Fraser & Neave Holdings Bhd Annual Report 2021

30. FINANCIAL INSTRUMENTS #CONTINUED$ #F$ MARKET RISK Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will a!ect the Group’s financial position or cash flows. (i) Currency risk The Group is exposed to foreign currency risk on cash and cash equivalents, sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily United States Dollar (“USD”), Singapore Dollar (“SGD”) and Australian Dollar (“AUD”). Risk management objectives, policies and processes for managing the risk The Group hedges a portion of its foreign currency denominated trade payables. The Group uses forward exchange contracts to hedge its foreign currency risk. Most of the forward exchange contracts have maturities of less than one year after the end of the financial year. Where necessary, the forward exchange contracts are rolled over at maturity. Exposure to foreign currency risk The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group entities) risk, based on carrying amounts as at the end of the financial year was: Denominated in Group USD RM’000 SGD RM’000 AUD RM’000 2021 Balances recognised in the statement of financial position Cash and cash equivalents 22,299 – – Receivables 82,702 4 – Payables (21,350) (761) (322) 83,651 (757) (322) Forecast transactions Forecast purchases – – (7,298) Forward exchange contract on forecast purchases – – 166 – – (7,132) Net exposure 83,651 (757) (7,454) 2020 Balances recognised in the statement of financial position Cash and cash equivalents 24,868 – – Receivables 53,295 23 – Payables – (567) – 78,163 (544) – Forecast transactions Forecast purchases (19,173) – (5,125) Forward exchange contract on forecast purchases 301 – 62 (18,872) – (5,063) Net exposure 59,291 (544) (5,063) Financial Statements 237 Fraser & Neave Holdings Bhd ! Annual Report 2021