47
MIGHT Directors’ Report And Audited Financial Statements 2020
22. COMMITMENTS
Capital commitments
GROUP
COMPANY
2019 RM
2019 RM
2020 RM
2020 RM
Approved but not contracted for in respect of: - Other investments
80, 000,00
30,000,00
-
-
23. CAPITAL AND FINANCIAL RISK MANAGEMENT
Capital management
(a)
The primary objective of the capital management of the Group is to ensure that the Group would be able to continue as going concern whilst maximising return to members through the optimisation of the debt and equity ratios. The overall strategy of the Group remains unchanged from that in the previous financial year.
No changes were made in the objectives, policies or processes during the financial years ended 31 December 2020 and 31 December 2019.
The Group is not subject to any externally imposed capital requirements.
Financial risk management
(b)
The financial risk management objective of the Group is to optimise value creation for its members whilst minimising the potential adverse impact arising from unpredictability of the financial markets.
The exposure to these risks arises in the normal course of the business of the Group. The overall business strategies of the Group outlines its tolerance to risk and its general risk management philosophy and is determined by the management in accordance with prevailing economic and operating conditions.
The Group is exposed mainly to credit risk, interest rate risk, foreign currency risk and liquidity and cash flow risks.
Credit risk
(i)
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. The counter parties are major licensed financial institutions. It is the policy of the Group 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 primary exposure of the Group to credit risk arises through its trade receivables. The trading terms of the Group with its customers are mainly on credit. The credit period is generally for a period of 30 to 60 days. Each customer has a maximum credit limit and the Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by the management.
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