40. FINANCIAL INSTRUMENTS Classification of financial instruments The principal accounting policies in Note 2.4 describe how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instrument to which they are assigned, and therefore by the measurement basis: Group FVTPL RM’000 Amortised cost RM’000 Total RM’000 2022 Assets Trade receivables, net (Note 22) – 407,328 407,328 Concession receivable (Note 22) – 121,910 121,910 Other receivables, net (Note 22) – 47,751 47,751 Cash, bank balances and deposits (Note 27) – 609,486 609,486 Short-term investments (Note 26) 97,178 – 97,178 Total financial assets 97,178 1,186,475 1,283,653 Liabilities Trade payables (Note 36) 352,850 352,850 Other payables (Note 36) 323,311 323,311 Lease liabilities (Note 15) 40,954 40,954 Borrowings (Note 35) 458,750 458,750 Total financial liabilities 1,175,865 1,175,865 2021 Assets Trade receivables, net (Note 22) – 440,837 440,837 Concession receivable (Note 22) – 128,695 128,695 Other receivables, net (Note 22) – 78,097 78,097 Cash, bank balances and deposits (Note 27) – 600,391 600,391 Short-term investments (Note 26) 28,310 – 28,310 Total financial assets 28,310 1,248,020 1,276,330 Liabilities Trade payables (Note 36) 422,776 422,776 Other payables (Note 36) 315,729 315,729 Lease liabilities (Note 15) 33,619 33,619 Borrowings (Note 35) 443,521 443,521 Total financial liabilities 1,215,645 1,215,645 40. FINANCIAL INSTRUMENTS (CONTD.) Classification of financial instruments (contd.) Amortised cost Company 2022 RM’000 2021 RM’000 Assets Other receivables, net (Note 22) 115,076 218,686 Cash, bank balances and deposits (Note 27) 62,289 50,457 Total financial assets 177,365 269,143 Liabilities Other payables (Note 36) 26,405 48,311 Lease liabilities (Note 15) 30,601 29,395 Borrowings (Note 35) 302,000 304,184 Total financial liabilities 359,006 381,890 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group is exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, foreign currency risk, interest rate risk and market price risk. The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process. It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. (a) Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. Trade receivables and contract assets Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. The Group minimises credit risk by dealing exclusively with high credit rating counterparties. The Group controls its credit risk by the application of credit approvals, limits and monitoring procedures. Credit evaluations are performed on all customers requiring credit over a certain amount and strictly limiting the Group’s associations to business partners with high credit worthiness. Outstanding customer receivables and contract assets are regularly monitored and the status of major receivables are reported to the Board of Directors. p.356 p.357 UEM EDGENTA BERHAD INTEGRATED ANNUAL REPORT 2022 1 2 3 4 5 6 7 8 9 FINANCIAL STATEMENTS Notes to the financial statements For the year ended 31 December 2022 Notes to the financial statements For the year ended 31 December 2022
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