288 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2023 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 41. Financial risk management objectives and policies (continued) (a) Market risk (continued) (ii) Foreign currency risk (continued) Effects of hedge accounting on the financial position and performance The effects of the foreign currency-related hedging instruments on the Group’s financial position and performance are as follows: 2023 RM million Foreign exchange forward contracts Carrying amount (current asset) 6 Notional amount 254 Hedge ratio 100% Change in discounted spot value of outstanding hedging instruments since 1 February (5) Change in value of hedged item used to determine hedge effectiveness 5 Weighted average hedged rate for outstanding hedging instruments (including forward points) INR 82.4419 : USD 1 The maturity period of foreign exchange forward contracts ranges from April 2023 to June 2023. Instruments used by the Group Hedge of net investment in a foreign subsidiary During the financial year, the Group raised, through the Rights Issue, proceeds denominated in RM to fund additional equity investments into a foreign subsidiary which are denominated in USD. The Group has been granted approval to convert the RM-denominated proceeds into USD by Bank Negara Malaysia with a requirement that any RM sold is fully repurchased in the future. In compliance with the above-mentioned requirement, the Group entered into foreign exchange forward contracts which were designated as a hedge of the net investment in the foreign subsidiaries. The changes in the spot component of the forward contracts, which are determined with reference to the relevant spot market exchange rates, are deferred in the foreign currency translation reserve. Cost of hedging is recognised in profit or loss. Effects of hedge accounting on the financial position and performance 2023 RM million Net investment in a foreign subsidiary Carrying amount (current asset) 32 USD carrying amount USD 200,000,000 Hedge ratio 100% Change in carrying amount of forward contracts as a result of foreign currency movements since 1 February, recognised in Other Comprehensive Income (65) Change in value of hedged item used to determine hedge effectiveness 65 Weighted average hedged rate for the year (including forward points) RM 4.2426 : USD 1
RkJQdWJsaXNoZXIy NDgzMzc=