EXCEL FORCE MSC BERHAD Annual Report 2019

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2019 109 notes to the financial statements 31 december 2019 (cont’d) 35. Financial Instruments (Cont’d) (b) Financial risk management objectives and policies (Cont’d) (i) Credit risk (Cont’d) The gross carrying amounts of credit impaired trade receivables are written off (either partial or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Nevertheless, trade receivables that are written off could still be subject to enforcement activities. The carrying amounts of the financial assets recorded on the statements of financial position at the end of the financial year represents the Group’s and the Company’s maximum exposure to credit risk. There are no significant changes as compared to previous financial year. The Group and the Company have no significant concentration to credit risk except as disclosed in Note 13 and loans to its subsidiary companies where risks of default have been assessed to be low. (ii) Liquidity risk Liquidity risk refers to the risk that the Group or the Company will encounter difficulty in meeting its financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s funding requirements and liquidity risk are managed with the objective of meeting business obligations on a timely basis. The Group finances its liquidity through internally generated cash flows and minimises liquidity risk by keeping committed credit lines available. The following table analyses the remaining contractual maturity for financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. On demand or within 1 year Total contractual cash flows Total carrying amount RM RM RM 2019 Group Non-derivative financial liabilities Lease liabilities 359,262 359,262 353,091 Trade payables 746,293 746,293 746,293 Other payables 2,353,750 2,353,750 2,353,750 3,459,305 3,459,305 3,453,134 Company Non-derivative financial liabilities Lease liabilities 359,262 359,262 353,091 Trade payables 720,233 720,233 720,233 Other payables 2,258,432 2,258,432 2,258,432 3,337,927 3,337,927 3,331,756