NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024 (CONT’D) 43. FINANCIAL INSTRUMENTS (CONT’D) 43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D) (b) Credit Risk T he exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group and the Company manages their exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties. A lso, the Company’s exposure to credit risk includes loans and advances to subsidiaries, and corporate guarantee given to financial institutions for credit facilities granted to certain subsidiaries. The Company monitors the ability of the subsidiaries to serve their loans on an individual basis. (i) Credit Risk Concentration Profile The Group and the Company 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 and the Company evaluate 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 and the Company consider a receivable 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. FINANCIAL STATEMENTS 207 INTEGRATED ANNUAL REPORT 2024
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