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22. FINANCIAl INSTRumENTS (Cont’d) 22.4 Credit risk Masterskill Education Group Berhad / Annual Report 2012 99 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) Credit risk is the risk of a financial loss to the Group if an educational sponsor, student 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 Perbadanan Tabung Pendidikan Tinggi Nasional (“PTPTN”), other educational sponsors and self-sponsored students. 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. Evaluations of students are performed by PTPTN or other educational sponsors before courses are offered to the students. Exposure to credit risk and credit quality As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. Approximately 97% (31.12.2011: 94%; 1.1.2011: 96%) of trade receivables are due from PTPTN. Any receivables due from students who have quit, terminated, rejected and withdrawn from their courses are deemed to have higher credit risk and are monitored individually. Impairment losses The Group maintains an ageing in respect to trade receivables only. The ageing of receivables as at the end of the reporting period was: Individual Collective Gross impairment impairment Net Group 31 December 2012 Rm’000 Rm’000 Rm’000 Rm’000 1 - 30 days 1,065 – – 1,065 31 - 60 days 12,361 – – 12,361 61 - 90 days 8,908 – – 8,908 91 - 120 days 3,351 – – 3,351 More than 120 days 50,139 (24,028) – 26,111 75,824 (24,028) – 51,796 31 December 2011 1 - 30 days 31,134 – – 31,134 31 - 60 days 17,548 – – 17,548 61 - 90 days 14,525 – – 14,525 91 - 120 days 3,349 – – 3,349 More than 120 days 56,650 (17,862) – 38,788 123,206 (17,862) – 105,344 1 January 2011 1 - 30 days 33,830 – – 31 - 60 days 26,051 – – 61 - 90 days 23,025 – – 91 - 120 days 2,062 – – More than 120 days 53,216 (11,689) – 138,184 (11,689) – 33,830 26,051 23,025 2,062 41,527 126,495
Masterskill Education Group Berhad / Annual Report 2012 100 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 22. FINANCIAl INSTRumENTS (Cont’d) 22.4 Credit risk (Cont’d) Impairment losses (Cont’d) other receivables and deposits are neither due nor impaired. Therefore, these are stated at their realisable values. The movements in allowance for impairment losses of receivables during the financial year were as follows: Group 2012 2011 Rm’000 Rm’000 At 1 January 17,862 11,689 Impairment loss recognised 8,033 7,116 Impairment loss reversed (1,867) (943) At 31 December 24,028 17,862 The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that recovery of the amount is possible, the amount is considered irrecoverable and is written off against the receivable directly. 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 results of the subsidiaries regularly. Exposure to credit risk and credit quality 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. Impairment losses As at the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to the subsidiaries.
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