FINANCIAL STATEMENTS (continued) 122 26. CAPITAL AND FINANCIAL RISK MANAGEMENT (continued) (b) Financial risk management (continued) i) Credit risk (continued) Other investments (continued) The management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on customers requiring credit over a certain period. There are no significant changes as compared to prior periods. ii) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk and the maturity profiles are as follows: (a) Lease liabilities, as disclosed in Note 11 to the financial statements; (b) Loans and borrowings, as disclosed in Note 18 to the financial statements; and (c) Trade and other payables, as disclosed in Note 19 to the financial statements. The Group maintains a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. There are no significant changes as compared to prior periods. iii) Interest rate risk The Group’s fixed rate borrowings are exposed to a risk of change in their fair values due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short-term receivables and payables are not significantly exposed to interest rate risk. The Group’s and the Company’s exposure to interest rate risk and the relating interest rate profiles are as follows: (a) Lease liabilities, as disclosed in Note 11 to the financial statements; (b) Cash and cash equivalents, as disclosed in Note 16 to the financial statements; and (c) Loans and borrowings, as disclosed in Note 18 to the financial statements. The Group adopts a practice to continuously seek for alternative banking facilities which provide competitive interest rates to finance and/or refinance its working capital requirements. 122 SASBADI HOLDINGS BERHAD
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