GHL System Berhad Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 139 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 CONT’D 20. TRADE AND OTHER RECEIVABLES (cont’d) (e) Included in other receivables of the Group is an amount of RM28,651,518 (2018: RM43,291,234) being the Payment Holding Account with Payment Network Malaysia Sdn. Bhd. (“PAYNET”), which was pending for settlement payment owing to Merchant. (f) Impairment for trade receivables that do not contain a significant financing component are recognised based on the simplified approach using the lifetime expected credit losses. (g) Expected credit loss assessment (“ECL”) for financial institution customers are as follows: The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss and applying experience credit judgement. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to external credit rating definitions from the agency, Bloomberg. The following table provides information about the exposure to credit risk and ECLs for trade receivables for financial institutions customers. 31 December 2019 Gross carrying amount Impairment loss allowance Credit impairment RM RM Group Grades (Low risk) 20,764,949 (191,673) No Grades (Loss) 972,763 (972,763) Yes 21,737,712 (1,164,436) Company Grades (Low risk) 227,680 (1,138) No Grades (Loss) 220,515 (220,515) Yes 448,195 (221,653) 31 December 2018 Gross carrying amount Impairment loss allowance Credit impairment RM RM Group Grades (Low risk) 23,671,943 (113,222) No Grades (Loss) 1,712,306 (1,712,306) Yes 25,384,249 (1,825,528) Company Grades (Low risk) 3,061,541 (15,308) No Grades (Loss) 554,354 (554,354) Yes 3,615,895 (569,662)