114
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
27. FINANCIAL INSTRUMENTS (CONT’D)
(a)
Financial Risk Management Policies (Cont’d)
(iii) Equity price risk
The Group does not have any investment that is exposed to equity price risk.
(iv) Credit risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from
receivables. The Group manages its exposure to credit risk by the application of credit approvals,
credit limits and monitoring procedures on an ongoing basis.
The Group establishes an allowance for impairment that represents its estimate of incurred
losses in respect of the trade and other receivables as appropriate. The main components of this
allowance are a specific loss component that relates to individually significant exposures, and a
collective loss component established for groups of similar assets in respect of losses that have
been incurred but not yet identified. Impairment is estimated by management based on prior
experience and the current economic environment.
Credit risk concentration profile
The Group’s major concentration of credit risk relates to the amount owing by one (1) customer
which constituted approximately 13% of its trade receivables as at the end of the reporting period.
Exposure to credit risk
As the Group does not hold any collateral, the maximum exposure to credit risk is represented
by the carrying amount of the financial assets as at the end of the reporting period.
Ageing analysis
The ageing of the Group’s trade receivables as at end of the reporting period was:-
Gross
Individual
Collective
Carrying
Amount
Impairment
Impairment
Value
The Group
RM
RM
RM
RM
2014
Not past due
90,046,306
–
–
90,046,306
Past due:-
- Less than 1 month
5,990,105
(163,605)
–
5,826,500
- 1 to 9 months
6,431,343
(253,767)
(418,373)
5,759,203
- Over 9 months
2,030,230
(1,778,082)
(42,426)
209,722
104,497,984
(2,195,454)
(460,799)
101,841,731
