220 Annual Report 2021 43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) (i) Credit risk (Cont’d) T he Group has a credit policy in place and the exposure to credit risk is managed through the application of credit approvals, credit limits and monitoring procedures. T he Group determines concentrations of credit risk by monitoring the country of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s net trade related receivables at the reporting date are as follows: The Group 2021 2020 RM % of total RM % of total By country: Malaysia 142,192,125 96.04% 131,317,133 95.42% Republic of Indonesia 4,060,973 2.74% 3,164,501 2.30% The Peoples’ Republic of China 1,807,002 1.22% 3,133,631 2.28% 148,060,100 100.00% 137,615,265 100.00% A t the reporting date, the Group has no significant concentration of credit risk on trade receivables, except for an individual customer with balance amounting to RM36,655,301 (2020: RM28,611,767), representing 25% (2020: 21%) of the total trade receivable balances. Financial guarantee T he Company provides unsecured financial guarantees to banks in respect of banking facilities granted to subsidiaries and creditors for credit terms granted to subsidiaries. T he Company monitors on an ongoing basis the repayments made by the subsidiaries and their financial performance. T he maximum exposure to credit risk amounts to RM504,347,539 (2020: RM561,486,678) representing the outstanding credit facilities of the subsidiaries guaranteed by the Company at the reporting date. At the reporting date, there was no indication that the subsidiaries would default on their repayment. T he financial guarantees have not been recognised since the fair value on initial recognition was immaterial as the financial guarantees provided by the Company did not contribute towards credit enhancement of the subsidiaries’ borrowings in view of the securities pledged by the subsidiaries and it was not probable that the counterparties to financial guarantee contracts will claim under the contracts. Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
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