Page 122 - HRC_AR2020

120 I 2020 ANNUAL REPORT I financial reports

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 (CONTINuED)

17 traDe receiVaBles (continued)
(i) transferred receivables
The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement.
Under this arrangement, the Company has the right to transfer the relevant receivables to the financial institutions
in exchange for cash upon submission of Purchase Request to the financial institutions when there is the need.
Trade receivables are derecognised when the trade receivables are transferred to the financial institution through the
factoring arrangement. In the event of default by the trade receivables, the financial institution has no recourse to the
Company. The Company considers that the held to collect business model remains appropriate for these receivables
and hence continues to measure them at amortised cost.
(ii) the company maintains an aging analysis for trade receivables. the following table provides information
about the exposure to ecl on trade receivables as at reporting date.
Gross impairment net
2020 rM’000 rM’000 rM’000
Current 511,348 - 511,348
1 to 30 days past due 689 - 689
30 to 180 days past due 277 - 277
More than 180 days past due 25,649 (24,512) 1,137
537,963 (24,512) 513,451

2019
Current 700,048 - 700,048
1 to 30 days past due 13,619 - 13,619
0 to 180 days past due - - -
More than 180 days past due 622 (426) 196
714,289 (426) 713,863

(iii) Movement on the allowance for impairment of trade receivables is as follows:
2020 2019
rM’000 rM’000

As at 1 January 426 1,254
Amount written off (426) (824)
Provision for impairment 26,190 -
Effect of exchange rate changes (1,678) (4)
As at 31 December 24,512 426

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned
above. Receivables amounting to RM25,118,000 were secured by bank guarantees.
Up to USD50,000,000 or RM200,550,000 of trade receivables as at reporting date are pledged in favour of a vendor to
secure credit lines for crude oil purchases.