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SUSTAINABILITY JOURNEY HOW WE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 299

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021

3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Foreign currencies

Functional and presentation currency
Items included in the financial statements of the each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The financial statements are
presented in Ringgit Malaysia (“RM”), which is the Group and Company’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash
flow hedges ad qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or
loss. Foreign exchange gains and losses related to foreign currency forward contracts are presented in profit or loss
within “other (losses)/gains - net” .
Group companies

The results and financial position of all Group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date
of that statement of financial position;
(ii) income and expenses for each statement of comprehensive income are translated at average rate (unless this
average is not reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates of the transactions); and
(iii) all resulting exchange differences are recognised in the foreign exchange reserve as a separate component of
equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of
the foreign entities and translated at closing rate. Exchange differences arising are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities and
long-term advances are taken to the foreign exchange reserve within equity. When a foreign operation is sold,
such exchange differences are recognised in profit or loss as part of the gain or loss on disposal.