FINANCIAL STATEMENTS - Mewah Group

MEWAH INTERNATIONAL INC.NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 201232. FINANCIAL RISK MANAGEMENTFinancial risk factorsThe Group’s activities expose it to market risk (including currency risk, commodity price risk and interest rate risk), credit risk and liquidityrisk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on theGroup’s financial performance. The Group’s risk management strategy provides for the use of financial instruments such as currency forwardcontracts, commodities forward and futures contracts of crude palm oil and palm oil products.Financial risk management is carried out by a Risk Committee in accordance with the policies set by the Board of Directors. The RiskCommittee works closely with the Group’s operating units in identifying, evaluating and managing financial risks. Regular reports aresubmitted to the Board of Directors.(a) Market risk(i)Currency riskThe Group’s revenue is denominated primarily in United States Dollar (“USD”), the functional and reporting currency of theCompany. There are some exposures in other currencies, the most significant of which are the Malaysian Ringgit (“Ringgit”),Singapore Dollar (“SGD”) and Australia Dollar (“AUD”). Currency risk arises within entities in the Group when transactions aredenominated in currencies other than the entities’ functional currencies.The Group’s risk management strategy provides for the use of currency forward contracts to hedge its future committed foreignexchange exposures, if necessary.92