Ni Hsin Berhad Annual Report 2017

24. Financial instruments (continued) 24.2 Net gains and losses arising from financial instruments Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Net gains/(losses) on: Loans and receivables 203 391 16 5 Financial liabilities measured at amortised cost 112 245 (52) - Fair value through profit or loss 1,560 - 1,560 - 1,875 636 1,524 5 24.3 Financial risk management The Group has exposure to the following risks from its use of financial instruments: � Credit risk � Liquidity risk � Market risk 24.4 Credit risk Credit risk is the risk of a financial loss to the Group 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 receivables. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries. Receivables Risk management objectives, policies and processes for managing the risk Management has an informal credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Exposure to credit risk, credit quality and collateral The Group has no significant exposure to any individual receivable other than the amounts due from corporations in which certain Directors have substantial financial interests in prior year as stated in Note 27 to the financial statements, which form 37% of the total trade receivables of the Group. The maximum exposure to credit risk for the Group is represented by the carrying amount of each financial asset. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses aging analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 60 days, which are deemed to have higher credit risk, are monitored individually. The exposure of credit risk for receivables as at the end of the reporting period by geographic region was: Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Domestic 2,021 1,542 304 81 Others 1,412 3,570 - - 3,433 5,112 304 81 Notes to the financial statements (continued) Annual Report 2017 82