NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2023 (CONT’D) 44. FINANCIAL INSTRUMENTS (CONT’D) 44.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D) (b) Credit Risk (Cont’d) (i) Credit Risk Concentration Profile The Group does not have any major concentration of credit risk related to any individual customer or counterparty. (ii) Maximum Exposure to Credit Risk At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable). (iii) Assessment of Impairment Losses At each reporting date, the Group assesses whether any of the financial assets at amortised cost and contract assets are credit impaired. The gross carrying amounts of financial assets are written off against the associated impairment, if any, when there is no reasonable expectation of recovery despite the fact that they are still subject to enforcement activities. The Group considers any receivables having significant balances, more than 90 days overdue and vacant possession delivered are deemed credit impaired. Trade Receivables and Contract Assets The Group applies the simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. Inputs, Assumptions and Techniques used for Estimating Impairment Losses To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. Therefore, the Group concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets. The expected loss rates are based on the historical credit losses experienced. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the trade receivables to settle their debts using the linear regressive analysis. The Group has identified the unemployment rate, Gross Domestic Product (GDP) and inflation rate as the key macroeconomic factors of the forward-looking information. INTEGRATED ANNUAL REPORT 2023 MATRIX CONCEPTS HOLDINGS BERHAD 226 FINANCIAL STATEMENTS
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