159 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2021 CONT’D 30. CONTINGENT LIABILITIES Group Company 2021 2020 2021 2020 RM RM RM RM Unsecured Corporate guarantee given to banks for credit facilities granted to subsidiaries - - 245,532,380 122,055,160 Guarantees given to a third party in respect of trade and contract 10,643,612 5,799,584 2,000,000 2,000,000 Secured Guarantees given to a third party in respect of trade and contract 9,527,806 12,879,265 - - 20,171,418 18,678,849 247,532,380 124,055,160 (a) The Group designates corporate guarantees given to banks and third parties for credit facilities granted to subsidiaries as insurance contracts as defined in MFRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits would be required to settle the obligation and reliable estimate can be made of the amount of the obligation. At the end of the reporting period, the Group assesses whether its recognised insurance liabilities are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss. Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is extinguished via a discharge, cancellation or expiration. The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote. (b) Guarantees given to a third party in respect of trade and contract amounting to RM9,527,806 (2020: RM12,879,265) are secured by first party charge over deposits with licensed banks as disclosed in Note 22 to the financial statements. 31. CAPITAL COMMITMENTS Group 2021 2020 RM RM Capital expenditure in respect of purchase of property, plant and equipment: Contracted but not provided 13,434,508 5,017,752
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