110 EXCEL FORCE MSC BERHAD Notes to the Financial Statements (cont’d) 34. FINANCIAL INSTRUMENTS (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Market risks (cont’d) (2) Foreign currency risk The Group is exposed to foreign currency risk on transactions that are denominated in currencies other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily United States Dollar (USD) and Singapore Dollar (SGD). The Group has not entered into any derivative instruments for hedging or trading purposes. Where possible, the Group will apply natural hedging by selling and purchasing in the same currency. However, the exposure to foreign currency risk is monitored from time to time by management. The carrying amounts of the Group’s and of the Company’s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are as follows: Denominated in USD SGD RM RM Group and Company 2021 Monetary assets Trade receivables - 92,852 Deposit, cash and bank balances 242,800 839 242,800 93,691 2020 Monetary assets Trade receivables - 52,816 Deposit, cash and bank balances 393,540 825 393,540 53,641 Foreign currency sensitivity analysis Foreign currency risk arises from Group entities which have a RM functional currency. The exposure to currency risk of Group entities which do not have a RM functional currency is not material and hence, sensitivity analysis is not presented.
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