187 / 204
Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110)
(21185-P)
• Annual Report 2020
185
38. Financial risk management objectives and policies (cont’d.)
(b) Foreign exchange risk
The Group operates internationally and is exposed to various currencies, mainly Indonesian Rupiah. Foreign currency
denominated assets and liabilities together with expected cash flows from highly probable purchases and sales give rise to
foreign exchange exposures.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to
an acceptable level. There are no material unhedged financial assets and financial liabilities that are not denominated in the
functional currencies of the Company and its subsidiaries.
Sensitivity analysis
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the
Indonesian Rupiah (“IDR”) exchange rates against the functional currency of the affected group companies (“RM”) with all
other variables held constant.
Group
2020
2019
Effect on
profit net of tax
Effect on
profit net of tax
RM’000
RM’000
IDR - strengthens 5% (2019: 5%)
+2,113
+1,765
IDR - weakens 5% (2019: 5%)
-2,113
-1,765
(c) Liquidity/funding risk
The Group defines liquidity/funding risk as the risk that funds will not be available to meet its liabilities as and when they fall
due.
The Group actively manages its operating cash flows and the availability of funding so as to ensure that all funding needs are
met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible
instruments to meet its working capital requirements. To ensure availability of funds, the Group closely monitors its cash flow
position on a regular basis.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group and of the Company’s liabilities at the reporting date based on
contractual undiscounted repayment obligations.