![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0193.png)
1 8 9
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.)
(c) Foreign currency risk (cont’d.)
Sensitivity analysis
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the
Indonesian Rupiah (“IDR”) and Papua New Guinea Kina (“PNGK”) exchange rates against the functional currency of the
affected group companies (“RM”) with all other variables held constant.
Group
2018
2017
Effect on
profit
net of tax
Effect on
profit
net of tax
RM’000
RM’000
IDR - strengthen 5% (2017: 5%)
1,786
2,578
IDR - weaken 5% (2017: 5%)
(1,786)
(2,578)
PNGK - strengthen 12% (2017:7%)
3,927
1,898
PNGK - weaken 12% (2017:7%)
(3,927)
(1,898)
(d) Credit Risk
Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and
monitoring procedures. Credit risk is minimised and monitored via strictly limiting the Group’s associations to business
partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via Group management
reporting procedures.
The Group does not have any significant exposure to any individual customer or counterparty except with the government
agencies as disclosed in Note 20. The Group does not have any major concentration of credit risk related to any financial
instruments.
40. Capital management
The primary objective of the Group’s capital management is to ensure that it maintains an optimal capital structure in order to
support its businesses and maximise shareholders’ value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain
or adjust the capital structure, the Group may adjust the dividend payment to shareholders. The Group’s approach in managing
capital is based on defined guidelines that are approved by the Board.
There were no changes in the Group’s approach to capital management during the year.