Chemical Company of Malaysia Berhad Annual Report 2019

25. Financial instruments (continued) 25.6Market risk (continued) 25.6.2 Currency risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The currency giving rise to this risk is primarily U.S. Dollar (“USD”). Risk management objectives, policies and processes for managing the risk The Group ensures that the net exposure on foreign currency risk arising from commercial transactions is kept to an acceptable level by buying and selling foreign currencies at spot rates where necessary to address short-term imbalances. 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 reporting period are as follows:  Denominated in   USD 2019 2018 Group Trade receivables 4,906 2,443 Trade payables (7,635) (877) Net exposure in the statements of financial position (2,729) 1,566 Currency risk sensitivity analysis A 10% (2018: 10%) strengthening of the Ringgit Malaysia (“RM”) against the following currency at the end of the reporting period would have increased post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular profit rates, remain constant and ignores any impact of forecasted transactions.    Profit or Loss 2019 2018 Group USD 207 (119) A 10% (2018: 10%) weakening of RM against the above currency at the end of the reporting period would have had equal but opposite effect on the above currency to the amounts shown above, on the basis that all other variables remain constant. BUSINESS OVERVIEW OTHER INFORMATION GOVERNANCE STRUCTURE 199 ANNUAL REPORT 2019 FINANCIAL STATEMENTS