151 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2022 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 CONT’D 33. CAPITAL AND FINANCIAL RISK MANAGEMENT (Cont’d) (b) Financial risk management (Cont’d) (v) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would fluctuate because of changes in foreign exchange rates. Subsidiaries operating in Australia, Philippines and Thailand have assets and liabilities together with expected cash flows from anticipated transactions denominated in foreign currencies that give rise to foreign exchange exposures. The Group also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. The sensitivity analysis for foreign currency risk has been disclosed in Notes 13, 20, 22, 25, 26 and 28 to the financial statements respectively. 34. MATERIAL LITIGATION On 25 September 2019, a subsidiary, GHL ePayments Sdn. Bhd. (“eGHL” or “Defendant”) had been served with a sealed Writ of Summons together with Statement of Claim both dated 19 September 2019 (“Writ”) by Messrs. Shukor Baljit & Partners, the solicitors acting for Bestinet Sdn Bhd (“Plaintiff”). The Plaintiff alleges that the Defendant has misrepresented and breached the contract with respect to the development, management and maintenance of digital wallet. As a result of that, the Plaintiff suffers loss and claims for the following: a) Judgment for the amount of RM371,000.00; b) Pre-judgment interest at the rate of 5% per annum on the amount of RM371,000.00 from the date of filing of the Writ up to the date of judgment; c) Interest at the rate of 5% per annum on the amount of RM371,000.00 from the date of judgment to the date of full and final payment; d) General damages of RM3,362,492.34 to be assessed by the Court; e) Interest at the rate of 5% per annum on general damages from the date of judgment up to the date of full and final payment; f) Costs; and g) Any further or other relief as the Court deems fit. Messrs. Shearn Delamore & Co. has been appointed as solicitors to represent eGHL. On 30 October 2019, the Defendant had filed Statement of Defence and Counterclaim against the Plaintiff, which the Plaintiff had, on 20 November 2019, served on eGHL with its Reply and Defence to Counterclaim. On 21 November 2019, the matter had been fixed for case management before the Registrar. The trial of the case was concluded on 28 January 2022.
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