are not held for speculative purposes.
The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The
Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets.
This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of
protection against rate hikes.
The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in their
respective notes.
The Group and the Company do not have significant interest rate exposures at the reporting date.
(b) Liquidity/funding risk
The Group defines liquidity/funding risk as the risk that funds will not be available to meet liabilities as they fall due.
The Group actively manages its operating cash flows and the availability of funding so as to ensure that all funding
needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or
cash convertible instruments to meet its working capital requirements. To ensure availability of funds, the Group closely
monitors its cash flow position on a regular basis.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Company’s liabilities at the reporting date based on contractual
undiscounted repayment obligations.
Contractual cashflow
on demand or within one year
2018
2017
RM’000
RM’000
Group
Financial liabilities:
Trade and other payables
65,820
112,459
Borrowings
33,419
14,516
Total undiscounted financial liabilities
99,239
126,975
Company
Financial liabilities:
Trade and other payables
1,833
1,432
Due to subsidiaries
17,688
17,573
Borrowings
33,419
14,516
Total undiscounted financial liabilities
52,940
33,521