Fraser & Neave Holdings Bhd Annual Report 2021

30. FINANCIAL INSTRUMENTS #CONTINUED$ #B$ NET GAINS AND LOSSES ARISING FROM FINANCIAL INSTRUMENTS Group Company 2021 RM’000 2020 RM’000 2021 RM’000 2020 RM’000 Net gains/(losses) on: Fair value through profit or loss – Mandatorily required by MFRS 9 197 (233) – – Financial assets at amortised cost 8,649 4,855 10,992 20,166 Financial liabilities at amortised cost (1,531) (3,661) 1,317 – 7,315 961 12,309 20,166 #C$ FINANCIAL RISK MANAGEMENT The Group has exposure to the following risks from its use of financial instruments: • Credit risk • Liquidity risk • Market risk #D$ CREDIT RISK Credit risk is the risk of a financial loss to the Group or the Company 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 its receivables from customers. 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 certain subsidiaries of the Company. There are no significant changes as compared to previous financial year. Trade receivables 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. Certain customers are required to have collateral in the form of financial assets and/or bank guarantees. At each reporting date, the Group assesses whether any of the trade receivables are credit impaired. The gross carrying amounts of credit impaired trade receivables are written o! (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate su&cient cash flows to repay the amounts subject to the write-o!. Nevertheless, trade receivables that are written o! could still be subject to enforcement activities. There are no significant changes as compared to previous financial year. 232 NOTES TO THE F INANCIAL STATEMENTS