2018 UEM Edgenta Annual Report

42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.) (a) Credit risk (cont’d.) Credit risk concentration profile The Group determines concentrations of credit risk by monitoring the country sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s net trade receivables at the reporting date are as follows: 2018 2017 RM’000 % of total RM’000 % of total By country: Malaysia 525,443 80 490,230 81 India – – 217 – United Arab Emirates 10,625 2 29,482 5 Indonesia 13,421 2 8,460 1 Singapore 43,836 7 37,221 6 Taiwan 60,571 9 44,295 7 653,896 100 609,905 100 At the reporting date, the Group’s ten largest customers account for approximately 46% (2017: 64%) of total trade receivables. Majority of these customers are government, quasi-government agency and government linked organisations. 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 21. Deposits with banks and other financial institutions are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 21. (b) Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness. NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 Management Discussion & Analysis UEM Edgenta Berhad Annual Report 2018 About UEM Edgenta Chairman’s Statement 238