Frontkn Berhad Annual Report 2015

113

FRONTKEN CORPORATION BERHAD

(651020-T)

ANNUAL REPORT

2015

26.

FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management Policies (Cont’d)

(iii) Equity price risk

The Group does not have any quoted 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 (where applicable).

Impairment is estimated by management based on prior experience and the current economic environment.

The Company provides financial guarantee to financial institutions for credit facilities granted to certain

subsidiaries. The Company monitors the results of these subsidiaries regularly and repayments made by the

subsidiaries.

Credit risk concentration profile

The Group does not have any major concentration of credit risk related to any individual customer or

counterparty.

Exposure to credit risk

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount

of each class of financial assets recognised in the statement of financial position of the Group and of the

Company after deducting any allowance for impairment losses (where applicable).

Ageing analysis

The ageing of the Group’s trade receivables as at end of the reporting period was:-

Gross

Individual

Collective

Carrying

Amount

Impairment

Value

The Group

2015

Not past due

73,326,282

Past due:-

- Less than 1 month

6,673,097

- 1 to 9 months

7,334,292

(357,750)

6,976,542

- over 9 months

1,585,605

(1,248,002)

(283,905)

53,698

88,919,276

(1,248,002)

(641,655)

87,029,619

NOTES TO THE FINANCIAL STATEMENTS

(cont’d)