EXCEL FORCE MSC BERHAD Annual Report 2019

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2019 108 notes to the financial statements 31 december 2019 (cont’d) 35. Financial Instruments (Cont’d) (a) Classification of financial instruments (Cont’d) The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they are assigned, and therefore by the measurement basis: (Cont’d) At amortised cost At FVTPL At FVTOCI Total RM RM RM RM 2018 Financial Liabilities Group Trade payables 265,867 - - 265,867 Other payables 10,184,788 - - 10,184,788 10,450,655 - - 10,450,655 Company Trade payables 241,681 - - 241,681 Other payables 10,105,531 - - 10,105,531 10,347,212 - - 10,347,212 (b) Financial risk management objectives and policies The Group’s financial risk management policy is to ensure that adequate financial resources are available for the development of the Group’s operations whilst managing its credit, liquidity, interest rate and foreign currency risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions. The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. (i) Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers and deposits with banks and financial institutions. The Company’s exposure to credit risk arises principally from its receivables from customers and deposits with banks and financial institutions and loans to subsidiary companies. There are no significant changes as compared to previous financial year. The Group and the Company have adopted a policy of only dealing with creditworthy counterparties. Management has a credit policy in place to control credit risk by dealing with creditworthy counterparties and deposits with banks and financial institutions with good credit rating. The exposure to credit risk is monitored on an ongoing basis and action will be taken for long outstanding debts. The Company provides unsecured loans to its subsidiary companies. The Company monitors on an ongoing basis the results of the subsidiary company and repayments made by the subsidiary company. At each reporting date, the Group and the Company assess whether any of the receivables are credit impaired