Serba Dinamik Annual Report 2021

Registration No: 201501042584 (1167905-P) Serba Dinamik Holdings Berhad (Incorporated in Malaysia) 122 32. Financial risk management policies (continued) (a) Credit risk (continued) Financial guarantees Risk management objectives, policies and processes for managing the risk The Group and the Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries Exposure to credit risk, credit quality and collateral The maximum exposure to credit risk amounts to RM3,939,953,956 (2019: RM3,339,527,000) representing the outstanding banking facilities of the subsidiaries as at end of the reporting period except as disclosed in Note 40.2. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment. (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings. Risk management objectives, policies and processes for managing the risk The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. It is no expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.