ENRICHING LIVES EXPANDING HORIZONS - Maxis

MAXIS BERHAD
ANNUAL REPORT 2011
185
33 FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk
The objectives of the Group’s credit risk management policies are to manage its exposure to credit risk from deposits, cash
and bank balances, receivables and derivative financial instruments. It does not expect any third parties to fail to meet their
obligations given the Group’s policy of selecting creditworthy counter parties.
The Group has no significant concentration of credit risk as the Group’s policy limits the concentration of financial
exposure to any single counterparty. Credit risk of trade receivables is controlled by the application of credit approvals,
limits and monitoring procedures. Credit risks are minimised and monitored via limiting the Group’s dealings with
creditworthy business partners and customers. Trade receivables are monitored on an on-going basis via the Group’s
management reporting procedures.
For deposits, cash and bank balances, the Group seeks to ensure that cash assets are invested safely and profitably by
assessing counterparty risks and allocating placement limits for various creditworthy financial institutions. As for derivative
financial instruments, the Group enters into the contracts with various reputable counterparties to minimise the credit risks.
The Group considers the risk of material loss in the event of non-performance by the above parties to be unlikely. The Group’s
maximum exposure to credit risk is equal to the carrying value of those financial instruments.
(c) Liquidity risk
The objectives of the Group’s liquidity risk management policies are to monitor rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs, availability of funding by keeping committed credit
lines and to meet external covenant compliance. Surplus cash held is invested in interest bearing money market deposits and
time deposits. The Group is exposed to liquidity risk where there could be difficulty in raising funds to meet commitments
associated with financial instruments.