MISC Integrated Annual Report 2020

38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.) (b) Foreign currency risk (cont’d.) With all other variables held constant, the following table demonstrates the sensitivity of the Group’s and the Corporation’s profit before taxation to a reasonably possible change in the USD and RM exchange rates. 2020 2019 Effect on Effect on Effect on other Effect on other profit before comprehensive profit before comprehensive Change in taxation loss Change in taxation loss currency Increase/ Increase/ currency Increase/ Increase/ rate (Decrease) (Decrease) rate (Decrease) (Decrease) % RM’000 RM’000 % RM’000 RM’000 Group USD/RM +10% 3,000 48,695 +5% 3,370 5,863 -10% (3,000) (48,695) -5% (3,370) (5,863) Corporation USD/RM +10% 36,639 – +5% 20,569 – -10% (36,639) – -5% (20,569) – The net unhedged financial receivables and payables and cash and bank balances of the Group and of the Corporation that are not denominated in their functional currencies are as follows: Net financial receivables/(payables) and cash and bank balances held in non-functional currencies United Great Ringgit States Britain Singapore Functional currency Malaysia Dollar Pound Euro Dollar Total of Group entities RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 31 December 2020 Ringgit Malaysia – 76,599 – (401) 4,120 80,318 United States Dollar 49,148 – 2,908 20,784 4,643 77,483 49,148 76,599 2,908 20,383 8,763 157,801 At 31 December 2019 Ringgit Malaysia – 86,006 – (333) (447) 85,226 United States Dollar (19,331) – 5,851 26,318 44,604 57,442 (19,331) 86,006 5,851 25,985 44,157 142,668 Functional currency of Corporation At 31 December 2020 United States Dollar (386,414) – 836 24,262 (1,307) (362,623) At 31 December 2019 United States Dollar (427,451) – 610 17,503 (250) (409,588) 38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.) (c) Liquidity risk Liquidity risk is the risk that the Group and the Corporation will encounter difficulty in meeting their financial obligations due to shortage of funds. The Group’s and the Corporation’s exposure to liquidity risk arise primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Corporation’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and various other sources of funding. The Group and the Corporation have at their disposal cash and short term deposits amounting to RM5,545,089,000 (2019: RM5,740,435,000) and RM1,620,947,000 (2019: RM2,817,049,000) respectively. As at 31 December 2020, the Group and the Corporation have unutilised credit lines of RM5.6 billion (2019: RM2.6 billion) and RM4.8 billion (2019: RM2.6 billion) respectively, which could be used for working capital purposes. 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 10 440 10 441 /// Leadership / Governance / Financial Statements / Additional Information / Annual General Meeting ////// /// Leadership / Governance / Financial Statements / Additional Information / Annual General Meeting ////// Section Section MISC Berhad / Integrated Annual Report 2020 MISC Berhad / Integrated Annual Report 2020