Wah Seong Corporation Berhad Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 FINANCIAL STATEMENTS WAH SEONG CORPORATION BERHAD ANNUAL REPORT 2017 188 46 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Liquidity risk (continued) Company Within 1 year RM’000 More than 1 year and less than 2 years RM’000 More than 2 years and less than 5 years RM’000 Total contractual undiscounted cash flows RM’000 Total carrying amount RM’000 2017 Non-derivative financial liabilities Financial guarantees* 311,479 - - 311,479 - Other payables and accruals 11,603 - - 11,603 11,603 Loans and borrowings 139,431 - - 139,431 134,167 462,513 - - 462,513 145,770 2016 Non-derivative financial liabilities Financial guarantees* 167,522 - - 167,522 - Other payables and accruals 12,302 - - 12,302 12,302 Loans and borrowings 233,402 - - 233,402 233,402 413,226 - - 413,226 245,704 * This represents the maximum exposure to the Company in the event that the financial guarantee contracts issued by the Company to its subsidiaries are called upon. These liabilities have been included in the consolidated statement of financial position of the Group and hence not result in any additional liability to the Group. 47 FAIR VALUES OF FINANCIAL INSTRUMENTS The carrying amounts of financial assets and liabilities classified within current assets and current liabilities respectively approximate their fair values due to the relatively short term nature of these financial instruments. Fair value of quoted equity instruments and debts securities are determined by reference to their respective published market bid price as at 31 December 2017. The fair values of forward exchange contracts are estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. The fair values of interest rate swaps is determined by using valuation techniques based on observable market data. Fair values of non-derivative financial liabilities are calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.