Dagang NeXchange Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) DAGANG NeXCHANGE BERHAD 176 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.6 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will affect the Group’s financial position or cash flows. 30.6.1 Foreign currency risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in the currency other than the functional currency, Ringgit Malaysia (“RM”). The currencies giving rise to this risk are primarily United States Dollar (“USD”), Euro, British Pound Sterling, (“GBP”), Indonesian Rupiah (“IDR”) and Singapore Dollar (“SGD”). Risk management objectives, policies and processes for managing the risk The Group does not have a fixed policy to hedge its sales and purchases via forward contracts. However, the exposure to foreign currency risk is monitored from time to time by management. Exposure to foreign currency risk The Group’s and the Company’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period are as follows: Denominated in 2019 USD Euro GBP SGD IDR Total Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Balances recognised in the statement of financial position Other investments 3,538 - - - - 3,538 Trade and other receivables 17,745 2,105 875 135 31 20,891 Cash and cash equivalents 2,994 - - - 53 3,047 Trade and other payables (8,772) (4,094) (1,969) (2) (3) (14,840) Net exposure 15,505 (1,989) (1,094) 133 81 12,636 Denominated in 2018 USD Euro GBP SGD Total Group RM’000 RM’000 RM’000 RM’000 RM’000 Balances recognised in the statement of financial position Other investments 4,633 - - - 4,633 Trade and other receivables 42,967 - - 224 43,191 Cash and cash equivalents 104 - 3 - 107 Trade and other payables (23,090) (701) (1,682) - (25,473) Net exposure 24,614 (701) (1,679) 224 22,458