ENRA Group Berhad Annual Report 2018

122 E N R A G R O U P B E R H A D ( 2 3 6 8 0 0 - T ) NOTES TO THE FINANCIAL STATEMENTS 31 March 2018 cont’d 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The financial risk management objective of the Group is to optimise value creation for shareholders whilst minimising the potential adverse impact arising from fluctuations in interest rates and the unpredictability of the financial markets. The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors and does not trade in derivative financial instruments. Financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group financial risk management policies. The Group is exposed mainly to credit risk, interest rate risk, liquidity and cash flow risk and foreign currency risk. Information on the management of the related exposures is detailed below. (i) Credit risk Cash deposits and trade receivables may give rise to credit risk, which requires the loss to be recognised if a counter party fails to perform as contracted. It is the Group’s policy to monitor the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk. The Group’s primary exposure to credit risk arises through its trade receivables. The credit period is generally for a period of 30 days to 60 days. The exposure to credit risk is monitored on an ongoing basis. There are no specific considerations of credit risk other than as disclosed in Note 12 to the financial statements and the maximum exposures to credit risk of the Group are represented by the carrying amounts of the financial assets in the statements of financial position. As at the end of the reporting period, other than the amounts owing by the subsidiaries amounting to RM72,255,000 (2017: RM51,165,000), which represent 95.00% (2017: 96.98%) of trade and other receivables of the Company, there is no significant concentration of credit risk of the Company. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statements of financial position. Exposure to credit risk At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position. Information regarding credit enhancements for trade and other receivables is disclosed in Note 12 to the financial statements. Financial assets that are neither past due nor impaired Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 12 to the financial statements. Fixed deposits with licensed banks that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high credit ratings and no history of default. Financial assets that are past due but not impaired Information regarding financial assets that are past due but not impaired is disclosed in Note 12 to the financial statements.