Page 339 - BTSGroup ONE REPORT 2021/22_EN

BTS Group Holdings Public Company Limited 6.4 Notes to Consolidated Financial Statements 337
Annual Report 2021/22

51.2 Financial Risk Management Objectives and Policies Financial instruments and cash deposits
The Group’s financial instruments principally comprise cash and The Group manages the credit risk from balances with banks and
cash equivalents, accounts receivable, loans, investments, payables, financial institutions and investments by making investments only with
short-term loans, debentures and long-term loans. The financial risks approved counterparties.
associated with these financial instruments and how they are managed
is described below. The credit risk on debt instruments and derivative financial instruments

is limited because the counterparties are banks or foreign governments
Credit Risk with high credit-ratings assigned by international credit-rating agencies.
The Group is exposed to credit risk primarily with respect to accounts The Group regularly monitors and assessed credit risk of financial assets.
receivable, loans, deposits with banks and financial institutions and other
financial instruments. Except for derivatives, the maximum exposure to Market Risk
credit risk is limited to the carrying amounts as stated in the statement of There are three types of market risk comprising interest rate risk,
financial position. The Group’s maximum exposure relating to derivatives currency risk and equity price risk.
is noted in the liquidity risk topic.
Foreign currency risk
Receivables and loans
The Group’s exposure to the foreign currency risk relates primarily to its
The Group manages the risk by adopting appropriate credit control investments, purchases of trains and related equipment, maintenance
policies and procedures and therefore does not expect to incur material service, borrowing in foreign currencies and foreign investments.
financial losses. Outstanding receivables and contract assets are
regularly monitored. In addition, the Group has receivables representing The Group manages its foreign currency risk by hedging transactions
government authorities and does not have high concentrations of credit of forecasted purchases of trains and related equipment, maintenance
risk since it has a large customer base in various industries. service and borrowings in Note 51.1 to the financial statement.

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.