Company: ARBB
Filing Date: 2025-10-31
Form Type: 20-F
Source: 0001213900-25-104705
Chunk: 5

Company: ARB IOT Group Ltd
Filing Date: 2025-10-31
Form: 20-F
Item: Item 3
Chunk 5
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 servers and functionality. We have limited or no experience in our newer market segments, and our customers may not adopt our product
or service offerings. These offerings, which can present new and difficult technology challenges, may subject us to claims if customers
of these offerings experience service disruptions or failures or other quality issues. In addition, profitability, if any, in our newer
activities may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them.
In response to new regulatory requirements or industry standards, or in connection with the introduction of new products, we may need
to impose more rigorous risk management systems and policies, which may negatively affect the growth of our business. Any significant
change to our business model may not achieve expected results and may materially and adversely affect our financial condition and results
of operations. Failure to realize the benefits of amounts we invest in new technologies, products, or services could also result in the
value of those investments being written down or written off.

We are subject to credit risks associated
with a significant amount of accounts receivable, and if we are unable to collect accounts receivable from our customers, our results
of operations and cash flows could be materially adversely affected.

Our normal trade credit terms range between 30 to 210 days. As of June
30, 2025, 2024 and 2023, we had approximately RM41.8 million ($9.9 million), RM27.8 million ($5.9 million) and RM38.4 million ($8.2 million)
in trade receivables. We provide a long credit period of approximately 210 days to some large customers to secure contracts from them.
However, our customers sometimes still require additional time for payment, depending on their cash flow. Due to uncertainty of the timing
of collection, we establish allowance for doubtful account based on individual account analysis and historical collection trends. We establish
a provision for doubtful receivables when there is objective evidence that we may not be able to collect amounts due. The allowance is
based on management’s best estimates of specific losses on individual exposures, as well as on past trends of collections. Considering
customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period
will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against account receivable
balance, with a corresponding charge recorded in the consolidated statements of operations and other comprehensive income. Delinquent