NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 19 DERIVATIVE FINANCIAL ASSETS/(LIABILITIES) (CONTINUED) Non-hedging derivatives The Group uses forward currency contracts to manage some of the transaction exposures and limit its exposure to adverse fluctuation in foreign currency. These contracts are not designated as cash flow or fair value hedges. Forward currency contracts The Group enters into foreign currency forward contracts to protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled. Forward currency contracts are mainly used to hedge certain trade receivables and trade payables denominated in United States Dollar, Singapore Dollar, Ringgit Malaysia, Euro Dollar and China Renminbi for which firm commitments existed at the reporting date, extending to September 2023. Gains or losses arising from fair value changes of its financial assets and financial liabilities During the financial year, the Group recognised a loss of RM2,144,000 (2021: RM2,595,000) in the profit or loss arising from fair value changes of its derivative financial assets and liabilities. The method and assumptions applied in determining the fair value of derivatives are disclosed in Note 46. 20 TIME DEPOSITS Group Company 2022 2021 2022 2021 RM’000 RM’000 RM’000 RM’000 Time deposits placed with licensed banks in Malaysia 29,566 82,100 1,466 6,800 Time deposits with maturity more than 3 months 23,515 23,167 - - Short term investments - 653 - 653 53,081 105,920 1,466 7,453 As at 31 December 2022 and 31 December 2021, the Group and the Company have no exposure to foreign currency risk for time deposits and short term investments. The effective interest rates of time deposits of the Group and the Company are as follows: Group Company 2022 2021 2022 2021 % % % % Time deposits 1.00 – 2.70 1.15 – 3.31 1.00 – 2.00 1.15 – 1.50 21 CASH AND BANK BALANCES Group Company 2022 2021 2022 2021 RM’000 RM’000 RM’000 RM’000 Cash and bank balances 275,929 136,053 1,801 1,054 Annual Report 2022 Wah Seong Corporation Berhad 173
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