333 ANNUAL REPORT 2022 ACCOUNTABILITY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2022 41. Financial risk management objectives and policies (continued) (a) Market risk (continued) (ii) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities and the Group’s net investments in foreign subsidiaries. The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily RM, USD, INR and Norwegian Krone (“NOK”). The foreign currency in which these transactions are denominated is mainly SGD, Euro and Ghanaian Cedi. The Group holds cash and cash equivalents denominated in foreign currencies for working capital purposes. The other financial instruments denominated in foreign currencies include finance lease receivables, trade and other receivables, trade and other payables, loans and borrowings and lease liabilities. The Group is also exposed to currency translation risk arising from its net investment in foreign operations primarily in Labuan, Singapore, Norway, Republic of the Marshall Islands, British Virgin Islands, Brazil, India and Netherlands. The Group’s investments in its foreign subsidiaries, joint ventures and associates are not hedged as the currency position in these investments are considered to be long-term in nature. The currency profile of monetary financial assets and financial liabilities are as follows: Denominated in currencies other than the entities’ functional currencies Malaysian Ringgit United States Dollar Others Denominated in functional currencies Total Group RM million RM million RM million RM million RM million 2022 Other investments - - - 14 14 Receivables 13 11 48 572 644 Receivables (intercompany, net) 195 853 49 10,793 11,890 Cash and bank balances 12 95 57 2,695 2,859 Borrowings - (1) - (8,757) (8,758) Lease liabilities - - (16) (7) (23) Payables (7) (2) (53) (943) (1,005) Payables (intercompany, net) (116) (505) (31) (11,542) (12,194) Derivatives - - - (23) (23) Put option liability - - - (126) (126) 97 451 54 (7,324) (6,722)
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