216 F INANC IAL Statements 05 Sect ion Ranhi ll Ut i l i t i es Berhad NOTES TO THE F INANC I AL STATEMENTS For the year ended 31 December 2022 23. OPERATING FINANCIAL ASSETS Operating financial assets comprise financial assets in accordance with accounting policies for concession contracts as described in Note 3. Group 2022 RM’000 2021 RM’000 Current 58,256 67,925 Non-current 481,881 531,184 540,137 599,109 The movements in the net carrying amounts of non-current and current operating financial assets are as follows: Group 2022 RM’000 2021 RM’000 At beginning of year 599,109 670,855 Additions 4,326 1,795 Finance income from operating financial asset (Note 7) 57,059 64,373 Repayments (121,693) (131,846) Exchange differences 1,336 (6,068) At end of year 540,137 599,109 Operating financial assets amounting to RM398,889,000 (2021: RM437,077,000) is charged for loans and borrowings as disclosed in Note 31. Through its subsidiaries, the Group entered into various service concession arrangements to design, build, operate and maintain power generation plants and water treatment plants both in Malaysia and Thailand. These services are primarily rendered under Build Operate Transfer (“BOT”), Build Operate Own (“BOO”) and Rehabilitate Operate Transfer (“ROT”) contracts with terms ranging from 20 to 30 years. These services use specific assets, such as power plants and potable water and wastewater treatment plants, which are generally build by the Group and are to be returned to the concession grantor at the end of the contract or comprise option for the concession grantor to purchase the specific assets. In the service concessionarrangements, theGroup recognises afinancial asset arising fromits construction serviceswhen it has anunconditional contractual right to receive fixed and determinable amounts of payments irrespective of the output produced. The consideration receivable is measured initially at fair value and subsequently measured at amortised cost using the effective interest method. The receivables will be collected over the period of the concession contracts. Further information on the accounting policy relating to service concession arrangements are disclosed in Note 3.
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