of electricity of the Group and the Company are other regulatory adjustments of RM1,243.9 million (2022: RM778.1 million) and RM1,272.2 million (2022: RM790.6 million) respectively. The revenue of the Group and of the Company are predominantly derived in Malaysia. 32 IMBALANCE COST PASS-THROUGH (‘ICPT’) UNDER RECOVERY Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million ICPT under recovery 10,598.2 22,315.3 10,213.4 21,942.2 Accounting Policy ICPT, a mechanism established under the IBR framework allows the Group and the Company to pass through the volatility in fuel and other generation specific costs (termed as the ‘Single Buyer Generation Cost’) to the customers, such that the Group and the Company remain financially neutral. The Group’s and the Company’s claims and undertakings under the ICPT mechanism are such that any over orunder recovery of these costs would be payable to or reimbursable from the Government. Upon approval by the Government, the agreed over or under recovery costs will be adjusted in the billing to customers, as ICPT rebate or surcharge. Actual base tariff billed to the customers remains unchanged. The ICPT over or under recovery is recognised in the statement of profit or loss, presented separately from revenue. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 FINANCIAL STATEMENTS Sec 5 283 33 OPERATING EXPENSES Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Cost of sales: - Energy cost 40,842.7 49,710.3 39,329.0 49,827.9 - Transmission cost 2,090.9 2,084.3 1,922.7 1,918.6 - Distribution cost 8,055.1 7,275.4 7,656.7 6,882.4 50,988.7 59,070.0 48,908.4 58,628.9 Administrative expenses 3,413.2 3,038.4 1,833.7 1,774.3 Other operating expenses 2,969.2 2,503.7 801.3 789.9 57,371.1 64,612.1 51,543.4 61,193.1 Operating expenses include the following items: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Purchases from Independent Power Producers (‘IPPs’) 15,498.4 17,999.5 31,283.8 36,101.1 Fuel costs 19,452.3