NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s and the Company’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s and the Company’s businesses whilst managing its risks. The Group and the Company operate within clearly defined guidelines that are approved by the Board and the Group's and the Company’s policy is not to engage in speculative transactions. The main risks and corresponding management policies arising from the Group’s and the Company’s normal course of business are as follows: (i) Credit risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk primarily arises from the receivables. For other financial assets, the Group and the Company minimise credit risk by dealing with high credit rating counterparties. The maximum risk associated with recognised financial assets is the carrying amounts as presented in the statements of financial position and corporate guarantee provided by the Company to banks on subsidiaries’ credit facilities. The Group and the Company have 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 2025 2024 RM % of total RM % of total By country: Malaysia 143,771,275 97.30% 150,326,435 98.19% Republic of Indonesia 3,987,046 2.70% 2,751,217 1.80% The Peoples’ Republic of China - 0.00% 16,893 0.01% 147,758,321 100.00% 153,094,545 100.00% 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 RMNil (2024: RM38,500,000), representing Nil% (2024: 25%) of the total trade receivable balances. PG | 294 ANNUAL REPORT 2025 MKH BERHAD
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