Directors - Boustead Holdings Berhad

Notes to the Financial Statements
1. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to a variety of financial risks, including interest rate, credit, liquidity and cash flow
risks. The Group’s overall financial risk management objective is to ensure that the Group creates value
for its shareholders while minimising the potential adverse effects on the performance of the Group. The
Group does not trade in financial instruments.
Interest rate risk
The Group finances its operations through operating cash flows and borrowings which are principally
denominated in Ringgit Malaysia. The Group’s policy is to derive the desired interest rate profile through
a mix of fixed and floating rate banking facilities and private debt securities.
Liquidity and cash flow risk
The Group practises prudent liquidity risk management by maintaining an adequate amount of committed
credit facilities.
Credit risk
The Group seeks to invest cash assets safely and profitably. The Group also seeks to control credit risk
by setting counterparty limits, obtaining bank guarantees where appropriate; and ensuring that sale of
products and services are made to customers with an appropriate credit history, and monitoring
customers’ financial standing through periodic credit review and credit checks at point of sales. The
Group considers the risk of material loss in the event of non-performance by a financial counterparty to
be unlikely.
Fair values
The carrying amounts of the following financial assets and liabilities approximate their fair values due to
the relatively short term maturity of these financial instruments: deposits, cash and bank balances,
receivables and payables (excluding non-trade amounts due to/from group companies) and short term
borrowings.
The fair values of the non-current quoted investments are represented by their market values as disclosed
in Note 19 to the financial statements.
It is not practical to estimate the fair values of the non-current unquoted investments of the Group and
the Company because of the lack of quoted market prices and the inability to estimate fair values without
incurring excessive costs. However, the Group and the Company believe that the carrying amounts
represent recoverable values.
It is also not practical to estimate the fair values of non-trade amounts due to/from Subsidiaries and
Associates, as there are no fixed repayment terms between the parties involved and without having to
incur excessive costs. However, the Group and the Company do not anticipate the carrying amounts
recorded at the balance sheet date to be significantly different from the values that would eventually be
received or settled.
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