GHL System Berhad Annual Report 2017

ANNUAL REPORT 2017 127 NOTES TO THE FINANCIAL STATEMENTS 31 December 2017 CONT’D 30. CAPITAL AND FINANCIAL RISK MANAGEMENT (cont’d) (b) Financial risk management (cont’d) (ii) Liquidity and cash flow risks The funding requirements of the Group and of the Company and their liquidity risk are managed with the objective of meeting business obligations on a timely basis. The Group and the Company monitor their cash flows and ensure that sufficient funding is in place to meet the obligations as and when they fall due. The Group actively manages its debt maturity profile, operating cash flows and availability of funding so as to ensure that all operating, investing and financing needs are met. In executing its liquidity risk management strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash equivalents deemed adequate to finance the activities of the Group. The analysis of financial instruments by remaining contractual maturities has been disclosed in Notes 23 and 26 to the financial statements respectively. (iii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the financial instruments of the Group and of the Company would fluctuate because of changes in market interest rates. The exposure of the Group and of the Company to interest rate risk arises primarily from their borrowings. The interest profile and sensitivity analysis of interest rate risk have been disclosed in Note 23 to the financial statements. (iv) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would fluctuate because of changes in foreign exchange rates. Subsidiaries operating in Australia, Philippines and Thailand have assets and liabilities together with expected cash flows from anticipated transactions denominated in foreign currencies that give rise to foreign exchange exposures. The Group also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. The sensitivity analysis for foreign currency risk has been disclosed in Notes 19, 20, 23 and 26 to the financial statements respectively.