Company: VCIG
Filing Date: 2025-05-13
Form Type: 20-F
Source: 0001213900-25-042476
Chunk: 172

Company: VCI Global Ltd
Filing Date: 2025-05-13
Form: 20-F
Item: Item 19
Chunk 172
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Credit risk refers to the risk that a counterparty will default on
its contractual obligations resulting in financial loss to the Company. At the end of each reporting period, the Company’s maximum
exposure to credit risk which will cause a financial loss to the Company due to failure to discharge an obligation by the counterparties
arises from the carrying amount of the respective recognized financial assets as stated in the statements of financial position.

In order to minimise credit risk, the Company has delegated its finance
team to develop and maintain the Company’s credit risk grading to categorise exposures according to their degree of risk of default.
The finance team uses publicly available financial information and the Company’s own historical repayment records to rate its major
customers and debtors. The Company’s exposure and the credit ratings of its counterparties are continuously monitored, and the aggregate
value of transactions concluded is spread amongst approved counterparties.

The Company’s current credit risk grading framework comprises
the following categories:

  Category        Description                                                                                                                               Basis for recognising ECL       
  Performing      The counterparty has a low risk of default and does not have any past-due amounts                                                         12-month ECL                    
  Doubtful        There has been a significant increase in credit risk since initial recognition                                                            Lifetime ECL-                   
                                                                                                                                                            not credit-impaired             
  In default      There is evidence indicating the asset is credit impaired                                                                                 Lifetime ECL - credit impaired  
  Write-off       There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery      Amount is written off           
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F-51

For trade and loan receivables, the Company has applied the simplified
approach allowed in the accounting standard to measure the loss allowance at lifetime ECL. The Company determines the ECL on these items
by using a provision matrix, estimated based on historical credit loss experience based on the past default experience of the debtor,
general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast
direction of conditions at the reporting date. To measure the expected credit losses, trade receivables has been grouped based on shared
credit risk characteristics (including high risk, normal risk and low risk type).

As at the end of the reporting period, the allowance for ECL is disclosed
in Note 10 and 11 to the financial statements.

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