NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 44 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED) Group Company 2022 2021 2022 2021 RM’000 RM’000 RM’000 RM’000 Financial liabilities Financial liabilities measured at fair value through profit or loss – designated upon initial recognition: - Derivatives financial liabilities 2,627 533 - - Financial liabilities at amortised cost: - Trade and other payables (excluding employee benefits and value added tax payables) 476,516 319,674 2,361 2,528 - Amounts owing to subsidiaries - - 22,410 29,148 - Amounts owing to joint ventures 3,493 1,610 - - - Dividend payable 10,200 19,875 - - - Loans and borrowings 789,966 754,394 59,714 102,163 - Lease liabilities 236,607 243,067 - - 1,516,782 1,338,620 84,485 133,839 Total 1,519,409 1,339,153 84,485 133,839 45 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s and the Company’s overall financial risk management objectives and policies are to ensure that the Group and the Company create value and maximise returns for its shareholders. Financial risk management is carried out through risk review, internal control systems, benchmarking to the industry’s best practices and adherence to the Group’s financial risk management policies. The main risks arising from the financial instruments of the Group and the Company are credit risk, market risk, and liquidity risk. Management monitors the Group’s and the Company’s financial position closely with the objective to minimise potential adverse effects on the financial performance of the Group and of the Company. The following sections provide details regarding the Group’s and the Company’s exposure to the above mentioned financial risks and the objectives, policies and processes for managing these risks. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and the Company. At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amounts of each class of financial assets recognised in the statements of financial position, including derivative financial instruments with positive fair values. (a) Receivables The Group’s and the Company’s exposure to credit risk is monitored on an ongoing basis. The Group and the Company have credit policies in place to manage the credit risk exposure. The risk is managed through the application of the Group’s and the Company’s credit management procedures which include the application of credit evaluations or approvals and follow up procedures. The Group and the Company actively monitor the utilisation of credit limits to manage the risk of any material loss from the non-performance of its counterparties. Annual Report 2022 Wah Seong Corporation Berhad 197
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