Press Metal Annual Report 2022

NOTES TO THE FINANCIAL STATEMENTS Cont’d 29. Financial instruments cont’d 29.2 Net gains and losses arising from financial instruments Group Company 2022 2021 2022 2021 RM’000 RM’000 RM’000 RM’000 Net gains/(losses) on: Financial assets at fair value through profit or loss: - Mandatorily required by MFRS 9 - 101 78,030 (51,699) Financial liabilities at fair value through profit or loss: - Mandatorily required by MFRS 9 (628) (94) (11,097) (83,815) Financial assets at amortised cost (11,282) 7,400 140,632 91,265 Financial liabilities at amortised cost (265,780) (178,044) (202,478) (131,857) Derivatives used for hedging - Recognised in other comprehensive income 1,009,225 (983,320) 167 (41,867) 731,535 (1,153,957) 5,254 (217,973) 29.3 Financial risk management The Group has exposure to the following risks from its use of financial instruments: • Credit risk • Liquidity risk • Market risk 29.4 Credit risk Credit risk is the risk of a financial loss 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 the individual characteristics of each customer. 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. There are no significant changes as compared to prior periods. 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. ANNUAL REPORT 2022 282

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