NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
(cont’d)
E X C E L F O R C E M S C B E R H A D • A N N U A L R E P O R T 2 0 1 4
104
33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)
(iv) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would
fluctuate because of changes in foreign exchange rates.
The Group and the Company are exposed to foreign currency risk on transactions that are
denominated in currencies other than the functional currencies of the operating entities.
The Group also holds cash and bank balances denominated in foreign currencies for working
capital purposes. At the end of the reporting period, such foreign currency balances in United States
Dollar amounted to RM299,708 (2013: RM429,132), in Singapore Dollar amounted to RM14,606 (2013:
RM1,022) and in New Taiwan Dollar amounted to RM2,549 (2013: RM2,645) for the Group.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible
change in the United States Dollar (‘USD’), Singapore Dollar (‘SGD’) and New Taiwan Dollar (‘TWD’)
exchange rates against the functional currency of the Group’s entities, with all other variables held
constant.
Group and Company
2014
2013
RM
RM
Profit after tax
USD/RM -strengthen by 2% (2013: 2%)
4,496
7,591
-weaken by 2% (2013: 2%)
(4,496)
(7,591)
SGD/RM -strengthen by 2% (2013: 2%)
3,132
15
-weaken by 2% (2013: 2%)
(3,132)
(15)
TWD/RM -strengthen by 2%
38
40
-weaken by 2%
(38)
(40)
34. ACQUISITIONS OF SUBSIDIARIES
(a) In the previous financial year, on 9 May 2013, the Company acquired fifty two percent (52%) equity
interest comprising 65,000 ordinary shares of RM1.00 each of the issued and paid up ordinary share
capital of Capital Market Risk Advisor Sdn. Bhd. (‘CMRA’) for a cash consideration of RM65,000.
CMRA is a company incorporated in Malaysia which is engaged in the development and provision of
software application to financial services industry.
In the previous financial year, on 23 October 2013, CMRA increased its issued and paid up share
capital of RM125,000 to RM250,000 by way of new issuance of 125,000 ordinary shares of RM1.00
each. On even date, the Company subscribed for an additional 65,000 ordinary shares of RM1.00
each in CMRA for a cash consideration of RM65,000. Consequently, there was no change in the
effective equity interest held by the Company in CMRA.
