EXCEL FORCE MSC BERHAD Annual Report 2020

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2020 115 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CONT’D) 35. FINANCIAL INSTRUMENTS (CONT’D) (b) Financial risk management objectives and policies (Cont’d) (iii) Market risks (Cont’d) (2) Foreign currency risk (Cont’d) Foreign currency sensitivity analysis Foreign currency risk arises from Group entities which have a RM functional currency. The exposure to currency risk of Group entities which do not have a RM functional currency is not material and hence, sensitivity analysis is not presented. The following table demonstrates the sensitivity of the Group’s and the Company’s profit before tax for the financial year to a reasonably possible change in the USD and SGD exchange rates against the functional currencies of the Group and of the Company, with all other variables held constant. Group and Company 2020 2019 Change in currency rate Effect on profit before tax Change in currency rate Effect on profit before tax RM RM USD Strengthened 10% 39,354 Strengthened 10% 40,950 Weakened 10% (39,354) Weakened 10% (40,950) SGD Strengthened 10% 5,364 Strengthened 10% 2,544 Weakened 10% (5,364) Weakened 10% (2,544) (c) Fair value of financial instruments The carrying amounts of short-term receivables and payables, cash and cash equivalents and short-term borrowings approximate their fair value due to the relatively short-term nature of these financial instruments and insignificant impact of discounting. It was not practicable to estimate the fair value of investment in unquoted equity due to the lack of comparable quoted prices in an active market and the fair value cannot be reliably measured.