Investor Presentaiton
En+
GROUP
FINANCIAL STATEMENTS
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
En+ Group Annual Report 2021
EN+ GROUP IPJSC
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
Appendices
(a)
Classification and measurement of financial assets and financial liabilities
IFRS 9 specifies three principal classification categories for financial assets: measured at amortised cost, fair
value through other comprehensive income ("FVOCI") and fair value through profit or loss ("FVTPL"). The
classification of financial assets under IFRS 9 is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. Under IFRS 9, derivatives embedded in
contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the
hybrid financial instrument as a whole is assessed for classification.
The Group's financial assets mostly fall within the category of financial assets measured at amortised cost.
The only exception is derivative financial assets measured at fair value through profit or loss and cash flow
hedges accounted through other comprehensive income (note 19) and other investments measured at fair
value through profit or loss (note 15(e)). The same applies to the Group's financial liabilities.
Impairment of trade receivables
Under IFRS 9, loss allowances (expected credit losses - ECL) are measured on either of the following bases:
12-month ECLs: these are ECLs that result from possible default events within the 12 months after the
reporting date; and
.
lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a
financial instrument.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances for which
credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not
increased significantly since initial recognition. The Group measures loss allowances for trade receivables at
an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group's historical experience and informed credit assessment and
including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
The Group considers a financial asset to be in default when:
The borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realising security (if any is held); or
The financial asset is more than 90 days past due, but additional analysis is conducted for each such
receivable and assessment is updated accordingly.
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract
and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of
the financial asset in case of long-term assets.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-
impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets. Impairment losses related to trade and other receivables are presented as part of net other
operating expenses.
The following analysis provides further detail about the calculation of ECLS related to trade receivables.
The Group uses an allowance matrix to measure the ECLs of trade receivables from the customers. Loss rates
are calculated using a 'roll rate' method based on the probability of a receivable progressing through
successive stages of delinquency to write-off. The ECLs were calculated based on actual credit loss
experience over the past two years. The Group performed the calculation of ECL rates separately for the
customers of each key trading company of the Group. Exposures within each trading company were not
further segmented except for individually significant customers which bear specific credit risk depending on
the repayment history of the customer and relationship with the Group.
METALS
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2021 and 31 December 2021.
Current (not past due)
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
POWER
Weighted-average loss rate
31 December
2021
1 January
2021
Credit-
impaired
1%
1%
No
18%
4%
No
45%
10%
No
52%
71%
No
63%
86%
Yes
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2021 and 31 December 2021.
Current (not past due)
1-90 days past due
90-180 days past due
More than 180 days past due
Weighted-average loss rate
31 December
1 January
2021
2021
Credit-
impaired
1%
1%
No
1%
1%
No
30%
30%
No
100%
100%
Yes
Fluctuations reflect differences between economic conditions during the period over which the historical data
has been collected, current conditions and the Group's view of economic conditions over the expected lives
of the receivables.
Impairment losses in respect of trade receivables are recorded using an allowance account unless the Group
is satisfied that recovery of the amount is remote, in which case the impairment loss is written off against
trade receivables directly.
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