74
ASIAMEDIAGROUPBERHAD
(813137-V)
Notes to theFinancial Statements
(Cont’d)
3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES
Theoperations of theGroupare subject toa variety of financial risks, including foreign currency
exchange risk,market risk, credit risk, interest rate riskand liquidity risk.TheGrouphas formulated
a financial risk management framework whose principal objective is to minimise the Group’s
exposure to risksand/or costsassociatedwith the financing, investingandoperatingactivitiesof
theGroup.
Foreign currencyexchange risk
Foreigncurrency risk is that the fairvalueof futurecashflowsofafinancial instrumentwill fluctuate
because of changes in foreign currency exchange rates.
Howeverasat31stDecember2013, theGroup’sexposure to foreigncurrency risk isnotsignificant.
The Group has not entered into any forward foreign exchange contracts as at 31st December
2013.
Market risk
Market risk is the risk that changes in market prices, and other prices will affect the Group’s
financial position and cash flows.
TheGrouphas inplacepolicies tomanage its competitive risks from its competitors inproviding
better alternatives in terms of better services.
Credit risk
Credit risk is the risk of a financial loss to theGroup if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises
principally from its receivables from customers. The Company’s exposure to credit risk arises
principally from trade receivables.
Managementhasacreditpolicy inplaceand theexposure tocredit risk ismonitoredonanongoing
basis. As at the end of the reporting period, the maximum exposure to credit risk arising from
receivables is represented by the carrying amounts in the statements of financial position.
Management has taken reasonablesteps toensure that receivables that areneither past duenor
impaired aremeasured at their realisable values. A significant portion of these receivables are
regular customers that have been transactingwith theGroup. TheGroup uses ageing analysis
tomonitor the credit quality of the receivables.Any receivables having significant balances past
duemore than120days,whicharedeemed tohavehigher credit risk, aremonitored individually.
