0 (12.3) Net carrying amount 44.6 0 0 44.6 (iv) Financial guarantees Risk management objectives, policies and processes for managing the risk The Company provides financial guarantees to banks in respect of banking facilities granted to certain subsidiaries and an associate. The Company monitors the ability of the subsidiaries and the associate to service their loans on an individual basis annually. Exposure to credit risk, credit quality and collateral The maximum exposure to the Group and the Company amounts to RM312.1 million (2022: RM310.6 million) and RM11,534.8 million (2022: RM8,797.7 million) respectively, representing banking facilities utilised by the subsidiaries and an associate as at the end of the financial year. The financial guarantees are provided as credit enhancements to the subsidiaries’ and associate’s secured loans. The total financial guaranteesand loss allowances provided are as follows: Group Company 2023 RM’million 2022 RM’million 2023 RM’million 2022 RM’million Financial guarantees 312.1 310.6 11,534.8 8,797.7 Less: Loss allowances (312.1) (310.6) (316.4) (312.2) 0 0 11,218.4 8,485.5 NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 326 45 FINANCIAL INSTRUMENTS (CONTINUED) (b) Financial risk management (continued) Credit risk (continued) (iv) Financial guarantees (continued) Impairment losses The Company assumes that there is a significant increase in credit risk when a subsidiary or associate has indication of defaulting on its banking facilities. The Company considers a financial guarantee to be credit impaired when the subsidiary or associate is unlikely to repay its credit obligation to the bank in full. The Company determines the probability of default of the guaranteed loans individually using internal information available. Loss allowance has been recognised mainly arising from the financial guarantee provided by the Group in 2016 to support the loan facility offered to İç Anadolu Doğalgaz Elektrik Üretim ve Ticaret A.Ş.