41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) (a) Credit risk (contd.) Trade receivables and contract assets (contd.) Credit risk concentration profile The Group determines concentrations of credit risk by monitoring the country sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s net trade receivables at the reporting date are as follows: 2024 2023 RM’000 % of total RM’000 % of total By country: Malaysia 232,544 50 298,225 58 United Arab Emirates 55,336 12 34,080 7 Singapore 56,807 12 73,303 14 Taiwan 100,709 22 105,525 20 Indonesia 4,679 1 674 0 Saudi Arabia 13,263 3 5,652 1 463,338 100 517,459 100 At the reporting date, the Group’s ten largest customers account for approximately 23% (2023: 21%) of total trade receivables. Majority of these customers are government, quasi-government agency and government linked organisations. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 22. (b) Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness. Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group’s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Notes to the Financial Statements For the year ended 31 December 2024 UEM EDGENTA BERHAD 358 Integrated Annual Report 2024
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