EXCEL FORCE MSC BERHAD Annual Report 2018

113 ANNUAL REPORT 2018 32. Financial Instruments (cont’d) (b) Financial risk management objectives and policies (cont’d) (ii) Liquidity risk (cont’d) On demand Total Total or within contractual carrying 1 year 1 to 2 years 2 to 5 years cash flows amount RM RM RM RM RM Company 2018 Non-derivative financial liabilities Trade payables 241,681 - - 241,681 241,681 Other payables 10,105,531 - - 10,105,531 10,105,531 10,347,212 - - 10,347,212 10,347,212 Company 2017 Non-derivative financial liabilities Trade payables 313,840 - - 313,840 313,840 Other payables 2,047,446 - - 2,047,446 2,047,446 Loan and borrowing 981,108 981,108 2,277,786 4,240,002 4,240,002 3,342,394 981,108 2,277,786 6,601,288 6,601,288 (iii) Market risks (i) Interest rate risk The Group’s and the Company’s fixed rate deposits placed with licensed banks and borrowing are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s and the Company’s variable rate borrowing are exposed to a risk of change in cash flows due to changes in interest rates. The Group manages the interest rate risk of its deposits with licensed banks by placing them at the most competitive interest rates obtainable, which yield better returns than cash at bank and maintaining a prudent mix of short and long-term deposits. The Group manages its interest rate risk exposure from interest bearing borrowings by obtaining financing with the most favourable interest rates in the market. The Group constantly monitors its interest rate risk by reviewing its debts portfolio to ensure favourable rates are obtained. The Group does not utilise interest swap contracts or other derivative instruments for trading or speculative purposes. Notes To The Financial Statements 31 December 2018 (cont’d)