KENANGA ANNUAL REPORT 2020

271 ANNUAL REPORT 2020 // KENANGA INVESTMENT BANK BERHAD 50. FINANCIAL RISK MANAGEMENT (CONT’D.) (a) Credit risk (cont’d.) Collateral and other credit enhancements The amount and type of collateral required depend on an assessment of the credit risk of the counterparty. Guidelines are implemented regarding the acceptability of types of collateral and valuation parameters. The main types of collateral obtained are as follows: (i) Cash; (ii) Charges over financial instruments; (iii) Securities; (iv) Charges over real estate properties, inventory and trade receivables; (v) Mortgages over properties; or (vi) Financial guarantees. Management monitors the market value of collateral, requests additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the allowance for impairment losses.