Page 151 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

19.3 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. The SC has exposure to the following risks from its use of financial instruments:

• Credit risk
• Liquidity risk
• Market risk

19.4 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 SC’s exposure to credit risk arises principally from the
individual characteristics of each customer. There are no significant changes as compared to
prior periods.

Receivables

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.

Recognition and measurement of impairment loss

In managing credit risk to 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 pay within 30 days.

The SC uses an allowance matrix to measure ECLs 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 2018 which are grouped together as they are expected to have
similar risk nature.

gross- Loss Net
carrying amount allowance balance
RM’000 RM’000 RM’000
2018
Not past due 29,525 - 29,525
Past due 1 - 30 days - - -
Past due 31 - 90 days - - -
Past due 91 - 180 days - - -
Past due more than 180 days 521 - 521

30,046 - 30,046

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