34. FINANCIAL INSTRUMENTS (CONTINUED) 34.6 Market risk (continued) 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. 34.6.1Foreign currency risk The foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level and short-term imbalances are addressed by buying or selling foreign currencies at spot rates. The currencies giving rise to this risk are primarily United States Dollar (“USD”), Euro, British Pound Sterling (“GBP”) , Singapore Dollar (“SGD”), Indonesian Rupiah (“IDR”) and Japanese Yen (“JPY”). 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 USD Euro GBP SGD IDR JPY Total Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 31.12.2024 Balances recognised in the statements of financial position Trade and other receivables 3,200 - 12,941 - - - 16,141 Cash and cash equivalents 6,065 75 274,078 - 11 - 280,229 Trade and other payables (1,075) (2,232) (28,412) - - - (31,719) Loans and borrowings - - (4,243) - - - (4,243) Provisions - - (2,755) - - - (2,755) Net exposure 8,190 (2,157) 251,609 - 11 - 257,653 191 Financial Statements DAGANG NeXCHANGE BERHAD Integrated Report 2024 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2024
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