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Kumpulan Fima Berhad
(11817-V)
202
Notes to the
financial statements
31 march 2017
36. Financial instruments (cont’d.)
(b) Classification of financial instruments (cont’d.)
Group
Company
2017
2016
2017
2016
RM’000
RM’000
RM’000
RM’000
(ii) Financial liabilities measured
at amortised cost
Trade payables (Note 30)
70,744
44,007
56
11
Other payables (Note 30)
41,715
41,381
1,376
1,337
Due to subsidiaries (Note 22)
-
-
17,573
25,344
Borrowings (Note 29)
14,516
15,281
14,516
13,020
Total financial liabilities measured at
amortised cost
126,975
100,669
33,521
39,712
37. 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.