34. FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (CONTINUED) Credit risk (Continued) Non-trade amounts due from joint ventures In determining the recoverability of receivable from the joint ventures, the Group considers the financial performance of the joint ventures. The expected credit loss of these receivables is recognised at $1,254,000 (2024: $1,254,000). Non-trade amounts due from joint operation In determining the recoverability of receivable from the joint operation, the Group considers the financial performance of the joint operation. The expected credit loss of these receivables has remained unchanged at $1,324,000 (2024: $1,324,000). Non-trade amounts due from associates For non-trade amounts due from associates, the Group have taken into account the financial strength and financial performance of the associates. The Group monitor and assess at each reporting date for any indicator of significant increase in credit risk on the amounts due from associates, by considering their financial performance. At the end of the reporting period, the Group has assessed the associates’ financial performance to meet the contractual cash flow obligations and have recognised an expected credit loss allowance of $819,000 (2024: $815,000) for non-trade amounts due from associates (Note 17). Non-trade amounts due from subsidiaries For non-trade amounts due from subsidiaries and the amounts due from subsidiaries which formed part of the Company’s net investment in subsidiaries, the Board of Directors has taken into account information that available internally about these subsidiaries’ past, current and expected operating performance and cash flow position. The Board of Directors monitors and assesses at each reporting date of any indicator of significant increase in credit risk on the amount due from the respective subsidiaries, by considering their financial performance and results. At the end of the reporting period, the Company has assessed its subsidiaries financial performance to meet the contractual cash flow obligations and has recognised expected credit loss allowance of $Nil (2024: $Nil) for non-trade amounts due from subsidiaries (Note 17). Cash and bank balances The cash and bank balances are held with bank and financial institution counterparties, which are rated A3 to Aa1 for long-term deposit and P2 to P1 for short term deposit, based on Moody’s rating. The Board of Directors monitors the credit ratings of counterparties regularly. Impairment on cash and bank balances has been measured on the 12-month expected credit loss model. At the reporting date, the Group and the Company did not expect any material credit losses from non-performance by the counterparties. Market risk Market risk is the risk that changes in market prices, such as equity prices, foreign exchange rates and interest rates that will affect the Group’s income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimising the return. (i) Equity prices The Group is exposeds to equity price risks arising from equity investments classified as financial assets at FVTOCI. Equity investments carried at FVTOCI are held for strategic reasons rather than trading purpose. The Group does not actively trade equity investments. Further details of these equity investments can be found in Note 16 to the financial statements. Equity price sensitivity analysis The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period. ANNUAL REPORT 2025 KEONG HONG HOLDINGS LIMITED 121 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025
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