7 199 198 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) Recognition and measurement of impairment loss (continued) The movements in the allowance for impairment in respect of receivables net of advances to suppliers during the year are shown below. Trade receivables Lifetime ECL RM’000 Credit impaired RM’000 Contract assets RM’000 Total RM’000 Group Balance at 1 April 2021 7,319 15,550 906 23,775 Amounts written off - (5,892) - (5,892) Net remeasurement of loss allowance 951 4,153 134 5,238 Balance at 31 March/1 April 2022 8,270 13,811 1,040 23,121 Amounts written off (131) (2,487) - (2,618) Net remeasurement of loss allowance 3,314 2,695 41 6,050 Balance at 31 March 2023 11,453 14,019 1,081 26,553 Cash and cash equivalents The cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position. These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by government agencies. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for. Other receivables Credit risks on other receivables are mainly arising from deposits paid for office buildings and convenience stores, and government subsidy receivables. The deposit paid will be received at the end of each lease terms. The Group manages the credit risk together with the leasing arrangement. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. As at the end of the reporting period, the Group did not recognise any allowance for impairment losses. Financial guarantees Risk management objectives, policies and processes for managing the risk The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors the ability of the subsidiaries to service their loans on an individual basis. 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.4 Credit risk (continued) Financial guarantees (continued) Exposure to credit risk, credit quality and collateral The maximum exposure to credit risk amounts to RM855,017,000 (2022: RM800,863,000) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period. The financial guarantees are provided as credit enhancements to the subsidiaries’ loans. Recognition and measurement of impairment loss The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates significantly. The Company considers a financial guarantee to be credit impaired when: • The subsidiary is unlikely to repay its credit obligation to the financial institution in full; or • The subsidiary is continuously loss making and is having a deficit shareholders’ fund. The Company determines the probability of default of the guaranteed loans individually using internal information available. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment and hence no allowance for impairment losses was recognised by the Company. Intercompany loans and advances Risk management objectives, policies and processes for managing the risk The Company provides unsecured loans and advances to subsidiaries. The Company monitors the ability of the subsidiaries to repay the loans and advances on an individual basis. Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. Loans and advances provided are not secured by any collateral or supported by any other credit enhancements. Recognition and measurement of impairment loss Generally, the Company considers loans and advances to subsidiaries have low credit risk. The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates significantly. As the Company is able to determine the timing of payments of the subsidiaries’ loans and advances when they are payable, the Company considers the loans and advances to be in default when the subsidiaries are not able to pay when demanded. The Company considers a subsidiary’s loan or advance to be credit impaired when: • The subsidiary is unlikely to repay its loan or advance to the Company in full; or • The subsidiary is continuously loss making and is having a deficit shareholders’ fund. The Company determines the probability of default for these loans and advances individually using internal information available. The following table provides information about the exposure to credit risk and ECLs for subsidiaries advances:
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