MKH Berhad 213 Notes to the Financial Statements For the Financial Year Ended 30 September 2022 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) 44. (i) Credit risk (Cont’d) The 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: At the reporting date, the Group has no significant concentration of credit risk on trade receivables, except for an individual customer with balance amounting to RM28,161,096 (2021: RM36,655,301), representing 21% (2021: 25%) of the total trade receivable balances. Financial guarantee The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to subsidiaries and creditors for credit terms granted to subsidiaries. The Company monitors on an ongoing basis the repayments made by the subsidiaries and their financial performance. The maximum exposure to credit risk amounts to RM346,177,860 (2021: RM504,347,539) 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. The 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. The Group 2022 2021 By country: 98.38% 130,090,033 Malaysia 1,871,168 1.42% 267,593 0.20% 132,228,794 100.00% 96.04% 142,192,125 4,060,973 2.74% 1,807,002 1.22% 148,060,100 100.00% Republic of Indonesia The Peoples’ Republic of China RM % of total RM % of total
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