185 ANNUAL REPORT 2024 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (cont’d) 35. FINANCIAL INSTRUMENTS (CONT’D) 35.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D) (b) Credit Risk (Cont’d) (iii) Assessment of Impairment Losses (Cont’d) Other Receivables and Amount Owing by Related Parties The Group applies the 3-stage general approach to measuring expected credit losses for its other receivables and amount owing by related parties. Under this approach, loss allowance is measured on either 12-month expected credit losses or lifetime expected credit losses, by considering the likelihood that the receivable would not be able to repay during the contractual period (probability of default, PD), the percentage of contractual cash flows that will not be collected if default happens (loss given default, LGD) and the outstanding amount that is exposed to default risk (exposure at default, EAD). In deriving the PD and LGD, the Group considers the receivable’s past payment status and its financial condition as at the reporting date. The PD is adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the receivable to settle its debts. Allowance for Impairment Losses No expected credit loss is recognised on other receivables as it is negligible. Fixed Deposits with Licensed Banks, Cash and Bank Balances The Group and the Company consider these banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by Government agencies. Therefore, the Group and the Company are of the view that the loss allowance is immaterial and hence, it is not provided for. (c) Liquidity Risk Liquidity risk arises mainly from general funding and business activities. The Group and the Company practise prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.
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