Dagang NeXchange Berhad Annual Report 2019

FINANCIAL STATEMENTS annual report 2019 173 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.4 Credit risk (continued) Receivables and contract assets (continued) Recognition and measurement of impairment losses (continued) Receivables Lifetime Credit Contract ECL impaired assets Total RM’000 RM’000 RM’000 RM’000 Group Balance at 1 January 2018 2,386 7,791 75 10,252 Acquisition through business combination - 241 - 241 Amounts written off - (1,471) - (1,471) Net remeasurement of loss allowance 1,117 504 (25) 1,596 Balance at 31 December 2018/1 January 2019 3,503 7,065 50 10,618 Amount written off (365) (3,198) - (3,563) Net remeasurement of loss allowance (300) 1,811 9 1,520 Balance at 31 December 2019 2,838 5,678 59 8,575 Cash and cash equivalents The cash and cash equivalents are held with banks and financial institutions. As at 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. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for. Inter-company balances Risk management objectives, policies and processes for managing the risk The Company provides unsecured loans and advances to subsidiaries. The Company monitors the ability of the subsidiaries to repay the loans and advances on an individual basis. Exposure to credit risk, credit quality and collateral 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.