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Notes to the
Financial Statements
As at 31 March 2020
Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
186
38. Financial risk management objectives and policies (cont’d.)
(c) Liquidity/funding risk (cont’d.)
Analysis of financial instruments by remaining contractual maturities (cont’d.)
Contractual cashflow on demand
or within one year
2020
2019
RM’000
RM’000
Group
Financial liabilities:
Trade and other payables excluding deposits, accruals and provision for bonus (Note 32)
11,784
16,495
Amount due to related companies (Note 22)
1,627
512
Total undiscounted financial liabilities
13,411
17,007
Company
Financial liabilities:
Trade and other payables excluding deposits, accruals and provision for bonus (Note 32)
29
63
Amount due to related companies (Note 22)
310
-
Total undiscounted financial liabilities
339
63
(d) Credit risk
Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring
procedures. Credit risk is minimised and monitored via strictly limiting the Group’s associations to business partners with high
creditworthiness. Trade receivables are monitored on an ongoing basis via Group management reporting procedures.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of
debtors except for a balance of RM60,806,000 (2019: RM41,827,000) due from the Government of Malaysia.
During the financial year, the Group changed its risk management practices in response to the COVID-19 outbreak. Accordingly,
the Group changed its ECL methodology in order to better estimate the impact of the outbreak in accordance with the
requirements of MFRS 9. The Group has accordingly, calculated any overlays and adjustments to these simplified models. In
order to accelerate the reflection of changes in credit quality not yet detected at an individual customer level, the Group adjusts
the ratings and the probabilities of default (PD) on a collective basis.
Whilst it is not possible to estimate the full impact of the outbreak’s short-term and longer-term effects or the Government’s
varying efforts to combat the outbreak and support businesses, it is likely that the ECL would increase by a further 2% within
the next financial year.