ACCOUNTABILITY | NOTES TO THE FINANCIAL STATEMENTS 265 INTEGRATED ANNUAL REPORT 2026 44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (b) Credit risk (continued) (ii) Other financial assets at amortised cost Other financial assets at amortised cost comprise other receivables, finance lease receivables and cash and bank balances. ECL for other financial assets at amortised cost are measured using the general 3-stage approach. The Group and the Company use three categories which reflect their credit risk and how the loss allowance is determined for each of those categories. A summary of the assumptions underpinning the Group’s and the Company’s ECL model is as follows: Category Group’s and Company’s definition of category Basis for recognising ECL Performing Debtors have a low risk of default and a strong capacity to meet contractual cash flow. 12-month ECL Under-performing Debtors for which there is a significant increase in credit risk or significant increase in credit risk if presumed the forward looking information and indicators available signify impairment to debtor’s ability to repay. Lifetime ECL Non-performing Debtor’s ability to repay or likelihood of repayment is determined as fully impaired according to the available indicators. Lifetime ECL (credit impaired) Based on the above, loss allowance is measured on either 12-month ECL or lifetime ECL using a PD x LGD x EAD methodology as follows: • PD (‘probability of default’) – the likelihood that the debtor would not be able to repay during the contractual period; • LGD (‘loss given default’) – the percentage of contractual cash flows that will not be collected if default happens; and • EAD (‘exposure at default’) – the outstanding amount that is exposed to default risk. In deriving the PD and LGD, the Group and the Company consider historical data by each debtor by category and adjust for forward-looking macroeconomic data. The Group and the Company have identified the industry and geographical area which the debtor operates in, to be the most relevant factors, and accordingly adjusted the historical loss rates based on expected changes in these factors. Loss allowance is measured at a probabilityweighted amount that reflects the possibility that a credit loss occurs and the possibility that no credit loss occurs. No significant changes to estimation techniques or assumptions were made during the reporting period. The following table contains an analysis of the credit risk exposure for which an ECL allowance is recognised. The gross carrying amount disclosed below also represents the Group’s and the Company’s maximum exposure to credit risk on these assets: Group 2026 Performing RM million Underperforming RM million Nonperforming RM million Total RM million Other receivables Gross carrying amount 375 - 16 391 Accumulated impairment loss (3) - (16) (19) Net carrying amount 372 - - 372 Cash and bank balances Gross/Net carrying amount 4,528 - - 4,528 Finance lease receivables Gross/Net carrying amount 13,164 - - 13,164
RkJQdWJsaXNoZXIy NDgzMzc=