7 FINANCIAL STATEMENTS 359 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) (b) Liquidity risk (contd.) 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. Some of the Group’s trade payables are included in the Group’s supplier finance arrangement and are, thus, with a single counterparty rather than individual suppliers. This results in the Group being required to settle a significant amount with a single counterparty, rather than less significant amounts with several counterparties. However, the Group’s payment terms for trade payables covered by the arrangement are identical to the payment terms for other trade payables. Management does not consider the supplier finance arrangement to result in excessive concentrations of liquidity risk, and the arrangement has been established to ease the administrative burden of managing invoices from a significant number of suppliers, rather than to obtain financing. Please refer to Note 36 for further disclosures about the arrangement. Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations. Group On demand or within one year RM’000 One to five years RM’000 More than five years RM’000 Total RM’000 2025 Financial liabilities: Trade and other payables 932,879 7,414 - 940,293 Lease liabilities 8,678 12,184 1,930 22,792 Loans and borrowings: - IMTNs 255,297 - - 255,297 - Revolving credit 102,556 - - 102,556 - Term loans 29,571 15,480 - 45,051 Total undiscounted financial liabilities 1,328,981 35,078 1,930 1,365,989 2024 Financial liabilities: Trade and other payables 771,777 31,143 - 802,920 Lease liabilities 15,459 10,734 1,930 28,123 Loans and borrowings: - IMTNs - 288,341 - 288,341 - Revolving credit 96,259 - - 96,259 - Term loans 49,280 46,922 - 96,202 Total undiscounted financial liabilities 932,775 377,140 1,930 1,311,845
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