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198 | S P SETIA BERHAD GROUP | Annual Report 2014

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 October 2014

V. FINANCIAL STATEMENTS

44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(d) Liquidity and cash flow risks

Liquidity and cash flow risks are the risks that the Group and the Company will not be able to meet its financial obligations when

they fall due. The Group’s and the Company’s exposure to liquidity risk arises principally from its various payables and borrowings.

The Group and the Company seek to ensure all business units maintain optimum levels of liquidity at all times, sufficient for their

operating, investing and financing activities.

Therefore, the policy seeks to ensure that each business unit, through efficient working capital management (i.e. inventory,

accounts receivable and accounts payable management), must be able to convert its current assets into cash to meet all demands

for payment as and when they fall due.

Owing to the nature of its businesses, the Group and the Company always maintain sufficient credit lines available to meet their

liquidity requirements while ensuring an effective working capital management within the Group and the Company.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the reporting date based

on contractual undiscounted repayment obligations.

2014

RM’000

On demand

or within One to five Over five

one year

years

years

Total

Group

Financial liabilities:

Trade payables

772,167

-

-

772,167

Other payables and accruals

495,753

-

-

495,753

Long term borrowings

-

3,497,353

69,496 3,566,849

Short term borrowings

979,021

-

-

979,021

Bank overdrafts

51,656

-

-

51,656

Redeemable cumulative preference shares

1,925

29,238

33,072

64,235

Total undiscounted financial liabilities

2,300,522 3,526,591

102,568 5,929,681

Company

Financial liabilities:

Trade payables

15

-

-

15

Amounts owing to subsidiary companies

129,717

-

-

129,717

Other payables and accruals

8,638

-

-

8,638

Long term borrowings

-

534,820

-

534,820

Short term borrowings

480,770

-

-

480,770

Bank overdrafts

31,569

-

-

31,569

Total undiscounted financial liabilities

650,709

534,820

-

1,185,529