My EG Services Berhad Annual Report 2020

ANNUAL REPORT 2020 209 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 46. 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 2020 2019 RM’000 RM’000 Corporate guarantees given to licensed banks for credit facilities granted to: - subsidiaries 24,408 25,357 47. 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. 47.1 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”), Singapore Dollar (“SGD”), United States Dollar (“USD”) and Philippine Peso (“PHP”) and foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.