ENRA Group Berhad | Annual Report 2022 132 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2022 13. DERIVATIVE ASSETS/(LIABILITY) Contract/ Contract/ Notional Notional amount Assets amount Liability RM’000 RM’000 RM’000 RM’000 Group 2022 Forward foreign currency contracts – – – – 2021 Forward foreign currency contracts 29,076 553 10,338 (344) Company 2022 Forward foreign currency contracts – – – – 2021 Forward foreign currency contracts – – 10,338 (344) (a) Derivatives are initially recognised at fair value on the date the derivative contracts are entered into and are subsequently remeasured to fair value with changes in fair value being recognised in profit or loss. (b) The Group and Company use forward foreign currency contracts to manage some of the foreign currency transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for period consistent with foreign currency transaction exposure and fair value changes exposure. The Group and Company do not apply hedge accounting. Forward foreign currency contracts represent selling and buying contracts are used to hedge the Company’s advance to a subsidiaries denominated in British Pound and to hedge the Group’s payable to certain suppliers denominated in US Dollar and Euro for which the commitments existed at the reporting date. (c) During the financial year, the Group and the Company recognised a net loss of RM553,000 (2021: loss of RM16,000) and RM Nil (2021: loss of RM532,000) respectively arising from the fair value changes in derivatives. The methods and assumptions applied in determining the fair values of derivatives are disclosed in Note 36(b) (v) to the financial statements.
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