ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad
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094<br />
WAWASAN <strong>TKH</strong> HOLDINGS BERHAD (540218-A)<br />
<strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2012</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER <strong>2012</strong> (cont’d)<br />
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)<br />
(iv) Foreign currency risk<br />
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will<br />
fluctuate because of changes in foreign exchange rates.<br />
The Group is exposed to foreign exchange risk on sales and purchases that are denominated in<br />
currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily US Dollar<br />
(‘USD’), Euro, Australian Dollar (‘AUD’) and Singapore Dollar (‘SGD’).<br />
Derivative financing instruments are used to reduce exposure to fluctuations in foreign exchange rates.<br />
The Group reviews, monitors and controls the hedging of transactions. USD and SGD bank accounts<br />
are being set up to facilitate natural hedging against any fluctuation in USD and SGD.<br />
The Group is also exposed to foreign currency risk in respect of the foreign subsidiary. The Group does<br />
not hedge this exposure with foreign currency borrowings.<br />
During the financial year, the Group entered into foreign currency forward contracts to manage exposures<br />
to currency risk for receivables, which are denominated in a currency other than the functional currencies<br />
of the Group.<br />
The notional amounts and maturity dates of the forward foreign exchange contracts outstanding as at<br />
31 December <strong>2012</strong> are as follows:<br />
Contract<br />
Sales contracts used<br />
to hedge trade<br />
receivables<br />
The notional amounts and maturity dates of the forward foreign exchange contracts outstanding as at<br />
31 December 2011 were as follows:<br />
Contract<br />
Sales contracts used<br />
to hedge trade<br />
receivables<br />
Sensitivity analysis for foreign currency risk<br />
No sensitivity analysis for foreign currency risk is prepared at the end of the reporting period as the Group<br />
does not have significant exposure to foreign currency risk.<br />
28. COMMITMENTS<br />
(a) Capital commitments<br />
Capital expenditure in respect of purchase of property,<br />
plant and equipment:<br />
Contracted but not provided for
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