My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 216 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 47. FINANCIAL INSTRUMENTS (CONT’D) 47.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d) (b) Credit Risk (cont’d) (i) Credit Risk Concentration Profile The Group’s major concentration of credit risk relates to the amount owing by 1 customer which constitutes approximately 16% of its trade and financing receivables as at end of the reporting period. In addition, the Group also determines the concentration of credit risk by monitoring, on an ongoing basis, its trade and financing receivables based on the countries where the customer has operations. The credit risk concentration profile of trade and financing receivables at the end of the reporting period is as follows:- The Group The Company 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 Malaysia 338,464 394,667 1,003 313 Outside Malaysia 63,950 81,149 - - 402,414 475,816 1,003 313 (ii) 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 statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable). In addition, the Company’s maximum exposure to credit risk also includes corporate guarantees provided to its subsidiaries as disclosed under the ‘Maturity Analysis’ of item (c) below, representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period. (iii) Assessment of Impairment Losses At each reporting date, the Group assesses whether any of the financial assets at amortised cost are credit impaired. The gross carrying amounts of financial assets are written off when there is no reasonable expectation of recovery (i.e. the debtor does not have assets or sources of income to generate sufficient cash flows to repay the debt) despite the fact that they are still subject to enforcement activities. Trade Receivables and Financing Receivables The Group applies the simplified approach to measure expected credit losses using a lifetime expected credit loss allowance for all trade and financing receivables. To measure the expected credit losses, trade and financing receivables have been grouped based on shared credit risk characteristics and the days past due. For certain large customers or customers with a high risk of default, the Group assesses the risk of loss of each customer individually based on their financial information, past trends of payments an external credit rating, where applicable. Also, the Group considers any trade receivables having financial difficulty or in default with significant balances outstanding for more than one year are deemed credit impaired and assess for their risk of loss individually.