GHL System Berhad Annual Report 2019

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 162 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 CONT’D 29. CONTRACT LIABILITIES (cont’d) (c) Contract value yet to be recognised as revenue Revenue expected to be recognised in the future relating to performance obligations that are unsatisfied at the end of the reporting period, are as follows: Group Company 2020 2019 2020 2019 RM RM RM RM Deferred income 4,104,741 1,536,233 374,692 422,773 30. CONTINGENT LIABILITIES Group Company 2019 2018 2019 2018 RM RM RM RM Unsecured Corporate guarantee given to banks for credit facilities granted to subsidiaries - - 119,451,960 95,907,000 Guarantees given to a third party in respect of trade and contract 19,286,660 24,062,732 1,000,000 1,655,400 19,286,660 24,062,732 120,451,960 97,562,400 The Group designates corporate guarantees given to banks 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.