Page 88 - Inegrated Annual Report 2020-Eng

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 31 DECEMBER 2020

With respect to credit risk arising from the other financial assets of the Group, including cash and cash equivalents,
the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the
carrying amount of these instruments. The Group manages its credit risk with respect to banks by only dealing
with reputable banks..

Liquidity risk
The Group seeks to limit its liquidity risk by ensuring bank facilities are available. As at 31 December 2020, the
Group has AED 707,363 thousand (2019: AED 104,623 thousand) of utilised credit facilities from banks which
is a revolving facility.
The table below summarises the maturities of the Group’s undiscounted financial liabilities at 31 December,
based on contractual payment dates and current market interest rates:

Less than 3 3 to 12 1 to 5 > 5
On demand months months years years Total
AED ‘000 AED’000 AED’000 AED’000 AED’000 AED’000
At 31 December 2020
Trade payables - 2,183,321 - - - 2,183,321
Bank overdrafts 707,363 - - - - 707,363
Short term borrowing - 52,327 52,327 104,654
Term loan - - - 118,618 148,272 266,890

Total 707,363 2,235,648 52,327 118,618 148,272 3,262,228
At 31 December 2019
Trade payables - 906,621 - - - 906,621
Bank overdrafts 104,623 - - - - 104,623
Short term borrowing - 25,000 66,667 - - 91,667
Trade payables - 1,075 16,615 147,972 - 165,662

Total 104,623 932,696 83,282 147,972 - 1,268,573

Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk, such as equity price risk. Financial instruments affected by market risk include bank deposits and
equity investments.

Interest rate risk

The Group is mainly exposed to interest rate risk on bank overdrafts, short term borrowing and long term loan.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other
variables held constant, of the Group’s profit for one year.

There is no impact on the Group’s equity.

Effect on profit AED’000
2020
+100 increase in basis points (10,789)
-100 decrease in basis points 10,789
2019
+100 increase in basis points (2,566)
-100 decrease in basis points 2,566

88 2020 Integrated Annual Report