Page 207 - SC SCAR 2023 ENGLISH Flipbook
P. 207

Not past due
Not past due
Gross- carrying amount RM’000
Loss allowance RM’000
Net balance RM’000
 25.2 Financial risk management
The SC has policies and guidelines on the overall investment strategies and tolerance towards risk. Investments are managed in a prudent manner to ensure the preservation and conservation of the fund.
During the year, the SC invested in units in quoted unit trust.
The SC has exposure to the following risks from its use of financial instruments:
• Credit risk
• Liquidity risk
• Market risk
• Price risk
25.3 Credit risk
Credit risk is the risk of a financial loss to the SC if a counterparty to a financial instrument fails to meet its contractual obligations. The exposure to credit risk arises principally from the individual characteristics of each customer. There are no significant changes as compared to prior periods.
Risk management objectives, policies and processes for managing the risk
The SC has a formal credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
In managing credit risk of receivables, the SC manages its debtors and take appropriate actions (including but not limited to legal actions) to recover long overdue balances. Generally, receivables will be collected within 30 days.
Recognition and measurement of impairment loss
The SC uses an allowance matrix to measure Expected Credit Loss (ECL) of trade receivables for all segments. Consistent with the debt recovery process, invoices which are past due 90 days will be considered as credit impaired.
The following table provides information about the exposure to credit risk and ECLs for receivables as at 31 December 2023.
                Receivables that are not past due and has not recognised any loss allowance comprise receivables from:
(a) Bursa which has no history of default and has been remitting levies to the SC within the stipulated time frame.
(b) Financial institutions and debt issuers who have no history of default.
(c) Staff financing are supported by collateral in the form of residential properties and motor vehicles with its respective fair value exceeding its outstanding debts. The fair value of the collateralised properties is determined using the comparison method based on professional valuation. The fair value of the collateralised motor vehicles is determined using the comparison method based on available market data.

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