MKH BERHAD | ANNUAL REPORT 2023 259 44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) (i) Credit risk (Cont’d) The 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. 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: The Group 2023 2022 RM % of total RM % of total By country: Malaysia 136,901,003 97.92% 130,090,033 98.38% Republic of Indonesia 2,625,722 1.88% 1,871,168 1.42% The Peoples’ Republic of China 282,672 0.20% 267,593 0.20% 139,809,397 100.00% 132,228,794 100.00% 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 RM38,500,000 (2022: RM28,161,096), representing 28% (2022: 21%) 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 RM316,177,704 (2022: RM346,177,860) 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 recognized 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 2023
RkJQdWJsaXNoZXIy NDgzMzc=