Page 216 - Amata-one-report2020-en

39. Financial instruments

39.1 Financial risk management objectives and policies

The Group’s financial instruments, principally comprise cash and cash equivalents,
investments, trade and other receivables, loans, trade and other payables, short-term and

long-term borrowings and long-term debentures. The financial risks associated with these
financial instruments and how they are managed is described below.

Credit risk

The Group are exposed to credit risk primarily with respect to trade accounts receivable and

contract assets. The maximum exposure to credit risk is limited to the carrying amounts of
trade receivables and contract assets as stated in the statement of financial position.
The Group manage the risk by adopting appropriate credit control policies and procedures

and therefore do not expect to incur material financial losses. Outstanding trade receivables
and contract assets are regularly monitored. In addition, the Group do not have high
concentrations of credit risk since it has a large customer base in various industries.

An impairment analysis is performed at each reporting date to measure expected credit

losses. The provision rates are based on days past due for groupings of various customer
segments with similar credit risks. The Group classifies customer segments by customer type

and rating. The calculation reflects the probability-weighted outcome, the time value of money
and reasonable and supportable information that is available at the reporting date about past
events, current conditions and forecasts of future economic conditions. Generally, trade

receivables are written-off if past due for more than one year and not subject to enforcement
activity.

Market risk

There are two types of market risk comprising interest rate risk and foreign currency risk.

Interest rate risk

The Group exposure to interest rate risk relates primarily to their cash at banks, current

investments, bank overdrafts, loans, and short-term and long-term borrowings and long-term
debentures. However, since most of the Group’ financial assets and liabilities bear floating
interest rates or fixed interest rates which are close to the market rate. The interest rate risk

is expected to be minimal.

As at 31 December 2020 and 2019, Significant financial assets and liabilities classified by
type of interest rate are summarised in the table below, with those financial assets and

liabilities that carry fixed interest rates further classified based on the maturity date, or the
repricing date if this occurs before the maturity date.
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