NOTES TO THE FINANCIAL STATEMENTS Cont’d 29. Financial instruments cont’d 29.4 Credit risk cont’d Trade receivables and contract assets cont’d Recognition and measurement of impairment loss cont’d The movements in the allowance for impairment in respect of non-related party trade receivables and contract assets during the year are shown below: Trade receivables credit impaired Contract assets Total Group RM’000 RM’000 RM’000 Balance at 1 January 2021 9,495 - 9,495 Amounts written off (169) - (169) Net remeasurement of loss allowance 2,880 - 2,880 Effect of movements in exchange rate (67) - (67) Balance at 31 December 2021/1 January 2022 12,139 - 12,139 Amounts written off (1,591) - (1,591) Net remeasurement of loss allowance 273 - 273 Effect of movements in exchange rate (220) - (220) Balance at 31 December 2022 10,601 - 10,601 Decrease in Group’s impairment loss allowance was mainly contributed by the decrease in credit impaired balance in the contracting and fabrication business. As at 31 December 2022, all of the trade receivables written off are still subject to enforcement activity. Cash and cash equivalents The cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by government agencies. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for. Investments and derivative financial instruments Risk management objectives, policies and processes for managing the risk Investments are allowed only in liquid securities. Transactions involving derivative financial instruments are with approved financial institutions. PRESS METAL ALUMINIUM HOLDINGS BERHAD 285
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