Rex International Holding Limited 241 NOTES TO THE FINANCIAL STATEMENTS 36 FINANCIAL INSTRUMENTS (CONTINUED) Market risk Market risk is the risk that changes in market prices, such as crude oil, foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured. Market risk exposures are measured using sensitivity analysis indicated below. Currency risk The Group operates internationally hence is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, financial assets and financial liabilities, including inter-company sales, purchases and inter-company balances, that are denominated in a currency other than the respective functional currencies of Group entities. The currencies in which these transactions primarily are denominated are the Euro (“EUR”), Swedish Krona (“SEK”), Singapore dollar (“SGD”), West African CFA franc (“XOF”) and Pounds Sterling (“GBP”). The Group does not have a formal hedging policy to govern this currency risk exposure as the Group monitors the exposure to currency risks on an ongoing basis and endeavours to keep the net exposures at an acceptable level. Exposure to currency risk The summary of quantitative data about the exposure to currency risk as reported to the management of the Group and the Company is as follows: 2025 2024 EUR SEK SGD XOF GBP EUR SEK SGD XOF GBP US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000 Group Cash and cash equivalents 727 – 147 1,133 140 1,219 158 198 835 2,014 Company Cash and cash equivalents – – 146 – – – – 154 – – Sensitivity analysis A 2% strengthening/(weakening) of the United States dollar against the following currencies at the reporting date would have changed profit or loss by the amounts shown below, respectively. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecasted sales and purchases.
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