APM AUTOMOTIVE HOLDINGS BERHAD
102
NOTES TO THE
FINANCIAL STATEMENTS
35. Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
l
Credit risk
l
Liquidity risk
l
Market risk
35.1 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The Group’s exposure to a credit risk arises principally from its
receivables from customers. The Company’s exposure to credit risk arises principally from its loans and
advances to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
The Group has a credit policy in place and the exposure to credit risk is monitored on ongoing basis. Credit
evaluations are performed on customers who wish to trade on credit terms.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables is
represented by the carrying amounts in the statement of financial position.
The Group has taken reasonable steps to ensure that receivables that are neither past due nor impaired are
stated at their realisable values. Due to the nature of the industry, a significant portion of these receivables
are regular customers that have been transacting with the Group. The Group uses ageing analysis to
monitor the credit quality of the receivables. Significant past due receivables, if deemed as high risks, are
normally being monitored individually.
The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region
was:
Group
2014
2013
RM’000
RM’000
Malaysia
238,712
255,806
Asia
6,111
3,408
Europe
976
3,784
North America
1,813
2,147
Central America
1,204
-
South America
-
723
Oceania
10,890
1,764
Africa
2,422
-
Middle East
3,101
-
265,229
267,632
