Financial Statements Financial Statements Press Metal Aluminium Holdings Berhad 276 277 Integrated Annual Report 2023 Notes to the Financial Statements Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.4 Credit risk (cont’d) Trade receivables and contract assets Risk management objectives, policies and processes for managing the risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on customers requiring credit over a certain amount. At each reporting date, the Group or the Company assesses whether any of the trade receivables and contract assets are credit impaired. The gross carrying amounts of credit impaired trade receivables and contract assets are written off (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Nevertheless, trade receivables and contract assets that are written off could still be subject to enforcement activities. There are no significant changes as compared to previous year. Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables and contract assets are represented by the carrying amounts in the statement of financial position. The Group does not normally receive financial guarantees given by banks, shareholders or directors of customers as the Group transacts with a small pool of customers which have been dealing with the Group for a long period of time. Nevertheless, the Directors use ageing analysis to monitor the credit quality of the receivables in managing exposure to credit risks. Concentration of credit risk The exposure of credit risk for non-related party trade receivables and contract assets as at the end of the reporting period by geographic region was: Group 2023 RM’000 2022 RM’000 Domestic 164,414 181,017 Asia 632,338 1,016,377 Oceania 36,479 70,684 Europe 450,391 269,192 America 28,440 15,211 1,312,062 1,552,481 28. FINANCIAL INSTRUMENTS (CONT’D) 28.4 Credit risk (cont’d) Trade receivables and contract assets (cont’d) Recognition and measurement of impairment loss In managing credit risk of trade receivables, the Group manages its debtors and takes appropriate actions (including but not limited to legal actions) to recover long overdue balances. Generally, trade receivables will pay within 180 days. The Group’s debt recovery process is as follows: a) Above 90 days past due after credit term, the Group will start to initiate a structured debt recovery process which is monitored by the sales management team; and b) The Group will commence a legal proceeding against the customer who fails to pay after the Group initiates the debt recovery process. As the Group does not deal with a large pool of customers, the Group assessed the risk of loss of each customer individually based on their financial information, past trend of payments and external credit ratings, where applicable. All of these customers have low risk of default, except for those which have been credit impaired. The following table provides information about the exposure to credit risk and expected credit losses for non-related party trade receivables and contract assets which are grouped together as they are expected to have similar risk nature. Group Gross carrying amount RM’000 Loss allowance RM’000 Net balance RM’000 2023 Current (not past due) 808,961 - 808,961 1 - 90 days past due 475,989 - 475,989 More than 90 days past due 27,112 - 27,112 1,312,062 - 1,312,062 Credit impaired Individually impaired 14,563 (14,563) - 1,326,625 (14,563) 1,312,062 Trade receivables 1,326,625 (14,563) 1,312,062 2022 Current (not past due) 1,419,787 - 1,419,787 1 - 90 days past due 119,612 - 119,612 More than 90 days past due 13,082 - 13,082 1,552,481 - 1,552,481 Credit impaired Individually impaired 10,601 (10,601) - 1,563,082 (10,601) 1,552,481 Trade receivables 1,563,082 (10,601) 1,552,481
RkJQdWJsaXNoZXIy NDgzMzc=