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Annual Report 2020
211
Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
42. Financial risk management objectives and policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Group’s businesses whilst managing its interest rate, foreign exchange, liquidity/funding and credit
risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group's policy is not
to engage in speculative transactions.
(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
2020
RM'000
2019
RM'000
Group
Financial liabilities:
Trade and other payables
63,217
63,673
Short term borrowings
33,490
34,506
Total undiscounted financial liabilities
96,707
98,179