Integrated Annual Report 2024 SECTION 6 • FINANCIAL STATEMENTS 303 Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.4 Credit risk (cont’d) Trade receivables and contract assets Risk management objectives, policies and processes for managing the risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on customers requiring credit over a certain amount. At each reporting date, the Group or the Company assesses whether any of the trade receivables and contract assets are credit impaired. The gross carrying amounts of credit impaired trade receivables and contract assets are written off (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Nevertheless, trade receivables and contract assets that are written off could still be subject to enforcement activities. There are no significant changes as compared to previous year. Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables and contract assets are represented by the carrying amounts in the statement of financial position. The Group does not normally receive financial guarantees given by banks, shareholders or directors of customers as the Group transacts with a small pool of customers which have been dealing with the Group for a long period of time. Nevertheless, the Directors use ageing analysis to monitor the credit quality of the receivables in managing exposure to credit risks. Concentration of credit risk The exposure of credit risk for non-related party trade receivables and contract assets as at the end of the reporting period by geographic region was: Group 2024 RM’000 2023 RM’000 Domestic 149,430 164,414 Asia 745,890 632,338 Oceania 96,369 36,479 Europe 450,763 450,391 America 14,163 28,440 1,456,615 1,312,062
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