263 INTEGRATED ANNUAL REPORT 2025 ACCOUNTABILITY | NOTES TO THE FINANCIAL STATEMENTS 43. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (a) Market risk (continued) (ii) Foreign currency risk (continued) The currency profile of monetary financial assets and financial liabilities are as follows: (continued) Denominated in currencies other than the entity’s functional currency Company United States Dollar RM million Others RM million Denominated in functional currency RM million Total RM million 2024 Receivables - - 2 2 Intercompany receivables 237 - 119 356 Cash and bank balances 1 - 9 10 Borrowings (50) - (1,005) (1,055) Lease liabilities - - (8) (8) Payables (4) - (37) (41) Intercompany payables (302) (2) (697) (1,001) (118) (2) (1,617) (1,737) Instruments used by the Group The Group uses foreign exchange forwards to hedge its exposure to foreign currency risk. Under the Group’s policy, the critical terms of the forwards must align with the hedged terms. The Group only designates the spot component of foreign exchange forward contracts in hedge relationships. The spot component is determined with reference to relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as the forward points. It is discounted, where material. The changes in the forward element of the foreign exchange forward contracts that relate to the hedged items are recognised in profit or loss. Hedge of net investment in a foreign subsidiary In the previous 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.
RkJQdWJsaXNoZXIy NDgzMzc=