{"url_path":"/sec/mgn/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 Quantitative and Qualitative Disclosures About Market Risk**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1995075/0001213900-26-057595-index.html","accession_number":"0001213900-26-057595","cik":"0001995075","ticker":"MGN","issuer_name":"Megan Holdings Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1995075/0001213900-26-057595-index.html","primary_entity_key":"0001995075","primary_entity_name":"Megan Holdings Ltd."},"word_count":783,"has_tables":true,"body_markdown":"**Item\n11. Quantitative and Qualitative Disclosures About Market Risk**\n\n \n\nWe are exposed to various types of market risk\nin the normal course of our business, including the effects of changes in equity prices, foreign currency exchange rates and interest\nrates. We do not use derivative financial instruments for trading or speculative purposes. The following discussion provides information\nabout our exposure to each of these market risks as of December 31, 2025.\n\n \n\n**11.A. Equity price risk**\n\n \n\nEquity price risk is the risk that the fair value\nof our investments in marketable equity securities will fluctuate as a result of changes in market prices, whether caused by factors\nspecific to an individual investment, its issuer or factors affecting all securities traded in the market.\n\n \n\nAs of December 31, 2025, we held investments\nin marketable securities consisting of ordinary shares of companies listed on Bursa Malaysia. These investments are measured at fair\nvalue on a recurring basis using quoted market prices in active markets and are classified within Level 1 of the fair value\nhierarchy under ASC 820. Changes in fair value are recognized in other income in our consolidated statements of comprehensive income\nin accordance with ASC 321. The carrying amount of our investments in marketable securities as of December 31, 2025 was MYR\n29,183,340 (approximately US$7,195,100), compared to MYR 22,594,500 as of December 31, 2024. A hypothetical 10% adverse change in\nthe quoted market prices of these securities as of December 31, 2025 would have resulted in a decrease in the fair value of our\nmarketable securities portfolio of approximately MYR 2,918,000 (approximately US$719,000) (2024: approximately MYR 2,259,000), with\na corresponding decrease in our other income (before tax) for the year. A hypothetical 10% favorable change would have had an equal\nand opposite effect. The selected hypothetical change does not reflect what could be considered the best or worst case\nscenarios.\n\n \n\n**11.B. Foreign Currency Exchange Rate Risk**\n\n** **\n\nOur reporting currency is the Malaysian Ringgit\n(MYR) and our functional currency is also MYR, as the majority of our revenues, costs and expenses are denominated in MYR. We are exposed\nto foreign currency exchange rate risk primarily in connection with cash and bank balances denominated in currencies other than MYR,\nprincipally the U.S. dollar (US$) and, to a lesser extent, other currencies arising from incidental cross-border transactions.\n\n \n\n116\n\n \n\n \n\nWe have not entered into any hedging transactions\nin an effort to reduce our exposure to foreign currency exchange rate risk. As our exposure to non-MYR-denominated monetary assets and\nliabilities was not material as of December 31, 2025, we do not believe that a hypothetical 10% appreciation or depreciation of the MYR\nagainst the U.S. dollar would have a material effect on our financial position, results of operations or cash flows. We will continue\nto monitor our foreign currency exposure and may consider hedging significant exposures should they arise in the future. U.S. dollar\namounts presented in this annual report have been translated from MYR solely for the convenience of the reader at the exchange rate set\nforth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the MYR amounts could have been, or\ncould be, converted into U.S. dollars at such rate or at any other rate.\n\n \n\n**11.C. Interest Rate Risk**\n\n \n\nInterest rate risk is the risk that the fair\nvalue or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to interest\nrate risk arises primarily from interest-bearing bank deposits and any interest-bearing borrowings outstanding from time to time.\n\n \n\nAs of December 31, 2025 and 2024, we had MYR\n325,982 (USD 80,370) and MYR 358,715 of outstanding interest-bearing bank loan, respectively. Interest income earned on our bank\ndeposits is sensitive to changes in prevailing market interest rates in Malaysia, although such income is not a primary source of\nincome for the Company. We have not used any derivative financial instruments to manage our interest rate risk exposure. Based on\nour financial position as of December 31, 2025, a hypothetical 100 basis point increase or decrease in market interest rates would\nnot have a material impact on our results of operations or cash flows for the year.\n\n \n\n**11.D. Inflation Risk**\n\n \n\nInflationary factors, such as increases in raw\nmaterial and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact\non our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our\nability to maintain current levels of gross margin and operating expenses as a percentage of revenue if our selling prices do not increase\ncommensurately with such increases in costs."}