260 MKH BERHAD | ANNUAL REPORT 2023 44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) (ii) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations when they fall due. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and financial liabilities. The Group’s objective is to maintain a balance between continuity of funding and flexibility through use of stand-by credit facilities. The Group actively manages its operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent 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 of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions so as to achieve overall cost effectiveness. As of 30 September 2023, the current liabilities of the Company have exceeded the current assets by RM54,449,972, which includes loans and borrowings of RM125,100,000 and amount due to subsidiaries of RM10,594,000 and accruals of RM628,961. The net current liabilities position is mainly due to the capitalisation of amount owing by subsidiaries into investment in subsidiaries. As of 30 September 2023, the Company complied with all of its loan covenants. Despite having the net current liabilities position, the Board of Directors is of the view that the Company will be able to meet its financial obligations as and when it was due with following measures placed by the Group: 1. Dividend receivable from the on-going projects’ stakeholders; and 2. Launch of projects in subsidiaries namely, Srijang Kemajuan Sdn. Bhd. and Suria Villa Sdn. Bhd., which currently hold a land bank amounted to RM182,249,959 and RM257,334,293, respectively. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023
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