Wah Seong Corporation Berhad Annual Report 2020

184 WAH SEONG CORPORATION BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 44 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED) Group Company 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 Financial liabilities Financial liabilities measured at fair value through profit or loss – designated upon initial recognition: - Derivatives financial liabilities 99 1,860 - - Financial liabilities at amortised cost: - Trade and other payables (excluding employee benefits and value added tax payables) 217,800 258,513 2,061 1,973 - Amounts owing to subsidiaries - - 17,216 20,592 - Amounts owing to associates 1,560 33 - - - Amounts owing to joint ventures 5,139 5,546 - - - Dividend payable 22,109 21,904 - - - Loans and borrowings 878,056 948,095 126,759 152,217 - Lease liabilities 210,385 234,764 - - 1,335,049 1,468,855 146,036 174,782 Total 1,335,148 1,470,715 146,036 174,782 45 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group’s and the Company’s overall financial risk management objectives and policies are to ensure that the Group and the Company create value and maximise returns for its shareholders. Financial risk management is carried out through risk review, internal control systems, benchmarking to the industry’s best practices and adherence to the Group’s financial risk management policies. The main risks arising from the financial instruments of the Group and the Company are credit risk, market risk, and liquidity risk. Management monitors the Group’s and the Company’s financial position closely with the objective to minimise potential adverse effects on the financial performance of the Group and of the Company. The following sections provide details regarding the Group’s and the Company’s exposure to the above mentioned financial risks and the objectives, policies and processes for managing these risks. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and the Company. At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amounts of each class of financial assets recognised in the statements of financial position, including derivative financial instruments with positive fair values.