Integrated Annual Report 2024 SECTION 6 • FINANCIAL STATEMENTS 305 Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.4 Credit risk (cont’d) Trade receivables and contract assets (cont’d) Recognition and measurement of impairment loss (cont’d) The movements in the allowance for impairment in respect of non-related party trade receivables and contract assets during the year are shown below: Group Trade receivables credit impaired RM’000 Contract assets RM’000 Total RM’000 Balance at 1 January 2023 10,601 - 10,601 Net remeasurement of loss allowance 7,407 - 7,407 Effect of movements in exchange rate (3,445) - (3,445) Balance at 31 December 2023/1 January 2024 14,563 - 14,563 Net remeasurement of loss allowance 485 - 485 Effect of movements in exchange rate (1,805) - (1,805) Balance at 31 December 2024 13,243 - 13,243 As at 31 December 2024, all of the trade receivables written off are still subject to enforcement activity. Cash and cash equivalents The cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position. These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by government agencies. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for. Investments and derivative financial instruments Risk management objectives, policies and processes for managing the risk Investments are allowed only in liquid securities. Transactions involving derivative financial instruments are with approved financial institutions. Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the Group has only invested in domestic securities. The derivative contracts were entered into with approved financial institutions. The maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position. In view of the sound credit rating of counterparties, management does not expect any counterparty to fail to meet its obligations. The Group is of the view that the loss allowance is not material and hence, it is not provided for. The investments are unsecured.
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