28. CAPITAL AND FINANCIAL RISK MANAGEMENT (continued) (b) Financial risk management (continued) i) Credit risk (continued) Other investments Risk management objectives, policies and processes for managing the risk Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group. Transactions involving derivative financial instruments, if any, are with approved financial institutions. Information regarding credit risk concentration for other investments is disclosed in Note 9 to the financial statements. 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(f) to the financial statements; (b) Loans and borrowings, as disclosed in Note 18(h) to the financial statements; and (c) Trade and other payables, as disclosed in Note 19(g) 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. Short-term receivables and payables are not significantly exposed to interest rate risk. ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 135 Financial Statements (continued)
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