163 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 33. CAPITAL AND FINANCIAL RISK MANAGEMENT (Cont’d) (b) Financial risk management (Cont’d) (ii) Liquidity and cash flow risk 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 13, 25 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 deposits with licensed banks and borrowings. The Directors were of the opinion that the Company was not subject to significant exposure to interest rate risk as the changes in market interest rates were insignificant. The interest profile and sensitivity analysis of interest rate risk have been disclosed in Notes 22 and 25 to the financial statements. (iv) Price risk Price risk is the risk that the fair value of future cash flows of the financial instruments of the Group and of the Company would fluctuate because of changes in market prices (other than interest or exchange rates). The Group and the Company is exposed to price risks arising from investment held by the Group and the Company. The investment comprises mainly unquoted unit trusts in Malaysia. During the financial year, the maximum exposure of the Group and of the Company to market risk is represented by the total carrying amount of the investment recognised in the statement of financial position, which amounted to RM101,578,702 (2020: RM64,809,567) and RM96,733,322 (2020: RM60,016,520) respectively. There has been no change to the exposure of the Group and of the Company to market risk or the manner in which the risk is managed and measured. As the investment of unit trust are mainly cash funds or money market placement where the risk of analysis in value is insignificant, the Directors were of the opinion that the Company was not subject to significant exposure to price risk and accordingly, no sensitivity analysis was being presented at the end of each financial year. (v) 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 13, 20, 22, 25, 26 and 28 to the financial statements respectively.
RkJQdWJsaXNoZXIy NDgzMzc=