Serba Dinamik Annual Report 2021

Registration No: 201501042584 (1167905-P) Serba Dinamik Holdings Berhad (Incorporated in Malaysia) 120 32. Financial risk management policies (continued) (a) Credit risk (continued) Trade receivables (continued) Concentration of credit risk As at the end of the reporting period, there are no significant concentration of credit risk other than the amounts due from two (2019: three) counterparties of RM567,566,143 (2019: RM442,268,295). The exposure of credit risk for trade receivables as at the end of the reporting period by geographical region is: Group 30.6.2021 31.12.2019 RM’000 RM’000 Malaysia 259,022 301,511 Asia 138,707 130,158 Middle East 1,013,353 772,628 Europe 3,332 14 1,414,414 1,204,311 Recognition and measurement of impairment loss 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. Generally, trade receivables will pay within 90-150 days. Above 90 days past due after credit term, the Group will start to initiate a structured debt recovery process which is monitored by the account receivables team. The gross carrying amounts of credit impaired trade receivables are written off (either partially or full) when there is no realistic prospect of recovery. This is generally the case when the Group or the Company 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, receivables that are written off could still be subject to enforcement activities. The Group assessed the risk of loss of each customer individually based on their financial information, past trend of payments and external credit ratings, where applicable. All of these customers have low risk of default.