My EG Services Berhad Annual Report 2019

MY E.G. SERVICES BERHAD [Registration No. 200001003034 (505639-K)] 178 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2019 (CONT’D) 50. CONTINGENT LIABILITIES No provisions are recognised on the following matters as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement:- The Company 31.12.2019 30.9.2018 RM’000 RM’000 Corporate guarantees given to licensed banks for credit facilities granted to: - subsidiaries 25,357 10,246 - an associate - 4,000 25,357 14,246 51. FINANCIAL INSTRUMENTS The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. 51.1 FINANCIAL RISK MANAGEMENT POLICIES The Group’s policies in respect of the major areas of treasury activity are as follows: (a) Market Risk (i) Foreign Currency Risk The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily Indonesian Rupiah (“IDR”), United States Dollar (“USD”) and Singapore Dollar (“SGD”). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. The Group’s exposure to foreign currency risk (a currency which is other than the functional currency of the entities within the Group) based on the carrying amounts of the financial instruments at the end of the reporting period is summarised below:-