15. TRADE AND OTHER RECEIVABLES (continued) (a) Trade and other receivables are classified as financial assets and are measured at amortised cost. (b) These are non-interest bearing and the normal credit terms granted by the Group and the Company ranges from cash term to 90 days (2023: cash term to 90 days). Trade and other receivables are recognised at their original invoices amounts, which represent their fair values on initial recognition. (c) Trade and other receivables are denominated in Ringgit Malaysia. (d) Non-current other receivable of the Group are advances in nature, unsecured and interest free, which are not expected to be receivable within the next twelve (12) months. The carrying amount of the non-current other receivable is recognised based on its net present value of expected future cash flows discounted at a rate of 7.26% (2023: Nil) per annum. (e) The non-current and current amounts due from subsidiaries are non-trade advances in nature, unsecured, bear interest of 3.00% per annum (2023: 2.73% to 3.00%). The non-current amount due from a subsidiary is receivable on demand in cash and cash equivalents but is not expected to be receivable within the next twelve (12) months. The carrying amount of the non-current amount due from subsidiary is recognised based on its net present value of expected future cash flows discounted at a rate of 6.67% (2023: Nil) per annum. The current amounts due from subsidiaries are receivable in cash and cash equivalents within the next twelve (12) months. (f) Credit risk and impairment policy for trade receivables As at the end of the reporting period, the maximum credit risk exposure is equivalent to the gross carrying amount of trade receivables of the Group. As at 31 August 2024, the Group has significant concentration of credit risk in the form of outstanding balances from five (5) (2023: five (5)) trade customers, which amounted to RM8,891,000 (2023: RM10,269,000) representing 21% (2023: 26%) of gross trade receivables. The Directors are of the opinion that the outstanding balances from these customers are fully recoverable based on the following: i) Significant payments have been subsequently received from 5 customers after the reporting period; and ii) The Directors have made assessments that all these customers have the ability to repay the balances outstanding. The Group has also entered into small number of sales contracts, all of which are monitored individually for completion and payment. The management is confident that, based on their knowledge of payment patterns and subsequent payments received, the Group is able to fully recover the amounts due from its customers. Where applicable, the Group will demand for guarantees from shareholders/ Directors of their customers as a form of safeguard over the outstanding debts. In managing credit risk of trade receivables, the Group manages its debtors and takes appropriate actions (including but not limited to legal actions) to recover long overdue balances. Any receivables having significant balances past due more than 330 days, which are deemed to have higher credit risk, are monitored individually. The gross carrying amounts of credit impaired trade receivables are written off (either partially or fully) when there is no realistic prospect of recovery. This is generally the case when the Group 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 that are written off could still be subject to enforcement activities. ANNUAL REPORT 2024 HOLDINGS BERHAD Financial Statements (continued) 120
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