EXCEL FORCE MSC BERHAD Annual Report 2018

115 ANNUAL REPORT 2018 32. Financial Instruments (cont’d) (b) Financial risk management objectives and policies (cont’d) (iii) Market risks (cont’d) (ii) 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 2018 Trade receivables - 177,687 Cash and bank balances 370,220 1,309 370,220 178,996 2017 Trade receivables 18,235 - Cash and bank balances 361,471 3,818 379,706 3,818 Foreign currency sensitivity analysis The following table demonstrates the sensitivity of the Group’s and the Company’s profit before tax for the financial year to a reasonably possible change in the USD and SGD exchange rates against the functional currencies of the Group and of the Company, with all other variables held constant. Group and Company 2018 2017 Change in Effect on Change in Effect on currency profit before currency profit before rate tax rate tax RM RM USD Strengthened 10% 37,022 Strengthened 10% 37,971 Weakened 10% (37,022) Weakened 10% (37,971) SGD Strengthened 10% 17,900 Strengthened 10% 382 Weakened 10% (17,900) Weakened 10% (382) Notes To The Financial Statements 31 December 2018 (cont’d)