Sasbadi Annual Report 2021

119 ANNUAL REPORT 2021 FINANCIAL STATEMENTS (continued) 119 27. CAPITAL AND FINANCIAL RISK MANAGEMENT (b) Financial risk management (continued) i) Credit risk (continued) Receivables (continued) Information regarding credit risk concentration for trade and other receivables is disclosed in Note 15 to the financial statements. Cash and cash equivalents The cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position. These banks and financial institutions have low credit risk. Consequently, the Group and the Company are of the view that the loss allowance is not material and hence, it is not provided for. Information regarding credit risk concentration for cash and cash equivalents is disclosed in Note 16 to the financial statements. Financial guarantees Risk management objectives, policies and processes for managing the risk The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries. Exposure to credit risk, credit quality and collateral The maximum exposure to credit risk amounts to RM17,386,000 (2020: RM37,263,000) representing the outstanding term loans, bankers’ acceptances and bank overdrafts of the subsidiaries as at the end of the reporting period. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment. The financial guarantees have not been recognised since the fair value on initial recognition was not material. Other investments Risk management objectives, policies and processes for managing the risk Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group. Transactions involving derivative financial instruments, if any, are with approved financial institutions. Information regarding credit risk concentration for other investments is disclosed in Note 9 to the financial statements.