120 MSC BERHAD Notes to the Financial Statements (cont’d) 36. Financial Instruments (cont’d) (c) Financial risk management objectives and policies (cont’d) (iii) Market risks (cont’d) (b) Foreign currency risk (cont’d) Foreign currency sensitivity analysis (cont’d) Change in currency rate Group Company Effect on profit before tax 2024 2023 2024 2023 RM RM RM RM USD Strengthened 10% 1,438,302 22,316 27,308 22,316 Weakened 10% (1,438,302) (22,316) (27,308) (22,316) SGD Strengthened 10% 35 1,278 35 1,278 Weakened 10% (35) (1,278) (35) (1,278) Material accounting policy information Transactions in foreign currencies are translated to the respective functional currencies of the Group and of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at financial year end are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the profit or loss. In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the foreign currency translation reserve in equity. (c) Market price risk Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates). The Group is exposed to equity price risk arising from its investment in quoted instruments. These investments are listed on Bursa Malaysia and are classified as financial assets at FVTOCI. Management of the Group monitors investments in quoted instruments on a portfolio basis. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by Risk Management Committee of the Group.
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