69 Commodity derivative contracts The Company has entered into Crack Spread Swap Contracts with a related party and several financial institutions in order to swap the spread of the average benchmark price of crude oil and petroleum products of the settlement months to the fixed price. As at 31 December 2023 and 2022, there were no the outstanding balances under such contracts. The Company has entered into Crude Oil Swap Contracts with a related party and several financial institutions in order to swap the average benchmark price of crude oil and petroleum products of the settlement months to the range of fixed price. As at 31 December 2023 and 2022, there were no the outstanding balances under such contracts. 37.2 Financial risk management objectives and policies The Group’s financial instruments principally comprise cash and cash equivalents, trade and other receivables, short-term and long-term loans, investments, debentures, short-term and long-term borrowings from financial institutions. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Group is exposed to credit risk primarily with respect to trade accounts receivable, shortterm and long-term loans, deposits with financial institutions and other financial instruments. Except for derivatives, the maximum exposure to credit risk is limited to the carrying amounts as stated in the statement of financial position. The Group’s maximum exposure relating to derivatives is noted in the liquidity risk topic. Trade and other receivables In order to minimise credit risk, the Group has determined the policies and procedures to consider the appropriate credit limit for business, comparable to leading companies in the same business. The Group takes into account the risks that will cause bad debts to the Group by having the credit committee who is responsible for supervising the credit management for selling all type of products and services of the Group. Before approving credit limit to counterparty, the Group has set the terms and analysis for both counterparty with or without collateral to determine the credit rating. The analysis includes financial position, financial performance, ability to pay off debts together with qualitative information such as the Company’s profile and major shareholders. The terms and credit limits are determined by the credit ratings as approved by the credit committee. The Group reviews the terms and credit limits with each counterparty on an annually basis. 362 IRPC Public Company Limited Notes to the Consolidate Financial Statements
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