7 197 196 Notes to the Financial Statements Notes to the Financial Statements 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.4 Credit risk (continued) Trade receivables and contract assets (continued) Concentration of credit risk The exposure of credit risk for trade receivables and contract assets as at the end of the reporting period by geographic region was: Group 2023 RM’000 2022 RM’000 Malaysia 362,071 358,985 Indonesia 127,185 86,348 Vietnam 6,468 5,770 Others 22,935 31,170 518,659 482,273 Recognition and measurement of impairment loss In managing credit risk of receivables, the Group manages its debtors and takes appropriate actions (including but not limited to legal actions) to recover long overdue balances. Generally, trade receivables will pay within 60 to 150 days. The Group uses an allowance matrix to measure expected credit losses (“ECL”) of trade receivables. Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through successive stages of delinquency. Loss rates are based on actual credit loss experience over the past three years. The Group also considers differences between (a) economic conditions during the period over which the historic data has been collected, (b) current conditions and (c) the Group’s view of economic conditions over the expected lives of the receivables. Nevertheless, the Group believes that these factors are immaterial for the purpose of impairment calculation for the year. The following table provides information about the exposure to credit risk and ECLs for trade receivables and contract assets which are grouped together as they are expected to have similar risk nature. 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.4 Credit risk (continued) Trade receivables and contract assets (continued) Recognition and measurement of impairment loss (continued) Gross carrying amount RM’000 Loss allowance RM’000 Net balance RM’000 Group 2023 Current (not past due) 384,540 (2,133) 382,407 1-30 days past due 86,983 (1,381) 85,602 31-60 days past due 17,776 (336) 17,440 61-90 days past due 7,333 (555) 6,778 91-120 days past due 13,756 (538) 13,218 More than 120 days past due 18,229 (6,510) 11,719 528,617 (11,453) 517,164 Credit impaired Individually impaired 16,595 (15,100) 1,495 545,212 (26,553) 518,659 Trade receivables 488,388 (25,472) 462,916 Contract assets 56,824 (1,081) 55,743 545,212 (26,553) 518,659 2022 Current (not past due) 342,955 (716) 342,239 1-30 days past due 78,153 (1,112) 77,041 31-60 days past due 27,316 (490) 26,826 61-90 days past due 10,415 (395) 10,020 91-120 days past due 6,046 (422) 5,624 More than 120 days past due 23,779 (5,135) 18,644 488,664 (8,270) 480,394 Credit impaired Individually impaired 16,730 (14,851) 1,879 505,394 (23,121) 482,273 Trade receivables 450,534 (22,081) 428,453 Contract assets 54,860 (1,040) 53,820 505,394 (23,121) 482,273 There are trade receivables where the Group has not recognised any loss allowance as the trade receivables are supported by collateral such as assets held as securities, agreed instalment plan, and other credit enhancement in managing exposure to credit risk.
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