Yinson Annual Report 2020

302 Notes to the financial statements (cont’d) For the financial year ended 31 January 2020 Yinson Holdings Berhad SECTION 7 ACCOUNTABILITY 41. Financial instruments by category (continued) Group Company 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 Financial liabilities Financial liabilities designated as cash flow hedge - Interest rate swaps (Note 37) 156,154 39,440 - - Other financial liabilities at amortised cost: - Trade and other payables 444,704 351,003 1,100,144 590,486 - Loans and borrowings (Note 32) 3,830,403 3,149,730 57,392 45,867 - Put option liability 412,398 455,725 - - - Lease liabilities (Note 33(b)) 31,393 - 308 - 4,718,898 3,956,458 1,157,844 636,353 Total 4,875,052 3,995,898 1,157,844 636,353 The Group’s and the Company’s exposure to various risks associated with the financial instruments are discussed in Note 42. 42. Financial risk management objectives and policies The Group’s principal financial liabilities, other than derivatives and put option liability, comprise loans and borrowings, lease liabilities, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal financial assets, other than derivatives, include other investments, finance lease receivables, trade and other receivables, cash and short-term deposits that are derived directly from its operations. The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. The Group’s senior management is supported by the corporate finance team that advises on financial risks and the appropriate financial risk governance framework for the Group. The corporate finance team provides assurance to the Group’s senior management that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below. (a) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk. Financial instruments affected by market risk include loans and borrowings, short-term deposits, financial assets at fair value through profit or loss and derivatives. The sensitivity analysis in the following sections relate to the positions as at 31 January 2020 and 2019.