Notes To The Financial Statements 31 March 2024 (Cont’d) 142 ENRA GROUP BERHAD ANNUAL REPORT 2024 10. TRADE AND OTHER RECEIVABLES (CONT’D) (h) Impairment for other receivables and amounts due from subsidiaries are recognised based on the general approach within MFRS 9 using the forward looking expected credit loss model. The methodology used to determine the amount of the impairment is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. At the end of the reporting period, the Group assessed whether there has been a significant increase in credit risk for financial assets by comparing the risk of default since initial recognition. For those in which the credit risk has not increased significantly since initial recognition of the financial asset, twelve-months expected credit losses along with gross interest income are recognised. For those in which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. The Group defined significant increase in credit risk based on changes to contractual terms, payment delays and past due information. Generally, the Company considers loans and advances to subsidiaries have low credit risk. The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates significantly. As the Company is able to determine the timing of payments of the subsidiaries’ loans and advances when they are payable, the Company considers the loans and advances to be in default when the subsidiaries are not able to pay when demanded. The Company considers a subsidiary’s loan or advance to be credit impaired when: - The subsidiary is unlikely to repay its loans or advances to the Company in full; - The subsidiary’s loan or advance is overdue for more than 120 days; or - The subsidiary is continuously loss making and is having a deficit shareholders’ fund. The Company determines the probability of default for these intercompany loans and advances using internal information available. It requires management to exercise its judgement in determining the probabilities of default by other receivables and subsidiaries, appropriate forward-looking information (gross domestic product (GDP)) and significant increase in credit risk. During the year, the Company recognised an impairment loss on amounts owing from subsidiaries of RM843,000 (2023: RM3,419,000). The movements in allowance for impairment losses of amounts owing by subsidiaries during the year were as follows: Amounts owing by subsidiaries Lifetime ECL Specific Total allowance allowance allowance Company RM’000 RM’000 RM’000 At 1 April 2023 1,880 1,539 3,419 Charge for the year - 843 843 At 31 March 2024 1,880 2,382 4,262 At 1 April 2022 - - - Charge for the year 1,880 1,539 3,419 At 31 March 2023 1,880 1,539 3,419 Specific allowance refer to individually determined debtors who are in significant financial difficulties and have defaulted on payments to be impaired as at the end of the reporting period. (i) Information on financial risks of trade and other receivables is disclosed in Note 33 to the financial statements.
RkJQdWJsaXNoZXIy NDgzMzc=