Integrated Annual Report 2024 SECTION 6 • FINANCIAL STATEMENTS 317 Notes to the Financial Statements 28. FINANCIAL INSTRUMENTS (CONT’D) 28.6 Market risk (cont’d) 28.6.3 Other price risk Other price risk arises from price fluctuation risk mainly on aluminium related products. The Group is exposed to commodity price risk due to fluctuations in aluminium prices. The Group’s aluminium products are generally priced with reference to the London Metal Exchange (“LME”) aluminium rates. The Group has entered into commodity swaps and options to manage its exposure to movements in LME aluminium rates (see Note 28.7.2). Risk management objectives, policies and processes for managing the risk The Group mitigates its risk to the price volatility through establishing fixed price level that the Group considers acceptable and where deemed prudent, entering into commodity fixed price contracts. Commodity price risk sensitivity analysis A 10% (2023: 10%) increase in LME aluminium rates at the end of the reporting period would have decreased equity and post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables remained constant. Equity Profit or loss Group Company 2024 RM’000 2023 RM’000 2024 RM’000 2023 RM’000 10% increase in LME aluminium rates 15,215 6,489 - - A 10% (2023: 10%) decrease in LME aluminium rates would have had equal but opposite effect to the amounts shown above, on the basis that all other variables remained constant.
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