ENRA Group Berhad Annual Report 2021

FINANCIAL STATEMENTS & OTHERS ENRA Group Berhad | Annual Report 2021 180 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2021 40. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d) (iv) 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. The Group is subject to foreign exchange fluctuations through the import and export of finished goods. The Group also has cash and bank balances, receivables, payables and borrowings denominated in foreign currencies. At the end of reporting period, the Group holds bank balance denominated in foreign currencies as disclosed in Note 16(f) to the financial statements. The Group is also exposed to foreign currency risk in respect of the overseas subsidiaries. Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity analysis of the Group and of the Company to a reasonably possible change of exchange rates in the US Dollar (“USD”), British Pound (“GBP), Australian Dollar (“AUD”), Euro and Singapore Dollar (“SGD”) against RM respectively, with all variables held constant. 3% is the sensitivity rate used when reporting foreign currency risk exposures internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 (Loss)/Profit after tax USD/RM - strengthen by 3% (2020: 3%) 48 17 235 – - weaken by 3% (2020: 3%) (48) (17) (235) – GBP/RM - strengthen by 3% (2020: 3%) (564) (467) 217 200 - weaken by 3% (2020: 3%) 564 467 (217) (200) AUD/RM - strengthen by 3% (2020: 3%) (82) (69) – – - weaken by 3% (2020: 3%) 82 69 – – EURO/RM - strengthen by 3% (2020: 3%) – (136) – – - weaken by 3% (2020: 3%) – 136 – – SGD/RM - strengthen by 3% (2020: 3%) – 1 – – - weaken by 3% (2020: 3%) – (1) – –