200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 33. Fair value (cont'd) (b) Note Trade and other receivables (current) 20 Cash and bank balances (current) 21 Loans and borrowings (current) 23 Loans and borrowings (non-current) 23 Lease liabilities (current) 24 Lease liabilities (non-current) 24 Trade and other payables (current) 25 Guarantees 34. The carrying amounts of the non-current portions of loans and borrowings and lease liabilities are reasonable approximations of fair values as the interest charged on these amounts are pegged to, or close to, market interest rates on or near the reporting date. Fair values of retention sums on construction contracts are estimated by discounting expected future cash flows at market incremental lending rates at the reporting date. The fair value of the guarantees provided by the Company in connection with credit facilities, construction contracts and development agreements granted to its subsidiaries is not significant as it is not probable that the financial institutions and third parties will call upon the guarantees. The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk. The Board of Directors approves and reviews policies and procedures for the management of these risks, which are executed by the management. The audit committee provides independent oversight to the effectiveness of the risk management process. The following sections provide details regarding the Group's and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximations of fair values: The Group and the Company do not undertake any trading of derivative financial instruments. Financial risk management objectives and policies The carrying amounts of the current portions of financial assets and liabilities of the Group and of the Company at the reporting date approximate fair values due to the relatively short term maturity of these financial instruments. Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximations of fair value - 93 - NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 Annual Report 2022 158
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