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THONG GUAN INDUSTRIES BERHAD

63

28.

Financial instruments (Cont’d)

Foreign currency risk

The Group incurs foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than Ringgit Malaysia. The currencies giving rise to this risk are primarily Australian Dollar,Singapore Dollar,Japanese Yen,US Dollar and Chinese RMB.

Material foreign currency transaction exposures are hedged with derivative financial instruments such as forward foreign exchange contracts. The amount of unrecognised gain associated with anticipated future transactions for the Group is approximately RM384,000 (2006 :RM422,000) and the expected timing of recognition as income is over the next six months. Where necessary, the forward foreign exchange contracts are rolled over at maturity at market rates.

In respect of other monetary assets and liabilities held in currencies other than Ringgit Malaysia, the Group ensured that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address short term imbalances.

Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever is earlier.

Effective

Within

1-5

After 5

interest rate

Total

1 year

years

years

per annum

RM’000

RM’000

RM’000

RM’000

Note

%

Financial assets Short term deposits

9

3.40

10,086

10,086

-

-

Financial liabilities Secured term loans Unsecured term loans Secured overdrafts Secured bankers’ acceptances Secured export credit financing Unsecured overdrafts Unsecured revolving credit Unsecured onshore foreign currency loan Finance lease liabilities

13 13 13 13 13 13 13 13 13

4.00 4.60 7.78 4.03 4.00 7.55 4.48 5.80 4.10

320 7,902 1,393 7,289 1,498 6,629 6,344 28,108 201

179 2,698 1,393 7,289 1,498 6,629 6,344 28,108 147

141 5,204 - - - - - - 54

- - - - - - - - -

Group

2007

Short term deposits

9

2.07

4,424

4,424

-

-

Financial liabilities Secured term loans Unsecured term loans Secured overdrafts Secured bankers’ acceptances Unsecured overdrafts Unsecured revolving credit Unsecured onshore foreign currency loan Finance lease liabilities

13 13 13 13 13 13 13 13

4.00 6.11 7.76 4.38 8.00 5.73 5.77 6.63

493 15,705 1,391 4,082 3,101 5,104 40,463 404

165 6,424 1,391 4,082 3,101 5,104 40,463 260

328 9,281 - - - - - 144

- - - - - - - -

2006 Financial assets

-

-

144

144

7.75

Company

2007

Financial liability Secured overdrafts

13

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